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): November 20, 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 months and fiscal year ended October 31, 2012, as described in Registrant’s news release dated November 20, 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 November 20, 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:

November 20, 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 November 20, 2012.




4


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 Months and Fiscal Year Ended October 31, 2012


Boston, MA, November 20, 2012 – Eaton Vance Corp. (NYSE: EV) today reported adjusted earnings per diluted share(1) of $0.53 for the fourth quarter of fiscal 2012, an increase of 23 percent over the $0.43 of adjusted earnings per diluted share in the third quarter of fiscal 2012 and up 13 percent from the $0.47 of adjusted earnings per diluted share in the fourth quarter of fiscal 2011.  Adjusted earnings per diluted share were $1.89 for the fiscal year ended October 31, 2012, 5.5 percent below the $2.00 of adjusted earnings per diluted share in the fiscal year ended October 31, 2011.


As determined under U.S. generally accepted accounting principles (“GAAP”), the Company earned $0.45 in the fourth quarter of fiscal 2012, $0.43 in the third quarter of fiscal 2012 and $0.40 in the fourth quarter of fiscal 2011. Adjusted earnings differed from GAAP earnings in the fourth quarter of fiscal 2012 and the fourth quarter of fiscal 2011 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 $0.08 and $0.07 per diluted share, respectively.  GAAP earnings were $1.72 per diluted share in the fiscal year ended October 31, 2012 compared to $1.75 per diluted share in the fiscal year ended October 31, 2011.  Non-controlling interest value adjustments reduced GAAP earnings by $0.17 and $0.25 per diluted share for the fiscal years ended October 31, 2012 and 2011, respectively.  The Company’s adjusted and GAAP earnings per diluted share were increased $0.01 and $0.03 in the fiscal years ended October 31, 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 inflows of $2.2 billion into long-term funds and separate accounts in the fourth quarter of fiscal 2012 compare to net outflows of $1.4 billion and $2.7 billion in the third quarter of fiscal 2012 and the fourth quarter of fiscal 2011, respectively.  The Company’s annualized internal growth rate (net inflows into long-term assets divided by beginning of period long-term assets managed) was 5 percent in the fourth quarter of fiscal 2012.  Net inflows of $0.2 billion in fiscal 2012 compare to net inflows of $3.9 billion in fiscal 2011.


“We are pleased to report higher managed assets, stronger gross and net flows, and improved earnings for our fourth quarter,” said Thomas E. Faust Jr., Chairman and Chief Executive Officer.  “Eaton Vance enters fiscal 2013 with considerable momentum and good prospects for continued progress.”


Assets under management were $199.5 billion on October 31, 2012, an increase of 3 percent from the $192.9 billion of managed assets on July 31, 2012 and an increase of 6 percent from managed assets of $188.2 billion on October 31, 2011. Assets under management on October 31, 2012

____________________________

(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


included $113.2 billion in long-term funds, $43.3 billion in institutional separate accounts, $15.0 billion in high-net-worth separate accounts, $27.7 billion in retail managed accounts and $0.2 billion in cash management fund assets. Average assets under management were $196.6 billion in the fourth quarter of fiscal 2012, up 2 percent from $192.8 billion in the third quarter of fiscal 2012 and up 4 percent from $188.2 billion in the fourth quarter of fiscal 2011.  The sequential increase in ending assets under management in the fourth quarter of fiscal 2012 primarily reflects long-term net inflows of $2.2 billion and market price appreciation of $4.5 billion.


As shown in Attachment 6, consolidated gross sales and other inflows were $14.4 billion in the fourth quarter of fiscal 2012, up 32 percent from $10.9 billion in the third quarter of fiscal 2012 and up 30 percent from $11.1 billion in the fourth quarter of fiscal 2011. Gross redemptions and other outflows were $12.3 billion in the fourth quarter of fiscal 2012, down 1 percent from $12.4 billion in the third quarter of fiscal 2012 and down 11 percent from $13.8 billion in the fourth 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)

 

 

 

 

 

 

 

 

 

 

October 31,

July 31,

October 31,

 

 

2012 

2012 

2011 

 

 

 

 

 

 

 

 

Revenue

$

309,889 

$

298,771 

$

297,323 

Expenses

 

203,544 

 

203,755 

 

192,675 

Operating income

 

106,345 

 

95,016 

 

104,648 

 

 

 

 

 

 

 

 

Operating margin

 

34%

 

32%

 

35%

 

 

 

 

 

 

 

 

Non-operating income (expense)

 

3,993 

 

1,875 

 

(21,782)

Income taxes

 

(37,655)

 

(34,379)

 

(37,665)

Equity in net income of affiliates, net of tax

 

1,758 

 

175 

 

387 

Net income

 

 74,441 

 

 62,687 

 

 45,588 

Net (income) loss attributable to non-controlling

 

 

 

 

 

 

 

 and other beneficial interests

 

(21,323)

 

(12,481)

 

1,232 

Net income attributable to

 

 

 

 

 

 

 

Eaton Vance Corp. shareholders

$

53,118 

$

50,206 

$

46,820 

Adjusted net income attributable to Eaton

 

 

 

 

 

 

 

Vance Corp. shareholders(1)

$

62,988 

$

51,002 

$

55,726 

 

 

 

 

 

 

 

 

Earnings per diluted share

$

0.45 

$

0.43 

$

0.40 

 

 

 

 

 

 

 

 

Adjusted earnings per diluted share(1)

$

0.53 

$

0.43 

$

0.47 


On August 6, 2012, the Company completed the purchase of a 49 percent interest in Hexavest Inc. (“Hexavest”), a Montreal-based investment advisor that provides discretionary management of equity and tactical asset allocation strategies using a predominantly top-down investment style. As of October 31, 2012, Hexavest managed $12.1 billion of client assets, an increase of 11 percent from the $11.0 billion of managed assets on August 6, 2012. Attachment 8 summarizes assets under management and asset flow information for Hexavest.


On November 11, 2012, the Company’s subsidiary Parametric Portfolio Associates LLC announced the signing of a definitive agreement to acquire the business of The Clifton Group Investment Management Company (“Clifton”).  Based in Minneapolis, Clifton specializes in providing futures- and options-based overlay services and custom risk management solutions to institutional



6


investors.  As of September 30, 2012, Clifton managed $33.4 billion of funded and overlay assets on behalf of approximately 180 institutional clients.  Completion of the transaction is expected on or about December 31, 2012 and is subject to certain customary closing conditions.  


Fourth Quarter Fiscal 2012 vs. Third Quarter Fiscal 2012


In the fourth quarter of fiscal 2012, revenue increased 4 percent to $309.9 million from revenue of $298.8 million in the third quarter of fiscal 2012.  Investment advisory and administrative fees were up 4 percent in the fourth quarter of fiscal 2012 compared to the third quarter of fiscal 2012, primarily due to a 2 percent increase in average assets under management and a modestly higher investment advisory and administrative effective fee rate.  Performance fees contributed $3.7 million to investment advisory and administrative fees in the fourth quarter of fiscal 2012. Distribution and service fees revenues increased 1 percent on a combined basis, reflecting an increase in average managed assets in fund share classes that are subject to such fees.


Expenses of $203.5 million in the fourth quarter of fiscal 2012 were substantially unchanged from $203.8 million in the third quarter of fiscal 2012, reflecting increases in compensation, distribution and service fee expenses reduced by lower amortization of deferred sales commissions and decreases in fund expenses and other expenses. The increase in compensation expense primarily reflects increases in sales- and operating income-based incentives. Gross sales and other inflows, which drive sales-based incentives, were up 32 percent in the fourth quarter of fiscal 2012 compared to the third quarter of fiscal 2012.  Pre-bonus adjusted operating income, which drives operating income-based incentives, was up 10 percent for the same period. The increase in distribution expense reflects an increase in Class A share commissions, partly offset by decreases 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 decreased 4 percent from the third quarter of fiscal 2012 due to lower subsidies on start-up funds and decreased expenses borne by the Company on funds for which it receives an all-in fee.  The 6 percent decrease in other expenses reflects lower professional services costs.


Operating income was up 12 percent to $106.3 million in the fourth quarter of fiscal 2012 from $95.0 million in the third quarter of fiscal 2012.


Non-operating income (expense) contributed $4.0 million to income before taxes in the fourth quarter of fiscal 2012, compared to a contribution of $1.9 million in the third quarter of fiscal 2012.  The increase in non-operating income (expense) is primarily attributable to a $3.6 million increase in gains and other investment income earned on the Company’s investments in sponsored products offset by a $1.2 million increase in interest expense recognized by the Company’s consolidated collateralized loan obligation (“CLO”) entity.


The Company’s effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 34.1 percent in the fourth quarter of fiscal 2012. Excluding the impact of CLO entity income (expense) borne by other beneficial interest holders, the Company’s effective tax rate was approximately 36.1 percent for the quarter.  


Equity in net income of affiliates increased by $1.6 million in the fourth quarter of fiscal 2012 compared to the third quarter of fiscal 2012, primarily reflecting the Company’s acquisition of a 49 percent equity interest in Hexavest on August 6, 2012.  Equity in net income of affiliates for the fourth quarter of fiscal 2012 includes $1.9 million related to Hexavest.  


Net income attributable to non-controlling and other beneficial interests totaled $21.3 million in the fourth quarter of fiscal 2012 and $12.5 million in the third quarter of fiscal 2012. As shown in Attachment 3, the increase can be primarily attributed to an increase in non-controlling interest value adjustments. Included in net income attributable to non-controlling and other beneficial interests in the fourth quarter of fiscal 2012 were $9.9 million of non-controlling interest value adjustments relating to our subsidiary Atlanta Capital Management, based on an October 31 enterprise value measurement.




7


Fourth Quarter Fiscal 2012 vs. Fourth Quarter Fiscal 2011


In the fourth quarter of fiscal 2012, revenue increased 4 percent to $309.9 million from revenue of $297.3 million in the fourth quarter of fiscal 2011.  Investment advisory and administrative fees were up 6 percent due to a 4 percent increase in average assets under management and modestly higher investment advisory and administrative effective fee rate. Performance fees contributed $3.7 million to investment advisory and administrative fees in the fourth quarter of fiscal 2012. Distribution and service fees were down 5 percent on a combined basis, reflecting lower managed assets in fund share classes that are subject to distribution and service fees.


Expenses increased 6 percent to $203.5 million in the fourth quarter of fiscal 2012 from $192.7 million in the fourth quarter of fiscal 2011, reflecting increases in compensation and distribution expense, offset by lower service fees, reduced amortization of deferred sales commissions and lower fund expenses. Increases in compensation expense reflect increases in sales- and operating income-based incentives, higher employee headcount, increased salaries and higher stock-based compensation. Gross sales and other inflows, which drive sales-based incentives, were up 30 percent year-over-year, while pre-bonus adjusted operating income, which drives operating-income based incentives, was up 10 percent over the same period. The increase in distribution expense can be attributed to an increase in Class A share commissions and Class C share distribution payments made to third-party intermediaries. The decreases in service fee expense 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 lower sub-advisory expenses. Other expenses were substantially unchanged from the prior year, as decreases in professional fees were offset by an increase in spending for travel and higher facilities-related expenses.


Operating income was up 2 percent to $106.3 million in the fourth quarter of fiscal 2012 from $104.6 million in the fourth quarter of fiscal 2011.


Non-operating income contributed $4.0 million to income before taxes in the fourth quarter of fiscal 2012 compared to non-operating expense of $21.8 million in the fourth quarter of fiscal 2011. The improvement in non-operating income (expense) reflects a $20.0 million increase in gains and other investment income recognized by the Company’s consolidated CLO entity and a $7.5 million increase in gains and other investment income earned on the Company’s investments in sponsored products.  


Equity in net income of affiliates increased $1.4 million from the fourth quarter of fiscal 2011, and includes $1.9 million related to the Company’s 49% equity interest in Hexavest acquired on August 6, 2012.


Net income attributable to non-controlling and other beneficial interests was $21.3 million in the fourth quarter of fiscal 2012 compared to a loss of $1.2 million in the fourth 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.  Included in net income attributable to non-controlling and other beneficial interests in the fourth quarter of fiscal 2012 and 2011 were $9.9 million and $8.9 million, respectively, of non-controlling interest value adjustments relating to our subsidiary Atlanta Capital Management, based on an annual October 31 enterprise value measurement.


Balance Sheet Information


Cash and cash equivalents totaled $462.1 million on October 31, 2012, with no outstanding borrowings against the Company’s $300 million credit facility.  During fiscal 2012, the Company used $106.5 million to repurchase and retire approximately 4.0 million shares of its Non-Voting Common Stock under its repurchase authorization.  Approximately 3.9 million shares of the current 8.0 million share repurchase authorization remains unused.




8


Conference Call Information


Eaton Vance Corp. will host a conference call and webcast at 11:00 AM EST today to discuss the financial results for the three months and fiscal year ended October 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. Fourth 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 confirmation code 403627.


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.


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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

 

 

 

 

 

 

 

% Change

% Change

 

 

 

 

 

 

 

 

 

 

October 31,

July 31,

October 31,

Q4 2012 to

Q4 2012 to

 

October 31,

October 31,

%

 

 

 

2012 

2012 

2011 

Q3 2012

Q4 2011

 

2012 

2011 

Change

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administrative fees

$

255,063 

$

244,655 

$

239,751 

%

%

 

$

988,058 

$

996,222 

(1)

%

 

Distribution and underwriter fees

 

22,278 

 

22,066 

 

23,079 

 

(3)

 

 

 

89,410 

 

102,979 

(13)

 

 

Service fees

 

31,221 

 

30,760 

 

33,281 

 

(6)

 

 

 

126,345 

 

144,530 

(13)

 

 

Other revenue

 

1,327 

 

1,290 

 

1,212 

 

 

 

 

5,223 

 

4,875 

 

 

 

Total revenue

 

309,889 

 

298,771 

 

297,323 

 

 

 

 

1,209,036 

 

1,248,606 

(3)

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and related costs

 

96,446 

 

94,700 

 

81,007 

 

19 

 

 

 

385,395 

 

369,927 

 

 

Distribution expense

 

32,956 

 

32,670 

 

32,577 

 

 

 

 

130,914 

 

132,664 

(1)

 

 

Service fee expense

 

28,559 

 

28,165 

 

30,186 

 

(5)

 

 

 

113,485 

 

124,517 

(9)

 

 

Amortization of deferred sales commissions

 

4,495 

 

4,593 

 

7,277 

(2)

 

(38)

 

 

 

20,441 

 

35,773 

(43)

 

 

Fund expenses

 

6,929 

 

7,205 

 

7,635 

(4)

 

(9)

 

 

 

27,375 

 

25,295 

 

 

Other expenses

 

34,159 

 

36,422 

 

33,993 

(6)

 

 

 

 

138,434 

 

134,198 

 

 

 

Total expenses

 

203,544 

 

203,755 

 

192,675 

 

 

 

 

816,044 

 

822,374 

(1)

 

Operating income

 

106,345 

 

95,016 

 

104,648 

12 

 

 

 

 

392,992 

 

426,232 

(8)

 

Non-operating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains (losses) and other investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income, net

 

5,517 

 

1,927 

 

(1,998)

186 

 

NM

 

 

 

18,417 

 

19,408 

(5)

 

 

Interest expense

 

(8,580)

 

(8,525)

 

(8,413)

 

 

 

 

(33,930)

 

(33,652)

 

 

Other income (expense) of consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CLO entity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Gains (losses) and other investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          income, net

 

12,659 

 

12,872 

 

(7,342)

(2)

 

NM

 

 

 

44,706 

 

(17,037)

NM

 

 

 

     Interest expense

 

(5,603)

 

(4,399)

 

(4,029)

27 

 

39 

 

 

 

(18,447)

 

(13,575)

36 

 

 

 

Total non-operating income (expense)

 

3,993 

 

1,875 

 

(21,782)

113 

 

NM

 

 

 

10,746 

 

(44,856)

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes and equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   in net income of affiliates

110,338 

 

96,891 

 

82,866 

14 

 

33 

 

 

 

403,738 

 

381,376 

 

Income taxes

 

(37,655)

 

(34,379)

 

(37,665)

10 

 

 

 

 

(142,385)

 

(156,844)

(9)

 

Equity in net income of affiliates, net of tax

 

1,758 

 

175 

 

387 

905 

 

354 

 

 

 

3,415 

 

3,042 

12 

 

Net income

 

74,441 

 

62,687 

 

45,588 

19 

 

63 

 

 

 

264,768 

 

227,574 

16 

 

Net (income) loss attributable to non-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   controlling and other beneficial interests

 

(21,323)

 

(12,481)

 

1,232 

71 

 

NM

 

 

 

(61,303)

 

(12,672)

384 

 

Net income attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Eaton Vance Corp. Shareholders

$

53,118 

$

50,206 

$

46,820 

 

13 

 

 

$

203,465 

$

214,902 

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.46 

$

0.44 

$

0.41 

 

12 

 

 

$

1.76 

$

1.82 

(3)

 

 

Diluted

$

0.45 

$

0.43 

$

0.40 

 

13 

 

 

$

1.72 

$

1.75 

(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

112,504 

 

112,110 

 

112,939 

 

 

 

 

112,359 

 

115,326 

(3)

 

 

Diluted

 

115,524 

 

114,591 

 

115,238 

 

 

 

 

115,126 

 

119,975 

(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

$

0.20 

$

0.19 

$

0.19 

 

 

 

$

0.77 

$

0.73 

 



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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

 

 

 

 

 

 

%
Change

%
Change

 

 

 

 

 

 

 

 

October 31,
2012 

July 31,
2012 

October 31,
2011 

Q4 2012
to
Q3 2012

Q4 2012
to
Q4 2011

 

October 31,
2012 

October 31,
2011 

%
Change

(in thousands, except per share figures)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Eaton Vance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Corp. shareholders

$

53,118 

$

50,206 

$

46,820 

%

13 

%

 

$

203,465 

$

214,902 

(5)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest value adjustments

 

9,870 

 

796 

 

8,906 

NM

 

11 

 

 

 

19,866 

 

30,216 

(34)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income attributable to Eaton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Vance Corp. shareholders

$

62,988 

$

51,002 

$

55,726 

24 

 

13 

 

 

$

223,331 

$

245,118 

(9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per diluted share

$

0.45 

$

0.43 

$

0.40 

 

13 

 

 

$

1.72 

$

1.75 

(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest value adjustments

 

 0.08 

 

 - 

 

 0.07 

NM

 

14 

 

 

 

 0.17 

 

0.25 

(32)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per diluted share

$

0.53 

$

0.43 

$

0.47 

23 

 

13 

 

 

$

1.89 

$

2.00 

(6)

 




11



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 3

Eaton Vance Corp.

Reconciliation of net income attributable

to non-controlling and other beneficial interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

October 31,

July 31,

October 31,

 

October 31,

October 31,

(in thousands)

2012 

2012 

2011 

 

2012 

2011 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated funds

$

(1,186)

$

(839)

$

310 

 

$

(4,353)

$

(5,319)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Majority-owned subsidiaries

 

(4,053)

 

(3,354)

 

(2,576)

 

 

(14,518)

 

(11,670)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest value adjustments

 

(9,870)

 

(796)

 

(8,906)

 

 

(19,866)

 

(30,216)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated CLO entity

 

(6,214)

 

(7,492)

 

12,404 

 

 

(22,566)

 

34,533 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (income) loss attributable to non-controlling

 

 

 

 

 

 

 

 

 

 

 

 

 

interests and other beneficial interests

$

(21,323)

$

(12,481)

$

1,232 

 

$

(61,303)

$

(12,672)




12



 

 

 

 

 

 

Attachment 4

 

Eaton Vance Corp.

 

Balance Sheet

 

(in thousands, except per share figures)

 

 

 

 

 

 

 

October 31,

 

 

 

October 31,

 

 

 

2012 

 

 

 

2011 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

462,076 

 

 

$

510,913 

 

Investment advisory fees and other receivables

 

133,589 

 

 

 

130,525 

 

Investments

 

486,933 

 

 

 

287,735 

 

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

 

 

 

 

 

 

 

          Cash and cash equivalents

 

36,758 

 

 

 

 16,521 

 

          Bank loans and other investments

 

430,583 

 

 

 

 462,586 

 

          Other assets

 

1,107 

 

 

 

 2,715 

 

Deferred sales commissions

 

19,336 

 

 

 

27,884 

 

Deferred income taxes

 

51,234 

 

 

 

41,343 

 

Equipment and leasehold improvements, net

 

54,889 

 

 

 

67,227 

 

Intangible assets, net

 

59,228 

 

 

 

67,224 

 

Goodwill

 

154,636 

 

 

 

142,302 

 

Other assets

 

89,122 

 

 

 

74,325 

 

   Total assets

$

1,979,491 

 

 

$

1,831,300 

 

 

 

 

 

 

 

 

 

Liabilities, Temporary Equity and Permanent Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued compensation

$

145,338 

 

 

$

137,431 

 

Accounts payable and accrued expenses

 

59,397 

 

 

 

51,333 

 

Dividend payable

 

23,250 

 

 

 

21,959 

 

Debt

 

500,000 

 

 

 

500,000 

 

Liabilities of consolidated CLO entity:

 

 

 

 

 

 

 

          Senior and subordinated note obligations

 

446,605 

 

 

 

 477,699 

 

          Other liabilities

 

766 

 

 

 

 5,193 

 

Other liabilities

 

91,785 

 

 

 

75,557 

 

   Total liabilities

 

1,267,141 

 

 

 

1,269,172 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Temporary Equity:

 

 

 

 

 

 

 

Redeemable non-controlling interests

 

98,765 

 

 

 

100,824 

 

          Total temporary equity

 

98,765 

 

 

 

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, 115,878,384 and 115,223,827 shares, respectively

 

453 

 

 

 

450 

 

Additional paid-in capital

 

26,730 

 

 

 

 - 

 

Notes receivable from stock option exercises

 

(4,155)

 

 

 

(4,441)

 

Accumulated other comprehensive income

 

3,923 

 

 

 

1,340 

 

Appropriated retained earnings (deficit)

 

18,699 

 

 

 

 (3,867)

 

Retained earnings

 

566,420 

 

 

 

466,931 

 

   Total Eaton Vance Corp. shareholders' equity

 

612,072 

 

 

 

460,415 

 

Non-redeemable non-controlling interests

 

1,513 

 

 

 

889 

 

   Total permanent equity

 

613,585 

 

 

 

461,304 

 

Total liabilities, temporary equity and permanent equity

$

1,979,491 

 

 

$

1,831,300 

 

 

 

 

 

 

 

 

 




13



 

 

 

 

 

 

 

 

 

 

 

 

Attachment 5

Eaton Vance Corp.

Net Flows by Investment Mandate(1)

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

October 31,

 

July 31,

 

October 31,

 

October 31,

 

October 31,

 

 

2012 

 

2012 

 

2011 

 

2012 

 

2011 

Equity assets - beginning of period(2)

$

 108,595 

 

$

 114,903 

 

$

 117,055 

 

$

 108,859 

 

$

 107,500 

 

Sales and other inflows

 

 5,944 

 

 

 4,604 

 

 

 6,144 

 

 

 23,679 

 

 

 29,973 

 

Redemptions/outflows

 

 (7,223)

 

 

 (7,656)

 

 

 (7,316)

 

 

 (30,456)

 

 

 (29,168)

 

Net flows

 

 (1,279)

 

 

 (3,052)

 

 

 (1,172)

 

 

 (6,777)

 

 

 805 

 

Assets acquired

 

 - 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 352 

 

Exchanges

 

 48 

 

 

 (19)

 

 

 (34)

 

 

 24 

 

 

 35 

 

Market value change

 

 3,732 

 

 

 (3,237)

 

 

 (6,990)

 

 

 8,990 

 

 

 167 

Equity assets - end of period

$

 111,096 

 

$

 108,595 

 

$

 108,859 

 

$

 111,096 

 

$

 108,859 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed income assets - beginning of period

 48,198 

 

 

 46,891 

 

 

 43,813 

 

 

 43,708 

 

 

 46,119 

 

Sales and other inflows

 

 3,140 

 

 

 2,886 

 

 

 2,426 

 

 

 12,278 

 

 

 10,336 

 

Redemptions/outflows

 

 (2,752)

 

 

 (1,973)

 

 

 (2,555)

 

 

 (9,455)

 

 

 (11,827)

 

Net flows

 

 388 

 

 

 913 

 

 

 (129)

 

 

 2,823 

 

 

 (1,491)

 

Exchanges

 

 13 

 

 

 30 

 

 

 98 

 

 

 84 

 

 

 (180)

 

Market value change

 

 404 

 

 

 364 

 

 

 (74)

 

 

 2,388 

 

 

 (740)

Fixed income assets - end of period

$

 49,003 

 

$

 48,198 

 

$

 43,708 

 

$

 49,003 

 

$

 43,708 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Floating-rate income assets -  beginning

 

 

 

 

 

 

 

 

 

 

 

 

 

 

of period

 

 25,245 

 

 

 24,847 

 

 

 25,586 

 

 

 24,322 

 

 

 20,003 

 

Sales and other inflows

 

 2,188 

 

 

 2,091 

 

 

 1,565 

 

 

 7,401 

 

 

 9,331 

 

Redemptions/outflows

 

 (1,387)

 

 

 (1,535)

 

 

 (2,218)

 

 

 (5,662)

 

 

 (5,220)

 

Net flows

 

 801 

 

 

 556 

 

 

 (653)

 

 

 1,739 

 

 

 4,111 

 

Exchanges

 

 21 

 

 

 5 

 

 

 (129)

 

 

 45 

 

 

 53 

 

Market value change

 

 321 

 

 

 (163)

 

 

 (482)

 

 

 282 

 

 

 155 

Floating-rate income assets - end of period

$

 26,388 

 

$

 25,245 

 

$

 24,322 

 

$

 26,388 

 

$

 24,322 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alternative assets -  beginning of period

 10,600 

 

 

 10,506 

 

 

 11,761 

 

 

 10,646 

 

 

 10,482 

 

Sales and other inflows

 

 3,166 

 

 

 1,342 

 

 

 930 

 

 

 6,725 

 

 

 5,250 

 

Redemptions/outflows

 

 (908)

 

 

 (1,201)

 

 

 (1,708)

 

 

 (4,336)

 

 

 (4,784)

 

Net flows

 

 2,258 

 

 

 141 

 

 

 (778)

 

 

 2,389 

 

 

 466 

 

Exchanges

 

 (19)

 

 

 (13)

 

 

 (5)

 

 

 (104)

 

 

 (79)

 

Market value change

 

 13 

 

 

 (34)

 

 

 (332)

 

 

 (79)

 

 

 (223)

Alternative assets - end of period

$

 12,852 

 

$

 10,600 

 

$

 10,646 

 

$

 12,852 

 

$

 10,646 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term assets - beginning of period

 192,638 

 

 

 197,147 

 

 

 198,215 

 

 

 187,535 

 

 

 184,104 

 

Sales and other inflows

 

 14,438 

 

 

 10,923 

 

 

 11,065 

 

 

 50,083 

 

 

 54,890 

 

Redemptions/outflows

 

 (12,270)

 

 

 (12,365)

 

 

 (13,797)

 

 

 (49,909)

 

 

 (50,999)

 

Net flows

 

 2,168 

 

 

 (1,442)

 

 

 (2,732)

 

 

 174 

 

 

 3,891 

 

Assets acquired

 

 - 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 352 

 

Exchanges

 

 63 

 

 

 3 

 

 

 (70)

 

 

 49 

 

 

 (171)

 

Market value change

 

 4,470 

 

 

 (3,070)

 

 

 (7,878)

 

 

 11,581 

 

 

 (641)

Total long-term assets - end of period

$

 199,339 

 

$

 192,638 

 

$

 187,535 

 

$

 199,339 

 

$

 187,535 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash management fund assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      

end of period

 

 169 

 

 

 220 

 

 

 669 

 

 

 169 

 

 

 669 

Total assets under management -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

end of period

$

 199,508 

 

$

 192,858 

 

$

 188,204 

 

$

 199,508 

 

$

 188,204 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  Consolidated Eaton Vance Corp.  See Attachment 8 for managed assets and flows of 49%-owned Hexavest Inc.

(2)  Includes balanced accounts holding income securities.

 

 

 

 

 

 

 

 

 

 

 



14



 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 6

Eaton Vance Corp.

Net Flows by Investment Vehicle (1)

(in millions)

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

 

October 31,

 

July 31,

 

October 31,

 

October 31,

 

October 31,

 

 

 

2012 

 

2012 

 

2011 

 

2012 

 

2011 

Long-term fund assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

beginning of period

 

$

 110,257 

 

$

 114,029 

 

$

 119,976 

 

$

 111,705 

 

$

 113,978 

 

Sales and other inflows

 

 

 7,261 

 

 

 6,266 

 

 

 6,195 

 

 

 27,080 

 

 

 33,035 

 

Redemptions/outflows

 

 

 (6,410)

 

 

 (8,554)

 

 

 (9,294)

 

 

 (30,895)

 

 

 (32,486)

 

Net flows

 

 

 851 

 

 

 (2,288)

 

 

 (3,099)

 

 

 (3,815)

 

 

 549 

 

Exchanges

 

 

 - 

 

 

 3 

 

 

 (70)

 

 

 (13)

 

 

 (175)

 

Market value change

 

 

 2,141 

 

 

 (1,487)

 

 

 (5,102)

 

 

 5,372 

 

 

 (2,647)

Long-term fund assets - end of period

$

 113,249 

 

$

 110,257 

 

$

 111,705 

 

$

 113,249 

 

$

 111,705 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Institutional separate account assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

beginning of period

 

 

 40,285 

 

 

 40,883 

 

 

 38,992 

 

 

 38,003 

 

 

 34,593 

 

Sales and other inflows

 

 

 5,149 

 

 

 2,262 

 

 

 2,954 

 

 

 12,496 

 

 

 12,350 

 

Redemptions/outflows

 

 

 (3,535)

 

 

 (1,970)

 

 

 (2,453)

 

 

 (10,514)

 

 

 (9,832)

 

Net flows

 

 

 1,614 

 

 

 292 

 

 

 501 

 

 

 1,982 

 

 

 2,518 

 

Exchanges

 

 

 27 

 

 

 - 

 

 

 

 

 38 

 

 

 (18)

 

Market value change

 

 

 1,412 

 

 

 (890)

 

 

 (1,490)

 

 

 3,315 

 

 

 910 

Institutional separate account assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

end of period

$

 43,338 

 

$

 40,285 

 

$

 38,003 

 

$

 43,338 

 

$

 38,003 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High-net-worth separate account assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

beginning of period

 

 

 14,682 

 

 

 14,704 

 

 

 13,588 

 

 

 13,256 

 

 

 11,883 

 

Sales and other inflows

 

 

 498 

 

 

 752 

 

 

 598 

 

 

 3,609 

 

 

 2,848 

 

Redemptions/outflows

 

 

 (657)

 

 

 (540)

 

 

 (494)

 

 

 (2,283)

 

 

 (2,419)

 

Net flows

 

 

 (159)

 

 

 212 

 

 

 104 

 

 

 1,326 

 

 

 429 

 

Assets acquired

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 352 

 

Exchanges

 

 

 9 

 

 

 - 

 

 

 (11)

 

 

 (990)

 

 

 (8)

 

Market value change

 

 

 504 

 

 

 (234)

 

 

 (425)

 

 

 1,444 

 

 

 600 

High-net-worth separate account assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

end of period

$

 15,036 

 

$

 14,682 

 

$

 13,256 

 

$

 15,036 

 

$

 13,256 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail managed account assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

beginning of period

 

 

 27,414 

 

 

 27,531 

 

 

 25,659 

 

 

 24,571 

 

 

 23,650 

 

Sales and other inflows

 

 

 1,530 

 

 

 1,643 

 

 

 1,318 

 

 

 6,898 

 

 

 6,657 

 

Redemptions/outflows

 

 

 (1,668)

 

 

 (1,301)

 

 

 (1,556)

 

 

 (6,217)

 

 

 (6,262)

 

Net flows

 

 

 (138)

 

 

 342 

 

 

 (238)

 

 

 681 

 

 

 395 

 

Exchanges

 

 

 27 

 

 

 - 

 

 

 11 

 

 

 1,014 

 

 

 30 

 

Market value change

 

 

 413 

 

 

 (459)

 

 

 (861)

 

 

 1,450 

 

 

 496 

Retail managed account assets - end of period

$

 27,716 

 

$

 27,414 

 

$

 24,571 

 

$

 27,716 

 

$

 24,571 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total long-term assets -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

beginning of period

 

 

 192,638 

 

 

 197,147 

 

 

 198,215 

 

 

 187,535 

 

 

 184,104 

 

Sales and other inflows

 

 

 14,438 

 

 

 10,923 

 

 

 11,065 

 

 

 50,083 

 

 

 54,890 

 

Redemptions/outflows

 

 

 (12,270)

 

 

 (12,365)

 

 

 (13,797)

 

 

 (49,909)

 

 

 (50,999)

 

Net flows

 

 

 2,168 

 

 

 (1,442)

 

 

 (2,732)

 

 

 174 

 

 

 3,891 

 

Assets acquired

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 352 

 

Exchanges

 

 

 63 

 

 

 3 

 

 

 (70)

 

 

 49 

 

 

 (171)

 

Market value change

 

 

 4,470 

 

 

 (3,070)

 

 

 (7,878)

 

 

 11,581 

 

 

 (641)

Total long-term assets - end of period

$

 199,339 

 

$

 192,638 

 

$

 187,535 

 

$

 199,339 

 

$

 187,535 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash management fund assets - end of period

 

 169 

 

 

 220 

 

 

 669 

 

 

 169 

 

 

 669 

Total assets under management -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

end of period

 

$

 199,508 

 

$

 192,858 

 

$

 188,204 

 

$

 199,508 

 

$

 188,204 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)   Consolidated Eaton Vance Corp.  See Attachment 8 for managed assets and flows of 49%-owned Hexavest Inc.

 

 

 



15





 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 7

 

Eaton Vance Corp.

 

Assets under Management

 

by Investment Mandate(1)

 

 (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

October 31,

 

July 31,

 

%

 

October 31,