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Washington, D.C. 20549
(Mark
One) |
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x |
Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the quarterly period ended April 30, 2009 |
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or |
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o |
Transition Report Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934 For the transition period from _____________ to ____________ |
Maryland (State or other jurisdiction of incorporation or organization) |
04-2718215 (I.R.S. Employer Identification No.) |
Large accelerated
filer |
x |
Accelerated filer |
o |
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Non-accelerated
filer |
o (Do not check if smaller reporting company) |
Smaller reporting company |
o |
Required Information |
|
|
Page Number Reference |
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Part
I |
Financial Information |
|||||||||
Item
1. |
Consolidated Financial Statements |
3 | ||||||||
Item
2. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
25 | ||||||||
Item
3. |
Quantitative and Qualitative Disclosures About Market Risk |
54 | ||||||||
Item
4. |
Controls and Procedures |
54 | ||||||||
Part
II |
Other Information |
|||||||||
Item
1. |
Legal Proceedings |
54 | ||||||||
Item
1A. |
Risk Factors |
54 | ||||||||
Item
2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
56 | ||||||||
Item
4. |
Submission of Matters to a Vote of Security Holders |
57 | ||||||||
Item
6. |
Exhibits |
57 | ||||||||
Signatures |
58 |
(in thousands) |
|
April 30, 2009 |
|
October 31, 2008 |
||||||
Assets |
||||||||||
Current
Assets: |
||||||||||
Cash and cash
equivalents |
$ | 259,912 | $ | 196,923 | ||||||
Short-term
investments |
49,245 | 169,943 | ||||||||
Investment
advisory fees and other receivables |
91,056 | 108,644 | ||||||||
Note
receivable from affiliate |
15,000 | | ||||||||
Other current
assets |
11,303 | 9,291 | ||||||||
Total current
assets |
426,516 | 484,801 | ||||||||
Other
Assets: |
||||||||||
Deferred
sales commissions |
58,477 | 73,116 | ||||||||
Goodwill |
122,234 | 122,234 | ||||||||
Other
intangible assets, net |
81,554 | 39,810 | ||||||||
Long-term
investments |
108,176 | 116,191 | ||||||||
Deferred
income taxes |
88,350 | 66,357 | ||||||||
Equipment and
leasehold improvements, net |
76,271 | 51,115 | ||||||||
Note
receivable from affiliate |
| 10,000 | ||||||||
Other
assets |
4,491 | 4,731 | ||||||||
Total other
assets |
539,553 | 483,554 | ||||||||
Total
assets |
$ | 966,069 | $ | 968,355 |
(in thousands, except share figures) |
|
April 30, 2009 |
|
October 31, 2008 |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Liabilities and Shareholders Equity |
||||||||||
Current
Liabilities: |
||||||||||
Accrued
compensation |
$ | 40,172 | $ | 93,134 | ||||||
Accounts
payable and accrued expenses |
46,679 | 55,322 | ||||||||
Dividend
payable |
18,151 | 17,948 | ||||||||
Taxes
payable |
| 848 | ||||||||
Deferred
income taxes |
17,096 | 20,862 | ||||||||
Other current
liabilities |
2,793 | 3,317 | ||||||||
Total current
liabilities |
124,891 | 191,431 | ||||||||
Long-Term
Liabilities: |
||||||||||
Long-term
debt |
500,000 | 500,000 | ||||||||
Contingent
purchase price liability |
14,613 | | ||||||||
Other
long-term liabilities |
34,582 | 26,269 | ||||||||
Total
long-term liabilities |
549,195 | 526,269 | ||||||||
Total
liabilities |
674,086 | 717,700 | ||||||||
Non-controlling interests |
3,445 | 10,528 | ||||||||
Commitments
and contingencies (See Note 18) |
| | ||||||||
Shareholders Equity: |
||||||||||
Voting Common
Stock, par value $0.00390625 per share: |
||||||||||
Authorized,
1,280,000 shares |
||||||||||
Issued and
outstanding, 431,790 and 390,009 shares, respectively |
2 | 2 | ||||||||
Non-Voting
Common Stock, par value $0.00390625 per share: |
||||||||||
Authorized,
190,720,000 shares |
||||||||||
Issued and
outstanding, 116,725,647 and 115,421,762 shares, respectively |
456 | 451 | ||||||||
Notes
receivable from stock option exercises |
(3,250 | ) | (4,704 | ) | ||||||
Accumulated
other comprehensive loss |
(4,886 | ) | (5,135 | ) | ||||||
Retained
earnings |
296,216 | 249,513 | ||||||||
Total
shareholders equity |
288,538 | 240,127 | ||||||||
Total
liabilities and shareholders equity |
$ | 966,069 | $ | 968,355 |
Three Months Ended April 30, |
Six Months Ended April 30, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands, except per share figures) |
2009 | 2008 | 2009 | 2008 | |||||||||||||||
Revenue: |
|||||||||||||||||||
Investment
advisory and administration fees |
$ | 153,158 | $ | 201,738 | $ | 313,670 | $ | 412,424 | |||||||||||
Distribution
and underwriter fees |
18,719 | 32,497 | 39,802 | 69,536 | |||||||||||||||
Service
fees |
25,641 | 38,057 | 53,241 | 78,860 | |||||||||||||||
Other
revenue |
871 | 1,134 | 1,147 | 2,402 | |||||||||||||||
Total
revenue |
198,389 | 273,426 | 407,860 | 563,222 | |||||||||||||||
Expenses: |
|||||||||||||||||||
Compensation
of officers and employees |
67,237 | 75,244 | 136,863 | 157,171 | |||||||||||||||
Distribution
expense |
21,451 | 29,547 | 43,507 | 62,338 | |||||||||||||||
Service fee
expense |
20,827 | 31,441 | 43,876 | 64,898 | |||||||||||||||
Amortization
of deferred sales commissions |
9,523 | 12,194 | 19,080 | 25,618 | |||||||||||||||
Fund
expenses |
4,384 | 5,910 | 9,416 | 12,426 | |||||||||||||||
Other
expenses |
29,844 | 22,945 | 57,996 | 45,459 | |||||||||||||||
Total
expenses |
153,266 | 177,281 | 310,738 | 367,910 | |||||||||||||||
Operating
income |
45,123 | 96,145 | 97,122 | 195,312 | |||||||||||||||
Other
Income (Expense): |
|||||||||||||||||||
Interest
income |
828 | 2,745 | 2,099 | 7,125 | |||||||||||||||
Interest
expense |
(8,407 | ) | (8,405 | ) | (16,823 | ) | (16,819 | ) | |||||||||||
Realized
(losses) gains on investments |
(1,256 | ) | (118 | ) | (2,386 | ) | 235 | ||||||||||||
Unrealized
gains (losses) on investments |
2,839 | 384 | 3,153 | (437 | ) | ||||||||||||||
Foreign
currency (losses) gains |
(25 | ) | (12 | ) | 36 | (32 | ) | ||||||||||||
Impairment
losses on investments |
(1,162 | ) | | (1,268 | ) | | |||||||||||||
Income before
income taxes, non-controlling interest and equity in net income (loss) of affiliates |
37,940 | 90,739 | 81,933 | 185,384 | |||||||||||||||
Income
taxes |
(10,866 | ) | (33,909 | ) | (28,326 | ) | (70,932 | ) | |||||||||||
Non-controlling interest |
(1,213 | ) | (4,042 | ) | (1,816 | ) | (5,404 | ) | |||||||||||
Equity in net
income (loss) of affiliates, net of tax |
(108 | ) | 374 | (1,341 | ) | 2,042 | |||||||||||||
Net
income |
$ | 25,753 | $ | 53,162 | $ | 50,450 | $ | 111,090 | |||||||||||
Earnings
Per Share: |
|||||||||||||||||||
Basic |
$ | 0.22 | $ | 0.46 | $ | 0.44 | $ | 0.96 | |||||||||||
Diluted |
$ | 0.22 | $ | 0.43 | $ | 0.42 | $ | 0.89 | |||||||||||
Weighted
Average Shares Outstanding: |
|||||||||||||||||||
Basic |
115,965 | 115,421 | 115,936 | 115,849 | |||||||||||||||
Diluted |
119,468 | 123,271 | 119,084 | 125,537 | |||||||||||||||
Dividends
Declared Per Share |
$ | 0.155 | $ | 0.150 | $ | 0.310 | $ | 0.300 |
Six Months Ended April 30, |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
2009 | 2008 | |||||||||
Cash and cash
equivalents, beginning of period |
$ | 196,923 | $ | 434,957 | |||||||
Cash Flows
from Operating Activities: |
|||||||||||
Net
income |
50,450 | 111,090 | |||||||||
Adjustments
to reconcile net income to net cash provided by operating activities: |
|||||||||||
Losses on
investments |
549 | 352 | |||||||||
Amortization
of long-term investments |
1,581 | 928 | |||||||||
Equity in net
loss (income) of affiliates |
2,091 | (3,228 | ) | ||||||||
Dividends
received from affiliates |
2,268 | 3,750 | |||||||||
Non-controlling interest |
1,816 | 5,404 | |||||||||
Amortization
of debt issuance costs |
456 | 673 | |||||||||
Deferred
income taxes |
(18,812 | ) | (19,601 | ) | |||||||
Stock-based
compensation |
20,677 | 20,668 | |||||||||
Depreciation
and other amortization |
9,712 | 6,754 | |||||||||
Amortization
of deferred sales commissions |
19,080 | 25,618 | |||||||||
Payment of
capitalized sales commissions |
(9,215 | ) | (18,064 | ) | |||||||
Contingent
deferred sales charges received |
4,761 | 6,793 | |||||||||
Proceeds from
the sale of trading investments |
27,167 | 6,737 | |||||||||
Purchase of
trading investments |
(28,453 | ) | (25,524 | ) | |||||||
Changes in
other assets and liabilities: |
|||||||||||
Investment
advisory fees and other receivables |
19,784 | 7,767 | |||||||||
Other current
assets |
(702 | ) | 101 | ||||||||
Other
assets |
(2 | ) | (85 | ) | |||||||
Accrued
compensation |
(53,039 | ) | (44,499 | ) | |||||||
Accounts
payable and accrued expenses |
(8,320 | ) | (22,684 | ) | |||||||
Taxes payable
current |
(6,545 | ) | (24,080 | ) | |||||||
Other current
liabilities |
(519 | ) | (129 | ) | |||||||
Taxes payable
long-term |
| 1,035 | |||||||||
Other
long-term liabilities |
7,001 | | |||||||||
Net cash
provided by operating activities |
41,786 | 39,776 | |||||||||
Cash Flows
From Investing Activities: |
|||||||||||
Additions to
equipment and leasehold improvements |
(35,855 | ) | (5,583 | ) | |||||||
Net cash paid
in acquisition |
(30,398 | ) | | ||||||||
Proceeds from
the sale of available-for-sale investments and investments in affiliates |
120,761 | 16,462 | |||||||||
Purchase of
available-for-sale investments |
(1,179 | ) | (11,533 | ) | |||||||
Net cash
provided by (used for) investing activities |
53,329 | (654 | ) |
Six Months Ended April 30, |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
2009 | 2008 | |||||||||
Cash Flows
From Financing Activities: |
|||||||||||
Distributions
to minority shareholders |
(2,818 | ) | (4,150 | ) | |||||||
Issuance of
short-term note receivable to affiliate |
(5,000 | ) | | ||||||||
Excess tax
benefit of stock option exercises |
8,626 | 6,037 | |||||||||
Proceeds from
issuance of Voting Common Stock |
86 | | |||||||||
Proceeds from
issuance of Non-Voting Common Stock |
10,053 | 19,862 | |||||||||
Repurchase of
Non-Voting Common Stock |
(7,652 | ) | (161,071 | ) | |||||||
Principal
repayments on notes receivable from stock option exercises |
2,305 | 399 | |||||||||
Dividends
paid |
(36,068 | ) | (35,134 | ) | |||||||
Proceeds from
the issuance of mutual fund subsidiaries capital stock |
2,034 | 199 | |||||||||
Redemption of
mutual fund subsidiaries capital stock |
(3,654 | ) | (52 | ) | |||||||
Net cash used
for financing activities |
(32,088 | ) | (173,910 | ) | |||||||
Effect of
currency rate changes on cash and cash equivalents |
(38 | ) | (38 | ) | |||||||
Net increase
(decrease) in cash and cash equivalents |
62,989 | (134,826 | ) | ||||||||
Cash and cash
equivalents, end of period |
$ | 259,912 | $ | 300,131 | |||||||
Supplemental Cash Flow Information: |
|||||||||||
Interest
paid |
$ | 16,321 | $ | 16,320 | |||||||
Income taxes
paid |
$ | 46,621 | $ | 108,734 | |||||||
Supplemental Non-Cash Flow Information: |
|||||||||||
Decrease in
investments due to net deconsolidations of sponsored investment funds |
$ | (4,442 | ) | $ | (38 | ) | |||||
Decrease in
non-controlling interests due to net deconsolidations of sponsored investment funds |
$ | (4,461 | ) | $ | (468 | ) | |||||
Exercise of
stock options through issuance of notes receivable |
$ | 851 | $ | 3,096 |
(dollars in thousands) |
|
Weighted- average amortization period (in years) |
|
Gross carrying amount |
|
Accumulated amortization |
|
Net carrying amount |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortizing
intangible assets: |
||||||||||||||||||
Client
relationships acquired |
10.2 | $ | 107,085 | $ | (31,164 | ) | $ | 75,921 | ||||||||||
Non-amortizing intangible assets: |
||||||||||||||||||
Mutual fund management contract acquired |
5,633 | | 5,633 | |||||||||||||||
Total |
$ | 112,718 | $ | (31,164 | ) | $ | 81,554 |
(in thousands) |
|
|||||
---|---|---|---|---|---|---|
Short-term
investments: |
||||||
Consolidated
funds: |
||||||
Commercial
paper |
$ | 11,613 | ||||
Debt securities |
37,632 | |||||
Total |
$ | 49,245 | ||||
Long-term
investments: |
||||||
Consolidated
funds: |
||||||
Debt
securities |
$ | 14,551 | ||||
Equity
securities |
1,064 | |||||
Separately
managed accounts: |
||||||
Debt
securities |
26,048 | |||||
Equity
securities |
10,541 | |||||
Sponsored
funds |
31,005 | |||||
Collateralized debt obligation entities |
2,537 | |||||
Investments
in affiliates |
21,484 | |||||
Other investments |
946 | |||||
Total |
$ | 108,176 |
Level
1 |
Investments valued using unadjusted quoted market prices in active markets for identical assets at the reporting date. Assets classified as
Level 1 include debt and equity securities held in the portfolios of consolidated funds and separate accounts, which are classified as trading and
investments in sponsored mutual funds which are classified as available-for-sale. |
|||||
Level
2 |
Investments valued using observable inputs other than Level 1 unadjusted quoted market prices, such as quoted market prices for similar assets
or liabilities in active markets, quoted prices for identical or similar assets or liabilities that are not active, and inputs other than quoted prices
that are observable or corroborated by observable market data. Investments in this category include investments in sponsored privately offered equity
funds, which are not listed but have a net asset value that is comparable to listed mutual funds. |
|||||
Level
3 |
Investments valued using unobservable inputs that are supported by little or no market activity. Level 3 valuations are derived primarily from
model-based valuation techniques that require significant management judgment or estimation based on assumptions that the Company believes market
participants would use in pricing the asset or liability. Investments in this category include investments in CDO entities that are measured at fair
value on a non-recurring basis when facts and circumstances indicate the investment has been impaired. The fair values of CDOs are derived from models
created to estimate cash flows using key inputs such as default and recovery rates for the underlying portfolio of loans or other securities. CDOs
measured at fair value on a non-recurring basis are classified as Level 3 because at least one of the significant inputs used in the determination of
fair value is not observable. |
(in thousands) |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Other Assets not held at Fair Value(1) |
|
Total |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cash equivalents |
$ | 37,673 | $ | 95,151 | $ | | $ | | $ | 132,824 | ||||||||||||
Total |
$ | 37,673 | $ | 95,151 | $ | | $ | | $ | 132,824 | ||||||||||||
Short-term
investments: |
||||||||||||||||||||||
Consolidated
funds: |
||||||||||||||||||||||
Commercial
paper |
$ | | $ | 11,613 | $ | | $ | | $ | 11,613 | ||||||||||||
Debt securities |
| 37,632 | | | 37,632 | |||||||||||||||||
Total |
$ | | $ | 49,245 | $ | | $ | | $ | 49,245 | ||||||||||||
Long-term
investments: |
||||||||||||||||||||||
Consolidated
funds: |
||||||||||||||||||||||
Debt
securities |
$ | 14,551 | $ | | $ | | $ | | $ | 14,551 | ||||||||||||
Equity
securities |
1,064 | | | | 1,064 | |||||||||||||||||
Separately
managed accounts: |
||||||||||||||||||||||
Debt
securities |
10,513 | 15,535 | | | 26,048 | |||||||||||||||||
Equity
securities |
10,541 | | | | 10,541 | |||||||||||||||||
Sponsored
funds |
28,012 | 2,993 | | | 31,005 | |||||||||||||||||
Collateralized debt obligation entities |
| | | 2,084 | 2,084 | |||||||||||||||||
Investments
in affiliates |
| | | 21,484 | 21,484 | |||||||||||||||||
Other investments |
| 38 | | 908 | 946 | |||||||||||||||||
Total |
$ | 64,681 | $ | 18,566 | $ | | $ | 24,476 | $ | 107,723 |
(1) |
Includes investments in equity method investees and other assets which, in accordance with GAAP, are not accounted for under a fair value measure. |
(in thousands) |
|
Total Level 3 |
Total Losses |
|
||||||
---|---|---|---|---|---|---|---|---|---|---|
Collateralized debt obligation entities |
$ | 453 | $ (1,268) |
|||||||
Total |
$ | 453 | $ (1,268) |
Three Months Ended April 30, |
Six Months Ended April 30, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|||||||||||
2008
Plan: |
|||||||||||||||||||
Stock
options |
$ | 8,127 | $ | 8,586 | $ | 17,331 | $ | 18,777 | |||||||||||
Restricted
shares |
1,462 | 352 | 2,889 | 705 | |||||||||||||||
Phantom stock
units |
43 | | 111 | | |||||||||||||||
Employee
Stock Purchase Plan |
| | 246 | 757 | |||||||||||||||
Incentive
Plan Stock Alternative |
| | | 429 | |||||||||||||||
ACM Plan |
50 | | 100 | | |||||||||||||||
Total stock-based compensation expense |
$ | 9,682 | $ | 8,938 | $ | 20,677 | $ | 20,668 |
|
2009 |
|
2008 |
|||||||
---|---|---|---|---|---|---|---|---|---|---|
Weighted-average grant date fair value of options granted |
$6.72 | $14.83 | ||||||||
Assumptions: |
||||||||||
Dividend
yield |
2.3% to 3.1% | 1.2% to 1.9% | ||||||||
Volatility |
32% to 34% | 25% to 28% | ||||||||
Risk-free
interest rate |
2.9% to 4.6% | 3.6% to 4.4% | ||||||||
Expected life
of options |
7.4 years | 6.8 to 7.8 years |
(share and intrinsic value figures in
thousands) |
|
Shares |
|
Weighted- Average Exercise Price |
|
Weighted- Average Remaining Contractual Term |
|
Aggregate Intrinsic Value |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Options
outstanding, beginning of period |
28,878 | $23.49 | ||||||||||||||||
Granted |
3,125 | 22.03 | ||||||||||||||||
Exercised |
(412 | ) | 14.08 | |||||||||||||||
Forfeited/expired |
(336 | ) | 31.09 | |||||||||||||||
Options outstanding, end of period |
31,255 | $23.38 | 5.7 | $ | 204,612 | |||||||||||||
Options exercisable, end of period |
19,754 | $18.88 | 4.3 | $ | 179,148 | |||||||||||||
Vested or expected to vest |
30,795 | $23.27 | 5.6 | $ | 203,593 |
(share figures in thousands) |
|
Shares |
|
Weighted- Average Grant Date Fair Value |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Unvested,
beginning of period |
149 | $28.21 | ||||||||
Granted |
972 | 22.04 | ||||||||
Vested |
(75 | ) | 20.27 | |||||||
Forfeited/expired |
(18 | ) | 21.99 | |||||||
Unvested, end of period |
1,028 | $23.06 |
(in thousands) |
|
2009 |
|
2008 |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Net
income |
$ | 50,450 | $ | 111,090 | ||||||
Net
unrealized gains (losses) on available-for-sale securities, net of income tax (expense) benefit of ($54) and $1,306, respectively |
308 | (2,248 | ) | |||||||
Foreign
currency translation adjustments, net of income taxes of $133 and $53, respectively |
(204 | ) | (94 | ) | ||||||
Change in unamortized loss on derivative instrument, net of income tax of $79 |
145 | 145 | ||||||||
Comprehensive income |
$ | 50,699 | $ | 108,893 |
Three Months Ended April 30, |
Six Months Ended April 30, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands, except per share data) |
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|||||||||||
Weighted-average shares outstanding basic |
115,965 | 115,421 | 115,936 | 115,849 | |||||||||||||||
Incremental common shares from stock options and restricted share awards |
3,503 | 7,850 | 3,148 | 9,688 | |||||||||||||||
Weighted-average shares outstanding diluted |
119,468 | 123,271 | 119,084 | 125,537 | |||||||||||||||
Earnings per
share: |
|||||||||||||||||||
Basic |
$ | 0.22 | $ | 0.46 | $ | 0.44 | $ | 0.96 | |||||||||||
Diluted |
$ | 0.22 | $ | 0.43 | $ | 0.42 | $ | 0.89 |
(TABS) business of M.D. Sass Investors Services (MD Sass), which has a lower effective management fee rate than our overall business, contributed to a decline in our average effective fee rate to 65 basis points in the second quarter of fiscal 2009 from 69 basis points in the first quarter of fiscal 2009 and 71 basis points in the second quarter of fiscal 2008. Investors in our sponsored open-end funds and separate accounts have the ability to redeem their shares or investments at any time, without prior notice, and there are no material restrictions that would prevent investors from doing so.
April 30, |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions) |
|
2009 |
|
% of Total |
|
2008 |
|
% of Total |
|
% Change |
|||||||||||||
Equity |
$ | 76,975 | 60 | % | $ | 107,659 | 68 | % | 29 | % | |||||||||||||
Fixed
income |
35,586 | 28 | % | 32,426 | 20 | % | 10 | % | |||||||||||||||
Floating-rate bank loan |
14,676 | 12 | % | 18,984 | 12 | % | 23 | % | |||||||||||||||
Total |
$ | 127,237 | 100 | % | $ | 159,069 | 100 | % | 20 | % |
For the Three Months Ended April 30, |
% |
For the Six Months Ended April 30, |
% |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
|||||||||||||||
Long-term
funds: |
|||||||||||||||||||||||||||
Open-end
funds(1) |
$ | 1,932 | $ | 2,162 | 11% | $ | 4,478 | $ | 4,157 | 8% | |||||||||||||||||
Closed-end
funds |
(124 | ) | 63 | NM | (3) | (574 | ) | 94 | NM | ||||||||||||||||||
Private funds |
(1,073 | ) | (11 | ) | NM | (2,663 | ) | (126 | ) | NM | |||||||||||||||||
Total long-term fund net inflows |
735 | 2,214 | 67% | 1,241 | 4,125 | 70% | |||||||||||||||||||||
HNW and
institutional accounts(1)(2) |
(16 | ) | 1,021 | NM | 2,336 | 1,561 | 50% | ||||||||||||||||||||
Retail managed accounts |
69 | 1,705 | 96% | 481 | 2,833 | 83% | |||||||||||||||||||||
Total separate account net inflows |
53 | 2,726 | 98% | 2,817 | 4,394 | 36% | |||||||||||||||||||||
Total net inflows |
$ | 788 | $ | 4,940 | 84% | $ | 4,058 | $ | 8,519 | 52% |
(1) |
Non-Eaton Vance funds subadvised by Atlanta Capital Management Company, LLC (Atlanta Capital), Fox Asset Management LLC (Fox Asset Management) and Parametric Portfolio Associates LLC (Parametric Portfolio Associates), which were previously reported in the Open-end funds category, have been reclassified to the HNW and institutional accounts category for all periods presented. |
(2) |
High-net-worth (HNW) |
(3) |
Not meaningful (NM) |
For the Three Months Ended April 30, |
% |
For the Six Months Ended April 30, |
% |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
|||||||||||||||
Equity fund
assets beginning |
$ | 46,591 | $ | 67,754 | 31 | % | $ | 51,956 | $ | 72,928 | 29 | % | |||||||||||||||
Sales/inflows |
3,513 | 3,951 | 11 | % | 8,302 | 9,060 | 8 | % | |||||||||||||||||||
Redemptions/outflows |
(3,497 | ) | (2,025 | ) | 73 | % | (7,027 | ) | (4,407 | ) | 59 | % | |||||||||||||||
Exchanges |
(53 | ) | (20 | ) | 165 | % | (87 | ) | (67 | ) | 30 | % | |||||||||||||||
Market value change |
583 | 887 | 34 | % | (6,007 | ) | (6,967 | ) | 14 | % | |||||||||||||||||
Equity fund assets ending |
47,137 | 70,547 | 33 | % | 47,137 | 70,547 | 33 | % | |||||||||||||||||||
Fixed income
fund assets beginning |
19,851 | 24,281 | 18 | % | 20,382 | 24,617 | 17 | % | |||||||||||||||||||
Sales/inflows |
1,388 | 1,619 | 14 | % | 2,786 | 3,157 | 12 | % | |||||||||||||||||||
Redemptions/outflows |
(1,051 | ) | (1,257 | ) | 16 | % | (2,442 | ) | (2,682 | ) | 9 | % | |||||||||||||||
Exchanges |
57 | 87 | 34 | % | 86 | 158 | 46 | % | |||||||||||||||||||
Market value change |
1,006 | (543 | ) | NM | 439 | (1,063 | ) | NM | |||||||||||||||||||
Fixed income fund assets ending |
21,251 | 24,187 | 12 | % | 21,251 | 24,187 | 12 | % | |||||||||||||||||||
Floating-rate
bank loan fund assets beginning |
12,466 | 18,359 | 32 | % | 13,806 | 20,381 | 32 | % | |||||||||||||||||||
Sales/inflows |
948 | 1,334 | 29 | % | 1,745 | 2,145 | 19 | % | |||||||||||||||||||
Redemptions/outflows |
(566 | ) | (1,408 | ) | 60 | % | (2,123 | ) | (3,148 | ) | 33 | % | |||||||||||||||
Exchanges |
16 | (119 | ) | NM | (8 | ) | (284 | ) | 97 | % | |||||||||||||||||
Market value change |
922 | (189 | ) | NM | 366 | (1,117 | ) | NM | |||||||||||||||||||
Floating-rate bank loan fund assets ending |
13,786 | 17,977 | 23 | % | 13,786 | 17,977 | 23 | % | |||||||||||||||||||
Total
long-term fund assets beginning |
78,908 | 110,394 | 29 | % | 86,144 | 117,926 | 27 | % | |||||||||||||||||||
Sales/inflows |
5,849 | 6,904 | 15 | % | 12,833 | 14,362 | 11 | % | |||||||||||||||||||
Redemptions/outflows |
(5,114 | ) | (4,690 | ) | 9 | % | (11,592 | ) | (10,237 | ) | 13 | % | |||||||||||||||
Exchanges |
20 | (52 | ) | NM | (9 | ) | (193 | ) | 95 | % | |||||||||||||||||
Market value change |
2,511 | 155 | NM | (5,202 | ) | (9,147 | ) | 43 | % | ||||||||||||||||||
Total long-term fund assets ending |
82,174 | 112,711 | 27 | % | 82,174 | 112,711 | 27 | % | |||||||||||||||||||
Separate
accounts beginning |
42,236 | 40,828 | 3 | % | 35,831 | 42,160 | 15 | % | |||||||||||||||||||
Inflows
HNW and institutional |
1,580 | 2,180 | 28 | % | 5,011 | 4,380 | 14 | % | |||||||||||||||||||
Outflows
HNW and institutional |
(1,596 | ) | (1,159 | ) | 38 | % | (2,675 | ) | (2,819 | ) | 5 | % | |||||||||||||||
Inflows
retail managed accounts |
2,179 | 2,618 | 17 | % | 4,058 | 4,625 | 12 | % | |||||||||||||||||||
Outflows
retail managed accounts |
(2,110 | ) | (913 | ) | 131 | % | (3,577 | ) | (1,792 | ) | 100 | % | |||||||||||||||
Market value
change |
1,993 | 836 | 138 | % | (1,219 | ) | (2,164 | ) | 44 | % | |||||||||||||||||
Assets acquired |
| | NM | 6,853 | | NM | |||||||||||||||||||||
Separate accounts ending |
44,282 | 44,390 | 0 | % | 44,282 | 44,390 | 0 | % | |||||||||||||||||||
Cash management fund assets ending |
781 | 1,968 | 60 | % | 781 | 1,968 | 60 | % | |||||||||||||||||||
Assets under management ending |
$ | 127,237 | $ | 159,069 | 20 | % | $ | 127,237 | $ | 159,069 | 20 | % |
(1) |
Non-Eaton Vance funds subadvised by Atlanta Capital, Fox Asset Management and Parametric Portfolio Associates, which were previously reported in the Long-term fund category, have been reclassified to the HNW and institutional category for all periods presented. |
April 30, |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions) |
|
2009 |
|
% of Total |
|
2008 |
|
% of Total |
|
% Change |
||||||||||||
Open-end
funds: |
||||||||||||||||||||||
Class
A |
$ | 29,134 | 23 | % | $ | 36,892 | 23 | % | 21 | % | ||||||||||||
Class
B |
2,307 | 2 | % | 4,339 | 3 | % | 47 | % | ||||||||||||||
Class
C |
6,687 | 5 | % | 9,303 | 6 | % | 28 | % | ||||||||||||||
Class
I |
6,271 | 5 | % | 3,894 | 2 | % | 61 | % | ||||||||||||||
Other(1)(2) |
1,155 | 1 | % | 1,318 | 1 | % | 12 | % | ||||||||||||||
Total open-end funds |
45,554 | 36 | % | 55,746 | 35 | % | 18 | % | ||||||||||||||
Private
funds(3) |
17,213 | 13 | % | 27,805 | 17 | % | 38 | % | ||||||||||||||
Closed-end funds |
20,188 | 16 | % | 31,128 | 20 | % | 35 | % | ||||||||||||||
Total fund assets |
82,955 | 65 | % | 114,679 | 72 | % | 28 | % | ||||||||||||||
HNW and
institutional account assets(2) |
27,754 | 22 | % | 27,749 | 17 | % | 0 | % | ||||||||||||||
Retail managed account assets |
16,528 | 13 | % | 16,641 | 11 | % | 1 | % | ||||||||||||||
Total separate account assets |
44,282 | 35 | % | 44,390 | 28 | % | 0 | % | ||||||||||||||
Total |
$ | 127,237 | 100 | % | $ | 159,069 | 100 | % | 20 | % |
(1) |
Includes other classes of Eaton Vance open-end funds. |
(2) |
Non-Eaton Vance funds subadvised by Atlanta Capital, Fox Asset Management and Parametric Portfolio Associates, which were previously reported in the Open-end funds category, have been reclassified to the HNW and institutional account assets category for all periods presented. |
(3) |
Includes privately offered equity and bank loan funds and CDO entities. |
For the Three Months Ended April 30, |
% |
For the Six Months Ended April 30, |
% |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
|||||||||||||||
Open-end
funds: |
|||||||||||||||||||||||||||
Class
A |
$ | 27,418 | $ | 34,635 | 21 | % | $ | 27,593 | $ | 34,875 | 21 | % | |||||||||||||||
Class
B |
2,303 | 4,906 | 53 | % | 2,446 | 5,303 | 54 | % | |||||||||||||||||||
Class
C |
6,363 | 9,148 | 30 | % | 6,438 | 9,474 | 32 | % | |||||||||||||||||||
Class
I |
5,327 | 3,479 | 53 | % | 4,915 | 3,485 | 41 | % | |||||||||||||||||||
Other(1)(2) |
1,138 | 938 | 21 | % | 1,191 | 859 | 39 | % | |||||||||||||||||||
Total open-end funds |
42,549 | 53,106 | 20 | % | 42,583 | 53,996 | 21 | % | |||||||||||||||||||
Private
funds(3) |
16,949 | 27,487 | 38 | % | 18,153 | 28,329 | 36 | % | |||||||||||||||||||
Closed-end funds |
19,627 | 30,629 | 36 | % | 20,277 | 31,599 | 36 | % | |||||||||||||||||||
Total fund assets |
79,125 | 111,222 | 29 | % | 81,013 | 113,924 | 29 | % | |||||||||||||||||||
HNW and
institutional account assets(2) |
26,337 | 26,692 | 1 | % | 24,929 | 26,892 | 7 | % | |||||||||||||||||||
Retail managed account assets |
15,551 | 15,390 | 1 | % | 15,278 | 15,152 | 1 | % | |||||||||||||||||||
Total separate account assets |
41,888 | 42,082 | 0 | % | 40,207 | 42,044 | 4 | % | |||||||||||||||||||
Total |
$ | 121,013 | $ | 153,304 | 21 | % | $ | 121,220 | $ | 155,968 | 22 | % |
(1) |
Includes other classes of Eaton Vance open-end funds. |
(2) |
Non-Eaton Vance funds subadvised by Atlanta Capital, Fox Asset Management and Parametric Portfolio Associates, which were previously reported in the Open-end funds category, have been reclassified to the HNW and institutional account assets category for all periods presented. |
(3) |
Includes privately offered equity and bank loan funds and CDO entities. |
For the Three Months Ended April 30, |
% |
For the Six Months Ended April 30, |
% |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands, except per share data) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
|||||||||||||||
Net
income |
$ | 25,753 | $ | 53,162 | 52 | % | $ | 50,450 | $ | 111,090 | 55 | % | |||||||||||||||
Earnings per
share: |
|||||||||||||||||||||||||||
Basic |
$ | 0.22 | $ | 0.46 | 52 | % | $ | 0.44 | $ | 0.96 | 54 | % | |||||||||||||||
Diluted |
$ | 0.22 | $ | 0.43 | 49 | % | $ | 0.42 | $ | 0.89 | 53 | % | |||||||||||||||
Operating
margin |
23% | 35% | 24% | 35% |
|
A decrease in revenue of $75.0 million, or 27 percent, primarily due to the 21 percent decrease in average assets under management and a decrease in our annualized effective fee rate to 65 basis points in the second quarter of fiscal 2009 from 71 basis points in the second quarter of fiscal 2008. The decrease in our annualized effective fee rate can be attributed to the increase in average separate account assets under management as a percentage of total average assets under management primarily as a result of the TABS acquisition in December 2008. |
|
A decrease in expenses of $24.0 million, or 14 percent, due to decreases in compensation expense, distribution expense, service fee expense, fund expenses and the amortization of deferred sales commissions, primarily reflecting decreases in both average assets under management and revenue. These decreases were partially offset by an increase in other expenses, primarily reflecting increases in facilities and technology expense associated with our move to new corporate offices in the second quarter of fiscal 2009. |
|
A decrease in interest income of $1.9 million, or 70 percent, reflecting a decrease in average cash balances and a decrease in effective interest rates over the last twelve months. |
|
Impairment losses on investments of $1.2 million associated with investments in CDO entities. |
|
A decrease in income taxes of $23.0 million, reflecting the decrease in taxable income year-over-year and the execution of a state tax voluntary disclosure agreement in the second quarter of fiscal 2009 that resulted in a net reduction in income tax expense of $3.4 million. |
|
A decrease in non-controlling interest of $2.8 million, primarily reflecting a $2.8 million adjustment to non-controlling interest in the second quarter of fiscal 2008. |
|
A decrease in weighted average diluted shares outstanding of 3.8 million shares, or 3 percent, primarily reflecting a decrease in the number of in-the-money share options included in the calculation of weighted average diluted shares outstanding and modest stock buybacks over the last twelve months. |
|
A decrease in revenue of $155.4 million, or 28 percent, primarily due to the 22 percent decrease in average assets under management and a decrease in our annualized effective fee rate to 67 basis points in the first six months of fiscal 2009 from 72 basis points in the first six months of fiscal 2008. The decrease in our annualized effective fee rate can be attributed to the increase in average separate account assets under management as a percentage of total average assets under management, primarily as a result of the TABS acquisition in December 2008. |
|
A decrease in expenses of $57.2 million, or 16 percent, due to decreases in compensation expense, distribution expense, service fee expense, fund expenses and the amortization of deferred sales commissions, primarily reflecting decreases in both average assets under management and revenue. These decreases were partially offset by an increase in other expenses, primarily reflecting increases in facilities and technology expense associated with our move to new corporate offices in the second quarter of fiscal 2009. |
|
A decrease in interest income of $5.0 million, or 71 percent, reflecting a decrease in average cash balances and a decrease in effective interest rates over the last twelve months. |
|
Impairment losses on investments of $1.3 million associated with investments in CDO entities. |
|
A decrease in income taxes of $42.6 million, reflecting the decrease in taxable income year-over-year and the execution of a state tax voluntary disclosure agreement in the second quarter of fiscal 2009 that resulted in a net reduction in income tax expense of $3.4 million. |
|
A decrease in non-controlling interest of $3.6 million, primarily reflecting a $2.8 million adjustment to non-controlling interest made in the second quarter of fiscal 2008. |
|
A decrease in weighted average diluted shares outstanding of 6.5 million shares, or 5 percent, primarily reflecting a decrease in the number of in-the-money share options included in the calculation of weighted average diluted shares outstanding and modest stock buybacks over the last twelve months. |
For the Three Months Ended April 30, |
% |
For the Six Months Ended April 30, |
% |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
|||||||||||||||
Operating
income |
$ | 45,123 | $ | 96,145 | 53 | % | $ | 97,122 | $ | 195,312 | 50 | % | |||||||||||||||
Adjusted
for: |
|||||||||||||||||||||||||||
Operating
(income) losses of consolidated funds |
151 | (352 | ) | NM | 58 | (85 | ) | NM | |||||||||||||||||||
Stock-based compensation |
9,682 | 8,938 | 8 | % | 20,677 | 20,668 | 0 | % | |||||||||||||||||||
Adjusted operating income |
$ | 54,956 | $ | 104,731 | 48 | % | $ | 117,857 | $ | 215,895 | 45 | % | |||||||||||||||
Adjusted operating margin |
28% | 38% | 29% | 38% |
For the Three Months Ended April 30, |
% |
For the Six Months Ended April 30, |
% |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
|||||||||||||||
Investment
advisory and administration fees |
$ | 153,158 | $ | 201,738 | 24 | % | $ | 313,670 | $ | 412,424 | 24 | % | |||||||||||||||
Distribution
and underwriter fees |
18,719 | 32,497 | 42 | % | 39,802 | 69,536 | 43 | % | |||||||||||||||||||
Service
fees |
25,641 | 38,057 | 33 | % | 53,241 | 78,860 | 32 | % | |||||||||||||||||||
Other revenue |
871 | 1,134 | 23 | % | 1,147 | 2,402 | 52 | % | |||||||||||||||||||
Total revenue |
$ | 198,389 | $ | 273,426 | 27 | % | $ | 407,860 | $ | 563,222 | 28 | % |
For the Three Months Ended April 30, |
% |
For the Six Months Ended April 30, |
% |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
|||||||||||||||
Compensation
of officers and employees: |
|||||||||||||||||||||||||||
Cash
compensation |
$ | 57,555 | $ | 66,306 | 13 | % | $ | 116,186 | $ | 136,503 | 15 | % | |||||||||||||||
Stock-based compensation |
9,682 | 8,938 | 8 | % | 20,677 | 20,668 | 0 | % | |||||||||||||||||||
Total compensation of officers and employees |
67,237 | 75,244 | 11 | % | 136,863 | 157,171 | 13 | % | |||||||||||||||||||
Distribution
expense(1) |
21,451 | 29,547 | 27 | % | 43,507 | 62,338 | 30 | % | |||||||||||||||||||
Service fee
expense |
20,827 | 31,441 | 34 | % | 43,876 | 64,898 | 32 | % | |||||||||||||||||||
Amortization
of deferred sales commissions |
9,523 | 12,194 | 22 | % | 19,080 | 25,618 | 26 | % | |||||||||||||||||||
Fund
expenses |
4,384 | 5,910 | 26 | % | 9,416 | 12,426 | 24 | % | |||||||||||||||||||
Other expenses(1) |
29,844 | 22,945 | 30 | % | 57,996 | 45,459 | 28 | % | |||||||||||||||||||
Total expenses |
$ | 153,266 | $ | 177,281 | 14 | % | $ | 310,738 | $ | 367,910 | 16 | % |
(1) |
Certain amounts from prior quarters have been reclassified to conform to current year presentation. See Note 3 in Item 1 for further discussion of this change. |
For the Three Months Ended April 30, |
% |
For the Six Months Ended April 30, |
% |
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
|||||||||||||||
Interest
income |
$ | 828 | $ | 2,745 | 70 | % | $ | 2,099 | $ | 7,125 | 71 | % | |||||||||||||||
Interest
expense |
(8,407 | ) | (8,405 | ) | 0 | % | (16,823 | ) | (16,819 | ) | 0 | % | |||||||||||||||
Realized
(losses) gains on investments |
(1,256 | ) | (118 | ) | 964 | % | (2,386 | ) | 235 | NM | |||||||||||||||||
Unrealized
(losses) gains on investments |
2,839 | 384 | 639 | % | 3,153 | (437 | ) | NM | |||||||||||||||||||
Foreign
currency (losses) gains |
(25 | ) | (12 | ) | 108 | % | 36 | (32 | ) | NM | |||||||||||||||||
Impairment losses on investments |
(1,162 | ) | | NM | (1,268 | ) | | NM | |||||||||||||||||||
Total other income (expense) |
$ | (7,183 | ) | $ | (5,406 | ) | 33 | % | $ | (15,189 | ) | $ | (9,928 | ) | 53 | % |
(in thousands) |
|
April 30, 2009 |
|
October 31, 2008 |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Balance
sheet data: |
||||||||||
Assets: |
||||||||||
Cash and cash
equivalents |
$ | 259,912 | $ | 196,923 | ||||||
Short-term
investments |
49,245 | 169,943 | ||||||||
Investment
advisory fees and other receivables |
91,056 | 108,644 | ||||||||
Total liquid
assets |
$ | 400,213 | $ | 475,510 | ||||||
Long-term
investments |
108,176 | 116,191 | ||||||||
Deferred
income taxes long term |
88,350 | 66,357 | ||||||||
Liabilities: |
||||||||||
Taxes
payable |
| 848 | ||||||||
Deferred
income taxes current |
17,096 | 20,862 | ||||||||
Long-term
debt |
500,000 | 500,000 |
For the Six Months Ended April 30, |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
(in thousands) |
|
2009 |
|
2008 |
|||||||
Cash flow
data: |
|||||||||||
Operating
cash flows |
$ | 41,786 | $ | 39,776 | |||||||
Investing
cash flows |
53,329 | (654 | ) | ||||||||
Financing
cash flows |
(32,088 | ) | (173,910 | ) |
|
Payments due |
|
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(in millions) |
|
Total |
|
Less than 1 Year |
|
1-3 Years |
|
4-5 Years |
|
After 5 Years |
|||||||||||||
Operating
leases facilities and equipment |
$ | 439.3 | $ | 18.4 | $ | 36.5 | $ | 35.4 | $ | 349.0 | |||||||||||||
Senior
notes |
500.0 | | | | 500.0 | ||||||||||||||||||
Interest
payment on senior notes |
276.3 | 32.5 | 97.5 | 65.0 | 81.3 | ||||||||||||||||||
Investment in
private equity partnership |
3.5 | | 3.5 | | | ||||||||||||||||||
Payments to
non-controlling interest holders of majority owned subsidiaries |
23.5 | 23.5 | | | | ||||||||||||||||||
Unrealized tax benefits |
10.1 | 10.1 | | | | ||||||||||||||||||
Total |
$ | 1,252.7 | $ | 84.5 | $ | 137.5 | $ | 100.4 | $ | 930.3 |
Level
1 |
Investments valued using unadjusted quoted market prices in active markets for identical assets at the reporting date. Assets classified as
Level 1 include debt and equity securities held in the portfolios of consolidated funds and separate accounts, which are classified as trading, and
investments in sponsored mutual funds, which are classified as available-for-sale. |
|||||
Level
2 |
Investments valued using observable inputs other than Level 1 unadjusted quoted market prices, such as quoted market prices for similar assets
or liabilities in active markets, quoted prices for identical or similar assets or liabilities that are not active, and inputs other than quoted prices
that are observable or corroborated by observable market data. Investments in this category include |
investments in sponsored privately offered equity funds, which are not listed but have a net asset value that is comparable to listed mutual
funds. |
||||||
Level
3 |
Investments valued using unobservable inputs that are supported by little or no market activity. Level 3 valuations are derived primarily from
model-based valuation techniques that require significant management judgment or estimation based on assumptions that we believe market participants
would use in pricing the asset or liability. Investments in this category include investments in CDO entities that are measured at fair value on a
non-recurring basis when facts and circumstances indicate the investment has been impaired. The fair values of CDOs are derived from models created to
estimate cash flows using key inputs such as default and recovery rates for the underlying portfolio of loans or other securities. CDOs measured at
fair value on a non-recurring basis are classified as Level 3 because at least one of the significant inputs used in the determination of fair value is
not observable. |
Period |
|
(a) Total Number of Shares Purchased |
|
(b) Average price paid per share |
|
(c) Total Number of Shares Purchased of Publicly Announced Plans or Programs(1) |
|
(d) Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
February 1,
2009 through February 28, 2009 |
| | | 2,461,857 | ||||||||||||||
March 1, 2009
through March 31, 2009 |
448 | $ | 19.22 | 448 | 2,461,409 | |||||||||||||
April 1, 2009 through April 30, 2009 |
106,202 | $ | 25.33 | 106,202 | 2,355,207 | |||||||||||||
Total |
106,650 | $ | 25.30 | 106,650 | 2,355,207 |
(1) |
We announced a share repurchase program on October 24, 2007. The Board authorized management to repurchase up to 8,000,000 shares of our Non-Voting Common Stock in the open market and in private transactions in accordance with applicable securities laws. This repurchase plan is not subject to an expiration date. |
Exhibit No. | Description | |||||
31.1 | Certification of Chief Executive Officer |
|||||
31.2 | Certification of Chief Financial Officer |
|||||
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 |
|||||
32.2 |
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 |
EATON VANCE CORP. (Registrant) |
||||||
DATE: June 5,
2009 |
/s/Robert J. Whelan |
|||||
(Signature) Robert J. Whelan Chief Financial Officer |
||||||
DATE: June 5,
2009 |
/s/Laurie G. Hylton |
|||||
(Signature) Laurie G. Hylton Chief Accounting Officer |
1. |
I have reviewed this quarterly report on Form 10-Q of Eaton Vance Corp.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined by Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
DATE: June 5,
2009 |
/s/ Thomas E. Faust Jr. |
|||||
(Signature) Thomas E. Faust Jr. Chairman, Chief Executive Officer and President |
1. |
I have reviewed this quarterly report on Form 10-Q of Eaton Vance Corp.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined by Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
DATE: June 5,
2009 |
/s/ Robert J. Whelan |
|||||
(Signature) Robert J. Whelan Chief Financial Officer |
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
DATE: June 5,
2009 |
/s/ Thomas E. Faust Jr. |
|||||
(Signature) Thomas E. Faust Jr. Chairman, Chief Executive Officer and President |
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
DATE: June 5,
2009 |
/s/ Robert J. Whelan |
|||||
(Signature) Robert J. Whelan Chief Financial Officer |