<PAGE>
[LOGO] [PICTURE EDUCATION]
Semiannual Report May 31, 2000
[PICTURE EATON VANCE
CARSON MUNICIPAL
HIGHWAY] INCOME
TRUST
[75TH ANNIVERSARY]
[PICTURE BRIDGE]
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
LETTER TO SHAREHOLDERS
[PHOTO]
Thomas J. Fetter,
President
Municipal bond investors have faced a challenging climate in 2000, as
fluctuating interest rates have contributed to increased volatility in nearly
all of the fixed-income markets. In its response to a strong economy and signs
of rising inflation, the Federal Reserve has raised its Federal Funds rate -- a
key barometer of short-term interest rates -- on six occasions in the past 13
months alone. The Fed has been especially concerned about rising labor costs and
increased demand, suggesting that, despite improvements in productivity, rising
demand could lead to higher inflation.
The bond market rallied briefly in February and March, as investors sought some
refuge from the increasingly volatile equity markets. However, the downtrend
resumed in April and lasted through May, when the Fed punctuated its
anti-inflation stance with a 50 basis point (0.50%) rate hike. By the end of
June, there was, at last, some evidence that the Fed's actions had succeeded in
cooling the economy somewhat.
The Trust's market yields remained well above prevailing municipal bond
yields...
Eaton Vance Municipal Income Trust is primarily a vehicle for tax-exempt income.
As such, it is important to note that the market yields of the Trust remained
well above prevailing municipal bond yields at May 31, 2000. The total return of
Eaton Vance Municipal Income Trust in the six months ended May 31, 2000 was,
like most fixed-income vehicles, hurt by rising interest rates. The performance
of the Trust was additionally impacted by the effect of the Trust's use of
leverage. Not surprisingly, while leverage added significantly to the Trust's
tax-exempt market yields, it also resulted in a larger price decline as interest
rates rose. We believe that the Trust's leverage may well contribute to price
increases in the event of a future interest rate decline.
Municipal bonds yield exceed Treasury yields
-----------------------------------------------------------
6.19% 10.25%
-----------------------------------------------------------
30-Year AAA-rated Taxable equivalent yield
General Obligation (GO) Bonds* in 39.6% tax bracket
-------------------------
6.01%
-------------------------
30-Year Treasury bond
Principal and interest payments of Treasury securities are guaranteed by the
U.S. government.
*GO yields are a compilation of a representative variety of general
obligations and are not necessarily representative of the Trust's yields.
Statistics as of May 31, 2000.
Past performance is no guarantee of future results.
Source: Bloomberg, L.P.
The outlook for municipal bonds appears to be improving...
While municipal bond investors have endured difficulties over the past year, we
believe the outlook has improved. First, municipal issuance has declined
dramatically. Second, a surge in Federal tax receipts has resulted in rising
estimates for the Federal budget surplus, sharply reducing the Treasury's
borrowing needs. Third, the Treasury Department has announced that it will buy
back at least $30 billion of 10 to 30-year bonds this fiscal year. That may,
over time, contribute to lower long-term interest rates.
Finally, we are encouraged that, in the midst of an election year, Congress and
the Administration have continued to exercise a high degree of fiscal
discipline. While we will closely monitor the economic proposals of the likely
major party nominees for president, we are confident that the progress of recent
years can be maintained. That could result in a much improved outlook for all
fixed-income areas, including the municipal bond market.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter,
President
July 12, 2000
2
<PAGE>
Eaton Vance Municipal Income Trust as of May 31, 2000
MANAGEMENT DISCUSSION
[PHOTO]
Thomas M. Metzold,
Portfolio Manager
Investment Environment
-------------------------------
- There is evidence that the Federal Reserve Board's series of rate hikes is
starting to have the desired effect. Interest rate-sensitive sectors of the
economy -- especially housing and construction -- have slowed significantly.
Also, although still healthy, consumer spending has cooled off, particularly
in auto/light truck sales and chain store sales.
- The rate of growth in manufacturing, as measured by the National Association
of Purchasing Managers' Index, has also slowed. Perhaps most important, there
was a net decrease in the number of private sector jobs in May 2000, with the
national unemployment rate actually rising back above 4.0%.
- Recent inflation indicators have been favorable. Wage gains, a source of
concern in a tight labor market, showed little movement in May. Both the
Producer Price Index and the Consumer Price Index have been benign, and the
number of manufacturers experiencing price increases from suppliers dropped
off sharply.
The Trust
----------------------------------------------
Performance for the Past Year
- Based on share price (traded on the New York Stock Exchange), the Trust had a
total return of -6.19% for the six months ended May 31, 2000. That return was
the result of a decrease in share price from $11.69 on November 30, 1999 to
$10.56 on May 31, 2000, and the reinvestment of $0.4125 in regular monthly
dividends.
- Based on net asset value, the Trust had a total return of -4.17% for the six
months ended May 31, 2000. That return was the result of a decrease in net
asset value per share from $11.72 on November 30, 1999 to $10.82 on May 31,
2000, and the reinvestment of all distributions.
- Based on the most recent dividend and a share price of $10.56 the Trust had a
market yield of 7.81% at May 31, 2000.(1) The Trust's market yield is
equivalent to a taxable yield of 12.93%.(2)
Management Discussion
- Healthcare bonds were once again well-represented. The Trust focused on
institutions that we view as financially sound, able to adjust to newly
implemented Medicare reimbursement policies and well-positioned competitively
within their respective markets.
- The Trust sought opportunities in selected non-rated bonds, which offered
above-average coupons in research-intensive credits. Among the Trust's non-
rated investments was Trillium Affordable Housing 6.75% bonds issued by the
state of Oregon.
- In the difficult market conditions that characterized the period, the Trust
established tax losses that may be used to offset potential capital gains in
the future. The Trust also continued to upgrade call protection, which helps
to stabilize dividend levels while giving the Trust's holdings better trading
characteristics.
Rating Distribution(3)
----------------------------------------------
By total net assets
[PIE CHART]
AAA 26.7%
AA 19.3%
A 5.6%
BBB 18.7%
B 1.1%
Non-Rated 28.6%
-----------------------------------------------
Shares of the Trust are not insured by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested. Yields will
vary.
--------------------------------------------------------------------------------
Trust Information
AS OF MAY 31, 2000
<TABLE>
<CAPTION>
Performance(4)
<S> <C>
--------------------------------------------------
Average Annual Total Returns (by market value, New
York Stock Exchange)
--------------------------------------------------
One Year -18.36%
Life of Trust (1/29/99) -18.33
Average Annual Total Returns (at net asset value)
--------------------------------------------------
One Year -19.25%
Life of Trust (1/29/99) -16.85
</TABLE>
5 Largest Categories(3)
----------------------------------
[GRAPHIC]
1 Hospital 18.7%
2 General Obligations 14.6%
3 Industrial Development 10.0%
4 Housing 7.8%
5 Electric Utilties 6.6%
----------------------------------
(1)The Trust's market yield is calculated by dividing the most recent dividend
per share by the share price at the end of the period and annualizing the
result.
(2)Taxable-equivalent yield assumes maximum 39.6% federal income tax rate. A
lower rate would result in a lower tax-equivalent figure.
(3)Rating Distribution and Largest Categories are determined by dividing the
total market value of the holdings by the total net assets of the Trust. Rating
Distribution and Largest Categories are subject to change.
(4)Returns are historical and are calculated by determining the percentage
change in share price or net asset value with all distributions reinvested.
Past performance is no guarantee of future results. Investment return and market
price will fluctuate so that shares, when sold, may be worth more or less than
their original cost.
3
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 98.8%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
-------------------------------------------------------------------------
Certificates of Participation -- 0.6%
-------------------------------------------------------------------------
$ 2,000 Cliff House Trust, PA, (AMT),
6.625%, 6/1/27 $ 1,782,860
-------------------------------------------------------------------------
$ 1,782,860
-------------------------------------------------------------------------
Cogeneration -- 1.0%
-------------------------------------------------------------------------
$ 2,950 Maryland Energy Cogeneration, (AES
Warrior Run), (AMT), 7.40%, 9/1/19 $ 2,980,739
-------------------------------------------------------------------------
$ 2,980,739
-------------------------------------------------------------------------
Education -- 3.4%
-------------------------------------------------------------------------
$ 6,875 Massachusetts Development Finance
Agency, (Boston University),
5.45%, 5/15/59 $ 5,750,387
4,750 New York Dormitory Authority, (State
University Educational Facilities),
4.75%, 5/15/28 3,767,225
1,000 Philadelphia, PA, HEFA, (Chestnut Hill
College), 6.00%, 10/1/29 850,410
-------------------------------------------------------------------------
$ 10,368,022
-------------------------------------------------------------------------
Electric Utilities -- 6.6%
-------------------------------------------------------------------------
$ 8,000 Brazos River Authority, TX, (Reliant
Energy, Inc.), 5.375%, 4/1/19 $ 6,701,680
6,250 Brazos River Authority, TX, (Texas
Utilities Electric Co.), (AMT),
5.55%, 6/1/30 5,347,125
1,500 North Carolina Eastern Municipal Power
Agency, (Power System Revenue),
5.75%, 1/1/26 1,302,015
7,250 North Carolina Municipal Power Agency,
6.50%, 1/1/20 7,069,475
-------------------------------------------------------------------------
$ 20,420,295
-------------------------------------------------------------------------
Escrowed / Prerefunded -- 3.0%
-------------------------------------------------------------------------
$35,000 Dawson Ridge, CO, Metropolitan District
#1, Escrowed to Maturity, 0.00%, 10/1/22 $ 7,234,500
1,725 Maricopa County, AZ, IDA, (Place Five
and The Greenery), Escrowed to Maturity,
8.625%, 1/1/27 2,071,673
-------------------------------------------------------------------------
$ 9,306,173
-------------------------------------------------------------------------
General Obligations -- 14.6%
-------------------------------------------------------------------------
$ 3,350 Bell Mountain Ranch, CO, (Metropolitan
District), 6.625%, 11/15/25 $ 2,991,985
5,000 California, Variable Rate, 12/1/23(1)(2) 4,757,400
7,750 California, 5.625%, 5/1/26 7,433,645
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
-------------------------------------------------------------------------
General Obligations (continued)
-------------------------------------------------------------------------
$15,735 Florida Board of Education,
4.75%, 6/1/28(3) $ 12,594,137
4,000 Kershaw County, SC, School District,
5.00%, 2/1/18(4) 3,601,840
8,500 Michigan Building Authority Revenue,
4.75%, 10/15/21 7,019,980
8,500 North East Independent School District,
TX, 4.50%, 10/1/28 6,515,250
-------------------------------------------------------------------------
$ 44,914,237
-------------------------------------------------------------------------
Hospital -- 18.7%
-------------------------------------------------------------------------
$ 4,000 Baxter County, AK, Community Hospital
District, 5.625%, 9/1/28 $ 3,188,840
3,265 Bell County, TX, (Heritage Oaks
Healthcare), 6.70%, 6/1/29 2,818,217
2,500 California Health Facilities Financing
Authority, (Cedars Sinai Medical
Center), Variable Rate, 12/1/34(1)(2) 2,437,925
1,000 Chautauqua County, NY, IDA, (Women's
Christian Association), 6.35%, 11/15/17 913,560
1,000 Chautauqua County, NY, IDA, (Women's
Christian Association), 6.40%, 11/15/29 844,410
1,000 Halifax, FL, Medical Center,
7.25%, 10/1/24 932,600
2,900 Highland County, OH, (Joint Township
Hospital District), 6.75%, 12/1/29 2,562,498
3,500 John Tolfree Health System Corp., MI,
6.00%, 9/15/23 2,864,645
1,215 Loris, SC, Community Hospital District,
5.625%, 1/1/20 1,005,145
3,500 Loris, SC, Community Hospital District,
5.625%, 1/1/29 2,784,425
5,750 Louisiana Public Facilities Authority,
(Tuoro Infirmary), 5.625%, 8/15/29 4,515,475
7,500 Maricopa County, AZ, IDA, (Mayo
Foundation), Residual Certificates,
5.25%, 11/15/37 6,359,025
2,000 Martin County, MN, (Fairmont Community
Hospital Association ), 6.625%, 9/1/22 1,791,920
6,000 Massachusetts HEFA, (Partners Healthcare
System), 5.25%, 7/1/29(3) 4,853,220
1,700 Mecosta County, MI, General Hospital,
5.75%, 5/15/09 1,566,346
2,500 Mecosta County, MI, General Hospital,
6.00%, 5/15/18 2,108,250
1,500 New Jersey Health Care Facilities
Financing Authority, (Trinitas
Hospital), 7.50%, 7/1/30 1,503,390
4,260 New Jersey Health Care Facilities,
(Capital Health System), 5.25%, 7/1/27 3,066,348
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
-------------------------------------------------------------------------
Hospital (continued)
-------------------------------------------------------------------------
$ 4,085 New Jersey Health Care Facilities, (St.
Barnabas Health), Variable Rate,
7/1/28(2)(5) $ 1,720,439
7,000 Rhode Island HEFA, (St. Joseph Health
Services), 5.50%, 10/1/29 5,194,910
2,425 Southwestern Illinois, IDR, (Anderson
Hospital), 5.625%, 8/15/29 1,864,704
3,000 Weber County, UT, (IHC Health Services,
Inc.), 5.00%, 8/15/30 2,422,740
-------------------------------------------------------------------------
$ 57,319,032
-------------------------------------------------------------------------
Housing -- 7.8%
-------------------------------------------------------------------------
$ 3,600 California Statewide Communities
Development Authority, (Corporate Fund
for Housing), 7.25%, 12/1/34 $ 3,502,404
4,000 Charter Mac Equity, TN, (AMT),
6.625%, 6/30/09 3,872,680
1,000 Lake Creek, CO, Affordable Housing
Corp., Multifamily, 7.00%, 12/1/23 919,430
4,660 Louisiana Public Facilities Authority,
(Eden Point), 6.25%, 3/1/34 4,127,548
4,000 Muni Mae Tax Revenue Exempt Bond, (AMT),
Variable Rate, 6/30/09 3,912,960
3,500 North Little Rock, AR, Residential
Housing Facilities, (Parkstone Place),
6.50%, 8/1/21 3,256,890
3,700 Oregon Health Authority, (Trillium
Affordable Housing), 6.75%, 8/15/29 3,340,804
1,000 Raleigh, NC, Housing Authority,
Multifamily, (Cedar Point),
7.00%, 11/1/30 908,950
-------------------------------------------------------------------------
$ 23,841,666
-------------------------------------------------------------------------
Industrial Development Revenue -- 10.0%
-------------------------------------------------------------------------
$ 2,000 Abia Development Corp., TX, (Austin
Cargoport Development), (AMT),
6.50%, 10/1/24 $ 1,761,380
2,000 Broward County, FL, IDR, (Lynxs
Cargoport), (AMT), 6.75%, 6/1/19 1,830,720
3,700 Charleston County, SC, IDA, (Zeigler
Coal Holding), 6.95%, 8/10/28 2,985,308
4,000 Courtland, AL, Solid Waste Disposal,
(Champion International Corp.),
6.70%, 11/1/29 3,919,240
2,500 Denver, CO, City and County, (United
Airlines), Variable Rate, 10/1/32(1)(2) 2,290,550
1,000 Gloucester County, NJ, Improvements
Authority, (Waste Management, Inc.),
7.00%, 12/1/29 1,005,160
2,500 Gulf Coast, TX, Waste Disposal
Authority, (Valero Energy Corp.) (AMT),
5.70%, 4/1/32 2,046,900
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
-------------------------------------------------------------------------
Industrial Development Revenue (continued)
-------------------------------------------------------------------------
$ 3,550 Mississippi Business Finance Corp.,
(System Energy Resources, Inc.),
5.90%, 5/1/22 $ 3,010,364
3,000 Missouri Development Finance Authority,
Solid Waste Disposal, (Proctor and
Gamble Paper Products), (AMT),
5.20%, 3/15/29 2,620,590
1,750 New Jersey EDA, (Continental Airlines),
(AMT), Variable Rate, 9/15/29(1)(2) 1,326,710
5,750 Ohio Solid Waste Disposal, (USG Corp.),
(AMT), 5.65%, 3/1/33 4,872,607
3,550 Phoenix, AZ, IDA, (America West
Airlines, Inc.), (AMT), 6.25%, 6/1/19 3,086,015
-------------------------------------------------------------------------
$ 30,755,544
-------------------------------------------------------------------------
Insured-Education -- 0.7%
-------------------------------------------------------------------------
$ 3,000 Massachusetts HEFA, Residual
Certificates, (Berklee College of
Music), (MBIA), Variable Rate,
10/1/27(1)(2) $ 2,194,860
-------------------------------------------------------------------------
$ 2,194,860
-------------------------------------------------------------------------
Insured-Electric Utilities -- 1.6%
-------------------------------------------------------------------------
$ 5,500 Burke County, GA, Development Authority,
(Power Plant), (MBIA), (AMT),
5.45%, 5/1/34 $ 4,878,775
-------------------------------------------------------------------------
$ 4,878,775
-------------------------------------------------------------------------
Insured-Hospital -- 4.4%
-------------------------------------------------------------------------
$10,000 New York Dormitory Authority, (Municipal
Health Facilities Improvement), (FSA),
4.75%, 1/15/29 $ 8,017,200
6,900 New York Dormitory Authority, (New York
Presbyterian Hospital), (AMBAC),
4.75%, 8/1/27 5,563,746
-------------------------------------------------------------------------
$ 13,580,946
-------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 1.2%
-------------------------------------------------------------------------
$ 5,000 San Mateo County, CA, Joint Powers
Financing Authority, (FSA), Variable
Rate, 7/15/29(1)(2) $ 3,587,950
-------------------------------------------------------------------------
$ 3,587,950
-------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.0%
-------------------------------------------------------------------------
$ 5,000 Pennsylvania Turnpike Commission Oil
Franchise Tax, (AMBAC), Variable Rate,
12/1/27(1)(2) $ 3,093,100
-------------------------------------------------------------------------
$ 3,093,100
-------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
-------------------------------------------------------------------------
Insured-Transportation -- 6.3%
-------------------------------------------------------------------------
$ 2,850 Clark County, NV, Airport Revenue,
(MBIA), 6.00%, 7/1/29 $ 2,820,816
3,000 Dallas-Fort Worth, TX, International
Airport, (FGIC), (AMT), 5.75%, 11/1/30 2,810,250
4,500 Dallas-Fort Worth, TX, International
Airport, (FGIC), (AMT), 6.125%, 11/1/35 4,416,750
3,500 Florida Turnpike Authority, (Department
of Transportation), (FGIC),
4.50%, 7/1/27 2,716,210
4,250 Metropolitan Transportation Authority,
NY, Commuter Revenue (FGIC),
4.75%, 7/1/26 3,465,068
5,000 Southeastern Pennsylvania Transit
Authority, (FGIC), Variable Rate,
3/1/29(1)(2) 3,047,600
-------------------------------------------------------------------------
$ 19,276,694
-------------------------------------------------------------------------
Insured-Water and Sewer -- 1.3%
-------------------------------------------------------------------------
$ 5,000 Charleston, SC, Waterworks and Sewer
Revenue, (FGIC), 4.50%, 1/1/24 $ 3,930,300
-------------------------------------------------------------------------
$ 3,930,300
-------------------------------------------------------------------------
Miscellaneous -- 1.1%
-------------------------------------------------------------------------
$ 3,300 Santa Fe, NM, (Crow Hobbs),
8.50%, 9/1/16 $ 3,431,043
-------------------------------------------------------------------------
$ 3,431,043
-------------------------------------------------------------------------
Nursing Home -- 0.8%
-------------------------------------------------------------------------
$ 2,000 Orange County, FL, Health Facilities
Authority, (Westminster Community Care),
6.75%, 4/1/34 $ 1,735,980
2,000 Tarrant County, TX, Health Facilities,
(3927 Foundation), 10.25%, 9/1/19 701,020
-------------------------------------------------------------------------
$ 2,437,000
-------------------------------------------------------------------------
Pooled Loans -- 0.9%
-------------------------------------------------------------------------
$ 676 Tax Exempt Securities Trust, Community
Health Provider, Pooled Loan Program,
6.00%, 12/1/36 $ 602,702
1,785 Tax Exempt Securities Trust, Community
Health Provider, Pooled Loan Program,
6.25%, 12/1/36 1,643,618
677 Tax Exempt Securities Trust, Community
Health Provider, Pooled Loan Program,
7.75%, 12/1/36 634,336
-------------------------------------------------------------------------
$ 2,880,656
-------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
-------------------------------------------------------------------------
Senior Living / Life Care -- 3.0%
-------------------------------------------------------------------------
$ 3,245 Logan County, CO, Industrial Development
Revenue, (TLC Care Choices, Inc.),
6.875%, 12/1/23 $ 2,822,598
3,700 Ohio HFA, Retirement Rental Housing,
(Encore Retirement Partners),
6.75%, 3/1/19 3,165,017
750 Okaloosa County, FL, Retirement Rental
Housing, (Encore Retirement Partners),
6.125%, 2/1/14 622,853
3,000 Wisconsin HEFA, (Wisconsin Illinois
Senior Housing), 7.00%, 8/1/29 2,731,260
-------------------------------------------------------------------------
$ 9,341,728
-------------------------------------------------------------------------
Special Tax Revenue -- 2.9%
-------------------------------------------------------------------------
$ 3,600 Black Hawk, CO, Business Improvement
District, 6.50%, 12/1/11 $ 3,403,836
2,330 Frederick County, MD, Urbana Community
Development Authority, 6.625%, 7/1/25 2,157,557
1,695 Longleaf, FL, Community Development
District, 6.20%, 5/1/09 1,588,452
1,955 Longleaf, FL, Community Development
District, 6.65%, 5/1/20 1,775,981
-------------------------------------------------------------------------
$ 8,925,826
-------------------------------------------------------------------------
Transportation -- 3.6%
-------------------------------------------------------------------------
$ 4,000 Kent County, MI, Airport Facility,
Variable Rate, 1/1/25(1)(2) $ 2,881,760
5,000 Los Angeles County, CA, Metropolitan
Transportation Authority, Variable Rate,
7/1/28(1)(2) 3,205,000
2,400 Massachusetts Turnpike Authority,
Metropolitan Highway System, Variable
Rate, 1/1/39(2)(5) 1,186,656
5,575 Wayne, MI, Charter County Airport,
Variable Rate, 12/1/28(1)(2) 3,660,657
-------------------------------------------------------------------------
$ 10,934,073
-------------------------------------------------------------------------
Utilities -- 1.6%
-------------------------------------------------------------------------
$ 5,000 Los Angeles, CA, Department Water and
Power, Variable Rate, 2/15/30(1)(2) $ 4,987,550
-------------------------------------------------------------------------
$ 4,987,550
-------------------------------------------------------------------------
Utilities - Electrical and Gas -- 2.2%
-------------------------------------------------------------------------
$ 8,500 San Antonio, TX, Electric and Natural
Gas Revenue, 4.50%, 2/1/21 $ 6,807,480
-------------------------------------------------------------------------
$ 6,807,480
-------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
-------------------------------------------------------------------------
Water and Sewer -- 0.5%
-------------------------------------------------------------------------
$ 2,500 Metropolitan Water District, (Southern
California Waterworks), Variable Rate,
7/1/27(2)(5) $ 1,477,550
-------------------------------------------------------------------------
$ 1,477,550
-------------------------------------------------------------------------
Total Tax-Exempt Investments -- 98.8%
(identified cost $348,385,857) $303,454,099
-------------------------------------------------------------------------
Other Assets, Less Liabilities -- 1.2% $ 3,820,542
-------------------------------------------------------------------------
Net Assets -- 100.0% $307,274,641
-------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax
preference item for purposes of the Federal Alternative Minimum Tax.
At May 31, 2000, the concentration of the Trust's investments in the various
states, determined as a percentage of net assets, is as follows:
<TABLE>
<S> <C>
Texas 13.0%
California 10.2%
Others, representing less than 10% individually 75.6%
</TABLE>
The Trust invests primarily in debt securities issued by municipalities. The
ability of the issuers of the debt securities to meet their obligations may
be affected by economic developments in a specific industry or municipality.
In order to reduce the risk associated with such economic developments, at
May 31, 2000, 16.7% of the securities in the portfolio of investments are
backed by bond insurance of various financial institutions and financial
guaranty assurance agencies. The aggregate percentage insured by financial
institutions ranged from 2.9% to 6.7% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(3) Security (or a portion thereof) has been segregated to cover when-
issued securities.
(4) When-issued security.
(5) Security has been issued as a leveraged inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF MAY 31, 2000
<S> <C>
Assets
------------------------------------------------------
Investments, at value
(identified cost, $348,385,857) $303,454,099
Cash 1,179,106
Receivable for investments sold 35,000
Interest receivable 6,237,305
Prepaid expenses 6,323
------------------------------------------------------
TOTAL ASSETS $310,911,833
------------------------------------------------------
Liabilities
------------------------------------------------------
Payable to affiliate for Trustees' fees $ 1,698
Payable for when-issued securities 3,575,938
Accrued expenses 59,556
------------------------------------------------------
TOTAL LIABILITIES $ 3,637,192
------------------------------------------------------
NET ASSETS $307,274,641
------------------------------------------------------
Sources of Net Assets
------------------------------------------------------
Auction Preferred Shares, $0.01 par
value; unlimited number of shares
authorized, 5,240 shares issued and
outstanding at $25,000 per share $131,000,000
Common Shares, $0.01 par value;
unlimited number of shares
authorized, 16,284,961 shares issued
and outstanding 162,850
Additional paid-in capital 241,669,454
Accumulated net realized loss (computed
on the basis of identified cost) (21,630,543)
Accumulated undistributed net
investment income 1,004,638
Net unrealized depreciation (computed on
the basis of identified cost) (44,931,758)
------------------------------------------------------
NET ASSETS $307,274,641
------------------------------------------------------
Net assets applicable to preferred
shares --
Auction Preferred Shares at
liquidation value $131,000,000
Cumulative undeclared dividends 56,233
------------------------------------------------------
TOTAL NET ASSETS APPLICABLE TO PREFERRED
SHARES $131,056,233
------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES $176,218,408
------------------------------------------------------
TOTAL NET ASSETS $307,274,641
------------------------------------------------------
Net Asset Value Per Common Share
------------------------------------------------------
($176,218,408 DIVIDED BY 16,284,961
COMMON SHARES ISSUED AND OUTSTANDING) $ 10.82
------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
MAY 31, 2000
<S> <C>
Investment Income
------------------------------------------------------
Interest $ 10,646,296
------------------------------------------------------
TOTAL INVESTMENT INCOME $ 10,646,296
------------------------------------------------------
Expenses
------------------------------------------------------
Investment adviser fee $ 1,098,226
Administration fee 313,704
Trustees fees and expenses 7,883
Preferred shares remarketing agent fee 164,199
Transfer and dividend disbursing
agent fees 74,818
Legal and accounting services 32,789
Printing and postage 26,171
Custodian fee 56,982
Miscellaneous 9,308
------------------------------------------------------
TOTAL EXPENSES $ 1,784,080
------------------------------------------------------
Deduct --
Reduction of custodian fee $ 56,982
Reduction of investment adviser fee 87,246
------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 144,228
------------------------------------------------------
NET EXPENSES $ 1,639,852
------------------------------------------------------
NET INVESTMENT INCOME $ 9,006,444
------------------------------------------------------
Realized and Unrealized Gain (Loss)
------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $(10,681,333)
------------------------------------------------------
NET REALIZED LOSS $(10,681,333)
------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ (3,662,086)
------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ (3,662,086)
------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(14,343,419)
------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (5,336,975)
------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INCREASE (DECREASE) MAY 31, 2000 PERIOD ENDED
IN NET ASSETS (UNAUDITED) NOVEMBER 30, 1999(1)
<S> <C> <C>
--------------------------------------------------------------------------------------
From operations --
Net investment income $ 9,006,444 $ 13,332,034
Net realized loss (10,681,333) (10,949,210)
Net change in unrealized
appreciation (depreciation) (3,662,086) (41,269,672)
--------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM OPERATIONS $ (5,336,975) $ (38,886,848)
--------------------------------------------------------------------------------------
Distributions to shareholders --
Preferred Shareholders --
From net investment income $ (2,610,253) $ (3,132,498)
Common Shareholders --
From net investment income (6,704,914) (8,886,175)
--------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (9,315,167) $ (12,018,673)
--------------------------------------------------------------------------------------
Capital share transactions --
Proceeds from sale of preferred
shares $ -- $ 131,000,000
Proceeds from sale of common shares -- 241,500,000
Reinvestment of distributions
to common shareholders 672,063 1,532,594
Offering costs and preferred shares
underwriting discounts -- (1,972,353)
--------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS $ 672,063 $ 372,060,241
--------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ (13,980,079) $ 321,154,720
--------------------------------------------------------------------------------------
Net Assets
--------------------------------------------------------------------------------------
At beginning of period $ 321,254,720 $ 100,000
--------------------------------------------------------------------------------------
AT END OF PERIOD $ 307,274,641 $ 321,254,720
--------------------------------------------------------------------------------------
Accumulated undistributed
net investement income
included in net assets
--------------------------------------------------------------------------------------
AT END OF PERIOD $ 1,004,638 $ 1,313,361
--------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, January 29, 1999, to
November 30, 1999.
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING DURING PERIODS STATED
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MAY 31, 2000 NOVEMBER 30,
(UNAUDITED)(1) 1999(1)(2)
<S> <C> <C>
------------------------------------------------------------------------------
Net asset value -- Beginning of period
(Common shares) $ 11.720 $ 15.000
------------------------------------------------------------------------------
Income (loss) from operations
------------------------------------------------------------------------------
Net investment income $ 0.554 $ 0.837
Net realized and unrealized loss (0.880) (3.246)
------------------------------------------------------------------------------
TOTAL LOSS FROM OPERATIONS $ (0.326) $ (2.409)
------------------------------------------------------------------------------
Less distributions
------------------------------------------------------------------------------
Preferred Shareholders --
From net investment income $ (0.161) $ (0.197)
Common Shareholders --
From net investment income $ (0.413) $ (0.550)
------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.574) $ (0.747)
------------------------------------------------------------------------------
PREFERRED AND COMMON SHARES OFFERING
COSTS CHARGED TO PAID-IN CAPITAL -- $ (0.042)
------------------------------------------------------------------------------
PREFERRED SHARES UNDERWRITING DISCOUNTS -- $ (0.082)
------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD (COMMON
SHARES) $ 10.820 $ 11.720
------------------------------------------------------------------------------
MARKET VALUE -- END OF PERIOD (COMMON
SHARES) $ 10.563 $ 11.688
------------------------------------------------------------------------------
TOTAL RETURN(3) (6.19)% (18.74)%
------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING DURING PERIODS STATED
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MAY 31, 2000 NOVEMBER 30,
RATIOS/SUPPLEMENTAL DATA+++ (UNAUDITED)(1) 1999(1)(2)
<S> <C> <C>
------------------------------------------------------------------------------
Net assets, end of period (000's
omitted) $307,275 $321,255
Ratios (As a percentage of average net
assets attributable to common
shares):
Net expenses(4) 1.88%(5) 1.76%(5)
Net expenses after custodian fee
reduction(4) 1.82%(5) 1.70%(5)
Net investment income(4) 9.98%(5) 7.38%(5)
Portfolio Turnover 36% 151%
+ The expenses of the Trust reflect a reduction of the investment adviser fee.
Had such action not been taken, the ratios and the net investment income
per share would have been as follows:
Ratios (As a percentage of average net
assets attributable to common
shares):
Expenses(4) 1.98%(5) 1.76%(5)
Expenses after custodian fee
reduction(4) 1.92%(5) 1.70%(5)
Net investment income(4) 9.88%(5) 7.38%(5)
Net investment income per share $ 0.548 $ 0.837
------------------------------------------------------------------------------
++ The ratios reported above are based on net assets attributable solely to
common shares. The ratios based on net assets, including amounts related to
preferred shares, are as follows:
Ratios (As a percentage of average total
net assets):
Net expenses 1.09%(5) 1.14%(5)
Net expenses after custodian fee
reduction 1.05%(5) 1.10%(5)
Net investment income 5.78%(5) 4.77%(5)
+ The expenses of the Trust reflect a reduction of the investment adviser fee.
Had such action not been taken, the ratios would have been as follows:
Ratios (As a percentage of average total
net assets):
Expenses 1.15%(5) 1.14%(5)
Expenses after custodian fee
reduction 1.11%(5) 1.10%(5)
Net investment income 5.72%(5) 4.77%(5)
------------------------------------------------------------------------------
Senior Securities:
Total preferred shares outstanding 5,240 5,240
Asset coverage per preferred share(6) $ 58,640 $ 61,308
Involuntary liquidation preference
per preferred share(7) $ 25,000 $ 25,000
Approximate market value per
preferred share(7) $ 25,000 $ 25,000
------------------------------------------------------------------------------
</TABLE>
(1) Computed using average common shares outstanding.
(2) For the period from the start of business, January 29, 1999, to
November 30, 1999.
(3) Total return is calculated assuming a purchase at the current market
price on the first day and a sale at the current market price on the
last day of each period reported. Dividends and distributions, if any,
are assumed reinvested at the net asset value on the reinvestment date.
Total return is not computed on an annualized basis.
(4) Ratios do not reflect the effect of dividend payments to preferred
shareholders. Ratios to average net assets attributable to common shares
reflect the Trust's leveraged capital structure.
(5) Annualized.
(6) Calculated by subtracting the Trust's total liabilities (not including
the preferred shares) from the Trust's total asset, and dividing this by
the number of preferred shares outstanding.
(7) Plus accumulated and unpaid dividends.
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
-------------------------------------------
Eaton Vance Municipal Income Trust (the Trust) is an entity commonly known as
a Massachusetts business trust and is registered under the Investment Company
Act of 1940 as a non-diversified, closed-end management investment company.
The Trust was organized under the laws of the Commonwealth of Massachusetts
by an Agreement and Declaration of Trust dated December 10, 1998. The Trust's
investment objective is to achieve current income exempt from regular federal
income tax by investing primarily in investment grade municipal obligations.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A Investment Valuation -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts listed on the
commodity exchanges are valued at closing settlement prices. Short-term
obligations, maturing in sixty days or less, are valued at amortized cost,
which approximates value. Investments for which valuations or market
quotations are unavailable are valued at fair value using methods determined
in good faith by or at the direction of the Trustees.
B Investment Transactions -- Investment transactions are recorded on a trade
date basis. Realized gains and losses from such transactions are determined
using the specific identification method. Securities purchased or sold on a
when-issued or delayed delivery basis may be settled a month or more after
the transaction date. The securities so purchased are subject to market
fluctuations during this period. To the extent that when-issued or delayed
delivery purchases are outstanding, the Trust instructs the custodian to
segregate assets in a separate account, with a current value at least equal
to the amount of its purchase commitments.
C Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount on long-term debt securities
when required for federal income tax purposes.
D Federal Income Taxes -- The Trust's policy is to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies and
to distribute to shareholders each year all of its taxable, if any, and
tax-exempt income, including any net realized gain on investments. Therefore,
no provision for federal income or excise tax is necessary. At November 30,
1999, the Trust, for federal income tax purposes, had a capital loss
carryover of $10,949,210 which will reduce the taxable income arising from
future net realized gain on investments, if any, to the extent permitted by
the Internal Revenue Code and thus will reduce the amount of distributions to
shareholders which would otherwise be necessary to relieve the Trust of any
liability for federal income or excise tax. Such capital loss carryover will
expire on November 30, 2007. In addition, the Trust intends to satisfy
conditions which will enable it to designate distributions from the interest
income generated by its investments in municipal obligations, which are
exempt from regular federal income taxes when received by the Trust, as
exempt-interest dividends. The portion of such interest, if any, earned on
private activity bonds issued after August 7, 1986, may be considered a tax
preference item for investors.
E Organization and Offering Costs -- Costs incurred by the Trust in connection
with its organization have been expensed. Costs incurred by the Trust in
connection with the offerings of the common shares and preferred shares were
recorded as a reduction of capital paid in excess of par applicable to common
shares.
F Financial Futures Contracts -- Upon the entering of a financial futures
contract, the Trust is required to deposit (initial margin) either in cash or
securities an amount equal to a certain percentage of the purchase price
indicated in the financial futures contract. Subsequent payments are made or
received by the Trust (margin maintenance) each day, dependent on the daily
fluctuations in the value of the underlying security, and are recorded for
book purposes as unrealized gains or losses by the Trust. The Trust's
investment in financial futures contracts is designed for both hedging
against anticipated future changes in interest rates and investment purposes.
Should interest rates move unexpectedly, the Trust may not achieve the
anticipated benefits of the financial futures contracts and may realize a
loss.
G Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by the Trust, the premium paid is recorded as
an investment, the value of which is marked-to-market daily. When a purchased
option expires, the Trust will realize a loss in the amount of the cost of
the option. When the Trust enters into a closing sale transaction, the Trust
will realize a gain or loss depending on whether the sales proceeds from the
closing sale transaction are greater or less than the cost of the option.
When the Trust exercises a
12
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
put option, settlement is made in cash. The risk associated with purchasing
put options is limited to the premium originally paid.
H Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income and expense during the reporting period. Actual results could
differ from those estimates.
I Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Trust. Pursuant to the custodian agreement, IBT receives a fee reduced
by credits which are determined based on the average daily cash balance the
Trust maintains with IBT. All significant credit balances used to reduce the
Trust's custodian fees are reported as a reduction of total expenses in the
Statement of Operations.
J Interim Financial Statements -- The interim financial statements relating to
May 31, 2000 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the Trust's
management reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 Auction Preferred Shares (APS)
-------------------------------------------
The Trust issued 2,620 shares of Auction Preferred Shares Series A and 2,620
shares of Auction Preferred Shares Series B on March 1, 1999 in a public
offering. The underwriting discount and other offering costs were recorded as
a reduction of the capital of the common shares. Dividends on the APS, which
accrue daily, are cumulative at a rate which was established at the offering
of the APS and have been reset every 7 days thereafter by an auction.
Dividend rates ranged from 3.50% to 5.25% and from 3.25% to 5.20% for
Series A and Series B Shares respectively, during the six months ended
May 31, 2000. Series A and Series B are identical in all respects except for
the dates of reset for the dividend rates.
The APS are redeemable at the option of the Trust, at a redemption price
equal to $25,000 per share, plus accumulated and unpaid dividends on any
dividend payment date. The APS are also subject to mandatory redemption at a
redemption price equal to $25,000 per share, plus accumulated and unpaid
dividends, if the Trust is in default on its asset maintenance requirements
with respect to the APS. If the dividends on the APS shall remain unpaid in
an amount equal to two full years' dividends, the holders of the APS as a
class have the right to elect a majority of the Board of Trustees. In
general, the holders of the APS and the common shares have equal voting
rights of one vote per share, except that the holders of the APS, as a
separate class, have the right to elect at least two members of the Board of
Trustees. The APS have a liquidation preference of $25,000 per share, plus
accumulated and unpaid dividends. The Trust is required to maintain certain
asset coverage with respect to the APS as defined in the Trust's By-Laws. The
Trust pays annual fees equivalent to 0.25% of the preferred shares
liquidation value for the remarketing efforts associated with the preferred
auctions.
3 Distributions to Shareholders
-------------------------------------------
The Trust intends to make monthly distributions of net investment income,
after payment of any dividends on any outstanding preferred shares.
Distributions are recorded on the ex-dividend date. Distributions to
preferred shareholders are recorded daily and are payable at the end of each
dividend period. Each dividend payment period for the Auction Preferred
Shares is generally seven days. The applicable dividend rate for the Auction
Preferred Shares on May 31, 2000 was 4.33% and 4.50%, for Series A and
Series B Shares, respectively. For the six months ended May 31, 2000, the
Trust paid dividends to Auction Preferred shareholders amounting to
$1,316,786 and $1,293,467 for Series A and Series B Shares, respectively,
representing an average APS dividend rate for such period of 4.06% and 4.02%,
respectively.
4 Investment Adviser Fee and Other Transactions with Affiliates
-------------------------------------------
The investment adviser fee, computed at an annual rate of 0.70% of the
Trust's average weekly gross assets, was earned by Eaton Vance Management
(EVM) as compensation for management and investment advisory services
rendered to the Trust. Except for Trustees of the Trust who are not members
of EVM's organization, officers and Trustees receive remuneration for their
services to the Trust out of such investment adviser fee. For the six months
ended May 31, 2000, the fee was equivalent to 0.70% (annualized) of the
Trust's average weekly gross assets and amounted to $1,098,226. In order to
enhance the net income of the Trust, EVM waived a portion of its investment
advisory fee in the amount of $87,246. EVM also serves as the administrator
of the Trust. An administration fee, computed at the annual rate of 0.20% of
the average weekly gross assets of the Trust is paid to EVM for managing and
administering business affairs of the Trust. For the six months ended
May 31, 2000, the administrative fee amounted to $313,704.
13
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
Trustees of the Trust that are not affiliated with the Investment Adviser may
elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of the Trustees Deferred Compensation Plan. For the
six months ended May 31, 2000, no significant amounts have been deferred.
Certain officers and Trustees of the Trust are officers of EVM.
5 Investments
-------------------------------------------
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $119,578,069 and $111,356,244
respectively, for the six months ended May 31, 2000.
6 Federal Income Tax Basis of Investments
-------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investment owned by the Trust at May 31, 2000, as computed for Federal income
tax purposes, are as follows:
<TABLE>
<S> <C>
AGGREGATE COST $348,385,857
------------------------------------------------------
Gross unrealized appreciation $ 482,497
Gross unrealized depreciation (45,414,255)
------------------------------------------------------
NET UNREALIZED DEPRECIATION $(44,931,758)
------------------------------------------------------
</TABLE>
7 Shares of Beneficial Interest
-------------------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional $0.01 par value common shares. Transactions in common
shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 2000 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 1999(1)
<S> <C> <C>
------------------------------------------------------------------------------------
Sales -- 16,100,000
Issued pursuant to the Trust's dividend
reinvestment plan 61,394 116,900
------------------------------------------------------------------------------------
NET INCREASE 61,394 16,216,900
------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, January 29, 1999 to
November 30, 1999.
8 Financial Instruments
-------------------------------------------
The Trust regularly trades in financial instruments with off-balance sheet
risk in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include futures
contracts and may involve, to a varying degree, elements of risk in excess of
the amounts recognized for financial statement purposes. The notional or
contractual amounts of these instruments represent the investment the Trust
has in particular classes of financial instruments and does not necessarily
represent the amounts potentially subject to risk. The measurement of the
risks associated with these instruments is meaningful only when all related
and offsetting transactions are considered.
At May 31, 2000 there were no outstanding obligations under these financial
instruments.
9 Annual Meeting of Shareholders (Unaudited)
-------------------------------------------
The Trust held its Annual Meeting of Shareholders on March 24, 2000.
16,238,974 common shares and 5,240 Auction Preferred Shares (APS) were
outstanding on January 14, 2000, the record date for the shares eligible to
vote at the meeting. 16,066,418 common and APS together, (98.905% of the
record date shares) were represented at the meeting. The following actions
were taken by the shareholders:
ITEM 1: The election of Jessica M. Bibliowicz and Donald R. Dwight as
Trustees of the Trust.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NOMINEES FOR TRUSTEE FOR WITHHELD
<S> <C> <C>
---------------------------------------------------------------
Jessica M. Bibliowicz 15,733,325 333,093
Donald R. Dwight 15,737,224 329,194
</TABLE>
ITEM 2: The ratification of the selection of Deloitte & Touche LLP as
independent certified public accountants to the Trust for the fiscal year
ending November 30, 2000.
<TABLE>
<CAPTION>
NUMBER OF SHARES
<S> <C>
----------------------------------------------------------
For 15,679,287
Against 189,378
Abstain 197,753
</TABLE>
14
<PAGE>
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the Plan) pursuant to which
shareholders automatically have dividends and capital gains distributions
reinvested in common shares (the Shares) of the Trust unless they elect
otherwise through their investment dealer. On the distribution payment date, if
the net asset value per Share is equal to or less than the market price per
Share plus estimated brokerage commissions then new Shares will be issued. The
number of Shares shall be determined by the greater of the net asset value per
Share or 95% of the market price. Otherwise, Shares generally will be purchased
on the open market by the Plan Agent. Distributions subject to income tax (if
any) are taxable whether or not shares are reinvested.
If your shares are in the name of a brokerage firm, bank, or other nominee, you
can ask the firm or nominee to participate in the Plan on your behalf. If the
nominee does not offer the Plan, you will need to request that your shares be
re-registered in your name with the Trust's transfer agent, PFPC, Inc. or you
will not be able to participate.
The Plan Agent's service fee for handling distributions will be paid by the
Trust. Each participant will be charged their pro rata share of brokerage
commissions on all open-market purchases.
Plan participants may withdraw from the Plan at any time by writing to the Plan
Agent at the address noted on the following page. If you withdraw, you will
receive shares in your name for all Shares credited to your account under the
Plan. If a participant elects by written notice to the Plan Agent to have the
Plan Agent sell part or all of his or her Shares and remit the proceeds, the
Plan Agent is authorized to deduct a $5.00 fee plus brokerage commissions from
the proceeds.
If you wish to participate in the Plan and your shares are held in your own
name, you may complete the form on the following page and deliver it to the Plan
Agent.
Any inquiries regarding the Plan can be directed to the Plan Agent, PFPC, Inc.,
at 1-800-331-1710.
15
<PAGE>
APPLICATION FOR PARTICIPATION IN DIVIDEND REINVESTMENT PLAN
This form is for shareholders who hold their common shares in their own names.
If your common shares are held in the name of a brokerage firm, bank, or other
nominee, you should contact your nominee to see if it will participate in the
Plan on your behalf. If you wish to participate in the Plan, but your brokerage
firm, bank, or nominee is unable to participate on your behalf, you should
request that your common shares be re-registered in your own name which will
enable your participation in the Plan.
The following authorization and appointment is given with the understanding that
I may terminate it at any time by terminating my participation in the Plan as
provided in the terms and conditions of the Plan.
<TABLE>
<S> <C> <C>
------------------------------------------------------
Please print exact name on account:
------------------------------------------------------
Shareholder signature Date
------------------------------------------------------
Shareholder signature Date
Please sign exactly as your common shares are registered.
All persons whose names appear on the share certificate
must sign.
</TABLE>
YOU SHOULD NOT RETURN THIS FORM IF YOU WISH TO RECEIVE YOUR DIVIDENDS AND
DISTRIBUTIONS IN CASH. THIS IS NOT A PROXY.
THIS AUTHORIZATION FORM, WHEN SIGNED, SHOULD BE MAILED TO THE FOLLOWING ADDRESS:
Eaton Vance Municipal Income Trust
c/o PFPC, Inc.
P.O. Box 8030
Boston, MA 02266-8030
800-331-1710
--------------------------------------------------------------------------------
NUMBER OF EMPLOYEES
The Trust is organized as a Massachusetts business trust and is registered under
the Investment Company Act of 1940, as amended, as a closed-end, non-diversified
management investment company and has no employees.
NUMBER OF SHAREHOLDERS
As of May 31, 2000, our records indicate that there are 200 registered
shareholders and approximately 7,700 shareholders owning the Trust shares in
street name, such as through brokers, banks, and financial intermediaries.
If you are a street name shareholder and wish to receive our reports directly,
which contain important information about the Trust, please write or call:
Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
1-800-225-6265
NEW YORK STOCK EXCHANGE SYMBOL
The New York Stock Exchange symbol is EVN.
16
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF MAY 31, 2000
INVESTMENT MANAGEMENT
EATON VANCE MUNICIPAL INCOME TRUST
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
Thomas M. Metzold
Vice President and
Portfolio Manager
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking Emeritus, Harvard University
Graduate School of Business Administration
Norton H. Reamer
Chairman of the Board,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
17
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
INVESTMENT ADVISER AND ADMINISTRATOR OF EATON VANCE
MUNICIPAL INCOME TRUST
EATON VANCE MANAGEMENT
The Eaton Vance Building
255 State Street
Boston, MA 02109
CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
PFPC, INC.
Attention: Eaton Vance Municipal Income Trust
P.O. Box 8030
Boston, MA 02266-8030
(800) 331-1710
EATON VANCE MUNICIPAL INCOME TRUST
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
151-7/00 CE-NASRC
