10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended December 31, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from              to             

Commission File Number: 1-9728

EPOCH HOLDING CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware	20-1938886
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

640 Fifth Avenue, New York, NY 10019

(Address of Principal Executive Offices)

(212) 303-7200

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not Check if Smaller Reporting Company)	Smaller reporting company	¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of February 4, 2013, there were 23,868,559 shares of the registrant’s common stock, $0.01 par value per share, issued and outstanding.

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE FISCAL QUARTER ENDED DECEMBER 31, 2012

TABLE OF CONTENTS

Form 10-Q Item No.		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Condensed Consolidated Balance Sheets (Unaudited)—December 31, 2012 and June 30, 2012		1
	Condensed Consolidated Statements of Income (Unaudited)—for the Three and Six Months Ended December 31, 2012 and 2011		2
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)—for the Three and Six Months Ended December 31, 2012 and 2011		3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)—for the Year Ended June 30, 2012 and Six Months Ended December 31, 2012		4
	Condensed Consolidated Statements of Cash Flows (Unaudited)—for the Six Months Ended December  31, 2012 and 2011		5
	Notes to Condensed Consolidated Financial Statements (Unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		43
Item 4.	Controls and Procedures		46
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		47
Item 1A.	Risk Factors		48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		49
Item 6.	Exhibits		50
	Signature		52

Items other than those listed above have been omitted because they are not applicable.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share data)

	December 31, 2012			June 30, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	21,866		$	24,528
Accounts receivable		23,428			20,718
Deferred income taxes		3,053			2,477
Held-to-maturity securities, at amortized cost (fair value of $0 and $710, respectively)—(Note 6)		—			706
Prepaid taxes and other current assets		8,263			1,275
Total current assets		56,610			49,704
Trading securities, at fair value		2,638			5,040
Available-for-sale securities, at fair value (cost of $6,468 and $8,209, respectively)—(Note 5)		6,645			8,448
Held-to-maturity securities, at amortized cost (fair value of $524 and $532, respectively)—(Note 6)		509			512
Equity method investments		3,188			2,580
Deferred income taxes		8,907			8,880
Property and equipment, net of accumulated depreciation of $4,883 and $4,306, respectively		5,451			863
Security deposits		1,673			1,639
Total assets	$	85,621		$	77,666
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	5,252		$	1,386
Accrued compensation and benefits		10,205			7,476
Income taxes payable		—			2,120
Total current liabilities		15,457			10,982
Deferred rent		1,673			531
Total liabilities		17,130			11,513
Commitments and contingencies—(Note 7)
Stockholders’ equity:
Common stock, $0.01 par value per share, 60,000,000 shares authorized; 24,743,160 issued and 23,868,559 outstanding at December 31, 2012 and 24,474,370 issued and 23,605,490 outstanding at June 30, 2012, respectively		247			245
Additional paid-in capital		85,982			75,058
(Accumulated deficit)/retained earnings		(6,112	)		2,307
Accumulated other comprehensive (loss)/income, net of tax		(27	)		8
Less: Treasury stock, at cost, 874,601 and 868,880 shares, respectively		(11,599	)		(11,465	)
Total stockholders’ equity		68,491			66,153
Total liabilities and stockholders’ equity	$	85,621		$	77,666

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)

	Three Months Ended December 31,				Six Months Ended December 31,
	2012		2011		2012		2011
Operating Revenues:
Investment advisory and management fees	$	27,309	$	20,694	$	54,500	$	38,805
Performance fees		494		1,040		927		1,938
Total operating revenues		27,803		21,734		55,427		40,743
Operating Expenses:
Employee compensation and benefits		10,512		8,353		20,907		16,170
Professional fees and services		3,926		756		4,768		1,467
Occupancy and technology		2,333		1,330		4,069		2,515
General and administrative		793		766		1,487		1,465
Distribution and servicing fees		403		470		846		969
Total operating expenses		17,967		11,675		32,077		22,586
Operating Income		9,836		10,059		23,350		18,157
Other income		284		331		693		137
Income Before Income Taxes		10,120		10,390		24,043		18,294
Provision for income taxes		4,382		4,527		10,411		8,013
Net Income	$	5,738	$	5,863	$	13,632	$	10,281
Earnings Per Share:—(Note 8)
Basic	$	0.24	$	0.25	$	0.58	$	0.44
Diluted	$	0.24	$	0.25	$	0.57	$	0.44
Weighted-Average Shares Outstanding:
Basic		23,714		23,285		23,697		23,320
Diluted		23,729		23,471		23,712		23,496
Cash Dividends Declared Per Share—(Note 11)	$	0.85	$	0.83	$	0.93	$	0.89

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(in thousands)

	Three Months Ended, December 31,						Six Months Ended, December 31,
	2012			2011			2012			2011
Net income	$	5,738		$	5,863		$	13,632		$	10,281
Other comprehensive income/(loss), net of tax—(Note 9):
Net unrealized gains/(losses) on available-for-sale securities		(17	)		196			73			(219	)
Reclassification for net gains included in net income		(47	)		(155	)		(108	)		(70	)
Other comprehensive income/(loss), net of tax		(64	)		41			(35	)		(289	)
Comprehensive income	$	5,674		$	5,904		$	13,597		$	9,992

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE YEAR ENDED JUNE 30, 2012 AND SIX MONTHS ENDED DECEMBER 31, 2012

(dollars and shares in thousands)

	Common Stock						Additional Paid-in Capital			(Accumulated Deficit)/ Retained Earnings			Accumulated Other Comprehensive (Loss)/ income			Treasury Stock					Total Stockholders’ Equity
	Shares			Amount												Shares		Amount
Balances at June 30, 2011		23,364		$	239		$	64,737		$	2,041		$	183			580	$	(5,465	)	$	61,735
Net income		—			—			—			24,767			—			—		—			24,767
Other comprehensive loss		—			—			—			—			(175	)		—		—			(175	)
Dividends		—			—			—			(24,501	)		—			—		—			(24,501	)
Issuance and forfeitures of restricted share awards		379			4			1,087			—			—			—		—			1,091
Amortization of share-based compensation		—			—			6,084			—			—			—		—			6,084
Excess income tax benefits from share-based compensation		—			—			1,702			—			—			—		—			1,702
Income tax benefit from dividends paid on unvested shares		—			—			511			—			—			—		—			511
Purchases of shares for employee withholding		(209	)		—			—			—			—			209		(4,807	)		(4,807	)
Repurchase of common shares		(80	)		—			—			—			—			80		(1,193	)		(1,193	)
Exercise of stock options		152			2			937			—			—			—		—			939
Balances at June 30, 2012		23,606			245			75,058			2,307			8			869		(11,465	)		66,153
Net income		—			—			—			13,632			—			—		—			13,632
Other comprehensive income—(Note 9)		—			—			—			—			(35	)		—		—			(35	)
Dividends		—			—			—			(22,051	)		—			—		—			(22,051	)
Issuance and forfeitures of restricted share awards		(11	)		(1	)		(154	)		—			—			—		—			(155	)
Amortization of share-based compensation		—			—			3,624			—			—			—		—			3,624
Excess income tax benefit from share-based compensation		—			—			5,303			—			—			—		—			5,303
Income tax benefit from dividends paid on unvested shares		—			—			424			—			—			—		—			424
Purchases of shares for employee withholding		(6	)		—			—			—			—			6		(134	)		(134	)
Exercise of stock options		280			3			1,727			—			—			—		—			1,730
Balances at December 31, 2012		23,869		$	247		$	85,982		$	(6,112	)	$	(27	)		875	$	(11,599	)	$	68,491

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Six Months Ended December 31,
	2012			2011
Cash flows from operating activities:
Net income	$	13,632		$	10,281
Adjustments to reconcile net income to net cash provided by operating activities:
Benefit from deferred income taxes		(576	)		(116	)
Share-based compensation		3,469			2,800
Depreciation and amortization		577			537
Net gains on investments		(396	)		(115	)
Net (income)/loss from equity method investments		(165	)		44
Amortization of bond premiums		10			21
Excess income tax benefit from share-based compensation		(5,303	)		(1,715	)
Income tax benefit from dividends paid on unvested shares		(424	)		(433	)
(Increase)/decrease in operating assets:
Accounts receivable		(2,710	)		(345	)
Prepaid taxes and other current assets		(6,988	)		(884	)
Trading securities		1,165			(6,777	)
Increase/(decrease) in operating liabilities:
Accounts payable and accrued liabilities		3,866			91
Accrued compensation and benefits		2,729			6,787
Income taxes payable		3,607			1,499
Deferred rent		1,142			(82	)
Net cash provided by operating activities		13,635			11,593
Cash flows from investing activities:
Proceeds from available-for-sale securities, net		1,930			1,745
Proceeds from equity method investments		1,000			—
Proceeds from redemption of held-to-maturity securities		700			—
Capital expenditures		(5,165	)		(173	)
Security deposits		(34	)		101
Net cash (used in)/provided by investing activities		(1,569	)		1,673
Cash flows from financing activities:
Dividends		(22,051	)		(3,265	)
Repurchase of common shares		(134	)		(1,943	)
Excess income tax benefit from share-based compensation		5,303			1,715
Income tax benefit from dividends paid on unvested shares		424			433
Proceeds from stock option exercises		1,730			357
Net cash used in financing activities		(14,728	)		(2,703	)
Net (decrease)/increase in cash and cash equivalents during period		(2,662	)		10,563
Cash and cash equivalents at beginning of period		24,528			29,128
Cash and cash equivalents at end of period	$	21,866		$	39,691
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	13,051		$	7,392
Supplemental disclosures of non-cash investing activities:
Net change in unrealized gains/(losses) on available-for-sale securities, net of tax—(Note 9)	$	(35	)	$	(289	)
Dividends declared but not yet paid	$	—		$	17,487

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Note 1—Organization and Basis of Presentation

Organization

Epoch Holding Corporation (“Epoch” or the “Company”), a Delaware corporation, is a holding company whose sole line of business is investment advisory and investment management services. The operations of the Company are conducted through its wholly-owned subsidiary, Epoch Investment Partners, Inc. (“EIP”). EIP is a registered investment adviser under the Investment Advisers Act of 1940, as amended. EIP provides investment advisory and investment management services to clients including corporations, mutual funds, retirement plans, public pension funds, endowments, foundations, financial institutions and high net worth individuals. Headquartered in New York City, the Company’s current investment strategies include U.S. Value, U.S. All Cap Value, U.S. Small Cap Value, U.S. Smid Cap (small/mid) Value, U.S. Choice, U.S. Equity Shareholder Yield, Global Equity Shareholder Yield, Global Choice, Global Absolute Return, International Small Cap, and Global Small Cap.

Basis of Presentation

The fiscal year-end June 30, 2012 Condensed Consolidated Balance Sheet was derived from audited financial statements and, in accordance with interim financial statement standards, does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial statements. The unaudited condensed consolidated financial statements of the Company included herein have been prepared in accordance with U.S. GAAP, and in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made herein are adequate to make the information not misleading.

Certain items previously reported have been reclassified to conform to the current year presentation. Such reclassifications had no impact on the condensed consolidated financial position, results of operations, or cash flows.

Use of Estimates

These financial statements rely, in part, on estimates. Actual results could differ from these estimates. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position, interim results of operations, comprehensive income and cash flows. All material intercompany accounts and transactions have been eliminated in consolidation. The nature of the Company’s business is such that the results for the interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The Company’s unaudited condensed consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012.

There have been no changes in significant accounting policies during the three and six months ended December 31, 2012. For a complete listing of the Company’s significant accounting policies, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012.

6

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Principles of Consolidation

The Company’s policy is to consolidate (i) variable interest entities (“VIEs”) in which the Company is deemed to be the primary beneficiary, (ii) partnership or similar entities in which the Company is the Managing Member, unless the other unrelated members have rights that would overcome the presumption of control by the Managing Member, and (iii) corporate entities in which it has a controlling financial interest through a majority voting interest or other contract.

Each reporting period, the Company assesses each of the funds in which it is the Managing Member and/or manages through a contract to determine whether consolidation/deconsolidation is appropriate. The Company first evaluates each fund that it manages to determine whether the fund is an investment company. The Company then evaluates whether each fund meets the definition of a VIE. This determination is made by considering whether the fund’s equity investment at risk is sufficient to finance its activities without additional subordinated financial support and whether the fund’s at-risk equity holders have the typical characteristics of a controlling financial interest.

An entity that is a VIE must be consolidated by its primary beneficiary. For VIEs that are investment companies and meet other requirements, the primary beneficiary of the VIE is defined as the party that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. For VIEs that are not investment companies, the primary beneficiary of a VIE is defined as the party who, considering the involvement of related parties and de facto agents, has (i) the power to direct the activities of the VIE that most significantly affect its economic performance, and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. This evaluation is updated continuously. As of December 31, 2012, all funds in which the Company was the Managing Member or managed through a contract were considered investment companies. Furthermore, as of December 31, 2012, none of the funds in which the Company served as a Managing Member and/or managed through a contract met the definition of a VIE.

If the Company determines that a fund is not a VIE, the Company then evaluates whether the fund is a partnership or similar entity. If the fund is a partnership or similar entity, the Company evaluates the fund under the partnership consolidation guidance. Pursuant to that guidance, the Company consolidates funds in which it is the Managing Member and/or manages through a contract, unless presumption of control by the Company can be overcome. This presumption is overcome only when unaffiliated investors in the fund have the substantive ability to liquidate the fund or otherwise remove the Company as the Managing Member without cause, based on a simple majority vote of unaffiliated investors, or have other substantive participating rights. If the presumption of control can be overcome, the Company accounts for its interest in the fund pursuant to the equity method of accounting. As of December 31, 2012, the Company’s investment in the Epoch Global All-Cap Fund, LLC required consolidation under this guidance, as the Company was the sole member in this fund.

If the Company determines that a fund is not a VIE and is not a partnership or similar entity, the Company then evaluates the fund pursuant to the general consolidation guidance that is applicable to corporate entities. Consistent with that guidance, the Company consolidates a fund that is not a VIE and is not a partnership or similar entity only when it has a controlling financial interest, which is usually demonstrated through ownership of a majority voting interest in the fund.

If the Company does not consolidate a fund in which it is the Managing Member and/or manages through a contract based on the evaluation above, it will account for its equity investment as one of the following depending on the characteristic of the investment: (1) an available-for-sale security if the equity investment has a readily determinable fair value (i.e., the equity investment is publicly traded) and the Company does not have significant influence, (2) as an equity method investment if the Company has significant influence (i.e., the Company is a Managing Member of a fund that is a partnership or similar entity that it is not required to consolidate), or (3) as a cost method investment if the equity method investment does not have a readily determinable fair value and the Company does not have significant influence. As of December 31, 2012, the Company accounted for its investments in its four Company-sponsored mutual funds as available-for-sale securities, as these investments have a readily determinable fair value and the Company did not have significant influence through its sub-advisory agreements. The Company accounted for its investments in the Epoch Global Equity Shareholder Yield Fund, LLC, the Epoch Global Choice Fund, LLC and the Epoch Global Absolute Return Fund, LLC under the equity method, as the Company had significant influence as Managing Member.

7

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Recently Issued Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11, Disclosures About Offsetting Assets and Liabilities. ASU No. 2011-11 provides new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements associated with its derivative and other financial instruments. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The new disclosures are designed to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards (“IFRS”). The Company adopted this standard in January 2013. The adoption of this standard did not have a material impact on its condensed consolidated financial position, results of operations, or cash flows.

Note 2—Merger Agreement

On December 6, 2012, Epoch, The Toronto-Dominion Bank (“TD”) and Empire Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of TD, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions, Merger Sub will be merged with and into Epoch, with Epoch surviving the merger as a wholly owned subsidiary of TD (the “Merger”). The Merger Agreement was unanimously approved by Epoch’s Board of Directors and is expected to be completed during the first half of calendar year 2013.

At the effective time of the Merger, each share of Epoch common stock (other than treasury shares held by Epoch and any shares of Epoch common stock held by TD or any wholly-owned subsidiary of TD or Epoch or any person who properly demands statutory appraisal of their shares) will be converted into the right to receive an amount in cash equal to $28.00, without interest (the “Merger Consideration”). Each option to acquire Epoch common stock that is outstanding, whether vested or unvested, at the effective time of the Merger will be canceled in exchange for the right to receive the Merger Consideration minus the exercise price per share of the option. Each share of restricted Epoch common stock that is outstanding at the effective time of the Merger will convert into the right to receive the Merger Consideration per share of restricted stock. Under the terms of the Merger Agreement, the Company may continue to declare or pay quarterly dividends to its common stockholders not in excess of $0.10 per share. No adjustment to the Merger Consideration was made on account of the previously announced $0.75 per share special dividend declared on November 12, 2012 and paid on December 14, 2012, or any ordinary quarterly dividends payable prior to the consummation of the Merger.

The consummation of the Merger is subject to customary closing conditions, including, among others, approval by Epoch’s stockholders, the receipt of consents from Epoch clients representing at least 80% of Epoch’s management fee revenues, the absence of certain legal impediments to the consummation of the Merger, the receipt of required governmental consents and approvals, the early termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (which has been satisfied) and, subject to materiality exceptions, the accuracy of representations and warranties made by Epoch and TD, respectively, and material compliance by Epoch and TD with their respective obligations under the Merger Agreement. The Merger is not subject to any financing condition.

The Merger Agreement requires Epoch to convene a stockholders meeting for purposes of obtaining the necessary stockholder approval and, subject to certain exceptions, Epoch has agreed (i) not to solicit alternative transactions or enter into discussions concerning, or provide confidential information in connection with, any alternative transaction and (ii) that Epoch’s Board of Directors will recommend that Epoch’s stockholders adopt the Merger Agreement.

Prior to adoption of the Merger Agreement by Epoch’s stockholders, Epoch’s Board of Directors may, in certain circumstances, change its recommendation that Epoch’s stockholders adopt the Merger Agreement, subject to complying with certain notice and other specified procedures set forth in the Merger Agreement, including giving TD the opportunity to propose changes to the Merger Agreement.

The Merger Agreement may be terminated under certain circumstances, including by Epoch, prior to the adoption of the Merger Agreement by Epoch’s stockholders, in the event that Epoch receives an unsolicited proposal that Epoch’s Board of Directors concludes, after following certain procedures, is a Superior Proposal (as defined in the Merger Agreement). In addition, TD may terminate the Merger Agreement under certain circumstances, including if Epoch breaches its non-solicitation obligations under the Merger Agreement or if Epoch’s Board of Directors changes, withholds, or fails to reaffirm its recommendation that Epoch’s stockholders adopt the Merger Agreement, or approves a proposal for an alternative transaction. In the foregoing circumstances, Epoch would be required to pay TD a termination fee of $20 million.

8

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

For terms of the Merger Agreement, including circumstances under which the Merger Agreement can be terminated and the ramifications of such termination, as well as other terms and conditions, please refer to the Merger Agreement filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 6, 2012. Additional information regarding the proposed Merger transaction will be contained in a definitive proxy statement to be filed by Epoch with the SEC.

If completed, the Merger will result in the Company becoming a wholly-owned subsidiary of TD and its shares will no longer be listed on any public market. No assurance can be given that the Merger will be completed.

During the three months ended December 31, 2012, merger related transaction costs totaled approximately $2.8 million, primarily for legal and investment banking fees. These costs are included in professional fees and services in the Condensed Consolidated Statements of Income.

Voting Agreements

In connection with the execution of the Merger Agreement, TD and Merger Sub have entered into voting and support agreements (each, a “Voting Agreement”) with certain of Epoch’s directors and certain members of Epoch’s senior management and the trustees of certain trusts for their benefit (the “Stockholders”) holding, as of the date of the Merger Agreement, in the aggregate approximately 28% of Epoch’s total voting power. Pursuant to the terms of the Voting Agreement, the Stockholders have agreed in their capacities as Epoch stockholders, among other things: (i) to vote their shares in favor of the adoption of the Merger Agreement and against any alternative proposal; and (ii) not to transfer any shares of Epoch subject to the Voting Agreement, subject to certain exceptions.

The Voting Agreements will terminate on the earlier of the effective time of the Merger and the date that the Merger Agreement is terminated.

Note 3—Accounts Receivable

Accounts receivable represent balances arising from investment advisory agreements. The Company’s accounts receivable balances do not include an allowance for doubtful accounts for the periods presented and there have been no bad debt expenses recognized during the three and six months ended December 31, 2012 and 2011. Management believes the December 31, 2012 accounts receivable balances are fully collectible.

Significant Customer

The Company’s clients are located worldwide and across many industries. For the three and six months ended December 31, 2012 New York Life Investment Management, through the MainStay Epoch Funds and other funds sub-advised by EIP (see Note 7—Strategic Relationship), accounted for approximately 13% and 14% of condensed consolidated operating revenues, respectively. For the three and six months ended December 31, 2011, this relationship accounted for approximately 18% of condensed consolidated operating revenues.

Note 4—Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date and establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the reported date. The three levels are defined as follows:

• Level 1—unadjusted quoted prices in active markets that are available for identical assets or liabilities as of the reported date.

• Level 2—quoted prices in markets that are not active or other pricing inputs that are either directly or indirectly observable as of the reported date.

9

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

• Level 3—prices or valuation techniques that are both significant to the fair value measurement and unobservable as of the reported date. These financial instruments do not have active markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

Assets and liabilities measured and reported at fair value are classified and disclosed in one of the above categories based on the nature of the inputs that are significant to the fair value measurement in its entirety. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s classification within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The underlying investments in Company-sponsored mutual funds, separate accounts, and trading securities are publicly traded equity securities which are valued under the market approach through the use of unadjusted quoted market prices available in active markets and are classified within Level 1 of the valuation hierarchy.

At December 31, 2012, the Company held less than a 2% ownership interest in a non-affiliated limited partnership. This investment was accounted for as available-for-sale and was valued based upon the Company’s ownership interest in the partnership’s net assets. The investment limited partnership was classified within Level 2 of the valuation hierarchy. In January 2013, the Company liquidated its remaining interest in this investment.

The following table presents, for each of the hierarchy levels previously described, the Company’s assets that are measured at fair value as of December 31, 2012 and June 30, 2012 (in thousands):

	December 31, 2012								June 30, 2012
	Fair Value Measurements		Level 1		Level 2		Level 3		Fair Value Measurements		Level 1		Level 2		Level 3
Trading securities:
Epoch Global All-Cap Fund, LLC	$	2,638	$	2,638	$	—	$	—	$	2,929	$	2,929	$	—	$	—
Epoch Global Choice Fund, LLC		—		—		—		—		2,111		2,111		—		—
Total trading securities		2,638		2,638		—		—		5,040		5,040		—		—
Available-for-sale securities:
Company-sponsored mutual funds		1,219		1,219		—		—		1,133		1,133		—		—
Epoch Global Champions separate account		1,095		1,095		—		—		1,088		1,088		—		—
Epoch U.S. Equity Shareholder Yield separate account		2,070		2,070		—		—		2,000		2,000		—		—
Investment in non-affiliated limited partnership		2,261		—		2,261		—		4,227		—		4,227		—
Total available-for-sale securities		6,645		4,384		2,261		—		8,448		4,221		4,227		—
Total investments measured at fair value	$	9,283	$	7,022	$	2,261	$	—	$	13,488	$	9,261	$	4,227	$	—

There were no transfers into or out of the Level 1, 2 and 3 categories in the fair value measurement hierarchy for the periods presented.

At June 30, 2012, the Company was the sole investor in, and managing member of, the Epoch Global All-Cap Fund, LLC and the Epoch Global Choice Fund, LLC. Therefore, these investments were consolidated as trading securities. During the quarter ended September 30, 2012, several new investors joined the Epoch Global Choice Fund, LLC. As a result, the Company’s ownership in this fund was diluted to less than 2%. Furthermore, the Company can be removed by the additional investors in the fund without cause, based on a simple majority vote of the unaffiliated investors. In accordance with the Company’s consolidation policy, the Company deconsolidated its interest and now records its investment in the Epoch Global Choice Fund, LLC under the equity method.

For the Company’s equity method investments, the Company records its percentage share of net earnings or losses in other income. Consequently, these investments are not recorded at fair value, but approximate fair value. The total carrying value of these investments was $3.2 million and $2.6 million at December 31, 2012 and June 30, 2012, respectively.

The Company did not hold any financial liabilities measured at fair value at December 31, 2012 or June 30, 2012.

10

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Note 5—Available-for-sale Securities

The Company’s available-for-sale securities at December 31, 2012 and June 30, 2012 are summarized as follows (in thousands):

	December 31, 2012									June 30, 2012
	Cost		Gross Unrealized					Fair Value		Cost		Gross Unrealized					Fair Value
			Gains		Losses							Gains		Losses
Available-for-sale securities:
Company-sponsored mutual funds	$	1,314	$	4	$	(99	)	$	1,219	$	1,217	$	72	$	(156	)	$	1,133
Epoch Global Champions separate account		1,004		100		(9	)		1,095		992		144		(48	)		1,088
Epoch U.S. Equity Shareholder Yield separate account		2,042		82		(54	)		2,070		2,000		—		—			2,000
Investment in non-affiliated limited partnership		2,108		153		—			2,261		4,000		227		—			4,227
Total	$	6,468	$	339	$	(162	)	$	6,645	$	8,209	$	443	$	(204	)	$	8,448

The Company has evaluated the carrying value and the gross unrealized losses of the investments and determined that these losses are not other-than-temporary. In its impairment analysis, the Company takes into consideration numerous criteria, including the duration and extent of any decline in fair value and the Company’s intent with respect to a given security. If the decline in value is determined to be other-than-temporary, the carrying value of the security is written down to fair value through net income. The unrealized losses for the available-for-sale securities have been unrealized for twelve months or more. However, the gross unrealized losses were primarily caused by overall weakness in the financial markets and world economy, and the Company has both the ability and intent to hold the investments for a period of time sufficient to recover such losses. No impairment losses in value of the Company’s investments were recognized during any of the periods presented.

Proceeds as well as realized gains and losses recognized from investments classified as available-for-sale during the three and six months ended December 31, 2012 and 2011 are as follows (in thousands):

	Three Months Ended December 31, 2012							Three Months Ended December 31, 2011
			Gross Realized							Gross Realized
	Proceeds		Gains		Losses			Proceeds		Gains		Losses
Available-for-sale securities:
Epoch U.S. Equity Shareholder Yield separate account	$	112	$	6	$	(10	)	$	—	$	—	$	—
Company-sponsored mutual funds		84		84		—			20		20		—
Epoch Global All Cap separate account		—		—		—			261		25		(49	)
Total	$	196	$	90	$	(10	)	$	281	$	45	$	(49	)

	Six Months Ended December 31, 2012							Six Months Ended December 31, 2011
			Gross Realized							Gross Realized
	Proceeds		Gains		Losses			Proceeds		Gains		Losses
Available-for-sale securities:
Epoch U.S. Equity Shareholder Yield separate account	$	167	$	8	$	(12	)	$	—	$	—	$	—
Investment in non-affiliated limited partnership		2,000		108		—			—		—		—
Company-sponsored mutual funds		84		84		—			20		20		—
Epoch Global All Cap separate account		—		—		—			1,634		80		(254	)
Total	$	2,251	$	200	$	(12	)	$	1,654	$	100	$	(254	)

Realized gains and losses from available-for-sale securities are included in other income in the Condensed Consolidated Statements of Income using the specific identification method.

11

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Note 6—Held-to-maturity Securities

The Company’s investment securities classified as held-to-maturity consist of high-grade debt instruments. These investments are carried at amortized cost. Gross unrecognized holding gains and losses, and fair values of these securities at December 31, 2012 and June 30, 2012 are as follows (in thousands):

	December 31, 2012								June 30, 2012
	Amortized Cost		Gross Unrecognized Holding				Aggregate Fair Value		Amortized Cost		Gross Unrecognized Holding				Aggregate Fair Value
			Gains		Losses						Gains		Losses
Current	$	—	$	—	$	—	$	—	$	706	$	4	$	—	$	710
Long-Term		509		15		—		524		512		20		—		532
Total	$	509	$	15	$	—	$	524	$	1,218	$	24	$	—	$	1,242

The fair value of investments in held-to-maturity securities is valued under the market approach through the use of quoted prices for similar investments in active markets, a Level 2 fair value measurement. See Note 4, Fair Value Measurements, for the three-level valuation hierarchy.

The contractual maturities of the investment securities classified as held-to-maturity at December 31, 2012 are as follows (in thousands):

Contractual Maturities	Amortized Cost		Aggregate Fair Value		Weighted- Average Interest Rate
Less than 1 year	$	—	$	—		0	%
Due after 1 year through 3 years		509		524		2.66	%
Total	$	509	$	524		2.66	%

Note 7—Commitments and Contingencies

Employment Agreements

Besides the employment contract with the Company’s Chief Executive Officer dated December 20, 2010, there are no employment contracts with any other officer or employee of the Company. There are written agreements with certain employees, which provide for sales commissions or bonuses, subject to the attainment of certain performance criteria or continuation of employment. Such commitments under the various agreements totaled approximately $2.7 million at December 31, 2012. Of this amount, approximately $1.1 million is included in accrued compensation and benefits in the Condensed Consolidated Balance Sheet at December 31, 2012. An additional $0.4 million will be accrued during the remainder of the fiscal year ending June 30, 2013 and thereafter. Approximately $1.2 million represents deferred compensation awards to be issued during the remainder of the fiscal year ending June 30, 2013 and thereafter.

Strategic Relationship

In July 2009, EIP entered into a strategic relationship with New York Life Investments, whereby the MainStay Group of Funds adopted the Company’s family of mutual funds (the “Epoch Funds”). The adoption was completed in November 2009. EIP is responsible for the day-to-day investment management of the funds through a sub-advisory relationship, while MainStay Investments (“MainStay”), the retail distribution arm of New York Life Investments, is responsible for the distribution and administration of the funds. Each former Epoch Fund is now co-branded as a “MainStay Epoch” Fund.

In addition to an existing sub-advisory relationship between EIP and New York Life Investments for certain funds, and the adoption of the Epoch Funds indicated above, EIP and New York Life Investments have entered into an arrangement wherein, among other things, EIP and an affiliate of New York Life Investments have established a distribution and administration relationship with respect to certain separately managed account and unified managed account strategies, and for a period of three years commencing November 2009 New York Life Investments agreed to pay certain additional base fees and meet minimum distribution targets. Final payment of additional base fees was received in November 2012. Although there are no longer any additional base fees or minimum distribution targets, the relationship between EIP and New York Life Investments remains ongoing.

12

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Legal Matters

From time to time, the Company or its subsidiaries may become parties to claims, legal actions and complaints arising in the ordinary course of business.

Litigation Relating to the Merger

Shortly after the announcement of the proposed transaction, five purported class action complaints were filed by purported shareholders of Epoch against Epoch, the individual directors of Epoch, and TD. One action was filed in the Supreme Court of the State of New York, County of New York, two were filed in the Delaware Court of Chancery, a fourth was filed in the Supreme Court of the State of New York, County of Nassau, and a fifth was filed in the United States District Court for the Southern District of New York.

Specifically, on December 11, 2012, a purported shareholder of Epoch filed an action in the Supreme Court of the State of New York, County of New York, captioned Cindy Goldman TTEE GSS 508 Trust Dated May 16, 2008 v. Epoch Holding Corporation, et al. (the “Goldman Action”). The complaint names as defendants all directors of Epoch, Epoch, and TD. The plaintiff alleges that the directors of Epoch breached their fiduciary duties by approving the proposed transaction with TD, and that TD aided and abetted those alleged breaches of fiduciary duty. Specifically, the lawsuit alleges, among other things, that the Merger Agreement was reached through an unfair process that benefitted the personal and financial positions of the directors of Epoch at the expense of the shareholders of Epoch, that the Merger Consideration is inadequate, and that the deal protection devices in the Merger Agreement have precluded other bidders from making competing offers for Epoch. The plaintiff seeks, among other things, injunctive relief and attorneys’ fees concerning the alleged breaches of fiduciary duty and to prohibit the defendants from consummating the merger. On January 8, 2013, Epoch and its directors (the “Epoch Defendants”) filed a motion to dismiss the complaint or in the alternative to stay the action pending resolution of parallel proceedings in Delaware. The parties thereafter stipulated and the Court ordered that the action be stayed pending the resolution of the related Delaware Action and the Katcher Action described herein.

On December 21, 2012, another purported shareholder of Epoch filed an action in the Delaware Court of Chancery, captioned Reich v. Epoch Holding Corporation, et al (the “Reich Action”). Like the Goldman Action, this action alleges that the directors of Epoch breached their fiduciary duties in connection with the proposed transaction with TD, and that both TD and Merger Sub aided and abetted those alleged breaches of fiduciary duty. The Reich Action seeks, among other things, injunctive relief and attorneys’ fees concerning the alleged breaches of fiduciary duty and to prohibit the defendants from consummating the merger. The suit names as defendants all directors of Epoch, Epoch, TD, and Merger Sub. On December 26, 2012, another purported shareholder action was filed in the Delaware Court of Chancery, captioned Hodgson v. Epoch Holding Corporation, et al (the “Hodgson Action”). The Hodgson Action also brings breach of fiduciary duty claims against the directors of Epoch, and aiding and abetting claims against Epoch, TD, and Merger Sub, seeking similar relief.

The Epoch Defendants answered the complaint in the Reich Action on December 28, 2012. On January 3, 2013, the Court of Chancery entered an order consolidating the Reich and Hodgson Actions as In re Epoch Holding Corporation Stockholder Litigation (the “Delaware Action”) and appointed lead counsel for the consolidated action. On January 18, 2013 the parties filed a stipulation and proposed order to govern the confidential treatment of discovery materials, which the court granted on January 29, 2013. On January 18, 2013, the plaintiffs filed an unopposed motion for leave to amend their complaint, which the Court granted on January 25, 2013. On January 21, 2013, the parties filed a proposed stipulated scheduling order to govern discovery and any motions for preliminary injunction that the plaintiffs may file, which the Court granted on January 28, 2013. The plaintiffs filed their amended class action complaint on January 25, 2013, which added claims that the director defendants breached their duty of disclosure by omitting or misstating material information in Epoch’s preliminary proxy statement. On February 6, 2013, the Epoch Defendants answered the plaintiffs’ amended complaint.

The third-filed action was brought in the Supreme Court of the State of New York, County of Nassau, on December 24, 2012, captioned Katcher v. Epoch Holding Corporation, et al. (the “Katcher Action”). The plaintiffs brought claims similar to those raised in the Goldman Action and Delaware Action against Epoch, the members of Epoch’s board, and TD, and seek declaratory and injunctive relief. The plaintiffs claim that Epoch’s directors breached their fiduciary duties in connection with entering into the proposed transaction with TD, and that TD and Epoch aided and abetted the alleged breaches of fiduciary duty.

13

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

On January 16, 2013, the Epoch Defendants filed a notice of motion to dismiss the complaint or stay the action pending the resolution of the parallel Delaware Action (the “Motion to Dismiss/Stay”). The plaintiffs filed an amended complaint on January 21, 2013, adding allegations that Epoch’s directors breached their duty of disclosure by omitting or misstating material information in Epoch’s preliminary proxy statement. The plaintiffs also filed a motion on order to show cause providing for expedited discovery (the “Motion for Expedited Discovery”) on January 23, 2013. The plaintiffs filed their brief in opposition to the Motion to Dismiss/Stay on January 25, 2013. On January 29, 2013, the Epoch Defendants filed a cross-motion to stay discovery, and a brief in support of that cross-motion and in opposition to the plaintiffs’ Motion for Expedited Discovery. On January 30, 2013, the Epoch Defendants filed a reply brief in further support of their Motion to Dismiss/Stay. On February 3, 2013, the plaintiffs moved by order to show cause to preliminarily enjoin defendants from refusing to respond to their discovery demands absent a stay of the action or an order of the court (the “February 3rd Motion”). On February 4, 2013, the court set a hearing date of February 13, 2013 to hear the plaintiffs’ February 3rd Motion, and ordered that pending the hearing and determination of the February 3rd Motion, and further order of the court, the defendants must comply with the plaintiffs’ discovery requests. Both the Epoch Defendants’ Motion to Dismiss/Stay and the plaintiffs’ Motion for Expedited Discovery remain pending before the court.

On January 24, 2013, another purported shareholder of Epoch filed a similar action in the United States District Court for the Southern District of New York, captioned Wilks v. Priest, et al. The defendants include Epoch, the members of its board, TD, and Merger Sub. The plaintiff brought a claim under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder regarding the disclosures in Epoch’s preliminary proxy. The plaintiff also brought a breach of fiduciary duty claim and a breach of duty of disclosure claim against the Epoch directors, and an aiding and abetting claim against TD and Merger Sub. The plaintiff seeks, among other things, declaratory and injunctive relief and, if the proposed transaction is consummated, rescission of the transaction or rescissory damages.

Epoch and its board of directors believe these claims are entirely without merit, and intend to vigorously defend against these actions.

Lease Commitments

The Company’s operations are located at 640 Fifth Avenue, New York, NY. Business is conducted at this location with approximately 20,000 rentable square feet under long-term non-cancelable operating leases that expire in September 2015.

In June 2012, the Company entered into a lease agreement to relocate its operations to 399 Park Avenue, New York, NY. This lease commenced on September 1, 2012 and the Company expects to occupy the new premises after construction is completed, during the third quarter ended March 31, 2013. The new lease is for approximately 39,500 rentable square feet and expires on June 1, 2023. Upon the expiration of the lease term, the lease may be renewed at the Company’s option, for an additional five or ten years. The initial annual base rent is approximately $3.7 million, with rent waived for the first nine months of the lease term. The base rent will increase approximately 10% on or about June 1, 2018. In addition, the lease also contains leasehold improvements incentives whereby the landlord agrees to reimburse the Company for certain leasehold improvements up to approximately $2.6 million within the first five years. The Company is currently searching for a sub-tenant for its present premises in conjunction with its planned relocation. As of December 31, 2012, the Company had approximately $3.8 million of lease payments remaining on its present premises. Any loss in connection with the lease commitment on the present premises will be recognized in accordance with FASB Accounting Standards Codification (“ASC”) 420, Exit or Disposal Cost Obligations.

The Company recognizes rent expense ratably over the lease period based upon the aggregate lease payments. The lease period is determined as the original lease term without renewals, unless and until the exercise of any lease renewal option is reasonably assured and also includes any period provided by the landlord as a “free rent” period. Rent expense includes all rental payments specified in the lease, including contractual rent increases, and is reduced by any lease incentives received from the landlord, including those used for tenant improvements.

Share-based Compensation

As of December 31, 2012, there was approximately $9.2 million of total unrecognized compensation cost related to outstanding restricted stock awards. In the normal course, that cost would be expected to be recognized over a weighted-average period of approximately 1.8 years. Upon consummation of the Merger, all unvested shares would become vested and the Company would recognize the full amount of any remaining unrecognized compensation costs.

14

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Other Matters

The Company retained a financial advisor in connection with the proposed Merger. The financial advisor will receive a transaction fee currently expected to be $5.0 million for its services, $1.0 million of which became payable upon the rendering of the financial advisor’s opinion and the principal portion of which is contingent upon completion of the Merger. In addition, the Company has agreed to reimburse the financial advisor for expenses incurred in connection with its engagement.

Note 8—Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income, adjusted for the effect of dilutive securities, by the weighted-average number of common and common equivalent shares outstanding during the period. The Company uses the treasury stock method to reflect the dilutive effect of outstanding stock options.

Earnings per basic and diluted share are calculated under the two-class method. Pursuant to the two-class method, the Company’s unvested restricted share awards with nonforfeitable rights to dividends are considered participating securities. The Company’s common shares outstanding consist of all shares issued and outstanding, including the unvested restricted shares. Dividends are paid on all common shares outstanding and at the same rate. Accordingly, the Company has evaluated the impact of earnings per share of all participating securities under the two-class method, noting no impact on earnings per share.

As of December 31, 2012 and 2011, the Company had 31,489 and 406,290 issued and outstanding employee stock options, respectively. The calculation of diluted EPS included all of the outstanding stock options for the three and six months ended December 31, 2012 and 2011.

The table below presents the computation of basic and diluted EPS for the three and six months ended December 31, 2012 and 2011, respectively (in thousands, except per share data):

	Three Months Ended December 31,				Six Months Ended December 31,
	2012		2011		2012		2011
Numerator:
Net income	$	5,738	$	5,863	$	13,632	$	10,281
Denominator:
Weighted-average common shares outstanding		23,714		23,285		23,697		23,320
Net common stock equivalents assuming the exercise of in-the-money stock options		15		186		15		176
Weighted-average common and common equivalent shares outstanding, assuming dilution		23,729		23,471		23,712		23,496
Earnings Per Share:
Basic	$	0.24	$	0.25	$	0.58	$	0.44
Diluted	$	0.24	$	0.25	$	0.57	$	0.44

15

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Note 9—Other Comprehensive (Loss)/Income

The components of other comprehensive (loss)/income include the changes in fair value of available-for-sale securities for the three and six months ended December 31, 2012 and 2011 and are as follows (in thousands):

	Three Months Ended December 31,
	2012								2011
	Pre-tax Amount			Tax (Expense)/ Benefit		Net-of- tax Amount			Pre-tax Amount			Tax (Expense)/ Benefit			Net-of- tax Amount
Net unrealized gains/(losses) on available-for-sale securities	$	(31	)	$	14	$	(17	)	$	347		$	(151	)	$	196
Reclassifications for net (gains)/losses included in net income		(83	)		36		(47	)		(274	)		119			(155	)
Total	$	(114	)	$	50	$	(64	)	$	73		$	(32	)	$	41

	Six Months Ended December 31,
	2012									2011
	Pre-tax Amount			Tax (Expense)/ Benefit			Net-of- tax Amount			Pre-tax Amount			Tax (Expense)/ Benefit		Net-of- tax Amount
Net unrealized gains/(losses) on available-for-sale securities	$	129		$	(56	)	$	73		$	(388	)	$	169	$	(219	)
Reclassifications for net (gains)/losses included in net income		(191	)		83			(108	)		(123	)		53		(70	)
Total	$	(62	)	$	27		$	(35	)	$	(511	)	$	222	$	(289	)

Note 10—Geographic Area Information

The Company operates under one business segment, investment management. Geographical information pertaining to the Company’s operating revenues is presented below. The amounts are aggregated by the client’s domicile (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2012		2011		2012		2011
United States	$	19,711	$	14,673	$	39,274	$	27,088
Canada		3,768		2,427		7,089		4,728
Australia		2,275		2,817		4,966		5,376
Europe		1,496		1,467		3,005		2,866
Asia/Africa		553		350		1,093		685
Total operating revenues	$	27,803	$	21,734	$	55,427	$	40,743

16

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Note 11—Special Dividends

In November 2012 the Board of Directors declared a special cash dividend of $0.75 per share on the Company’s common stock. The dividend was paid in December 2012. The aggregate dividend payment totaled approximately $17.8 million.

In November 2011 the Board of Directors declared a special cash dividend of $0.75 per share on the Company’s common stock. The dividend was paid in January 2012. The aggregate dividend payment totaled approximately $17.5 million.

Note 12—Related Party Agreement

In April 2012, the Company entered into a consulting agreement with one of its Board members. The Board member is providing assistance with strategic planning initiatives, in conjunction with his services as a Board member. The agreement is month-to-month and can be terminated by either party at any time. The agreement calls for a monthly payment of approximately $33 thousand. The Company incurred $0.1 million and $0.2 million of expense for these consulting services during the three and six months ended December 31, 2012 and had a $33 thousand outstanding liability related to these services as of December 31, 2012, which was paid subsequent to quarter end.

Note 13—Subsequent Event

On January 7, 2013, the Company’s Board of Directors declared a quarterly cash dividend on the Company’s Common Stock of $0.10 per share. The dividend is payable on February 11, 2013 to all shareholders of record at the close of business on January 28, 2013. The aggregate dividend payment is approximately $2.4 million.

The Company typically pays dividends in February, May, August and November of each fiscal year. However, the actual declaration of future cash dividends, and the establishment of record and payment dates, will be subject to final determination by the Board of Directors each quarter after its review of the Company’s financial performance. Under the terms of the Merger Agreement, the Company may continue to declare or pay quarterly dividends to its common stockholders not in excess of $0.10 per share.

*****

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Set forth on the following pages is management’s discussion and analysis of our financial condition and results of operations for the three and six months ended December 31, 2012 and 2011. Such information should be read in conjunction with our unaudited condensed consolidated financial statements together with the notes to the unaudited condensed consolidated financial statements. When we use the terms “Company,” “Firm,” “management,” “we,” “us,” and “our,” we mean Epoch Holding Corporation, a Delaware corporation, and its consolidated subsidiaries.

Forward-Looking Statements

Certain information included or incorporated by reference in this Quarterly Report on Form 10-Q and other materials filed or to be filed by Epoch Holding Corporation (“Epoch” or the “Company”) with the United States Securities and Exchange Commission (the “SEC”) contain statements that may be considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about our Company, may include projections of our future financial performance based on our anticipated growth strategies and trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by our forward-looking statements. In particular, you should consider the risks and uncertainties outlined in “Factors Which May Affect Future Results.”

These risks and uncertainties are not exhaustive. Other sections of this Quarterly Report on Form 10-Q may include additional factors which could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q, nor to conform our prior statements to actual results or revised expectations, and we do not intend to do so.

Forward-looking statements include, but are not limited to, statements about our:

• pending proposed Merger with The Toronto-Dominion Bank (“TD”),

• business environment,

• expectations with respect to the economy, securities markets, the market for asset management activity and other industry trends,

• competitive position,

• business strategy,

• strategic relationships,

• investment products,

• recruitment and retention of employees,

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• possible or assumed future results of operations and operating cash flows,

• potential operating performance, achievements, technological changes,

• litigation,

• expected tax rates, and

• the effect of future legislation and regulation.

Available Information

Reports we file electronically with the SEC via the SEC’s Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”) may be accessed through the internet. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, at www.sec.gov. In addition, the public may read and copy any material that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

We maintain a website which contains current information on operations and other matters. Our website address is www.eipny.com. Through the Investor Relations section of our website, and the “Financial Information” tab therein, we make available, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our Annual Proxy Statement, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. In addition, we post on our website within the Investor Relations section, and the “Corporate Governance” tab therein, our Code of Ethics and Business Conduct, as well as charters for the Audit, Nominating/Corporate Governance, and the Compensation Committees of our Board of Directors. We also make our financial statement information from our periodic SEC filings available on our website in the form of XBRL data files that may be used to facilitate computer-assisted investor analysis. The information on our website is not, and shall not be deemed to be a part hereof or incorporated into this or any other filings with the SEC.

Factors Which May Affect Future Results

There are numerous factors which may affect our future results of operations. These include, but are not limited to, the ability to attract and retain clients, performance of the financial markets and invested assets we manage, retention of key employees and members of management, and significant changes in regulations.

In addition, our ability to expand or alter our investment strategy offerings and distribution network, whether through acquisitions or internal development, is critical to our long-term success and has inherent risks. This success is dependent on the ability to identify and fund those developments or acquisitions on terms which are favorable to us. There can be no assurance that any of these operating factors or acquisitions can be achieved or, if undertaken, will be successful.

Other risks and uncertainties that we do not presently consider to be material or of which we are not presently aware may become important factors that affect us in the future.

These and other risks related to our Company are discussed in detail under Part I, Item 1A., “Risk Factors” beginning on page 13 in our Annual Report on Form 10-K for the fiscal year ended June 30, 2012 and herein in Part II, Item 1A., “Risk Factors.”

Critical Accounting Estimates

Our significant accounting estimates are described in Note 2 of the Notes to the Consolidated Financial Statements, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the fiscal year ended June 30, 2012, and have not changed from those described therein.

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Overview

We are a global asset management firm with accomplished and experienced professionals. Our professional investment staff averages over 20 years of industry experience. Headquartered in New York City, we had approximately $24.5 billion in assets under management (“AUM”) as of December 31, 2012. We remain debt-free and continue to have substantial capital resources available to fund current operations and implement our long-term growth strategy.

Merger Agreement

On December 6, 2012, Epoch Holding Corporation (“Epoch”), The Toronto-Dominion Bank (“TD”) and Empire Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of TD, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions, Merger Sub will be merged with and into Epoch, with Epoch surviving the merger as a wholly owned subsidiary of TD (the “Merger”). The Merger Agreement was unanimously approved by Epoch’s Board of Directors and is expected to be completed during the first half of calendar year 2013.

At the effective time of the Merger, each share of Epoch common stock (other than treasury shares held by Epoch and any shares of Epoch common stock held by TD or any wholly-owned subsidiary of TD or Epoch or any person who properly demands statutory appraisal of their shares) will be converted into the right to receive an amount in cash equal to $28.00, without interest (the “Merger Consideration”). Each option to acquire Epoch common stock that is outstanding, whether vested or unvested, at the effective time of the Merger will be canceled in exchange for the right to receive the Merger Consideration minus the exercise price per share of the option. Each share of restricted Epoch common stock that is outstanding at the effective time of the Merger will convert into the right to receive the Merger Consideration per share of restricted stock. Under the terms of the Merger Agreement, the Company may continue to declare or pay quarterly dividends to its common stockholders not in excess of $0.10 per share. No adjustment to the Merger Consideration was made on account of the previously announced $0.75 per share special dividend declared on November 12, 2012 and paid on December 14, 2012, or any ordinary quarterly dividends payable prior to the consummation of the Merger.

The consummation of the Merger is subject to customary closing conditions, including, among others, approval by Epoch’s stockholders, the receipt of consents from Epoch clients representing at least 80% of Epoch’s management fee revenues, the absence of certain legal impediments to the consummation of the Merger, the receipt of required governmental consents and approvals, the early termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (which has been satisfied) and, subject to materiality exceptions, the accuracy of representations and warranties made by Epoch and TD, respectively, and material compliance by Epoch and TD with their respective obligations under the Merger Agreement. The Merger is not subject to any financing condition.

The Merger Agreement requires Epoch to convene a stockholders meeting for purposes of obtaining the necessary stockholder approval and, subject to certain exceptions, Epoch has agreed (i) not to solicit alternative transactions or enter into discussions concerning, or provide confidential information in connection with, any alternative transaction and (ii) that Epoch’s Board of Directors will recommend that Epoch’s stockholders adopt the Merger Agreement.

Prior to adoption of the Merger Agreement by Epoch’s stockholders, Epoch’s Board of Directors may, in certain circumstances, change its recommendation that Epoch’s stockholders adopt the Merger Agreement, subject to complying with certain notice and other specified procedures set forth in the Merger Agreement, including giving TD the opportunity to propose changes to the Merger Agreement.

The Merger Agreement may be terminated under certain circumstances, including by Epoch, prior to the adoption of the Merger Agreement by Epoch’s stockholders, in the event that Epoch receives an unsolicited proposal that Epoch’s Board of Directors concludes, after following certain procedures, is a Superior Proposal (as defined in the Merger Agreement). In addition, TD may terminate the Merger Agreement under certain circumstances, including if Epoch breaches its non-solicitation obligations under the Merger Agreement or if Epoch’s Board of Directors changes, withholds, or fails to reaffirm its recommendation that Epoch’s stockholders adopt the Merger Agreement, or approves a proposal for an alternative transaction. In the foregoing circumstances, Epoch would be required to pay TD a termination fee of $20 million.

For terms of the Merger Agreement, including circumstances under which the Merger Agreement can be terminated and the ramifications of such termination, as well as other terms and conditions, please refer to the Merger Agreement filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 6, 2012. Additional information regarding the proposed Merger transaction will be contained in a definitive proxy statement to be filed by Epoch with the SEC.

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If completed, the Merger will result in the Company becoming a wholly-owned subsidiary of TD and its shares will no longer be listed on any public market. No assurance can be given that the Merger will be completed.

During the three months ended December 31, 2012, merger related transaction costs totaled approximately $2.8 million, primarily for legal and investment banking fees. These costs are included in professional fees and services in the Condensed Consolidated Statements of Income.

Voting Agreements

In connection with the execution of the Merger Agreement, TD and Merger Sub have entered into voting and support agreements (each, a “Voting Agreement”) with certain of Epoch’s directors and certain members of Epoch’s senior management and the trustees of certain trusts for their benefit (the “Stockholders”) holding, as of the date of the Merger Agreement, in the aggregate approximately 28% of Epoch’s total voting power. Pursuant to the terms of the Voting Agreement, the Stockholders have agreed in their capacities as Epoch stockholders, among other things: (i) to vote their shares in favor of the adoption of the Merger Agreement and against any alternative proposal; and (ii) not to transfer any shares of Epoch subject to the Voting Agreement, subject to certain exceptions.

The Voting Agreements will terminate on the earlier of the effective time of the Merger and the date that the Merger Agreement is terminated.

Investment Philosophy

Our investment philosophy is focused on achieving superior long-term, total and risk-adjusted returns by investing in companies that generate free cash flow, appropriately allocate cash to create returns for shareholders, have understandable business models, possess transparent financial statements, and are undervalued relative to our investment team’s value determinations. Risk management is integrated into each step of our investment process. Our portfolio construction process is designed to minimize stock-specific risk and manage volatility.

Distribution Channels

Our operating subsidiary, Epoch Investment Partners, Inc. (“EIP”), is a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”). Our sole line of business is to provide investment advisory and investment management services to our clients including corporations, public pension funds, retirement plans, foundations, endowments, financial institutions, and high net worth individuals. These services are provided through both separately managed accounts and commingled vehicles, such as sub-advised mutual funds and our proprietary private investment funds. Our investment strategies are primarily distributed through three distribution channels. These channels and the relative percentage of managed assets at December 31, 2012 are: institutional (53%), sub-advisory (46%) and high net worth (1%).

All of the assets we manage are invested utilizing our investment strategies. We do not invest assets of our clients in any investment strategies of third parties.

Nearly all the assets we manage for our institutional and high net worth clients are managed as separate accounts. To the extent that any of our institutional or high net worth clients are invested in mutual funds for which we serve as sub-advisor or proprietary investment funds for which we serve as investment advisor, the assets are included in the reported AUM of the respective fund. In particular, mutual funds for which we serve as investment sub-advisor are reported as ‘Sub-advisory’ and our proprietary funds are reported as ‘Institutional’. For those assets that are invested in funds that we manage, the fees are assessed strictly at the fund level, as part of the contractual management fee or related sub-advisory fee of the respective fund. There is no additional management fee.

Revenue

We earn revenues from managing client accounts under investment advisory and sub-advisory agreements. These agreements specify, among other things, the investment strategy for the account and the management fees to be paid, and are generally terminable by either party on relatively short notice. Fees vary by investment strategy, account size and servicing requirements. Fees are generally higher for international or global equity investment strategies than for U.S. investment strategies. Agreements remain in effect indefinitely, with the exception of sub-advised funds which are typically subject to annual approval by the respective fund’s board of directors.

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Revenues are generally derived as a percentage of AUM. The majority of accounts pay us management fees pursuant to a tiered fee schedule in which the fee rate declines as the amount of AUM increases. The fees we earn on institutional and high net worth separate accounts are typically based on the value of AUM at the end of the quarter. Our institutional separate account investment advisory agreements generally provide for fees ranging from 45 to 100 basis points of AUM annually, and our high net worth investment advisory agreements generally provide for fees ranging from 100 to 125 basis points of AUM annually. Fees earned from services to mutual funds under sub-advisory agreements are typically calculated based on the average of the daily net asset value of the fund. Due to the generally reduced client distribution and servicing requirements and the typically larger account size, the average advisory fees we earn on sub-advisory accounts as a percentage of AUM are lower than the advisory fees we earn on our institutional accounts, and generally range from 35 to 85 basis points of AUM annually. Fees earned for services provided to our proprietary funds (i.e. limited liability companies) are calculated based upon net asset values at the end of the month, and range from 80 to 150 basis points of AUM annually. Accordingly, notwithstanding an increase or decrease in AUM from quarter-end to quarter-end, significant fluctuations in asset values within a given quarter may have a more pronounced impact on revenues generated from sub-advised mutual funds than on revenues generated from separate accounts or our proprietary funds. Under some circumstances, particularly in connection with the introduction of a new proprietary fund, we may waive a portion of a fund’s management fee and/or pay some expenses of the fund. Our proprietary funds currently represent approximately 1% of our AUM.

Some of the institutional client accounts and proprietary funds we manage provide for performance fees according to the performance of the account or fund relative to certain agreed-upon benchmarks, which typically results in a lower base fee, but may permit us to earn higher fees if the relevant investment strategy outperforms the agreed-upon benchmark. Generally, if an agreement includes a performance fee, the performance fee ranges from 10% to 20% of the investment performance in excess of the relative benchmark. Several of our accounts with performance fees include a high-watermark provision which generally provides that if the account underperforms relative to its performance target, it must gain back such underperformance before we can collect future performance-based fees. The period in which performance fees are recognized may vary by account, based upon the particular client arrangement (i.e. quarterly or annual measurement period), commencement date of the agreement, and performance criteria.

Typically, investment advisory agreements may not be assigned (including as a result of transactions, such as a direct or indirect change of control of the asset manager that would constitute an assignment under the Investment Advisers Act or other applicable regulatory requirements) without the prior consent of the client. When the asset management client is a U.S. registered mutual fund or closed end fund, the fund’s board of directors generally must annually approve the investment management contract, and any material changes to the contract, and the board and fund shareholders must approve any assignment of the contract (including as a result of transactions that would constitute an assignment under the Investment Company Act of 1940).

Investment advisory agreements are generally terminable upon thirty or fewer days’ notice. Our clients may elect to terminate their relationships with us, reduce the aggregate amount of assets under our management, or shift their funds to other types of investment strategies with different fee structures.

As revenues are derived as a percentage of AUM, among other factors, they are dependent upon:

• performance of financial markets,

• performance of our investment strategies,

• our ability to retain existing clients and attract new ones, and

• changes in the composition of AUM.

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Expenses

Our most significant operating expense is employee compensation and benefits, comprising fixed salaries, variable incentive compensation, share-based compensation, and employee benefits. Variable incentive compensation is based upon our operating results, including AUM growth, investment performance, and operating income. Our level of compensation reflects our plan to maintain competitive compensation levels to retain key personnel. Other operating expenses include professional fees and services, occupancy and technology costs, general and administrative costs, and distribution and servicing fees.

AUM Fair Value Measurement

AUM consists of actively traded securities. The fair value of these securities that comprise our AUM, and materially impacts the determination of revenue, is measured using Level 1 inputs as defined by the Fair Value Topic in the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), which are publicly available, unadjusted, quoted prices in active markets. These prices are obtained from an independent pricing service. We substantiate the values obtained with another independent pricing service to confirm that all prices are valid. There is no estimation involved in the calculation of AUM that materially impacts our revenue recognition.

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Key Performance Indicators

We monitor a variety of key performance indicators when evaluating our business results. The charts that follow depict our quarterly results in certain key financial performance measures over the past five quarters:

(1) Ending AUM

(2) Average AUM

(3) Operating Revenues vs. Operating Expenses

(4) Operating Margin*

* Defined as operating income divided by total operating revenues.

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Financial and Business Highlights

Highlights from the three months ended December 31, 2012 were as follows:

• On December 6, 2012, we agreed to enter into a Merger Agreement with The Toronto-Dominion Bank (“TD”), wherein TD will acquire our common stock for $28.00 per share.

• Our AUM was $24.5 billion at December 31, 2012, an increase of approximately $0.3 billion, from the previous quarter ended September 30, 2012. Net AUM inflows were approximately $0.1 billion.

• AUM increased by $5.3 billion, or 28%, from the period ended December 31, 2011. Net AUM inflows were approximately $2.7 billion and market appreciation was approximately $2.6 billion during this twelve-month period.

• Most of our investment strategies met or exceeded their respective benchmarks since investment strategy inception. For the three-month, one-year, three-year and five-year periods, less than half of our investment strategies outperformed their respective benchmarks.

• Total operating revenues increased by $6.1 million, or 28% during the three months ended December 31, 2012 when compared with the same period a year ago.

• Our operating margin was approximately 35%, compared with 46% for the comparable period a year ago. Costs associated with the pending Merger were the primary reason for the decline.

• Basic earnings per share decreased to $0.24 for the three months ended December 31, 2012, compared to $0.25 for the same period a year ago.

• Our balance sheet remains strong. At December 31, 2012, working capital was $41.2 million, while cash and cash equivalents and accounts receivable were $45.3 million. We remain debt-free.

The following table presents key operating and financial indicators for the three and six months ended December 31, 2012 and 2011, respectively:

	Three Months Ended												Six Months Ended
	December 31,						Change						December 31,						Change
	2012			2011			Amt			%			2012			2011			Amt			%
Operating Indicators ($ in millions):
AUM at end of period	$	24,534		$	19,217		$	5,317			28	%	$	24,534		$	19,217		$	5,317			28	%
Average AUM for the period	$	24,185		$	17,925		$	6,260			35	%	$	24,025		$	17,042		$	6,983			41	%
Net client flows	$	74		$	1,588		$	(1,514	)		(95	%)	$	4		$	3,143		$	(3,139	)		(100	%)
Financial Indicators ($ in thousands, except share data):
Operating Revenue	$	27,803		$	21,734		$	6,069			28	%	$	55,427		$	40,743		$	14,684			36	%
Operating Income	$	9,836		$	10,059		$	(223	)		(2	%)	$	23,350		$	18,157		$	5,193			29	%
Net Income	$	5,738		$	5,863		$	(125	)		(2	%)	$	13,632		$	10,281		$	3,351			33	%
Earnings Per Share:
Basic	$	0.24		$	0.25		$	(0.01	)		(4	%)	$	0.58		$	0.44		$	0.14			32	%
Diluted	$	0.24		$	0.25		$	(0.01	)		(4	%)	$	0.57		$	0.44		$	0.13			30	%
Operating Margin(1)		35	%		46	%		(11	%)		N	M		42	%		45	%		(3	%)		N	M

NM Not meaningful.

⁽¹⁾  Defined as operating income divided by total operating revenues.

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Business Environment

As an investment management and advisory firm, our results are impacted by the prevailing global economic climate, including such factors as corporate profitability, investor confidence, and interest rates. These factors can directly affect investor sentiment and global equity markets, and accordingly, our investment returns and AUM.

During the three months ended December 31, 2012, uncertainty about the November elections and U.S. fiscal policy afterwards caused domestic markets to decline. Non-U.S. markets experienced slight gains. Investors remained generally confident about the European Central Bank’s (ECB) bond-buying program, which has reduced borrowing costs for the most distressed eurozone countries. The economic environment in which we operate continues to be challenging.

Investment returns for select broad market indices were as follows:

	Period Ended December 31, 2012
Index(1)	3 Months			12 Months
Dow Jones Industrial Average(2 )		(1.7	%)		10.2	%
NASDAQ Composite(2 )		(3.1	%)		15.9	%
S&P 500(2)		(0.4	%)		16.0	%
MSCI World (net)(2)		2.5	%		15.8	%

⁽¹⁾  Assumes dividend re-investment.

⁽²⁾ Indices are trademarks of Dow Jones & Company, NASDAQ Stock Market, Inc., McGraw-Hill Companies, Inc. and MSCI Inc., respectively, which are not affiliated with Epoch.

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Assets under Management (“AUM”)

The graph below depicts our quarterly AUM and operating revenue over the past eight quarters.

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AUM and Flows

The following table sets forth the changes in our AUM for the periods presented (dollars in millions):

	Three Months Ended December 31,						Six Months Ended December 31,
	2012			2011			2012			2011
Institutional
Beginning of period AUM	$	12,616		$	7,759		$	12,096		$	8,140
Inflows		422			352			888			1,332
Outflows		(189	)		(169	)		(671	)		(217	)
Net inflows/(outflows)		233			183			217			1,115
Market appreciation/(depreciation)		148			774			684			(539	)
Net change		381			957			901			576
End of period AUM		12,997			8,716			12,997			8,716
Sub-advisory
Beginning of period AUM		11,282			7,977			10,848			8,680
Inflows		616			1,630			1,026			2,530
Outflows		(768	)		(224	)		(1,232	)		(492	)
Net inflows/(outflows)		(152	)		1,406			(206	)		2,038
Market appreciation/(depreciation)		139			867			627			(468	)
Net change		(13	)		2,273			421			1,570
End of period AUM		11,269			10,250			11,269			10,250
High net worth
Beginning of period AUM		275			236			264			267
Inflows		—			—			2			—
Outflows		(7	)		(1	)		(9	)		(10	)
Net inflows/(outflows)		(7	)		(1	)		(7	)		(10	)
Market appreciation/(depreciation)		—			16			11			(6	)
Net change		(7	)		15			4			(16	)
End of period AUM		268			251			268			251
Total
Beginning of period AUM		24,173			15,972			23,208			17,087
Inflows(1)		1,038			1,982			1,916			3,862
Outflows(1)		(964	)		(394	)		(1,912	)		(719	)
Net inflows/(outflows)		74			1,588			4			3,143
Market appreciation/(depreciation)(2)		287			1,657			1,322			(1,013	)
Net change		361			3,245			1,326			2,130
End of period AUM	$	24,534		$	19,217		$	24,534		$	19,217
Percent change in total AUM		1.5	%		20.3	%		5.7	%		12.5	%
Net inflows/Beginning of period AUM		0.3	%		9.9	%		0.0	%		18.4	%

⁽¹⁾  Inflows include new client accounts and additional assets into existing client accounts. Outflows include closed accounts and withdrawals of assets from existing client accounts. For the Sub-advisory channel, inflows also include mutual fund distributions which are reinvested and outflows include mutual fund distributions which are not reinvested. Such mutual fund distributions are not a material portion of the gross flows.

⁽²⁾  Market appreciation/(depreciation) includes the impact of foreign currency fluctuations.

Our revenues are correlated with the levels of our AUM. Our AUM fluctuates based on changes in the market value of accounts advised and managed by us, and on our fund flows. As a long-only equity manager, a general or prolonged decline in equity markets may cause our revenues and net income to decline due to the value of our AUM decreasing, and/or clients withdrawing funds in favor of investments they perceive as offering greater opportunity or lower risk.

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We believe that market conditions and our investment performance are critical elements in our attempts to grow our AUM and business. Since we are long-term fundamental investors, we believe that our investment strategies yield the most benefits, and are best evaluated, over a long-term timeframe. We believe that our investment strategies are generally evaluated by our clients and our potential future clients based on their relative performance since inception, and the previous 1-year, 3-year, and 5-year periods. There has typically been a correlation between our strategies’ investment performance and the size and direction of asset flows. To the extent that our returns for these periods outperform client benchmarks or peers, we would generally anticipate increased asset flows. Correspondingly, negative returns relative to client benchmarks or peers could cause existing clients to reduce their exposure to our products and hinder new client acquisitions.

For the Three Months Ended December 31, 2012

AUM increased to $24.5 billion at December 31, 2012 from $24.2 billion at September 30, 2012. This increase was primarily attributable to market appreciation. Client flows also contributed to the increase, with AUM inflows slightly outpacing outflows by $74 million.

For the three months ended December 31, 2012, gross inflows into our Institutional distribution channel were approximately $0.4 billion and gross outflows were approximately $0.2 billion. Market appreciation on assets in our Institutional channel was approximately $0.1 billion. Inflows into the Institutional channel included approximately $0.2 billion of new accounts in our Global Equity Shareholder Yield and Global Choice strategies.

Gross inflows into our Sub-advisory distribution channel were approximately $0.6 billion and gross outflows were approximately $0.8 billion. Market appreciation on assets in our Sub-advisory channel was approximately $0.1 billion. Inflows primarily into our Global Shareholder Yield strategy were offset by outflows from our U.S. Value strategy.

For the three month period ended December 31, 2012, our investment strategies had net returns ranging from (0.1) % in U.S. Choice to 3.6% in International Small Cap. Global Equity Shareholder Yield comprised the majority of the total market appreciation as a result of its proportionate share of total AUM during the period. For further information regarding the performance of our investment strategies and their applicable benchmarks, please see “Investment Strategy Performance.”

For the Six Months Ended December 31, 2012

AUM increased to $24.5 billion at December 31, 2012 from $23.2 billion at June 30, 2012. This increase was primarily attributable to market appreciation.

For the six months ended December 31, 2012, gross inflows into our Institutional distribution channel were approximately $0.9 billion and gross outflows were approximately $0.7 billion. Market appreciation on assets in our Institutional channel was approximately $0.7 billion. Inflows into our Institutional channel included approximately $0.5 billion of new accounts, including approximately $0.3 billion into our U.S. All Cap strategy and $0.1 billion into our Global Equity Shareholder Yield strategy. Additional flows into existing accounts, particularly in our Global Choice and U.S. Value strategies accounted for the balance of the gross inflows for the six months ended December 31, 2012.

Gross inflows into our Sub-advisory distribution channel were approximately $1.0 billion and gross outflows were approximately $1.2 billion. Market appreciation on assets in our Sub-advisory channel was approximately $0.6 billion. Inflows into our Sub-advisory channel included $0.1 billion of new accounts into our U.S. Choice Strategy. Inflows into our Global Shareholder Yield and U.S. Choice strategies were primarily offset by a large outflow from our U.S. Value strategy.

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For the Three Months Ended December 31, 2011

AUM increased to $19.2 billion at December 31, 2011 from $16.0 billion at September 30, 2011. This increase was attributable to both market appreciation and net client flows. Market appreciation was $1.7 billion and net inflows were $1.6 billion.

Gross inflows into our Institutional distribution channel were approximately $0.4 billion, and gross outflows were approximately $0.2 billion. Market appreciation on assets in our Institutional channel was $0.8 billion. Inflows into our Institutional channel were primarily into our Global Choice strategy, including new accounts totaling $0.3 billion.

Gross inflows into our Sub-advisory distribution channel were approximately $1.6 billion and gross outflows were approximately $0.2 billion. Market appreciation on assets in our Sub-advisory channel was $0.9 billion. Inflows into our Sub-advisory channel were primarily into our Global Shareholder Yield strategy.

For the Six Months Ended December 31, 2011

AUM increased to $19.2 billion at December 31, 2011 from $17.1 billion at June 30, 2011. This increase was attributable to net client inflows, partially offset by market depreciation. Net inflows of $3.1 billion were offset by market depreciation of $1.0 billion.

Gross inflows into our Institutional distribution channel were approximately $1.3 billion, and gross outflows were approximately $0.2 billion. Market depreciation on assets in our Institutional channel was $0.5 billion. Inflows into our Institutional channel were primarily into our Global Choice and Global Shareholder Yield strategies.

Gross inflows into our Sub-advisory distribution channel were approximately $2.5 billion and gross outflows were approximately $0.5 billion. Market depreciation on assets in our Sub-advisory channel was $0.5 billion. Inflows into our Sub-advisory channel were primarily into our Global Shareholder Yield strategy.

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Investment Strategies

The table below depicts the AUM in our investment strategies as of December 31, 2012, September 30, 2012 and December 31, 2011, respectively, as well as the 3-month and 1-year changes (dollars in millions):

	Dec. 31,		Sept. 30,		Dec. 31,		3-Month Change						1-Year Change
Strategy	2012		2012		2011		Amt			%			Amt			%
Global Equity Shareholder Yield	$	10,387	$	9,588	$	6,464	$	799			8	%	$	3,923			61	%
U.S. Value		4,402		4,859		4,404		(457	)		(9	%)		(2	)		(0	%)
U.S. All Cap Value		3,429		3,494		3,526		(65	)		(2	%)		(97	)		(3	%)
Global Choice(2)		3,096		2,934		1,920		162			6	%		1,176			61	%
U.S. Smid Cap Value		1,012		1,030		895		(18	)		(2	%)		117			13	%
Int’l Small Cap		845		836		703		9			1	%		142			20	%
U.S. Small Cap Value		377		370		359		7			2	%		18			5	%
Global Small Cap		206		258		249		(52	)		(20	%)		(43	)		(17	%)
Other(1)(2)		780		804		697		(24	)		(3	%)		83			12	%
Total AUM	$	24,534	$	24,173	$	19,217	$	361			1	%	$	5,317			28	%

⁽¹⁾  Primarily includes U.S. Choice and Global Absolute Return strategies.

⁽²⁾  In the year ended June 30, 2012, approximately $170 million of AUM transferred from the Global Absolute Return investment strategy to the Global Choice investment strategy.

The charts below show our investment strategies as a percentage of AUM as of December 31, 2012 and 2011, respectively:

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Investment Strategy Performance

We measure relative investment performance by comparing our investment strategy returns to competing investment strategies, industry benchmarks and client investment objectives. As long-term fundamental investors, we believe that our investment strategies yield the most benefits, and are best evaluated, over a long-term time horizon. The following table displays our investment strategies’ composite returns, net of management fees, for the three months, as well as the 1-year, 3-year and 5-year periods ended December 31, 2012 and since investment strategy inception, compared to their applicable benchmarks:

		Returns (%)(1)(3)
	Inception					Since
Strategy	Date(2)	3 Months	1 Year	3 Years	5 Years	Inception
U.S. Value	7/31/01	0.2	12.5	8.8	1.2	5.6
Russell 1000		0.1	16.4	11.1	1.9	3.9
Russell 1000 Value		1.5	17.5	10.9	0.6	4.5
S&P 500		(0.4)	16.0	10.9	1.7	3.5
U.S. All Cap Value	7/31/94	0.7	11.4	9.4	1.5	10.3
Russell 3000		0.2	16.4	11.2	2.0	8.5
Russell 3000 Value		1.6	17.5	10.9	0.8	8.9
U.S. Small Cap Value	12/31/02	2.3	14.4	12.8	3.7	9.1
Russell 2000		1.9	16.3	12.2	3.6	9.7
Russell 2000 Value		3.2	18.1	11.6	3.5	9.5
U.S. Smid Cap Value	8/31/06	3.4	13.6	11.8	3.5	5.2
Russell 2500		3.1	17.9	13.3	4.3	5.2
Russell 2500 Value		4.1	19.2	12.9	4.5	3.9
U.S. Choice	4/30/05	(0.1)	12.3	10.3	2.8	6.1
Russell 3000		0.2	16.4	11.2	2.0	5.4
Global Equity Shareholder Yield	12/31/05	1.0	11.1	10.2	2.6	6.6
MSCI World (Net)		2.5	15.8	6.9	(1.2)	3.0
Global Choice	9/30/05	2.7	14.9	6.6	1.0	7.3
MSCI World (Net)		2.5	15.8	6.9	(1.2)	3.4
Global Absolute Return	12/31/01	1.9	13.5	5.4	2.2	8.9
MSCI World (Net)		2.5	15.8	6.9	(1.2)	4.7
S&P 500		(0.4)	16.0	10.9	1.7	4.0
Barclays Capital U.S. Aggregate		0.2	4.2	6.2	5.9	5.6
International Small Cap	1/31/05	3.6	19.7	6.8	(1.8)	7.6
MSCI World ex USA Small Cap (Net)		4.8	17.5	7.2	(0.7)	5.0
Global Small Cap	12/31/02	2.9	15.3	9.9	2.4	11.0
MSCI World Small Cap (Net)		3.6	17.5	10.5	2.5	11.7

⁽¹⁾  Index and investment strategy returns assume dividend reinvestment. Investment strategy returns are net of management fees.

⁽²⁾  Epoch Investment Partners, Inc. became a registered investment adviser under the Investment Advisers Act in June 2004. Performance from April 2001 through May 2004 is for our investment team and accounts while at Steinberg Priest & Sloane Capital Management, LLC. For the period July 1994 through March 2001, Co-Chief Investment Officer William W. Priest managed the accounts while at Credit Suisse Asset Management, LLC.

⁽³⁾  The historical returns of these investment strategies are not necessarily indicative of their future performance.

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Distribution Channels

Our investment management services are distributed through multiple channels. Our institutional sales efforts include building strong relationships with institutional consultants and establishing direct relationships with institutional clients.

We manage certain sub-advisory mandates that provide access to market segments that we would not otherwise serve. For example, we currently serve as sub-advisor to mutual funds offered by major financial institutions in retail channels. These mandates are attractive to us because we have chosen not to build the large team of sales professionals typically required to service those channels. We typically approach the servicing of those relationships in a manner similar to our approach with large institutional account clients.

We service the high net worth channel both directly and through third-party intermediaries, such as wealth advisers who utilize our investment strategies in investment programs they construct for their clients. We maintain a limited direct sales effort in the high net worth channel.

The table and graphs below presents our AUM by distribution channel as of December 31, 2012 and December 31, 2011, as well as the three-month and one-year changes, respectively (dollars in millions):

	Dec. 31, 2012		Sept. 30, 2012		Dec. 31, 2011		3-Month Change						1-Year Change
Distribution Channel							Amt			%			Amt		%
Institutional	$	12,997	$	12,616	$	8,716	$	381			3	%	$	4,281		49	%
Sub-advisory		11,269		11,282		10,250		(13	)		(0	%)		1,019		10	%
High net worth		268		275		251		(7	)		(3	%)		17		7	%
Total AUM	$	24,534	$	24,173	$	19,217	$	361			1	%	$	5,317		28	%

Strategic Relationship

In July 2009, we entered into a strategic relationship with New York Life Investments, whereby the MainStay Group of Funds adopted our family of mutual funds (the “Epoch Funds”). The adoption was completed in November 2009. We are responsible for the day-to-day investment management of the funds through a sub-advisory relationship, while MainStay Investments (“MainStay”), the retail distribution arm of New York Life Investments, is responsible for the distribution and administration of the funds. Each former Epoch Fund is now co-branded as a “MainStay Epoch” Fund.

In addition to an existing sub-advisory relationship with New York Life Investments for certain funds, and the adoption of the Epoch Funds indicated above, EIP and New York Life Investments have entered into an arrangement wherein, among other things, EIP and an affiliate of New York Life Investments have established a distribution and administration relationship with respect to certain separately managed account and unified managed account strategies, and for a period of three years commencing November 2009 New York Life Investments agreed to pay certain additional base fees and meet minimum distribution targets. Final payment of additional base fees was received in November 2012. Although there are no longer any additional base fees or minimum distribution targets, the relationship between EIP and New York Life Investments remains ongoing.

For the three and six months ended December 31, 2012 New York Life Investment Management accounted for approximately 13% and 14% of condensed consolidated operating revenues, respectively. For the three and six months ended December 31, 2011, this relationship accounted for approximately 18% of condensed consolidated operating revenues. Our relationship and services with New York Life Investment Management are considered important to our ongoing growth strategy.

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Revenue by Client Domicile

The following charts show our operating revenue by client domicile as a percentage of total operating revenue for the six months ended December 31, 2012 and 2011:

Results of Operations

For The Three Months Ended December 31, 2012 and 2011

For the three months ended December 31, 2012, net income was $5.7 million, a decrease of 2%, or $0.1 million, from the same period a year ago.

Basic earnings per share were $0.24 compared to $0.25 per share for the same period a year ago. Revenues increased by $6.1 million offset by increased operating expenses of $6.3 million. The increase in operating expenses was driven by increases in employee compensation and benefits of $2.2 million, occupancy and technology costs of $1.0 million, and professional fees and services of $3.2 million. Included within the increase in professional fees and services were merger related expenses of $2.8 million.

For The Six Months Ended December 31, 2012 and 2011

For the six months ended December 31, 2012, net income was $13.6 million, an increase of 33%, or $3.4 million, from the same period a year ago.

Basic earnings per share were $0.58 compared to $0.44 per share for the same period a year ago. Revenues increased by $14.7 million, offset by increased operating expenses of $9.5 million. The increase in operating expenses was driven by increases in employee compensation and benefits of $4.7 million, occupancy and technology costs of $1.6 million, and professional fees and services of $3.3 million. Included within the increase in professional fees and services were merger related expenses of $2.8 million.

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Operating Revenues:

	Three Months Ended												Six Months Ended
	Dec. 31,			Dec. 31,			‘12 vs ‘11 Change						Dec. 31,			Dec. 31,			‘12 vs ‘11 Change
(Dollars in thousands)	2012			2011			$			%			2012			2011			$			%
Investment advisory and management fees	$	27,309		$	20,694		$	6,615			32	%	$	54,500		$	38,805		$	15,695			40	%
As a percent of total revenue		98	%		95	%								98	%		95	%
The increase in investment advisory and management fees for both the three and six months ended December 31, 2012 was driven by increases in average AUM. The growth in AUM is a result of net inflows from new and existing clients and market appreciation. Net inflows for the past twelve months were approximately $2.7 billion and market appreciation was approximately $2.6 million. Average AUM for the three months ended December 31, 2012 was approximately $24.2 billion compared to $17.9 billion for the prior year. Our average effective fee rate (investment advisory and management fees, excluding performance fees, as a percentage of average AUM) overall was approximately 45 basis points during both the three months ended December 31, 2012 and 2011. Institutional separate accounts had an average effective fee rate of approximately 52 and 53 basis points during the three months ended December 31, 2012 and 2011, respectively. During the six months ended December 31, 2012 and 2011, the average effective fees were 52 and 53 basis points. Institutional separate accounts were approximately 53% and 46% of AUM during those periods, respectively. Sub-advisory AUM had an average effective fee rate of approximately 38 and 40 basis points during the three months ended December 31, 2012 and 2011 respectively. During the six months ended December 31, 2012 and 2011, the average effective fees were 38 and 40 basis points. Sub-advisory AUM was approximately 46% and 53% of AUM during those periods, respectively. As our tiered fee schedules or negotiated fees typically allow for lower fee rates as account size increases, additional inflows from existing institutional clients and from existing sub-advisory relationships, as well as a general increase in the size of new mandates, have slightly reduced the effective fee rates. Additionally, the agreements on certain separate accounts which have a performance fee component, generally have a reduced base management fee. Although growth in our global and international product AUM has been a key contributor to our overall increase in AUM and therefore management fees, effective fee rates have slightly declined due to the impact of larger mandates from new and existing clients in nearly all strategies, as well as the addition of several accounts with performance fee arrangements. For the three and six months ended December 31, 2012 New York Life Investment Management, through the MainStay Epoch Funds and other funds sub-advised by EIP, accounted for approximately 13% and 14% of condensed consolidated operating revenues, respectively. For the three and six months ended December 31, 2011, New York Life Investment Management accounted for approximately 18% of condensed consolidated operating revenues.
	Three Months Ended												Six Months Ended
	Dec. 31,			Dec. 31,			‘12 vs ‘11 Change						Dec. 31,			Dec. 31,			‘12 vs ‘11 Change
(Dollars in thousands)	2012			2011			$			%			2012			2011			$			%
Performance fees	$	494		$	1,040		$	(546	)		(53	%)	$	927		$	1,938		$	(1,011	)		(52	%)
As a percent of total revenue		2	%		5	%								2	%		5	%

We have certain fee agreements that allow us to earn performance fees in the event that investment returns meet or exceed certain pre-established benchmarks specified in such agreements. Revenues for these incentives are recognized only when such performance targets are met or exceeded at the end of the respective measurement period.

The period in which performance fees are recognized may vary by account, based upon the particular client arrangement (i.e. quarterly or annual measurement period), commencement date of the agreement, and performance criteria. Most of our performance fee agreements are based upon an annual measurement period. However, that period may vary across contracts (i.e. June 1 through May 31 for a client that commences on June 1, and December 1 through November 30, for a client that commences on December 1). We have several performance fee arrangements with a quarterly measurement period, typically based on three-year rolling cumulative performance through the end of the respective quarter.

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Approximately 12% and 13% of AUM, had the ability to generate performance fees with varying measurement periods and criteria at December 31, 2012 and 2011, respectively. The decrease in performance fees for the three and six months ended December 31, 2012 stems from fewer performance fee accounts outperforming their targets and a reduction in relative performance, compared to the same period a year ago.

Operating Expenses:

We are continuously managing and reviewing our resource allocation. Our most significant operating expense is employee compensation. Our ability to compete depends, in part, on our ability to attract and retain key employees while managing our compensation and other costs.

	Three Months Ended											Six Months Ended
	Dec. 31,			Dec. 31,			‘12 vs ‘11 Change					Dec. 31,			Dec. 31,			‘12 vs ‘11 Change
(Dollars in thousands)	2012			2011			$		%			2012			2011			$		%
Employee compensation and benefits	$	10,512		$	8,353		$	2,159		26	%	$	20,907		$	16,170		$	4,737		29	%
As a percent of total revenue		38	%		38	%							38	%		40	%

Employee compensation and benefits include salaries, share-based compensation, incentive compensation, signing bonuses, commissions, severance, payroll taxes and benefits. Maintaining and recruiting high-caliber, experienced employees are critical to our growth strategy. We place a high emphasis on pay for performance. As such, changes in our performance as well as changes in the underlying performance of our investment strategies have an impact on compensation and benefits.

Incentive compensation and share-based compensation are primarily based on our operating results, including AUM growth, net inflows, investment performance, operating income and margins. However, there are no predetermined formulas or weighting factors used to determine compensation. We also review peer compensation surveys but do not specifically set any compensation elements or pay levels versus the survey results. Rather, we use the comparative survey data as part of our decision-making process in the determination of the appropriate level and mix of each component of compensation in any given year.

We generally issue share awards to employees shortly following the calendar year and these awards facilitate employee retention through multi-year vesting. Commissions are paid to certain sales persons and are based on a percentage of management fees earned on the respective AUM.

In conjunction with the pending Merger, we are changing our share-based compensation policy and will no longer be issuing Company shares. Instead, deferred cash compensation will be awarded to employees and invested in Company-managed funds, subject to multi-year vesting. As of December 31, 2012, there was approximately $9.2 million of total unrecognized compensation costs related to outstanding restricted stock awards. In the normal course, that cost would be expected to be recognized over a weighted-average period of approximately 1.8 years. Upon consummation of the Merger, all unvested shares would become vested and we would recognize the full amount of any remaining unrecognized compensation costs.

For the three months ended December 31, 2012 and 2011, these expenses included salaries of $3.0 million and $2.6 million, incentive compensation of $4.7 million and $3.8 million, amortization of share-based compensation of $1.6 million and $1.4 million, commissions of $0.5 million and $0.2 million, and benefits and payroll taxes of $0.7 million and $0.5 million, respectively. The increase during the current period was driven by additions to professional staff, merit increases, and our operating results, including AUM growth. Average headcount increased by approximately 11% during the three months ended December 31, 2012 when compared with the prior year period, respectively. Several additions were made to our investment and client relations teams to support our business expansion. As a percentage of total revenue, employee compensation and related benefits remained the same from the prior year three-month period.

For the six months ended December 31, 2012 and 2011, these expenses included salaries of $5.9 million and $5.2 million, incentive compensation of $9.3 million and $6.9 million, amortization of share-based compensation of $3.5 million and $2.8 million, commissions of $1.0 million and $0.3 million, and benefits and payroll taxes of $1.3 million and $0.9 million, respectively. The increase during the six month period was driven by additions to professional staff, merit increases, and our operating results, including AUM growth. Average headcount increased by approximately 11% during the six months ended December 31, 2012 when compared with the prior year period, respectively. Several additions were made to our investment and client relations teams to support our business expansion. As a percentage of total revenue, employee compensation and related benefits declined compared with the prior year six-month period.

36

We anticipate employee compensation and related benefit costs to increase during the current fiscal year in conjunction with an increase in our professional staff to support the planned growth of our business.

	Three Months Ended												Six Months Ended
	Dec. 31,			Dec. 31,			‘12 vs ‘11 Change						Dec. 31,			Dec. 31,			‘12 vs ‘11 Change
(Dollars in thousands)	2012			2011			$			%			2012			2011			$			%
Professional fees and services	$	3,926		$	756		$	3,170			419	%	$	4,768		$	1,467		$	3,301			225	%
As a percent of total revenue		14	%		3	%								9	%		4	%
These expenses include outside legal fees, independent accountants’ fees, consulting fees, employee placement fees and other professional services. Approximately $2.8 million, primarily in legal and investment banking fees, in connection with the pending Merger contributed to the increase from the comparable period in the prior year. These expenses are expected to increase during the next quarter as a result of additional costs related to the closing of the pending Merger and the defense of litigation relating thereto.
	Three Months Ended												Six Months Ended
	Dec. 31,			Dec. 31,			‘12 vs ‘11 Change						Dec. 31,			Dec. 31,			‘12 vs ‘11 Change
(Dollars in thousands)	2012			2011			$			%			2012			2011			$			%
Occupancy and technology	$	2,333		$	1,330		$	1,003			75	%	$	4,069		$	2,515		$	1,554			62	%
As a percent of total revenue		8	%		6	%								7	%		6	%
Occupancy and technology costs consist primarily of office rent and related costs, market data services, information technology costs and depreciation. An increase in rent expense related to our new office lease was the primary reason for this increase. In conjunction with anticipated growth, we entered into a lease agreement in June 2012 for expanded new headquarters. The lease commenced on September 1, 2012. We expect to relocate all of our operations upon completion of construction in the new location, which is expected to be during the quarter ended March 31, 2013. As a result, rent expense is expected to increase by approximately $3.1 million for the fiscal year ended June 30, 2013. The Company is currently searching for a sub-tenant for its present premises in conjunction with its planned relocation. As of December 31, 2012, the Company had approximately $3.8 million of lease payments remaining on its present premises. Any loss in connection with the lease commitment on the present premises will be recognized in accordance with FASB ASC 420, Exit or Disposal Cost Obligations.
	Three Months Ended												Six Months Ended
	Dec. 31,			Dec. 31,			‘12 vs ‘11 Change						Dec. 31,			Dec. 31,			‘12 vs ‘11 Change
(Dollars in thousands)	2012			2011			$			%			2012			2011			$			%
General and administrative	$	793		$	766		$	27			4	%	$	1,487		$	1,465		$	22			2	%
As a percent of total revenue		3	%		4	%								3	%		4	%
General and administrative expenses consist primarily of expenses for travel and entertainment, advertising and marketing, insurance, and other office related expenses. These expenses were virtually unchanged from the prior year comparable periods.
	Three Months Ended												Six Months Ended
	Dec. 31,			Dec. 31,			‘12 vs ‘11 Change						Dec. 31,			Dec. 31,			‘12 vs ‘11 Change
(Dollars in thousands)	2012			2011			$			%			2012			2011			$			%
Distribution and servicing fees	$	403		$	470		$	(67	)		(14	%)	$	846		$	969		$	(123	)		(13	%)
As a percent of total revenue		1	%		2	%								2	%		2	%

Distribution and servicing fees represent amounts paid to third-party distributors or administrators in conjunction with the sale or administration of certain separate accounts. Distribution fees are generally a percentage of investment advisory and performance fees earned on the underlying accounts. A reduction in performance fees on certain separate accounts was the reason for the current year declines.

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	Three Months Ended												Six Months Ended
	Dec. 31,			Dec. 31,			‘12 vs ‘11 Change						Dec. 31,			Dec. 31,			‘12 vs ‘11 Change
(Dollars in thousands)	2012			2011			$			%			2012			2011			$		%
Other income	$	284		$	331		$	(47	)		(14	%)	$	693		$	137		$	556		406	%
As a percent of income before income taxes		3	%		3	%								3	%		1	%
Other income includes investment gains and losses, dividends and interest income. The increase from the prior year six-month comparable period primarily stems from gains associated with investments in several new Company-sponsored vehicles.
	Three Months Ended												Six Months Ended
	Dec. 31,			Dec. 31,			‘12 vs ‘11 Change						Dec. 31,			Dec. 31,			‘12 vs ‘11 Change
(Dollars in thousands)	2012			2011			$			%			2012			2011			$		%
Provision for income taxes	$	4,382		$	4,527		$	(145	)		(3	%)	$	10,411		$	8,013		$	2,398		30	%
Effective income tax rate		43	%		44	%								43	%		44	%

The increase in the six-month period is the result of higher pre-tax income levels when compared with the same period a year ago.

At the end of each interim period, we estimate the annual effective income tax rate and apply that rate to our ordinary quarterly earnings. The effect of changes in enacted tax laws or rates is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and judgments including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various jurisdictions, and permanent differences. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or as the tax environment changes.

Three Months Ended December 31, 2012 and Prior Three Months Ended September 30, 2012

The table below presents key operating and financial indicators for the three months ended December 31, 2012 and the prior three months ended September 30, 2012, respectively:

	Dec. 31,			Sept. 30,			Change
	2012			2012			Amt			%
Operating Indicators ($ in millions):
AUM at end of period	$	24,534		$	24,173		$	361			1	%
Average AUM for the period	$	24,185		$	23,900		$	285			1	%
Net client flows	$	74		$	(70	)	$	144			N	M
Financial Indicators ($ in thousands, except share data):
Operating Revenue	$	27,803		$	27,623		$	180			1	%
Operating Income	$	9,836		$	13,513		$	(3,677	)		(27	%)
Net Income	$	5,738		$	7,894		$	(2,156	)		(27	%)
Earnings Per Share:
Basic	$	0.24		$	0.33		$	(0.09	)		(27	%)
Diluted	$	0.24		$	0.33		$	(0.09	)		(27	%)
Operating Margin(1)		35	%		49	%		(14	%)		N	M

NM Not meaningful.

(1) Defined as operating income divided by total operating revenues.

AUM increased by approximately $0.4 billion from September 30, 2012 driven primarily by market appreciation. Quarterly inflows slightly outpaced outflows by $74 million. While management fees increased, total operating income decreased primarily as a result of legal fees and investment banking fees incurred during the quarter in conjunction with the pending Merger.

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Liquidity and Capital Resources

Sources of Liquidity

Our principal source of liquidity is cash flows from operating activities, particularly investment management fees. Our current financial condition is highly liquid, with a significant amount of our assets comprised of cash and cash equivalents and accounts receivable. While it is currently our intention to hold the held-to-maturity securities until maturity and our other investments long-term, we have the ability to convert these items into cash and cash equivalents during any fiscal year. Cash and cash equivalents, accounts receivable, held-to-maturity securities and our other investments accounted for approximately 68% of total assets as of December 31, 2012.

The following table summarizes our principal and potential sources of liquidity as of December 31, 2012 and June 30, 2012 (dollars in thousands):

	December 31, 2012			June 30, 2012
Balance Sheet Data:
Cash and cash equivalents	$	21,866		$	24,528
Accounts receivable		23,428			20,718
Trading securities		2,638			5,040
Available-for-sale securities		6,645			8,448
Held-to-maturity securities		509			1,218
Equity method investments		3,188			2,580
Total	$	58,274		$	62,532
Percent of total assets		68	%		81	%

We believe that the sources of liquidity described above as well as our continuing cash flows from operations will be sufficient to meet our operating needs for the foreseeable future and will enable us to continue implementing our growth strategy. We do not anticipate a need for an external source of liquidity.

Uses of Liquidity

We expect that our main uses of cash will be to pay operating expenses, recruit key personnel, enhance our operating and technology infrastructure, pay dividends, and repurchase shares of our common stock when appropriate.

Our philosophy regarding the maintenance of a balance sheet with a large component of cash and cash equivalents reflects our views on potential future capital requirements relating to enhancement of our investment capabilities, creation and expansion of distribution channels, potential strategic acquisitions or transactions, support of our infrastructure growth, and possible challenges to our business. If we believe that we have sufficient capital for the aforementioned needs and circumstances, our approach is to return a portion of our excess liquidity to our shareholders. Accordingly, we declared a special dividend of $0.75 per share, or $17.8 million in aggregate, in November 2012 which was paid in December 2012.

In view of the pending Merger transaction, the Company will not be issuing annual incentive stock awards to employees during the quarter ended March 31, 2013 for performance during the calendar year ended December 31, 2012. Instead, deferred cash compensation will be awarded to employees and invested in Company-managed funds, subject to multi-year vesting. As a result of this funding, as well as the ongoing Merger expenses, such as legal fees and investment banking fees to complete the transaction, we anticipate next quarter’s use of cash to be higher than historical norms.

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Cash Flows Analysis

A summary of the Statements of Cash Flows for the six months ended December 31, 2012 and 2011, respectively, is as follows (in thousands):

	Six Months Ended December 31,
	2012			2011
Cash flows provided by/(used in):
Operating activities	$	13,635		$	11,593
Investing activities		(1,569	)		1,673
Financing activities		(14,728	)		(2,703	)
Net (decrease)/increase in cash and cash equivalents		(2,662	)		10,563
Cash and cash equivalents at beginning of period		24,528			29,128
Cash and cash equivalents at end of period	$	21,866		$	39,691

A more detailed analysis of cash flows for the six months is as follows:

Cash Flows from Operating Activities

Our cash flows from operating activities are calculated by adjusting net income to reflect other significant operating sources and uses of cash, certain significant non-cash items such as share-based compensation and depreciation, and timing differences in the cash settlement of operating assets and liabilities. Significant operating sources and uses of cash that are not reflected in net income include net cash flows associated with the purchase and sale of investments in Company-sponsored vehicles classified as trading securities.

For the six months ended December 31, 2012, our net cash provided by operating activities totaled $13.6 million. The increase from the prior year period reflects the increase in revenues and related operating income as well as the timing differences in the cash settlement of assets and liabilities.

Accrued compensation and benefits increased by $2.7 million from the June 30, 2012 balance and primarily reflects accruals for incentive compensation. A portion of incentive compensation was paid during the quarter ended December 31, 2012. The balance of this liability will be paid shortly after the calendar year end. Prior year’s incentive compensation was paid in full during the quarter ended March 31, 2012.

Cash Flows from Investing Activities

Our cash flows from investing activities consist primarily of capital expenditures, the purchase and redemption of held-to-maturity securities, and investments in Company-sponsored products and a non-affiliated limited partnership.

Cash flows used in investing activities totaled $1.6 million for the six months ended December 31, 2012. During the period, we redeemed $3.7 million of existing investments, including $2.0 million from the non-affiliated investment limited partnership. These inflows were partially offset by $5.2 million of capital expenditures, primarily for the construction of our new corporate headquarters which we anticipate occupying during the quarter ended March 31, 2013.

Cash Flows from Financing Activities

Our cash flows from financing activities primarily reflect the payment of common stock dividends, the repurchase of our common stock, and the recognition of excess tax benefits associated with share-based compensation.

Net cash flows used in financing activities totaled $14.7 million. The primary cash flows used in financing activities during the six months ended December 31, 2012, were $22.1 million for the payment of dividends, and $0.1 million for the repurchase of common stock in conjunction with employee tax withholding obligations on the vesting of common shares. Excess tax benefits of $5.3 million offset the cash used in financing activities. Excess tax benefits arise in connection with our share-based compensation. When a restricted stock award vests, the market price on the date the stock vests to the employee may be higher than the original grant date fair market value of the award. If so, the difference between the cumulative amount that has been recognized through the Statement of Income and the vesting amount results in an excess tax benefit. Excess tax benefits reduce income taxes payable and increase additional paid-in capital in the period recognized. Proceeds from employee stock option exercises of $1.7 million also offset the cash outflows from financing activities.

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Working Capital

Our working capital at December 31, 2012 and June 30, 2012 is set forth in the table below (in thousands):

	December  31, 2012		June  30, 2012		Change
					$		%
Current Assets	$	56,610	$	49,704	$	6,906		14	%
Current Liabilities		15,457		10,982		4,475		41	%
Working Capital	$	41,153	$	38,722	$	2,431		6	%

Deferred Tax Assets

As of December 31, 2012, we had $8.9 million in long-term deferred tax assets, primarily relating to acquired net operating losses and alternative minimum tax credits. We believe there is sufficient positive evidence existing from earnings history, pre-tax income growth rates, current operating income levels, and the outlook for sustained profitability, to conclude that it is more likely than not that these deferred tax assets will be fully realized in future operating periods.

Capital Expenditures

In June 2012, we entered into a lease agreement to relocate our operations to 399 Park Avenue, New York, NY. This lease commenced September 1, 2012 and we expect to occupy the new premises once construction is completed, during the quarter ended March 31, 2013. The new lease is for approximately 39,500 rentable square feet. We anticipate leasehold improvements and the purchase of additional office equipment, net of the landlord’s contribution, to be in the range of $6.5 million to $7.5 million. During the six months ended December 31, 2012, we incurred $5.2 million of capital expenditures related to the new space. Any related capital expenditures and obligations for such office space will be paid from our cash flows from operations.

Quarterly Dividends on Common Stock

We have been paying regular quarterly dividends since the quarter ended December 31, 2007. During the three months ended September 30, 2012, an aggregate quarterly dividend of $1.9 million was paid. On October 1, 2012, our Board of Directors increased the Company’s quarterly cash dividend rate from $0.08 to $0.10 per share. The dividend was paid in November 2012. The aggregate quarterly dividend was approximately $2.4 million.

The Company typically pays dividends in February, May, August and November of each fiscal year. However, the actual declaration of future cash dividends, and the establishment of record and payment dates, will be subject to final determination by the Board of Directors each quarter after its review of the Company’s financial performance. Under the terms of the Merger Agreement, the Company may continue to declare or pay quarterly dividends to its common stockholders not in excess of $0.10 per share.

Special Dividends

In November 2012 the Board of Directors declared a special cash dividend of $0.75 per share on the Company’s common stock. The dividend was paid in December 2012. The aggregate dividend payment totaled approximately $17.8 million.

In November 2011 the Board of Directors declared a special cash dividend of $0.75 per share on the Company’s common stock. The dividend was paid in January 2012. The aggregate dividend payment totaled approximately $17.5 million.

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Common Stock Repurchase Plan

We maintain a stock repurchase plan with the objective of maximizing shareholder value. Subject to applicable laws, shares may be purchased from time to time in the open market and/or in privately negotiated transactions. Such purchases will be at times and in amounts as we deem appropriate, based on factors such as prevailing market conditions, legal requirements and other business considerations.

We did not repurchase any of our common stock during the three months ended December 31, 2012 under the repurchase plan. As of December 31, 2012, we have repurchased a cumulative total of 659,516 shares at a cost of approximately $6.7 million and had 490,484 shares remaining available for repurchase. All shares repurchased are shown as Treasury Stock, at cost, in the stockholders’ equity section of the Condensed Consolidated Balance Sheets.

Under the Merger Agreement, the Company has agreed not to repurchase any shares of Common Stock without the prior written consent of TD.

Employee Tax Withholding

To satisfy statutory employee tax withholding requirements related to the vesting of common shares, employees may elect to have us withhold shares and remit the necessary tax withholding on their behalf. We may promptly sell these shares in the open market on behalf of employees or acquire them as treasury shares. Any resulting gain or loss on sale is accounted for as an adjustment to additional paid-in capital. During the three and six months ended December 31, 2012, respectively, a total of 221 and 5,721 employee relinquished shares related to employee tax withholding were acquired as treasury shares at a weighted-average price of $21.32 and $23.40 per share.

Other Matters

The Company retained a financial advisor in connection with the proposed Merger. The financial advisor will receive a transaction fee currently expected to be $5.0 million for its services, $1.0 million of which became payable upon the rendering of the financial advisor’s opinion and the principal portion of which is contingent upon completion of the Merger. In addition, the Company has agreed to reimburse the financial advisor for expenses incurred in connection with its engagement.

Fair Value Measurements

Investments classified as trading securities and available-for-sale securities are measured at fair value. Fair value for these investments is measured using Level 1 inputs, as defined by the Fair Value Topic in the FASB ASC, which are publicly available, unadjusted quoted prices in active markets. We do not hold any derivative instruments or financial liabilities. See Note 4 to the Condensed Consolidated Financial Statements for a further discussion on Fair Value Measurements.

Contractual Obligations

Our contractual obligations are summarized on page 50 in our Annual Report on Form 10-K for the fiscal year ended June 30, 2012. At December 31, 2012, there were no material changes in our contractual obligations from June 30, 2012.

Under the Merger Agreement, we are prohibited from making any material commitments of capital outside of the normal course of business or assuming indebtedness in excess of certain limits. This prohibition includes, but is not limited to, issuing or granting new shares of stock; selling, leasing, or disposing of assets; and making acquisitions or investments in excess of certain thresholds. For more information, as well as other terms and conditions, please refer to the Merger Agreement filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 6, 2012.

Off-Balance Sheet Arrangements

As of December 31, 2012, we had no off-balance sheet arrangements.

Recently Issued Accounting Pronouncements

In December 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-11, Disclosures About Offsetting Assets and Liabilities. ASU No. 2011-11 provides new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements associated with its derivative and other financial instruments. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The new disclosures are designed to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards (“IFRS”). We adopted this standard in January 2013. The adoption of this standard did not have a material impact on our condensed consolidated financial position, results of operations, or cash flows.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

In the normal course of business, our results of operations and financial position are subject to different types of risk, including market risk. Market risk is the risk that we will incur losses primarily due to adverse changes in equity prices, interest rates, or currency exchange rates. As an investment manager, we continuously identify, assess, and manage market and other risks. The following information, together with information included in other parts of Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” illustrate the significant characteristics of certain items that cause market risk to us.

In evaluating market risk, it is important to note that substantially all of our revenue is based on the market value of AUM. As noted in “Risk Factors” in Item 1A. of our June 30, 2012 Annual Report filed on Form 10-K, declines of equity market values negatively impact our revenue and net income.

The management of market risk on behalf of our clients and its impact on fees is a significant focus for us. We use a variety of risk measurement techniques to identify and manage market risk within client portfolios. However, at the corporate level, we have historically not attempted to hedge revenue fluctuations that arise from changes in fair value of our overall AUM.

Equity Price Risk

Revenues and Net Income

Our predominant exposure to market risk is directly related to our role as an investment adviser to the separate accounts we manage and funds we sub-advise. Substantially all of our management fees are based upon the market value of our AUM. Accordingly, our investment management fees will change in proportion to changes in the market price of equity securities underlying our AUM. Declines in equity security market prices could cause our revenues and net income to decline by causing:

• the value of our AUM to decrease, which would result in lower investment management fees;

• the returns realized on our AUM to decrease, impacting performance fees; and

• clients to withdraw funds in favor of investments in markets or investment strategies that they perceive as offering greater opportunity or lower risk, which would also result in lower investment management fees.

In addition, a decline in the price of securities may present market conditions that could preclude us from increasing AUM and prevent us from realizing higher revenue associated with such growth. Underperformance of client accounts relative to competing investment strategies could exacerbate these factors.

Our AUM was approximately $24.5 billion as of December 31, 2012. At December 31, 2012, we performed a sensitivity analysis to assess the potential loss in the fair value and associated revenue of our market-risk sensitive AUM. Assuming a 10% market decline in associated market indices, and the change proportionally distributed over all of our investment strategies, the fair value of our AUM would decrease by an estimated $2.2 billion, which would cause an annualized decrease in total investment advisory and management fees of approximately $9.8 million. We do not hedge equity price risk on this exposure.

We earn performance fees on certain client accounts in the event that investment returns meet or exceed targeted amounts specified in the investment management agreements. Our performance fees will be impacted by changes in the market values of those accounts, which in turn are affected by changes in market risk factors. However, several other factors may influence the degree of impact, including: the performance criteria for the respective investment portfolio, the period over which the performance fee applies, and, to the extent applicable, the previous performance of the investment portfolio. As a result, the impact on changes in market risk factors on performance fees may vary widely and is therefore not readily predicted or estimated. A small portion of our investment advisory agreements include a performance fee component. Historically, less than 5% of our revenues have been generated from performance fees.

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Company Investments

We are exposed to fluctuations in the market security price of our investments. Our investments primarily consist of investments in Company-sponsored investment vehicles, including mutual funds, investment strategy separate accounts, and affiliated limited liability companies. Our corporate investments also include an investment in a non-affiliated investment limited partnership. We do not hedge our market security price risk related to these investments and do not intend to do so in the future.

At December 31, 2012 and June 30, 2012, respectively, we performed a sensitivity analysis to assess the potential loss in the fair value of these market-risk sensitive securities. The following table represents the estimated impact on our financial position assuming a hypothetical 10% decline in associated market indices (in thousands):

	Fair Value		Fair Value Assuming 10% Decline(1)		Decrease in Stockholders’ Equity(2)
At December 31, 2012:
Trading securities:(3)
Epoch Global All-Cap Fund, LLC	$	2,638	$	2,385	$	143
Available-for-sale securities:(4)
Company-sponsored mutual funds		1,219		1,104		65
Epoch Global Champions separate account		1,095		994		57
Epoch U.S. Equity Shareholder Yield separate account		2,070		1,863		117
Investment in non-affiliated limited partnership		2,261		2,223		22
Equity method investments:(5)
Epoch Global Equity Shareholder Yield Fund, LLC		1,135		1,047		50
Epoch Global Choice Fund, LLC(6)		1,511		1,355		88
Epoch Global Absolute Return Fund, LLC		542		487		31
Total	$	12,471	$	11,458	$	573
At June 30, 2012:
Trading securities:(3)
Epoch Global All-Cap Fund, LLC	$	2,929	$	2,677	$	142
Epoch Global Choice Fund, LLC(6)		2,111		1,915		111
Available-for-sale securities:(4)
Company-sponsored mutual funds		1,133		1,025		60
Epoch Global Champions separate account		1,088		980		61
Epoch U.S. Equity Shareholder Yield separate account		2,000		1,800		113
Investment in non-affiliated limited partnership		4,227		4,156		40
Equity method investments:(5)
Epoch Global Equity Shareholder Yield Fund, LLC		2,073		1,912		91
Epoch Global Absolute Return Fund, LLC		507		465		24
Total	$	16,068	$	14,930	$	642

⁽¹⁾  Based upon the investment’s correlation with its associated market index, a hypothetical 10% decline in the associated market index may result in a change other than 10% in the respective investment.

⁽²⁾  All amounts shown in this column are net of tax.

⁽³⁾  Unrealized and realized gains or losses on trading securities are included in net income.

⁽⁴⁾  Unrealized gains or losses on available-for-sale securities are recorded in accumulated other comprehensive income/(loss), net of tax, as a separate component of stockholders’ equity until realized.

⁽⁵⁾  Net earnings or losses on equity method investments are included in net income.

⁽⁶⁾  At June 30, 2012, we were the sole investor in, and managing member of, the Epoch Global Choice Fund, LLC, and thus accounted for this investment as trading securities. During the six months ended December 31, 2012, several new investors  joined the fund, and at December 31, 2012 had substantive rights to remove us as the managing member. Therefore, we reclassified this investment to an equity method investment.

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Interest Rate Risk

Revenues and Net Income

Our AUM is also subject to interest rate risk. Changes in both domestic and global interest rates may impact the valuation of equities, and thus our AUM, operating revenues and net income.

Held-to-maturity Investments

We have invested in and continue to hold high-grade debt securities. Since it is our intent to hold these investments until they mature, we have accounted for them as held-to-maturity securities. We do not hedge our interest rate risk related to these securities and we do not intend to do so in the future. We estimate that a hypothetical change in interest rates of 100 basis points would not have a material impact on our condensed consolidated results of operations, financial condition or cash flows.

The table below provides information about our investment securities held-to-maturity, including expected principal flows for the fiscal years June 30, 2013 through June 30, 2017 and thereafter (in thousands):

	Payments Due in Fiscal Years Ended June 30,													Total Principal Cash Flows			Fair Market Value at December 31, 2012
	2013		2014			2015		2016		2017		Thereafter
Long-term debt securities	$	—	$	500		$	—	$	—	$	—	$	—	$	500		$	524
Weighted-average interest rate		—		2.66	%		—		—		—		—		2.66	%

Cash and Cash Equivalents

Cash consists of amounts held in checking and money market accounts. Cash equivalents include highly liquid investments in money market funds consisting of short-term securities of the U.S. government and its agencies with maturities of three months or less when acquired. Cash and cash equivalents are exposed to market risk due to changes in interest rates, which impacts interest income.

We monitor the quality of the institution where our cash is deposited, the balance of which, at times, may be in excess of the Federal Deposit Insurance Corporation insurance limits. While changes in interest rates could decrease our interest income, we do not believe we have a material exposure. We do not undertake any specific actions to cover our exposure to interest rate risk and are not a party to any interest rate risk transactions.

Foreign Currency Exchange Risk

Certain client portfolios include securities denominated in foreign currencies. Accordingly, foreign currency fluctuations may affect the levels of our AUM. For securities denominated in currencies other than U.S. dollars, an increase in the value of the U.S. dollar relative to those non-U.S. currencies may result in a decrease in the dollar value of our AUM, which, in turn, would result in lower U.S. dollar denominated revenues. We estimate that, as of December 31, 2012, a 10% weakening or strengthening of the U.S. dollar against all or any combination of currencies to which our portfolios have exposure to exchange rates would not have a material effect on our revenues.

While we operate in the U.S., we have clients in several countries outside the U.S. However, nearly all of our revenue from these clients and the associated expenses are denominated in U.S. dollars. Therefore, only a limited portion of our revenues and expenses are impacted by movements in currency exchange rates. We estimate that, as of December 31, 2012, the effect of a 10% change in exchange rates on such revenues and expenses would not have a material effect on our results of operations. Our exposure to currency movements may likely increase as our business outside the U.S. grows, and we will continue to monitor our foreign currency exposure accordingly.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company has established and maintains disclosure controls and other procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to provide reasonable assurance that material information relating to Epoch Holding Corporation and its subsidiaries on a consolidated basis required to be disclosed in its reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated accurately to the Company’s management, including its principal executive officer and principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can only provide reasonable, not absolute assurance, that the objectives of the disclosure controls and procedures are met.

For the quarter ended December 31, 2012, management, with the participation of the Company’s principal executive officer and principal financial and accounting officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on such evaluation of these disclosure controls and procedures, the Company’s principal executive officer and principal financial and accounting officer have concluded that the Company’s disclosure controls and procedures were effective during the period covered by this Quarterly Report on Form 10-Q.

The Company has also established and maintains internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of condensed consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States. In the ordinary course of business, the Company routinely enhances its internal controls and procedures for financial reporting by either upgrading its current systems or implementing new systems. During the fiscal quarter ended December 31, 2012, there was no change in the Company’s internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Litigation Relating to the Merger

Shortly after the announcement of the proposed transaction, five purported class action complaints were filed by purported shareholders of Epoch against Epoch, the individual directors of Epoch, and TD. One action was filed in the Supreme Court of the State of New York, County of New York, two were filed in the Delaware Court of Chancery, a fourth was filed in the Supreme Court of the State of New York, County of Nassau, and a fifth was filed in the United States District Court for the Southern District of New York.

Specifically, on December 11, 2012, a purported shareholder of Epoch filed an action in the Supreme Court of the State of New York, County of New York, captioned Cindy Goldman TTEE GSS 508 Trust Dated May 16, 2008 v. Epoch Holding Corporation, et al. (the “Goldman Action”). The complaint names as defendants all directors of Epoch, Epoch, and TD. The plaintiff alleges that the directors of Epoch breached their fiduciary duties by approving the proposed transaction with TD, and that TD aided and abetted those alleged breaches of fiduciary duty. Specifically, the lawsuit alleges, among other things, that the Merger Agreement was reached through an unfair process that benefitted the personal and financial positions of the directors of Epoch at the expense of the shareholders of Epoch, that the Merger Consideration is inadequate, and that the deal protection devices in the Merger Agreement have precluded other bidders from making competing offers for Epoch. The plaintiff seeks, among other things, injunctive relief and attorneys’ fees concerning the alleged breaches of fiduciary duty and to prohibit the defendants from consummating the merger. On January 8, 2013, Epoch and its directors (the “Epoch Defendants”) filed a motion to dismiss the complaint or in the alternative to stay the action pending resolution of parallel proceedings in Delaware. The parties thereafter stipulated and the Court ordered that the action be stayed pending the resolution of the related Delaware Action and the Katcher Action described herein.

On December 21, 2012, another purported shareholder of Epoch filed an action in the Delaware Court of Chancery, captioned Reich v. Epoch Holding Corporation, et al (the “Reich Action”). Like the Goldman Action, this action alleges that the directors of Epoch breached their fiduciary duties in connection with the proposed transaction with TD, and that both TD and Merger Sub aided and abetted those alleged breaches of fiduciary duty. The Reich Action seeks, among other things, injunctive relief and attorneys’ fees concerning the alleged breaches of fiduciary duty and to prohibit the defendants from consummating the merger. The suit names as defendants all directors of Epoch, Epoch, TD, and Merger Sub. On December 26, 2012, another purported shareholder action was filed in the Delaware Court of Chancery, captioned Hodgson v. Epoch Holding Corporation, et al (the “Hodgson Action”). The Hodgson Action also brings breach of fiduciary duty claims against the directors of Epoch, and aiding and abetting claims against Epoch, TD, and Merger Sub, seeking similar relief.

The Epoch Defendants answered the complaint in the Reich Action on December 28, 2012. On January 3, 2013, the Court of Chancery entered an order consolidating the Reich and Hodgson Actions as In re Epoch Holding Corporation Stockholder Litigation (the “Delaware Action”) and appointed lead counsel for the consolidated action. On January 18, 2013 the parties filed a stipulation and proposed order to govern the confidential treatment of discovery materials, which the court granted on January 29, 2013. On January 18, 2013, the plaintiffs filed an unopposed motion for leave to amend their complaint, which the Court granted on January 25, 2013. On January 21, 2013, the parties filed a proposed stipulated scheduling order to govern discovery and any motions for preliminary injunction that the plaintiffs may file, which the Court granted on January 28, 2013. The plaintiffs filed their amended class action complaint on January 25, 2013, which added claims that the director defendants breached their duty of disclosure by omitting or misstating material information in Epoch’s preliminary proxy statement. On February 6, 2013, the Epoch Defendants answered the plaintiffs’ amended complaint.

The third-filed action was brought in the Supreme Court of the State of New York, County of Nassau, on December 24, 2012, captioned Katcher v. Epoch Holding Corporation, et al. (the “Katcher Action”). The plaintiffs brought claims similar to those raised in the Goldman Action and Delaware Action against Epoch, the members of Epoch’s board, and TD, and seek declaratory and injunctive relief. The plaintiffs claim that Epoch’s directors breached their fiduciary duties in connection with entering into the proposed transaction with TD, and that TD and Epoch aided and abetted the alleged breaches of fiduciary duty. On January 16, 2013, the Epoch Defendants filed a notice of motion to dismiss the complaint or stay the action pending the resolution of the parallel Delaware Action (the “Motion to Dismiss/Stay”). The plaintiffs filed an amended complaint on January 21, 2013, adding allegations

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that Epoch’s directors breached their duty of disclosure by omitting or misstating material information in Epoch’s preliminary proxy statement. The plaintiffs also filed a motion on order to show cause providing for expedited discovery (the “Motion for Expedited Discovery”) on January 23, 2013. The plaintiffs filed their brief in opposition to the Motion to Dismiss/Stay on January 25, 2013. On January 29, 2013, the Epoch Defendants filed a cross-motion to stay discovery, and a brief in support of that cross-motion and in opposition to the plaintiffs’ Motion for Expedited Discovery. On January 30, 2013, the Epoch Defendants filed a reply brief in further support of their Motion to Dismiss/Stay. On February 3, 2013, the plaintiffs moved by order to show cause to preliminarily enjoin defendants from refusing to respond to their discovery demands absent a stay of the action or an order of the court (the “February 3rd Motion”). On February 4, 2013, the court set a hearing date of February 13, 2013 to hear the plaintiffs’ February 3rd Motion, and ordered that pending the hearing and determination of the February 3rd Motion, and further order of the court, the defendants must comply with the plaintiffs’ discovery requests. Both the Epoch Defendants’ Motion to Dismiss/Stay and the plaintiffs’ Motion for Expedited Discovery remain pending before the court.

On January 24, 2013, another purported shareholder of Epoch filed a similar action in the United States District Court for the Southern District of New York, captioned Wilks v. Priest, et al. The defendants include Epoch, the members of its board, TD, and Merger Sub. The plaintiff brought a claim under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder regarding the disclosures in Epoch’s preliminary proxy. The plaintiff also brought a breach of fiduciary duty claim and a breach of duty of disclosure claim against the Epoch directors, and an aiding and abetting claim against TD and Merger Sub. The plaintiff seeks, among other things, declaratory and injunctive relief and, if the proposed transaction is consummated, rescission of the transaction or rescissory damages.

Epoch and its board of directors believe these claims are entirely without merit, and intend to vigorously defend against these actions.

Item 1A. Risk Factors.

You should carefully consider the risk factors disclosed in our Annual Report on Form 10-K for the year ended June 30, 2012 included under Item 1A., “Risk Factors” in addition to the other information set forth in this report including the risk factors set forth below. The risks described below and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

There are risks and uncertainties associated with our proposed pending Merger with The Toronto-Dominion Bank.

As previously announced on December 6, 2012, the Company, The Toronto-Dominion Bank (“TD”) and Empire Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of TD, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions, Merger Sub will be merged with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of TD (the “Merger”). The Merger Agreement was unanimously approved by the Company’s Board of Directors and is expected to be completed during the first half of calendar year 2013.

There are a number of risks and uncertainties relating to the Merger. For example, the Merger may not be consummated or may not be consummated in the timeframe or manner currently anticipated, as a result of several factors, including, among other things, the occurrence of any event, change, or other circumstances that could give rise to the termination of the Merger Agreement, including a termination under circumstances that would require us to pay a termination fee of $20 million. In addition, there can be no assurance that approval of our shareholders will be obtained, that the other conditions to closing of the Merger will be satisfied or waived or that other events will not intervene to delay or result in the termination of the Merger. If the Merger is not completed, the price of our common stock may change to the extent that the current market price of our common stock may reflect an assumption that the Merger will be consummated.

Pending the closing of the Merger, the Merger Agreement also restricts us from engaging in certain actions without TD’s consent, which could prevent us from pursuing opportunities that may arise prior to the closing of the merger. Any delay in closing or a failure to close could have a negative impact on our business and stock price as well as our relationships with our customers, vendors or employees, as well as a negative impact on our ability to pursue alternative strategic transactions and/or our ability to implement alternative business plans.

48

Our business could be adversely impacted as a result of uncertainty related to the proposed Merger.

There are a number of risks and uncertainties relating to the impact of the Merger on our business. These risks include the following:

• the attention of our management may be directed to transaction-related considerations and may be diverted from the day-to-day operations of our business;

• our employees may experience uncertainty about their future roles with us, which might adversely affect our ability to retain and hire key personnel and other employees;

• clients or other parties with which we maintain business relationships may experience uncertainty about our future and seek alternative relationships with third parties or seek to alter their business relationships with us;

• the potential adverse effect on our business and operations because of certain covenants we agreed to in the Merger Agreement; and

• the amount of the costs, fees and expenses for professional services and transaction costs in connection with the proposed Merger regardless of whether or not the Merger is consummated.

Lawsuits have been filed against the Company relating to the proposed Merger with TD. The outcome of these lawsuits is uncertain and an adverse ruling in any such lawsuits may prevent the proposed Merger from being completed.

Since the proposed Merger with TD was announced on December 6, 2012, the Company, certain Company officers and directors, TD and Merger Sub have been named as defendants in one or more of the five purported stockholder class actions filed in the Supreme Court of the State of New York, County of New York, Supreme Court of the State of New York, County of Nassau, the Delaware Court of Chancery and the United States District Court for the Southern District of New York by stockholders of the Company challenging the proposed Merger. The actions seek, among other things, to enjoin the defendants from completing the Merger on the agreed upon terms. In addition, other lawsuits may be brought against us related to the proposed Merger. We may be required to defend such lawsuits, thus incurring significant expenses. If these actions or similar actions that may be brought are successful, the Merger could be delayed or prevented. See Part II, Item 1. herein for further information on litigation related to the Merger.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(c) Purchases of Equity Securities by the Issuer.

Common Stock Repurchase Plan

There were no share repurchases under the Company’s Stock Repurchase Plan during the three months ended December 31, 2012. As of December 31, 2012, the Company has repurchased a cumulative total of 659,516 shares and has 490,484 shares remaining for repurchase under the existing repurchase plan. Under the Merger Agreement, the Company has agreed not to repurchase any shares of Common Stock without the prior written consent of TD.

Employee Tax Withholding

To satisfy statutory employee tax withholding requirements related to the vesting of common shares, employees may elect to have us withhold shares and remit the necessary tax withholding on their behalf. We may promptly sell these shares in the open market on behalf of employees or acquire them as treasury shares. Any resulting gain or loss on sale is accounted for as an adjustment to additional paid-in capital. During the three months ended December 31, 2012, a total of 221 employee relinquished shares related to employee tax withholding were acquired as treasury shares at a weighted-average price of $21.32 per share.

49

Item 6. Exhibits.

Exhibit No.	Description
	(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
2.1	Agreement and Plan of Merger by and between The Toronto-Dominion Bank, Empire Merger Sub, Inc., and Epoch Holding Corporation, dated as of December 6, 2012 and incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, filed with the SEC on December 6, 2012.
	(3) Articles of Incorporation and Bylaws
3.1	Certificate of Incorporation of the Registrant, as amended, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on December 7, 2004.
3.2	Amended and Restated By-Laws of Epoch Holding Corporation (as adopted April 2, 2008), incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on April 2, 2008.
	(4) Instruments Defining the Rights of Security Holders
4.1*	Amended and Restated 2004 Omnibus Long-Term Incentive Compensation Plan, incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-8, filed with the SEC on December 29, 2008.
4.2*	Epoch Holding Corporation 2012 Long-Term Incentive Compensation Plan, incorporated by reference to Exhibit A to the Definitive Proxy Statement on Schedule 14A, filed with the SEC on October 18, 2012.
	(10) Material Contracts
10.1*	Amended and Restated Employment Agreement by and between Epoch Holding Corporation and William W. Priest, dated as of December 20, 2010 and effective as of January 1, 2011, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on December 20, 2010.
10.2	Office lease between BP 399 Park Avenue LLC (Landlord) and Epoch Investment Partners, Inc. (Tenant), dated as of June 15, 2012, incorporated by reference to Exhibit 10.2 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2012, filed with the SEC on September 10, 2012.
10.45	Office lease between Vornado 640 Fifth Avenue LLC (Landlord) and Epoch Investment Partners, Inc. (Tenant), incorporated by reference to Exhibit 10.45 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2005, filed with the SEC on September 28, 2005.
10.46	Form of Restricted Stock Award, incorporated by reference to Exhibit 10.46 to the Annual Report, as amended, on Form 10-K/A for the fiscal year ended June 30, 2006, filed with the SEC on September 28, 2006.
10.49	Office sublease between Centerview Partners Holdings LLC (Sublessor) and Epoch Investment Partners, Inc. (Sublessee), incorporated by reference to Exhibit 10.49 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, filed with the SEC on November 6, 2009.
	(31) Rule 13a-14(a)/15d-14(a) Certifications
31.1†	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

50

Exhibit No.	Description
31.2†	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	(32) Section 1350 Certification
32.1†	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	(101) XBRL Documents
101.INS**	XBRL Instance Document.
101.SCH**	XBRL Taxonomy Extension Schema Document.
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document.

† Filed herewith.

* Employment contract, compensatory plan or arrangement.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

51

SIGNATURE

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 thereunto duly authorized.

	EPOCH HOLDING CORPORATION
	(Registrant)
Date: February 7, 2013	By:	/s/ ADAM BORAK
		Adam Borak
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

52

EX-31.1

Exhibit 31.1

CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER

OF EPOCH HOLDING CORPORATION

I, William W. Priest, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Epoch Holding Corporation (the “Registrant”);

(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 registrant’s 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 in the 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: February 7, 2013	By:	/s/ WILLIAM W. PRIEST
		William W. Priest
		Chief Executive Officer
		(Principal Executive Officer)

A signed original of this written statement required by Section 302 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-31.2

Exhibit 31.2

CERTIFICATE OF CHIEF FINANCIAL OFFICER

OF EPOCH HOLDING CORPORATION

I, Adam Borak, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Epoch Holding Corporation (the “Registrant”);

(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 registrant’s 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 in the 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: February 7, 2013	By:	/s/ ADAM BORAK
		Adam Borak
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 302 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report for Epoch Holding Corporation (the “Company”) on Form 10-Q for the period ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), William W. Priest, Chief Executive Officer of the Company, and Adam Borak, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report.

Date: February 7, 2013	By:	/s/ WILLIAM W. PRIEST
		William W. Priest
		Chief Executive Officer
		(Principal Executive Officer)
Date: February 7, 2013	By:	/s/ ADAM BORAK
		Adam Borak
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Earnings Per Share - Computation of Basic and Diluted EPS (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Numerator:
Net income	$ 5,738	$ 5,863	$ 13,632	$ 10,281
Denominator:
Weighted-average common shares outstanding	23,714	23,285	23,697	23,320
Net common stock equivalents assuming the exercise of in-the-money stock options	15	186	15	176
Weighted-average common and common equivalent shares outstanding, assuming dilution	23,729	23,471	23,712	23,496
Earnings Per Share:
Basic	$ 0.24	$ 0.25	$ 0.58	$ 0.44
Diluted	$ 0.24	$ 0.25	$ 0.57	$ 0.44

XML

Available-for-sale Securities - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Dec. 31, 2012	Jun. 30, 2012
Period of unrealized losses for the available-for-sale securities	Twelve months or more
Impairment losses	$ 0	$ 0

XML

Earnings Per Share (Tables)

6 Months Ended

Dec. 31, 2012

Computation of Basic and Diluted EPS

The table below presents the computation of basic and diluted EPS for the three and six months ended December 31, 2012 and 2011, respectively (in thousands, except per share data):

	Three Months Ended December 31,				Six Months Ended December 31,
	2012		2011		2012		2011
Numerator:
Net income	$	5,738	$	5,863	$	13,632	$	10,281
Denominator:
Weighted-average common shares outstanding		23,714		23,285		23,697		23,320
Net common stock equivalents assuming the exercise of in-the-money stock options		15		186		15		176
Weighted-average common and common equivalent shares outstanding, assuming dilution		23,729		23,471		23,712		23,496
Earnings Per Share:
Basic	$	0.24	$	0.25	$	0.58	$	0.44
Diluted	$	0.24	$	0.25	$	0.57	$	0.44

XML

Special Dividends - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	1 Months Ended
	Dec. 31, 2012	Jan. 31, 2012	Dec. 14, 2012	Nov. 30, 2012	Nov. 12, 2012	Nov. 30, 2011
Dividends [Line Items]
Declared special dividend per share			$ 0.75	$ 0.75	$ 0.75	$ 0.75
Special dividends paid	$ 17.8	$ 17.5

XML

Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Dec. 31, 2012
Gain Contingencies [Line Items]
Commitments amount under employment agreement	$ 2.7
Accrued compensation and benefits under employment agreement	1.1
Additional compensation and benefits under employment agreement	0.4
Restricted stock awards to be issued under employment agreement	1.2
Additional base fees payment period under agreement	3 years
Expiry date of non-cancelable operating leases	2015-09
Initial annual base rent	3.7
Reimbursement on leasehold improvements	2.6
Remaining lease payments	3.8
Unrecognized compensation cost	9.2
Cost recognized over weighted average period	1 year 9 months 18 days
Transaction fee	5.0
Transaction fee payable	$ 1.0
Subsequent Event [Member]
Gain Contingencies [Line Items]
Increase in base rent, Percentage	10.00%
Expiration date of new lease	June 1, 2023

XML

Merger Agreement

6 Months Ended

Dec. 31, 2012

Merger Agreement

Note 2—Merger Agreement

On December 6, 2012, Epoch, The Toronto-Dominion Bank (“TD”) and Empire Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of TD, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions, Merger Sub will be merged with and into Epoch, with Epoch surviving the merger as a wholly owned subsidiary of TD (the “Merger”). The Merger Agreement was unanimously approved by Epoch’s Board of Directors and is expected to be completed during the first half of calendar year 2013.

At the effective time of the Merger, each share of Epoch common stock (other than treasury shares held by Epoch and any shares of Epoch common stock held by TD or any wholly-owned subsidiary of TD or Epoch or any person who properly demands statutory appraisal of their shares) will be converted into the right to receive an amount in cash equal to $28.00, without interest (the “Merger Consideration”). Each option to acquire Epoch common stock that is outstanding, whether vested or unvested, at the effective time of the Merger will be canceled in exchange for the right to receive the Merger Consideration minus the exercise price per share of the option. Each share of restricted Epoch common stock that is outstanding at the effective time of the Merger will convert into the right to receive the Merger Consideration per share of restricted stock. Under the terms of the Merger Agreement, the Company may continue to declare or pay quarterly dividends to its common stockholders not in excess of $0.10 per share. No adjustment to the Merger Consideration was made on account of the previously announced $0.75 per share special dividend declared on November 12, 2012 and paid on December 14, 2012, or any ordinary quarterly dividends payable prior to the consummation of the Merger.

The consummation of the Merger is subject to customary closing conditions, including, among others, approval by Epoch’s stockholders, the receipt of consents from Epoch clients representing at least 80% of Epoch’s management fee revenues, the absence of certain legal impediments to the consummation of the Merger, the receipt of required governmental consents and approvals, the early termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (which has been satisfied) and, subject to materiality exceptions, the accuracy of representations and warranties made by Epoch and TD, respectively, and material compliance by Epoch and TD with their respective obligations under the Merger Agreement. The Merger is not subject to any financing condition.

The Merger Agreement requires Epoch to convene a stockholders meeting for purposes of obtaining the necessary stockholder approval and, subject to certain exceptions, Epoch has agreed (i) not to solicit alternative transactions or enter into discussions concerning, or provide confidential information in connection with, any alternative transaction and (ii) that Epoch’s Board of Directors will recommend that Epoch’s stockholders adopt the Merger Agreement.

Prior to adoption of the Merger Agreement by Epoch’s stockholders, Epoch’s Board of Directors may, in certain circumstances, change its recommendation that Epoch’s stockholders adopt the Merger Agreement, subject to complying with certain notice and other specified procedures set forth in the Merger Agreement, including giving TD the opportunity to propose changes to the Merger Agreement.

The Merger Agreement may be terminated under certain circumstances, including by Epoch, prior to the adoption of the Merger Agreement by Epoch’s stockholders, in the event that Epoch receives an unsolicited proposal that Epoch’s Board of Directors concludes, after following certain procedures, is a Superior Proposal (as defined in the Merger Agreement). In addition, TD may terminate the Merger Agreement under certain circumstances, including if Epoch breaches its non-solicitation obligations under the Merger Agreement or if Epoch’s Board of Directors changes, withholds, or fails to reaffirm its recommendation that Epoch’s stockholders adopt the Merger Agreement, or approves a proposal for an alternative transaction. In the foregoing circumstances, Epoch would be required to pay TD a termination fee of $20 million.

For terms of the Merger Agreement, including circumstances under which the Merger Agreement can be terminated and the ramifications of such termination, as well as other terms and conditions, please refer to the Merger Agreement filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 6, 2012. Additional information regarding the proposed Merger transaction will be contained in a definitive proxy statement to be filed by Epoch with the SEC.

If completed, the Merger will result in the Company becoming a wholly-owned subsidiary of TD and its shares will no longer be listed on any public market. No assurance can be given that the Merger will be completed.

During the three months ended December 31, 2012, merger related transaction costs totaled approximately $2.8 million, primarily for legal and investment banking fees. These costs are included in professional fees and services in the Condensed Consolidated Statements of Income.

Voting Agreements

In connection with the execution of the Merger Agreement, TD and Merger Sub have entered into voting and support agreements (each, a “Voting Agreement”) with certain of Epoch’s directors and certain members of Epoch’s senior management and the trustees of certain trusts for their benefit (the “Stockholders”) holding, as of the date of the Merger Agreement, in the aggregate approximately 28% of Epoch’s total voting power. Pursuant to the terms of the Voting Agreement, the Stockholders have agreed in their capacities as Epoch stockholders, among other things: (i) to vote their shares in favor of the adoption of the Merger Agreement and against any alternative proposal; and (ii) not to transfer any shares of Epoch subject to the Voting Agreement, subject to certain exceptions.

The Voting Agreements will terminate on the earlier of the effective time of the Merger and the date that the Merger Agreement is terminated.

XML

Related Party Agreement - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended
	Dec. 31, 2012	Dec. 31, 2012
Monthly amount of transaction with related party under agreement		$ 33,000
Expenses for consulting services	100,000	200,000
Outstanding liability	$ 33,000	$ 33,000

XML

Accounts Receivable - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Consolidated operating revenues	13.00%	18.00%	14.00%	18.00%

XML

Merger Agreement - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended					3 Months Ended
	Dec. 31, 2012	Dec. 14, 2012	Nov. 30, 2012	Nov. 12, 2012	Nov. 30, 2011	Dec. 31, 2012 Merger related transaction costs [Member]
Merger Transaction [Line Items]
Common stock conversion right to receive cash per share	$ 28.00
Declared special dividend per share		$ 0.75	$ 0.75	$ 0.75	$ 0.75
Receipt of consents from Epoch clients representing minimum percentage of Epoch's management fee revenues	80.00%
Fees payable to TD in case of agreement termination	$ 20
Legal and investment banking fees						$ 2.8
Stockholders holding percentage of voting power in Epoch's	28.00%

XML

Subsequent Event - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended		1 Months Ended		3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Feb. 11, 2013 Subsequent Event [Member]	Jan. 07, 2013 Subsequent Event [Member]	Dec. 31, 2012 Maximum [Member]
Quarterly cash dividends	$ 0.85	$ 0.83	$ 0.93	$ 0.89		$ 0.10	$ 0.10
Aggregate dividend payment					$ 2.4

XML

Fair Value Measurements - Additional Information (Detail) (USD $)	6 Months Ended	12 Months Ended
	Dec. 31, 2012	Jun. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value transfers between levels	$ 0	$ 0
Carrying value of investments	3,188,000	2,580,000
Financial liabilities measured at fair value	$ 0	$ 0
Investment in non-affiliated limited partnership [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ownership interest less than 2%	2.00%	2.00%

XML

Fair Value Measurements - Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Jun. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements	$ 2,638	$ 5,040
Available-for-sale securities, Fair Value Measurements	6,645	8,448
Total investments measured at fair value	9,283	13,488
Epoch Global All-Cap Fund, LLC [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements	2,638	2,929
Epoch Global Choice Fund, LLC [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements		2,111
Company-sponsored mutual funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements	1,219	1,133
Epoch Global Champions separate account [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements	1,095	1,088
Epoch U.S. Equity Shareholder Yield separate account [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements	2,070	2,000
Investment in non-affiliated limited partnership [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements	2,261	4,227
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements	2,638	5,040
Available-for-sale securities, Fair Value Measurements	4,384	4,221
Total investments measured at fair value	7,022	9,261
Level 1 [Member] | Epoch Global All-Cap Fund, LLC [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements	2,638	2,929
Level 1 [Member] | Epoch Global Choice Fund, LLC [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements		2,111
Level 1 [Member] | Company-sponsored mutual funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements	1,219	1,133
Level 1 [Member] | Epoch Global Champions separate account [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements	1,095	1,088
Level 1 [Member] | Epoch U.S. Equity Shareholder Yield separate account [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements	2,070	2,000
Level 1 [Member] | Investment in non-affiliated limited partnership [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements
Available-for-sale securities, Fair Value Measurements	2,261	4,227
Total investments measured at fair value	2,261	4,227
Level 2 [Member] | Epoch Global All-Cap Fund, LLC [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements
Level 2 [Member] | Epoch Global Choice Fund, LLC [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements
Level 2 [Member] | Company-sponsored mutual funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements
Level 2 [Member] | Epoch Global Champions separate account [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements
Level 2 [Member] | Epoch U.S. Equity Shareholder Yield separate account [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements
Level 2 [Member] | Investment in non-affiliated limited partnership [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements	2,261	4,227
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements
Available-for-sale securities, Fair Value Measurements
Total investments measured at fair value
Level 3 [Member] | Epoch Global All-Cap Fund, LLC [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements
Level 3 [Member] | Epoch Global Choice Fund, LLC [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading securities, Fair Value Measurements
Level 3 [Member] | Company-sponsored mutual funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements
Level 3 [Member] | Epoch Global Champions separate account [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements
Level 3 [Member] | Epoch U.S. Equity Shareholder Yield separate account [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements
Level 3 [Member] | Investment in non-affiliated limited partnership [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, Fair Value Measurements

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Organization and Basis of Presentation

6 Months Ended

Dec. 31, 2012

Organization and Basis of Presentation

Note 1—Organization and Basis of Presentation

Organization

Epoch Holding Corporation (“Epoch” or the “Company”), a Delaware corporation, is a holding company whose sole line of business is investment advisory and investment management services. The operations of the Company are conducted through its wholly-owned subsidiary, Epoch Investment Partners, Inc. (“EIP”). EIP is a registered investment adviser under the Investment Advisers Act of 1940, as amended. EIP provides investment advisory and investment management services to clients including corporations, mutual funds, retirement plans, public pension funds, endowments, foundations, financial institutions and high net worth individuals. Headquartered in New York City, the Company’s current investment strategies include U.S. Value, U.S. All Cap Value, U.S. Small Cap Value, U.S. Smid Cap (small/mid) Value, U.S. Choice, U.S. Equity Shareholder Yield, Global Equity Shareholder Yield, Global Choice, Global Absolute Return, International Small Cap, and Global Small Cap.

Basis of Presentation

The fiscal year-end June 30, 2012 Condensed Consolidated Balance Sheet was derived from audited financial statements and, in accordance with interim financial statement standards, does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial statements. The unaudited condensed consolidated financial statements of the Company included herein have been prepared in accordance with U.S. GAAP, and in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made herein are adequate to make the information not misleading.

Certain items previously reported have been reclassified to conform to the current year presentation. Such reclassifications had no impact on the condensed consolidated financial position, results of operations, or cash flows.

Use of Estimates

These financial statements rely, in part, on estimates. Actual results could differ from these estimates. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position, interim results of operations, comprehensive income and cash flows. All material intercompany accounts and transactions have been eliminated in consolidation. The nature of the Company’s business is such that the results for the interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The Company’s unaudited condensed consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012.

There have been no changes in significant accounting policies during the three and six months ended December 31, 2012. For a complete listing of the Company’s significant accounting policies, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012.

Principles of Consolidation

The Company’s policy is to consolidate (i) variable interest entities (“VIEs”) in which the Company is deemed to be the primary beneficiary, (ii) partnership or similar entities in which the Company is the Managing Member, unless the other unrelated members have rights that would overcome the presumption of control by the Managing Member, and (iii) corporate entities in which it has a controlling financial interest through a majority voting interest or other contract.

Each reporting period, the Company assesses each of the funds in which it is the Managing Member and/or manages through a contract to determine whether consolidation/deconsolidation is appropriate. The Company first evaluates each fund that it manages to determine whether the fund is an investment company. The Company then evaluates whether each fund meets the definition of a VIE. This determination is made by considering whether the fund’s equity investment at risk is sufficient to finance its activities without additional subordinated financial support and whether the fund’s at-risk equity holders have the typical characteristics of a controlling financial interest.

An entity that is a VIE must be consolidated by its primary beneficiary. For VIEs that are investment companies and meet other requirements, the primary beneficiary of the VIE is defined as the party that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. For VIEs that are not investment companies, the primary beneficiary of a VIE is defined as the party who, considering the involvement of related parties and de facto agents, has (i) the power to direct the activities of the VIE that most significantly affect its economic performance, and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. This evaluation is updated continuously. As of December 31, 2012, all funds in which the Company was the Managing Member or managed through a contract were considered investment companies. Furthermore, as of December 31, 2012, none of the funds in which the Company served as a Managing Member and/or managed through a contract met the definition of a VIE.

If the Company determines that a fund is not a VIE, the Company then evaluates whether the fund is a partnership or similar entity. If the fund is a partnership or similar entity, the Company evaluates the fund under the partnership consolidation guidance. Pursuant to that guidance, the Company consolidates funds in which it is the Managing Member and/or manages through a contract, unless presumption of control by the Company can be overcome. This presumption is overcome only when unaffiliated investors in the fund have the substantive ability to liquidate the fund or otherwise remove the Company as the Managing Member without cause, based on a simple majority vote of unaffiliated investors, or have other substantive participating rights. If the presumption of control can be overcome, the Company accounts for its interest in the fund pursuant to the equity method of accounting. As of December 31, 2012, the Company’s investment in the Epoch Global All-Cap Fund, LLC required consolidation under this guidance, as the Company was the sole member in this fund.

If the Company determines that a fund is not a VIE and is not a partnership or similar entity, the Company then evaluates the fund pursuant to the general consolidation guidance that is applicable to corporate entities. Consistent with that guidance, the Company consolidates a fund that is not a VIE and is not a partnership or similar entity only when it has a controlling financial interest, which is usually demonstrated through ownership of a majority voting interest in the fund.

If the Company does not consolidate a fund in which it is the Managing Member and/or manages through a contract based on the evaluation above, it will account for its equity investment as one of the following depending on the characteristic of the investment: (1) an available-for-sale security if the equity investment has a readily determinable fair value (i.e., the equity investment is publicly traded) and the Company does not have significant influence, (2) as an equity method investment if the Company has significant influence (i.e., the Company is a Managing Member of a fund that is a partnership or similar entity that it is not required to consolidate), or (3) as a cost method investment if the equity method investment does not have a readily determinable fair value and the Company does not have significant influence. As of December 31, 2012, the Company accounted for its investments in its four Company-sponsored mutual funds as available-for-sale securities, as these investments have a readily determinable fair value and the Company did not have significant influence through its sub-advisory agreements. The Company accounted for its investments in the Epoch Global Equity Shareholder Yield Fund, LLC, the Epoch Global Choice Fund, LLC and the Epoch Global Absolute Return Fund, LLC under the equity method, as the Company had significant influence as Managing Member.

Recently Issued Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11, Disclosures About Offsetting Assets and Liabilities. ASU No. 2011-11 provides new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements associated with its derivative and other financial instruments. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The new disclosures are designed to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards (“IFRS”). The Company adopted this standard in January 2013. The adoption of this standard did not have a material impact on its condensed consolidated financial position, results of operations, or cash flows.

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Available-for-sale Securities - Summary of Available-for-Sale Securities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Jun. 30, 2012
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Cost	$ 6,468	$ 8,209
Available-for-sale securities, Gross Unrealized Gains	339	443
Available-for-sale securities, Gross Unrealized Losses	(162)	(204)
Available-for-sale securities, Fair Value	6,645	8,448
Company-sponsored mutual funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Cost	1,314	1,217
Available-for-sale securities, Gross Unrealized Gains	4	72
Available-for-sale securities, Gross Unrealized Losses	(99)	(156)
Available-for-sale securities, Fair Value	1,219	1,133
Epoch Global Champions separate account [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Cost	1,004	992
Available-for-sale securities, Gross Unrealized Gains	100	144
Available-for-sale securities, Gross Unrealized Losses	(9)	(48)
Available-for-sale securities, Fair Value	1,095	1,088
Epoch U.S. Equity Shareholder Yield separate account [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Cost	2,042	2,000
Available-for-sale securities, Gross Unrealized Gains	82
Available-for-sale securities, Gross Unrealized Losses	(54)
Available-for-sale securities, Fair Value	2,070	2,000
Investment in non-affiliated limited partnership [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Cost	2,108	4,000
Available-for-sale securities, Gross Unrealized Gains	153	227
Available-for-sale securities, Gross Unrealized Losses
Available-for-sale securities, Fair Value	$ 2,261	$ 4,227

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Other Comprehensive (Loss)/Income - Components of Other Comprehensive (Loss)/Income Include Changes in Fair Value of Available-for-Sale Securities (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Other Comprehensive Income [Line Items]
Net unrealized gains/(losses) on available-for-sale securities, Pre-tax Amount	$ (31)	$ 347	$ 129	$ (388)
Reclassifications for net (gains)/ losses included in net income, Pre-tax Amount	(83)	(274)	(191)	(123)
Pre-tax Amount, Total	(114)	73	(62)	(511)
Net unrealized gains/(losses) on available-for-sale securities, Tax (Expense)/Benefit	14	(151)	(56)	169
Reclassifications for net (gains)/ losses included in net income, Tax (Expense)/Benefit	36	119	83	53
Tax (Expense)/Benefit, Total	50	(32)	27	222
Net unrealized gains/(losses) on available-for-sale securities, Net-of-tax Amount	(17)	196	73	(219)
Reclassification for net (gains)/losses included in net income, Net-of-tax Amount	(47)	(155)	(108)	(70)
Net-of-tax Amount, Total	$ (64)	$ 41	$ (35)	$ (289)

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Jun. 30, 2012
Current assets:
Cash and cash equivalents	$ 21,866	$ 24,528
Accounts receivable	23,428	20,718
Deferred income taxes	3,053	2,477
Held-to-maturity securities, at amortized cost (fair value of $0 and $710, respectively)-(Note 6)		706
Prepaid taxes and other current assets	8,263	1,275
Total current assets	56,610	49,704
Trading securities, at fair value	2,638	5,040
Available-for-sale securities, at fair value (cost of $6,468 and $8,209, respectively)-(Note 5)	6,645	8,448
Held-to-maturity securities, at amortized cost (fair value of $524 and $532, respectively)-(Note 6)	509	512
Equity method investments	3,188	2,580
Deferred income taxes	8,907	8,880
Property and equipment, net of accumulated depreciation of $4,883 and $4,306, respectively	5,451	863
Security deposits	1,673	1,639
Total assets	85,621	77,666
Current liabilities:
Accounts payable and accrued liabilities	5,252	1,386
Accrued compensation and benefits	10,205	7,476
Income taxes payable		2,120
Total current liabilities	15,457	10,982
Deferred rent	1,673	531
Total liabilities	17,130	11,513
Commitments and contingencies-(Note 7)
Stockholders' equity:
Common stock, $0.01 par value per share, 60,000,000 shares authorized; 24,743,160 issued and 23,868,559 outstanding at December 31, 2012 and 24,474,370 issued and 23,605,490 outstanding at June 30, 2012, respectively	247	245
Additional paid-in capital	85,982	75,058
(Accumulated deficit)/retained earnings	(6,112)	2,307
Accumulated other comprehensive (loss)/income, net of tax	(27)	8
Less: Treasury stock, at cost, 874,601 and 868,880 shares, respectively	(11,599)	(11,465)
Total stockholders' equity	68,491	66,153
Total liabilities and stockholders' equity	$ 85,621	$ 77,666

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) In Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	(Accumulated Deficit)/Retained Earnings [Member]	Accumulated Other Comprehensive (Loss)/ income [Member]	Treasury Stock [Member]
Balances, value at Jun. 30, 2011	$ 61,735	$ 239	$ 64,737	$ 2,041	$ 183	$ (5,465)
Balances, Shares at Jun. 30, 2011		23,364				580
Net income	24,767			24,767
Other comprehensive income/(loss) - (Note 9)	(175)				(175)
Dividends	(24,501)			(24,501)
Issuance and forfeitures of restricted share awards	1,091	4	1,087
Issuance and forfeitures of restricted share awards, Shares		379
Amortization of share-based compensation	6,084		6,084
Excess income tax benefit from share-based compensation	1,702		1,702
Income tax benefit from dividends paid on unvested shares	511		511
Purchases of shares for employee withholding	(4,807)					(4,807)
Purchases of shares for employee withholding, Shares		(209)				209
Repurchase of common shares	(1,193)					(1,193)
Repurchase of common shares, Shares		(80)				80
Exercise of stock options	939	2	937
Exercise of stock options, Shares		152
Balances, value at Jun. 30, 2012	66,153	245	75,058	2,307	8	(11,465)
Balances, Shares at Jun. 30, 2012		23,606				869
Net income	13,632			13,632
Other comprehensive income/(loss) - (Note 9)	(35)				(35)
Dividends	(22,051)			(22,051)
Issuance and forfeitures of restricted share awards	(155)	(1)	(154)
Issuance and forfeitures of restricted share awards, Shares		(11)
Amortization of share-based compensation	3,624		3,624
Excess income tax benefit from share-based compensation	5,303		5,303
Income tax benefit from dividends paid on unvested shares	424		424
Purchases of shares for employee withholding	(134)					(134)
Purchases of shares for employee withholding, Shares		(6)				6
Exercise of stock options	1,730	3	1,727
Exercise of stock options, Shares		280
Balances, value at Dec. 31, 2012	$ 68,491	$ 247	$ 85,982	$ (6,112)	$ (27)	$ (11,599)
Balances, Shares at Dec. 31, 2012		23,869				875

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Held-to-maturity Securities - Unrealized Holding Gains and Losses, and Fair Value of Securities Classified as Held-to-Maturity (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Jun. 30, 2012
Schedule of Held-to-maturity Securities [Line Items]
Amortized cost current		$ 706
Amortized cost long term	509	512
Total Amortized Cost	509	1,218
Gross Unrecognized Gains current		4
Gross Unrecognized Gains long term	15	20
Gross Unrecognized Gains total	15	24
Gross Unrecognized Losses current
Gross Unrecognized Losses long term
Gross Unrecognized Losses total
Aggregate Fair Value	524	1,242
Current [Member]
Schedule of Held-to-maturity Securities [Line Items]
Aggregate Fair Value		710
Long-Term [Member]
Schedule of Held-to-maturity Securities [Line Items]
Aggregate Fair Value	$ 524	$ 532

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Fair Value Measurements (Tables)

6 Months Ended

Dec. 31, 2012

Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis

The following table presents, for each of the hierarchy levels previously described, the Company’s assets that are measured at fair value as of December 31, 2012 and June 30, 2012 (in thousands):

	December 31, 2012								June 30, 2012
	Fair Value Measurements		Level 1		Level 2		Level 3		Fair Value Measurements		Level 1		Level 2		Level 3
Trading securities:
Epoch Global All-Cap Fund, LLC	$	2,638	$	2,638	$	—	$	—	$	2,929	$	2,929	$	—	$	—
Epoch Global Choice Fund, LLC		—		—		—		—		2,111		2,111		—		—
Total trading securities		2,638		2,638		—		—		5,040		5,040		—		—
Available-for-sale securities:
Company-sponsored mutual funds		1,219		1,219		—		—		1,133		1,133		—		—
Epoch Global Champions separate account		1,095		1,095		—		—		1,088		1,088		—		—
Epoch U.S. Equity Shareholder Yield separate account		2,070		2,070		—		—		2,000		2,000		—		—
Investment in non-affiliated limited partnership		2,261		—		2,261		—		4,227		—		4,227		—
Total available-for-sale securities		6,645		4,384		2,261		—		8,448		4,221		4,227		—
Total investments measured at fair value	$	9,283	$	7,022	$	2,261	$	—	$	13,488	$	9,261	$	4,227	$	—

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Held-to-maturity Securities - Contractual Maturities of Investment Securities Classified as Held-to-Maturity (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 31, 2012	Jun. 30, 2012
Amortized Cost, Less than 1 year
Amortized Cost, Due after 1 year through 3 years	509
Total Amortized Cost	509	1,218
Aggregate Fair Value, Less than 1 year
Aggregate Fair Value, Due after 1 year through 3 years	524
Total Aggregate Fair Value	$ 524
Weighted-Average Interest Rate, Less than 1 year	0.00%
Weighted-Average Interest Rate, Due after 1 year through 3 years	2.66%
Weighted-Average Interest Rate	2.66%

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Held-to-maturity Securities (Tables)

6 Months Ended

Dec. 31, 2012

Unrealized Holding Gains and Losses, and Fair Value of Securities Classified as Held-to-Maturity

These investments are carried at amortized cost. Gross unrecognized holding gains and losses, and fair values of these securities at December 31, 2012 and June 30, 2012 are as follows (in thousands):

	December 31, 2012								June 30, 2012
	Amortized Cost		Gross Unrecognized Holding				Aggregate Fair Value		Amortized Cost		Gross Unrecognized Holding				Aggregate Fair Value
			Gains		Losses						Gains		Losses
Current	$	—	$	—	$	—	$	—	$	706	$	4	$	—	$	710
Long-Term		509		15		—		524		512		20		—		532
Total	$	509	$	15	$	—	$	524	$	1,218	$	24	$	—	$	1,242

Contractual Maturities of Investment Securities Classified as Held-to-Maturity

The contractual maturities of the investment securities classified as held-to-maturity at December 31, 2012 are as follows (in thousands):

Contractual Maturities	Amortized Cost		Aggregate Fair Value		Weighted- Average Interest Rate
Less than 1 year	$	—	$	—		0	%
Due after 1 year through 3 years		509		524		2.66	%
Total	$	509	$	524		2.66	%

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net income	$ 13,632	$ 10,281
Adjustments to reconcile net income to net cash provided by operating activities:
Benefit from deferred income taxes	(576)	(116)
Share-based compensation	3,469	2,800
Depreciation and amortization	577	537
Net gains on investments	(396)	(115)
Net (income)/loss from equity method investments	(165)	44
Amortization of bond premiums	10	21
Excess income tax benefit from share-based compensation	(5,303)	(1,715)
Income tax benefit from dividends paid on unvested shares	(424)	(433)
(Increase)/decrease in operating assets:
Accounts receivable	(2,710)	(345)
Prepaid taxes and other current assets	(6,988)	(884)
Trading securities	1,165	(6,777)
Increase/(decrease) in operating liabilities:
Accounts payable and accrued liabilities	3,866	91
Accrued compensation and benefits	2,729	6,787
Income taxes payable	3,607	1,499
Deferred rent	1,142	(82)
Net cash provided by operating activities	13,635	11,593
Cash flows from investing activities:
Proceeds from available-for-sale securities, net	1,930	1,745
Proceeds from equity method investments	1,000
Proceeds from redemption of held-to-maturity securities	700
Capital expenditures	(5,165)	(173)
Security deposits	(34)	101
Net cash (used in)/provided by investing activities	(1,569)	1,673
Cash flows from financing activities:
Dividends	(22,051)	(3,265)
Repurchase of common shares	(134)	(1,943)
Excess income tax benefit from share-based compensation	5,303	1,715
Income tax benefit from dividends paid on unvested shares	424	433
Proceeds from stock option exercises	1,730	357
Net cash used in financing activities	(14,728)	(2,703)
Net (decrease)/increase in cash and cash equivalents during period	(2,662)	10,563
Cash and cash equivalents at beginning of period	24,528	29,128
Cash and cash equivalents at end of period	21,866	39,691
Supplemental disclosure of cash flow information:
Cash paid for income taxes	13,051	7,392
Supplemental disclosures of non-cash investing activities:
Net change in unrealized gains/(losses) on available-for-sale securities, net of tax-(Note 9)	(35)	(289)
Dividends declared but not yet paid		$ 17,487

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2012	Jun. 30, 2012
Held-to-maturity securities, fair value current	$ 0	$ 710
Available-for-sale securities	6,468	8,209
Held-to-maturity securities, fair value non current	524	532
Property and equipment, accumulated depreciation	$ 4,883	$ 4,306
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	24,743,160	24,474,370
Common stock, shares outstanding	23,868,559	23,605,490
Treasury stock, shares	874,601	868,880

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Geographic Area Information

6 Months Ended

Dec. 31, 2012

Geographic Area Information

Note 10—Geographic Area Information

The Company operates under one business segment, investment management. Geographical information pertaining to the Company’s operating revenues is presented below. The amounts are aggregated by the client’s domicile (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2012		2011		2012		2011
United States	$	19,711	$	14,673	$	39,274	$	27,088
Canada		3,768		2,427		7,089		4,728
Australia		2,275		2,817		4,966		5,376
Europe		1,496		1,467		3,005		2,866
Asia/Africa		553		350		1,093		685
Total operating revenues	$	27,803	$	21,734	$	55,427	$	40,743

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Document and Entity Information	6 Months Ended
	Dec. 31, 2012	Feb. 04, 2013
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Trading Symbol	EPHC
Entity Registrant Name	Epoch Holding Corporation
Entity Central Index Key	0000351903
Current Fiscal Year End Date	--06-30
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		23,868,559

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Special Dividends

6 Months Ended

Dec. 31, 2012

Special Dividends

Note 11—Special Dividends

In November 2012 the Board of Directors declared a special cash dividend of $0.75 per share on the Company’s common stock. The dividend was paid in December 2012. The aggregate dividend payment totaled approximately $17.8 million.

In November 2011 the Board of Directors declared a special cash dividend of $0.75 per share on the Company’s common stock. The dividend was paid in January 2012. The aggregate dividend payment totaled approximately $17.5 million.

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Operating Revenues:
Investment advisory and management fees	$ 27,309	$ 20,694	$ 54,500	$ 38,805
Performance fees	494	1,040	927	1,938
Total operating revenues	27,803	21,734	55,427	40,743
Operating Expenses:
Employee compensation and benefits	10,512	8,353	20,907	16,170
Professional fees and services	3,926	756	4,768	1,467
Occupancy and technology	2,333	1,330	4,069	2,515
General and administrative	793	766	1,487	1,465
Distribution and servicing fees	403	470	846	969
Total operating expenses	17,967	11,675	32,077	22,586
Operating Income	9,836	10,059	23,350	18,157
Other income	284	331	693	137
Income Before Income Taxes	10,120	10,390	24,043	18,294
Provision for income taxes	4,382	4,527	10,411	8,013
Net Income	$ 5,738	$ 5,863	$ 13,632	$ 10,281
Earnings Per Share:-(Note 8)
Basic	$ 0.24	$ 0.25	$ 0.58	$ 0.44
Diluted	$ 0.24	$ 0.25	$ 0.57	$ 0.44
Weighted-Average Shares Outstanding:
Basic	23,714	23,285	23,697	23,320
Diluted	23,729	23,471	23,712	23,496
Cash Dividends Declared Per Share-(Note 11)	$ 0.85	$ 0.83	$ 0.93	$ 0.89

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Available-for-sale Securities

6 Months Ended

Dec. 31, 2012

Available-for-sale Securities

Note 5—Available-for-sale Securities

The Company’s available-for-sale securities at December 31, 2012 and June 30, 2012 are summarized as follows (in thousands):

	December 31, 2012									June 30, 2012
	Cost		Gross Unrealized					Fair Value		Cost		Gross Unrealized					Fair Value
			Gains		Losses							Gains		Losses
Available-for-sale securities:
Company-sponsored mutual funds	$	1,314	$	4	$	(99	)	$	1,219	$	1,217	$	72	$	(156	)	$	1,133
Epoch Global Champions separate account		1,004		100		(9	)		1,095		992		144		(48	)		1,088
Epoch U.S. Equity Shareholder Yield separate account		2,042		82		(54	)		2,070		2,000		—		—			2,000
Investment in non-affiliated limited partnership		2,108		153		—			2,261		4,000		227		—			4,227
Total	$	6,468	$	339	$	(162	)	$	6,645	$	8,209	$	443	$	(204	)	$	8,448

The Company has evaluated the carrying value and the gross unrealized losses of the investments and determined that these losses are not other-than-temporary. In its impairment analysis, the Company takes into consideration numerous criteria, including the duration and extent of any decline in fair value and the Company’s intent with respect to a given security. If the decline in value is determined to be other-than-temporary, the carrying value of the security is written down to fair value through net income. The unrealized losses for the available-for-sale securities have been unrealized for twelve months or more. However, the gross unrealized losses were primarily caused by overall weakness in the financial markets and world economy, and the Company has both the ability and intent to hold the investments for a period of time sufficient to recover such losses. No impairment losses in value of the Company’s investments were recognized during any of the periods presented.

Proceeds as well as realized gains and losses recognized from investments classified as available-for-sale during the three and six months ended December 31, 2012 and 2011 are as follows (in thousands):

	Three Months Ended December 31, 2012							Three Months Ended December 31, 2011
			Gross Realized							Gross Realized
	Proceeds		Gains		Losses			Proceeds		Gains		Losses
Available-for-sale securities:
Epoch U.S. Equity Shareholder Yield separate account	$	112	$	6	$	(10	)	$	—	$	—	$	—
Company-sponsored mutual funds		84		84		—			20		20		—
Epoch Global All Cap separate account		—		—		—			261		25		(49	)
Total	$	196	$	90	$	(10	)	$	281	$	45	$	(49	)

	Six Months Ended December 31, 2012							Six Months Ended December 31, 2011
			Gross Realized							Gross Realized
	Proceeds		Gains		Losses			Proceeds		Gains		Losses
Available-for-sale securities:
Epoch U.S. Equity Shareholder Yield separate account	$	167	$	8	$	(12	)	$	—	$	—	$	—
Investment in non-affiliated limited partnership		2,000		108		—			—		—		—
Company-sponsored mutual funds		84		84		—			20		20		—
Epoch Global All Cap separate account		—		—		—			1,634		80		(254	)
Total	$	2,251	$	200	$	(12	)	$	1,654	$	100	$	(254	)

Realized gains and losses from available-for-sale securities are included in other income in the Condensed Consolidated Statements of Income using the specific identification method.

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Fair Value Measurements

6 Months Ended

Dec. 31, 2012

Fair Value Measurements

Note 4—Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date and establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the reported date. The three levels are defined as follows:

• Level 1—unadjusted quoted prices in active markets that are available for identical assets or liabilities as of the reported date.

• Level 2—quoted prices in markets that are not active or other pricing inputs that are either directly or indirectly observable as of the reported date.

• Level 3—prices or valuation techniques that are both significant to the fair value measurement and unobservable as of the reported date. These financial instruments do not have active markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

Assets and liabilities measured and reported at fair value are classified and disclosed in one of the above categories based on the nature of the inputs that are significant to the fair value measurement in its entirety. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s classification within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The underlying investments in Company-sponsored mutual funds, separate accounts, and trading securities are publicly traded equity securities which are valued under the market approach through the use of unadjusted quoted market prices available in active markets and are classified within Level 1 of the valuation hierarchy.

At December 31, 2012, the Company held less than a 2% ownership interest in a non-affiliated limited partnership. This investment was accounted for as available-for-sale and was valued based upon the Company’s ownership interest in the partnership’s net assets. The investment limited partnership was classified within Level 2 of the valuation hierarchy. In January 2013, the Company liquidated its remaining interest in this investment.

The following table presents, for each of the hierarchy levels previously described, the Company’s assets that are measured at fair value as of December 31, 2012 and June 30, 2012 (in thousands):

	December 31, 2012								June 30, 2012
	Fair Value Measurements		Level 1		Level 2		Level 3		Fair Value Measurements		Level 1		Level 2		Level 3
Trading securities:
Epoch Global All-Cap Fund, LLC	$	2,638	$	2,638	$	—	$	—	$	2,929	$	2,929	$	—	$	—
Epoch Global Choice Fund, LLC		—		—		—		—		2,111		2,111		—		—
Total trading securities		2,638		2,638		—		—		5,040		5,040		—		—
Available-for-sale securities:
Company-sponsored mutual funds		1,219		1,219		—		—		1,133		1,133		—		—
Epoch Global Champions separate account		1,095		1,095		—		—		1,088		1,088		—		—
Epoch U.S. Equity Shareholder Yield separate account		2,070		2,070		—		—		2,000		2,000		—		—
Investment in non-affiliated limited partnership		2,261		—		2,261		—		4,227		—		4,227		—
Total available-for-sale securities		6,645		4,384		2,261		—		8,448		4,221		4,227		—
Total investments measured at fair value	$	9,283	$	7,022	$	2,261	$	—	$	13,488	$	9,261	$	4,227	$	—

There were no transfers into or out of the Level 1, 2 and 3 categories in the fair value measurement hierarchy for the periods presented.

At June 30, 2012, the Company was the sole investor in, and managing member of, the Epoch Global All-Cap Fund, LLC and the Epoch Global Choice Fund, LLC. Therefore, these investments were consolidated as trading securities. During the quarter ended September 30, 2012, several new investors joined the Epoch Global Choice Fund, LLC. As a result, the Company’s ownership in this fund was diluted to less than 2%. Furthermore, the Company can be removed by the additional investors in the fund without cause, based on a simple majority vote of the unaffiliated investors. In accordance with the Company’s consolidation policy, the Company deconsolidated its interest and now records its investment in the Epoch Global Choice Fund, LLC under the equity method.

For the Company’s equity method investments, the Company records its percentage share of net earnings or losses in other income. Consequently, these investments are not recorded at fair value, but approximate fair value. The total carrying value of these investments was $3.2 million and $2.6 million at December 31, 2012 and June 30, 2012, respectively.

The Company did not hold any financial liabilities measured at fair value at December 31, 2012 or June 30, 2012.

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Available-for-sale Securities (Tables)

6 Months Ended

Dec. 31, 2012

Summary of Available-for-Sale Securities

The Company’s available-for-sale securities at December 31, 2012 and June 30, 2012 are summarized as follows (in thousands):

	December 31, 2012									June 30, 2012
	Cost		Gross Unrealized					Fair Value		Cost		Gross Unrealized					Fair Value
			Gains		Losses							Gains		Losses
Available-for-sale securities:
Company-sponsored mutual funds	$	1,314	$	4	$	(99	)	$	1,219	$	1,217	$	72	$	(156	)	$	1,133
Epoch Global Champions separate account		1,004		100		(9	)		1,095		992		144		(48	)		1,088
Epoch U.S. Equity Shareholder Yield separate account		2,042		82		(54	)		2,070		2,000		—		—			2,000
Investment in non-affiliated limited partnership		2,108		153		—			2,261		4,000		227		—			4,227
Total	$	6,468	$	339	$	(162	)	$	6,645	$	8,209	$	443	$	(204	)	$	8,448

Summary of Proceeds as Well as Realized Gains and Losses on Investments Classified as Available-for-Sale Securities

Proceeds as well as realized gains and losses recognized from investments classified as available-for-sale during the three and six months ended December 31, 2012 and 2011 are as follows (in thousands):

	Three Months Ended December 31, 2012							Three Months Ended December 31, 2011
			Gross Realized							Gross Realized
	Proceeds		Gains		Losses			Proceeds		Gains		Losses
Available-for-sale securities:
Epoch U.S. Equity Shareholder Yield separate account	$	112	$	6	$	(10	)	$	—	$	—	$	—
Company-sponsored mutual funds		84		84		—			20		20		—
Epoch Global All Cap separate account		—		—		—			261		25		(49	)
Total	$	196	$	90	$	(10	)	$	281	$	45	$	(49	)

	Six Months Ended December 31, 2012							Six Months Ended December 31, 2011
			Gross Realized							Gross Realized
	Proceeds		Gains		Losses			Proceeds		Gains		Losses
Available-for-sale securities:
Epoch U.S. Equity Shareholder Yield separate account	$	167	$	8	$	(12	)	$	—	$	—	$	—
Investment in non-affiliated limited partnership		2,000		108		—			—		—		—
Company-sponsored mutual funds		84		84		—			20		20		—
Epoch Global All Cap separate account		—		—		—			1,634		80		(254	)
Total	$	2,251	$	200	$	(12	)	$	1,654	$	100	$	(254	)

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Related Party Agreement

6 Months Ended

Dec. 31, 2012

Related Party Agreement

Note 12—Related Party Agreement

In April 2012, the Company entered into a consulting agreement with one of its Board members. The Board member is providing assistance with strategic planning initiatives, in conjunction with his services as a Board member. The agreement is month-to-month and can be terminated by either party at any time. The agreement calls for a monthly payment of approximately $33 thousand. The Company incurred $0.1 million and $0.2 million of expense for these consulting services during the three and six months ended December 31, 2012 and had a $33 thousand outstanding liability related to these services as of December 31, 2012, which was paid subsequent to quarter end.

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Earnings Per Share

6 Months Ended

Dec. 31, 2012

Earnings Per Share

Note 8—Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income, adjusted for the effect of dilutive securities, by the weighted-average number of common and common equivalent shares outstanding during the period. The Company uses the treasury stock method to reflect the dilutive effect of outstanding stock options.

Earnings per basic and diluted share are calculated under the two-class method. Pursuant to the two-class method, the Company’s unvested restricted share awards with nonforfeitable rights to dividends are considered participating securities. The Company’s common shares outstanding consist of all shares issued and outstanding, including the unvested restricted shares. Dividends are paid on all common shares outstanding and at the same rate. Accordingly, the Company has evaluated the impact of earnings per share of all participating securities under the two-class method, noting no impact on earnings per share.

As of December 31, 2012 and 2011, the Company had 31,489 and 406,290 issued and outstanding employee stock options, respectively. The calculation of diluted EPS included all of the outstanding stock options for the three and six months ended December 31, 2012 and 2011.

The table below presents the computation of basic and diluted EPS for the three and six months ended December 31, 2012 and 2011, respectively (in thousands, except per share data):

	Three Months Ended December 31,				Six Months Ended December 31,
	2012		2011		2012		2011
Numerator:
Net income	$	5,738	$	5,863	$	13,632	$	10,281
Denominator:
Weighted-average common shares outstanding		23,714		23,285		23,697		23,320
Net common stock equivalents assuming the exercise of in-the-money stock options		15		186		15		176
Weighted-average common and common equivalent shares outstanding, assuming dilution		23,729		23,471		23,712		23,496
Earnings Per Share:
Basic	$	0.24	$	0.25	$	0.58	$	0.44
Diluted	$	0.24	$	0.25	$	0.57	$	0.44

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Held-to-maturity Securities

6 Months Ended

Dec. 31, 2012

Held-to-maturity Securities

Note 6—Held-to-maturity Securities

The Company’s investment securities classified as held-to-maturity consist of high-grade debt instruments. These investments are carried at amortized cost. Gross unrecognized holding gains and losses, and fair values of these securities at December 31, 2012 and June 30, 2012 are as follows (in thousands):

	December 31, 2012								June 30, 2012
	Amortized Cost		Gross Unrecognized Holding				Aggregate Fair Value		Amortized Cost		Gross Unrecognized Holding				Aggregate Fair Value
			Gains		Losses						Gains		Losses
Current	$	—	$	—	$	—	$	—	$	706	$	4	$	—	$	710
Long-Term		509		15		—		524		512		20		—		532
Total	$	509	$	15	$	—	$	524	$	1,218	$	24	$	—	$	1,242

The fair value of investments in held-to-maturity securities is valued under the market approach through the use of quoted prices for similar investments in active markets, a Level 2 fair value measurement. See Note 4, Fair Value Measurements, for the three-level valuation hierarchy.

The contractual maturities of the investment securities classified as held-to-maturity at December 31, 2012 are as follows (in thousands):

Contractual Maturities	Amortized Cost		Aggregate Fair Value		Weighted- Average Interest Rate
Less than 1 year	$	—	$	—		0	%
Due after 1 year through 3 years		509		524		2.66	%
Total	$	509	$	524		2.66	%

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Commitments and Contingencies

6 Months Ended

Dec. 31, 2012

Commitments and Contingencies

Note 7—Commitments and Contingencies

Employment Agreements

Besides the employment contract with the Company’s Chief Executive Officer dated December 20, 2010, there are no employment contracts with any other officer or employee of the Company. There are written agreements with certain employees, which provide for sales commissions or bonuses, subject to the attainment of certain performance criteria or continuation of employment. Such commitments under the various agreements totaled approximately $2.7 million at December 31, 2012. Of this amount, approximately $1.1 million is included in accrued compensation and benefits in the Condensed Consolidated Balance Sheet at December 31, 2012. An additional $0.4 million will be accrued during the remainder of the fiscal year ending June 30, 2013 and thereafter. Approximately $1.2 million represents deferred compensation awards to be issued during the remainder of the fiscal year ending June 30, 2013 and thereafter.

Strategic Relationship

In July 2009, EIP entered into a strategic relationship with New York Life Investments, whereby the MainStay Group of Funds adopted the Company’s family of mutual funds (the “Epoch Funds”). The adoption was completed in November 2009. EIP is responsible for the day-to-day investment management of the funds through a sub-advisory relationship, while MainStay Investments (“MainStay”), the retail distribution arm of New York Life Investments, is responsible for the distribution and administration of the funds. Each former Epoch Fund is now co-branded as a “MainStay Epoch” Fund.

In addition to an existing sub-advisory relationship between EIP and New York Life Investments for certain funds, and the adoption of the Epoch Funds indicated above, EIP and New York Life Investments have entered into an arrangement wherein, among other things, EIP and an affiliate of New York Life Investments have established a distribution and administration relationship with respect to certain separately managed account and unified managed account strategies, and for a period of three years commencing November 2009 New York Life Investments agreed to pay certain additional base fees and meet minimum distribution targets. Final payment of additional base fees was received in November 2012. Although there are no longer any additional base fees or minimum distribution targets, the relationship between EIP and New York Life Investments remains ongoing.

Legal Matters

From time to time, the Company or its subsidiaries may become parties to claims, legal actions and complaints arising in the ordinary course of business.

Litigation Relating to the Merger

Shortly after the announcement of the proposed transaction, five purported class action complaints were filed by purported shareholders of Epoch against Epoch, the individual directors of Epoch, and TD. One action was filed in the Supreme Court of the State of New York, County of New York, two were filed in the Delaware Court of Chancery, a fourth was filed in the Supreme Court of the State of New York, County of Nassau, and a fifth was filed in the United States District Court for the Southern District of New York.

Specifically, on December 11, 2012, a purported shareholder of Epoch filed an action in the Supreme Court of the State of New York, County of New York, captioned Cindy Goldman TTEE GSS 508 Trust Dated May 16, 2008 v. Epoch Holding Corporation, et al. (the “Goldman Action”). The complaint names as defendants all directors of Epoch, Epoch, and TD. The plaintiff alleges that the directors of Epoch breached their fiduciary duties by approving the proposed transaction with TD, and that TD aided and abetted those alleged breaches of fiduciary duty. Specifically, the lawsuit alleges, among other things, that the Merger Agreement was reached through an unfair process that benefitted the personal and financial positions of the directors of Epoch at the expense of the shareholders of Epoch, that the Merger Consideration is inadequate, and that the deal protection devices in the Merger Agreement have precluded other bidders from making competing offers for Epoch. The plaintiff seeks, among other things, injunctive relief and attorneys’ fees concerning the alleged breaches of fiduciary duty and to prohibit the defendants from consummating the merger. On January 8, 2013, Epoch and its directors (the “Epoch Defendants”) filed a motion to dismiss the complaint or in the alternative to stay the action pending resolution of parallel proceedings in Delaware. The parties thereafter stipulated and the Court ordered that the action be stayed pending the resolution of the related Delaware Action and the Katcher Action described herein.

On December 21, 2012, another purported shareholder of Epoch filed an action in the Delaware Court of Chancery, captioned Reich v. Epoch Holding Corporation, et al (the “Reich Action”). Like the Goldman Action, this action alleges that the directors of Epoch breached their fiduciary duties in connection with the proposed transaction with TD, and that both TD and Merger Sub aided and abetted those alleged breaches of fiduciary duty. The Reich Action seeks, among other things, injunctive relief and attorneys’ fees concerning the alleged breaches of fiduciary duty and to prohibit the defendants from consummating the merger. The suit names as defendants all directors of Epoch, Epoch, TD, and Merger Sub. On December 26, 2012, another purported shareholder action was filed in the Delaware Court of Chancery, captioned Hodgson v. Epoch Holding Corporation, et al (the “Hodgson Action”). The Hodgson Action also brings breach of fiduciary duty claims against the directors of Epoch, and aiding and abetting claims against Epoch, TD, and Merger Sub, seeking similar relief.

The Epoch Defendants answered the complaint in the Reich Action on December 28, 2012. On January 3, 2013, the Court of Chancery entered an order consolidating the Reich and Hodgson Actions as In re Epoch Holding Corporation Stockholder Litigation (the “Delaware Action”) and appointed lead counsel for the consolidated action. On January 18, 2013 the parties filed a stipulation and proposed order to govern the confidential treatment of discovery materials, which the court granted on January 29, 2013. On January 18, 2013, the plaintiffs filed an unopposed motion for leave to amend their complaint, which the Court granted on January 25, 2013. On January 21, 2013, the parties filed a proposed stipulated scheduling order to govern discovery and any motions for preliminary injunction that the plaintiffs may file, which the Court granted on January 28, 2013. The plaintiffs filed their amended class action complaint on January 25, 2013, which added claims that the director defendants breached their duty of disclosure by omitting or misstating material information in Epoch’s preliminary proxy statement. On February 6, 2013, the Epoch Defendants answered the plaintiffs’ amended complaint.

The third-filed action was brought in the Supreme Court of the State of New York, County of Nassau, on December 24, 2012, captioned Katcher v. Epoch Holding Corporation, et al. (the “Katcher Action”). The plaintiffs brought claims similar to those raised in the Goldman Action and Delaware Action against Epoch, the members of Epoch’s board, and TD, and seek declaratory and injunctive relief. The plaintiffs claim that Epoch’s directors breached their fiduciary duties in connection with entering into the proposed transaction with TD, and that TD and Epoch aided and abetted the alleged breaches of fiduciary duty. On January 16, 2013, the Epoch Defendants filed a notice of motion to dismiss the complaint or stay the action pending the resolution of the parallel Delaware Action (the “Motion to Dismiss/Stay”). The plaintiffs filed an amended complaint on January 21, 2013, adding allegations that Epoch’s directors breached their duty of disclosure by omitting or misstating material information in Epoch’s preliminary proxy statement. The plaintiffs also filed a motion on order to show cause providing for expedited discovery (the “Motion for Expedited Discovery”) on January 23, 2013. The plaintiffs filed their brief in opposition to the Motion to Dismiss/Stay on January 25, 2013. On January 29, 2013, the Epoch Defendants filed a cross-motion to stay discovery, and a brief in support of that cross-motion and in opposition to the plaintiffs’ Motion for Expedited Discovery. On January 30, 2013, the Epoch Defendants filed a reply brief in further support of their Motion to Dismiss/Stay. On February 3, 2013, the plaintiffs moved by order to show cause to preliminarily enjoin defendants from refusing to respond to their discovery demands absent a stay of the action or an order of the court (the “February 3rd Motion”). On February 4, 2013, the court set a hearing date of February 13, 2013 to hear the plaintiffs’ February 3rd Motion, and ordered that pending the hearing and determination of the February 3rd Motion, and further order of the court, the defendants must comply with the plaintiffs’ discovery requests. Both the Epoch Defendants’ Motion to Dismiss/Stay and the plaintiffs’ Motion for Expedited Discovery remain pending before the court.

On January 24, 2013, another purported shareholder of Epoch filed a similar action in the United States District Court for the Southern District of New York, captioned Wilks v. Priest, et al. The defendants include Epoch, the members of its board, TD, and Merger Sub. The plaintiff brought a claim under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder regarding the disclosures in Epoch’s preliminary proxy. The plaintiff also brought a breach of fiduciary duty claim and a breach of duty of disclosure claim against the Epoch directors, and an aiding and abetting claim against TD and Merger Sub. The plaintiff seeks, among other things, declaratory and injunctive relief and, if the proposed transaction is consummated, rescission of the transaction or rescissory damages.

Epoch and its board of directors believe these claims are entirely without merit, and intend to vigorously defend against these actions.

Lease Commitments

The Company’s operations are located at 640 Fifth Avenue, New York, NY. Business is conducted at this location with approximately 20,000 rentable square feet under long-term non-cancelable operating leases that expire in September 2015.

In June 2012, the Company entered into a lease agreement to relocate its operations to 399 Park Avenue, New York, NY. This lease commenced on September 1, 2012 and the Company expects to occupy the new premises after construction is completed, during the third quarter ended March 31, 2013. The new lease is for approximately 39,500 rentable square feet and expires on June 1, 2023. Upon the expiration of the lease term, the lease may be renewed at the Company’s option, for an additional five or ten years. The initial annual base rent is approximately $3.7 million, with rent waived for the first nine months of the lease term. The base rent will increase approximately 10% on or about June 1, 2018. In addition, the lease also contains leasehold improvements incentives whereby the landlord agrees to reimburse the Company for certain leasehold improvements up to approximately $2.6 million within the first five years. The Company is currently searching for a sub-tenant for its present premises in conjunction with its planned relocation. As of December 31, 2012, the Company had approximately $3.8 million of lease payments remaining on its present premises. Any loss in connection with the lease commitment on the present premises will be recognized in accordance with FASB Accounting Standards Codification (“ASC”) 420, Exit or Disposal Cost Obligations.

The Company recognizes rent expense ratably over the lease period based upon the aggregate lease payments. The lease period is determined as the original lease term without renewals, unless and until the exercise of any lease renewal option is reasonably assured and also includes any period provided by the landlord as a “free rent” period. Rent expense includes all rental payments specified in the lease, including contractual rent increases, and is reduced by any lease incentives received from the landlord, including those used for tenant improvements.

Share-based Compensation

As of December 31, 2012, there was approximately $9.2 million of total unrecognized compensation cost related to outstanding restricted stock awards. In the normal course, that cost would be expected to be recognized over a weighted-average period of approximately 1.8 years. Upon consummation of the Merger, all unvested shares would become vested and the Company would recognize the full amount of any remaining unrecognized compensation costs.

Other Matters

The Company retained a financial advisor in connection with the proposed Merger. The financial advisor will receive a transaction fee currently expected to be $5.0 million for its services, $1.0 million of which became payable upon the rendering of the financial advisor’s opinion and the principal portion of which is contingent upon completion of the Merger. In addition, the Company has agreed to reimburse the financial advisor for expenses incurred in connection with its engagement.

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Other Comprehensive (Loss)/Income

6 Months Ended

Dec. 31, 2012

Other Comprehensive (Loss)/Income

Note 9—Other Comprehensive (Loss)/Income

The components of other comprehensive (loss)/income include the changes in fair value of available-for-sale securities for the three and six months ended December 31, 2012 and 2011 and are as follows (in thousands):

	Three Months Ended December 31,
	2012								2011
	Pre-tax Amount			Tax (Expense)/ Benefit		Net-of- tax Amount			Pre-tax Amount			Tax (Expense)/ Benefit			Net-of- tax Amount
Net unrealized gains/(losses) on available-for-sale securities	$	(31	)	$	14	$	(17	)	$	347		$	(151	)	$	196
Reclassifications for net (gains)/losses included in net income		(83	)		36		(47	)		(274	)		119			(155	)
Total	$	(114	)	$	50	$	(64	)	$	73		$	(32	)	$	41

	Six Months Ended December 31,
	2012									2011
	Pre-tax Amount			Tax (Expense)/ Benefit			Net-of- tax Amount			Pre-tax Amount			Tax (Expense)/ Benefit		Net-of- tax Amount
Net unrealized gains/(losses) on available-for-sale securities	$	129		$	(56	)	$	73		$	(388	)	$	169	$	(219	)
Reclassifications for net (gains)/losses included in net income		(191	)		83			(108	)		(123	)		53		(70	)
Total	$	(62	)	$	27		$	(35	)	$	(511	)	$	222	$	(289	)

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Available-for-sale Securities - Summary of Proceeds as Well as Realized Gains and Losses on Investments Classified as Available-for-Sale Securities (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Proceeds	$ 196	$ 281	$ 2,251	$ 1,654
Available-for-sale securities, Gains	90	45	200	100
Available-for-sale securities, Losses	(10)	(49)	(12)	(254)
Epoch U.S. Equity Shareholder Yield separate account [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Proceeds	112		167
Available-for-sale securities, Gains	6		8
Available-for-sale securities, Losses	(10)		(12)
Company-sponsored mutual funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Proceeds	84	20	84	20
Available-for-sale securities, Gains	84	20	84	20
Available-for-sale securities, Losses
Epoch Global All Cap separate account [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Proceeds		261		1,634
Available-for-sale securities, Gains		25		80
Available-for-sale securities, Losses		(49)		(254)
Investment in non-affiliated limited partnership [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Proceeds			2,000
Available-for-sale securities, Gains			108
Available-for-sale securities, Losses

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Organization and Basis of Presentation (Policies)

6 Months Ended

Dec. 31, 2012

Organization

Organization

Epoch Holding Corporation (“Epoch” or the “Company”), a Delaware corporation, is a holding company whose sole line of business is investment advisory and investment management services. The operations of the Company are conducted through its wholly-owned subsidiary, Epoch Investment Partners, Inc. (“EIP”). EIP is a registered investment adviser under the Investment Advisers Act of 1940, as amended. EIP provides investment advisory and investment management services to clients including corporations, mutual funds, retirement plans, public pension funds, endowments, foundations, financial institutions and high net worth individuals. Headquartered in New York City, the Company’s current investment strategies include U.S. Value, U.S. All Cap Value, U.S. Small Cap Value, U.S. Smid Cap (small/mid) Value, U.S. Choice, U.S. Equity Shareholder Yield, Global Equity Shareholder Yield, Global Choice, Global Absolute Return, International Small Cap, and Global Small Cap.

Basis of Presentation

Basis of Presentation

The fiscal year-end June 30, 2012 Condensed Consolidated Balance Sheet was derived from audited financial statements and, in accordance with interim financial statement standards, does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial statements. The unaudited condensed consolidated financial statements of the Company included herein have been prepared in accordance with U.S. GAAP, and in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made herein are adequate to make the information not misleading.

Certain items previously reported have been reclassified to conform to the current year presentation. Such reclassifications had no impact on the condensed consolidated financial position, results of operations, or cash flows.

Use of Estimates

Use of Estimates

These financial statements rely, in part, on estimates. Actual results could differ from these estimates. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position, interim results of operations, comprehensive income and cash flows. All material intercompany accounts and transactions have been eliminated in consolidation. The nature of the Company’s business is such that the results for the interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The Company’s unaudited condensed consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012.

There have been no changes in significant accounting policies during the three and six months ended December 31, 2012. For a complete listing of the Company’s significant accounting policies, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012.

Principles of Consolidation

Principles of Consolidation

The Company’s policy is to consolidate (i) variable interest entities (“VIEs”) in which the Company is deemed to be the primary beneficiary, (ii) partnership or similar entities in which the Company is the Managing Member, unless the other unrelated members have rights that would overcome the presumption of control by the Managing Member, and (iii) corporate entities in which it has a controlling financial interest through a majority voting interest or other contract.

Each reporting period, the Company assesses each of the funds in which it is the Managing Member and/or manages through a contract to determine whether consolidation/deconsolidation is appropriate. The Company first evaluates each fund that it manages to determine whether the fund is an investment company. The Company then evaluates whether each fund meets the definition of a VIE. This determination is made by considering whether the fund’s equity investment at risk is sufficient to finance its activities without additional subordinated financial support and whether the fund’s at-risk equity holders have the typical characteristics of a controlling financial interest.

An entity that is a VIE must be consolidated by its primary beneficiary. For VIEs that are investment companies and meet other requirements, the primary beneficiary of the VIE is defined as the party that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. For VIEs that are not investment companies, the primary beneficiary of a VIE is defined as the party who, considering the involvement of related parties and de facto agents, has (i) the power to direct the activities of the VIE that most significantly affect its economic performance, and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. This evaluation is updated continuously. As of December 31, 2012, all funds in which the Company was the Managing Member or managed through a contract were considered investment companies. Furthermore, as of December 31, 2012, none of the funds in which the Company served as a Managing Member and/or managed through a contract met the definition of a VIE.

If the Company determines that a fund is not a VIE, the Company then evaluates whether the fund is a partnership or similar entity. If the fund is a partnership or similar entity, the Company evaluates the fund under the partnership consolidation guidance. Pursuant to that guidance, the Company consolidates funds in which it is the Managing Member and/or manages through a contract, unless presumption of control by the Company can be overcome. This presumption is overcome only when unaffiliated investors in the fund have the substantive ability to liquidate the fund or otherwise remove the Company as the Managing Member without cause, based on a simple majority vote of unaffiliated investors, or have other substantive participating rights. If the presumption of control can be overcome, the Company accounts for its interest in the fund pursuant to the equity method of accounting. As of December 31, 2012, the Company’s investment in the Epoch Global All-Cap Fund, LLC required consolidation under this guidance, as the Company was the sole member in this fund.

If the Company determines that a fund is not a VIE and is not a partnership or similar entity, the Company then evaluates the fund pursuant to the general consolidation guidance that is applicable to corporate entities. Consistent with that guidance, the Company consolidates a fund that is not a VIE and is not a partnership or similar entity only when it has a controlling financial interest, which is usually demonstrated through ownership of a majority voting interest in the fund.

If the Company does not consolidate a fund in which it is the Managing Member and/or manages through a contract based on the evaluation above, it will account for its equity investment as one of the following depending on the characteristic of the investment: (1) an available-for-sale security if the equity investment has a readily determinable fair value (i.e., the equity investment is publicly traded) and the Company does not have significant influence, (2) as an equity method investment if the Company has significant influence (i.e., the Company is a Managing Member of a fund that is a partnership or similar entity that it is not required to consolidate), or (3) as a cost method investment if the equity method investment does not have a readily determinable fair value and the Company does not have significant influence. As of December 31, 2012, the Company accounted for its investments in its four Company-sponsored mutual funds as available-for-sale securities, as these investments have a readily determinable fair value and the Company did not have significant influence through its sub-advisory agreements. The Company accounted for its investments in the Epoch Global Equity Shareholder Yield Fund, LLC, the Epoch Global Choice Fund, LLC and the Epoch Global Absolute Return Fund, LLC under the equity method, as the Company had significant influence as Managing Member.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11, Disclosures About Offsetting Assets and Liabilities. ASU No. 2011-11 provides new disclosure requirements regarding the nature of an entity’s rights of setoff and related arrangements associated with its derivative and other financial instruments. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The new disclosures are designed to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards (“IFRS”). The Company adopted this standard in January 2013. The adoption of this standard did not have a material impact on its condensed consolidated financial position, results of operations, or cash flows.

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Other Comprehensive (Loss)/Income (Tables)

6 Months Ended

Dec. 31, 2012

Components of Other Comprehensive (Loss)/Income Include Changes in Fair Value of Available-for-Sale Securities

The components of other comprehensive (loss)/income include the changes in fair value of available-for-sale securities for the three and six months ended December 31, 2012 and 2011 and are as follows (in thousands):

	Three Months Ended December 31,
	2012								2011
	Pre-tax Amount			Tax (Expense)/ Benefit		Net-of- tax Amount			Pre-tax Amount			Tax (Expense)/ Benefit			Net-of- tax Amount
Net unrealized gains/(losses) on available-for-sale securities	$	(31	)	$	14	$	(17	)	$	347		$	(151	)	$	196
Reclassifications for net (gains)/losses included in net income		(83	)		36		(47	)		(274	)		119			(155	)
Total	$	(114	)	$	50	$	(64	)	$	73		$	(32	)	$	41

	Six Months Ended December 31,
	2012									2011
	Pre-tax Amount			Tax (Expense)/ Benefit			Net-of- tax Amount			Pre-tax Amount			Tax (Expense)/ Benefit		Net-of- tax Amount
Net unrealized gains/(losses) on available-for-sale securities	$	129		$	(56	)	$	73		$	(388	)	$	169	$	(219	)
Reclassifications for net (gains)/losses included in net income		(191	)		83			(108	)		(123	)		53		(70	)
Total	$	(62	)	$	27		$	(35	)	$	(511	)	$	222	$	(289	)

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Geographic Area Information - Geographical Information Pertaining to Company's Operating Revenues (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Revenues from External Customers and Long-Lived Assets [Line Items]
Operating revenues	$ 27,803	$ 21,734	$ 55,427	$ 40,743
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Operating revenues	19,711	14,673	39,274	27,088
Canada [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Operating revenues	3,768	2,427	7,089	4,728
Australia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Operating revenues	2,275	2,817	4,966	5,376
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Operating revenues	1,496	1,467	3,005	2,866
Asia/Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Operating revenues	$ 553	$ 350	$ 1,093	$ 685

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
Net income	$ 5,738	$ 5,863	$ 13,632	$ 10,281
Other comprehensive income/(loss), net of tax-(Note 9):
Net unrealized gains/(losses) on available-for-sale securities	(17)	196	73	(219)
Reclassification for net gains included in net income	(47)	(155)	(108)	(70)
Other comprehensive income/(loss), net of tax	(64)	41	(35)	(289)
Comprehensive income	$ 5,674	$ 5,904	$ 13,597	$ 9,992

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Accounts Receivable

6 Months Ended

Dec. 31, 2012

Accounts Receivable

Note 3—Accounts Receivable

Accounts receivable represent balances arising from investment advisory agreements. The Company’s accounts receivable balances do not include an allowance for doubtful accounts for the periods presented and there have been no bad debt expenses recognized during the three and six months ended December 31, 2012 and 2011. Management believes the December 31, 2012 accounts receivable balances are fully collectible.

Significant Customer

The Company’s clients are located worldwide and across many industries. For the three and six months ended December 31, 2012 New York Life Investment Management, through the MainStay Epoch Funds and other funds sub-advised by EIP (see Note 7—Strategic Relationship), accounted for approximately 13% and 14% of condensed consolidated operating revenues, respectively. For the three and six months ended December 31, 2011, this relationship accounted for approximately 18% of condensed consolidated operating revenues.

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Geographic Area Information (Tables)

6 Months Ended

Dec. 31, 2012

Geographical Information Pertaining to Company's Operating Revenues

The Company operates under one business segment, investment management. Geographical information pertaining to the Company’s operating revenues is presented below. The amounts are aggregated by the client’s domicile (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2012		2011		2012		2011
United States	$	19,711	$	14,673	$	39,274	$	27,088
Canada		3,768		2,427		7,089		4,728
Australia		2,275		2,817		4,966		5,376
Europe		1,496		1,467		3,005		2,866
Asia/Africa		553		350		1,093		685
Total operating revenues	$	27,803	$	21,734	$	55,427	$	40,743

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Earnings Per Share - Additional Information (Detail)	Dec. 31, 2012	Dec. 31, 2011
Equity And Earnings Per Share [Line Items]
Stock options outstanding	31,489	406,290

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Subsequent Event

6 Months Ended

Dec. 31, 2012

Subsequent Event

Note 13—Subsequent Event

On January 7, 2013, the Company’s Board of Directors declared a quarterly cash dividend on the Company’s Common Stock of $0.10 per share. The dividend is payable on February 11, 2013 to all shareholders of record at the close of business on January 28, 2013. The aggregate dividend payment is approximately $2.4 million.

The Company typically pays dividends in February, May, August and November of each fiscal year. However, the actual declaration of future cash dividends, and the establishment of record and payment dates, will be subject to final determination by the Board of Directors each quarter after its review of the Company’s financial performance. Under the terms of the Merger Agreement, the Company may continue to declare or pay quarterly dividends to its common stockholders not in excess of $0.10 per share.