SECURITIES AND EXCHANGE COMMISSION

UNITED STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549


FORM 8-K


CURRENT REPORT




Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



Date of Report (Date of earliest event reported): August 22, 2012

                               


   EATON VANCE CORP.   

 (Exact name of registrant as specified in its charter)




Maryland

1 - 8100

    

    

04-2718215

(State or other jurisdiction

(Commission File Number)

(IRS Employer Identification No.)

  of incorporation)



       Two International Place, Boston, Massachusetts

02110

  (Address of principal executive offices)

        (Zip Code)




Registrant’s telephone number, including area code:  (617) 482-8260



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))




INFORMATION INCLUDED IN THE REPORT



Item 2.02.

Results of Operations and Financial Condition


Registrant has  reported  its results of  operations  for the three and nine months ended July 31, 2012, as described in Registrant’s news release dated August 22, 2012, a copy of which is furnished herewith as Exhibit  99.1 and  incorporated herein by reference.


Item 9.01.

Financial Statements and Exhibits


Exhibit No.

Document


99.1           

Press release issued by the Registrant dated August 22, 2012.





2


SIGNATURES



Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the Registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the undersigned hereunto duly authorized.


EATON VANCE CORP.

 (Registrant)



Date:

August 22, 2012

/s/ Laurie G. Hylton

Laurie G. Hylton, Chief Financial Officer &

Chief Accounting Officer






3


EXHIBIT INDEX



Each exhibit is listed in this index according to the number assigned to it in the exhibit table set forth in Item 601 of Regulation S-K.  The following exhibit is filed as part of this Report:


Exhibit No.

Description


99.1            

Copy of Registrant's news release dated August 22, 2012.




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Exhibit 99.1



[evc8k_8k002.gif]

News Release


Contacts:   Laurie G. Hylton 617.672.8527

Daniel C. Cataldo 617.672.8952


Eaton Vance Corp.

Report for the Three and Nine Month Periods Ended July 31, 2012


Boston, MA, August 22, 2012 – Eaton Vance Corp. (NYSE: EV) today reported adjusted earnings per diluted share(1) of $0.43 for the third quarter of fiscal 2012 compared to adjusted earnings per diluted share of $0.45 in the second quarter of fiscal 2012 and $0.55 in the third quarter of fiscal 2011.


As determined under U.S. generally accepted accounting principles (“GAAP”), the Company earned $0.43 per diluted share in the third quarter of fiscal 2012, $0.44 in the second quarter of fiscal 2012 and $0.55 in the third quarter of fiscal 2011.  Adjusted earnings differed from GAAP earnings in the second quarter of fiscal 2012 due to adjustments in connection with increases in the estimated redemption value of non-controlling interests in affiliates redeemable at other than fair value, which reduced GAAP earnings by $0.01 per diluted share.


Adjusted earnings per diluted share were $1.35 in the nine months ended July 31, 2012 compared to $1.52 in the nine months ended July 31, 2011. The Company’s GAAP earnings per diluted share were $1.27 and $1.35, respectively, for the compared periods.  The Company’s adjusted and GAAP earnings per diluted share were increased $0.01 and $0.03 in the first nine months of fiscal 2012 and 2011, respectively, by gains related to the sale of the Company’s equity interest in Lloyd George Management (BVI) Limited in the second quarter of fiscal 2011.


Net outflows of $1.4 billion from long-term funds and separate accounts in the third quarter of fiscal 2012 compare to net inflows of $0.6 billion and $1.9 billion in the second quarter of fiscal 2012 and the third quarter of fiscal 2011, respectively.  Net outflows from Eaton Vance large-cap value mandates totaled $3.8 billion in the third quarter of fiscal 2012, more than offsetting the $2.4 billion of net inflows into other long-term strategies in the period.


On August 6, 2012, the Company completed its purchase of a 49 percent interest in Hexavest Inc., a Quebec corporation providing discretionary management of equity and tactical asset allocation strategies to institutions in Canada, the United States, Europe and the Asia Pacific region using a predominantly top-down investment style.  As of the close of the transaction, Hexavest managed $11.0 billion of client assets invested primarily in global and global ex-U.S. equity mandates.


“Accelerating outflows from our large-cap value strategy caused net flows to turn negative in the third quarter of fiscal 2012,” said Thomas E. Faust Jr., Chairman and Chief Executive Officer.  “Improving large-cap value performance and a robust pipeline of new institutional and sub-advisory opportunities give reason for optimism regarding flow trends in the coming months.”

______________________

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



5




Assets under management were $192.9 billion on July 31, 2012, a decrease of 2 percent from the $197.5 billion of managed assets on April 30, 2012 and down 3 percent from managed assets of $199.0 billion on July 31, 2011. Assets under management on July 31, 2012 included $110.3 billion in long-term funds, $40.3 billion in institutional separate accounts, $14.7 billion in high-net-worth separate accounts, $27.4 billion in retail managed accounts and $0.2 billion in cash management fund assets. Average assets under management were $192.8 billion in the third quarter of fiscal 2012, down 1 percent from $195.6 billion in the second quarter of fiscal 2012 and down 4 percent from $201.2 billion in the third quarter of fiscal 2011.  The sequential decrease in ending assets under management in the third quarter of fiscal 2012 primarily reflects long-term net outflows of $1.4 billion and market price declines of $3.1 billion.


As shown in Table 2 (Attachment 6), gross sales and other inflows were $10.9 billion in the third quarter of fiscal 2012, down 17 percent from $13.2 billion in the second quarter of fiscal 2012 and down 20 percent from $13.7 billion in the third quarter of fiscal 2011. Gross redemptions and other outflows were $12.4 billion in the third quarter of fiscal 2012, down 2 percent from $12.7 billion in the second quarter of fiscal 2012 and up 5 percent from $11.8 billion in the third quarter of fiscal 2011.  


Attachments 5 and 6 summarize the Company’s assets under management and asset flows by investment mandate and investment vehicle.


Financial Highlights

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

  

Three Months Ended

 

  

(in thousands, except per share figures)

 

  

 

 

 

 

 

 

 

  

July 31,

April 30,

July 31,

 

  

2012 

2012 

2011 

 

  

 

 

 

 

 

 

Revenue

$

298,771 

$

304,770 

$

327,056 

Expenses

 

203,755 

 

205,959 

 

211,629 

Operating income

 

95,016 

 

98,811 

 

115,427 

 

  

 

 

 

 

 

 

Operating margin

 

32%

 

32%

 

35%

 

  

 

 

 

 

 

 

Non-operating income (expense)

 

1,875 

 

(855)

 

(3,365)

Income taxes

 

(34,379)

 

(35,164)

 

(43,320)

Equity in net income (loss) of affiliates, net of tax

 

175 

 

(22)

 

194 

Net income

 

 62,687 

 

 62,770 

 

 68,936 

Net income attributable to non-controlling

 

 

 

 

 

 

 

 and other beneficial interests

 

(12,481)

 

(9,900)

 

(868)

Net income attributable to  

 

 

 

 

 

 

 

Eaton Vance Corp. shareholders

$

50,206 

$

52,870 

$

68,068 

Adjusted net income attributable to Eaton  

 

 

 

 

 

 

 

Vance Corp. shareholders(1)

$

51,002 

$

53,967 

$

68,306 

 

  

 

 

 

 

 

 

Earnings per diluted share

$

0.43 

$

0.44 

$

0.55 

 

  

 

 

 

 

 

 

Adjusted earnings per diluted share(1)

$

0.43 

$

0.45 

$

0.55 


Third Quarter Fiscal 2012 vs. Second Quarter Fiscal 2012


Revenue in the third quarter of fiscal 2012 decreased 2 percent to $298.8 million from revenue of $304.8 million in the second quarter of fiscal 2012.  Investment advisory and administrative fees were down 2 percent in the third quarter of fiscal 2012 compared to the second quarter of fiscal 2012, primarily due to a 1 percent decrease in average assets under management.  Distribution and service fees revenues decreased 3 percent on a combined basis, reflecting a declining share of managed assets in fund share classes that are subject to such fees.



6




Expenses decreased 1 percent to $203.8 million in the third quarter of fiscal 2012 from $206.0 million in the second quarter of fiscal 2012, reflecting decreases in compensation, declines in certain distribution expenses and reduced amortization of deferred sales commissions, offset by increases in fund expenses and other expenses. The decrease in compensation expense primarily reflects decreases in sales- and operating income-based incentives, as well as lower severance expense. Gross sales and other inflows, which drive sales-based incentives, were down 17 percent in the third quarter of fiscal 2012 compared to the second quarter of fiscal 2012.  Pre-bonus adjusted operating income, which drives operating income-based incentives, was down 4 percent for the same period. The decrease in distribution expense reflects a decrease in intermediary marketing support payments to our distribution partners driven by a decrease in sales and managed assets, partly offset by increases in promotional expenses. The decrease in amortization of deferred sales commissions largely reflects changes in product mix away from fund share classes to which these expenses apply.  Fund expenses increased 9 percent from the second quarter of 2012 due to higher subsidies on start-up funds and increased non-advisory expenses borne by the Company on funds for which we are paid an all-in fee.  The 3 percent increase in other expenses reflects increases in spending related to travel and information technology to support the Company’s product and infrastructure initiatives.

 

Operating income was down 4 percent to $95.0 million in the third quarter of fiscal 2012 from $98.8 million in the second quarter of fiscal 2012.


Non-operating income (expense) contributed $1.9 million to income before taxes in the third quarter of fiscal 2012, compared to a reduction of $0.9 million in the second quarter of fiscal 2012.  The improved non-operating income (expense) is primarily attributable to a $4.0 million increase in gains and other investment income recognized by the Company’s consolidated collateralized loan obligation (“CLO”) entity, offset by a $0.9 million decline in gains and other investment income earned on the Company’s investments in sponsored products.


The Company’s effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 35.5 percent in the third quarter of fiscal 2012. Excluding the impact of other income (expense) associated with the Company’s consolidated CLO entity borne by other beneficial interest holders, the Company’s effective tax rate was approximately 38.2 percent for the quarter.  


Net income attributable to non-controlling and other beneficial interests totaled $12.5 million in the third quarter of fiscal 2012 and $9.9 million in the second quarter of fiscal 2012. As shown in Attachment 3, the increase can be primarily attributed to an improvement in the financial performance of the Company’s consolidated CLO entity. Included in net income attributable to non-controlling and other beneficial interests in the second quarter of fiscal 2012 were $1.1 million of non-controlling interest value adjustments that related primarily to the profit growth of our subsidiary Parametric Risk Advisors based on an April 30 measurement date.


Third Quarter Fiscal 2012 vs. Third Quarter Fiscal 2011


Revenue in the third quarter of fiscal 2012 decreased 9 percent to $298.8 million from revenue of $327.1 million in the third quarter of fiscal 2011.  Investment advisory and administrative fees were down 7 percent due to a 4 percent decrease in average assets under management and modestly lower average effective fee rates. Distribution and service fees were, on a combined basis, down 17 percent, reflecting lower managed assets in fund share classes that are subject to distribution and service fees.


Expenses decreased 4 percent to $203.8 million in the third quarter of fiscal 2012 from $211.6 million in the third quarter of fiscal 2011, reflecting lower distribution and service fees, reduced amortization of deferred sales commissions and lower fund expenses, offset by an increase in other expenses. The decreases in distribution and service fee expenses and amortization of deferred sales commissions largely reflect changes in product mix away from fund share classes to which these expenses apply. The decrease in fund-related expenses can be attributed primarily to



7



lower sub-advisory expenses. The increase in other expenses is attributable primarily to higher spending for travel and other professional services. Compensation expense was substantially unchanged year-over-year, as decreases in sales- and operating income-based incentives were offset by higher employee headcount and increased salaries and stock-based compensation. Gross sales and other inflows, which drive sales-based incentives, were down 20 percent in the third quarter of fiscal 2012 compared to the third quarter of fiscal 2011, while pre-bonus adjusted operating income, which drives operating-income based incentives, was down 17 percent over the same period.


Operating income was down 18 percent to $95.0 million in the third quarter of fiscal 2012 from $115.4 million in the third quarter of fiscal 2011.


Non-operating income (expense) contributed $1.9 million to income before taxes in the third quarter of fiscal 2012 compared to a reduction of $3.4 million in the third quarter of fiscal 2011. The improved non-operating income (expense) reflects an $11.4 million increase in gains and other investment income recognized by the Company’s consolidated CLO entity, offset by a $5.7 million decrease in gains and other investment income earned on the Company’s investments in sponsored products. The Company’s gains and other investment income in the third quarter of fiscal 2011 included a $1.9 million gain recognized upon the sale of the Company’s equity interest in a non-consolidated CLO entity.  


Net income attributable to non-controlling and other beneficial interests totaled $12.5 million in the third quarter of fiscal 2012 and $0.9 million in the third quarter of fiscal 2011. As shown in Attachment 3, the change can be primarily attributed to an improvement in the financial performance of the Company’s consolidated CLO entity.


Balance Sheet Information


Cash and cash equivalents totaled $600.2 million on July 31, 2012, with no outstanding borrowings against the Company’s $300.0 million credit facility.  On August 6, 2012, the Company paid $192.7 million to acquire its 49 percent equity interest in Hexavest Inc., sourced from cash on hand.  During the first nine months of fiscal 2012, the Company used $76.6 million to repurchase and retire approximately 3.0 million shares of its Non-Voting Common Stock under its repurchase authorization.  Approximately 5.0 million shares of the current 8.0 million share repurchase authorization remains unused.


Conference Call Information


Eaton Vance Corp. will host a conference call and webcast at 11:00 AM EDT today to discuss the financial results for the three and nine month periods ended July 31, 2012. To participate in the conference call, please call 877-407-0778 (domestic) or 201-689-8565 (international) and refer to “Eaton Vance Corp. Third Quarter Earnings.” A webcast of the conference call can also be accessed via Eaton Vance’s website, www.eatonvance.com.  


A replay of the call will be available for one week by calling 877-660-6853 (domestic) or 201-612-7415 (international) or by accessing Eaton Vance’s website, www.eatonvance.com. Listeners to the telephone replay must enter the account number 286 and the confirmation code 398870.


About Eaton Vance Corp.


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





8




Forward-Looking Statements


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



9






 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 1

 

Eaton Vance Corp.

Summary of Results of Operations

(in thousands, except per share figures)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

 

 

 

 

% Change

% Change

 

 

 

 

 

 

 

 

 

 

July 31,

April 30,

July 31,

Q3 2012 to

Q3 2012 to

 

July 31,

July 31,

%

 

 

 

 

2012 

2012 

2011 

Q2 2012

Q3 2011

 

2012 

2011 

Change

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administrative fees

$

244,655 

$

248,888 

$

262,067 

(2)

%

(7)

%

 

$

732,995 

$

756,471 

(3)

%

 

Distribution and underwriter fees

 

22,066 

 

22,551 

 

26,432 

(2)

 

(17)

 

 

 

67,132 

 

79,900 

(16)

 

 

Service fees

 

30,760 

 

32,065 

 

37,426 

(4)

 

(18)

 

 

 

95,124 

 

111,249 

(14)

 

 

Other revenue

 

1,290 

 

1,266 

 

1,131 

 

14 

 

 

 

3,896 

 

3,663 

 

 

 

Total revenue

 

298,771 

 

304,770 

 

327,056 

(2)

 

(9)

 

 

 

899,147 

 

951,283 

(5)

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and related costs

 

94,700 

 

97,566 

 

94,713 

(3)

 

 

 

 

288,949 

 

288,920 

 

 

Distribution expense

 

32,670 

 

32,960 

 

33,733 

(1)

 

(3)

 

 

 

97,958 

 

100,087 

(2)

 

 

Service fee expense

 

28,165 

 

28,088 

 

32,222 

 

(13)

 

 

 

84,926 

 

94,331 

(10)

 

 

Amortization of deferred sales commissions

 

4,593 

 

5,533 

 

8,503 

(17)

 

(46)

 

 

 

15,946 

 

28,496 

(44)

 

 

Fund expenses

 

7,205 

 

6,590 

 

8,099 

 

(11)

 

 

 

20,446 

 

17,660 

16 

 

 

Other expenses

 

36,422 

 

35,222 

 

34,359 

 

 

 

 

104,275 

 

100,205 

 

 

 

Total expenses

 

203,755 

 

205,959 

 

211,629 

(1)

 

(4)

 

 

 

612,500 

 

629,699 

(3)

 

Operating income

 

95,016 

 

98,811 

 

115,427 

(4)

 

(18)

 

 

 

286,647 

 

321,584 

(11)

 

Non-operating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains and other investment income, net

 

1,927 

 

2,796 

 

7,594 

(31)

 

(75)

 

 

 

12,900 

 

21,406 

(40)

 

 

Interest expense

 

(8,525)

 

(8,412)

 

(8,414)

 

 

 

 

(25,350)

 

(25,239)

 

 

Other income (expense) of consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CLO entity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Gains (losses) and other investment income, net

12,872 

 

8,895 

 

1,454 

45 

 

785 

 

 

 

32,047 

 

(9,695)

NM

 

 

 

     Interest expense

 

(4,399)

 

(4,134)

 

(3,999)

 

10 

 

 

 

(12,844)

 

(9,546)

35 

 

 

 

Total non-operating income (expense)

 

1,875 

 

(855)

 

(3,365)

NM

 

NM

 

 

 

6,753 

 

(23,074)

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes and equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   in net income (loss) of affiliates

96,891 

 

97,956 

 

112,062 

(1)

 

(14)

 

 

 

293,400 

 

298,510 

(2)

 

Income taxes

 

(34,379)

 

(35,164)

 

(43,320)

(2)

 

(21)

 

 

 

(104,730)

 

(119,179)

(12)

 

Equity in net income (loss) of affiliates, net of tax

 

175 

 

(22)

 

194 

NM

 

(10)

 

 

 

1,657 

 

2,655 

(38)

 

Net income

 

62,687 

 

62,770 

 

68,936 

 

(9)

 

 

 

190,327 

 

181,986 

 

Net income attributable to non-controlling

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   and other beneficial interests

 

(12,481)

 

(9,900)

 

(868)

26 

 

NM

 

 

 

(39,980)

 

(13,904)

188 

 

Net income attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Eaton Vance Corp. Shareholders

$

50,206 

$

52,870 

$

68,068 

(5)

 

(26)

 

 

$

150,347 

$

168,082 

(11)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.44 

$

0.46 

$

0.58 

(4)

 

(24)

 

 

$

1.30 

$

1.42 

(8)

 

 

Diluted

$

0.43 

$

0.44 

$

0.55 

(2)

 

(22)

 

 

$

1.27 

$

1.35 

(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

112,110 

 

112,418 

 

115,574 

 

(3)

 

 

 

112,354 

 

116,191 

(3)

 

 

Diluted

 

114,591 

 

115,881 

 

120,543 

(1)

 

(5)

 

 

 

115,031 

 

121,566 

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

$

0.19 

$

0.19 

$

0.18 

 

 

 

$

0.57 

$

0.54 

 



10





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 2

Eaton Vance Corp.

Reconciliation of net income attributable to Eaton Vance Corp. shareholders

and earnings per diluted share to adjusted net income attributable to Eaton Vance

 Corp. shareholders and adjusted earnings per diluted share

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

July 31,

April 30,

July 31,

 

July 31,

July 31,

(in thousands, except per share figures)

2012 

2012 

2011 

 

2012 

2011 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Eaton Vance

 

 

 

 

 

 

 

 

 

 

 

 

    Corp. shareholders

$

50,206 

$

52,870 

$

68,068 

 

$

150,347 

$

168,082 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest value adjustments

 

796 

 

1,097 

 

238 

 

 

9,996 

 

21,310 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income attributable to Eaton

 

 

 

 

 

 

 

 

 

 

 

 

    Vance Corp. shareholders

$

51,002 

$

53,967 

$

68,306 

 

$

160,343 

$

189,392 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per diluted share

$

0.43 

$

0.44 

$

0.55 

 

$

1.27 

$

1.35 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest value adjustments

 

 - 

 

 0.01 

 

 

 

0.08 

 

0.17 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per diluted share

$

0.43 

$

0.45 

$

0.55 

 

$

1.35 

$

1.52 



























11




 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 3

Eaton Vance Corp.

Reconciliation of net income attributable

to non-controlling and other beneficial interests

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

July 31,

April 30,

July 31,

 

July 31,

July 31,

(in thousands)

2012 

2012 

2011 

 

2012 

2011 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated funds

$

(839)

$

(1,182)

$

(970)

 

$

(3,167)

$

(5,629)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Majority-owned subsidiaries

 

(3,354)

 

(3,751)

 

(3,158)

 

 

(10,465)

 

(9,094)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated CLO entity

 

(7,492)

 

(3,870)

 

3,498 

 

 

(16,352)

 

22,129 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest value adjustments

 

(796)

 

(1,097)

 

(238)

 

 

(9,996)

 

(21,310)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling

 

 

 

 

 

 

 

 

 

 

 

 

 

interests and other beneficial interests

$

(12,481)

$

(9,900)

$

(868)

 

$

(39,980)

$

(13,904)



12






 

 

 

 

 

 

Attachment 4

 

Eaton Vance Corp.

 

Balance Sheet

 

(in thousands, except per share figures)

 

(unaudited)

 

 

 

 

 

 

 

July 31,

 

 

 

October 31,

 

 

 

2012 

 

 

 

2011 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

600,182 

 

 

$

510,913 

 

Investment advisory fees and other receivables

 

127,303 

 

 

 

130,525 

 

Investments

 

285,986 

 

 

 

287,735 

 

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

 

 

 

 

 

 

 

          Cash and cash equivalents

 

33,380 

 

 

 

 16,521 

 

          Bank loans and other investments

 

458,392 

 

 

 

 462,586 

 

          Other assets

 

1,150 

 

 

 

 2,715 

 

Deferred sales commissions

 

20,370 

 

 

 

27,884 

 

Deferred income taxes

 

47,858 

 

 

 

41,343 

 

Equipment and leasehold improvements, net

 

57,732 

 

 

 

67,227 

 

Intangible assets, net

 

61,227 

 

 

 

67,224 

 

Goodwill

 

154,636 

 

 

 

142,302 

 

Other assets

 

75,562 

 

 

 

74,325 

 

   Total assets

$

1,923,778 

 

 

$

1,831,300 

 

 

 

 

 

 

 

 

 

Liabilities, Temporary Equity and Permanent Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued compensation

$

110,070 

 

 

$

137,431 

 

Accounts payable and accrued expenses

 

57,143 

 

 

 

51,333 

 

Dividend payable

 

21,875 

 

 

 

21,959 

 

Debt

 

500,000 

 

 

 

500,000 

 

Liabilities of consolidated CLO entity:

 

 

 

 

 

 

 

          Senior and subordinated note obligations

 

477,096 

 

 

 

 477,699 

 

          Other liabilities

 

822 

 

 

 

 5,193 

 

Other liabilities

 

91,077 

 

 

 

75,557 

 

   Total liabilities

 

1,258,083 

 

 

 

1,269,172 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Temporary Equity:

 

 

 

 

 

 

 

Redeemable non-controlling interests

 

113,080 

 

 

 

100,824 

 

          Total temporary equity

 

113,080 

 

 

 

100,824 

 

 

 

 

 

 

 

 

 

Permanent Equity:

 

 

 

 

 

 

 

Voting common stock, par value $0.00390625 per share:

 

 

 

 

 

 

 

   Authorized, 1,280,000 shares

 

 

 

 

 

 

 

   Issued, 413,167 and 399,240 shares, respectively

 

 

 

 

 

Non-voting common stock, par value $0.00390625 per share:

 

 

 

 

 

 

 

   Authorized, 190,720,000 shares

 

 

 

 

 

 

 

   Issued, 114,776,913 and 115,223,827 shares, respectively

 

448 

 

 

 

450 

 

Notes receivable from stock option exercises

 

(3,888)

 

 

 

(4,441)

 

Accumulated other comprehensive income

 

2,630 

 

 

 

1,340 

 

Appropriated retained earnings (deficit)

 

12,485 

 

 

 

 (3,867)

 

Retained earnings

 

540,047 

 

 

 

466,931 

 

   Total Eaton Vance Corp. shareholders' equity

 

551,724 

 

 

 

460,415 

 

Non-redeemable non-controlling interests

 

891 

 

 

 

889 

 

   Total permanent equity

 

552,615 

 

 

 

461,304 

 

Total liabilities, temporary equity and permanent equity

$

1,923,778 

 

 

$

1,831,300 

 

 

 

 

 

 

 

 

 



13






  

  

 

 

 

 

 

 

 

 

 

 

Attachment 5

 Eaton Vance Corp.

 Table 1

 Net Flows by Investment Mandate(1)

 (in millions) (unaudited)

  

  

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Three Months Ended

 

Nine Months Ended

  

  

July 31,

 

April 30,

 

July 31,

 

July 31,

 

July 31,

  

  

2012 

 

2012 

 

2011 

 

2012 

 

2011 

 Equity assets - beginning of period(2)

$

 114,903 

 

$

 110,834 

 

$

 122,740 

 

$

 108,859 

 

$

 107,500 

  

Sales and other inflows

 

 4,604 

 

 

 6,817 

 

 

 7,984 

 

 

 17,735 

 

 

 23,829 

  

Redemptions/outflows

 

 (7,656)

 

 

 (7,897)

 

 

 (7,564)

 

 

 (23,234)

 

 

 (21,853)

  

Net flows

 

 (3,052)

 

 

 (1,080)

 

 

 420 

 

 

 (5,499)

 

 

 1,976 

  

Assets acquired

 

 - 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 352 

  

Exchanges

 

 (19)

 

 

 (6)

 

 

 (25)

 

 

 (23)

 

 

 70 

  

Market value change

 

 (3,237)

 

 

 5,155 

 

 

 (6,080)

 

 

 5,258 

 

 

 7,157 

 Equity assets - end of period

$

 108,595 

 

$

 114,903 

 

$

 117,055 

 

$

 108,595 

 

$

 117,055 

  

  

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 Fixed income assets - beginning of period

 46,891 

 

 

 45,514 

 

 

 43,066 

 

 

 43,708 

 

 

 46,119 

  

Sales and other inflows

 

 2,886 

 

 

 3,626 

 

 

 2,404 

 

 

 9,139 

 

 

 7,909 

  

Redemptions/outflows

 

 (1,973)

 

 

 (2,276)

 

 

 (2,223)

 

 

 (6,702)

 

 

 (9,270)

  

Net flows

 

 913 

 

 

 1,350 

 

 

 181 

 

 

 2,437 

 

 

 (1,361)

  

Exchanges

 

 30 

 

 

 - 

 

 

 7 

 

 

 70 

 

 

 (278)

  

Market value change

 

 364 

 

 

 27 

 

 

 559 

 

 

 1,983 

 

 

 (667)

 Fixed income assets - end of period

$

 48,198 

 

$

 46,891 

 

$

 43,813 

 

$

 48,198 

 

$

 43,813 

  

  

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 Floating-rate income assets -  beginning

 

 

 

 

 

 

 

 

 

 

 

 

  

  

of period

 

 24,847 

 

 

 24,376 

 

 

 24,224 

 

 

 24,322 

 

 

 20,003 

  

Sales and other inflows

 

 2,091 

 

 

 1,662 

 

 

 2,207 

 

 

 5,212 

 

 

 7,767 

  

Redemptions/outflows

 

 (1,535)

 

 

 (1,451)

 

 

 (977)

 

 

 (4,274)

 

 

 (3,002)

  

Net flows

 

 556 

 

 

 211 

 

 

 1,230 

 

 

 938 

 

 

 4,765 

  

Exchanges

 

 5 

 

 

 27 

 

 

 2 

 

 

 24 

 

 

 182 

  

Market value change

 

 (163)

 

 

 233 

 

 

 130 

 

 

 (39)

 

 

 636 

 Floating-rate income assets - end of period

$

 25,245 

 

$

 24,847 

 

$

 25,586 

 

$

 25,245 

 

$

 25,586 

  

  

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 Alternative assets -  beginning of period

 10,506 

 

 

 10,449 

 

 

 11,860 

 

 

 10,646 

 

 

 10,482 

  

Sales and other inflows

 

 1,342 

 

 

 1,121 

 

 

 1,068 

 

 

 3,558 

 

 

 4,320 

  

Redemptions/outflows

 

 (1,201)

 

 

 (1,035)

 

 

 (1,044)

 

 

 (3,428)

 

 

 (3,077)

  

Net flows

 

 141 

 

 

 86 

 

 

 24 

 

 

 130 

 

 

 1,243 

  

Exchanges

 

 (13)

 

 

 (23)

 

 

 (21)

 

 

 (84)

 

 

 (76)

  

Market value change

 

 (34)

 

 

 (6)

 

 

 (102)

 

 

 (92)

 

 

 112 

 Alternative assets - end of period

$

 10,600 

 

$

 10,506 

 

$

 11,761 

 

$

 10,600 

 

$

 11,761 

  

  

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 Long-term assets - beginning of period

 197,147 

 

 

 191,173 

 

 

 201,890 

 

 

 187,535 

 

 

 184,104 

  

Sales and other inflows

 

 10,923 

 

 

 13,226 

 

 

 13,663 

 

 

 35,644 

 

 

 43,825 

  

Redemptions/outflows

 

 (12,365)

 

 

 (12,659)

 

 

 (11,808)

 

 

 (37,638)

 

 

 (37,202)

  

Net flows

 

 (1,442)

 

 

 567 

 

 

 1,855 

 

 

 (1,994)

 

 

 6,623 

  

Assets acquired

 

 - 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 352 

  

Exchanges

 

 3 

 

 

 (2)

 

 

 (37)

 

 

 (13)

 

 

 (102)

  

Market value change

 

 (3,070)

 

 

 5,409 

 

 

 (5,493)

 

 

 7,110 

 

 

 7,238 

 Total long-term assets - end of period

$

 192,638 

 

$

 197,147 

 

$

 198,215 

 

$

 192,638 

 

$

 198,215 

  

  

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 Cash management fund assets

 

 

 

 

 

 

 

 

 

 

 

 

 

  

       

end of period

 

 220 

 

 

 340 

 

 

 815 

 

 

 220 

 

 

 815 

 Total assets under management -

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

end of period

$

 192,858 

 

$

 197,487 

 

$

 199,030 

 

$

 192,858 

 

$

 199,030 

  

  

 

 

 

 

 

 

 

 

 

 

 

 

 

  

(1)  Includes funds and separate accounts.

 

 

 

 

 

 

 

 

 

 

  

(2)  Includes balanced accounts holding income securities.

 

 

 

 

 

 

 

 

 

 

  



























14




 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 6

Eaton Vance Corp.

Table 2

Net Flows by Investment Vehicle

(in millions) (unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

July 31,

 

April 30,

 

July 31,

 

July 31,

 

July 31,

 

 

 

2012 

 

2012 

 

2011 

 

2012 

 

2011 

Long-term fund assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

beginning of period

 

$

 114,029 

 

$

 112,664 

 

$

 122,886 

 

$

 111,705 

 

$

 113,978 

 

Sales and other inflows

 

 

 6,266 

 

 

 6,648 

 

 

 7,293 

 

 

 19,819 

 

 

 26,840 

 

Redemptions/outflows

 

 

 (8,554)

 

 

 (7,818)

 

 

 (7,225)

 

 

 (24,483)

 

 

 (23,192)

 

Net flows

 

 

 (2,288)

 

 

 (1,170)

 

 

 68 

 

 

 (4,664)

 

 

 3,648 

 

Exchanges

 

 

 3 

 

 

 (2)

 

 

 (37)

 

 

 (13)

 

 

 (105)

 

Market value change

 

 

 (1,487)

 

 

 2,537 

 

 

 (2,941)

 

 

 3,229 

 

 

 2,455 

Long-term fund assets - end of period

$

 110,257 

 

$

 114,029 

 

$

 119,976 

 

$

 110,257 

 

$

 119,976 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Institutional separate account assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 beginning of period

 

 

 40,883 

 

 

 38,726 

 

 

 38,264 

 

 

 38,003 

 

 

 34,593 

 

Sales and other inflows

 

 

 2,262 

 

 

 3,261 

 

 

 4,336 

 

 

 7,347 

 

 

 9,396 

 

Redemptions/outflows

 

 

 (1,970)

 

 

 (2,794)

 

 

 (2,522)

 

 

 (6,979)

 

 

 (7,379)

 

Net flows

 

 

 292 

 

 

 467 

 

 

 1,814 

 

 

 368 

 

 

 2,017 

 

Exchanges

 

 

 - 

 

 

 40 

 

 

 - 

 

 

 11 

 

 

 (19)

 

Market value change

 

 

 (890)

 

 

 1,650 

 

 

 (1,086)

 

 

 1,903 

 

 

 2,401 

Institutional separate account assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

end of period

$

 40,285 

 

$

 40,883 

 

$

 38,992 

 

$

 40,285 

 

$

 38,992 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High-net-worth separate account assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

beginning of period

 

 

 14,704 

 

 

 13,255 

 

 

 14,249 

 

 

 13,256 

 

 

 11,883 

 

Sales and other inflows

 

 

 752 

 

 

 1,338 

 

 

 529 

 

 

 3,110 

 

 

 2,250 

 

Redemptions/outflows

 

 

 (540)

 

 

 (534)

 

 

 (552)

 

 

 (1,626)

 

 

 (1,925)

 

Net flows

 

 

 212 

 

 

 804 

 

 

 (23)

 

 

 1,484 

 

 

 325 

 

Assets acquired

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 352 

 

Exchanges

 

 

 - 

 

 

 (42)

 

 

 7 

 

 

 (999)

 

 

 2 

 

Market value change

 

 

 (234)

 

 

 687 

 

 

 (645)

 

 

 941 

 

 

 1,026 

High-net-worth separate account assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

end of period

$

 14,682 

 

$

 14,704 

 

$

 13,588 

 

$

 14,682 

 

$

 13,588 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail managed account assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

beginning of period

 

 

 27,531 

 

 

 26,528 

 

 

 26,491 

 

 

 24,571 

 

 

 23,650 

 

Sales and other inflows

 

 

 1,643 

 

 

 1,979 

 

 

 1,505 

 

 

 5,368 

 

 

 5,339 

 

Redemptions/outflows

 

 

 (1,301)

 

 

 (1,513)

 

 

 (1,509)

 

 

 (4,550)

 

 

 (4,706)

 

Net flows

 

 

 342 

 

 

 466 

 

 

 (4)

 

 

 818 

 

 

 633 

 

Exchanges

 

 

 - 

 

 

 2 

 

 

 (7)

 

 

 988 

 

 

 20 

 

Market value change

 

 

 (459)

 

 

 535 

 

 

 (821)

 

 

 1,037 

 

 

 1,356 

Retail managed account assets - end of period

$

 27,414 

 

$

 27,531 

 

$

 25,659 

 

$

 27,414 

 

$

 25,659 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total long-term assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

beginning of period

 

 

 197,147 

 

 

 191,173 

 

 

 201,890 

 

 

 187,535 

 

 

 184,104 

 

Sales and other inflows

 

 

 10,923 

 

 

 13,226 

 

 

 13,663 

 

 

 35,644 

 

 

 43,825 

 

Redemptions/outflows

 

 

 (12,365)

 

 

 (12,659)

 

 

 (11,808)

 

 

 (37,638)

 

 

 (37,202)

 

Net flows

 

 

 (1,442)

 

 

 567 

 

 

 1,855 

 

 

 (1,994)

 

 

 6,623 

 

Assets acquired

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 352 

 

Exchanges

 

 

 3 

 

 

 (2)

 

 

 (37)

 

 

 (13)

 

 

 (102)

 

Market value change

 

 

 (3,070)

 

 

 5,409 

 

 

 (5,493)

 

 

 7,110 

 

 

 7,238 

Total long-term assets - end of period

$

 192,638 

 

$

 197,147 

 

$

 198,215 

 

$

 192,638 

 

$

 198,215 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash management fund assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      

end of period

 

 

 220 

 

 

 340 

 

 

 815 

 

 

 220 

 

 

 815 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets under management -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

end of period

 

$

 192,858 

 

$

 197,487 

 

$

 199,030 

 

$

 192,858 

 

$

 199,030 



























15




 

  

 

  

 

 

 

 

 

 

 

 

 

 

Attachment 7

 

 Eaton Vance Corp.

 

 Table 3

 

 Assets under Management

 

 by Investment Mandate(1)

 

  (in millions) (unaudited)