<PAGE>
[LOGO]
[PHOTO]
Semiannual Report June 30, 1999
EATON VANCE
UTILITIES
FUND
Global Management-Global Distribution
[PHOTO]
<PAGE>
EATON VANCE UTILITIES FUND AS OF JUNE 30, 1999
INVESTMENT UPDATE
[PHOTO]
Judith A Saryan
Portfolio Manager
INVESTMENT ENVIRONMENT
- -----------------------------
THE ECONOMY
- - On the last day of June, the Federal Reserve Bank announced, as expected, that
it would raise the Federal Funds rate (the rate at which banks lend money to
each other overnight) by 25 basis points to 5.0%. At the same time, the Fed
indicated it had moved toward a neutral bias, causing stock and bond markets
to rally.
- - During the just-ended second quarter, the outlook was optimistic for continued
U.S. economic strength, especially as the manufacturing sector showed signs of
recovery. In May, the index of leading economic indicators rose by 0.3%, an
improvement over April's 0.1% increase, suggesting the period of sustained
growth could continue into the next year.
- - The nation's gross domestic product increased by a stronger-than-expected 4.6%
in the first quarter of 1999. Weaker demand from Asia was offset by continuing
gains in productivity and strong consumer activity.
- - Despite the Fed's neutral bias, Federal Reserve Chairman Greenspan has
reaffirmed the Fed's commitment to stifle any reoccurrence of inflation, and
has left open the possibility that he will tighten rates in the coming months.
THE STOCK MARKET
- - June was another record month for the S&P 500 and the NASDAQ Composite, as
both indices hit new highs on the last day of the month after the Fed's
interest rate announcement. The Dow Jones Industrial Average also had a solid
finish, up 20.46% so far in 1999.(1) Investors and analysts were also
optimistic about corporate second quarter earnings.
- - Growth stocks and value stocks struggled for dominance in the first half of
1999, with growth stocks ahead at the end of June. Leading the way was the
technology sector of the S&P 500, up 12.36% in the first six months of
1999.(1)
THE FUND
- -----------------------------
THE PAST SIX MONTHS
- - During the six months ended June 30, 1999, the Fund's Class A shares had a
total return of 13.14%.(2) This return was the result of an increase in net
asset value (NAV)to $11.27 on June 30, 1999 from $10.15 on December 31, 1998,
and the reinvestment of $0.055 per share in dividend income and $0.144 per
share in capital gains.
- - The Fund's Class B shares had a total return of 12.68%(2) during the period,
the result of an increase in NAV to $12.90 from $11.61, and the reinvestment
of $0.025 per share in dividend income and $0.144 per share in capital gains.
- - The Fund's Class C shares had a total return of 12.62%(2) during the period,
the result of an increase in NAV to $13.63 from $12.27, and the reinvestment
of $0.031 per share in dividend income and $0.144 per share in capital gains.
- - For comparison, during the six months ended June 30, 1999, the S&P Utilities
Index had a return of 1.19%, and the average return of funds included in the
Lipper Utility Funds Category was 7.02%.(1)
MANAGEMENT DISCUSSION
- - The Portfolio continued to emphasize the telecommunication sector with
holdings such as Energis, SBC Communications, and MCI Worldcom. Management
believes that deregulation, new technology, and increased demand for data and
Internet services have made telecommunications an area with superior growth
potential.
- - Electric utilities remained an important component of the Portfolio. Stocks in
these companies have offered stability and provided dividend income. Amid the
restructuring in the industry, we seek to identify those companies best
positioned to benefit in the changing utilities environment.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
FUND INFORMATION
AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
Performance(3) Class A Class B Class C
- ----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
One Year 21.71% 20.80% 20.69%
Five Years 17.34 16.33 15.66
Ten Years 12.58 N.A. N.A.
Life of Fund+ 14.60 11.64 11.23
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
One Year 14.73% 15.80% 19.69%
Five Years 15.95 16.11 15.66
Ten Years 11.91 N.A. N.A.
Life of Fund+ 14.22 11.53 11.23
</TABLE>
+Inception Dates - Class A: 12/18/81; Class B: 11/1/93; Class C:11/1/93
<TABLE>
<CAPTION>
Ten Largest Holdings(4) By total net assets
- -------------------------------------------
<S> <C>
Energis 12.5%
SBCCommunications, Inc. 8.8
MCIWorldcom, Inc. 8.0
Sprint Corp. 5.9
GTECorp. 5.4
Ameritech Corp. 4.6
Pinnacle West Capital Corp. 4.5
DQE, Inc. 3.7
Bell Atlantic Corp. 3.6
Omnipoint Corp. 3.4
</TABLE>
(1) It is not possible to invest directly in an Index or a Lipper category.
(2) These returns do not include the 5.75% maximum sales charge for the
Fund's Class A shares or the applicable contingent deferred sales charges
(CDSC) for Class B and Class C shares. (3) Returns are historical and are
calculated by determining the percentage change in net asset value with all
distributions reinvested. SEC returns for Class A reflect the maximum 5.75%
sales charge. SEC returns for Class B reflect the applicable CDSC based on
the following schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year;
2% - 5th year; 1% - 6th year. SEC 1-Year return for Class C reflects 1% CDSC.
(4) Ten largest holdings accounted for 60.4% of the Portfolio's net assets.
Holdings are subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
2
<PAGE>
EATON VANCE UTILITIES FUND AS OF JUNE 30, 1999
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
<S> <C>
Assets
------------------------------------------------------------------------------------
Investment in Utilities Portfolio, at value
(identified cost, $330,700,041) $493,306,743
Receivable for Fund shares sold 140,483
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TOTAL ASSETS $493,447,226
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Liabilities
------------------------------------------------------------------------------------
Payable for Fund shares redeemed $ 217,039
Payable to affiliate for Trustees' fees 1,327
Other accrued expenses 362,153
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TOTAL LIABILITIES $ 580,519
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NET ASSETS $492,866,707
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Sources of Net Assets
------------------------------------------------------------------------------------
Paid-in capital $244,764,128
Accumulated undistributed net realized gain from Portfolio (computed
on the basis of identified cost) 32,468,005
Accumulated undistributed net investment income 53,027,872
Net unrealized appreciation from Portfolio (computed on the basis of
identified cost) 162,606,702
------------------------------------------------------------------------------------
TOTAL $492,866,707
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Class A Shares
------------------------------------------------------------------------------------
NET ASSETS $437,812,148
SHARES OUTSTANDING 38,856,884
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial interest outstanding) $ 11.27
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 94.25 of $11.27) $ 11.96
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Class B Shares
------------------------------------------------------------------------------------
NET ASSETS $ 50,654,134
SHARES OUTSTANDING 3,927,842
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial interest outstanding) $ 12.90
------------------------------------------------------------------------------------
Class C Shares
------------------------------------------------------------------------------------
NET ASSETS $ 4,400,425
SHARES OUTSTANDING 322,839
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial interest outstanding) $ 13.63
------------------------------------------------------------------------------------
</TABLE>
On sales of $50,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30, 1999
<S> <C>
Investment Income
------------------------------------------------------------------------------------
Dividends allocated from Portfolio (net of
foreign taxes, $38,917) $ 4,475,370
Interest allocated from Portfolio (net of
defaulted interest, $1,263,834) 615,689
Expenses allocated from Portfolio (1,723,709)
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NET INVESTMENT INCOME FROM PORTFOLIO $ 3,367,350
------------------------------------------------------------------------------------
Expenses
------------------------------------------------------------------------------------
Trustees fees and expenses $ 3,039
Distribution and service fees
Class A 463,086
Class B 232,000
Class C 20,057
Transfer and dividend disbursing agent fees 225,607
Registration fees 18,303
Custodian fee 15,254
Legal and accounting services 13,444
Printing and postage 11,096
Amortization of organization expenses 7,906
Miscellaneous 3,951
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TOTAL EXPENSES $ 1,013,743
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NET INVESTMENT INCOME $ 2,353,607
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Realized and Unrealized
Gain (Loss) from Portfolio
------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 35,380,478
Foreign currency transactions (16,636)
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NET REALIZED GAIN $ 35,363,842
------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $ 20,485,807
Foreign currency (5,000)
------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $ 20,480,807
------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 55,844,649
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NET INCREASE IN NET ASSETS FROM OPERATIONS $ 58,198,256
------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
EATON VANCE UTILITIES FUND AS OF JUNE 30, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED
Increase (Decrease) 1999 DECEMBER 31,
in Net Assets (UNAUDITED) 1998
<S> <C> <C>
---------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 2,353,607 $ 11,445,332
Net realized gain 35,363,842 5,496,806
Net change in unrealized appreciation (depreciation) 20,480,807 75,228,988
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NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 58,198,256 $ 92,171,126
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Distributions to shareholders --
From net investment income
Class A $ (2,170,013) $ (9,905,578)
Class B (78,478) (845,623)
Class C (9,602) (61,649)
In excess of net investment income
Class B (19,346) --
From net realized gain
Class A (5,668,063) (1,582,078)
Class B (557,414) (157,576)
Class C (45,747) (12,962)
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TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (8,548,663) $(12,565,466)
---------------------------------------------------------------------------------------------------
Transactions in shares of
beneficial interest --
Proceeds from sale of shares
Class A $ 2,276,012 $ 4,777,604
Class B 3,339,883 3,716,353
Class C 757,113 610,654
Issued in reorganization of EV Classic
and Marathon Total Return
Funds
Class B -- 42,228,739
Class C -- 3,724,892
Net asset value of shares issued to shareholders in payment of
distributions declared
Class A 6,149,626 8,677,027
Class B 540,181 805,844
Class C 46,873 62,598
Cost of shares redeemed
Class A (23,942,865) (45,654,104)
Class B (4,255,993) (8,794,964)
Class C (565,336) (1,346,110)
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NET INCREASE (DECREASE) IN NET ASSETS FROM FUND SHARE TRANSACTIONS $(15,654,506) $ 8,808,533
---------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 33,995,087 $ 88,414,193
---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED
1999 DECEMBER 31,
Net Assets (UNAUDITED) 1998
<S> <C> <C>
---------------------------------------------------------------------------------------------------
At beginning of period $458,871,620 $370,457,427
---------------------------------------------------------------------------------------------------
AT END OF PERIOD $492,866,707 $458,871,620
---------------------------------------------------------------------------------------------------
Accumulated
undistributed net
investment income
included in net assets
---------------------------------------------------------------------------------------------------
AT END OF PERIOD $ 53,027,872 $ 52,951,704
---------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
EATON VANCE UTILITIES FUND AS OF JUNE 30, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------------------------------------------
JUNE 30, 1999
(UNAUDITED)(1) 1998(1) 1997 1996 1995 1994
----------------------------------- ---------------------------- ---------- ------------ --------- ---------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS A CLASS A CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value --
Beginning of
period $ 10.150 $11.610 $12.270 $ 8.450 $ 9.670 $10.190 $ 8.770 $ 9.130 $ 7.630 $ 9.140
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- --------------------------------------------------------------------------------------------------------------------------------
Net investment
income $ 0.057 $ 0.020 $ 0.020 $ 0.251 $ 0.209 $ 0.220 $ 0.409 $ 0.626 $ 0.523 $ 0.545
Net realized and
unrealized gain
(loss) 1.262 1.439 1.515 1.721 1.970 2.082 0.887 (0.014)(2) 1.520 (1.667)
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS)
FROM OPERATIONS $ 1.319 $ 1.459 $ 1.535 $ 1.972 $ 2.179 $ 2.302 $ 1.296 $ 0.612 $ 2.043 $ (1.122)
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions
- --------------------------------------------------------------------------------------------------------------------------------
From net investment
income $ (0.055) $(0.020) $(0.031) $ (0.235) $(0.202) $(0.185) $ (0.331) $ (0.522) $ (0.364) $ (0.388)
In excess of net
investment income -- (0.005) -- -- -- -- -- -- (0.039) --
From net realized
gain (0.144) (0.144) (0.144) (0.037) (0.037) (0.037) (1.243) (0.450) (0.078) --
In excess of net
realized gain -- -- -- -- -- -- (0.042) -- (0.062) --
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.199) $(0.169) $(0.175) $ (0.272) $(0.239) $(0.222) $ (1.616) $ (0.972) $ (0.543) $ (0.388)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE --
END OF PERIOD $ 11.270 $12.900 $13.630 $ 10.150 $11.610 $12.270 $ 8.450 $ 8.770 $ 9.130 $ 7.630
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 13.14% 12.68% 12.62% 23.78% 22.89% 22.88% 16.18% 7.00% 27.52% (12.28)%
- --------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
period (000's
omitted) $437,812 $50,654 $ 4,400 $409,178 $45,958 $ 3,736 $370,457 $401,974 $457,879 $445,133
Ratios (As a
percentage of
average daily net
assets):
Expenses(4) 1.07%(5) 1.82%(5) 1.85%(5) 1.27% 2.01% 2.05% 1.13% 1.23% 1.19% 1.18%
Net investment
income 1.08%(5) 0.33%(5) 0.30%(5) 2.75% 2.01% 1.99% 4.06% 5.59% 4.49% 4.90%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The per share amount is not in accord with the net realized and unrealized
gain (loss) for the period because of the timing of sales of Fund shares
and the amount of the per share realized and unrealized gains and losses at
such time.
(3) 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
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(4) Includes the Fund's share of the Portfolio's allocated expenses.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
EATON VANCE UTILITIES FUND AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
Eaton Vance Utilities Fund (the Fund), (formerly Eaton Vance Total Return
Fund), is a non-diversified series of Eaton Vance Special Investment Trust
(the Trust). The Trust is an entity of the type commonly known as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Fund is a series of the Eaton Vance Special Investment Trust (the Trust). The
Fund offers three classes of shares: Class A, Class B and Class C shares.
Class A shares are generally sold subject to a sales charge imposed at time
of purchase. Class B and Class C shares are sold at net asset value and are
subject to a contingent deferred sales charge (see Note 6). Each class
represents a pro rata interest in the Fund, but votes separately on
class-specific matters and (as noted below) is subject to different expenses.
Realized and unrealized gains and losses and net investment income, other
than class specific expenses, are allocated daily to each class of shares
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its distribution plan and certain other
class specific expenses. The Fund invests all of its investable assets in
interests in the Utilities 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 (99.9% at June 30, 1999). 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 statements.
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 Valuation -- 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 determined in accordance with generally accepted
accounting principles.
C 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. Accordingly, no provision for federal
income or excise tax is necessary.
D Other -- Investment transactions are accounted for on a trade date basis.
E 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 revenue and expense during the reporting period. Actual results could
differ from those estimates.
F Interim Financial Statements -- The interim financial statements relating to
June 30, 1999 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders
- -------------------------------------------
The Fund's policy is to distribute monthly substantially all of the net
investment income allocated to the Fund by the Portfolio (less the Fund's
direct expenses) and to distribute at least annually substantially all of its
net realized capital gains so allocated. Distributions are paid in the form
of additional shares of the same class 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 over
distributions only for financial statement purposes are classified as
distributions in excess of net investment income or net realized gain on
investments. Permanent differences between book and tax accounting relating
to distributions are reclassified to paid-in capital.
6
<PAGE>
EATON VANCE UTILITIES FUND AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
3 Shares of Beneficial Interest
- -------------------------------------------
The Trust's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Such shares may be issued in a number of different series (such as
the Fund) and classes. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999 YEAR ENDED
CLASS A (UNAUDITED) DECEMBER 31, 1998
<S> <C> <C>
- ------------------------------------------------------------------------------
Sales 211,025 513,278
Issued to shareholders electing to
receive payment of distribution in
Fund shares 585,021 961,346
Redemptions (2,232,540) (5,003,117)
- ------------------------------------------------------------------------------
NET DECREASE (1,436,494) (3,528,493)
- ------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999 YEAR ENDED
CLASS B (UNAUDITED) DECEMBER 31, 1998
<S> <C> <C>
- ------------------------------------------------------------------------------
Sales 270,647 354,812
Issued to shareholders electing to
receive payment of distribution in
Fund shares 45,130 78,426
Redemptions (346,223) (839,996)
Issued to EV Marathon Total Return
Fund shareholders -- 4,365,046
- ------------------------------------------------------------------------------
NET INCREASE (DECREASE) (30,446) 3,958,288
- ------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999 YEAR ENDED
CLASS C (UNAUDITED) DECEMBER 31, 1998
<S> <C> <C>
- ------------------------------------------------------------------------------
Sales 57,747 54,891
Issued to shareholders electing to
receive payment of distribution in
Fund shares 3,696 5,721
Redemptions (43,066) (121,642)
Issued to EV Classic Total Return Fund
shareholders -- 365,492
- ------------------------------------------------------------------------------
NET INCREASE 18,377 304,462
- ------------------------------------------------------------------------------
</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 2 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report. Except as to 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. Eaton Vance Distributors, Inc. (EVD), a subsidiary of
EVM and the Fund's principal underwriter, received $8,253 from the Fund as
its portion of the sales charge on sales of Class A shares for the six months
ended June 30, 1999.
Certain officers and Trustees of the Fund and of the Portfolio are officers
of the above organizations.
5 Distribution and Service Plans
- -------------------------------------------
The Fund has adopted distribution plans (Class B Plan and Class C Plan)
pursuant to Rule 12b-1 under the Investment Company Act of 1940 and a service
plan (Class A Plan), (collectively, the Plans). The Class B and Class C Plans
require the Fund to pay EVD amounts equal to 1/365 of 0.75% of the Fund's
average daily net assets attributable to Class B and Class C shares 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) 5.00% and 6.25% of the aggregate amount received by the
Fund for the Class B and Class C shares sold, respectively, plus (ii)
interest calculated by applying the rate of 1% over the prevailing prime rate
to the outstanding balance of Uncovered Distribution Charges of EVD of each
respective class, reduced by the aggregate amount of contingent deferred
sales charges (see Note 6) and amounts theretofore paid to EVD by each
respective class. The Fund paid or accrued $179,347 and $15,043 for Class B
and Class C shares, respectively, to or payable to EVD for the six months
ended June 30, 1999 representing 0.75% (annualized) of the average daily net
assets for Class B and Class C shares. At June 30, 1999, the amount of
Uncovered Distribution Charges of EVD calculated under the Plan were
approximately $373,000 and $844,000 for Class B and Class C shares,
respectively.
7
<PAGE>
EATON VANCE UTILITIES FUND AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
In addition, the Plans also authorize each class to make payments of service
fees to EVD, investment dealers and other persons in amounts not exceeding
0.25% of the Fund's average daily net assets attributable to Class A (Service
Plan), Class B and Class C shares for any fiscal year. The Trustees have
initially implemented the Plans by authorizing the Fund to make quarterly
payments of service fees to EVD and investment dealers in amounts not
expected to exceed 0.25% per annum of the Fund's average daily net assets
attributable to Class A and Class B shares based on the value of Fund shares
sold by such persons and remaining outstanding for at least twelve months.
The Class C Plan requires the Fund to make monthly payments of service fees
in amounts not expected to exceed 0.25% of the Fund's average daily net
assets attributable to Class C shares for any fiscal year. Service fee
payments are made for personal services and/or the maintenance of shareholder
accounts. Service fees are separate and distinct from the sales commissions
and distribution fees payable by the Fund to EVD, and, as such are not
subject to automatic discontinuance when there are no outstanding Uncovered
Distribution Charges of EVD. Service fee payments for the six months ended
June 30, 1999 amounted to $463,086, $52,653 and $5,014 for Class A, Class B
and Class C shares, respectively.
Certain officers and Trustees of the Fund are officers or directors of EVD.
6 Contingent Deferred Sales Charge
- -------------------------------------------
A contingent deferred sales charge (CDSC) generally is imposed on redemptions
of Class B shares made within six years of purchase and on redemptions of
Class C shares made within one year of purchase. A CDSC of 1% is imposed on
any redemption of Class A shares made within 12 months of purchase that were
acquired at net asset value if the purchase amount was $1 million or more.
Generally, the CDSC is based upon the lower of the net asset value at date of
redemption or date of purchase. No charge is levied on shares acquired by
reinvestment of dividends or capital gains distributions. The Class B CDSC is
imposed at declining rates that begin at 5% in the case of redemptions in the
first and second year after purchase, declining one percentage point each
subsequent year. Class C shares will be subject to a 1% CDSC if redeemed
within one year of purchase. No CDSC is levied on shares which have been sold
to EVM or its affiliates or to their respective employees or clients and may
be waived under certain other limited conditions. CDSC charges are paid to
EVD to reduce the amount of Uncovered Distribution Charges calculated under
the Fund's Distribution Plan. (See Note 5). CDSC charges received when no
Uncovered Distribution Charges exist will be retained by the Fund. EVD
received approximately $16,000 and $1,000 of CDSC paid by shareholders for
Class B and Class C shares, respectively, for the six months ended June, 30
1999.
7 Investment Transactions
- -------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio for the six
months ended June 30, 1999, aggregated $6,269,400 and $31,790,716,
respectively.
8 Transfer of Net Assets
- -------------------------------------------
On January 1, 1998, EV Traditional Total Return Fund acquired the net assets
of EV Marathon Total Return Fund and EV Classic Total Return Fund pursuant to
an Agreement and Plan of Reorganization dated June 23, 1997. In accordance
with the agreement, EV Traditional Total Return Fund, at the closing, issued
4,365,046 Class B shares and 365,492 Class C shares of the Fund having an
aggregate value of $42,228,739 and $3,724,892 respectively. As a result, the
Fund issued one Class B share for each share of EV Marathon Total Return Fund
and one Class C share for each share of EV Classic Total Return Fund. The
transaction was structured for tax purposes to qualify as a tax free
reorganization under the Internal Revenue Code. The EV Marathon Total Return
Fund's and EV Classic Total Return Fund's net assets at the date of the
transaction were $42,228,739 and $3,724,892, respectively, including
$6,799,057 and $627,601 of unrealized appreciation. Directly after the
merger, the combined net assets of the Eaton Vance Utilities Fund (formerly
"EV Traditional Total Return Fund") were $416,411,058 with a net asset value
of $8.45, $9.67, and $10.19 for Class A, Class B and Class C shares,
respectively.
8
<PAGE>
UTILITIES PORTFOLIO AS OF JUNE 30, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
<TABLE>
<S> <C> <C>
COMMON STOCKS -- 88.5%
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
Broadcasting and Cable -- 0.7%
- --------------------------------------------------------------------------
Ovation, Inc.(1)(2) 285,787 $ 3,469,454
- --------------------------------------------------------------------------
$ 3,469,454
- --------------------------------------------------------------------------
Electric Utilities -- 23.6%
- --------------------------------------------------------------------------
Allegheny Energy, Inc. 150,000 $ 4,809,375
Cleco Corp. 300,000 9,112,500
DPL, Inc. 650,000 11,943,750
DQE, Inc. 450,000 18,056,250
DTE Energy Co. 103,000 4,120,000
Duke Energy Corp. 80,000 4,350,000
Energy East Corp. 100,000 2,600,000
Illinova Corp. 40,000 1,090,000
LG & E Energy Corp. 200,000 4,200,000
National Grid Group PLC(3) 800,000 5,567,520
Nisource, Inc. 450,000 11,615,625
PacifiCorp 100,000 1,837,500
Pinnacle West Capital Corp. 550,000 22,137,500
PowerGen PLC(3) 600,000 6,469,140
Sierra Pacific Resources 100,000 3,637,500
Unicom Corp. 133,000 5,128,813
- --------------------------------------------------------------------------
$ 116,675,473
- --------------------------------------------------------------------------
Gas Utilities -- 3.0%
- --------------------------------------------------------------------------
CMS Energy Corp., Class G 35,100 $ 824,850
Columbia Energy Group 50,000 3,134,375
Keyspan Corp. 90,000 2,373,750
NICOR, Inc. 75,000 2,854,688
Northwestern Corp. 92,000 2,225,250
Peoples Energy Corp. 87,000 3,278,813
- --------------------------------------------------------------------------
$ 14,691,726
- --------------------------------------------------------------------------
REITS -- 1.9%
- --------------------------------------------------------------------------
Annaly Mortgage, Inc. 144A 350,000 $ 3,937,500
Security Capital US Realty Trust(2) 300,000 5,700,000
- --------------------------------------------------------------------------
$ 9,637,500
- --------------------------------------------------------------------------
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
Telephone Utilities -- 59.3%
- --------------------------------------------------------------------------
Alltel Corp. 70,000 $ 5,005,000
Ameritech Corp. 310,000 22,785,000
AT&T Corp. 123,000 6,864,938
Bell Atlantic Corp. 275,000 17,978,125
BellSouth Corp. 25,000 1,171,875
Cincinnati Bell, Inc. 310,000 7,730,625
Digital Island, Inc.(2) 100,000 1,793,750
Energis(2)(3) 2,585,397 61,660,166
GTE Corp. 350,000 26,512,500
MCI Worldcom, Inc.(2) 460,000 39,675,000
Omnipoint Corp. 575,000 16,639,063
SBC Communications, Inc. 750,000 43,499,999
Sprint Corp. 550,000 29,046,875
US West, Inc. 84,000 4,935,000
Vodafone AirTouch PLC ADR 25,000 4,925,000
Voicestream Wireless Corp.(2) 75,000 2,132,813
- --------------------------------------------------------------------------
$ 292,355,729
- --------------------------------------------------------------------------
Total Common Stocks
(identified cost $277,785,567) $ 436,829,882
- --------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS -- 6.9%
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
Electric Utilities -- 0.7%
- --------------------------------------------------------------------------
National Grid General Purpose 146,500 $ 3,552,625
- --------------------------------------------------------------------------
$ 3,552,625
- --------------------------------------------------------------------------
Gas Utilities -- 3.0%
- --------------------------------------------------------------------------
El Paso Energy Capital Trust 300,000 $ 14,850,000
- --------------------------------------------------------------------------
$ 14,850,000
- --------------------------------------------------------------------------
Telephone Utilities -- 3.2%
- --------------------------------------------------------------------------
Omnipoint Corp. 180,000 $ 9,831,600
Qwest Trends Trust 100,000 5,675,000
- --------------------------------------------------------------------------
$ 15,506,600
- --------------------------------------------------------------------------
Total Convertible Preferred Stocks
(identified cost $31,898,133) $ 33,909,225
- --------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
UTILITIES PORTFOLIO AS OF JUNE 30, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<S> <C> <C>
WARRANTS -- 0.0%
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
REITS -- 0.0%
- --------------------------------------------------------------------------
Walden Residential(2) 340,000 $ 78,200
- --------------------------------------------------------------------------
$ 78,200
- --------------------------------------------------------------------------
Total Warrants
(identified cost -- $0) $ 78,200
- --------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
CONVERTIBLE BONDS -- 3.2%
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
Bell Atlantic Financial, 4.25%, 9/15/05 $ 6,000 $ 6,172,800
National Grid Co., 4.25%, 2/17/08(3) 800 1,477,009
NTL, Inc., 7.00%, 12/15/08 3,500 5,508,300
Ovation, Inc., 9.75%, 2/23/01(1) 2,500 2,500,000
- --------------------------------------------------------------------------
Total Convertible Bonds
(identified cost $14,181,530) $ 15,658,109
- --------------------------------------------------------------------------
COMMERCIAL PAPER -- 1.3%
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
Associates Corp., 5.75%, 7/1/99 $ 6,167 $ 6,167,000
- --------------------------------------------------------------------------
Total Commercial Paper
(amortized cost $6,167,000) $ 6,167,000
- --------------------------------------------------------------------------
Total Investments -- 99.9%
(identified cost $330,032,230) $ 492,642,416
- --------------------------------------------------------------------------
Other Assets, Less Liabilities -- 0.1% $ 664,355
- --------------------------------------------------------------------------
Net Assets -- 100% $ 493,306,771
- --------------------------------------------------------------------------
</TABLE>
ADR - American Depositary Receipt
(1) Security valued at fair value using methods determined in good faith by or
at the direction of the Trustees.
(2) Non-income producing security.
(3) Foreign security.
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
UTILITIES PORTFOLIO AS OF JUNE 30, 1999
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
<S> <C>
Assets
- -------------------------------------------------------
Investments, at value (identified cost,
$330,032,230) $ 492,642,416
Cash 451,547
Receivable for investments sold 246,189
Dividends and interest receivable 1,616,834
Miscellaneous receivable 15,213
Tax reclaim receivable 12,389
- -------------------------------------------------------
TOTAL ASSETS $ 494,984,588
- -------------------------------------------------------
Liabilities
- -------------------------------------------------------
Payable for investments purchased $ 1,638,476
Payable to affiliate for Trustees' fees 7,677
Other accrued expenses 31,664
- -------------------------------------------------------
TOTAL LIABILITIES $ 1,677,817
- -------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $ 493,306,771
- -------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $ 330,700,063
Net unrealized appreciation (computed on
the basis of identified cost) 162,606,708
- -------------------------------------------------------
TOTAL $ 493,306,771
- -------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30, 1999
<S> <C>
Investment Income
- ------------------------------------------------------
Dividends (net of foreign taxes,
$38,917) $ 4,475,370
Interest (net of defaulted interest,
$1,263,834) 615,689
- ------------------------------------------------------
TOTAL INVESTMENT INCOME $ 5,091,059
- ------------------------------------------------------
Expenses
- ------------------------------------------------------
Investment adviser fee $ 1,552,119
Trustees fees and expenses 17,285
Custodian fee 130,575
Legal and accounting services 21,119
Miscellaneous 2,611
- ------------------------------------------------------
TOTAL EXPENSES $ 1,723,709
- ------------------------------------------------------
NET INVESTMENT INCOME $ 3,367,350
- ------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 35,380,480
Foreign currency transactions (16,636)
- ------------------------------------------------------
NET REALIZED GAIN $ 35,363,844
- ------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 20,485,808
Foreign currency (5,000)
- ------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ 20,480,808
- ------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 55,844,652
- ------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 59,212,002
- ------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
UTILITIES PORTFOLIO AS OF JUNE 30, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
Increase (Decrease) JUNE 30, 1999 YEAR ENDED
in Net Assets (UNAUDITED) DECEMBER 31, 1998
<S> <C> <C>
- --------------------------------------------------------------------------------
From operations --
Net investment income $ 3,367,350 $ 13,457,660
Net realized gain 35,363,844 5,496,806
Net change in unrealized appreciation
(depreciation) 20,480,808 75,228,993
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 59,212,002 $ 94,183,459
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 6,269,400 $ 17,840,966
Withdrawals (31,790,716) (65,817,239)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CAPITAL
TRANSACTIONS $ (25,521,316) $ (47,976,273)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 33,690,686 $ 46,207,186
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 459,616,085 $ 413,408,899
- --------------------------------------------------------------------------------
AT END OF PERIOD $ 493,306,771 $ 459,616,085
- --------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
UTILITIES PORTFOLIO AS OF JUNE 30, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
1999 -----------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------
Expenses 0.73%(1) 0.88% 0.75% 0.85% 0.84% 0.85%
Net investment income 1.42%(1) 3.13% 4.42% 5.94% 4.83% 5.22%
Portfolio turnover 33% 78% 169% 166% 103% 107%
- -------------------------------------------------------------------------------------------------------------------------
Borrowing Analysis:
- ------------------------------------------------------------------------------------------------------------------------------
Average daily balance of debt outstanding
during
period (000's omitted) -- $ 10,594 $ 922 $ 217 $ 232 $ 3,137
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $493,307 $459,616 $413,409 $455,067 $521,670 $505,567
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
UTILITIES PORTFOLIO AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
Utilities Portfolio (the Portfolio), (formerly the Total Return Portfolio),
is registered under the Investment Company Act of 1940 as a non-diversified
open-end management 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 beneficial 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 Investment Valuation -- Securities listed on securities exchanges or in the
NASDAQ National Market are valued at closing sales prices or, if there has
been no sale, at the mean between the closing bid and asked prices. Unlisted
securities are valued at the mean between the latest available bid and asked
prices. Options and financial futures contracts are valued at the last sale
price, as quoted on the principal exchange or board of trade on which such
options or contracts are traded or, in the absence of a sale, the mean
between the last bid and asked prices. Short-term obligations, maturing in 60
days or less, are valued at amortized cost, which approximates value. 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 are appraised at their fair value as
determined in good faith by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes. During the six months ended June 30, 1999, the Portfolio
took a one time charge to interest income in the amount of $1,263,834
representing accrued defaulted income on certain investments. Dividend income
is recorded on the ex-dividend date for dividends received in cash and/or
securities. However, if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as the Portfolio is informed of the
ex-dividend date. Dividend income may include dividends that represent
returns of capital for federal income tax purposes.
C 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 Internal Revenue 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.
D Foreign Currency Translation -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing on
the respective dates of such transactions. Recognized gains or losses on
investment transactions attributable to foreign currency rates are recorded
for financial statement purposes as net realized gains and losses on
investments. That portion of unrealized gains and losses on investments that
result from fluctuations in foreign currency exchange rates are not
separately disclosed.
E Option Accounting Principles -- Upon the writing of a covered call option, an
amount equal to the premium received by the Portfolio is included in the
Statement of Assets and Liabilities as a liability. The amount of the
liability is subsequently marked-to-market to reflect the current market
value of the option written in accordance with the Portfolio's policies on
investment valuations discussed above. Premiums received from writing call
options which expire are treated as realized gains. Premiums received from
writing call options which are exercised or are closed are added to or offset
against the proceeds or amount paid on the transaction to determine the
realized gain or loss. The Portfolio, as writer of a call option, may have no
control over whether the underlying securities may be sold and, as a result,
bears the market risk for an unfavorable change in the price of the
securities underlying the written option.
F Financial Futures Contracts -- Upon the entering of a financial futures
contract, the Portfolio is required to deposit an amount ("initial margin")
either in cash or securities equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by the Portfolio ("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 Portfolio.
The Portfolio's investment
14
<PAGE>
UTILITIES PORTFOLIO AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
in financial futures contracts is designed only to hedge against anticipated
future changes in interest rates, security prices, commodity prices or
currency exchange rates. Should interest rates, security prices, commodity
prices or currency exchange rates move unexpectedly, the Portfolio may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss. If the Portfolio enters into a closing transaction, the
Portfolio will realize for book purposes a gain or loss equal to the
difference between the value of the financial futures contract to sell and
the financial futures contract to buy.
G Delayed Delivery Transactions -- The Portfolio may purchase or sell
securities on a when-issued or forward commitment basis. Payment and delivery
may take place at a period in time after the date of the transaction. At the
time the transaction is negotiated, the price of the security that will be
delivered and paid for is fixed. Losses may arise due to changes in the
market value of the underlying securities if the counterparty does not
perform under the contract.
H Other -- Investment transactions are accounted for on a trade date basis.
I 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 revenue and expense during the reporting period. Actual results could
differ from those estimates.
J Interim Financial Statements -- The interim financial statements relating to
June 30, 1999 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the
Portfolio's management, reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 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 based upon a percentage of average daily net assets. For the six
months ended June 30, 1999, the fee was equivalent to 0.65% (annualized) of
the Portfolio's average daily net assets for such period and amounted to
$1,552,119. 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
officers and Trustees of the Portfolio are officers 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 six months ended June 30, 1999, no significant
amounts have been deferred.
3 Investment Transactions
- -------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $146,943,604 and $154,542,134, respectively.
4 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation/depreciation in value of the investments
owned at June 30, 1999, as computed on a federal income tax basis, were as
follows:
<TABLE>
<S> <C>
AGGREGATE COST $ 330,032,230
- -------------------------------------------------------
Gross unrealized appreciation $ 166,544,198
Gross unrealized depreciation (3,934,012)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 162,610,186
- -------------------------------------------------------
</TABLE>
5 Line of Credit
- -------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $130 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 Eurodollar rate or Federal Funds rate. In addition, a fee
computed at an annual rate of 0.10% 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 six months ended June 30, 1999. At June 30, 1999
the Portfolio did not have a loan outstanding under this agreement.
15
<PAGE>
UTILITIES PORTFOLIO AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
6 Financial Instruments
- -------------------------------------------
The Portfolio may trade 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 written
options, forward foreign currency exchange contracts, and financial 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
Portfolio 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 June 30, 1999
there were no outstanding obligations under these financial instruments.
16
<PAGE>
EATON VANCE UTILITIES FUND AS OF JUNE 30, 1999
INVESTMENT MANAGEMENT
EATON VANCE UTILITIES FUND
Officers
James B. Hawkes
President and Trustee
Edward E. Smiley, Jr.
Vice President
Michael B. Terry
Vice President
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
UTILITIES PORTFOLIO
Officers
James B. Hawkes
President and Trustee
Judith A. Saryan
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
17
<PAGE>
INVESTMENT ADVISER OF
UTILITIES PORTFOLIO
BOSTON MANAGEMENT AND RESEARCH
The Eaton Vance Building
255 State Street
Boston, MA 02109
ADMINISTRATOR OF
EATON VANCE UTILITIES FUND
EATON VANCE MANAGEMENT
The Eaton Vance Building
255 State Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
EATON VANCE DISTRIBUTORS, INC.
The Eaton Vance Building
255 State Street
Boston, MA 02109
(617) 482-8260
CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
FIRST DATA INVESTOR SERVICES GROUP
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
EATON VANCE UTILITIES FUND
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------
3-4265 UTSRC-7/99
