<PAGE>
[EATON VANCE LOGO] [EDUCATION LOGO]
Annual Report November 30, 1999
EATON VANCE
MUNICIPAL
[PHOTO OF HIGHWAY] INCOME
TRUST
Global Management-Global Distribution
[PHOTO OF SUSPENSION BRIDGE]
<PAGE>
This Page Intentionally Left Blank
2
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
LETTER TO SHAREHOLDERS
[PHOTO]
Thomas J. Fetter
President
1999 has proven a very challenging year for investors, as a continuing
strong economy has led to higher interest rates and a difficult environment
for fixed-income vehicles. Amid a continuing robust economy, the Federal
Reserve has maintained a watchful eye for any sign of inflation. On three
occasions during the year, the Fed raised its Federal Funds rate - a key
barometer of short-term interest rates - in an attempt to reduce the
potential for inflation. The Fed actions kept the bond markets - including
the municipal market on the defensive for much of the year.
In the wake of this year's market
decline, municipal yields nearly
equal Treasury yields...
The rising interest rate environment that characterized this fiscal period
produced negative total returns for municipal bonds - including Eaton Vance
Municipal Income Trust. In last year's flight to quality, the ratio of
Treasury yields to municipal yields reached historically high levels, with
municipal yields actually EQUALLING Treasury yields at one point. By November
30, 1999, those ratios had narrowed, but only slightly. Municipal yields
still equalled around 96% of Treasury yields at November 30, 1999,
representing exceptional value in a tax-exempt investment. At November 30,
the Trust offered market yields that were well above the average tax-exempt
bond yields.
A growing budget surplus suggests
a favorable long-term outlook for
municipal bonds...
A strong economy combined with low inflation has resulted in the first budget
surpluses in a generation and created an excellent long-term scenario for
bonds. In addition, the upcoming calendar of new MUNICIPAL issuance is
significantly lighter than in recent years. That will be a positive factor
for municipal bonds because the market should be less impacted by supply
pressures. As a result, municipal bonds should remain an attractive income
alternative for tax-conscious investors.
Municipal bonds yield 96% of Treasury yields
- ----------------------------------------------
6.06% 9.47%
- ----------------------------------------------
30-Year AAA-rated Taxable equivalent yield
General Obligation (GO) Bonds* in 36% tax bracket
- -------------------------
6.29%
- -------------------------
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 yield.
Statistics as of November 30, 1999.
Past performance is no guarantee of future results.
Source: Bloomberg, L.P.
Eaton Vance Municipal
Income Trust offers tax-exempt
income, flexibility, and liquidity...
Municipal bonds are among the few tax-advantaged vehicles remaining for
investors. Eaton Vance Municipal Income Trust is designed to deliver tax-exempt
income together with the flexibility of a closed-end fund and the liquidity
afforded by trading on the New York Stock Exchange. We believe that the Trust
will continue to provide promising opportunities for its tax-conscious
shareholders.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter
President
January 12, 2000
3
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
MANAGEMENT DISCUSSION
[PHOTO]
Thomas M. Metzold
Portfolio Manager
Investment Environment
- ----------------------
- - 1999 marked another year of continued U.S. economic expansion. Allaying
fears that the record economic expansion would end in a resurgence of
inflation, the U.S. economy posted a 4.8% gain for the quarter ended in
September. The nation's unemployment rate remained at 4.1% in November, the
lowest rate since the current expansion began in March 1991.
- - Although job growth increased overall, manufacturing employment continued to
decline. However, other manufacturing productivity data showed signs of
resurgence. Retail business showed major growth during the Christmas selling
season.
- - The Consumer Price Index (CPI)rose 0.1% in November, for a total of 2.7%
(seasonally adjusted)in calendar year 1999. CPI measures the change in cost of
a fixed market basket of goods and is considered the key barometer of
inflation.
Management Discussion
- - Hospital bonds were the Trust's largest sector weighting at November 30, 1999.
With changing Medicare reimbursement rules and an increased focus on cost
containment, the Trust's hospital investments have focused on those
institutions that are well-positioned for the newly competitive environment.
- - The Trust's second largest sector concentration at November 30, 1999 was
electric utilities. Ongoing deregulation and consolidation in this industry
could be beneficial to well-regarded public power issuers. The Trust's largest
holding in this area is the Long Island (NY)Power Authority Electric System.
- - Management continued to improve the Trust's call protection. With the decline
of interest rates from their highs earlier in the decade, many bonds are now
approaching call dates, thereby making call protection an increasingly
important strategic consideration.
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 -18.74% for the period from its inception on January 29, 1999
through November 30, 1999. That return was the result of a decline in share
price from $15.00 on January 29, 1999 to $11.6875 on November 30, 1999, and
the reinvestment of $0.55 in regular monthly dividends.
- - Based on net asset value, the Trust had a total return of -18.52% for the
period ended November 30, 1999. That return was the result of a decline in net
asset value from $15.00 on January 29, 1999 to $11.72 on November 30, 1999,
and the reinvestment of all distributions.
- - Based on the most recent dividend and a share price of $11.875 the Trust had a
market yield of 7.06% at November 30, 1999.(1)
Rating Distribution(2)
- -------------------------------------------------------------------------------
By total investments
[PIE CHART]
AAA 21.3%
AA 16.4%
A 10.4%
BBB 25.4%
B 1.1%
Non-Rated 25.4%
- -------------------------------------------------------------------------------
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 November 30, 1999
Performance(3)
- -------------------------------------------------------------------------------
Cumulative Total Return (by market value, New York Stock Exchange)
- -------------------------------------------------------------------------------
Life of Trust (1/29/99) -18.74%
Cumulative Total Return (at net asset value)
- -------------------------------------------------------------------------------
Life of Trust (1/29/99) -18.52%
Sector Weightings(2)
[BAR CHART]
Hospital 22.2%
Electric Utilities 10.7%
General Obligations 9.3%
Industrial Revenue Development 8.8%
Transportation 5.4%
(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) Rating Distribution is determined by dividing the total market value of the
holdings by the total investments of the Trust. Rating Distribution and
Sector Weightings are subject to change.
(3) 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.
4
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 96.3%
<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 $ 1,920,760
- -----------------------------------------------------------------------------
$ 1,920,760
- -----------------------------------------------------------------------------
Cogeneration -- 2.0%
- -----------------------------------------------------------------------------
$ 2,950 Maryland Energy Cogeneration, (AES
Warrior Run), (AMT), 7.40%, 9/1/19 $ 3,062,041
3,500 Pennsylvania, EDA, (Northampton
Generating), (AMT), 6.40%, 1/1/09 3,501,505
- -----------------------------------------------------------------------------
$ 6,563,546
- -----------------------------------------------------------------------------
Education -- 5.2%
- -----------------------------------------------------------------------------
$ 3,000 California Educational Facilities
Authority, (Santa Clara University),
5.00%, 9/1/23 $ 2,658,840
6,875 Massachusetts Development Finance
Agency, (Boston University),
5.45%, 5/15/59 5,862,106
4,750 New York Dormitory Authority, (State
University Educational Facilities),
4.75%, 5/15/28 3,827,977
5,000 Ohio Higher Educational Facilities,
(Oberlin College), Variable Rate,
10/1/29(1)(2) 3,562,900
1,000 Philadelphia, PA, HEFA, (Chestnut Hill
College), 6.00%, 10/1/29 909,440
- -----------------------------------------------------------------------------
$ 16,821,263
- -----------------------------------------------------------------------------
Electric Utilities -- 10.7%
- -----------------------------------------------------------------------------
$ 8,000 Brazos River Authority, TX, (Reliant
Energy, Inc.), 5.375%, 4/1/19 $ 7,056,640
6,250 Brazos River Authority, TX, (Texas
Utilities Electric Co.), (AMT),
5.55%, 6/1/30 5,384,125
5,500 Burke County, GA, Development Authority,
(Georgia Power Co.), (AMT),
5.45%, 5/1/34 4,869,095
9,550 Long Island Power Authority, NY,
Electric System Revenue, 5.25%, 12/1/26 8,430,358
1,500 North Carolina Eastern Municipal Power
Agency, (Power System Revenue),
5.75%, 1/1/26 1,327,005
7,250 North Carolina Municipal Power Agency,
6.50%, 1/1/20 7,241,372
- -----------------------------------------------------------------------------
$ 34,308,595
- -----------------------------------------------------------------------------
Escrowed / Prerefunded -- 2.4%
- -----------------------------------------------------------------------------
$35,000 Dawson Ridge, CO, Metropolitan District
#1, Escrowed to Maturity, 0.00%, 10/1/22 $ 7,796,950
- -----------------------------------------------------------------------------
$ 7,796,950
- -----------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -----------------------------------------------------------------------------
General Obligations -- 9.3%
- -----------------------------------------------------------------------------
$ 3,350 Bell Mountain Ranch, CO, (Metropolitan
District), 6.625%, 11/15/25 $ 3,099,554
15,735 Florida Board of Education,
4.75%, 6/1/28 12,908,050
8,500 Michigan Building Authority Revenue,
4.75%, 10/15/21 7,182,500
8,500 North East Independent School District,
TX, 4.50%, 10/1/28 6,631,615
- -----------------------------------------------------------------------------
$ 29,821,719
- -----------------------------------------------------------------------------
Health Care-Miscellaneous -- 0.8%
- -----------------------------------------------------------------------------
$ 2,845 Illinois Development Finance Authority,
(Community Rehabilitation Providers),
5.60%, 7/1/19 $ 2,493,557
- -----------------------------------------------------------------------------
$ 2,493,557
- -----------------------------------------------------------------------------
Hospital -- 22.2%
- -----------------------------------------------------------------------------
$ 4,000 Baxter County, AK, Community Hospital
District, 5.625%, 9/1/28 $ 3,420,520
3,300 Bell County, TX, (Heritage Oaks
Healthcare), 6.70%, 6/1/29 3,015,276
2,500 California Health Facilities Financing
Authority (Cedar Sinai Medical Center),
Variable Rate, 12/1/34(1)(2) 2,470,425
5,000 California Statewide Communities
Development Authority, (Children's
Hospital of Los Angeles),
5.25%, 8/15/29 4,242,250
1,000 Chautauqua County, NY, IDA, (Women's
Christian Association), 6.35%, 11/15/17 943,920
1,000 Chautauqua County, NY, IDA, (Women's
Christian Association), 6.40%, 11/15/29 892,830
2,900 Highland County, OH, (Joint Township
Hospital District), 6.75%, 12/1/29 2,708,571
3,500 John Tolfree Health System Corp., MI,
6.00%, 9/15/23 3,139,570
1,215 Loris, SC, Community Hospital District,
5.625%, 1/1/20 1,065,786
3,500 Loris, SC, Community Hospital District,
5.625%, 1/1/29 2,981,475
6,500 Louisiana Public Facilities Authority,
(Tuoro Infirmary), 5.625%, 8/15/29 5,607,290
3,750 Maricopa County, AZ, IDA, (Mayo
Foundation), Residual Certificates,
Variable Rate, 11/15/37(1)(2) 2,778,000
2,000 Martin County, MN, (Fairmont Community
Hospital Association), 6.625%, 9/1/22 1,885,760
6,000 Massachusetts HEFA, (Partners Healthcare
System), 5.25%, 7/1/29 5,169,960
1,700 Mecosta County, MI, (Michigan General
Hopital), 5.75%, 5/15/09 1,648,286
2,500 Mecosta County, MI, (Michigan General
Hospital), 6.00%, 5/15/18 2,243,050
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -----------------------------------------------------------------------------
Hospital (continued)
- -----------------------------------------------------------------------------
$ 4,260 New Jersey Health Care Facilities,
(Capital Health System), 5.25%, 7/1/27 $ 3,426,574
4,085 New Jersey Health Care Facilities, (St.
Barnabas Health), Variable Rate,
7/1/28(2)(3) 2,701,410
9,750 Oklahoma Development Finance Authority,
(Hillcrest Health System),
5.625%, 8/15/29 7,988,467
7,000 Rhode Island HEFA, (St. Joseph Health
Services), 5.50%, 10/1/29 5,778,010
2,425 Southwestern Illinois, IDR, (Anderson
Hospital), 5.625%, 8/15/29 2,064,524
6,000 Weber County, UT, (IHC Health Services,
Inc.), 5.00%, 8/15/30 4,991,340
- -----------------------------------------------------------------------------
$ 71,163,294
- -----------------------------------------------------------------------------
Housing -- 3.7%
- -----------------------------------------------------------------------------
$ 4,680 Louisiana Public Facilities Authority,
(Eden Point), 6.25%, 3/1/34 $ 4,276,022
3,500 North Little Rock, AR, Residential
Housing Facilities, (Parkstone Place),
6.50%, 8/1/21 3,343,305
3,700 Oregon Health Authority, (Trillium
Affordable Housing), 6.75%, 8/15/29 3,441,592
1,000 Raleigh, NC, Housing Authority,
Multifamily, (Cedar Point),
7.00%, 11/1/30 934,990
- -----------------------------------------------------------------------------
$ 11,995,909
- -----------------------------------------------------------------------------
Industrial Development Revenue -- 9.5%
- -----------------------------------------------------------------------------
$ 2,000 Abia Development Corp., TX, (Austin
Cargoport Development ), (AMT),
6.50%, 10/1/24 $ 1,900,780
2,000 Broward County, FL, IDR, (Lynxs
Cargoport), (AMT), 6.75%, 6/1/19 1,891,680
3,700 Charleston County, SC, IDA, (Zeigler
Coal Holding), 6.95%, 8/10/28 3,264,917
5,500 Courtland, AL, Solid Waste Disposal,
(Champion International Corp.),
6.70%, 11/1/29 5,537,730
2,500 Gulf Coast, TX, Waste Disposal
Authority, (Valero Energy Corp.), (AMT),
5.70%, 4/1/32 2,141,850
3,550 Mississippi Business Finance Corp.,
(System Energy Resources, Inc.),
5.90%, 5/1/22 3,147,714
3,000 Missouri Development Finance Authority,
Solid Waste Disposal, (Proctor and
Gamble Paper Products), (AMT),
5.20%, 3/15/29 2,618,910
1,750 New Jersey EDA, (Continental Airlines),
(AMT), Variable Rate, 9/15/29(1)(2) 1,524,075
5,750 Ohio Solid Waste Disposal, (USG Corp.),
(AMT), 5.65%, 3/1/33 4,976,050
3,550 Phoenix, AZ, IDA, (America West
Airlines, Inc.), (AMT), 6.25%, 6/1/19 3,277,183
- -----------------------------------------------------------------------------
$ 30,280,889
- -----------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -----------------------------------------------------------------------------
Insured-Education -- 0.7%
- -----------------------------------------------------------------------------
$ 3,000 Massachusetts HEFA, Residual
Certificates, (Berklee College of
Music), (MBIA), Variable Rate,
10/1/27(1)(2) $ 2,244,660
- -----------------------------------------------------------------------------
$ 2,244,660
- -----------------------------------------------------------------------------
Insured-Hospital -- 4.3%
- -----------------------------------------------------------------------------
$10,000 New York Dormitory Authority, (Municipal
Health Facilities Improvement), (FSA),
4.75%, 1/15/29 $ 8,176,600
6,900 New York Dormitory Authority, (New York
Presbyterian Hospital), (AMBAC),
4.75%, 8/1/27 5,665,935
- -----------------------------------------------------------------------------
$ 13,842,535
- -----------------------------------------------------------------------------
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) $ 3,702,500
- -----------------------------------------------------------------------------
$ 3,702,500
- -----------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.0%
- -----------------------------------------------------------------------------
$ 5,000 Pennsylvania Turnpike Commission Oil
Franchise Tax, (AMBAC), Variable Rate,
12/1/27(1)(2) $ 3,209,800
- -----------------------------------------------------------------------------
$ 3,209,800
- -----------------------------------------------------------------------------
Insured-Transportation -- 2.9%
- -----------------------------------------------------------------------------
$ 3,500 Florida Turnpike Authority, (Department
of Transportation), (FGIC),
4.50%, 7/1/27 $ 2,778,300
4,250 Metropolitan Transportation Authority,
NY, Commuter Revenue (FGIC),
4.75%, 7/1/26 3,516,493
5,000 Southeastern Pennsylvania Transit
Authority, (FGIC), Variable Rate,
3/1/29(1)(2) 3,173,400
- -----------------------------------------------------------------------------
$ 9,468,193
- -----------------------------------------------------------------------------
Insured-Water and Sewer -- 1.2%
- -----------------------------------------------------------------------------
$ 5,000 Charleston, SC, Waterworks and Sewer
Revenue, (FGIC), 4.50%, 1/1/24 $ 3,983,400
- -----------------------------------------------------------------------------
$ 3,983,400
- -----------------------------------------------------------------------------
Miscellaneous -- 2.5%
- -----------------------------------------------------------------------------
$ 4,000 Charter Mac Equity, TN, (AMT),
6.625%, 6/30/09 $ 3,916,040
4,000 Muni Mae Tax Revenue Exempt Bond, (AMT),
Variable Rate, 6/30/09 3,958,000
- -----------------------------------------------------------------------------
$ 7,874,040
- -----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -----------------------------------------------------------------------------
Nursing Home -- 1.2%
- -----------------------------------------------------------------------------
$ 2,000 Orange County, FL, Health Facilities
Authority, (Westminster Community Care),
6.75%, 4/1/34 $ 1,844,340
2,000 Tarrant County, TX, Health Facilities,
(3927 Foundation), 10.25%, 9/1/19 1,996,680
- -----------------------------------------------------------------------------
$ 3,841,020
- -----------------------------------------------------------------------------
Pooled Loans -- 0.9%
- -----------------------------------------------------------------------------
$ 676 Tax Exempt Securities Trust, Community
Health Provider, Pooled Loan Program,
6.00%, 12/1/36 $ 610,480
1,800 Tax Exempt Securities Trust, Community
Health Provider, Pooled Loan Program,
6.25%, 12/1/36 1,729,980
677 Tax Exempt Securities Trust, Community
Health Provider, Pooled Loan Program,
7.75%, 12/1/36 653,470
- -----------------------------------------------------------------------------
$ 2,993,930
- -----------------------------------------------------------------------------
Senior Living / Life Care -- 3.1%
- -----------------------------------------------------------------------------
$ 3,245 Logan County, CO, Industrial Development
Revenue, (TLC Care Choices, Inc.),
6.875%, 12/1/23 $ 2,977,125
3,700 Ohio HFA, Retirement Rental Housing,
(Encore Retirement Partners),
6.75%, 3/1/19 3,317,161
750 Okaloosa County, FL, Retirement Rental
Housing, (Encore Retirement Partners),
6.125%, 2/1/14 648,210
3,000 Wisconsin HEFA, (Wisconsin Illinois
Senior Housing), 7.00%, 8/1/29 2,892,750
- -----------------------------------------------------------------------------
$ 9,835,246
- -----------------------------------------------------------------------------
Special Tax Revenue -- 2.8%
- -----------------------------------------------------------------------------
$ 3,600 Black Hawk, CO, Business Improvement
District, 6.50%, 12/1/11 $ 3,439,440
2,330 Frederick County, MD, Urbana Community
Development Authority, 6.625%, 7/1/25 2,227,783
1,750 Longleaf, FL, Community Development
District, 6.20%, 5/1/09 1,664,303
1,955 Longleaf, FL, Community Development
District, 6.65%, 5/1/20 1,823,976
- -----------------------------------------------------------------------------
$ 9,155,502
- -----------------------------------------------------------------------------
Transportation -- 5.4%
- -----------------------------------------------------------------------------
$ 4,000 Kent County, MI, Airport Facility,
Variable Rate, 1/1/25(1)(2) $ 2,964,160
5,000 Los Angeles County, CA, Metropolitan
Transportation Authority, Variable Rate,
7/1/28(1)(2) 3,306,500
2,400 Massachusetts Turnpike Authority,
Metropolitan Highway System, Variable
Rate, 1/1/39(2)(3) 1,211,424
4,000 Metropolitan Atlanta Rapid
Transportation Authority, GA, Variable
Rate, 7/1/20(1)(2) 3,198,720
3,500 New York State Thruway Authority,
General Revenue, 5.00%, 1/1/25 3,022,495
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -----------------------------------------------------------------------------
Transportation (continued)
- -----------------------------------------------------------------------------
$ 5,575 Wayne, MI, Charter County Airport,
Variable Rate, 12/1/28(1)(2) $ 3,803,823
- -----------------------------------------------------------------------------
$ 17,507,122
- -----------------------------------------------------------------------------
Utilities - Electrical and Gas -- 2.2%
- -----------------------------------------------------------------------------
$ 8,500 San Antonio, TX, Electric and Natural
Gas Revenue, 4.50%, 2/1/21 $ 6,916,450
- -----------------------------------------------------------------------------
$ 6,916,450
- -----------------------------------------------------------------------------
Water and Sewer -- 0.5%
- -----------------------------------------------------------------------------
$ 2,500 Metropolitan Water District, (Southern
California Waterworks), Variable Rate,
7/1/27(2)(3) $ 1,535,125
- -----------------------------------------------------------------------------
$ 1,535,125
- -----------------------------------------------------------------------------
Total Tax-Exempt Investments -- 96.3%
(identified cost $350,545,677) $309,276,005
- -----------------------------------------------------------------------------
Other Assets, Less Liabilities -- 3.7% $ 11,978,715
- -----------------------------------------------------------------------------
Net Assets -- 100.0% $321,254,720
- -----------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
At November 30, 1999, the concentration of the Trust's investments in the
various states, determined as a percentage of net assets, is as follows:
<TABLE>
<S> <C>
New York 10.7%
Texas 10.9%
Others, representing less than 10% individually 74.7%
</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
November 30, 1999, 11.8% 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 0.7% to 4.3% 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 has been issued as a leveraged inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF NOVEMBER 30, 1999
<S> <C>
Assets
- ------------------------------------------------------
Investments, at value (identified cost,
$350,545,677) $309,276,005
Cash 6,017,484
Interest receivable 6,045,190
Receivable from the Investment Adviser 685
Prepaid expenses 2,953
- ------------------------------------------------------
TOTAL ASSETS $321,342,317
- ------------------------------------------------------
Liabilities
- ------------------------------------------------------
Payable to affiliate for Trustees' fees $ 1,457
Accrued expenses 86,140
- ------------------------------------------------------
TOTAL LIABILITIES $ 87,597
- ------------------------------------------------------
NET ASSETS $321,254,720
- ------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------
Auction Preferred Shares, $0.01 par
value; unlimited number of shares
authorized, 5,240 shares issued and
outstanding, liquidation preference
of $25,000 per share $131,000,000
Common Shares, $0.01 par value;
unlimited number of shares
authorized, 16,223,567 shares issued
and outstanding 162,236
Additional paid-in capital 240,998,005
Accumulated net realized loss (computed
on the basis of identified cost) (10,949,210)
Accumulated undistributed net investment
income 1,313,361
Net unrealized depreciation (computed on
the basis of identified cost) (41,269,672)
- ------------------------------------------------------
NET ASSETS $321,254,720
- ------------------------------------------------------
Net assets applicable to preferred
shareholders --
Auction Preferred Shares at
liquidation value $131,000,000
Cumulative undeclared dividends 45,810
- ------------------------------------------------------
TOTAL NET ASSETS APPLICABLE TO PREFERRED
SHARES $131,045,810
- ------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES $190,208,910
- ------------------------------------------------------
TOTAL NET ASSETS $321,254,720
- ------------------------------------------------------
Net Asset Value Per Common Share
- ------------------------------------------------------
($190,208,910 DIVIDED BY 16,223,567
COMMON SHARES ISSUED AND OUTSTANDING) $ 11.72
- ------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED
NOVEMBER 30, 1999(1)
<S> <C>
Investment Income
- ------------------------------------------------------
Interest $ 16,410,016
- ------------------------------------------------------
TOTAL INVESTMENT INCOME $ 16,410,016
- ------------------------------------------------------
Expenses
- ------------------------------------------------------
Investment adviser fee $ 1,930,593
Administration fee 551,597
Trustees fees and expenses 9,918
Preferred shares remarketing agent fee 244,055
Transfer and dividend disbursing agent
fees 175,979
Custodian fee 97,169
Legal and accounting services 50,335
Printing and postage 13,006
Registration fees 8,230
Miscellaneous 94,954
- ------------------------------------------------------
TOTAL EXPENSES $ 3,175,836
- ------------------------------------------------------
Deduct --
Reduction of custodian fee $ 97,169
Reduction of investment adviser fee 685
- ------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 97,854
- ------------------------------------------------------
NET EXPENSES $ 3,077,982
- ------------------------------------------------------
NET INVESTMENT INCOME $ 13,332,034
- ------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $(11,134,761)
Financial futures contracts 185,551
- ------------------------------------------------------
NET REALIZED LOSS $(10,949,210)
- ------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (Identified cost basis) $(41,269,672)
- ------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $(41,269,672)
- ------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(52,218,882)
- ------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $(38,886,848)
- ------------------------------------------------------
</TABLE>
(1) For the period from the start of business, January 29, 1999, to
November 30, 1999.
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase (Decrease) PERIOD ENDED
in Net Assets NOVEMBER 30, 1999(1)
<S> <C>
- --------------------------------------------------------------
From operations --
Net investment income $ 13,332,034
Net realized loss (10,949,210)
Net change in unrealized appreciation
(depreciation) (41,269,672)
- --------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (38,886,848)
- --------------------------------------------------------------
Distributions to shareholders --
Preferred Shareholders --
From net investment income $ (3,132,498)
Common Shareholders --
From net investment income (8,886,175)
- --------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (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 1,532,594
Offering costs and preferred shares
underwriting discounts (1,972,353)
- --------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS $ 372,060,241
- --------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 321,154,720
- --------------------------------------------------------------
Net Assets
- --------------------------------------------------------------
At beginning of period $ 100,000
- --------------------------------------------------------------
AT END OF PERIOD $ 321,254,720
- --------------------------------------------------------------
Accumulated undistributed
net investment income
included in net assets
- --------------------------------------------------------------
AT END OF PERIOD $ 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 NOVEMBER 30, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING DURING THE PERIOD
<TABLE>
<CAPTION>
PERIOD ENDED
NOVEMBER 30, 1999(1)(2)
<S> <C>
- -----------------------------------------------------------------------------------------------
Net asset value -- Beginning of period (Common shares) $ 15.000
- -----------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------
Net investment income $ 0.837
Net realized and unrealized loss (3.246)
- -----------------------------------------------------------------------------------------------
TOTAL LOSS FROM OPERATIONS $ (2.409)
- -----------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------
Preferred Shareholders--
From net investment income $ (0.197)
Common Shareholders--
From net investment income (0.550)
- -----------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (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) $ 11.720
- -----------------------------------------------------------------------------------------------
MARKET VALUE -- END OF PERIOD (COMMON SHARES) $ 11.688
- -----------------------------------------------------------------------------------------------
TOTAL RETURN(3) (18.74)%
- -----------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD ENDED
NOVEMBER 30, 1999(1)(2)
<S> <C>
- -----------------------------------------------------------------------------------------------
Ratios/Supplemental Data+++
- -----------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $321,255
Ratios (As a percentage of average net assets attributable to common
shares):
Net expenses(5) 1.76%(4)
Net expenses after custodian fee reduction(5) 1.70%(4)
Net investment income(5) 7.38%(4)
Portfolio Turnover 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(5) 1.76%(4)
Expenses after custodian fee reduction(5) 1.70%(4)
Net investment income(5) 7.38%(4)
Net investment income per share $ 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 1.14%(4)
Net expenses after custodian fee reduction 1.10%(4)
Net investment income 4.77%(4)
+ 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 1.14%(4)
Expenses after custodian fee reduction 1.10%(4)
Net investment income 4.77%(4)
- -----------------------------------------------------------------------------------------------
Senior Securities:
Total preferred shares outstanding 5,240
Asset coverage per preferred share(6) $ 61,308
Involuntary liquidation preference per preferred share(7) $ 25,000
Approximate market value per preferred share(7) $ 25,000
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, January 29, 1999, to
November 30, 1999.
(2) Computed using average common shares outstanding.
(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) Annualized.
(5) 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.
(6) Calculated by subtracting the Trust's total liabilities (not including the
preferred shares) from the Trust's total assets, 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 NOVEMBER 30, 1999
NOTES TO FINANCIAL STATEMENTS
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 provide current income exempt from regular federal
income tax. The Trust seeks to achieve its objective 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
12
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
proceeds from the closing sale transaction are greater or less than the cost
of the option. When the Trust exercises a 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.
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 2.90% to 3.80% and from 2.80% to 3.75% for
Series A and Series B Shares respectively, during the period ended
November 30, 1999. 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 November 30, 1999 was 3.80% and 3.69% for Series A and
Series B Shares, respectively. For the period ended November 30, 1999, the
Trust paid dividends to Auction Preferred shareholders amounting to
$1,571,187 and $1,561,311 for Series A and Series B Shares, respectively,
representing an average APS dividend rate for such period of 3.23% and 3.27%,
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 period
ended November 30, 1999, the fee was equivalent to 0.70% of the Trust's
average weekly gross assets and amounted to $1,930,593. In order to enhance
the net income of the Trust, EVM waived a portion of its investment advisory
fee in the amount of $685. 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 period ended
November 30, 1999, the administrative fee amounted to $551,597.
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
13
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
terms of the Trustees Deferred Compensation Plan. For the period ended
November 30, 1999, 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 $832,007,780 and $470,799,234
respectively, for the period ended November 30, 1999.
6 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by the Trust at November 30, 1999, as computed for Federal
income tax purposes, are as follows:
<TABLE>
<S> <C>
AGGREGATE COST $350,545,677
------------------------------------------------------
Gross unrealized appreciation $ 317,385
Gross unrealized depreciation (41,587,057)
------------------------------------------------------
NET UNREALIZED DEPRECIATION $(41,269,672)
------------------------------------------------------
</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>
PERIOD ENDED
NOVEMBER 30, 1999(1)
<S> <C>
--------------------------------------------------------------
Sales 16,100,000
Issued pursuant to the Trust's dividend
reinvestment plan 116,900
--------------------------------------------------------------
NET INCREASE 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 November 30, 1999 there were no outstanding obligations under these
financial instruments.
14
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND SHAREHOLDERS
OF EATON VANCE MUNICIPAL INCOME TRUST:
- ---------------------------------------------
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Eaton Vance Municipal Income Trust (the Trust)
as of November 30, 1999, and the related statement of operations, the statement
of changes in net assets and the financial highlights for the period from the
start of business, January 29, 1999, to November 30, 1999. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. Our procedures included confirmation of
securities held as of November 30, 1999 by correspondence with the custodian. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights, referred to
above, present fairly, in all material respects, the financial position of Eaton
Vance Municipal Income Trust at November 30, 1999, and the results of its
operations, the changes in its net assets and its financial highlights for the
period from the start of business, January 29, 1999, to November 30, 1999 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 30, 1999
15
<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 Global Fund
Services 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 Global
Fund Services, at 1-800-331-1710.
16
<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 Global Fund Services
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 November 30, 1999, our records indicate that there are 190 registered
shareholders and approximately 6,950 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 directly receive our reports,
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.
17
<PAGE>
EATON VANCE MUNICIPAL INCOME TRUST AS OF NOVEMBER 30, 1999
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 and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
18
<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 GLOBAL FUND SERVICES
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
200 Berkeley Street
Boston, MA 02116-5022
EATON VANCE MUNICIPAL INCOME TRUST
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
151-11/99 CE-NASRC-11/99
