<PAGE>
[LOGO OF EATON Investing [PHOTO OF FINANCIAL
VANCE MUTUAL for the NEWSPAPER & CALCULATOR
FUNDS APPEARS 21st APPEARS HERE]
HERE] Century
Semiannual Report June 30, 1997
[PHOTO OF EV
NYSE FLAG CLASSIC
APPEARS SPECIAL
HERE] EQUITIES FUND
Eaton Vance
Global management-Global Distribution
[PHOTO OF NYSE APPEARS HERE]
Classic
<PAGE>
EV Classic Special Equities Fund as of June 30, 1997
INVESTMENT UPDATE
Investment Environment
- --------------------------------------------------------------------------------
The Economy
[PHOTO OF EDWARD E. SMILEY,
PORTFOLIO MANAGER OMITTED]
. Economic conditions in the U.S. were very favorable in the first half of
1997. Gross Domestic Product (GDP) increased at an annualized rate of 4.9%
during the first quarter. In the second quarter, the economy slowed
somewhat, with advance estimates showing an annualized GDP increase of 2.2%.
. Unemployment remained low throughout the period, hitting a 24-year low of
4.8% in May and rising slightly to 5.0% in June.
. Inflation was low throughout the first half of the year, despite continued
economic growth and a tight labor market. During the first half of 1997, the
Consumer Price Index (CPI) rose at an annual rate of only 1.4%, the slowest
rate of increase since 1986.
The Markets
. The sustained growth of the U.S. economy and low inflation have helped
propel prices of large capitalization stocks to record levels. In the six
months ended June 30, 1997, the S&P 500 Index had a total return of 20.6%.*
. An increase in volatility has accompanied higher stock valuations in the
first half of 1997. Within a six-week period in March and April, the Dow
Jones Industrial Average declined almost 10%, and then fully recovered to
reach new record highs.*
. While the performance of large capitalization stocks has surged in the
current economic environment, investors have not showed as much enthusiasm
for the small and mid-capitalization sectors. The total returns of the S&P
400 Mid Cap Index and the Russell 2000 Stock Index during the first half of
the year were 13.0% and 10.2%, respectively.*
- --------------------------------------------------------------------------------
Mutual fund shares 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.
The Fund
- --------------------------------------------------------------------------------
The Past Six Months
. During the six months ended June 30, 1997, EV Classic Special Equities Fund
had a total return of 4.2%./1/
. This return resulted from a decrease in net asset value to $12.04 per share
on June 30, 1997 from $13.35 per share on December 31, 1996, and the
reinvestment of $1.610 per share in capital gains distributions./2/
. By comparison, the average total return for mutual funds in the Lipper
Growth Fund Category was 14.3% during this period.*
Management Discussion
. The Fund remains focused on the small- and mid-capitalization companies that
we view as future industry leaders. The Fund's concentrations include the
networking, specialty software, and communications equipment sectors,
industries in which order rates remain especially strong in the current
climate.
. In the media sector, the Fund had an investment in A.H. Belo Corp. A
well-managed operator of broadcast and newspaper holdings, Belo includes The
Dallas Morning News, The Providence Journal, and several West Coast
television stations in its portfolio.
. The Fund also maintained a relatively strong exposure to the oil service
sector and supply sectors through its investments in Camco, Inc., Ensco,
Inc. and Noble Drilling. In a period of weak oil prices, these service and
supply companies have fared better than exploration companies and have
benefited from a consolidation following the industry woes of the late
1980s.
- --------------------------------------------------------------------------------
/1/ This return does not include 1% contingent deferred sales charge (CDSC).
/2/ Returns are calculated by determining the percentage change in net asset
value with all distributions reinvested. SEC returns reflect a maximum 1%
contingent deferred sales charge (CDSC) deducted for redemptions made
within the first 12 months of investment. Past performance is no guarantee
of future results. The value of an investment in the Fund will fluctuate so
that shares, when redeemed, may be worth more or less than their original
cost.
/3/ Industry sectors and top 10 holdings are as of 6/30/97 and may not be
representative of the Portfolio's current or future investments. Top 10
holdings account for 13.94% of the Portfolio's investments, determined by
dividing the total market value of the holdings by the total net assets of
the Portfolio.
* It is not possible to invest directly in an index, average, or Lipper
Category.
- --------------------------------------------------------------------------------
Fund Information
as of June 30, 1997
<TABLE>
<CAPTION>
Average Annual Total Returns/2/
- -------------------------------------------------
<S> <C>
One Year 13.1%
Life of Fund (11/17/94) 15.7
<CAPTION>
SEC Average Annual Total Returns/2/
- -------------------------------------------------
<S> <C>
One Year 12.2%
Life of Fund (11/17/94) 15.7
<CAPTION>
Five Largest Industry Sectors/3/
- -------------------------------------------------
As a percentage of total net assets
<S> <C>
Information Services 19.3%
Health Services 8.2%
Oil & Gas 7.9%
Business Products & Services 5.4%
Drugs 5.2%
<CAPTION>
Ten Largest Equity Holdings/3/
- ------------------------------------------------
As a percentage of total net assets
<S> <C>
A.H. Belo Corp. 1.6%
Vanstar Corp. 1.5
Genzyme Corp. 1.5
BISYS Group 1.4
MGM Grand 1.4
Mutual Risk Management 1.4
Sofomor Danek 1.3
Bed Bath & Beyond 1.3
Strayer Education 1.3
Paychex, Inc. 1.3
</TABLE>
2
<PAGE>
EV Classic Special Equities Fund as of June 30, 1997
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of June 30, 1997
Assets
- --------------------------------------------------------------------------------
<S> <C>
Investment in Special Investment Portfolio, at value (Note 1A)
(identified cost, $1,700,720) $ 1,976,198
Receivable for Fund shares sold 33,677
Receivable from Administrator (Note 4) 13,501
Deferred organization expenses (Note 1E) 20,840
- --------------------------------------------------------------------------------
Total assets $ 2,044,216
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable to affiliate for Trustees' fees (Note 4) $ 24
Accrued expenses 3,810
- --------------------------------------------------------------------------------
Total liabilities $ 3,834
- --------------------------------------------------------------------------------
Net Assets for 169,403 shares of
beneficial interest outstanding $ 2,040,382
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Paid-in capital $ 1,549,773
Accumulated undistributed net realized gain on
investments (computed on the basis of identified cost) 244,708
Accumulated net investment loss (29,577)
Net unrealized appreciation of investments (computed
on the basis of identified cost) 275,478
- --------------------------------------------------------------------------------
Total $ 2,040,382
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share (Note 6)
- --------------------------------------------------------------------------------
($2,040,382 / 169,403 shares of
beneficial interest outstanding) $ 12.04
- --------------------------------------------------------------------------------
<CAPTION>
Statement of Operations
For the Six Months Ended
June 30, 1997
Investment Income (Note 1B)
- --------------------------------------------------------------------------------
<S> <C>
Dividend income allocated
from Portfolio $ 1,341
Interest income allocated from Portfolio 5,456
Expenses allocated from Portfolio (7,374)
- --------------------------------------------------------------------------------
Net investment loss $ (577)
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Registration fees $ 10,579
Distribution and service fees (Note 5) 9,845
Printing and postage 9,810
Legal and accounting services 5,921
Amortization of organization expenses (Note 1E) 4,344
Custodian fee (Note 1C) 1,253
Transfer and dividend disbursing agent fees 749
- --------------------------------------------------------------------------------
Total expenses $ 42,501
- --------------------------------------------------------------------------------
Deduct --
Preliminary allocation of expenses to the
Administrator (Note 4) $ 13,501
- --------------------------------------------------------------------------------
Total expense reductions $ 13,501
- --------------------------------------------------------------------------------
Net expenses $ 29,000
- --------------------------------------------------------------------------------
Net investment loss $ (29,577)
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) from Portfolio
- --------------------------------------------------------------------------------
Net realized gain --
Investment transactions (identified cost basis) $ 245,841
- --------------------------------------------------------------------------------
Net realized gain on investment transactions $ 245,841
- --------------------------------------------------------------------------------
Change in unrealized appreciation --
Investment transactions $ (144,541)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation of investments $ (144,541)
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 101,300
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 71,723
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
3
<PAGE>
EV Classic Special Equities Fund as of June 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
Increase (Decrease) June 30, 1997 Year Ended
in Net Assets (Unaudited) December 31, 1996
- ------------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment loss $ (29,577) $ (58,933)
Net realized gain on investments and
financial futures contracts 245,841 388,691
Net change in unrealized appreciation
of investments (144,541) 117,756
- ------------------------------------------------------------------------------------
Net increase in net assets from operations $ 71,723 $ 447,514
- ------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net realized gain on investments $ (253,630) $ (86,680)
- ------------------------------------------------------------------------------------
Total distributions to shareholders $ (253,630) $ (86,680)
- ------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest (Note 3)--
Proceeds from sale of shares $ 414,440 $ 1,066,218
Net asset value of shares issued to
shareholders in payment of
distributions declared 235,484 77,849
Cost of shares redeemed (530,372) (1,540,664)
- ------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Fund share transactions $ 119,552 $ (396,597)
- ------------------------------------------------------------------------------------
Net decrease in net assets $ (62,355) $ (35,763)
- ------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------
At beginning of period $2,102,737 $ 2,138,500
- ------------------------------------------------------------------------------------
At end of period $2,040,382 $ 2,102,737
- ------------------------------------------------------------------------------------
Accumulated
net investment loss
included in net assets
- ------------------------------------------------------------------------------------
At end of period $ (29,577) $ --
- ------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
4
<PAGE>
EV Classic Special Equities Fund as of June 30, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 ----------------------------------
(Unaudited) 1996 1995 1994*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value -- Beginning of period $13.350 $ 11.630 $ 9.880 $10.000
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment loss $(0.175) $ (0.374) $(0.182) $(0.003)
Net realized and unrealized gain (loss) on investments 0.475 2.669 2.022 (0.117)
- -----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.300 $ 2.295 $ 1.840 $(0.120)
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments $(1.610) $ (0.575) $ -- $ --
In excess of net realized gain on investments -- -- (0.090) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions $(1.610) $ (0.575) $(0.090) $ --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value-- End of period $12.040 $ 13.350 $11.630 $ 9.880
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 4.18% 19.90% 18.65% (1.20)%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data++
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 2,040 $ 2,103 $ 2,139 $ 122
Ratio of net expenses to average daily net assets/(2)/ 3.69%+ 3.50% 3.44% 1.60%+
Ratio of net investment income gain (loss) to average daily net assets/(2)/ (3.00)%+ (2.58)% (2.54)% 0.59%+
<CAPTION>
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the Investment Adviser Fee, an allocation of
expenses to the Administrator, or both. Had such actions not been taken, the ratios and net investment loss per share would have
been as follows:
Ratios (As a percentage of average daily net assets):
<S> <C> <C> <C> <C>
Expenses/(2)/ 5.07%+ 4.38% 7.23% 45.05%+
Net investment loss (4.38)%+ (1.70)% (6.34)% (44.04)%+
Net investment loss per share $(0.256) $ (0.503) $(0.453) $(0.236)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, November 17, 1994, to
December 31, 1994.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the payable date. Total return is not
computed on an annualized basis.
/(2)/ Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
See notes to financial statements
5
<PAGE>
EV Classic Special Equities Fund as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
------------------------------------------------------------------------------
EV Classic Special Equities Fund (the Fund) a Massachusetts business trust is
registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company. The Fund is a series in
the Eaton Vance Special Investment Trust. The Fund invests all of its
investable assets in interests in the Special Investment Portfolio (the
Portfolio), a New York Trust, having the same investment objective as the
Fund. The value of the Fund's investment in the Portfolio reflects the Fund's
proportionate interest in the net assets of the Portfolio (2.5% at June 30,
1997). The performance of the Fund is directly affected by the performance of
the Portfolio. The financial statements of the Portfolio, including the
portfolio of investments, are included elsewhere in this report and should be
read in conjunction with the Fund's financial statement. The following is a
summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements. The policies are in conformity
with generally accepted accounting principles.
A Investment Valuations -- Valuation of securities by the portfolio is
discussed in Note 1A of the Portfolio's Notes to Financial Statements which
are included elsewhere in this report.
B Income -- The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund.
C Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Fund. Pursuant to the custodian agreement, IBT receives a fee
reduced by credits which are determined based on the average daily cash
balances the Fund maintains with IBT. All significant credit balances used to
reduce the Fund's custodian fees are reported as a reduction of expenses on
the Statement of Operations.
D Federal Taxes -- The Fund'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 income, including any
net realized gain on investments, option and financial futures transactions.
Accordingly, no provision for federal income or excise tax is necessary.
E Deferred Organization Expenses -- Costs incurred by the Fund in connection
with its organization are being amortized on the straight-line basis over five
years.
F Other -- Investment transactions are accounted for on a trade date basis.
G Use of Estimates -- The preparation of the 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.
2 Distributions to Shareholders
------------------------------------------------------------------------------
The Fund's present policy is to make a distribution at least annually of net
investment income allocated to the Fund by the Portfolio (less the Fund's
direct and allocated expenses) and to distribute at least annually any net
realized gains so allocated. Distributions are paid in the form of additional
shares of the Fund or, at the election of the shareholder, in cash. The Fund
distinguishes between distributions on a tax basis and a financial reporting
basis. Generally accepted accounting principles require that only
distributions in excess of tax basis earnings and profits be reported in the
financial statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax earnings and
profits which result in overdistributions only for financial statement
purposes are classified as distributions in excess of net investment income or
accumulated net realized gains. Permanent differences between book and tax
accounting relating to distributions are reclassified to paid-in capital.
6
<PAGE>
EV Classic Special Equities Fund as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
3 Shares of Beneficial Interest
------------------------------------------------------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Sales 34,817 86,531
Issued to shareholders electing to
receive payments of distributions in
Fund shares 22,653 6,021
Redemptions (45,577) (118,969)
- --------------------------------------------------------------------------------
Net increase (decrease) 11,893 (26,417)
- --------------------------------------------------------------------------------
</TABLE>
4 Transactions with Affiliates
------------------------------------------------------------------------------
Eaton Vance Management (EVM) serves as the administrator of the Fund, but
receives no compensation. The Portfolio has engaged Boston Management and
Research (BMR), a subsidiary of EVM, to render investment advisory services.
See Note 3 of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report. To reduce the net operating loss of the Fund, the
administrator was allocated $13,501 of the Fund's expenses, on a preliminary
basis for the six months ended June 30, 1997. Investment Adviser fee and other
transactions with affiliates is discussed in Note 3 of the Portfolio's Notes
to Financial Statements which are included in this report. Except as Trustees
of the Fund and the Portfolio who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services to
the Fund out of such investment adviser fee. Certain of the officers and
Trustees of the Fund and the Portfolio are officers and directors/trustees of
the above organizations.
5 Distribution Plan
------------------------------------------------------------------------------
The Fund has adopted a distribution plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plan requires the Fund to pay
the Principal Underwriter, Eaton Vance Distributors, Inc. (EVD) amounts equal
to 1/365 of 0.75% of the Fund's daily net assets, for providing ongoing
distribution services and facilities to the Fund. The Fund will automatically
discontinue payments to EVD during any period in which there are no
outstanding Uncovered Distribution Charges, which are equivalent to the sum of
(i) 6.25% of the aggregate amount received by the Fund for the shares sold
plus, (ii) distribution fees calculated by applying the rate of 1% over the
prevailing prime rate to the outstanding balance of Uncovered Distribution
Charges of EVD reduced by amounts theretofore paid to EVD.
The amount payable to EVD with respect to each day is accrued on such day as a
liability of the Fund and, accordingly, reduces the Fund's net assets. Such
payments would cease upon termination of the distribution agreement (unless
made in accordance with another distribution agreement). As a result, the Fund
does not accrue amounts which may become payable to EVD in the future because
the conditions for recording any contingent liability under generally accepted
accounting principles have not been satisfied. EVD earned $7,384 for the six
months ended June 30, 1997 representing 0.75% (annualized) of average daily
net assets. At June 30, 1997, the amount of Undercovered Distribution Charges
of EVD calculated under the Plan was approximately $205,000.
In addition, the Plan provides that the Fund may make payments of service fees
to the Principal Underwriter, Authorized Firms and other persons in amounts
not exceeding 0.25% of the Fund's average daily net assets for any fiscal
year. The Trustees of the Fund have initially implemented this provision of
the Plan by authorizing the Fund to make payments of service fees to the
Principal Underwriter, Authorized Firms and other persons in each fiscal year
of the Fund in amounts not exceeding 0.25% (per annum) of the Fund's average
daily net assets. Provision for service fee payments for the six months ended
June 30, 1997 amounted to $2,461.
Certain of the officers and Trustees of the Fund are officers or directors of
EVD.
7
<PAGE>
EV Classic Special Equities Fund as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
6 Contingent Deferred Sales Charge
------------------------------------------------------------------------------
Shares purchased on or after January 30, 1995 and redeemed during the first
year after purchase (except shares acquired through the reinvestment of
distributions) generally will be subject to a contingent deferred sales charge
at a rate of one percent of redemption proceeds, exclusive of all
reinvestments and capital appreciation in the account. No contingent deferred
sales charge is imposed on exchanges for shares of other funds in the Eaton
Vance Classic Group of Funds or Eaton Vance Money Market which are distributed
with a contingent deferred sales charge. EVD received approximately ($100) of
CDSC paid by shareholders for the six months ended June 30, 1997.
7 Investment Transactions
------------------------------------------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio aggregated
$408,001 and $602,324 respectively.
8
<PAGE>
Special Investment Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
Common Stocks -- 91.8%
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Advertising -- 1.5%
- --------------------------------------------------------------------------------
Catalina Marketing Corp. 14,000 $ 673,750
Specialized market research
Outdoor Systems, Inc. 14,940 571,455
Dominant operator of outdoor advertising
- --------------------------------------------------------------------------------
$1,245,205
- --------------------------------------------------------------------------------
Banks - Regional -- 0.6%
- --------------------------------------------------------------------------------
Colonial Bancgroup, Inc. 21,000 $ 509,250
Emerging banking company in the
Southeastern U.S.
- --------------------------------------------------------------------------------
$ 509,250
- --------------------------------------------------------------------------------
Banks and Money Services -- 1.6%
- --------------------------------------------------------------------------------
Bank United, Corp., Class A 12,000 $ 456,000
Operates 70 branch bank system in Texas
First USA Paymentech, Inc.* 28,000 810,250
Payment processor of merchant credit
card transactions
- --------------------------------------------------------------------------------
$1,266,250
- --------------------------------------------------------------------------------
Broadcasting and Cable -- 2.7%
- --------------------------------------------------------------------------------
Emmis Broadcasting Corp., Class A* 15,000 $ 654,375
Diversified media company
Jacor Communications, Inc.* 16,500 631,125
Rapidly growing operator of radio
stations and syndicated
programming
Lin Television Corp.* 20,000 882,500
Commercial television broadcast company
- --------------------------------------------------------------------------------
$2,168,000
- --------------------------------------------------------------------------------
Building Materials -- 0.9%
- --------------------------------------------------------------------------------
Texas Industries, Inc. 28,000 $ 743,750
Regional producer of building
products in
the Southwest
- --------------------------------------------------------------------------------
$ 743,750
- --------------------------------------------------------------------------------
Business Products and Services -- 5.4%
- --------------------------------------------------------------------------------
CN Maximus, Inc.* 950 $ 16,981
Management consulting group.
Ecolab, Inc. 9,000 429,750
Producer of industrial cleaning products
G and K Services, Inc. 23,000 856,750
Rents and launders uniforms and other
textile products
Gartner Group, Inc.-Class A* 8,500 305,469
Leading consultant on high tech
equipment purchases
Personnel Group of America, Inc.* 15,000 432,188
Temporary employment company
Precision Response Corp.* 28,000 462,000
Inbound calling marketing company
Teletech Holdings, Inc.* 26,000 682,500
Inbound calling marketing company
Vanstar Corp.* 85,000 1,200,624
Value added reseller providing
corporations with computing
solutions
- --------------------------------------------------------------------------------
$4,386,262
- --------------------------------------------------------------------------------
Communication Services -- 2.0%
- --------------------------------------------------------------------------------
Sterling Commerce, Inc.* 25,000 $ 821,875
Provides electronic data interchange services
Transition Systems, Inc.* 45,000 818,438
Healthcare information systems
- --------------------------------------------------------------------------------
$1,640,313
- --------------------------------------------------------------------------------
Communications Equipment -- 4.2%
- --------------------------------------------------------------------------------
Ascend Communications, Inc.* 15,000 $ 590,625
Manufacturer of high speed
telecommunications products
Brooktrout Technology, Inc.* 33,000 391,875
Provides telecom equipment specialty products
Comverse Technology, Inc.* 8,000 416,000
Specialized communications products
Davox Corp. 7,500 268,125
Designs and manufactures specialized
telecom products
ECI Telecommunications 20,000 595,000
A company that produces advanced
telecommunications equipment
Glenayre Technologies, Inc. 27,010 442,289
Leading supplier of wireless
communications equipment
</TABLE>
See notes to financial statements
9
<PAGE>
Special Investment Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Communications Equipment (continued)
- --------------------------------------------------------------------------------
Mosaix, Inc.* 30,000 $ 408,750
Manufacturer of specialized
telecommunications products.
Natural Microsystems Corp. 8,000 288,000
Manufacturer of specialized
telecommunications products.
- --------------------------------------------------------------------------------
$3,400,664
- --------------------------------------------------------------------------------
Consumer Services -- 1.3%
- --------------------------------------------------------------------------------
Strayer Education, Inc. 27,910 $1,060,580
Specialized supplemental education services.
- --------------------------------------------------------------------------------
$1,060,580
- --------------------------------------------------------------------------------
Drugs -- 5.2%
- --------------------------------------------------------------------------------
Curative Health Services, Inc.* 25,000 $ 718,750
Operator of specialty burn unit clinics.
Elan Corp., PLC ADR* 17,000 769,250
Specialty pharmaceutical.
Genzyme Corp.* 40,000 405,000
Leading researcher in gene therapy.
Genzyme Corp. Class A 43,000 1,193,249
Diversified biotechnology pharmaceuticals.
Parexel International Corp. 23,000 730,250
Contract research services for large
drug companies.
Roberts Pharmaceutical Corp.* 40,000 447,500
Diversified health care products.
- --------------------------------------------------------------------------------
$4,263,999
- --------------------------------------------------------------------------------
Electrical Equipment -- 1.5%
- --------------------------------------------------------------------------------
Chicago Minature Lamp, Inc. 7,000 $ 174,125
Niche marketer of lighting products.
Level One Communications, Inc.* 8,000 307,500
Designs and sells integrated circuits.
Linear Technology Corp. 14,000 724,500
Manufacturer of high performance linear
integrated circuits.
- --------------------------------------------------------------------------------
$1,206,125
- --------------------------------------------------------------------------------
Electronics - Semiconductors -- 0.8%
- --------------------------------------------------------------------------------
Cypress Semiconductor Corp.* 45,000 $ 652,500
Innovative semiconductor manufacturer.
- --------------------------------------------------------------------------------
$ 652,500
- --------------------------------------------------------------------------------
Entertainment -- 3.4%
- --------------------------------------------------------------------------------
MGM Grand, Inc.* 31,000 $1,146,999
Operator of MGM Grand Hotel in Las Vegas.
Mirage Resorts, Inc. 32,000 808,000
Nevada based gaming resort operator.
Regal Cinemas 17,000 561,000
Rapidly growing theater chain.
Speedway Motorsports* 13,500 293,625
Large operator of NASCAR tracks.
- --------------------------------------------------------------------------------
$2,809,624
- --------------------------------------------------------------------------------
Financial - Miscellaneous -- 0.6%
- --------------------------------------------------------------------------------
Capital One Financial Corp. 12,000 $ 453,000
Leading credit card services specialists.
- --------------------------------------------------------------------------------
$ 453,000
- --------------------------------------------------------------------------------
Health Services -- 8.2%
- --------------------------------------------------------------------------------
American Retirement Corp.* 40,000 $ 710,000
Assisted living services.
Express Scripts, Inc., Class A* 15,000 626,250
Rapidly growing pharmacy specialist.
Genesis Health Ventures, Inc.* 30,000 1,012,500
Nursing home chain.
Health Management Associates, Inc. Class A* 31,000 883,500
Hospital chain.
MiniMed, Inc.* 29,000 772,125
Developer and manufacturer of medical devices
focusing on diabetics.
National Surgery Centers, Inc.* 12,000 424,500
Operator of independent surgery units.
Omnicare, Inc. 27,000 847,125
Provides pharmacy services to
retirement centers.
Pediatrix Medical Group, Inc.* 22,000 1,007,875
Operates pediatric care units.
PhyCor, Inc.* 13,000 447,688
Physicians practice management.
- --------------------------------------------------------------------------------
$6,731,563
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
10
<PAGE>
Special Investment Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Household Products -- 0.7%
- --------------------------------------------------------------------------------
Sola International* 17,000 $ 569,500
Specialty eye care products.
- --------------------------------------------------------------------------------
$ 569,500
- --------------------------------------------------------------------------------
Information Services -- 19.3%
- --------------------------------------------------------------------------------
Acxiom Corp. 23,000 $ 471,500
Database information services.
Affiliated Computer Services, Inc. Class A 30,000 840,000
Nationwide provider of information
processing services.
Aspect Development, Inc.* 5,988 156,062
Information processing services specialist.
Aspen Technologies, Inc. 27,000 1,015,875
Specialty software for upgrading
manufacturing plants.
BISYS Group, Inc.* 28,000 1,168,999
Services financial institutions with computer,
administrative and marketing support data
processing services.
Cambridge Technology Partners, Inc.* 31,000 992,000
Software consulting company.
CCC Information Services Group* 37,000 721,500
Automotive repair information specialist.
Claremont Technology Group, Inc.* 17,000 403,750
Management consulting services.
Cognos, Inc.* 30,000 933,750
Computer tool developer and supporter.
Fiserv, Inc.* 22,300 995,138
Provider of data processing services to banks
and savings institutions, benefiting from
outsourcing trend.
Harbinger, Corp. 27,000 756,000
Electronic Data Interchange products
and services.
IDX Systems Corp.* 21,000 724,500
Healthcare information systems.
Medic Computer Systems, Inc. 24,000 534,000
Physicians information company.
National Data Corp. 10,000 433,125
Information technology services provider.
Nova Corp. Georgia* 36,000 $ 933,750
Nation's largest bankcard processor.
Paychex, Inc. 27,000 1,026,000
Payroll and corporate information services.
Pegasystems, Inc.* 26,000 815,750
Marketing information specialist.
PRI Automation, Inc. 14,000 531,125
Material handling equipment for high cost
semiconductor wafers.
Scopus Technology, Inc. 35,018 783,528
A leading provider of software.
SunGard Data Systems, Inc.* 20,000 930,000
Data storage and emergency back up products.
Veritas Software Co. 12,000 603,000
Provides communications companies with software
measuring systems.
- --------------------------------------------------------------------------------
$15,769,352
- --------------------------------------------------------------------------------
Insurance -- 3.3%
- --------------------------------------------------------------------------------
CRA Managed Care, Inc.* 15,000 $ 782,813
Workers compensation company.
HCC Insurance Holdings, Inc. 30,000 800,625
Emerging specialty insurance provider.
Mutual Risk Management Ltd. 24,003 1,101,151
Specialty insurer focusing on
workmen's compensation.
- --------------------------------------------------------------------------------
$ 2,684,589
- --------------------------------------------------------------------------------
Investment Services -- 3.7%
- --------------------------------------------------------------------------------
Centura Banks, Inc. 17,500 $ 802,813
Growing Southeastern bankers.
PMI Group, Inc. 15,000 935,625
Specialty financial products.
Sovereign Bancorp, Inc. 50,000 762,500
A thrift holding company.
The Money Store, Inc. 18,000 516,375
Diversified finance specialist.
- --------------------------------------------------------------------------------
$ 3,017,313
- --------------------------------------------------------------------------------
Leisure Equipment -- 0.4%
- --------------------------------------------------------------------------------
Cannondale Corp.* 17,000 $ 301,750
Designer and manufacturer of high end bikes.
- --------------------------------------------------------------------------------
$ 301,750
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
11
<PAGE>
Special Investment Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- --------------------------------------------------------------------------------
Lodging and Gaming -- 1.6%
- --------------------------------------------------------------------------------
Promus Hotel Corp.* 23,000 $ 891,250
Owner and operator of Embassy Suite and
Hampton Inn hotels.
Station Casinos, Inc.* 50,000 418,750
Operates casinos in Nevada and Kansas City.
- --------------------------------------------------------------------------------
$1,310,000
- --------------------------------------------------------------------------------
Machinery -- 0.9%
- --------------------------------------------------------------------------------
Camco International, Inc. 14,000 $ 766,500
Oilfield services.
- --------------------------------------------------------------------------------
$ 766,500
- --------------------------------------------------------------------------------
Medical Products -- 4.4%
- --------------------------------------------------------------------------------
Acuson Corp.* 25,000 $ 575,000
Medical testing equipment.
Arterial Vascular Engineering, Inc.* 25,000 804,688
Growing provider of stents in Europe.
Heartstream, Inc.* 39,000 341,250
Portable defibrillator products.
Invacare Corp. 19,000 444,125
Provider of diverse medical products.
Physio-Control International Corp.* 22,000 330,000
Portable defibrillator products.
Sofamor Danek Group, Inc.* 24,000 1,098,000
Leading developer/manufacturer of spinal
implant devices. Company markets
products internationally.
- --------------------------------------------------------------------------------
$3,593,063
- --------------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 0.6%
- --------------------------------------------------------------------------------
Ensco International, Inc.* 10,000 $ 527,500
Largest operator of premium jackup oil rigs.
- --------------------------------------------------------------------------------
$ 527,500
- --------------------------------------------------------------------------------
Oil and Gas - Exploration
and Production -- 7.3%
- --------------------------------------------------------------------------------
Abacan Resources Corp. 50,000 $ 159,375
International oil exploration.
American Exploration Co. 37,000 $ 541,125
Merging with Louis Dreyfus Natural Gas.
Anadarko Petroleum Corp. 11,000 660,000
A leading independent company in oil and gas
exploration, development and production
Cairn Energy USA, Inc. 43,000 564,375
Energy company that is exploring sale
of company.
Louisiana Land & Exploration Corp. 14,000 799,750
Undervalued medium sized diversified
energy exploration.
Noble Affiliates, Inc. 17,000 657,688
An independent energy company that specializes
in oil and gas exploration and production.
Noble Drilling, Inc. 33,000 744,563
Oil and gas well drilling.
Nuevo Energy Co. 14,000 574,000
Diversified energy exploration with aggressive
drilling program.
Swift Energy Co. 24,000 573,000
Emerging energy exploration company focusing
on Texas properties.
Triton Energy Ltd. 15,000 687,188
International oil and gas exploration
and development.
- --------------------------------------------------------------------------------
$5,961,064
- --------------------------------------------------------------------------------
Publishing -- 2.0%
- --------------------------------------------------------------------------------
A.H. Belo Corp. 31,927 $1,328,969
Publishes Dallas Morning News and Providence
Journal; also operates T.V. and radio properties.
Franklin Covey Co.* 13,000 329,063
Time management seminars and products.
- --------------------------------------------------------------------------------
$1,658,032
- --------------------------------------------------------------------------------
Retail - Food and Drug -- 2.3%
- --------------------------------------------------------------------------------
Papa John's International, Inc. 25,000 $ 918,750
Rapidly growing restaurant chain.
Starbucks Corp. 25,000 973,438
High quality specialty retailer.
- --------------------------------------------------------------------------------
$1,892,188
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
12
<PAGE>
Special Investment Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Retail - Specialty and Apparel -- 4.2%
- --------------------------------------------------------------------------------
Ann Taylor Stores Corp.* 16,000 $ 312,000
Leading vendor of women's apparel.
Bed Bath and Beyond, Inc.* 35,000 1,063,125
Specialty retailer.
Claires Stores, Inc. 40,000 700,000
Fashion items for teenagers.
Gadzooks, Inc.* 12,000 234,000
Specialty retailer of teenage apparel.
K&G Mens Center, Inc. 9,000 195,750
Innovative retailer of men's clothing.
Pacific Sunwear of California, Inc. 5,000 161,250
Specialty retailer of teenage apparel.
Polo Ralph Lauren Corp., Class A* 3,700 101,288
A designer of men's and women's clothing.
The Mens Wearhouse, Inc.* 21,000 661,500
Specialty apparel chain
- --------------------------------------------------------------------------------
$ 3,428,913
- --------------------------------------------------------------------------------
Transportation -- 1.2%
- --------------------------------------------------------------------------------
Comair Holdings, Inc. 36,000 $ 996,750
Regional airline holding company.
- --------------------------------------------------------------------------------
$ 996,750
- --------------------------------------------------------------------------------
Total Common Stocks
(identified cost $61,601,380) $75,013,599
- --------------------------------------------------------------------------------
<CAPTION>
Commercial Paper -- 7.4%
Principal
Amount
Security (000 Omitted) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Cut Group, 6.25%, 7/1/97 $2,524 $ 2,523,562
Ford Motor Credit Co., 5.56%, 7/9/97 3,500 3,492,432
- --------------------------------------------------------------------------------
Total Commercial Paper
(amortized cost $6,015,994) $ 6,015,994
- --------------------------------------------------------------------------------
Total Investments -- 99.2%
(identified cost $67,617,374) $81,029,593
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 0.8% $ 659,157
- --------------------------------------------------------------------------------
Net Assets -- 100% $81,688,750
- --------------------------------------------------------------------------------
</TABLE>
ADR -- American Depositary Receipt
* Non-income producing security.
See notes to financial statements
13
<PAGE>
Special Investment Portfolio as of June 30, 1997
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of June 30, 1997
Assets
- --------------------------------------------------------------------------------
<S> <C>
Investments, at value (Note 1A)
(identified cost, $67,617,374) $81,029,593
Cash 1,219
Receivable for investments sold 801,973
Interest and dividends receivable 7,009
Deferred organization expenses (Note 1E) 6,604
- --------------------------------------------------------------------------------
Total assets $81,846,398
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for investments purchased $ 141,972
Payable to affiliate for Trustees' fees (Note 3) 1,700
Accrued expenses 13,976
- --------------------------------------------------------------------------------
Total liabilities $ 157,648
- --------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $81,688,750
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $68,276,531
Net unrealized appreciation of investments
(computed on the basis of identified cost) 13,412,219
- --------------------------------------------------------------------------------
Total $81,688,750
- --------------------------------------------------------------------------------
<CAPTION>
Statement of Operations
For the Six Months Ended
June 30, 1997
Investment Income (Note 1B & 1D)
- --------------------------------------------------------------------------------
Dividend income $ 52,062
Interest income 211,694
- --------------------------------------------------------------------------------
Total income $ 263,756
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 3) $ 237,360
Compensation of Trustees not members of the
Investment Adviser's organization (Note 3) 2,632
Custodian fee (Note 1C) 33,133
Legal and accounting services 9,020
Amortization of organization expenses (Note 1E) 1,549
Miscellaneous 1,679
- --------------------------------------------------------------------------------
Total expenses $ 285,373
- --------------------------------------------------------------------------------
Net investment loss $ (21,617)
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------------
Net realized gain --
Investment transactions (identified cost basis) $ 9,737,492
- --------------------------------------------------------------------------------
Net realized gain on investments $ 9,737,492
- --------------------------------------------------------------------------------
Change in unrealized appreciation --
Investments (identified cost basis) $(5,492,823)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation $(5,492,823)
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 4,244,669
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 4,223,052
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
14
<PAGE>
Special Investment Portfolio as of June 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
Increase (Decrease) June 30, 1997 Year Ended
in Net Assets (Unaudited) December 31, 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment income (loss) $ (21,617) $ 135,724
Net realized gain on investments 9,737,492 18,226,741
Net change in unrealized appreciation
of investments (5,492,823) (1,762,538)
- --------------------------------------------------------------------------------
Net increase in net assets
from operations $ 4,223,052 $ 16,599,927
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 13,232,554 $ 10,738,468
Withdrawals (18,714,130) (18,331,396)
- --------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $ (5,481,576) $ (7,592,928)
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets $ (1,258,524) $ 9,006,999
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 82,947,274 $ 73,940,275
- --------------------------------------------------------------------------------
At end of period $ 81,688,750 $ 82,947,274
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
15
<PAGE>
Special Investment Portfolio as of June 30, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 ------------------------------------------
(Unaudited) 1996 1995 1994*
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------
Expenses 0.76%+ 0.76% 0.77% 0.74%+
Net investment income (loss) (0.06)%+ 0.18% 0.19% 0.20%+
Portfolio Turnover 110% 91% 81% 19%
- ------------------------------------------------------------------------------------------------------------------
Average commission rate (per share)/(1)/ $0.0590 $0.0579 $ -- $ --
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $81,689 $82,947 $73,940 $64,442
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, August 1, 1994, to December 31,
1994.
/(1)/ Average commission rate paid is computed by dividing the total dollar
amount of commissions paid during the fiscal year by the total number of
shares purchased and sold during the fiscal year for which commissions
were charged. For fiscal years beginning on or after September 1, 1995, a
Portfolio is required to disclose its average commission rate per share
for security trades on which commissions were charged.
See notes to financial statements
16
<PAGE>
Special Investment Portfolio as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
------------------------------------------------------------------------------
Special Investment Portfolio (the Portfolio) is registered under the
Investment Company Act of 1940 as a diversified open-end investment company
which was organized as a trust under the laws of the State of New York on May
1, 1992. The Declaration of Trust permits the Trustees to issue interests in
the Portfolio. The following is a summary of significant accounting policies
of the Portfolio. The policies are in conformity with generally accepted
accounting principles.
A Security Valuations -- Securities listed on foreign or U.S. securities
exchanges or in the NASDAQ National Market System generally are valued at
closing sales prices or, if there were no sales, at the mean between the
closing bid and asked prices therefor on the exchange where such securities
are principally traded or on such National Market System. Unlisted or listed
securities for which closing sales prices are not available are valued at the
mean between the latest available bid and asked prices on the prinicpal market
where the security was traded. An option is valued at the last sale price as
quoted on the principal exchange or board of trade on which such option or
contract is traded or, in the absence of a sale, at the mean between the last
bid and asked prices. Futures positions on securities or currencies are
generally valued at closing settlement prices. Short-term debt securities with
a remaining maturity of 60 days or less are valued at amortized cost. If
securities were acquired with a remaining maturity of more than 60 days, their
amortized cost value will be based on their value on the sixty-first day prior
to maturity. Other fixed income and debt securities, including listed
securities and securities for which price quotations are available, will
normally be valued on the basis of valuations furnished by a pricing service.
Securities for which market quotations are unavailable, including any security
the disposition of which is restricted under the Securities Act of 1933, and
other assets will be appraised at their fair market value as determined in
good faith by or at the direction of the Trustees of the Portfolio.
B Income Taxes -- The Portfolio is treated as a partnership for federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes. Since some of the
Portfolio's investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolio, the Portfolio normally
must satisfy the applicable source of income and diversification requirements
(under the Code) in order for its investors to satisfy them. The Portfolio
will allocate at least annually among its investors each investor's
distributive share of the Portfolio's net investment income, net realized
capital gains, and any other items of income, gain, loss, deduction or credit.
C Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT receives
a fee reduced by credits which are determined based on the average daily cash
balances the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reported as a reduction of
expenses on the Statement of Operations.
D Other -- Investment transactions are accounted for on the date the
investments are purchased and sold. Dividend income is recorded on ex-dividend
date. Realized gains and losses on the sale of investments are determined on
the identified cost basis.
E Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization, including registration costs, are being
amortized on the straight-line basis over five years.
F Use of Estimates -- The preparation of the 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.
2 Investment Transactions
------------------------------------------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $76,640,196 and $74,324,273, respectively.
3 Investment Adviser Fee and Other Transactions with Affiliates
------------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation for
management and investment advisory services rendered to the Portfolio. The fee
is at the annual
17
<PAGE>
Special Investment Portfolio as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
rate of 5/8 of 1% of average daily net assets. For the six months ended June
30, 1997, the fee was equivalent to 0.625% (annualized) of the Portfolio's
average net assets for such period and amounted to $237,360. Except as to
Trustees of the Portfolio who are not members of EVM's or BMR's organization,
officers and Trustees receive remuneration for their services to the Portfolio
out of such investment adviser fee. Certain of the officers and Trustees of
the Portfolio are officers and directors/trustees of the above organizations.
Trustees of the Portfolio 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
period ended June 30, 1997, no significant amounts have been deferred.
4 Line of Credit
------------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a committed $120 million unsecured line of credit
agreement with a group of banks. The Portfolio may temporarily borrow from the
line of credit to satisfy redemption requests or settle investment
transactions. Interest is charged to each portfolio or fund based on its
borrowings at an amount above the bank's adjusted certificate of deposit rate,
Eurodollar rate or federal funds rate. In addition, a fee computed at an
annual rate of 0.15% on the daily unused portion of the line of credit is
allocated among the participating Portfolios and funds at the end of each
quarter. The Portfolio did not have any significant borrowings or allocated
fees during the period.
5 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the investments
owned at June 30, 1997, as computed on a federal income tax basis, were as
follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate cost $ 67,617,374
------------------------------------------------------------------------------
Gross unrealized appreciation $ 15,042,798
Gross unrealized depreciation 1,630,579
------------------------------------------------------------------------------
Net unrealized appreciation $ 13,412,219
------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
EV Classic Special Equities Fund as of June 30, 1997
INVESTMENT MANAGEMENT
EV Classic Special Equities Fund
Officers Trustees
James B. Hawkes
President and Trustee M. Dozier Gardner
Vice Chairman, Eaton Vance
Edward E. Smiley, Jr Management
Vice President
Donald R. Dwight
James L. O'Connor President, Dwight Partners, Inc.
Treasurer Chairman, Newspapers of New England, Inc.
Alan R. Dynner Samuel L. Hayes, III
Secretary Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School
of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company
Incorporated
Jack L. Treynor
Investment Adviser and Consultant
Special Investment Portfolio
Officers Trustees
James B. Hawkes M. Dozier Gardner
President and Trustee Vice Chairman, Eaton Vance
Management
Edward E. Smiley, Jr
Vice President and Donald R. Dwight
Portfolio Manager President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
James L. O'Connor
Treasurer Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Alan R. Dynner Banking, Harvard University Graduate School
Secretary of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company
Incorporated
Jack L. Treynor
Investment Adviser and Consultant
19
<PAGE>
Investment Adviser of
Special Investment Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of
EV Classic Special Equities Fund
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
Transfer and Dividend Disbursing Agent
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
EV Classic Special Equities Fund
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution plan,
sales charges and expenses. Please read the prospectus carefully before you
invest or send money.
- --------------------------------------------------------------------------------
C-SESRC-8/97
