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

FORM 10-K


(Mark One)
x		Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended October 31, 2010
or o		Transition Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 For the transition period from to

Commission File Number 1-8100

EATON VANCE CORP.

(Exact name of registrant as specified in its charter)


Maryland		04-2718215
(State of incorporation)		(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)

Securities registered pursuant to Section 12(b) of the Act:


Non-Voting Common Stock ($0.00390625 par value per share)		New York Stock Exchange
(Title of each class)		(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

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 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

o (Do not check if smaller reporting company)

Smaller reporting company

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

Aggregate market value of Non-Voting Common Stock held by non-affiliates of the Registrant, based on the closing price of $35.24 on April 30, 2010 on the New York Stock Exchange was $4,073,320,052. Calculation of holdings by non-affiliates is based upon the assumption, for these purposes only, that executive officers, directors, and persons holding 5 percent or more of the registrant’s Non-Voting Common Stock are affiliates.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the close of the latest practicable date.


Class:		Outstanding at October 31, 2010
Non-Voting Common Stock, $0.00390625 par value		117,927,054
Voting Common Stock, $0.00390625 par value		399,240

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Eaton Vance Corp.
Form 10-K
For the Fiscal Year Ended October 31, 2010
Index


Required Information	Page Number Reference
Part I
Item 1. Business		3
Item 1A. Risk Factors		13
Item 1B. Unresolved Staff Comments		15
Item 2. Properties		15
Item 3. Legal Proceedings		15
Item 4. Removed and Reserved		15
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		16
Item 6. Selected Financial Data		19
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		46
Item 8. Financial Statements and Supplementary Data		49
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		97
Item 9A. Controls and Procedures		97
Item 9B. Other Information		97
Part III
Item 10. Directors, Executive Officers and Corporate Governance		99
Item 11. Executive Compensation		104
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		127
Item 13. Certain Relationships and Related Transactions and Director Independence		130
Item 14. Principal Accountant Fees and Services		131
Part IV
Item 15. Exhibits and Financial Statement Schedules		132
Signatures		133

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PART I

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K 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-K regarding our financial position, business strategy and other plans and objectives for future operations are forward-looking statements. The terms “may,” “will,” “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 Item 1A, “Risk Factors.” 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.

Item 1. Business

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 strategies encompass a diversity of investment objectives, risk profiles, income levels and geographic representation. Our income investment strategies cover a broad duration and credit quality range and encompass both taxable and tax-free investments. As of October 31, 2010, we had $185.2 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 advisors, 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. Specialized sales teams at our affiliates develop relationships in this market and deal directly with these clients.

We conduct our investment management business through five wholly owned affiliates, Eaton Vance Management (“EVM”), Boston Management and Research (“BMR”), Eaton Vance Investment Counsel (“EVIC”), Eaton Vance (Ireland) Limited (“EVAI”) and Eaton Vance Trust Company (“EVTC”), and four other consolidated subsidiaries, Atlanta Capital Management Company, LLC (“Atlanta Capital”), Fox Asset Management LLC (“Fox Asset

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Management”), Parametric Portfolio Associates LLC (“Parametric Portfolio Associates”) and Parametric Risk Advisors LLC (“Parametric Risk Advisors”). EVM, BMR, EVIC, Atlanta Capital, Fox Asset Management, Parametric Portfolio Associates and Parametric Risk Advisors are all registered with the Securities and Exchange Commission (“SEC”) as investment advisers under the Investment Advisers Act of 1940 (the “Advisers Act”). EVAI, registered under the Central Bank of Ireland, provides management services to the Eaton Vance International (Ireland) Funds. EVTC, a trust company, is exempt from registration under the Advisers Act. Eaton Vance Distributors, Inc. (“EVD”), a wholly owned broker/dealer registered under the Securities Exchange Act of 1934 (the “Exchange Act”), markets and sells the Eaton Vance funds and retail managed accounts. Eaton Vance Management (International) Limited (“EVMI”), a wholly owned financial services company registered under the Financial Services and Market Act in the United Kingdom, markets and sells our investment products in Europe and certain other international markets. Eaton Vance Management International (Asia) Private Limited, (“EVS”), a wholly owned financial services company registered under the Singapore Companies Act by the Accounting and Corporate Regulatory Authority in Singapore, markets and sells our products in Asia Pacific. We are headquartered in Boston, Massachusetts. Our affiliates and subsidiaries have offices in Atlanta, Georgia; Red Bank, New Jersey; Seattle, Washington; Westport, Connecticut; New York, New York; London, England; and Singapore. Our sales representatives operate throughout the United States, and in Europe, Asia Pacific and Latin America.

Company History and Development

We have been in the investment management business for eighty-six years, tracing our history to two Boston-based investment managers: Eaton & Howard, formed in 1924, and Vance, Sanders & Company, organized in 1934. Eaton & Howard, Vance Sanders, Inc. (renamed Eaton Vance Management, Inc. in June 1984 and reorganized as Eaton Vance Management in October 1990) was formed at the time of the acquisition of Eaton & Howard, Incorporated by Vance, Sanders & Company, Inc. on April 30, 1979. Eaton Vance Corp. was incorporated in Maryland in 1990. Following the 1979 merger of these predecessor organizations to form Eaton Vance, our managed assets consisted primarily of open-end mutual funds marketed to U.S. retail investors under the Eaton Vance brand and investment counsel services offered directly to high-net-worth and institutional investors. In recent years we have expanded our product and distribution focus to include closed-end, private and offshore funds, as well as retail managed accounts and a broad array of products and services for institutional and high-net-worth investors.

In fiscal 2001 we acquired controlling interests in Atlanta Capital and Fox Asset Management, investment management firms focusing, respectively, on growth and value equity investment styles. In fiscal 2003, we acquired a controlling interest in Parametric Portfolio Associates, a leader in structured equity portfolio management. Parametric Portfolio Associates offers three principal products: core equity investment portfolios that seek to outperform client-specified benchmarks on an after-tax basis through active tax management; overlay portfolio management for retail managed accounts utilizing proprietary technology to implement multi-manager portfolios with consolidated trading, reporting and tax management; and quantitative active equity portfolio management, with a primary focus on emerging market equity. Parametric Portfolio Associates’ clients include family offices, individual high-net-worth investors, financial intermediaries, institutional investors and mutual funds.

In fiscal 2004, 2005 and 2006 we completed a series of acquisitions aimed at expanding our management of investment portfolios for high-net-worth individuals through EVIC. In fiscal 2004, we acquired the management contracts of Deutsche Bank’s private investment counsel group in Boston, Massachusetts. In conjunction with the transaction, we hired six investment counselors with extensive experience in providing customized investment management services. We acquired the management contracts of Weston Asset Management in fiscal 2005 and the management contracts of Voyageur Asset Management (MA) Inc. in fiscal 2006.

In fiscal 2007, Parametric Portfolio Associates merged Parametric Risk Advisors, a newly formed Parametric Portfolio Associates’ affiliate, with Managed Risk Advisors, LLC, an investment management and derivatives investment advisory firm based in Westport, Connecticut. The merger extended Parametric Portfolio Associates’ offerings for the wealth management market to include investment programs utilizing equity and equity index options and other derivatives.

In December 2008, we acquired the Tax Advantaged Bond Strategies (“TABS”) business of M.D. Sass Investors Services (“MD Sass”), a privately held investment manager based in New York, New York. Subsequent to closing,

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the TABS business was reorganized as the Tax-Advantaged Bond Strategies division of EVM. The TABS team employs a disciplined, quantitative investment process that seeks to achieve high after-tax returns and low performance volatility by investing in high quality municipal bonds and U.S. government securities.

In November 2010, we announced the acquisition of the assets of Managed ETFs LLC, an intellectual property company that holds three issued and several pending patents. The patents relate principally to a method for trading exchange traded funds (“ETFs”) based on a reference future net asset value (“NAV”) of the fund, which is referred to as NAV-based trading, and a method for commercializing non-transparent actively managed ETFs that relies in part on NAV-based trading. We believe NAV-based trading may prove the key to unlocking the ETF market opportunity for traditional active investment strategies for which real-time daily disclosure of portfolio holdings is not appropriate.

To be commercialized, both NAV-based trading of index ETFs and the development of non-transparent active ETFs require approval of the SEC, which has not yet been granted. If we are successful in getting SEC approval, we intend to commercialize the technology by licensing the patent rights to ETF sponsors and developing a family of Eaton Vance-sponsored actively managed ETFs, in both cases seeking to earn asset-based licensing fees.

Investment Management and Administrative Activities

Our wholly owned subsidiaries EVM and BMR are investment advisers for all but five of the Eaton Vance funds. Lloyd George Management (“LGM”), an independent investment management company based in Hong Kong in which we own a 20 percent equity position, is the investment adviser for three of our emerging market equity funds, Eaton Vance Asian Small Companies Fund, Eaton Vance Greater China Growth Fund and Eaton Vance Greater India Fund. OrbiMed Advisors LLC (“OrbiMed”), an independent investment management company

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based in New York, is the investment adviser for Eaton Vance Worldwide Health Sciences Fund and Eaton Vance International (Ireland) Worldwide Health Sciences Fund. Certain Eaton Vance funds use investment sub-advisers under agreements between the adviser and the sub-adviser approved by the fund trustees. Eagle Global Advisors L.L.C., an independent investment management company based in Houston, Texas, acts as a sub-adviser to Eaton Vance International Equity Fund and Eaton Vance Tax-Managed International Equity Fund. Richard Bernstein Advisors LLC, an independent investment management company based in New York, New York, acts as sub-adviser to Eaton Vance Richard Bernstein Multi-Market Equity Strategy Fund. Armored Wolf, LLC, an independent investment management company based in Aliso Viejo, California, acts as sub-adviser to Eaton Vance Commodity Strategy Fund. Atlanta Capital, Fox Asset Management, Parametric Portfolio Associates and Parametric Risk Advisors also act as sub-advisers to EVM and BMR for 15 funds.

EVM provides administrative services, including personnel and facilities, necessary for the operation of all Eaton Vance funds. These services are provided under comprehensive management agreements with certain funds that also include investment advisory services and through separate administrative services agreements with other funds as discussed below.

For funds that are registered under the Investment Company Act of 1940 (“1940 Act”) (“Registered Funds”), a majority of the independent trustees (i.e., those unaffiliated with us or any adviser controlled by us and deemed “non-interested” under the 1940 Act) must review and approve the investment advisory and administrative agreements annually. The fund trustees generally may terminate these agreements upon 30 to 60 days’ notice without penalty. Shareholders of Registered Funds must approve any material amendments to the investment advisory agreements.

Investment counselors and separate account portfolio managers employed by our wholly owned and other controlled subsidiaries make investment decisions for the separate accounts we manage. Investment counselors and separate account portfolio managers generally use the same research information as fund portfolio managers, but tailor investment decisions to the needs of particular clients. We receive investment advisory fees for separate accounts quarterly, based on the value of the assets managed on a particular date, such as the first or last calendar day of a quarter, or, in some instances, on the average assets for the period. These fees generally range from ten to 105 basis points annually of assets under management and the associated advisory contracts are generally terminable upon 30 to 60 days’ notice without penalty.

The following table shows investment advisory and administration fees earned for the three years ended October 31, 2010, 2009 and 2008 as follows:


	Investment Advisory and Administration Fees
(in thousands)	2010		2009		2008
Investment advisory fees –
Funds	$	631,930	$	509,155	$	645,554
Separate accounts		198,666		147,925		133,592
Administration fees – funds		37,087		26,740		36,560
Total	$	867,683	$	683,820	$	815,706

Investment Management Agreements and Distribution Plans

The Eaton Vance funds have entered into agreements with EVM or BMR for investment advisory and/or administrative services. The agreements are of three types: investment advisory agreements, administrative services agreements and management agreements, which may provide for both advisory and administrative services. Although the specifics of these agreements vary, the basic terms are similar. Pursuant to the advisory agreements, EVM or BMR provides overall investment management services to each internally advised fund, subject, in the case of Registered Funds, to the supervision of the fund’s board of trustees in accordance with the fund’s investment objectives and policies. Our investment advisory agreements with the funds provide for fees ranging from 10 to 100

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basis points of average assets annually. Atlanta Capital, Fox Asset Management, Parametric Portfolio Associates, Parametric Risk Advisors or an unaffiliated advisory firm acts as a sub-adviser to EVM and BMR for certain funds.

EVM provides administrative services to all Eaton Vance funds, including those advised by LGM and OrbiMed. As administrator, EVM is responsible for managing the business affairs of the funds, subject to the oversight of each fund’s board of trustees. Administrative services include recordkeeping, preparing and filing documents required to comply with federal and state securities laws, legal, fund administration and compliance services, supervising the activities of the funds’ custodians and transfer agents, providing assistance in connection with the funds’ shareholder meetings and other administrative services, including providing office space and office facilities, equipment and personnel that may be necessary for managing and administering the business affairs of the funds. For the services provided under the agreements, certain funds pay EVM a monthly fee calculated at an annual rate of up to 50 basis points of average daily net assets. Each agreement remains in effect indefinitely, subject, in the case of Registered Funds, to annual approval by the fund’s board of trustees.

In addition, certain funds have adopted distribution plans as permitted by the 1940 Act, which provide for payment of ongoing distribution fees (so-called “12b-1 fees”) for the sale and distribution of shares, and service fees for personal and/or shareholder account services. Distribution fees reimburse us for sales commissions paid to retail distribution firms and for distribution services provided. Each distribution plan and distribution agreement with EVD for the Registered Funds is initially approved and its subsequent continuance must be approved annually by the board of trustees of the respective funds, including a majority of the independent trustees. The funds generally bear all expenses associated with their operation and the issuance and redemption or repurchase of their securities, except for the compensation of trustees and officers of the fund who are employed by us. Under some circumstances, particularly in connection with the introduction of new funds, EVM or BMR may waive a portion of its management fee and/or pay some expenses of the fund.

Either EVM, BMR, EVIC, Atlanta Capital, Fox Asset Management, Parametric Portfolio Associates or Parametric Risk Advisors has entered into an investment advisory agreement for each separately managed account and retail managed account program, which sets forth the account’s investment objectives and fee schedule, and provides for management of assets in the account in accordance with the stated investment objectives. Our separate account portfolio managers may assist clients in formulating investment strategies.

EVTC is the trustee for each collective investment trust that is maintained by it and is responsible for designing and implementing the trust’s investment program or overseeing subadvisors managing the trust’s investment portfolios. As trustee, EVTC also provides certain administrative and accounting services to the trust. For services provided under each trust’s declaration of trust, EVTC receives a monthly fee calculated at an annual rate of up to 105 basis points of average daily net assets of the trust.

EVM has entered into an investment advisory and administrative agreement with The U.S. Charitable Gift Trust. In addition, the Trust and its Pooled Income Funds have entered into distribution agreements with EVD that provide for reimbursement of the costs of fundraising and servicing donor accounts.

Marketing and Distribution of Fund Shares

We market and distribute shares of Eaton Vance funds domestically through EVD. EVD sells fund shares through a network of financial intermediaries, including national and regional broker/dealers, banks, registered investment advisors, insurance companies and financial planning firms. The Eaton Vance International (Ireland) Funds are Undertakings for Collective Investments in Transferable Securities (“UCITS”) funds domiciled in Ireland and sold by EVMI through certain dealer firms to investors who are citizens of member nations of the European Union and other countries outside the United States. The Eaton Vance International (Cayman Islands) Funds, are Cayman Island domiciled funds distributed by EVMI and EVD for non-U.S. investors.

Although the firms in our domestic retail distribution network have each entered into selling agreements with EVD, these agreements (which generally are terminable by either party) do not legally obligate the firms to sell any specific amount of our investment products. EVD currently maintains a sales force of more than 130 external and internal

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wholesalers. External and internal wholesalers work closely with investment advisers in the retail distribution network to assist in placing Eaton Vance funds.

EVD currently sells Eaton Vance mutual funds under four primary pricing structures: front-end load commission (“Class A”); spread-load commission (“Class B”); level-load commission (“Class C”); and institutional no-load (“Class I”). For Class A shares, the shareholder may be required to pay a sales charge to the selling broker-dealer of up to five percent and an underwriting commission to EVD of up to 75 basis points of the dollar value of the shares sold. Under certain conditions, we waive the sales load on Class A shares and the shares are sold at net asset value. EVD generally receives (and then pays to authorized firms after one year) distribution and service fees of up to 30 basis points of average net assets annually, and in the case of certain funds, also may receive and pay to authorized firms a distribution fee not to exceed 50 basis points annually of average daily net assets. In recent years, a growing percentage of the Company’s sales of Class A shares have been made on a load-waived basis through various fee-based programs. EVD does not receive underwriting commissions on such sales.

Class B shares are offered at net asset value, with EVD paying a commission to the dealer at the time of sale from its own funds, which may be borrowed. Such payments are capitalized and amortized over the period during which the shareholder is subject to a contingent deferred sales charge, which does not exceed six years. EVD recovers the dealer commissions paid on behalf of the shareholder through distribution plan payments limited to an annual rate of 75 basis points of the average net assets of the fund or class of shares in accordance with a distribution plan adopted by the fund pursuant to Rule 12b-1 under the 1940 Act. The SEC has taken the position that Rule 12b-1 would not permit a fund to continue making compensation payments to EVD after termination of the plan and that any continuance of such payments may subject the fund to legal action. Distribution plans are terminable at any time without notice or penalty. In addition, EVD receives (and then pays to authorized firms after one year) a service fee not to exceed 25 basis points annually of average net assets. Class B shares automatically convert to Class A shares after eight years of ownership.

For Class C shares, the shareholder pays no front-end commissions and no contingent deferred sales charges on redemptions after the first year. EVD pays a commission and the projected first year’s service fees to the dealer at the time of sale. The fund makes monthly distribution plan and service fee payments to EVD similar to those for Class B shares, at an annual rate of up to 75 basis points and 25 basis points, respectively, of average net assets of the Class. EVD retains the distribution and service fee paid to EVD for the first twelve months and pays the distribution and service fee to the dealer after one year.

Class I shares are offered to certain types of investors at net asset value and are not subject to any sales charges, underwriter commissions, distribution fees or service fees. For Class I shares, a minimum investment of $250,000 or higher is normally required.

From time to time we sponsor unregistered equity funds that are privately placed by EVD, as placement agent, and by various sub-agents to whom EVD and the subscribing shareholders make sales commission payments. The privately placed equity funds are managed by EVM and BMR.

Reference is made to Note 22 of the Notes to Consolidated Financial Statements contained in Item 8 of this document for a description of the major customers that provided over 10 percent of our total revenue.

Regulation

EVM, BMR, EVIC, Atlanta Capital, Fox Asset Management, Parametric Portfolio Associates and Parametric Risk Advisors are each registered with the SEC under the Advisers Act. The Advisers Act imposes numerous obligations on registered investment advisers, including fiduciary duties, recordkeeping requirements, operational requirements and disclosure obligations. Most Eaton Vance funds are registered with the SEC under the 1940 Act. Except for privately offered funds exempt from registration, each U.S. fund is also required to make notice filings with all states where it is offered for sale. Virtually all aspects of our investment management business are subject to various federal and state laws and regulations. These laws and regulations are primarily intended to benefit shareholders of the funds and separate account clients and generally grant supervisory agencies and bodies broad administrative powers, including the power to limit or restrict us from carrying on our investment management business in the event we fail

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to comply with such laws and regulations. In such event, the possible sanctions that may be imposed include the suspension of individual employees, limitations on EVM, BMR, EVIC, Atlanta Capital, Fox Asset Management, Parametric Portfolio Associates or Parametric Risk Advisors engaging in the investment management business for specified periods of time, the revocation of any such company’s registration as an investment adviser, and other censures or fines.

EVTC is registered as a non-depository Maine Trust Company and is subject to regulation by the State of Maine Bureau of Financial Institutions (“Bureau of Financial Institutions”). EVTC is subject to certain capital requirements, as determined by the Examination Division of the Bureau of Financial Institutions. At periodic intervals, regulators from the Bureau of Financial Institutions examine the Company’s financial condition as part of their legally prescribed oversight function. There were no violations by EVTC of these capital requirements in fiscal 2010 or prior years.

EVD is registered as a broker/dealer under the Securities Exchange Act of 1934 and is subject to regulation by the Financial Industry Reporting Authority (“FINRA”), the SEC and other federal and state agencies. EVD is subject to the SEC’s net capital rule designed to enforce minimum standards regarding the general financial condition and liquidity of broker/dealers. Under certain circumstances, this rule may limit our ability to make withdrawals of capital and receive dividends from EVD. EVD’s regulatory net capital consistently exceeded minimum net capital requirements during fiscal 2010. The securities industry is one of the most highly regulated in the United States, and failure to comply with related laws and regulations can result in the revocation of broker/dealer licenses, the imposition of censures or fines and the suspension or expulsion from the securities business of a firm, its officers or employees.

EVMI has the permission of the Financial Services Authority (“FSA”) to conduct a regulated business in the United Kingdom. EVMI’s primary business purpose is to distribute our investment products in Europe and certain other international markets. Under the Financial Services and Markets Act of the United Kingdom, EVMI is subject to certain liquidity and capital requirements. Such requirements may limit our ability to make withdrawals of capital from EVMI. In addition, failure to comply with such requirements could jeopardize EVMI’s approval to conduct business in the United Kingdom. There were no violations by EVMI of the liquidity and capital requirements in fiscal 2010 or prior years.

EVAI has the permission of the Central Bank of Ireland to conduct its business of providing management services to the Eaton Vance International (Ireland) Funds. EVAI is subject to certain liquidity and capital requirements. Such requirements may limit our ability to make withdrawals of capital from EVAI. There were no violations by EVAI of the liquidity and capital requirements in fiscal 2010 or prior years.

EVS has the permission of the Accounting and Corporate Regulatory Authority (“ACRA”) to conduct a regulated business in Singapore. Under the Monetary Authority of Singapore, EVS is subject to certain liquidity and capital requirements. Such requirements may limit our ability to make withdrawals of capital from EVS. There were no violations by EVS of the liquidity and capital requirements in fiscal 2010, its first year of operation.

Our officers, directors and employees may from time to time own securities that are held by one or more of the funds and separate accounts we manage. Our internal policies with respect to individual investments by investment professionals and other employees with access to investment information require prior clearance of most types of transactions and reporting of all securities transactions, and restrict certain transactions to avoid the possibility of conflicts of interest. All employees are required to comply with all prospectus restrictions and limitations on purchases, sales or exchanges of our mutual fund shares and to pre-clear purchases and sales of shares of our closed-end funds.

Competition

The investment management business is a highly competitive global industry and we are subject to substantial competition in each of our principal product categories and distribution channels. There are few barriers to entry for new firms and consolidation within the industry continues to alter the competitive landscape. According to the Investment Company Institute, there were more than 680 investment managers at the end of calendar 2009 that

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competed in the U.S. mutual fund market. We compete with these firms, many of whom have substantially greater resources, on the basis of investment performance, diversity of products, distribution capability, scope and quality of service, fees charged, reputation and the ability to develop new investment strategies and products to meet the changing needs of investors.

In the retail fund channel, we compete with other mutual fund management, distribution and service companies that distribute investment products through affiliated and unaffiliated sales forces, broker/dealers and direct sales to the public. According to the Investment Company Institute, at the end of calendar 2009 there were more than 8,600 open-end investment companies of varying sizes and investment objectives whose shares were being offered to the public in the United States. We rely primarily on intermediaries to distribute our products and pursue sales relationships with all types of intermediaries to broaden our distribution network. A failure to maintain strong relationships with intermediaries who distribute our products in the retail fund channel could have a negative effect on our level of assets under management, revenue and financial condition.

We are also subject to substantial competition in the retail managed account channel from other investment management firms seeking to participate as managers in “wrap-fee” programs. Sponsors of wrap-fee programs limit the number of approved managers within their programs and firms compete based on investment performance to win and maintain positions in these programs.

In the high-net-worth and institutional separate account channels, we compete with other investment management firms based on the breadth of product offerings, investment performance, strength of reputation and the scope and quality of client service.

Employees

On October 31, 2010, we and our controlled subsidiaries had 1,094 full-time and part-time employees. On October 31, 2009, the comparable number was 1,059.

Available Information

We make available free of charge our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13 and 15(d) of the Exchange Act as soon as reasonably practicable after such filing has been made with the SEC. Reports may be viewed and obtained on our website, http://www.eatonvance.com, or by calling Investor Relations at 617-482-8260. We have included our website address in this report as inactive textual reference only. Information on our website is not incorporated by reference into this report.

The public may read and copy any of the materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE., Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxies and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

Item 1A. Risk Factors

We are subject to substantial competition in all aspects of our investment management business and there are few barriers to entry. Our funds and separate accounts compete against a large number of investment products and services sold to the public by investment management companies, investment dealers, banks, insurance companies and others. Many institutions we compete with have greater financial resources than us. We compete with these firms on the basis of investment performance, diversity of products, distribution capability, scope and quality of services, fees charged, reputation and the ability to develop new investment strategies and products to meet the changing needs of investors. Our ability to market investment products is highly dependent on access to the various distribution systems of national and regional securities dealer firms, which generally offer competing affiliated and externally managed investment products that could limit the distribution of our investment products. There can be no assurance that we will be able to retain access to these channels. The inability to have such access

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could have a material adverse effect on our business. To the extent that existing or potential customers, including securities broker/dealers, decide to invest in or broaden distribution relationships with our competitors, the sales of our products as well as our market share, revenue and net income could decline.

We derive almost all of our revenue from investment advisory and administration fees, distribution income and service fees received from the Eaton Vance funds and separate accounts. As a result, we are dependent upon management contracts, administration contracts, distribution contracts, underwriting contracts or service contracts under which these fees are paid. Generally, these contracts are terminable upon 30 to 60 days’ notice without penalty. If any of these contracts are terminated, not renewed, or amended to reduce fees, our financial results could be adversely affected.

Our assets under management, which impact revenue, are subject to significant fluctuations. Our major sources of revenue (i.e., investment advisory, administration, distribution and service fees) are generally calculated as percentages of assets under management. Any decrease in the level of our assets under management could negatively impact our revenue and net income. A decline in securities prices or in the sales of our investment products or an increase in fund redemptions or client withdrawals generally would reduce fee income. Financial market declines generally have a negative impact on the level of our assets under management and consequently our revenue and net income. To the extent that we receive fee revenue from assets under management that are derived from financial leverage, any reduction in leverage (financing used by the investment vehicle to increase the investable assets of the vehicle) used would adversely impact the level of our assets under management, revenue and net income. Leverage could be reduced due to an adverse change in interest rates, a decrease in the availability of credit on favorable terms or a determination by us to reduce or eliminate leverage on certain products when we determine that the use of leverage is no longer in our clients’ best interests. Leverage on certain investment funds was modified in fiscal 2009 and 2010 to maintain minimum debt coverage ratios and for other portfolio purposes.

The continuing weakness the economy is experiencing could adversely impact our revenue and net income if it leads to a decreased demand for investment products and services, a higher redemption rate or a decline in securities prices. Any decreases in the level of our assets under management due to securities price declines, reduction in leverage or other factors could negatively impact our revenue and net income.

We may need to raise additional capital or refinance existing debt in the future, and resources may not be available to us in sufficient amounts or on acceptable terms. Our ability to access capital markets efficiently depends on a number of factors, including the state of global credit and equity markets, interest rates, credit spreads and our credit ratings. If we are unable to access capital markets to issue new debt, refinance existing debt or sell shares of our Non-Voting Common Stock as needed, or if we are unable to obtain such financing on acceptable terms, our business could be adversely impacted.

Poor investment performance of our products could affect our sales or reduce the amount of assets under management, potentially negatively impacting revenue and net income. Investment performance is critical to our success. While strong investment performance could stimulate sales of our investment products, poor investment performance on an absolute basis or as compared to third-party benchmarks or competitor products could lead to a decrease in sales and stimulate higher redemptions, thereby lowering the amount of assets under management and reducing the investment advisory fees we earn. Past or present performance in the investment products we manage is not indicative of future performance.

Our success depends on key personnel and our financial performance could be negatively affected by the loss of their services. Our success depends upon our ability to attract, retain and motivate qualified portfolio managers, analysts, investment counselors, sales and management personnel and other key professionals, including our executive officers. Our key employees generally do not have employment contracts and may voluntarily terminate their employment at any time. Certain senior executives and directors are subject to our mandatory retirement policy. The loss of the services of key personnel or our failure to attract replacement or additional qualified personnel could negatively affect our financial performance. An increase in compensation to attract or retain personnel could result in a decrease in net income.

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Our expenses are subject to fluctuations that could materially affect our operating results. Our results of operations are dependent on the level of expenses, which can vary significantly from period to period. Our expenses may fluctuate as a result of variations in the level of compensation, expenses incurred to support distribution of our investment products, expenses incurred to enhance our infrastructure (including technology and compliance) and impairments of intangible assets or goodwill.

Our reputation could be damaged. We have built a reputation of high integrity, prudent investment management and superior client service over 86 years. Our reputation is extremely important to our success. Any damage to our reputation could result in client withdrawals from funds or separate accounts that are advised by us and ultimately impede our ability to attract and retain key personnel. The loss of either client relationships or key personnel could reduce the amount of assets under management and cause us to suffer a loss in revenue or a reduction in net income.

We are subject to federal securities laws, state laws regarding securities fraud, other federal and state laws and rules, and regulations of certain regulatory, self-regulatory and other organizations, including, among others, the SEC, FINRA, the FSA and the New York Stock Exchange. While we have focused significant attention and resources on the development and implementation of compliance policies, procedures and practices, non-compliance with applicable laws, rules or regulations, either in the United States or abroad, or our inability to adapt to a complex and ever-changing regulatory environment could result in sanctions against us, which could adversely affect our reputation, prospects, revenue and earnings.

We could be impacted by changes in tax policy. Changes in U.S. tax policy may affect us to a greater degree than many of our competitors because we emphasize managing funds and separate accounts with an after-tax return objective. We believe an increase in overall tax rates could have a positive impact on our municipal income and tax-managed equity businesses. An increase in the tax rate on qualified dividends could have a negative impact on a portion of our tax-advantaged equity income business. Changes in tax policy could also affect our privately offered equity funds.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We conduct our principal operations through leased offices located in Boston, Massachusetts and New York, New York. The leased offices of our subsidiaries are in Atlanta, Georgia; Red Bank, New Jersey; Seattle, Washington; Westport, Connecticut; London, England and Singapore. For more information see Note 20 of our Notes to Consolidated Financial Statements contained in Item 8 of this document.

Item 3. Legal Proceedings

Eaton Vance is party to various lawsuits that are incidental to its business. The Company believes these lawsuits will not have a material adverse effect on its consolidated financial condition, liquidity or results of operations.

Item 4. Removed and Reserved

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Price Range of Non-Voting Common Stock, Dividend History and Policy

Our Voting Common Stock, $0.00390625 par value, is not publicly traded and was held as of October 31, 2010 by 19 Voting Trustees pursuant to the Voting Trust described in paragraph (A) of Item 12 hereof, which paragraph (A) is incorporated herein by reference. Dividends on our Voting Common Stock are paid quarterly and are equal to the dividends paid on our Non-Voting Common Stock (see below).

Our Non-Voting Common Stock, $0.00390625 par value, is traded on the New York Stock Exchange under the symbol EV. The approximate number of registered holders of record of our Non-Voting Common Stock at October 31, 2010 was 2,240. The high and low common stock prices and dividends per share were as follows for the periods indicated:


	Fiscal 2010						Fiscal 2009
	High Price		Low Price		Dividend Per Share		High Price		Low Price		Dividend Per Share
Quarter Ended:
January 31	$	33.47	$	27.34	$	0.160	$	23.48	$	11.86	$	0.155
April 30	$	36.08	$	27.48	$	0.160	$	27.79	$	14.34	$	0.155
July 31	$	36.05	$	26.87	$	0.160	$	30.19	$	23.02	$	0.155
October 31	$	30.86	$	25.60	$	0.180	$	31.31	$	26.30	$	0.160

We currently expect to declare and pay comparable dividends per share on our Voting and Non-Voting Common Stock on a quarterly basis.

The following table sets forth certain information concerning our equity compensation plans at October 31, 2010:


Securities Authorized for Issuance Under Equity Compensation Plans
Plan category	(a)⁽¹⁾ Number of securities to be issued upon the exercise of outstanding options, warrants and rights		(b) Weighted- average exercise price of outstanding options, warrants and rights		(c)⁽²⁾ Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders		28,712,103	$	25.16		3,750,944
Equity compensation plans not approved by security holders		—		—		—
Total		28,712,103	$	25.16		3,750,944

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⁽¹⁾

The amount appearing under the “Number of securities to be issued upon the exercise of outstanding options, warrants and rights” represents 28,712,103 shares related to our 2008 Omnibus Incentive Plan, as amended and restated, and predecessor plans.

⁽²⁾

The amount appearing under “Number of securities remaining available for future issuance under equity compensation plans” includes 1,274,537 shares related to our 1986 Employee Stock Purchase Plan, 1,181,904 shares related to our 1992 Incentive Stock Alternative Plan and 1,294,503 shares related to our 2008 Omnibus Incentive Plan, as amended and restated, which provides for the issuance of stock options, restricted stock and phantom stock.

Performance Graph

The graph below compares the cumulative total return on our Non-Voting Common Stock for the period from November 1, 2005 through October 31, 2010 to that of the Morningstar Financial Services Sector Index and the Standard & Poor’s 500 Stock Index over the same period. The comparison assumes $100 was invested on October 31, 2005 in our Non-Voting Common Stock and the foregoing indices at the closing price on that day and assumes reinvestments of all dividends paid over the period.

Comparison of Five Year Cumulative Total Return

[GRAPHIC MISSING]

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Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The table below sets forth information regarding purchases by the Company of our Non-Voting Common Stock on a monthly basis during the fourth quarter of fiscal 2010:


Period	(a) Total Number of Shares Purchased		(b) Average Price Paid Per Share		(c)⁽¹⁾ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs
August 1, 2010 through August 31, 2010		300,000	$	28.31		300,000		5,962,281
September 1, 2010 through September 30, 2010		358,020	$	28.74		358,020		5,604,261
October 1, 2010 through October 31, 2010		803,165	$	29.42		803,165		4,801,096
Total		1,461,185	$	29.03		1,461,185		4,801,096

(1)

We announced a share repurchase program on January 15, 2010, which authorized the repurchase of up to 8,000,000 shares of our Non-Voting Common Stock in the open market and in private transactions in accordance with applicable securities laws. This repurchase plan is not subject to an expiration date.

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Item 6. Selected Financial Data

The following table contains selected financial data for the last five years. This data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 and our Consolidated Financial Statements and Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Financial Highlights


	For the Years Ended October 31,
(in thousands, except per share data)	2010		2009		2008		2007		2006
Income Statement Data:
Revenue	$	1,121,661	$	890,371	$	1,095,800	$	1,084,100	$	862,194
Net income⁽¹⁾		201,225		135,525		202,816		149,069		164,480
Net income attributable to non-controlling interests⁽²⁾		26,927		5,418		7,153		6,258		5,103
Net income attributable to Eaton Vance Corp. shareholders		174,298		130,107		195,663		142,811		159,377
Balance Sheet Data:
Total assets	$	1,280,607	$	1,075,067	$	968,355	$	966,831	$	668,195
Long-term debt⁽³⁾		500,000		500,000		500,000		500,000		—
Redeemable non-controlling interests (temporary equity)		67,019		43,871		72,137		73,422		64,046
Total Eaton Vance Corp. shareholders’ equity		410,285		306,969		178,518		163,970		441,984
Non-redeemable non-controlling interests		570		91		—		—		—
Total permanent equity		410,855		307,060		178,518		163,970		441,984
Per Share Data:
Earnings per share before cumulative effect of change in accounting principle:
Basic earnings	$	1.47	$	1.11	$	1.69	$	1.15	$	1.25
Diluted earnings		1.40		1.07		1.57		1.05		1.18
Earnings per share:
Basic earnings		1.47		1.11		1.69		1.15		1.24
Diluted earnings		1.40		1.07		1.57		1.05		1.17
Cash dividends declared		0.660		0.625		0.605		0.510		0.420

⁽¹⁾

Net income of $149.1 million in fiscal 2007 includes $76.0 million of structuring fee payments associated with closed-end fund offerings and payments totaling $52.2 million to terminate compensation agreements in respect of certain previously offered closed-end funds.

⁽²⁾

Net income attributable to non-controlling interests of $26.9 million in fiscal 2010 reflects an increase of $18.4 million in the estimated redemption value of redeemable non-controlling interests recognized in conjunction with the adoption of new accounting guidance effective November 1, 2009.

⁽³⁾

In fiscal 2007, the Company offered $500 million of 6.5 percent ten-year senior notes. In fiscal 2006, EVM retired its outstanding zero-coupon exchangeable notes.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

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.

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 is 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, fair value, stock-based compensation and non-controlling interests. 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.

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Market Developments

Prevailing market conditions affect our 1) asset levels, 2) operating results and 3) 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 27 percent in fiscal 2010 over fiscal 2009 due to both strong net flows and positive market action, as reflected in the 14 percent increase in the S&P 500 Index over the fiscal year. Revenue increased faster than our overall expenses in fiscal 2010, resulting in higher operating margins, and our balance sheet continues to provide financial flexibility as more fully described below.

Managed Asset Levels

In fiscal 2010, revenue increased relative to fiscal 2009, primarily reflecting an increase in average managed assets due to improving equity markets and positive net flows. Average assets under management were $169.0 billion in fiscal 2010 compared to $132.7 billion in fiscal 2009. Growth in separate account assets, which earn lower fees on average than funds, contributed to a decline in our average effective fee rate to 66 basis points in fiscal 2010 from 67 basis points in fiscal 2009.

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 them from doing so.

Operating Results

In fiscal 2010, our revenue increased by $231.3 million, or 26 percent, from fiscal 2009. Our operating expenses increased by $111.2 million, or 17 percent, in the same period, reflecting increases in expenses tied to asset levels 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. The increase in our operating expenses also reflects an increase in our sales-related expenses, including sales incentives, which vary with the level of sales and the acquisition cost of new assets.

Recoverability of our Investments

In fiscal 2010 we used our balance sheet strength to invest in our business, committing excess cash to bring new products to scale to facilitate placement on our distribution partners’ platforms. Our long-term investments of $329.7 million primarily reflect seed capital investments in new products and strategies. These investments are generally in liquid debt or equity securities and are carried at fair market value. Accordingly, recoverability of these investments is generally not an area of significant risk to us.

We test our investments, including our investments in collateralized debt obligation (“CDO”) entities and investments classified as available-for-sale, for impairment on a quarterly basis. Our investments in CDO entities, which have been the subject of past impairments, totaled $1.4 million on October 31, 2010. We evaluate our investments in CDO 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 CDO entities or investments classified as available-for-sale in future quarters that were in an unrealized loss position at October 31, 2010.

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 fiscal 2010 that would indicate that an impairment loss exists at October 31, 2010.

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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 fiscal 2010 that would indicate that an impairment loss exists at October 31, 2010.

Assets Under Management

Assets under management of $185.2 billion on October 31, 2010 were 20 percent higher than the $154.9 billion reported a year earlier, reflecting improving securities prices and strong open-end fund, high-net worth and institutional net inflows. Long-term fund net inflows of $11.4 billion over the last fiscal year reflect $12.8 billion of open-end fund net inflows and $0.7 billion of closed-end fund net inflows offset by $2.1 billion of private fund net outflows. Outflows from private and closed-end funds include net reductions in fund leverage of $0.5 billion in the last twelve months. High-net-worth and institutional separate account net inflows were $4.7 billion and retail managed account net inflows were $0.2 billion. Market price appreciation, reflecting recovering equity and income markets, contributed $14.3 billion to growth in managed assets, while a decrease in cash management assets reduced assets under management by $0.3 billion.

Ending Assets Under Management by Investment Category⁽¹⁾


	October 31,															2010 vs. 2009			2009 vs. 2008
(in millions)	2010		% of Total			2009		% of Total			2008		% of Total			2010 vs. 2009			2009 vs. 2008
Equity	$	109,096		59	%	$	96,140		62	%	$	81,029		66	%		13	%		19	%
Fixed income		54,273		29	%		41,309		27	%		27,414		22	%		31	%		51	%
Floating-rate bank loan		21,874		12	%		17,447		11	%		14,644		12	%		25	%		19	%
Total	$	185,243		100	%	$	154,896		100	%	$	123,087		100	%		20	%		26	%

⁽¹⁾ Includes funds and separate accounts.

Equity assets under management included $31.8 billion, $31.4 billion and $34.9 billion of equity funds managed for after-tax returns on October 31, 2010, 2009 and 2008, respectively. Fixed income assets included $17.3 billion, $16.4 billion and $14.2 billion of tax-exempt municipal bond fund assets and $1.1 billion, $1.4 billion and $1.1 billion of cash management fund assets on October 31, 2010, 2009 and 2008, respectively.

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

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Long-Term Fund and Separate Account Net Flows


	Years Ended October 31,									2010 vs. 2009			2009 vs. 2008
(in millions)	2010			2009			2008			2010 vs. 2009			2009 vs. 2008
Long-term funds:
Open-end funds	$	12,804		$	7,397		$	8,426			73	%		-12	%
Closed-end funds		691			(9	)		(613	)		NM	⁽²⁾		-99	%
Private funds		(2,053	)		(3,960	)		(1,141	)		-48	%		247	%
Total long-term fund net inflows		11,442			3,428			6,672			234	%		-49	%
HNW and institutional accounts⁽¹⁾		4,733			7,912			2,450			-40	%		223	%
Retail managed accounts		171			2,118			5,581			-92	%		-62	%
Total separate account net inflows		4,904			10,030			8,031			-51	%		25	%
Total net inflows	$	16,346		$	13,458		$	14,703			21	%		-8	%

⁽¹⁾

High-net-worth (“HNW”)

⁽²⁾

Not meaningful (“NM”)

Long-term fund net inflows totaled $11.4 billion in fiscal 2010 compared to $3.4 billion in fiscal 2009 and $6.7 billion in fiscal 2008. Open-end fund net inflows of $12.8 billion, $7.4 billion and $8.4 billion in fiscal 2010, 2009 and 2008, respectively, reflect gross inflows of $32.2 billion, $23.1 billion and $25.9 billion, respectively, net of redemptions of $19.4 billion, $15.7 billion and $17.5 in fiscal 2010, 2009 and 2008, respectively. Closed-end fund net inflows in fiscal 2010 reflect the $200.0 million initial public offering of Eaton Vance Tax-Advantaged Bond and Option Strategies Fund, a net increase in portfolio leverage and dividend reinvestment. Private funds, which include privately offered equity and income funds as well as CDO entities, had net outflows of $2.1 billion, $4.0 billion and $1.1 billion in fiscal 2010, 2009 and 2008, respectively. Approximately $0.8 billion and $1.4 billion of private fund outflows in fiscal 2010 and 2009, respectively, can be attributed to reductions in portfolio leverage. Reductions in portfolio leverage in closed-end and private funds reflect paydowns to maintain required asset coverage ratios as well as other portfolio activity.

Separate account net inflows totaled $4.9 billion in fiscal 2010 compared to net inflows of $10.0 billion and $8.0 billion in fiscal 2009 and 2008, respectively. High-net-worth and institutional account net inflows totaled $4.7 billion in fiscal 2010 compared to $7.9 billion and $2.4 billion in fiscal 2009 and 2008, respectively, reflecting gross inflows of $12.0 billion, $13.0 billion and $7.8 billion in fiscal 2010, 2009 and 2008, respectively, net of redemptions of $7.3 billion, $5.1 billion and $5.4 billion, respectively. Retail managed account net inflows totaled $0.2 billion, $2.1 billion and $5.6 billion in fiscal 2010, 2009 and 2008, respectively, reflecting gross inflows of $6.7 billion, $8.4 billion and $9.8 billion, respectively, net of redemptions of $6.5 billion, $6.3 billion and $4.2 billion, respectively. Retail managed account redemptions in fiscal 2010 reflect a $1.5 billion reduction in Parametric Portfolio Associates’ retail managed account overlay assets as a result of the integration of Bank of America’s retail managed account program into the Merrill Lynch retail managed account program following Bank of America’s 2009 acquisition of Merrill Lynch. Unlike the former Bank of America program, the Merrill Lynch retail managed account program does not currently utilize outside overlay managers.

The following table summarizes the asset flows by investment category for the fiscal years ended October 31, 2010, 2009 and 2008:

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Asset Flows


	Years Ended October 31,									2010 vs. 2009			2009 vs, 2008
(in millions)	2010			2009			2008			2010 vs. 2009			2009 vs, 2008
Equity fund assets – beginning	$	54,779		$	51,956		$	72,928			5	%		-29	%
Sales/inflows		13,272			14,108			18,528			-6	%		-24	%
Redemptions/outflows		(13,514	)		(12,667	)		(10,818	)		7	%		17	%
Exchanges		346			(77	)		(196	)		NM			-61	%
Market value change		4,669			1,459			(28,486	)		220	%		NM
Equity fund assets – ending		59,552			54,779			51,956			9	%		5	%
Fixed income fund assets – beginning		24,970			20,382			24,617			23	%		-17	%
Sales/inflows		15,878			6,994			5,888			127	%		19	%
Redemptions/outflows		(6,471	)		(5,026	)		(5,316	)		29	%		-5	%
Exchanges		219			106			184			107	%		-42	%
Market value change		1,827			2,514			(4,991	)		-27	%		NM
Fixed income fund assets – ending		36,423			24,970			20,382			46	%		23	%
Floating-rate bank loan fund assets – beginning		16,452			13,806			20,381			19	%		-32	%
Sales/inflows		4,973			4,270			3,691			16	%		16	%
Redemptions/outflows		(2,696	)		(4,251	)		(5,301	)		-37	%		-20	%
Exchanges		(639	)		3			(347	)		NM			NM
Market value change		(91	)		2,624			(4,618	)		NM			NM
Floating-rate bank loan fund assets – ending		17,999			16,452			13,806			9	%		19	%
Total long-term fund assets – beginning		96,201			86,144			117,926			12	%		-27	%
Sales/inflows		34,123			25,372			28,107			34	%		-10	%
Redemptions/outflows		(22,681	)		(21,944	)		(21,435	)		3	%		2	%
Exchanges		(74	)		32			(359	)		NM			NM
Market value change		6,405			6,597			(38,095	)		-3	%		NM
Total long-term fund assets – ending		113,974			96,201			86,144			18	%		12	%
Separate accounts – beginning		57,278			35,832			42,160			60	%		-15	%
Inflows – HNW and institutional		12,000			13,015			7,813			-8	%		67	%
Outflows – HNW and institutional		(7,267	)		(5,103	)		(5,363	)		42	%		-5	%
Inflows – retail managed accounts		6,683			8,379			9,754			-20	%		-14	%
Outflows – retail managed accounts		(6,512	)		(6,261	)		(4,173	)		4	%		50	%
Market value change		7,944			4,563			(14,359	)		74	%		NM
Assets acquired		—			6,853			—			NM			NM
Separate accounts – ending		70,126			57,278			35,832			22	%		60	%
Cash management fund assets – ending		1,143			1,417			1,111			-19	%		28	%
Assets under management – ending	$	185,243		$	154,896		$	123,087			20	%		26	%

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Ending Assets Under Management by Asset Class


	October 31,															2010 vs. 2009			2009 vs. 2008
(in millions)	2010		% of Total			2009		% of Total			2008		% of Total			2010 vs. 2009			2009 vs. 2008
Open-end funds:
Class A	$	38,048		20	%	$	34,608		22	%	$	28,659		23	%		10	%		21	%
Class B		1,861		1	%		2,297		2	%		2,831		2	%		-19	%		-19	%
Class C		10,387		6	%		8,102		5	%		6,939		6	%		28	%		17	%
Class I		22,198		12	%		10,727		7	%		4,148		4	%		107	%		159	%
Other⁽¹⁾		1,073		1	%		1,110		1	%		1,294		1	%		-3	%		-14	%
Total open-end funds		73,567		40	%		56,844		37	%		43,871		36	%		29	%		30	%
Private funds⁽²⁾		17,518		9	%		17,612		11	%		21,193		17	%		-1	%		-17	%
Closed-end funds		24,032		13	%		23,162		15	%		22,191		18	%		4	%		4	%
Total fund assets		115,117		62	%		97,618		63	%		87,255		71	%		18	%		12	%
HNW and institutional account assets		46,476		25	%		36,860		24	%		21,293		17	%		26	%		73	%
Retail managed account assets		23,650		13	%		20,418		13	%		14,539		12	%		16	%		40	%
Total separate account assets		70,126		38	%		57,278		37	%		35,832		29	%		22	%		60	%
Total	$	185,243		100	%	$	154,896		100	%	$	123,087		100	%		20	%		26	%

⁽¹⁾ Includes other classes of Eaton Vance open-end funds.

⁽²⁾ Includes privately offered equity and bank loan funds and CDO entities.

We currently sell our sponsored open-end mutual funds under four primary pricing structures: front-end load commission (“Class A”); spread-load commission (“Class B”); level-load commission (“Class C”); and institutional no-load (“Class I”). We waive the front-end sales load on Class A shares under certain circumstances. In such cases, the shares are sold at net asset value.

Fund assets represented 62 percent of total assets under management on October 31, 2010, down from 63 percent and 71 percent on October 31, 2009 and 2008, respectively, while separate account assets, which include high-net-worth, institutional and retail managed account assets, increased to 38 percent of total assets under management on October 31, 2010, from 37 percent and 29 percent on October 31, 2009 and 2008, respectively. The 18 percent increase in fund assets under management in fiscal 2010 reflects annualized internal growth before deleveraging of 12 percent, market appreciation of $6.4 billion and net reductions in fund leverage of $0.5 billion. The 22 percent increase in separate account assets under management in fiscal 2010 reflects annualized internal growth of 9 percent and market appreciation of $7.9 billion.

Average assets under management presented in the following table represent a monthly average by asset class. This table is intended to provide information useful in the analysis of our asset-based revenue and distribution expenses. With the exception of our separate account investment advisory fees, which are generally calculated as a percentage of either beginning, average or ending quarterly assets, our investment advisory, administration, distribution and service fees, as well as certain expenses, are generally calculated as a percentage of average daily assets.

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Average Assets Under Management by Asset Class⁽¹⁾


	Years Ended October 31,						2010 vs. 2009			2009 vs. 2008
(in millions)	2010		2009		2008		2010 vs. 2009			2009 vs. 2008
Open-end funds:
Class A	$	36,682	$	30,676	$	34,969		20	%		-12	%
Class B		2,070		2,403		4,554		-14	%		-47	%
Class C		9,221		7,002		9,097		32	%		-23	%
Class I		15,887		6,601		3,882		141	%		70	%
Other⁽²⁾		1,076		1,168		1,168		-8	%		0	%
Total open-end funds		64,936		47,850		53,670		36	%		-11	%
Private funds⁽³⁾		17,336		17,915		27,024		-3	%		-34	%
Closed-end funds		23,253		21,290		29,898		9	%		-29	%
Total fund assets		105,525		87,055		110,592		21	%		-21	%
HNW and institutional account assets		41,160		28,576		26,603		44	%		7	%
Retail managed account assets		22,332		17,053		15,964		31	%		7	%
Total separate account assets		63,492		45,629		42,567		39	%		7	%
Total	$	169,017	$	132,684	$	153,159		27	%		-13	%

⁽¹⁾

Assets under management attributable to acquisitions that closed during the relevant periods are included on a weighted average basis for the period from their respective closing dates.

⁽²⁾

Includes other classes of Eaton Vance open-end funds.

⁽³⁾

Includes privately offered equity and bank loan funds and CDO entities.

Results of Operations


	Years Ended October 31,									2010 vs. 2009			2009 vs. 2008
(in thousands, except per share data)	2010			2009			2008			2010 vs. 2009			2009 vs. 2008
Net income attributable to Eaton Vance Corp. shareholders	$	174,298		$	130,107		$	195,663			34	%		-34	%
Earnings per share:
Basic	$	1.47		$	1.11		$	1.69			32	%		-34	%
Diluted	$	1.40		$	1.07		$	1.57			31	%		-32	%
Operating margin		31	%		26	%		33	%

We reported net income attributable to Eaton Vance Corp. shareholders of $174.3 million, or $1.40 per diluted share, in fiscal 2010 compared to net income attributable to Eaton Vance Corp. shareholders of $130.1 million, or $1.07 per diluted share, in fiscal 2009. The increase in net income attributable to Eaton Vance Corp. shareholders of $44.2 million, or $0.33 per diluted share, can be primarily attributed to the following:

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•

An increase in revenue of $231.3 million, or 26 percent, primarily due to the 27 percent increase in average assets under management offset by a decrease in our annualized effective fee rate to 66 basis points in fiscal 2010 from 67 basis points in fiscal 2009. The decrease in our annualized effective fee rate can be attributed to the increase in average separate account assets under management as a percentage of total average assets under management and a shift in product mix from equity assets under management toward fixed and floating-rate assets under management.

•

An increase in expenses of $111.2 million, or 17 percent, due to increases in compensation expense, distribution expense, service fee expense, the amortization of deferred sales commissions and other expenses partially offset by a decrease in fund expenses.

•

A net decrease in gains on investments and derivatives of $1.8 million.

•

An increase in income taxes of $55.2 million, or 78 percent, reflecting the 57 percent increase in taxable income year-over-year and a deferred tax adjustment in the fourth quarter of fiscal 2009 related to stock-based compensation expense that resulted in a decrease in our fiscal 2009 income tax expense of $5.2 million.

•

An increase in net income attributable to non-controlling interests of $21.5 million, reflecting an increase in the profitability of our majority-owned subsidiaries and consolidated funds and an $18.4 million increase in the estimated redemption value of redeemable non-controlling interests recognized in conjunction with the November 1, 2009 implementation of a new accounting standard on non-controlling interests.

•

An increase in weighted average diluted shares outstanding of 2.1 million shares, or 2 percent, primarily reflecting an increase in the number of in-the-money share options and an increase in vested restricted shares included in the calculation of weighted average diluted shares outstanding, offset by shares repurchased in fiscal 2010.

We reported net income attributable to Eaton Vance Corp. shareholders of $130.1 million, or $1.07 per diluted share, in fiscal 2009 compared to net income attributable to Eaton Vance Corp. shareholders of $195.7 million, or $1.57 per diluted share, in fiscal 2008. The decrease in net income attributable to Eaton Vance Corp. shareholders of $65.6 million, or $0.50 per diluted share, can be primarily attributed to the following:

•

A decrease in revenue of $205.4 million, or 19 percent, primarily due to the 13 percent decrease in average assets under management and a decrease in our annualized effective fee rate to 67 basis points in fiscal 2009 from 72 basis points in fiscal 2008. The decrease in our annualized effective fee rate can be attributed to the increase in average separate account assets under management as a percentage of total average assets under management primarily as a result of the TABS acquisition in December 2008.

•

A decrease in expenses of $74.9 million, or 10 percent, due to decreases in compensation expense, distribution expense, service fee expense, fund expenses and the amortization of deferred sales commissions, primarily reflecting decreases in both average assets under management and revenue.

•

A decrease in interest income of $7.4 million, or 66 percent, reflecting a modest decrease in average cash balances and a substantial decrease in effective interest rates over the twelve month period ended October 31, 2009.

•

An increase in gains on investments and derivatives of $11.1 million, reflecting improving equity markets in the second half of fiscal 2009.

•

A decrease in impairment losses on investments in CDO entities of $11.3 million.

•

A decrease in income taxes of $54.1 million, or 43 percent, reflecting the 36 percent decrease in taxable income year-over-year, a decrease in our state effective tax rate and the $5.2 million tax adjustment in the fourth quarter of fiscal 2009 related to stock-based compensation expense.

•

A decrease in the equity in net income of affiliates of $6.2 million, reflecting decreases in the net income of Lloyd George Management and a private equity partnership.

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•

A decrease in net income attributable to non-controlling interests of $1.7 million, primarily reflecting a $2.8 million adjustment to net income attributable to non-controlling interests in fiscal 2008 partially offset by an increase in the profitability of our majority-owned subsidiaries and consolidated funds.

•

A decrease in weighted average diluted shares outstanding of 3.9 million shares, or 3 percent, primarily reflecting a decrease in the number of in-the-money share options included in the calculation of weighted average diluted shares outstanding and modest stock buybacks over the last twelve months.

In evaluating operating performance we consider operating income and net income, which are calculated on a basis consistent with GAAP, as well as adjusted operating income, an internally derived non-GAAP performance measure. We define adjusted operating income as operating income excluding the results of consolidated funds and adding back stock-based compensation, closed-end fund structuring fees, any write-off of intangible assets or goodwill associated with our acquisitions and other items we consider non-operating in nature. We believe that adjusted operating income is a key indicator of our ongoing profitability and therefore use this measure as the basis for calculating performance-based management incentives. Adjusted operating income is not, and should not be construed to be, a substitute for operating income computed in accordance with GAAP. However, in assessing the performance of the business, our management and our Board of Directors look at adjusted operating income as a measure of underlying performance, since operating results of consolidated funds and amounts resulting from one-time events do not necessarily represent normal results of operations. In addition, when assessing performance, management and the Board look at performance both with and without stock-based compensation, a non-cash operating expense.

The following table provides a reconciliation of operating income to adjusted operating income for the fiscal years ended October 31, 2010, 2009 and 2008:


	Years Ended October 31,									2010 vs. 2009			2009 vs. 2008
(in thousands)	2010			2009			2008			2010 vs. 2009			2009 vs. 2008
Operating income	$	353,282		$	233,220		$	363,752			51	%		-36	%
Operating losses (income) of consolidated funds		(4,901	)		(1,925	)		8,268			155	%		NM
Closed-end fund structuring fees		2,583			2,677			—			-4	%		NM
Stock-based compensation		47,859			41,670			39,422			15	%		6	%
Adjusted operating income	$	398,823		$	275,642		$	411,442			45	%		-33	%
Adjusted operating margin		36	%		31	%		38	%

Revenue

Our average overall effective fee rate (total revenue, excluding other revenue, as a percentage of average assets under management) was 66 basis points in fiscal 2010 compared to 67 basis points in 2009 and 72 basis points in fiscal 2008. The decrease in our average overall effective fee rate in both fiscal 2010 and 2009 can be attributed to the increase in separate account assets under management as a percentage of total average assets under management, the decline in average assets under management subject to distribution and service fees and, in fiscal 2010, the shift in product mix from equity assets under management toward fixed and floating-rate assets under management.

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	Years Ended October 31,							2010 vs. 2009			2009 vs. 2008
(in thousands)	2010		2009		2008			2010 vs. 2009			2009 vs. 2008
Investment advisory and administration fees	$	867,683	$	683,820	$	815,706			27	%		-16	%
Distribution and underwriter fees		103,995		85,234		128,940			22	%		-34	%
Service fees		139,741		116,331		155,091			20	%		-25	%
Other revenue		10,242		4,986		(3,937	)		105	%		NM
Total revenue	$	1,121,661	$	890,371	$	1,095,800			26	%		-19	%

Investment advisory and administration fees

Investment advisory and administration fees are determined by contractual agreements with our sponsored funds and separate accounts and are generally based upon a percentage of the market value of assets under management. Net asset flows and changes in the market value of managed assets affect the amount of managed assets on which investment advisory and administration fees are earned, while changes in asset mix among different investment disciplines and products affect our average effective fee rate. Investment advisory and administration fees represented 77 percent of total revenue in fiscal 2010 and fiscal 2009 compared to 74 percent in fiscal 2008.

The increase in investment advisory and administration fees of 27 percent, or $183.9 million, in fiscal 2010 over the prior fiscal year can be primarily attributed to a 27 percent increase in average assets under management. Fund assets, which had an average effective fee rate of 63 basis points in fiscal 2010 and 62 basis points in fiscal 2009, decreased to 62 percent of total assets under management on October 31, 2010 from 63 percent of total assets under management on October 31, 2009, while separately managed account assets, which had an average effective fee rate of 31 basis points in fiscal 2010 and 32 basis points in fiscal 2009, increased to 38 percent of total assets under management on October 31, 2010 from 37 percent of total assets under management on October 31, 2009. Equity assets under management, which generally have a higher effective investment advisory and administration fee rate, declined to 59 percent of total assets under management on October 31, 2010 from 62 percent on October 31, 2009, largely as a result of strong net sales of fixed and floating-rate income funds in fiscal 2010.

The decrease in investment advisory and administration fees of 16 percent, or $131.9 million, in fiscal 2009 can be attributed to a 13 percent decrease in average assets under management and a decrease in our average effective investment advisory and administration fee rate due to a change in product mix. Fund assets, which had an average effective fee rate of 62 basis points in fiscal 2009 and 2008, decreased to 63 percent of total assets under management on October 31, 2009 from 71 percent of total assets under management on October 31, 2008, while separately managed account assets, which had an average effective fee rate of 32 basis points in fiscal 2009 and 31 basis points in fiscal 2008, increased to 37 percent of total assets under management on October 31, 2009 from 29 percent of total assets under management on October 31, 2008. The increase in separately managed account assets as a percentage of total assets under management can be attributed to the TABS acquisition, which contributed $6.9 billion in new separately managed account assets on December 31, 2008, and strong institutional separate account net inflows at EVM and Parametric Portfolio Associates during fiscal 2009.

Distribution and underwriter fees

Distribution plan payments, which are made under contractual agreements with our sponsored funds, are calculated as a percentage of average assets under management in certain share classes of our mutual funds, as

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well as certain private funds. These fees fluctuate with both the level of average assets under management and the relative mix of assets. Underwriter commissions are earned on the sale of shares of our sponsored mutual funds on which investors pay a sales charge at the time of purchase (Class A share sales). Sales charges and underwriter commissions are waived or reduced on shareholder purchases that exceed specified minimum amounts and on certain categories of investors. Underwriter commissions fluctuate with the level of Class A share sales and the mix of Class A shares offered with and without sales charges.

Distribution plan payments increased 19 percent, or $14.8 million, to $91.8 million in fiscal 2010, reflecting an increase in average Class C fund assets partially offset by decreases in average Class A, Class B and certain private equity fund assets subject to distribution fees. Class C share distribution fees increased by 33 percent, or $16.5 million, to $66.3 million, reflecting a 32 percent increase in average Class C share assets under management. Class A share distribution fees decreased by 8 percent, or $0.1 million, to $1.1 million, reflecting certain reductions in Class A share distribution fee rates implemented in fiscal 2010. Class B share distribution fees decreased by 8 percent, or $1.5 million, to $18.4 million, reflecting a 14 percent decrease in average Class B share assets under management. Private fund distribution fees decreased by 7 percent, or $0.4 million, to $5.0 million, reflecting a 6 percent decrease in average assets subject to distribution fees. Underwriter fees and other distribution income totaled $12.2 million in fiscal 2010, an increase of 49 percent, or $4.0 million, over the same period a year earlier, primarily reflecting an increase of $3.8 million in underwriter fees received on sales of Class A shares.

Distribution plan payments decreased 34 percent, or $38.8 million, to $77.0 million in fiscal 2009, reflecting decreases in average Class A, Class B, Class C and certain private fund assets subject to distribution fees. Class A share distribution fees decreased by 42 percent, or $0.9 million, to $1.2 million, reflecting a 43 percent decrease in average Class A share assets that are subject to distribution fees. Class B share distribution fees decreased by 45 percent, or $16.5 million, to $19.9 million, reflecting a decrease in average Class B share assets under management of 47 percent year-over-year. Class C share distribution fees decreased by 24 percent, or $15.3 million, to $49.8 million, reflecting a 23 percent decrease in average Class C share assets under management. Private fund distribution fees decreased by 54 percent, or $6.4 million, to $5.4 million, reflecting a 46 percent decrease in average assets subject to distribution fees. Underwriter fees and other distribution income decreased 37 percent, or $4.9 million, to $8.2 million in fiscal 2009, reflecting a decrease of $1.9 million in underwriter fees received on sales of Class A shares, a decrease of $2.0 million in contingent deferred sales charges received on certain Class A redemptions and a decrease of $1.0 in other distribution income.

Service fees

Service fees, which are paid to Eaton Vance Distributors, Inc. pursuant to distribution or service plans adopted by our sponsored mutual funds, are calculated as a percent of average assets under management in specific share classes of the funds (principally Classes A, B and C). Certain private funds also make service fee payments to EVD. Service fees are paid to EVD as principal underwriter or placement agent to the funds for service and/or the maintenance of shareholder accounts.

Service fee revenue increased 20 percent, or $23.4 million, to $139.7 million in fiscal 2010 over the same period a year earlier, primarily reflecting a 16 percent increase in average assets under management in funds and classes of funds subject to service fees and an increase in our average effective service fee revenue rate. The increase in our average effective service fee revenue rate can be attributed to the increase in average Class A share assets under management subject to higher than average service fee rates.

Service fee revenue decreased 25 percent, or $38.8 million, to $116.3 million in fiscal 2009 over the same period a year earlier, primarily reflecting a 23 percent decrease in average assets under management in funds and classes of funds subject to service fees.

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Other revenue

Other revenue, which consists primarily of shareholder service fees, miscellaneous dealer income, custody fees and investment income earned by consolidated funds, increased by $5.3 million in fiscal 2010 over the same period a year ago, primarily reflecting an increase in realized and unrealized gains recognized on securities held in the portfolios of consolidated funds. Other revenue in fiscal 2010 includes $5.7 million of net investment gains (net realized and unrealized gains plus dividend income earned) related to consolidated funds for the period during which they were consolidated, compared to $1.3 million of net investment gains in fiscal 2009.

Other revenue increased by $8.9 million in fiscal 2009 over the same period a year earlier, primarily reflecting an increase in realized and unrealized gains recognized on securities held in the portfolios of consolidated funds and certain limited partnerships offset by a decrease in miscellaneous dealer income. Other revenue in fiscal 2009 includes $1.3 million of net investment gains (net realized and unrealized gains plus dividend income earned) related to consolidated funds for the period during which they were consolidated, compared to $8.2 million of net investment losses (net realized and unrealized losses offset in part by dividend income earned) in fiscal 2008.

Expenses

Operating expenses increased by 17 percent, or $111.2 million, in fiscal 2010, reflecting increases in compensation expense, distribution expense, service fee expense and other expenses partially offset by a decrease in fund expenses as more fully described below.


	Years Ended October 31,						2010 vs. 2009			2009 vs. 2008
(in thousands)	2010		2009		2008		2010 vs. 2009			2009 vs. 2008
Compensation of officers and employees:
Cash compensation	$	300,737	$	251,392	$	263,257		20	%		-5	%
Stock-based compensation		48,160		41,670		39,422		16	%		6	%
Total compensation of officers and employees		348,897		293,062		302,679		19	%		-3	%
Distribution expense		126,064		95,988		122,930		31	%		-22	%
Service fee expense		116,900		94,468		129,287		24	%		-27	%
Amortization of deferred sales commissions		35,533		35,178		47,811		1	%		-26	%
Fund expenses		20,455		22,432		24,684		-9	%		-9	%
Other expenses		120,530		116,023		104,657		4	%		11	%
Total expenses	$	768,379	$	657,151	$	732,048		17	%		-10	%

Compensation of officers and employees

Compensation expense increased by 19 percent, or $55.8 million, in fiscal 2010, reflecting increases in base salaries and employee benefits, sales-based, revenue-based and operating income-based incentives and stock-based compensation. Base compensation and employee benefits increased by 4 percent, or $5.4 million, primarily reflecting increases in base compensation associated with higher headcount, annual merit increases and increases in the cost of employee benefits and payroll taxes associated with the increase in sales-based, revenue-based and operating income-based incentives. Sales and revenue-based incentives increased by 43 percent, or $18.1 million, primarily reflecting a 34 percent increase in gross sales of long-term funds and the

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success of Eaton Vance Global Macro Absolute Return Fund, sales of which were compensated at an above-average level through the third quarter of fiscal 2010. Sales and revenue-based incentives include $0.4 million and $0.6 million in sales-based compensation associated with closed-end fund offerings in fiscal 2010 and 2009, respectively. Operating income-based incentives increased by 40 percent, or $26.9 million, primarily reflecting the 44 percent increase in pre-bonus adjusted operating income. Stock-based compensation increased by 16 percent, or $6.5 million, primarily reflecting the increase in restricted stock grants made in the first quarter of fiscal 2010.

Compensation expense decreased by 3 percent, or $9.6 million, in fiscal 2009, reflecting decreases in sales-based, revenue-based and operating income-based incentives, offset by increases in base salaries and employee benefits, stock-based compensation and other compensation, including severance costs. Sales and revenue-based incentives decreased by 13 percent, or $6.1 million, primarily reflecting a decrease in open-end gross sales and a realignment of our sales incentive compensation structure. Operating income-based incentives decreased by 18 percent, or $14.2 million, reflecting a decrease in adjusted operating income partially offset by an increase in the rate at which operating income-based incentives were accrued. Base compensation and employee benefits increased by 6 percent, or $7.7 million, primarily reflecting a 4 percent increase in average headcount. Stock-based compensation increased by 6 percent, or $2.2 million, primarily reflecting the 4 percent increase in average headcount. Other compensation expense increased by 34 percent, or $0.8 million, reflecting an increase in signing bonuses and other compensation expense partially offset by a decrease in severance costs.

Distribution expense

Distribution expense consists primarily of ongoing payments made to distribution partners pursuant to third-party distribution arrangements for certain Class C share and closed-end fund assets, which are calculated as a percentage of average assets under management, commissions paid to broker/dealers on the sale of Class A shares at net asset value, structuring fees paid on new closed-end funds and other marketing expenses, including marketing expenses associated with marketing support arrangements with our distribution partners.

Distribution expense increased by 31 percent, or $30.1 million, to $126.1 million in fiscal 2010 over the same period a year earlier, reflecting increases in marketing expenses associated with intermediary marketing support payments, Class A share commissions, Class C share distribution fees, payments made under certain closed-end fund compensation agreements and other marketing expenses. Marketing expenses associated with intermediary marketing support payments to our distribution partners increased by 37 percent, or $9.9 million, to $36.3 million, reflecting the increase in sales and average managed assets that are subject to these arrangements and changes in the terms of certain support agreements. Class A share commissions increased by 54 percent, or $4.0 million, to $11.3 million, reflecting an increase in certain Class A sales on which we pay a commission. Class C share distribution fees increased by 25 percent, or $9.1 million, to $46.3 million, reflecting an increase in Class C share assets held more than one year. Payments made under certain closed-end fund compensation agreements increased by 14 percent, or $2.0 million, to $16.8 million, reflecting higher closed-end fund managed assets on which these fees are paid. Other marketing expenses increased by 66 percent, or $5.1 million, to $12.8 million, primarily reflecting a major commitment made in fiscal 2010 to elevate the scope and quality of the Company’s marketing programs. Total distribution expense included $2.6 million and $2.7 million in closed-end fund structuring fees in fiscal 2010 and 2009, respectively.

Distribution expense decreased by 22 percent, or $26.9 million, to $96.0 million in fiscal 2009, primarily reflecting decreases in Class C share distribution fees, Class A share commissions, payments made under certain closed-end fund compensation agreements and marketing expenses associated with revenue sharing arrangements, offset by $2.7 million in closed-end fund structuring fees recognized in fiscal 2009. Class C share distribution fees decreased by 22 percent, or $10.8 million, to $37.1 million in fiscal 2009, reflecting a decrease in Class C share assets older than one year. Class A share commissions decreased by 30 percent, or $3.1 million, to $7.3 million, reflecting a decrease in certain Class A sales on which we pay a commission. Payments made

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under certain closed-end fund compensation agreements decreased by 33 percent, or $7.4 million, to $14.7 million in fiscal 2009, reflecting lower asset-based compensation payments. Marketing expenses associated with intermediary marketing support payments to our distribution partners decreased by 10 percent, or $2.9 million, to $26.4 million in fiscal 2009, reflecting the decrease in sales and average managed assets that are subject to these arrangements. Other marketing expenses decreased by 41 percent, or $5.4 million, to $7.7 million in fiscal 2009, primarily reflecting decreases in literature and literature fulfillment, marketing and other promotional activities.

Service fee expense

Service fees we receive from sponsored funds are generally retained in the first year and paid to broker/dealers thereafter pursuant to third-party service arrangements. These fees are calculated as a percent of average assets under management in certain share classes of our mutual funds (principally Classes A, B, and C), as well as certain private funds. Service fee expense increased by 24 percent, or $22.4 million, in fiscal 2010, reflecting an increase in average fund assets retained more than one year in funds and share classes that are subject to service fees. Service fee expense decreased by 27 percent, or $34.8 million, in fiscal 2009, reflecting a decrease in average fund assets retained more than one year in funds and share classes that are subject to service fees.

Amortization of deferred sales commissions

Amortization expense is affected by ongoing sales and redemptions of mutual fund Class B shares, Class C shares and certain private funds. Amortization expense increased 1 percent in fiscal 2010, reflecting an increase in Class C amortization expense in connection with increased Class C share sales, offset by declining Class B share and privately offered equity fund amortization expense. In fiscal 2010, 22 percent of total amortization related to Class B shares, 59 percent to Class C shares and 19 percent to privately offered equity funds.

Amortization expense decreased 26 percent in fiscal 2009 compared to the same period a year earlier, reflecting declining Class B share and privately offered equity fund amortization expense. In fiscal 2009, 31 percent of total amortization related to Class B shares, 42 percent to Class C shares and 27 percent to privately offered equity funds.

Fund expenses

Fund expenses consist primarily of fees paid to subadvisors, compliance costs and other fund-related expenses we incur. Fund expenses decreased 9 percent, or $2.0 million, in fiscal 2010, reflecting a decrease in subadvisory fees partially offset by an increase in other fund-related expenses. The decrease in subadvisory fees can be attributed to the termination by us of certain closed-end fund subadvisory agreements in fiscal 2009. The increase in other fund-related expenses can be attributed to increases in the subsidies we provide to startup and other smaller funds to enhance their cost competitiveness and the non-advisory expenses we bear on certain funds for which we are paid an all-in management fee.

Fund expenses decreased by 9 percent, or $2.3 million, in fiscal 2009, primarily reflecting decreases in subadvisory fees and other fund-related expenses offset by an increase in fund subsidies. The decrease in subadvisory fees in fiscal 2009 can be attributed to the decrease in average assets under management in funds for which we employ a subadvisor, partially offset by an increase in subadvisory expenses due to additional accruals in connection with the termination by us of certain closed-end fund subadvisory agreements in fiscal 2009. The decrease in other fund-related expenses can be attributed to a decrease in the subsidies we provide to startup and other smaller funds to enhance their cost competitiveness and the non-advisory expenses we bear on certain funds for which we are paid an all-in management fee.

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Other expenses

Other expenses consist primarily of travel, facilities, information technology, consulting, communications and other corporate expenses, including the amortization of intangible assets.

Other expenses increased by 4 percent, or $4.5 million, in fiscal 2010 over the same period a year earlier, primarily reflecting increases in travel expense of $1.8 million, consulting expense of $2.6 million, information technology expense of $1.7 million, communications expense of $0.2 million and other corporate expenses of $1.9 million, offset by a decrease in facilities-related expenses of $3.7 million. The increase in travel expense can be attributed to an increase in the cost of travel partially offset by corporate initiatives to manage expenses. The increase in consulting expense can be attributed to increases in legal and recruiting expenses. The increase in information technology expense can be attributed to an increase in the cost of data services. The increase in communications expense can be attributed to an increase in telephone and cable expense, while the increase in other corporate expenses reflects increases in other general corporate expenses, including charitable giving and professional development. The decrease in facilities-related expenses can be attributed to a decrease in rent and other building expenses associated with the completion of our move to new corporate headquarters in Boston in the second quarter of fiscal 2009 and the termination of our lease at our former location.

Other expenses increased by 11 percent, or $11.4 million, in fiscal 2009, primarily reflecting increases in facilities-related expenses of $11.4 million, information technology expense of $4.5 million and other corporate expenses of $2.7 million, offset by decreases in travel expense of $1.9 million, consulting expense of $4.4 million and communications expense of $1.0 million. The increase in facilities-related expenses can be attributed to an increase in rent, insurance and depreciation associated with our move to new corporate headquarters in Boston, which was completed in the second quarter of fiscal 2009. The increase in information technology expense can be attributed to an increase in outside data services and costs incurred in conjunction with several significant system implementations. The increase in other corporate expenses reflects a $4.1 million increase in the amortization of intangible assets associates with the TABS acquisition and the purchase of additional non-controlling interests in our majority-owned subsidiaries offset by decreases in other general corporate expenses. The decrease in travel expense can be attributed to corporate initiatives to manage cost. The decrease in consulting expense can be attributed to decreases in all external consulting categories, including audit and legal, while the decrease in communications expense can be attributed to decreases in postage, subscriptions and supplies.

Other Income and Expense


	Years Ended October 31,									2010 vs. 2009			2009 vs. 2008
(in thousands)	2010			2009			2008			2010 vs. 2009			2009 vs. 2008
Interest income	$	2,864		$	3,745		$	11,098			-24	%		-66	%
Interest expense		(33,666	)		(33,682	)		(33,616	)		0	%		0	%
Gains and (losses) on investments and derivatives		4,300			6,078			(5,005	)		-29	%		NM
Foreign currency gains (losses)		181			165			(176	)		10	%		NM
Impairment losses on investments		—			(1,863	)		(13,206	)		NM			-86	%
Total other income (expense)	$	(26,321	)	$	(25,557	)	$	(40,905	)		3	%		-38	%

Interest income decreased by $0.9 million and $7.4 million, or 24 percent and 66 percent, in fiscal 2010 and 2009, respectively, primarily due to a decrease in effective interest rates.

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Interest expense was flat year-over-year in both fiscal 2010 and 2009, reflecting interest accrued on our fixed-rate senior notes.

In fiscal 2010, we recognized gains on investments totaling $4.3 million, primarily representing gains on seed investments in separately managed accounts and consolidated funds and derivative positions entered into to hedge those seed investments. In fiscal 2009, we recognized gains of $6.1 million and in fiscal 2008 we recognized losses of $5.0 million, primarily representing activity on seed investments.

We recognized impairment losses of $1.9 million and $13.2 million in fiscal 2009 and 2008, respectively, related to two cash flow instrument CDO entities and a synthetic CDO entity. The impairment losses associated with the two cash instrument CDO entities resulted from a decrease in estimated future cash flows from the CDO entities due to increases in the default rates of the underlying loan portfolios. The impairment loss associated with the synthetic CDO entity, which reduced our investment in that entity to zero in fiscal 2009, resulted from a decrease in the estimated cash flows from the entity due to higher realized default rates and lower recovery rates on the reference securities underlying the synthetic CDO entity’s portfolio of credit default swaps.

Income Taxes

Our effective tax rate (income taxes as a percentage of income before income taxes and equity in net income (loss) of affiliates) was 38.6 percent, 34.2 percent and 38.8 percent in fiscal 2010, 2009 and 2008, respectively. The increase in our overall effective tax rate in fiscal 2010 can be primarily attributed to the execution of a state tax voluntary disclosure agreement in fiscal 2009 that resulted in a net reduction in our income tax expense of $2.8 million and a deferred tax adjustment in fiscal 2009 related to stock-based compensation expense that resulted in reduction in our income tax expense of $5.2 million.

Our policy for accounting for income taxes includes monitoring our business activities and tax policies for compliance with federal, state and foreign tax laws. In the ordinary course of business, various taxing authorities may not agree with certain tax positions we have taken, or applicable law may not be clear. We periodically review these tax positions and provide for and adjust as necessary estimated liabilities relating to such positions as part of our overall tax provision. There were no significant changes in our estimates surrounding these positions in either of the periods presented.

Equity in Net Income (Loss) of Affiliates, Net of Tax

Equity in net income (loss) of affiliates, net of tax, for fiscal 2010 primarily reflects our 20 percent minority equity interest in Lloyd George Management, a 7 percent minority equity interest in a private equity partnership and our minority interest in Eaton Vance Global Macro Absolute Return Advantaged Fund (33 percent at fiscal year end). Equity in net income of affiliates, net of tax, increased by $1.6 million in fiscal 2010, primarily due to an increase in the net income of the private equity partnership. Equity in net income of affiliates, net of tax, decreased by $6.2 million in fiscal 2009 over the same period a year earlier, primarily due to gains recognized by the private equity partnership partially offset by a decrease in the net income of Lloyd George Management.

Net Income Attributable to Non-controlling Interests

Net income attributable to non-controlling interests increased by $21.5 million in fiscal 2010, primarily reflecting an increase of $18.4 million in the estimated redemption value of non-controlling interests redeemable at other than fair value in fiscal 2010 in conjunction with the adoption of a new accounting standard on non-controlling interests on November 1, 2009. The standard requires that redeemable non-controlling interests be carried at estimated redemption value each reporting period, and that the net change in the estimated redemption

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value of non-controlling interests redeemable at other than fair value be recognized as a component of net income attributable to non-controlling interests in our consolidated statements of income. The increase in estimated redemption value is primarily due to an increase in the profitability of our majority-owned subsidiaries.

Net income attributable to non-controlling interests decreased by $1.7 million in fiscal 2009, primarily due to a $2.8 million adjustment in fiscal 2008 to reverse stock-based compensation previously allocated to non-controlling interest holders of our majority-owned subsidiaries partially offset by an increase in the profitability of our majority-owned subsidiaries and consolidated funds. In fiscal 2008, we determined that the allocation of stock-based compensation expense to non-controlling interest holders reduces our liability to non-controlling interest holders in a manner that is not consistent with the agreements governing partnership distributions to those individuals. The $2.8 million adjustment represented the reversal of accumulated stock-based compensation expense allocated to non-controlling interest holders from the date of acquisition. Stock-based compensation expense allocated to non-controlling interest holders in prior periods was neither quantitatively nor qualitatively material to our consolidated financial statements in any of our previously reported fiscal years or periods.

Net income attributable to non-controlling interests is not adjusted for taxes due to the underlying tax status of our consolidated subsidiaries. Atlanta Capital Management Company LLC (“Atlanta Capital”), Fox Asset Management LLC (“Fox Asset Management”), Parametric Portfolio Associates LLC (“Parametric Portfolio Associates”) and Parametric Risk Advisors LLC (“Parametric Risk Advisors”) are limited liability companies that are treated as partnerships for tax purposes. Funds we consolidate are registered investment companies or private funds that are treated as pass-through entities for tax purposes.

Changes in Financial Condition, Liquidity and Capital Resources

The following table summarizes certain key financial data relating to our liquidity, capital resources and uses of cash on October 31, 2010, 2009 and 2008 and for the years then ended:

Balance Sheet and Cash Flow Data


	October 31,
(in thousands)	2010		2009		2008
Balance sheet data:
Assets:
Cash and cash equivalents	$	307,886	$	310,586	$	196,923
Short-term investments		4,732		49,924		169,943
Investment advisory fees and other receivables		129,380		107,975		108,644
Total liquid assets	$	441,998	$	468,485	$	475,510
Long-term investments	$	329,677	$	133,536	$	116,191
Deferred income taxes – long-term		119,341		97,044		66,357
Liabilities:
Taxes payable	$	—	$	—	$	848
Deferred income taxes – current		22,067		15,580		20,862
Long-term debt		500,000		500,000		500,000

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	Years Ended October 31,
(in thousands)	2010			2009			2008
Cash flow data:
Operating cash flows	$	95,899		$	164,355		$	152,380
Investing cash flows		(14,025	)		41,345			(149,248	)
Financing cash flows		(84,252	)		(91,863	)		(240,949	)

Liquidity and Capital Resources

Liquid assets consist of cash and cash equivalents, short-term investments and investment advisory fees and other receivables. Cash and cash equivalents consist of cash and short-term, highly liquid investments that are readily convertible to cash. Short-term investments as of October 31, 2009 consisted of an investment in a sponsored short-term income fund. Investment advisory fees and other receivables primarily represent receivables due from sponsored funds and separately managed accounts for investment advisory and distribution services provided. Liquid assets represented 35 percent and 44 percent of total assets on October 31, 2010 and 2009, respectively.

The $26.5 million decrease in liquid assets in fiscal 2010 can be attributed to a decrease in cash and cash equivalent balances of $2.7 million and a decrease of $45.2 million in short-term investments offset by an increase in investment advisory fees and other receivables of $21.4 million. The decrease in cash and cash equivalent balances in fiscal 2010 primarily reflects net cash provided by operating activities of $95.9 million and proceeds from the issuance of Non-Voting Common Stock of $56.2 million offset by the payment of $75.7 million of dividends to shareholders, the repurchase of $111.2 million of Non-Voting Common Stock, $1.0 million of net purchases of available-for-sale securities, the payment of $11.2 million to purchase additional interests in Parametric Portfolio Associates and Parametric Risk Advisors in the third quarter of fiscal 2010 and $8.8 million in contingent payments to the sellers of TABS in the second quarter of fiscal 2010. The decrease in short-term investments can be attributed to the deconsolidation of a cash management fund in the second quarter of fiscal 2010. The increase in investment advisory fees and other receivables can be attributed to the increase in our revenue run rate at the end of fiscal 2010 compared to the end of fiscal 2009.

The $7.0 million decrease in liquid assets in fiscal 2009 can be attributed to a decrease in cash and short-term investment balances of $6.4 million and a decrease in investment advisory fees and other receivables of $0.7 million. The decrease in cash and short-term investment balances in fiscal 2009 primarily reflects the $30.9 million initial cost of the acquisition of TABS, the payment of $17.0 million to purchase additional interests in Parametric Portfolio Associates and Atlanta Capital Management, the payment of $72.4 million of dividends to shareholders and additions to equipment and leasehold improvements of $46.3 million, offset by net cash provided by operating activities of $164.4 million. The decrease in investment advisory fees and other receivables can be attributed to the decrease in our revenue run rate at the end of fiscal 2009 compared to the end of fiscal 2008.

On October 31, 2010, our debt consisted of $500.0 million in aggregate principal amount of 6.5 percent ten-year unsecured notes due 2017. We also maintain a $200.0 million unsecured revolving credit facility with several banks that expires on August 13, 2012. The facility provides that we may borrow at LIBOR-based rates of interest that vary depending on the level of usage of the facility and our credit ratings. The agreement contains financial covenants with respect to leverage and interest coverage and requires us to pay an annual commitment fee on any unused portion. We had no borrowings under our revolving credit facility at October 31, 2010 or at any point during the fiscal year. We were in compliance with all of the covenants as of October 31, 2010.

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We continue to monitor our liquidity daily. We remain committed to growing our business and expect that our main uses of cash will be to invest in new products, acquire shares of our Non-Voting Common Stock, pay dividends, make strategic acquisitions, enhance technology infrastructure and pay the operating expenses of the business, which are largely variable in nature and fluctuate with revenue and assets under management. We believe that our existing liquid assets, cash flows from operations, which contributed $95.9 million in fiscal 2010, and borrowing capacity under our existing credit facility, are sufficient to meet our current and forecasted operating cash needs and to satisfy our future commitments as more fully described in Contractual Obligations below. The risk exists, however, that if we determine we need to raise additional capital or refinance existing debt in the future, resources may not be available to us in sufficient amounts or on acceptable terms. Our ability to enter the capital markets in a timely manner depends on a number of factors, including the state of global credit and equity markets, interest rates, credit spreads and our credit ratings. If we are unable to access capital markets to issue new debt, refinance existing debt or sell shares of our Non-Voting Common Stock as needed, or if we are unable to obtain such financing on acceptable terms, our business could be adversely impacted.

Income Taxes

Long-term deferred income taxes consist principally of deferred income tax benefits associated with stock-based compensation and expenses incurred in the launch of new closed-end funds, which are capitalized and amortized for tax purposes over a 15-year period following a change in tax accounting method filed in fiscal 2008, offset by deferred income tax liabilities associated with deferred sales commissions and certain deferred tax liabilities associated with a change in tax accounting method related to certain closed end fund expenses. The net current deferred tax liability of $22.1 million as of October 31, 2010 principally represents the remaining $21.5 million deferred tax liability associated with the change in accounting method.

Taxes payable at October 31, 2010 included a prepaid balance of $20.9 million and a long-term payable of $9.9 million, which are included in current assets and other long-term liabilities on our Consolidated Balance Sheet, respectively. Taxes payable at October 31, 2009 included a prepaid balance of $8.7 million and a long-term payable of $1.4 million, which are included in other current assets and other long-term liabilities on our Consolidated Balance Sheet, respectively. The net change in total taxes payable in fiscal 2010 reflects a current tax provision totaling $142.8 million offset by $135.9 million of income taxes paid and the recognition of $10.8 million of excess tax benefits associated with stock option exercises in fiscal 2010.

Contractual Obligations

The following table details our future contractual obligations as of October 31, 2010:

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	Payments due
(in millions)	Total		Less than 1 Year		1 – 3 Years		4 – 5 Years		After 5 Years
Operating leases – facilities and equipment⁽¹⁾	$	430	$	19	$	59	$	39	$	313
Senior notes		500		—		—		—		500
Interest payment on senior notes		228		33		97		65		33
Investment in private equity partnership		2		2		—		—		—
Unrecognized tax benefits⁽²⁾		10		—		10		—		—
Total	$	1,170	$	54	$	166	$	104	$	846

⁽¹⁾

Minimum payments have not been reduced by minimum sublease rentals of $5.8 million due in the future under noncancelable subleases.

⁽²⁾

This amount includes unrecognized tax benefits along with accrued interest and penalties.

In July 2006, we committed to invest up to $15.0 million in a private equity partnership that invests in companies in the financial services industry. As of October 31, 2010, we had invested $12.8 million of the maximum $15.0 million of committed capital. This remaining commitment is included in the table above.

Interests held by non-controlling interest holders of Atlanta Capital, Fox Asset Management, Parametric Portfolio Associates and Parametric Risk Advisers are not subject to mandatory redemption. The purchase of non-controlling interests is predicated, for each subsidiary, on the exercise of a series of puts held by non-controlling interest holders and calls held by us. Neither the exercise of the puts nor the exercise of the calls is contingent upon the non-controlling interest holders of the acquired entities remaining employed by the Company. The puts provide the non-controlling interest holders the right to require us to purchase these retained interests at specific intervals over time, while the calls provide us with the right to require the non-controlling interest holders to sell their retained equity interests to us at specified intervals over time, as well as upon the occurrence of certain events such as death or permanent disability. As a result, there is significant uncertainty as to the timing of any non-controlling interest purchase in the future. The value assigned to the purchase of an originating non-controlling interest is based, in each case, on a multiple of earnings before interest and taxes of the subsidiary, which is a measure that is intended to represent fair market value. There is no discrete floor or ceiling on any non-controlling interest purchase. As a result, there is significant uncertainty as to the amount of any non-controlling interest purchase in the future. Accordingly, future payments to be made to purchase non-controlling interests have been excluded from the above table, unless a put or call option has been exercised and a mandatory firm commitment exists for us to purchase such non-controlling interests. Although the timing and amounts of these purchases cannot be predicted with certainty, we anticipate that the purchase of non-controlling interests in our consolidated subsidiaries may be a significant use of cash in future years.

In conjunction with our adoption of a new non-controlling interest accounting standard, we have presented all redeemable non-controlling interests at estimated redemption value on our balance sheet as of October 31, 2010. We have recorded the current year change in the estimated redemption value of non-controlling interests redeemable at fair value as a component of additional paid-in capital and have recorded the current year change in the estimated redemption value of non-controlling interests redeemable at other than fair value as a component of net income attributable to non-controlling interests. Based on our calculations, the estimated redemption value of our non-controlling interests, redeemable at either fair value or other than fair value, totaled $67.0 million on October 31, 2010 compared to $43.9 million on October 31, 2009.

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In July 2010, the Company exercised a call option requiring the non-controlling interest holders of Parametric Risk Advisors to sell to us an additional interest in Parametric Risk Advisors for $2.2 million. The transaction increased our ownership interest from 40 to 51 percent. The payment was treated as an equity transaction and reduced redeemable non-controlling interests at closing.

In May 2010, the Company exercised a call option requiring the non-controlling interest holders of Parametric Portfolio Associates to sell to us an additional interest in Parametric Portfolio Associates for $9.0 million. The transaction increased our capital ownership interest from 92.4 percent to 94.3 percent and our profit interest from 85.8 percent to 88.9 percent. The payment was treated as an equity transaction and reduced redeemable non-controlling interests at closing.

On December 31, 2008, the Company acquired the TABS business of MD Sass, a privately held investment manager based in New York, New York. The Company paid $30.9 million in cash to acquire the TABS business, including costs associated with the acquisition. In conjunction with the acquisition, the Company recorded $44.8 million of intangible assets and a contingent purchase price liability of $13.9 million. The Company made a contingent payment in the second quarter of fiscal 2010 equal to $8.8 million. The Company will be obligated to make six additional annual contingent payments based on prescribed multiples of TABS’s revenue for the twelve months ending December 31, 2010, 2011, 2012, 2014, 2015 and 2016. All future payments will be paid in cash. There is no defined floor or ceiling on any payment, resulting in significant uncertainty as to the amount of any payment in the future. Accordingly, future payments to be made have been excluded from the above table until such time as the uncertainty has been resolved.

Operating Cash Flows

Our operating cash flows are calculated by adjusting net income to reflect other significant sources and uses of cash, certain significant non-cash items and timing differences in the cash settlement of other assets and liabilities. Significant sources and uses of cash that are not reflected in either revenue or operating expenses include net cash flows associated with our deferred sales commission assets (capitalized sales commissions paid net of contingent deferred sales charges received) as well as net cash flows associated with the purchase and sale of investments within the portfolios of our consolidated funds and separate accounts (proceeds received from the sale of trading investments net of cash outflows associated with the purchase of trading investments). Significant non-cash items include the amortization of deferred sales commissions and other intangible assets, depreciation, stock-based compensation and the net change in deferred income taxes. Operating activities also reflect the net change in restricted cash balances in margin accounts used in trading activities related to the hedging of certain investments within consolidated funds and separately managed accounts seeded for the purpose of product development.

Cash provided by operating activities totaled $95.9 million in fiscal 2010, a decrease of $68.5 million from the $164.4 million reported in fiscal 2009. Net income increased by $65.7 million to $201.2 million in fiscal 2010 from $135.5 million in fiscal 2009. In our reconciliation of net income to cash provided by operating activities, we adjusted net income for net investment gains of $7.2 million in fiscal 2010, compared to net investment gains of $4.5 million in fiscal 2009. Net investment gains (losses) in fiscal 2009 include $1.9 million of impairment losses recognized on CDO investments. We also adjusted net income for the activities of our equity-method affiliates, which contributed $0.5 million in fiscal 2010 compared to $4.8 million in fiscal 2009. Timing differences in the cash settlement of our short-term and long-term receivables and payables increased cash provided by operating activities by $50.1 million in fiscal 2010 and reduced cash provided by operating activities by $5.2 million in fiscal 2009. Other significant sources and uses of cash include net cash inflows associated with the purchase and sale of trading investments in the portfolios of consolidated funds and separate accounts, which reduced

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net cash provided by operating activities by $208.8 million and $12.8 million in fiscal 2010 and 2009, respectively, and net cash outflows associated with deferred sales commissions, which reduced net cash provided by operating activities by $31.7 million and $14.0 million in fiscal 2010 and 2009, respectively. Significant non-cash expenses, including the amortization of deferred sales commissions, other intangible assets and debt issuance costs, depreciation, stock-based compensation and the net change in deferred income taxes, increased to $91.1 million in 2010 from $60.3 million in fiscal 2009, reflecting increases in stock-based compensation, the amortization of deferred sales commissions and other depreciation and amortization offset by the net change in deferred income taxes. The increase in other depreciation and amortization can be primarily attributed to an increase in depreciation expense associated with tenant improvements in connection with our move to new corporate headquarters and the amortization of intangible assets associated with the TABS acquisition.

Investing Cash Flows

Cash flows from investing activities consist primarily of the purchase of equipment and leasehold improvements, cash paid in acquisitions, cash payments and receipts on a note receivable from affiliate and the purchase and sale of available-for-sale investments in our sponsored funds that we do not consolidate.

Cash used for investing activities totaled $14.0 million in fiscal 2010 compared to cash provided by investing activities of $41.3 million in fiscal 2009. In fiscal 2010, additions to equipment and leasehold improvements totaled $12.2 million, compared to $46.3 million in fiscal 2009. Additions in fiscal 2009 reflect tenant improvements made in conjunction with our move to new corporate headquarters. The acquisition of TABS resulted in a net cash payment of $30.9 million in fiscal 2009 as more fully described in “Contractual Obligations” above. In fiscal 2010, the Company made $8.8 million in contingent payments to the sellers of TABS under the terms of the 2009 acquisition agreement. In fiscal 2010, net purchases and sales of available-for-sale investments reduced investing cash flows by $1.0 million compared to a contribution of $116.6 million in the prior fiscal year.

In October 2008, the Company, as lender, entered into a subordinated term note agreement (the “Note”) with a sponsored privately offered equity fund under which the fund may borrow up to $15.0 million. The Note earns daily interest based on the fund’s cost of borrowing under its commercial paper financing facility. Upon expiration on December 16, 2009, the Note was extended until December 15, 2010. Subject to certain conditions, the privately offered equity fund may prepay the Note in whole or in part, at any time, without premium or penalty. In fiscal 2010, the sponsored private equity fund made payments on the Note totaling $8.0 million, bringing the remaining balance to zero on October 31, 2010.

Financing Cash Flows

Financing cash flows primarily reflect distributions to non-controlling interest holders of our majority-owned subsidiaries and consolidated funds, the purchase of additional non-controlling interests in our majority-owned subsidiaries, the issuance and repurchase of our Non-Voting Common Stock, excess tax benefits associated with stock option exercises and the payment of dividends to our shareholders. Financing cash flows also include proceeds from the issuance of capital stock by consolidated investment companies and cash paid to meet redemptions by non-controlling interest holders of these funds.

Cash used for financing activities totaled $84.3 million and $91.9 million in fiscal 2010 and 2009, respectively. In fiscal 2010, we repurchased and retired a total of 3.7 million shares of our Non-Voting Common Stock for $111.2 million under our authorized repurchase programs and issued 4.5 million shares of our Non-Voting Common Stock in connection with the grant of restricted share awards, the exercise of stock options and other employee stock purchases for total proceeds of $56.2 million. We have authorization to purchase an additional 4.8 million shares under our current share repurchase authorization and anticipate that future repurchases will continue to be an ongoing use of cash. Our dividends per share were $0.66 in fiscal 2010, compared to $0.63 in

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fiscal 2009. We currently expect to declare and pay comparable dividends on our Voting and Non-Voting Common Stock on a quarterly basis.

Off-Balance Sheet Arrangements

We do not invest in any off-balance sheet vehicles that provide financing, liquidity, market or credit risk support or engage in any leasing activities that expose us to any liability that is not reflected in our Consolidated Financial Statements.

Critical Accounting Policies

We believe the following critical accounting policies, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. Actual results may differ from these estimates.

Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a hierarchy that prioritizes inputs to valuation techniques to measure fair value. This fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value and gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

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

Level 1

Unadjusted quoted market prices in active markets for identical assets or liabilities at the reporting date.

Level 2

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.

Level 3

Unobservable inputs that are supported by little or no market activity.

Deferred Sales Commissions

Sales commissions paid to broker/dealers in connection with the sale of certain classes of shares of open-end funds and private funds are generally capitalized and amortized over the period during which redemptions by the purchasing shareholder are subject to a contingent deferred sales charge, which does not exceed six years from purchase. Distribution plan payments received from these funds are recorded in revenue as earned. Contingent deferred sales charges and early withdrawal charges received from redeeming shareholders of these funds are generally applied to reduce our unamortized deferred sales commission assets. Should we lose our ability to recover such sales commissions through distribution plan payments and contingent deferred sales charges, the value of these assets would immediately decline, as would future cash flows.

We evaluate the carrying value of our deferred sales commission asset for impairment on a quarterly basis. In our impairment analysis, we compare the carrying value of the deferred sales commission asset to the

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undiscounted cash flows expected to be generated by the asset in the form of distribution fees over the remaining useful life of the deferred sales commission asset to determine whether impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to fair value based on discounted cash flows. Impairment adjustments are recognized in operating income as a component of amortization of deferred sales commissions.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of our investment in the net assets of acquired companies over the fair value of the underlying identifiable net assets at the dates of acquisition. We attribute all goodwill associated with the acquisitions of Atlanta Capital, Fox Asset Management and Parametric Portfolio Associates, which share similar economic characteristics, to a single reporting unit. Management believes that the inclusion of these entities in a single reporting unit for the purposes of goodwill impairment testing most accurately reflects the synergies achieved in acquiring these entities, namely centralized distribution of similar products and services to similar clients.

Goodwill is not amortized but is tested annually for impairment in the fourth quarter of each fiscal year by comparing the fair value of the reporting unit to its carrying amount, including goodwill. We establish fair value for the purpose of impairment testing by averaging fair value established using an income approach and fair value established using a market approach.

The income approach employs a discounted cash flow model that takes into account (1) assumptions that marketplace participants would use in their estimates of fair value, (2) current period actual results, and (3) budgeted results for future periods that have been vetted by senior management at the reporting unit level. Budgeted results for future periods are most significantly impacted by assumptions made as to the growth in assets under management, future revenue run rates and future operating margins. The discounted cash flow model incorporates the same fundamental pricing concepts used to calculate fair value in the acquisition due diligence process and a discount rate that takes into consideration our estimated cost of capital adjusted for the uncertainty inherent in the acquisition.

The market approach employs market multiples for comparable transactions in the financial services industry obtained from industry sources, taking into consideration the nature, scope and size of the acquired reporting unit. Estimates of fair value are established using a multiple of assets under management and current and forward multiples of both revenue and EBITDA adjusted for size and performance level relative to peer companies. A weighted average calculation is then performed, giving greater weight to fair value calculated based on multiples of revenue and EBITDA and lesser weight to fair value calculated as a multiple of assets under management. Fair values calculated using one year, two year and trailing twelve month revenue multiples and one year, two year and trailing twelve month EBITDA multiples are each weighted 15 percent, while fair value calculated based on a multiple of assets under management is weighted 10 percent. We believe that fair value calculated based on multiples of revenue and EBITDA is a better indicator of fair value in that these fair values provide information as to both scale and profitability.

If the carrying amount of the reporting unit exceeds its calculated fair value, the second step of the goodwill impairment test will be performed to measure the amount of the impairment loss, if any.

Amortized identifiable intangible assets generally represent the cost of client relationships and management contracts acquired. In valuing these assets, we make assumptions regarding useful lives and projected growth rates, and significant judgment is required. We periodically review identifiable intangibles for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the carrying amounts of the assets exceed their respective fair values, additional impairment tests are performed to measure the amount of the impairment loss, if any.

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Non-amortizing intangible assets generally represent the cost of mutual fund management contracts acquired. Non-amortizing intangible assets are tested for impairment in the fourth quarter of each fiscal year by comparing the fair value of the management contracts acquired to their carrying values. If the carrying value of a management contract acquired exceeds its fair value, an impairment loss is recognized equal to that excess.

Accounting for Income Taxes

Our effective tax rate reflects the statutory tax rates of the many jurisdictions in which we operate. Significant judgment is required in determining our effective tax rate and in evaluating our tax positions. In the ordinary course of business, many transactions occur for which the ultimate tax outcome is uncertain, and we adjust our income tax provision in the period in which we determine that actual outcomes will likely be different from our estimates. Accounting standards requires that the tax effects of a position be recognized only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date. The more-likely-than-not threshold must continue to be met in each reporting period to support continued recognition of a benefit. Unrecognized tax benefits, as well as the related interest, are adjusted regularly to reflect changing facts and circumstances. While we have considered future taxable income and ongoing tax planning in assessing our taxes, changes in tax laws may result in a change to our tax position and effective tax rate. We classify any interest or penalties incurred as a component of income tax expense.

Management is required to estimate the timing of the recognition of deferred tax assets and liabilities and to make assumptions about the future deductibility of deferred tax assets. We assess whether a valuation allowance should be established against our deferred tax assets based on consideration of all available evidence, using a more-likely-than-not standard. This assessment takes into account our forecast of future profitability, the duration of statutory carry back and carry forward periods, our experience with the tax attributes expiring unused, tax planning alternatives and other tax considerations.

Stock-Based Compensation

Stock-based compensation expense reflects the fair value of stock-based awards measured at grant date, is recognized over the relevant service period, and is adjusted each period for anticipated forfeitures. The fair value of each 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 but are not subject to significant variability. Management must also apply judgment in developing an expectation of awards that may be forfeited. If actual experience differs significantly from these estimates, stock-based compensation expense and our results of operations could be materially affected.

Non-controlling interests

Effective November 1, 2009, we adopted new accounting standards related to non-controlling interests and redeemable non-controlling interests and retrospectively applied such provisions to our reported prior periods. Non-redeemable non-controlling interests have been reclassified to permanent equity with no change in the measurement principles previously applied to these interests. Redeemable non-controlling interests remain classified in mezzanine equity as temporary equity and are measured at estimated redemption value as of the balance sheet date. Presentation of net income in our Consolidated Statements of Income has been changed to reflect net income with and without consideration of the non-controlling interests. Earnings per share continue to be calculated after consideration of the net income attributable to non-controlling interests.

Non-Redeemable Non-controlling Interests

Non-redeemable non-controlling interests consist entirely of interests granted to employees of our majority-owned subsidiaries under subsidiary-specific long-term equity plans. These grants become subject to put rights upon vesting and will be reclassified to temporary equity as vesting occurs.

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Redeemable Non-controlling Interests at Fair Value

Redeemable non-controlling interests at fair value consist of interests in our consolidated funds and interests granted to employees of our majority-owned subsidiaries under subsidiary-specific long-term equity plans. The Company’s non-controlling interests redeemable at fair value are recorded in temporary equity at estimated redemption value and changes in the estimated redemption value of these interests are recognized as increases or decreases to additional paid in capital.

Redeemable Non-controlling Interests at Other Than Fair Value

The interests in our majority-owned subsidiaries are puttable at established multiples of earnings before interest and taxes and, as such, are considered redeemable at other than fair value. The Company’s non-controlling interests redeemable at other than fair value are recorded in temporary equity at estimated redemption value and changes in estimated redemption value are recorded in earnings. As a result, net income attributable to Eaton Vance Corp. shareholders and earnings per basic and diluted share are impacted by changes in the estimated redemption values of such redeemable non-controlling interests.

Accounting Developments

VIEs

In June 2009, the FASB issued literature introducing a new consolidation model. This new literature prescribes how enterprises account for and disclose their involvement with VIEs and other entities whose equity at risk is insufficient or lacks certain characteristics. This new accounting changes how an entity determines whether it is the primary beneficiary of a VIE and whether that VIE should be consolidated and requires additional disclosures. As a result, the Company must comprehensively review its involvements with VIEs and potential VIEs to determine the effect on its Consolidated Financial Statements and related disclosures. The new consolidation standard is effective for the Company’s fiscal year that begins on November 1, 2010 and for interim periods within the first annual reporting period. Earlier application is prohibited. In February 2010, the FASB issued an amendment to this standard. For certain investments held by a reporting entity, the amendment indefinitely defers a requirement to perform a qualitative analysis to determine whether its variable interests give it a controlling financial interest in a VIE. This deferral generally applies to the reporting entities interests in entities that have the attributes of an investment company or that apply the specialized accounting guidance for investment companies, such as the privately offered equity funds in which the Company invests. The new consolidation model will not change the Company’s conclusions regarding consolidation for VIEs in which it is involved, with the exception of one VIE. The aforementioned VIE is a CDO entity, and the impact of consolidating this VIE upon adoption will be to increase the Company’s total assets and long-term debt by approximately $0.5 billion.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business, our financial position is subject to different types of risk, including market risk. Market risk is the risk that we will incur losses due to adverse changes in equity and bond prices, interest rates, credit risk or currency exchange rates. Management is responsible for identifying, assessing and managing market and other risks.

In evaluating market risk, it is important to note that most of our revenue is based on the market value of assets under management. As noted in “Risk Factors” in Item 1A, declines of financial market values negatively impact our revenue and net income.

Our primary direct exposure to equity price risk arises from our investments in sponsored equity funds, our equity interest in affiliates, investments in equity securities held by sponsored funds we consolidate and investments in equity securities held in separately managed accounts seeded for new product development purposes. Equity price risk as it relates to these investments represents the potential future loss of value that would result from a decline in the fair values of the fund shares or underlying equity securities.

The following is a summary of the effect that a 10 percent increase or decrease in equity prices would have on our investments subject to equity price fluctuation at October 31, 2010:


(in thousands)	Carrying Value		Carrying Value Assuming a 10% Increase		Carrying Value Assuming a 10% Decrease
Trading:
Equity securities	$	116,876	$	128,563	$	105,188
Available-for-sale securities:
Sponsored funds		25,097		27,607		22,587
Investment in affiliates		51,111		56,222		46,000
Total	$	193,084	$	212,392	$	173,775

Currently we have a corporate hedging program in place to hedge currency risk and market price exposures on certain investments in consolidated funds and separately managed accounts seeded for new product development purposes. As part of this program we enter into futures and forward contracts to hedge exposure to certain equity instruments held within the portfolios of these separately managed accounts and consolidated funds. The contracts negotiated are short term in nature. We do not enter into derivative instruments for speculative purposes.

At October 31, 2010, the Company had outstanding foreign currency contracts, stock index futures contracts, and commodity futures contracts with aggregate notional values of approximately $41.9 million, $78.4 million and $9.6 million, respectively. The Company estimates that a 10 percent adverse change in market prices would result in a decrease of approximately $4.2 million, $7.8 million and $0.9 million, respectively, in the value of the open derivative contracts.

In addition to utilizing forwards and futures contracts, the Company has also entered into transactions in which securities not yet purchased have been sold. In its short sales, the Company has sold securities that have been borrowed from third party brokers with the intention of buying back identical assets at a later date to return to the

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lender, thereby incurring a liability. As of October 31, 2010, the Company had $0.7 million included in other current liabilities on its Consolidated Balance Sheet related to securities sold, not yet purchased. The Company estimates that a 10 percent adverse change in market prices would result in a decrease of approximately $0.1 million in the value of these securities.

Our primary direct exposure to interest rate risk arises from our investment in fixed and floating-rate income funds sponsored by us, debt securities held by sponsored funds we consolidate, debt securities held in separately managed accounts seeded for new product development purposes and corporate debt securities. We considered the negative effect on pre-tax interest income of a 50 basis point (0.50 percent) decline in interest rates as of October 31, 2010. A 50 basis point decline in interest rates is a hypothetical scenario used to demonstrate potential risk and does not represent our management’s view of future market changes. The following is a summary of the effect that a 50 basis point percent (0.50 percent) decline in interest rates would have on our pre-tax net income as of October 31, 2010:


(in thousands)	Carrying Value		Pre-tax Interest Income Impact of a 50 Basis Point Decline in Interest Rates
Trading:
Debt securities	$	119,983	$	600
Available-for-sale securities:
Sponsored funds		11,787		59
Total	$	131,770	$	659

From time to time, we seek to offset our exposure to changing interest rates associated with our debt financing. In October 2007, we issued $500.0 million in aggregate principal amount of 6.5 percent ten year senior notes due 2017. In conjunction with the offering, we entered into an interest rate lock intended to hedge against adverse Treasury rate movements between the time at which the decision was made to issue the debt and the pricing of the securities. At the time the debt was issued, we terminated the lock and settled the transaction in cash. At termination, the lock was determined to be a fully effective cash flow hedge and the $4.5 million settlement cost was recorded as a component of other comprehensive income. There can be no assurance that our hedge instruments will meet their overall objective of reducing our interest expense or that we will be successful in obtaining hedging contracts on any future debt offerings.

Our primary direct exposure to credit risk arises from our interests in the cash instrument CDO entities that are included in long-term investments in our Consolidated Balance Sheets. As an investor in a CDO entity, we are entitled to only a residual interest in the CDO entity, making these investments highly sensitive to the default and recovery experiences of the underlying instruments held by the CDO entity. Our investments are subject to an impairment loss in the event that the cash flows generated by the collateral securities are not sufficient to allow equity holders to recover their investments. If there is deterioration in the credit quality of collateral and reference securities and a corresponding increase in defaults, CDO entity cash flows may be adversely impacted and we may be unable to recover our investment. Our total investment in interests in CDO entities was valued at $1.4 million as of October 31, 2010, which represents our total value at risk with respect to such entities as of October 31, 2010.

We operate primarily in the United States and accordingly, most of our consolidated revenue and associated expenses are denominated in U.S. dollars. However, we do provide services and earn revenue outside of the

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United States and the portion of our revenue and expenses denominated in foreign currencies may be impacted by movements in currency exchange rates. Our exposure to currency movements will likely increase as our business outside of the United States grows. We do not enter into foreign currency transactions for speculative purposes.

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Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements and Supplementary Data
For the Fiscal Years Ended October 31, 2010, 2009 and 2008


Contents	Page number reference
Consolidated Financial Statements of Eaton Vance Corp.:
Consolidated Statements of Income for each of the three years in the period ended October 31, 2010		50
Consolidated Statements of Comprehensive Income for each of the three years in the period ended October 31, 2010		51
Consolidated Balance Sheets as of October 31, 2010 and 2009		52
Consolidated Statements of Shareholders’ Equity for each of the three years in the period ended October 31, 2010		53
Consolidated Statements of Cash Flows for each of the three years in the period ended October 31, 2010		56
Notes to Consolidated Financial Statements		58
Report of Independent Registered Public Accounting Firm		96

All schedules have been omitted because they are not required, are not applicable or the information is otherwise shown in the consolidated financial statements or notes thereto.

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Consolidated Statements of Income


	Years Ended October 31,
(in thousands, except per share data)	2010			2009			2008
Revenue:
Investment advisory and administration fees	$	867,683		$	683,820		$	815,706
Distribution and underwriter fees		103,995			85,234			128,940
Service fees		139,741			116,331			155,091
Other revenue		10,242			4,986			(3,937	)
Total revenue		1,121,661			890,371			1,095,800
Expenses:
Compensation of officers and employees		348,897			293,062			302,679
Distribution expense		126,064			95,988			122,930
Service fee expense		116,900			94,468			129,287
Amortization of deferred sales commissions		35,533			35,178			47,811
Fund expenses		20,455			22,432			24,684
Other expenses		120,530			116,023			104,657
Total expenses		768,379			657,151			732,048
Operating income		353,282			233,220			363,752
Other Income (Expense):
Interest income		2,864			3,745			11,098
Interest expense		(33,666	)		(33,682	)		(33,616	)
Gains and (losses) on investments and derivatives		4,300			6,078			(5,005	)
Foreign currency gains (losses)		181			165			(176	)
Impairment losses on investments		—			(1,863	)		(13,206	)
Income before income taxes and equity in net income (loss) of affiliates		326,961			207,663			322,847
Income taxes		(126,263	)		(71,044	)		(125,154	)
Equity in net income (loss) of affiliates, net of tax		527			(1,094	)		5,123
Net income		201,225			135,525			202,816
Net income attributable to non-controlling interests		(26,927	)		(5,418	)		(7,153	)
Net income attributable to Eaton Vance Corp. shareholders	$	174,298		$	130,107		$	195,663
Earnings Per Share:
Basic	$	1.47		$	1.11		$	1.69
Diluted	$	1.40		$	1.07		$	1.57
Weighted Average Shares Outstanding:
Basic		116,444			116,175			115,810
Diluted		122,632			120,575			124,431
Dividends Declared Per Share	$	0.660		$	0.625		$	0.605

See notes to Consolidated Financial Statements.

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Consolidated Statements of Comprehensive Income


	Years Ended October 31,
(in thousands)	2010			2009			2008
Net income	$	201,225		$	135,525		$	202,816
Other comprehensive income (loss):
Amortization of loss on derivative instrument, net of income tax expense of $158, $157 and $157, respectively		290			290			290
Unrealized holding gains (losses) on investments, net of income tax benefit (expense) of $(517), $(1,941), and $4,727, respectively		770			3,310			(7,942	)
Foreign currency translation adjustments, net of income tax benefit (expense) of $16, $(74), and $379, respectively		(101	)		141			(676	)
Total comprehensive income		202,184			139,266			194,488
Comprehensive income attributable to non-controlling interests		(26,927	)		(5,418	)		(7,153	)
Total comprehensive income attributable to Eaton Vance Corp. shareholders	$	175,257		$	133,848		$	187,335

See notes to Consolidated Financial Statements.

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Consolidated Balance Sheets


		October 31,
(in thousands, except share data)


	Ending Assets Under Management by Vehicle at October 31,
(in millions)	2010		2009		2008
Fund assets:
Open-end funds	$	73,567	$	56,844	$	43,871
Closed-end funds		24,032		23,162		22,191
Private funds		17,518		17,612		21,193
Total fund assets		115,117		97,618		87,255
Separate account assets:
High-net-worth and institutional account assets		46,476		36,860		21,293
Retail managed account assets		23,650		20,418		14,539
Total separate account assets		70,126		57,278		35,832
Total	$	185,243	$	154,896	$	123,087


	Ending Assets Under Management by Investment Category at October 31,
(in millions)	2010		2009		2008
Equity assets	$	109,096	$	96,140	$	81,029
Fixed income assets		54,273		41,309		27,414
Floating-rate income assets		21,874		17,447		14,644
Total	$	185,243	$	154,896	$	123,087

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

FORM 10-K

EATON VANCE CORP.

Eaton Vance Corp. Form 10-K For the Fiscal Year Ended October 31, 2010 Index

PART I

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Item 1. Business

General

Company History and Development

Sponsored Investment Products

Open-end Funds

Closed-end Funds

Private Funds

Institutional Separate Accounts

High-net-worth Separate Accounts

Retail Managed Accounts

Investment Management and Administrative Activities

Investment Management Agreements and Distribution Plans

Marketing and Distribution of Fund Shares

Regulation

Competition

Employees

Available Information

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Removed and Reserved

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Price Range of Non-Voting Common Stock, Dividend History and Policy

Performance Graph

Comparison of Five Year Cumulative Total Return

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Item 6. Selected Financial Data

Financial Highlights

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

Market Developments

Managed Asset Levels

Operating Results

Recoverability of our Investments

Assets Under Management

Ending Assets Under Management by Investment Category(1)

Long-Term Fund and Separate Account Net Flows

Asset Flows

Ending Assets Under Management by Asset Class

Average Assets Under Management by Asset Class(1)

Results of Operations

Revenue

Investment advisory and administration fees

Distribution and underwriter fees

Service fees

Other revenue

Expenses

Compensation of officers and employees

Distribution expense

Service fee expense

Amortization of deferred sales commissions

Fund expenses

Other expenses

Other Income and Expense

Income Taxes

Equity in Net Income (Loss) of Affiliates, Net of Tax

Net Income Attributable to Non-controlling Interests

Changes in Financial Condition, Liquidity and Capital Resources

Balance Sheet and Cash Flow Data

Liquidity and Capital Resources

Income Taxes

Contractual Obligations

Operating Cash Flows

Investing Cash Flows

Financing Cash Flows

Off-Balance Sheet Arrangements

Critical Accounting Policies

Fair Value Measurements

Deferred Sales Commissions

Goodwill and Other Intangible Assets

Accounting for Income Taxes

Stock-Based Compensation

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

Eaton Vance Corp.
Form 10-K
For the Fiscal Year Ended October 31, 2010
Index

Ending Assets Under Management by Investment Category⁽¹⁾

Average Assets Under Management by Asset Class⁽¹⁾

Index to Consolidated Financial Statements and Supplementary Data
For the Fiscal Years Ended October 31, 2010, 2009 and 2008