<PAGE>
[Logo] Investing [Photo of Stock Certificate]
EATON VANCE for the
================ 21st
Mutual Funds Century
Semiannual Report September 30, 1997
[Photo of Paul Revere Statue]
EV
CLASSIC
HIGH INCOME FUND
C l a s s i c
Eaton Vance
Global Management-Global Distribution
[Photo of Boston Skyline]
Classic
<PAGE>
EV Classic High Income Fund as of September 30, 1997
INVESTMENT UPDATE
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[Photo of Michael Weilheimer]
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Michael Weilheimer,
Portfolio Manager
INVESTMENT ENVIRONMENT
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o Despite increasing volatility, the six-month period was a favorable one for
the bond market. Ten-year Treasury bond yields declined from 6.9% at March 31
to around 6.1% by September 30, as the Federal Reserve maintained a stable
interest rate policy amid a climate of continued low inflation.
o Buoyed by the strong economy and a rising stock market, the high-yield market
again outperformed the investment-grade market. For example, the Lehman
Brothers High-Yield Bond Index posted a return of 9.4% during the six-month
period, while the Lehman Brothers Government/Corporate Bond Index returned
7.3%.(1)
o The high-yield market continued to expand during 1997, surpassing $400 billion
in market capitalization. Through September alone, issuance for 1997 reached
$100 billion, eclipsing the $75 billion issued for all of 1996.
THE FUND
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Performance for the Past Six Months
o The Fund's total return was 11.9% for the six months ended September 30,
1997,(2) the result of a rise in net asset value per share from $9.84 on March
31, 1997 to $10.57 on September 30, 1997, and the reinvestment of $0.417 in
dividends.
o The Fund's risk-adjusted performance through September 30 earned it a
Five-Star Overall Rating among taxable bond funds covered by Morningstar,
Inc.(3) - a nationally-recognized monitor of mutual fund performance.
Recent Portfolio Developments
o Hooker Talcott, Jr. announced his retirement, effective October 31. Under his
management since its inception, the Fund has established a superior long-term
record. Michael Weilheimer, with whom Hooker has shared Portfolio management
for the past 21 months, has now assumed sole management responsibilities.
o Communications services bonds constituted the Portfolio's largest sector
weighting at September 30. Prompted by the industry's increasing capital
requirements to finance growth, telecom-related bonds represented around 30%
of new high-yield issuance in 1997.
o Among the Portfolio's telecom-related holdings, Brooks Fiber Properties, which
recently agreed to be purchased by Worldcom, Inc., is among the competitive
local exchange companies that are gaining market share from Bell operating
companies and becoming increasingly important telecommunications players.
o Broadcasting and cable bonds were the Portfolio's second largest weighting.
Cablevision Systems, Inc. enjoyed modest subscriber growth even as it
implemented price increases; it now offers additional products such as
internet services. Elsewhere, Chancellor Radio Broadcasting has become a
national powerhouse through an aggressive acquisition policy.
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.
- ----------
(1) It is not possible to invest directly in an Index.
(2) Return does not reflect 1% contingent deferred sales charge (CDSC) incurred
by shareholders redeeming within the first year.
(3) Morningstar ratings reflect historical risk-adjusted performance through
9/30/97 and are subject to change. Past performance is no guarantee of
future results. Funds are assigned ratings from 1 star (lowest) to 5 stars
(highest). Ratings are calculated from the funds' 3-,5-, and 10-year returns
(with fee adjustment) in excess of 90-day Treasury bill returns. The top 10%
of the funds in a category receive 5 stars. For the 3-year period, the Fund
was rated 5 stars among 1309 funds.
(4) Returns are calculated by determining the percentage change in net asset
value with all distributions reinvested. SEC return for one year reflects
1% CDSC.
(5) Industry positions and ten largest holdings are as of 9/30/97 only and may
not be representative of the Portfolio's current or future investments. Ten
largest holdings account for 13.5% of the Portfolio's investments,
determined by dividing the total market value of the holdings by the total
net assets of the Portfolio. 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.
FUND INFORMATION
as of September 30, 1997
Performance(4)
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Average Annual Total Returns (at net asset value)
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One year 16.7%
Life of Fund (6/8/94) 11.3
SEC Average Annual Total Returns (including applicable CDSC)
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One year 15.7%
Life of Fund (6/8/94) 11.3
Diversification by Industry(5)
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By total investments
Communication Services 13.9%
Broadcast/Cable 11.6%
Foods 5.8%
Oil/Gas 5.1%
Manufacturing 4.2%
Ten Largest Holdings5
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Cablevision Systems, Inc. 1.9%
Nextlink Communications, Inc. 1.7
United International Holdings, Inc. 1.5
Dial Call, Communications, Inc. 1.2
Chancellor Radio Broadcasting, Inc. 1.2
Mariner Energy Corp. 1.2
AFC Enterprises, Inc. 1.2
International Home Foods, Inc. 1.2
Hyperion Communications, Inc. 1.2
Pricellular Communications, Inc. 1.2
<PAGE>
EV Classic High Income Fund as of September 30, 1997
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Financial Statements (Unaudited)
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Statement of Assets and Liabilities
As of September 30, 1997
Assets
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Investment in High Income Portfolio, at value (Note 1A)
(identified cost, $21,084,646) $22,399,104
Receivable from Administrator (Note 4) 22,512
Deferred organization expenses (Note 1D) 8,151
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Total assets $22,429,767
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Liabilities
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Dividends payable $ 38,130
Payable for Fund shares redeemed 39,081
Payable to affiliate -
Trustees' fees 42
Accrued expenses 10,948
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Total liabilitie $ 88,201
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Net Assets for 2,112,894 shares of
beneficial interest outstanding $22,341,566
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Sources of Net Assets
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Paid-in capital $20,759,520
Accumulated net realized gain on investments from Portfolio
(computed on the basis of identified cost) 257,613
Accumulated undistributed net investment income 9,975
Net unrealized appreciation of investments from Portfolio
(computed on the basis of identified cost) 1,314,458
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Total $22,341,566
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Net Asset Value, Offering Price and Redemption
Price Per Share (Note 6)
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($22,341,566 / 2,112,894 shares
of beneficial interest outstanding) $ 10.57
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<PAGE>
Statement of Operations
For the Six Months Ended
September 30, 1997
Investment Income (Note 1B)
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Interest income allocated from Portfolio $ 984,517
Dividend income allocated from Portfolio 6,352
Miscellaneous income 8,450
Expenses allocated from Portfolio (62,611)
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Net investment income from Portfolio $ 936,708
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Expenses
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Compensation of Trustees not members of the
Administrators' organization (Note 4) $ 126
Distribution fees (Note 5) 98,592
Printing and postage 11,262
Transfer and dividend disbursing agent fees 10,711
Legal and accounting services 7,400
Custodian fee 5,555
Amortization of organization expenses (Note 1D) 4,815
Registration fees 3,961
Miscellaneous 4,850
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Total expenses $ 147,272
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Deduct --
Preliminary allocation of expenses to the Administrator
(Note 4) $ 22,512
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Total expense reductions $ 22,512
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Net expenses $ 124,760
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Net investment income $ 811,948
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Realized and Unrealized
Gain (Loss) from Portfolio
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Net realized gain (loss) --
Investment transactions (identified cost basis) $ 321,281
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Net realized gain on investments $ 321,281
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Change in unrealized appreciation (depreciation) --
Investments $1,104,131
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Net change in unrealized appreciation (depreciation) of
investments $1,104,131
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Net realized and unrealized gain on investments $1,425,412
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Net increase in net assets from operations $2,237,360
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See notes to financial statements
<PAGE>
EV Classic High Income Fund as of September 30, 1997
- -------------------------------------------------------------------------------
Financial Statements Cont'd
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
Increase (Decrease) September 30, 1997 Year Ended
in Net Assets (Unaudited) March 31, 1997
- ------------------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment income $ 811,948 $ 1,085,164
Net realized gain (loss) on investments 321,281 (23,804)
Net change in unrealized appreciation
(depreciation) of investments 1,104,131 160,339
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Net increase in net assets from operations $ 2,237,360 $ 1,221,699
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Distributions to shareholders (Note 2) --
From net investment income $ (808,527) $(1,074,911)
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Total distributions to shareholders $ (808,527) $(1,074,911)
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Transactions in shares of beneficial interest
(Note 3) --
Proceeds from sales of shares $ 8,050,640 $14,569,442
Net asset value of shares issued to
shareholders in payment of distributions
declared 433,177 556,369
Cost of shares redeemed $(4,862,997) $(5,594,937)
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Net increase in net assets from Fund share
transactions $ 3,620,820 $ 9,530,874
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Net increase in net assets $ 5,049,653 $ 9,677,662
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Net Assets
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At beginning of period $17,291,913 $ 7,614,251
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At end of period $22,341,566 $17,291,913
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Accumulated undistributed
net investment income
included in net assets
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At end of period $ 9,975 $ 6,554
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</TABLE>
See notes to financial statements
<PAGE>
EV Classic High Income Fund as of September 30, 1997
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Financial Statements Cont'd
- -------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended :Year Ended March 31,
September 30, 1997 -----------------------------------
(Unaudited) 1997 1996 1995*
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<S> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 9.840 $ 9.650 $ 9.430 $ 10.000
- -------------------------------------------------------------------------------------------------------------
Income from operations
- -------------------------------------------------------------------------------------------------------------
Net investment income $ 0.419 $ 0.878 $ 0.888 $ 0.735
Net realized and unrealized gain (loss) on
investments 0.729 0.181 0.225 (0.544)
- -------------------------------------------------------------------------------------------------------------
Total income from operations $ 1.148 $ 1.059 $ 1.113 $ 0.191
- -------------------------------------------------------------------------------------------------------------
Less distributions
- -------------------------------------------------------------------------------------------------------------
From net investment income $ (0.418) $ (0.869) $ (0.888) $(0.735)
In excess of net investment income -- -- (0.005) (0.026)
- -------------------------------------------------------------------------------------------------------------
Total distributions $ (0.418) $ (0.869) $ (0.893) $ (0.761)
- -------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 10.570 $ 9.840 $ 9.650 $ 9.430
- -------------------------------------------------------------------------------------------------------------
Total Return(1) 11.88% 11.44% 12.25% 1.89%
- -------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $22,342 $17,292 $ 7,614 $ 2,076
Ratio of net expenses to average daily net
assets(2) 1.90%+ 1.74% 1.69% 2.04%+
Ratio of net investment income to average
daily net assets 8.23%+ 8.88% 9.17% 9.17%+
- -------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund may reflect an allocation of expenses to the Administrator. Had
such action not been taken, the ratios and net investment income per share would have been as
follows:
Ratios (As a percentage of average daily net
assets):
Expenses(2) 2.13%+ 2.29% 3.24% 5.20%+
Net investment income 8.00%+ 8.32% 7.62% 6.01%+
Net investment income per share $ 0.407 $ 0.823 $ 0.738 $ 0.482
- -------------------------------------------------------------------------------------------------------------
+ Annualized.
* For the period from the start of business, June 8, 1994, to March 31, 1995.
(1) Total return is calculated assuming a purchase at the net asset value on the first day and a sale at
the net asset value on the last day of each period reported. Dividends and distributions, if any, are
assumed to be reinvested at the net asset value on the payable date. Total return is not computed on
an annualized basis.
(2) Includes the Fund's share of its corresponding Portfolio's allocated expenses.
</TABLE>
See notes to financial statements
<PAGE>
EV Classic Income Fund as of September 30, 1997
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NOTES TO FINANCIAL STATEMENTS (Unaudited)
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1 Significant Accounting Policies
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EV Classic High Income Fund (the Fund) is a diversified series of Eaton
Vance Mutual Funds 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 invests all of its investable assets in
interests in the High Income Portfolio (the Portfolio), a New York Trust,
having the same investment objective as the Fund. The value of the Fund's
investment in the Portfolio reflects the Fund's proportionate interest in
the net assets of the Portfolio (2.7% at September 30, 1997). The
performance of the Fund is directly affected by the performance of the
Portfolio. The financial statements of the Portfolio, including the
portfolio of investments, are included elsewhere in this report and should
be read in conjunction with the Fund's financial 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 -- 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. At March 31, 1997, the Fund, for federal
income tax purposes, had a capital loss carryover of $26,240, which will
reduce the taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Internal Revenue Code
and thus will reduce the amount of distributions to shareholders which would
otherwise be necessary to relieve the Fund of any liability for federal
income or excise tax. Such capital loss carryover will expire on March 31,
2003 ($3,625) and March 31, 2005 ($22,615), respectively. Additionally, net
losses of $50,019 attributable to security transactions incurred after
October 31, 1996, are treated as arising on the first day of the Fund's
current taxable year.
D Deferred Organization Expenses -- Costs incurred by the Fund in connection
with its organization, including registration costs, are being amortized on
the straight-line basis over five years.
E Other -- Investment transactions are accounted for on a trade date basis.
F 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.
G Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Fund and the Portfolio. Pursuant to the respective
custodian agreements, IBT receives a fee reduced by credits which are
determined based on the average daily cash balances the Fund or the
Portfolio maintains with IBT. All significant credit balances used to reduce
the Fund's custodian fees are reported as a reduction of expenses on the
statement of operations.
H Interim Financial Information -- The interim financial statements relating
to September 30, 1997 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 net income of the Fund is determined daily and substantially all of the
net income so determined is declared as a dividend to shareholders of record
at the time of declaration. Distributions of allocated realized capital
gains, if any, are made at least annually. Shareholders may reinvest capital
gain distributions in additional shares of the Fund at the net asset value
as of the ex-dividend date. Distributions are paid in the form of additional
shares or, at the election of the shareholder, in cash. The Fund
distinguishes between distributions on a tax basis and a financial reporting
basis and requires that only distributions in excess of tax basis earnings
and profits are 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 for financial statement purposes only are classified as
distributions in excess of net investment income or accumulated net realized
gains. Permanent differences between book and tax accounting relating to
distributions are reclassified to paid-in capital.
3 Shares of Beneficial Interest
- --------------------------------------------------------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
Six Months Ended
September 30, 1997 Year Ended
(Unaudited) March 31, 1997
- --------------------------------------------------------------------------------
Sales 796,302 1,478,448
Issued to shareholders electing to
receive payments of distributions
in Fund shares 42,353 56,546
Redemptions (482,554) (567,383)
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Net increase 356,101 967,611
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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. To enhance the net income of the Fund,
$22,512 of expenses related to the operation of the Fund were allocated, on
a preliminary basis, to EVM.
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 the investment advisor fee. Certain of the
officers and Trustees of the Fund and the Portfolio are officers and
directors/trustees of the above organizations.
5 Distribution Plan
- --------------------------------------------------------------------------------
The Fund has adopted a distribution plan (the Plan) pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plan requires the Fund to pay
the Principal Underwriter, Eaton Vance Distributors, Inc. (EVD) amounts
equal to 1/365 of 0.75% of the Fund's daily net assets, for providing
ongoing distribution services and facilities to the Fund. The Fund will
automatically discontinue payments to EVD during any period in which there
are no outstanding Uncovered Distribution Charges, which are equivalent to
the sum of (i) 6.25% of the aggregate amount received by the Fund for the
shares sold plus, (ii) distribution fees calculated by applying the rate of
1% over the prevailing prime rate to the outstanding balance of Uncovered
Distribution Charges of EVD, reduced by the aggregate amount of contingent
deferred sales charges (see Note 6) 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. The
Fund paid or accrued $73,944 to or payable to EVD for the six months ended
September 30, 1997, representing 0.75% (annualized) of average daily net
assets. At September 30, 1997, the amount of Uncovered Distribution Charges
of EVD calculated under the Plan was approximately $1,834,300.
In addition, the Plan permits the Fund to make payments of service fees to
the Principal Underwriter in amounts not to exceed 0.25% of the Fund's
average daily net assets for any fiscal year. The Trustees have initially
implemented the Plan by authorizing the Fund to make monthly payments of
service fees to the Principal Underwriter in amounts not exceeding 0.25% of
the Fund's average daily net assets for any fiscal year. The Fund paid or
accrued service fees to or payable to EVD for the six months ended September
30, 1997 in the amount of $24,648. Pursuant to the Distribution Plan, EVD
currently expects to pay to an Authorized Firm a service fee at the time of
sale equal to 0.25% of the purchase price of shares sold by such Firm and
monthly service payments in amounts not to exceed 0.25% per annum of the
Fund's average daily net assets based on the value of Fund shares sold by
such Firm and remaining outstanding for at least one year. During the first
year after purchase of Fund shares, EVD will retain the service fee as
reimbursement for the service fee payment made to the Authorized Firm at the
time of sale. Service fee payments are made for personal services and/or the
maintenance of shareholder accounts. Service fees paid to EVD and Authorized
Firms 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 officers and Trustees of the Fund are officers or directors of EVD.
6 Contingent Deferred Sales Charge
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A contingent deferred sales charge (CDSC) of 1% is imposed on any redemption
of Fund shares made within one year 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 gains distributions. No CDSC is levied on shares which
have been sold to EVD or its affiliates or to their respective employees.
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.
For the six months ended September 30, 1997, EVD received approximately
$7,900 of CDSC paid by shareholders.
7 Investment Transactions
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Increases and decreases in the Fund's investment in the Portfolio for the
six months ended September 30, 1997 aggregated $8,242,497 and $5,694,386,
respectively.
<PAGE>
High Income Portfolio as of September 30, 1997
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PORTFOLIO OF INVESTMENTS (Unaudited)
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(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Corporate Bonds & Notes -- 92.5%
Principal
Amount
Security (000 omitted) Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Advertising -- 0.7%
- -----------------------------------------------------------------------------------------------
Outdoor Systems, Inc., Sr. Sub Notes, 8.875%, 6/15/07 $ 5,600 $ 5,712,000
- -----------------------------------------------------------------------------------------------
$ 5,712,000
- -----------------------------------------------------------------------------------------------
Apparel -- 2.4%
- -----------------------------------------------------------------------------------------------
Dan River Inc., Sr. Sub. Notes, 10.125%, 12/15/03 $ 5,800 $ 6,220,500
Glenoit Corp., Sr. Sub. Notes, 11.00%, 4/15/07(1) 4,800 5,148,000
Polysindo International Finance, Inc., Guaranteed Notes,
9.375%, 7/30/07 1,200 1,179,000
William Carter Co., Sr. Sub. Notes, 10.375%, 12/1/06 6,275 6,557,375
- -----------------------------------------------------------------------------------------------
$ 19,104,875
- -----------------------------------------------------------------------------------------------
Auto and Parts -- 1.2%
- -----------------------------------------------------------------------------------------------
Key Plastics, Inc., Sr. Notes, 14.00%, 11/15/99 $ 5,500 $ 6,105,000
Terex Corp., Sr. Sub. Notes, 13.25%, 5/15/02 3,333 3,816,285
- -----------------------------------------------------------------------------------------------
$ 9,921,285
- -----------------------------------------------------------------------------------------------
Banks-Regional -- 1.2%
- -----------------------------------------------------------------------------------------------
First Nationwide Holdings, Inc., Sr. Sub Notes, 10.625%, 10/1/03 $ 7,200 $ 7,920,000
First Nationwide, Inc., Sr. Notes, 12.50%, 4/15/03 1,600 1,800,000
- -----------------------------------------------------------------------------------------------
$ 9,720,000
- -----------------------------------------------------------------------------------------------
Banks and Money Services -- 0.7%
- -----------------------------------------------------------------------------------------------
Intertek Finance PLC, Sr. Sub. Notes, 10.25%, 11/1/06 $ 5,600 $ 5,880,000
- -----------------------------------------------------------------------------------------------
$ 5,880,000
- -----------------------------------------------------------------------------------------------
Broadcasting and Cable -- 8.0%
- -----------------------------------------------------------------------------------------------
Adelphia Communications Corp., Sr. Notes, 10.50%, 7/15/04(1) $ 2,640 $ 2,798,400
Adelphia Communications Corp., Sr. Notes, 9.875%, 3/1/07 4,480 4,625,600
Austrailis Holdings, Sr. Sec. Disc. Notes, 15.00% (0% until
2000), 11/1/02 2,000 1,600,000
Cablevision Systems Corp., Sr. Sub. Notes, 9.25%, 11/1/05 3,400 3,553,000
Diamond Cable Communications Co., Sr. Disc. Notes, 13.25% (0%
until 1999),9/30/04 1,600 1,400,000
Diamond Cable Communications Co., Sr. Disc. Notes, 11.75% (0%
until 2000),12/15/05 1,400 1,048,250
Digital Television Services, Inc., Sr. Sub. Notes,
12.50%, 8/1/07(1) 5,760 6,033,600
International Cabletel, Inc., Sr. Disc. Notes, 11.50%
(0% until 2001), 2/1/06 1,400 1,046,500
Marcus Cable Operating Co., Sr. Debs., 11.875%, 10/1/05 2,800 3,062,500
Marcus Cable Operating Co., Sr. Disc. Notes, 13.50%
(0% until 1999),8/1/04 800 721,000
Marcus Cable Operating Co., Sr. Disc. Notes, 14.25%
(0% until 2000),12/15/05 8,500 7,055,000
NTL, Inc., Sr. Notes, 10.00%, 2/15/07 4,400 4,598,000
Sullivan Broadcasting Co., Inc., Sr. Sub. Notes, 10.25%, 12/15/05 4,800 5,034,000
UIH Australia/Pacific, Inc., Sr. Disc. Notes,
14.00% (0% until 2007), 5/15/06(1) 1,600 1,148,000
UIH Australia/Pacific, Inc., Sr. Disc. Notes,
14.00% (0% until 2001), 5/15/06 2,000 1,435,000
United International-Series B, Sr. Sec. Disc. Notes,
0.00%, 11/15/99 800 654,000
United International Holdings Inc., Sr. Sec. Disc. Notes,
0.00%, 11/15/99 14,953 12,224,240
Videotron Holdings PLC, Inc., Sr. Disc. Notes, 11.00%
(0% until 1999), 8/15/05 3,200 2,760,000
Young Broadcasting Corp., Sr. Sub. Notes, 10.125%, 2/15/05 4,000 4,200,000
- -----------------------------------------------------------------------------------------------
$ 64,997,090
- -----------------------------------------------------------------------------------------------
Building Materials -- 1.6%
- -----------------------------------------------------------------------------------------------
Commemorative Brands, Inc., Sr. Sub. Notes, 11.00%, 1/15/07 $ 2,000 $ 2,077,500
Nortek, Inc., Sr. Notes, 9.125%, 9/1/07(1) 3,550 3,585,500
Overhead Door Corp., Sr. Notes, 12.25%, 2/1/00 3,450 3,583,688
Tarkett International, AG., Sr. Sub. Notes, 9.00%, 3/1/02 3,600 3,645,000
- -----------------------------------------------------------------------------------------------
$ 12,891,688
- -----------------------------------------------------------------------------------------------
Business Services -- 0.8%
- -----------------------------------------------------------------------------------------------
Kindercare Learning Ctrs., Inc., Sr. Sub. Notes, 9.50%, 2/15/09 $ 6,500 $ 6,353,750
- -----------------------------------------------------------------------------------------------
$ 6,353,750
- -----------------------------------------------------------------------------------------------
Business Services - Miscellaneous -- 1.7%
- -----------------------------------------------------------------------------------------------
Allied Waste Industries, Inc., Sr. Disc. Notes, 11.30% (0%
until 2002), 6/1/07(1) $ 6,550 $ 4,437,625
Allied Waste North America, Inc., Sr. Sub Notes, LOC,
10.25%, 12/1/06 8,200 8,979,000
- -----------------------------------------------------------------------------------------------
$ 13,416,625
- -----------------------------------------------------------------------------------------------
Chemicals -- 4.1%
- -----------------------------------------------------------------------------------------------
Huntsman Corp., Sr. Sub. Notes, 9.50%, 7/1/07(1) $ 6,950 $ 7,297,500
Key Plastics, Inc., Sr. Sub. Notes, 10.25%, 3/15/07 800 840,000
NL Industries, Inc., Sr. Notes, 11.75%, 10/15/03 5,040 5,531,400
Plastic Containers, Inc., Sr. Notes, 10.00%, 12/15/06 2,400 2,556,000
Plastic Specialties and Tech., Inc., Sr. Sec. Notes,
11.25%, 12/1/03 7,950 8,625,750
Sovereign Specialties, Sr. Sub. Notes, 9.50%, 8/1/07(1) 3,120 3,182,400
Sterling Chemical Holdings, Inc., Sr. Disc. Notes, 0.00%, 8/15/08 2,400 1,692,000
UCC Investors, Inc., Sr. Sub. Notes, 11.00%, 5/1/03 3,700 3,977,500
- -----------------------------------------------------------------------------------------------
$ 33,702,550
- -----------------------------------------------------------------------------------------------
Coal -- 0.2%
- -----------------------------------------------------------------------------------------------
Anker Coal Group, Inc., Sr. Sub Notes, 9.75%, 10/1/07 $ 1,440 $ 1,461,600
- -----------------------------------------------------------------------------------------------
$ 1,461,600
- -----------------------------------------------------------------------------------------------
Communications Equipment -- 3.6%
- -----------------------------------------------------------------------------------------------
Echostar Communications, Sr. Sub. Notes, 12.875%
(0% until 1999), 6/1/04 $ 2,200 $ 1,991,000
Hyperion Telecommunications, Inc., Sr. Disc. Notes,
13.00% (0% until 2001), 4/15/03 5,000 3,506,250
Hyperion Telecommunications, Inc., Sr. Sec. Notes,
12.25%, 9/1/04(1) 5,800 6,351,000
MGC Communications, Inc., Sr. Sec. Notes and Warrants,
13.00%, 10/1/04 5,200 5,408,000
Omnipoint Corp., Sr. Notes, 11.625%, 8/15/06 2,440 2,513,200
Pricellular Wireless Communications Corp., Sr. Notes,
10.75%, 11/1/04 2,400 2,592,000
Pricellular Wireless Communications Corp., Sr. Sub. Disc.
Notes, 12.25% (0% until 1998), 10/1/03 6,980 6,910,200
- -----------------------------------------------------------------------------------------------
$ 29,271,650
- -----------------------------------------------------------------------------------------------
Communications Services -- 12.5%
- -----------------------------------------------------------------------------------------------
Australis Media Ltd., Sub. Disc. Notes, 14.00%
(0% until 2000), 5/15/03 $ 4,453 $ 3,696,142
Brooks Fiber Properties, Inc., Sr. Disc. Notes, 11.875%
(0% until 2001), 11/1/06 2,400 1,848,000
Brooks Fiber Properties, Inc., Sr. Sub. Notes, 10.00%, 6/1/07 800 906,000
Brooks Fiber Properties. Inc., Sr. Disc. Notes, 10.875%
(0% until 2001), 3/1/06 5,500 4,400,000
Call-net Enterprises, Inc., Sr. Disc. Notes,
9.27% (0% until 2002), 8/15/07 2,000 1,330,000
Cellnet Data Systems, Inc., Sr. Disc. Notes, 0.00%,
10/1/07 800 4,080,000
Dial Call Communications Inc., Sr. Red. Notes, 12.25%
(0% until 1999), 4/15/04 10,720 10,023,200
Diamond Cable Communications, PLC, Sr. Disc. Notes, 10.75% (0%
until 2002), 2/15/07 6,000 3,907,500
Dobson Communications Corp., Sr. Notes, 11.75%, 4/15/07 2,000 1,987,500
Echostar DBS Corp., Sr. Sec. Notes, 12.50%, 7/1/02(1) 3,600 3,964,500
Echostar Satellite Broadcasting Corp., Sr. Disc. Notes, 13.125%
(0% until 2000), 3/15/04 7,525 6,292,781
Esat Holdings, Ltd., Sr. Deferred Coupon Notes, 12.50% (0%
until 2002), 2/1/07(1) 3,600 2,340,000
Esat Telecom Group PLC, Sr. Deferred Coupon Notes, 12.50% (0%
until 2002), 2/1/07 7,400 4,810,000
Intermedia Communications, Inc., Sr. Disc. Notes, 11.25% (0%
until 2002), 7/15/07(1) 11,040 7,645,200
Metronet Commerce Sr. Notes, 12.00%, 8/15/07(1) 1,800 1,998,000
Microcell Telecommunication, Sr. Disc. Notes, 14.00%
(0% until 2001), 6/1/06 9,800 6,713,000
Millicom International Cellular, Sr. Disc Notes, 13.50% (0%
until 2001), 6/1/06 7,200 5,580,000
Nextel Communications, Inc., Sr. Disc. Notes, 10.65%, 9/15/07(1) 1,390 856,588
Nextlink Communications, Inc., Sr. Notes, 9.625%, 10/1/07 6,320 6,557,000
Nextlink Communications, Inc., Sr. Notes, 12.50%, 4/15/06 6,720 7,728,000
Primus Telecom Group, Sr. Notes, 11.75%, 8/1/04 7,200 7,704,000
Telesystem International Wireless, Inc., Sr. Disc. Notes,
13.25% (0% until 2002), 6/30/07(1) 3,800 2,384,500
Telewest PLC, Debs., 11.00% (0% until
2002), 10/1/07 7,000 5,250,000
- -----------------------------------------------------------------------------------------------
$102,001,911
- -----------------------------------------------------------------------------------------------
Computer Software -- 1.1%
- -----------------------------------------------------------------------------------------------
Unisys Corp., Sr. Notes, 11.75%, 10/15/04 $ 2,600 $ 2,938,000
Unisys Corp., Sr. Notes, 12.00%, 4/15/03 5,600 6,286,000
- -----------------------------------------------------------------------------------------------
$ 9,224,000
- -----------------------------------------------------------------------------------------------
Containers and Packaging -- 3.2%
- -----------------------------------------------------------------------------------------------
American Pad and Paper Co., Sr. Sub. Notes, 13.00%, 11/15/05 $ 3,250 $ 3,835,000
Asia Pulp and Paper, Guaranteed Notes, 12.00%, 12/29/49 6,000 6,127,500
Container Corp., Sr. Notes, 10.75%, 5/1/02 3,250 3,591,250
Gaylord Container Corp., Sr. Sub. Disc. Debs., 12.75%
(0% until 1996), 5/15/05 5,700 6,234,375
S.D. Warren Co., Sr. Sub. Notes, 12.00%, 12/15/04 3,800 4,294,000
US Can Corp., Sr. Sub. Notes, 10.125%, 10/15/06 1,600 1,698,000
- -----------------------------------------------------------------------------------------------
$ 25,780,125
- -----------------------------------------------------------------------------------------------
Electric Utilities -- 0.2%
- -----------------------------------------------------------------------------------------------
AES Corp., Sr. Sub. Notes, 8.375%, 8/15/07 $ 1,200 $ 1,206,000
- -----------------------------------------------------------------------------------------------
$ 1,206,000
- -----------------------------------------------------------------------------------------------
Electrical Equipment -- 0.4%
- -----------------------------------------------------------------------------------------------
Wavetek Corp., Sr. Sub. Notes, 10.125%, 6/15/07(1) $ 3,360 $ 3,477,600
- -----------------------------------------------------------------------------------------------
$ 3,477,600
- -----------------------------------------------------------------------------------------------
Electronics - Instruments -- 2.0%
- -----------------------------------------------------------------------------------------------
Blue Bell Funding Inc., Sec. Ext. Notes, 11.85%, 5/1/99 $ 4,304 $ 4,454,640
GS Technologies Corp., Sr. Notes, 12.25%, 10/1/05 7,100 7,916,500
HCC Industries, Inc., Sr. Sub. Notes, 10.75%, 5/15/07(1) 3,975 4,213,500
- -----------------------------------------------------------------------------------------------
$ 16,584,640
- -----------------------------------------------------------------------------------------------
Entertainment -- 1.1%
- -----------------------------------------------------------------------------------------------
All American Communications, Inc., Sr. Sub. Notes,
10.875%, 10/15/01 $ 4,400 $ 4,763,000
Cinemark USA, Sr. Sub. Notes, 9.625%, 8/1/08 4,000 4,115,000
- -----------------------------------------------------------------------------------------------
$ 8,878,000
- -----------------------------------------------------------------------------------------------
Foods -- 5.8%
- -----------------------------------------------------------------------------------------------
Aurora Foods, Inc., Sr. Sub Notes, 9.875%, 2/15/07(1) $ 5,600 $ 5,824,000
B and G Foods, Inc., Sr. Sub. Notes, 9.625%, 8/1/07(1) 3,925 3,939,719
Del Monte Corp., Sr. Sub. Notes, 12.25%, 4/15/07 4,400 4,807,000
Inflo Holdings Corp., Promissory Notes, 0.00%
(0% until 1999), 1/27/07+ 4,400 3,960,000
International Home Foods, Inc., Sr. Sub. Notes, 10.375%, 11/1/06 9,000 9,922,500
Keebler Corp., Sr. Sub. Notes, 10.75%, 7/1/06 5,720 6,435,000
PM Holdings Corp., Sr. Sub. Notes, 11.50%
(0% until 2000), 9/1/05 2,837 2,234,138
Van De Kamps, Inc., Sr. Sub. Notes, 12.00%, 9/15/05 6,100 6,725,250
Windy Hill Pet Food Products, Inc., Sr. Sub Notes,
9.75%, 5/15/07(1) 3,050 3,172,000
- -----------------------------------------------------------------------------------------------
$ 47,019,607
- -----------------------------------------------------------------------------------------------
Health Services -- 1.8%
- -----------------------------------------------------------------------------------------------
Dade International, Inc., Sr. Sub. Notes, 11.125%, 5/1/06 $ 4,800 $ 5,406,000
Genesis Eldercare Acquisition Corp., Sr. Sub. Notes,
9.00%, 8/1/07(1) 6,120 6,089,400
Vencor, Inc., Sr. Sub. Notes, 8.625%, 7/15/07 2,800 2,842,000
- -----------------------------------------------------------------------------------------------
$ 14,337,400
- -----------------------------------------------------------------------------------------------
Household Products -- 1.7%
- -----------------------------------------------------------------------------------------------
Communications Instruments, Inc., Sr. Sub Notes,
10.00%, 9/15/04(1) $ 1,760 $ 1,801,800
Hedstrom Holdings, Inc., Sr. Disc. Notes, 12.00%
(0% until 2002), 6/1/09(1) 1,400 896,000
Icon Fitness Corp., Sr. Disc. Notes,
14.00% (0% until 2001), 11/15/06 1,600 944,000
Icon Health and Fitness, Inc., Sr. Sub. Notes, 13.00%, 7/15/02 4,000 4,540,000
Pillowtex Corp., Sr. Sub. Notes, 10.00%, 11/15/06 2,400 2,532,000
Ridell Sports, Inc., Sr. Notes, 10.50%, 7/15/07 3,160 3,314,050
- -----------------------------------------------------------------------------------------------
$ 14,027,850
- -----------------------------------------------------------------------------------------------
Information Services -- 3.6%
- -----------------------------------------------------------------------------------------------
Federal Data Corp., Sr. Sub. Notes, 10.125%, 8/1/05(1) $ 4,320 $ 4,428,000
Icg Holdings, Inc., Sr. Disc. Notes, 12.50%
(0% until 2001), 5/1/06 1,240 930,000
Icg Holdings, Inc., Sr. Disc. Notes, 11.625%
(0% until 2002), 3/15/07 7,075 4,811,000
Intermedia Capital Partners, Sr. Sub. Notes, 11.25%, 8/1/06 2,050 2,249,875
ITC Deltacom, Inc., Sr. Notes, 11.00%, 6/1/07(1) 4,000 4,390,000
ITT Publimedia, Sr. Notes, 9.375%, 9/15/07(1) 1,440 1,508,400
Mcleod Usa, Inc., Sr. Notes, 9.25%, 7/15/07(1) 3,680 3,910,000
Orion Network Systems, Inc., Sr. Disc. Notes, 12.50%
(0% until 2002), 1/15/07 1,600 1,072,000
Orion Network Systems, Inc., Sr. Notes, 11.25%, 1/15/07 5,600 6,132,000
- -----------------------------------------------------------------------------------------------
$ 29,431,275
- -----------------------------------------------------------------------------------------------
Investment Services -- 1.6%
- -----------------------------------------------------------------------------------------------
DVI, Inc., Sr. Notes, 9.875%, 2/1/04 $ 4,400 $ 4,554,000
IHF Holdings, Inc., Sr. Disc. Notes, 15.00%
(0% until 1999), 11/15/04 2,960 2,575,200
ISP Holdings, Inc., Sr. Notes, 9.75%, 2/15/02 5,750 6,210,000
- -----------------------------------------------------------------------------------------------
$ 13,339,200
- -----------------------------------------------------------------------------------------------
Lodging and Gaming -- 4.0%
- -----------------------------------------------------------------------------------------------
Aztar Corp., Sr. Sub. Notes, 13.75%, 10/1/04 $ 5,000 $ 5,731,250
Capstar Hotel, Co., Sr. Sub. Notes, 8.75%, 8/15/07(1) 2,025 2,047,781
Harvey Casinos Resorts, Sr. Sub. Notes, 10.625%, 6/1/06 6,000 6,570,000
Horseshoe Gaming L.l.C., Sr. Sub. Notes, 9.375%, 6/15/07(1) 3,200 3,304,000
Showboat Marina Casino, 1st Mtg. Notes, 13.50%, 3/15/03 6,000 6,900,000
Trump Atlantic City Associates, Co., 1st Mtg. Notes, 11.25%, 5/1/06 4,700 4,559,000
Trump Holdings & Funding Inc., Sr. Notes, 15.50%, 6/15/05 3,000 3,502,500
- -----------------------------------------------------------------------------------------------
$ 32,614,531
- -----------------------------------------------------------------------------------------------
Machinery -- 2.2%
- -----------------------------------------------------------------------------------------------
Alvey Systems, Inc., Sr. Sub. Notes, 11.375%, 1/31/03 $ 2,400 $ 2,520,000
Amtrol Acquisition, Inc., Sr. Sub. Notes, 10.625%, 12/31/06 3,600 3,726,000
Cambridge Industries, Inc., Sr. Sub. Notes, 10.25%, 7/15/07(1) 2,520 2,633,400
IMO Industries, Sr. Sub. Notes, 11.75%, 5/1/06 8,680 9,265,900
- -----------------------------------------------------------------------------------------------
$ 18,145,300
- -----------------------------------------------------------------------------------------------
Manufacturing -- 4.2%
- -----------------------------------------------------------------------------------------------
Consumers International, Inc., Sr. Sub. Notes, 10.25%, 4/1/05(1) $ 3,935 $ 4,289,150
Energy Corp., Sr. Sub. Notes, 9.50%, 5/15/07 5,400 5,427,000
Motors and Gears, Inc., Sr. Notes, 10.75%, 11/15/06 4,000 4,280,000
Roller Bearing Co. America, Inc., Sr. Sub. Notes, 9.625%, 6/15/07(1) 1,600 1,640,000
Roller Bearing Holdings Co., Sr. Disc. Debs., 13.00%
(0% until 2002), 6/15/09(1) 3,000 1,785,000
Telex Communication Group, Inc., Sr. Sub. Notes, 10.50%, 5/1/07(1) 4,475 4,592,469
Tjiwi Kimia Finance Mauritius, Ltd., Guaranteed Sr. Sub. Notes,
10.00%, 8/1/04(1) 3,800 3,728,750
United Refining Co., Gty. Notes, 10.75%, 6/15/07(1) 3,200 3,200,000
Viasystems, Inc., Sr. Sub. Notes, 9.75%, 6/1/07(1) 5,000 5,200,000
- -----------------------------------------------------------------------------------------------
$ 34,142,369
- -----------------------------------------------------------------------------------------------
Medical Products -- 0.7%
- -----------------------------------------------------------------------------------------------
Maxxim Medical, Inc., Sr. Sub. Notes, 10.50%, 8/1/06 $ 5,200 $ 5,668,000
- -----------------------------------------------------------------------------------------------
$ 5,668,000
- -----------------------------------------------------------------------------------------------
Metals - Industrial -- 3.1%
- -----------------------------------------------------------------------------------------------
Applied Extrusion Inc., Sr. Notes, 11.50%, 4/1/02 $ 6,000 $ 6,360,000
Howmet Corp., Sr. Sub. Notes, 10.00%, 12/1/03 2,850 3,106,500
Kaiser Aluminum and Chemical Corp., Sr. Notes, 10.875%, 10/15/06 2,500 2,706,250
Kaiser Aluminum and Chemical Corp., Sr. Sub. Notes, 12.75%, 2/1/03 6,600 7,128,000
Newflo Corp., Sub. Notes, 13.25%, 11/15/02 5,500 5,831,100
- -----------------------------------------------------------------------------------------------
$ 25,131,850
- -----------------------------------------------------------------------------------------------
Miscellaneous -- 2.4%
- -----------------------------------------------------------------------------------------------
Alliant Tech Systems Inc., Sr. Sub. Notes, 11.75%, 3/1/03 $ 4,000 $ 4,430,000
Clark-Schwebel, Sr. Notes, 10.50%, 4/15/06 5,200 5,694,000
Day International Group, Inc., Sr. Sub. Notes, 11.125%, 6/1/05 3,300 3,564,000
Selmer Co., Inc., Sr. Sub. Notes, 11.00%, 5/15/05 5,300 5,777,000
- -----------------------------------------------------------------------------------------------
$ 19,465,000
- -----------------------------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 5.1%
- -----------------------------------------------------------------------------------------------
AES Corp., Sr. Sub. Notes, 10.25%, 7/15/06 $ 1,600 $ 1,748,000
Belden and Blake Corp., Sr. Sub. Notes, 9.875%, 6/15/07(1) 5,200 5,226,000
Cal Energy Company, Inc., Sr. Notes, 9.50%, 9/15/06 5,500 5,935,160
Dawson Product Services, Inc., Sr. Notes, 9.375%, 2/1/07 2,800 2,919,000
DI Industries, Inc., Sr. Sub. Notes, 8.875%, 7/1/07 4,800 4,944,000
Mariner Energy Corp., Sr. Sub. Notes, 10.50%, 8/1/06 10,000 10,200,000
Midland Funding II, Sec. Lease Oblig., 11.75%, 7/23/05 2,200 2,611,180
Rutherford-Moran Oil Corp., Sr. Sub. Notes, 10.75%, 10/1/04 4,630 4,803,625
Veritas DGC, Inc., Sr. Notes, 9.75%, 10/15/03 3,200 3,400,000
- -----------------------------------------------------------------------------------------------
$ 41,786,965
- -----------------------------------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 0.4%
- -----------------------------------------------------------------------------------------------
Dailey Petroleum Service Corp., Sr. Disc. Notes, 9.75%, 8/15/07(1) $ 3,025 $ 3,146,000
- -----------------------------------------------------------------------------------------------
$ 3,146,000
- -----------------------------------------------------------------------------------------------
Paper and Forest Products -- 0.7%
- -----------------------------------------------------------------------------------------------
Pindo Deli Finance Mauritius, Ltd., Guaranteed Sr. Notes,
10.75%, 10/1/07(1) $ 4,000 $ 4,085,000
Stone Container Corp., Sr. Sub. Notes, 12.25%, 4/1/02 1,400 1,452,500
- -----------------------------------------------------------------------------------------------
$ 5,537,500
- -----------------------------------------------------------------------------------------------
Printing and Business Products -- 0.4%
- -----------------------------------------------------------------------------------------------
MDC Communications Corp., Sr. Sub. Notes, 10.50%, 12/1/06 $ 3,200 $ 3,436,000
- -----------------------------------------------------------------------------------------------
$ 3,436,000
- -----------------------------------------------------------------------------------------------
Publishing -- 1.8%
- -----------------------------------------------------------------------------------------------
Newsquest Capital Corp., Sr. Sub. Notes, 11.00%, 5/1/06 $ 1,000 $ 1,115,000
Newsquest Capital Corp., Sr. Sub. Notes, 11.00%, 5/1/06 7,400 8,251,000
Von Hoffman Press, Inc., Sr. Sub Notes, 10.375%, 5/15/07(1) 4,800 5,088,000
- -----------------------------------------------------------------------------------------------
$ 14,454,000
- -----------------------------------------------------------------------------------------------
Retail - Food and Drug -- 3.6%
- -----------------------------------------------------------------------------------------------
AFC Enterprises, Inc. Sr Notes, 10.25%, 5/15/07 $ 9,600 $ 10,080,000
Duane Reade, G.P., Sr. Notes, 12.00%, 9/15/02 6,200 6,510,000
Jitney-Jungle Stores America, Inc., Sr. Sub. Notes,
10.375%, 9/15/07(1) 3,040 3,131,200
Randalls Food Products Markets, Inc., Sr. Sub. Notes, 9.375%,
7/1/07(1) 2,120 2,141,200
Star Markets Co., Sr. Sub. Notes, 13.00%, 11/1/04 6,200 7,068,000
- -----------------------------------------------------------------------------------------------
$ 28,930,400
- -----------------------------------------------------------------------------------------------
Retail - General -- 0.3%
- -----------------------------------------------------------------------------------------------
Knoll, Inc., Sr. Sub. Notes, 10.875%, 3/15/06 $ 2,335 $ 2,591,850
- -----------------------------------------------------------------------------------------------
$ 2,591,850
- -----------------------------------------------------------------------------------------------
Retail - Specialty and Apparel -- 0.6%
- -----------------------------------------------------------------------------------------------
Specialty Retailers, Inc., Gty. Notes, 9.00%, 7/15/07 $ 800 $ 813,000
Stage Stores, Inc., Notes, 8.50%, 7/15/05 4,000 4,095,000
- -----------------------------------------------------------------------------------------------
$ 4,908,000
- -----------------------------------------------------------------------------------------------
Telephone Utilities -- 0.7%
- -----------------------------------------------------------------------------------------------
Jordan Telecom Products, Inc., Sr. Disc. Notes, 11.75% (0%
until 2001), 8/1/07(1) $ 7,700 $ 6,006,000
- -----------------------------------------------------------------------------------------------
$ 6,006,000
- -----------------------------------------------------------------------------------------------
Textiles -- 0.5%
- -----------------------------------------------------------------------------------------------
Clark-Schwebel Holdings, Inc., Sr. Sub. Notes,
12.50%, 7/15/07(1) $ 3,726 $ 4,023,555
- -----------------------------------------------------------------------------------------------
$ 4,023,555
- -----------------------------------------------------------------------------------------------
Transportation -- 0.6%
- -----------------------------------------------------------------------------------------------
Hermes Europe Railtel, Sr. Sub. Notes, 11.50%, 8/15/07(1) $ 4,735 $ 5,161,150
- -----------------------------------------------------------------------------------------------
$ 5,161,150
- -----------------------------------------------------------------------------------------------
Total Corporate Bonds & Notes (identified cost $708,176,781) $752,889,191
- -----------------------------------------------------------------------------------------------
Common Stocks, Warrants and
Rights -- 0.6%
Shares
- -----------------------------------------------------------------------------------------------
Broadcasting and Cable -- 0.0%
- -----------------------------------------------------------------------------------------------
American Telecasting, Inc. Warrants+* 2,600 $ 26
Australis Holdings, Ltd., Warrants+* 2,000 --
Australis Media Ltd., Warrants+* 3,600 --
United International Holdings, Inc.,
Warrants Exp. 11/15/99+* 7,840 56,840
- -----------------------------------------------------------------------------------------------
$ 56,866
- -----------------------------------------------------------------------------------------------
Chemicals -- 0.1%
- -----------------------------------------------------------------------------------------------
Crompton & Knowles Corp., Common 9,489 $ 252,047
Sterling Chemicals Holdings, Warrants+* 3,200 112,000
- -----------------------------------------------------------------------------------------------
$ 364,047
- -----------------------------------------------------------------------------------------------
Communications Equipment -- 0.0%
- -----------------------------------------------------------------------------------------------
In Flight Phone Corp., Warrants Exp. 8/31/02+* 1,600 $ --
- -----------------------------------------------------------------------------------------------
$ --
- -----------------------------------------------------------------------------------------------
Communications Services -- 0.3%
- -----------------------------------------------------------------------------------------------
CS Wireless Systems, Inc., Common+* 902 $ --
Esat Holdings, Ltd., Warrants To Buy
.0447477 Shrs of Common+* 3,600 90,000
Hyperion Communications, Inc., Warrants,
Expires 4/15/01* 4,000 90,000
Microcell Telecommunication, Warrants+* 58,400 1,387,000
Microcell Telecommunication, Contingent Warrants+* 58,400 584
Nextel Communications Warrants Exp. 4/25/99+* 7,200 82,800
Nextel Communications, Inc., Common+ 11,154 322,072
- -----------------------------------------------------------------------------------------------
$ 1,972,456
- -----------------------------------------------------------------------------------------------
Containers and Packaging -- 0.0%
- -----------------------------------------------------------------------------------------------
SD Warren Company, Warrants Exp. 12/15/06+* 48,000 $ 252,000
- -----------------------------------------------------------------------------------------------
$ 252,000
- -----------------------------------------------------------------------------------------------
Foods -- 0.0%
- -----------------------------------------------------------------------------------------------
Servam Corp., $2.00 Warrant Exp. 4/1/01+* 12,276 $ --
Servam Corp., $4.50 Warrant Exp. 4/1/01+* 2,760 --
Servam Corp., Common+* 1,380 --
Specialty Foods Acquisition Corp., Common+* 48,000 12,000
- -----------------------------------------------------------------------------------------------
$ 12,000
- -----------------------------------------------------------------------------------------------
Industrial Development Revenue/Pollution
Control Revenue -- 0.0%
- -----------------------------------------------------------------------------------------------
Thermadyne Holdings Corp., Common+* 40,000 $ 400
- -----------------------------------------------------------------------------------------------
$ 400
- -----------------------------------------------------------------------------------------------
Information Services -- 0.0%
- -----------------------------------------------------------------------------------------------
Orion Network Warrants Expire 1/15/07* 7,200 $ --
- -----------------------------------------------------------------------------------------------
$ --
- -----------------------------------------------------------------------------------------------
Machinery -- 0.2%
- -----------------------------------------------------------------------------------------------
Terex Corp., Common* 77,120 $ 1,600,240
Terex Corp., Warrants Exp. 5/15/02+* 20,000 260,000
- -----------------------------------------------------------------------------------------------
$ 1,860,240
- -----------------------------------------------------------------------------------------------
Metals - Industrial -- 0.0%
- -----------------------------------------------------------------------------------------------
Gulf States Steel, Warrants+* 2,400 $ 120
- -----------------------------------------------------------------------------------------------
$ 120
- -----------------------------------------------------------------------------------------------
Total Common Stocks, Warrants and Rights
(identified cost $1,315,377) $ 4,518,129
- -----------------------------------------------------------------------------------------------
Preferred Stocks -- 5.3%
Broadcasting and Cable -- 3.6%
- -----------------------------------------------------------------------------------------------
Adelphia Communications, Corp.(1) 40,000 $ 4,440,000
Cablevision Systems Corp., 11.125% (PIK)(1) 104,608 11,768,343
Chancellor Radio Broadcasting, Inc.(1) 89,194 10,268,459
Echostar Communications(1) 3,200 3,356,000
- -----------------------------------------------------------------------------------------------
$ 29,832,802
- -----------------------------------------------------------------------------------------------
Communications Services -- 1.1%
- -----------------------------------------------------------------------------------------------
IXC Communications, Inc.(1) 7,600 $ 8,816,000
Nextlink Communications 14% (PIK)(1) 897 58,754
- -----------------------------------------------------------------------------------------------
$ 8,874,754
- -----------------------------------------------------------------------------------------------
Containers and Packaging -- 0.3%
- -----------------------------------------------------------------------------------------------
S.D. Warren Co. w / Warrants, 14%, 12/15/06 48,000 $ 2,160,000
- -----------------------------------------------------------------------------------------------
$ 2,160,000
- -----------------------------------------------------------------------------------------------
Telephone Utilities -- 0.3%
- -----------------------------------------------------------------------------------------------
Jordan Telecom Products, Inc.(1) 2,500 $ 2,687,500
- -----------------------------------------------------------------------------------------------
$ 2,687,500
- -----------------------------------------------------------------------------------------------
Total Preferred Stocks
(identified cost $38,326,233) $ 43,555,056
- -----------------------------------------------------------------------------------------------
Short-Term Investment -- 1.6%
Principal
Amount
(000 omitted)
- -----------------------------------------------------------------------------------------------
Associates Corporation of America, 6.36%, 10/1/97 $ 12,574 $ 12,574,000
- -----------------------------------------------------------------------------------------------
Total Short-Term Investment
(at amortized cost $12,574,000) $ 12,574,000
- -----------------------------------------------------------------------------------------------
Total Investments -- 100.0%
(identified cost $760,392,391) $813,536,376
- -----------------------------------------------------------------------------------------------
(1) Security exempt from registration under Rule 144A of the Securities Act of 1933. These
securities may be resold in transactions exempt from registration, normally to qualified
institutional buyers. At September 30, 1997, the value of these securities amounted to
$210,621,388 or 25.5% of net assets.
+ Restricted security (see Note 6).
* Non-income producing security.
(PIK) Payment in-kind.
</TABLE>
See notes to financial statements
<PAGE>
High Income Portfolio as of September 30, 1997
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
As of September 30, 1997
(Expressed in United States Dollars)
Assets
- --------------------------------------------------------------------------------
Investments, at value (Note 1A)
(identified cost, $760,392,391) $813,536,376
Cash 3,151
Receivable for investments sold 14,054,834
Interest receivable 17,183,311
Prepaid expenses 10,866
Deferred organization expenses (Note 1D) 7,508
- --------------------------------------------------------------------------------
Total assets $844,796,046
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for investments purchased $ 19,742,797
Payable to affiliate for Trustees' fees (Note 2) 5,229
Accrued expenses 35,517
- --------------------------------------------------------------------------------
Total liabilities $ 19,783,543
- --------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $825,012,503
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $771,868,518
Net unrealized appreciation of investments
(computed on the basis of identified cost) 53,143,985
- --------------------------------------------------------------------------------
Total $825,012,503
- --------------------------------------------------------------------------------
<PAGE>
Statement of Operations
For the Six Months Ended
September 30, 1997
(Expressed in United States Dollars)
Investment Income (Note 1B)
- --------------------------------------------------------------------------------
Interest income $37,842,819
Dividend income 251,621
Miscellaneous income 303,500
- --------------------------------------------------------------------------------
Total investment income $38,397,940
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 2,220,108
Compensation of Trustees not members of the Investment Adviser's
organization (Note 2) 104
Custodian fee 130,471
Legal and accounting services 48,668
Amortization of organization expenses (Note 1D) 2,265
Miscellaneous 5,311
- --------------------------------------------------------------------------------
Total expenses $ 2,406,927
- --------------------------------------------------------------------------------
Net investment income $35,991,013
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $12,116,158
- --------------------------------------------------------------------------------
Net realized gain on investments $12,116,158
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $42,365,746
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $42,365,746
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments $54,481,904
- --------------------------------------------------------------------------------
Net increase in net assets from operations $90,472,917
- --------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
High Income Portfolio as of September 30, 1997
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
(Expressed in United States Dollars)
Six Months Ended
Increase (Decrease) September 30, 1997 Year Ended
in Net Assets (Unaudited) March 31, 1997
- --------------------------------------------------------------------------------
From operations --
Net investment income $ 35,991,013 $ 60,083,973
Net realized gain (loss) on investments 12,116,158 (4,056,681)
Net change in unrealized appreciation
(depreciation) of investments 42,365,746 13,401,858
- --------------------------------------------------------------------------------
Net increase in net assets from operations $ 90,472,917 $ 69,429,150
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 134,568,596 $ 280,137,284
Withdrawals (106,740,472) (154,202,111)
- --------------------------------------------------------------------------------
Net increase in net assets from capital
transactions $ 27,828,124 $ 125,935,173
- --------------------------------------------------------------------------------
Net increase in net assets $ 118,301,041 $ 195,364,323
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 706,711,462 $ 511,347,139
- --------------------------------------------------------------------------------
At end of period $ 825,012,503 $ 706,711,462
- --------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
High Income Portfolio as of September 30, 1997
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Supplementary Data
(Expressed in United States Dollars)
Six Months Ended Year Ended March 31,
September 30, 1997 -----------------------------------------------------
(Unaudited) 1997 1996 1995*
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios (as a percentage of average daily net assets)
- ---------------------------------------------------------------------------------------------------------------------------
Expenses 0.63%+ 0.67% 0.71% 0.70%+
Net investment income 9.44%+ 10.02% 10.41% 10.63%+
Portfolio Turnover 61% 78% 88% 53%
- ---------------------------------------------------------------------------------------------------------------------------
Average Commission Rate (per share)(1) $0.060 -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $825,013 $706,711 $511,347 $442,552
- ---------------------------------------------------------------------------------------------------------------------------
+ Annualized.
* For the period from the start of business, June 1, 1994, to March 31, 1995.
(1) Average commission rate paid is computed by dividing the total dollar amount of commissions paid during the fiscal
year by the total number of shares purchased and sold during the fiscal year for which commissions were charged.
</TABLE>
See notes to financial statements
<PAGE>
High Income Portfolio as of September 30, 1997
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
(Expressed in United States Dollars)
1 Significant Accounting Policies
- -------------------------------------------------------------------------------
High Income Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940 as a 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
interests in the Portfolio. The following is a summary of significant
accounting policies of the Portfolio. The policies are in conformity with
accounting principles generally accepted in the United States of America.
A Investment Valuations -- Investments listed on securities exchanges or in
the NASDAQ National Market are valued at closing sale prices. Listed or
unlisted investments for which closing sale prices are not available are
valued at the mean between the latest bid and asked prices. Fixed income
investments (other than short-term obligations), including listed
investments and investments for which price quotations are available, will
normally be valued on the basis of market valuations furnished by a pricing
service. Financial futures contracts listed on commodity exchanges are
valued at closing settlement prices. Short-term obligations, maturing in
sixty days or less, are valued at amortized cost, which approximates value.
Investments for which there are no quotations or valuations are valued at
fair value using methods 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. Dividend income is recorded on the ex-dividend date for
dividends received in cash and/or securities.
C Income Taxes -- The Portfolio has elected to be treated as a partnership
for United States 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 taxable investment income, net realized capital gains, and
any other items of income, gain, loss, deduction or credit.
D Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E Financial Futures Contracts -- Upon the entering of a financial futures
contract, the Portfolio is required to deposit ("initial margin") either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by the 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 in financial futures contracts is designed only
to hedge against anticipated future changes in interest rates. Should
interest rates move unexpectedly, the Portfolio may not achieve the
anticipated benefits of the financial futures contracts and may realize a
loss.
F Use of Estimates -- The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America 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.
G Other -- Investment transactions are accounted for on a trade date basis.
H Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balances the Portfolio maintains with IBT. All significant credit
balances used to reduce the Portfolio's custodian fees are reflected as a
reduction of expenses on the Statement of Operations.
I Interim Financial Information -- The interim financial statements relating
to September 30, 1997 and 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
plus a percentage of gross income (i.e., income other than gains from the
sale of securities). For the six months ended September 30, 1997, the fee
was equivalent to 0.58%, annualized, of the Portfolio's average daily net
assets and amounted to $2,220,108. Except as to Trustees of the Portfolio
who are not members of EVM's or BMR's organization, officers and Trustees
receive remuneration for their services to the Portfolio out of such
investment adviser fee. Certain of the officers and Trustees of the
Portfolio are officers and directors/trustees of the above organizations.
Trustees of the Portfolio that are not affiliated with the Investment
Adviser may elect to defer receipt of all or a portion of their annual fees
in accordance with the terms of the Trustees Deferred Compensation Plan. For
the six months ended September 30, 1997, no significant amounts have been
deferred.
3 Investments
- --------------------------------------------------------------------------------
The Portfolio invests primarily in debt securities. The ability of the issuers
of the debt securities held by the Portfolio to meet their obligations may be
affected by economic developments in a specific industry. Purchases and sales
of investments, other than U.S. Government securities and short-term
obligations, aggregated $515,140,152 and $447,503,735, respectively, for the
six months ended September 30, 1997.
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 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 banks' adjusted certificate of deposit
rate, Eurodollar rate or federal funds rate. In addition, a fee computed at
an annual rate of 0.15% on the daily unused portion of the line of credit is
allocated among the participating portfolios and funds at the end of each
quarter. The Portfolio did not have any significant borrowings or allocated
fees during the period.
5 Federal Income Tax Basis of Investments
- --------------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the
investments owned at September 30, 1997, as computed on a federal income tax
basis, were as follows:
Aggregate cost $760,392,391
------------------------------------------------------------------
Gross unrealized appreciation $ 53,864,321
Gross unrealized depreciation (720,336)
------------------------------------------------------------------
Net unrealized appreciation $ 53,143,985
------------------------------------------------------------------
6 Restricted Securities
- --------------------------------------------------------------------------------
At September 30, 1997, the Portfolio owned the following securities
(constituting 0.79% of net assets) which were restricted as to public resale
and not registered under the Securities Act of 1933 (excluding Rule 144A
Securities). The Portfolio has various registration rights (exercisable
under a variety of circumstances) with respect to certain of these
securities. The fair value of these securities is determined based on
valuations provided by brokers when available, or if not available, they are
valued at fair value using methods determined in good faith by or at the
direction of the Trustees.
<TABLE>
<CAPTION>
Date of
Description Acquisition Shares/Face Cost Fair Value
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Corporate Note
- -----------------------------------------------------------------------------------------------------------
Inflo Holdings Corp.,
Promissory Notes, 10%
(0% until 1999), 1/27/07 9/13/96 4,400,000 $2,884,000 $3,960,000
Common Stocks, Warrants, and Rights
- -----------------------------------------------------------------------------------------------------------
American Telecasting, Inc. Warrants 01/16/96 2,600 $ 71,500 $ 26
Australis Holdings, Ltd., Warrants 04/02/97 2,000 -- --
Australis Media Ltd., Warrants 05/26/95 3,600 -- --
CS Wireless Systems, Inc., Common 01/14/97 902 -- --
Esat Holdings, Ltd., Warrants 06/19/97 3,600 -- 90,000
Gulf States Steel, Warrants 08/22/95 2,400 -- 120
In Flight Phone Corp., Warrants Exp. 8/31/02 11/28/95 1,600 -- --
Microcell Telecommunication, Warrants 10/30/96 58,400 -- 1,387,000
Microcell Telecommunication, Contingent
Warrants 10/30/96 58,400 -- 584
Nextel Communications, Inc., Common 09/05/97 11,154 180,000 322,072
Nextel Communications Warrants Exp. 4/25/99 10/04/96 7,200 -- 82,800
SD Warren Company Warrants Exp. 12/15/06 05/15/95 48,000 -- 252,000
Servam Corp., $2.00 Warrant Exp. 4/1/01 12/15/87 12,276 -- --
Servam Corp., $4.50 Warrant Exp. 4/1/01 12/15/87 2,760 -- --
Servam Corp., Common 12/15/87 1,380 -- --
Sterling Chemicals Holdings, Warrants 10/07/96 3,200 -- 112,000
Specialty Foods Acquisition Corp., Common 08/10/93 48,000 34,886 12,000
Terex Corp., Warrants Exp. 5/15/02 11/07/96 20,000 -- 260,000
Thermadyne Holdings Corp., Common 04/03/89 40,000 28,800 400
United International Holdings, Inc.,
Warrants Exp. 11/15/99 11/16/94 7,840 222,186 56,840
- -----------------------------------------------------------------------------------------------------------
$3,421,372 $6,535,842
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EV Classic High Income Fund as of September 30, 1997
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT
- --------------------------------------------------------------------------------
<TABLE>
EV Classic High Income Fund
<S> <C>
Officers Independent Trustees
M. DOZIER GARDNER DONALD R. DWIGHT
President and Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
JAMES B. HAWKES
Vice President and Trustee SAMUEL L. HAYES, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
WILLIAM H. AHERN, JR. Business Administration
Vice President
NORTON H. REAMER
MICHAEL B. TERRY President and Director, United Asset
Vice President Management Corporation
JAMES L. O'CONNOR JOHN L. THORNDIKE
Treasurer Formerly Director, Fiduciary Company Incorporated
ALAN R. DYNNER JACK L. TREYNOR
Secretary Investment Adviser and Consultant
High Income Portfolio
Officers Independent Trustees
M. DOZIER GARDNER DONALD R. DWIGHT
President and Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
JAMES B. HAWKES
Vice President and Trustee SAMUEL L. HAYES, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
HOOKER TALCOTT, JR. Business Administration
Vice President and
Co-Portfolio Manager
NORTON H. REAMER
President and Director, United Asset
MICHAEL W. WEILHEIMER Management Corporation
Vice President and
Co-Portfolio Manager
JOHN L. THORNDIKE
Formerly Director, Fiduciary Company Incorporated
WILLIAM CHISHOLM
Vice President
JACK L. TREYNOR
Investment Adviser and Consultant
RAYMOND O'NEIL
Vice President
MICHEL NORMANDEAU
Vice President
JAMES L. O'CONNOR
Treasurer
ALAN R. DYNNER
Secretary
</TABLE>
<PAGE>
Investment Adviser of High Income Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of EV Classic High Income Fund
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
Transfer and Dividend
Disbursing Agent
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
EV Classic High Income Fund
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------
C-HISRC-11/97
