<PAGE>
To Shareholders
Eaton Vance Income Fund of Boston had a total return of 11.3% for the year ended
September 30, 1995. This was the result of a rise in net asset value per share
to $7.92 on September 30, 1995, from $7.90 on September 30, 1994, and the
reinvestment of $0.82 per share in income dividends. It does not include the
effect of the Fund's 3.75% sales charge. For comparison, the Lehman Brothers
High Yield Bond Index, an unmanaged index of corporate bonds, returned 15.2 %
for the same period.
Based on the Fund's most recent dividend and a net asset value of $7.92, the
Fund had a distribution rate of 10.5% at September 30.
THE HIGH YIELD MARKET CROSSES THE $300 BILLION THRESHOLD IN 1995...
New issuance has again been brisk in 1995, totalling about $20 billion through
September. While that is somewhat lower than the pace of recent years, $35
billion in 1994 and $54 billion in 1993, it shows a continuing reliance by
corporations on the high yield market for financing. By the end of September,
the high yield market had crossed a major threshold, reaching $300 billion in
market capitalization, according to Securities Data Corp. That figure
demonstrates the rapid growth of a market that measured only $120 billion in
1986. Importantly, the new supply has been met by strong demand from investors.
WITH GROWTH HAS COME IMPROVED MARKET LIQUIDITY...
The growth of the high yield market has resulted in improved liquidity, an
important investment criterion for investors. Quality, too, continues to
improve. As one indication of that trend, net upgrades in the market totalled
nearly $10 billion through September alone, according to a recent high yield
market review by CS First Boston.
- -------------------------------------------------------------------------------
[GRAPHIC OMITTED: pie chart:
INCOME FUND OF BOSTON: RATINGS BREAKDOWN OF BOND HOLDINGS*
Aaa 5.0%
Ba 9.4%
B1 12.8%
B2 25.6%
B3 40.9%
Caa 5.4%
Non-rated 0.9%
* Moody's Investors Services ratings; percentages based on market value as of
September 30, 1995.
Source: Eaton Vance Management.]
- -------------------------------------------------------------------------------
These trends should provide a favorable background for Eaton Vance Income Fund
of Boston. In the following pages, portfolio manager Hooker Talcott reviews the
past year and discusses the outlook for income-seeking investors in the high
yield market.
[Photo of
M. Dozier Gardner]
Sincerely,
/s/ M. Dozier Gardner
M. Dozier Gardner
President
November 20, 1995
<PAGE>
Management Discussion
An interview with Hooker Talcott, Jr., Vice President and Portfolio Manager of
Eaton Vance Income Fund of Boston.
Q. HOOKER, HOW WOULD YOU EVALUATE THE FUND'S PERFORMANCE DURING THE YEAR?
A. Although the market has been somewhat difficult to negotiate, the Fund
posted a good positive total return during the year, up 11.3%. However, the
Treasury market certainly provided a volatile backdrop, and the Fund
underperformed the Lehman Brothers High Yield Bond Index. The primary reason
for the Fund's underperformance was our emphasis on lower-rated,
higher-yielding bonds. These do not respond to the U.S. Treasury* market to
the same degree that higher-rated bonds in the high yield universe do.
Yield spreads - the difference in yields between bonds of varying quality -
widened in the period, meaning that higher-yielding, B-rated bonds - the
primary investment universe of the Portfolio - slightly underperformed their
BB-rated counterparts. I think it's fair to say that, given the difficult
terrain for the high yield market, the Fund fared satisfactorily in this
period. It's important for shareholders to remember that the Fund tends to
emphasize high current yields. Over the long-term, the compounding of those
higher yields can have a significant and beneficial effect on long-term
returns.
*High yield bonds carry a higher degree of investment risk, while the principal
and interest of Treasury issues are guaranteed by the U.S. government. High
yield bonds are considered speculative because they present greater risks of
price volatility and default.
Q. HOW HAVE YOU ALTERED THE PORTFOLIO?
A. I've continued the restructuring that I mentioned in our last report.
Namely, decreasing the Portfolio's exposure to cyclical issues, while
increasing our exposure to defensive issues. The current mix is
approximately 65% defensive bonds and 35% cyclical bonds. A year ago, those
percentages were roughly reversed.
- ----------------------------------
[Photo of Hooker Talcott, Jr.]
HOOKER TALCOTT, JR.
- ----------------------------------
Q. WHAT GROUPS HAVE YOU BEEN BUYING?
A. I've focused on areas of the economy where cash flow and earnings are likely
to remain strong, regardless of the direction of the economy. Those areas
include consumer products, healthcare, cable and broadcasting.
We've purchased companies such as Van de Kamp's, a food processing and
packaging company, and American Safety Razor, a maker of shaving
accessories. These makers of consumer staples are less dependent on a strong
economy than are cyclical industries. Health care providers, such as
Universal Healthcare, tend to maintain their growth rates even in a slowing
economic climate. Elsewhere, we've retained an exposure to the cable and
broadcasting segments. Cable television operators, like Marcus Cable, and
broadcasters, such as Young Broadcasting, continue to enjoy good growth.
Q. AND WHAT SECTORS HAVE YOU AVOIDED?
A. While the Federal Reserve has apparently managed to engineer a soft landing,
the economy remains in a very delicate balance. At the retail level,
consumers are nearing the upper reaches of their available credit limits,
according to bank industry data. Since consumer spending accounts for around
60% of economic activity in the U.S., that's a cause for concern. We've
therefore lightened up on autos, retailers, and apparel makers.
In the manufacturing sector, inventories have crept higher in recent months.
As Fed chairman Greenspan noted recently, that's a trend that bears watching
because it may signal a slowdown in future manufacturing activity.
Therefore, we've also reduced our holdings among the steels, metals, and
heavy manufacturers. Moreover, the trends I've mentioned above suggest that
the economic cycle is reaching a more mature stage.
Q. WE'VE DISCUSSED YOUR BUY DISCIPLINE IN PAST REPORTS. BUT WHAT DRIVES YOU TO
SELL A BOND HOLDING?
A. At Eaton Vance, we follow a very credit-intensive approach. Through
"bottom-up" research, we monitor companies very closely for any change in
their creditworthiness. We search for signs of deteriorating fundamentals or
changing economic conditions that might adversely affect the company's
future cash flows or earnings prospects. Equally as important, we try to be
alert to signs that a bond may have reached what we believe is its full
price potential. In that event, we may elect to sell and redirect our
investment into bonds that we believe represent better value.
Q. COULD YOU GIVE A RECENT EXAMPLE?
A. Yes. The Portfolio recently sold an Inland Steel issue, which we had
purchased in 1991 at a yield near 12%. As the manufacturing side of the
economy recovered in the early 1990s, and demand rose both domestically and
abroad, Inland's results improved significantly, and the bonds performed
very well. We sold the issue recently at a yield of 8.5%, after significant
price appreciation. At that level we felt the bonds were fully priced and
chose to look for opportunities elsewhere.
Q. HOOKER, WHAT IS YOUR OUTLOOK FOR THE HIGH-YIELD MARKET?
A. While the economy is clearly less robust than it was six months ago, the
high yield market should continue to fare relatively well. Given the Fed's
success in controlling inflation, we should see less volatility in interest
rates generally. A slow-growth economy will continue to benefit some sectors
of the economy. Meanwhile, yield spreads on 10-year B-rated bonds have
widened to 500 basis points over 10-year Treasuries. Naturally, there are
additional risks associated with high yield bonds, and past trends don't
always guarantee future performance. But in my view, the high yield sector
continues to offer unusual value and good opportunities for the
income-oriented investor.
Comparison of Change in Value of a $10,000 Investment in Eaton Vance Income Fund
of Boston (Including Sales Charge) and the Lehman Brothers High Yield Bond Index
From September 30, 1985, thrugh September 30, 1995
----------------------------------------------
AVERAGE ANNUAL 1 5 10
RETURNS Year Year Year
----------------------------------------------
With 3.75%
Max. Sales Charge 7.1% 14.9% 10.7%
----------------------------------------------
Without 3.75%
Max. Sales Charge 11.3% 15.8% 11.2%
----------------------------------------------
Label A B C
-------------------------------------------------------------
date ifob - nav ifob - off hi yield
-------------------------------------------------------------
1 9/85+ 10000 9627 10000
2 10/85 10247 9865 10026
3 11/85 10516 10124 10276
4 12/85 10873 10467 10662
5 1/86 10840 10436 10802
6 2/86 11259 10839 11218
7 3/86 11516 11087 11649
8 4/86 11516 11087 11834
9 5/86 11708 11272 11965
10 6/86 11869 11426 12097
11 7/86 11799 11359 11976
12 8/86 12136 11684 12161
13 9/86 11926 11482 12307
14 10/86 12271 11814 12592
15 11/86 12426 11963 12558
16 12/86 12498 12032 12522
17 1/87 13046 12560 13040
18 2/87 13266 12772 13317
19 3/87 13300 12805 13409
20 4/87 12950 12468 12942
21 5/87 12875 12395 13035
22 6/87 13085 12598 13202
23 7/87 13162 12672 13238
24 8/87 13457 12956 13320
25 9/87 13250 12757 12900
26 10/87 12566 12098 12478
27 11/87 12803 12326 12838
28 12/87 12926 12444 13147
29 1/88 13310 12814 13586
30 2/88 13679 13170 14026
31 3/88 13677 13168 13880
32 4/88 13780 13266 13986
33 5/88 13897 13379 14007
34 6/88 14159 13631 14211
35 7/88 14294 13761 14305
36 8/88 14309 13776 14284
37 9/88 14489 13950 14464
38 10/88 14675 14128 14639
39 11/88 14721 14172 14725
40 12/88 14891 14336 14794
41 1/89 15145 14581 15055
42 2/89 15193 14627 15088
43 3/89 15240 14672 14970
44 4/89 15371 14798 15033
45 5/89 15637 15055 15325
46 6/89 15748 15161 15515
47 7/89 15861 15270 15495
48 8/89 15942 15348 15547
49 9/89 15904 15311 15286
50 10/89 15638 15055 14924
51 11/89 15509 14931 14894
52 12/89 15522 14943 14918
53 1/90 15154 14589 14597
54 2/90 14494 13954 14296
55 3/90 14380 13844 14671
56 4/90 14449 13911 14646
57 5/90 14767 14216 14929
58 6/90 15086 14524 15290
59 7/90 15431 14856 15701
60 8/90 14734 14185 14808
61 9/90 13826 13311 13727
62 10/90 13399 12900 13006
63 11/90 13169 12678 13412
64 12/90 13116 12627 13487
65 1/91 13083 12596 13858
66 2/91 13924 13405 15374
67 3/91 14676 14129 16279
68 4/91 15827 15237 16947
69 5/91 15911 15318 16977
70 6/91 16371 15761 17480
71 7/91 17047 16412 18039
72 8/91 17318 16673 18454
73 9/91 17772 17109 18711
74 10/91 18401 17716 19336
75 11/91 18623 17929 19436
76 12/91 18735 18036 19716
77 1/92 19521 18793 20410
78 2/92 19983 19238 20914
79 3/92 20455 19692 21174
80 4/92 20725 19952 21254
81 5/92 20953 20173 21554
82 6/92 21280 20487 21756
83 7/92 21616 20810 22085
84 8/92 21903 21087 22374
85 9/92 22082 21259 22602
86 10/92 21844 21030 22284
87 11/92 21946 21128 22564
88 12/92 22158 21333 22822
89 1/93 22674 21829 23486
90 2/93 23146 22284 23899
91 3/93 23477 22602 24207
92 4/93 23691 22808 24418
93 5/93 24056 23160 24709
94 6/93 24553 23638 25228
95 7/93 24802 23878 25472
96 8/93 24879 23952 25686
97 9/93 24862 23935 25753
98 10/93 25413 24466 26273
99 11/93 25754 24794 26399
100 12/93 26141 25167 26727
101 1/94 26747 25750 27307
102 2/94 26951 25947 27236
103 3/94 26160 25185 26206
104 4/94 25854 24890 26028
105 5/94 25992 25023 26042
106 6/94 26113 25140 26122
107 7/94 26018 25049 26344
108 8/94 25923 24957 26530
109 9/94 25917 24952 26532
110 10/94 25952 24985 26595
111 11/94 25643 24687 26260
112 12/94 25806 24844 26453
113 1/95 26037 25067 26811
114 2/95 26656 25663 27730
115 3/95 26789 25791 28029
116 4/95 27538 26512 28742
117 5/95 28237 27185 29548
118 6/95 28266 27212 29745
119 7/95 28764 27692 30112
120 8/95 28658 27590 30206
121 9/95 28833 27758 30577
Past performance is not indicative of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Source: Towers Data Systems,
Bethesda, MD.
* Investment operations commenced on 6/15/72.
+ Index information is available only at month-end; therefore, the line
comparison begins at the next month-end following the commencement of the
Fund's investment.
FUND PERFORMANCE
In accordance with Securities and Exchange Commission guidelines, we are
including a performance chart that compares your Fund's total return with that
of a broad-based securities market index. The lines on the chart represent the
total returns of $10,000 hypothetical investments in the Fund and the unmanaged
Lehman Brothers High Yield Bond Index.
THE TOTAL RETURN FIGURES
The black solid line on the chart represents the Fund's performance, after
deducting the Fund's 3.75% current maximum sales charge. The Fund's total return
figure reflects Fund expenses and portfolio transaction costs, and assumes the
reinvestment of income dividends and capital gain distributions.
The dotted line represents the performance of the Lehman Brothers High Yield
Bond Index, a broad-based, widely recognized unmanaged index of high yield
bonds. The Index's total return does not reflect any management, transaction or
custody expenses, or commissions that would be incurred if an investor
individually purchased or sold the securities represented in the Index.
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES -- 94.5%
- --------------------------------------------------------------------------------
FACE
SECURITY AMOUNT VALUE
- --------------------------------------------------------------------------------
AUTOMOTIVE/TRUCK -- 3.1%
Exide Corporation, Sr. Notes,
10.75%, 12/15/02 $ 500,000 $ 532,500
JPS Automotive Prod. Corp., Sr. Notes,
11.125%, 6/15/01 1,500,000 1,515,000
Key Plastics, Sr. Notes, 14%, 11/15/99 1,200,000 1,224,000
------------
$ 3,271,500
------------
BUILDING PRODUCTS -- 5.7%
American Standard, Sr. Notes,
11.375%, 5/15/04 $ 750,000 $ 825,000
Building Materials Corp., Sr. Sub. Notes,
11.75% (0% until 2000), 7/1/04 1,850,000 1,147,000
Overhead Door Corp., Sr. Notes, 12.25%, 2/1/00 1,500,000 1,462,500
Schuller International Group Inc., Sr. Notes,
10.875%, 12/15/04 800,000 880,000
Southdown Inc., Sr. Sub. Notes.,
14%, 10/15/01 750,000 828,750
Tarkett International, Sr. Sub. Notes,
9%, 3/1/02 900,000 918,000
------------
$ 6,061,250
------------
CHEMICALS -- 7.4%
Agricultural Minerals & Chemicals, Sr. Notes,
10.75%, 9/30/03 $1,000,000 $ 1,047,500
GI Holdings, Sr. Discount Notes,
11.125% (0% until 1995), 10/1/98 1,300,000 942,500
NL Industries Inc., Sr. Sec. Notes,
11.75%, 10/15/03 1,000,000 1,055,000
NL Industries Inc., Sr. Disc. Notes,
13% (0% until 1998), 10/15/05 1,250,000 925,000
Pioneer Americas Acq., Senior Notes,
13.625%, 4/1/05+ 1,500,000 1,537,500
Rexene Corp, Sr. Notes, 11.75%, 12/1/04 700,000 750,750
Terra Industries Inc., Senior Notes,
10.5%, 6/15/05 700,000 736,750
Uniroyal Chemical Corp., Sr. Sub.
Notes, 11%, 5/01/03 800,000 818,000
------------
$ 7,813,000
------------
COMMUNICATIONS -- 11.3%
Australis Media LTD.,
Sub. Disc. Notes,
14% (0% until 2000), 5/13/03 $1,700,000 $ 1,020,000
Dial Call Communications Inc.,
Sr. Red. Notes,
12.25% (0% until 1998), 4/15/04 1,800,000 949,500
<PAGE>
Diamond Cable Communications Co.,
Sr. Disc. Notes,
13.25% (0% until 1999), 9/30/04 1,600,000 1,064,000
Galaxy Telecom LP., Sr. Sub. Notes,
12.375%, 10/01/05 1,000,000 1,000,000
Granite Broadcasting Corp., Sr. Sub.
Notes, 10.375%, 5/15/05 1,500,000 1,530,000
In-Flight Phone Corp., Sr. Disc. Notes,
14% (0% until 1998), 5/15/02+ 1,500,000 615,000
IXC Communications Inc., Senior
Notes, 13%, 10/1/05+ 900,000 886,500
Marcus Cable Co., Sr. Disc. Notes,
14.25% (0% until 2000), 12/15/05 2,500,000 1,450,000
Marcus Cable Co., Senior Debs.,
11.875%, 10/1/05 200,000 202,000
Pricellular Wireless Comm.,
Sr. Sub. Disc. Nts.,
12.25% (0% until 1998), 10/01/03 800,000 568,000
United International Holdings Inc.,
Sr. Sec. Disc. Notes, 0%, 11/15/99 1,960,000 1,195,600
Videotron Holdings, Sr. Disc. Notes,
11% (0% until 2000), 8/15/05 2,600,000 1,501,500
------------
$ 11,982,100
------------
ENERGY -- 6.0%
Gulf Canada Resources Ltd., Sr. Sub.
Notes, 9.25%, 1/15/04 $1,800,000 $ 1,782,000
Midland Funding II, Subordinated Secured Lease
Obligation, 11.75%, 7/23/05 1,200,000 1,254,000
Mesa Capital Corp., Sec. Disc. Notes,
12.75%, 6/30/98 1,200,000 1,107,000
Midland Cogeneration Venture, Sr. Sec. Lease
Oblig., 10.33%, 7/23/02 804,091 839,270
Trans Texas Gas Corp., Sr. Sec. Notes,
11.5%, 6/15/02 850,000 890,375
Tuboscope Vetco, Sr. Sub. Debs.,
10.75%, 4/15/03 500,000 510,000
------------
$ 6,382,645
------------
FOOD/RESTAURANTS/HOTELS -- 5.7%
American Restaurant Group Inc., Sr. Sec. Notes,
12%, 9/15/98 $ 700,000 $ 514,500
BFI Acquisition Corp., Sr. Sub. Notes (Series A)
12%, 12/1/01 1,500,000 1,050,000
Flagstar Corp., Sub. Debs., 10.75%, 9/15/01 2,150,000 2,021,000
Purina Mills, Sr. Sec. Sub. Notes, 10.25%, 9/1/03 1,050,000 1,076,250
Seven Up/RC Bottling Co., Sr. Sec. Notes,
11.5%, 8/1/99* 1,200,000 516,000
Van De Kamps, Inc., Sr. Sub. Notes, 12%, 9/15/05+ 850,000 862,750
------------
$ 6,040,500
------------
HEALTHCARE -- 4.8%
Dade International Inc., Sr. Sub. Notes,
13%, 2/1/05 $1,200,000 $ 1,284,000
Genesis Health Ventures, Sr. Sub. Notes,
9.75%, 6/15/05 750,000 781,875
Ordna Health Corp., Sr. Sub. Notes,
11.375%, 8/15/04 1,425,000 1,585,313
Universal Health Services Corp., Sr. Notes,
8.75%, 8/15/05 1,500,000 1,487,640
------------
$ 5,138,828
------------
<PAGE>
HIGH TECH -- 2.6%
Blue Bell Funding Inc., Sec. Ext. Notes,
11.85%, 5/1/99 $ 742,000 $ 780,955
GS Technologies Corp., Sr. Notes, 12.25%, 10/1/05 1,000,000 1,012,500
Unisys Corp., Sr. Notes, 13.5%, 7/1/97 900,000 974,250
------------
$ 2,767,705
------------
LEISURE -- 1.0%
Roadmaster Industries, Inc., Sr. Sub. Notes,
11.75%, 7/15/02 $1,600,000 $ 1,040,000
------------
METALS -- 6.4%
Acme Metals Inc., Sr. Notes, 12.5%, 8/1/02 $ 650,000 $ 643,500
Algoma Steel Corp., Sr. Secured Notes,
12.375%, 7/15/05 500,000 457,500
Gulf States Steel, First Mtg. Notes, 13.5%, 4/15/03 1,000,000 960,000
Inland Steel Corp., First Mtg. Bonds, 12%, 12/1/98 750,000 817,500
Kaiser Aluminum, Sr. Sub. Notes, 12.75%, 2/1/03 1,000,000 1,082,500
Maxxam Group Inc., Sr. Sec. Notes, 11.25%, 8/1/03 700,000 684,250
Maxxam Group Inc., Sr. Sec. Disc. Notes,
12.25% (0% until 1998), 8/1/03 700,000 456,750
Republic Engineered Steels Inc., First Mtg.,
9.875%, 12/15/01 1,000,000 932,500
Stelco Inc., SF Debentures, 13.5%, 10/1/00 CAD 272,380 203,740
Ucar Global Enterprises, Sr. Sub. Notes,
12%, 1/15/05 525,000 585,375
------------
$ 6,823,615
------------
MANUFACTURING/MACHINERY -- 9.1%
Applied Extrusion Inc., Sr. Notes, 11.5%, 4/1/02 $ 800,000 $ 856,000
Day International Group, Inc., Sr. Sub. Notes,
11.125%, 6/1/05+ 1,000,000 1,037,500
Dictaphone Corp., Sr. Sub. Notes, 11.75%, 8/1/05 1,250,000 1,231,250
Graphic Controls Corp., Sr. Sub. Notes,
12%, 9/15/05+ 900,000 915,750
Monarch Acquisition Corp., Senior Notes,
12.5%, 7/1/03+ 1,200,000 1,230,000
Newflo Corp., Sub. Notes, 13.25%, 11/15/02 1,400,000 1,442,000
Plastic Specialties & Tech, Sr. Sec. Notes,
11.25%, 12/1/03 500,000 457,500
Selmer Company, Inc., Sr. Sub. Notes, 11%, 5/15/05 900,000 873,000
Waters Corp., Sr. Sub. Notes, 12.75%, 9/30/04 1,500,000 1,627,500
------------
$ 9,670,500
------------
MISCELLANEOUS -- 4.8%
Alliance Entertainment Corp., Sr. Sub. Notes,
11.25%, 7/15/05+ $ 900,000 $ 897,750
Alliant Tech Systems Inc., Sr. Sub. Notes,
11.75%, 3/1/03 1,000,000 1,085,000
Corporate Express Inc., Sr. Sub. Notes,
9.125%, 3/15/04 1,300,000 1,293,500
Imax Corp., Sr. Notes, 7%, 3/1/01 600,000 567,000
Williamhouse-Regency of Del., Sr. Sub. Deb.,
11.5%, 6/15/05 1,300,000 1,287,000
------------
$ 5,130,250
------------
PAPER/PACKAGING -- 9.6%
Container Corp., Sr. Notes (Ser. B), 10.75%, 5/1/02 $ 600,000 $ 631,500
Fort Howard Corp., Sr. Sec. Notes, 11%, 1/2/02 655,633 681,858
Gaylord Container Corp., Sr. Sub. Disc. Debs.,
12.75% (0% until 1996), 5/15/05 300,000 295,500
Owens Illinois Inc., Sr. Notes,
9.95%, 10/15/04 1,000,000 1,027,500
Portola Packaging Corp., Senior Notes,
10.75%, 10/1/05 1,000,000 1,011,250
Riverwood International, Sr. Sub. Notes,
10.375%, 6/30/04 1,100,000 1,210,000
S.D. Warren Company Inc., Sr. Sub. Notes,
12%, 12/15/04 1,000,000 1,105,000
Silgan Corp., Sr. Notes,
13.25% (0% until 1996), 12/15/02 1,000,000 935,000
Silgan Corp., Sr. Sub. Notes,
11.75%, 6/15/02 500,000 527,500
Stone Container Corp., First Mtg. Notes,
10.75%, 10/1/02 500,000 518,750
Stone Container Corp., Sr. Notes, 12.625%, 7/15/98 800,000 868,000
<PAGE>
Tembec Finance Corp., Sr. Notes, 9.875%, 9/30/05 600,000 594,000
U.S. Can Company, Sr. Sub. Notes, 13.5%, 1/15/02 750,000 823,125
------------
$ 10,228,983
------------
RECREATION -- 3.3%
Aztar Corp., Sr. Sub. Notes, 13.75%, 10/1/04 $1,000,000 $ 1,076,250
Trump Holdings & Funding, Senior Notes,
15.5%, 6/15/05 300,000 297,000
Trump Plaza Funding, First Mtg. Notes,
10.875%, 6/15/01 900,000 824,625
Trump Taj Mahal, First Mtg. Bonds,
11.35%, 11/15/99 1,524,215 1,352,741
------------
$ 3,550,616
------------
RETAILING -- 10.1%
Apparel Retailers Inc., Sr. Disc. Debs.,
12.75% (0% until 1998), 8/15/05 $1,400,000 $ 854,000
Brunos, Inc., Sr. Sub. Notes, 10.5%, 8/1/05 1,425,000 1,382,250
Dominick's Finer Foods, Inc., Sr. Sub. Notes,
10.875%, 5/1/05+ 1,000,000 1,015,000
Duane Reade, G.P., Sr. Notes, 12%, 9/15/02 1,200,000 1,098,000
Levitz Furniture Corp., Sr. Sub. Notes,
9.625%, 7/15/03 600,000 477,000
Pathmark Stores Inc., Jr. Sub., Disc. Notes,
10.75% (0% until 1999), 11/1/03 1,500,000 971,250
Purity Supreme, Sr. Sec. Notes, 11.75%, 8/1/99 1,200,000 1,311,000
Ralphs Grocery Company, Inc., Sr. Sub. Notes,
13.75%, 6/15/05 1,500,000 1,582,500
Specialty Foods, Inc., Sr. Sub. Notes,
13% (0% until 1999), 8/15/05 500,000 265,000
Specialty Foods, Inc., Sr. Sub. Notes,
10.25%, 8/15/01 1,000,000 952,500
Specialty Retailers, Inc., Sr. Sub. Notes, 11%,
8/15/03 900,000 846,000
------------
$ 10,754,500
------------
TEXTILES -- 3.0%
Dan River Inc., Sr. Sub. Notes, 10.125%, 12/15/03 $1,450,000 $ 1,460,875
Westpoint Stevens, Sr. Sub. Debs., 9.375%, 12/15/05 1,800,000 1,750,500
------------
$ 3,211,375
------------
TRANSPORTATION -- 0.6%
Moran Transportation, 1st Mtg. Notes, 11.75%,
7/15/04 $ 700,000 $ 654,500
------------
TOTAL CORPORATE BONDS AND NOTES
(identified cost, $98,695,496) $100,521,867
------------
- --------------------------------------------------------------------------------
PREFERRED STOCKS -- 0.4%
- --------------------------------------------------------------------------------
SD Warren Company 14% PFD Stock $ 12,000 $ 366,000
Terex Corp., 13% CV PFD+ 8,000 104,000
------------
TOTAL PREFERRED STOCKS
(identified cost, $510,400) $ 470,000
------------
- --------------------------------------------------------------------------------
COMMON STOCKS, WARRANTS AND RIGHTS -- 1.5%
- --------------------------------------------------------------------------------
SHARES/WARRANTS
- --------------------------------------------------------------------------------
AUTO/TRUCK -- 0.7%
Bucyrus - Erie Company, Common* 87,279 $ 774,601
------------
<PAGE>
CHEMICALS -- 0.1%
UCC Invt. Hldgs, Class A Common+* 7,431 $ 83,599
------------
COMMUNICATIONS -- 0.1%
Dial Call Communications, Wts.+* 1,800 $ 450
United International Hldg. Inc., Warrants+* 1,960 58,800
------------
$ 59,250
------------
ENERGY -- 0.0%
Empire Gas Corp., Wts.+* 1,380 $ 1,380
------------
FOOD -- 0.0%
Servam Corp., Common* 884 $ 0
Servam Corp., $2.00 Wts.
Exp. 4/1/2001+* 7,864 0
Servam Corp., $4.50 Wts.
Exp. 4/1/2001+* 1,768 0
Specialty Foods Acquisition, Common+* 12,000 21,000
------------
$ 21,000
------------
INDUSTRIAL -- 0.0%
Thermadyne Holdings Corp., Common+* 777 $ 13,986
------------
MANUFACTURING -- 0.5%
Pullman Company, Common Stock+* 43,702 $ 349,615
Southdown Inc., Wts.+* 7,500 31,875
Terex Corporation, Rights,
Exp. 8/1/96+* 2,700 1,350
Terex Corporation, Rights,
Exp. 8/1/96+* 375 188
Terex Corporation, Rights,
Exp. 7/1/97+* 1,790 1,343
Terex Corp., Wts.+* 8,000 76,000
Triangle Wire & Cable, Common Stock+* 31,667 79,168
Triangle Wire and Cable, Wts.+* 7,500 0
------------
$ 539,539
------------
METALS -- 0.0%
Gulf States Steel, Warrants+* 1,000 $ 50
------------
MISCELLANEOUS -- 0.0%
Australis Media, Warrants+* 1,700 $ 0
------------
PAPER/PACKAGING -- 0.1%
SD Warren Company, Warrants* 12,000 $ 72,000
------------
RETAILING -- 0.0%
Purity Supreme, Wts.,
Exp. 8/1/1999+* 1,733 $ 1,334
Waxman Industries Inc., Warrants+* 14,000 700
------------
$ 2,034
------------
TOTAL COMMON STOCKS, WARRANTS AND RIGHTS
(IDENTIFIED COST, $3,648,961) $ 1,567,439
------------
<PAGE>
- --------------------------------------------------------------------------------
SHORT-TERM OBLIGATION -- 5.0%
- --------------------------------------------------------------------------------
FACE
SECURITY AMOUNT VALUE
- --------------------------------------------------------------------------------
Melville Corp. 6.60%, 10/02/95,
at amortized cost $5,317,000 $ 5,314,076
------------
TOTAL INVESTMENTS
(IDENTIFIED COST, $110,487,822) $107,873,382
OTHER ASSETS, LESS LIABILITIES -- (1.4%) (1,459,411)
------------
NET ASSETS -- 100% $106,413,971
============
*Non-income producing security.
+Restricted Security (Note 8).
CAD -- The principal amount of these securities is stated in Canadian
Dollars, the currency in which the security is denominated.
The accompanying notes are an integral part of the financial statements
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------
September 30, 1995
- ------------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$110,487,822) $107,873,382
Cash 3,782
Receivable for investments sold 436,841
Receivable for Trust shares sold 283,824
Interest and dividends receivable 2,502,570
------------
Total assets $111,100,399
LIABILITIES:
Dividends payable $ 410,456
Payable for investments purchased 4,026,359
Payable for Trust shares redeemed 197,377
Payable to affiliates --
Trustees' fee 1,478
Custodian fee 4,296
Accrued expenses 46,462
----------
Total liabilities 4,686,428
------------
NET ASSETS for 13,434,312 shares of beneficial
interest outstanding $106,413,971
============
SOURCES OF NET ASSETS:
Paid-in capital $124,816,196
Accumulated net realized loss on investment
transactions (computed on the basis
of identified cost) (15,063,922)
Unrealized depreciation of investments (computed
on the basis of identified cost) (2,611,674)
Accumulated distributions in excess of net
investment income (726,629)
------------
Total $106,413,971
============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($106,413,971 / 13,434,312 shares of beneficial
interest) $7.92
=====
COMPUTATION OF OFFERING PRICE:
(Offering price per share 100/96.25 of $7.92) $8.23
=====
On sales of $50,000 or more, the offering price is reduced.
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended September 30, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income $11,650,298
Expenses --
Investment adviser fee (Note 4) $ 628,411
Compensation of Trustees not members of the
Investment Adviser's organization 34,783
Service fees (Note 5) 118,974
Custodian fees (Note 4) 68,455
Transfer and dividend disbursing agent fees 85,714
Printing and postage 55,271
Legal and accounting services 48,058
Registration costs 23,605
Miscellaneous 28,518
-----------
Total expenses 1,091,789
-----------
Net investment income $10,558,509
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis) ($1,177 net loss for
federal income tax purposes) $(2,502,141)
Change in unrealized appreciation of investments 2,497,668
-----------
Net realized and unrealized loss on
investments (4,473)
-----------
Net increase in net assets from
operations $10,554,036
===========
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
----------------------------
1995 1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 10,558,509 $ 10,066,646
Net realized gain (loss) on investment
transactions (2,502,141) 147,154
Change in unrealized appreciation
(depreciation) of investments 2,497,668 (6,048,456)
------------ ------------
Net increase in net assets from operations $ 10,554,036 $ 4,165,344
------------ ------------
Distributions to shareholders --
From net investment income $(10,503,271) $(10,066,646)
In excess of net investment income -- (563,437)
------------ ------------
Total distributions to shareholders $(10,503,271) $(10,630,083)
------------ ------------
Net increase from Trust share transactions
(Note 2) $ 2,880,933 $ 14,824,209
------------ ------------
Net increase in net assets $ 2,931,698 $ 8,359,470
NET ASSETS:
At beginning of year 103,482,273 95,122,803
------------ ------------
At end of year (including distributions in
excess of net investment income of
$726,629 and $775,340 respectively) $106,413,971 $103,482,273
============ ============
The accompanying notes are an integral part of the financial statements
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ---------- ---------- ---------
NET ASSET
VALUE, beginning
of year $ 7.90 $ 8.40 $ 8.33 $ 7.56 $ 6.89
-------- -------- ------- ------- -------
INCOME FROM
OPERATIONS:
Net investment
income $ 0.82 $ 0.83 $ 0.92 $ 0.97 $ 1.04
Net realized
and unrealized
gain (loss) on
investments 0.02 (0.47) 0.07 0.77 0.71
-------- -------- ------- ------- -------
Total income from
operations $ 0.84 $ 0.36 $ 0.99 $ 1.74 $ 1.75
-------- -------- ------- ------- -------
LESS DISTRIBUTIONS:
From net
investment
income $ (0.82) $ (0.81) $ (0.92) $ (0.97) $ (1.04)
From paid-in
capital -- -- -- -- (0.04)
In excess of net
investment income -- (0.05) -- -- --
-------- -------- ------- ------- -------
Total
distributions $ (0.82) $ (0.86) $ (0.92) $ (0.97) $ (1.08)
-------- -------- ------- ------- -------
NET ASSET VALUE,
end of year $ 7.92 $ 7.90 $ 8.40 $ 8.33 $ 7.56
======== ======== ======= ======= =======
TOTAL RETURN (1) 11.25% 4.25% 12.59% 24.25% 28.53%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end
of year (000's
omitted) $106,414 $103,482 $95,123 $85,778 $70,773
-------- -------- ------- ------- -------
Ratio of net
expenses to
average daily
net assets 1.09% 1.04% 1.03% 1.08% 1.15%
Ratio of net
investment
income to
average daily
net assets 10.50% 9.75% 11.01% 12.02% 15.36%
PORTFOLIO TURNOVER 84% 70% 102% 90% 80%
- -------------
(1) Total investment 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.
The accompanying notes are an integral part of the financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Eaton Vance Income Fund of Boston (the Trust), a Massachusetts business trust,
is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end, management investment company. The following is a summary
of significant accounting policies consistently followed by the Trust in the
preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles.
A. INVESTMENT 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. Short-term obligations,
maturing in sixty days or less, are valued at amortized cost, which approximates
value. Investments for which there is no quotation or valuation 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.
C. FEDERAL TAXES -- The Trust's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net realized
gain on investments. Accordingly, no provision for federal income or excise tax
is necessary. At September 30, 1995, the Trust, for federal income tax purposes,
had a capital loss carryover of $12,557,485 which will reduce the Trust's
taxable income arising from future net realized gains on investments, 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 Trust of any liability for federal income or excise tax. Such
capital loss carryovers will expire on September 30, 1999 ($7,407,810), 2000
($5,148,498) and 2003 ($1,177). Additionally, at September 30, 1995, net capital
losses of $2,416,189 attributable to security transactions incurred after
October 31, 1994, are treated as arising on the first day of the Fund's next
taxable year.
D. DISTRIBUTIONS TO SHAREHOLDERS -- The net investment income of the Trust is
determined daily, and substantially all of the net investment income so
determined is declared daily as a dividend to shareholders of record at the time
of declaration. Distributions are paid monthly. Distributions of realized
capital gains, if any, are made at least annually. Shareholders may reinvest
capital gain distributions in additional shares of the Trust at the net asset
value as of the ex-dividend date. Distributions are paid in the form of
additional shares of the Trust or, at the election of the shareholder, in cash.
The Trust distinguishes between distributions on a tax basis and a financial
reporting basis. Generally accepted accounting principles require that only
distributions in excess of tax basis earnings and profits be reported in the
financial statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax earnings and
profits which result in temporary over-distributions for financial statement
purposes are classified as distributions in excess of net investment income or
accumulated net realized gains. Permanent differences between book and tax
accounting relating to distributions are reclassified to paid-in capital.
E. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold.
<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 Trust shares were as follows:
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
Sales 2,247,830 $17,720,814 3,376,464 $28,296,646
Issued to shareholders
electing to receive
payment of
distributions in
Trust shares 748,929 5,876,531 743,312 6,186,563
Repurchases (2,656,086) (20,716,412) (2,351,168) (19,659,000)
--------- ----------- --------- -----------
Net increase
(decrease) 340,673 $ 2,880,933 1,768,608 $14,824,209
========= =========== ========= ===========
- ------------------------------------------------------------------------------
(3) PURCHASES AND SALES OF INVESTMENTS
The Trust invests primarily in debt securities. The ability of the issuers of
the debt securities held by the Trust 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 $80,678,587 and $81,267,554, respectively.
- ------------------------------------------------------------------------------
(4) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee, computed at the monthly rate of 5/96 of 1% ( 5/8 of
1% annually) of the Trust's average monthly net assets, was earned by Eaton
Vance Management (EVM) as compensation for management and investment advisory
services rendered to the Trust. Except as to Trustees of the Trust who are not
members of EVM's organization, officers and Trustees receive remuneration for
their services to the Trust out of such investment adviser fee. Eaton Vance
Distributors, Inc., a subsidiary of EVM and the Trust's principal underwriter,
received approximately $16,600 as its portion of the sales charge on sales of
Trust shares during the year ended September 30, 1995. Investors Bank & Trust
Company (IBT), an affiliate of EVM, serves as custodian of the Trust. Pursuant
to the custodian agreement, IBT receives a fee reduced by credits which are
determined based on the average daily cash balances the Trust maintains with
IBT. Certain of the officers and Trustees of the Trust are officers and
directors/trustees of the above organizations.
- ------------------------------------------------------------------------------
(5) SERVICE PLAN
The Trustees of the Trust on behalf of the Fund have adopted a Service Plan
designed to meet the requirements of Rule 12b-1 under the Investment Company Act
of 1940 and the service fee requirements of the revised sales charge rule of The
National Association of Securities Dealers Inc. The Service Plan provides that
the Trust may make service fee payments to the Principal Underwriter, Eaton
Vance Distributors, Inc., a subsidiary of Eaton Vance Management, Authorized
Firms or other persons in amounts not exceeding 0.25% of the Trust's average
daily net assets for any fiscal year. The Trustees have implemented the Service
plan by authorizing the Fund to make quarterly service fee payments to the
Principal Underwriter and Authorized Firms in amounts not expected to exceed
0.25% of that portion of the Trust's average daily net assets for any fiscal
year which is attributable to shares of the Trust sold on or after May 22, 1989
by such persons and remaining outstanding for at least twelve months. Such
payments are made for personal services and/or the maintenance of shareholder
accounts. Pursuant to the Plan, the Trust made provisions of $118,974 under the
Plan to the Principal Underwriter and Authorized Firms during the year ended
September 30, 1995.
- ------------------------------------------------------------------------------
(6) LINE OF CREDIT
The Trust participates with other funds managed by EVM 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.
Borrowings will be made by the Trust solely to facilitate the handling of
unusual and/or unanticipated short term cash requirements. Interest is charged
to each fund 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 at the end of each quarter. The Trust did not have any
significant borrowings or allocated fees during the period.
- ------------------------------------------------------------------------------
(7) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized depreciation/appreciation in value of the investments
owned at September 30, 1995, as computed on a federal income tax basis, are as
follows:
Aggregate cost $110,578,070
============
Gross unrealized depreciation $ 5,844,613
Gross unrealized appreciation 3,139,925
------------
Net unrealized depreciation $ 2,704,688
============
- ------------------------------------------------------------------------------
(8) RESTRICTED SECURITIES
At September 30, 1995, the Trust owned the following securities (constituting
9.2% of net assets) which were restricted at such date. The Trust has various
registration rights (exercisable under a variety of circumstances) with respect
to 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>
DESCRIPTION DATES OF ACQUISITION SHARES/FACE COST FAIR VALUE
CORPORATE BONDS AND NOTES
<S> <C> <C> <C> <C>
Alliance Entertainment,
Sr. Sub. Notes,
11.25%, 7/15/05 7/18/95 900,000 $ 905,375 $ 897,750
Day International Corp.,
Sr. Sub. Notes,
11.125%, 6/1/05 5/20/95 1,000,000 1,010,000 1,037,500
Dominick's Finer Foods,
Sr. Sub Notes,
10.875%, 5/1/05 4/27/95 1,000,000 1,000,000 1,015,000
Graphic Controls, Sr. Sub.
Notes, 12%, 9/15/05 9/21/95 900,000 900,000 915,750
In-Flight Phone Corp., Sr.
Disc. Notes, 0/14%, 5/15/02 4/28/95 1,500,000 997,260 615,000
IXC Communications Corp.,
Sr. Notes, 13%, 10/1/05 9/25/95 900,000 875,250 886,500
Monarch Acquisition Corp.,
Sr. Notes, 12.5%, 7/1/03 6/23/95 1,200,000 1,200,000 1,230,000
Pioneer Americas Acquisition,
First Mtg. Notes,
13.625%, 4/1/05 4/13, 7/13, 8/24/95 1,500,000 1,523,000 1,537,500
Van De Kamps, Inc., Sr.
Sub. Notes, 12%, 9/19/05 9/14, 9/15/95 850,000 856,125 862,750
CORPORATE STOCKS, WARRANTS
AND RIGHTS
Australis Media, Warrants 5/26/95 1,700 0 0
Dial Call Communications,
Warrants 10/01/94 1,800 0 450
Empire Gas Corp., Warrants 1/27/95 1,380 0 1,380
Gulf States Steel, Warrants 8/23/95 1,000 0 50
Pullman Co., Common Stock 2/22/95 43,702 1,267,788 349,616
Purity Supreme, Warrants,
Exp. 8/1/99 7/29/92 1,733 0 1,334
Servam Corp., $2.00 Warrants,
Exp. 4/1/01 8/28/91 7,864 0 0
Servam Corp., $4.50 Warrants,
Exp. 4/1/01 8/28/91 1,768 0 0
Southdown, Inc., Warrants 10/28/91 7,500 22,500 31,875
Specialty Foods, Acquisition,
Common Stock 8/10/93 12,000 8,722 21,000
Terex Corp., 13%, CV Preferred 12/15/93 8,000 198,400 104,000
Terex Corp., Rights, Exp.
8/1/96 7/24/92 2,700 0 1,350
Terex Corp., Rights,
Exp. 8/1/96 8/20/92-7/01/94-8/02/94 375 0 188
Terex Corp., Rights,
Exp. 7/1/97 11/07/94 1,791 0 1,343
Terex Corp., Warrants 12/15/93 8,000 1,600 76,000
Thermadyne Holdings Corp.,
Common Stock 5/17/94 777 18,900 13,986
Triangle Wire & Cable,
Common Stock 5/02/94 31,667 750,000 79,168
Triangle Wire & Cable,
Warrants 10/28/91 7,500 0 0
UCC Holdings, Class A
Common Stock 12/05/89 7,431 7,431 83,599
United International Hldg.
Inc., Warrants 11/16/94 1,960 55,546 58,800
Waxman Industries, Inc.,
Warrants 10/01/91 14,000 14,000 700
----------- ----------
$11,611,897 $9,822,589
=========== ==========
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- ------------------------------------------------------------------------------
TO THE TRUSTEES AND SHAREHOLDERS OF
EATON VANCE INCOME FUND OF BOSTON:
We have audited the accompanying statement of assets and liabilities of
Eaton Vance Income Fund of Boston, including the investment portfolio, as of
September 30, 1995, the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
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
September 30, 1995 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
Eaton Vance Income Fund of Boston as of September 30, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
OCTOBER 27, 1995
<PAGE>
INVESTMENT MANAGEMENT
EATON VANCE OFFICERS INDEPENDENT TRUSTEES
INCOME FUND M. DOZIER GARDNER KENNETH C. KNIGHT
OF BOSTON President and Trustee Consultant
24 Federal Street HOOKER TALCOTT, JR. DONALD R. DWIGHT
Boston, MA 02110 Vice President President, Dwight Partners, Inc.
and Portfolio Manager Chairman, Newspapers of
JAMES L. O'CONNOR New England, Inc.
Treasurer ROBERT GLUCK
THOMAS OTIS Management Consultant
Secretary SAMUEL L. HAYES, III
Jacob H. Schiff Professor of
Investment Banking,
Harvard University
Graduate School of
Business Administration
JEROME PRESTON, JR.
Partner, Foley, Hoag & Eliot
NORTON H. REAMER
President and Director,
United Asset Management
Corporation
JOHN L. THORNDIKE
Director,
Fiduciary Company Incorporated
<PAGE>
ADMINISTRATOR OF
EATON VANCE
INCOME FUND OF BOSTON
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
LEGAL COUNSEL
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, NY 10036
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA02109
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.
EATON VANCE
INCOME FUND OF BOSTON
24 FEDERAL STREET
BOSTON, MA 02110
T-IBSRC
EATON VANCE
INCOME FUND
OF BOSTON
ANNUAL
SHAREHOLDER REPORT
SEPTEMBER 30, 1995
</TABLE>
