<PAGE>
TO SHAREHOLDERS
EV Marathon Total Return Fund had a total return of -12.7 percent for the year
ended December 31, 1994. That return was the result of a decline in net asset
value per share to $8.30 from $9.93 on December 31, 1993, adjusted for the
reinvestment of $0.395 per share in income dividends. The return does not
include the effect on a redeeming shareholder of the Fund's contingent deferred
sales charge. For comparison, the Dow Jones Utility Average -- an unmanaged
index of utility common stocks -- had a total return of -15.1 percent for the
same period.
RISING INTEREST RATES AND INCREASED COMPETITION...
1994 proved to be a tumultuous year for the electric utility sector. Rising
interest rates, increased competition, a shifting regulatory climate, and a rash
of dividend cuts created a difficult environment for the industry and for
investors. A jump in interest rates posed the most immediate threat to investors
as long-term bond yields rose to nearly 8 percent on December 31, 1994 from 6.3
percent a year ago. Because utilities closely track long-term fixed-income
securities, the group trended lower through much of the year. On the other hand,
interest rates remained well below the levels of the 1980s, and that affected
the companies' abilities to obtain rate requests. In 1994, utilities filed a
record low $1.1 billion in rate hikes.
The prospect of deregulation has made the utilities sector -- historically one
of the most predictable of industries -- one of the fastest-changing sectors in
the economy. For a possible sign of things to come, many analysts have looked to
California, where the Public Utilities Commission has advocated the complete
deregulation of the electric utilities industry by the year 2002. The likelihood
of heightened competition was an additional factor in the decline of utility
stocks. Price competition clearly hurts companies with higher-cost power plants.
This is especially true of utilities with a large commercial customer base, as
large business customers are increasingly demanding -- and receiving -- special
rates.
AMID INCREASED COMPETITION, SOME POSITIVES FOR THE UTILITY SECTOR...
While there are major hurdles ahead for the utility industry, there are some
positives as well. First, demand for electricity continues to rise around 2
percent annually, consistent with a growing population and increased industrial
demand. Second, energy prices have remained low. Fuel represents a significant
portion of utilities cost structures, and low fuel prices have helped in
utilities efforts to contain costs. Finally, full deregulation is likely to
occur only gradually, which should give companies ample time to adjust to
changing conditions. Unquestionably, this period of rapid changes poses major
questions for industry officials and investors alike. However, looking ahead,
utilities are likely to remain a favored vehicle for income and total
return-minded investors.
Sincerely,
/s/ M. Dozier Gardner
[Photograph of M. Dozier Gardner] M. Dozier Gardner
President
February 21, 1995
<PAGE>
A PROFILE OF EV MARATHON TOTAL RETURN FUND
TOTAL RETURN PORTFOLIO:
COMMON STOCK HOLDINGS
Label A B C D
- -------------------------------------------------------------------------------
Total Return Portfolio
Label Common Stock Holdings data
1 Electric 66.5
2 REITs 19.8
3 Telephones 7.4
4 Oil/Gas 5.8
5 Other 0.5
6
7 A pie chart showing the Fund holdings according
8 to industry sector on 12/31/94
IN 1994, CHANGING INDUSTRY CONDITIONS AND SHARPLY HIGHER INTEREST RATES EXACTED
A HEAVY TOLL ON ELECTRIC UTILITY STOCKS
Label A B C
- -------------------------------------------------------------
Label Dow Jones 30-year Treasury
Utility Average* Yields+
1 Dec93 229.3 6.35
2 Jan94 226.01 6.245
3 Feb94 210.45 6.66
4 Mar94 196.28 7.09
5 Apr94 199.43 7.3
6 May94 186.07 7.43
7 Jun94 177.17 7.61
8 Jul94 186.4 7.39
9 Aug94 189.16 7.45
10 Sep94 181.45 7.82
11 Oct94 181.39 7.97
12 Nov94 179.54 8
13 Dec94 181.52 7.88
14
15 A graph showing the relationship between the performance of the
16 Dow Jones Utility Average and the movement in 30-year treasury yields
17
18
*Dow Jones Utility Average (blue line, left axis) is an unmanaged index of 15
utility common stocks.
+U.S. Treasury yields (black line, right axis) refer to yields on 30-Year
Treasury bonds.
...FOCUSING ON COMPANIES WITH GOOD FINANCIAL FLEXIBILITY...
THE PORTFOLIO'S 10 LARGEST HOLDINGS*:
Dividend yield+
CINergy Corp.................................7.4%
Southern Company.............................5.9
Carolina Power & Light Co....................6.6
FPL Group, Inc...............................4.8
DPL Inc......................................5.8
Wisconsin Energy Corp........................5.4
Ameritech Corp...............................5.0
Northern States Power Co.....................6.0
Union Electric Co............................6.9
NIPSCO Industries, Inc.......................5.2
*By market value as of 12/31/94. +Dividend yield represents the annualized yield
based on most recent indicated dividend and stock price at December 31, 1994.
<PAGE>
MANAGEMENT DISCUSSION
An interview with Timothy P. O'Brien, Vice President and Portfolio Manager of
the Total Return Portfolio.
Q. TIM, 1994 WAS A DIFFICULT YEAR FOR THE UTILITIES SECTOR AND FOR THE FUND.
HOW WOULD YOU EVALUATE THE INDUSTRY?
A. Clearly, 1994 was a challenging year, primarily because of the rise in
interest rates. Moreover, with the likelihood of increased competition in
the future, the fundamental outlook has changed markedly. With interest
rates having declined significantly since the 1980s, utilities' earnings
power has been eroded. Many companies have exacerbated the problem by
continuing to raise their dividends even while earnings have stagnated.
With payouts thus unsustainably high, those companies eventually found
themselves with very little financial flexibility. Given lower allowed
rates of return and little room for earnings growth, many companies have
been forced to reduce dividends. For that reason, we have been increasingly
selective in our electric utility investments.
Q. HOW, THEN, HAVE YOU POSITIONED THE PORTFOLIO?
A. The Portfolio has reduced its electric utility holdings to around 62
percent of investments from 83 percent on December 31, 1993. I've
concentrated electric utility investments on low cost operators, such as
Southern Company, which have maintained their financial flexibility and
have relatively low payout ratios. In addition, many of the Portfolio's
electric utility investments tend to have a smaller commercial customer
base and therefore may be less vulnerable to competition from wholesale
wheeling.
Elsewhere, the Portfolio has significantly increased its investments in
real estate investment trusts (REITs), from 5 percent a year ago to around
18.4 percent at December 31. Telephone stocks represented around 6.9
percent, while energy stocks comprised another 5 percent. Over the longer
term, I'll likely supplement the Portfolio's domestic electric holdings
with some attractive foreign companies, as well as expand into some sectors
not currently represented in the Portfolio, such as water companies.
[Photograph of Timothy P. O'Brien]
Q. REITS COMPRISE A SIZABLE PORTION OF THE PORTFOLIO. WHAT DO YOU LIKE ABOUT
THEM?
A. The fundamentals of the real estate industry are relatively strong. In the
wake of the overbuilding of the 1980s, there has been relatively little new
construction of offices, apartments, hotels, or warehouses. While much of
that surplus inventory has been eliminated, some properties remain on the
market at a significant discount to replacement value. As long as that is
the case, we won't see an acceleration in the construction of commercial
real estate in the near future. REITs currently offer yields comparable to
utility yields and, with a strong economic recovery under way, real estate
stocks have enjoyed good earnings momentum. Naturally, this sector is
subject to some risk, including a degree of interest rate sensitivity as
well as the possibility of a downturn in the real estate sector. Because
these stocks tend to be small and fairly illiquid, the Portfolio has widely
diversified its investments according to asset class and geographical mix.
The Portfolio's holdings comprise a broad range of properties, including
office buildings, residential apartments, shopping centers, and nursing
homes.
Q. WHAT ABOUT THE TELEPHONE SECTOR?
A. Like the electric utilities, telephone companies are vulnerable to
competitive inroads and changing industry dynamics. It's clear that long
distance companies are targeting local telephone business, while local
companies covet long distance business. In addition, some telephone
companies have been active in diversifying into businesses such as wireless
and cellular. While those moves will fuel growth in the future, they tend
to have a dilutive effect on current earnings. I have focused on telephone
companies such as Ameritech that are less vulnerable to competition and
less likely to dilute earnings through diversification.
Q. WHAT'S COMPELLING ABOUT FOREIGN UTILITIES?
A. Foreign electric utilities tend to be regulated on a price cap basis, which
places fewer limitations on what the companies may earn. That's a far cry
from the U.S., where regulation uses an allowed rate of return method. The
foreign companies are therefore less exposed to many of the trends that
have afflicted the domestic industry. One foreign Portfolio investment,
Norweb, is a British electric power distribution company. Unlike U.S.
companies, which are vertically integrated to include generation as well as
delivery, Norweb concentrates solely on distribution. In the foreign
telephone sector, Portfolio holding TeleDanmark, the Danish telephone
company, has superior earnings growth, a competitive yield, and is able to
sustain a high rate of dividend growth. Telecom New Zealand is similarly
well-positioned.
Q. WHAT IS YOUR OUTLOOK FOR THE UTILITY SECTORS?
A. Despite the troubling fundamentals of the electric sector, interest rates
remain the dominant influence on utility stock prices. Moreover, there is a
good likelihood that interest rates will stabilize and that the recent bond
rally will continue well into 1995. While past performance is naturally no
guarantee of future results, a more stable interest rate environment would
present a more favorable climate for these sectors. In an increasingly
challenging period for the utilities sectors, the Portfolio will continue
to search for stocks we believe have prospects for earnings and dividend
growth and provide attractive opportunities for solid long-term total
returns.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EV MARATHON TOTAL
RETURN FUND AND THE S&P 500 STOCK INDEX
1 Life of
Average Annual Returns Year Fund*
- ----------------------------------------------
With 5% CDSC -16.7% -14.6%
Without CDSC -12.7% -10.9%
From November 30, 1993, through December 31, 1994
Marathon
Total Return
Fund S&P 500
- ----------------------------------------
11/93 10000 10000
12/93 10117 10168
1/94 9980 10498
2/94 9567 10183
3/94 9366 9785
4/94 9515 9898
5/94 9127 10021
6/94 8870 9827
7/94 8989 10137
8/94 8909 10518
9/94 8754 10308
10/94 8754 10523
11/94 8733 10107
12/94 8855 10306
Past performance is not indicative of future results. Investment returns and
principal will fluctuate so that an investor's shares, when redeemed, may be
worth more or les than their original cost. Source: Towers Data Systems,
Bethesda, MD.
*Investment operations commenced on 11/1/93.
<PAGE>
FUND PERFORMANCE
In accordance with guidelines issued by the Securities and Exchange Commission,
we are including a performance chart that compares your Fund's total return with
that of a broad- based investment index. The lines on the chart represent the
total returns of a $10,000 hypothetical investment in EV Marathon Total Return
Fund and the unmanaged S&P 500 Index.
TOTAL RETURN FIGURES
The solid line on the chart represents the Fund's performance at net asset
value. The Fund's total return figure reflects Fund expenses and transaction
costs, and assumes the reinvestment of income dividends and capital gain
distributions. The second dollar figure for the Fund reflects the Fund's maximum
applicable deferred sales charge (CDSC), deducted at redemption as follows: 5% -
1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th year.
The dotted line represents the performance of the S&P 500 Index, a broad-based,
widely recognized unmanaged index of 500 common stocks. The Index's total return
does not reflect any commissions or expenses that would be incurred if an
investor individually purchased or sold the securities represented in the Index.
<PAGE>
<TABLE>
<CAPTION>
EV MARATHON TOTAL RETURN FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------------------------
December 31, 1994
--------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investment in Total Return Portfolio (Portfolio) at value (Note 1A) $26,128,193
Receivable for Fund shares sold 195,717
Deferred organization expenses (Note 1D) 36,595
-----------
Total assets $26,360,505
LIABILITIES:
Payable for Fund shares redeemed $135,705
Accrued expenses 13,912
--------
Total liabilities 149,617
-----------
NET ASSETS for 3,158,766 shares of beneficial interest outstanding $26,210,888
===========
SOURCES OF NET ASSETS:
Proceeds from sales of shares (including shares issued to
shareholders electing to receive payment of distributions
in shares), less cost of shares redeemed $28,689,291
Undistributed net investment income 3,607
Accumulated net realized loss on investments and financial
futures transactions (1,761,166)
Unrealized depreciation of investments and open financial
future contracts (computed on the basis of identified cost) (720,844)
------------
Total net assets $26,210,888
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($26,210,888 / 3,158,766 shares of beneficial interest) $8.30
=====
The accompanying notes are an integral part of the financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
-------------------------------------------------------------------------------------------------
For the Year Ended December 31, 1994
-------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME (NOTE 1B):
Dividend income allocated from Portfolio $ 1,287,862
Interest income allocated from Portfolio 54,717
Expenses allocated from Portfolio (188,969)
-----------
Total investment income $ 1,153,610
Expenses --
Custodian fee $ 12,357
Distribution fees (Note 4) 167,071
Printing & Postage 26,900
Registration fees 23,546
Transfer and dividend disbursing agent fees 18,681
Legal and accounting services 12,131
Amortization of organization expenses 8,030
Miscellaneous 4,068
-----------
Total expenses 272,784
-----------
Net investment income $ 880,826
REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO:
Net realized gain (loss) (identified cost basis) --
Investment transactions $(2,861,257)
Financial futures contracts 228,634
-----------
Net realized loss on investments and financial futures
(identified cost basis) $(2,632,623)
Change in unrealized appreciation of investments and
financial futures contracts (823,963)
-----------
Net realized and unrealized loss on investments (3,456,586)
----------
Net decrease in net assets resulting from operations (2,575,760)
==========
The accompanying notes are an integral part of the financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------
1994 1993*
----------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 880,826 $ 42,114
Net realized loss from Portfolio (2,632,623) (51,495)
Change in unrealized appreciation from Portfolio (823,963) 103,119
------------ -----------
Net increase (decrease) in net assets resulting from
operations $(2,575,760) $ 93,738
----------- -----------
Distributions to shareholders --
From net investment income $ (866,139) $ (42,114)
Tax return of capital (131,190) (10,379)
----------- -----------
Total distributions to shareholders $ (997,329) $ (52,493)
----------- -----------
Net increase in net assets from Fund share transactions
(Note 2) $18,264,787 $11,477,935
----------- -----------
Net increase in net assets $14,691,698 $11,519,180
NET ASSETS:
At beginning of period 11,519,190 10
----------- -----------
At end of period $26,210,888 $11,519,190
=========== ===========
*For the period from the start of business, November 1, 1993, to December 31, 1993.
The accompanying notes are an integral part of the financial statements
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------
1994 1993*
---- -----
FINANCIAL HIGHLIGHTS (for a share outstanding
throughout the period):
NET ASSET VALUE -- Beginning of period $ 9.9300 $10.0000
-------- --------
Income from investment operations:
Net investment income $ 0.3638 $ 0.0409
Net realized and unrealized loss on investments (1.5988) (0.0559)\1/
--------- --------
Total loss from investment operations $(1.2350) $(0.0150)
-------- --------
Less distributions declared to shareholders:
From net investment income $(0.3535) $(0.0461)
Tax return of capital (0.0415) (0.0089)
--------- --------
Total distributions $(0.3950) $(0.0550)
--------- --------
NET ASSET VALUE -- End of period $ 8.3000 $ 9.9300
======== ========
TOTAL RETURN** (12.70%) (0.15%)
RATIOS/SUPPLEMENTAL DATA: (to average
daily net assets)***
Expenses\2/ 2.07% 0.68%+
Net investment income 3.95% 3.38%+
NET ASSETS AT END OF PERIOD (000'S OMITTED) $ 26,210 $ 11,519
Note: Per share amounts have been computed using average shares outstanding
during the period.
\1/ The per share amount for the period from the start of business, November
1, 1993 to December 31, 1993, is not in accord with the net realized and
unrealized gain for the period allocated to the Fund by the Portfolio due
to the timing of the sales of Fund shares and the amount of per share
realized and unrealized gains and losses at such time.
\2/ Includes the Fund's share of Total Return Portfolio's allocated expenses
for the year ended December 31, 1994 and the period from November 1, 1993,
to December 31, 1993.
+ Computed on an annualized basis.
* For the period from the start of business, November 1, 1993, to December
31, 1993.
** 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 record date.
*** The expenses related to the operation of the fund reflect an allocation of
expenses to the administrator. Had such action not been taken, the ratios
would have been as follows:
Ratios (to average daily net assets)
Expenses -- 1.83%+
Net investment income -- 2.23%+
The accompanying notes are an integral part of the financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
- -------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
EV Marathon Total Return Fund (the Fund) is a non-diversified 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 in the Eaton Vance Total Return Trust. The Fund
invests all of its investable assets in interests in the Total Return 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 (5.2% at December 31,
1994). 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 VALUATIONS -- Valuations of securities by the Portfolio is
discussed in Note 1 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. 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. At
December 31, 1994, the Fund, for federal income tax purposes, had capital loss
carryovers of $1,835,173, which will reduce the Fund's taxable income arising
from future net realized gain on investment transactions, if any, to the extent
permitted by the Internal Revenue Code, and thus will reduce the amount of the
distributions to shareholders which would otherwise be necessary to relieve the
Fund of any liability for federal income or excise tax. Such capital loss
carryovers will expire on December 31, 2001 ($48,915) and December 31, 2002
($1,786,258).
D. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Fund in connection
with its organization are being amortized on the straight-line basis over five
years.
E. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Distributions to shareholders are recorded on
the ex-dividend date. Dividend income may include dividends that represent
returns of capital for federal tax purposes.
F. DISTRIBUTION COSTS -- For book purposes, commissions paid on the sale of Fund
shares and other distribution costs are charged to operations. For tax purposes,
commissions paid were charged to paid-in capital prior to November 16, 1994 and
subsequently charged to operations. The change in the tax accounting practice
was prompted by a recent Internal Revenue Service ruling and has no effect on
either the Fund's current yield or total return (Note 4).
G. DISTRIBUTIONS -- Generally accepted accounting principles require that
differences in the recognition or classification of income between the financial
statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains.
<PAGE>
- --------------------------------------------------------------------------------
(2) 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>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1994 1993*
------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
Sales 2,631,297 $23,702,106 1,187,442 $11,749,837
Issued to shareholders electing to receive payment of
distribution in Fund shares 90,751 785,136 3,323 33,616
Redemptions (723,105) (6,222,454) (30,943) (305,518)
--------- ----------- --------- -----------
Net increase 1,998,943 $18,264,788 1,159,822 $11,477,935
========= =========== ========= ===========
*From the start of business, November 1, 1993 to December 31, 1993
</TABLE>
- --------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio aggregated
$24,515,051 and $6,756,703, respectively.
- --------------------------------------------------------------------------------
(4) 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 accrue amounts
daily to the principal underwriter, Eaton Vance Distributors, Inc. (EVD), equal
to 1/365th of 0.75% of the Fund's average daily net assets, for providing
ongoing distribution services and facilities to the Fund. The Fund will
automatically discontinue accruals to EVD during any period in which there are
no outstanding Uncovered Distribution Charges, which are approximately
equivalent to the sum of (i) 5% of the aggregate amount received by the Fund for
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 the aggregate amount of contingent
deferred sales charges (see Note 5) and 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 $142,927 for the year
ended December 31, 1994, representing 0.75% of average daily net assets. At
December 31, 1994, the amount of Uncovered Distribution Charges of EVD
calculated under the Plan was approximately $1,322,445.
In addition, the Plan authorizes the Fund to 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 each fiscal year. The
Trustees have implemented the Plan by authorizing the Fund to make quarterly
payments of service fees to the Principal Underwriter and Authorized Firms in
amounts not expected to exceed 0.25% of the Fund's average daily net assets for
each fiscal year based on the value of Fund shares sold by such persons and
remaining outstanding for at least twelve months. During the year ended December
31, 1994 the Fund provided for $24,144 under the Plan to the Principal
Underwriter and Authorized Firms. 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 where there are no outstanding
Uncovered Distribution Charges of EVD.
Certain of the officers of the Fund and Directors of the Corporation are
officers and directors of EVD.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
(5) CONTINGENT DEFERRED SALES CHARGE
A contingent deferred sales charge (CDSC) is imposed on any redemption of Fund
shares made within six years of purchase. 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 gain
distributions. For Fund shares purchased prior to August 1, 1994, the CDSC was
imposed at declining rates that begin at 6% in the first year of redemption
after purchase, declining one percentage point each year. For Fund shares
purchased on or after August 1, 1994, the CDSC will be imposed at declining
rates beginning at 5% in the first and second years, of redemption after
purchase, declining one percentage point in each subsequent year. No CDSC is
levied on shares which have been sold to EVM or its affiliates or to their
respective employees or clients. CDSC charges are paid to EVD to reduce the
amount of Uncovered Distribution Charges calculated under the Fund's
Distribution Plan. CDSC charges received when no Uncovered Distribution Charges
exist will be credited to the Fund. EVD received approximately $118,019 of CDSC
paid by shareholders for the year ended December 31, 1994.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
EV Marathon Total Return Fund, a series of Eaton Vance Total Return Trust:
We have audited the accompanying statement of assets and liabilities of EV
Marathon Total Return Fund, a series of Eaton Vance Total Return Trust, as of
December 31, 1994, and the related statement of operations for the year then
ended, the statement of changes in net assets and the financial highlights for
the year then ended and for the period from November 1, 1993 (start of business)
to December 31, 1993. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of EV
Marathon Total Return Fund, a series of Eaton Vance Total Return Trust, as of
December 31, 1994, the results of its operations for the year then ended, and
the changes in its net assets and the financial highlights for the year then
ended and for the period from November 1, 1993, (start of business) to December
31, 1993, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 3, 1995
<PAGE>
- --------------------------------------------------------------------------------
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS -- 93.4%
- -------------------------------------------------------------------------------------------------
NAME OF COMPANY SHARES VALUE
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
ELECTRIC UTILITIES -- 62.1%
American Electric Power Co. Inc. 200,000 $ 6,575,000
Baltimore Gas & Electric Co. 150,000 3,318,750
Carolina Power & Light Co. 750,000 19,968,750
Central & South West Corp. 479,994 10,859,864
Central Louisiana Electric Co. 326,800 7,720,650
Cinergy Corp. 1,250,250 29,224,594
Dominion Resources, Inc. 200,000 7,150,000
DPL Inc. 950,000 19,475,000
DQE, Inc. 400,000 11,850,000
Duke Power Co. 270,000 10,293,750
FPL Group, Inc. 560,000 19,670,000
General Public Utilities Corp. 320,000 8,400,000
IPALCO Enterprises, Inc. 350,000 10,500,000
Kansas City Power & Light Co. 181,900 4,251,913
LG & E Energy Corp. 125,000 4,609,375
New England Electric System 100,000 3,212,500
NIPSCO Industries, Inc. 400,000 11,900,000
Northern States Power Co. Minn. 322,800 14,203,200
Norweb Ord PLC 200,000 2,690,940
Ohio Edison Co. 200,000 3,700,000
PacifiCorp 583,200 10,570,500
PECO Energy Co. 200,000 4,900,000
Pinnacle West Capital Corp. 300,000 5,925,000
Portland General Corp. 350,000 6,737,500
Public Service Co. of New Mexico<F2> 565,300 7,348,900
Southern Co. 1,072,460 21,449,200
Teco Energy, Inc. 410,000 8,251,250
Union Electric Co. 346,500 12,257,438
United Illuminating Co. 110,200 3,250,900
Western Resources, Inc. 200,000 5,725,000
Wisconsin Energy Corp. 689,650 17,844,694
------------
$313,834,668
------------
OIL & GAS -- 5.4%
Amoco Corp. 165,000 $ 9,755,625
BP Prudhoe Bay Rty Tr Unit Ben Int. 437,000 7,429,000
Mobil Corp. 120,000 10,110,000
------------
$ 27,294,625
------------
REITS -- 18.5%
Apartment Investment & Management Co. Class A 200,000 $ 3,450,000
Associated Estates Realty Corp. 200,000 4,200,000
Avalon Properties, Inc. 165,000 3,795,000
Bay Apartment Communities 213,400 4,294,675
Bradley Real Estate Trust 72,750 1,109,437
Cali Realty Corp. 150,000 2,400,000
Camden Properties Trust SBI 200,000 4,975,000
Columbus Realty Trust 140,000 2,590,000
Developers Diversified Realty Corp. 170,000 5,312,500
Duke Realty Investments, Inc. 40,000 1,130,000
Equity Residential Properties Trust 80,000 2,400,000
Health Care Property Investors, Inc. 140,000 4,217,500
Healthcare Realty Trust 350,000 7,350,000
LTC Properties, Inc. 490,000 6,492,500
Macerich Co. 175,000 3,740,625
Meditrust Sh Ben Int. 100,000 3,025,000
Mid America Apartment Communities, Inc. 164,500 4,400,375
Nationwide Health Properties, Inc. 320,000 11,440,000
Oasis Residential, Inc. 225,000 5,512,500
Post Properties Inc. 100,000 3,150,000
Simon Property Group, Inc. 150,000 3,637,500
Southwestern Property Trust, Inc. 180,000 2,205,000
Sun Communities Inc. 110,000 2,475,000
------------
$ 93,302,612
------------
TELEPHONE UTILITIES -- 6.9%
Ameritech Corp. 380,000 $ 15,342,500
Bell Atlantic Corp. 100,000 4,975,000
Southern New England
Telecommunications 50,000 1,606,250
Southwestern Bell Corp. 150,000 6,056,250
Tele Danmark A/S<F2> 63,000 1,606,500
Telecom Corp. New Zealand Ltd. ADR 100,000 5,137,500
------------
$ 34,724,000
------------
OTHER -- 0.5%
British Sky Broadcasting Group PLC ADR<F2> 25,000 $ 600,000
Sonat Inc. 71,000 1,988,000
------------
$ 2,588,000
------------
TOTAL COMMON STOCKS
(identified cost, $455,294,874) $471,743,905
------------
<CAPTION>
- -------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 2.0%
- -------------------------------------------------------------------------------------------------
SHARES VALUE
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Freeport McMoRan Copper & Gold 40,000 $ 830,000
Kenetech Corp., 8.25s 200,000 3,075,000
Philippines Long Distance Telephone, 7s 112,000 6,062,000
------------
$ 9,967,000
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(identified cost, $10,549,225) $ 9,967,000
------------
<PAGE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS -- 0.1%
- -------------------------------------------------------------------------------------------------
FACE AMOUNT
(000 OMITTED)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
IDB Communications Group, Inc.,
5s, 8/15/03 (identified cost, $858,750) $1,000 $ 762,500
------------
- -------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 1.5%
- -------------------------------------------------------------------------------------------------
U.S. Treasury Bill, 0s, 3/5/95<F1>
(identified cost, $7,696,456) $7,780 $ 7,703,600
------------
- -------------------------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS -- 1.5%
- -------------------------------------------------------------------------------------------------
CXC Inc., 5.95s, 1/3/95 $3,499 $ 3,497,265
American Express Credit Corp.,
5.80s, 1/5/95 4,294 4,290,541
------------
TOTAL SHORT-TERM OBLIGATIONS, AT
AMORTIZED COST $ 7,787,806
------------
TOTAL INVESTMENTS -- 98.5%
(identified cost, $482,187,111) $497,964,811
OTHER ASSETS, LESS LIABILITIES -- 1.5% 7,602,081
------------
NET ASSETS -- 100.0% $505,566,892
============
<FN>
<F1>Collateral for futures held at December 31, 1994 (see Note 6)
<F2>Non-income producing security
</FN>
</TABLE>
The accompanying notes are an integral part
of the financial statements
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------------------------
December 31, 1994
--------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments, at value (Note 1A)
(identified cost, $482,187,111) $497,964,811
Cash 2,597
Receivable for investments sold 8,994,384
Dividends receivable 2,364,639
Receivable for daily variation margin on financial
futures contracts 975,000
Deferred organization expenses (Note 1E) 16,027
Foreign tax reclaim receivable 25,565
Interest receivable 29,754
------------
Total assets $510,372,777
LIABILITIES:
Payable for investments purchased $4,775,774
Trustees fees payable 5,160
Custodian fee payable 8,403
Accrued expenses 16,548
----------
Total liabilities 4,805,885
------------
NET ASSETS applicable to investors' interest in Portfolio $505,566,892
============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and withdrawals $491,941,692
Unrealized appreciation of investments and open futures
contracts (computed on the basis of identified cost) 13,625,200
------------
Total net assets $505,566,892
============
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE>
FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
----------------------------------------------------------------------------------------------
For the Year Ended December 31, 1994
----------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividend income $ 32,158,717
Interest income 1,330,065
-------------
Total income $ 33,488,782
Expenses -- Investment adviser fee (Note 3) $ 4,106,857
Compensation of trustees not members of the
investment adviser's organization
(Note 3) 20,687
Custodian fee (Note 3) 159,872
Interest expense 187,106
Commitment fee 143,450
Audit and legal fees 46,657
Printing and postage fees 14,129
Amortization of deferred organizational expenses
(Note 1E) 4,197
Miscellaneous 19,841
-----------
Total expenses 4,702,796
-------------
Net investment income $ 28,785,986
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) (identified cost basis) --
Investment transactions $(21,035,623)
Financial futures contracts 5,883,625
------------
Net realized loss on investments and financial
futures (identified cost basis) $(15,151,998)
Change in unrealized appreciation on investments and
financial futures contracts (89,492,365)
------------
Net realized and unrealized loss on investments (104,644,363)
-------------
Net decrease in net assets resulting from
operations $ (75,858,377)
=============
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
-----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------
1994 1993<F1>
----------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 28,785,986 $ 5,227,429
Net realized loss on investment transactions and
financial futures contracts (15,151,998) (3,109,783)
Decrease in unrealized appreciation of investments (89,492,365) (31,858,504)
------------- -------------
Net decrease in net assets resulting from
operations $ (75,858,377) $ (29,740,858)
------------- -------------
Capital transactions --
Contributions $ 97,021,559 $ 700,057,818
Withdrawals (152,162,876) (33,850,394)
------------- -------------
Increase (decrease) in net assets resulting from
capital transactions $ (55,141,317) $ 666,207,424
------------- -------------
Total increase (decrease) in net assets $(130,999,694) $ 636,466,566
NET ASSETS:
At beginning of period 636,566,586 100,020
------------- -------------
At end of period $ 505,566,892 $ 636,566,586
============= =============
<FN>
<F1>For the period from the start of business, October 28, 1993, to December 31, 1993.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
SUPPLEMENTARY DATA
-----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------
1994 1993<F2>
----------------- -----------------
<S> <C> <C>
RATIOS (As a percentage of average net assets):
Expenses 0.85% 0.91%<F1>
Net investment income 5.22% 4.57%<F1>
PORTFOLIO TURNOVER 107% 16%
LEVERAGE ANALYSIS:
Amount of debt outstanding at end of period (000's
omitted) -- --
Average daily balance of debt outstanding during
period (000 omitted) $ 3,137 $15,452
<FN>
<F1>Computed on an annualized basis.
<F2>For the period from the start of business, October 28, 1993, to December 31, 1993.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
-------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Total Return 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 beneficial interests in the
Portfolio. Investment operations began on October 28, 1993, with the acquisition
of net assets of $668,641,088 in exchange for an interest in the Portfolio by
one of the Portfolio's investors. The following is a summary of significant
accounting policies of the Portfolio. The policies are in conformity with
generally accepted accounting principles.
A. INVESTMENT VALUATIONS -- 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. 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 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 investors' 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. 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 of an unfavorable change in the price of the securities underlying the
written option.
D. 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. When 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. The
Portfolio's investment 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.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
E. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line basis
over five years.
F. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income is recorded on the ex-
dividend date. Realized gains and losses on the sale of investments are
determined on the identified cost basis.
- --------------------------------------------------------------------------------
(2) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregated $574,395,813 and $620,810,869, 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 based upon a percentage of average daily net assets. For the year ended
December 31, 1994, the fee was equivalent to 0.74% of the Portfolio's average
net assets for such period and amounted to $4,106,857. 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 service to the Portfolio out of such
investment adviser fee. Investors Bank & Trust Company (IBT), an affiliate of
EVM and BMR, 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. Certain of the
officers and Trustees of the Portfolio are officers and directors/trustees of
the above organizations.
<PAGE>
- --------------------------------------------------------------------------------
(4) LINE OF CREDIT
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $120 million unsecured line of credit agreement with
a bank. The line of credit consists of a $20 million committed facility and a
$100 million discretionary facility. The Portfolio expects to use the proceeds
of the advances primarily for leveraging purposes. Borrowings by the Portfolio
under the Credit Agreement will not exceed the lesser of 1/3 of the market value
of the net assets of the Portfolio or $60,000,000. Interest is charged to each
portfolio based on its borrowings at an amount above either the bank's adjusted
certificate of deposit rate, a variable adjusted certificate of deposit rate, or
a federal funds effective rate. In addition, a fee computed at an annual rate of
1/4 of 1% on the $20 million committed facility and on the daily unused portion
of the $100 million discretionary facility is allocated among the participating
funds and portfolios at the end of each quarter. The average daily loan balance
for the year ended December 31, 1994 was $3,137,134 and the average interest
rate was 5.96%. The maximum borrowings outstanding at any month end during the
year ended December 31, 1994, was $26,083,000.
- --------------------------------------------------------------------------------
(5) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation/depreciation in value of the investments
owned at December 31, 1994, as computed on a federal income tax basis, are as
follows:
Aggregate cost $482,915,174
============
Gross unrealized appreciation $ 28,239,363
Gross unrealized depreciation 13,189,726
------------
Net unrealized appreciation $ 15,049,637
============
- --------------------------------------------------------------------------------
(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 notational 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 off-setting
transactions are considered.
A summary of obligations under these financial instruments at December 31, 1994
is as follows:
NET
FUTURES CONTRACT UNREALIZED
EXPIRATION DATE CONTRACTS POSITION DEPRECIATION
- --------------- --------- -------- ------------
3/95 600 S&P 500 Futures Short $2,152,500
At December 31, 1994, the Portfolio has sufficient cash and/or securities to
cover margin requirements on open futures contracts.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Trustees and Investors of
Total Return Portfolio:
We have audited the accompanying statement of assets and liabilities of Total
Return Portfolio, including the portfolio of investments, as of December 31,
1994, the related statement of operations for the year then ended and the
statement of changes in net assets and supplementary data for the year ended
December 31, 1994, and for the period from the start of business, October 28,
1993, to December 31, 1993. These financial statements and supplementary data
are the responsibility of the Portfolio's management. Our responsibility is to
express an opinion on these financial statements and supplementary data based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and supplementary data referred to
above present fairly, in all material respects, the financial position of Total
Return Portfolio as of December 31, 1994, the results of its operations for the
year then ended, and the changes in its net assets and the supplementary data
for the year ended December 31, 1994, and for the period from the start of
business, October 28, 1993, to December 31, 1993, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 3, 1995
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT
EV MARATHON OFFICERS TRUSTEES
TOTAL RETURN FUND M. DOZIER GARDNER DONALD R. DWIGHT
24 Federal Street President, Trustee President, Dwight
Boston, MA 02110 LANDON T. CLAY Partners, Inc.
Vice President, Chairman,
Trustee Newspapers of
EDWIN W. BRAGDON New England, Inc.
Vice President JAMES B. HAWKES
A. WALKER MARTIN Executive Vice
Vice President President,
JAMES L. O'CONNOR Eaton Vance
Treasurer Management
THOMAS OTIS SAMUEL L. HAYES, III
Secretary Jacob H. Schiff
WILLIAM J. AUSTIN, JR. Professor of
Assistant Treasurer Investment Banking,
JANET E. SANDERS University Graduate
Assistant Treasurer Harvard
and School of Business
Assistant Secretary Administration
NORTON H. REAMER
President and
Director,
United Asset
Management
Corporation
JOHN L. THORNDIKE
Director, Fiduciary
Trust Company
JACK L. TREYNOR
Investment Adviser
and Consultant
----------------------------------------------------
TOTAL RETURN OFFICERS TRUSTEES
PORTFOLIO M. DOZIER GARDNER DONALD R. DWIGHT
24 Federal Street President, Trustee President, Dwight
Boston, MA 02110 LANDON T. CLAY Partners, Inc.
Vice President, Chairman,
Trustee Newspapers of
EDWIN W. BRAGDON New England, Inc.
Vice President SAMUEL L. HAYES, III
JAMES B. HAWKES Jacob H. Schiff
Vice President, Professor of
Trustee Investment Banking,
A. WALKER MARTIN Harvard
Vice President University Graduate
JAMES L. O'CONNOR School of Business
Treasurer Administration
THOMAS OTIS NORTON H. REAMER
Secretary President and
WILLIAM J. AUSTIN, JR. Director,
Assistant Treasurer United Asset
JANET E. SANDERS Management
Assistant Treasurer Corporation
and JOHN L. THORNDIKE
Assistant Secretary Director, Fiduciary
Trust Company
JACK L. TREYNOR
PORTFOLIO MANAGER Investment Adviser
TIMOTHY O'BRIEN and Consultant
<PAGE>
INVESTMENT ADVISER OF
TOTAL RETURN PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF EV MARATHON
TOTAL RETURN 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
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
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.
EV MARATHON TOTAL RETURN FUND
24 FEDERAL STREET
BOSTON, MA 02110
M-TMSRC
<PAGE>
EV MARATHON
TOTAL RETURN
FUND
ANNUAL
SHAREHOLDER REPORT
DECEMBER 31, 1994
