| 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 22, 2011 |
| 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)) |
Page 1 of 14
| 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, 2011, as described in Registrant’s news release dated November 22, 2011, 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 22, 2011. |
Page 2 of 14
| 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 22, 2011 | /s/ Robert J. Whelan | |
| Robert J. Whelan, Chief Financial Officer | ||
Page 3 of 14
| 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 22, 2011. |
Page 4 of 14
Exhibit 99.1
| Contact: Robert Whelan - 617.482.8260 rwhelan@eatonvance.com |
| Eaton Vance Corp. Report for the Three Months and Fiscal Year Ended October 31, 2011 |
Boston, MA, November 22, 2011 – Adjusting for items management deems non-recurring or non-operating, Eaton Vance Corp. (NYSE: EV) earned a record $2.00 of adjusted earnings per diluted share(1) in the fiscal year ended October 31, 2011, an increase of 28 percent over the $1.56 of adjusted earnings per diluted share in the fiscal year ended October 31, 2010. Adjusted earnings per diluted share were $0.47 for the fourth quarters of fiscal 2011 and fiscal 2010 and $0.55 in the third quarter of fiscal 2011.
As determined under U.S. generally accepted accounting principles (“GAAP”), the Company earned $1.75 per diluted share in the fiscal year ended October 31, 2011 compared to $1.40 per diluted share in the fiscal year ended October 31, 2010. GAAP earnings per diluted share were $0.40 in the fourth quarter of fiscal 2011, $0.41 in the fourth quarter of fiscal 2010 and $0.55 in the third quarter of fiscal 2011. Adjusted earnings differed from GAAP earnings due primarily to adjustments in connection with increases in the estimated redemption value of non-controlling interests in our affiliates redeemable at other than fair value, which totaled $0.25, $0.15, $0.07 and $0.06 per diluted share in fiscal 2011, fiscal 2010, the fourth quarter of fiscal 2011 and the fourth quarter of fiscal 2010, respectively.
Net inflows of $3.9 billion in fiscal 2011 compare to net inflows of $16.3 billion in fiscal 2010. The Company’s internal growth rate (net inflows divided by beginning of period long-term assets managed) was 2 percent in fiscal 2011 and 11 percent in fiscal 2010. Net outflows of $2.7 billion from long-term funds and separate accounts in the fourth quarter of fiscal 2011 compare to net inflows of $3.2 billion in the fourth quarter of fiscal 2010 and $1.9 billion in the third quarter of fiscal 2011.
Assets under management on October 31, 2011 were $188.2 billion, an increase of 2 percent from the $185.2 billion of managed assets as of October 31, 2010 and a decrease of 5 percent from the $199.0 billion of managed assets as of July 31, 2011.
“Amid weak market conditions, Eaton Vance closed fiscal 2011 with a difficult fourth quarter,” said Thomas E. Faust Jr., Chairman and Chief Executive Officer. “Net flows for the quarter were negative, and revenues and adjusted earnings were down sequentially. Even as we face near-term challenges, I continue to believe that the Company’s strong financial position and diversity of leading investment franchises position us well for continued growth and success over the course of market cycles.”
Comparison to Fourth Quarter of Fiscal 2010
Long-term fund net outflows of $3.1 billion in the fourth quarter of fiscal 2011 compare to $3.4 billion of long-term fund net inflows in the fourth quarter of fiscal 2010, and reflect $6.2 billion of
| __________________________ |
| (1) Adjusted earnings per diluted share reflects 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 on page 7 for more |
| information on adjusting items. |
| Page 5 of 14 |
fund sales and other inflows and $9.3 billion of fund redemptions and other outflows. The $0.5 billion of institutional separate account net inflows in the fourth quarter of fiscal 2011 compare to $0.7 billion of institutional separate account net inflows in the fourth quarter of fiscal 2010, and reflect gross inflows of $3.0 billion and $2.5 billion of outflows. The $0.1 billion of high-net-worth separate account net inflows in the fourth quarter of fiscal 2011 compare to $0.2 billion of high-net-worth separate account net inflows in the fourth quarter of fiscal 2010 and reflect gross inflows of $0.6 billion and $0.5 billion of outflows. Retail managed account net outflows of $0.2 billion in the fourth quarter of fiscal 2011 compare to $1.1 billion of retail managed account net outflows in the fourth quarter of fiscal 2010. Fourth quarter fiscal 2010 net outflows reflect a $1.5 billion reduction in Parametric Portfolio Associates’ retail managed account (RMA) overlay assets as a result of the integration of Bank of America’s RMA program into the Merrill Lynch RMA program following Bank of America’s 2009 acquisition of Merrill Lynch. Tables 1-4 on pages 9 and 10 summarize the Company’s assets under management and asset flows by investment mandate.
Revenue in the fourth quarter of fiscal 2011 decreased $9.0 million, or 3 percent, to $294.6 million from revenue of $303.6 million in the fourth quarter of fiscal 2010. Investment advisory and administration fees increased 4 percent to $239.8 million, reflecting primarily a 6 percent increase in average assets under management. Distribution and underwriter fees decreased 23 percent due to a decrease in average fund assets on which distribution fees are collected and a reduction in underwriter fees collected on Class A fund sales. Service fee revenue decreased 10 percent due to a decrease in average fund assets subject to service fees. Other revenue, which decreased by $7.7 million, included $2.7 million of net investment losses (net losses plus dividend income earned) related to consolidated funds in the fourth quarter of fiscal 2011 compared to $4.8 million of net investment income in the fourth quarter of fiscal 2010.
Operating expenses decreased $4.8 million, or 2 percent, to $192.7 million in the fourth quarter of fiscal 2011 compared to operating expenses of $197.5 million in the fourth quarter of fiscal 2010. Compensation expense decreased 8 percent due to decreases in bonus accruals, payroll taxes and sales-based incentives offset by increases in employee headcount and higher base salaries, stock-based compensation and employee benefits. Distribution expense was substantially unchanged from the prior fiscal year’s fourth quarter, as increases in Class C distribution expense and revenue sharing payments were offset by decreases in marketing expense and commissions paid on certain sales of Class A shares. Service fee expense was substantially unchanged from the prior fiscal year’s fourth quarter. Amortization of deferred sales commissions decreased 27 percent, reflecting a decrease in Class C amortization. Fund expenses increased 59 percent from the fourth quarter of fiscal 2010 due to increases in subadvisory expenses and fund expenses contractually borne by the Company. Other expenses increased 6 percent, reflecting increases in information technology and facilities, offset by a decrease in professional services.
Operating income in the fourth quarter of fiscal 2011 was $101.9 million, a decrease of 4 percent over operating income of $106.1 million in the fourth quarter of fiscal 2010. The Company’s operating margin declined to 34.6 percent in the fourth quarter of fiscal 2011 from 34.9 percent in the fourth quarter of fiscal 2010.
Interest income decreased 2 percent in the fourth quarter of fiscal 2011 compared to the fourth quarter of fiscal 2010 due to a decrease in average effective interest rates. In the fourth quarter of fiscal 2011, the Company recognized $0.2 million of net investment losses, primarily reflecting losses related to the Company’s seed capital investments. The Company recognized $1.1 million of net investment losses in the fourth quarter of fiscal 2010. Also included in other income and expenses for the fourth quarter of fiscal 2011 are net losses of $11.4 million associated with the consolidation of a CLO entity primarily attributable to a decrease in the fair market value of the bank loan investments held by the entity. This loss was substantially offset by an increase in net loss attributable to non-controlling and other beneficial interests, as the consolidated CLO entity loss is largely borne by the CLO entity’s outside investors rather than the Company.
The Company’s effective tax rate, calculated as a percentage of income before income taxes and equity in net income (loss) of affiliates, was 45.5 percent and 38.0 percent in the fourth quarter of fiscal 2011 and fiscal 2010, respectively. The increase in the Company’s effective tax rate was due primarily to losses recognized by the consolidated CLO entity, which is not subject to tax.
Page 6 of 14
In the fourth quarter of fiscal 2011, net income attributable to non-controlling and other beneficial interests decreased $11.1 million from the fourth quarter of fiscal 2010, primarily reflecting $12.4 million of consolidated CLO entity losses borne by other beneficial interest holders and a $0.1 million increase in non-controlling beneficial interest associated with the Company’s majority-owned subsidiaries and consolidated funds. Also included in non-controlling and other beneficial interests in the fourth quarter of fiscal 2011 and the fourth quarter of fiscal 2010 are $8.5 million and $7.3 million, respectively, that relate to non-controlling interest value adjustments in our subsidiary Atlanta Capital Management that are attributable to its profit growth over the respective preceding twelve months ended October 31.
Adjusted net income attributable to Eaton Vance Corp. shareholders(2) was $55.7 million in the fourth quarter of fiscal 2011 compared to $58.1 million in the fourth quarter of fiscal 2010, a decrease of 4 percent. GAAP net income attributable to Eaton Vance Corp. shareholders was $46.8 million in the fourth quarter of fiscal 2011 and $50.3 million in the fourth quarter of fiscal 2010. Adjusted net income attributable to Eaton Vance Corp. shareholders differed from GAAP net income attributable to Eaton Vance Corp. shareholders due primarily to the increases in the estimated redemption value of non-controlling interests in our subsidiary Atlanta Capital Management described in the preceding paragraph.
Comparison to Third Quarter of Fiscal 2011
Long-term fund net outflows of $3.1 billion in the fourth quarter of fiscal 2011 compare to $0.1 billion of long-term fund net inflows in the third quarter of fiscal 2011. The $0.5 billion of institutional separate account net inflows in the fourth quarter of fiscal 2011 compare to institutional separate account net inflows of $1.8 billion in the third quarter of fiscal 2011. The $0.1 billion of net inflows into high-net-worth separate accounts in the fourth quarter of fiscal 2011 compare to substantially flat net flows in the third quarter of fiscal 2011. The $0.2 billion of net outflows from retail managed accounts in the fourth quarter of fiscal 2011 compare to substantially flat net flows in the third quarter of fiscal 2011. Tables 1-4 on pages 9 and 10 summarize the Company’s assets under management and asset flows by investment mandate.
Revenue in the fourth quarter of fiscal 2011 decreased $32.7 million, or 10 percent, to $294.6 million from $327.3 million in the third quarter of fiscal 2011. Investment advisory and administration fees decreased 9 percent to $239.8 million, reflecting primarily a 6 percent decrease in average assets under management. Distribution and underwriter fees decreased 13 percent and service fee revenue decreased 11 percent due to a decrease in average fund assets that pay these fees. Other revenue, which decreased $2.9 million from the prior quarter, included $2.7 million of net investment losses related to consolidated funds recognized in the fourth quarter of fiscal 2011 compared to $0.2 million of net investment income in the third quarter of fiscal 2011.
Operating expenses decreased $18.9 million, or 9 percent, to $192.7 million in the fourth quarter of fiscal 2011 from $211.6 million in the third quarter of fiscal 2011. Compensation decreased 14 percent from the third quarter of fiscal 2011, reflecting decreases in bonus accruals, sales-based incentives, stock-based compensation, employee benefits and payroll taxes. Distribution expense decreased 3 percent from the prior fiscal quarter due to decreases in Class C distribution fees and commissions paid on certain sales of Class A shares. Service fee expense decreased 6 percent due to a decrease in assets subject to service fees. Amortization expense decreased 14 percent from the prior fiscal quarter due to a decrease in Class C amortization. Fund expenses decreased 6 percent from the third quarter of fiscal 2011 due to a decrease in subadvisory fees. Other expenses decreased 1 percent from the third quarter primarily due to decreases in professional services.
| _______________________________ |
| (2) Adjusted net income attributable to Eaton Vance Corp. shareholders reflects 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, closed-end structuring fees and other items management deems non- |
| recurring or non-operating. See reconciliation provided in Attachment 2 on page 7 for more information on |
| adjusting items. |
Page 7 of 14
Operating income in the fourth quarter of fiscal 2011 was $101.9 million, a decrease of 12 percent from operating income of $115.7 million in the third quarter of fiscal 2011. The Company’s operating margin declined to 34.6 percent in the fourth quarter of fiscal 2011 from 35.3 percent in the third quarter of fiscal 2011.
Interest income decreased 11 percent in the fourth quarter of fiscal 2011 compared to the third quarter of fiscal 2011 due to lower effective interest rates earned on cash balances. The $0.2 million of net investment losses recognized in the fourth quarter of fiscal 2011 compare to $6.3 million of net investment gains in the third quarter of fiscal 2011, which included a $1.9 million gain recognized upon the sale of the Company’s interest in nonconsolidated CLO entity. Also included in other income and expenses for the fourth quarter of fiscal 2011 and third quarter of fiscal 2011 were net losses of $11.4 million and $2.5 million, respectively, primarily attributable to a decrease in the fair market value of the bank loans held by a consolidated CLO entity. For both quarters, this loss was substantially offset by an increase in net loss attributable to non-controlling and other beneficial interests.
The Company’s effective tax rate, calculated as a percentage of income before income taxes and equity in net income (loss) of affiliates, was 45.5 percent and 38.7 percent in the fourth quarter of fiscal 2011 and third quarter of fiscal 2011, respectively. The increase in the Company’s effective tax rate was due primarily to higher reported CLO entity losses, which are not subject to current tax, in the fourth quarter of fiscal 2011 compared to the prior quarter.
Net income attributable to non-controlling and other beneficial interests decreased $2.1 million in the fourth quarter of fiscal 2011 from the prior quarter due primarily to an $8.9 million increase in non-controlling beneficial interest associated with the consolidated CLO entity and a $1.9 million decrease in non-controlling beneficial interest associated with the Company’s majority-owned subsidiaries and consolidated funds. Also included in the fourth quarter of fiscal 2011 net income attributable to non-controlling and other beneficial interests are non-controlling interest value adjustments of $8.5 million relating to our subsidiary Atlanta Capital Management that are attributable to its profit growth over the twelve months ended October 31, 2011.
Adjusted net income attributable to Eaton Vance Corp. shareholders was $55.7 million in the fourth quarter of fiscal 2011 compared to $68.3 million in the third quarter, a decrease of 18 percent. GAAP net income attributable to Eaton Vance Corp. shareholders was $46.8 million in the fourth quarter of fiscal 2011 and $68.1 million in the third quarter of fiscal 2011. Fourth quarter fiscal 2011 adjusted net income attributable to Eaton Vance Corp. shareholders differed from GAAP net income attributable to Eaton Vance Corp. shareholders due to the increases in the estimated redemption value of non-controlling interests in our subsidiary Atlanta Capital Management described in the preceding paragraph.
Cash and cash equivalents totaled $510.9 million on October 31, 2011 compared to $307.9 million on October 31, 2010. There were no outstanding borrowings against the Company’s $200.0 million credit facility on October 31, 2011. During fiscal 2011, the Company used $198.6 million to repurchase and retire approximately 7.3 million shares of its Non-Voting Common Stock under its repurchase authorizations and paid $85.2 million of dividends to shareholders. Substantially all of the current 8.0 million share repurchase authorization remains unused.
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 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.
Page 8 of 14
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, 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.
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Attachment 1
| Eaton Vance Corp. Summary of Results of Operations (in thousands, except per share figures) |
| Three Months Ended | Twelve Months Ended | |||||||||||
|
|
| |||||||||||
| % | % | |||||||||||
| Change | Change | |||||||||||
| Q4 2011 | Q4 2011 | |||||||||||
| October 31, | July 31, | October 31, | to | to | October 31, | October 31, | % | |||||
| 2011 | 2011 | 2010 | Q3 2011 | Q4 2010 | 2011 | 2010 | Change | |||||
|
| ||||||||||||
| Revenue: | ||||||||||||
| Investment advisory and | ||||||||||||
| administration fees | $ 239,751 | $ 262,067 | $ 230,403 | (9) % | 4% | $ 996,222 | $ 867,683 | 15 % | ||||
| Distribution and underwriter fees | 23,079 | 26,432 | 29,954 | (13) | (23) | 102,979 | 103,995 | (1) | ||||
| Service fees | 33,281 | 37,426 | 37,055 | (11) | (10) | 144,530 | 139,741 | 3 | ||||
| Other revenue | (1,508) | 1,378 | 6,182 | NM | NM | 16,300 | 10,242 | 59 | ||||
|
|
||||||||||||
| Total revenue | 294,603 | 327,303 | 303,594 | (10) | (3) | 1,260,031 | 1,121,661 | 12 | ||||
|
|
||||||||||||
| Expenses: | ||||||||||||
| Compensation of officers and employees | 81,007 | 94,713 | 87,855 | (14) | (8) | 369,927 | 348,897 | 6 | ||||
| Distribution expense | 32,577 | 33,733 | 32,584 | (3) | - | 132,664 | 126,064 | 5 | ||||
| Service fee expense | 30,186 | 32,222 | 30,265 | (6) | - | 124,517 | 116,900 | 7 | ||||
| Amortization of deferred sales commissions | 7,277 | 8,503 | 10,011 | (14) | (27) | 35,773 | 35,533 | 1 | ||||
| Fund expenses | 7,635 | 8,099 | 4,792 | (6) | 59 | 25,295 | 20,455 | 24 | ||||
| Other expenses | 33,993 | 34,359 | 32,003 | (1) | 6 | 134,198 | 120,530 | 11 | ||||
|
|
||||||||||||
| Total expenses | 192,675 | 211,629 | 197,510 | (9) | (2) | 822,374 | 768,379 | 7 | ||||
|
|
||||||||||||
| Operating Income | 101,928 | 115,674 | 106,084 | (12) | (4) | 437,657 | 353,282 | 24 | ||||
| Other Income/(Expense): | ||||||||||||
| Interest income | 643 | 719 | 659 | (11) | (2) | 2,907 | 2,864 | 2 | ||||
| Interest expense | (8,413) | (8,414) | (8,426) | - | - | (33,652) | (33,666) | - | ||||
| Net gains and (losses) on investments and | ||||||||||||
| derivatives | (172) | 6,322 | (1,105) | NM | (84) | 5,102 | 4,300 | 19 | ||||
| Foreign currency gains (losses) | 251 | 306 | (131) | (18) | NM | (26) | 181 | NM | ||||
| Other income/(expense) of consolidated | ||||||||||||
| collateralized loan obligation entity: | ||||||||||||
| Interest income | 5,272 | 5,268 | - | - | NM | 21,116 | - | NM | ||||
| Interest expense | (4,029) | (3,999) | - | 1 | NM | (13,575) | - | NM | ||||
| Net losses on investments and note | ||||||||||||
| obligations | (12,614) | (3,814) | - | 231 | NM | (38,153) | - | NM | ||||
|
|
||||||||||||
| Income Before Income Taxes and Equity | ||||||||||||
| in Net Income (Loss) of Affiliates | 82,866 | 112,062 | 97,081 | (26) | (15) | 381,376 | 326,961 | 17 | ||||
| Income Taxes | (37,665) | (43,320) | (36,849) | (13) | 2 | (156,844) | (126,263) | 24 | ||||
| Equity in Net Income (Loss) of Affiliates, | ||||||||||||
| Net of Tax | 387 | 194 | (16) | 99 | NM | 3,042 | 527 | 477 | ||||
|
|
||||||||||||
| Net Income | 45,588 | 68,936 | 60,216 | (34) | (24) | 227,574 | 201,225 | 13 | ||||
| Net (Income) Loss Attributable to | ||||||||||||
| Non-Controlling and Other Beneficial Interests | 1,232 | (868) | (9,910) | NM | NM | (12,672) | (26,927) | (53) | ||||
|
|
||||||||||||
| Net Income Attributable to | ||||||||||||
| Eaton Vance Corp. Shareholders | $ 46,820 | $ 68,068 | $ 50,306 | (31) | (7) | $ 214,902 | $ 174,298 | 23 | ||||
|
|
||||||||||||
| Earnings Per Share Attributable to | ||||||||||||
| Eaton Vance Corp. Shareholders: | ||||||||||||
| Basic | $ 0.41 | $ 0.58 | $ 0.43 | (29) | (5) | $ 1.82 | $ 1.47 | 24 | ||||
|
|
||||||||||||
| Diluted | $ 0.40 | $ 0.55 | $ 0.41 | (27) | (2) | $ 1.75 | $ 1.40 | 25 | ||||
|
|
||||||||||||
| Weighted Average Shares Outstanding: | ||||||||||||
| Basic | 112,939 | 115,574 | 116,217 | (2) | (3) | 115,326 | 116,444 | (1) | ||||
|
|
||||||||||||
| Diluted | 115,238 | 120,543 | 121,601 | (4) | (5) | 119,975 | 122,632 | (2) | ||||
|
|
||||||||||||
| Dividends Declared Per Share | $ 0.19 | $ 0.18 | $ 0.18 | 6 | 6 | $ 0.73 | $ 0.66 | 11 | ||||
|
|
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| 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 | Twelve Months Ended | ||||
|
| |||||
| October 31, | July 31, | October 31, | October 31, | October 31, | |
| (in thousands, except per share figures) | 2011 | 2011 | 2010 | 2011 | 2010 |
|
| |||||
| Net income attributable to Eaton Vance | |||||
| Corp. shareholders | $ 46,820 | $ 68,068 | $ 50,306 | $ 214,902 | $ 174,298 |
| Non-controlling interest value adjustments | 8,906 | 238 | 7,753 | 30,216 | 18,385 |
| Closed-end fund structuring fees | - | - | - | - | 1,552 |
|
| |||||
| Adjusted net income attributable to Eaton | |||||
| Vance Corp. shareholders | $ 55,726 | $ 68,306 | $ 58,059 | $ 245,118 | $ 194,235 |
|
| |||||
| Earnings per diluted share | $ 0.40 | $ 0.55 | $ 0.41 | $ 1.75 | $ 1.40 |
| Non-controlling interest value adjustments | 0.07 | - | 0.06 | 0.25 | 0.15 |
| Closed-end fund structuring fees | - | - | - | - | 0.01 |
|
| |||||
| Adjusted earnings per diluted share | $ 0.47 | $ 0.55 | $ 0.47 | $ 2.00 | $ 1.56 |
|
| |||||
Page 11 of 14
Attachment 3
| Eaton Vance Corp. Balance Sheet (in thousands, except per share figures) |
| October 31, | October 31, | |
| 2011 | 2010 | |
| ASSETS |
| |
| Cash and cash equivalents | $ 510,913 | $ 307,886 |
| Investment advisory fees and other receivables | 130,525 | 129,380 |
| Investments | 287,735 | 334,409 |
| Assets of consolidated collateralized loan obligation entity: | ||
| Cash and cash equivalents | 16,521 | - |
| Bank loans and other investments | 462,586 | - |
| Other assets | 2,715 | - |
| Deferred sales commissions | 27,884 | 48,104 |
| Deferred income taxes | 41,343 | 97,274 |
| Equipment and leasehold improvements, net | 67,227 | 71,219 |
| Other intangible assets, net | 67,224 | 73,018 |
| Goodwill | 142,302 | 135,786 |
| Other assets | 74,325 | 61,464 |
|
| ||
| Total assets | $ 1,831,300 | $ 1,258,540 |
|
| ||
| LIABILITIES, TEMPORARY EQUITY AND PERMANENT EQUITY | ||
| Liabilities: | ||
| Accrued compensation | $ 137,431 | $ 119,957 |
| Accounts payable and accrued expenses | 51,333 | 60,843 |
| Dividend payable | 21,959 | 21,319 |
| Contingent purchase price liability | - | 5,079 |
| Debt | 500,000 | 500,000 |
| Liabilities of consolidated collateralized loan obligation entity: | ||
| Senior and subordinated note obligations | 477,699 | - |
| Other liabilities | 5,193 | - |
| Other liabilities | 75,557 | 73,468 |
|
| ||
| Total liabilities | 1,269,172 | 780,666 |
| Commitments and contingencies |
| |
| Temporary Equity: | ||
| Redeemable non-controlling interests | 100,824 | 67,019 |
|
| ||
| Total temporary equity | 100,824 | 67,019 |
|
| ||
| Permanent Equity: | ||
| Voting common stock, par value $0.00390625 per share: | ||
| Authorized, 1,280,000 shares | ||
| Issued, 399,240 and 399,240 shares, respectively | 2 | 2 |
| Non-voting common stock, par value $0.00390625 per share: | ||
| Authorized, 190,720,000 shares | ||
| Issued, 115,223,827 and 117,927,054 shares, respectively | 450 | 461 |
| Additional paid-in capital | 20,391 | 50,225 |
| Notes receivable from stock option exercises | (4,441) | (3,158) |
| Accumulated other comprehensive income (loss) | 1,340 | (435) |
| Appropriated retained earnings | (3,867) | - |
| Retained earnings | 446,540 | 363,190 |
|
| ||
| Total Eaton Vance Corp. shareholders' equity | 460,415 | 410,285 |
| Non-redeemable non-controlling interests | 889 | 570 |
|
| ||
| Total permanent equity | 461,304 | 410,855 |
|
| ||
| Total liabilities, temporary equity and permanent equity | $ 1,831,300 | $ 1,258,540 |
|
| ||
Page 12 of 14
Attachment 4
| Eaton Vance Corp. Table 1 Asset Flows (in millions) Twelve Months Ended October 31, 2011 (unaudited) |
| Assets as of October 31, 2010 - beginning of period | $ 185,243 |
| Long-term fund sales and inflows | 33,035 |
| Long-term fund redemptions and outflows | (32,486) |
| Long-term fund net exchanges | (175) |
| Institutional account inflows | 12,350 |
| Institutional account outflows | (9,832) |
| High-net-worth account inflows | 2,848 |
| High-net-worth account outflows | (2,419) |
| High-net-worth assets acquired | 352 |
| Retail managed account inflows | 6,657 |
| Retail managed account outflows | (6,262) |
| Separate account reclassification | 4 |
| Market value change | (641) |
| Change in cash management funds | (470) |
|
| |
| Net change | 2,961 |
|
| |
| Assets as of October 31, 2011 - end of period | $ 188,204 |
|
|
| Eaton Vance Corp. Table 2 Assets Under Management By Investment Mandate (1) (in millions) (unaudited) |
| October 31, | July 31, | % | October 31, | % | ||
| 2011 | 2011 | Change | 2010 | Change | ||
|
| ||||||
| Equity | $ 108,859 | $ 117,055 | -7% | $ 107,500 | 1% | |
| Fixed income | 43,741 | 43,842 | 0% | 46,127 | -5% | |
| Floating-rate income | 24,322 | 25,586 | -5% | 20,003 | 22% | |
| Alternative | 10,612 | 11,732 | -10% | 10,474 | 1% | |
| Cash management | 670 | 815 | -18% | 1,139 | -41% | |
|
| ||||||
| Total | $ 188,204 | $ 199,030 | -5% | $ 185,243 | 2% | |
|
| ||||||
| (1) Includes funds and separate accounts | ||||||
| Eaton Vance Corp. Table 3 Long-Term Fund and Separate Account Net Flows (in millions) (unaudited) |
| Three Months Ended | Twelve Months Ended | ||||
|
| |||||
| October 31, | July 31, | October 31, | October 31, | October 31, | |
| 2011 | 2011 | 2010 | 2011 | 2010 | |
| Long-term funds: |
| ||||
| Open-end funds | $ (3,494) | $ 91 | $ 3,207 | $ 1,425 | $ 12,804 |
| Closed-end funds | 108 | 121 | 389 | 117 | 691 |
| Private funds | 286 | (144) | (228) | (993) | (2,053) |
| Institutional accounts | 501 | 1,814 | 726 | 2,518 | 4,059 |
| High-net-worth accounts | 104 | (23) | 156 | 429 | 674 |
| Retail managed accounts | (238) | (4) | (1,089) | 395 | 171 |
|
| |||||
| Total net flows | $ (2,733) | $ 1,855 | $ 3,161 | $ 3,891 | $ 16,346 |
|
| |||||
Page 13 of 14
Attachment 5
| Eaton Vance Corp. Table 4 Asset Flows by Investment Mandate (in millions) (unaudited) |
| Three Months Ended | Twelve Months Ended | ||||
|
| |||||
| October 31, | July 31, | October 31, | October 31, | October 31, | |
| 2011 | 2011 | 2010 | 2011 | 2010 | |
|
| |||||
| Equity fund assets - beginning of period | $ 59,644 | $ 64,325 | $ 55,808 | $ 58,434 | $ 53,829 |
| Sales/inflows | 2,300 | 2,653 | 3,615 | 12,935 | 12,993 |
| Redemptions/outflows | (3,911) | (3,992) | (4,327) | (16,065) | (13,599) |
| Exchanges | (34) | (25) | (22) | 32 | 377 |
| Market value change | (4,139) | (3,317) | 3,360 | (1,476) | 4,834 |
|
| |||||
| Net change | (5,784) | (4,681) | 2,626 | (4,574) | 4,605 |
|
| |||||
| Equity assets - end of period | $ 53,860 | $ 59,644 | $ 58,434 | $ 53,860 | $ 58,434 |
|
| |||||
| Fixed income fund assets - beginning of period | 27,580 | 26,976 | 28,080 | 29,421 | 26,076 |
| Sales/inflows | 1,608 | 1,561 | 2,210 | 6,568 | 7,416 |
| Redemptions/outflows | (1,598) | (1,281) | (1,339) | (7,156) | (5,422) |
| Exchanges | 101 | 7 | 6 | (177) | 178 |
| Market value change | (186) | 317 | 464 | (1,151) | 1,173 |
|
| |||||
| Net change | (75) | 604 | 1,341 | (1,916) | 3,345 |
|
| |||||
| Fixed income assets - end of period | $ 27,505 | $ 27,580 | $ 29,421 | $ 27,505 | $ 29,421 |
|
| |||||
| Floating-rate income fund assets - beginning of | |||||
| period | 21,494 | 20,223 | 14,687 | 16,128 | 14,361 |
| Sales/inflows | 1,359 | 2,025 | 1,536 | 8,317 | 4,481 |
| Redemptions/outflows | (2,098) | (911) | (477) | (4,504) | (2,421) |
| Exchanges | (129) | 2 | 3 | 52 | (733) |
| Market value change | (470) | 155 | 379 | 163 | 440 |
|
| |||||
| Net change | (1,338) | 1,271 | 1,441 | 4,028 | 1,767 |
|
| |||||
| Floating-rate income assets - end of period | $ 20,156 | $ 21,494 | $ 16,128 | $ 20,156 | $ 16,128 |
|
| |||||
| Alternative fund assets - beginning of period | 11,258 | 11,362 | 7,701 | 9,995 | 1,938 |
| Sales/inflows | 928 | 1,054 | 2,813 | 5,215 | 9,233 |
| Redemptions/outflows | (1,687) | (1,041) | (662) | (4,761) | (1,239) |
| Exchanges | (8) | (21) | 14 | (82) | 104 |
| Market value change | (307) | (96) | 129 | (183) | (41) |
|
| |||||
| Net change | (1,074) | (104) | 2,294 | 189 | 8,057 |
|
| |||||
| Alternative assets - end of period | $ 10,184 | $ 11,258 | $ 9,995 | $ 10,184 | $ 9,995 |
|
| |||||
| Long-term fund assets - beginning of period | 119,976 | 122,886 | 106,276 | 113,978 | 96,204 |
| Sales/inflows | 6,195 | 7,293 | 10,174 | 33,035 | 34,123 |
| Redemptions/outflows | (9,294) | (7,225) | (6,805) | (32,486) | (22,681) |
| Exchanges | (70) | (37) | 1 | (175) | (74) |
| Market value change | (5,102) | (2,941) | 4,332 | (2,647) | 6,406 |
|
| |||||
| Net change | (8,271) | (2,910) | 7,702 | (2,273) | 17,774 |
|
| |||||
| Total long-term fund assets - end of period | $ 111,705 | $ 119,976 | $ 113,978 | $ 111,705 | $ 113,978 |
|
| |||||
| Separate accounts - beginning of period | 78,239 | 79,004 | 65,876 | 70,126 | 57,278 |
| Institutional account inflows | 2,954 | 4,336 | 1,765 | 12,350 | 9,285 |
| Institutional account outflows | (2,453) | (2,522) | (1,039) | (9,832) | (5,226) |
| High-net-worth account inflows | 598 | 529 | 510 | 2,848 | 2,715 |
| High-net-worth account outflows | (494) | (552) | (354) | (2,419) | (2,041) |
| High-net-worth assets acquired | - | - | - | 352 | - |
| Retail managed account inflows | 1,318 | 1,505 | 1,599 | 6,657 | 6,683 |
| Retail managed account outflows | (1,556) | (1,509) | (2,688) | (6,262) | (6,512) |
| Exchanges and reclassifications | - | - | - | 4 | - |
| Market value change | (2,776) | (2,552) | 4,457 | 2,006 | 7,944 |
|
| |||||
| Net change | (2,409) | (765) | 4,250 | 5,704 | 12,850 |
|
| |||||
| Separate accounts - end of period | $ 75,830 | $ 78,239 | $ 70,126 | $ 75,830 | $ 70,126 |
|
| |||||
| Cash management fund assets - end of | |||||
| period | 669 | 815 | 1,139 | 669 | 1,139 |
|
| |||||
| Total assets under management - | |||||
| end of period | $ 188,204 | $ 199,030 | $ 185,243 | $ 188,204 | $ 185,243 |
|
| |||||
Page 14 of 14