BOSTON, Nov. 22, 2011 /PRNewswire/ -- 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 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.
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.
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.
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.
(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.
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(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.
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Attachment 1
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Eaton Vance
Corp.
|
|
Summary of
Results of Operations
|
|
(in
thousands, except per share figures)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
|
|
|
|
|
|
|
|
%
Change
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
October
31,
|
July
31,
|
October 31,
|
Q4
2011
to
|
Q4
2011
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):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Interest income
|
|
643
|
|
719
|
|
659
|
(11)
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|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
derivatives
|
|
(172)
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|
6,322
|
|
(1,105)
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NM
|
|
(84)
|
|
|
|
5,102
|
|
4,300
|
19
|
|
|
|
Foreign currency gains
(losses)
|
|
251
|
|
306
|
|
(131)
|
(18)
|
|
NM
|
|
|
|
(26)
|
|
181
|
NM
|
|
|
|
Other income/(expense) of
consolidated
|
|
|
|
|
|
|
|
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|
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|
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|
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|
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collateralized loan obligation
entity:
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|
|
|
|
|
|
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|
|
|
|
|
|
|
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Interest
income
|
|
5,272
|
|
5,268
|
|
-
|
-
|
|
NM
|
|
|
|
21,116
|
|
-
|
NM
|
|
|
|
|
Interest
expense
|
|
(4,029)
|
|
(3,999)
|
|
-
|
1
|
|
NM
|
|
|
|
(13,575)
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|
-
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Eaton Vance Corp.