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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): May 24, 2006

      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)         
 
 
255 State Street, Boston, Massachusetts   02109
(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))

Page 1 of 11


INFORMATION INCLUDED IN THE REPORT

Item 9.01.     Financial Statements and Exhibits

                      Registrant has reported its results of operations for the three and six months ended April 30, 2006, as described in Registrant’s news release dated May 24, 2006, a copy of which is filed herewith as Exhibit 99.1 and incorporated herein by reference.

Exhibit No.    Document 
99.1    Press release issued by the Registrant dated May 24, 2006. 

Page 2 of 11


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:    May 24, 2006    /s/ William M. Steul                                         
        William M. Steul, Chief Financial Officer 

Page 3 of 11


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 May 24, 2006. 

Page 4 of 11


Exhibit 99.1


May 24, 2006

FOR IMMEDIATE RELEASE

EATON VANCE CORP.

REPORT FOR THE THREE MONTHS AND SIX MONTHS ENDED APRIL 30, 2006

Boston, MA--Eaton Vance Corp. reported diluted earnings per share of $0.29 in the second quarter of fiscal 2006 compared to diluted earnings per share of $0.23 in the second quarter of fiscal 2005, an increase of 26 percent. The Company earned $0.57 per diluted share in the first six months of fiscal 2006, an increase of 24 percent compared to earnings of $0.46 per diluted share in the first six months of fiscal 2005.

In the second quarter of fiscal 2006, Eaton Vance accelerated non-cash amortization by $8.9 million or $0.04 per diluted share to write off intangible assets relating to the termination of certain institutional and high-net-worth asset management contracts at the Company’s Fox Asset Management LLC subsidiary. The amortization expense is included in other expenses in the Company’s Consolidated Statements of Income for both the three and six-month periods ended April 30, 2006. These contracts were identified and accounted for as intangible assets at the time of the Fox acquisition in September 2001. Assets under management at Fox have remained relatively stable despite the attrition of assets managed under the original contracts acquired as these assets have been replaced over time by other managed assets.

Assets under management of $118.8 billion at the end of the second quarter of fiscal 2006 were $20.0 billion or 20 percent greater than the $98.8 billion at the end of the second fiscal quarter last year. In the 12-month period ended April 30, 2006, the Company’s assets under management were positively affected by long-term fund and separate account net inflows of $8.9 billion, market price appreciation of $9.8 billion and $0.6 billion of acquired separate accounts. Gross sales and inflows of long-term funds and separate accounts in the last 12 months were $25.6 billion.

Fund and separate account net inflows of $2.8 billion increased 33 percent in the second quarter of fiscal 2006 compared to net inflows of $2.1 billion in the second quarter of fiscal 2005. The Company did not offer a closed-end fund in the second quarter of fiscal 2006. Excluding closed-end funds flows, total fund and separate account net inflows increased 170 percent in the second quarter of fiscal 2006 compared to the second quarter of fiscal 2005.

Page 5 of 11


The Company experienced institutional and high-net-worth separate account net inflows of $156 million in the second quarter of fiscal 2006 compared to net outflows of $373 million in the second quarter of fiscal 2005. Retail managed account net inflows were $391 million in the second quarter of fiscal 2006 compared to $474 million in the same period last year. Attached tables 1-4 summarize assets under management and asset flows by investment objective.

As a result of higher average assets under management, revenue in the second quarter of fiscal 2006 increased by $29.0 million or 16 percent to $211.5 million compared to revenue in the second quarter of fiscal 2005 of $182.5 million. Investment adviser and administration fees increased 20 percent to $145.3 million, compared to the 17 percent increase in average assets under management. Distribution and underwriter fees increased 4 percent, reflecting the continuing shift in sales and assets from class B mutual fund shares to other fund share classes and other managed assets with low or no distribution fees. Service fee revenue increased 17 percent due to the increase in average fund assets that pay these fees. Other revenue decreased 20 percent primarily because of investment income earned last year by an investment company that after April 2005 was no longer consolidated.

Operating expenses increased 18 percent in the second quarter of fiscal 2006 to $150.9 million compared to operating expense of $127.7 million in the second quarter of fiscal 2005, because of higher compensation, service fee, distribution and other expenses. Compensation expense increased 16 percent because of increases in employee headcount, higher sales and asset based marketing incentive costs and higher operating income-based management bonus accruals.

Amortization of deferred sales commissions declined $3.6 million or 21 percent in the second quarter of fiscal 2006 compared to the second quarter of fiscal 2005 primarily because of the continuing decline in class B share sales and assets under management. Service fee expense increased 12 percent in line with the increase in assets that have service fee revenue. Distribution expense increased 21 percent as a result of increases in sales support expenses, class A and C share fund distribution fees and closed-end fund fees. Other expenses increased 71 percent primarily because of the aforementioned acceleration of amortization and other fund, information technology, communications, and other miscellaneous expenses.

Operating income increased 11 percent in the second quarter of fiscal 2006 to $60.6 million compared to $54.8 million in the second quarter of fiscal 2005. Operating income was reduced in the second quarter of fiscal 2006 and fiscal 2005 by $8.0 million and $6.9 million respectively, for non-cash stock-based compensation as required by Statement of Financial Accounting Standards (SFAS) No. 123R. A Stock-Based Compensation Summary table showing the impact of SFAS 123R on the Company’s financial statements is attached to the release. As previously discussed, operating income was also reduced by $8.9 million in the second quarter of fiscal 2006 and by $0.9 million in the second quarter of fiscal 2005 because of accelerated amortization relating to Fox Asset Management.

Net income increased 23 percent to $39.9 million in the second quarter of fiscal 2006 compared to $32.5 million in the second quarter of fiscal 2005. Interest income increased 91 percent because of higher interest earned on cash and short-term investments. The Company’s effective tax rate, before minority interest and equity in net income of affiliates, was 38.5 percent in the second quarter of fiscal 2006 and 37.9 percent in the second quarter of fiscal 2005.

Cash, cash equivalents and short-term investments were $286.5 million on April 30, 2006, and $284.8 million April 30, 2005. The Company’s strong operating cash flow in the last 12 months allowed it to pay $135.9 million to repurchase 5.2 million shares of its non-voting common stock and $46.8 million in dividends to shareholders. There are currently no outstanding borrowings against the Company’s $180 million credit facility.

Page 6 of 11


During the first six months of fiscal 2006, the Company repurchased and retired 2.8 million shares of its non-voting common stock at an average price of $27.63 per share under its current and prior repurchase authorizations. Approximately 2.5 million shares remained of the current 8.0 million share authorization on April 30, 2006.

Eaton Vance Corp., a Boston-based investment management firm, is traded on the New York Stock Exchange under the symbol EV.

This news release contains 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, the volume of sales and repurchases of fund shares, 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.

Page 7 of 11


Eaton Vance Corp.
Summary of Results of Operations
(in thousands, except per share amounts)
 
 
    Three Months Ended   Six Months Ended

 
    April 30,   April 30,   %   April 30,   April 30,   %
    2006   2005   Change   2006   2005   Change

 
Revenue:                                                 
     Investment adviser and administration fees           $         145,284         $         121,361           20      $ 287,353       $     240,276    $ 20   
     Distribution and underwriter fees               35,090               33,809             4               70,267           68,869             2     
     Service fees               29,346               25,139           17               58,003           50,616           15     
     Other revenue                         2,195         (20)            2,199             4,521           (51)     

 
     Total revenue             211,472             182,504           16             417,822         364,282           15     

 
Expenses:                                                 
     Compensation of officers and employees               58,489               50,578           16             119,938         100,129           20     
     Amortization of deferred sales commissions               13,308               16,907         (21)               27,048           34,947           (23)     
     Service fee expense               22,971               20,594           12               45,834           41,766           10     
     Distribution expense               27,979               23,194           21               54,104           46,113           17     
     Other expenses               28,108               16,445           71               46,203           31,032           49     

 
     Total expenses             150,855             127,718           18             293,127         253,987           15     

 
Operating Income               60,617               54,786           11             124,695         110,295           13     
 
Other Income/(Expense):                                                 
     Interest income                         1,057           91            3,742             1,766         112     
     Interest expense                   (360)                   (3)            (724)               (732)             (1)     
     Gain on investments                         n/a            3,547                   87           n/a     
     Foreign currency gain (loss)                     (71)                 n/a            (127)                   25           n/a     
     Impairment loss on investments                       -               (1,840)         n/a            (592)             (1,840)           n/a     

 
Income Before Income Taxes, Minority Interest                                                 
     Equity in Net Income (Loss) of Affiliates and                                                 
     Cumulative Effect of Change in Accounting Principle               65,092               53,712           21             130,541         109,601           19     
 
Income Taxes             (25,074)             (20,338)           23               (50,217)           (41,534)           21     
 
Minority Interest               (1,271)               (1,208)             5                 (2,820)             (2,608)             8     
 
Equity in Net Income (Loss) of Affiliates, Net of Tax                         n/a            2,153               (207)           n/a     

 
Net Income Before Cumulative Effect of Change in                                                 
     Accounting Principle               39,900               32,536           23               79,657           65,252           22     
 
Cumulative Effect of Change in Accounting Principle,                                                 
     Net of Tax                       -                       -         n/a            (626)                     -           n/a     

 
Net Income           $           39,900         $           32,536           23        $ 79,031       $       65,252           21     

 
Earnings Per Share Before Cumulative Effect of                                                 
     Change in Accounting Principle:                                                 
       Basic           $               0.31         $             0.25           24          0.62       $           0.49           27     

       Diluted           $               0.29         $             0.23           26          0.57       $           0.46           24     

 
Earnings Per Share:                                                 
       Basic           $               0.31         $             0.25           24          0.61       $           0.49           25     

       Diluted           $               0.29         $             0.23           26          0.57       $           0.46           24     

 
Dividends Declared, Per Share           $               0.10         $             0.08           25          0.20       $           0.16           25     

 
Weighted Average Shares Outstanding:                                                 
     Basic             128,447             132,121           (3)             128,859         132,826             (3)     

     Diluted             138,736             140,954           (2)             138,942         141,636             (2)     


Page 8 of 11


Eaton Vance Corp.
Balance Sheet
(in thousands, except per share figures)
 
    April 30,   October 31,   April 30,
    2006   2005   2005

 
ASSETS                 
Current Assets:                 
 Cash and cash equivalents    $ 158,060    $    146,389    $ 158,814 
 Short-term investments         128,427        127,858         125,953 
 Investment adviser fees and other receivables           90,066         83,868           32,506 
 Other current assets             6,029         10,473             6,217 

     Total current assets         382,582        368,588         323,490 

Other Assets:                 
 Deferred sales commissions         116,148        126,113         140,028 
 Goodwill           89,634         89,634           89,281 
 Other intangible assets, net           31,580         40,644           41,537 
 Long-term investments           53,850         61,766           40,071 
 Equipment and leasehold improvements, net           18,247         12,764           12,224 
 Other assets             2,061           3,035             4,416 

     Total other assets         311,520        333,956         327,557 

Total assets    $ 694,102    $    702,544    $ 651,047 

LIABILITIES AND SHAREHOLDERS' EQUITY                 
 
Current Liabilities:                 
 Accrued compensation    $ 40,832    $     62,880    $ 32,628 
 Accounts payable and accrued expenses           30,939         27,987           24,078 
 Dividend payable           12,833         12,952           10,506 
 Other current liabilities             7,011         12,538             9,144 

     Total current liabilities           91,615        116,357           76,356 

Long-Term Liabilities:                 
 Long-term debt           76,027         75,467           74,900 
 Deferred income taxes           26,616         29,804           31,388 

     Total long-term liabilities         102,643        105,271         106,288 

     Total liabilities         194,258        221,628         182,644 

Minority interest           10,799           4,620             4,472 

Commitments and contingencies      -           -          -   
 
Shareholders' Equity:                 
 Common stock, par value $0.00390625 per share:                 
     Authorized, 1,280,000 shares                 
     Issued, 309,760 shares                     1                   1                     1 
 Non-voting common stock, par value $0.00390625 per share:                 
     Authorized, 190,720,000 shares                 
     Issued, 127,613,866, 129,243,023 and 131,565,793 shares, respectively                 498               505                 513 
 Notes receivable from stock option exercises           (2,204)         (2,741)           (2,862) 
 Accumulated other comprehensive income             3,192           2,566             1,996 
 Retained earnings         487,558        475,965         464,283 

 
     Total shareholders' equity         489,045        476,296         463,931 

 
Total liabilities and shareholders' equity    $ 694,102    $    702,544    $ 651,047 


Page 9 of 11


Table 1
Asset Flows (in millions)
Twelve Months Ended April 30, 2006
 
 
Assets 4/30/2005 - beginning of period    $      98,768 
Long-term fund sales and inflows          19,624 
Long-term fund redemptions and outflows        (11,903) 
Long-term fund net exchanges               (27) 
Long-term fund mkt. value change           6,325 
Institutional and HNW account inflows           2,819 
Institutional and HNW account outflows         (3,154) 
Institutional and HNW assets acquired1,2             555 
Retail managed account inflows          3,143 
Retail managed account outflows         (1,632) 
Separate account mkt. value change          3,466 
Change in money market funds             784 

Net change        20,000 

Assets 4/30/2006 - end of period    $    118,768 


Table 2
Assets Under Management
By Investment Objective (in millions)

 
    April 30,   October 31,   %   April 30,   %
    2006   2005   Change   2005   Change

Equity funds    $     50,116    $     45,146         11%    $    39,104         28% 
Fixed income funds         19,588         18,603         5%        17,958           9% 
Bank loan funds         17,792         16,816         6%        16,416           8% 
Money market funds           1,091           278       292%         307       255% 
Separate accounts         30,181         27,650         9%        24,983         21% 

Total    $     118,768    $    108,493         9%    $    98,768         20% 


Table 3
Asset Flows by Investment Objective (in millions)
 
         Three Months Ended           Six Months Ended   

    April 30,   April 30,   April 30,    April 30,
    2006   2005   2006   2005

Equity fund assets - beginning of period    $       48,129      $     39,329    $ 45,146    $    36,895 
Sales/inflows           1,991         1,705         3,672        3,762 
Redemptions/outflows           (1,229)         (1,191)       (2,661)        (2,185) 
Exchanges               12             11           37           30 
Market value change           1,213           (750)         3,922         602 

Net change           1,987           (225)         4,970        2,209 

Equity assets - end of period    $       50,116    $     39,104    $ 50,116    $    39,104 

 
Fixed income fund assets - beginning of period           19,149         17,710       18,603        17,553 
Sales/inflows           1,360         1,146         2,807        1,825 
Redemptions/outflows             (819)           (603)       (1,828)        (1,187) 
Exchanges                 8             (37)           (10)           (47) 
Market value change             (110)           (258)           16         (186) 

Net change               439           248           985         405 

Fixed income assets - end of period    $       19,588    $     17,958    $ 19,588    $    17,958 

 
Bank loan fund assets - beginning of period           16,744         15,558       16,816        15,034 
Sales/inflows           1,849         1,709         3,024        2,892 
Redemptions/outflows             (882)           (783)       (2,280)        (1,498) 
Exchanges               (19)               3           (28)           (4) 
Market value change               100             (71)           260           (8) 

Net change           1,048           858           976        1,382 

Bank loan assets - end of period    $       17,792    $     16,416    $ 17,792    $    16,416 

 
Long-term fund assets - beginning of period           84,022         72,597       80,565        69,482 
Sales/inflows           5,200         4,560         9,503        8,479 
Redemptions/outflows           (2,930)         (2,577)       (6,769)        (4,870) 
Exchanges                 1             (23)             (1)           (21) 
Market value change           1,203         (1,079)         4,198         408 

Net change           3,474           881         6,931        3,996 

Total long-term fund assets - end of period    $       87,496    $     73,478    $ 87,496    $    73,478 

 
Separate accounts - beginning of period           28,942         25,087       27,650        24,475 
Institutional/HNW account inflows               697           767         1,349        1,479 
Institutional/HNW account outflows             (541)         (1,140)       (2,144)        (2,577) 
Institutional/HNW assets acquired1                           449         
Retail managed account inflows               928           895         1,667        1,722 
Retail managed account outflows             (537)           (421)         (946)         (866) 
Separate accounts market value change               692           (205)         2,156         750 

Net change           1,239           (104)         2,531         508 

Separate accounts - end of period    $       30,181    $     24,983    $ 30,181    $    24,983 

Money market fund assets - end of period           1,091           307         1,091         307 

Total assets under management - end of period    $     118,768    $     98,768    $ 118,768    $    98,768 


Table 4
Long-Term Fund and Separate Account Net Flows (in millions)
 
    Three Months Ended   Six Months Ended

    April 30,   April 30,   April 30,   April 30,
    2006   2005   2006   2005

Long-term funds:                             
 Open-end funds    $       1,479    $     821    $ 2,294    $    1,296 
 Closed-end funds                1,042           108        1,909 
 Private funds               791         120           332         404 
Institutional/HNW accounts               156        (373)         (795)        (1,098) 
Retail managed accounts               391         474           721         856 

Total net flows    $       2,817    $    2,084    $ 2,660    $    3,367 

 
 
1 Voyageur Asset Management (MA) acquired by Eaton Vance in December 2005.           
2 Weston Asset Management acquired by Eaton Vance in August 2005.             

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Eaton Vance Corp.
Stock-Based Compensation Summary
(in millions, except per share figures)

 
    Fiscal year 2005   Fiscal year 2006

                                                        Projected 1

    Q1   Q2   Q3   Q4   Total   Q1 2   Q2   Q3   Q4   Total

Stock-based compensation expense      7.5      6.9      7.3      6.9       .6       .5    $ 8.0    $ 8.2     $     7.7    $ 36.4 
 
Stock-based compensation expense, net of tax      5.8      5.2      5.6      5.1       .7      9.0    $ 6.5    $ 6.3     $     5.8    $ 27.6 
 
Stock-based compensation, net of tax, per diluted share      .04      .04      .04      .04      .15      .06    $ 0.05    $ 0.05     $    0.04    $ 0.20 
 
Diluted EPS pre-SFAS 123R    $ 0.27    $ 0.27    $ 0.29    $ 0.31    $ 1.13    $ 0.35    $ 0.34                 
 
Diluted EPS post-SFAS 123R    $ 0.23    $ 0.23    $ 0.25    $ 0.27    $ 0.98    $ 0.29    $ 0.29                 

1      Projections do not include estimated expense for future FY2006 option grants. Projected EPS figures calculated using April 30, 2006 fully diluted shares.
 
2      EPS figure before cumulative effect in change in accounting principal of $626,000.
 

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