<PAGE>
[LOGO OF EATON VANCE APPEARS HERE]
[PHOTO OF STOCK CERTIFICATES, NEWSPAPER STOCK PAGE & PHONE APPEARS HERE]
SEMI-ANNUAL REPORT MARCH 31, 1997
[PHOTO OF STATUE OF PAUL REVERE ON HORSEBACK APPEARS HERE]
EATON VANCE INCOME FUND OF BOSTON
Global management - Global Distribution
[PHOTO OF BOSTON SKYLINE FROM BOSTON HARBOR APPEARS HERE]
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
INVESTMENT UPDATE
Investment Environment
- --------------------------------------------------------------------------------
The High-Yield Market
. Interest rates were volatile during the six-month period ended March 31. For
example, ten-year Treasury bond yields declined from 6.92% in late summer to
6.05% by November in response to expectations of continued low inflation.
However, as the Federal Reserve signalled its renewed inflation concerns,
yields again rose to the 6.90% level by the end of March.
. The high-yield market continued to expand in 1996. New issuance reached $74
billion, while total market capitalization grew from $300 billion to $354
billion, according to Securities Data Corp.
. Credit quality for high-yield bonds improved. According to Moody's Investor
Service, a bond rating agency, $19.8 billion in bonds were upgraded in the
first quarter of 1997. Meanwhile, default rates have fallen to less than half
their 4% historical rate.
[PHOTO OF HOOKER TALCOTT, JR. PORTFOLIO MANAGER APPEARS HERE]
The Fund
- --------------------------------------------------------------------------------
Performance for the Past Six Months
. The Fund's total return was 4.4% for the six months ended March 31, 1997,/1/
the result of a decline in net asset value per share from $8.12 on
September 30, 1996 to $8.08 on March 31, 1997, and the reinvestment of $0.396
in dividends.
. In comparison, the Lehman Brothers High Yield Index - an unmanaged index of
high-yield bonds - had a total return of 4.7% during the same period.*
Recent Portfolio Shifts
. The Portfolio increased its commitments to non-economically-sensitive sectors
such as food processors. One such holding, International Home Foods, has an
impressive array of brand names, including Gulden's Mustard and Chef
Boyardee. Another food holding, MBW Foods, Inc., makes Mrs. Butterworth's
syrup. The Portfolio decreased its holdings in cyclical issues like steels
and paper.
. Broadcasting and cable bonds remained the Portfolio's largest sector
weighting. Cable companies such as Marcus Cable Co. enjoyed good subscriber
growth, while the radio and television sectors were swept by a round of
mergers.
[PHOTO OF MICHAEL WEILHEIMER, PORTFOLIO MANAGER APPEARS HERE]
Other developments in the Portfolio
. The Fund benefited from increased corporate finance activity as two of its
high yield issuers - Monarch Marking and Overhead Door Corp. - were purchased
by investment grade companies. Another Portfolio holding, Videotron UK, is in
the process of being merged into a subsidiary of Cable & Wireless, a large
U.K.-based telecom company.
. A new investment among the Portfolio's ten largest holdings was Allied Waste
North America, the nation's fourth largest waste management company. Allied
has achieved impressive business synergies through acquisitions and, by
matching landfills sites with waste hauling routes in selected areas, has
generated major cost savings.
- --------------------------------------------------------------------------------
Fund shares are not guaranteed by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
- --------------------------------------------------------------------------------
................................................................................
Fund Information
as of March 31, 1997
<TABLE>
<CAPTION>
Performance/2/
................................................................................
Average Annual total Returns (at net asset value)
- ----------------------------------------------------------------
<S> <C>
One year 11.6%
Five years 10.8
Ten years 9.9
<CAPTION>
SEC Average Annual Total Returns (including 3.75% sales charge.)
- -----------------------------------------------------------------
<S> <C>
One year 7.4%
Five years 10.0
Ten years 9.5
<CAPTION>
Diversification by Industry/3/
- -----------------------------------------------------------------
By total net assets
<S> <C>
Broadcast/Cable 12.1%
Communication Services 9.6%
Oil/Gas 7.7%
Foods 6.6%
Containers/Packaging 6.3%
<CAPTION>
Ten Largest Holdings/4/
- -----------------------------------------------------------------
By total net assets
<S> <C>
United International Holdings 1.6%
Allied Waste NA 1.4
Specialty Foods Acquisition 1.4
Newsquest Capital Corp. 1.3
Marcus Cable Operating Co. 1.2
Imo Industries 1.2
Shared Tech/Fairchild Inc. 1.2
Videotron UK 1.2
Diamond Cable Communications Co. 1.2
Kaiser AluminumCorp. 1.2
</TABLE>
- --------------------------------------------------------------------------------
/1/ Return does not reflect 3.75% maximum sales charge.
/2/ Returns are calculated by determining the percentage change in net asset
value with all distributions reinvested. SEC average annual returns reflect
maximum 3.75% sales charge.
Past performance is no guarantee of future results. The value of an
investment in the Fund may fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
/3/ By net assets as of 3/31/97. Sector weightings subject to change due to
active management.
/4/ Positions and holdings are as of 3/31/97 only and may not be representative
of the Fund's current or future investments. Ten largest holdings account
for 12.9% of the Fund's investments, determined by dividing the total market
value of the holdings by the total net assets of the Fund.
* It is not possible to invest directly in the Index.
2
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
Corporate Bonds & Notes -- 91.8%
<TABLE>
<CAPTION>
Principal
Amount
Security (000 omitted) Value
- -------------------------------------------------------------------------
Apparel -- 3.1%
- -------------------------------------------------------------------------
<S> <C> <C>
Anvil Knitwear, Inc, Sr. Notes,
10.875%, 3/15/07/(1)/ $ 900 $ 886,500
Collins & Aikman Corp., Sr. Sub.
Notes, 11.50%, 4/15/06 700 773,500
Dan River Inc., Sr. Sub. Notes,
10.125%, 12/15/03 1,450 1,464,500
Glenoit Corp., Sr. Sub Notes,
11.00%, 4/15/07/(1)/ 1,200 1,195,500
William Carter, Sr. Sub Notes,
10.375%, 12/1/06/(1)/ 1,000 1,010,000
- -------------------------------------------------------------------------
$ 5,330,000
- -------------------------------------------------------------------------
Auto and Parts -- 1.1%
- -------------------------------------------------------------------------
Key Plastics Inc., Sr. Notes,
14.00%, 11/15/99 $ 1,500 $ 1,665,000
Key Plastics, Inc., Sr. Notes,
10.25%, 3/15/07 200 198,500
- -------------------------------------------------------------------------
$ 1,863,500
- -------------------------------------------------------------------------
Banks - Regional -- 0.2%
- -------------------------------------------------------------------------
First Nationwide, Inc. Sr. Notes,
12.50%, 4/15/03 $ 400 $ 436,000
- -------------------------------------------------------------------------
$ 436,000
- -------------------------------------------------------------------------
Banks and Money Services -- 1.4%
- -------------------------------------------------------------------------
Hawk Corp., Sr. Notes, 10.25%,
12/1/03/(1)/ $ 1,100 $ 1,111,000
Intertek Finance PLC, Sr. Sub.
Notes, 10.25%, 11/1/06/(1)/ 1,200 1,218,000
- -------------------------------------------------------------------------
$ 2,329,000
- -------------------------------------------------------------------------
Broadcasting and Cable -- 10.8%
- -------------------------------------------------------------------------
Australis Holdings Pty Ltd., Sr.
Disc. Notes, 15.00%, (0% until
2000) 11/1/02/(1)/ $ 859 $ 502,515
Cablevision Systems Corp., Sr. Sub.
Notes, 10.75%, 4/1/04 500 513,750
Cablevision Systems Corp., Sr. Sub.
Notes, 9.25%, 11/1/05 700 665,000
Diamond Cable Communications Co.,
Sr. Disc. Notes, 13.25%, (0% until
1999), 9/30/04 400 312,000
Diamond Cable Communications Co.,
Sr. Disc. Notes, 11.75%, (0% until
2000), 12/15/05 1,700 1,088,000
Diamond Cable Communications Co.,
Sr. Disc. Notes, 10.75%, (0% until
2002), 2/15/07 1,200 648,000
Dobson Communications Corp., Sr.
Notes, 11.75%, 4/15/07/(1)/ 500 480,000
EZ Communications Inc., Sr. Sub.
Notes, 9.75%, 12/1/05 1,900 1,957,000
Groupe Videotron Ltd., Sr. Notes,
10.625%, 2/15/05 1,000 1,100,000
ICG Holdings, Inc., Sr. Sub. Notes,
11.625%, (0% until 2002) 3/15/07/(1)/ 1,400 759,500
International Cabletel, Inc., Sr.
Disc. Notes, 11.50%, (0% until
2001), 2/1/06 1,450 899,000
International Cabletel, Inc., Sr.
Notes, 10.00%, 2/15/07/(1)/ 1,000 940,000
Marcus Cable Co., Sr. Debs.,
11.875%, 10/1/05 200 208,000
Marcus Cable Co., Sr. Disc. Notes,
14.25%, (0% until 2000), 12/15/05 2,500 1,725,000
Marcus Cable Operating Co., Sr.
Disc. Notes, 13.50%, (0% until
1999), 8/1/04 200 159,000
Sullivan Broadcasting Co., Inc.,
Sr. Sub. Notes, 10.25%, 12/15/05 1,350 1,329,750
TCI Satellite Entertainment, Sr.
Sub Notes, 10.875%, 2/15/07/(1)/ 600 528,000
United International -Series B, 0%,
11/15/99 700 511,000
United International Holdings Inc.,
Sr. Sec. Disc. Notes, 0%, 11/15/99 2,910 2,124,300
Videotron Holdings PLC, Inc., Sr.
Disc. Notes, 11.00%, (0% until
1999), 8/15/05 2,600 2,054,000
- -------------------------------------------------------------------------
$ 18,503,815
- -------------------------------------------------------------------------
Building Materials -- 3.6%
- -------------------------------------------------------------------------
Building Materials Corp., Sr. Sub,
8.625%, 12/15/06 $ 200 $ 200,000
Building Materials Corp., Sr. Sub.
Notes, 11.75%, (0% until 2000),
7/1/04 1,000 887,500
Kaiser Aluminum and Chemical, Sr.
Notes, 10.875%, 10/15/06 500 520,000
Overhead Door Corp., Sr. Notes,
12.25%, 2/1/00 1,900 2,023,500
Southdown, Inc., Sr. Sub. Notes.,
10.00%, 3/1/06 1,500 1,605,000
Tarkett International, AG., Sr.
Sub. Notes, 9.00%, 3/1/02 900 915,750
- -------------------------------------------------------------------------
$ 6,151,750
- -------------------------------------------------------------------------
</TABLE>
See notes to financial statements
3
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Principal
Amount
Security (000 omitted) Value
- ---------------------------------------------------------------------------
<S> <C> <C>
Business Services -- 0.6%
- ---------------------------------------------------------------------------
Kindercare Learning Centers, Sr.
Sub. Notes, 9.50%, 2/15/09/(1)/ $ 1,000 $ 965,000
- ---------------------------------------------------------------------------
$ 965,000
- ---------------------------------------------------------------------------
Business Services - Miscellaneous -- 1.4%
- ---------------------------------------------------------------------------
Allied Waste North America, 10.25%,
12/1/06/(1)/ $ 2,400 $ 2,448,000
- ---------------------------------------------------------------------------
$ 2,448,000
- ---------------------------------------------------------------------------
Chemicals -- 5.1%
- ---------------------------------------------------------------------------
Agricultural Minerals & Chemicals
Inc., Sr. Notes, 10.75%, 9/30/03 $ 1,000 $ 1,055,000
ISP Holdings, Inc., Sr. Notes,
9.75%, 2/15/02 1,215 1,263,600
NL Industries, Inc., Sr. Notes,
11.75%, 10/15/03 1,000 1,050,000
Pioneer Americas Acq. Corp., Sr.
Notes, 13.375%, 4/1/05 1,250 1,456,250
Plastic Containers, Inc., Sr.
Notes, 10.00%, 12/15/06 600 606,000
Plastic Specialties and Tech.,
Inc., Sr. Sec. Notes, 11.25%,
12/1/03 1,550 1,674,000
Terra Industries Inc., Sr. Notes,
10.50%, 6/15/05 700 742,000
UCC Investors, Inc., Sr. Sub.
Notes, 11.00%, 5/1/03 800 848,000
- ---------------------------------------------------------------------------
$ 8,694,850
- ---------------------------------------------------------------------------
Communications Equipment -- 1.7%
- ---------------------------------------------------------------------------
Omnipoint Corp., Sr. Notes,
11.625%, 8/15/06 $ 1,200 $ 1,044,000
Pricellular Wireless Communications
Corp., Sr Sub. Disc. Nts., 12.25%,
(0% until 1998), 10/1/03 1,500 1,335,000
Pricellular Wireless Communications
Corp., Sr. Notes, 10.75%, 11/1/04 600 607,500
- ---------------------------------------------------------------------------
$ 2,986,500
- ---------------------------------------------------------------------------
Communications Services -- 9.5%
- ---------------------------------------------------------------------------
Australis Media Ltd., Sub. Disc.
Notes, 14.00%, (0% until 2000),
5/15/03 $ 1,501 $ 870,593
Brooks Fiber Properties, Inc., Sr.
Disc. Notes, 11.875%, (0% until
2001), 11/1/06 1,200 714,000
Brooks Fiber Properties. Inc., Sr.
Disc. Notes, 10.875%, (0% until
2001), 3/1/06 1,500 930,000
CS Wireless Systems, Inc., 11.375%,
(0% until 2001), 3/1/06 720 223,200
Dial Call Communications Inc., Sr.
Red. Notes, 12.25%, (0% until
1999), 4/15/04 $ 1,800 1,296,000
Echostar Satellite Broadcasting
Corp., Sr. Disc. Notes, 13.125%,
(0% until 2000), 3/15/04 1,200 948,000
Esat Holdings, Ltd., Sr. Notes,
12.50%, (0% until 2002), 2/1/07/(1)/ 800 440,000
Galaxy Telecom LP., Sr. Sub. Notes,
12.375%, 10/1/05 600 618,000
McCaw International, Ltd., 13.00%,
(0% until 2002) 4/15/07/(1)/ 1,700 794,750
McLeod Inc., Sr. Disc. Notes,
10.50%, (0% until 2000)
3/1/07/(1)/ 1,600 880,000
Microcell Telecommunication, Sr.
Disc. Notes, 14.00%, (0% until
2001), 6/1/06 2,800 1,372,000
Millicom International Cellular,
Inc., Sr. Disc. Notes, 13.50%, (0%
until 2001), 6/1/06 1,800 1,170,000
Nextlink Communications, Inc., Sr.
Notes, 12.50%, 4/15/06 1,400 1,421,000
Orion Network Systems, Inc., Sr.
Notes, 11.25%, 1/15/07 1,400 1,358,000
Orion Network Systems, Inc., Sr.
Notes, 12.50%, (0% until 2002)
1/15/07 800 400,000
Shared Tech / Fairchild, Inc., Sr.
Disc. Notes, 12.25%, (0% until
1999), 3/1/06 2,500 2,056,250
Telewest PLC, Debs., 11.00%, (0%
until 2002) 10/1/07 1,200 780,000
- ---------------------------------------------------------------------------
$ 16,271,793
- ---------------------------------------------------------------------------
Computer Software -- 1.1%
- ---------------------------------------------------------------------------
Unisys Corp., Sr. Notes, 11.75%,
10/15/04 $ 400 $ 418,000
Unisys Corp., Sr. Notes, 12.00%,
4/15/03 1,400 1,463,000
- ---------------------------------------------------------------------------
$ 1,881,000
- ---------------------------------------------------------------------------
Containers and Packaging -- 6.0%
- ---------------------------------------------------------------------------
American Pad and Paper Co., Sr.
Sub. Notes, 13.00%, 11/15/05 $ 650 $ 754,000
Asia Pulp and Paper, 12.00%,
12/29/49 1,500 1,447,500
Container Corp., Sr. Notes, 10.75%,
5/1/02 1,000 1,080,000
Fort Howard Corp., Sr. Sec. Notes,
11.00%, 1/2/02 614 626,751
Gaylord Container Corp., Sr. Sub.
Disc. Debs., 12.75%, 5/15/05 1,700 1,853,000
Repap New Brunswick, Inc, Sr.
Notes, 10.625%, 4/15/05 400 400,000
Repap Wisconsin, Inc., Sr. Notes,
9.25%, 2/1/02 800 792,000
S.D. Warren Co., Sr. Sub. Notes,
12.00%, 12/15/04 1,200 1,308,000
</TABLE>
See notes to financial statements
4
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Principal
Amount
Security (000 omitted) Value
- -------------------------------------------------------------------------
Containers and Packaging (continued)
- -------------------------------------------------------------------------
<S> <C> <C>
Silgan Corp., Sr. Sub. Notes,
11.75%, 6/15/02 $ 500 $ 535,000
Stone Container Corp., 1st Mtg.
Notes, 10.75%, 10/1/02 1,000 995,000
US Can Corp., 10.125%, 10/15/06 400 416,000
- -------------------------------------------------------------------------
$ 10,207,251
- -------------------------------------------------------------------------
Electronics - Instruments -- 1.6%
- -------------------------------------------------------------------------
Blue Bell Funding Inc., Sec. Ext.
Notes, 11.85%, 5/1/99 $ 1,138 $ 1,126,620
GS Technologies Corp., Sr. Notes,
12.25%, 10/1/05 1,500 1,560,000
- -------------------------------------------------------------------------
$ 2,686,620
- -------------------------------------------------------------------------
Entertainment -- 1.4%
- -------------------------------------------------------------------------
All American Communications, Inc.,
Sr. Sub. Notes, 10.875%, 10/15/01 $ 1,100 $ 1,133,000
Cinemark USA, Sr. Sub. Notes,
9.625%, 8/1/08 1,200 1,200,000
- -------------------------------------------------------------------------
$ 2,333,000
- -------------------------------------------------------------------------
Foods -- 6.6%
- -------------------------------------------------------------------------
Inflo Holdings Corp., Promissory
Notes, 10.00%, (0% until 1999),
1/27/07+ $ 1,100 $ 924,000
International Home Foods, Inc., Sr.
Sub. Notes, 10.375%, 11/1/06 2,000 2,015,000
Keebler Corp., Sr. Sub. Notes,
10.75%, 7/1/06 1,430 1,558,700
MBW Foods, Inc., Sr. Sub. Notes,
9.875%, 2/15/07/(1)/ 1,200 1,188,000
PM Holdings Corp., Sr. Sub. Notes,
11.50%, (0% until 2000), 9/1/05 600 432,000
Purina Mills, Inc., Sr. Sec. Sub.
Notes, 10.25%, 9/1/03 1,000 1,030,000
Specialty Foods Acquisition Corp.,
11.25%, 8/15/03 800 708,000
Specialty Foods Acquisition Corp.,
Sr. Sub. Notes, 10.25%, 8/15/01 1,500 1,466,250
Specialty Foods Aquisition Corp.,
Sr. Sub Notes, 13.00%, (0% until
1999), 8/15/05 400 186,000
Van De Kamps, Inc., Sr. Sub. Notes,
12.00%, 9/15/05 1,575 1,716,750
- -------------------------------------------------------------------------
$ 11,224,700
- -------------------------------------------------------------------------
Health Services -- 2.1%
- -------------------------------------------------------------------------
Dade International, Inc., Sr. Sub.
Notes, 11.125%, 5/1/06 $ 1,200 $ 1,362,000
Owens & Minor, Inc., Sr. Sub.
Notes, 10.875%, 6/1/06 800 862,000
Tenet Healthcare Corp., Sr. Sub.
Notes, 8.625%, 1/15/07 1,400 1,365,000
- -------------------------------------------------------------------------
$ 3,589,000
- -------------------------------------------------------------------------
Household Products -- 1.9%
- -------------------------------------------------------------------------
Lifestyle Furnishings, Inc.,
10.875%, 8/1/06 $ 1,000 $ 1,100,000
Pillowtex Corp., 10.00%, 11/15/06 600 621,000
Renaisance Cosmetics, Sr. Notes,
11.75%, 2/15/04/(1)/ 500 502,500
Revlon Worldwide, Inc., Sr.
Discount Notes, 0%, 3/15/01/(1)/ 800 496,000
Scholastic Brands, Inc., Sr. Sub
Notes, 11.00%, 1/15/07/(1)/ 500 515,000
- -------------------------------------------------------------------------
$ 3,234,500
- -------------------------------------------------------------------------
Investment Services -- 0.6%
- -------------------------------------------------------------------------
DVI, Inc., Sr. Notes, 9.875%, 2/1/04 $ 1,100 $ 1,097,250
- -------------------------------------------------------------------------
$ 1,097,250
- -------------------------------------------------------------------------
Lodging and Gaming -- 3.4%
- -------------------------------------------------------------------------
Aztar Corp., Sr. Sub. Notes,
13.75%, 10/1/04 $ 1,000 $ 1,120,000
Harvey Casinos Resorts, Sr. Sub.
Notes, 10.625%, 6/1/06 1,500 1,582,500
Showboat Marina Casino, 1st Mtg.
Notes, 13.50%, 3/15/03 1,000 1,125,000
Trump Atlantic City Associates,
Co., 1st Mtg. Notes, 11.25%, 5/1/06 1,000 910,000
Trump Holdings & Funding Inc., Sr.
Notes, 15.50%, 6/15/05 1,000 1,130,000
- -------------------------------------------------------------------------
$ 5,867,500
- -------------------------------------------------------------------------
Machinery -- 2.7%
- -------------------------------------------------------------------------
Alvey Systems, Inc., Sr. Sub.
Notes, 11.375%, 1/31/03 $ 600 $ 624,000
Amtrol Acquisition, Inc., Sr. Sub,
10.625%, 12/31/06 900 927,000
Imo Industries, Sr. Sub. Notes,
11.75%, 5/1/06 2,070 2,070,000
Motors And Gears, Inc., Sr. Notes,
10.75%, 11/15/06/(1)/ 1,000 1,012,500
- -------------------------------------------------------------------------
$ 4,633,500
- -------------------------------------------------------------------------
</TABLE>
See notes to financial statements
5
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Principal
Amount
Security (000 omitted) Value
- --------------------------------------------------------------------------------
Medical Products -- 0.8%
- --------------------------------------------------------------------------------
<S> <C> <C>
Maxxim Medical, Inc., Sr. Sub. Notes, 10.50%,
8/1/06 $ 1,300 $ 1,347,125
- --------------------------------------------------------------------------------
$ 1,347,125
- --------------------------------------------------------------------------------
Metals - Industrial -- 4.5%
- --------------------------------------------------------------------------------
AK Steel Corp., Sr. Notes, 9.125%,
12/15/06 $ 800 $ 788,000
Applied Extrusion Inc., Sr. Notes, 11.50%,
4/1/02 1,500 1,552,500
Essex Group, Inc., Sr. Notes, 10.00%,
5/1/03 1,000 1,040,000
Howmet Corp., Sr. Sub. Notes, 10.00%,
12/1/03 650 692,250
Kaiser Aluminum Corp., Sr. Sub. Notes,
12.75%, 2/1/03 1,900 2,042,500
Newflo Corp., Sub. Notes, 13.25%,
11/15/02 1,400 1,519,000
- --------------------------------------------------------------------------------
$ 7,634,250
- --------------------------------------------------------------------------------
Miscellaneous -- 4.6%
- --------------------------------------------------------------------------------
Alliant Tech Systems Inc., Sr. Sub. Notes,
11.75%, 3/1/03 $ 1,000 $ 1,070,000
Clark-Schwebel, Sr. Notes, 10.50%,
4/15/06 1,300 1,358,500
Day International Group, Inc., Sr. Sub. Notes,
11.125%, 6/1/05 1,000 1,040,000
First Nationwide Escrow, Inc., Sr. Sub. Notes,
10.625%, 10/1/03/(1)/ 1,800 1,908,000
Imax Corp., Sr. Notes, 10.00%, (7% until 1997),
3/1/01 600 606,000
Selmer Co., Inc., Sr. Sub. Notes, 11.00%,
5/15/05 1,000 1,092,500
Webb Delaware Corp., Sr. Sub. Notes, 9.75%,
1/15/08 800 800,000
- --------------------------------------------------------------------------------
$ 7,875,000
- --------------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 7.5%
- --------------------------------------------------------------------------------
AES Corp., Sr. Sub. Notes, 10.25%,
7/15/06 $ 400 $ 433,000
Cal Energy Company, Inc., Sr. Notes, 9.50%,
9/15/06 1,500 1,597,500
Chesapeake Energy Corp., Sr. Notes, 9.125%,
4/15/06 800 820,000
Clark USA, Inc., Sr. Notes, 10.875%,
12/1/05 600 615,000
Coda Energy Inc., Sr. Sub. Notes, 10.50%,
4/1/06 1,000 1,055,000
Dawson Product Services, Inc., Sr. Notes,
9.375%, 2/1/07 700 693,000
El Paso Electric Co., 1st Mtg. Notes, 9.40%,
5/1/11 650 696,787
Kelley Oil and Natural Gas Corp., 10.375%,
10/15/06 400 412,000
Mariner Energy Corp., Sr. Sub. Notes, 10.50%,
8/1/06 1,900 1,976,000
Midland Cogeneration Venture, Sr. Sec. Lease
Oblig., 10.33%, 7/23/02 684 724,596
Midland Funding II, Sec. Lease Oblig., 11.75%,
7/23/05 200 227,170
Parker Drilling Corp., Sr. Sub Notes, 9.75%,
11/15/06 600 633,000
Perez Companc, S.A., 9.00%, 1/30/04/(1)/ 1,000 985,000
Trans Texas Gas Corp., Sr. Sec. Notes, 11.50%,
6/15/02 1,100 1,204,500
Veritas DGC, Inc., Sr. Notes, 9.75%, 10/15/03 800 812,000
- --------------------------------------------------------------------------------
$ 12,884,553
- --------------------------------------------------------------------------------
Printing and Business Products -- 1.7%
- --------------------------------------------------------------------------------
MDC Communications Corp., Sr. Sub. Notes,
10.50%, 12/1/06 $ 1,300 $ 1,358,500
Monarch Acquisition Corp., Sr. Notes,
12.50%, 7/1/03 1,300 1,517,750
- --------------------------------------------------------------------------------
$ 2,876,250
- --------------------------------------------------------------------------------
Publishing -- 1.8%
- --------------------------------------------------------------------------------
Hollinger International Publications, Inc.,
Sr. Sub Notes, 9.25%, 3/15/07 $ 900 $ 864,000
Newsquest Capital Corp., Sr. Sub. Notes,
11.00%, 5/1/06 2,095 2,178,800
- --------------------------------------------------------------------------------
$ 3,042,800
- --------------------------------------------------------------------------------
Retail - Food and Drug -- 3.3%
- --------------------------------------------------------------------------------
Dominicks Finer Foods, Inc., Sr. Sub. Notes,
10.875%, 5/1/05 $ 400 $ 430,000
Duane Reade, G.P., Sr. Notes, 12.00%,
9/15/02 1,200 1,269,000
Ralphs Grocery Co., Inc., Sr. Sub. Notes,
13.75%, 6/15/05 1,500 1,605,000
Smith's Food & Drug Corp., Sr. Sub. Notes,
11.25%, 5/15/07 600 657,000
Star Markets Co., Sr. Sub. Notes, 13.00%,
11/1/04 1,550 1,736,000
- --------------------------------------------------------------------------------
$ 5,697,000
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
6
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Principal
Amount
Security (000 omitted) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Retail - General -- 1.7%
- --------------------------------------------------------------------------------
Knoll, Inc., Sr. Sub. Notes, 10.875%,
3/15/06 $ 800 $ 880,000
Levitz Furniture Corp., Sr. Sub. Notes,
9.625%, 7/15/03 450 330,750
Levitz Furniture Corp., Sr. Sub. Notes,
13.375%, 10/15/98 200 198,000
Specialty Retailers, Inc., Sr. Sub. Notes,
11.00%, 8/15/03 1,350 1,434,375
- --------------------------------------------------------------------------------
$ 2,843,125
- --------------------------------------------------------------------------------
Total Corporate Bonds & Notes
(identified cost $154,053,710) $156,934,632
- --------------------------------------------------------------------------------
</TABLE>
Preferred Stocks -- 1.9%
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Broadcasting and Cable -- 1.3%
- --------------------------------------------------------------------------------
American Radio Systems Corp., 11.375%/(1)/ 6,000 $ 603,000
Cablevision Systems Corp., 11.125%,
2/15/96 (PIK) 7,243 648,221
Chancellor Radio Broadcasting
Corp., 12.00%/(1)/ 10,000 985,000
- --------------------------------------------------------------------------------
$ 2,236,221
- --------------------------------------------------------------------------------
Communications Services -- 0.1%
- --------------------------------------------------------------------------------
Nextlink Communications, 14.00% (PIK)/(1)/ 5,500 $ 247,500
- --------------------------------------------------------------------------------
$ 247,500
- --------------------------------------------------------------------------------
Containers and Packaging -- 0.3%
- --------------------------------------------------------------------------------
S.D. Warren Co. w / Warrants, 14%,
12/15/06 12,000 $ 468,000
- --------------------------------------------------------------------------------
$ 468,000
- --------------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 0.2%
- --------------------------------------------------------------------------------
Kelley Oil and Natural Gas Corp. 10,560 $ 274,560
- --------------------------------------------------------------------------------
$ 274,560
- --------------------------------------------------------------------------------
Total Preferred Stocks
(identified cost $3,110,958) $ 3,226,281
- --------------------------------------------------------------------------------
</TABLE>
Common Stocks, Warrants and Rights-- 0.9%
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Auto and Parts -- 0.4%
- --------------------------------------------------------------------------------
Bucyrus - Erie Co., Common 87,279 $ 698,232
- --------------------------------------------------------------------------------
$ 698,232
- --------------------------------------------------------------------------------
Broadcasting and Cable -- 0.0%
- --------------------------------------------------------------------------------
American Telecasting, Inc. Warrants+* 1,400 $ 2,800
Australis Media Ltd., Warrants+* 1,300 --
United International Holdings, Inc.,
Warrants Exp. 11/15/99+* 1,960 14,210
- --------------------------------------------------------------------------------
$ 17,010
- --------------------------------------------------------------------------------
Building Materials -- 0.1%
- --------------------------------------------------------------------------------
Southdown, Inc. 4,500 $ 155,250
- --------------------------------------------------------------------------------
$ 155,250
- --------------------------------------------------------------------------------
Chemicals -- 0.1%
- --------------------------------------------------------------------------------
Crompton & Knowles Corp., Common 7,117 $ 143,223
Sterling Chemicals Holdings- Warrants+* 800 28,000
- --------------------------------------------------------------------------------
$ 171,223
- --------------------------------------------------------------------------------
Communications Equipment -- 0.0%
- --------------------------------------------------------------------------------
In Flight Phone Corp., Warrants Exp.
8/31/02+* 400 $ --
- --------------------------------------------------------------------------------
$ --
- --------------------------------------------------------------------------------
Communications Services -- 0.1%
- --------------------------------------------------------------------------------
CS Wireless Systems, Inc., Common+ 198 $ --
Microcell Telecommunication, Warrants+* 11,200 112,000
Microcell Telecommunication,
Contingent Warrants+* 11,200 7,560
Nextel Communications Warrants Exp.
04/25/99+* 1,800 450
- --------------------------------------------------------------------------------
$ 120,010
- --------------------------------------------------------------------------------
Containers and Packaging -- 0.0%
- --------------------------------------------------------------------------------
SD Warren Company, Warrants Exp.
12/15/06+* 12,000 $ 48,000
- --------------------------------------------------------------------------------
$ 48,000
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
7
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Security Shares Value
- -------------------------------------------------------------------------------
<S> <C> <C>
Foods -- 0.0%
- -------------------------------------------------------------------------------
Servam Corp., $2.00 Warrant Exp. 4/1/01+* 7,864 $ --
Servam Corp., $4.50 Warrant Exp. 4/1/01+* 1,768 --
Servam Corp., Common+* 884 --
Specialty Foods Acquisition Corp.,
Common+*/(1)/ 12,000 3,000
- -------------------------------------------------------------------------------
$ 3,000
- -------------------------------------------------------------------------------
Machinery -- 0.0%
- -------------------------------------------------------------------------------
Thermadyne Holdings Corp., Common+* 777 $ 21,076
- -------------------------------------------------------------------------------
$ 21,076
- -------------------------------------------------------------------------------
Metals - Industrial -- 0.2%
- -------------------------------------------------------------------------------
Gulf States Steel, Warrants+* 600 $ 30
Terex Corp., Rights, Exp. 7/1/97+* 1,791 179
Terex Warrants, Exp. 12/31/00+* 8,000 256,000
Triangle Wire & Cable, Inc., Common+* 31,667 63,334
- -------------------------------------------------------------------------------
$ 319,543
- -------------------------------------------------------------------------------
Total Common Stocks, Warrants and Rights
(identified cost $2,468,673) $ 1,553,344
- -------------------------------------------------------------------------------
</TABLE>
Short-Term Investments -- 4.4%
<TABLE>
<CAPTION>
Principal
Amount
Security (000 omitted) Value
- -------------------------------------------------------------------------------
<S> <C> <C>
Associates Corp. of North America, 6.8%,
4/1/97 $ 7,435 $ 7,435,000
- -------------------------------------------------------------------------------
Total Short-Term Investments
(at amortized cost) $ 7,435,000
- -------------------------------------------------------------------------------
Total Investments -- 99.0%
(identified cost $167,068,341) $169,149,257
- -------------------------------------------------------------------------------
Other Assets, Less Liabilities-- 1.0% $ 1,786,457
- -------------------------------------------------------------------------------
Net Assets-- 100% $170,935,714
- -------------------------------------------------------------------------------
</TABLE>
/(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 March 31,
1997, the value of these securities amounted to $21,342,486 or 12.5% of
net assets.
+ Restricted security (Note 8).
* Non-income producing security.
See notes to financial statements
8
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
<TABLE>
As of March 31, 1997
Assets
- --------------------------------------------------------------------------------
<S> <C>
Investment at value (Note 1A)
(identified cost, $167,068,341) $169,149,257
Cash 2,064
Receivable for investments sold 366,071
Receivable for Trust shares sold 1,041,287
Interest receivable 4,068,928
- --------------------------------------------------------------------------------
Total assets $174,627,607
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for investments purchased $ 2,315,472
Payable for Trust shares redeemed 489,158
Distributions payable 778,503
Payable to affiliate for Trustees' fees (Note 4) 6,000
Accrued expenses 102,760
- --------------------------------------------------------------------------------
Total liabilities $ 3,691,893
- --------------------------------------------------------------------------------
Net Assets for 21,159,408 shares of beneficial
interest outstanding $170,935,714
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Paid-in capital $187,258,873
Accumulated net realized loss on investments
(computed on the basis of identified cost) (17,523,889)
Accumulated distributions in excess of net
investment income (880,186)
Net unrealized appreciation of investments
(computed on the basis of identified cost) 2,080,916
- --------------------------------------------------------------------------------
Total $170,935,714
- --------------------------------------------------------------------------------
Net Asset Value and Redemption
Price Per Share
- --------------------------------------------------------------------------------
($170,935,714 / 21,159,408 shares of
beneficial interest outstanding) $ 8.08
- --------------------------------------------------------------------------------
Computation of Offering Price
- --------------------------------------------------------------------------------
Offering price per share (100 / 96.25 of $8.08) $ 8.39
- --------------------------------------------------------------------------------
On sales of $50,000 or more, the offering price is reduced.
</TABLE>
Statement of Operations
<TABLE>
<CAPTION>
For the Six Months Ended
March 31, 1997
Investment Income (Note 1B)
- --------------------------------------------------------------------------------
<S> <C> <C>
Dividends $ 422
Interest 8,290,299
Miscellaneous income 179,302
- --------------------------------------------------------------------------------
Total investment income $ 8,470,023
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 4) $ 493,418
Compensation of Trustees not members of the
Investment Adviser's organization 12,013
Service fees (Note 5) 109,365
Custodian fee 50,827
Transfer and dividend disbursing agent fees 68,250
Printing and postage 30,598
Legal and accounting services 22,154
Registration fees 38,964
Miscellaneous 15,003
- --------------------------------------------------------------------------------
Total expenses $ 840,592
- --------------------------------------------------------------------------------
Net investment income $ 7,629,431
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ (1,145,933)
- --------------------------------------------------------------------------------
Net realized loss on investment transactions $ (1,145,933)
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ (146,832)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments $ (146,832)
- --------------------------------------------------------------------------------
Net realized and unrealized loss on investments $ (1,292,765)
- --------------------------------------------------------------------------------
Net increase in net assets from operations $ 6,336,666
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
9
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
Increase (Decrease) March 31, 1997 Year Ended
in Net Assets (Unaudited) September 30, 1996
- ----------------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment income $ 7,629,431 $ 12,162,914
Net realized loss on
investment transactions (1,145,933) (1,311,602)
Change in unrealized appreciation
(depreciation) of investments (146,832) 4,839,422
- ----------------------------------------------------------------------------------------
Net increase in net assets
from operations $ 6,336,666 $ 15,690,734
- ----------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income $ (7,604,582) $ (12,162,914)
In excess of net investment income -- (180,838)
- ----------------------------------------------------------------------------------------
Total distributions to shareholders $ (7,604,582) $ (12,343,752)
- ----------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest (Note 2) --
Proceeds from sales of shares $ 47,064,731 $ 45,698,870
Net asset value of shares issued to
shareholders in payment of
distributions declared 3,571,069 6,333,668
Cost of shares redeemed (22,275,888) (17,949,773)
- ----------------------------------------------------------------------------------------
Net increase in net assets from Trust
share transactions $ 28,359,912 $ 34,082,765
- ----------------------------------------------------------------------------------------
Net increase in net assets $ 27,091,996 $ 37,429,747
- ----------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------
At beginning of period $ 143,843,718 $ 106,413,971
- ----------------------------------------------------------------------------------------
At end of period $ 170,935,714 $ 143,843,718
- ----------------------------------------------------------------------------------------
Accumulated distributions
in excess of net
investment income
included in net assets
- ----------------------------------------------------------------------------------------
At end of period $ (880,186) $ (905,035)
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
10
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended Year Ended September 30,
March 31, 1997 -------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.12 $ 7.92 $ 7.90 $ 8.40 $ 8.33 $ 7.56
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.41 $ 0.80 $ 0.82 $ 0.83 $ 0.92 $ 0.97
Net realized and unrealized gain (loss) on investments (0.05) 0.21 0.02 (0.47) 0.07 0.77
- ------------------------------------------------------------------------------------------------------------------------------------
Total income from operations $ 0.36 $ 1.01 $ 0.84 $ 0.36 $ 0.99 $ 1.74
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.40) $ (0.80) $ (0.82) $ (0.81) $ (0.92) $ (0.97)
In excess of net investment income -- (0.01) -- (0.05) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.40) $ (0.81) $ (0.82) $ (0.86) $ (0.92) $ (0.97)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.08 $ 8.12 $ 7.92 $ 7.90 $ 8.40 $ 8.33
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 4.42% 13.41% 11.25% 4.25% 12.59% 24.25%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $170,936 $143,844 $106,414 $103,482 $95,123 $85,778
Ratio of net expenses to average daily net assets 1.07%+ 1.07% 1.09% 1.04% 1.03% 1.08%
Ratio of net investment income to average daily net assets 9.69%+ 9.96% 10.50% 9.75% 11.01% 12.02%
Portfolio Turnover 41% 81% 84% 70% 102% 90%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
/(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. Total return
is computed on a non-annualized basis.
See notes to financial statements
11
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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
NASDAQ 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, 1996, the Trust, for federal
income tax purposes, had a capital loss carryover of $15,003,963 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), 2003 ($1,177) and 2004
($2,446,478). Additionally, at September 30, 1996, net capital losses of
$1,318,745 attributable to security transactions incurred after October 31,
1995, are treated as arising on the first day of the Trust's current 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 Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
F Other -- Investment transactions are accounted for on the date the
investments are purchased or sold. Gains and losses on securities sold are
determined on the basis of identified cost.
G Expense Reduction -- Investors Bank and Trust Company (IBT) serves as
custodian of the Fund. Pursuant to the Custodian Agreement, IBT receives a
fee reduced by credits which are determined based on the average daily cash
balance the Trust maintains with IBT. Any significant credit balance used to
reduce the Trust's custodian fee is reflected as a reduction of operating
expenses in the Statement of Operations.
12
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
H Interim Financial Information -- The interim financial statements relating
to March 31, 1997 and for the six-month period 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 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:
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1997 Year Ended
(Unaudited) September 30, 1996
----------------------------------------------------------------------------
<S> <C> <C>
Sales 5,732,828 5,726,284
Issued to shareholders
electing to receive
payment of distributions
in Trust shares 436,650 793,091
Redemptions (2,715,739) (2,248,018)
----------------------------------------------------------------------------
Net increase 3,453,739 4,271,357
----------------------------------------------------------------------------
</TABLE>
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 $86,375,897 and $61,701,091, respectively, for the
six months ended March 31, 1997.
4 Investment Adviser Fee and Other Transactions with Affiliates
----------------------------------------------------------------------------
The investment adviser fee, computed at a 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. (EVD), a subsidiary of EVM and the
Trust's principal underwriter, did not receive any of the sales charge on
sales of Trust shares during the six months ended March 31, 1997. Certain of
the officers and Trustees of the Trust are officers and directors/trustees
of the above organizations.
5 Service Plan
----------------------------------------------------------------------------
The Trustees on behalf of the Trust have adopted a Service Plan (the Plan)
designed to meet the 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
initially implemented the Plan by authorizing the Trust 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 $109,365 under the Plan to the Principal
Underwriter and Authorized Firms during the six months ended March 31, 1997.
6 Line of Credit
----------------------------------------------------------------------------
The Trust participates with other funds and portfolios managed by EVM and
its affiliates in a $120 million unsecured line of credit agreement with a
group of banks. 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 or portfolio based on its borrowings at the
bank's base rate or at an amount above either the bank's adjusted
certificate of deposit rate, Eurodollar rate or federal funds effective
rate. In addition, a fee computed at an annual rate of 0.15% on the daily
unused portion of the facility is allocated among the participating funds
and portfolios at the end of each quarter. The Trust did not have any
significant borrowings or allocated fees during the six months ended March
31, 1997.
7 Federal Income Tax Basis of Investments
----------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the
investments owned at March 31, 1997, as computed on a federal income tax
basis, were as follows:
<TABLE>
<S> <C>
Aggregate cost $ 167,123,589
-----------------------------------------------------------------------
Gross unrealized appreciation $ 5,887,367
Gross unrealized depreciation (3,861,699)
-----------------------------------------------------------------------
Net unrealized appreciation $ 2,025,668
-----------------------------------------------------------------------
</TABLE>
13
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
8 Restricted Securities
----------------------------------------------------------------------------
At March 31, 1997, The Trust owned the following securities (representing
0.86% of net assets) which were restricted as to public resale and not
registered under the Securities Act of 1933 (excluding Rule 144A
Securities). 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>
Date of
Description Acquisition Shares/Face Cost Fair Value
--------------------------------------------------------------------------
Corporate Note
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Inflo Holdings Corp,
Promissory Note, 10%,
1/27/07 9/13/96 1,100,000 $ 773,226 $ 924,000
Common Stocks, Warrants, and Rights
--------------------------------------------------------------------------
American Telecasting,
Inc., Wts. 1/16/96 1,400 $ 38,500 $ 2,800
Australis Media Ltd.,
Wts. 5/26/95 1,300 0 0
CS Wireless Systems,
Inc, Common 1/14/97 198 0 0
Gulf States Steel, Wts 8/23/95 600 0 30
In Flight Phone Corp,
Wts, 8/31/02 11/28/95 400 0 0
Microcell
Telecommunication,
Wts 10/29/96 11,200 0 112,000
Microcell
Telecommunication,
Wts 10/29/96 11,200 0 7,560
Nextel Communications
Wts, 4/25/99 10/4/94 1,800 0 450
SD Warren Co.,
Wts, 12/15/06 5/15/95 12,000 0 48,000
Servam Corp, Wts,
$2.00 4/1/01 12/15/87 7,864 0 0
Servam Corp, Wts,
$4.50 4/1/01 12/15/87 1,768 0 0
Servam Corp., Common 12/15/87 884 0 0
Sterling Chemicals
Holdings, Wts 10/11/96 800 0 28,000
Terex Corp., Rights,
Exp 7/1/97 11/7/94 1,791 0 179
Terex Warrants,
Exp 12/31/00 12/20/93 8,000 1,600 256,000
Thermadyne Holdings
Corp., Common 5/17/94 777 18,900 21,076
Triangle Wire & Cable
Inc., Common 5/2/94 31,667 750,000 63,334
United International
Holdings, Inc, Wts,
exp. 11/15/99 11/16/94 1,960 55,546 14,210
--------------------------------------------------------------------------
$1,637,772 $1 ,477,639
--------------------------------------------------------------------------
</TABLE>
14
<PAGE>
Eaton Vance Income Fund of Boston as of March 31, 1997
INVESTMENT MANAGEMENT
Eaton Vance Income Fund of Boston
Officers
M. Dozier Gardner
President and Trustee
Hooker Talcott, Jr.
Vice President and
Co-Portfolio Manager
Michael W. Weilheimer
Vice President and
Co-Portfolio Manager
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Independent Trustees
Kenneth C. Knight
Consultant
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Robert Gluck
Management Consultant
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
15
<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
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
Transfer Agent
First Data Investor Services Group, Inc.
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
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, MA 02109
Eaton Vance Income Fund of Boston
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution plan,
sales charges and expenses. Please read the prospectus carefully before you
invest or send money.
- --------------------------------------------------------------------------------
