SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended April 30, 1994 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 (I.R.S. Employer Identification No.
incorporation or organization)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
(Address of principal executive offices) (Zip Code)
(617) 482-8260
Registrant's telephone number, including area code
NONE
(Former name, address and former fiscal year, if changed since last record)
Shares outstanding as of April 30, 1994:
Voting common stock - 19,360 shares
Non-Voting Common Stock - 9,270,633 shares
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
Page 1 of 17 pages
<PAGE>
PART I
FINANCIAL INFORMATION
-2-
<PAGE>
Consolidated Balance Sheets
(unaudited)
ASSETS
April 30, October 31,
1994 1993
(all figures in thousands)
CURRENT ASSETS:
Cash and equivalents $ 13,482 $ 12,414
Receivable for investment company
shares sold 1,588 3,007
Investment adviser fees and other
receivables 2,302 2,923
Marketable securities, at market (cost $343) 234 -
Other current assets 972 1,390
Total current assets 18,578 19,734
INVESTORS BANK & TRUST COMPANY ASSETS:
Cash and equivalents 6,177 16,241
Investment securities (market value
$75,546 and $82,404, respectively) 76,443 80,206
Loans, less allowance for possible
loan losses 12,151 10,221
Accrued interest and fees receivable 5,977 5,668
Equipment and leasehold improvements, net 3,183 3,010
Other assets 4,198 4,838
Total bank assets 108,129 120,184
OTHER ASSETS:
Investments -
Real estate 22,094 22,448
VenturesTrident, L.P. and
VenturesTrident II, L.P. 3,789 6,924
Investment companies (market value
$5,095 and $5,025, respectively) 3,639 3,377
Other investments 3,846 4,154
Notes receivable & receivables from affiliates 3,371 3,381
Deferred sales commissions 267,825 240,017
Property and equipment, net 3,608 3,329
Goodwill 1,943 1,999
Total other assets 310,115 285,629
Total assets $436,822 $425,547
See notes to consolidated financial statements
-3-
<PAGE>
Consolidated Balance Sheets (continued)
(unaudited)
LIABILITIES AND April 30, October 31,
SHAREHOLDERS' 1994 1993
EQUITY (all figures in thousands)
CURRENT LIABILITIES:
Payable for investment company
shares purchased $ 1,605 $ 3,073
Accrued compensation 4,358 8,626
Accounts payable and accrued expenses 4,046 4,046
Accrued income taxes 1,460 1,443
Dividend payable 1,397 1,285
Other current liabilities 883 603
Total current liabilities 13,749 19,076
INVESTORS BANK & TRUST COMPANY LIABILITIES:
Demand and time deposits 89,377 104,851
Other 3,747 3,624
Total bank liabilities 93,124 108,475
OTHER LIABILITIES:
6.22% Senior Note due 2004 50,000 -
Note payable to unaffiliated banks 16,800 42,300
Mortgage notes payable 16,589 16,759
10% subordinated debentures - 14,169
Minority interest in consolidated subsidiaries 2,652 2,340
Total other liabilities 86,041 75,568
Deferred income taxes 84,454 77,128
Commitments - -
SHAREHOLDERS' EQUITY:
Common stock, par value $.0625 per share-
Authorized, 80,000 shares
Issued, 19,360 shares 1 1
Non-voting common stock, par value
$.0625 per share-
Authorized, 11,920,000 shares
Issued 9,270,633 and 9,134,218 shares,
respectively 581 571
Additional paid-in capital 55,015 52,845
Notes receivable from stock sales (2,475) (1,804)
Retained earnings 106,332 93,687
Total shareholders' equity 159,454 145,300
Total liabilities and shareholders' equity $436,822 $425,547
See notes to consolidated financial statements
-4-
<PAGE>
Consolidated Statements of Income
(unaudited)
Three Months Ended Six Months Ended
April 30, April 30,
1994 1993 1994 1993
(in thousands, except per share figures)
INCOME:
Investment adviser and
administration fees $21,679 $18,301 $43,123 $35,735
Distribution income 19,402 16,842 39,545 31,720
Bank fee income 10,726 7,911 19,807 15,667
Bank net interest income 1,154 1,127 2,342 2,018
Real estate, oil and gas & other income 1,293 1,289 2,544 2,451
Total income 54,254 45,470 107,361 87,591
EXPENSES:
Compensation of officers and employees 16,928 15,295 34,367 29,851
Amortization of deferred sales
commissions 12,797 9,625 25,548 18,472
Other expenses 11,727 8,679 21,501 16,681
Total expenses 41,452 33,599 81,416 65,004
Operating income 12,802 11,871 25,945 22,587
OTHER INCOME (EXPENSE):
Interest earned 321 160 452 401
Share of partnership income (loss), etc. (524) 2,154 (106) 846
Interest expense (1,430) (1,346) (2,781) (2,710)
Income before income taxes 11,169 12,839 23,510 21,124
Income taxes:
Currently payable-
Federal 704 621 704 772
State (157) 142 138 269
Deferred-
Federal 2,595 4,156 7,080 6,529
State 389 736 1,546 1,446
Total income taxes 3,531 5,655 9,468 9,016
Net income before cumulative effect
of change in accounting for
income taxes 7,638 7,184 14,042 12,108
Cumulative effect of change in
accounting for income taxes - - 1,300 -
Net income $ 7,638 $ 7,184 $15,342 $12,108
Earnings per share before cumulative
effect of change in accounting for
income taxes $0.80 $0.86 $1.47 $1.48
Cumulative effect of change in
accounting for income taxes per share - - .14 -
Earnings per share $0.80 $0.86 $1.61 $1.48
Dividends declared, per share $0.15 $0.12 $0.29 $0.23
Average common shares outstanding 9,574 8,384 9,552 8,177
See notes to consolidated financial statements
-5-
<PAGE>
Consolidated Statements of Cash Flows
(unaudited) Six Months ended
April 30,
1994 1993
(in thousands)
Cash and equivalents (including IB&T),
Beginning of period................................... $ 28,655 $ 9,535
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................................. 15,342 12,108
Adjustments to reconcile net income to net cash
provided by (used for) operating activities--
Share of net (income) loss of partnerships.............. 106 (846)
Deferred income taxes................................... 8,626 7,975
Change in accounting principle.......................... (1,300) -
Amortization of deferred sales commissions.............. 25,548 18,533
Depreciation and other amortization..................... 2,436 2,058
Payments of sales commissions........................... (64,947) (64,461)
Capitalized sales charges received...................... 11,807 9,247
Change in refundable income taxes....................... - 1,036
Changes in other assets and liabilities................. (2,517) (3,388)
Net cash provided by (used for) operating activities.... $ (4,899) $(17,738)
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from (investment in) partnerships......... - (75)
Additions to real estate, property and equipment........ (1,607) (1,864)
Net (increase) decrease in notes and other receivables.. (689) (397)
Net (increase) decrease in investment companies
and other investments.................................. 2,853 (755)
Proceeds from sales and maturities of
investment securities.................................. 3,112 851
Purchases of investment securities...................... - (25,726)
Decrease (increase) in federal funds sold............... - 13,200
Net (increase) decrease in loans........................ (1,930) (1,549)
Net cash provided by (used for) investing activities.... $ 1,739 $(16,315)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable............................. 107,000 44,400
Payments on notes payable............................... (82,662) (65,651)
Payment of 10% subordinated debentures.................. (14,169) -
Proceeds from the issuance of non-voting common stock... 2,243 46,403
Dividends paid.......................................... (2,711) (1,947)
Repurchase of non-voting common stock................... (63) (770)
Changes in demand and time deposits..................... (15,474) 27,401
Net cash provided by (used for) financing activities.. $ (5,836) $ 49,836
Net increase (decrease) in cash and equivalents...... $ (8,996) $ 15,783
Cash and equivalents (including IB&T), end of period.... $ 19,659 $ 25,318
NONCASH INVESTING ACTIVITY:
Distribution of securities from gold mining partnership $ 3,815 $ -
SUPPLEMENTAL INFORMATION:
Interest paid........................................... $ 2,940 $ 3,123
Income taxes paid (refunded)............................ $ 1,142 $ (287)
See notes to consolidated financial statements
-6-
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) April 30, 1994
(1) Consolidating Financial Statements
The components of the April 30, 1994 Eaton Vance Corp. consolidated
balance sheet and statement of income by major business segment follow:
BALANCE SHEET April 30, 1994
Investment Real Mining Consolidated
Management Banking Estate Oil&Gas Eliminations Total
(in thousands)
CURRENT ASSETS:
Cash and equivalents $ 14,299 $ 861 $ 1,648 ($ 3,326) $ 13,482
Receivables and other
current assets 4,477 709 635 (725) 5,096
Total current assets 18,776 1,570 2,283 (4,051) 18,578
IB&T Company assets 108,129 108,129
OTHER ASSETS:
Investments-
Real estate 22,094 22,094
VenturesTrident,L.P. &
VenturesTrident II,L.P. 3,789 3,789
Investments in and
advances to
Northeast Properties, Inc. 6,120 (6,120)
Investors Bank & Trust Co. 9,027 (9,027)
Marblehead Energy Corp. 234 (234)
Energex Corp.
Mining related subs. 9,069 (9,069)
Investment companies 3,639 3,639
Oil & gas properties 290 290
Other investments 1,791 1,765 3,556
Notes and other receivables 322 3,049 3,371
Deferred sales commissions 267,526 299 267,825
Property & equipment 3,494 1 113 3,608
Goodwill 1,932 11 1,943
Intercompany receivable
(payable) 2,350 (207) (2,143)
Total assets $321,608 $108,129 $26,647 $11,082 ($30,644) $436,822
-7-
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)-April 30, 1994
Consolidating Financial Statements (Continued)
BALANCE SHEET (Continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
April 30, 1994
Investment Real Mining Consolidated
Management Banking Estate Oil&Gas Eliminations Total
(in thousands)
CURRENT LIABILITIES:
Payable for investment
company shares purchased $ 1,605 $ 1,605
Accrued compensation 4,358 4,358
Accounts payable and
accrued expenses 3,848 147 51 4,046
Accrued income taxes 1,152 (4) 312 1,460
Dividend payable 1,397 1,397
Deferred investment
adviser fees 1,276 (726) 550
Current portion of
mortgage notes payable 333 333
Total current liabilities 13,636 476 363 (726) 13,749
IB&T Company liabilities 96,450 (3,326) 93,124
OTHER LIABILITIES:
6.22% Senior Note due
March 1, 2004 50,000 50,000
Note payable to
unaffiliated banks 16,800 16,800
Mortgage notes payable 16,589 16,589
Minority interest in
consolidated subsidiary 2,652 2,652
Total other liabilities 66,800 16,589 2,652 86,041
Deferred income taxes 82,212 1,113 1,129 84,454
Total shareholders' equity 158,960 11,679 8,469 9,590 (29,244) 159,454
Total liabilities
& shareholders' equity $321,608 $108,129 $26,647 $11,082 ($30,644)$436,822
-8-
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) April 30, 1994
Consolidating Financial Statements (Continued)
CONSOLIDATING STATEMENT OF INCOME
Six months ended
April 30, 1994
Investment Real Mining Consolidated
Management Banking Estate Oil&Gas Eliminations Total
(all figures in thousands)
INCOME:
Investment adviser and
administration fees $42,022 $1,101 $ 43,123
Distribution income 39,545 39,545
Bank fee income 20,090 (283) 19,807
Bank net interest income 2,291 51 2,342
Real estate, oil & gas
and other income 453 2,683 169 (761) 2,544
Total income 82,020 22,381 2,683 1,270 (993) 107,361
EXPENSES:
Compensation of officers
and employees 20,988 12,978 304 97 34,367
Amortization of deferred
sales commissions 25,548 25,548
Real estate operating
expenses & other expenses 12,058 7,272 1,811 1,079 (719) 21,501
Total expenses 58,594 20,250 2,115 1,176 (719) 81,416
Operating income (loss) 23,426 2,131 568 94 (274) 25,945
OTHER INCOME (EXPENSE):
Interest earned 343 27 133 (51) 452
Share of partnership
income (loss), etc. 62 (62) (106) (106)
Interest expense (2,053) (728) (2,781)
Income before income taxes 21,778 2,131 (195) 121 (325) 23,510
Income taxes 8,877 704 (80) (33) 9,468
Net income (loss), before
cumulative effect of
change in accounting
for income taxes 12,901 1,427 (115) 154 (325) 14,042
Cumulative effect of
change in accounting
for income taxes 1,374 129 (203) 1,300
Net income (loss) $14,275 $1,427 $ 14 ($49) ($325) $15,342
-9-
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - April 30, 1994
(2) Investment in VenturesTrident, L.P. ("V.T.") and VenturesTrident II, L.P.
("V.T.II")
The balance sheets of V.T. and V.T.II at April 30, 1994 and October 31, 1993
follow:
VenturesTrident, L.P. (unaudited) April 30, October 31,
1994 1993
(in thousands)
ASSETS:
Cash and short-term investments................. $ 83 $ 280
Investments, at fair value...................... 7,597 6,702
Other assets.................................... 71 80
Total................................. $7,751 $7,062
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities..................................... $1,901 $1,909
Partners' capital............................... 5,850 5,153
Total................................. $7,751 $7,062
VenturesTrident II, L.P. (unaudited) April 30, October 31,
1994 1993
(in thousands)
ASSETS:
Cash and short-term investments................. $ 37 $ 818
Investments, at fair value...................... 54,321 92,279
Other assets.................................... 904 1,189
Total...................................... $55,262 $94,286
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities..................................... $ 1,969 $ 1,941
Partners' capital............................... 53,293 92,345
Total...................................... $55,262 $94,286
For the six months ended April 30, 1994 and 1993 the unaudited operating
results of V.T. reflect net operating income (losses) of $697,000 and
($4,387,000), respectively, including realized and unrealized gains (losses)
on investments of $873,000 and ($4,479,000), respectively.
For the six months ended April 30, 1994 and 1993, the unaudited operating
results of V.T.II reflect net operating income of $2,948,000 and
$16,382,000, respectively, including realized and unrealized gains on
investments of $3,946,000 and $15,575,000, respectively.
On January 18, 1994, V.T.II distributed 1,750,000 shares of Pegasus Gold
Corporation, with a value of $42 million, to its partners. The Company's
share of this distribution was 159,000 shares. All but 14,300 shares of
Pegasus Gold Corporation were sold between January 18, 1994 and April 30,
1994.
For the six months ended April 30, 1994 and 1993, the Company's share of the
income of V.T. and V.T.II as accounted for under the equity method was
$680,000 and $1,185,000, respectively. At April 30, 1994, the Company's
investment in V.T. and V.T.II approximated its share of the partners capital
of each partnership.
-10-
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - April 30, 1994
(3) Non-Voting Common Stock Options
Options to subscribe to shares of non-voting common stock are summarized as
follows:
Shares Under Option Option Price Range
Balance, October 31, 1992............. 740,400 $ 3.95 - 17.00
Exercised............................. (216,200) 3.95 - 15.75
Granted............................... 202,084 27.25 - 33.50
Cancelled/Expired..................... (7,600) 8.75 - 15.75
Balance, October 31, 1993............. 718,684 8.75 - 33.50
Exercised............................. (107,181) 8.75 - 27.25
Granted............................... 109,970 34.00
Cancelled/Expired..................... (4,725) 27.25 - 34.00
Balance, April 30, 1994............... 716,748 $ 8.75 - 34.00
At April 30, 1994, options for 447,105 shares were exercisable. Options for
269,643 additional shares will become exercisable over the next four years.
(4) Net Capital Requirements
A subsidiary of the Company is subject to the Securities and Exchange
Commission uniform net capital rule (Rule 15c3-1) requiring such subsidiary
to maintain a certain level of net capital (as defined). For purposes of
this rule the subsidiary had net capital of $6,574,213 at April 30, 1994,
which exceeded the net capital requirement of $76,266 as of that date.
(5) Property and Equipment
Property and equipment (including Bank furniture and equipment) at April 30,
1994, and October 31, 1993 follow:
April 30, October 31,
1994 1993
(all figures in thousands)
At Cost:
Furniture and equipment......................... $12,839 $11,544
Leasehold improvements.......................... 683 530
Total......................................... 13,522 12,074
Less accumulated depreciation................... 6,731 5,735
Net book value................................ $ 6,791 $ 6,339
-11-
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - April 30, 1994
(6) Real Estate Investments
Real estate investments held at April 30, 1994 and October 31, 1993 follow:
April 30, October 31,
1994 1993
(all figures in thousands)
Buildings................................. $27,176 $26,999
Land...................................... 2,467 2,478
Total................................... 29,643 29,477
Less: Accumulated depreciation............ 7,051 6,594
Net book value.......................... 22,592 22,883
Share of accumulated losses in excess of
partnership interest..................... (498) (435)
Total................................... $22,094 $22,448
(7) Income Taxes
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
109, "Accounting for Income Taxes" effective November 1, 1993. The
cumulative effect of adopting SFAS No. 109 on the Company's financial
statements was to increase income by $1.3 million ($.14 per share) for the
six months ended April 30, 1994.
As of October 31, 1993, the Company has an operating loss carryforward of
approximately $55 million, of which $13 million and $42 million can be
carried forward to offset future taxable income through 2007 and 2008,
respectively. Additionally, the Company has an alternative minimum tax
credit carryforward of approximately $1.7 million, of which $1.3 million and
$.4 million can be carried forward to offset future regular tax liabilities
through 2003 and 2005, respectively.
(8) Earnings Per Common and Common Equivalent Share
Earnings per share for the six months ended April 30, 1994 and April 30,
1993, are based upon the weighted average number of common, non-voting
common and non-voting common equivalent shares outstanding of 9,552,000 and
8,177,000. Earnings per common, non-voting common and common equivalent
share assuming full dilution have not been presented because the dilutive
effect is immaterial.
(9) Opinion of Management
In the opinion of management, the unaudited consolidated financial
statements include all adjustments, consisting of normal recurring
adjustments, necessary to present fairly the results for the interim
periods.
-12-
<PAGE>
Item 2. Management's Discussion and Analysis
RESULTS OF OPERATIONS
Quarter ended April 30, 1994, compared with quarter ended April 30, 1993
INCOME
Assets under management rose 19% to $15.4 billion at April 30, 1994, from
$12.9 billion a year earlier. Sales of mutual fund shares were the primary
contributors to the increase in assets. Sales were $0.9 billion in the
second quarter ended April 30, 1994, as compared with sales of $1.1 billion
a year earlier. Redemptions were $474 million during the second quarter of
1994 and $288 million in the same quarter of 1993.
In the second quarter of 1994, total income increased 19% over that of the
second quarter of 1993. Investment management revenues rose to $41.1
million, 17% over those for the comparable quarter of 1993. The increase
was a result of the growth in assets under management. The revenue growth
included an increase in distribution income from $16.8 million to $19.4
million despite the application in July, 1993, of a new NASD rule reducing
the annual rate of the distribution plan payments received by the Company
from the Marathon Family of funds from 1.0% to 0.75% of assets managed.
Bank income increased 31% to $11.9 million from $9.0 million in the
preceding period as a result of an increase in custody assets.
EXPENSES
In the second quarter of 1994, total expenses rose 23% to $41.5 million,
amortization of sales commissions increased 33% to $12.8 million. The
increase is the result of increased assets under management in funds with
deferred sales commissions. Compensation rose 11% to $16.9 million, while
other expenses increased 35% to $11.7 million. The increases in all
categories were largely the result of increased sales and marketing efforts.
OTHER INCOME (EXPENSE)
The Company's gold mining partnerships, VT and VTII, contributed a loss of
$57,000 for the quarter ended April 30, 1994, compared to a $2,149,000 gain
for the quarter ended April 30, 1993. Realized and unrealized losses of
$361,000 on shares of Pegasus Gold which were distributed to Eaton Vance
Corp. for its General and Limited partnership interests are included in
share of partnership income (loss), etc. for the second quarter.
NET INCOME OR LOSS
Net income in the second quarter of 1994 amounted to $7,638,000 or $.80 per
share on 9,574,000 average shares outstanding. In the second quarter of
1993, net income was $7,184,000 or $.86 per share on 8,384,000 average
shares outstanding.
-13-
<PAGE>
Item 2. Management's Discussion and Analysis
RESULTS OF OPERATIONS (Continued)
Six Months ended April 30, 1994 compared with six months ended April 30,
1993
INCOME
Total revenues increased 23% to $107.4 million from $87.6 million one year
earlier. Increased assets under management caused investment management
revenues for the first six months of fiscal 1994 to rise to $82.7 million,
23% higher than those of the previous year. Sales of mutual fund shares for
the first six months of fiscal 1994 were $2.3 billion, 22% higher than the
same period a year ago. Banking revenues were $22.1 million, up 25% from
the prior year; the increase was a result of additional assets under
custody.
EXPENSES
In the first six months of fiscal 1994, total expenses were $81.4 million,
up 25% from those of the first six months of fiscal 1993. Increased assets
under management in funds with deferred sales commissions caused
amortization of deferred sales commissions to increase 38% to $25.5 million
for the first six months of fiscal 1994. Investment management compensation
for the six months ended April 30, 1994 was $21.0 million, 12% higher than
the $18.7 million in the six months ended April 30, 1993. Other expenses
rose $4.8 million, up 29% from a year ago, to $21.5 million at April 30,
1994. All increases were largely the result of a higher level of sales and
concerted marketing efforts.
OTHER INCOME (EXPENSE)
The Company's gold mining partnerships, VT and VTII, contributed a gain of
$679,000 for the first six months of 1994, compared to a $1,185,000 gain for
the first six months of 1993. Realized and unrealized losses of $679,000 on
shares of Pegasus Gold which were distributed to Eaton Vance Corp. for its
General and Limited partnership interest are included in partnership income
(loss), etc. for the first six months of 1994. Unrealized losses of
$327,000 on shares of Dakota Mining are included in partnership income
(loss), etc. for the first six months of 1993.
NET INCOME OR LOSS
Net income for the first six months of fiscal 1994 amounted to $15,342,000,
or $1.61 per share on 9,552,000 average shares outstanding. Net income
includes the cumulative effect of a change in accounting for income taxes of
$1.3 million, or $0.14 per share. Net income for the first six months of
1993 was $12,108,000 of $1.48 per share on 8,177,000 average shares
outstanding.
DIVIDENDS
The company increased the dividend in the current quarter from $0.14 to
$0.15 per share. Dividends for the first half of 1994 were $0.29, they were
$0.23 for the first half of 1993.
-14-
<PAGE>
Item 2. Management's Discussion and Analysis
LIQUIDITY AND CAPITAL RESOURCES
Most of the Company's income is received from its investment management and
banking activities. Investment management income is provided primarily by
investment adviser fees, administrative fees and distribution plan payments.
These fees are directly related to the amount of assets under management.
Those assets rose 19% to $15.4 billion on April 30, 1994 from $12.9 billion
a year earlier. Banking income is largely accounting and custody fees for
assets in trust or custody at the Company's 77.3% owned banking subsidiary,
Investors Bank & Trust Company. Assets under custody rose 38% to $65 billion
on April 30, 1994, from $47 billion a year earlier.
In connection with the sales of the Company's spread commission mutual
funds, the Company pays sales commissions at the time of sale to
broker/dealers selling the funds. At April 30, 1994, the Company's
investment in deferred sales commissions was $268 million.
Investments in investment companies are carried at the lower of cost or
market. At April 30, 1994 and October 31, 1993, the Company had gross
unrealized gains of $1,456,000 and $1,648,000, respectively. The Company,
as a non-managing partner of certain investment company partnerships, is
required to maintain a minimum investment in such partnerships. At April
30, 1994, a minimum investment of $2,814,000 was required under the terms of
the partnership agreements.
On March 18, 1994 the Company privately placed, with three insurance
companies, a $50 million 6.22% Senior Note due March, 2004. Principal
payments on the note are due in equal annual installments beginning March
18, 1998. The note may be prepaid in part or in whole on or after March 16,
1996. The proceeds were used to call the Company's outstanding $14 million
of 10% Subordinated Debentures and to reduce the borrowings under a $75
million revolving line of credit with two unaffiliated banks. Certain
covenants in the credit agreement require specific levels of cash flow and
net income and others restrict additional investment and indebtedness. On
April 30, 1994, the company had borrowings of $16.8 million under this bank
credit agreement.
-15-<PAGE>
PART II
OTHER INFORMATION
-16-<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EATON VANCE CORP.
(Registrant)
DATE: June 9, 1994 /S/Curtis H. Jones
(Signature)
Curtis H. Jones, Treasurer
DATE: June 9, 1994 /S/John P. Rynne
(Signature)
John P. Rynne, Comptroller
-17-
