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 July 31, 2011
or
o		Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
		For the transition period from to

Commission file no. 1-8100

EATON VANCE CORP.

(Exact name of registrant as specified in its charter)


Maryland		04-2718215
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Two International Place, Boston, Massachusetts 02110

(Address of principal executive offices) (zip code)

(617) 482-8260

(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 o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes x No o

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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer x		Accelerated filer o
Non-accelerated filer o (Do not check if smaller reporting company)		Smaller reporting company o

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

Shares outstanding as of July 31, 2011:
Voting Common Stock — 399,240 shares
Non-Voting Common Stock — 116,929,735 shares

TABLE OF CONTENTS

Eaton Vance Corp.
Form 10-Q
As of July 31, 2011 and for the
Three and Nine Month Periods Ended July 31, 2011


Required Information	Page Number Reference
Part I Financial Information
Item 1. Consolidated Financial Statements		3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Item 3. Quantitative and Qualitative Disclosures About Market Risk		56
Item 4. Controls and Procedures		56
Part II Other Information
Item 1. Legal Proceedings		56
Item 1A. Risk Factors		56
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		57
Item 6. Exhibits		57
Signatures		58

TABLE OF CONTENTS

Part I — Financial Information

Item 1. Consolidated Financial Statements

Eaton Vance Corp.
Consolidated Balance Sheets (unaudited)


(in thousands)	July 31, 2011		October 31, 2010
Assets
Cash and cash equivalents	$	502,262	$	307,886
Investment advisory fees and other receivables		137,525		129,380
Investments		284,199		334,409
Assets of consolidated collateralized loan obligation entity:
Cash and cash equivalents		28,772		—
Bank loans and other investments		468,884		—
Other assets		11,598		—
Deferred sales commissions		33,387		48,104
Deferred income taxes		27,999		97,274
Equipment and leasehold improvements, net		70,354		71,219
Other intangible assets, net		69,222		73,018
Goodwill		142,302		135,786
Other assets		58,784		61,464
Total assets	$	1,835,288	$	1,258,540

See notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Eaton Vance Corp.
Consolidated Balance Sheets (unaudited) (continued)


(in thousands, except share figures)	July 31, 2011			October 31, 2010
Liabilities, Temporary Equity and Permanent Equity
Liabilities:
Accrued compensation	$	111,400		$	119,957
Accounts payable and accrued expenses		68,261			60,843
Dividend payable		21,125			21,319
Contingent purchase price liability		—			5,079
Debt		500,000			500,000
Liabilities of consolidated collateralized loan obligation entity:
Senior and subordinated note obligations		480,466			—
Other liabilities		17,479			—
Other liabilities		57,654			73,468
Total liabilities		1,256,385			780,666
Commitments and contingencies
Temporary Equity:
Redeemable non-controlling interests		89,225			67,019
Permanent Equity:
Voting Common Stock, par value $0.00390625 per share:
Authorized, 1,280,000 shares
Issued and outstanding, 399,240 and 399,240 shares, respectively		2			2
Non-Voting Common Stock, par value $0.00390625 per share:
Authorized, 190,720,000 shares
Issued and outstanding, 116,929,735 and 117,927,054 shares, respectively		457			461
Additional paid-in capital		12,113			50,225
Notes receivable from stock option exercises		(2,921	)		(3,158	)
Accumulated other comprehensive income (loss)		1,637			(435	)
Appropriated retained earnings		8,538			—
Retained earnings		469,016			363,190
Total Eaton Vance Corp. shareholders’ equity		488,842			410,285
Non-redeemable non-controlling interests		836			570
Total permanent equity		489,678			410,855
Total liabilities, temporary equity and permanent equity	$	1,835,288		$	1,258,540

See notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Eaton Vance Corp.
Consolidated Statements of Income (unaudited)


	Three Months Ended July 31,						Nine Months Ended July 31,
(in thousands, except per share figures)	2011			2010			2011			2010
Revenue:
Investment advisory and administration fees	$	262,067		$	214,752		$	756,471		$	637,280
Distribution and underwriter fees		26,432			24,341			79,900			74,041
Service fees		37,426			34,243			111,249			102,686
Other revenue		1,378			(257	)		17,808			4,060
Total revenue		327,303			273,079			965,428			818,067
Expenses:
Compensation of officers and employees		94,713			86,079			288,920			261,042
Distribution expense		33,733			33,771			100,087			93,480
Service fee expense		32,222			28,906			94,331			86,635
Amortization of deferred sales commissions		8,503			9,187			28,496			25,522
Fund expenses		8,099			6,267			17,660			15,663
Other expenses		34,359			30,107			100,205			88,527
Total expenses		211,629			194,317			629,699			570,869
Operating income		115,674			78,762			335,729			247,198
Other Income (Expense):
Interest income		719			719			2,264			2,205
Interest expense		(8,414	)		(8,413	)		(25,239	)		(25,240	)
Net gains on investments and derivatives		6,322			1,313			5,274			5,405
Foreign currency gains (losses)		306			(22	)		(277	)		312
Other income/(expense) of consolidated collateralized loan obligation entity:
Interest income		5,268			—			15,844			—
Interest expense		(3,999	)		—			(9,546	)		—
Net losses on investments and note obligations		(3,814	)		—			(25,539	)		—
Income before income taxes and equity in net income of affiliates		112,062			72,359			298,510			229,880
Income taxes		(43,320	)		(28,889	)		(119,179	)		(89,414	)
Equity in net income of affiliates, net of tax		194			10			2,655			543
Net income		68,936			43,480			181,986			141,009
Net income attributable to non-controlling and other beneficial interests		(868	)		(1,730	)		(13,904	)		(17,017	)
Net income attributable to Eaton Vance Corp. shareholders	$	68,068		$	41,750		$	168,082		$	123,992
Earnings Per Share:
Basic	$	0.58		$	0.35		$	1.42		$	1.05
Diluted	$	0.55		$	0.34		$	1.35		$	0.99
Weighted Average Shares Outstanding:
Basic		115,574			116,549			116,191			116,541
Diluted		120,543			122,612			121,566			122,996
Dividends Declared Per Share	$	0.18		$	0.16		$	0.54		$	0.48

See notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Eaton Vance Corp.
Consolidated Statements of Comprehensive Income (unaudited)


	Three Months Ended July 31,						Nine Months Ended July 31,
(in thousands)	2011			2010			2011			2010
Net income	$	68,936		$	43,480		$	181,986		$	141,009
Other comprehensive income (loss):
Amortization of loss on derivative instrument, net of income taxes of $40, $40, $119 and $119, respectively		72			72			216			216
Unrealized holding (losses) gains on available-for-sale investments, net of income taxes of $594, $473, $(1,006) and $(171), respectively		(969	)		(762	)		1,599			164
Foreign currency translation adjustments, net of income taxes of $50, $(77), $(128) and $87, respectively		(81	)		58			257			(194	)
Total comprehensive income		67,958			42,848			184,058			141,195
Comprehensive income attributable to non-controlling interests and other beneficial interests		(868	)		(1,730	)		(13,904	)		(17,017	)
Total comprehensive income attributable to Eaton Vance Corp. shareholders	$	67,090		$	41,118		$	170,154		$	124,178

See notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Eaton Vance Corp.
Consolidated Statements of Shareholders’ Equity (unaudited)


	Permanent Equity																										Temporary Equity
(in thousands)	Voting Common Stock		Non-Voting Common Stock			Additional Paid-In Capital			Notes Receivable from Stock Option Exercises			Accumulated Other Comprehensive Income (Loss)			Appropriated Retained Earnings			Retained Earnings			Non- Redeemable Non- Controlling Interests			Total Permanent Equity			Redeemable Non- Controlling Interests
Balance, November 1, 2010	$	2	$	461		$	50,225		$	(3,158	)	$	(435	)	$	—		$	363,190		$	570		$	410,855		$	67,019
Cumulative effect of adoption of new accounting principle		—		—			—			—			—			30,666			1,665			—			32,331			—
Net income		—		—			—			—			—			(22,128	)		168,082			1,962			147,916			34,070
Other comprehensive income		—		—			—			—			2,072			—			—			—			2,072			—
Dividends declared		—		—			—			—			—			—			(63,921	)		—			(63,921	)		—
Issuance of Non-Voting Common Stock:
On exercise of stock options		—		6			29,664			(602	)		—			—			—			—			29,068			—
Under employee stock purchase plan		—		1			3,766			—			—			—			—			—			3,767			—
Under employee incentive plan		—		—			3,655			—			—			—			—			—			3,655			—
Under restricted stock plan, net of forfeitures		—		4			—			—			—			—			—			—			4			—
Stock-based compensation		—		—			40,184			—			—			—			—			—			40,184			—
Tax benefit of stock option exercises		—		—			4,336			—			—			—			—			—			4,336			—
Repurchase of Non-Voting Common Stock		—		(15	)		(118,857	)		—			—			—			—			—			(118,872	)		—
Principal repayments		—		—			—			839			—			—			—			—			839			—
Subscriptions (redemptions/distributions) of non-controlling interest holders		—		—			—			—			—			—			—			(1,630	)		(1,630	)		114,081
Deconsolidation		—		—			—			—			—			—			—			—			—			(120,260	)
Reclass to temporary equity		—		—			—			—			—			—			—			(66	)		(66	)		66
Purchase of non-controlling interests		—		—			—			—			—			—			—			—			—			(6,611	)
Other changes in non-controlling interests		—		—			(860	)		—			—			—			—			—			(860	)		860
Balance, July 31, 2011	$	2	$	457		$	12,113		$	(2,921	)	$	1,637		$	8,538		$	469,016		$	836		$	489,678		$	89,225

See notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Eaton Vance Corp.
Consolidated Statements of Shareholders’ Equity (unaudited) (continued)


	Permanent Equity																							Temporary Equity
(in thousands)	Voting Common Stock		Non-Voting Common Stock			Additional Paid-In Capital			Notes Receivable from Stock Option Exercises			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Non- Redeemable Non- Controlling Interests			Total Permanent Equity			Redeemable Non- Controlling Interests
Balance, November 1, 2009	$	2	$	457		$	44,786		$	(3,078	)	$	(1,394	)	$	266,196		$	91		$	307,060		$	43,871
Net income		—		—			—			—			—			123,992			883			124,875			16,134
Other comprehensive income		—		—			—			—			186			—			—			186			—
Dividends declared		—		—			—			—			—			(56,836	)		—			(56,836	)		—
Issuance of Non-Voting Common Stock:
On exercise of stock options		—		6			28,849			(1,063	)		—			—			—			27,792			—
Under employee stock purchase plan		—		1			3,887			—			—			—			—			3,888			—
Under employee incentive plan		—		1			2,873			—			—			—			—			2,874			—
Under restricted stock plan, net of forfeitures		—		4			—			—			—			—			—			4			—
Stock-based compensation		—		—			36,897			—			—			—			—			36,897			—
Tax benefit of stock option exercises		—		—			4,917			—			—			—			—			4,917			—
Repurchase of Voting Common Stock		—		—			(96	)		—			—			—			—			(96	)		—
Repurchase of Non-Voting Common Stock		—		(9	)		(68,750	)		—			—			—			—			(68,759	)		—
Principal repayments		—		—			—			1,347			—			—			—			1,347			—
Subscriptions (redemptions/distributions) of non-controlling interest holders		—		—			—			—			—			—			(499	)		(499	)		(139	)
Deconsolidation		—		—			—			—			—			—			—			—			(1,831	)
Reclass to temporary equity		—		—			—			—			—			—			(5	)		(5	)		5
Purchase of non-controlling interests		—		—			—			—			—			—			—			—			(11,244	)
Other changes in non-controlling interests		—		—			(101	)		—			—			822			—			721			(721	)
Balance, July 31, 2010	$	2	$	460		$	53,262		$	(2,794	)	$	(1,208	)	$	334,174		$	470		$	384,366		$	46,075

See notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Eaton Vance Corp.
Consolidated Statements of Cash Flows (unaudited)


	Nine Months Ended July 31,
(in thousands)	2011			2010
Cash Flows From Operating Activities:
Net income	$	181,986		$	141,009
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		18,539			18,471
Amortization of deferred sales commissions		28,457			25,507
Stock-based compensation		40,184			36,897
Deferred income taxes		68,022			(24,030	)
Gains on investments		(14,481	)		(4,776	)
Equity in net income of affiliates		(4,273	)		(876	)
Dividends received from affiliates		1,592			1,313
Consolidated collateralized loan obligation entity operating activities:
Losses		25,539			—
Amortization of investments		(984	)		—
Net decrease in other assets and liabilities, including cash		(11,953	)		—
Changes in operating assets and liabilities:
Investment advisory fees and other receivables		(7,867	)		(6,091	)
Investments in trading securities		(173,322	)		(5,583	)
Deferred sales commissions		(13,739	)		(23,467	)
Other assets		(19,935	)		2,115
Accrued compensation		(8,581	)		3,304
Accounts payable and accrued expenses		9,005			11,119
Other liabilities		5,483			15,338
Net cash provided by operating activities		123,672			190,250
Cash Flows From Investing Activities:
Additions to equipment and leasehold improvements		(8,919	)		(7,958	)
Net cash paid in acquisition		(11,595	)		(8,797	)
Cash paid for intangible assets		(1,650	)		—
Payments received on note receivable from affiliate		—			8,000
Proceeds from sales of investments		119,839			21,279
Purchase of investments		(1,226	)		(31,452	)
Consolidated collateralized loan obligation entity investing activities:
Proceeds from sales and maturities of investments		250,689			—
Purchase of investments		(241,310	)		—
Net cash provided by (used for) investing activities		105,828			(18,928	)

See notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Eaton Vance Corp.
Consolidated Statements of Cash Flows (unaudited) (continued)


	Nine Months Ended July 31,
(in thousands)	2011			2010
Cash Flows From Financing Activities:
Purchase of additional non-controlling interest		(6,611	)		(11,244	)
Proceeds from issuance of Non-Voting Common Stock		36,494			34,558
Repurchase of Voting Common Stock		—			(96	)
Repurchase of Non-Voting Common Stock		(118,872	)		(68,759	)
Principal repayments on notes receivable from stock option exercises		839			1,347
Excess tax benefit of stock option exercises		4,336			4,917
Dividends paid		(64,116	)		(56,747	)
Net subscriptions received from (redemptions/distributions paid to) non-controlling interest holders		112,451			(639	)
Net cash used for financing activities		(35,479	)		(96,663	)
Effect of currency rate changes on cash and cash equivalents		355			(314	)
Net increase in cash and cash equivalents		194,376			74,345
Cash and cash equivalents, beginning of period		307,886			310,586
Cash and cash equivalents, end of period	$	502,262		$	384,931
Supplemental Cash Flow Information:
Cash paid for interest	$	24,481		$	24,481
Cash paid for interest by consolidated loan obligation entity		10,360			—
Cash paid for income taxes, net of refunds		41,534			94,838
Supplemental Disclosure of Non-Cash Information:
Increase in fixed assets due to non-cash additions	$	3,350		$	3,088
Exercise of stock options through issuance of notes receivable		602			1,063
Consolidation of collateralized loan obligation entity:
Increase in other assets, net of other liabilities		10,418			—
Increase in investments		466,440			—
Increase in borrowings		446,192			—
Deconsolidations of sponsored investment funds:
Decrease in investments		(121,274	)		(1,625	)
Decrease in non-controlling interests		(120,260	)		(1,831	)

See notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Eaton Vance Corp.
Notes to Consolidated Financial Statements (unaudited)

1. Basis of Presentation

In the opinion of management, the accompanying unaudited interim Consolidated Financial Statements of Eaton Vance Corp. (“the Company”) include all adjustments necessary to present fairly the results for the interim periods in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures have been omitted pursuant to such rules and regulations. As a result, these financial statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company’s latest annual report on Form 10-K.

During the first quarter of fiscal 2011, the Company changed its balance sheet presentation from “classified” (distinguishing between short-term and long-term accounts) to “unclassified” (no such distinction). This change was precipitated by factors including (i) the presentation complexities inherent in the consolidation of variable interest entities (“VIEs”); and (ii) a desire to conform the Company’s balance sheet presentation to that of other companies within its peer group. Such a change is a presentation election made by management; the October 31, 2010 balance sheet has also been presented in an unclassified format comparable to the third quarter presentation.

2. Principles of Consolidation

As described further in Note 3, the Company adopted the provisions of a new consolidation standard on November 1, 2010. In conjunction with the adoption, the Company concluded that it was the primary beneficiary of one of the collateralized loan obligation (“CLO”) entities for which it acts as collateral manager. As a result, the Company consolidated the assets, liabilities and results of operations of that entity in the Company’s Consolidated Financial Statements beginning on November 1, 2010. The assets of the CLO entity cannot be used by the Company, and the note holders of the entity have no recourse to the general credit or assets of the Company.

The Consolidated Financial Statements include the accounts of the Company and its controlled subsidiaries. The Company consolidates all investments in affiliates in which the Company’s ownership exceeds 50 percent or where the Company has control. In addition, the Company consolidates any VIE (including the above-referenced CLO entity) for which the Company is considered the primary beneficiary. The Company provides for non-controlling and other beneficial interests in consolidated subsidiaries for which the Company’s ownership is less than 100 percent. The equity method of accounting is used for investments in non-controlled affiliates in which the Company’s ownership ranges from 20 to 50 percent, or in instances in which the Company is able to exercise significant influence but not control (such as representation on the investee’s Board of Directors). All intercompany accounts and transactions have been eliminated.

3. Adoption of New Accounting Standards

The Company adopted the following accounting standard in the nine months ended July 31, 2011:

VIEs
The Company adopted the provisions of a new accounting standard on November 1, 2010. This standard prescribed a new consolidation model. While the new consolidation model did not change the Company’s conclusions regarding consolidation for the majority of VIEs in which it is involved, it did require that the Company consolidate into its Consolidated Balance Sheets one CLO entity with non-recourse assets of $487.0 million and non-recourse liabilities of $456.3 million. The Company irrevocably elected the fair value option for all assets and liabilities of this CLO entity upon adoption. The change in accounting had no effect on the terms of the Company’s management contract with this entity, the revenue the Company is contractually entitled to receive from this entity or the Company’s exposure to liability with respect to this entity. The Company’s

TABLE OF CONTENTS

maximum exposure to loss related to this entity remains limited to its direct investment and beneficial interest in this entity of $2.3 million and investment management fees receivable of $0.5 million as of July 31, 2011.

In conjunction with the adoption, the Company recorded a cumulative effect adjustment to retained earnings of $1.7 million, representing an adjustment to the carrying value of the Company’s direct investment in the CLO entity, and a cumulative effect adjustment to appropriated retained earnings of $30.7 million, equal to the difference between the fair value of the CLO’s assets and the fair value of its liabilities that can be attributed to external investors. This amount was recorded as appropriated retained earnings since the CLO’s external note holders, not the Company, will receive the benefits or absorb the losses associated with their proportionate share of the CLO’s assets and liabilities. In subsequent reporting periods, the net change in the fair value of the CLO’s assets and liabilities that can be attributed to those note holders will be recorded as net income (loss) attributable to non-controlling and other beneficial interests and as an adjustment to appropriated retained earnings.

4. Future Accounting Pronouncements

Comprehensive Income
In June 2011, the Financial Accounting Standards Board (“FASB”) issued an update regarding the presentation of comprehensive income. Under this new guidance, an entity will have the option to present the components of net income and comprehensive income in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new guidance eliminates the option to present other comprehensive income in the statement of shareholders’ equity. The new guidance does not change the items that must be included in other comprehensive income. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and is required to be applied retrospectively. The new guidance is effective for the Company on November 1, 2012. The adoption of this new guidance will not have a material effect on the Company’s consolidated financial statements.

Fair Value Measurements
In May 2011, the FASB issued an update regarding fair value measurements and disclosures. The amendments in the update result in common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and International Financial Reporting Requirements. The amendments change the wording used to describe many of the requirements for measuring fair value and for disclosing information about fair value measurements and clarify the Board’s intent about the application of existing fair value measurements and disclosure requirements. In some instances, the amendments change principles or requirements for measuring fair value or for disclosing information about fair value measurements. The amendment is effective for the Company’s fiscal quarter that begins on February 1, 2012. Early application is prohibited. The adoption of this new guidance will not have a material effect on the company’s consolidated financial statements.

5. Acquisitions

Tax Advantaged Bond Strategies (“TABS”)
During the second quarter of fiscal 2011, the Company made its second contingent payment of $11.6 million to the selling group based upon prescribed multiples of TABS’s revenue for the twelve months ended December 31, 2010. The payment reduced the contingent purchase price liability to zero and increased goodwill by $6.5 million. The Company will be obligated to make five additional annual contingent payments to the selling group based on prescribed multiples of TABS’s revenue for the twelve months ending December 31, 2011, 2012, 2014, 2015 and 2016. All future payments will be in cash and will result in an addition to goodwill. These payments are not contingent upon any member of the selling group remaining an employee of the Company.

Fox Asset Management LLC (“Fox Asset Management”)
On February 6, 2011, the non-controlling interest holders of Fox Asset Management executed a put option requiring the Company to purchase an additional 16 percent interest in Fox Asset Management. The transaction settled on March 1, 2011 and increased the Company’s ownership interest from 84 percent to 100 percent. Pursuant to the terms of the unit purchase agreement, no proceeds were transferred at closing.

TABLE OF CONTENTS

Parametric Portfolio Associates LLC (“Parametric Portfolio Associates”)
On April 7, 2011, the non-controlling interest holders of Parametric Portfolio Associates exercised a put option requiring the Company to purchase an additional interest in Parametric Portfolio Associates for approximately $4.3 million. Pursuant to the acquisition agreement, the exercise price of the put option was based on a multiple of earnings before taxes for the calendar year ended December 31, 2010. As a result of the transaction, the Company’s capital ownership interest increased from 94.3 percent to 94.8 percent. The payment was treated as an equity transaction and reduced redeemable non-controlling interests at closing.

Parametric Risk Advisors LLC (“Parametric Risk Advisors”)
On June 15, 2011, the Company exercised a call option requiring the non-controlling interest holders of Parametric Risk Advisors to sell units representing a 9 percent ownership interest in Parametric Risk Advisors for $2.3 million. Pursuant to the acquisition agreement, the exercise price of the call option was based on a multiple of earnings before interest and taxes for the twelve months ended April 30, 2011. As a result of the transaction, the Company’s ownership interest increased from 51 percent to 60 percent. The payment was treated as an equity transaction and reduced redeemable non-controlling interests at closing.

6. Other Intangible Assets

The following is a summary of other intangible assets at July 31, 2011 and October 31, 2010:

July 31, 2011


(dollars in thousands)	Gross carrying amount		Accumulated amortization			Net carrying amount
Amortizing intangible assets:
Client relationships acquired	$	110,327	$	(48,767	)	$	61,560
Intellectual property acquired		1,000		(46	)		954
Non-amortizing intangible assets:
Mutual fund management contract acquired		6,708		—			6,708
Total	$	118,035	$	(48,813	)	$	69,222

October 31, 2010


(dollars in thousands)	Gross carrying amount		Accumulated amortization			Net carrying amount
Amortizing intangible assets:
Client relationships acquired	$	109,177	$	(42,867	)	$	66,310
Non-amortizing intangible assets:
Mutual fund management contract acquired		6,708		—			6,708
Total	$	115,885	$	(42,867	)	$	73,018

Amortization expense was $2.0 million for both the three months ended July 31, 2011 and 2010 and $5.9 million for both the nine months ended July 31, 2011 and 2010.

TABLE OF CONTENTS

7. Investments

The following is a summary of investments at July 31, 2011 and October 31, 2010:


(in thousands)	July 31, 2011		October 31, 2010
Corporate debt securities	$	4,794	$	4,732
Consolidated funds:
Debt securities		56,151		111,585
Equity securities		51,217		88,184
Separately managed accounts:
Debt securities		11,242		3,666
Equity securities		36,740		28,692
Sponsored funds		34,419		37,541
Collateralized loan obligation entities		554		1,391
Investments in affiliates		81,575		51,111
Other investments		7,507		7,507
Total investments	$	284,199	$	334,409

Investments classified as trading

The following is a summary of the cost and fair value of investments classified as trading at July 31, 2011 and October 31, 2010. These investments include corporate debt securities held directly by the Company and debt and equity securities held in the portfolios of consolidated funds and separately managed accounts seeded for product development purposes.

July 31, 2011


(in thousands)	Cost		Fair Value
Debt securities	$	71,096	$	72,187
Equity securities		85,301		87,957
Total investments	$	156,397	$	160,144

October 31, 2010


(in thousands)	Cost		Fair Value
Debt securities	$	119,159	$	119,983
Equity securities		111,814		116,876
Total investments	$	230,973	$	236,859

Investment gains and losses on debt and equity securities held in the portfolios of consolidated sponsored funds have been reported in income as a component of other revenue. Investment gains and losses on the Company’s investments in corporate debt securities and on debt and equity securities held in the portfolios of the Company’s separately managed accounts have been reported in income as a component of gains (losses) on investments and derivatives (i.e., below operating income). The specific identified cost method is used to determine the realized gain or loss on all trading securities sold.

The Company recognized $3.0 million and $1.9 million of net unrealized losses related to investments classified as trading for the three months ended July 31, 2011 and 2010, respectively, and recognized $6.5 million and $1.3 million of net unrealized gains for the nine months ended July 31, 2011 and 2010, respectively.

TABLE OF CONTENTS

During the first quarter of fiscal 2011, the Company deconsolidated its investments in Eaton Vance International (Ireland) U.S. Research Fund, Eaton Vance Richard Bernstein Multi-Market Equity Strategy Fund and Eaton Vance Option Absolute Return LLC when the Company redeemed all of its shares.

During the second quarter of fiscal 2011, the Company deconsolidated its investments in Eaton Vance Short Term Real Return Fund and Eaton Vance Parametric Structured International Equity Fund when its ownership interest fell below 50 percent. The Company’s remaining investment in Eaton Vance Short Term Real Return Fund is now classified as an investment in affiliate and the Company’s remaining investment in Eaton Vance Parametric Structured International Equity Fund is now classified as available-for-sale.

During the third quarter of fiscal 2011, the Company deconsolidated its investments in Eaton Vance Tax-Advantaged Bond Strategies Long Term Fund, Eaton Vance Tax-Advantaged Bond Strategies Intermediate Term Fund and Eaton Vance Option Absolute Return Strategy Fund when its ownership interest fell below 50 percent. The Company’s remaining investment in each fund is classified as an investment in affiliate.

Investments classified as available-for-sale

The following is a summary of the cost, gross unrealized gains and losses and fair value of investments classified as available-for-sale at July 31, 2011 and October 31, 2010:

July 31, 2011


			Gross Unrealized
(in thousands)	Cost		Gains		Losses			Fair Value
Sponsored funds	$	28,537	$	5,907	$	(25	)	$	34,419

October 31, 2010


			Gross Unrealized
(in thousands)	Cost		Gains		Losses			Fair Value
Sponsored funds	$	34,300	$	3,655	$	(414	)	$	37,541

Gross unrealized gains and losses on investments in sponsored funds classified as available-for-sale have been excluded from earnings and reported as a component of accumulated other comprehensive income (loss), net of deferred taxes. No investment with a gross unrealized loss has been in a loss position for greater than one year.

The Company reviewed the gross unrealized losses of $25,000 as of July 31, 2011 and determined that these losses were not other-than-temporary, primarily because the Company has both the ability and intent to hold the investments for a period of time sufficient to recover such losses. The aggregate fair value of investments associated with the unrealized losses was $1.9 million at July 31, 2011.

The following is a summary of the Company’s realized gains and losses upon disposition of sponsored funds and certain equity securities classified as available-for-sale for the three and nine months ended July 31, 2011 and 2010. The specific identified cost method is used to determine the realized gain or loss on the sale of shares of sponsored funds.


	Three Months Ended July 31,					Nine Months Ended July 31,
(in thousands)	2011			2010		2011			2010
Gains	$	232		$	26	$	2,338		$	2,109
Losses		(379	)		—		(1,933	)		(40	)
Net realized gains (losses)	$	(147	)	$	26	$	405		$	2,069

TABLE OF CONTENTS

Investments in collateralized loan obligation entities

During the third quarter of fiscal 2011, the Company sold its equity interest in a non-consolidated CLO entity and recognized a realized gain of $1.9 million in its Consolidated Statements of Income. The Company did not recognize any impairment losses related to its investments in non-consolidated CLO entities in either the three or nine months ended July 31, 2011 or 2010, respectively.

Investments in affiliates

During the second quarter of fiscal 2011, the Company sold its equity interest in Lloyd George Management (BVI) Limited (“LGM”), an investment management company based in Hong Kong that primarily manages Asia Pacific and emerging market equity funds and separate accounts, including several funds sponsored by the Company. The Company recognized a realized gain of $5.5 million in the Company’s Consolidated Statements of Income in connection with the sale. The Company’s investment in LGM was $8.0 million at October 31, 2010.

The Company has a 7 percent equity interest in a private equity partnership that invests in companies in the financial services industry. The Company’s investment in the partnership was $15.6 million and $12.8 million at July 31, 2011 and October 31, 2010, respectively.

The Company has a 31 percent equity interest in Eaton Vance Short Term Real Return Fund at July 31, 2011, valued at $20.9 million.

The Company has a 31 percent equity interest in Eaton Vance Tax-Advantage Bond Strategies Intermediate Term Fund at July 31, 2011, valued at $17.3 million.

The Company has a 39 percent equity interest in Eaton Vance Option Absolute Return Strategy Fund at July 31, 2011, valued at $26.5 million.

The Company has a 47 percent equity interest in Eaton Vance Tax-Advantaged Bond Strategies Long Term Fund at July 31, 2011, valued at $1.3 million.

The Company had a 31 percent equity interest in Eaton Vance Parametric Structured International Equity Fund at April 30, 2011, valued at $18.3 million. As of July 31, 2011, the Company’s interest in this fund had dropped below 20 percent and the Company’s remaining interest is now classified as available-for-sale.

The Company had a 33 percent equity interest in Eaton Vance Global Macro Absolute Return Advantage Fund at October 31, 2010, valued at $30.3 million. At July 31, 2011, the Company’s interest in this fund dropped below 20 percent and the Company’s remaining investment is now classified as available-for-sale.

The Company reviews its equity method investments annually for impairment in the fourth quarter of each fiscal year.

Other investments

Included in other investments are certain investments carried at cost totaling $7.5 million for the periods ended July 31, 2011 and October 31, 2010, respectively. Management believes that the fair value of its other investments approximates their carrying value.

TABLE OF CONTENTS

8. Fair Value Measurements

Substantially all of the Company’s investments are carried at fair value, with the exception of its investments in non-consolidated CLO entities that have not been impaired in the current fiscal period and certain non-marketable investments, which are accounted for using the equity or cost method.

The Company has recorded all eligible assets and liabilities in its consolidated CLO entity at fair value. In connection with the adoption of a new accounting standard, the Company elected and applied the fair value option to measure all of the eligible assets and liabilities of the entity at fair value upon adoption and thereafter. The Company elected the fair value option in order to mitigate any accounting mismatches between the carrying value of the senior and subordinated note obligations and the carrying value of the assets that are held to provide the cash flows for those note obligations. The Company has also concluded that the measurement of the note obligations issued by the entity at fair value better correlates with the fair value of the assets held by the entity, which are held to provide the cash flows for the note obligations of the entity.

The Company recognizes transfers between levels at the end of each quarter. There were no significant transfers between levels during the nine months ended July 31, 2011.

The following is a description of the valuation methodologies used for financial assets and liabilities measured at fair value, as well as the general classification of such financial assets and liabilities pursuant to the valuation hierarchy.

TABLE OF CONTENTS


Financial Instrument	Hierarchy	Valuation Methodology
Cash Equivalents	Level 1	Includes investments in money market funds. Fair value is determined based upon unadjusted quoted market prices.
	Level 2	Includes agency securities. Fair value is determined based upon observable inputs other than Level 1 unadjusted quoted market prices, such as quoted market prices for similar assets in active markets, quoted prices for identical or similar assets that are not active, and inputs other than quoted prices that are observable or corroborated by observable market data.
Investments	Level 1	Includes certain debt and certain equity securities held in the portfolios of consolidated funds and separately managed accounts, which are classified as trading, and investments in sponsored funds. Fair value is determined based upon unadjusted quoted market prices.
	Level 2	Includes commercial paper, certain debt securities, certain equity securities, investments in privately offered equity funds that are not listed but have a net asset value that is comparable to mutual funds and investments in portfolios that have a net asset value that is comparable to mutual funds. Fair value is determined using observable inputs other than Level 1 unadjusted quoted market prices, such as quoted market prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities that are not active, and inputs other than quoted prices that are observable or corroborated by observable market data. If events occur after the close of the primary market for any security, the quoted market prices may be adjusted for the observable price movements of country-specific market proxies.
Derivative assets and liabilities	Level 2	Includes foreign exchange contracts, stock index futures contracts and commodity futures contracts. Foreign exchange contract pricing is determined by interpolating a value using the spot foreign currency rate based on spot rate and currency exchange rate differentials, which are all observable inputs. Index futures contracts and commodity futures contracts pricing is determined by a third-party pricing service that determines fair value based on bid and ask prices.

TABLE OF CONTENTS


Financial Instrument	Hierarchy	Valuation Methodology
Securities sold, not yet purchased	Level 2	Pricing is determined by a third-party pricing service that determines fair value based on bid and ask prices.
Assets of consolidated collateralized loan obligation entity	Level 1	Includes investments in money market funds and certain equity securities. Fair value is determined based upon unadjusted quoted market prices.
	Level 2	Includes bank loans, debt and equity securities. Fair value is determined based upon valuations obtained from independent third-party broker or dealer prices.
	Level 3	Includes warrants, bank loans and equity securities. In certain instances the fair value has been determined using discounted cash flow analyses. Fair value in which pricing is received from one non-binding broker quote is also considered to be Level 3.
Liabilities of consolidated collateralized loan obligation entity	Level 3	Includes senior and subordinated note obligations. Fair value is determined primarily from model-based valuation techniques in which one or more significant inputs are unobservable in the market.

Other assets not held at fair value includes investments in equity method investees and other investments carried at cost which, in accordance with GAAP, are not measured at fair value.

The following table summarizes the assets and liabilities measured at fair value on a recurring basis and their assigned levels within the hierarchy at July 31, 2011.

TABLE OF CONTENTS

July 31, 2011


(in thousands)	Level 1		Level 2		Level 3		Other Assets Not Held at Fair Value		Total
Cash equivalents	$	7,341	$	291,182	$	—	$	—	$	298,523
Investments:
Corporate debt securities	$	—	$	4,794	$	—	$	—	$	4,794
Consolidated funds:
Debt securities		—		56,151		—		—		56,151
Equity securities		48,921		2,296		—		—		51,217
Separately managed accounts:
Debt securities		4,354		6,888		—		—		11,242
Equity securities		36,724		16		—		—		36,740
Sponsored funds		30,705		3,714		—		—		34,419
Collateralized loan obligation entities		—		—		—		554		554
Investments in affiliates		—		—		—		81,575		81,575
Other investments		—		37		—		7,470		7,507
Total investments	$	120,704	$	73,896	$	—	$	89,599	$	284,199
Other financial assets:
Derivative financial assets	$	—	$	1,736	$	—	$	—	$	1,736
Assets of consolidated collateralized loan obligation entity:
Cash equivalents		22,033		—		—		—		22,033
Bank loans and other investments		104		464,264		4,516		—		468,884
Total other financial assets	$	22,137	$	466,000	$	4,516	$	—	$	492,653
Financial liabilities:
Derivative financial liabilities	$	—	$	1,908	$	—	$	—	$	1,908
Securities sold, not yet purchased		—		7,216		—		—		7,216
Liabilities of consolidated collateralized loan obligation entity:
Senior and subordinated note obligations		—		—		480,466		—		480,466
Total financial liabilities	$	—	$	9,124	$	480,466	$	—	$	489,590

TABLE OF CONTENTS

The following table summarizes the assets and liabilities measured at fair value on a recurring basis and their assigned levels within the hierarchy at October 31, 2010:

October 31, 2010


(in thousands)	Level 1		Level 2		Level 3		Other Assets Not Held at Fair Value		Total
Cash equivalents	$	1,291	$	90,416	$	—	$	—	$	91,707
Investments:
Corporate debt securities	$	—	$	4,732	$	—	$	—	$	4,732
Consolidated funds:
Debt securities		9,372		102,213		—		—		111,585
Equity securities		45,135		43,049		—		—		88,184
Separately managed accounts:
Debt securities		—		3,666		—		—		3,666
Equity securities		27,724		968		—		—		28,692
Sponsored funds		34,194		3,347		—		—		37,541
Collateralized loan obligation entities		—		—		—		1,391		1,391
Investments in affiliates		—		—		—		51,111		51,111
Other investments		—		37		—		7,470		7,507
Total investments	$	116,425	$	158,012	$	—	$	59,972	$	334,409
Other financial assets:
Derivative financial assets	$	—	$	582	$	—	$	—	$	582
Financial liabilities:
Derivative financial liabilities	$	—	$	3,519	$	—	$	—	$	3,519
Securities sold, not yet purchased		—		731		—		—		731
Total financial liabilities	$	—	$	4,250	$	—	$	—	$	4,250

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three months ended July 31, 2011 were as follows:

TABLE OF CONTENTS


(in thousands)	Bank loans and other investments of consolidated CLO entity			Senior and subordinated note obligations of consolidated CLO entity
Balance at May 1, 2011	$	4,170		$	479,277
Net losses on investments and note obligations⁽¹⁾		337			1,189
Purchases, sales and settlements, net		(39	)		—
Net transfers in and/or out of Level 3		49			—
Balance at July 31, 2011	$	4,517		$	480,466
Change in unrealized gains included in net income relating to assets and liabilities held at July 31, 2011	$	337		$	1,189

⁽¹⁾

Net losses on investments and note obligations attributable to the assets and borrowings of the Company’s consolidated CLO entity are allocated to non-controlling and other beneficial interests on the Company’s Consolidated Statement of Income.

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the nine months ended July 31, 2011 were as follows:


(in thousands)	Bank loans and other investments of consolidated CLO entity			Senior and subordinated note obligations of consolidated CLO entity
Balance at November 1, 2010	$	—		$	—
Adjustment for adoption of new consolidation guidance		5,265			444,087
Net losses on investments and note obligations⁽¹⁾		1,162			36,379
Purchases, sales and settlements, net		(1,354	)		—
Net transfers in and/or out of Level 3		(556	)		—
Balance at July 31, 2011	$	4,517		$	480,466
Change in unrealized gains included in net income relating to assets and liabilities held at July 31, 2011	$	1,162		$	36,379

⁽¹⁾

While the Company believes the valuation methods described above are appropriate, the use of different methodologies or assumptions to determine fair value could result in a different estimate of fair value at the reporting date.

The Company maintains an investment in one non-consolidated CLO entity totaling $0.6 million at July 31, 2011. The Company’s investment in this CLO entity is carried at amortized cost unless facts and circumstances indicate that the investment has been impaired, at which point the investment is written down to fair value.

TABLE OF CONTENTS

9. Fair Value Measurements of Other Financial Instruments

Certain financial instruments are not required to be carried on the balance sheet at fair value. The following is a summary of the carrying amounts and estimated fair values of these financial instruments at July 31, 2011 and October 31, 2010:


	July 31, 2011				October 31, 2010
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Other investments	$	7,507	$	7,507	$	7,507	$	7,507
Notes receivable from stock option exercises	$	2,921	$	2,921	$	3,158	$	3,158
Debt	$	500,000	$	589,468	$	500,000	$	590,692

For fair value purposes the carrying value of other investments and notes receivable from stock option exercises approximates fair value. The carrying value of the Company’s debt has been valued utilizing publicly available market prices, which are considered Level 1 inputs.

10. Variable Interest Entities

In the normal course of business, the Company maintains investments in sponsored CLO entities and privately offered equity funds that are considered VIEs. These variable interests generally represent seed investments made by the Company, as collateral manager or investment advisor, to launch or market these vehicles. The Company receives management fees for the services it provides as collateral manager or investment advisor to these entities. These fees may also be considered variable interests.

A company is the primary beneficiary of a VIE if it has a controlling financial interest in the entity. A company is deemed to have a controlling financial interest in the entity if it has both (i) the power to direct the activities of the entity that most significantly impact the entity’s economic performance, and (ii) the obligation to absorb a majority of the entity’s expected losses, receive a majority of the entity’s expected residual returns, or both, that potentially could be significant to the entity.

To determine whether or not the Company should be treated as the primary beneficiary of a VIE, management must make significant estimates and assumptions regarding probable future cash flows of the VIE. These estimates and assumptions relate primarily to market interest rates, credit default rates, pre-payment rates, discount rates, the marketability of certain securities and the probability of certain outcomes.

Investments in VIEs That Are Consolidated

CLO Entities
As described in Note 3, the Company adopted the provisions of a new consolidation standard on November 1, 2010.

The Company irrevocably elected the fair value option for all assets and liabilities of this CLO entity upon adoption of the new accounting guidance. The Company elected the fair value option to mitigate any accounting mismatches between the carrying value of the senior and subordinated note obligations and the carrying value of the assets that are held to provide the cash flows for those note obligations. Unrealized gains and losses on assets and liabilities for which the fair value option has been elected are reported in earnings. Although the subordinated note obligations of the CLO entity have certain equity characteristics, the Company has determined that the subordinated notes should be recorded as liabilities on the Company’s Consolidated Balance Sheet.

TABLE OF CONTENTS

The assets of this CLO entity are held solely as collateral to satisfy the obligations of the entity. The Company has no right to the benefits from, nor does the Company bear the risks associated with, the assets held by the entity beyond the Company’s minimal direct investment and beneficial interest therein and management fees generated from the entity. The note holders of the CLO entity have no recourse to the Company’s general assets. There are neither explicit arrangements nor does the Company hold implicit variable interests that would require the Company to provide any ongoing financial support to the entity.

The following table presents, as of July 31, 2011, the fair value of the CLO entity’s assets and liabilities subject to fair value accounting:


	CLO Bank Loan Investments
(in thousands)	Total CLO bank loan investments			90 days or more past due			Senior and subordinated note obligations
Unpaid principal balance	$	465,221		$	798		$	499,919
Excess unpaid principal balance over fair value		(2,817	)		(611	)		(19,453	)
Fair value	$	462,404		$	187		$	480,466

During the three and nine months ended July 31, 2011, the changes in the fair value of the CLO entity’s investments resulted in net losses of $2.7 million and net gains of $10.8 million, respectively. For the three and nine months ended July 31, 2011, an increase in the fair value of the CLO’s note obligations resulted in net losses of $1.1 million and $36.4 million, respectively. The combined net losses of $3.8 million and $25.5 million were recorded as net losses on investments and note obligations of the consolidated CLO entity on the Company’s Consolidated Statements of Income for the three and nine months ended July 31, 2011, respectively. Substantially all of the gains and losses related to the CLO entity’s investments and note obligations recorded in earnings for the period were attributable to changes in instrument-specific credit risk due to the credit spreads for these instruments tightening while benchmarked interest rates remained relatively unchanged.

The CLO entity’s note obligations bear interest at variable rates based on LIBOR plus a pre-defined spread, which ranges from 0.21 percent to 1.50 percent. The principal amounts outstanding of the note obligations issued by the CLO entity mature on April 20, 2019. The CLO entity may prepay its note obligations prior to April 2013, the contractual maturity date, as a result of collateral asset repayments.

Interest income and expense are recorded on an accrual basis and reported as interest income and interest expense in other income/(expense) of the consolidated CLO entity on the Company’s Consolidated Statements of Income for the three and nine months ended July 31, 2011.

At July 31, 2011, the following carrying amounts related to this CLO entity were included in the Company’s Consolidated Balance Sheet:

TABLE OF CONTENTS


(in thousands)	July 31, 2011
Assets of consolidated CLO entity:
Cash and cash equivalents	$	28,772
Bank loans and other investments		468,884
Other assets		11,598
Liabilities of consolidated CLO entity:
Senior and subordinated note obligations		480,466
Other liabilities		17,479
Appropriated retained earnings		8,538
Total net interest in consolidated CLO entity	$	2,771

For the three and nine months ended July 31, 2011, the Company recorded net losses of $2.6 million and $19.5 million, respectively, related to the CLO entity. Net losses of $3.5 million and $22.1 million for the three and nine months ended July 31, 2011, respectively, were included in net income attributable to non-controlling interests and other beneficial interests, reflecting the interests of third-party note holders of the CLO entity.

Other Entities
Parametric Portfolio Associates maintains a 60 percent economic interest in Parametric Risk Advisors, which meets the definition of a VIE. The Company has made the determination that Parametric Portfolio Associates is the primary beneficiary of the VIE based on the fact that Parametric Portfolio Associates has the ability to direct the activities of Parametric Risk Advisors that most significantly impact its economic performance and Parametric Portfolio Associates is committed to providing ongoing working capital and infrastructure support. Additionally, Parametric Portfolio Associates is obligated to absorb all of the losses of Parametric Risk Advisors that could potentially be significant to Parametric Risk Advisors.

Parametric Risk Advisors had assets of $5.2 million and $3.8 million on July 31, 2011 and October 31, 2010, respectively, consisting primarily of cash and cash equivalents and investment advisory fees receivable, and current liabilities of $2.7 million and $1.7 million on July 31, 2011 and October 31, 2010, respectively, consisting primarily of accrued compensation, accounts payable, accrued expenses and intercompany payables. Neither the Company’s variable interest nor maximum risk of loss related to this VIE was material to the Company’s Consolidated Financial Statements at either balance sheet date.

Investments in VIEs That Are Not Consolidated

CLO Entities
The Company is not deemed the primary beneficiary of three CLO entities in which it holds variable interests. These non-consolidated entities had total assets of $1.9 billion as of July 31, 2011 and October 31, 2010. The Company’s variable interests in these entities consist of the Company’s direct ownership in these entities and any collateral management fees earned but uncollected. The Company held investments in these entities totaling $0.6 million and $1.4 million on July 31, 2011 and October 31, 2010, respectively, and collateral management fees receivable totaling $2.0 million and $1.8 million on July 31, 2011 and October 31, 2010, respectively. In the first nine months of fiscal 2011, the Company did not provide any financial or other support to these entities that it was not previously contractually required to provide. The Company’s risk of loss with respect to these managed CLO entities is limited to the carrying value of its investments in and collateral management fees receivable from the CLO entities as of July 31, 2011.

The Company’s investments in the CLO entities identified above are carried at amortized cost and collectively disclosed as a component of investments in Note 7. Income from these entities is recorded as a component of interest income based upon projected investment yields.

Other Entities
The Company holds variable interests in but is not deemed to be the primary beneficiary of 15 privately offered equity funds with total assets of $10.0 billion and $10.9 billion as of July 31, 2011 and October 31, 2010,

TABLE OF CONTENTS

respectively. The Company’s variable interests in these entities consist of the Company’s direct ownership in these entities and any investment advisory fees earned but uncollected. The Company held investments in these entities totaling $3.7 million and $3.3 million on July 31, 2011 and October 31, 2010, respectively, and investment advisory fees receivable totaling $0.5 million and $0.4 million on July 31, 2011 and October 31, 2010, respectively. In the first nine months of fiscal 2011, the Company did not provide any financial or other support to these entities that it was not previously contractually required to provide. The Company’s risk of loss with respect to these managed entities is limited to the carrying value of its investments in and investment advisory fees receivable from the entities as of July 31, 2011.

The Company’s investments in privately offered equity funds are carried at fair value and included in investments in sponsored funds, which are disclosed as a component of investments in Note 7. These investments are classified as available-for-sale and the Company records any change in fair value, net of income tax, in other comprehensive income (loss).

11. Stock-Based Compensation Plans

The Company recognized total compensation cost related to its stock-based compensation plans as follows:


	Three Months Ended July 31,					Nine Months Ended July 31,
(in thousands)	2011			2010		2011		2010
2008 Plan:
Stock options	$	7,408		$	7,812	$	24,617	$	24,486
Restricted shares		4,072			2,900		12,794		10,124
Phantom stock units		(1	)		23		208		240
Employee Stock Purchase Plan		528			739		781		1,099
Incentive Plan – Stock Alternative		108			119		373		342
ACM Plan		159			102		479		306
PPA Plan		380			180		1,140		540
Total stock-based compensation expense	$	12,654		$	11,875	$	40,392	$	37,137

The total income tax benefit recognized for stock-based compensation arrangements was $3.7 million and $3.4 million for the three months ended July 31, 2011 and 2010, respectively, and $12.8 million and $11.5 million for the nine months ended July 31, 2011 and 2010, respectively.

2008 Omnibus Incentive Plan

The 2008 Plan, which is administered by the Compensation Committee of the Board, allows for awards of stock options, restricted shares and phantom stock units to eligible employees and non-employee Directors. A total of 12.5 million shares of Non-Voting Common Stock have been reserved for issuance under the 2008 Plan. Through July 31, 2011, 3.0 million restricted shares and options to purchase 8.5 million shares have been issued pursuant to the 2008 Plan.

Stock Options
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. The Black-Scholes option valuation model incorporates assumptions as to dividend yield, volatility, an appropriate risk-free interest rate and the expected life of the option. Many of these assumptions require management’s judgment. The Company’s stock volatility assumption is based upon its historical stock price fluctuations. The Company uses historical data to estimate option forfeiture rates and the expected term of options granted. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

TABLE OF CONTENTS

The weighted-average fair value per share of stock options granted during the nine months ended July 31, 2011 and 2010 using the Black-Scholes option pricing model were as follows:


	2011		2010
Weighted-average grant date fair value of options granted		$8.55		$8.84
Assumptions:
Dividend yield		2.2% to 2.5%		1.8% to 2.3%
Volatility		34%		33%
Risk-free interest rate		2.2% to 3.1%		2.7% to 3.6%
Expected life of options		7.3 years		7.3 years

Stock option transactions under the 2008 Plan and predecessor plans for the nine months ended July 31, 2011 are summarized as follows:


(share and intrinsic value figures in thousands)	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Options outstanding, beginning of period		28,712		$	25.16
Granted		2,813			29.41
Exercised		(1,565	)		18.96
Forfeited/expired		(256	)		32.74
Options outstanding, end of period		29,704		$	25.82		4.9	$	119,930
Options exercisable, end of period		19,988		$	23.41		3.5	$	109,694
Vested or expected to vest		29,316		$	25.75		4.8	$	119,521

The Company received $29.1 million and $27.8 million related to the exercise of options for the nine months ended July 31, 2011 and 2010, respectively. Options exercised represent newly issued shares. The total intrinsic value of options exercised during the nine months ended July 31, 2011 and 2010 was $20.1 million and $24.0 million, respectively. The total fair value of options that vested during the nine months ended July 31, 2011 was $31.4 million.

As of July 31, 2011, there was $44.3 million of compensation cost related to unvested stock options granted under the 2008 Plan and predecessor plans not yet recognized. That cost is expected to be recognized over a weighted-average period of 2.6 years.

Restricted Shares
Compensation expense related to restricted share grants is recorded over the forfeiture period of the restricted shares, as they are contingently forfeitable. As of July 31, 2011, there was $50.9 million of compensation cost related to unvested awards not yet recognized. That cost is expected to be recognized over a weighted-average period of 3.3 years.

A summary of the Company’s restricted share activity for the nine months ended July 31, 2011 under the 2008 Plan and predecessor plans is presented below:

TABLE OF CONTENTS


(share figures in thousands)	Shares			Weighted- Average Grant Date Fair Value
Unvested, beginning of period		1,792		$	25.73
Granted		1,060			29.36
Vested		(287	)		25.73
Forfeited/expired		(57	)		26.39
Unvested, end of period		2,508		$	27.28

Phantom Stock Units
In the nine months ended July 31, 2011, 8,853 phantom stock units were issued to non-employee Directors pursuant to the 2008 Plan. Because these units are contingently forfeitable, compensation expense is recorded over the forfeiture period. As of July 31, 2011, there was $0.2 million of compensation cost related to unvested awards not yet recognized. That cost is expected to be recognized over a weighted-average period of 1.1 years.

12. Common Stock Repurchases

The Company’s current share repurchase program was announced on July 13, 2011. The Board authorized management to repurchase and retire up to 8.0 million shares of its Non-Voting Common Stock on the open market and in private transactions in accordance with applicable securities laws. The Company’s stock repurchase program is not subject to an expiration date.

In the first nine months of fiscal 2011, the Company purchased and retired approximately 3.5 million shares of its Non-Voting Common Stock under a previous repurchase authorization and approximately 0.3 million shares of its Non-Voting Common Stock under the current authorization. Approximately 7.7 million additional shares may be repurchased under the current authorization.

13. Income Taxes

The provision for income taxes for the three months ended July 31, 2011 and 2010 was $43.3 million and $28.9 million, or 38.7 percent and 39.9 percent of pre-tax income, respectively. The provision for income taxes for the nine months ended July 31, 2011 and 2010 was $119.2 million and $89.4 million, or 39.9 percent and 38.9 percent of pre-tax income, respectively. The provision for income taxes is comprised of federal, state, and foreign taxes. The primary difference between the Company’s effective tax rate and the statutory federal rate of 35.0 percent is state income taxes and losses recognized by the consolidated CLO entity.

During the first quarter of fiscal 2011, the Company received approval from the Internal Revenue Service to change the Company’s tax accounting for certain closed-end fund expenses. This change in tax accounting allows for the immediate tax deduction of current year closed-end fund expenses, as well as a tax deduction in the Company’s fiscal 2010 federal tax return for previously deferred expenses. This change in accounting resulted in a decrease in deferred tax assets and a corresponding decrease in taxes payable of $94.7 million. In conjunction with the approval of the change in tax accounting, the Company filed for and received a refund of $85.0 million in the first three months of fiscal 2011.

The Company records a valuation allowance, when necessary, to reduce deferred tax assets to an amount that is more likely than not to be realized. There is no valuation allowance recorded as of July 31, 2011 or 2010.

The Company is currently under audit by several states. One state previously provided the Company with a draft position that may result in a proposed adjustment to the Company’s previously filed tax returns. The state is currently reevaluating its draft position. The Company believes that its tax positions related to this potential adjustment were correct, and if an adjustment is proposed, the Company intends to vigorously defend its

TABLE OF CONTENTS

positions. It is possible the ultimate resolution of the proposed adjustment, if unfavorable, may be material to the results of operations in the period it occurs. Pending receipt of a formal assessment, an estimate of the range of the reasonably possible change in unrecognized tax benefits over the next twelve months cannot be made.

14. Earnings per Share

Earnings per basic share is calculated pursuant to the two-class method to determine income attributable to common shareholders. Earnings per basic share is calculated by dividing net distributed and undistributed earnings allocated to common shareholders by the weighted-average number of common shares outstanding during the period. Earnings per diluted share is computed on the basis of the weighted-average number of common shares outstanding during the period plus the dilutive effect of any potential common shares outstanding during the period using the more dilutive of the treasury method or two-class method. The weighted-average number of restricted stock awards that have vested within the period are included in the calculation of earnings per basic and diluted share. Unvested restricted stock awards are not included as incremental shares in the calculation of earnings per diluted share.

The following table provides a reconciliation of common shares used in the earnings per basic share and earnings per diluted share computations as follows:


	Three Months Ended July 31,				Nine Months Ended July 31,
(in thousands, except per share data)	2011		2010		2011		2010
Net income allocated to:
Common shares	$	66,618	$	41,113	$	164,505	$	122,095
Participating restricted shares		1,450		637		3,577		1,897
Total net income attributable to Eaton Vance Corp. shareholders	$	68,068	$	41,750	$	168,082	$	123,992
Weighted-average shares outstanding – basic		115,574		116,549		116,191		116,541
Incremental common shares		4,969		6,063		5,375		6,455
Weighted-average shares outstanding – diluted		120,543		122,612		121,566		122,996
Earnings per common share attributable to Eaton Vance Corp. shareholders:
Basic	$	0.58	$	0.35	$	1.42	$	1.05
Diluted	$	0.55	$	0.34	$	1.35	$	0.99

The Company uses the treasury stock method to account for the dilutive effect of unexercised stock options in earnings per diluted share. Antidilutive common shares related to stock options excluded from the computation of earnings per diluted share were approximately 10.5 million and 8.8 million for the three months ended July 31, 2011 and 2010, respectively and were approximately 10.6 million and 9.0 million for the nine months ended July 31, 2011 and 2010, respectively.

15. Derivative Financial Instruments

Derivative Financial Instruments Designated as Cash Flow Hedges
During the nine months ended July 31, 2011 and 2010, the Company reclassified $0.3 million of the loss on the Treasury lock transaction into interest expense. At July 31, 2011, the remaining unamortized loss on this transaction was $2.8 million. During the next twelve months, the Company expects to reclassify approximately $0.4 million of the loss on the Treasury lock transaction into interest expense.

TABLE OF CONTENTS

Other Derivative Financial Instruments not Designated for Hedge Accounting
The Company has entered into a series of foreign exchange contracts, stock index futures contracts and commodity futures contracts to structurally hedge currency risk exposure and market risk associated with its investments in separate accounts and consolidated funds seeded for new product development purposes.

At July 31, 2011, the Company had ten outstanding foreign exchange contracts with two counterparties with an aggregate notional value of approximately $9.1 million. At July 31, 2011, the Company had eight outstanding stock index futures contracts with one counterparty with an aggregate notional value of approximately $76.7 million. In addition, at July 31, 2011 the Company had twenty-two outstanding commodity futures contracts with one counterparty with an aggregate notional value of approximately $26.9 million.

The following table presents the fair value as of July 31, 2011 of derivative instruments not designated as hedging instruments:

July 31, 2011


	Assets				Liabilities
(in thousands)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Foreign exchange contracts		Other assets	$	1		Other liabilities	$	200
Stock index futures contracts		Other assets		1,221		Other liabilities		456
Commodity futures contracts		Other assets		514		Other liabilities		1,252
Total			$	1,736			$	1,908

The following table presents the fair value as of October 31, 2010, of derivative instruments not designated as hedging instruments:

October 31, 2010


	Assets				Liabilities
(in thousands)	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Foreign exchange contracts		Other assets	$	12		Other liabilities	$	1,187
Stock index futures contracts		Other assets		489		Other liabilities		1,415
Commodity futures contracts		Other assets		81		Other liabilities		917
Total			$	582			$	3,519

The following is a summary of the gains (losses) recognized in income for the three and nine months ended July 31, 2011 and 2010:

TABLE OF CONTENTS


	Income Statement Location		Three Months Ended July 31,				Nine Months Ended July 31,
(in thousands)	Income Statement Location		2011		2010		2011			2010
Foreign exchange contracts		Gains and (losses) on investments and derivatives	$	322	$	533	$	(1,595	)	$	663
Stock index futures contracts		Gains and (losses) on investments and derivatives		5,682		1,214		(3,159	)		517
Commodity futures contracts		Gains and (losses) on investments and derivatives		239		—		(1,953	)		—
Total			$	6,243	$	1,747	$	(6,707	)	$	1,180

16. Commitments and Contingencies

In the normal course of business, the Company enters into agreements that include indemnities in favor of third parties, such as engagement letters with advisors and consultants, information technology agreements, distribution agreements and service agreements. In certain circumstances, these indemnities in favor of third parties relate to service agreements entered into by investment funds managed and/or advised by Eaton Vance Management or Boston Management and Research. The Company has also agreed to indemnify its directors, officers and employees in accordance with the Company’s Articles of Incorporation, as amended. Certain agreements do not contain any limits on the Company’s liability and, therefore, it is not possible to estimate the Company’s potential liability under these indemnities. In certain cases, the Company has recourse against third parties with respect to these indemnities. Further, the Company maintains insurance policies that may provide coverage against certain claims under these indemnities.

The Company and its subsidiaries are subject to various legal proceedings. In the opinion of management, after discussions with legal counsel, the ultimate resolution of these matters will not have a material adverse effect on the consolidated financial condition or results of operations of the Company.

In July 2006, the Company committed to invest $15.0 million in a private equity partnership that invests in companies in the financial services industry. The Company had invested $13.5 million of the total $15.0 million of committed capital at July 31, 2011. The Company believes the remaining $1.5 million will likely be invested by March 2015.

The Company has entered into transactions in financial instruments in which it has sold securities, not yet purchased as part of its corporate hedging program. As of July 31, 2011 the Company has $7.2 million included within other liabilities on its Consolidated Balance Sheet related to securities sold, not yet purchased.

TABLE OF CONTENTS

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

This Item includes statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our expectations, intentions or strategies regarding the future. All statements, other than statements of historical facts, included in this Form 10-Q regarding our financial position, business strategy and other plans and objectives for future operations are forward-looking statements. The terms “may”, “could”, “anticipate”, “plan”, “continue”, “project”, “intend”, “estimate”, “believe”, “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Although we believe that the assumptions and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that they will prove to have been correct or that we will take any actions that may now be planned. Certain important factors that could cause actual results to differ materially from our expectations are disclosed in the “Risk Factors” section of this Form 10-Q. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such factors.

General

Our principal business is managing investment funds and providing investment management and counseling services to high-net-worth individuals and institutions. Our core strategy is to develop and sustain management expertise across a range of investment disciplines and to offer leading investment products and services through multiple distribution channels. In executing this strategy, we have developed a broadly diversified product line and a powerful marketing, distribution and customer service capability. Although we manage and distribute a wide range of products and services, we operate in one business segment, namely as an investment adviser to funds and separate accounts.

We are a market leader in a number of investment areas, including tax-managed equity, value equity, equity income, emerging market equity, floating-rate bank loan, municipal bond, investment grade, global and high-yield bond investing. Our diversified product line offers fund shareholders, retail managed account investors, institutional investors and high-net-worth clients a wide range of products and services designed and managed to generate attractive risk-adjusted returns over the long term. Our equity products encompass a diversity of investment objectives, risk profiles, income levels and geographic representation. Our income investment products cover a broad duration and credit quality range and encompass both taxable and tax-free investments. As of July 31, 2011, we had $199.0 billion in assets under management.

Our principal retail marketing strategy is to distribute funds and separately managed accounts through financial intermediaries in the advice channel. We have a broad reach in this marketplace, with distribution partners including national and regional broker/dealers, independent broker/dealers, independent financial advisory firms, banks and insurance companies. We support these distribution partners with a team of more than 130 sales professionals covering U.S. and international markets.

We also commit significant resources to serving institutional and high-net-worth clients who access investment management services on a direct basis. Through our wholly owned affiliates and consolidated subsidiaries we manage investments for a broad range of clients in the institutional and high-net-worth marketplace, including corporations, endowments, foundations, family offices and public and private employee retirement plans.

TABLE OF CONTENTS

Our revenue is derived primarily from investment advisory, administration, distribution and service fees received from Eaton Vance funds and investment advisory fees received from separate accounts. Our fees are based primarily on the value of the investment portfolios we manage and fluctuate with changes in the total value and mix of assets under management. Such fees are recognized over the period that we manage these assets. Our major expenses are employee compensation, distribution-related expenses, amortization of deferred sales commissions, facilities expense and information technology expense.

Our discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to deferred sales commissions, goodwill and intangible assets, income taxes, investments and stock-based compensation. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under current circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates.

Market Developments

Prevailing market conditions affect our managed asset levels, operating results and the recoverability of our investments. Since financial markets bottomed in the first half of fiscal 2009, we have experienced significant improvement in our key financial metrics. Average assets under management increased 18 percent in the third quarter of fiscal 2011 relative to the third quarter of fiscal 2010, reflecting strong net flows and positive market action. Gross inflows were well diversified among major investment categories and well balanced between funds and separate accounts. Revenue increased faster than our overall expenses in the third quarter of fiscal 2011, resulting in higher operating margins.

Managed Asset Levels
Average assets under management were $201.2 billion in the third quarter of fiscal 2011 compared to $170.8 billion in the third quarter of fiscal 2010. Our average effective fee rate was 65 basis points in the third quarter of fiscal 2011 compared to 64 basis points in the third quarter of fiscal 2010.

As a matter of course, investors in our sponsored open-end funds and separate accounts have the ability to redeem their shares or investments at any time, without prior notice, and there are no material restrictions that would prevent investors from doing so.

Operating Results
In the third quarter of fiscal 2011, our revenue increased by $54.2 million, or 20 percent, from the third quarter of fiscal 2010. Our operating expenses increased by $17.3 million, or 9 percent, in the same period, reflecting increases in asset-based expenses that increase as assets under management increase, such as certain distribution and service fees, and increases in expenses that adjust to increases in operating earnings, such as the performance-based management incentives we accrue. These increases were partially offset by a decrease in our sales-related expenses, which vary with the level of sales and the acquisition costs of new assets.

Recoverability of our Investments
Our $284.2 million of investments consist primarily of positions in Eaton Vance-managed funds and separate accounts entered into for investment and business development purposes. These investments are generally in liquid debt or equity securities and are carried at fair market value. We test our investments, including our investments in collateralized loan obligation (“CLO”) entities and investments classified as available-for-sale, for impairment on a quarterly basis. Our investments in non-consolidated CLO entities, which have been the

TABLE OF CONTENTS

subject of past impairments, totaled $0.6 million on July 31, 2011. We evaluate our investments in CLO entities and investments classified as available-for-sale for impairment using quantitative factors, including how long the investment has been in a net unrealized loss position, and qualitative factors, including the underlying credit quality of the issuer and our ability and intent to hold the investment. If markets deteriorate during the quarters ahead, our assessment of impairment on a quantitative basis may lead us to impair investments in future quarters that were in an unrealized loss position at July 31, 2011.

We test our investments in affiliates and goodwill in the fourth quarter of each fiscal year, or as facts and circumstances indicate that additional analysis is warranted. There have been no significant changes in financial condition in the third quarter of fiscal 2011 that would indicate that an impairment loss exists at July 31, 2011.

We periodically review our deferred sales commissions and identifiable intangible assets for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. There have been no significant changes in financial condition in the third quarter of fiscal 2011 that would indicate that an impairment loss exists at July 31, 2011.

Assets under Management

Assets under management of $199.0 billion on July 31, 2011 were 15 percent higher than the $173.3 billion reported a year earlier, reflecting market price appreciation and positive net inflows. Long-term fund net inflows of $7.0 billion over the last twelve months reflect $8.1 billion of open-end fund and $0.4 billion of closed-end fund net inflows offset by $1.5 billion of private fund net outflows. Private and closed-end fund flows include net reductions in fund leverage of $0.6 billion in the last twelve months. Institutional separate account net inflows were $2.7 billion, high-net-worth separate account net inflows were $0.5 billion and retail managed account net outflows were $0.5 billion over the past twelve months. Market price appreciation, reflecting generally favorable equity and income markets, contributed $16.0 billion to growth in managed assets, while a decrease in cash management assets reduced assets under management by $0.3 billion. Acquired assets contributed $0.3 billion to assets under management.

In prior years we have shown managed assets and flow data by major investment class (equity, fixed income and floating-rate income), using underlying portfolio classification as the primary driver. In the first quarter of fiscal 2011, we began reporting managed assets and flow data by investment mandate, using fund or separate account investment strategy as the primary driver. Concurrent with this change, we added a new “Alternative” category to reflect the growing importance to our business of investment mandates that are designed to exhibit low correlation to stock and bond market performance. The Alternative category includes a range of absolute return and market neutral strategies, as well as commodity-linked investments.

TABLE OF CONTENTS

Ending Assets under Management by Investment Mandate⁽¹⁾


	July 31,
(in millions)	2011		% of Total			2010		% of Total			% Change
Equity	$	117,055		59	%	$	101,358		58	%		15	%
Fixed income		43,842		22	%		44,425		26	%		-1	%
Floating-rate income		25,586		13	%		18,186		10	%		41	%
Alternative		11,732		6	%		8,183		5	%		43	%
Cash management		815		0	%		1,160		1	%		-30	%
Total	$	199,030		100	%	$	173,312		100	%		15	%

⁽¹⁾

Includes funds and separate accounts.

Equity assets under management included $31.1 billion and $30.1 billion of equity funds managed for after-tax returns on July 31, 2011 and 2010, respectively. Fixed income assets included $14.5 billion and $16.9 billion of tax-exempt municipal bond fund assets on July 31, 2011 and 2010, respectively.

Assets under management for which we estimate fair value are not material relative to the total value of the assets we manage.

Long-Term Fund and Separate Account Net Flows


	Three Months Ended July 31,		% Change	Nine Months Ended July 31,		% Change
(in millions)	2011	2010		2011	2010
Long-term funds:

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-Q

Commission file no. 1-8100

EATON VANCE CORP.

Two International Place, Boston, Massachusetts 02110

(617) 482-8260

Eaton Vance Corp. Form 10-Q As of July 31, 2011 and for the Three and Nine Month Periods Ended July 31, 2011

Table of Contents

Part I — Financial Information

Item 1. Consolidated Financial Statements

Eaton Vance Corp. Consolidated Balance Sheets (unaudited)

Eaton Vance Corp. Consolidated Balance Sheets (unaudited) (continued)

Eaton Vance Corp. Consolidated Statements of Income (unaudited)

Eaton Vance Corp. Consolidated Statements of Comprehensive Income (unaudited)

Eaton Vance Corp. Consolidated Statements of Shareholders’ Equity (unaudited)

Eaton Vance Corp. Consolidated Statements of Shareholders’ Equity (unaudited) (continued)

Eaton Vance Corp. Consolidated Statements of Cash Flows (unaudited)

Eaton Vance Corp. Consolidated Statements of Cash Flows (unaudited) (continued)

Eaton Vance Corp. Notes to Consolidated Financial Statements (unaudited)

1. Basis of Presentation

2. Principles of Consolidation

3. Adoption of New Accounting Standards

4. Future Accounting Pronouncements

5. Acquisitions

6. Other Intangible Assets

July 31, 2011

October 31, 2010

7. Investments

Investments classified as trading

July 31, 2011

October 31, 2010

Investments classified as available-for-sale

July 31, 2011

October 31, 2010

Investments in collateralized loan obligation entities

Investments in affiliates

Other investments

8. Fair Value Measurements

July 31, 2011

October 31, 2010

9. Fair Value Measurements of Other Financial Instruments

10. Variable Interest Entities

Investments in VIEs That Are Consolidated

Investments in VIEs That Are Not Consolidated

11. Stock-Based Compensation Plans

2008 Omnibus Incentive Plan

12. Common Stock Repurchases

13. Income Taxes

14. Earnings per Share

15. Derivative Financial Instruments

July 31, 2011

October 31, 2010

16. Commitments and Contingencies

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

General

Market Developments

Assets under Management

Ending Assets under Management by Investment Mandate(1)

Long-Term Fund and Separate Account Net Flows

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Eaton Vance Corp.
Form 10-Q
As of July 31, 2011 and for the
Three and Nine Month Periods Ended July 31, 2011

Eaton Vance Corp.
Consolidated Balance Sheets (unaudited)

Eaton Vance Corp.
Consolidated Balance Sheets (unaudited) (continued)

Eaton Vance Corp.
Consolidated Statements of Income (unaudited)

Eaton Vance Corp.
Consolidated Statements of Comprehensive Income (unaudited)

Eaton Vance Corp.
Consolidated Statements of Shareholders’ Equity (unaudited)

Eaton Vance Corp.
Consolidated Statements of Shareholders’ Equity (unaudited) (continued)

Eaton Vance Corp.
Consolidated Statements of Cash Flows (unaudited)

Eaton Vance Corp.
Consolidated Statements of Cash Flows (unaudited) (continued)

Eaton Vance Corp.
Notes to Consolidated Financial Statements (unaudited)

Ending Assets under Management by Investment Mandate⁽¹⁾