| 2018 Annual Report

Advanced Investing At Eaton Vance, advanced investing means providing strategies and services to help forward-thinking investors address their most important financial needs. 2018 Annual Report | 1 2018 Annual Report | 2

To Shareholders and Friends of Eaton Vance:

As featured on the cover of this report, Eaton Vance introduced new branding in fiscal 2018 around the theme “Advanced Investing.” Although the phraseology is new, our focus on serving the evolving needs of sophisticated, forward-thinking investors is longstanding. In the marketplace, we seek to differentiate Eaton Vance principally as a leading provider of specialized investment strategies and services that address the challenges faced by high- net-worth and institutional investors and their advisors – delivering returns, managing risk, controlling investment exposures, maximizing portfolio efficiency, minimizing investment taxes and aligning portfolio holdings with clients’ goals and values. By serving clients and advisors with distinction, we also advance the Company’s objectives to provide our employees with rewarding work and fulfilling careers and to build long-term value for Eaton Vance shareholders. For the fiscal year ended October 31, 2018, Eaton Vance earned $3.11 per diluted share, an increase of 29 percent from $2.42 of earnings per diluted share in fiscal 2017. On an adjusted basis,1 the Company earned $3.21 per diluted share, an increase of 29 percent from $2.48 of adjusted earnings per diluted share in fiscal 2017. Fiscal 2018 adjusted earnings exceeded earnings under U.S. generally accepted accounting principles (GAAP) by $0.10 per 1See footnote 1 on page 14. 2018 Annual Report | 3

diluted share, reflecting the add back of $24.0 million of charges related to new federal tax legislation enacted in December 2017 (the 2017 Tax Act), a $6.5 million charge recognized upon the expiration of the Company’s option to acquire an additional 26 percent ownership interest in our 49 percent-owned affiliate Hexavest, Inc. (Hexavest) and the reversal of $17.5 million of net excess tax benefits recognized upon the exercise of employee stock options and vesting of restricted stock awards during fiscal 2018. On both a GAAP and an adjusted basis, the Company’s fiscal 2018 net income and earnings per diluted share surpassed all previous years by wide margins. Fiscal 2018 consolidated revenue increased 11 percent to $1.7 billion, reflecting a 16 percent increase in average managed assets and three percent lower average management fee rates. Adjusting to remove closed-end fund structuring fees paid in fiscal 2017, operating expenses were up 10 percent and operating income was 14 percent higher. On an adjusted basis, the Company’s operating margins increased to 32.6 percent in fiscal 2018 from 31.8 percent in fiscal 2017.

On both a GAAP and an adjusted basis, the Company’s fiscal 2018 net income and earnings per diluted share surpassed all previous years by wide margins.

The differential between the Company’s 14 percent increase in adjusted operating income and the 29 percent increase in adjusted earnings per diluted share in fiscal 2018 relates principally to lower income taxes. A centerpiece of the 2017 Tax Act was reducing the U.S. corporate income tax rate from the previous high of 35 percent to 21 percent, effective January 1, 2018. Although we did not realize a full year’s worth of benefit from the tax cut in fiscal 2018, our adjusted effective income tax rate nonetheless fell nearly 10 points – to 27.6 percent from 37.0 percent in fiscal 2017. In fiscal 2018, the Company had consolidated net inflows of $17.3 billion, which equates to four percent internal growth in managed assets (consolidated net inflows divided by beginning-of-period consolidated assets under management) and five percent internal growth in management fee revenue (management fees attributable to consolidated inflows less management fees attributable to consolidated outflows, divided by beginning-of-period consolidated management fee revenue). For comparison, the Company realized 11 percent internal growth in managed assets and seven percent growth in management fee revenue in fiscal 2017. This fiscal year marked our 23rd consecutive year of positive net flows. Net inflows in fiscal 2018 were led by Parametric Portfolio Associates (Parametric) Custom Core™ equity separate accounts, with net inflows of $10.4 billion, Eaton Vance Management (EVM) laddered municipal and corporate bond strategies ($6.3 billion), EVM floating-rate bank loans ($5.9 billion) and EVM privately offered equity funds ($2.5 billion). In its first full year as part of Eaton Vance, Calvert Research and Management (Calvert) contributed net inflows of $1.9 billion. Leading sources of net outflows in fiscal 2018 were Parametric’s exposure management (-$8.3 billion), systematic emerging market equity (-$2.6 billion) and centralized portfolio management (-$2.3 billion) offerings. Excluding exposure management, whose flows are more variable and fee rates are lower than the rest of our business, our consolidated net inflows for the fiscal year were $25.6 billion, nearly matching fiscal 2017’s record flow results. 2018 Annual Report | 4

Contributing to the Company’s net inflows in fiscal 2018 was strong investment performance across a broad range of asset classes and strategies. As of October 31, 2018, 66 Calvert, Eaton Vance and Parametric U.S. mutual funds were rated four or five stars by Morningstar for at least one class of shares, including 28 five star-rated funds. At the end of fiscal 2018, 46 percent of our U.S. mutual fund assets ranked in the top quartile of their Morningstar categories for total-return performance net of expenses over one year, 50 percent in the top quartile over three years, 63 percent in the top quartile over five years and 56 percent in the top quartile over 10 years. The Company finished fiscal 2018 with consolidated assets under management of $439.3 billion, up four percent from $422.3 billion at the end of fiscal 2017, reflecting the $17.3 billion of consolidated net inflows and market price declines in managed assets of $0.4 billion in fiscal 2018. In October, our board of directors voted to increase the Company’s quarterly dividend by 13 percent to an annual rate of $1.40 per share, marking the 38th consecutive fiscal year that we have raised our regular quarterly dividend. During fiscal 2018, the Company repurchased and retired approximately 5.6 million shares of non-voting common stock for $287 million and paid $145 million of dividends to shareholders. At fiscal year-end, we held $874 million of cash, cash equivalents and short-term debt securities and maintained seed investments in sponsored funds and separate accounts of $359 million. The Company’s outstanding debt obligations at the end of the fiscal year were $625 million. Eaton Vance was again recognized this year as one of the “Top Places to Work in Massachusetts,” based on the results of a confidential survey of company employees sponsored by The Boston Globe. We ranked first among investment managers, and are among a handful of Massachusetts companies to be recognized ten or more times since the survey’s inception in 2008. In fiscal 2018, we expanded our commitment to attracting, developing and retaining a diverse workforce and fostering inclusive work environments across the Company. Ingrid Jacobs joined Eaton Vance as Chief Diversity Officer to lead the Company’s initiatives in support of these objectives. In fiscal 2018, we expanded our commitment to attracting, developing and retaining a diverse workforce and fostering inclusive work environments across the Company.

Each year in the life of a growing, successful company brings changes in leadership. The most significant leadership change at Eaton Vance this year was the retirement in May of Jeff Beale, our longtime Chief Administrative Officer. Beyond his functional responsibilities overseeing the Company’s information technology, operations, fund administration, human resources and facilities management, Jeff spearheaded the Company’s community engagement activities and served as leading shepherd of the Eaton Vance culture and core values. Jeff contributed immeasurably to the Company’s growth and success over the past 25 years, and he will be greatly missed. Replacing Jeff as Chief Administrative Officer is Dan Cataldo, who joined Eaton Vance in 1984 and has served as Treasurer since 2012. The Company is fortunate to have a leader of Dan’s experience and capabilities to assume Jeff’s responsibilities. We are pleased to welcome Dr. Paula Johnson, President of Wellesley College, as a new member of the Eaton Vance board of directors. Paula brings to our board broad leadership experience and a record of exceptional accomplishment in education, medicine, public health and public policy. We look forward to benefiting from her oversight and guidance. 2018 Annual Report | 5

Although the Company achieved strong earnings growth and good business and investment results in fiscal 2018, that success did not translate into favorable stock price performance. After a fiscal year in which holders of Eaton Vance non-voting common stock realized returns of 47.6 percent, returns on our stock fell to -8.5 percent in fiscal 2018. This compares to an average total return of -13.5 percent for our peer group of U.S. publicly traded asset managers over the same period. As of fiscal year-end, our stock returns also exceeded the average of peer asset managers over the past three, five and 10 years. We attribute the Company’s outperformance versus peer managers to our higher historical growth rates and comparatively favorable strategic position. While fiscal 2018 was a period of strong business performance for Eaton Vance, declining valuations of our stock and those of peer companies over recent months portend more challenging times ahead.

Over the year ended October 31, 2018, Eaton Vance and nearly all of our asset management peers underperformed the S&P 500 Index, which returned 7.3 percent for the period. Measured as of the same date, U.S. asset management stocks also underperformed the broad market over longer-term periods, reflecting a decline in industry valuations amid reduced expectations for revenue and profit growth in the face of intensifying competition. While fiscal 2018 was a period of strong business performance for Eaton Vance, declining valuations of our stock and those of peer companies over recent months portend more challenging times ahead. To support the Company’s continuing success in a more difficult industry environment, we are pursuing five primary strategic priorities: building upon and defending our leadership positions in specialty strategies and services for high-net-worth and institutional investors; expanding our market position in floating-rate and short-duration fixed income strategies; growing in responsible investing; increasing our global investment capabilities and distribution outside the U.S.; and capitalizing on opportunities arising from the transformation of asset management. Our specialty strategies and services for high-net-worth and institutional investors include market-leading positions in custom indexing (through Parametric Custom Core), municipal and corporate laddered bond separate accounts, portfolio overlay services, centralized implementation of multi-manager portfolios and concentrated stock solutions. Among these businesses, leading growth drivers include Parametric Custom Core equity and EVM laddered bond separate accounts. As potential advantages over index mutual funds and exchange- traded funds (ETFs), Custom Core separate accounts provide clients with the ability to tailor their market exposures to achieve better tax outcomes and to reflect client-specified responsible investing criteria and other desired portfolio tilts and exclusions. EVM’s laddered bond separate accounts employ a rules-based approach to constructing and managing fixed income portfolios with customized maturity and credit profiles. On a combined basis, Parametric Custom Core equity and EVM laddered bond separate accounts offered to retail and high-net-worth investors realized net inflows of $14.8 billion in fiscal 2018, driving 24 percent growth in managed assets to $84.3 billion at fiscal year-end. While we expect increased competition in these fast-growing markets, we are committed to maintaining our leadership position and believe the potential opportunity remains enormous. As part of our growth plan, we expect to introduce an array of enhanced features and complementary strategies in fiscal 2019. 2018 Annual Report | 6

One of the most significant changes in the investment landscape over recent quarters has been the Federal Reserve’s move to a less-accommodating monetary policy. After eight years of benchmark U.S. short-term interest rates hovering near zero, yields on three-month Treasuries rose approximately two percent over the two years ended October 31, 2018 to close our fiscal 2018 at 2.34 percent. With higher yields on short-term income instruments and growing concerns about the prospects for equities and long-term bonds, investors are increasingly looking to add exposure to floating-rate and short-duration fixed income instruments. Given Eaton Vance’s leadership position in floating-rate bank loans and our While market stresses and economic pressures create uncertainties for some of our investment franchises, they provide growth opportunities for others. broad lineup of short and ultra-short duration and adjustable-rate fixed income strategies, we believe we are ideally positioned to meet this market demand. Among our leading offerings in this category, we are particularly optimistic about the prospects for Eaton Vance Short- Duration Government Income Fund. Over the course of fiscal 2018, this five star-rated mutual fund attracted net inflows of $1.2 billion, growing from $550 million to $1.7 billion of net assets. While market stresses and economic pressures create uncertainties for some of our investment franchises, they provide growth opportunities for others. Upon the acquisition of the Calvert business in December 2016, Eaton Vance moved to a leadership position in responsible investing. With a history in responsible investing dating back to 1982, the Calvert Funds are one of the largest and most diversified families of responsibly invested mutual funds, encompassing actively and passively managed equity, fixed and floating-rate income, and multi-asset strategies. Since Calvert became part of Eaton Vance, we have made significant progress growing managed assets in Calvert-branded investment strategies and positioning Calvert as a center for excellence in environmental, social and governance (ESG) research and engagement. Including the Calvert Equity Fund sub-advised by Atlanta Capital Management (Atlanta Capital), assets under management in Calvert strategies grew to $14.7 billion at October 31, 2018 from $11.9 billion at the time of acquisition, an increase of 24 percent in just 20 months. While Calvert sits at the middle of our responsible investment strategy, our commitment to responsible investing does not end there. In fiscal 2018, we launched a program to integrate consideration of responsible investing criteria into EVM’s fundamental research processes using Calvert’s proprietary ESG research. Atlanta Capital also maintains a significant focus on responsible investing, and Parametric manages over $20 billion of client assets based on client-directed responsible investment criteria. On an overall basis, Eaton Vance is one of the largest participants in responsible investing, a position we are committed to growing in conjunction with surging market demand for investment strategies that achieve both favorable returns and positive societal impact. Outside the U.S., the Company continues to expand investment staff and commit additional client service and distribution resources to support business growth. In addition to owning 49 percent of Montreal-based global equity manager Hexavest, we now have nearly 75 employees in five non-U.S. office locations. In fiscal 2018, we added a new global income investment team in Frankfurt, Germany, and expanded our Tokyo office to support a growing roster of clients in Japan. Assets managed for clients outside the U.S. increased to $24.9 billion at October 31, 2018 from $24.2 billion at the end of fiscal 2017, reflecting approximately 2018 Annual Report | 7

$750 million of net inflows in fiscal 2018. With non-U.S. clients accounting for only five percent of our consolidated managed assets and four percent of management fee revenue, we see significant opportunities for Eaton Vance to grow internationally. While constant change has long been a hallmark of the investment industry, the pace of change appears to be accelerating. We see this in changing market conditions and demographic trends, shifts in investor sentiment and outlook, advances in information technology, changes in the business strategies of key intermediaries and gatekeepers, and new tax and regulatory initiatives. Over recent years, we have seen a marked shift in investor demand from actively managed strategies to lower-cost index mutual funds and ETFs and other passive investments. Within both active and passive management, price competition has increased. Asset management industry revenue growth has become increasingly reliant on price appreciation of managed assets, with fallout effects felt by every industry participant. Not only are stock prices of public asset managers down, but investment managers of all descriptions are being pressured to examine their cost structures and revisit their business strategies. Long-predicted investment industry consolidation is beginning to happen. Eaton Vance has been built with staying power, not only to carry us through challenging times, but to emerge from periods of difficulty a stronger and better company.

Amid these challenging times, we see ample opportunities for Eaton Vance to capitalize on. As financial intermediaries narrow the list of asset managers and investment strategies they represent, business opportunities for the surviving incumbents go up, not down. As valuations of asset management businesses decline, the potential to improve our strategic position and support business growth through targeted acquisitions also increases. Industry disruption likewise creates opportunities for business strategy and product innovation, long a hallmark of our Company. Eaton Vance has been built with staying power, not only to carry us through challenging times, but to emerge from periods of difficulty a stronger and better company. As we enter fiscal 2019, I continue to believe that Eaton Vance is exceptionally well-positioned to meet the challenges and opportunities presented by a changing asset management industry. Our success, as always, is based on the talents and dedication of the 1,764 Eaton Vance employees whose names are listed on the back of this report. Their capability and commitment are the source of my optimism for the Company’s future. Sincerely,

Thomas E. Faust Jr. Chairman and Chief Executive Officer 2018 Annual Report | 8 2018 Annual Report | 9 2018 Annual Report | 10

Historical Stock Returns

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.

Eaton Vance Corp. Value of $1,000 invested April 30, 1979

$10,000,000

$3,176,077

1,000,000

100,000

10,000

1,000 4/79 10/85 10/90 10/95 10/00 10/05 10/10 10/18

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

Best-Performing Publicly Traded U.S. Stocks April 30, 1979 to October 31, 2018

Rank Company Annual Return 1 Eaton Vance Corp. 22.6% 2 Helen of Troy Limited 22.4 3 Progressive Corporation 22.3 4 TJX Companies Inc. 22.2 5 Hasbro, Inc. 21.4 S&P 500 Index 11.7 Total return with dividends reinvested. Source: FactSet. 2018 Annual Report | 11

Assets under Management as of October 31, 2018

Consolidated Total: $439.3 billion

by Investment Mandate (in billions) by Investment Affiliate (in billions)

Hexavest $13.81 100% Alternative $12.1 100% Calvert Research and Management $12.42 Atlanta Capital $23.4 Floating-Rate Income $44.8

80 80

Fixed Income $77.8

60 60 Exposure Management $77.9

40 40 Parametric $224.2

Portfolio Implementation $110.8

20 20

0 Equity $115.8 0 Eaton Vance Management $179.33

by Investment Vehicle (in billions)

Closed-End Funds $24.0

Private Funds $38.5 $154.0 Institutional Separate Accounts

High-Net-Worth Separate Accounts $44.7

Retail Managed Accounts $75.6 $102.4 Open-End Funds

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 $3.0 billion of Calvert-sponsored funds managed by third-party advisers under Calvert supervision; excludes $2.3 billion of managed assets of the Calvert Equity Fund, for which Atlanta Capital serves as subadviser. 3Includes managed assets of Eaton Vance Investment Counsel, Eaton Vance Trust Company and Boston Management and Research. Also includes $2.3 billion of Eaton Vance-sponsored funds and accounts managed by Hexavest and unaffiliated third-party advisers under Eaton Vance supervision. 2018 Annual Report || 12

Eaton Vance Investment Affiliates

Fundamental active managers Eaton Vance provides advanced History dating to 1924 | AUM: $179.3 billion1 investment strategies and wealth management solutions to forward- Equity Floating-Rate Income thinking investors around the world. Dividend/Global Dividend Floating-Rate Loan Emerging/Frontier Markets Taxable Fixed Income Through our five primary investment Equity Option Cash Management affiliates, we offer a diversity of Global Developed Global ex U.S. Core Bond/Core Plus investment approaches, encompassing Global ex U.S. Small-Cap Emerging-Markets Debt bottom-up and top-down fundamental Global Small-Cap Global active management, responsible Health Care High Yield investing, systematic investing and Large-Cap Core Inflation-Linked Investment-Grade Corporate customized implementation of Large-Cap Growth Laddered Corporate client-specified portfolio exposures. Large-Cap Value Multi-Cap Growth Mortgage-Backed Securities Real Estate Multi-Asset Credit Small-Cap Multisector Small/Mid-Cap Preferred Securities Tax-Managed Short Duration Taxable Municipal The following third-party organizations provide investment management services Alternative as subadvisers to certain Eaton Vance- and Commodity Municipal Income/ Calvert-sponsored mutual funds: Currency Tax-Advantaged Laddered Municipal Eaton Vance Funds Global Macro Hedged Equity Municipal Income BMO Global Asset Management (Asia) Floating Rate Goldman Sachs Asset Management Multi-Asset High Yield National OakTree Capital Management Asset Allocation Balanced State-Specific Richard Bernstein Advisors Global Diversified Income Opportunistic Municipal Calvert Funds Tax-Advantaged Bond Ameritas Investment Partners Hermes Investment Management Milliman Financial Risk Management

Eaton Vance and affiliates as of 10/31/2018.

1Includes managed assets of Eaton Vance Investment Counsel, Eaton Vance Trust Company and Boston Management and Research. Also includes managed assets of Eaton Vance-sponsored funds and separate accounts managed by Hexavest and unaffiliated third-party advisers under Eaton Vance supervision. 2018 Annual Report | 13

Investment science in action Specialists in high-quality investing Founded in 1987 | AUM: $224.2 billion Founded in 1969 | AUM: $23.4 billion2

Equity Alternative Equity Taxable Fixed Income Dividend Commodity Large-Cap Growth Core Bond Emerging Markets Mid-Large Cap Intermediate Duration Global Income Small-Cap Short Duration Global ex U.S. Enhanced Income SMID-Cap Responsible Implementation Tax-Managed Centralized Portfolio Management U.S. Custom Core™

Options Exposure Management Absolute Return Policy Overlay Services Covered Calls Defensive Equity Dynamic Hedged Equity Put Selling

Top-down global equity managers A global leader in Responsible Investing Founded in 2004 | AUM: $13.8 billion3 History dating to 1976 | AUM: $12.4 billion2,4

Equity Active Equity Alternative Canadian Emerging Markets Absolute Return Bond Emerging Markets Global ex U.S. Global – All Country Global ex U.S. Small/Mid-Cap Multi-Asset Global – Developed Large-Cap Asset Allocation Global ex U.S. Mid-Cap Balanced Small-Cap Floating-Rate Income Equity Index Floating-Rate Loan Global Energy Taxable Fixed Income Global ex U.S. Core/Core Plus Global Water Green Bond U.S. Large-Cap Core High Yield U.S. Large-Cap Growth Long Duration U.S. Large-Cap Value Short Duration/Ultra-Short U.S. Mid-Cap Core Tax-Exempt Income Municipal

2The managed assets of Atlanta Capital include the assets of Calvert Equity Fund, for which Atlanta Capital serves as subadviser. The total managed assets of Calvert, including assets subadvised by other Eaton Vance affiliates, were $14.7 billion as of October 31, 2018. 3Eaton Vance holds a 49 percent interest in Hexavest. 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. 4Includes managed assets of Calvert-sponsored funds and separate accounts managed by unaffiliated third-party advisers under Calvert supervision. 2018 Annual Report | 14

Key Statistics

Fiscal Year Ended October 31, 2018 2017 % Change (in $ millions, except per share and employee amounts)

Ending assets under management 439,303 422,316 4%

Average assets under management 442,388 382,392 16%

Gross inflows 156,453 168,251 -7%

Net inflows 17,341 37,834 -54%

Revenue 1,702 1,529 11%

Operating income 555 483 15%

Operating income margin 32.6% 31.6% 3%

Net income attributable to Eaton Vance Corp. shareholders 382 282 35%

Adjusted net income attributable to Eaton Vance Corp. shareholders1 394 288 37%

Earnings per diluted share 3.11 2.42 29%

Adjusted earnings per diluted share1 3.21 2.48 29%

Dividends declared per share 1.28 1.15 11%

Cash and cash equivalents 601 611 -2%

Debt 620 619 0%

Employees 1,764 1,638 8%

Market capitalization 5,250 5,959 -12%

Eaton Vance Corp. consolidated totals.

1Although the Company reports its financial results in accordance with U.S. GAAP, management believes that certain non-U.S. GAAP financial measures, specifically, adjusted net income attributable to Eaton Vance Corp. shareholders and adjusted earnings per diluted share, while not a substitute for U.S. GAAP financial measures, may be effective indicators of the Company’s performance over time. Non-U.S. GAAP financial measures should not be construed to be superior to U.S. GAAP measures. In calculating these non-U.S. GAAP financial measures, net income attributable to Eaton Vance Corp. shareholders and earnings per diluted share are adjusted to exclude items management deems non-operating or non-recurring in nature, or otherwise outside the ordinary course of business. These adjustments may include, when applicable, the add back of 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, costs associated with special dividends, debt repayments and tax settlements, the tax impact of stock-based compensation shortfalls or windfalls, and non-recurring charges for the effect of the tax law changes. Management and our Board of Directors, as well as certain of our outside investors, consider these adjusted numbers a measure of the Company’s underlying operating performance. Management believes adjusted net income attributable to Eaton Vance Corp. shareholders and adjusted earnings per diluted share are important indicators of our operations because they exclude items that may not be indicative of, or are unrelated to, our core operating results, and may provide a useful baseline for analyzing trends in our underlying business. 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. 2018 Annual Report | | 15

Performance Trends

Assets Under Management (in billions) Gross Inflows (in billions) Net Inflows (in billions)

$500 $200 $40

400 150 30

300 100 20 200

50 10 100

0 0 0 '08 '13 '18 '08 '13 '18 '08 '13 '18

Revenue (in millions) Operating Income (in millions) Employees

$2,000 $600 2,000

1,500 1,500 400

1,000 1,000

200 500 500

0 0 0 '08 '13 '18 '08 '13 '18 '08 '13 '18

Earnings per Diluted Share Adjusted Earnings per Diluted Share1 Dividends per Share2

$3.50 $3.50 $2.50

2.80 2.80 2.00

2.10 2.10 1.50

1.40 1.40 1.00

0.70 0.70 0.50

0.00 0.00 0.00 '08 '13 '18 '08 '13 '18 '08 '13 '18

Eaton Vance Corp. consolidated totals.

1See footnote 1 on previous page. 2The Company declared and paid a special dividend of $1.00 per share in fiscal 2013. 2018 Annual Report | 16

Financial Review

Page

17 Five-Year Financial Summary

19 Management’s Discussion and Analysis of Financial Condition and Results of Operations

61 Consolidated Statements of Income

62 Consolidated Statements of Comprehensive Income

63 Consolidated Balance Sheets

64 Consolidated Statements of Shareholders’ Equity

67 Consolidated Statements of Cash Flows

69 Notes to Consolidated Financial Statements

124 Report of Independent Registered Public Accounting Firm

126 Investor Information

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 our 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) 2018 2017 2016 2015 2014

Income Statement Data: Total revenue $ 1,702,249 $ 1,529,010 $ 1,342,860 $ 1,403,563 $ 1,450,294 Operating Income(1) 555,202 482,758 414,268 400,447 519,857 Net income(1) 397,905 306,373 264,757 238,191 321,164 Net income attributable to non-controlling and other beneficial interests(2) 15,967 24,242 23,450 7,892 16,848 Net income attributable to Eaton Vance Corp. shareholders(1) 381,938 282,131 241,307 230,299 304,316 Adjusted net income attributable to Eaton Vance Corp. shareholders(3) 394,138 288,187 242,908 274,990 309,627

Balance Sheet Data: Total assets(4)(5) $ 3,599,328 $ 2,330,901 $ 1,730,382 $ 2,113,737 $ 1,856,814 Debt(5)(6) 619,678 618,843 571,773 571,077 570,382 Redeemable non-controlling interests (temporary equity) 335,097 250,823 109,028 88,913 107,466 Total Eaton Vance Corp. shareholders' equity 1,107,431 1,011,396 703,789 620,231 655,176 Non-redeemable non-controlling interests 1,000 864 786 1,725 2,305 Total permanent equity 1,108,431 1,012,260 704,575 621,956 657,481

Per Share Data: Earnings per share: Basic $ 3.33 $ 2.54 $ 2.20 $ 2.00 $ 2.55 Diluted 3.11 2.42 2.12 1.92 2.44 Adjusted diluted(3) 3.21 2.48 2.13 2.29 2.48 Cash dividends declared 1.280 1.150 1.075 1.015 0.910

17

(1) Operating income, net income and net income attributable to Eaton Vance Corp. shareholders reflect 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 $0.5 million, $0.2 million, $(0.2) million and $5.3 million in the estimated redemption value of non-controlling interests in our affiliates redeemable at other than fair value in fiscal 2017, 2016, 2015 and 2014, respectively. There were no holders of non-controlling interests in our affiliates redeemable at other than fair value in fiscal 2018. Net income attributable to non-controlling and other beneficial interests also includes net income (loss) of $9.8 million, $(5.8) million and $(4.1) million, respectively, in fiscal 2016, 2015, and 2014 attributable to other beneficial interest holders of consolidated CLO entities. The net income (loss) of consolidated CLO entities in fiscal 2018 and 2017 was entirely attributable to the Company. (3) Although the Company reports its financial results in accordance with U.S. generally accepted accounting principles (U.S. GAAP), management believes that certain non-U.S. GAAP financial measures, specifically, adjusted net income attributable to Eaton Vance Corp. shareholders and adjusted earnings per diluted share, while not a substitute for U.S. GAAP financial measures, may be effective indicators of the Company’s performance over time. Non-U.S. GAAP financial measures should not be construed to be superior to U.S. GAAP measures. In calculating these non-U.S. GAAP financial measures, net income attributable to Eaton Vance Corp. shareholders and earnings per diluted share are adjusted to exclude items management deems non-operating or non-recurring in nature, or otherwise outside the ordinary course of business. These adjustments may include, when applicable, the add back of 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, costs associated with special dividends, debt repayments and tax settlements, the tax impact of stock-based compensation shortfalls or windfalls, and non- recurring charges for the effect of the tax law changes. Management and our Board of Directors, as well as certain of our outside investors, consider these adjusted numbers a measure of the Company’s underlying operating performance. Management believes adjusted net income attributable to Eaton Vance Corp. shareholders and adjusted earnings per diluted share are important indicators of our operations because they exclude items that may not be indicative of, or are unrelated to, our core operating results, and may provide a useful baseline for analyzing trends in our underlying business. 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, 2018, 2017, 2015 and 2014 include $1.1 billion, $31.3 million, $467.1 million and $156.5 million of assets held by consolidated CLO entities, respectively. The Company did not consolidate any CLO entities as of October 31, 2016. (5) In fiscal 2017, the Company adopted Accounting Standard Update 2015-03, which requires certain debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability. Total assets and debt were each reduced by $2.2 million, $2.7 million and $3.3 million as of October 31, 2016, 2015 and 2014, respectively, to reflect the reclassification of debt issuance costs from other assets to debt. (6) In fiscal 2017, the Company issued $300 million of 3.5 percent Senior Notes due April 2027 and used the net proceeds from the issuance in part to retire the remaining $250 million aggregate principal amount of its 6.5 percent Senior Notes due October 2017. The Company recognized a loss on extinguishment of debt totaling $5.4 million in conjunction with the retirement in fiscal 2017.

18

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Oerie

Our principal usiness is managing inestment funds and proiding inestment management and adisory serices to highnetworth indiiduals and institutions Our core strategy is to deelop and sustain management epertise across a range of inestment disciplines and to offer leading inestment strategies and serices through multiple distriution channels n eecuting our core strategy we hae deeloped roadly diersified inestment management capailities and a highly functional mareting distriution and customer serice organiation e measure our success as a Company ased on inestment performance deliered client satisfaction reputation in the maretplace progress achieing strategic ojecties employee deelopment and satisfaction usiness and financial results and shareholder alue created

e conduct our inestment management and adisory usiness through wholly and majorityowned inestment affiliates which include aton ance Management arametric ortfolio Associates C arametric Atlanta Capital Management Company C Atlanta Capital and Calert Research and Management Calert e also offer inestment management adisory serices through minorityowned affiliate eaest nc eaest

hrough aton ance Management Atlanta Capital Calert and our other affiliates we manage actie euity income and alternatie strategies across a range of inestment styles and asset classes including and gloal euities floatingrate an loans municipal onds and gloal income highyield and inestment grade onds hrough arametric we manage a range of systematic inestment strategies including systematic euity systematic alternaties and managed options strategies hrough arametric we also proide custom portfolio implementation and oerlay serices including tamanaged and nontamanaged Custom Core euity strategies centralied portfolio management of multimanager portfolios and eposure management serices e also oersee the management of and distriute inestment funds suadised y unaffiliated thirdparty managers including gloal emerging maret and regional euity and asset allocation strategies

Our readth of inestment management capailities supports a wide range of strategies and serices offered to fund shareholders retail managed account inestors institutional inestors and highnetworth clients Our euity strategies encompass a diersity of inestment ojecties ris profiles income leels and geographic representation Our income inestment strategies coer a road duration geographic representation and credit uality range and encompass oth taale and municipal inestments e also offer a range of alternatie inestment strategies including asolute return and commodity and currencyased inestments Although we manage and distriute a wide range of inestment strategies and serices we operate in one usiness segment namely as an inestment adiser to funds and separate accounts As of Octoer we had illion in consolidated assets under management

e distriute our funds and retail managed accounts principally through financial intermediaries e hae road maret reach with distriution partners including national and regional roerdealers independent roerdealers registered inestment adisors ans and insurance companies e support these distriution partners with a team of approimately sales professionals coering and international marets

e also commit significant resources to sering institutional and highnetworth clients who access inestment management serices on a direct asis and through inestment consultants hrough our whollyand majority owned affiliates and consolidated susidiaries we manage inestments for a road range of clients in the

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institutional and highnetworth maretplace in the and internationally including corporations soereign wealth funds endowments foundations family offices and pulic and priate employee retirement plans

Our reenue is deried primarily from management distriution and serice fees receied from aton ance arametric and Calertranded funds and management fees receied from separate accounts Our fees are ased primarily on the alue of the inestment portfolios we manage and fluctuate with changes in the total alue and mi of assets under management As a matter of course inestors in our sponsored openend funds and separate accounts hae the aility to redeem their inestments at any time without prior notice and there are no material restrictions that would preent them from doing so Our major epenses are employee compensation distriutionrelated epenses serice fee epense fundrelated epenses facilities epense and information technology epense

Our discussion and analysis of our financial condition results of operations and cash flows is ased upon our Consolidated Financial tatements which hae een prepared in accordance with accounting principles generally accepted in the nited tates of America AA he preparation of these financial statements reuires us to mae estimates and judgments that affect the reported amounts of assets liailities reenue and epenses and related disclosures of contingent assets and liailities On an ongoing asis we ealuate our estimates including those related to goodwill and intangile assets income taes inestments and stoc ased compensation e ase our estimates on historical eperience and on arious assumptions that we eliee to e reasonale under current circumstances the results of which form the asis for maing judgments aout the carrying alues of assets and liailities that are not readily aailale from other sources Actual results may differ from these estimates

usiness Deelopments

e are pursuing fie primary strategic priorities to support usiness growth uilding upon and defending our leadership position in specialty strategies and serices for highnetworth and institutional inestors capitaliing on the current interest enironment to grow our maret position in floatingrate and short duration fied income strategies epanding our leadership position in responsile inesting increasing our gloal inestment capailities and distriution reach outside the nited tates and positioning aton ance to profit from a changing enironment for the asset management industry

n fiscal we continued to eperience strong growth in our Custom eta strategies which include Parametric’s Custom Core equity and Eaton Vance’s laddered municipal and corporate bond separate account strategies hese maretleading offerings comine the enefits of passie inesting with the aility to customie portfolios to meet indiidual preferences and needs Compared to inde mutual funds and echangetraded funds Custom Core separate accounts can proide clients with the aility to tailor their maret eposures to achiee etter ta outcomes and to reflect clientspecified responsile inesting criteria and desired portfolio tilts and eclusions n fiscal net inflows into our Custom eta strategies offered as retail managed accounts and highnetworth separate accounts totaled illion

Our lineup of floatingrate and shortduration fied income strategies demonstrated strong appeal to inestors in the rising interest rate enironment of fiscal n fiscal net inflows into our floatingrate an loan strategies totaled illion primarily drien y strong sales of our floatingrate income mutual funds offered in the a maret in which we are the maret leader Our lineup of fied income mutual funds positioned as short or ultrashort duration shortterm or adjustalerate generated illion of net inflows in fiscal Among our leading funds in this category are the highly rated aton ance hortDuration oernment ncome aton ance hortDuration Municipal Opportunities and aton ance hortDuration

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nlationProtected ncome unds ic are ellsuited or income inestors o ae limited appetite or interest rate ris

ur leadersip position in responsible inestin continues to epand e Calert unds are one o te larest and most diersiied amilies o responsibly inested mutual unds encompassin actiely and passiely manaed equity ied and loatinrate income and asset allocation strateies manaed in accordance it te Calert Principles or esponsible nestment or oter responsible inestment criteria ince Calert became part o Eaton Vance e ae made siniicant proress roin manaed assets in Calertbranded inestment strateies and positionin Calert as a center or ecellence in enironmental social and oernance E researc and enaement ncludin te tlanta Capitalsubadised Calert Equity und assets under manaement in Calert strateies re to billion at ctober rom billion at ctober relectin net inlos o billion and maret price declines o billion

ile Calert is te centerpiece o our responsible inestment stratey our commitment to responsible inestin does not end tere n iscal Eaton Vance anaement launced a proram to interate consideration of responsible investing criteria into the firm’s fundamental research processes capitaliin on Calvert’s proprietary ESG research. Atlanta Capital also maintains a significant focus on responsible investing, and Parametric manaes oer billion o client assets based on clientdirected responsible inestment criteria n an oerall basis Eaton Vance is one o te larest participants in responsible inestin a position e are committed to roin in conunction it risin demand or inestment strateies tat incorporate Einterated inestment researc andor are manaed it a dual obectie to aciee aorable inestment returns and positie societal impact

utside te nited tates te Company continues to epand inestment sta and commit additional client serice and distribution resources to support business rot e no ae nearly employees located in ie non oice locations an increase o percent rom te end o iscal n iscal EV ired a ieperson lobal iedincome team in ranurt ermany and epanded our oyo oice to support clients in apan ssets manaed or clients outside te increased to billion at ctober rom billion at ctober relectin positie net los o billion in iscal

ile cane is a constant in te asset manaement industry te pace o cane appears to be acceleratin e see tis in canin maret conditions and demorapic trends sits in inestor sentiment and outloo adances in inormation tecnoloy canes in te business strateies o ey intermediaries and ateeepers and ne ta and reulatory initiaties rou canin maret conditions e strie to anticipate te eolin needs o inestors and to deelop timely solutions to address teir needs Positionin te Company or continued success amid acceleratin cane is te primary ocus o our strateic initiaties

Consolidated Assets under Management

Preailin equity and income maret conditions and inestor sentiment aect te sales and redemptions o our inestment oerins manaed asset leels operatin results and te recoerability o our inestments urin iscal te P nde a broad measure o equity maret perormance ad total returns o percent and te C Emerin aret nde a broad measure o emerin maret equity perormance ad total returns o percent er te same period te arclays reate ond nde a broad measure o bond maret perormance ad total returns o percent

Consolidated assets under manaement o billion on ctober increased billion or percent rom billion o consolidated assets under manaement on ctober e yearoer

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year increase in consolidated assets under management reflects net inflos of . billion and maret price declines in managed assets of . billion. Consolidated net inflos of . billion in fiscal represent a percent internal groth rate in managed assets consolidated net inflos divided by beginning of period consolidated assets under management. or comparison, the Company had consolidated net inflos of . billion and . billion in fiscal and , respectively, representing percent and percent internal groth in managed assets, respectively. Average consolidated assets under management increased . billion, or percent, to . billion for the fiscal year ended ctober , from . billion for the fiscal year ended ctober , . or the fiscal year ended ctober , , average consolidated assets under management ere . billion.

he folloing tables summarie our consolidated assets under management by investment mandate, investment vehicle and investment affiliate as of ctober , , and . ithin the investment mandate table, the “Portfolio implementation” category consists of arametric Custom Core euity strategies and centralized portfolio management services, and the “Exposure management” category consists of Parametric’s futures and optionsbased portfolio overlay services.

Consolidated Assets under Management by Investment Mandate (1)

Octoer of of of s s in millions otal otal otal Euity , , , ied income , , , loatingrate income , , , Alternative , , , ortfolio implementation , , , Eposure management , , , otal , , ,

Consolidated aton ance Corp. ee table on page for directly managed assets and flows of percent owned eavest, which are not included in the table above. ncludes balanced and other multiasset mandates. ncludes cash management mandates.

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Euity assets under management included billion, billion and billion of assets managed for aftertax returns on ctober , , and , respectively Portfolio implementation assets under management included billion, billion and billion of assets managed for aftertax returns on ctober , , and , respectively ixed income assets included billion, billion and billion of municipal income assets on ctober , , and , respectively

Consolidated Assets under Management by Investment Vehicle(1)

Octoer of of of s s in millions otal otal otal penend funds , , , losedend funds , , , Private funds , , , nstitutional separate accounts , , , ighnetorth separate accounts , , , etail managed accounts , , , otal , , ,

Consolidated aton ance Corp. ee table on page for directly managed assets and flows of percent owned eavest, which are not included in the table above. ncludes assets in ethares funds. ncludes privately offered euity, fied income and floatingrate income funds and C entities.

he folloing table summarizes our assets under management by investment affiliate as of ctober , , and

Consolidated Assets under Management by Investment Affiliate(1) Octoer s s in millions Eaton ance anagement , , , Parametric , , , tlanta apital , , , alvert esearch and anagement , , otal , , ,

Consolidated aton ance Corp. ee table on page for directly managed assets and flows of percent owned eavest, which are not included in the table above. ncludes managed assets of aton ancesponsored funds and separate accounts managed by eavest and unaffiliated thirdparty advisers under aton ance supervision. Consistent with the Companys policies for reporting the managed assets and flows of investment portfolios for which multiple aton ance affiliates have management responsibilities, the managed assets of Atlanta Capital indicated above include the assets of Calvert uity Fund, for which Atlanta Capital serves as subadviser. he total managed assets of Calvert esearch and Management, including assets subadvised by other aton ance affiliates, were . billion and . billion as of ctober , and , respectively. ncludes managed assets of Calvertsponsored funds and separate accounts managed by unaffiliated thirdparty advisers under Calvert supervision. ot meaningful M.

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onsolidated average assets under management presented in the folloing tables are derived by averaging the beginning and ending assets of each month over the period he tables are intended to provide information useful in the analysis of our assetbased revenue and distribution expenses eparate account management fees are generally calculated as a percentage of either beginning, average or ending uarterly assets und management, distribution and service fees, as ell as certain expenses, are generally calculated as a percentage of average daily assets

Consolidated Average Assets under Management by Investment Mandate(1) ears nded Octoer s s in millions Euity , , , ixed income , , , loatingrate income , , , lternative , , , Portfolio implementation , , , Exposure management , , , otal , , ,

Consolidated aton ance Corp. ee table on page for directly managed assets and flows of percentowned eavest, which are not included in the table above. ncludes balanced and other multiasset mandates. ncludes cash management mandates.

Consolidated Average Assets under Management by Investment Vehicle(1) ears nded Octoer s s in millions penend funds , , , losedend funds , , , Private funds , , , nstitutional separate accounts , , , ighnetorth separate accounts , , , etail managed accounts , , , otal , , ,

Consolidated aton ance Corp. ee table on page for directly managed assets and flows of percentowned eavest, which are not included in the table above. ncludes assets in ethares funds. ncludes privately offered euity, fied income and floatingrate income funds and C entities.

Consolidated et Flos

onsolidated net inflos of billion during fiscal represent percent annualized internal groth in managed assets consolidated net inflos divided by beginning of period consolidated assets under management or comparison, the ompany had consolidated net inflos of billion and billion in fiscal and , respectively, representing annualized internal groth in managed assets of percent and percent in fiscal and , respectively Excluding exposure management mandates, hich have

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loer fees and more variable flos than the rest of our business, the Company’s annualized internal growth rate in managed assets as percent, percent and percent in fiscal , , and , respectively The Company’s annualized internal management fee revenue growth rate (management fees attributable to consolidated inflos less management fees attributable to consolidated outflos, divided by beginning of period consolidated management fee revenue as percent, percent and percent in fiscal , and , respectively, as the management fee revenue contribution from ne sales and other inflos during each of these years exceeded the management fee revenue lost from redemptions

he folloing tables summarize our consolidated assets under management and asset flos by investment mandate and investment vehicle for the fiscal years ended ctober , , and

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(1) Consolidated Assets under Management and Net Flows by Investment Mandate ears nded Octoer s s in millions uity assets beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows , , ( ssets auired , hanges ( aret value hange , , uity assets end of period ied inome assets beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows , , , ssets auired , hanges ( aret value hange (, Fied income assets end of period loatingrate inome assets beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows , , (, hanges ( aret value hange Floatingrate income assets end of period lternative assets beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows , hanges ( ( ( aret value hange (, ( Alternatie assets end of period ortfolio implementation assets beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows , , , hanges ( ( aret value hange , , , ortfolio implementation assets end of period posure management assets end of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows (, , , aret value hange ( , , posure management assets end of period Total assets under management beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows , , , ssets auired , hanges ( ( aret value hange ( , , otal assets under management end of period

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Consolidated aton ance Corp. ee table on page for directly managed assets and flows of percentowned eavest, which are not included in the table above. henever presented, uity assets include balanced and other multiasset mandates. epresents managed assets gained in the acuisition of the business assets of Calvert nvestment Management, nc. Calvert nvestments on December , . uity assets acuired and total assets acuired eclude . billion of managed assets of Calvert uity Fund, which is subadvised by Atlanta Capital and whose managed assets were included in the Companys consolidated assets under management prior to the Calvert nvestments acuisition. henever presented, Fied ncome assets include cash management mandates. ncludes . billion of managed assets gained in assuming the fied income business assets of the former echsle nternational Advisors, C on anuary , .

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Consolidated Assets under Management and Net Flows by Investment Vehicle(1) ears nded Octoer s s in millions und assets beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows , , ssets auired , hanges , ( aret value hange (, , ( Fund assets end of period nstitutional separate aounts beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows (, , , ssets auired hanges (, aret value hange , , nstitutional separate accounts end of period ighnetworth separate aounts beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows , , hanges ( ( ( aret value hange , ignetort separate accounts end of period etail managed aounts beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows , , , ssets auired hanges ( ( ( aret value hange , , Retail managed accounts end of period Total assets under management beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows , , , ssets auired , hanges ( ( aret value hange ( , , otal assets under management end of period

Consolidated aton ance Corp. ee the table on page for directly managed assets and flows of percent owned eavest, which are not included in the table above. henever presented, Fund assets include assets of cash management funds. epresents managed assets gained in the acuisition of the business assets of Calvert nvestments on December , . Fund assets acuired and total assets acuired eclude . billion of managed assets of Calvert uity Fund, which is subadvised by Atlanta Capital and whose managed assets were included in the Company’s consolidated assets under management prior to the Calvert Investments acquisition. eflects the reclassification from institutional separate accounts to funds of . billion of managed assets of Calvert uity Fund subadvised by Atlanta Capital upon the Companys acuisition of the business assets of Calvert nvestments on December , . ncludes . billion of managed assets gained in assuming the fied income business assets of the former echsle nternational Advisors, C on anuary , .

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As of October 31, 2018, the Company’s 49 percentowned affiliate eavest n (eavest managed billion of lient assets, down perent from billion of managed assets on tober , ther than aton anesponsored funds for whih eavest is adviser or subadviser, the managed assets and flows of eavest are not inluded in aton ane’s onsolidated totals

The following table summarizes assets under management and net flows of eavest for the fisal years ended tober , , and

Hexavest Assets under Management and Net Flows ears nded Octoer s s in millions aton ance distriuted aton ane sponsored funds – beginning of period ales and other inflows edemptionsoutflows ( ( ( et flows ( ( ( aret value hange aton ance sponsored funds – end of period aton ane distributed separate aounts – beginning of period , , , ales and other inflows , edemptionsoutflows (, ( ( et flows ( ( aret value hange aton ance distriuted separate accounts – end of period , , , Total aton ane distributed – beginning of period , , , ales and other inflows , edemptionsoutflows (, (, ( et flows ( ( aret value hange otal aton ance distriuted – end of period eavest diretly distributed – beginning of period , , , ales and other inflows , , edemptionsoutflows (, (, (, et flows (, ( ( aret value hange ( , eaest directly distriuted – end of period , , , Total eavest assets – beginning of period , , , ales and other inflows , , , edemptionsoutflows (, (, (, et flows (, (, aret value hange , otal eaest assets – end of period

anaged assets and lows o aton ancesponsored pooled investment vehicles or which eavest is adviser or suadviser aton ance receives management ees and in some cases also distriution ees on these assets which are included in aton ances consolidated assets under management and lows anaged assets and lows o aton ancedistriuted separate accounts managed y eavest aton ance receives distriution ees ut not management ees on these assets which are not included in aton ances consolidated assets under management and lows anaged assets and lows o pretransaction eavest clients and posttransaction eavest clients in Canada aton ance receives no management ees or distriution ees on these assets which are not included in aton ances consolidated assets under management and lows

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n eaatn operatn performance, e conser net ncome attrbtabe to aton ance Corp sharehoers an earnns per te share, hch are cacate on a bass consstent th AA, as e as aste net ncome attrbtabe to aton ance Corp sharehoers an aste earnns per te share, both of hch are nternay ere non AA performance measres

anaement beees that certan non AA fnanca measres, specfcay, aste net ncome attrbtabe to aton ance Corp sharehoers an aste earnns per te share, he not a sbsttte for U.S. GAAP financial measures, may be effective indicators of the Company’s performance over time. Non AA fnanca measres sho not be constre to be speror to AA measres n cacatn these non AA fnanca measres, net ncome attrbtabe to aton ance Corp sharehoers an earnns per te share are aste to ece tems manaement eems nonoperatn or nonrecrrn n natre, or otherse otse the ornary corse of bsness hese astments may nce, hen appcabe, the a bac of chanes n the estmate reempton ae of noncontron nterests n or affates reeemabe at other than far ae noncontron nterest ae astments, coseen fn strctrn fees, costs assocate th speca ens, ebt repayments an ta settements, the ta mpact of stocbase compensaton shortfas or nfas, an nonrecrrn chares for the effect of ta a chanes anaement an or oar of rectors, as e as certan of or otse nestors, conser these adjusted numbers a measure of the Company’s underlying operating performance. Management believes aste net ncome attrbtabe to aton ance Corp sharehoers an aste earnns per te share are mportant ncators of or operatons becase they ece tems that may not be ncate of, or are nreate to, or core operatn rests, an may proe a sef basene for anayn trens n or neryn bsness

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he folloing table provides a reconciliation of net income attributable to aton ance Corp. shareholders and earnings per diluted share to adjusted net income attributable to aton ance Corp. shareholders and adjusted earnings per diluted share, respectively, for the fiscal years ended ctober , , and

in thousands ecept per share data

Net income attributable to aton ance Corp. shareholders , , , epatriation of undistributed earnings of foreign subsidiaries , NM NM Net ecess ta benefit from stocbased compensation plans , NM NM evaluation of deferred ta amounts , NM NM oss on riteoff of eavest option, net of ta , NM NM oss on etinguishment of debt, net of ta , NM Closedend fund structuring fees, net of ta , , Noncontrolling interest value adjustments Adjusted net income attributable to aton ance Corp. shareholders , , ,

arnings per diluted share . . . epatriation of undistributed earnings of foreign subsidiaries . NM NM Net ecess ta benefit from stocbased compensation plans . NM NM evaluation of deferred ta amounts . NM NM oss on riteoff of eavest option, net of ta . NM NM oss on etinguishment of debt, net of ta . NM Closedend fund structuring fees, net of ta . . Noncontrolling interest value adjustments . NM Adjusted earnings per diluted share . . .

elects the recognition o incremental ta epense related to the deemed repatriation o oreign earnings considered to e indeinitely reinvested aroad and not previously suect to taation under the a ct elects the impact o ccounting tandard pdate Improvements to mployee hareased ayment ccounting which was adopted in the irst quarter o iscal elects the revaluation o deerred ta assets and deerred ta liailities resulting rom the enactment o the a ct on ecemer elects the million loss recognied upon epiration o the Companys option to acquire an additional percent ownership interest in eavest net o the associated impact to taes o million elects the million loss on etinguishment o det associated with retiring the Companys enior otes in ay net o the associated impact to taes o million elects structuring ees o million net o the associated impact to taes o million paid in connection with the uly initial pulic oering o aton ance loatingate arget erm rust

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he percent increase in net income attributable to aton ance Corp. shareholders in fiscal compared to fiscal reflects

 An increase in revenue of . million, primarily reflecting a percent increase in management fees.  An increase in operating epenses of . million, reflecting higher compensation, distribution epense, service fee epense, amortiation of deferred sales commissions, fundrelated epenses and other operating epenses.  A decrease in nonoperating epense of . million, reflecting loer interest epense, an increase in income from our consolidated C entities and the onetime loss on etinguishment of debt recognied during fiscal , partially offset by a decrease in net gains and other investment income.  A decrease in income taes of . million.  An increase in euity in net income of affiliates, net of ta, of . million.  A decrease in net income attributable to noncontrolling and other beneficial interests of . million.

eighted average diluted shares outstanding increased by . million shares, or percent, in fiscal compared to fiscal , primarily reflecting the issuance of new shares in conjunction with employees’ eercise of stoc options, the vesting of restricted stoc aards granted to employees and groth in the amount of inthemoney uneercised options and unvested restricted stoc, partially offset by share repurchases.

he percent increase in net income attributable to aton ance Corp. shareholders in fiscal compared to fiscal reflects

 An increase in revenue of . million, primarily reflecting a percent increase in management fees.  An increase in operating epenses of . million, reflecting higher compensation, distribution epense, service fee epense, amortiation of deferred sales commissions, fundrelated epenses and other operating epenses.  An increase in nonoperating epense of . million, reflecting a decrease in income from our consolidated C entities and the onetime loss on etinguishment of debt recognied during fiscal , partially offset by an increase in net gains and other investment income and loer interest epense.  An increase in income taes of . million.  An increase in euity in net income of affiliates, net of ta, of . million.  An increase in net income attributable to noncontrolling and other beneficial interests of . million.

eighted average diluted shares outstanding increased by . million shares, or percent, in fiscal compared to fiscal , primarily reflecting the impact of employee stoc option eercises and vesting of restricted stoc, partially offset by share repurchases in fiscal , as ell as an increase in the dilutive effect of inthemoney options and unvested restricted stoc.

Revenue

ur revenue increased by percent in fiscal , reflecting higher management fees, distribution and underriter fees, service fees and other revenue.

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he following tale shows the components of our reenue for the fiscal years ene ctoer an

in thousands anagement fees istriution an unerwriter fees erice fees ther reenue otal reenue

anagement ees he increase in management fees of percent in fiscal an percent in fiscal is primarily attriutale to an increase in consoliate aerage assets uner management partially offset y a ecline in our consoliate aerage management fee rate ue primarily to changes in usiness mi onsoliate aerage assets uner management increase y percent an percent in fiscal an respectiely cluing performancease fees consoliate aerage annualie management fee rates ecrease to asis points in fiscal from asis points in fiscal an asis points in fiscal erformancease fees were million million an million in fiscal an respectiely hanges in consoliate aerage annualie management fee rates for the compare perios primarily reflect the ongoing shift in the Company’s mix of business towards investment mandates and istriution channels with lower fee rates

onsoliate aerage management fee rates ecluing performancease fees for the fiscal years ene ctoer an y inestment manate were as follows

in asis points on average managed assets uity ie income loatingrate income lternatie ortfolio implementation posure management onsoliate aerage management fee rates

onsoliate aerage assets uner management y inestment manate to which these fee rates apply can e found in the table, “Consolidated Average ssets uner anagement y nestment anate,” on page

istriution and underwriter ees istriution fees which are earne uner contractual agreements with certain sponsore funs are calculate as a percentage of an fluctuate with aerage assets uner management of the applicale funs an fun share classes istriution fees are pai y our sponsore funs to reimurse for the costs of mareting an selling fun shares hese fees are largely passe through after one year as istriution epense to thir

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party intermediaries who distribute our sponsored funds nderwriter fees and other distribution income primarily consists of underwriter commissions earned on sales of fund share classes subect to those fees, contingent deferred sales charges received on certain Class A redemptions and fundraising and servicing fees associated with the Charitable ift rust

und distribution and underwriter fee revenue and other fundrelated distribution income for the fiscal years ended ctober , , and were as follows

in thousands Class A , Class , Class C , , , Class , , Class Class , , , rivate funds , , , otal distribution fees , , , nderwriter fees , , , ther distribution income , , , otal distribution and underwriter fees , , ,

ervice ees ervice fees, which are paid to pursuant to distribution or service plans adopted by our sponsored mutual funds, are calculated as a percent of, and fluctuate with, average assets under management in specific mutual fund share classes principally Classes A, C, and Certain private funds also mae service fee payments to hese fees are largely passed through after one year as service fee expense to thirdparty broer dealers

ervice fee revenue increased percent in fiscal , primarily reflecting an increase in consolidated average assets in funds and fund share classes subect to service fees ervice fee revenue increased percent in fiscal , primarily reflecting an increase in consolidated average assets in funds and fund share classes subect to service fees

ther revenue ther revenue, which consists primarily of fund shareholder servicing fees, miscellaneous dealer income and separate account distribution and service fee revenue, increased percent in fiscal , primarily reflecting increases in each of the principal components ther revenue increased percent in fiscal , primarily reflecting increases in shareholder servicing fees and miscellaneous dealer income

Expenses

perating expenses increased percent in fiscal from fiscal , reflecting increases in compensation, distribution expense, service fee expense, the amortiation of deferred sales commissions, fundrelated expenses and other operating expenses

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he following table shows our operating expenses for the fiscal years ended ctober , , and

in thousands Compensation and related costs , , , istribution expense , , , ervice fee expense , , , Amortiation of deferred sales commissions , , , undrelated expenses , , , ther expenses , , , otal expenses ,, ,, ,

Compensation and related costs he following table shows our compensation and related costs for the fiscal years ended ctober , , and

in thousands ase salaries and employee benefits , , , tocbased compensation , , , perating incomebased incentives , , , alesbased incentives , , , ther compensation expense , , , otal , , ,

Compensation expense increased by million, or percent, in fiscal compared to fiscal he increase was driven primarily by i a million increase in base salaries and benefits, reflecting annual merit increases, higher headcount and increases in our corporate match and profit sharing contribution ii an million increase in stocbased compensation expense primarily due to an increase in annual stoc based compensation awards iii a million increase in operating incomebased incentives due to higher prebonus adjusted operating income (as described in more detail in “Compensation Discussion and Analysis” included within this Annual eport hese increases were partially offset by a million decrease in sales based incentive compensation resulting from a decrease in incentive rates, partially offset by an increase in compensationeligible sales, and a decrease of million in other compensation expense related to lower employee recruiting and termination costs

Compensation expense increased by million, or percent, in fiscal compared to fiscal he increase was driven primarily by i a million increase in base salaries and benefits, reflecting annual merit increases and higher headcount, partially due to the Calvert acuisition on ecember , ii an million increase in stocbased compensation, primarily due to an increase in annual stocbased compensation awards iii a million increase in operating incomebased incentives due to an increase in prebonus adusted operating income and iv a million increase in salesbased incentive driven by

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strong compensationeligible sales e million decrease in oter compensation epense is related to loer employee recruiting and termination costs

istriution epense Distribution epense includes distribution ees paid to tirdparty intermediaries or te distribution o our sponsored unds Distribution epense also includes intermediary mareting support payments to ualiied intermediaries for distribution, shareholder servicing and marketing and support of the Company’s sponsored unds ot distribution ees and intermediary mareting support payments are assetbased ees ter asset based distribution ees include commissions paid to broerdealers on te sale o Class A sares at net asset alue payments made to distribution partners or certain closedend unds and inder’s ees paid to intermediaries or reerring certain retail ignet ort and institutional inestors Distribution epense also includes discretionary mareting epenses ic are drien by corporate initiaties

e olloing table sos our distribution epense or te iscal years ended ctober and

in thousands Class A sare commissions Distribution ees Closedend und structuring ees Closedend und dealer compensation payments ntermediary mareting support payments Discretionary mareting epenses inders ees otal

Distribution epense increased by million or percent in iscal compared to iscal primarily attributable to increases in distribution ees and intermediary mareting support payments due to iger aerage assets under management subject to tese payments an increase in discretionary mareting epense related to signiicant corporate initiaties and an increase in tirdparty reerral ees paid in te and internationally ese increases ere partially oset by a decrease in closedend und structuring ees and Class A sales on ic e pay commissions

Distribution epense increased by million or percent in iscal compared to iscal primarily attributable to increases in Class A sales on ic e pay commissions Class C sare assets eld more tan one year on ic e pay distribution ees closedend und structuring ees intermediary mareting support payments and discretionary mareting epense related to signiicant corporate initiaties e increase in intermediary maret support payments as drien primarily by iger aerage assets under management subject to mareting support payments attributable in part to te acuisition o te Calert business in December

ervice ee epense erice ees e receie rom sponsored unds in connection it ne sales o und sares are generally retained in te irst year and paid to broerdealers tereater as serice ee epense pursuant to tirdparty selling agreements ese ees are calculated as a percent o aerage assets under management in certain

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share classes of our mutual funds principally Classes , C, and , as ell as certain private funds ervice fee epense increased by percent in fiscal and percent in fiscal , reflecting in each case higher average fund assets retained more than one year in funds and share classes that are subect to service fees

mortiation o deerred sales commissions mortiation epense is primarily affected by ongoing sales and redemptions of mutual fund Class C shares and certain private funds mortiation epense increased percent and percent in fiscal and , respectively, reflecting higher private fund commission amortiation offset by loer Class and Class C commission amortiation for both periods n fiscal , percent of total amortiation epense related to Class C shares and percent to privately offered euity funds n fiscal , percent of total amortiation epense related to Class shares, percent to Class C shares and percent to privately offered euity funds

undrelated epenses undrelated epenses consist of fund subsidy epenses, fees paid to subadvisers, compliance costs and other fundrelated epenses e incur undrelated epenses increased by percent in fiscal , reflecting increases in fund subsidy accruals, subadvisory fees paid and an increase in fund epenses borne by the Company on funds for hich e earn an allin fee, partially offset by a million decrease in fund epenses borne by the Company related to a onetime reimbursement made by the Company to certain funds in fiscal undrelated epenses increased by percent in fiscal , reflecting higher fund subsidies attributable primarily to the addition of the Calvert unds, higher subadvisory fees paid, an increase in fund epenses borne by the Company on funds for hich it earns an allin fee and million in onetime reimbursements made to certain funds as noted in the preceding sentence

ther epenses he folloing table shos our other epense for the fiscal years ended ctober , , and

in thousands nformation technology , , , acilitiesrelated , , , ravel , , , rofessional services , , , Communications , , , mortiation of intangible assets , , , ther corporate epense , , , otal , , ,

he increase in information technology epense in fiscal as primarily attributable to increases in costs associated with the consolidation of our trading platforms, enhancements to Calvert’s research system, higher market data epenses and ongoing system maintenance costs he increase in facilitiesrelated epenses reflects the acceleration of million of depreciation in the second uarter of fiscal , as ell as increases in softare consulting, rent and other buildingrelated epenses he increase in travel epense relates to an increase in travel activity during the fiscal year he increase in professional services epense primarily reflects an increase in corporate consulting engagements and eternal legal costs he increase in

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communications reflects increases in costs associated with telecommunications hese increases were offset y a decrease in the amortiation of intangile assets and other corporate epenses

he increase in information technology epense in fiscal was primarily attriutale to increases in maret data and maintenance costs, partially offset by decreases in project‐related consulting and outside custody and back‐office service costs. The increase in travel expense relates to an increase in travel activity he increase in professional services epense reflects primarily one‐time legal and consulting costs incurred in conunction with the investigation of fraudulent activities of a former aton ance anagement trader he increase in communications reflects increases in costs associated with telecommunications, suscriptions and supplies, partially offset y a decrease in postage he increase in other corporate epenses is largely associated with the Calvert acuisition

Non-operating Income (Expense)

he main categories of nonoperating income epense for the fiscal years ended ctoer , , and are as follows

in thousands ains and other investment income, net , , , nterest epense , , , oss on etinguishment of det , ther income epense of consolidated C entities ains and other investment income, net , , nterest and other epense , , otal nonoperating income epense , , ,

ains and other investment income, net, decreased y million in fiscal compared to fiscal , primarily reflecting a million increase in net investment losses primarily attriutale to investments in sponsored strategies and associated hedges and a million loss recognied in fiscal upon epiration of the Company’s option to acquire an additional 26 ownership interest in Hexavest. The increase in net investment losses was offset y increases in interest and other income and foreign currency gains of million and million, respectively

ains and other investment income, net, increased y million in fiscal compared to fiscal , primarily reflecting an increase in interest and other income of million, offset y an increase in net investment losses attriutale to investments in sponsored strategies and associated hedges of million and an increase in foreign currency losses of million

nterest epense decreased y million in fiscal compared to fiscal and million in fiscal compared to he decreases in interest epense reflect the ay retirement of the Company’s 2017 Senior Notes and the April 2017 issuance of the Company’s 2027 Senior Notes at a lower interest rate.

et gains losses of consolidated C entities were million during fiscal and million in fiscal et gains losses of consolidated C entities were negligible in fiscal 2017. Consolidated CLO entities’

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gains losses included in net income attributable to non‐controlling and other beneficial interests were approximately . million during fiscal 2016, reflecting third‐party note holders’ proportionate interests in the net income loss of each consolidated CLO entity. ncome associated with the consolidated CLO entities included in net income attributable to aton ance Corp. shareholders was 1.6 million during fiscal 201 and $0.8 million for fiscal 2016, representing management fees earned by the Company and the Company’s proportionate interest in net gains losses of the consolidated CLO entities.

Income Taxes

Our effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 2. percent, 7.0 percent and 7.6 percent in fiscal 201, 2017 and 2016, respectively.

Our policy for accounting for income taxes includes monitoring our business activities and tax policies for compliance with federal, state and foreign tax laws. n the ordinary course of business, various taxing authorities may not agree with certain tax positions we have taken, or applicable law may not be clear. e periodically review these tax positions and provide for and adjust as necessary estimated liabilities relating to such positions as part of our overall tax provision.

On ecember 22, 2017, the Tax Cuts and obs Act the 2017 Tax Act was signed into law in the .S. Among other significant changes, the 2017 Tax Act reduced the statutory federal income tax rate for .S. corporate taxpayers from a maximum of percent to 21 percent and required the deemed repatriation of foreign earnings not previously subject to .S. taxation. ecause the lower federal income tax rate became effective two months into the Company’s fiscal year, a blended federal tax rate of 23.3 percent applied to the Company for the year ended October 1, 201.

Our income tax provision for the year ended October 1, 201 included a non‐recurring charge of 2.0 million that reflects the estimated effects of the enactment of the 2017 Tax Act. The non‐recurring charge was based on guidance issued by the nternal evenue Service S and our interpretations of the tax law changes. The non‐recurring charge consists of 21.2 million from the revaluation of our deferred tax assets and liabilities and 2. million for the deemed repatriation of foreign‐sourced net earnings not previously subject to .S. taxation. The tax increase associated with the non‐recurring charges was partially offset by an income tax benefit of 17. million related to the exercise of stock options and vesting of restricted stock during the period, and . million related to the net income attributable to redeemable non‐controlling and other beneficial interests, which is not taxable to us. e anticipate additional guidance will be issued by the S and continue to monitor interpretative developments. As additional guidance becomes available, we may reconsider our repatriation policy, as a result of which the associated estimated tax charge may change.

Our calculations of adjusted net income and adjusted earnings per diluted share remove the effect of the net excess tax benefits recognied in connection with AS 2016‐0 and the non‐recurring impact of the tax reform recognied during fiscal 201. On this basis, our adjusted effective tax rate was 27.6 percent for the year ended October 1, 201.

Equity in Net Income of Affiliates, Net of Tax

quity in net income of affiliates, net of tax, primarily reflects our percent equity interest in Hexavest and our seven percent minority equity interest in a private equity partnership managed by a third party.

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he following table smmaries the components of eity in net income of affiliates, net of tax, for the fiscal he following table smmaries certain ey financial data relating to or liidity and capital resorces on years ended ctober 31, 2018, 201 and 2016 ctober 31, 2018, 201 and 2016 and ses of cash for the years then ended

Balance Sheet and Cash Flow Data in thousands in thousands nvestment in exavest, net of tax and amortiation $ 10, $ 10,602 $ , 3 6 nvestment in private eity partnership, Cash and cash eivalents $ 600,66 $ 610, $ 2,1 net of tax 18 268 36 6 2 anagement fees and other receivables 236,36 200,3 186,12 otal $ 11,33 $ 10,80 $ 10,33 otal liid assets $ 83,32 $ 811,008 $ 610,36

Net Income Attributable to Non-controlling and Other Beneficial Interests nvestments $ 1,08,62 $ 88,12 $ 8,3 he following table smmaries the components of net income attribtable to noncontrolling and other beneficial interests for the fiscal years ended ctober 31, 2018, 201 and 2016 ebt $ 62,000 $ 62,000 $ ,000 epresents the principal amount o det outstanding he carrying value o the det including det issuance costs was in thousands million million and million as o ctoer and respectively Consolidated sponsored fnds $ 232 $ 6,816 $ 3

aorityowned sbsidiaries 16,1 16,8 13,2 2 oncontrolling interest vale adstments 31 200 100 166 Consolidated C entities ,68 100 in thousands et income attribtable to noncontrolling and other beneficial interests $ 1,6 $ 2,22 $ 23,0 3 3 perating cash flows $ 133,60 $ ,6 $ 33,80 nvesting cash flows 32,0 1,2 108,28 et income attribtable to noncontrolling and other beneficial interests is not adsted for taxes de to the inancing cash flows 18,13 1,30 23,130 nderlying tax stats of or consolidated maorityowned sbsidiaries, which are treated as partnerships or

other passthrogh entities for tax prposes. nds and the C entities we consolidate are registered s previously discussed the Company adopted in iscal pon adoption the Company elected to use a investment companies or private fnds that are also treated as passthrogh entities for tax prposes. retrospective approach which required ecess ta eneits or ta deiciencies previously classiied as inancing cash lows to

e classiied as operating cash lows s a result ecess ta eneits o million and million or the years ended

n fiscal 201 and 2016, noncontrolling interest vale adstments related to noncontrolling interests ctoer and respectively were reclassiied out o inancing cash lows and into operating cash lows

redeemable at other than fair vale reflect changes in the estimated redemption vale of noncontrolling interests in tlanta Capital. he Company had no noncontrolling interests that are redeemable at other than Liquidity and Capital Resources fair vale as of ctober 31, 2018. iid assets consist of cash and cash eivalents and management fees and other receivables. Cash and cash Changes in Financial Condition, Liquidity and Capital Resources eivalents consist of cash and shortterm, highly liid investments that are readily convertible to cash. anagement fees and other receivables primarily represent receivables de from sponsored fnds and he assets and liabilities of or consolidated C entities do not affect or liidity or capital resorces. he separately managed acconts for investment advisory and distribtion services provided. xclding those collateral assets of or consolidated C entities are held solely to satisfy the obligations of these entities and assets identified as assets of consolidated C entities, liid assets represented 33 percent and 3 percent of we have no right to these assets beyond or direct investment in, and management fees generated from, total assets on ctober 31, 2018 and 201, respectively. ot inclded in the liid asset amonts are $23.3 these entities. he note holders and thirdparty creditors of these entities have no recorse to the general million and $213. million of highly liid shortterm debt secrities with remaining matrities between three credit of the Company. s a reslt, the assets and liabilities of or consolidated C entities are exclded from and 12 months held as of ctober 31, 2018 and 201, respectively, which are inclded within investments on the discssion of liidity and capital resorces below. or Consolidated alance heets. r seed investments in consolidated fnds and separate acconts are not treated as liid assets becase they may be longer term in natre.

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he following table smmaries certain ey financial data relating to or liidity and capital resorces on ctober 31, 2018, 201 and 2016 and ses of cash for the years then ended

Balance Sheet and Cash Flow Data in thousands Cash and cash eivalents $ 600,66 $ 610, $ 2,1 anagement fees and other receivables 236,36 200,3 186,12 otal liid assets $ 83,32 $ 811,008 $ 610,36

nvestments $ 1,08,62 $ 88,12 $ 8,3

ebt $ 62,000 $ 62,000 $ ,000

epresents the principal amount o det outstanding he carrying value o the det including det issuance costs was million million and million as o ctoer and respectively

in thousands perating cash flows $ 133,60 $ ,6 $ 33,80 nvesting cash flows 32,0 1,2 108,28 inancing cash flows 18,13 1,30 23,130

s previously discussed the Company adopted in iscal pon adoption the Company elected to use a retrospective approach which required ecess ta eneits or ta deiciencies previously classiied as inancing cash lows to

e classiied as operating cash lows s a result ecess ta eneits o million and million or the years ended

ctoer and respectively were reclassiied out o inancing cash lows and into operating cash lows

Liquidity and Capital Resources

iid assets consist of cash and cash eivalents and management fees and other receivables. Cash and cash eivalents consist of cash and shortterm, highly liid investments that are readily convertible to cash. anagement fees and other receivables primarily represent receivables de from sponsored fnds and separately managed acconts for investment advisory and distribtion services provided. xclding those assets identified as assets of consolidated C entities, liid assets represented 33 percent and 3 percent of total assets on ctober 31, 2018 and 201, respectively. ot inclded in the liid asset amonts are $23.3 million and $213. million of highly liid shortterm debt secrities with remaining matrities between three and 12 months held as of ctober 31, 2018 and 201, respectively, which are inclded within investments on or Consolidated alance heets. r seed investments in consolidated fnds and separate acconts are not treated as liid assets becase they may be longer term in natre.

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s of ctober 31, 2018, or debt consisted of $32 million in aggregate principal amont of 3.62 percent enior otes de in ne 2023 and $300 million in aggregate principal amont of 3. percent enior otes de in pril 202.

e maintain a $300 million nsecred revolving credit facility with several bans that expires on ctober 21, 201. he facility provides that we may borrow at based rates of interest that vary depending on the level of sage of the facility and or credit ratings. he agreement contains financial covenants with respect to leverage and interest coverage and reires s to pay an annal commitment fee on any nsed portion. e had no borrowings nder or revolving credit facility at ctober 31, 2018 or at any point dring the fiscal year. e were in compliance with all debt covenants as of ctober 31, 2018. n ecember 11, 2018, we replaced this credit facility with a new $300 million nsecred revolving credit facility that expires on ecember 11, 2023 with similar terms and conditions.

e contine to monitor or liidity daily. e remain committed to growing or bsiness and retrning capital to shareholders. e expect that or main ses of cash will be paying dividends, aciring shares of or onoting Common toc, maing seed investments in new investment strategies, potential strategic acisitions, enhancing or technology infrastrctre and paying the operating expenses of or bsiness. e believe that or existing liid assets, cash flows from operations and borrowing capacity nder or credit facility are sfficient to meet or crrent and forecasted operating cash needs. he ris exists, however, that if we need to raise additional capital or refinance existing debt in the ftre, resorces may not be available to s in sfficient amonts or on acceptable terms. r ability to enter the capital marets in a timely manner depends on a nmber of factors, inclding the state of global credit and eity marets, interest rates, credit spreads and or credit ratings. f we are nable to access capital marets to isse new debt, refinance existing debt or sell shares of or onoting Common toc as needed, or if we are nable to obtain sch financing on acceptable terms, or bsiness cold be adversely affected.

Recoverability of our Investments

r $1.1 billion of investments as of ctober 31, 2018 consisted of or percent eity interest in exavest, positions in Companysponsored fnds and separate acconts entered into for investment and bsiness development prposes, and certain other investments held directly by the Company. nvestments in Company sponsored fnds and separate acconts and investments held directly by the Company are generally in liid debt or eity secrities and are carried at fair maret vale. e test or investments, other than trading and eity method investments, for impairment on a arterly basis. e evalate or investments in non consolidated C entities and investments classified as availableforsale for impairment sing antitative factors, inclding how long the investment has been in a net nrealied loss position, and alitative factors, inclding the credit ality of the nderlying isser and or ability and intent to contine holding the investment. n fiscal 2018, the Company recognied $0.2 million of otherthantemporary impairment losses related to its investment in a nonconsolidated C entity. f marets deteriorate in the arters ahead, or assessment of impairment on a antitative basis may lead s to impair additional investments in ftre arters that were in an nrealied loss position at ctober 31, 2018.

e test or investments in eity method investees, goodwill and indefinitelived intangible assets for impairment in the forth arter of each fiscal year, or as facts and circmstances indicate that additional analysis is warranted. here have been no significant changes in financial condition in fiscal 2018 that wold indicate that an impairment loss exists at ctober 31, 2018.

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e periodically review or deferred sales commissions and amortiing identifiable intangible assets for impairment as events or changes in circmstances indicate that the carrying amont of sch assets may not be recoverable. here have been no significant changes in financial condition in fiscal 2018 that wold indicate that an impairment loss exists at ctober 31, 2018.

Operating Cash Flows

r operating cash flows are calclated by adsting net income to reflect other significant sorces and ses of cash, certain significant noncash items and timing differences in the cash settlement of other assets and liabilities. ignificant sorces and ses of cash that are not reflected in either revene or expenses inclde net cash flows associated with or deferred sales commission assets capitalied sales commissions paid net of contingent deferred sales charges received, as well as net cash flows associated with the prchase and sale of investments within the portfolios of or consolidated sponsored fnds and separate acconts proceeds received from the sale of trading investments net of cash otflows associated with the prchase of trading investments. ignificant noncash items inclde the amortiation of deferred sales commissions and intangible assets, depreciation, stocbased compensation and net change in deferred income taxes.

Cash provided by operating activities totaled $133. million in fiscal 2018 compared to $. million in fiscal 201. he increase in net cash provided by operating activities primarily reflects a decrease in net cash sed for the prchase of investments in trading secrities and an increase in the timing differences in the cash settlements of or other assets and liabilities, partially offset by a decrease in cash sed in the operating activities of consolidated C entities.

Cash provided by operating activities totaled $. million in fiscal 201 compared to $33. million in fiscal 2016. he decrease in net cash provided by operating activities primarily reflects an increase in net cash sed for the prchase of investments in trading secrities and a decrease in cash provided by the operating activities of consolidated C entities, partially offset by an increase in the timing differences in the cash settlements of or other assets and liabilities.

Investing Cash Flows

Cash flows from investing activities reflect primarily the prchase of eipment and leasehold improvements, the prchase and sale of availableforsale investments in sponsored fnds that we do not consolidate, the prchase and sale of investments in C entity note obligations and any cash payments made in connection with acisitions. n addition, investing cash flows reflect the investing activities of or consolidated C entities, inclding the prchase and sale of ban loans and other investments.

Cash sed for investing activities totaled $32.1 million in fiscal 2018 compared to $1. million in fiscal 201. he increase in cash sed for investing activities was primarily attribtable to a $221. million increase in net prchases of ban loans and other investments by or consolidated C entities, a $0.8 million increase in net prchases of investments made by the Company in C entity note obligations and a $6.0 million increase in additions to eipment and leasehold improvements, partially offset by a $63.6 decrease in net cash paid in acisitions.

Cash sed for investing activities totaled $1. million in fiscal 201 compared to $108.3 million in fiscal 2016. he decrease in cash sed by investing activities reflects a $1.3 million decrease in net prchases of ban loans and other investments by or consolidated C entities, a $20. million increase in net proceeds from sales of availableforsale secrities and a $. million decrease in proceeds from sales of investments in C

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entity note obligations, partially offset by a $3. million increase in net cash paid in acisitions, the issance of a $.0 million note receivable to exavest in fiscal 2016 and a $2.0 million increase in additions to eipment and leasehold improvements.

Financing Cash Flows

inancing cash flows primarily reflect the issance and reprchase of or onoting Common toc, the payment of dividends to or shareholders, the prchase of noncontrolling interests in or maorityowned sbsidiaries, distribtions to noncontrolling interest holders of or maorityowned sbsidiaries and any proceeds received or repayments made in connection with the Company’s debt. inancing cash flows also reflect the financing activities of or consolidated fnds, inclding the proceeds from the issance of capital stoc, payments for redemptions and distribtions to noncontrolling interest holders of these fnds. n addition, financing cash flows reflect the financing activities of or consolidated C entities, inclding the issance and repayment of C beneficial interests senior and sbordinated note obligations and proceeds and repayments of C borrowings.

Cash provided by financing activities totaled $18. million in fiscal 2018. he Company paid $20.8 million to acire additional interests in tlanta Capital and arametric, reprchased and retired .6 million shares of or onoting Common toc for $23.6 million nder or athoried reprchase programs, and issed .0 million shares of or onoting Common toc in connection with the grant of restricted share awards, the exercise of stoc options and other employee stoc prchases for total proceeds of $6. million. s of ctober 31, 2018, we had athoriation to prchase an additional .3 million shares of or onoting Common toc nder or crrent share reprchase athoriation. e anticipate that reprchases of or on oting Common toc will contine to be an ongoing se of cash. r dividends declared per share increased to $1.28 in fiscal 2018 from $1.1 in fiscal 201, and we paid an additional $1.1 million of dividends in fiscal 2018 verss fiscal 201. e crrently expect to declare and pay arterly dividends on or oting and on oting Common toc comparable to the dividend declared in the forth arter of fiscal 2018. Cash provided by financing activities of consolidated C entities totaled $2.2 million in fiscal 2018.

Cash provided by financing activities totaled $1. million in fiscal 201. he Company issed $300 million of 202 enior otes, reslting in net proceeds of approximately $26.1 million, and redeemed the remaining $250 million of the Company’s 2017 enior otes for $2. million. e paid $.8 million to acire additional interests in tlanta Capital and arametric, reprchased and retired 2. million shares of or onoting Common toc for $126.2 million nder or athoried reprchase programs, and issed . million shares of or onoting Common toc in connection with the grant of restricted share awards, the exercise of stoc options and other employee stoc prchases for total proceeds of $210. million. Cash provided by financing activities of consolidated C entities totaled $12.6 million in fiscal 201.

Cash sed for financing activities totaled $23.1 million in fiscal 2016. he Company paid $1. million to acire additional interests in tlanta Capital and arametric, reprchased and retired approximately .3 million shares of or onoting Common toc for $23.0 million nder or athoried reprchase programs and issed . million shares of or onoting Common toc in connection with the grant of restricted share awards, the exercise of stoc options and other employee stoc prchases for total proceeds of $110. million.

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he followin table details o ontatal obliations as of tobe 1 201

in millions peatin leases $ 0 $ 2 $ $ 7 $ 21 enio notes 25 25 00 nteest payment on senio notes 1 22 ayments to nonontollin inteest holdes of maoityowned sbsidiaies 1 1 neonied ta benefits 1 1 otal $ 11 $ 1 $ 2 $ 1 $ 57

Contatal obliations of onsolidated C entities enio and sbodinated note obliations inldin inteest $ 11 $ 7 $ 7 $ 7 $ 112 otal fo onsolidated C entities $ 11 $ 7 $ 7 $ 7 $ 112

his amount includes unrecognied ta eneits along with accrued interest and penalties nly the assets o consolidated C entities can e used to satisy the oligations o each entity ther eneicial interest holders o consolidated C entities do not have any recourse to the Company’s general credit. In the event of default, recourse to the Company is limited to its investment in these entities

onontollin inteests held by employees in tlanta Capital and aameti lontem eity inentie plans ae not sbet to mandatoy edemption he phase of nonontollin inteests is pediated on the eeise of a seies of pts held by nonontollin inteest holdes and alls held by s he pts poide the nonontollin inteest holdes the iht to eie s to phase these etained inteests at speifi inteals oe time while the alls poide s with the iht to eie the nonontollin inteest holdes to sell thei etained eity inteests to s at speified inteals oe time as well as pon the oene of etain eents sh as death o pemanent disability hese nonontollin inteests ae edeemable at fai ale hee is sinifiant netainty as to the timin and amont of any nonontollin inteest phase in the fte odinly fte payments to phase nonontollin inteests hae been elded fom the aboe table nless a pt o all option has been eeised and a mandatoy fim ommitment eists fo s to phase sh nonontollin inteests lthoh the timin and amonts of these phases annot be pedited with etainty we antiipate that the phase of nonontollin inteests in o onsolidated sbsidiaies may be a sinifiant se of ash in fte yeas n the table aboe payments to nonontollin inteest holdes of maoityowned sbsidiaies inlde $2 million and $5 million of payments pon the eetion of temination all options by the Company elated to pofit inteests held by nonontollin inteest holdes of tlanta Capital and aameti espetiely hese tansations settled in oembe 201 n fisal 201 and fisal 2017 the Company intoded phantom eity plans fo aameti and tlanta Capital espetiely and eased main ants of pofits inteests nde the lontem eity inentie plans efeened aboe

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e hae pesented all edeemable nonontollin inteests at edemption ale on o Consolidated alane heet as of tobe 1 201 e hae eoded the ent yea hane in the estimated edemption ale of nonontollin inteests edeemable at fai ale as a omponent of additional paidin apital he estimated edemption ale of o nonontollin inteests totaled $51 million on tobe 1 201 ompaed to $250 million on tobe 1 2017 hese inteests ae all edeemable at fai ale hee wee no non ontollin inteests edeemable at othe than fai ale as of tobe 1 201 edeemable nonontollin inteests as of tobe 1 201 onsisted of pofit inteests anted nde the lontem inentie plans of aameti and tlanta Capital of $7 million and $2 million espetiely and nonontollin inteests in aameti issed in onntion with the aameti is disos C aameti is disos final pt option of $15 million dditionally edeemable nonontollin inteests as of tobe 1 201 also inlded thidparty investors’ ownership in consolidated sponsored funds of $245.0 million.

n oembe 2010 we aied patents and othe intelletal popety fom anaed s C a deelope of intelletal popety in the field of ehanetaded fnds his intelletal popety is the fondation of the Company’s NextShares™ exchangetaded manaed fnds initiatie he tems of the aisition of the patents and othe intelletal popety of anaed s C inlde appoimately $0 million in aeate ontinent milestone payments that ae based on speifi eents epesentin ey deelopments in the ommeialiation of ethaes hee is no defined timin on these payments esltin in sinifiant netainty as to when the amont of any payment is de in the fte odinly fte payments to be made hae been elded fom the aboe table ntil sh time as the netainty has been esoled f and when the milestones ae eahed anaed s C is also entitled to eeneshain payments that ae allated as a peentae of liensin eene that we eeie fo se of the aied intelletal popety

s of tobe 1 201 we onsideed the ndistibted eanins of etain foein sbsidiaies to be indefinitely einested in foein opeations elatin to the enatment of the 2017 a t an estimated ta of $2 million was eoded din the yea ended tobe 1 201 on these eanins he allation of this nonein hae was based on the lanae of the 2017 a t idane issed by the and o intepetation of this infomation e antiipate additional idane will be issed by the and ontine to monito intepetatie deelopments s additional idane beomes aailable we may eonside o epatiation poliy and this estimated ta hae may hane

e do not inest in any offbalane sheet ehiles that poide finanin liidity maet o edit is sppot o enae in any leasin atiities that epose s to any liability that is not efleted in o Consolidated inanial tatements

e beliee the followin itial aontin poliies eflet o aontin poliies that eie sinifiant dments and estimates sed in the pepaation of o Consolidated inanial tatements tal eslts may diffe fom these estimates

Consolidation of variale interest entities Is ontin idane poides a famewo fo deteminin whethe an entity shold be onsideed a and if so whethe o inolement with the entity epesents a aiable inteest in the entity f we detemine that

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we have a variale interest in a we must perform an analysis to determine whether we are the primary eneficiary of the . f we determine we are the primary eneficiary of the we are reuired to consolidate the assets liailities results of operations and cash flows of the .

ur evaluation of whether we ualify as the primary eneficiary of a is complex. e are the primary eneficiary of a if we have a controlling financial interest in the . company is deemed to have a controlling financial interest in a if it has oth i the power to direct the activities of the that most significantly affect the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE that could potentially e significant to the or the right to receive enefits from the that could potentially e significant to the .

or C entities we must evaluate the relative sie of our eneficial interest and the overall magnitude and design of the collateral management fees within each structure. here is also udgment involved in assessing whether we have the power to direct the activities that most significantly affect the VIE’s economic performance and the oligation to asor losses of or the right to receive enefits from the that could potentially e significant.

hile we elieve our overall evaluation of s is appropriate future changes in estimates udgments and assumptions or changes in our ownership interests in a may affect the resulting consolidation or deconsolidation of the assets liailities results of operations and cash flows of a .

air value measurements he accounting standards for fair value measurement provide a framewor for measuring fair value and reuire expanded disclosures regarding fair value measurements. air value is defined as the price that would e received for an asset or the exit price that would e paid to transfer a liaility in the principal or most advantageous maret in an orderly transaction etween maret participants on the measurement date. he accounting standards estalish a fair value measurement hierarchy which reuires an entity to maximie the use of oservale inputs where availale. his fair value measurement hierarchy gives the highest priority to uoted prices in active marets for identical assets or liailities and the lowest priority to unoservale inputs.

e utilie thirdparty pricing services to value investments in various asset classes including interests in senior floatingrate loans and other det oligations derivatives and certain foreign euity securities as further discussed elow. aluations provided y the pricing services are suect to exception reporting that identifies securities with significant movements in valuation as well as investments with no movements in valuation. hese exceptions are reviewed y us on a daily asis. e compare the price of trades executed y us to the valuations provided y the thirdparty pricing services to identify and research significant variances. e periodically compare the pricing service valuations to valuations provided y a secondary independent source when availale. aret data provided y the pricing services and other maret participants such as the oan Syndication and rading ssociation S trade study is reviewed to assess the reliaility of the provided data. ur aluation Committee reviews the general assumptions underlying the methodologies used y the pricing services to value various asset classes at least annually. hroughout the year memers of our aluation Committee meet with the service providers to discuss any significant changes to the service providers’ valuation methodologies or operational processes.

ssets and liailities measured and reported at fair value are classified and disclosed in one of the following categories ased on the nature of the inputs that are significant to the fair value measurements in their entirety. n certain cases the inputs used to measure fair value may fall into different levels of the fair value

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measurement hierarchy. In such cases, an investment’s classification within the fair value measurement hierarchy is based on the lowest level of input that is significant to the fair value measurement

evel nadusted uoted maret prices in active marets for identical assets or liabilities at the reporting date

evel bservable inputs other than evel unadusted uoted maret prices such as uoted maret prices for similar assets or liabilities in active marets uoted prices for identical or similar assets or liabilities that are not active and inputs other than uoted prices that are observable or corroborated by observable maret data

evel nobservable inputs that are supported by little or no maret activity

e recognie any transfers between levels at the end of each uarter

Income taes eferred income taes reflect the epected future ta conseuences of temporary differences between the carrying amounts and ta bases of our assets and liabilities measured using rates epected to be in effect when such differences reverse o the etent that deferred ta assets are considered more liely than not to be unrealiable valuation allowances are provided roposed changes in ta policy which include a proposal to reduce federal ta rates for corporations may affect the carrying value of deferred ta assets and liabilities due to the change in future ta rates emeasurement of deferred taes for a corporate rate reduction and other applicable provisions of ta reform will be recorded as an epense or benefit in the period that the new legislation is enacted

ur effective ta rate reflects the statutory ta rates of the many urisdictions in which we operate ignificant udgment is reuired in evaluating our ta positions In the ordinary course of business many transactions occur for which the ultimate ta outcome is uncertain ccounting standards governing the accounting for uncertainty in income taes for a ta position taen or epected to be taen in a ta return reuire that the ta effects of a position be recognied only if it is more liely than not to be sustained based solely on its technical merits as of the reporting date he morelielythannot threshold must be met in each reporting period to support continued recognition of the benefit he difference between the ta benefit recognied in the financial statements for a ta position and the ta benefit claimed in the income ta return is referred to as an unrecognied ta benefit nrecognied ta benefits as well as the related interest and penalties are regularly evaluated and adusted as appropriate to reflect changing facts and circumstances e classify any interest or penalties incurred as a component of income ta epense

oodill oodwill represents the ecess of the cost of our investment in the net assets of acuired companies over the fair value of the underlying identifiable net assets at the dates of acuisition e attribute all goodwill associated with the acuisitions of tlanta Capital arametric and Clifton which share similar economic characteristics to one reporting unit e attribute all goodwill associated with the acuisition of the business of ass Investor ervices and other acuisitions to a second reporting unit

oodwill is not amortied but is tested annually for impairment in the fourth uarter of each fiscal year by comparing the fair values of identified reporting units to their respective carrying amounts including goodwill e establish fair value for the purpose of impairment testing for each reporting unit by using an income approach and a maret approach

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he income aroach emloys a iscounte cash flow moel that taes into account assumtions that maret articiants woul use in their estimates of fair value, current erio actual results an uet roections for future erios that have een vette y senior manaement. he iscounte cash flow moel incororates the same funamental ricin concets use to calculate fair value in the acuisition ue ilience rocess an a iscount rate that taes into consieration our estimate cost of caital auste for the uncertainty inherent in the forecaste information.

he maret aroach emloys maret multiles ase on comarale ulicly trae comanies in the financial services inustry, calculate with ata from inustry sources. stimates of fair value are estalishe usin current an forwar multiles of oth revenue an earnins efore interest, taes, ereciation an amortiation I, auste for sie an erformance of the reortin unit relative to eer comanies.

If the carryin amount of the reortin unit ecees its calculate fair value, the secon ste of the oowill imairment test will e erforme to measure the amount of the imairment loss, if any.

Intangile assets mortiin ientifiale intanile assets enerally reresent the cost of client relationshis, intellectual roerty, traemars, an research systems. In valuin these assets, we mae assumtions rearin useful lives an roecte rowth rates, an sinificant ument is reuire. e erioically review our amortiin ientifiale intanile assets for imairment as events or chanes in circumstances inicate that the carryin amount of such assets may not e recoverale. If the carryin amounts of those assets ecee their resective fair values, an imairment loss is reconie eual to that ecess.

onamortiin intanile assets enerally reresent the cost of mutual fun manaement contracts acuire. onamortiin intanile assets are teste for imairment in the fourth uarter of each fiscal year y comarin the fair values of the manaement contracts acuire to their carryin values. e estalish fair value for uroses of imairment testin usin the income aroach. If the carryin value of a manaement contract acuire ecees its fair value, an imairment loss is reconie eual to that ecess.

tocased compensation e account for stocase comensation eense at fair value. ner the fair value metho, stocase comensation eense, which reflects the fair value of stocase awars measure at rant ate, is reconie on a straihtline asis over the relevant service erio enerally five years an is auste each erio for forfeitures as they occur.

he fair value of each otion awar rante is estimate usin the laccholes otion valuation moel. he laccholes otion valuation moel incororates assumtions as to ivien yiel, eecte volatility, an aroriate risfree interest rate an the eecte life of the otion.

he fair value of rofits interests an hantom euity units rante uner susiiary lonterm euity lans is estimate on the rant ate y averain fair value estalishe usin an income aroach an fair value estalishe usin a maret aroach for each susiiary. he income an fair value aroaches use in the etermination of rant ate fair value of rofits interests an hantom euity units are consistent with those escrie in oowill aove.

he ta effect of the ifference, if any, etween the cumulative comensation eense reconie for a stoc ase awar for financial reortin uroses an the euction for such awar for ta uroses is reconie as income ta eense for ta eficiencies or enefit for ecess ta enefits in the onsoliate tatements

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of Income in the erio in which the ta euction arises enerally in the erio of vestin or settlement of a stocase awar, as alicale an are reflecte as an oeratin activity in the onsoliate tatements of ash lows. hares of nonvotin common stoc withhel for ta withholin uroses uon the vestin of restricte share awars are reflecte as a financin activity in the onsoliate tatements of ash lows.

oncontrolling interests onreeemale noncontrollin interests consist entirely of unveste interests rante to emloyees of our maorityowne susiiaries uner susiiarysecific lonterm euity lans. hese rants ecome suect to holer ut rihts uon vestin an are reclassifie to temorary euity as vestin occurs.

oncontrollin interests reeemale at fair value consist of interests in our consoliate sonsore funs an certain veste interests hel y emloyees of our maorityowne susiiaries that were rante uner the subsidiaries’ longterm euity lans. ur noncontrollin interests reeemale at fair value are recore in temorary euity at estimate reemtion value an chanes in the estimate reemtion value of these interests are reconie as increases or ecreases to aitional aiin caital.

oncontrollin interests reeemale at other than fair value consiste of certain other interests in our maorityowne susiiaries. urin the fiscal year ene ctoer , , the omany acuire the remainin rofit interests hel y the noncontrollin interest holers of tlanta aital. s a result, the omany ha no noncontrollin interests that are reeemale at other than fair value as of ctoer , .

See Note 1, “Summary of Significant Accounting Policies – Adoption of new accounting standards,” and Note 2, “New Accounting Standards Not Yet Adopted,” in the otes to onsoliate inancial tatements.

In the normal course of usiness, our financial osition is suect to ifferent tyes of ris, incluin maret ris. aret ris is the ris that we will incur losses ue to averse chanes in euity an on rices, interest rates, creit events or currency echane rates. anaement is resonsile for ientifyin, assessin an manain maret an other riss.

In evaluatin maret ris, it is imortant to note that most of our revenue is ase on the maret value of assets under management. As noted in “Risk Factors” in this Annual Report, declines of financial market values aversely affect our revenue an net income.

ur rimary irect eosure to euity rice ris arises from investments in euity securities mae y consoliate sonsore funs, investments in euity securities we hol in searately manae accounts an our investments in sonsore euity funs that are not consoliate. uity rice ris as it relates to these investments reresents the otential future loss of value that woul result from a ecline in the fair values of the fun shares or unerlyin euity securities.

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he following is a summary of the effect that a 1 percent increase or decrease in euity prices would have on our investments subect to euity price fluctuations at ctober 1, 21

in thousands onsolidated sponsored funds and separately managed accounts 1, 1, 1, Sponsored funds , , ,1 otal 1,2 1, 11,

At ctober 1, 21, we were eposed to interest rate risk and credit spread risk as a result of approimately .1 million in investments in fied and floatingrate income funds sponsored or managed by us, debt securities held by sponsored funds we consolidate and debt securities we hold in separately managed accounts. anagement considered a hypothetical 1 basis point change in interest rates and determined that an increase of such magnitude would result in a decrease of approimately . million in the carrying amount of our debt investments and that a decrease of 1 basis points would increase the carrying amount of such investments by approimately . million.

urrently we have a corporate hedging program in place to hedge currency risk, interest rate risk and market price eposures on certain of our investments in consolidated sponsored funds and separately managed accounts. As part of this program, we enter into forwards, futures and swap contracts to hedge certain eposures held within the portfolios of these consolidated sponsored funds and separately managed accounts. he contracts negotiated are short term in nature. e do not enter into derivative instruments for speculative purposes.

he following is a summary of the estimated effect that a 1 percent adverse change in market prices would have on the forwards, futures and swap contracts of our corporate hedging program as of ctober 1, 21

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in thousands Stock inde futures contracts 1, otal return swap contracts 1, redit default swap contracts , 1 Foreign echange contracts 2,2 1 ommodity futures contracts 11, urrency futures contracts 1, 2 nterest rate futures contracts ,1 1 otal 2,2 1

e are reuired to maintain cash collateral for margin accounts to support certain derivative positions, which are classified as restricted cash and included as a component of other assets on our onsolidated alance Sheets. At ctober 1, 21, cash collateral included in other assets on our onsolidated alance Sheet totaled 1.1 million.

irect eposure to credit risk arises from our interests in nonconsolidated entities that are included in investments in our onsolidated alance Sheets, as well as our interests in consolidated entities that are eliminated in consolidation. ur entity investments entitle us only to a residual interest in the entity, making these investments highly sensitive to the default and recovery eperiences of the underlying instruments held by the entity. ur investments are subect to an impairment loss in the event that the cash flows generated by the collateral securities are not sufficient to allow euity holders to recover their investments. f there is deterioration in the credit uality of collateral and reference securities and a corresponding increase in defaults, entity cash flows may be adversely affected and we may be unable to recover our investment. e had total investments in nonconsolidated entities of 2. million and investments of .2 million in our consolidated entities as of ctober 1, 21, representing our total value at risk with respect to such entities as of that date.

e are subect to foreign currency echange risk through our international operations. hile we operate primarily in the nited States and, accordingly, most of our consolidated revenue and associated epenses are denominated in .S. dollars, we also provide services and earn revenue outside of the nited States. Revenue and epenses denominated in foreign currencies may be affected by movements in foreign currency echange rates. he eposure to foreign currency echange risk in our onsolidated alance Sheets relates primarily to an euity method investment and cash and cash euivalents that are denominated in foreign currencies, principally anadian dollars. his risk will likely increase as our business outside of the nited States grows. e generally do not use derivative financial instruments to manage the foreign currency echange risk eposure we assume in connection with investments in international operations. As a result, both positive and negative currency fluctuations against the .S. dollar may affect our results of operations and accumulated other comprehensive income loss. e do not enter into foreign currency transactions for speculative purposes.

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We are subject to substantial competition in all aspects of our investment management business. ur funds and separate accounts compete against a large number of investment strategies and services sold to the public by investment management companies, investment dealers, banks, insurance companies and others. any institutions we compete against have greater financial resources than us, and there are few barriers to entry. e compete with these firms on the basis of investment performance, diversity of offerings, distribution capability, scope and uality of services, reputation and the ability to develop new investment strategies and services to meet the changing needs of investors. o the etent that current or potential customers decide to invest in strategies sponsored by our competitors, the sales of our sponsored strategies, as well as our market share, revenue and net income, could decline. ur actively managed investment strategies compete not only against other active strategies, but also against similarly positioned inde strategies. he continuing shift in market demand toward inde funds and other passive strategies reduces opportunities for active managers and may accelerate fee compression as active managers reduce their fees to compete with lower cost passive strategies. o the etent that trend continues, our business could be adversely affected.

he investment management industry is highly competitive and investment management customers are increasingly fee sensitive. n the event that competitors charge lower fees for substantially similar strategies and services, we may be forced to compete increasingly on the basis of price to attract and retain customers. Rules and regulations applicable to Registered Funds provide, in substance, that each investment advisory agreement between a fund and its investment adviser continues in effect from year to year only if its continuation is approved at least annually by the fund’s board of trustees. Periodic review of fund advisory agreements could result in a reduction in the Company’s advisory fee revenues from Registered Funds. Fee reductions on eisting or future strategies and services could have an adverse impact on our revenue and net income.

The inability to access clients through intermediaries could have a material adverse effect on our business. ur ability to market investment strategies and services is highly dependent on access to the various distribution systems of national and regional securities dealer firms, which generally offer competing strategies and services that could limit the distribution of our offerings. here can be no assurance that we will be able to retain access to these intermediaries. he inability to have such access could have a material adverse effect on our business. o the etent that eisting or potential customers, including securities brokerdealers, decide to invest in or broaden distribution relationships with our competitors, the sales of our strategies and services, as well as our market share, revenue and net income, could decline. ertain intermediaries with which we conduct business charge the ompany fees to maintain access to their distribution networks. f we choose not to pay such fees, our ability to distribute our strategies and services through those intermediaries would be limited.

Our investment advisory agreements are subject to termination on short notice or non-renewal. e derive almost all of our revenue from management fees, distribution income and service fees received from managed funds and separate accounts. As a result, we are dependent upon management contracts, administrative contracts, distribution contracts, underwriting contracts andor service contracts under which these fees are paid. Generally, these contracts are terminable upon 30 to 60 days’ notice without penalty. If material contracts are terminated, not renewed or amended to reduce fees, our financial results could be adversely affected.

Our assets under management, which affect revenue, are subject to significant fluctuations. ur maor sources of revenue, including investment advisory, administrative, distribution and service fees, are generally

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calculated as percentages of assets under management. ee rates for our investment strategies and services generally vary by investment mandate e.g., euity, fied income, floatingrate income, alternative, portfolio implementation or eposure management services and investment vehicle e.g., fund or separate account. n adverse change in asset mi by mandate or vehicle, independent of our level of assets under management, may result in a decrease in our overall average effective fee rate. ny decrease in the level of our assets under management generally would reduce our revenue and net income. ssets under management could decrease due to, among other things, a decline in securities prices, a decline in the sales of our investment offerings, an increase in openend fund redemptions or client withdrawals, repurchases of, or other reductions in, closed end fund shares outstanding, or reductions in leverage used by investment vehicles. dverse maret conditions andor lac of investor confidence in the financial marets could lead to a decrease in investor ris tolerance. decrease in investor ris tolerance could result in investors withdrawing from marets or decreasing their rate of investment, thereby reducing our overall assets under management and adversely affecting our revenue, earnings and growth prospects. Changes in investor ris tolerance could also result in investor allocation away from higherfee strategies to lowerfee strategies, which could adversely affect our revenue and earnings. ur overall assets under management may not change in tandem with overall maret conditions, as changes in our assets under management may lag improvements or declines in the overall maret due to mi effects and investment performance.

Poor investment performance of the assets we manage could affect our sales or reduce the amount of assets under management, adversely affecting revenue and net income. he performance of the assets we manage is critical to our success. Poor investment performance on an absolute basis or as compared to thirdparty benchmars or competitors could lead to a decrease in sales and stimulate higher redemptions, thereby lowering the amount of assets under management and reducing the investment advisory fees we earn. decline in investment performance of any investment franchise could have a material adverse effect on the level of assets under management, revenue and net income of that franchise. Past or present performance in the investment strategies we manage is not indicative of future performance.

Our clients can withdraw the assets we manage on short notice, making our future client and revenue base unpredictable. ur openend fund clients generally may redeem their investments in these funds each business day without prior notice. hile not subect to daily redemption, closedend funds that we manage may shrin in sie due to repurchases of shares in openmaret transactions or pursuant to tender offers, or in connection with distributions in ecess of realied returns. Institutional and individual separate account clients can terminate their relationships with us generally at any time. In a declining stoc maret, the pace of open end fund redemptions could accelerate. Poor performance of the assets we manage relative to other asset management firms could result in lower purchases and increased redemptions of openend fund shares, and the loss of institutional and individual separate accounts. he decrease in revenue that could result from any of these events could have a material adverse effect on our business.

We could be adversely affected by counterparty or client defaults. s we have seen in periods of significant maret volatility, the deteriorating financial condition of one financial institution may materially and adversely affect the performance of others. e, and the funds and accounts we manage, have eposure to many different counterparties, and routinely eecute transactions with counterparties across the financial industry. e, and the funds and accounts we manage, may be eposed to credit, operational or other ris in the event of a default by a counterparty or client, or in the event of other unrelated systemic maret failures.

Our success depends on key personnel and our financial performance could be negatively affected by the loss of their services. ur success depends upon our ability to attract, retain and motivate ualified portfolio managers, analysts, investment counselors, sales and management personnel, and other ey professionals,

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including our eecutive officers. ur ey employees generally do not have employment contracts and may voluntarily terminate their employment at any time. Certain senior eecutives and the nonemployee members of our oard of irectors are subect to our mandatory retirement policy at age 6 and age , respectively. he loss of the services of ey personnel or our failure to attract replacement or additional ualified personnel could negatively affect our financial performance. n increase in compensation to attract or retain personnel could result in a decrease in net income.

Our expenses are subject to fluctuations that could materially affect our operating results. ur results of operations are dependent on our level of epenses, which can vary significantly from period to period. ur epenses may fluctuate as a result of, among other things, variations in the level of compensation, epenses incurred to support distribution of our investment strategies and services, epenses incurred to develop new strategies and services, epenses incurred to enhance our technology, compliance and other infrastructure, impairments of intangible assets or goodwill, and the impact of inflation. Increases in our level of epenses, or our inability to reduce our level of epenses when necessary, could materially affect our operating results.

Our business is subject to operational risk. In the management and administration of funds and client accounts, we are subect to the ris that we commit errors that cause the Company to incur financial losses and damage our reputation. ecause they involve large numbers of accounts and operate at generally low fee rates, our portfolio implementation and eposure management services businesses may be particularly susceptible to losses from operational or trading errors.

We could be adversely affected by changes in tax laws. Changes in .. ta policy may affect us to a greater degree than many of our competitors because we manage significant assets in funds and separate accounts with an afterta return obective. he a Cuts and obs ct enacted into .. law in ecember 0 0 a ct included a permanent reduction in the corporate income ta rate. his change in future ta rates caused the carrying value of our deferred ta assets to be lowered. Issuance of additional technical guidance related to the 0 a ct may also pose future ris to our assets under management.

Exposure to additional tax liabilities could have a material impact on our financial condition, results of operations and/or liquidity. a authorities may disagree with certain positions we tae and assess additional taes. e regularly assess the liely outcomes of these audits in order to determine the appropriateness of our ta provision. owever, there can be no assurance that we will accurately predict the outcomes of these audits, and the actual outcomes of these audits could have a material impact on our financial statements. e are subect to ongoing ta audits in various urisdictions, including several states. Changes in ta laws or ta rulings could materially affect our effective ta rate.

Our reputation could be damaged. e have built a reputation of high integrity, prudent investment management and superior client service. ur reputation is etremely important to our success. ny damage to our reputation could result in client withdrawals from funds or separate accounts that are advised by us and ultimately impede our ability to attract and retain ey personnel. he loss of either client relationships or ey personnel due to damage to our reputation could reduce the amount of assets under management and cause us to suffer a loss in revenue and a reduction in net income. Increasingly, we must manage actual and potential conflicts of interest, including situations where our services to a particular client conflict, or are perceived to conflict, with the interests of another client or our affiliates. ailure to adeuately address or disclose potential conflicts of interest could adversely affect our reputation, results of operations and business prospects.

Success of our NextShares initiative is highly uncertain. In recent years, the Company has devoted substantial resources to the development of ethares, a new type of actively managed fund designed to provide better

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performance for investors. road maret adoption and commercial success reuires the development of epanded distribution, the launch of ethares by other fund sponsors and acceptance by maret participants, which cannot be assured.

Support provided to developing new strategies and services may reduce fee income, increase expenses and expose us to potential loss on invested capital. e may support the development of new investment offerings by waiving all or a portion of the fees we receive, by subsidiing epenses or by maing seed capital investments. eed investments utilie Company capital that would otherwise be available for general corporate purposes and epose us to capital losses to the etent that realied investment losses are not offset by hedging gains. he ris of loss may be greater for seed capital investments that are not hedged, or if an intended hedge does not perform as epected. ailure to have or devote sufficient capital to support new investment offerings could have an adverse impact on our future growth.

We may need to raise additional capital or refinance existing debt in the future, and resources may not be available to us in sufficient amounts or on acceptable terms. ignificant future demands on our capital include contractual obligations to service our debt, satisfy the terms of noncancelable operating leases and purchase noncontrolling interests in our maorityowned subsidiaries as described more fully in Contractual bligations in Management’s Discussion and Analysis of Financial Condition and Results of Operations in this nnual Report and in ote 0 in this nnual Report. lthough we believe our eisting liuid assets, cash flows from operations and borrowing capacity under our credit facility are sufficient to meet our current and forecasted operating cash needs, our ability to satisfy our longterm contractual obligations may be dependent on our ability to access capital marets. ur ability to access capital marets efficiently depends on a number of factors, including the state of global credit and euity marets, interest rates, credit spreads and our credit ratings. If we are unable to access capital marets to issue new debt, refinance eisting debt or sell shares of our onoting Common toc as needed, or if we are unable to obtain such financing on acceptable terms, our business could be adversely affected.

We could be subject to losses and reputational harm if we, or our agents, fail to properly safeguard sensitive and confidential information or as a result of cyber attacks. e are dependent on the effectiveness of our information and cyber security policies, procedures and capabilities to protect our computer and telecommunications systems and the data that resides in, or is transmitted through, such systems. s part of our normal operations, we maintain and transmit confidential information about our clients and employees as well as proprietary information relating to our business operations. e maintain a system of internal controls designed to provide reasonable assurance that fraudulent activity, including misappropriation of assets, fraudulent financial reporting and unauthoried access to sensitive or confidential data, is either prevented or detected on a timely basis. evertheless, all technology systems remain vulnerable to unauthoried access and may be corrupted by cyber attacs, computer viruses or other malicious software code, the nature of which threats are constantly evolving and becoming increasingly sophisticated. In addition, authoried persons could inadvertently or intentionally release confidential or proprietary information. lthough we tae precautions to password protect and encrypt our mobile electronic hardware, if such hardware is stolen, misplaced or left unattended, it may become vulnerable to hacing or other unauthoried use, creating a possible security ris and resulting in potentially costly actions by us. reach or other failure of our technology systems, including those of third parties with which we do business, or failure to timely and effectively identify and respond to any such breach or failure, could result in the loss of valuable information, liability for stolen assets or information, remediation costs to repair damage caused by the incident, additional security costs to mitigate against future incidents and litigation costs resulting from the incident. oreover, loss of confidential customer identification information could harm our reputation, result in the termination of contracts by our eisting customers and subect us to liability under state, federal and international laws that protect

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confidential personal data resulting in increased costs loss of reenues and sustantial penalties ffectie in May the significantly increased the potential penalties for noncompliance ith reuirements for the handling and maintenance of personal and sensitie data concerning customers and employees Our failure to comply ith these reuirements could result in penalties of up to four percent of our gloal reenues regulatory action and reputational ris Recent ellpulicied security reaches at other companies hae led to enhanced goernment and regulatory scrutiny of the measures taen y companies to protect against cyer attacs and may in the future result in heightened cyer security reuirements including additional regulatory epectations for oersight of endors and serice proiders

Failure to maintain adequate infrastructure could impede our productivity and ability to support business growth. Our infrastructure including our technological capacity data centers and office space is ital to the operations and competitieness of our usiness he failure to maintain an infrastructure commensurate ith the sie and scope of our usiness including any epansion could impede our productiity and groth hich could result in a decline in our earnings

Failure to maintain adequate business continuity plans could have a material adverse impact on us and the investment strategies and services we offer. ignificant portions of our usiness operations and those of our critical thirdparty serice proiders are concentrated in a fe geographic areas including oston Massachusetts and eattle ashington Critical operations that are geographically concentrated in oston andor eattle include trading operations information technology fund administration and custody and portfolio accounting services for the Company’s investment offerings. Should we, or any of our critical serice proiders eperience a significant local or regional disaster or other usiness continuity prolem our continued success ill depend in part on the safety and aailaility of our personnel our office facilities and the proper functioning of our computer telecommunication and other related systems and operations he failure y us or any of our critical serice proiders to maintain updated adeuate usiness continuity plans including acup facilities could impede our aility to operate in the eent of a disruption hich could cause our earnings to decline e hae deeloped arious acup systems and contingency plans ut cannot e assured that they ill e adeuate in all circumstances that could arise or that material disruptions ill not occur n addition e rely to arying degrees on outside endors for disaster contingency support and e cannot e assured that these endors ill e ale to perform in an adeuate and timely manner f e or any of our critical serice proiders are unale to respond adeuately to such an eent in a timely manner e may e unale to continue our usiness operations hich could lead to a damaged reputation and loss of customers that results in a decrease in assets under management loer reenues and reduced net income

We pursue growth in the United States and abroad in part through acquisitions, which exposes us to risks inherent in assimilating new operations, expanding into new jurisdictions and executing on new development opportunities. Our groth strategy is ased in part on the selectie deelopment or acuisition of asset management or related usinesses that e eliee ill add alue to our usiness and generate positie net returns his strategy may not e effectie and failure to successfully deelop and implement such a strategy may decrease earnings and harm the Company’s competitive position. We cannot guarantee that e ill identify and consummate any such transactions on acceptale terms or hae sufficient resources to accomplish such a strategy n addition any strategic transaction can inole a numer of riss including additional demands on our staff unanticipated prolems regarding integration of operating facilities technologies and ne employees and the eistence of liailities or contingencies not disclosed to or otherise non y us prior to closing a transaction As a result the Company may not e ale to realie net enefits from such transactions n addition e may e reuired to spend additional time or money on integration that ould otherise e spent on the deelopment of our usiness.

57

Expansion into international markets and the introduction of new investment strategies and services increases our operational, regulatory and other risks. We continue to increase the scope of our investment offerings and the scale of our international usiness activities. s a result, we face increased operational, regulatory, compliance and reputational riss. he failure of our compliance and internal control systems to properly mitigate such additional riss, or of our operating infrastructure to support such epansion, could result in operational failures and regulatory fines or sanctions. ur operations in the .., the .., ustralia, Singapore and other urisdictions are suect to significant compliance, disclosure and other oligations. We incur additional costs to satisfy the reuirements of the .. irective on CS and other .. directives together, the .. irectives. Compliance reuirements relating to the .. irectives may also limit our operating fleiility and affect our aility to epand in uropean marets. ctivity in international marets also eposes us to fluctuations in currency echange rates, which may adversely affect the .S. dollar value of revenues, epenses and assets associated with our usiness activities outside the nited States. ctual and anticipated changes in current echange rates may also adversely affect international demand for our investment strategies and services, most of which represent investments primarily in .S. dollarased assets. ecause certain of our costs to support international usiness activities are ased in local currencies, the profitaility of such activities in .S. dollar terms may e adversely affected y a weaening of the .S. dollar versus other currencies in which we derive significant revenues.

The impact of the U.K.’s exit from the E.U. (Brexit) on the Company’s business operations in the U.K. and urope is unnown, and will vary depending on the final terms of the impending separation agreement. Ongoing changes in the E.U.’s regulatory framework applicable to the Company’s operations, including Brexit as well as any other changes in the composition of the E.U.’s member states, may add compleity to the Company’s global operations, impede expansion and/or impose additional risks.

Legal and regulatory developments affecting the investment industry could increase our regulatory costs and/or reduce our revenues. ur usiness is suect to comple and etensive regulation y various regulatory authorities in urisdictions around the world. his regulatory environment may e altered without notice y new laws or regulations, revisions to eisting regulations or new interpretations or guidance. loal financial regulatory reform initiatives may result in more stringent regulation, and changes in laws or regulations and their application to us could have a material adverse impact on our usiness, our profitaility and mode of operations. n recent years, regulators in oth the nited States and aroad have increased oversight of the financial sector of the economy. Some of the newly adopted and proposed regulations are focused directly on the investment management industry, while others are more roadly focused, ut affect our industry. t is uncertain how regulatory trends will e affected y current and future political developments.

nder a final rule and interpretive guidance issued y SC, certain nonan financial institutions have een designated for the Federal Reserve’s supervision as Ss. dditional nonan financial companies, which may include large asset management companies such as us, may e designated as Ss in the future. f we are designated a S, we would e suect to enhanced prudential measures, which could include capital and liuidity reuirements, leverage limits, enhanced pulic disclosures and ris management reuirements, annual stress testing y the ederal eserve, credit eposure and concentration limits, supervisory and other reuirements. hese heightened regulatory oligations could, individually or in the aggregate, adversely affect our usiness and operations.

aton ance anagement, arametric and are registered with the CC and the as Commodity ool perators and Commodity rading dvisors other susidiaries of the Company claim eemptions from registration. he CC generally allows operators of registered mutual funds that are suect to registration as Commodity ool perators to comply with SC disclosure, reporting and recordeeping rules as the means of

58

complying with CFTC’s similar requirements. These CFTC rules do not, however, relieve registered Commodity ool Operators from compliance with applicable antifraud provisions or certain performance reporting and recordkeeping reuirements. The Company may incur ongoing costs associated with monitoring compliance with these reuirements, including, but not limited to, CFTC and F registration and exemption obligations and the periodic reporting reuirements of Commodity ool Operators and Commodity Trading dvisors.

The regulation of derivatives markets has undergone substantial change in recent years and such change may continue. n particular, the oddFrank all treet Reform and Consumer rotection ct (the oddFrank ct), and regulations promulgated thereunder reuire many derivatives to be cleared and traded on an exchange, expand entity registration reuirements, impose business conduct reuirements on counterparties, and impose other regulatory reuirements that will continue to change derivative markets as regulations are implemented. dditional regulation of the derivatives markets may make the use of derivatives more costly, may limit the availability or reduce the liuidity of derivatives, and may impose limits or restrictions on the counterparties to derivative transactions.

Certain of our subsidiaries are reuired to file uarterly reports on Form F for private funds they manage, pursuant to systemic risk reporting reuirements adopted by the EC. These filings reuire significant investments in people and systems to ensure timely and accurate reporting. Further investment will be necessary in the coming years as we implement rules adopted by the EC in that amended Form and established Form ORT to reuire additional reporting for the separate accounts and Registered Funds we manage, respectively.

n , the U.. epartment of abor (O) began introducing changes to definitions and rules relating to fiduciaries serving holders of ualified retirement accounts. fter several delays and challenges, the U.. Court of Appeals for the Fifth Circuit vacated the DOL’s conflictofinterest rule, but the O has announced a conditional enforcement policy pending issuance of further guidance and is likely to repropose changes to the definitions and rules relating to fiduciaries that will materially affect how advice can be provided to retirement account holders in (k) plans, individual retirement accounts and other ualified retirement programs. e may need to modify our interactions or limit distribution to retirement plans, which could negatively affect our results of operations.

Our revenues and expenses may also be adversely affected by the new rule adopted in by the EC to address liuidity risk management by registered openend funds and the new rule proposed in to address use of derivatives by registered openend and closedend funds. These rules could limit investment opportunities for certain funds we manage and increase our management and administration costs. dditionally, in pril , the EC proposed a package of rulemakings and interpretations designed to enhance the standard of care for brokerdealers and reiterate the SEC’s standards for investment advisers. The SEC’s promulgation or enactment of an enhanced standard of care could also increase our costs of doing business.

n Europe, the revised arkets in Financial nstruments irective (iF irective) and the arkets in Financial nstruments Regulation (iFR) (collectively, iF ) took effect in anuary . mplementation of iF significantly affects the structure and operation of the E.U. financial markets and our European operations. ome of the main changes introduced by iF include (i) enhancing business conduct and governance reuirements (ii) broadening the scope of pre and posttrade transparency (iii) enhancing disclosure reuirements (iv) increasing transaction reporting reuirements (v) revising the relationship between client commissions and investment research services and (vi) further regulating trading revenue.

59

All of these new and developing laws and regulations will liely result in greater compliance and administrative urdens on us, increasing our epenses.

Our business is subject to risk from regulatory investigation, potential securities laws, liability and litigation. e are suect to federal securities laws, state laws regarding securities fraud, other federal and state laws and rules, and regulations of certain regulatory, selfregulatory and other organiations, including, among others, the SEC, FA, the CFTC, the FA and the ew or Stoc Echange. e are also suect to sustantial legal and regulatory requirements in the .., E.., Singapore, apan and other urisdictions in which we operate outside the .S. hile we have focused significant attention and resources on the development and implementation of compliance policies, procedures and practices, noncompliance with applicale laws, rules or regulations, either in the .S. or aroad, or our inaility to adapt to a comple and everchanging regulatory environment could result in sanctions against us, which could adversely affect our reputation, usiness, revenue and earnings. From time to time, various claims or potential claims against us arise, including employmentrelated claims. e carry insurance in amounts and under terms that we elieve are appropriate. e cannot guarantee that our insurance will cover most liailities and losses to which we may e eposed, or that our insurance policies will continue to e availale at acceptale terms and fees. Certain insurance coverage may not e availale or may e prohiitively epensive in future periods. As our insurance policies come up for renewal, we may need to assume higher deductiles or pay higher premiums, which would increase our epenses and reduce our net income.

Our Non-Voting Common Stock lacks voting rights. Our onoting Common Stoc has no voting rights under any circumstances. All voting power resides with our oting Common Stoc, all shares of which are held y officers of the Company and our susidiaries and deposited in a voting trust the oting Trust in echange for “Voting Trust Receipts,” which entitle the holder to receive the equivalent of all cash dividends that may e paid to the oting Trustees with respect to the deposited shares represented therey. As of Octoer , , there were holders of oting Trust eceipts representing oting Common Stoc, each holder of which is a “Voting Trustee” of the Voting Trust. Holders of Nonoting Common Stoc should understand that such ownership interests have no ability to vote in the election of the Company’s Board of Directors and no right to direct the Company’s management and strategy.

e evaluated the effectiveness of our disclosure controls and procedures as of Octoer , . Disclosure controls and procedures are designed to ensure that the information we are required to disclose in the reports that we file or sumit under the Echange Act is recorded, processed, summaried and reported within the time period specified in the SEC’s rule and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports that we file or sumit under the Echange Act is accumulated and communicated to our management, including our Chief Eecutive Officer CEO and Chief Financial Officer CFO, to allow timely decisions regarding required disclosure. Our CEO and CFO participated in this evaluation and concluded that, as of Octoer , , our disclosure controls and procedures were effective.

There have een no changes in our internal control over financial reporting that occurred during the fourth quarter of our fiscal year ended Octoer , that materially affected, or are reasonaly liely to materially affect, our internal control over financial reporting.

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in thousands, ecept per share data anagement fees ,, ,, ,, Distribution and underwriter fees , , , Service fees , , , ther revenue , , , Total revenue ,, ,, ,,

Compensation and related costs , , , Distribution epense , , , Service fee epense , , , mortiation of deferred sales commissions , , , undrelated epenses , , , ther epenses , , , Total epenses ,, ,, ,

perating income , , , ains and other investment income, net , , , nterest epense , , , oss on etinguishment of debt , ther income epense of consolidated collateralied loan obligation C entities ains and other investment income, net , , nterest and other epense , , Total nonoperating epense , , , ncome before income taes and euity in net income of affiliates , , ,

ncome taes , , ,

Euity in net income of affiliates, net of ta , , ,

Net income , , ,

Net income attributable to noncontrolling and other beneficial interests , , ,

Net income attributable to Eaton Vance Corp. shareholders , , , Basic . . . Diluted . . . Basic , , , Diluted , , , ee notes to Consolidated inancial tatements.

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in thousands

, , ,

ther comprehensive income loss nrealied loss on cash flow hedges, net of ta mortiation of net gains on cash flow hedges, net of ta nrealied gains losses on availableforsale investments and reclassification adustments, net of ta , oreign currency translation adustments , , , ther comprehensive income loss, net of ta , , ,

Total comprehensive income , , , Comprehensive income attributable to noncontrolling and other beneficial interests , , ,

Total comprehensive income attributable to Eaton Vance Corp. shareholders , , , ee notes to Consolidated inancial tatements.

62

in thousands, ecept share data

Cash and cash euivalents , , anagement fees and other receivables , , nvestments ,, , ssets of consolidated C entities Cash , Ban loans and other investments , , ther assets , Deferred sales commissions , , Deferred income taes , , Euipment and leasehold improvements, net , , ntangible assets, net , , oodwill , , oan to affiliate , , ther assets , , Total assets ,, ,,

ccrued compensation , , ccounts payable and accrued epenses , , Dividend payable , , Debt , , iabilities of consolidated C entities Senior and subordinated note obligations , ine of credit , ther liabilities , ther liabilities , , Total liabilities ,, ,, Commitments and contingencies Note Redeemable noncontrolling interests , , Total temporary euity , , Voting Common Stoc, par value . per share uthoried, ,, shares ssued and outstanding, , and , shares, respectively NonVoting Common Stoc, par value . per share uthoried, ,, shares ssued and outstanding, ,, and ,, shares, respectively dditional paidin capital , , Notes receivable from stoc option eercises , , ccumulated other comprehensive loss , , Retained earnings ,, , Total Eaton Vance Corp. shareholders euity ,, ,, Nonredeemable noncontrolling interests , Total permanent euity ,, ,, Total liabilities, temporary euity and permanent euity ,, ,,

ee notes to Consolidated inancial tatements.

63

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Equity of Statements Shareholders’ Consolidated thousandsin Balance, November, Balance, ctober , tatements. to inancial notes ee Consolidated

64

, , , , , , , , , on , , Equity , , , nterests on Equity emorary emorary Controllin edeemale nterests

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Voting Common Stoc Common Voting controlling interests Voting Common Stoc Common Voting Voting Common Stoc controlling interest controlling interests

f non

controlling interest holders eercise of stoc options controlling interest holders compensation based ctober , , ctober based compensation n eercisen of stoc options n non nderemployee stoc purchase plans nderemployee stoc purchase in nder restricted stoc plan, net of forfeitures restricted stoc awards repurchases from stoc option eercises sponsored investment funds interests redeemable at fair value nder employee stoc purchase plans nder employee stoc purchase incentive plan nder restricted stoc plan, net of forfeitures restricted stoc awards repurchases See Note stocfrom option eercises non sponsored andinvestment Cfunds entities interests at value fair redeemable Net income thercomprehensive loss, net of ta Dividends declared . share per Stoc Common Voting of ssuance ssuance of Non Net income thercomprehensive income,of net ta Dividends declared . share per ssuance of Non Stoc Ta benefit of stoc option eercises and vesting of Ta benefit of non Repurchase of Non rincipal repaymentson notes receivable Net subscriptions redemptionsdistributions o Net consolidations deconsolidations of Reclass to temporary euity urchase of non Changes in redemption value of non Stoc Ta benefit of stoc option vesting eercises and of Ta benefit o Repurchase of Voting Common Stoc Repurchase of Non rincipal notesrepayments on receivable Net subscriptions redemptionsdistributionsof Net consolidations deconsolidationsof Reclass temporary to euity urchase of non Changes value in redemption of non

Equity of Statements Shareholders’ Consolidated thousandsin Balance, November, Balance, ctober , tatements. to inancial notes ee Consolidated of Statements S Consolidated thousandsin Balance, November, Balance, tatements. to inancial notes ee Consolidated

65

, , , , , , , eorary Equity edeeale on ontrollin nterests

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Voting Common Stoc controlling interest rary euity controlling interests Voting Common Stoc Common Voting standard S

controlling interest holders based compensation based rom stoc option eercises n eercisen of stoc non accounting nderemployee stoc purchase plans nderemployee stoc purchase incentive plan nder restricted stoc plan, net of forfeitures repurchases f sponsored investment funds interests redeemable at fair value solidated Statements of Shareholders’ Equity (continued) Equity of Statements Shareholders’ solidated Cumulative effect adustment upon adoption of new Net income thercomprehensive loss, net of ta Dividends declared . share per ssuance of Non Stoc Ta benefit of non Repurchase of Voting Common Stoc Repurchase of Non rincipal repaymentson notes receivable Net subscriptions redemptionsdistributions of Net consolidations deconsolidations of Reclass to tempo urchase of non Changes in redemption value of non nce, November,

66 on thousandsin Bala , ctober Balance, tatements. to inancial notes ee Consolidated

onsolidated Statements of ash los ears Ended ctoer in thousands

ash los rom eratin ctiities Net income , , , dustments to reconcile net income to net cash provided by operating activities Depreciation and amortiation , , , namortied loss on derivative instrument mortiation of deferred sales commissions , , , Stocbased compensation , , , Deferred income taes , , , Net losses on investments and derivatives , , oss on epiration of Heavest option , Euity in net income of affiliates, net of ta , , , Dividends received from affiliates , , , oss on etinguishment of debt , Consolidated CLO entities’ operating activities: Net gains on ban loans, other investments and note obligations , , mortiation ncrease decrease in other assets and cash, net of other liabilities , , Changes in operating assets and liabilities anagement fees and other receivables , , , nvestments in trading securities , , , Deferred sales commissions , , , ther assets , , , ccrued compensation , , , ccounts payable and accrued epenses , , , ther liabilities , , , Net cash provided by operating activities , , , ash los rom nestin ctiities dditions to euipment and leasehold improvements , , , ssuance of loan to affiliate , Net cash paid in acuisitions , , roceeds from sale of investments , , , urchase of investments , , roceeds from sale of investments in C entity note obligations , , urchase of investments in C entity note obligations , Consolidated CLO entities’ investing activities: roceeds from sales of ban loans and other investments , , urchase of ban loans and other investments , , , Net cash used for investing activities , , ,

In fiscal , the Company elected to present the investing cash flos related to the purchase and sale of investments in C entity note oligations separately from the purchase and sale of other investments. he prior year amounts, hich ere previously presented ithin the purchase and sale of investments line items, ere reclassified to these line items for comparaility purposes.

ee notes to Consolidated inancial tatements.

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Consolidated tateents o Cas los contined ears nded Octoer in thousands Cas los ro inancing ctivities: urchase of additional noncontrolling interest , , , Debt issuance costs , roceeds from issuance of debt , Repayment of debt , oss on etinguishment of debt , roceeds from issuance of Voting Common Stoc roceeds from issuance of NonVoting Common Stoc , , , Repurchase of Voting Common Stoc Repurchase of NonVoting Common Stoc , , , rincipal repayments on notes receivable from stoc option eercises , , , Dividends paid , , , Net subscriptions received from redemptionsdistributions paid to noncontrolling interest holders , , Consolidated CLO entities’ financing activities: roceeds from line of credit , , Repayment of line of credit , ssuance of senior and subordinated note obligations ,, rincipal repayments of senior and subordinated note obligations , Net cash provided by used for financing activities , , , Effect of currency rate changes on cash and cash euivalents , , , Net increase decrease in cash and cash euivalents , , , Cash and cash euivalents, beginning of year , , , Cash and cash euivalents, end of year , , , ppleental Cas lo noration: Cash paid for interest , , , Cash paid for interest upon repayment of debt , Cash paid for interest by consolidated C entities , , Cash paid for income taes, net of refunds , , , ppleental isclosre o onCas noration: ncrease in euipment and leasehold improvements due to noncash additions , Eercise of stoc options through issuance of notes receivable , , , NonVoting Common Stoc repurchases recorded in accounts payable and accrued epenses , Noncontrolling interest call option eercise recorded in other liabilities , , , ncrease decrease in noncontrolling interest due to net consolidations deconsolidation of sponsored investment funds , , , ncrease in ban loans and other investments of consolidated C entities due to unsettled purchases , nitial Consolidation o CLO ntities: ncrease in ban loans and other investments , , ncrease in senior loan obligations , ncrease in line of credit , econsolidation o CLO ntities: Decrease in ban loans and other investments , , Decrease in senior and subordinated loan obligations , ,

ee notes to Consolidated inancial tatements.

68

otes to Consolidated inancial tateents

a of ignificant cconting olicies

Business and organization

Eaton Vance Corp. and its subsidiaries the Company manage investment funds and provide investment management and advisory services to highnetworth individuals and institutions in the nited States, Europe, the sia acific region and certain other international marets. The Company distributes its funds and retail managed accounts principally through financial intermediaries. The Company also commits significant resources to serving institutional and highnetworth clients who access investment management services on a direct basis.

Revenue is largely dependent on the total value and composition of assets under management, which include sponsored funds and separate accounts. ccordingly, fluctuations in financial marets and changes in the composition of assets under management affect revenue and the results of operations.

Basis of presentation

The preparation of the Company’s Consolidated Financial Statements in conformity with accounting principles generally accepted in the nited States of merica .S. reuires management to mae udgments, estimates and assumptions that affect the amounts reported in the Consolidated inancial Statements and related notes to the Consolidated inancial Statements. However, due to the inherent uncertainties in maing estimates, actual results could differ from those estimates.

Adoption of new accounting standards

n arch , the inancial ccounting Standards Board SB issued ccounting Standard pdate, mprovements to Employee ShareBased ayment ccounting S , which simplifies certain aspects of the accounting for sharebased payment transactions. The Company adopted S as of November , . nder this S, ecess ta benefits or ta deficiencies related to the eercise of stoc options and vesting of restricted stoc awards are no longer recognied in additional paidin capital but rather as an income ta benefit or income ta epense in the period of vesting or settlement. This provision of the S reuires a prospective approach to adoption. During the year ended ctober , , the Company recognied ecess ta benefits of . million attributable to the eercise of stoc options and vesting of restricted stoc awards in conunction with the adoption of this S.

This guidance also reuires that the ecess ta benefits or ta deficiencies described above be classified as an operating cash flow within the Consolidated Statements of Cash lows as opposed to a financing cash flow, as previously reported. The Company elected to use a retrospective approach to the adoption of this provision of the S. s a result, ecess ta benefits of . million and . million recognied for the years ended ctober , and were reclassified out of financing activities and into operating activities.

inally, the guidance allows companies to elect to continue to account for forfeitures using an estimate or instead to elect to account for forfeitures as they occur. pon adoption, the Company elected to account for forfeitures as they occur and adopted this provision of the S using the modified retrospective approach. Therefore, upon adoption, the Company recognied a . million cumulative effect adustment

69

reduction to retained earnings net of related income ta effects to reflect the timing difference of when forfeitures are recognied in the measurement of stocased compensation cost

Where applicable, the Company’s significant accounting policies discussed below have been amended to reflect the adoption of S as of oemer

Principles of consolidation

he Consolidated Financial Statements include the accounts of the Company and its controlled affiliates ll legal entities are ealuated for consolidation under two primary consolidation models namely the oting interest entity model and the ariale interest entity model oth consolidation models reuire the Company to consolidate a legal entity when it has a controlling financial interest in that entity he Company recognies noncontrolling and other eneficial interests held y third parties in consolidated affiliates in which the Company’s ownership is less than percent ll intercompany accounts and transactions hae een eliminated in consolidation

nder the oting interest entity model the Company consolidates any oting interest entity when the Company is considered to hae a controlling financial interest which is typically present when the Company’s oting ownership eceeds percent or where the Company otherwise has the power to goern the financial and operating policies of the entity oting interest entities primarily include wholly and maorityowned affiliates through which the Company conducts its usiness

he Company ealuates any s in which the Company has a ariale interest for consolidation is an entity in which either a the euity inestment at ris is not sufficient to permit the entity to finance its own actiities without additional financial support or where as a group the holders of the euity inestment at ris do not possess i the power through oting or similar rights to direct the actiities that most significantly affect the entity’s economic performance, (ii) the obligation to absorb expected losses or the right to receie epected residual returns of the entity or iii proportionate oting and economic interests in instances in which substantially all of the entity’s activities either involve or are conducted on ehalf of an inestor with disproportionately fewer oting rights f an entity has any of these characteristics it is considered a and is reuired to e consolidated y its primary eneficiary

he Company is deemed to e the primary eneficiary of a when it has a ariale interest that proides it with oth i the power to direct the actiities that most significantly affect the VIE’s economic performance and ii the oligation to asor losses of or the right to receie enefits from the that could potentially e significant to the s consolidated y the Company primarily include arious open‐end registered investment companies that it sponsors sponsored funds and collateralied loan obligation (CLO) entities. The Company’s initial and continuous ongoing assessment of whether it qualifies as the primary eneficiary of a is comple dditional considerations releant to the application of the model to sponsored funds and C entities are discussed elow

he Company may consolidate one or more sponsored funds or C entities during a gien reporting period. Due to the similarity of risks related to the Company’s involvement with each of these entities and disclosures reuired under the model certain disclosures regarding these entities are aggregated

Consolidation of sponsored funds With limited exceptions, each of the Company’s sponsored funds is organized as a separately managed component or series of a series trust ll assets of a series irreocaly elong to that series and are

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subect to the liabilities of that series under no circumstances are the liabilities of one series payable by another series. The Company’s series trusts have no equity investment at risk rather, all equity is issued at the series level. owever, decisions regarding the trustees of the trust and certain key activities of each series (i.e., sponsored fund) within the trust, such as appointment of each sponsored fund’s investment adviser, typically reside at the trust level. s a result, shareholders of a sponsored fund that is organized as a series of a series trust lack the ability to control the key decision‐making processes that most significantly affect the economic performance of the sponsored fund. ccordingly, the Company believes that each trust is a variable interest entity (VIE) and each sponsored fund within the trust is a silo that will be evaluated for consolidation as a separate VIE. aving concluded that each silo is a VIE for accounting purposes, the primary beneficiary evaluation is focused on an analysis of economic interests in each silo.

The Company regularly seeds new sponsored funds and may hold a significant interest in the shares of a sponsored fund during the seed investment stage when the sponsored fund’s investment track record is being established. To the extent that the Company’s interest in a sponsored fund is limited to: (i) market‐ based fees earned from the fund that are commensurate with the level of effort to provide the service and (ii) other interests that, in aggregate, would absorb an insignificant amount of variability in the fund, the Company’s management contract would not be considered a variable interest that provides the Company with the power to direct the activities of the fund and would therefore not be required to consolidate the fund. The Company has concluded that its fees earned from asset management arrangements with sponsored funds in which the Company holds a significant (at least percent) ownership interest in the fund do represent variable interests that convey both power, in combination with the ownership interest, and significant economic exposure (both characteristics of a controlling financial interest) to the Company and therefore the Company would be deemed to be the primary beneficiary that would be required to consolidate the fund.

Upon consolidation, management fee revenue earned on, as well as the Company’s investments in, consolidated sponsored funds are eliminated. The Company retains the specialized accounting treatment of the sponsored fund in consolidation whereby the underlying investments are carried at fair value, with corresponding changes in fair value reflected in gains (losses) and other investment income, net, in the Company’s Consolidated Statements of Income. When the Company is no longer deemed to hold a controlling financial interest in a sponsored fund, the Company deconsolidates the sponsored fund and removes the related assets, liabilities and non‐controlling interests from its balance sheet and classifies the Company’s remaining equity investment as available‐for‐sale. ecause consolidated sponsored funds carry their assets and liabilities at fair value, there is no incremental gain or loss recognized upon deconsolidation.

Consolidation of C entities In the normal course of business, the Company provides collateral management services to, and in certain cases invests in, sponsored CLO entities. The Company evaluates such CLO entities under the VIE model as the equity investment at risk is not sufficient to finance the activities of these entities, which are primarily financed through the issuance of senior debt obligations. The fees paid to the Company as collateral manager are not considered to be variable interests in sponsored CLO entities in cases where each of the following conditions are met (i) the fees paid to the Company are commensurate with the level of effort required to provide the collateral management services, (ii) the Company does not hold other interests in the CLO entity that individually, or in the aggregate, would absorb more than an insignificant amount (less than percent) of the CLO entity’s expected losses or residual returns, and (iii) the terms of the collateral management agreement between the Company and the CLO entity are consistent with the terms for similar services negotiated at arm’s length. If each of these criteria are not met, the Company is deemed to

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have a variable interest in the CLO entity and would be required to consolidate the I if the Company is the primary beneficiary.

In assessing whether the Company is the primary beneficiary of a sponsored CLO entity, the Company considers its role as collateral manager and the significance of other interests in the CLO entity that are held by the Company. s collateral manager, the Company has the power to direct the activities that most significantly affect the economic performance of these entities. In cases where the Company holds at least percent of the subordinated interests of a CLO entity, the Company is deemed to have the obligation to absorb losses of, or the right to receive benefits from, the CLO entity that could potentially be significant to the CLO entity. ccordingly, the Company deems itself to be the primary beneficiary of a CLO entity, and thus consolidates the entity, in cases where the Company both: (i) provides collateral management services to the CLO entity and (ii) holds at least percent of the subordinated interests of the CLO entity.

Upon consolidation, management fee revenue earned on, as well as the Company’s subordinated interests in, consolidated CLO entities are eliminated. The Company applies the measurement alternative to ccounting Standard Codification (SC) , related to fair value measurement for collateralied financing entities upon the initial consolidation and for the subsequent measurement of CLO entities in the securitiation phase. The measurement alternative requires reporting entities to use the more observable of the fair value of the financial assets or the fair value of the financial liabilities to measure both the financial assets and the financial liabilities of a collateralied financing entity. ny gain or loss resulting from the initial application of the measurement alternative is reflected in earnings attributable to the reporting entity. Subsequent to initial consolidation, the application of the measurement alternative requires the Company to recognie in earnings amounts that reflect the equivalent of its own economic interests in the CLO entity, which generally include both changes in fair value of any retained investment, and management fees as compensation for collateral management services. When the Company is no longer deemed to be the primary beneficiary of a CLO entity, the Company deconsolidates the CLO entity and removes the related assets and liabilities from its balance sheet. ecause assets and liabilities of consolidated CLO entities in the securitiation phase are carried at fair value pursuant to the measurement alternative to SC previously described, there is no incremental gain or loss recognied upon deconsolidation.

Segment information

anagement has determined that the Company operates in one segment, namely as an investment adviser managing funds and separate accounts. The Company’s determination that it operates in one business segment is based on the fact that the Company’s Chief Executive Officer reviews the Company’s financial performance at an aggregate level. ll of the business services provided by the Company relate to investment management and are subect to similar regulatory frameworks. Investment management teams at the Company are generally not aligned with specific business lines or distribution channels in many instances, the investment professionals who manage the Company’s sponsored funds are the same investment professionals who manage the Company’s separately managed accounts.

Cash and cash equivalents

Cash and cash equivalents consists principally of cash as well as cash equivalents that may consist of short term, highly liquid investments in money market funds, commercial paper, certificates of deposit and holdings of Treasury and government agency securities, which are readily convertible to cash. Cash equivalents have maturities of less than three months on the date of acquisition and are stated at fair

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value or cost, which approximates fair value due to the shortterm maturities of the underlying investments.

Restricted cash

estricted cash consists principally of cash collateral reuired for margin accounts established to support derivative positions, and is included as a component of other assets on the Company’s Consolidated alance heets. uch derivatives are used to hedge certain investments in consolidated sponsored funds and separately managed accounts seeded for business development purposes consolidated seed investments. ecause the accounts are used to support trading activities, changes in restricted cash balances are reflected as operating cash flows in other assets in the Company’s Consolidated Statements of Cash lows.

Investments

Investment securities, trading aretable securities classified as trading securities consist of investments in debt and euity securities held in the portfolios of consolidated seed investments, ban obligations, certificates of deposit, commercial paper and corporate debt securities with remaining maturities upon purchase by the Company ranging from three months to months.

nvestment securities held in the portfolios of consolidated seed investments andor held directly by the Company are carried at fair value based on uoted maret prices. et realied and unrealied gains or losses are reflected as a component of gains losses and other investment income. The specific identified cost method is used to determine the realied gains or losses on all trading securities sold.

Investment securities, availaleforsale aretable securities classified as availableforsale consist primarily of investments in shares of sponsored funds and are carried at fair value based on uoted maret prices. Unrealied holding gains or losses to the extent such losses are considered temporary are reported net of deferred tax as a separate component of accumulated other comprehensive income loss until realied. ealied gains or losses are reflected as a component of gains losses and other investment income. The specific identified cost method is used to determine the realied gains or losses on the sale of shares of sponsored funds.

The Company evaluates the carrying value of maretable securities classified as availableforsale for impairment on a uarterly basis. n its impairment analysis, the Company taes into consideration numerous criteria, including the duration and extent of any decline in fair value and the Company’s intent with respect to a given security. f the decline in value is determined to be otherthantemporary, the carrying value of the security is written down to fair value through earnings.

Investments in nonconsolidated C entities nvestments in nonconsolidated CO entities are carried at amortied cost unless impaired. The excess of actual and anticipated future cash flows over the initial investment at the date of purchase is recognied in gains losses and other investment income, net, over the life of the investment using the effective yield method. The Company reviews cash flow estimates throughout the life of each nonconsolidated CO entity. f the updated estimate of future cash flows taing into account both timing and amounts is less than the last estimate, an impairment loss is recognied to the extent the carrying amount of the investment exceeds its fair value.

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Investments in euity method investees nvestments in noncontrolled affiliates in which the Company’s ownership ranges from 20 to 50 percent, or in instances in which the Company is able to exercise significant influence but not control, are accounted for under the euity method of accounting nder the euity method of accounting, the Company’s share of the investee’s underlying net income or loss is recorded as equity in net income of affiliates, net of tax. Distributions received from investees reduce the Company’s investment balance nvestments in euity method investees are evaluated for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable f the carrying amounts of the assets exceed their respective fair values, additional impairment tests are performed to measure the amounts of the impairment losses, if any

Investments, other Certain investments are carried at cost he fair values of costmethod investments are not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair values of the investments

Fair value measurements

he accounting standards for fair value measurement provide a framewor for measuring fair value and reuire expanded disclosures regarding fair value measurements air value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous maret in an orderly transaction between maret participants on the measurement date he accounting standards establish a fair value measurement hierarchy, which reuires an entity to maximie the use of observable inputs where available his fair value measurement hierarchy gives the highest priority to uoted prices in active marets for identical assets or liabilities and the lowest priority to unobservable inputs

he Company utilies thirdparty pricing services to value investments in various asset classes, including interests in senior floatingrate loans and other debt obligations, derivatives and certain foreign euity securities, as further discussed below aluations provided by the pricing services are subect to exception reporting that identifies securities with significant movements in valuation, as well as investments with no movements in valuation hese exceptions are reviewed by the Company on a daily basis he Company compares the price of trades executed by the Company to the valuations provided by the thirdparty pricing services to identify and research significant variances he Company periodically compares the pricing service valuations to valuations provided by a secondary independent source when available aret data provided by the pricing services and other maret participants, such as the oan Syndication and rading ssociation S trade study, is reviewed by the Company to assess the reliability of the provided data. The Company’s Valuation Committee reviews the general assumptions underlying the methodologies used by the pricing services to value various asset classes at least annually hroughout the year, members of the Company’s Valuation Committee or its designees meet with the service providers to discuss any significant changes to the service providers’ valuation methodologies or operational processes.

ssets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories based on the nature of the inputs that are significant to the fair value measurements in their entirety n certain cases, the inputs used to measure fair value may fall into different levels of the fair value measurement hierarchy. In such cases, an investment’s classification within the fair value measurement hierarchy is based on the lowest level of input that is significant to the fair value measurement

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evel nadusted quoted maret prices in active marets for identical assets or liabilities at the reporting date.

evel 2 bservable inputs other than evel unadusted quoted maret prices, such as quoted maret prices for similar assets or liabilities in active marets, quoted prices for identical or similar assets or liabilities that are not active, and inputs other than quoted prices that are observable or corroborated by observable maret data.

evel nobservable inputs that are supported by little or no maret activity.

The Company recognies any transfers between levels at the end of each quarter.

Derivative financial instruments

The Company may utilie derivative financial instruments to hedge maret, interest rate, commodity and currency riss associated with its investments in separate accounts and certain consolidated sponsored funds seeded for business development purposes, exposures to fluctuations in foreign currency exchange rates associated with investments denominated in foreign currencies and interest rate ris inherent in debt offerings. These derivative financial instruments may or may not qualify for designation in a hedge relationship for accounting purposes. In addition, certain consolidated seed investments may enter into derivative financial instruments within their portfolios to achieve stated investment obectives. The Company does not use derivative financial instruments for speculative purposes.

The Company records all derivative financial instruments as either assets or liabilities on its Consolidated alance heets and measures these instruments at fair value. Derivative transactions are presented on a gross basis in the Company’s Consolidated alance heets. or a derivative financial instrument that is designated as a cash flow hedge, the effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income loss and subsequently reclassified into earnings over the life of the hedge. The ineffective portion of the gain or loss is reported in earnings immediately. Changes in the fair value of the Company’s other derivative financial instruments are recognized in earnings in the current period.

Deferred sales commissions

ales commissions paid to broerdealers in connection with the sale of certain classes of shares of sponsored openend and private funds are generally deferred and amortied over the period during which redemptions by the purchasing shareholder are subect to a contingent deferred sales charge, which does not exceed five years from purchase. Distribution plan payments received from these funds are recorded in revenue as earned. Contingent deferred sales charges and early withdrawal charges received from redeeming shareholders of these sponsored funds are generally applied to reduce the Company’s unamortied deferred sales commission assets. hould the Company lose its ability to recover such sales commissions through distribution plan payments and contingent deferred sales charges, the value of its deferred sales commission asset would immediately decline, as would related future cash flows.

The Company evaluates the carrying value of its deferred sales commission asset for impairment on a quarterly basis. In its impairment analysis, the Company compares the carrying value of the deferred sales commission asset to the undiscounted cash flows expected to be generated by the asset in the form of distribution fees over its remaining useful life to determine whether impairment has occurred. If the

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carrying value of the asset eceeds the undiscounted cash flows, the asset is written down to fair value based on discounted cash flows mpairment adustments are recognized in operating income as a component of amortization of deferred sales commissions

Income taxes

eferred income taes reflect the epected future ta conseuences of temporary differences between the carrying amounts and tax bases of the Company’s assets and liabilities measured using rates epected to be in effect when such differences reverse o the etent that deferred ta assets are considered more liely than not to be unrealizable, valuation allowances are provided ny adustments to deferred ta assets and liabilities attributable to changes in ta laws or rates are recorded as an epense or benefit in the period that the new legislation is enacted

The Company’s effective tax rate reflects the statutory tax rates of the many jurisdictions in which it operates ignificant udgment is reuired in evaluating its ta positions n the ordinary course of business, many transactions occur for which the ultimate ta outcome is uncertain ccounting standards governing the accounting for uncertainty in income taes for a ta position taen or epected to be taen in a ta return reuire that the ta effects of a position be recognized only if it is more liely than not to be sustained based solely on its technical merits as of the reporting date he morelielythannot threshold must be met in each reporting period to support continued recognition of the benefit he difference between the ta benefit recognized in the financial statements for a ta position and the ta benefit claimed in the income ta return is referred to as an unrecognized ta benefit nrecognized ta benefits, as well as the related interest and penalties, are adusted regularly to reflect changing facts and circumstances he Company classifies any interest or penalties incurred as a component of income ta epense

Equipment and leasehold improvements

uipment and other fied assets are recorded at cost and depreciated on a straightline basis over their estimated useful lives, which range from three to five years easehold improvements are amortized on a straightline basis over the shorter of their estimated useful lives or the terms of the leases penditures for repairs and maintenance are charged to epense when incurred uipment and leasehold improvements are tested for impairment whenever changes in facts or circumstances indicate that the carrying amount of an asset may not be recoverable

Certain internal and eternal costs incurred in connection with developing or obtaining software for internal use are capitalized and amortized on a straightline basis over the shorter of the estimated useful life of the software or three years, beginning when the software proect is complete and the application is put into production hese costs are included in euipment and leasehold improvements on the Company’s Consolidated Balance Sheets.

Goodwill

Goodwill represents the excess of the cost of the Company’s investment in the net assets of acquired companies over the fair value of the underlying identifiable net assets at the dates of acuisition he Company attributes all goodwill associated with its acuisitions of tlanta Capital anagement Company, C tlanta Capital, arametric ortfolio ssociates C arametric and he Clifton roup nvestment anagement Company Clifton, which share similar economic characteristics, to one reporting unit he

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Company attributes all goodwill associated with its acquisition of the Tax dvantaged Bond Strategies TBS business of .. Sass nvestor Services and other acquisitions to a second reporting unit.

Goodwill is not amortied but is tested annually for impairment in the fourth quarter of each fiscal year by comparing the fair values of identified reporting units to their respective carrying amounts including goodwill. The Company establishes fair value for the purpose of impairment testing for each reporting unit by using an income approach and a maret approach.

The income approach employs a discounted cash flow model that taes into account assumptions that maret participants would use in their estimates of fair value current period actual results and budget projections for future periods that have been vetted by senior management. The discounted cash flow model incorporates the same fundamental pricing concepts used to calculate fair value in the acquisition due diligence process and a discount rate that takes into consideration the Company’s estimated cost of capital adjusted for the uncertainty inherent in the forecasted information.

The maret approach employs maret multiples based on comparable publicly traded companies in the financial services industry calculated with data from industry sources. stimates of fair value are established using current and forward multiples of both revenue and earnings before interest taxes depreciation and amortiation BT adjusted for sie and performance of the reporting unit relative to peer companies.

f the carrying amount of the reporting unit exceeds its calculated fair value the second step of the goodwill impairment test will be performed to measure the amount of the impairment loss if any.

Intangible assets

mortiing identifiable intangible assets generally represent the cost of client relationships intellectual property trademars and research systems. n valuing these assets the Company maes assumptions regarding useful lives and projected growth rates and significant judgment is required. The Company periodically reviews its amortiing identifiable intangible assets for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. f the carrying amounts of those assets exceed their respective fair values an impairment loss is recognied equal to that excess.

onamortiing intangible assets generally represent the cost of mutual fund management contracts acquired. onamortiing intangible assets are tested for impairment in the fourth quarter of each fiscal year by comparing the fair values of the management contracts acquired to their carrying values. The Company establishes fair value for purposes of impairment testing using the income approach. f the carrying value of a management contract acquired exceeds its fair value an impairment loss is recognied equal to that excess.

Debt issuance costs

eferred debt issuance costs are amortied using the effective interest method over the related debt term. Debt issuance costs related to the Company’s term debt are included in debt in the Company’s Consolidated Balance Sheets. The amortiation of deferred debt issuance costs is included in interest expense on the Company’s Consolidated Statements of Income.

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Revenue recognition

anagement fees Inestment adisory and administratie fees for the funds and inestment adisory fees for separate accounts managed by the Company are recorded in management fee reenue as the serices are performed. Such fees are based primarily on predetermined percentages of the market alues of the assets under management. The Company’s fund investment adisory and administratie fees are calculated principally as a percentage of aerage daily net assets. The Company’s separate account inestment adisory fees are calculated as a percentage of either beginning aerage or ending monthly or quarterly net assets. Inestment adisory and administratie fees for the funds are earned daily and paid monthly inestment adisory fees for separate accounts are earned daily and paid either monthly or quarterly. he Company may aie certain fees for inestment adisory and administratie serices at its discretion.

erformance fees are generated on certain fund and separate account management contracts hen specific performance hurdles are met. Such fees are recorded in management fee reenue as of the performance measurement date hen the outcome can be reasonably assured and measured reliably.

he Company has contractual arrangements ith third parties to proide certain fundrelated serices including subadisory and distributionrelated serices. anagement’s determination of whether related reenue should be reported on a gross basis ithout subtracting payments to thirdparty serice proiders or net of payments to thirdparty service providers is based on management’s assessment of hether the Company is acting as the principal serice proider or is acting as an agent. he primary factors considered in assessing the nature of the Company’s role include (1) whether the Company is responsible for the fulfillment of the obligation including the acceptability of the serices proided hether the Company has reasonable latitude to establish the price of the serice proided hether the Company has the discretion to select the serice proider and hether the Company assumes credit risk in the arrangement.

Pursuant to management’s assessment of the criteria described above, management fees are recorded gross of any subadisory payments ith the corresponding fees paid to any subadiser based on the terms of those arrangements included in fundrelated expenses in the Company’s Consolidated Statements of Income.

istriution, underriter and service fees Distribution and serice fees for all share classes subect to these fees are calculated as a percentage of aerage daily net assets and recorded in reenue as earned gross of any thirdparty distribution and serice fee payments made by the Company. Distribution and serice fees are earned daily and paid monthly. he expenses associated ith thirdparty distribution and serice fee arrangements are recorded in distribution and serice fee expense respectiely as the serices are proided by the third party. hese expenses are also paid monthly.

nderriter commissions are earned on sales of shares of sponsored mutual funds on hich inestors pay a sales charge at the time of purchase. therise applicable sales charges and underriter commissions may be aied or reduced on shareholder purchases that exceed specified minimum amounts and on purchases by certain categories of inestors.

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Advertising and promotion

The Company expenses all advertising and promotional costs as incurred. dvertising costs incurred were not material to the Company’s Consolidated Financial Statements in the fiscal years ended ctober 1, 1, 1 or 1.

Leases

The Company leases office space under various leasing arrangements. s leases expire, they are normally renewed or replaced in the ordinary course of business. ost lease agreements contain renewal options, rent escalation clauses andor other inducements provided by the landlord. ent expense is recorded on a straightline basis, including escalations and inducements, over the lease term.

Earnings per share

asic earnings per share is calculated by dividing net income attributable to aton ance Corp. shareholders by the weightedaverage number of shares outstanding during the reporting period. iluted earnings per share is calculated by dividing net income attributable to aton ance Corp. shareholders by the weightedaverage number of common shares outstanding during the period plus the dilutive effect of any potential common shares outstanding during the period using the treasury stoc method.

Stock-based compensation

The Company accounts for stock‐based compensation expense at fair value. Under the fair value method, stock‐based compensation expense for equity awards, which reflects the fair value of stock‐based awards measured at grant date, is recognied on a straight‐line basis over the relevant service period (generally five years) and is adusted each period for forfeitures as they occur.

The tax effect of the difference, if any, between the cumulative compensation expense recognied for a stocbased award for financial reporting purposes and the deduction for such award for tax purposes is recognied as income tax expense (for tax deficiencies) or benefit (for excess tax benefits) in the Company’s Consolidated Statements of Income in the period in which the tax deduction arises (generally in the period of vesting or settlement of a stocbased award, as applicable) and are reflected as an operating activity on the Company’s Consolidated Statements of Cash Flows. Shares of nonvoting common stoc withheld for tax withholding purposes upon the vesting of restricted share awards are reflected as a financing activity in the Company’s Consolidated Statements of Cash Flows.

Foreign currency translation

Substantially all of the Company’s foreign subsidiaries have a functional currency that is something other than the .. dollar. ssets and liabilities of these subsidiaries are translated into .. dollars at current exchange rates as of the end of each accounting period. elated revenue and expenses are translated at average exchange rates in effect during the accounting period. et translation exchange gains and losses are excluded from income and recorded in accumulated other comprehensive income (loss). oreign currency transaction gains and losses are reflected in gains (losses) and other investment income, net, as they occur.

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Comprehensive income

The Company reports all changes in comprehensive income in its Consolidated Statements of Comprehensive Income. Comprehensive income includes net income, unrealied gains and losses on certain derivatives designated as cash flow hedges and related reclassification adustments attributable to the amortiation of net gains and losses on these derivatives, unrealied holding gains and losses on investment securities classified as available‐for‐sale and related reclassification adustments attributable to realied net gains and losses on disposal of these securities, and foreign currency translation adustments, in each case net of tax. hen the Company has established an indefinite reinvestment assertion for a foreign subsidiary, deferred income taxes are not provided on the related foreign currency translation.

Non-controlling interests

on‐redeemable non‐controlling interests consist entirely of unvested interests granted to employees of the Company’s majority‐owned subsidiaries. These grants become subect to holder put rights upon vesting and are reclassified to temporary equity as vesting occurs.

edeemable non‐controlling interests include vested interests held by employees of the Company’s maority‐owned subsidiaries and are recorded in temporary equity at estimated redemption value. Future payments to purchase these interests reduce temporary equity. Future changes in the redemption value of these interests are recognied as increases or decreases to additional paid‐in capital. edeemable non‐ controlling interests also include interests in the Company’s consolidated sponsored funds given that investors in those funds may request withdrawals at any time.

Loss contingencies

The Company continuously reviews any investor, employee or vendor complaints and pending or threatened litigation. The Company evaluates the likelihood that a loss contingency exists under the criteria of applicable accounting standards through consultation with legal counsel and records a loss contingency, inclusive of legal costs, if the contingency is probable and reasonably estimable at the date of the financial statements. There are no losses of this nature that are currently deemed probable and reasonably estimable, and, thus, none have been recorded in the accompanying Consolidated Financial Statements.

e cconting tandads ot et doted

Revenue recognition

In ay , the FS issued new guidance for revenue recognition. The new guidance seeks to improve comparability by removing inconsistencies in revenue recognition practices. The core principle of the guidance requires companies to recognie revenue upon the transfer of promised goods or services to customers in an amount that reflects the expected consideration to be received for the goods or services. In addition, certain costs incurred to obtain and fulfill contracts with customers may need to be capitalied if they meet certain criteria. This guidance was further updated in arch to clarify how companies should evaluate the principal‐versus‐agent aspects of the previously issued revenue guidance. The new guidance is effective for the Company’s fiscal year that began on ovember , . The Company will apply a full retrospective approach to adoption.

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he process undertaen y the Company to implement the ne guidance included among other things applying the five steps in the ne revenue frameor to contracts ith customers covering a road range of investment strategies and services applying the guidance on ho to account for costs to otain and fulfill such contracts and determining hether the Company is acting as a principal or an agent in relation to identified performance oligations he Company has sustantially completed these efforts and is currently in the process of preparing enhanced revenue disclosures reuired y the ne guidance ased upon the procedures performed to date the Company does not anticipate any significant changes to the timing of recognition of revenue or recognition of costs incurred to otain and fulfill the revenue contracts

he Company epects that the amended guidance ill affect the presentation of certain revenue and epense alances pecifically the Company epects that fund susidies of million and million currently presented in fundrelated epenses in the Consolidated tatements of ncome for the years ended ctoer and respectively ill e presented as a reduction in management fee revenue eparately in applying the revised principalversusagent guidance to the Company’s various distriution contracts the Company epects that for certain classes of shares in sponsored funds ith a frontend load commission pricing structure the entire frontend load commission including oth the underriting commission retained y the Company and the sales charge paid to the selling roerdealer ill e presented ithin distriution and underriting fee revenue and the sales charge paid to the selling roerdealer ill e presented ithin distriution epense in the Consolidated tatements of ncome Currently only the underriting commission retained y the Company is presented ithin distriution and underriting fee revenue and the sales charge paid to the selling roerdealer is not reflected ithin distriution epense he Company epects that distriution and underriter fees and distriution epense ill each e increased y approimately million and million for the years ended ctoer and respectively attriutale to this change

Financial instruments

n anuary issued an amendment to its financial instruments guidance hich amends certain aspects of the recognition measurement presentation and disclosure of financial instruments he ne guidance is effective for the Company’s fiscal year that egan on ovemer cept for those investments accounted for using the euity method of accounting and investments in consolidated investees the amendment reuires sustantially all euity investments ith a readily determinale fair value to e measured at fair value ith changes in fair value recognied in net income he amendment effectively eliminates the aility at acuisition to classify an euity investment as availaleforsale ith holding gains and losses presented in other comprehensive income until realied he guidance reuires a modified retrospective approach to adoption he Company held million of availaleforsale euity investments in sponsored funds at ctoer pon adoption the Company epects to reclassify million of net unrealied holding gains net of ta attriutale to these securities from accumulated other comprehensive income loss to retained earnings

n une the issued ne guidance for the accounting for credit losses hich changes the impairment model for most financial assets. The new guidance requires the use of an “expected loss” model for instruments measured at amortied cost and an alloance for credit loss model for availale forsale debt securities. The new guidance is effective for the Company’s fiscal year that begins on ovemer and reuires a modified retrospective approach to adoption arly adoption is permitted for the fiscal year eginning ovemer he Company is currently evaluating the potential impact of this guidance on its Consolidated inancial tatements and related disclosures

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Leases

n ebruary the issued new guidance for the accounting for leases which requires a lessee to recognie on the balance sheet the assets and liabilities for the rights and obligations created by those leases with a lease term of more than twelve months. eases will continue to be classified as either financing or operating with classification affecting the recognition measurement and presentation of expenses and cash flows arising from a lease. The new guidance is effective for the Company’s fiscal year that begins on ovember and requires a modified retrospective approach to adoption. arly adoption is permitted. The Company is currently evaluating the potential impact on its Consolidated inancial tatements and related disclosures.

Statement of cash flows

n ugust the issued new guidance that addresses eight specific cash flow issues to reduce diversity in practice in how certain cash receipts and cash payments are presented on the tatements of Cash Flows. The new guidance is effective for the Company’s fiscal year that began ovember and requires a retrospective approach to adoption. The Company does not expect the adoption of this standard to have a material impact on its Consolidated inancial tatements and related disclosures.

n ovember the issued an amendment to existing guidance on the presentation and classification of restricted cash in the statement of cash flows. The amendment requires that a statement of cash flows explain the change during the period in the total of cash cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginningofperiod and endofperiod total amounts shown on the statement of cash flows. The new guidance is effective for the Company’s fiscal year that began on ovember and requires a retrospective approach to adoption. The Company does not expect the adoption of this standard to have a material impact on its Consolidated inancial tatements and related disclosures.

Simplifying the test for goodwill impairment

n anuary the issued amended guidance that simplifies the test for goodwill impairment. The standard eliminates the tep from the goodwill impairment test. nder the amended guidance an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. n entity will recognie an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss cannot exceed the total amount of goodwill allocated to the reporting unit. The new guidance is effective for the Company’s fiscal year that begins on ovember and requires a prospective approach to adoption. arly adoption is permitted for interim or annual goodwill impairment tests. The Company is currently evaluating the potential impact of this guidance on its Consolidated inancial tatements and related disclosures.

Disclosure requirements for fair value measurement

n ugust the issued guidance that maes changes to the disclosure requirements for fair value measurements. otably this guidance removes the disclosure requirements for the amount of and reasons for transfers between evel and evel of the fair value hierarchy the policy for timing of transfers between levels and the valuation processes for evel fair value measurements. This guidance also adds new disclosure requirements for the range and weighted average of significant unobservable

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Leases inputs used to develop fair value measurements categoried within evel of the fair value hierarchy. The new guidance is effective for the Company’s fiscal year that begins on November 1, 2020. Early adoption is n ebruary the issued new guidance for the accounting for leases which requires a lessee to permitted. The Company is currently evaluating the potential impact of this guidance on its Consolidated recognie on the balance sheet the assets and liabilities for the rights and obligations created by those Financial tatements and related disclosures. leases with a lease term of more than twelve months. eases will continue to be classified as either financing or operating with classification affecting the recognition measurement and presentation of Capitalization of implementation costs in a cloud computing service contract expenses and cash flows arising from a lease. The new guidance is effective for the Company’s fiscal year that begins on ovember and requires a modified retrospective approach to adoption. arly n ugust , the F issued new guidance that aligns the accounting reuirements for capitaliing adoption is permitted. The Company is currently evaluating the potential impact on its Consolidated implementation costs implementation, setup, and other upfront costs related to cloud computing inancial tatements and related disclosures. hosting arrangements that are accounted for as a service contract with the accounting reuirements for capitaliing implementation costs incurred to develop or obtain internaluse software and hosting Statement of cash flows arrangements that include an internal use software license. This new guidance does not affect the accounting for the hosting element of a cloud computing arrangement that is a service contract. The new n ugust the issued new guidance that addresses eight specific cash flow issues to reduce guidance is effective for the Company’s fiscal year that begins on ovember , . arly adoption is diversity in practice in how certain cash receipts and cash payments are presented on the tatements of permitted and the new guidance may be adopted either retrospectively or prospectively to all Cash Flows. The new guidance is effective for the Company’s fiscal year that began ovember and implementation costs incurred after the date of adoption. The Company is currently evaluating the requires a retrospective approach to adoption. The Company does not expect the adoption of this potential impact of this guidance on its Consolidated Financial tatements and related disclosures. standard to have a material impact on its Consolidated inancial tatements and related disclosures. Consolidated onsoed nds n ovember the issued an amendment to existing guidance on the presentation and classification of restricted cash in the statement of cash flows. The amendment requires that a statement nderlying investments held by consolidated sponsored funds were included in investments on the of cash flows explain the change during the period in the total of cash cash equivalents and amounts Company’s Consolidated Balance Sheets and classified as trading securities at October 31, 2018 and 2017. generally described as restricted cash or restricted cash equivalents. The amounts generally described as et investment income or loss related to consolidated sponsored funds was included in gains losses and restricted cash and restricted cash equivalents should be included with cash and cash equivalents when other investment income, net, on the Company’s Consolidated Statements of Income for all periods reconciling the beginningofperiod and endofperiod total amounts shown on the statement of cash presented. The impact of consolidated sponsored funds’ net income or loss on net income attributable flows. The new guidance is effective for the Company’s fiscal year that began on ovember and to aton ance Corp. shareholders was reduced by amounts attributable to noncontrolling interest requires a retrospective approach to adoption. The Company does not expect the adoption of this holders, which are recorded in net income attributable to noncontrolling and other beneficial interests on standard to have a material impact on its Consolidated inancial tatements and related disclosures. the Company’s Consolidated Statements of Income for all periods presented. The extent of the Company’s exposure to loss with respect to a consolidated sponsored fund is limited to the amount of the Company’s Simplifying the test for goodwill impairment investment in the sponsored fund and any uncollected management and performance fees. The Company is not obligated to provide financial support to sponsored funds. nly the assets of a sponsored fund are n anuary the issued amended guidance that simplifies the test for goodwill impairment. The available to settle its obligations. eneficial interest holders of sponsored funds do not have recourse to standard eliminates the tep from the goodwill impairment test. nder the amended guidance an entity the general credit of the Company. should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. n entity will recognie an impairment charge for the amount by which the carrying The following table sets forth the balances related to consolidated sponsored funds at ctober , amount exceeds the reporting unit’s fair value, but the loss cannot exceed the total amount of goodwill and 2017, as well as the Company’s net interest in these funds allocated to the reporting unit. The new guidance is effective for the Company’s fiscal year that begins on ovember and requires a prospective approach to adoption. arly adoption is permitted for in thousands interim or annual goodwill impairment tests. The Company is currently evaluating the potential impact of nvestments , , this guidance on its Consolidated inancial tatements and related disclosures. ther assets , ,

ther liabilities , , Disclosure requirements for fair value measurement edeemable noncontrolling interests , , n ugust the issued guidance that maes changes to the disclosure requirements for fair value et interest in consolidated sponsored funds , , measurements. otably this guidance removes the disclosure requirements for the amount of and reasons for transfers between evel and evel of the fair value hierarchy the policy for timing of transfers between levels and the valuation processes for evel fair value measurements. This guidance also adds new disclosure requirements for the range and weighted average of significant unobservable

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nvestents

The following is a summary of investments at October 31, 2018 and 2017

in thousands nvestent secities tading: Shortterm debt securities 273,320 213,37 Consolidated sponsored funds 0,82 01,72 Separately managed accounts 8,121 3,113 Total investment securities, trading 03,023 708,37 Investment securities, availableforsale 10,32 22, Investments in nonconsolidated CO entities 2,8 3,0 Investments in euity method investees 11,0 1,11 Investments, other 20,87 18,831 Total investments 1,078,27 88,12 cludes an loans and other investments held y consolidated C entities, hich are discussed in ote .

Investment securities, trading

The following is a summary of the fair value of investments classified as trading at October 31, 2018 and 2017

in thousands Shortterm debt securities 273,320 213,37 Other debt securities 70,033 313,31 Euity securities 1,70 181,88 Total investment securities, trading 03,023 708,37

The Company recognied gains losses related to trading securities still held at the reporting date of 22.8 million, 1. million and 11.3 million for the years ended October 31, 2018, 2017 and 201, respectively, within gains losses and other investment income, net, on the Company’s Consolidated Statements of Income.

Investment securities, available-for-sale

The following is a summary of the gross unrealied gains and losses included in accumulated other comprehensive income loss related to securities classified as availableforsale at October 31, 2018 and 2017

Octoe oss nealied in thousands Cost ains Losses ai ale Investment securities, availableforsale ,10 ,20 27 10,32

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Octoe oss nealied in thousands Cost ains Losses ai ale nestment seities aailaleosale

et nealied holdin ains losses on inestment seities lassiied as aailaleosale inlded in other comprehensive income (loss) on the Company’s Consolidated Statements o Compehensie nome ee million million and million o the yeas ended toe and espetiely

he Company did not eonie any impaiment losses on inestment seities lassiied as aailaleo sale o the yeas ended toe o he Company eonied million o othethan tempoay impaiment losses elated to inestment seities lassiied as aailaleosale hih amont is inlded in ains losses and othe inestment income, net, on the Company’s Consolidated tatement o nome o the yea ended toe

he aeate ai ale o aailaleosale inestments in an nealied loss position at toe as million nealied losses elated to these inestments totaled o inestment ith a oss nealied loss has een in a mateial loss position o eate than one yea

The following is a summary of the Company’s realized gains and losses recognized upon disposition of inestments lassiied as aailaleosale o the yeas ended toe and

in thousands ains osses et ealied ains

Investments in non-consolidated CLO entities

he Company poides inestment manaement seies o and has made diet inestments in a number of CLO entities that it does not consolidate, as described further in Note 6. The Company’s inestments in nononsolidated C entities ae aied at amotied ost nless impaied at hih point they ae itten don to ai ale t toe and the ayin ales o sh inestments ee million and million espetiely t toe and omined assets nde manaement in the pools o nononsolidated C entities ee illion and illion espetiely

he Company eonied million million and million o impaiment losses elated to the Company’s investments in nononsolidated C entities o the yeas ended toe and espetiely

Investments in equity method investees

he Company has a peent inteest in eaest n eaest a onteal Canadaased inestment adise he ayin ale o this inestment as million and million at toe and espetiely. At October 31, 2018, the Company’s investment in Hexavest consisted of million o eity in the net assets o eaest deinitelied intanile assets o million and oodill o million net o a deeed ta liaility o million. At October 31, 2017, the Company’s

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investment in Hexavest consisted of 6.1 million of euity in the net assets of Hexavest, definitelived intangible assets of 23.7 million and goodwill of 118.6 million, net of a deferred tax liability of 6. million. The Company’s investment in Hexavest is denominated in Canadian dollars and is subect to foreign currency translation adustments, which are recorded in accumulated other comprehensive income (loss). The yearoveryear change in the carrying value of goodwill is entirely attributable to foreign currency translation adustments.

The Company also has a seven percent euity interest in a private euity partnership managed by a third party that invests in companies in the financial services industry. The Company’s investment in the partnership was 3. million and 2. million at October 31, 2018 and 2017, respectively.

The Company did not recognize any impairment losses related to its investments in euity method investees during the years ended October 31, 2018, 2017 or 2016.

uring the years ended October 31, 2018, 2017 and 2016, the Company received dividends of 12.2 million, 11. million and 11. million, respectively, from its investments in euity method investees.

Investments, other

nvestments, other, which totaled 20. million and 18.8 million at October 31, 2018 and 2017, respectively, primarily consists of investments carried at cost.

n fiscal 2016, the Company participated as lead investor in an euity financing in Sigig, an independent San ranciscobased wealth management technology firm. n une 2018, the Company invested an additional 2.0 million in Sigig. The carrying value of the Company’s investment in SigFig was $19.0 million and 17.0 million at October 31, 2018 and 2017, respectively.

eivative inancial nstents

Derivative financial instruments designated as cash flow hedges

n fiscal 2017, the Company entered into a Treasury loc transaction in connection with the offering of its 2027 Senior Notes (see Note 11). The Company concurrently designated the Treasury loc as a cash flow hedge to mitigate its exposure to variability in the forecasted semiannual interest payments and recorded a loss of 0. million, net of tax, in other comprehensive income (loss). The Company reclassified approximately 68,000 and 37,000 of the loss into interest expense for the years ended October 31, 2018 and 2017, respectively, and will reclassify the remaining 0.6 million loss as of October 31, 2018 to earnings over the remaining term of the debt. uring the next twelve months, the Company expects to reclassify approximately 68,000 of the unamortized loss.

n fiscal 2013, the Company entered into a forwardstarting interest rate swap in connection with the offering of its 2023 Senior Notes (see Note 11) and recorded a gain in other comprehensive income (loss), net of tax. The Company reclassified 0.2 million of the gain into interest expense for the years ended October 31, 2018, 2017 and 2016 and will reclassify the remaining 0. million gain as of October 31, 2018 to earnings over the remaining term of the debt. uring the next twelve months, the Company expects to reclassify approximately 0.2 million of the unamortized gain.

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Other derivative financial instruments not designated for hedge accounting

The Company utilies derivative financial instruments to hedge maret and currency riss associated with its investments in certain consolidated seed investments that are not designated as hedging instruments for accounting purposes.

cluding derivative financial instruments held y consolidated sponsored funds the Company was party to the following derivative financial instruments at ctoer 1 01 and 01

e of otional ale e of otional ale Contacts in millions Contacts in millions Stoc inde futures contracts 100 $ 91. 10 $ 11.1 Total return swap contracts 10. 0. Credit default swap contracts 1 .0 Foreign echange contracts .0 1 .1 Commodity futures contracts 11. 1 10. Currency futures contracts 1 1.9 11 1. nterest rate futures contracts .0 1 .

The derivative contracts outstanding and notional values they represent at ctoer 1 01 and 01 are representative of derivative alances throughout each respective year. The weightedaverage remaining contract term for derivative contracts outstanding at ctoer 1 01 and 01 was 1. months and . months respectively.

The Company has not elected to offset fair value amounts related to derivative financial instruments eecuted with the same counterparty under master netting arrangements as a result the Company records all derivative financial instruments as either other assets or other liailities gross on its Consolidated alance Sheets and measures them at fair value see ote 1. The following tale presents the fair value of derivative financial instruments not designated for hedge accounting and how they are reflected on the Company’s Consolidated Balance Sheets as of October 31, 01 and 01

Ote Ote Ote Ote in thousands ssets Liailities ssets Liailities Stoc inde futures contracts $ 0 $ $ 0 $ 01 Total return swap contracts 9 0 Credit default swap contracts 10 Foreign echange contracts 9 0 0 0 Commodity futures contracts 0 1 10 Currency futures contracts 1 1 nterest rate futures contracts 19 1 Total $ $ $ 11 $ 1

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he Company maintains collateral ith certain conterparties to satisfy marin reirements for deriatie positions he collateral is classified as restricted cash and is inclded as a component of other assets on or Consolidated Balance Sheets t October 31, 1 and 1, collateral balances ere 131 million and million, respectiely

he Company reconied the folloin ains losses on deriatie financial instrments for the years ended October 31, 1, 1 and 1 ithin ains losses and other inestment income, net, on the Company’s Consolidated Statements of Income:

in thousands Stoc inde ftres contracts , 3, ,31 otal retrn sap contracts , 3, ,3 Credit defalt sap contracts 1 orein echane contracts 1 Commodity ftres contracts 1, Crrency ftres contracts nterest rate ftres contracts 3 1 nterest rate sap contracts 1 et ains losses ,3 ,

n addition to the deriatie contracts described aboe, certain consolidated seed inestments may tilie deriatie financial instrments ithin their portfolios in prsit of their stated inestment obecties

aiale nteest ntities

n the normal corse of bsiness, the Company maintains inestments in sponsored entities that are considered s to spport their lanch and maretin he Company consolidates these sponsored entities if it is the primary beneficiary of the

Investments in VIEs that are consolidated

Consolidated sponsored funds he Company inests in inestment companies that meet the definition of a isclosre reardin sch consolidated sponsored fnds is inclded in ote 3

Consolidated C entities s of October 31, 1, the Company deemed itself to be the primary beneficiary of three nonrecorse secritied CO entities, namely, aton ance CO 11 CO 11, aton ance CO 11 CO 11 and aton ance CO 11 CO 11 collectiely, the consolidated secritied CO entities s of October 31, 1, the Company deemed itself to be the primary beneficiary of one non recorse arehose CO entity, namely, aton ance CO 11 CO 11 or consolidated arehose CO entity

he assets of consolidated CO entities are held solely as collateral to satisfy the obliations of each entity he Company has no riht to receie benefits from, nor does the Company bear the riss associated ith, the assets held by these CLO entities beyond the Company’s investment in these entities n the eent of

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defalt ecose to the Company is limited to its investment in these entities he Company has not povided any financial o othe sppot to these entities that it as not peviosly contactally eied to povide and thee ae neithe eplicit aanements no does the Company hold implicit vaiable inteests that cold eie the Company to povide any onoin financial sppot to these entities Othe beneficial inteest holdes of consolidated CLO entities do not have any ecourse to the Company’s general cedit

aton ance C and aton ance C he Company established CLO on st CLO as in the aehosin phase as of Octobe he Company contibted million in capital at the inception of the aehose entity and concently enteed into a cedit facility aeement ith a thidpaty lende to povide CLO ith a million nonecose evolvin line of cedit he cedit facility aeement eied the Company to maintain cetain levels of contibted capital elative to the total otstandin booins nde the line of cedit in the yea ended Octobe the Company made additional capital contibtions of million in ode to incease the level of fndin available fo booin nde the line of cedit

hile in the aehosin phase the Company actin as collateal manae and sbect to the appoval of the thidpaty lende sed its capital contibtions alon ith the poceeds fom the evolvin line of cedit to accmlate a potfolio of commecial ban loan investments in open maet pchases in an amont sfficient fo evental secitiation he line of cedit as seced by all of the commecial ban loan investments held by the CLO aehose and initially boe inteest at a ate of daily LIO pls pecent pe annm ith sch inteest ate inceasin to daily LIO pls pecent pe annm in st he Company did not ean any collateal manaement fees fom CLO din the aehosin phase

s collateal manae the Company had the nilateal ability to liidate the CLO aehose ithot case a iht that by definition povided the Company ith the poe to diect the activities that most sinificantly affect the economic performance of the entity. The Company’s investment in the aehose seved as fistloss potection to the thidpaty lende and povided the Company ith an obliation to absob losses of o the iht to eceive benefits fom the I that cold potentially be sinificant to the entity ccodinly the Company deemed itself to be the pimay beneficiay of CLO as it had both poe and economics and bean consolidatin the entity fom establishment of the aehose on st

pon initial consolidation the Company ievocably elected to sbseently mease the ban loan investments of the CLO aehose at fai vale sin the fai vale option he Company did not elect the fai vale option fo amonts otstandin nde the evolvin line of cedit pon initial consolidation of the CLO aehose as these liabilities ee tempoay in nate isclose of the fai vale of amonts that ee otstandin nde the evolvin line of cedit as of Octobe is inclded in ote

In the foth ate of fiscal CLO enteed the secitiation phase the secitied CLO entity is heeafte efeed to as CLO Contempoaneos ith the close of CLO on Octobe the poceeds fom the issance of the senio and sbodinated note obliations of CLO ee sed to pchase the potfolio ban loans held by CLO epay the thidpaty evolvin line of cedit povided to the CLO aehose and return the Company’s total capital contributions of $40 million he Company acied appoimately pecent of the sbodinated notes issed by CLO

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at closing for $. million an ill provie collateral management services to this C entity in echange for a collateral management fee. The Company eeme itself to be the primary beneficiary of C 0 upon acuiring percent of the suborinate interests of C 0 on ctober 4 0 an began consoliating the entity as of that ate. There as no gain or loss resulting from the initial consoliation of C 0.

aton ance C and aton ance C s of ctober 0 the Company hel percent of the suborinate interests of C 04 as an investment in nonconsoliate C entities. The investment as recore at amortie cost an ha a carrying value of $0. million. The Company is the collateral manager of C 04. n ay 0 the Company purchase all of the remaining suborinate interests of C 04 for $4. million. The Company eeme itself to be the primary beneficiary of C 04 upon acuiring 00 percent of the suborinate interests of the entity on ay 0 an began consoliating C 04 as of that ate. The Company recognie a gain of $0.4 million upon initial consoliation of C 04 eual to the ifference beteen the initial carrying value of the position upon consoliation an the fair value of the percent suborinate interest hich as hel by the Company prior to ay 0. This gain is inclue in gains and other investment income, net, on the Company’s Consolidated Statement of Income for the year ene ctober 0.

n the fourth uarter of fiscal 0 C 04 as reset into a ne C entity hereafter referre to as C 04. Contemporaneous ith the close of C 04 on ugust 0 the procees from the issuance of the senior an suborinate note obligations of C 04 ere use to purchase the portfolio ban loans an reeem the senior note obligations of C 04. The Company use the resiual procees receive from the transaction of $. million relate to its suborinate interests in C 04 an mae an aitional contribution of $. million to acuire 00 percent of the suborinate notes issue by C 04 at closing for $. million. The Company ill provie collateral management services to C 04 in echange for a collateral management fee. The Company eeme itself to be the primary beneficiary of C 04 upon acuiring 00 percent of the suborinate interests of the entity on ugust 0 an began consoliating C 04 as of that ate. There as no gain or loss resulting from the initial consoliation of C 04.

The Company is still consoliating the resiual net assets of C 04 as of ctober 0 hich consist of approimately $. million of nonualifying investments that i not meet the investment criteria of C 04.

The Company electe to apply the measurement alternative to C 0 for collateralie financing entities upon the initial consoliation an for the subseuent measurement of C 0 C 04 an C 04 collectively the consoliate securitie C entities. The Company etermine that the fair value of the financial assets of these entities is more observable than the fair value of the financial liabilities. Through the application of the measurement alternative the fair value of the financial liabilities of these entities are measure as the ifference beteen the fair value of the financial assets an the fair value of the Company’s beneficial interests in these entities, which include the subordinated interests held by the Company an any accrue management fees ue to the Company. The fair value of the suborinate notes hel by the Company is etermine primarily base on an income approach hich proects the cash flos of the C assets using proecte efault prepayment recovery an iscount rates as ell as observable assumptions about maret yiels callability an other maret factors. n appropriate iscount rate is then applie to etermine the iscounte cash flo valuation of the

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subordinated notes ggregate disclosures for the securitied C entities consolidated by the Company as of ctober , are provided below

he following table presents the balances attributable to the consolidated securitied C entities and the consolidated warehouse CLO entity that were included in the Company’s Consolidated Balance Sheets at ctober , and , respectively

Consolidated Consolidated ecitied aeose CLO ntities CLO ntit in thousands ssets of consolidated CLO entities: Cash , an loans and other investments , , eceivable for pending ban loan sales , ther assets , Liailities of consolidated CLO entities: Senior and subordinated note obligations , ine of credit , ayable for pending ban loan purchases , ther liabilities , otal beneficial interests , ,

Although the Company’s beneficial interests in the consolidated securitized CLO entities are eliminated upon consolidation, the application of the measurement alternative results in the Company’s total beneficial interests in these entities of million at ctober , being eual to the net amount of the consolidated CLO entities’ assets and liabilities included on the Company’s Consolidated alance Sheet at ctober , , as shown above

s of ctober , and ctober , , there were no ban loan investments in default and no unpaid principal balances of such loans that were days or more past due or in nonaccrual status dditional disclosure of the fair values of assets and liabilities of consolidated C entities that are measured at fair value on a recurring basis is included in ote

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he following table presents the balances attributable to the consolidated securitized CLO entities and the consolidated warehouse CLO entity that were included in the Company’s Consolidated Statement of ncome for the year ended October

Consolidated Consolidated ecitied aeose CLO ntities CLO ntit in thousands otal Ote incoe eense of consolidated CLO entities: ains and other investment income net nterest and other epense et gain loss attributable to the Company

ains and other investment income and interest epense attributable to these entities were negligible for both the years ended October and

As summarized in the table below the application of the measurement alternative results in the Companys earnings from the consolidated securitized CLO entities subseuent to initial consolidation as shown above to be euivalent to the Companys own economic interests in these entities

Consolidated ecitied CLO ntities in thousands conoic inteests: istributions received and unrealized gains losses on the subordinated interests held by the Company anagement fees otal economic interests

aton ance C C On eptember the Company sold its percent subordinated interest in CLO and recognized a gain on disposal of million which is included in gains and other investment income net on the Company’s Consolidated tatement of ncome for the year ended October Although the Company continues to serve as collateral manager of the entity and therefore has the power to direct the activities that most significantly affect the economic performance of the entity the Company concluded that it no longer had an obligation to absorb losses of or the right to receive benefits from CLO that could potentially be significant to the entity As a result the Company concluded that it was no longer the primary beneficiary of CLO upon the sale of its residual interest on eptember and deconsolidated the entity as of that date

rior to deconsolidation changes in the fair values of CLO 1’s bank loan investments and note obligations resulted in net gains of million and million respectively for the fiscal year ended October he combined net gains of million were recorded in gains and other investment income, net, of consolidated CLO entities in the Company’s Consolidated tatement of ncome for the fiscal year ended October he Company recorded net income of million related to CLO

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11 for the fiscal year ended October 1, 1, million of which was attributable to other beneficial interest holders and million attributable to the Company

On ovember 1, 1, the Company purchased 1 percent of the subordinated interests in CLO 11 for million he Company deemed itself to be the primary beneficiary of CLO 11 upon acuirin 1 percent of the subordinated interests in the entity on ovember 1, 1 and bean consolidatin the entity as of that date n the first uarter of fiscal 1, CLO 11 refinanced its senior note obliations Contemporaneous with the close of the refinance on ecember , 1, the proceeds from the issuance of new senior note obliations were used to redeem the old senior note obliations of CLO 11 Concurrent with the close of the refinance, the Company sold percent of its subordinated interests in CLO 11 for million and simultaneously purchased interests in certain of the newly issued senior debt tranches of CLO 11 for 1 million he Company reconied a loss on disposal of its subordinated interest of million, which is included in ains and other investment income, net, on the Company’s Consolidated Statement of Income for the year ended October 31, 2018. lthouh the Company continues to serve as collateral manaer of the entity, and therefore has the power to direct the activities that most sinificantly affect the economic performance of the entity, the Company concluded that it no loner had an obliation to absorb losses of, or the riht to receive benefits from, CLO 11 that could potentially be sinificant to the entity s a result, the Company concluded that it was no loner the primary beneficiary of CLO 11 upon the sale of percent of its subordinated interests on ecember 1, 1 and deconsolidated the entity as of that date

urin the year ended October 1, 1, the Company sold its interests in the senior debt tranches of CLO 11 for million and reconied a loss on disposal of 1 million, which is included in ains and other investment income, net, on the Company’s Consolidated Statement of ncome for the year ended October 1, 1 s of October 1, 1, the Company maintains its residual percent subordinated interest in CLO 11 as an investment in nonconsolidated CLO entities

ther entity he Company holds variable interests in, and is deemed to be the primary beneficiary of, a privately offered equity fund that was seeded towards the end of fiscal 2018. The Company’s variable interests consist of a 1, investment in the fund and a promissory note that enables the fund to borrow up to million from the Company he promissory note bears interest at a rate eual to onemonth LO plus 1.10 percent per annum. As of October 31, 2018, the Company’s risk of loss with respect to this entity is limited to the Company’s investment in the fund and the outstanding borrowings under the promissory note of million

he Company consolidated this newly seeded fund as of October 1, 1 he holdins of the fund consist solely of deposits on real estate, which are eual to the outstandin borrowins under the promissory note. These deposits are included within other assets in the Company’s Consolidated Balance Sheet at October 1, 1

Investments in VIEs that are not consolidated

ponsored funds he Company classifies its investments in certain sponsored funds that are considered s as available forsale investments when it is not considered the primary beneficiary of these s he Company provides areated disclosures with respect to these nonconsolidated sponsored fund s in ote and ote

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onconsolidated C entities The Company is not deemed the primary beneficiary of several CO entities in which it holds variable interests. In developing its conclusion that it is not the primary beneficiary of these entities, the Company determined that although it has variable interests in each CO by virtue of its beneficial ownership interests in the CO entities, these interests neither individually nor in the aggregate represent an obligation to absorb losses of, or a right to receive benefits from, any such entity that could potentially be significant to that entity.

The Company’s maximum exposure to loss with respect to these nonconsolidated CO entities is limited to the carrying value of its investments in, and collateral management fees receivable from, these entities as of October 31, 2018. Collateral management fees receivable for these entities totaled 0.1 million and 0. million on October 31, 2018 and 201, respectively. Investors in these CO entities have no recourse against the Company for any losses sustained in the CO structures. The Company did not provide any financial or other support to these entities that it was not previously contractually required to provide in any of the fiscal years presented. Income from these entities is recorded as a component of gains losses and other investment income, net, in the Company’s Consolidated Statements of Income, based upon projected investment yields. Additional information regarding the Company’s investment in non consolidated CO entities, as well as the combined assets under management in the pools of non consolidated CO entities, is included in ote .

ther entities The Company holds variable interests in, but is not deemed to be the primary beneficiary of, certain sponsored privately offered equity funds with total assets of 21.8 billion and 18.1 billion as of October 31, 2018 and 2017, respectively. The Company’s variable interests in these entities consist of the Company’s direct ownership therein, which in each case is insignificant relative to the total ownership of the fund, and any investment advisory fees earned but uncollected. The Company’s maximum exposure to loss with respect to these managed entities is limited to the carrying value of its investments in, and investment advisory fees receivable from, the entities as of October 31, 2018. The Company held investments in these entities totaling 2. million on both October 31, 2018 and 201, and investment advisory fees receivable totaling 1.3 million and 1.1 million on October 31, 2018 and 201, respectively. The Company did not provide any financial or other support to these entities that it was not contractually required to provide in any of the fiscal years presented. The Company does not consolidate these Is because it does not have the obligation to absorb losses of, or the right to receive benefits from, these Is that could potentially be significant to these Is.

The Company’s investments in privately offered equity funds are carried at fair value and included in investment securities, availableforsale, which are disclosed as a component of investments in ote . The Company records any change in fair value, net of income ta, in other comprehensive income loss.

The Company also holds a variable interest in, but is not deemed to be the primary beneficiary of, a private equity partnership managed by a third party that invests in companies in the financial services industry. The Company’s variable interest in this entity consists of the Company’s direct ownership in the private equity partnership, equal to 3. million and 2. million at October 31, 2018 and 201, respectively. The Company did not provide any financial or other support to this entity. The Company’s risk of loss with respect to the private equity partnership is limited to the carrying value of its investment in the entity as of October 31, 2018. The Company does not consolidate this I because the Company does not hold the power to direct the activities that most significantly affect the I.

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The Company’s investment in the private equity partnership is accounted for as an equity method investment and disclosures related to this entity are included in ote under the heading Investments in equity method investees.

ai ale of ssets and Liailities eased at ai ale on a ecing asis

The following tables summarie financial assets and liabilities measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy at ctober 31, 2018 and 2017

Octoe Ote ssets ot eld at ai in thousands Level Level Level ale otal

inancial assets: Cash equivalents 23,22 11,070 13,332 Investments Investment securities, trading Shortterm debt securities 273,320 273,320 ther debt securities 13,3 ,78 70,033 quity securities ,33 2,737 1,70 Investment securities, availableforsale 7,112 3,217 10,32 Investments in nonconsolidated C entities 2,8 2,8 Investments in equity method investees 11,0 11,0 Investments, other 20,87 20,87 erivative instruments ,37 ,37 Assets of consolidated C entities an loans and other investments 872,77 1,7 87,30 Total financial assets 10,2 1,71,12 1,7 1,27 2,08,10

inancial liailities: erivative instruments , , iabilities of consolidated C entities Senior and subordinated note obligations 873,008 873,008 Total financial liabilities 877, 877,

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Octoe Ote ssets ot eld at ai in thousands Level Level Level ale otal

inancial assets: Cash equivaents nvestments nvestment securities tradin hortterm det securities ther det securities quity securities nvestment securities avaiaeforsae nvestments in nonconsoidated C entities nvestments in equity method investees nvestments other erivative instruments ssets of consoidated C entity an oan investments Tota financia assets

inancial liailities: erivative instruments Tota financia iaiities Investments in nonconsolidated C entities are carried at amortied cost unless facts or circumstances indicate that the investments have een impaired, at hich time the investments are ritten don to fair value as measured using level inputs. Investments in euity method investees are not measured at fair value in accordance ith .. . Investments, other, include investments carried at cost that are not measured at fair value in accordance ith .. . t ctoer , and , there ere no indicators of impairment on these investments.

Valuation methodologies

Cash euivalents Cash equivaents incude investments in money maret funds overnment aency securities certificates of deposit and commercia paper ith oriina maturities of days or ess Cash investments in daiy redeemae money maret funds are vaued usin puished net asset vaues and are cassified as eve ithin the fair vaue measurement hierarchy overnment aency securities are vaued ased upon quoted maret prices for simiar assets in active marets quoted prices for identica or simiar assets that are not active and inputs other than quoted prices that are oservae or corroorated y oservae maret data The carryin amounts of certificates of deposit and commercia paper are measured at amortied cost hich approimates fair vaue due to the short time eteen the purchase and epected maturity of the investments ependin on the nature of the inputs these assets are eneray cassified as eve or ithin the fair vaue measurement hierarchy

Investment securities, trading – shortterm det hortterm det securities incude certificates of deposit commercia paper and corporate det oiations ith remainin maturities from three months to months hortterm det securities hed

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are eneray vaued on the asis of vauations provided y thirdparty pricin services as derived from such services’ pricing models. Inputs to the models may include, but are not imited to reported trades eecutae id and as prices roerdeaer quotations prices or yieds of securities ith simiar characteristics enchmar curves or information pertainin to the issuer as e as industry and economic events The pricin services may use a matri approach hich considers information reardin securities ith simiar characteristics to determine the vauation for a security These assets are eneray cassified as eve or ithin the fair vaue measurement hierarchy

– ther det securities cassified as tradin incude det oiations hed in the portfoios of consoidated sponsored funds and separatey manaed accounts ther det securities hed are eneray vaued on the asis of vauations provided y thirdparty pricin services as descried aove for investment securities tradin – shortterm det ther det securities purchased ith a remainin maturity of days or ess ecudin those that are non denominated hich typicay are vaued y a thirdparty pricin service or deaer quotes are eneray vaued at amortied cost hich approimates fair vaue ependin upon the nature of the inputs these assets are eneray cassified as eve or ithin the fair vaue measurement hierarchy

– quity securities cassified as tradin incude forein and domestic equity securities hed in the portfoios of consoidated sponsored funds and separatey manaed accounts quity securities are vaued at the ast sae officia cose or if there are no reported saes on the vauation date at the mean eteen the atest avaiae id and as prices on the primary echane on hich they are traded hen vauin forein equity securities that meet certain criteria the portfoios use a fair vaue service that vaues such securities to refect maret tradin that occurs after the cose of the appicae forein marets of comparae securities or other instruments that have a stron correation to the fairvaued securities n addition the Company performs its on independent ac test revie of fair vaues versus the susequent oca maret openin prices hen avaiae ependin upon the nature of the inputs these assets eneray are cassified as eve or ithin the fair vaue measurement hierarchy

nvestment securities cassified as avaiaeforsae incude investments in sponsored mutua funds and privatey offered equity funds ponsored mutua funds are vaued usin puished net asset vaues and are cassified as eve ithin the fair vaue measurement hierarchy nvestments in sponsored privatey offered equity funds that are not isted on an active echane ut have net asset vaues that are comparae to mutua funds and have no redemption restrictions are cassified as eve ithin the fair vaue measurement hierarchy

erivative instruments hich incude stoc inde futures contracts tota return sap contracts credit defaut saps forein echane contracts commodity futures contracts currency futures contracts and interest rate futures contracts, are recorded as either other assets or other liabilities on the Company’s Consoidated aance heets toc inde futures contracts tota return sap contracts credit defaut sap contracts commodity futures contracts currency futures contracts and interest rate futures contracts are vaued usin a thirdparty pricin service that determines fair vaue ased on id and as prices orein echane contracts are vaued y interpoatin a vaue usin the spot forein echane rate and forard points hich are ased on spot rate and currency interest rate differentias erivative instruments eneray are cassified as eve ithin the fair vaue measurement hierarchy

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Consolidated C entity assets include investments in ban loans and euity securities. air value is determined utiliing unadusted uoted maret prices hen available. uity securities are valued using the same techniues as described above for trading securities. Interests in senior floatingrate loans for hich reliable maret uotations are readily available are valued generally at the average midpoint of bid and as uotations obtained from a thirdparty pricing service. air value may also be based upon valuations obtained from independent thirdparty broers or dealers utiliing matri pricing models that consider information regarding securities ith similar characteristics. In certain instances, fair value has been determined utiliing discounted cash flo analyses or single broer nonbinding uotes. epending on the nature of the inputs, these assets are classified as evel or ithin the fair value measurement hierarchy.

Consolidated C entity liabilities include senior and subordinated note obligations. air value is determined using the measurement alternative to C for collateralied financing entities as discussed further in ote . In accordance ith the measurement alternative, the fair value of C liabilities as measured as the fair value of C assets less the sum of i the fair value of the beneficial interests held by the Company and ii the carrying value of any beneficial interests that represent compensation for services. lthough both evel and evel inputs ere used to measure the fair value of the C liabilities, the senior and subordinated note obligations are classified as evel ithin the fair value measurement hierarchy as the evel inputs used ere not significant.

Transfers in and out of Levels

he folloing table summaries fair value transfers beteen evel and evel of the fair value measurement hierarchy for the years ended ctober , and

ransfers from evel into evel ransfers from evel into evel

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Level 3 assets and liabilities

he folloing table shos a reconciliation of the beginning and ending fair value measurements of assets and liabilities valued on a recurring basis and classified as evel ithin the fair value measurement hierarchy for the fiscal year ended ctober ,

an Loans and Ote nvestents of Consolidated CLO ntities eginning balance Consolidation of C entities , aydons ales , et gains included in net income ransfers out of evel , nding balance ,

ai ale easeents of Ote inancial nstents

Certain financial instruments are not carried at fair value, but their fair value is reuired to be disclosed. he folloing is a summary of the carrying amounts and estimated fair values of these financial instruments at ctober , and

ai ai Caing ai ale Caing ai ale ale ale Level ale ale Level oan to affiliate , , , , ther assets , , ebt , , , , Consolidated C entity line of credit , ,

s discussed in ote , on ecember , , aton ance anagement Canada td. C, a holly oned subsidiary of the Company, loaned . million to eavest under a term loan agreement to seed a ne investment strategy. he carrying value of the loan approimates fair value. he fair value is determined annually using a cash flo model that proects future cash flos based upon contractual obligations, to hich the Company then applies an appropriate discount rate.

Included in other assets at ctober , as an option to acuire an additional percent interest in eavest carried at . million. he Company valued the option as of ctober , using a maret

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approach and determined that the carrying value of the option approimates fair value. he Company determined not to eercise the option, hich epired uneercised on ecember , . pon expiration, the company recognized a loss equal to the option’s carrying amount of $6.5 million as of December 11, 2017 within gains (losses) and other investment income, net, in the Company’s Consolidated tatement of Income.

The fair value of the Company’s debt has been determined based on quoted prices in inactive markets.

s of ctober , 17, the Company’s consolidated CLO 2017 entity as in a arehouse phase. he C entity held a nonrecourse revolving line of credit. s of ctober , , the carrying amount of the revolving line of credit of . million approimated fair value. uring fiscal , the revolving line of credit as paidoff upon securitiation of the ne C entity. efer to ote for additional information.

ient and Leaseold oveents

he folloing is a summary of euipment and leasehold improvements at ctober , and

uipment , , easehold improvements , , ubtotal , , ess ccumulated depreciation and amortiation , , uipment and leasehold improvements, net , ,

epreciation and amortiation epense as . million, . million and . million for the years ended ctober , , and , respectively.

cisitions oodill and ntangile ssets

Atlanta Capital Management Company, LLC (Atlanta Capital)

In fiscal , the Company eercised a series of call options through hich it purchased the remaining direct profit interests held by noncontrolling interest holders of tlanta Capital pursuant to the provisions of the original tlanta Capital acuisition agreement, as amended, for . million, of hich . million settled in the fourth uarter of fiscal and . million settled in the first uarter of fiscal .

In fiscal and , the Company eercised a series of call options through hich it purchased . million and . million, respectively, of indirect profit interests held by noncontrolling interest holders of tlanta Capital pursuant to the provisions of the tlanta Capital lan as defined in ote . hese transactions settled in the first uarter of fiscal and , respectively.

otal profit interests in tlanta Capital held by noncontrolling interest holders issued pursuant to the tlanta Capital lan decreased to . percent as of ctober , from . percent as of ctober , , reflecting the transactions described above. he estimated fair value of these interests as .

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million and $27. million at October 1, 201 and 2017, respectively, and is included as a component of temporary equity on the Consolidated alance heets.

Calvert Research and Management (Calvert)

On December 0, 2016, the Company, through its newly formed subsidiary Calvert, acquired substantially all of the assets of Calvert nvestment anagement, nc. (Calvert nvestments) for cash. The transaction was accounted for as an asset acquisition because substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable intangible asset related to contracts acquired to manage and distribute sponsored mutual funds (the Calvert unds). The Calvert unds are a diversified family of mutual funds, encompassing actively and passively managed equity, fixed and floatingrate income, and multiasset strategies managed principally in accordance with the Calvert rinciples for esponsible nvestment or other responsible investment criteria.

Parametric Portfolio Associates LLC (Parametric)

Total profit interests in arametric held by noncontrolling interest holders decreased to 5.1 percent as of October 1, 201 from 6.0 percent as of October 1, 2017, as described below. Total capital interests in arametric held by noncontrolling interest holders decreased to 0. percent as of October 1, 201 from 1. percent as of October 1, 2017, as described below.

n December 2012, arametric acquired Clifton. s part of the transaction, the Company issued a 1. percent profit interest and a 1. percent capital interest in arametric ortfolio L (arametric L) to certain employees. n fiscal 201 and 2017, the Company exercised a series of call options through which it purchased both profit and capital interests for $. million and $6. million, respectively. These transactions settled in the first quarter of fiscal 201 and 2017, respectively. n the fiscal 201 transaction, the Company acquired the remaining 0.5 percent profit interest and 0.5 percent capital interests in arametric held by noncontrolling interest holders related to the Clifton acquisition.

n ovember 201, the non‐controlling interest holders of Parametric Risk Advisors entered into a Unit cquisition greement with arametric to exchange their remaining 20 percent ownership interests in arametric isk dvisors for additional ownership interests in arametric L, whose sole asset is ownership interests in Parametric. As a result of this exchange, Parametric Risk Advisors became a wholly‐owned subsidiary of arametric. The arametric L ownership interests issued in the exchange represent a 0. percent profit interest and a 0. percent capital interest, and contain put and call features that become exercisable over a four‐year period starting in fiscal 2019. The estimated fair value of these interests was $15. million and $1.7 million at October 1, 201 and 2017, respectively, and is included as a component of temporary equity on the Consolidated alance heets.

n fiscal 201 and 2017, the Company exercised a series of call options through which it purchased $5. million and $5.7 million, respectively, of profit interests held by noncontrolling interest holders of arametric pursuant to the provisions of the arametric lan (as defined in ote 12). These transactions settled in the first quarter of fiscal 201 and 201, respectively.

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otal profit interests in Parametric held by non‐controlling interest holders issued pursuant to the Parametric Plan decreased to . percent as of ctober 1, 201 from . percent as of ctober 1, 201, reflecting the transactions described above. he estimated fair value of these interests was .9 million and . million at ctober 1, 201 and 201, respectively, and is included as a component of temporary euity on the onsolidated alance heets.

Tax Advantaged Bond Strategies (TABS)

n fiscal 2009, the ompany acuired the A business of .. ass nvestors ervices for cash and future consideration. uring the second uarter of fiscal 201, the ompany made a final contingent payment of 11. million to the selling group based upon prescribed multiples of TABS’s revenue for the twelve months ended ecember 1, 201. he payment increased goodwill by 11. million, as the acuisition was completed prior to the change in accounting for contingent purchase price consideration.

Goodwill

he changes in the carrying amount of goodwill for the years ended ctober 1, 201 and 201 are as follows

Octoe alance, beginning of period 29,1 2,091 oodwill acuired ‐ 11,90 alance, end of period 29,1 29,1

All acuired goodwill is deductible for tax purposes.

he ompany completed its most recent goodwill impairment testing in the fourth uarter of fiscal 201 and determined that there was no impairment in the carrying value of this asset. o evaluate the sensitivity of the goodwill impairment testing to the calculation of fair value, the ompany applied a hypothetical 10 percent and 20 percent decrease to the fair value of each reporting unit. ased on such hypothetical scenarios, the results of the Company’s impairment testing would not change, as the reporting units still had an excess of fair value over the carrying value under both hypothetical scenarios.

o impairment in the value of goodwill was recognied during the years ended ctober 1, 201, 201 or 201.

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Intangible assets

The following is a summary of intangile assets at ctoer , and

Octoe eigted veage eaining otiation oss eiod Caing cclated et Caing in eas ont otiation ont

otiing intangile assets: Client relationships acuired , , , ntellectual property acuired , Trademar acuired , , , esearch system acuired

onaotiing intangile assets: utual fund management contracts acuired , , Total , , ,

Octoe eigted veage eaining otiation oss eiod Caing cclated et Caing in eas ont otiation ont

otiing intangile assets: Client relationships acuired , , , ntellectual property acuired , Trademar acuired , , esearch system acuired

onaotiing intangile assets: utual fund management contracts acuired , , Total , , ,

o impairment in the value of amortiing or nonamortiing intangile assets was recognied during the years ended ctoer , , or

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Amortiation epense was million, million and million for the years ended ctoer , , and , respectively stimated amortiation epense to e recognied y the Company over the net five years is as follows

stiated ea nding Octoe otiation ense , , , , ,

et

2027 Senior Notes

uring fiscal , the Company issued million in aggregate principal amount of percent ten year senior notes due April , nterest is payale semiannually in arrears on April th and ctoer th of each year At ctoer , and , the carrying value of the Senior otes was million and million, respectively The Senior otes are unsecured and unsuordinated oligations of the Company There are no covenants associated with the Senior otes

Redemption of 2017 Senior Notes

uring fiscal , the Company used net proceeds from the Senior otes to redeem the remaining million aggregate principal amount of its Senior otes The Company paid total consideration of million at redemption to the holders of the Senior otes, which was determined pursuant to the terms of the ndenture that governs the notes at an amount eual to the sum of the aggregate principal amount outstanding, the present value of the remaining scheduled payments of interest through the original maturity date and the interest accrued to the date of redemption The Company recognied a million nonoperating loss on the etinguishment of the Senior otes, representing the difference etween the total consideration paid and the net carrying amount of the etinguished det plus interest accrued to the date of redemption

2023 Senior Notes

uring fiscal , the Company issued million in aggregate principal amount of percent ten year senior notes due une , nterest is payale semiannually in arrears on une th and ecemer th of each year At ctoer , and , the carrying value of the Senior otes was million and million, respectively The Senior otes are unsecured and unsuordinated oligations of the Company There are no covenants associated with the Senior otes

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Corporate credit facility

The Company entered into a million senior unsecured revolving credit facility on ctoer , The credit facility has a fiveyear term, epiring on ctoer , nder the facility, the Company may orrow up to million at Based rates of interest that vary depending on the level of usage of the facility and credit ratings of the Company The credit facility is unsecured, contains financial covenants with respect to leverage and interest coverage, and reuires the Company to pay an annual commitment fee on any unused portion As of ctoer , , the Company had no orrowings under its unsecured revolving credit facility

– n ecemer , , the Company replaced the eisting credit facility with a new million unsecured revolving credit facility with similar terms and conditions that epires on ecemer , As of ecemer , , the Company had no orrowings under its unsecured revolving credit facility

tocased Coensation lans

The Company recognied compensation cost related to its stocased compensation plans for the years ended ctoer , , and as follows

mnius ncentive lans Stoc options , , , estricted shares , , , eferred stoc units , mployee Stoc urchase lans mployee Stoc urchase ncentive lan Atlanta Capital lan , , , arametric lan , , , arametric hantom ncentive lan , , Atlanta Capital hantom ncentive lan Total stocased compensation epense , , ,

The total income ta enefit recognied for stocased compensation arrangements was million, million and million for the years ended ctoer , , and , respectively

Omnibus Incentive Plans

The mnius ncentive lan the lan, which is administered y the Compensation Committee of the Board, allows for awards of stoc options, restricted shares and deferred stoc units to eligile employees and nonemployee irectors and the issuance of shares to settle phantom incentive units awarded to employees of Atlanta Capital and arametric ptions to purchase onoting Common Stoc

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granted under the lan vest over five years pursuant to a graduated vesting schedule, epire ten years from the date of grant and may not e granted with an eercise price that is less than the fair maret value of the stoc as of the close of usiness on the date of grant estricted shares of onoting Common Stoc granted under the lan vest over five years pursuant to a graduated vesting schedule and may e suect to performance goals These performance goals generally relate to the achievement of specified levels of adusted operating income eferred stoc units, previously referred to as phantom stoc units, granted to nonemployee irectors under the lan vest over two years uring fiscal , the lan was amended such that nonemployee irectors no longer have sustantive service conditions for vesting of awards nce the awards are granted, the nonemployee irectors have the right to receive cash payments related to such awards upon separation from the Company other than for cause The lan contains change in control provisions that may accelerate the vesting of awards A total of million shares of onoting Common Stoc have een reserved for issuance under the lan Through ctoer , , million restricted shares, options to purchase million shares and , shares to settle phantom incentive units have een issued pursuant to the lan

The fair value of each stoc option award is estimated on the date of grant using the BlacScholes option valuation model The BlacScholes option valuation model incorporates assumptions as to dividend yield, epected volatility, an appropriate risfree interest rate and the epected life of the option any of these assumptions reuire management’s judgment. The dividend yield assumption represents the Company’s epected dividend yield ased on its historical dividend payouts and the stoc price at the date of grant The epected volatility assumption is ased upon its historical stoc price fluctuations The Company uses historical data to estimate the epected life of options granted The risfree rate for periods within the contractual life of the option is ased on the S Treasury yield curve at the time of grant Stoc options are accounted for as euity awards

The weightedaverage fair values per share of stoc options granted during the years ended ctoer , , and using the BlacScholes option valuation model were as follows

eightedaverage grant date fair value of options granted

Assumptions: ividend yield to to pected volatility to isfree interest rate to to to pected life of options years years years

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to option transations under the lan and predeessor plans or the year ended toer are summaried as ollos

eigted veage eigted eaining veage Contactal ggegate ecise e ntinsic aes ice in eas ale ptions outstanding eginning o period . ranted . erised . oreitedepired . ptions outstanding end o period . . ptions eerisale end o period . .

The Company reeived . million . million and . million related to the eerise o options or the isal years ended toer and respetively. hares issued upon eerise o options represent nely issued shares. The total intrinsi value o options eerised during the years ended toer and as . million . million and . million respetively. The total air value o options that vested during the year ended toer as . million.

s o toer there as . million o ompensation ost related to unvested sto options granted under the lan and predeessor plans not yet reognied. That ost is epeted to e reognied over a eightedaverage period o . years.

n ovemer the Company granted options to purhase . million shares of the Company’s Non oting Common to under the lan to employees at a prie o . per share the thenurrent trading prie o the underlying seurities.

estrited shares granted to employees are aounted or as euity aards. s o toer there as . million o ompensation ost related to unvested aards granted under the lan and predeessor plans not yet reognied. That ost is epeted to e reognied over a eightedaverage period o . years.

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smmary of the Company’s restricted share activity for the year ended October 31, 2018 under the 2013 lan an preeessor plans is presente elo

eigted veage ant ate aes ai ale neste einnin of perio rante este orfeite neste en of perio

he total fair ale of restrite sto este for the years ene toer an as million million an million respetiely

n Noemer the Company aare a total of million shares of restrite shares ner the lan at a rant ate fair ale of per share

eferre sto nits isse to nonemployee iretors ner the lan are aonte for as liaility aars rin fisal the lan as amene sh that nonemployee iretors no loner hae sstantie serie onitions for estin of aars s a reslt of this amenment eferre sto nits rante after Noemer are onsiere flly este on the rant ate an the entire fair ale of these aars is reonie as ompensation ost on the ate of rant rin fisal eferre sto nits ere isse to nonemployee iretors prsant to the lan he total liaility attritale to eferre sto nits is inle as a omponent of are ompensation on the Company’s Consolidated Balance Sheet was $1.3 million an million as of toer an respetiely he Company mae ash payments of million an million in the first arter of fisal an respetiely to settle eferre sto nit aar liailities

Employee Stock Purchase Plans

he mployee to rhase lan the alifie an the Nonalifie mployee to rhase lan the Nonalifie toether the mployee to rhase lans hih are aministere y the Compensation Committee of the oar permit eliile employees to iret p to a maimm of per simonth offerin perio toar the prhase of Nonotin Common to at the loer of perent of the maret prie of the Nonotin Common to at the einnin or at the en of eah offerin perio he alifie alifies ner etion of the nternal eene Coe of as amene nternal eene Coe total of million an million shares of the Company’s Nonotin Common to hae een resere for issane ner the alifie an Nonalifie respetiely hroh toer million shares hae een isse prsant to the mployee to rhase lans

he Company reeie million million an million relate to shares isse ner the mployee to rhase lans for the years ene toer an respetiely

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Employee Stock Purchase Incentive Plan

he 2013 ncentive Compensation Nonualified mployee Stoc urchase lan the mployee Stoc urchase ncentive lan, which is administered by the Compensation Committee of the Board, permits employees to direct up to half of their incentive bonuses and commissions toward the purchase of the Company’s Nonotin Common Stoc at the lower of 0 percent of the maret price of the Nonotin Common Stoc at the beinnin or at the end of each uarterly offerin period. total of 0. million shares of the Company’s Nonotin Common Stoc have been reserved for issuance under the mployee Stoc urchase ncentive lan. hrouh October 31, 2018, 0. million shares have been issued pursuant to the plan.

he Company received $. million, $.0 million and $3. million related to shares issued under the mployee Stoc urchase ncentive lan for the years ended October 31, 2018, 201 and 201, respectively.

Atlanta Capital and Parametric Long-term Equity Incentive Plans

he tlanta Capital lan and the arametric lan allow for awards of profit units of tlanta Capital and arametric, respectively, to ey employees. rofit units ranted under the tlanta Capital and arametric lans vest over five years and entitle the holders to uarterly distributions of available cash flow. air value of the awards is determined on the rant date utiliin an annual appraisal of each entity. he annual appraisal is developed usin two models, an income approach and a maret approach, as described in Note 1. hese models utilie appropriate discount rates as well as relevant investment manaement industry maret multiples. ested profit units are redeemable upon the eercise of limited inservice put rihts held by the employee or call rihts held by the Company. he call rihts held by the Company entitle the Company to repurchase the profit units at the end of a tenyear call period and each year thereafter, and upon termination of employment. ecution of the puts and calls taes place upon availability of the annual appraisal to ensure the transactions tae place at fair value. rofit units are not reserved for issuance the number of profit units authoried for awards is determined annually by the Company on the first calendar day of the fiscal year. he awards under the tlanta Capital and arametric lans are accounted for as euity awards.

he Company did not rant any profit interests under the tlanta Capital lan in fiscal 2018. s of October 31, 2018, there was $. million of compensation cost related to unvested awards ranted under the tlanta Capital lan not yet reconied. hat cost is epected to be reconied over a weihtedaverae period of 2. years. total of 323,01 profit units have been issued pursuant to the tlanta Capital lan throuh October 31, 2018.

he Company did not rant any profit interests under the arametric lan in fiscal 2018 or 201. s of October 31, 2018, there was $3. million of compensation cost related to unvested awards ranted under the arametric lan not yet reconied. hat cost is epected to be reconied over a weihtedaverae period of 1. years. total of 3,23 profit units have been issued pursuant to the arametric lan throuh October 31, 2018.

Atlanta Capital and Parametric Phantom Incentive Plans

he 201 tlanta Capital hantom ncentive lan the tlanta Capital hantom ncentive lan, the 201 arametric hantom ncentive lan 201 arametric lan and the 2018 arametric hantom ncentive

109

an arametr an oetey the arametr an an the arametr an are hereafter referre to as the arametr hantom nente an are onterm ety nente pans that proe for the aar of phantom nente nts to ee empoyees of tanta Capta an arametr respetey hantom nente nts est oer fe years he rant ate ae of eah phantom nente nt s te to the enterprse ae of tanta Capta or arametr on a per nt ass aste to tae nto onseraton that phantom nente nts o not hae rhts to reee artery ash fo strtons from tanta Capta or arametr as appae or rhts to reee artery ens from the Company he per nt ae of tanta Capta an arametr s etermne tn an anna apprasa of eah respete entty that s eeope sn to aaton tehnes spefay an nome approah an a maret approah as esre n Note hese aaton tehnes te approprate sont rates as e as reeant nestment manaement nstry maret mtpes t eah estn ate the este porton of eah phantom nente nt s aste to refet the thenrrent enterprse ae of tanta Capta or arametr on a per nt ass as appae an the aste ae of the este phantom nente nt s sette n aton ane Nonotn Common to ner the an

hantom nente nts are not resere for ssane rather the nmer of phantom nente nts athore for aars s etermne annay y the Company on the frst aenar ay of the fsa year oeer sne the aars are sette n aton ane Nonotn Common to ner the an the aars are set to the Nonotn Common to reseres efne ner the an as esre aoe hantom nente nt aars ner the tanta Capta hantom nente an an the arametr hantom nente an are aonte for as ety aars

n fsa the Company estashe the arametr an an oes not nten to rant any atona phantom nente nts ner the arametr an he terms of these pans are sstantay eaent eept that ner the arametr an the aars are no nte sh that one nt of arametr s eaent to phantom nente nts ner the arametr an one nt of arametr s eaent to one phantom nente nt he orresponn rant ate far ae of phantom nente nts rante ner the arametr an s aste to e eaent to th of the far ae of one nt of arametr

s of toer there as mon an of ompensaton ost reate to neste aars rante ner the arametr an an the arametr an respetey not yet reone hat ost attrtae to the arametr an an the arametr an s epete to e reone oer a ehteaerae pero of years an years respetey

smmary of phantom nente nt atty for the year ene toer ner the arametr hantom nente an s presente eo eigted anto veage ncentive ant ate nits ai ale neste ennn of pero rante este neste en of pero

110

smmary of phantom nente nt atty for the year ene toer ner the arametr hantom nente an s presente eo eigted anto veage ncentive ant ate nits ai ale neste ennn of pero rante neste en of pero

n the frst arter of fsa the Company rante a tota of phantom nente nts at a rant ate phantom nente nt ae of per nt

s of toer there as mon of ompensaton ost reate to neste aars rante ner the tant Capta hantom nente an not yet reone hat ost s epete to e reone oer a ehteaerae pero of years

smmary of phantom nente nt atty for the year ene toer ner the tanta Capta hantom nente an s presente eo eigted anto veage ncentive ant ate nits ai ale neste ennn of pero rante neste en of pero

n the frst arter of fsa the Company rante a tota of phantom nente nts at a rant ate phantom nente nt ae of per nt

Stock Option Income Deferral Plan

he Company has estashe an nfne nonafe to pton nome eferra an to permt ey empoyees to efer reonton of nome pon eerse of nonafe sto optons preosy rante y the Company s of toer optons to prhase mon shares hae een eerse an pae n trst th the Company

111

loee enefit lans

Profit Sharing and Savings Plan

he Company has a roft harn an ans an for the eneft of empoyees he roft harn an ans an s a efne ontrton proft sharn pan th a eferra omponent ftme empoyees ho hae met ertan ae an enth of sere rerements are ee to partpate n the plan. The plan allows participating employees to make elective deferrals of compensation up to the plan’s anna mts he Company then mathes eah participant’s contribution on a dollarforoar ass to a mamm of per annm n aton the Company may at ts sreton ontrte p to perent of ee empoyee ompensaton to the pan p to a mamm of an per employee for the years ended October 31, 2018, 2017 and 2016. The Company’s expense under the pan as mon mon an mon for the years ene toer an respetey

Supplemental Profit Sharing Retirement Plan

he Company has an nfne nonafe ppementa roft harn etrement an herey ertan ey empoyees of the Company may reee proft sharn ontrtons n eess of the amonts aoe ner the roft harn an ans an artpaton n the ppementa roft harn etrement an has een froen an s restrte to empoyees ho afe as partpants on Noemer he Company not mae any ontrtons to the pan n fsa artpants n the ppementa roft harn etrement an ontne to earn nestment retrns on ther aanes ommensrate th those earne n the empoyerrete porton of the roft harn an ans an The Company’s expense under the Supplemental Profit harn etrement an for the years ene toer an as an respetey

Coon toc

All outstanding shares of the Company’s Voting Common Stock are deposited in a voting trust, the trustees of hh hae nrestrte otn rhts th respet to the otn Common to he trstees of the otn trst are a offers of the Company Nonotn Common shares o not hae otn rhts ner any rmstanes rn fsa the Company not sse any otn shares an reprhase shares of ts otn Common to

The Company’s current Nonotn Common to share reprhase proram as athore on toer he oar athore manaement to reprhase an retre p to mon shares of ts Non otn Common to on the open maret an n prate transatons n aorane th appae securities laws. The timing and amount of share purchases are subject to management’s discretion. The Company’s share repurchase proram s not set to an epraton ate

n fsa the Company prhase an retre appromatey mon shares of ts Nonotn Common to ner the rrent reprhase athoraton an appromatey mon shares ner a preos reprhase athoraton ppromatey mon atona shares may e reprhase ner the rrent athoraton as of toer

112

onoeating ncoe ense

The components of nonoperating income expense for the years ended October 31, 2018, 2017 and 2016 were as follows

nterest and other income 3,10 22,01 11,1 Net losses on investments and derivatives 2,31 1,01 116 Net foreign currency gains losses 76 1,27 1,012 ains and other investment income, net 10,066 1,303 12,11 nterest expense 23,62 27,6 2,10 oss on extinguishment of debt ,36 Other income expense of consolidated CO entities nterest income 1,883 17,7 Net gains on bank loans and other investments and note obligations 1, 6,0 ains and other investment income, net 16,882 2,06 Structuring and closing fees ,830 nterest expense 10,6 13,286 nterest and other expense 1,286 13,286 Total nonoperating income expense 11,67 13,8 6,216

ncoe aes

The provision for income taxes for the years ended October 31, 2018, 2017 and 2016 consists of the following

Cent: ederal 10,10 136, 11,30 State 26,2 22,73 17,30 efeed: ederal 2,8 11,2 18,31 State 37 2,002 3,8 Total 16,703 173,666 13,630

On ecember 22, 2017, the Tax Cuts and obs Act the 2017 Tax Act was signed into law in the .S. Among other significant changes, the 2017 Tax Act reduced the statutory federal income tax rate for .S. corporate taxpayers from a maximum of 3 percent to 21 percent and reuired the deemed repatriation of foreign earnings not previously subject to .S. taxation. ecause the lower federal income tax rate became effective two months into the Company’s fiscal year, a blended federal tax rate of 23.3 percent applied to the Company for the year ended October 31, 2018.

The Company’s income tax provision for the year ended October 31, 2018 included a nonrecurring charge of 2.0 million to reflect the estimated effects of the enactment of the 2017 Tax Act. The nonrecurring

113

chare was based on guidance issued by the Internal Revenue Service (IRS), as well as the Company’s current interpretation of the tax law chanes. The nonrecurrin chare consists of 21.2 million from the revaluation of the Company’s deferred tax assets and liabilities and 2.8 million for the deemed repatriation of foreinsourced net earnins not previously subect to .. taxation. The accountin for these elements of the 201 Tax ct is complete. The tax increase associated with the nonrecurrin chares was partially offset by an income tax benefit of 1. million related to the exercise of stoc options and vestin of restricted stoc durin the period, and . million related to the net income attributable to redeemable noncontrollin interests and other beneficial interests, which is not taxable to the Company.

The following table reconciles the U.S. statutory federal income tax rate to the Company’s effective tax rate for the years ended October 31, 2018, 201 and 201

tatutory .. federal income tax rate 23.3 3.0 3.0 tate and local income tax, net of federal income tax benefits . 3. 3. et income attributable to noncontrollin and other beneficial interests 0. 1.8 2.0 onrecurrin impact of .. tax reform . tocbased compensation 0. 0.3 0. et excess tax benefits from stocbased compensation plans 3.2 Other items 0.2 0. ffective income tax rate 28.8 3.0 3.

mpany anticipates that the adoption of this guidance may cause fluctuations in the Company’s effective tax rate, particularly in the first quarter of each fiscal year, when most of the Company’s annual stock

ith the adoption of 2010 as of ovember 1, 201, excess tax benefits or tax deficiencies related to the exercise of stoc options and vestin of restricted stoc awards are no loner reconied in additional paid‐in capital but rather as an income tax benefit or income tax expense in the period of vestin or settlement. or the year ended October 31, 2018, net excess tax benefits of approximately 1. million were included in the income tax provision. or the years ended October 31, 201 and 201, net excess tax benefits of approximately 3.2 million and 2.2 million, respectively, were included in additional paid‐in capital.

s of October 31, 2018, the Company considers the undistributed earnins of certain forein subsidiaries to be indefinitely reinvested in forein operations however, as a result of the 201 Tax ct, an estimated tax of 2.8 million was recorded durin the year ended October 31, 2018 on these earnins. The calculation of this nonrecurrin chare is based on the 201 Tax ct, uidance issued by the and our interpretation of this information.

114

The Company continues to carefully evaluate the impact of the Tax ct, certain provisions of which do not tae effect for the Company until fiscal , including, but not limited to, the global intangible low‐ taxed income, foreign‐derived intangible income and base erosion anti‐abuse tax provisions. Under the guidance provided by the U.S. Securities and xchange Commission in Staff ccounting ulletin o. (S ), no provisional estimate is reuired for these items until the accounting for these elements of the Tax ct is complete.

eferred income taxes reflect the expected future tax conseuences of temporary differences between the carrying amounts and tax basis of the Company’s assets and liabilities. The significant components of deferred income taxes are as follows

in thousands eferred tax assets Stoc‐based compensation , , Investment basis in partnerships , , eferred rent , , ifferences between boo and tax bases of investments , , Compensation and benefit expense , , ederal benefit of unrecognied state tax benefits ther Total deferred tax asset , ,

eferred tax liabilities eferred sales commissions (,) (,) ifferences between boo and tax bases of property (,) (,) ifferences between boo and tax bases of goodwill and intangibles (,) (,) Unrealied net holding gains on investments (,) (,) Unrealied gains on derivative instruments () () Total deferred tax liability (,) (,) et deferred tax asset , ,

The Company records a valuation allowance when necessary to reduce deferred tax assets to an amount that is more liely than not to be realied. o valuation allowance has been recorded for deferred tax assets, reflecting management’s belief that all deferred tax assets will be utilied.

115

he changes in gross unrecognied tax benefits, excluding interest and penalties, for the years ended ctober , , and are as follows

in thousands eginning alance , , , dditions for tax positions of prior years dditions based on tax positions related to current year eductions for tax positions of prior years eductions for settlements with taxing authorities apse of statute of limitations nding alance , ,

nrecognied tax benefits, if recognied, would reduce the effectie tax amount by million, million and million, respectiely, for the years ended ctober , , and

he Company recognied million and million in interest and penalties in its income tax proision for the years ended ctober , and , respectiely he Company did not recognie any interest or penalties in its income tax proision for the year ended ctober , ccrued interest and penalties, which are included as a component of unrecognied tax benefits, totaled million and million at ctober , and , respectiely

he Company beliees that it is reasonably possible that approximately million of its currently remaining unrecognied tax benefits, each of which are indiidually insignificant, may be recognied within the next months as a result of a lapse of the statute of limitations and settlements with state taxing authorities

he Company is generally no longer subect to income tax examinations by federal, state, local or non taxing authorities for fiscal years prior to fiscal

n fiscal , the Company identified an immaterial error related to basis adustments of certain partnership interests arising from Company repurchases of noncontrolling interests in maorityowned subsidiaries that was not recorded in preious fiscal periods he cumulatie impact of this error resulted in an increase to deferred income tax asset and additional paid‐in capital of $50.5 million. The error had no effect on the Consolidated tatements of ncome, Comprehensie ncome, or Cash lows for the year ended ctober ,

oncontolling and Ote eneficial nteests

oncontrolling and other beneficial interests are as follows

Non-redeemable non-controlling interests

onredeemable noncontrolling interests consist entirely of unested interests granted to employees of the Company’s majorityowned subsidiaries hese grants become subect to holder put rights upon esting and are reclassified to temporary euity as esting occurs

116

Redeemable non-controlling interests at other than fair value

n fiscal 0 the Company acired the remainin direct profit interests held y the non‐controllin interest holders of tlanta Capital ee ote 0. s a reslt the Company had no non‐controllin interests that are redeemale at other than fair ale as of ctoer 0 and 0.

Redeemable non-controlling interests at fair value

edeemale non‐controlling interests include vested interests held by employees of the Company’s majority‐oned ssidiaries and are recorded in temporary eity at estimated redemption ale. tre payments to prchase these interests redce temporary eity. tre chanes in the redemption ale of these interests are reconied as increases or decreases to additional paid‐in capital. edeemale non‐ controlling interests also include interests in the Company’s consolidated sponsored funds given that inestors in those fnds may reest ithdraals at any time.

The components of net income loss attritale to non‐controllin and other eneficial interests for the years ended ctoer 0 0 and 0 ere as follos

in thousands Consolidated sponsored fnds $ $ $ ajority‐oned ssidiaries 5 55 on‐controllin interest ale adjstments ‐ 5 00 Consolidated C entities ‐ ‐ et income attritale to non‐controllin and other eneficial interests $ 5 $ $ 50

elates to noncontrolling interests redeemale at other than fair value

117

cclated Ote Coeensive ncoe Loss

he components of accumulated other comprehensive income loss net of ta for the years ended ctober and are as follos

naotied et nealied et ains ains Losses on oeign Cenc Losses on Cas vailalefoale anslation (in thousands) lo edges(1) nvestents(2) dstents otal alance at ctober ther comprehensive income loss before reclassifications and ta a impact eclassification adustments before ta a impact et current period other comprehensive income loss alance at ctober ther comprehensive income loss before reclassifications and ta a impact eclassification adustments before ta a impact et current period other comprehensive income loss alance at ctober ther comprehensive income loss before reclassifications and ta a impact eclassification adustments before ta a impact et current period other comprehensive income loss alance at ctober

mounts reclassified from accumulated other comprehensive income loss, net of tax, represent the amortiation of net gains losses on qualifying derivative financial instruments designated as cash flow hedges over the life of the Companys senior notes into interest expense on the Consolidated tatements of ncome mounts reclassified from accumulated other comprehensive income loss, net of tax, represent gains losses on disposal of availale forsale securities that were recorded in gains losses and other investment income, net, on the Consolidated tatements of ncome

118

anings e ae

he folloing table sets forth the calculation of earnings per basic and diluted shares for the years ended ctober and

in thousands, except per share data et income attributable to aton ance Corp shareholders eightedaverage shares outstanding – basic ncremental common shares eightedaverage shares outstanding – diluted arnings per share asic iluted

ntidilutive common shares related to stoc options and unvested restricted stoc ecluded from the computation of earnings per diluted share ere approimately million million and million for the years ended ctober and respectively

Coitents and Contingencies

n the normal course of business the Company enters into agreements that include indemnities in favor of third parties such as engagement letters ith advisors and consultants information technology agreements distribution agreements and service agreements n certain circumstances these indemnities in favor of third parties relate to service agreements entered into by investment funds advised by aton ance anagement oston anagement and esearch or Calvert all of hich are direct or indirect hollyoned subsidiaries of the Company he Company has also agreed to indemnify its directors officers and employees in accordance with the Company’s Articles of Incorporation, as amended. Certain agreements do not contain any limits on the Company’s liability and, therefore, it is not possible to estimate the Company’s potential liability under these indemnities. In certain cases, the Company has recourse against third parties ith respect to these indemnities urther the Company maintains insurance policies that may provide coverage against certain claims under these indemnities

he Company and its subsidiaries are subect to various legal proceedings n the opinion of management after discussions ith legal counsel the ultimate resolution of these matters ill not have a material effect on the consolidated financial condition results of operations or cash flos of the Company

n ovember the Company acuired patents and other intellectual property from anaged s C a developer of intellectual property in the field of echangetraded funds he intellectual property is the foundation of the Company’s NextShares™ exchangetraded managed funds initiative he terms of the acuisition of the patents and other intellectual property of anaged s C include approimately million in aggregate contingent milestone payments that are based on specific events representing ey developments in the commercialiation of ethares here is no defined timing on these payments resulting in significant uncertainty as to hen the amount of any payment is due in the future f and hen the milestones have been accomplished anaged s C is also entitled to revenuesharing payments that are calculated based on a percentage of licensing revenue that the Company receives for use of the acuired intellectual property

119

he Company leases certain office space and euipment under noncancelable operating leases. he office space leases expire oer arious terms that extend through . Certain of the leases contain renewal options. he lease payments are recognied on a straightline basis oer the noncancelable term of each lease plus any anticipated extensions. ent expense under these leases totaled . million, . million and . million, respectiely, for the years ended ctober , , and . uture minimum lease commitments are as follows

ea nding Octoe in thousands ont , , , , , – thereafter , otal ,

ther commitments and contingencies include puts and calls related to profit interests issued to non controlling interest holders pursuant to the proisions of the Atlanta Capital lan and arametric lan, respectiely See Note .

elated at ansactions

Sponsored funds

he Company is an inestment adiser to, and has administratie agreements with, certain sponsored openend funds, priately offered euity funds and closedend funds for which employees of the Company are officers andor directors. Substantially all of the serices to these entities for which the Company earns a fee, including inestment adisory, distribution, shareholder and administratie serices, are proided under contracts that set forth the serices to be proided and the fees to be charged. Certain of these contracts are subject to annual review and approval by the funds’ boards of directors or trustees.

eenues for serices proided or related to these funds for the years ended ctober , , and were as follows

in thousands anagement fees ,, , , istribution fees , , , Serice fees , , , Shareholder serice fees , , , ther reenue , otal ,, ,, ,

or the years ended ctober , , and , the Company had inestment adisory agreements with certain sponsored funds pursuant to which the Company contractually waied . million, . million and . million, respectiely, of management fees it was otherwise entitled to receie.

120

ales proceeds and net realied ains for the years ended ctober and fro investents in sponsored funds classified as availableforsale are as follows

in thousands roceeds fro sales et realied ains

he opany pays all ordinary operatin epenses of certain sponsored funds ecludin investent advisory and adinistrative fees for which it earns an allin anaeent fee and provides subsidies to certain share classes of sponsored funds to ensure that specified operatin epenses attributable to such share classes do not eceed a specified percentae. or the years ended ctober and epenses of . illion . illion and . illion respectively were incurred by the opany pursuant to these arraneents.

ncluded in anaeent fees and other receivables at ctober and are receivables due fro sponsored funds of . illion and . illion respectively. ncluded in accounts payable and accrued epenses at ctober and are payables due to sponsored funds of . illion and . illion respectively.

Loan to affiliate

n eceber a wholly owned subsidiary of the opany loaned . illion to eavest under a ter loan areeent to seed a new investent stratey. he loan renews autoatically for an additional oneyear period on each anniversary date unless written terination notice is provided by . hrouh ctober the opany earned interest eual to the oneyear anadian ollar ffered ate plus basis points. eavest ay prepay the loan in whole or in part at any tie without penalty. he opany recorded . illion of interest incoe related to the loan in ains losses and other investment income, net, on the Company’s Consolidated Statement of ncoe for the fiscal years ended ctober and . nterest due fro eavest under this arraneent included in other assets on the Company’s Consolidated Balance Sheets was $ and at ctober and respectively.

usequent event – amendment to term loan agreement n oveber the opany aended the ter loan areeent to reduce the aret interest rate of the loan to be eual to the oneyear anadian ollar ffered ate plus basis points.

Employee loan program

he opany has established an ployee oan rora under which a prora aiu of . illion is available for loans to officers other than eecutive officers and other ey eployees of the opany for purposes of financin the eercise of eployee stoc options. oans are written for a seven year period at varyin fied interest rates currently ranin fro . percent to . percent are payable in annual installents coencin with the third year in which the loan is outstandin and are collateralied by the stoc issued upon eercise of the option. ll loans under the prora ust be ade on or before ctober . oans outstandin under this prora which are full recourse in nature are reflected as notes receivable fro stoc option exercises in shareholders’ equity and totaled . illion and . illion at ctober and respectively.

121

eglato eieents

he Company is required to maintain net capital in certain reulated susidiaries within a numer o jurisdictions. Such requirements may limit the Company’s ability to make withdrawals of capital from these susidiaries

aton ance istriutors, nc , a whollyowned susidiary o the Company and principal underwriter o the aton ance and Parametric funds, is subject to the U.S. Securities and Exchange Commission’s uniorm net capital rule, which requires the maintenance o minimum net capital or purposes o this rule, had net capital o $ million at ctoer , , which exceeded its minimum net capital requirement o $ million as o such date he ratio o areate indetedness to net capital at ctoer , was to

t ctoer , , the Company was required to maintain net capital in certain other reulated susidiaries he Company was in compliance with all applicale reulatory minimum net capital requirements

Concentations of Cedit is and ignificant elationsis

inancial instruments that potentially suect the Company to concentrations o credit ris consist primarily o cash and cash equivalents held he Company maintains cash and cash equivalents with various inancial institutions Cash deposits maintained at a inancial institution may exceed the ederally insured limit

urin the iscal years ended ctoer , , and , there were no manaed portolios, related unds or other clients that provided over percent o the total revenue or the Company

eogaic nfoation

evenues y principal eoraphic area or the years ended ctoer , , and are as ollows

evene: S $ ,, $ ,, $ ,, nternational , , , otal $ ,, $ ,, $ ,,

onlived assets y principal eoraphic area as o ctoer , and are as ollows

Longlived ssets: S $ , $ , nternational , , otal $ , $ ,

122

nternational reenues and longlied assets are attributed to countries based on the location in which reenues are earned.

Coaative atel inancial nfoation nadited

ist econd id ot ate ate ate ate ll ea

otal reenue , , , , ,, perating income , , , , , et income , , , , , et income attributable to Eaton ance Corp. shareholders , , , , , Earnings per Share asic . . . . . iluted . . . . .

ist econd id ot ate ate ate ate ll ea

otal reenue , , , , ,, perating income , , , , , et income , , , , , et income attributable to Eaton ance Corp. shareholders , , , , , Earnings per Share asic . . . . . iluted . . . . .

123 O O LC CCO o the shareholders and the oard of irectors of Eaton ance Corp.

Oinion on te inancial tateents

e hae audited the accompanying consolidated balance sheets of Eaton ance Corp. and subsidiaries the Company as of ctober , and , the related consolidated statements of income, comprehensie income, shareholders equity, and cash flows, for each of the three years in the period ended ctober , , and the related notes collectiely referred to as the financial statements. n our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of ctober , and , and the results of its operations and its cash flows for each of the three years in the period ended ctober , , in conformity with accounting principles generally accepted in the United States of merica.

asis fo Oinion

hese financial statements are the responsibility of the Companys management. ur responsibility is to express an opinion on the Companys financial statements based on our audits. e are a public accounting firm registered with the PC and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PC.

e conducted our audits in accordance with the standards of the PC. hose standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. ur audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, eidence regarding the amounts and disclosures in the financial statements. ur audits also included ealuating the accounting principles used and significant estimates made by management, as well as ealuating the oerall presentation of the financial statements. e beliee that our audits proide a reasonable basis for our opinion.

s EE UCE P

oston, assachusetts ecember , .

e hae sered as the Company’s auditor since 1959.

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125 Investor Information

Eaton Vance Corp. has filed an Annual Report on Form 10-K with the Securities and Exchange Commission for the 2018 fiscal 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 Vice President and Chief Financial Officer 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 certificate of the chief executive officer 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 Communications Services 118 Fernwood Avenue Edison, NJ 08837-3852 732-417-2928 computershare.com/investor

The Transfer Agent maintains shareholder account records and should be contacted regarding changes in address, name or ownership, lost certificates and consolidation of accounts. When corresponding with the Transfer Agent, shareholders should state the exact name(s) in which their stock is registered and the certificate 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

126 2018 Annual Report | | 127

Directors and Officers

Directors

Ann E. Berman (1,2,3) Brian D. Langstraat

Thomas E. Faust Jr. Dorothy E. Puhy (1,3)

Leo I. Higdon Jr.*(2) Winthrop H. Smith Jr. (1,2,3)

Paula A. Johnson M.D.(3) Richard A. Spillane Jr. (2,3)

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

Officers

Thomas E. Faust Jr. Laurie G. Hylton Chairman, Chief Executive Officer and President Vice President and Chief Financial Officer

Daniel C. Cataldo Frederick S. Marius Vice President and Chief Administrative Officer Vice President, Secretary and Chief Legal Officer

Julie E. Rozen Pierric G. Senay Vice President and Chief Accounting Officer Vice President and Treasurer 2018 Annual Report | 128

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 strategies across a range of investment disciplines and distribution channels.

§§ We seek to provide an attractive work environment and fulfilling careers for our dedicated employees.

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

Integrity Professionalism

Is honest in word and deed. Demonstrates maturity, dedication and a strong work ethic. Adheres to the company’s code of ethics, industry standards of Behaves appropriately; is respectful business conduct and of clients, colleagues and business applicable law. partners and uses the company’s resources wisely. Deals fairly and forthrightly with clients, colleagues and business Responsible citizen of the partners. communities in which we live and work.

Teamwork Client Focus

Communicates openly and Meets or exceeds client collaborates with others to achieve performance expectations. shared goals. Places the interests of clients first. Enhances the work experience of colleagues. Supports workforce diversity and an inclusive work environment.

Creativity/Adaptability Excellence

Develops business opportunities Achieves outstanding results for and process improvements. clients and shareholders. Is open and adaptable to change. Advances the record and reputation of Eaton Vance as an Works to achieve personal industry leader. development.

Printed on 100% PC Recycled Paper continued from back cover

Benjamin Lazarus Lee Bertram Jennifer Rodas Jenna Baratto Joshua Rock Carolyn Cawley Steven Heck Ashley Pirkl Shiva Iyer Jacob Homchick Glenn Pardo Raewyn Williams Timothy Gaudette Erin Kandamar Elizabeth McDonough Alba Shkurti Michael Sullivan Patrick Keogh Scott VanSickle Jason Chalmers Paul Cocanour Heather Anderson Kathryn Salzl Daniel Cozzi Michael Ferrante Edward Perkin Ashok Nayak Sheila Pechacek Bradford Thomas Andrew Spero Darrell Thompson Joseph Cinar Glenn Fitzsimmons Alexandra Monaco Christopher Arthur James Allen Dial Boehmer Michael Bortnick Allison Goldie Nicholas Stahelski Jason Nelson Mark Bumann Miles Ferguson Elaina Kenney Caitlyn Emilio Wei Ge Michael Gose Audrey Grant Justin Horner Kurt Kostyu Joonmo Ku Tyler Nowicki Adam Swinney Scott Mackey Alli Bayko Lauren McAllister Abbas Jaffri Danielle OBrien Jeffrey Miller 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 Roy Belen Karen Long Onix Marrero Clinton Talmo Cory Gately Yuepeng Li William Murray Vincent Primavera Kevin DeVito Andrew Scanlon Azyzah Sasry David Turk Jackson Bennett Christopher Ferrier Domini Gardner Joseph Zeck Malia Bandli Amir Aliabadi Brock Griffin Dorothy Maloney Richard Bissell Collin Schrier Steven Abbiuso Matthew Butorac Kattie Elder Matthew Calos Max Chisaka Kristine Delano Holly DiCostanzo Robert Pieroni Alec Szczerbinski Nataliya Zubrylova Cory Gorski Alexander Lee 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 Lucas Anderson Matthew Johnson Jennifer Kilroy Theodore Zwieg Riley Allen 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 Mary Primiterra Russell Smith Kathleen Colangelo Kyle Shanafelt David Miles Elizabeth Royer August Kristoferson Kiva Boddy Kathrine Vinciguerra Ryan Olsen Alexander Payne Helena Racette Anne Darlington Adam Homicz Tasha Thomas Heather Wolf Steven Fahey Juan Garcia Corey O’Connor Georgia Emms Joseph Hudepohl Jan Mowbray Colt Wolfram Nicholas Burdeau Paul Chang Mark Collins Christopher Dyer Aidan Farrell Marielle Gallant Andrew Lebowitz Jake McDougall Katharine Maretz Alison Wagner Emily Cetlin Peter Correggio Matthew Liebl Kathryn Mohrfeld Matthew Morin Maria van Heeckeren Justin Ziegler Deanna Young Neal Cabanos Jeremy Catt Joshua Schramm Jonathan Alexander Cailly Carroll Suresh Sundaram Dane Fickel Carmen Boscia Gregory Gelinas Peter Smith Sandy Tam Tatyana Ryabchenko James McCourt Patricia Odnakk Joshua Ford Jo-Ellen Kenney Quinn Christofferson Gregory Lawson Sterling Tran Gavin Kennedy Audrey Ford Andrew McKee Raymond Singh Julija Coloma Alexander Dyson Nicholas Kirsch Hillary Kloeckner Gregory Bauer Sean Melville Robert Ankenbauer Katherine Baker 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 Amelia Wren Tiffany Lee Allen Mayer Samantha Pandolfi Alexa Whiteman Ian Kirwan Maria Calabrese Stephanie Hammond Kevin Karales Iain McNaught Nakaba Minai Devendra Singh Manoj Sukumaran Laura Bourgeois Kyle Buswell Thomas Coan Kristopher Brassard Timothy George Michael Zaslavsky Ryan Dalzell Sandy Fortin John Holberg Shawn Klopp Morgan Woods Jennifer Bullock Mark Lobbestael Leah Smith Angie Wu Nehemie Alcindor Bryan Holdt Robert Buckley Paul Kimani Amanda Woodgate Seth Goldzweig James Croom David White Joseph Whiting Kristen Grant Ryan Hartung Alexander Hovsepian Reed Lerner Scott Price Jacob Rife Colin Sammataro Samuel Shankel Tyrone Gamby Charlotte Keith Joseph Bustros Jamie Manzo Sandra Oles Kerry Wasgatt Colton Blackman Nancy Curtin Christopher Powers Lillian Pena Surya Rai Martha Strebinger Kirby Arens Doug Keagle Luke Murdock Andrew Carlson Randall Hegarty Christine Japhet Scott Tice Jennifer Everett Krishna Das Peter Graham Scott Kudlacik Kyle Lunde Esther Tam Vivek Vinayak Michael Esposito Michael Broughton Lawrence Gingrow Scott Lindsay Chris Morahan Joseph Brody Natividad Lozada Cheryl Swanberg David Dodson Robel Ghebremichael Leah Lam Alex Meyer Lisa Weiler Scott Albanese Marc Fiore Katherine Walsh Andrew Grennon Michael Hill Ryan Martin Kimberly Roessiger Agneta Sheire Terry Stebner Matthew Groth Tin Mai Wei Mei Ashley Beckham Jesse Cauble Benjamin Cheung Lindsay Hydorn Joshua Latimer Michael LaVita Jason Michonski Patrick Mullin Kellen Smith Daniel Sullivan Sarah Wood Digajara Degaga Aaron Benedict Carolina Concannon Michael Dietrich Adam Gardner Justin Ward Alexandros Apostolidis Jie Yuan Taylor Jenkins Brian Smith Walter Lindsay Jay Schwartz Francis Coughlin Matthew Morse Erik Saarinen John Spence Hari Thirumalai Zachary Gears Andrew Goodale Anthony Mitrano Moran Zhang Nicholas Scalia Ash Islam Thomas Deang Richard Perrins Alex Woolbert Julie Brezen Stephen Antanavige David Bloom Emily Casey Jennette Erickson John Hemingway Razzie Smith Jeffrey Leighton Connor O’Leary Tjalling Halbertsma Timothy Mamis Fan Bu Laurie Halulakos William Heffernan Billy Savanh Nicole Vicino Galina Warner Brian Hertzog Christopher Reed Tyler Anderl Arthur Driscoll Cristy O’Neil Paula Shea Kriti Tawfik Luke Brodzinski Kaitlin Callison Francesco Garofalo Patricia Willis Morgan Baker Clifton Hunt Julie Schoening Matthew Bradley Dorothy Levine Brandon Lindley David Curran John Paul Botcheller Darrow DiBattista Philip Hong Phayvanh Vongmixay Gregg Fowler Maximilian Lutz Brian Goncalves Jack Bauer Hope Brown Imani Camp Stuart Dalheim Alexander Deleon Trudy Doyle Anthony Eames Brian Ellis Jade Huang Vishal Khanduja Erica Lasdon Christopher Madden Steven Matosziuk Reed Montague Andrew Olig Darrile Papier Shirley Peoples Christopher Santos Jason Schumacher Patrick Simpson Alexander Smith John Streur Johnny Hom Tetsuo Kushiya Yat Lun Benjamin Mahlik Julie Rozen Marina Brighouse-Thorpe Arthur Harris Mattison King Brian Helmholz Molly MacKinnon John Menefee Bindu Sutaria Tian Xie Andres Alemann Robert Burr Matthew Dowd Christopher Flavin Taylor Morley Alec Strain Charles Tilden Adrian Woolard Giuseppina Cucinotta Nicole Gallagher Jessica Malinski Aaron Patel Jennifer Chambers Bryan Dixon John Kraft Michael Mulkern Claire von Loesecke Karl Fredrickson Mary Nickerson Kyle Nestor Gene Manning David Tirrell Olivia Burger Jaime Gill Songyi He Rafael Piniasz Lenore Reiner Craig Fisher Thomas Pelletier Michael Thompson Daniel Austin Tyler Brent Michael Giacco Stuart Weeks Timothy Lui Michael Berman Akbar Causer Grace Donesasorith Jaclyn Sostilio Alexa DeBuccia David DeFronzo Jr. Naga Pavuluri Erma Pinto Chad Priest Jessica Derman Lyndsey McGill Nicholas Muscatiello Christopher Ryan Jill Damon Brandon Fritz Zachary Olsen Rawan Sarhan Jeremy Smith Thomas Vercillo Alek Auxier Eric Bland Mark Etherington Kristen Clark Shane Claugherty Ryan Lewis Daren Delaney James Ostrem Kelly Rechen Tyler Bergantino James Henderson Louis Rosa Bianca Minns Maria Wasnick Natalie Kintop Courtney Gramstorff Ross Meyer Jacqueline Ngo Brittany Panzino Patrick Persons Alec Schaefer Christian Costanza Bryan Adams Anthony Antonetti Cameron Cipolla Kristopher Frank Autrey Gates Kimberly Ginsberg Briana Howard Allison Mahoney Anthony Maiuri Connor McGuirk Matthew Muckjian Andrew Schlumper Molly Welch Mi Zhou Laura Griffiths William Cabell Angela Chai David Lee Juan Mejia Jason Newnham Amelia Ricketts Steven Silver Andrew Stutzman Alba Alvarez Christopher Baez Brendan Greene Eva Wu Stephan McElreath Theresa Carignan Siobhan Kranz Robert Black Hyunjin Yun John Nettles Bryan Cassill Jeremy Corbett Jonathan Ferrazzani Ryan Helgeson Parker Hoffman Anthony Hutson Lane McLaughlin Jarren Petit Paul Shifflet Donald Wells Jacob Wolfe Priscilla Wong Catherine Hua Fiona Morrison Jason Shiu Huy Le Dain Charbonneau James Gilloran Douglas Taylor Michael Duplisea Jeffrey Nizzardo Luke Webber Victoria Wiley Ann Marie Collins Zachary Costello John Brophy Hillary Dobbs Karen Cai Nicholas Gaskell Julius Huttunen Elif Senvardarli Robert Kuberski Jacob Welton Laura McFerrin Thomas Body Andrew Brandao-Carvalho Jerome Reed Nicole Burshan Alyssa Creager Devin Kaufman Adwoa Poku John Winkle Eric Colvin Jordan Marciello William Roeder Jason Welch Emma Doner Richard Froio Preeti Saxena Nicole Sonett Thomas Finneran David Reid Bryan Sandvig Kiran Inamdar Andrew Lang Laura Zalanskas Walter Cook Laura Godine Stephanie Nicolai Angel Pang Bryan Kelly Scott McLaren Cole Lawson John Moriarty Carlos Calderon Kari Cats Whitney Gosnell Michael Lucy Keith Schnaars Aditi Upmanyu Jordan Wise Alison Katz Sofya Kirillova Cody Jacquez Mary Murphy William Rockwell Susan Murphy Rachel Ragucci Samuel Hodge Gail Kronberg Chenying Lai Jennifer Liu Anne Montgelas Anne Richardson Halley Kornfeind Jessica Riccio Christiana Ross Hasan Ahmed Yijia Chen Amanda Ancheta Neal Brown Alexander Buxbaum Elizabeth Craig Jack Curran Caroline Dennehy Sharon Di Leah Donlavage Steven Farwell Zeev Gray-Mandell Patrick Harraghy Antashe Howard Patrick Lotane Daniel Martin Joseph McCadden Kevin McMurtagh Rachel Murphy Daniel Negus Dakota Radigan Raghu Raghunath Quinn Snell Christopher Blanchette Blake Bonine Misao Ito Maria Viel Joven Michael Keane Michael Born Roman Kostal Angelika Kraus Frank Schwantner Astrid Vogler Dishi Amin Conor MacPhee Nicholas Pueringer Cameron Raughtigan Jacob Rocchi Susan Benson Brian Keller John Rogers Junior Uditnarain Michael Passinsky Nancy Vang Matthew Albert Tyler DeLisle Norman Vigeant Sakin Ibrahim Tyler Millican Adriana Olaru Liyuan Du Christopher Dunn Mabel Ebunefru Kyle Zebroski Stephen Kasabula Anne Mahoney Jennifer Priplata Michael Stephens Joanna Yang Oliver Ciman Jaclyn Gagnon Raymond Luong Oliver Nelson Colleen Rooney Tyler Caulfield Steven Landau Lang Chang Elizabeth Saltonstall Alena Sianko Charles Wright Allison Enriquez Janice Johnston Tommy Li Dorothy Miranda Rachel Salako Jin Chung Jamal Elbatnigi Jessica Milano Pierric Senay Oluwasemilore Adenegan Meghan Beatty Jason Lau Danny Morel Brianna Turk John Brigham Emily Corbett Victoria Churilova Nicholas Sweet Maria White Colby Daly Samuel Langston Cristine Leach David Lowe Frank Savoca Lexy Becker Erin Garrity William Jackson Josette Kauffeld Laura Adie Christian Cherau Andrew Cohen Stephanie Gridley Keegan Gullick Ingrid Jacobs Nathan Yang William Beattie Kathleen Brennan Gavin Cottrell Michael Durkin Nicholas Gorski Hattie Llavina Andrew LoRusso Diep Mong Chandler Wishart Gabrielle Zona Jennifer Eustance Shelly Fayard-Rerat Robert Larsen Zachary Perkins Andrew Wiginton Alanna Bollas Isaiah Douglas Mindy Freedman Maya Gardiner Mackay Lowrie Tim Nelson Thomas Powell John Powers Andrea Scibetta Brendon Smith Robert Stiller Philip Sypolt Johnathon Tang Christaly Torres JiWon Park Andrew Crossman Jonathan Eytinge Maricel Ferraro Anish Guha Denise Jaylene Howard Wai Kei Vickie Ip Comfort Kalu Lynn Loiselle Erik Manditch John Njuguna Jock Payten Parviz Razaghmanesh Samuel Rodiger Tyler Sargent Caroline Schmidt Dustin Sidhu Anika Williams Marta Faugstad Paul Babbel Justine Baird Brian Byrnes Frank LaMar Stephen Smialek Chengzhe Yao Lhadolma Bhattachan Suhrid Deshmukh Jessica Downes Rebecca Garcia Saida Mustafayeva Eloise Smith Zachary Bach Jared Bales Laura Blank Ashley Castaneda Marlon Do Couto Levi Dorr Justin Dube Logan Fitzgerald Colleen Geigle Leah Goldman Talon Grimm Joshua Haskill Carson Hollyoak Anthony Huang Michael Lewton Lev Marcus Christopher Moreton Domenico Napoli Thomas Porter Benjamin Reidy Brady Schneider Riley Steliga Kaylee Wolcott Daniel Dorman Kristina Dotto Shannon Holloway David MacDougall John Miller Melanie Ministerio Daniel Rourke Aidan Bateman Angela Liu Tiana Pignataro Brandon Schwab Rashmi Singh Donal Kinsella Alexandra Landry Kah-Ram Bamfo Alexandria Champion Stephanie Watts Elijah Dingels Beau Figliola Daniel Reblin Melissa Restivo Marisa Allard Dana Cease Colton Dwyer Tyler Harris Edward Kasedde Joshua Masse Delaine Surani Jacob Berrigan Fiona Chan Stephen Griffin James Larson George Lin Hellen Mbugua Terry Simpson Steffen Zwink Storm Baker Jillian Hatfield Lucas Triana John Zwolak Brenden Cain Margaret Cobb Lydia Geving Janet Stafford Samuel Beller Jacqueline Bullock Lauren Greeley Timothy Hambidge Leah Lyons Aaron Payne Mary Regan Terin Robertson Wilver Rodriguez Danielle Tata Charles Abbott Rocky Donohue Jake Shields Catherine Chua Julian Atencio Joshua Carter Henry Glindmeyer Aditi Gupta Jimmy Liu Michael Major Jean-Rudy Mukania Linda Hanson Nora Bernazzani Wayne Saulnier Deborah Bishop Daniel Cataldo Jenilde Mastrangelo Linda Doherty Thomas 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 Thebado Lynne Hetu Mary Byrom Payson Swaffield Michael Weilheimer Amy Ursillo John Gibson Gregory Parker Hadi Mezher Julie Andrade John Murphy Deanna Berry Jane Rudnick 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 Thomas Luster John Pumphrey James Godfrey Katherine Kreider Marie Preston Lewis Piantedosi Christopher Gaylord Kelly Williams Elizabeth Prall John Macejka Brian Dunkley Leanne Parziale Mark Burkhard Peter Crowley Craig Russ Michelle Green Roseann Sulano Yana Barton Michael Botthof Deborah Trachtenberg John Redding Kristin Anagnost Duke Laflamme Tiffany Cayarga Sotiria Kourtelidis Joanne Mey Jeffrey DuVall William Delahunty Gillian Moore MichaelMcGurn Michael Kinahan Daniel Ethier John Ullman Richard Wilson Maria Cappellano Suzanne Marger Steven O’Brien Noah Coons Daniel Puopolo Adam Weigold Lee Thacker Craig Brandon Charles Reed Thomas Seto Far Salimian Scott Firth Catherine Gagnon David Zimmerman Eric Caplinger Andrew Sveen Simone Santiago Robert Breshock Joseph Roman Carolee MacLellan Mary Arutyunyan Jeanene Montgomery Amanda Madison Gregory Walsh Jeremiah Casey Amanda Kokan 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 Michael Costello Katharine Walker Randall Clark Steven Widder Michelle Baran Troy Evans Michael McLean Paul Rose James Durocher James Putman ColeenLynch Elizabeth Johnson Kristen Abruzzese John Santoro Jay McKenney Christopher Berry Linda Bailey James Skesavage Timothy Breer Robert Ellerbeck Deborah Henry David Lochiatto Brian Herbert Joseph Furey Bradford Godfrey Amy Schwartz Lawrence Fahey Matthew Hereford Dorothy Kopp Deidre Walsh Gregor Yuska John Simchuk Michael Cirami Christian Howe Vassilii Nemtchinov Heath Christensen Ralph Hinckley Eugene Lee Christopher Hayes Lori Miller Paul Nicely Darin Clauson Charles Gaffney Ian McGinn West Saltonstall 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 Melinda Olson Erin Kace John Murphy Jamie Babineau Nicole Hoitt Sharon Gordon Daniel McElaney Brian Kiernan Christopher Teixeira Joseph Hernandez Charles Manning William Holt Gordon Wotherspoon Gary LeFave Barbara Andre-Jean Jeffrey Sine Geoff Longmeier Erick Lopez Matthew McNamara Scott Craig Richard Milano Jamie Mullen Stewart Taylor Sean Broussard Thomas Tajmajer David Lefcourt 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 Michael Reidy Sebastian Vargas Jay Schlott Stephanie Douglas Eric Stein Kate Chanoux Marsh Enquist Thomas Guiendon Juliene Ehmig Matthew Buckley Eric Robertson Ryan Landers Ross Chapin Carla Lopez-Codio Laura Donovan Ivan Huerta Jennifer Mihara Rainer Germann Dan Maalouly Louis Membrino Adan Gutierrez Stephen Byrnes Tracey Carter Bernadette Mahoney David McCabe Michael Striglio Michael Keogh Daniel Clayton Hemambara Vadlamudi Michaella Callaghan Patricia Greene Patricia Bishop Susan Brengle Gayle Hodus Francine Pappas Kevin Taylor Henry Hong Egan Ludwig Robert Allen 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 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 Lawrence Berman Kenneth Everding Helen Hedberg Jonathan Orseck John Ring Patrick Escarcega Kevin Longacre John Jannino Matthew Witkos Elaine Peretti Stephanie Rosander Kathleen Walsh Eileen Storz-Salino Brooke Beresh 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 Christopher Mitchell Roger Weber Steven Dansreau Tara O’Brien Jaime Smoller Michael Ferreira 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 Thomas 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 James Maynard Nathan Flint Rachael Carey Michael Kelly Margaret Egan Christopher Nebons James Roccas Alice Li Charles McCrosson Michael Shattuck Michael Alexander 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 Christopher Nabhan Eric Trottier Lauren Kashmanian Wiwik Soetanto Lorraine Lake John Murray 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 Alicia Ramsdell Sarah Orvin Davendra Rao Timothy Williamson Hydn Vales Brian Blair Dustin Cole Andrew Hinkelman Alain Auguste Robyn Tice Susan Perry Elizabeth Stohlman Dana Wood Diane Mehdiyoun 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 Justine Abbadessa Joseph Kosciuszek Kevin Rookey Michelle Graham Kerianne Austin Jason DesLauriers 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 Theodore Hovivian Issac Kuo Stuart Shaw Paul Leonardo Timothy Atwill Jessica Hemenway Maeve Flanagan Jeanette Liu Robert Quinn Johnathan Komich Daniel Grzywacz Sean Bakhtiari Robert Nichols Aaron Burke Sarah Kenyon Aida Jovani Jeffrey Timbas Brian Ventura Trevor Smith Harsh Vahalia Cyril Legrand Steven DeAlmo Dori Hetrick Alfonso Hernandez Marc Savaria Timothy Russo Sabina Duborg Federico Sequeda Rodolfo Galgana 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 Amy Bell Charles Cordeiro Deirdre O’Connell Richard Raymond Robert Howell Michael Guertin James Barrett Ryan Gagliastre David Smith Rafika Shibly Robert Yocum Jarir Mallah Charles Turgeon Stephen Kistner Andrew Subkoviak Andrew Haycock Jennifer Klempa Brian Dailey David Callard Anne Chaisiriwatanasai John Paolella Miranda Hill Anthony Zanetti Daryl Johnson Kai Xie Michael Yip Eric Britt Darcy Fernandes Justin Brown Ross Taylor Leidy Valerin Jacob Greene Victor Joita Colleen McElhinney Ryan Gallagher Toebe Hinckle Julia LeGacy Monica McGillicuddy Emily Coville Mark Haskell Jason Rendon Carl Thompson Jason Jung Reuben Butler Syed Rahman Timothy Kierstead Isabel Clark Matthew Murphy Schuyler Hooper Michael Wagner Courtney Collura 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 Peter Lonergan Megan Dooley Rachael Boggia Jeffrey Schenkman Rocco Scanniello Tyler Cortelezzi Adrian Jackson Hottis McGovern Kenneth Zinner Robert D’Amato Matthew Williams Brian Arcara Michael Kincheloe Jeremy Milleson Cory McGrath William King Colin Looby Gregory Johnsen David Chafin Gregory Chalas Yu Fu David Zigas Kara Boon Matthew Clenney Yanling Zhang Sheila Doherty Robert Holmes Katherine Johnson Thomas Leonard Jason Vanas Laura Foster Alexander Paulsen David Pychewicz Frederick Wright Peter Avallone Sachiko McHugh Lori Abboud Aaron Dunn John Wilton Philip Casalini Candice Flemming Lindsay Mallett John Noble Steven Reece Jason Kritzer David Doggett Luke Bruno Matthew Gibbons Kirk Heelen Anthony Scalese Matthew Furan Bradford Richards Daniel Lee William Lesler Hang Nguyen Paulina Koutroubis John Jezowski Leonard Senkovsky Andrius Balta Andrew Dillon Christopher Hearne Dorothy Jones Eric Zeigler Sarah Sheehan Stephannie Workman Qihua Liu Elaine Sullivan Jennifer Flynn Laura Nykreim Christopher Loger Alexander Randall Jennifer Orlando Jeremy Davis Jill Holland Karl Saur Huong Strong Kathleen Gaffney Brendan Lanahan Danforth Sullivan Megan Fiorito Teresa Watkins Cynthia Danger Michael Spear Dean Graves John Moninger Jennifer Casey Harrison Kent Dan Codreanu 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 Thomas 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 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 A.J. Leimenstoll Kelly Finneran Milind Kanitkar Rachel Schaefbauer Melanie Kramer Sean Sorensen Robert Cunha Katherine Todd Diane Gordon Thomas McMahon Michi McDonough Michael Finney Benjamin Hammes Christopher Burnet Raffi Samkiranian Kristen Novello Serena Lee Craig Melillo Todd Johnson Mahesh Pritamani Juliet Todd Patrick Huerta Chris Smith Mei Chang Matthew Mueller Timothy Nelson Jared Pawelk Christopher Belnap Troy Neville Jeffrey Sayman Spencer Swan Charlotte Watkins Christopher Webb Alexander Amado Christopher Briant Heather Chapman Bradley Galko Daniel Saltus James Thorson Marshall Stocker Jared Allen Ryan Cavanaugh Sophie Murray Christopher Cook Matthew Gile Henry Peabody David Brinker Benjamin LeFevre Robert Rowe William Turner Charles Norvish Biana Perez Rachel LeBlanc Nokio Twumasi Steven Vanne Lisa Brown Amir Vaziri Alan Arrington Kevin Pih Michael Szyska Mamatha Chilumuthuru Isaiah Petersen Victor La William Spring Daniel Ryan Casey Foskett Caroline Spellman Wenlei Sun Benjamin Adams Allen Wagner David Butters Erin Canon Holly Bragdon Christopher Brown David Glen William Reardon Ashley Peterson Michael Askew Diogenes Balsam Nagabhushan Beeram Tracy Potorski Jesse Tobiason Macki Anderson Amy Arslain Ryan Balko Michael Hebert Qiwen Liu Laura Sanders Punit Shetty Robert Cruice Craig McHaffie Robert Pellow John Jaje