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): February 20, 2013

                               


   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 ended January 31, 2013, as described in Registrant’s news release dated February 20, 2013, 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 February 20, 2013.





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:

February 20, 2013

/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 February 20, 2013.




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Exhibit 99.1




[evc8k_8k002.gif]

News Release


Contacts:   Laurie G. Hylton 617.672.8527

Daniel C. Cataldo 617.672.8952


Eaton Vance Corp.

Report for the Three Months Ended January 31, 2013

Boston, MA, February 20, 2013 – Eaton Vance Corp. (NYSE: EV) today reported adjusted earnings per diluted share(1) of $0.50 for the first quarter of fiscal 2013, an increase of 6 percent over the $0.47 of adjusted earnings per diluted share in the first quarter of fiscal 2012 and a decrease of 6 percent from the $0.53 of adjusted earnings per diluted share in the fourth quarter of fiscal 2012.


As determined under U.S. generally accepted accounting principles (“GAAP”), the Company earned $0.38 in the first quarter of fiscal 2013, $0.40 in the first quarter of fiscal 2012 and $0.45 in the fourth quarter of fiscal 2012. Adjusted earnings differed from GAAP earnings 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 $0.09, $0.07 and $0.08 per diluted share in the first quarter of fiscal 2013, the first quarter of fiscal 2012 and the fourth quarter of fiscal 2012, respectively. In the first quarter of fiscal 2013, adjusted earnings per diluted share also differed from GAAP earnings per diluted share due to the application of the two-class method of computing earnings per share in connection with the special dividend declared in the first quarter of fiscal 2013, which reduced GAAP earnings per diluted share by $0.03.  


Net inflows of $5.4 billion into long-term funds and separate accounts in the first quarter of fiscal 2013 compare to net outflows of $1.1 billion in the first quarter of fiscal 2012 and net inflows of $2.2 billion in the fourth quarter of fiscal 2012.  As shown in Attachment 5, the sharp improvement in net flow results year-over-year reflects strong net inflows into floating-rate income and implementation service mandates and reduced net outflows from equity strategies.  The Company’s annualized internal growth rate (net inflows into long-term assets divided by beginning of period long-term assets managed) was 11 percent in the first quarter of fiscal 2013.  


"The first quarter of fiscal 2013 was a period of growth and investment for Eaton Vance," said Thomas E. Faust Jr., Chairman and Chief Executive Officer. "Strong net flows, the support of rising markets and increased contributions from our strategic initiatives should position us for improved earnings results over coming quarters."


Consolidated assets under management were $247.8 billion on January 31, 2013, a new all-time high.  This represents an increase of 29 percent from managed assets of $191.7 billion on January 31, 2012 and an increase of 24 percent from the $199.5 billion of managed assets on October 31,


________________________________________

(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, such as special dividends.  See reconciliation provided in Attachment 2 for more information on adjusting items.



5




2012. Consolidated assets under management on January 31, 2013 included $36.3 billion managed by the former Clifton Group Investment Management Company (“Clifton”), which was acquired by the Company’s subsidiary Parametric Portfolio Associates LLC (“Parametric”) on December 31, 2012.


Consolidated assets under management on January 31, 2013 included $119.2 billion in long-term funds, $83.3 billion in institutional separate accounts, $16.2 billion in high-net-worth separate accounts, $28.9 billion in retail managed accounts and $0.2 billion in cash management fund assets.  Average consolidated assets under management were $216.2 billion in the first quarter of fiscal 2013, up 15 percent from $187.4 billion in the first quarter of fiscal 2012 and up 10 percent from $196.6 billion in the fourth quarter of fiscal 2012.  The sequential increase in ending assets under management in the first quarter of fiscal 2013 primarily reflects the acquisition of $34.8 billion of assets from Clifton, long-term net inflows of $5.4 billion and market price appreciation of $8.2 billion.


As shown in Attachment 6, consolidated gross sales and other inflows were $19.4 billion in the first quarter of fiscal 2013, up 69 percent from $11.5 billion in the first quarter of fiscal 2012 and up 35 percent from $14.4 billion in the fourth quarter of fiscal 2012. Gross redemptions and other outflows were $14.1 billion in the first quarter of fiscal 2013, up 11 percent from $12.6 billion in the first quarter of fiscal 2012 and up 15 percent from $12.3 billion in the fourth quarter of fiscal 2012.    


Attachments 5 and 6 summarize the Company’s assets under management and asset flows by investment mandate and investment vehicle. Attachment 7 summarizes the Company’s assets under management by investment affiliate.


As of January 31, 2013, 49 percent-owned affiliate Hexavest, Inc. (“Hexavest”) managed $14.5 billion of client assets, an increase of 20 percent from the $12.1 billion of managed assets on October 31, 2012. Net inflows into Hexavest-managed funds and separate accounts were $1.9 billion in the first quarter of fiscal 2013 and have totaled $2.7 billion since Eaton Vance acquired its interest in Hexavest on August 6, 2012.  Attachment 9 summarizes assets under management and asset flow information for Hexavest. Other than Eaton Vance-sponsored funds for which Hexavest is advisor or sub-advisor, the managed assets of Hexavest are not included in Eaton Vance consolidated totals.



























6




Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

(in thousands, except per share figures)

 

 

 

 

 

 

 

 

 

 

January 31,

October 31,

January 31,

 

 

2013 

2012 

2012 

 

 

 

 

 

 

 

 

Revenue

$

318,517 

$

309,889 

$

295,606 

Expenses

 

217,837 

 

203,544 

 

202,786 

Operating income

 

100,680 

 

106,345 

 

92,820 

 

 

 

 

 

 

 

 

Operating margin

 

32%

 

34%

 

31%

 

 

 

 

 

 

 

 

Non-operating (expense) income

 

(5,791)

 

3,993 

 

5,733 

Income taxes

 

(35,939)

 

(37,655)

 

(35,187)

Equity in net income of affiliates, net of tax

 

3,177 

 

1,758 

 

1,504 

Net income

 

 62,127 

 

 74,441 

 

 64,870 

Net income attributable to non-controlling

 

 

 

 

 

 

 

 and other beneficial interests

 

(12,322)

 

(21,323)

 

(17,599)

Net income attributable to

 

 

 

 

 

 

 

Eaton Vance Corp. shareholders

$

49,805 

$

53,118 

$

47,271 

Adjusted net income attributable to Eaton

 

 

 

 

 

 

 

Vance Corp. shareholders(1)

$

60,452 

$

62,988 

$

55,373 

 

 

 

 

 

 

 

 

Earnings per diluted share

$

0.38 

$

0.45 

$

0.40 

 

 

 

 

 

 

 

 

Adjusted earnings per diluted share(1)

$

0.50 

$

0.53 

$

0.47 


First Quarter Fiscal 2013 vs. First Quarter Fiscal 2012


In the first quarter of fiscal 2013, revenue increased 8 percent to $318.5 million from revenue of $295.6 million in the first quarter of fiscal 2012.  Investment advisory and administrative fees were up 10 percent, reflecting a 15 percent increase in average assets under management and lower average effective fee rates, primarily as a result of the Clifton acquisition. Performance fees contributed $1.6 million and $0.3 million to investment advisory and administrative fees in the first quarter of fiscal 2013 and the first quarter of fiscal 2012, respectively.  Distribution and service fees were down 2 percent on a combined basis, reflecting lower managed assets in fund share classes that are subject to distribution and service fees.


Expenses increased 7 percent to $217.8 million in the first quarter of fiscal 2013 from $202.8 million in the first quarter of fiscal 2012, reflecting increases in compensation, distribution, fund-related and other expenses, offset by lower service fees and reduced amortization of deferred sales commissions. Increases in compensation expense reflect increases in sales- and operating income-based incentives, higher employee headcount and increases in base salaries and benefits, offset by a decrease in stock-based compensation. Gross sales and other inflows, which drive sales-based incentives, were up 69 percent year-over-year, while pre-bonus adjusted operating income, which drives operating-income based incentives, was up 8 percent over the same period. The decrease in stock-based compensation reflects revised retirement provisions of newly granted employee stock options.  The increase in distribution expense reflects an increase in commissions paid on certain Class A share fund sales and marketing support payments made to third-party intermediaries, offset by a decrease in promotional expenses. The increase in fund-related expenses can be attributed to an increase in expenses borne by the Company on funds for which it receives an all-in fee partly offset by lower fund subsidies on start-up funds. Other expenses increased 6 percent from the prior year, as increases in information technology and professional fees were offset by a decrease in facilities-related expenses.  The decrease in service fee expense



7



and amortization of deferred sales commissions largely reflects changes in product mix away from fund share classes to which these expenses apply.


Operating income was up 8 percent to $100.7 million in the first quarter of fiscal 2013 from $92.8 million in the first quarter of fiscal 2012.


Non-operating expense was $5.8 million in the first quarter of fiscal 2013 compared to net non-operating income of $5.7 million in the first quarter of fiscal 2012. The decrease in non-operating income (expense) reflects an $8.5 million decrease in gains and other investment income recognized by the Company’s consolidated collateralized loan obligation entity (“CLO”) and a $3.0 million decrease in gains and other investment income earned on the Company’s investments in sponsored products.


The Company’s effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 37.9 percent in the first quarter of fiscal 2013. Excluding the impact of CLO entity income (expense) borne by other beneficial interest holders, the Company’s effective tax rate was 36.7 percent for the quarter.  


Equity in net income of affiliates increased $1.7 million from the first quarter of fiscal 2012, and includes $2.0 million related to the Company’s interest in Hexavest.


Net income attributable to non-controlling and other beneficial interests was $12.3 million in the first quarter of fiscal 2013 compared to $17.6 million in the first quarter of fiscal 2012. As shown in Attachment 3, the change can be primarily attributed to a decline 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 first quarter of fiscal 2013 and 2012 were $10.6 million and $8.1 million, respectively, of non-controlling interest value adjustments relating to our Parametric subsidiary, based on an annual December 31 enterprise value measurement.


Weighted average diluted shares outstanding increased 4.2 million shares, or 4 percent, in the first quarter of fiscal 2013 over the first quarter of fiscal 2012.  The change reflects an increase in the total number of shares outstanding due to exercise of employee stock options and an increase in the dilutive effect of in-the-money options resulting from the 32 percent increase in the average share price over the prior year period.


First Quarter Fiscal 2013 vs. Fourth Quarter Fiscal 2012


In the first quarter of fiscal 2013, revenue increased 3 percent to $318.5 million from revenue of $309.9 million in the fourth quarter of fiscal 2012.  Investment advisory and administrative fees were up 3 percent in the first quarter of fiscal 2013 compared to the fourth quarter of fiscal 2012, reflecting a 10 percent increase in average assets under management and lower average effective fee rates, primarily as a result of the Clifton acquisition. Performance fees contributed $1.6 million and $3.7 million to investment advisory and administrative fees in the first quarter of fiscal 2013 and the fourth quarter of fiscal 2012, respectively. Distribution and service fee revenue 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 increased 7 percent to $217.8 million in the first quarter of fiscal 2013 from $203.5 million in the fourth quarter of fiscal 2012, reflecting increases in compensation, distribution, fund-related and other expenses, higher amortization of deferred sales commissions and a decrease in service fee expense. The increase in compensation expense reflects an increase in headcount, higher base salaries and benefits, and increases in sales-based incentives. Gross sales and other inflows, which drive sales-based incentives, were up 35 percent in the first quarter of fiscal 2013 compared to the fourth quarter of fiscal 2012. The increase in distribution expense primarily reflects an increase in marketing support payments made to third-party intermediaries and an increase in commissions paid on certain Class A share fund sales. The increase in amortization of deferred sales commissions largely reflects an increase in Class C share amortization.  Fund-related expenses increased 7 percent from the fourth quarter of fiscal 2012 due to higher expenses borne by the Company on funds for which it receives an all-in fee, as well as an increase in sub-advisory fees paid.



8




Operating income was down 5 percent to $100.7 million in the first quarter of fiscal 2013 from $106.3 million in the fourth quarter of fiscal 2012.


Non-operating expense was $5.8 million in the first quarter of fiscal 2013 compared to net non-operating income of $4.0 million in the fourth quarter of fiscal 2012.  The decrease in non-operating income (expense) is primarily attributable to a $10.9 million decrease in gains and other investment income recognized by the Company’s consolidated CLO entity and a $0.3 million decrease in gains and other investment income earned on the Company’s investments in sponsored products, offset by a $1.4 million decrease in interest expense recognized by the Company’s consolidated CLO entity.


Equity in net income of affiliates increased by $1.4 million in the first quarter of fiscal 2013 compared to the fourth quarter of fiscal 2012, primarily reflecting an increase in the equity in net income related to the Company’s investments in sponsored products.  Equity in net income of affiliates for the first quarter of fiscal 2013 and the fourth quarter of fiscal 2012 includes $2.0 million and $1.9 million, respectively, related to Hexavest.  


Net income attributable to non-controlling and other beneficial interests totaled $12.3 million in the first quarter of fiscal 2013 and $21.3 million in the fourth quarter of fiscal 2012. As shown in Attachment 3, the decrease can be primarily attributed to a decrease 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 first quarter of fiscal 2013 and the fourth quarter of fiscal 2012 were $10.6 million and $9.9 million of non-controlling interest value adjustments relating, respectively, to our Parametric and Atlanta Capital subsidiaries based on a December 31 and October 31 enterprise value measurement.


Weighted average diluted shares outstanding increased 3.6 million shares, or 3 percent, in the first quarter of fiscal 2013 over the fourth quarter of fiscal 2012.  The change reflects an increase in the total number of shares outstanding due to exercise of employee stock options and an increase in the dilutive effect of in-the-money options resulting from the 13 percent increase in the average share price over the prior quarter.


Balance Sheet Information


Cash and cash equivalents totaled $218.3 million on January 31, 2013, with no outstanding borrowings against the Company’s $300 million credit facility.  The Company paid a special dividend of $1.00 per share, which totaled $119.8 million, in the first quarter of fiscal 2013. During the first quarter of fiscal 2013, the Company used $13.3 million to repurchase and retire approximately 0.5 million shares of its Non-Voting Common Stock under its repurchase authorization.  Approximately 3.5 million shares of the current 8.0 million share repurchase authorization remains unused.


Conference Call Information


Eaton Vance Corp. will host a conference call and webcast at 11:00 AM EST today to discuss the financial results for the three months ended January 31, 2013. To participate in the conference call, please call 877-407-0778 (domestic) or 201-689-8565 (international) and refer to “Eaton Vance Corp. First 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 408769.


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



9



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 in the Company’s filings with the Securities and Exchange Commission.



10






 

 

 

 

 

 

 

 

 

Attachment 1

Eaton Vance Corp.

Summary of Results of Operations

(in thousands, except per share figures)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

% Change

% Change

 

 

 

January 31,

October 31,

January 31,

Q1 2013 vs.

Q1 2013 vs.

 

 

 

2013 

2012 

2012 

Q4 2012

Q1 2012

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory and administrative fees

$

263,281 

$

255,063 

$

239,452 

%

10 

%

 

Distribution and underwriter fees

 

22,751 

 

22,278 

 

22,515 

 

 

 

Service fees

 

31,130 

 

31,221 

 

32,299 

 

(4)

 

 

Other revenue

 

1,355 

 

1,327 

 

1,340 

 

 

 

 

Total revenue

 

318,517 

 

309,889 

 

295,606 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and related costs

 

108,829 

 

96,446 

 

96,683 

13 

 

13 

 

 

Distribution expense

 

33,889 

 

32,956 

 

32,328 

 

 

 

Service fee expense

 

28,264 

 

28,559 

 

28,673 

(1)

 

(1)

 

 

Amortization of deferred sales commissions

 

4,783 

 

4,495 

 

5,820 

 

(18)

 

 

Fund-related expenses

 

7,424 

 

6,929 

 

6,651 

 

12 

 

 

Other expenses

 

34,648 

 

34,159 

 

32,631 

 

 

 

 

Total expenses

 

217,837 

 

203,544 

 

202,786 

 

 

Operating income

 

100,680 

 

106,345 

 

92,820 

(5)

 

 

Non-operating income (expense):

 

 

 

 

 

 

 

 

 

 

 

Gains and other investment income, net

 

5,207 

 

5,517 

 

8,177 

(6)

 

(36)

 

 

Interest expense

 

(8,570)

 

(8,580)

 

(8,413)

 

 

 

Other income (expense) of consolidated CLO entity:

 

 

 

 

 

 

 

 

 

 

 

 

     Gains and other investment income, net

 

1,793 

 

12,659 

 

10,280 

(86)

 

(83)

 

 

 

     Interest expense

 

(4,221)

 

(5,603)

 

(4,311)

(25)

 

(2)

 

 

 

Total non-operating (expense) income

 

(5,791)

 

3,993 

 

5,733 

NM

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes and equity in net

 

 

 

 

 

 

 

 

 

 

   income of affiliates

94,889 

 

110,338 

 

98,553 

(14)

 

(4)

 

Income taxes

 

(35,939)

 

(37,655)

 

(35,187)

(5)

 

 

Equity in net income of affiliates, net of tax

 

3,177 

 

1,758 

 

1,504 

81 

 

111 

 

Net income

 

62,127 

 

74,441 

 

64,870 

(17)

 

(4)

 

Net income attributable to non-controlling

 

 

 

 

 

 

 

 

 

 

   and other beneficial interests

 

(12,322)

 

(21,323)

 

(17,599)

(42)

 

(30)

 

Net income attributable to

 

 

 

 

 

 

 

 

 

 

   Eaton Vance Corp. Shareholders

$

49,805 

$

53,118 

$

47,271 

(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

Basic

$

0.39 

$

0.46 

$

0.41 

(15)

 

(5)

 

 

Diluted

$

0.38 

$

0.45 

$

0.40 

(16)

 

(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

114,925 

 

112,504 

 

112,768 

 

 

 

Diluted

 

119,112 

 

115,524 

 

114,901 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

$

1.20 

$

0.20 

$

0.19 

500 

 

532 

 



11






 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 2

Eaton Vance Corp.

Reconciliation of net income attributable to Eaton Vance Corp. shareholders

to adjusted net income attributable to Eaton Vance

 Corp. shareholders and earnings per diluted share to adjusted earnings per diluted share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

% Change

% Change

 

January 31,

October 31,

January 31,

Q1 2013 vs.

Q1 2013 vs.

(in thousands, except per share figures)

2013 

2012 

2012 

Q4 2012

Q1 2012

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Eaton Vance Corp. shareholders

$

49,805 

$

53,118 

$

47,271 

(6)

%

%

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest value adjustments

 

10,647 

 

9,870 

 

8,102 

 

31 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income attributable to Eaton Vance Corp. shareholders

$

60,452 

$

62,988 

$

55,373 

(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per diluted share

$

0.38 

$

0.45 

$

0.40 

(16)

 

(5)

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest value adjustments

 

 0.09 

 

 0.08 

 

 0.07 

13 

 

29 

 

 

 

 

 

 

 

 

 

 

 

 

Special dividend adjustment

 

 0.03 

 

 - 

 

 - 

NM

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per diluted share

$

0.50 

$

0.53 

$

0.47 

(6)

 

 



























12




 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 3

 

Eaton Vance Corp.

 

Components of net income attributable

 

to non-controlling and other beneficial interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

January 31,

October 31,

January 31,

 

(in thousands)

2013 

2012 

2012 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated funds

$

(1,106)

$

(1,186)

$

(1,146)

 

 

 

 

 

 

 

 

 

 

 

Majority-owned subsidiaries

 

(3,899)

 

(4,053)

 

(3,360)

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest value adjustments

 

(10,647)

 

(9,870)

 

(8,102)

 

 

 

 

 

 

 

 

 

 

 

Consolidated CLO entity

 

3,330 

 

(6,214)

 

(4,991)

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling

 

 

 

 

 

 

 

 

 

and other beneficial interests

$

(12,322)

$

(21,323)

$

(17,599)

 



13






 

 

 

 

 

 

Attachment 4

 

Eaton Vance Corp.

 

Balance Sheet

 

(in thousands, except per share figures)

 

 

 

 

 

 

 

January 31,

 

 

 

October 31,

 

 

 

2013 

 

 

 

2012 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

218,283 

 

 

$

462,076 

 

Investment advisory fees and other receivables

 

148,648 

 

 

 

133,589 

 

Investments

 

482,329 

 

 

 

486,933 

 

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

 

 

 

 

 

 

 

          Cash and cash equivalents

 

48,296 

 

 

 

 36,758 

 

          Bank loans and other investments

 

380,672 

 

 

 

 430,583 

 

          Other assets

 

870 

 

 

 

 1,107 

 

Deferred sales commissions

 

18,742 

 

 

 

19,336 

 

Deferred income taxes

 

52,861 

 

 

 

51,234 

 

Equipment and leasehold improvements, net

 

52,911 

 

 

 

54,889 

 

Intangible assets, net

 

81,610 

 

 

 

59,228 

 

Goodwill

 

227,623 

 

 

 

154,636 

 

Other assets

 

90,688 

 

 

 

89,122 

 

   Total assets

$

1,803,533 

 

 

$

1,979,491 

 

 

 

 

 

 

 

 

 

Liabilities, Temporary Equity and Permanent Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued compensation

$

60,360 

 

 

$

145,338 

 

Accounts payable and accrued expenses

 

65,090 

 

 

 

59,397 

 

Dividend payable

 

 

 

 

23,250 

 

Debt

 

500,000 

 

 

 

500,000 

 

Liabilities of consolidated CLO entity:

 

 

 

 

 

 

 

          Senior and subordinated note obligations

 

411,583 

 

 

 

 446,605 

 

          Other liabilities

 

628 

 

 

 

 766 

 

Other liabilities

 

98,646 

 

 

 

91,785 

 

   Total liabilities

 

1,136,307 

 

 

 

1,267,141 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Temporary Equity:

 

 

 

 

 

 

 

Redeemable non-controlling interests

 

89,918 

 

 

 

98,765 

 

          Total temporary equity

 

89,918 

 

 

 

98,765 

 

 

 

 

 

 

 

 

 

Permanent Equity:

 

 

 

 

 

 

 

Voting Common Stock, par value $0.00390625 per share:

 

 

 

 

 

 

 

   Authorized, 1,280,000 shares

 

 

 

 

 

 

 

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

 

 

 

 

 

Non-Voting Common Stock, par value $0.00390625 per share:

 

 

 

 

 

 

 

   Authorized, 190,720,000 shares

 

 

 

 

 

 

 

   Issued, 120,049,619 and 115,878,384 shares, respectively

 

469 

 

 

 

453 

 

Additional paid-in capital

 

93,534 

 

 

 

 26,730 

 

Notes receivable from stock option exercises

 

(7,688)

 

 

 

(4,155)

 

Accumulated other comprehensive income

 

1,596 

 

 

 

3,923 

 

Appropriated retained earnings

 

15,369 

 

 

 

 18,699 

 

Retained earnings

 

472,587 

 

 

 

566,420 

 

   Total Eaton Vance Corp. shareholders' equity

 

575,869 

 

 

 

612,072 

 

Non-redeemable non-controlling interests

 

1,439 

 

 

 

1,513 

 

   Total permanent equity

 

577,308 

 

 

 

613,585 

 

Total liabilities, temporary equity and permanent equity

$

1,803,533 

 

 

$

1,979,491 

 

 

 

 

 

 

 

 

 



14






 

 

 

 

 

 

 

Attachment 5

Eaton Vance Corp.

Consolidated Net Flows by Investment Mandate(1)

(in millions)

 

 

Three Months Ended

 

 

January 31,

 

October 31,

 

January 31,

 

 

2013 

 

2012 

 

2012 

Equity assets - beginning of period(2)

$

 80,782 

 

$

 80,260 

 

$

 84,281 

 

Sales and other inflows

 

 4,496 

 

 

 3,828 

 

 

 4,777 

 

Redemptions/outflows

 

 (4,959)

 

 

 (5,902)

 

 

 (6,476)

 

Net flows

 

 (463)

 

 

 (2,074)

 

 

 (1,699)

 

Assets acquired(3)

 

 1,572 

 

 

 - 

 

 

 - 

 

Exchanges

 

 (8)

 

 

 48 

 

 

 (8)

 

Market value change

 

 4,635 

 

 

 2,548 

 

 

 2,383 

Equity assets - end of period

$

 86,518 

 

$

 80,782 

 

$

 84,957 

Fixed income assets - beginning of period

 

 49,003 

 

 

 48,198 

 

 

 43,708 

 

Sales and other inflows

 

 3,377 

 

 

 3,140 

 

 

 2,627 

 

Redemptions/outflows

 

 (3,375)

 

 

 (2,752)

 

 

 (2,453)

 

Net flows

 

 2 

 

 

 388 

 

 

 174 

 

Assets acquired(3)

 

 472 

 

 

 - 

 

 

 - 

 

Exchanges

 

 (22)

 

 

 13 

 

 

 40 

 

Market value change

 

 224 

 

 

 404 

 

 

 1,592 

Fixed income assets - end of period

$

 49,679 

 

$

 49,003 

 

$

 45,514 

Floating-rate income assets -  beginning

 

 

 

 

 

 

 

 

 

of period

 

 26,388 

 

 

 25,245 

 

 

 24,322 

 

Sales and other inflows

 

 3,260 

 

 

 2,188 

 

 

 1,460 

 

Redemptions/outflows

 

 (1,359)

 

 

 (1,387)

 

 

 (1,289)

 

Net flows

 

 1,901 

 

 

 801 

 

 

 171 

 

Exchanges

 

 33 

 

 

 21 

 

 

 (8)

 

Market value change

 

 334 

 

 

 321 

 

 

 (109)

Floating-rate income assets - end of period

$

 28,656 

 

$

 26,388 

 

$

 24,376 

Alternative assets -  beginning of period

 

 12,864 

 

 

 10,612 

 

 

 10,650 

 

Sales and other inflows

 

 1,809 

 

 

 3,167 

 

 

 1,105 

 

Redemptions/outflows

 

 (1,055)

 

 

 (909)

 

 

 (1,202)

 

Net flows

 

 754 

 

 

 2,258 

 

 

 (97)

 

Assets acquired(3)

 

 650 

 

 

 - 

 

 

 - 

 

Exchanges

 

 (13)

 

 

 (19)

 

 

 (38)

 

Market value change

 

 90 

 

 

 13 

 

 

 (53)

Alternative assets - end of period

$

 14,345 

 

$

 12,864 

 

$

 10,462 

Implementation services assets -  beginning of period(4)

 

 30,302 

 

 

 28,323 

 

 

 24,574 

 

Sales and other inflows

 

 6,479 

 

 

 2,115 

 

 

 1,527 

 

Redemptions/outflows

 

 (3,316)

 

 

 (1,320)

 

 

 (1,196)

 

Net flows

 

 3,163 

 

 

 795 

 

 

 331 

 

Assets acquired(3)

 

 32,064 

 

 

 - 

 

 

 - 

 

Market value change

 

 2,891 

 

 

 1,184 

 

 

 959 

Implementation services assets - end of period

$

 68,420 

 

$

 30,302 

 

$

 25,864 

Long-term assets - beginning of period

 

 199,339 

 

 

 192,638 

 

 

 187,535 

 

Sales and other inflows

 

 19,421 

 

 

 14,438 

 

 

 11,496 

 

Redemptions/outflows

 

 (14,064)

 

 

 (12,270)

 

 

 (12,616)

 

Net flows

 

 5,357 

 

 

 2,168 

 

 

 (1,120)

 

Assets acquired(3)

 

 34,758 

 

 

 - 

 

 

 - 

 

Exchanges

 

 (10)

 

 

 63 

 

 

 (14)

 

Market value change

 

 8,174 

 

 

 4,470 

 

 

 4,772 

Total long-term assets - end of period

$

 247,618 

 

$

 199,339 

 

$

 191,173 

Cash management fund assets - end of period

 

 155 

 

 

 169 

 

 

 533 

Total assets under management - end of period

$

 247,773 

 

$

 199,508 

 

$

 191,706 

(1)  Consolidated Eaton Vance Corp.  See Attachment 9 for managed assets and flows of 49 percent-owned Hexavest Inc.

(2)  Balances include assets in balanced accounts holding income securities.

 

 

 

 

 

 

(3)  Balances represent Clifton assets acquired on December 31, 2012.

(4)  Balances represent amounts reclassified from equity for all periods presented.

 

 

 

 

 

 



























15




 

 

 

 

 

 

 

Attachment 6

Eaton Vance Corp.

Consolidated Net Flows by Investment Vehicle(1)

(in millions)

 

 

 

Three Months Ended

 

 

 

January 31,

 

October 31,

 

January 31,

 

 

 

2013 

 

2012 

 

2012 

Long-term fund assets - beginning of period

 

$

 113,249 

 

$

 110,257 

 

$

 111,705 

 

Sales and other inflows

 

 

 9,079 

 

 

 7,261 

 

 

 6,905 

 

Redemptions/outflows

 

 

 (6,876)

 

 

 (6,410)

 

 

 (8,113)

 

Net flows

 

 

 2,203 

 

 

 851 

 

 

 (1,208)

 

Assets acquired(2)

 

 

 638 

 

 

 - 

 

 

 - 

 

Exchanges

 

 

 (19)

 

 

 - 

 

 

 (14)

 

Market value change

 

 

 3,091 

 

 

 2,141 

 

 

 2,181 

Long-term fund assets - end of period

$

 119,162 

 

$

 113,249 

 

$

 112,664 

 

 

 

 

 

 

 

 

 

 

 

Institutional separate account assets - beginning of period

 

 

 43,338 

 

 

 40,285 

 

 

 38,003 

 

Sales and other inflows

 

 

 6,785 

 

 

 5,149 

 

 

 1,824 

 

Redemptions/outflows

 

 

 (3,821)

 

 

 (3,535)

 

 

 (2,215)

 

Net flows

 

 

 2,964 

 

 

 1,614 

 

 

 (391)

 

Assets acquired(2)

 

 

 34,120 

 

 

 - 

 

 

 - 

 

Exchanges

 

 

 5 

 

 

 27 

 

 

 (29)

 

Market value change

 

 

 2,923 

 

 

 1,412 

 

 

 1,143 

Institutional separate account assets - end of period

 

$

 83,350 

 

$

 43,338 

 

$

 38,726 

 

 

 

 

 

 

 

 

 

 

 

High-net-worth separate account assets - beginning of period

 

 

 15,036 

 

 

 14,682 

 

 

 13,256 

 

Sales and other inflows

 

 

 1,379 

 

 

 498 

 

 

 1,021 

 

Redemptions/outflows

 

 

 (1,198)

 

 

 (657)

 

 

 (552)

 

Net flows

 

 

 181 

 

 

 (159)

 

 

 469 

 

Exchanges

 

 

 (15)

 

 

 9 

 

 

 (957)

 

Market value change

 

 

 1,043 

 

 

 504 

 

 

 487 

High-net-worth separate account assets - end of period

 

$

 16,245 

 

$

 15,036 

 

$

 13,255 

 

 

 

 

 

 

 

 

 

 

 

Retail managed account assets - beginning of period

 

 

 27,716 

 

 

 27,414 

 

 

 24,571 

 

Sales and other inflows

 

 

 2,178 

 

 

 1,530 

 

 

 1,746 

 

Redemptions/outflows

 

 

 (2,169)

 

 

 (1,668)

 

 

 (1,736)

 

Net flows

 

 

 9 

 

 

 (138)

 

 

 10 

 

Exchanges

 

 

 19 

 

 

 27 

 

 

 986 

 

Market value change

 

 

 1,117 

 

 

 413 

 

 

 961 

Retail managed account assets - end of period

$

 28,861 

 

$

 27,716 

 

$

 26,528 

 

 

 

 

 

 

 

 

 

 

 

Total long-term assets - beginning of period

 

 

 199,339 

 

 

 192,638 

 

 

 187,535 

 

Sales and other inflows

 

 

 19,421 

 

 

 14,438 

 

 

 11,496 

 

Redemptions/outflows

 

 

 (14,064)

 

 

 (12,270)

 

 

 (12,616)

 

Net flows

 

 

 5,357 

 

 

 2,168 

 

 

 (1,120)

 

Assets acquired(2)

 

 

 34,758 

 

 

 - 

 

 

 - 

 

Exchanges

 

 

 (10)

 

 

 63 

 

 

 (14)

 

Market value change

 

 

 8,174 

 

 

 4,470 

 

 

 4,772 

Total long-term assets - end of period

$

 247,618 

 

$

 199,339 

 

$

 191,173 

 

 

 

 

 

 

 

 

 

 

 

Cash management fund assets - end of period

 

 155 

 

 

 169 

 

 

 533 

 

 

 

 

 

 

 

 

 

 

 

Total assets under management - end of period

 

$

 247,773 

 

$

 199,508 

 

$

 191,706 

 

 

 

 

 

 

 

 

 

 

 

(1)   Consolidated Eaton Vance Corp.  See Attachment 9 for managed assets and flows of 49 percent-owned Hexavest Inc.

(2)   Balances represent Clifton assets acquired on December 31, 2012.

 



























16




 

 

 

 

Attachment 7

Eaton Vance Corp.

Consolidated Assets under Management by Investment Affiliate (1)

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

January 31,

 

 

October 31,

 

 

January 31,

 

 

 

2013 

 

 

2012 

 

 

2012 

Eaton Vance Management(2)

$

 134,554 

 

$

 131,004 

 

$

 133,538 

Parametric

 

 96,725 

 

 

 53,332 

 

 

 44,179 

Atlanta Capital

 

 16,494 

 

 

 15,172 

 

 

 13,989 

Total

$

 247,773 

 

$

 199,508 

 

$

 191,706 

 

 

 

 

 

 

 

 

 

 

(1)   Consolidated Eaton Vance Corp. See Attachment 9 for managed assets and flows of 49 percent-owned Hexavest.

(2)   Includes managed assets of wholly owned subsidiaries Eaton Vance Investment Counsel and Fox Asset Management LLC,

     as well as certain Eaton Vance-sponsored funds and accounts managed by Hexavest and unaffiliated third-party advisors

     under Eaton Vance supervision.



























17




 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 8

 

Eaton Vance Corp.

 

Assets under Management by Investment Mandate(1)

 

 (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 31,

 

October 31,

 

%

 

January 31,

 

%

 

 

 

 

2013 

 

2012 

 

Change

 

2012 

 

Change

 

Equity(2)

$

 86,518 

 

$

 80,782 

 

7%

 

$

 84,957 

 

2%

 

Fixed income

 

 49,679 

 

 

 49,003 

 

1%

 

 

 45,514 

 

9%

 

Floating-rate income

 

 28,656 

 

 

 26,388 

 

9%

 

 

 24,376 

 

18%

 

Alternative

 

 14,345 

 

 

 12,864 

 

12%

 

 

 10,462 

 

37%

 

Implementation services

 

 68,420 

 

 

 30,302 

 

126%

 

 

 25,864 

 

165%

 

Cash management

 

 155 

 

 

 169 

 

-8%

 

 

 533 

 

-71%

 

Total

$

 247,773 

 

$

 199,508 

 

24%

 

$

 191,706 

 

29%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  Consolidated Eaton Vance Corp.  See Attachment 9 for managed assets and flows of 49 percent-owned Hexavest Inc.

 

(2)  Balances include assets in balanced accounts holding income securities.

 

 

 

 

 

 

 



























18




 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 9

Eaton Vance Corp.

Hexavest Inc. Assets under Management and Net Flows

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended January 31, 2013

 

 

 

 

 

 

 

 

 

Eaton Vance-Distributed

 

 

 

 

 

 

 

 

 

Eaton Vance-

 

 

 

 

 

 

 

 

Hexavest

 

Eaton Vance-

 

Distributed

 

Total

 

 

 

 

 

Directly

 

Sponsored

 

Separate

 

Eaton Vance-

 

 

 

Total

 

Distributed(1)

 

Funds(2)

 

Accounts(3)

 

Distributed

Managed assets - beginning of period

$

 12,110 

 

$

 12,073 

 

$

 

 37 

 

$

 

 - 

 

$

 37 

       Sales and other inflows

 

 2,162 

 

 

 920 

 

 

 

 94 

 

 

 

 1,148 

 

 

 1,242 

       Redemptions/outflows

 

 (268)

 

 

 (263)

 

 

 

 (5)

 

 

 

 - 

 

 

 (5)

       Net flows

 

 1,894 

 

 

 657 

 

 

 

 89 

 

 

 

 1,148 

 

 

 1,237 

       Market value change

 

 540 

 

 

 494 

 

 

 

 9 

 

 

 

 37 

 

 

 46 

Managed assets - end of period

$

 14,544 

 

$

 13,224 

 

$

 

 135 

 

$

 

 1,185 

 

$

 1,320 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Managed assets and flows of pre-transaction Hexavest clients and post-transaction Hexavest clients in Canada.  Eaton Vance receives no

 

management or distribution revenue on these assets, which are not included in the Eaton Vance consolidated results in Attachments 5, 6, 7 and 8.

(2)

Managed assets and flows of Eaton Vance-sponsored pooled investment vehicles for which Hexavest is advisor or sub-advisor.  Eaton Vance

 

receives management and/or distribution revenue on these assets, which are included in the Eaton Vance consolidated results in

 

Attachments 5, 6, 7 and 8.

(3)

Managed assets and flows of Eaton Vance-distributed separate accounts managed by Hexavest.  Eaton Vance receives distribution, but not

 

management, revenue on these assets, which are not included in the Eaton Vance consolidated results in Attachments 5, 6, 7 and 8.





19