UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 23, 2012

   EATON VANCE CORP.   

 (Exact name of registrant as specified in its charter)

Maryland

1 - 8100

04-2718215

(State or other jurisdiction

(Commission File Number)

(IRS Employer Identification No.)

  of incorporation)

       Two International Place, Boston, Massachusetts

02110

  (Address of principal executive offices)

        (Zip Code)

Registrant’s telephone number, including area code:  (617) 482-8260

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

INFORMATION INCLUDED IN THE REPORT

Item 2.02.

Results of Operations and Financial Condition

Registrant has  reported  its results of  operations  for the three and six months ended April 30, 2012, as described in Registrant’s news release dated May 23, 2012, a copy of which is furnished herewith as Exhibit  99.1 and  incorporated herein by reference.

Item 9.01.

Financial Statements and Exhibits

Exhibit No.

Document

99.1           

Press release issued by the Registrant dated May 23, 2012.

2

SIGNATURES

Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the Registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the undersigned hereunto duly authorized.

EATON VANCE CORP.

 (Registrant)

Date:

May 23, 2012

/s/ Laurie G. Hylton

Laurie G. Hylton, Chief Financial Officer &

Chief Accounting Officer

3

EXHIBIT INDEX

Each exhibit is listed in this index according to the number assigned to it in the exhibit table set forth in Item 601 of Regulation S-K.  The following exhibit is filed as part of this Report:

Exhibit No.

Description

99.1            

Copy of Registrant's news release dated May 23, 2012.

4

Exhibit 99.1

News Release

Contacts:   Laurie G. Hylton 617.672.8527

Daniel C. Cataldo 617.672.8952

Eaton Vance Corp.

Report for the Three and Six Month Periods Ended April 30, 2012

Boston, MA, May 23, 2012 – Eaton Vance Corp. (NYSE: EV) today reported adjusted earnings per diluted share⁽¹⁾ of $0.45 for the second quarter of fiscal 2012 compared to adjusted earnings per diluted share of $0.47 in the first quarter of fiscal 2012 and $0.52 in the second quarter of fiscal 2011. Adjusted earnings per diluted share were increased $0.01 and $0.03 in the first quarter of fiscal 2012 and the second quarter of fiscal 2011, respectively, by gains related to the sale of the Company’s equity interest in Lloyd George Management (BVI) Limited (“Lloyd George Management”) in the second quarter of fiscal 2011.

As determined under U.S. generally accepted accounting principles (“GAAP”), the Company earned $0.44 per diluted share in the second quarter of fiscal 2012, $0.40 in the first quarter of fiscal 2012 and $0.50 in the second quarter of fiscal 2011.  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 totaled $0.01, $0.07 and $0.02 per diluted share in the second quarter of fiscal 2012, the first quarter of fiscal 2012 and the second quarter of fiscal 2011, respectively.

Adjusted earnings per diluted share were $0.92 in the six months ended April 30, 2012 compared to $0.97 in the six months ended April 30, 2011. The Company’s GAAP earnings per diluted share were $0.84 and $0.80, respectively, for the compared semi-annual periods.  The Company’s adjusted and GAAP earnings per diluted share were increased $0.01 and $0.03 in the first half of fiscal 2012 and 2011, respectively, by gains related to the sale of the Company’s equity interest in Lloyd George Management noted above.

Net inflows of $0.6 billion into long-term funds and separate accounts in the second quarter of fiscal 2012 compare to net outflows of $1.1 billion in the first quarter of fiscal 2012 and net inflows of $2.9 billion in the second quarter of fiscal 2011.  As shown in Table 1 (Attachment 5), the sequential improvement in net flows from the first quarter of fiscal 2012 reflects better flow results for each long-term investment category: equities, fixed income, floating-rate income and alternatives.

“We were pleased to see the Company return to positive organic growth in the second quarter of fiscal 2012,” said Thomas E. Faust Jr., Chairman and Chief Executive Officer.  “Even as we face renewed macro concerns and deteriorating markets, we continue to see significant growth opportunities for Eaton Vance.”

Assets under management were $197.5 billion on April 30, 2012, an increase of 3 percent from the $191.7 billion of managed assets on January 31, 2012 and down 3 percent from managed assets of $203.0 billion on April 30, 2011. Assets under management on April 30, 2012 included $114.0 billion in

5

long-term funds, $40.9 billion in institutional separate accounts, $14.7 billion in high-net-worth separate accounts, $27.5 billion in retail managed accounts and $0.3 billion in cash management fund assets. Average assets under management were $195.6 billion in the second quarter of fiscal 2012, up 4 percent from $187.4 billion in the first quarter of fiscal 2012 and down 1 percent from $197.3 billion in the second quarter of fiscal 2011.  The sequential increase in assets under management in the second quarter of fiscal 2012 reflects long-term net inflows of $0.6 billion, market appreciation of $5.4 billion and a $0.2 billion reduction in cash management fund assets.

As shown in Table 2 (Attachment 6), gross sales and other inflows were $13.2 billion in the second quarter of fiscal 2012, up 15 percent from $11.5 billion in the first quarter of fiscal 2012 and down 17 percent from $16.0 billion in the second quarter of fiscal 2011. Gross redemptions and other outflows were $12.7 billion in the second quarter of fiscal 2012, up 1 percent from $12.6 billion in the first quarter of fiscal 2012 and down 3 percent from $13.0 billion in the second quarter of fiscal 2011.  

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

Second Quarter Fiscal 2012 vs. First Quarter Fiscal 2012

Revenue in the second quarter of fiscal 2012 increased 3 percent to $304.8 million from revenue of $295.6 million in the first quarter of fiscal 2012.  Investment advisory and administrative fees were up 4 percent in the second quarter of fiscal 2012 compared to the first quarter of fiscal 2012, consistent with the 4 percent increase in average assets under management.  Reflecting a declining share of managed assets in fund share classes that are subject to distribution and service fees, revenues from such fees were substantially unchanged.

Expenses increased 2 percent to $206.0 million in the second quarter of fiscal 2012 from $202.8 million in the first quarter of fiscal 2012, reflecting increases in compensation, certain distribution expenses and

6

other expenses, offset by decreases in service fee expenses and reduced amortization of deferred sales commissions. The increase in compensation expense reflects increases in sales- and operating income-based incentives, partly offset by a decrease in stock-based compensation. Gross sales and other inflows, which drive sales-based incentives, were up 15 percent in the second quarter of fiscal 2012 compared to the first quarter of fiscal 2012.  Pre-bonus adjusted operating income, which drives operating-income based incentives, was up 3 percent for the same period. The increase in distribution expense reflects an increase in intermediary marketing support payments to our distribution partners, driven by growth in sales and managed assets and revised terms of certain support agreements. Higher other expenses can be primarily attributed to increased spending on information technology and other professional services, reflecting ongoing investment in systems and legal expenses related to various corporate initiatives. The decreases in service fee expense and the amortization of deferred sales commissions largely reflect changes in product mix away from fund share classes to which these expenses apply.

Operating income was up 6 percent to $98.8 million in the second quarter of fiscal 2012 from $92.8 million in the first quarter of fiscal 2012.

Non-operating expense reduced income before taxes by $0.9 million in the second quarter of fiscal 2012, compared to a non-operating income contribution of $5.7 million in the first quarter of fiscal 2012.  The decrease in non-operating income (expense) is attributable primarily to a $5.4 million decline in gains and other investment income earned on the Company’s investments in sponsored products and a $1.4 million decrease in gains and other investment income recognized by the Company’s consolidated collateralized loan obligation (“CLO”) entity.  The Company’s gains and other investment income in the first quarter of fiscal 2012 included a $2.4 million gain recognized upon the sale of the Company’s interest in Lloyd George Management in the second quarter of fiscal 2011.

The Company’s effective tax rate, calculated as a percentage of income before income taxes and equity in net income of affiliates, was 35.9 percent in the second quarter of fiscal 2012. Excluding the impact of other income (expense) associated with the Company’s consolidated CLO entity borne by other beneficial interest holders, the Company’s effective tax rate was approximately 37.3 percent for the quarter.  

Equity in net income of affiliates was down $1.5 million in the second quarter of fiscal 2012 compared to the first quarter of fiscal 2012, largely due to a reduction in the Company’s attributable share of the earnings of a private equity partnership in which it invests.

Net income attributable to non-controlling and other beneficial interests totaled $9.9 million in the second quarter of fiscal 2012 and $17.6 million in the first quarter of fiscal 2012. As shown in Attachment 3, the decrease can be primarily attributed to a decrease in non-controlling interest value adjustments. Included in net (income) loss attributable to non-controlling and other beneficial interests in the second quarter of fiscal 2012 are $1.1 million of non-controlling interest value adjustments that relate primarily to the profit growth of our subsidiary Parametric Risk Advisors based on an April 30 measurement date. Included in net (income) loss attributable to non-controlling and other beneficial interests in the first quarter of fiscal 2012 are $8.1 million of non-controlling interest value adjustments that relate primarily to the profit growth of our subsidiary Parametric Portfolio Associates based on a December 31 measurement date.

Second Quarter Fiscal 2012 vs. Second Quarter Fiscal 2011

Revenue in the second quarter of fiscal 2012 decreased 3 percent to $304.8 million from revenue of $315.6 million in the second quarter of fiscal 2011, reflecting lower average assets under management and lower distribution- and service-related revenues.  Investment advisory and administrative fees were down 1 percent, consistent with the 1 percent decrease in average assets under management. Distribution and service fees were, on a combined basis, down 13 percent, reflecting lower managed assets in fund share classes that are subject to distribution and service fees.

Expenses decreased 1 percent to $206.0 million in the second quarter of fiscal 2012 from $208.8 million in the second quarter of fiscal 2011, reflecting lower distribution and service fee expenses and reduced

7

amortization of deferred sales commissions, offset by increases in compensation, fund-related and other expenses. The decreases in distribution and service fee expenses and amortization of deferred sales commissions largely reflect the changes in product mix noted above. The increase in compensation expense reflects the base salaries and benefits associated with a 5 percent increase in headcount and a $1.1 million increase in severance costs, partly offset by decreases in sales- and operating income-based incentives. Gross sales and other inflows, which drive sales-based incentives, were down 17 percent in the second quarter of fiscal 2012 compared to the second quarter of fiscal 2011, while pre-bonus adjusted operating income, which drives operating-income based incentives, was down 7 percent over the same period. The increase in fund-related expenses can be attributed primarily to higher sub-advisory expenses. The increase in other expenses is attributable primarily to higher spending for information technology and other professional services to support the Company’s growth.

Operating income was down 7 percent to $98.8 million in the second quarter of fiscal 2012 from $106.8 million in the second quarter of fiscal 2011.

Non-operating expense reduced income before taxes by $0.9 million in the second quarter of fiscal 2012 compared to a reduction of $12.9 million in the second quarter of fiscal 2011. The decrease in non-operating expense reflects a $21.9 million positive swing in gains and other investment income recognized by the Company’s consolidated CLO entity and a $9.7 million decrease in gains and other investment income earned on the Company’s investments in sponsored products. The Company’s gains and other investment income in the second quarter of fiscal 2011 included a $5.5 million gain recognized upon the sale of the Company’s interest in Lloyd George Management.  

Equity in net income of affiliates was down $1.2 million in the second quarter of fiscal 2012 compared to the second quarter of fiscal 2011, largely due to a reduction in the Company’s attributable share of the earnings of a private equity partnership in which it invests.

Net income attributable to non-controlling and other beneficial interests was $9.9 million in the second quarter of fiscal 2012 compared to a net loss attributable to non-controlling and other beneficial interests of $8.7 million in the second quarter of fiscal 2011. As shown in Attachment 3, the change can be primarily attributed to an improvement in the financial performance of the Company’s consolidated CLO entity. Included in net (income) loss attributable to non-controlling and other beneficial interests in the second quarter of fiscal 2012 and 2011 are $1.1 million and $2.9 million, respectively, of non-controlling interest value adjustments that relate primarily to the profit growth of our subsidiary Parametric Risk Advisors based on an April 30 measurement date.

Balance Sheet Information

Cash and cash equivalents totaled $514.7 million on April 30, 2012, with no outstanding borrowings against the Company’s $200.0 million credit facility.  During the first six months of fiscal 2012, the Company used $51.7 million to repurchase and retire approximately 2.0 million shares of its Non-Voting Common Stock under its repurchase authorization.  Approximately 5.9 million shares of the current 8.0 million share repurchase authorization remains unused.

Conference Call Information

Eaton Vance Corp. (NYSE: EV) will host a conference call and webcast at 11:00 AM EDT today to discuss the financial results for the three and six month periods ended April 30, 2012. To participate in the conference call, please call 877-407-0778 (domestic) or 201-689-8565 (international) and refer to “Eaton Vance Corp. Second 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 account number 286 and the confirmation code 394586.

8

About Eaton Vance Corp.

Eaton Vance Corp. is one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance and its affiliates offer individuals and institutions a broad array of investment strategies and wealth management solutions.  The Company’s long record of providing exemplary service, timely innovation and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today’s most discerning investors.  For more information about Eaton Vance, visit www.eatonvance.com.

Forward-Looking Statements

This news release may contain statements that are not historical facts, referred to as “forward-looking statements.”  The Company’s actual future results may differ significantly from those stated in any forward-looking statements, depending on factors such as changes in securities or financial markets or general economic conditions, client sales and redemption activity, the continuation of investment advisory, administration, distribution and service contracts, and other risks discussed from time to time in the Company’s filings with the Securities and Exchange Commission.

9

10

11

12

13