<PAGE>
[LOGO]
INVESTING FOR THE 21ST CENTURY-Registered Trademark-
ANNUAL REPORT SEPTEMBER 30, 2000
EATON VANCE
INCOME
FUND
OF
BOSTON
[PICTURE OF MAN ON A HORSE]
[EATON VANCE LOGO]
[PICTURE OF BUILDINGS]
[PICTURES OF STOCK CERTIFICATES]
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
--------------------------------------------------------------------------------
[PICTURE OF JAMES B. HAWKES]
James B. Hawkes
President
Eaton Vance Income Fund of Boston Class A shares had a total return of 5.01% for
the year ended September 30, 2000.(1) That return was the result of a decrease
in net asset value per share from $8.16 on September 30, 1999 to $7.75 on
September 30, 2000, and the reinvestment of $0.824 in dividends.
The Fund's Class I shares had a total return of 5.07%. That return was the
result of a decrease in NAV from $9.71 on September 30, 1999 to $9.21 on
September 30, 2000, and the reinvestment of $0.997 in dividends.
Based on the Fund's most recent distributions and NAVs of $7.75 for Class A
and $9.21 for Class I, Class A and Class I had distribution rates of 10.81%
and 11.02%, respectively, on September 30, 2000.(2) The Class A and Class I
30-day SEC yields were 10.42% and 11.20%, respectively, at September 30,
2000.(3)
AMID SOME UNCERTAINTIES, HIGH-YIELD INVESTORS HAVE FACED A DIFFICULT ENVIRONMENT
IN 2000...
High-yield bond investors faced many uncertainties in 2000, including rising oil
prices, declines in technology company profits and increasing stock market
volatility. These factors created a challenging climate and contributed to
reduced market liquidity. However, while the market reacted negatively to these
trends, the economy remained in fundamentally sound condition. Gross domestic
product continued to expand, generating impressive job growth. Meanwhile,
inflation remained in check.
INCOME FUND OF BOSTON AGAIN OUTPERFORMED ITS PEER GROUP...
The Fund's Class A shares outperformed the average 0.00% return of its High
Yield Fund peer group, according to Lipper Inc., a nationally recognized monitor
of mutual fund performance. The Fund's long-term performance has been even more
compelling. For the five-year period ended September 30, 2000, the Fund's Class
A shares ranked 1st of 45 funds in the High Yield Fund classification.(4)
WE BELIEVE THAT THE RECENT MARKET WEAKNESS COULD REPRESENT A BUYING OPPORTUNITY
FOR HIGH-YIELD INVESTORS...
We believe that market corrections are healthy, ironing out excesses and
adjusting valuations. With high-yield bonds sure to remain a major financing
component for industry, the Fund will continue to pursue promising opportunities
in this sector. In the pages that follow, co-portfolio managers Michael
Weilheimer and Thomas Huggins review the past year in the high-yield markets and
offer their outlook for the coming year.
Sincerely,
/s/ James B. Hawkes
James B. Hawkes
President
November 9, 2000
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FUND INFORMATION
AS OF SEPTEMBER 30, 2000
PERFORMANCE(5) CLASS A CLASS I
--------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
--------------------------------------------------------------------------------
<S> <C> <C>
One Year 5.01% 5.07%
Five Years 9.64 N.A.
Ten Years 12.71 N.A.
Life of Fund 9.93 4.38%
SEC Average Annual Total Returns (including sales charge)
--------------------------------------------------------------------------------
One Year -0.03% 5.07%
Five Years 8.59 N.A.
Ten Years 12.17 N.A.
Life of Fund+ 9.74 4.38%
</TABLE>
+ Inception dates: Class A: 6/15/72; Class I: 7/1/99
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS(6)
--------------------------------------------------------------------------------
<S> <C>
NTL Communications Corp. 3.3%
Exodus Communications, Inc. 2.2
Versatel Telecom B.V. 1.9
Spectrasite Holdings, Inc. 1.8
Park Place Entertainment 1.8
Covad Communications Corp. 1.6
PSINet, Inc. 1.6
Allied Waste 1.5
Nextel Communications, Inc. 1.4
Mandalay Resort group 1.4
</TABLE>
(1) This return does not include the Fund's maximum 4.75% sales charge. Class A
and Class I shares redeemed within 3 months of purchase, including
exchanges, are subject to a 1% redemption fee, which is not reflected in
this return.
(2) The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.
(3) The Fund's SEC yield is calculated by dividing the net investment income
per share for the 30-day period by the offering price at the end of the
period and annualizing the result.
(4) Source: Lipper Inc. For the one-year, three-year, and 10-year periods,
Income Fund of Boston Class A shares ranked 11 (of 95 funds), 1 (of 62
funds), and 1 (of 35 funds), respectively. Rankings are based on percent
change in net asset value and do not take sales charges into consideration.
Rankings for other Classes will vary. Past performance is no guarantee of
future results. It is not possible to invest directly in an Index or Lipper
Classification.
(5) Returns are calculated by determining the percentage change in net asset
value (NAV) with all distributions reinvested. SEC returns reflect maximum
sales charge as noted.
(6) Ten largest holdings account for 18.5% of the Fund's net assets, determined
by dividing the total market value of the holdings by the total net assets
of the Fund. Holdings are subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
2
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
MANAGEMENT DISCUSSION
--------------------------------------------------------------------------------
AN INTERVIEW WITH
MICHAEL W. WEILHEIMER AND
THOMAS HUGGINS,
CO-PORTFOLIO MANAGERS OF
INCOME FUND OF BOSTON.
[PICTURE OF MICHAEL W. WEILHEIMER]
Michael W. Weilheimer
Co-Portfolio Manager
[PICTURE OF THOMAS HUGGINS]
Thomas Huggins
Co-Portfolio Manager
Q: MIKE, IN A DIFFICULT HIGH YIELD MARKET, THE FUND OUTPERFORMED ITS BENCHMARK.
WHAT EXPLAINS THE FUND'S STRONG RELATIVE PERFORMANCE?
A: MR. WEILHEIMER: In the first half of the fiscal year, the Fund was helped by
an over weighting in telecom bonds, which has historically been a defensive
sector. However, in the second half of the fiscal year, the telecom sector
came under the pressure of falling equity prices. With many telecom companies
strapped for cash to complete the build-out of their networks, telecom bond
prices declined significantly.
While the Fund felt the impact of that decline, we were able to temper the
effect somewhat with a larger cash position and an increase in the Fund's
exposure to BB rated credits from 3% to 13.6%. Finally, the Fund was
helped by its energy bonds, which responded to rising oil prices, and by
the Fund's casino and resort bonds, which have benefited from the strong
economy and brisk tourist traffic.
Q: YOU MENTIONED AN OVERWEIGHTING IN TELECOMMUNICATION BONDS. WHERE HAVE YOU
INVESTED IN THE SECTOR?
A: MR. HUGGINS: We believe that increasing competition and technological
innovation have hastened the transition from voice orientation to data and
bandwidth services. Data traffic has doubled roughly every six months, while
broadband provides the capacity to offer a wide range of new services,
including Internet, messaging, e-commerce, audio/visual on demand, and
teleconferencing. These new services are likely to alter the way consumers
and businesses utilize phone services and represent major new revenue
opportunities for telecom companies.
In the domestic wireless sector, Nextel provides wireless phone services
throughout the U.S. The company has achieved very strong subscriber growth
in recent years, enrolling more than 540,000 new customers in the third
quarter alone. Historically, Nextel has consistently generated higher
revenues and cash flow per subscriber than its rivals. In addition, in an
industry characterized by increasing consolidation, we feel the company's
superior business model has made it an attractive acquisition candidate.
--------------------------------------------------------------------------------
PORTFOLIO CREDIT QUALITY RATINGS(1)
---------------------------------------------
[CHART]
<TABLE>
<S> <C>
B 59.0%
BB 13.6%
CCC 11.5%
AAA 10.4%
NON-RATED 4.4%
BBB & A 1.1%
</TABLE>
FIVE LARGEST SECTOR WEIGHTINGS(1)
---------------------------------------------
[GRAPH]
<TABLE>
<S> <C>
WIRELINE COMMUNICATIONS SERVICES 15.1%
BROADCASTING & CABLE 11.6%
WIRELESS COMMUNICATIONS SERVICES 8.2%
LODGING & GAMING 8.0%
INFORMATION TECHNOLOGY SERVICES 7.6%
</TABLE>
(1) Five largest Sector Weightings account for 50.5% of the Fund's investments,
determined by dividing the total market value of the holdings by the total
net assets of the Fund. Because the Fund is actively managed, Credit Quality
Ratings and Sector Weightings and Portfolio holdings are subject to change.
Credit ratings are those provided by Moody's, Inc., a nationally recognized
bond rating service.
--------------------------------------------------------------------------------
MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED. YIELD WILL
VARY.
--------------------------------------------------------------------------------
3
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
MANAGEMENT DISCUSSION CONT'D
--------------------------------------------------------------------------------
In Europe, Versatel Telecom BV is a fast-growing provider of voice, data and
Internet services in Belgium, the Netherlands, and northern Germany. The company
has significantly increased its business and carrier product offerings, thus
expanding its customer base and revenue sources. Versatel's revenues for the
first half of 2000 quadrupled with the introduction of new data and Internet
services as well as two strategic acquisitions.
Q: YOU MENTIONED THE FIERCE COMPETITION IN THE TELECOM INDUSTRY. IS THERE ANY
WAY TO TAKE ADVANTAGE OF THAT COMPETITION?
A: MR. HUGGINS: Yes. Another telecom area where the Fund has been active is
network services. Spectrasite Holdings, Inc. is among the nation's largest
operators of antennae sites for wireless telecom and broadcast companies.
These sites are a critical component of the wireless infrastructure and
operators may lease space on their towers to several companies.
Spectrasite's customers include AT&T, Nextel, Sprint and many others. The
company's prospects improved further with the recent announcement that it
purchased from SBCCommunications 3,900 additional towers. This agreement
marks an important strategic alliance with one of the nation's
fastest-growing regional Bell operating companies. For the first half of
2000, Spectrasite's revenues rose nine-fold.
Q: THE FUND CONTINUED TO HAVE A LARGE EXPOSURE TO BROADCASTING AND CABLE. WHAT
COMPANIES DID YOU FIND ATTRACTIVE IN THE CABLE SECTOR?
A: MR. WEILHEIMER: The Fund maintained its exposure to European cable operators
that we began last year. For example, NTL, Ltd. is the second largest cable
operator in Europe, with a fiber optic network passing 8.2 million homes. NTL
has a faster growth rate than U.S. companies and has been able to package
cable television service together with local telephone services and Internet,
providing the company with alternative sources of incomes. The company
received an equity infusion of $8 billion from France Telecom and was among
the few cable operators to be able to issue new bonds in recent months. We
believe that NTL is a good candidate for a credit upgrade in coming years.
Another U.K.-based operator, Telewest Communication PLC, delivers cable
and other services over a highly advanced broadband network. With 1.6
million residential customers, Telewest is the U.K.'s second largest cable
operator. The company saw revenues rise 32% in the first half of 2000,
helped by growth in subscribers and the acquisition of Flextech, one of
Britain's leading pay-TV providers.
Q: YOU INDICATED THAT THE FUND HAD INVESTMENTS IN THE RESORT AND GAMING SECTOR.
WHAT ARE YOUR LARGEST INVESTMENTS THERE?
A: MR. HUGGINS: Mandalay Resort Group is among the largest hotel-casino
operators in the U.S., operating 16 upscale, creative destination resorts
with 27,000 rooms. In a strong economy, the Las Vegas gaming market has
remained robust, and Mandalay's properties have fared very well to date. In
addition to its marquee properties in Las Vegas, Mandalay has enjoyed some
successes with its new MotorCity Casino in Detroit and its Grand Victoria
gaming vessel in Illinois. For the first half of 2000, the company saw a
strong revenue increase, reflecting increased visitor traffic and higher room
rates.
MGM Grand was another large resort investment. MGM has doubled revenues in
2000 due in part to the completion of its acquisition of Mirage Resorts, the
largest merger in industry history. MGM has continued to sell off
non-strategic assets - $200 million since May alone - with the proceeds used
to retire debt and strengthen the company's balance sheet.
Elsewhere in the gaming sector, the Fund had an investment in Hollywood
Casinos, representing the increasing geographical diversity within the gaming
industry. Hollywood's Aurora casino benefits from its location in the
affluent suburbs north of Chicago. The company also operates a gaming and
entertainment complex in Tunica County, Mississippi. Finally,
4
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
MANAGEMENT DISCUSSION CONT'D
--------------------------------------------------------------------------------
Hollywood is building a destination resort in the fast-growing gaming market
of Shreveport, Louisiana. The company posted record revenue growth in the
third quarter of 2000.
Q: AND WHERE HAVE YOU INVESTED IN THE ENERGY SECTOR?
A: MR. WEILHEIMER: R&B Falcon has benefited from rising oil prices in 2000, as
exploration companies have increased their budgets. The company operates 139
mobile offshore drilling units and marine barges in facilities around the
world. In August, Falcon agreed to a merger with Transocean Sedco Forex, a
combination that would result in the world's third largest oilfield services
company. The merger is expected to result in significant cost savings and a
lower debt-to-capitalization ratio for the combined company.
Universal Compression rents compression equipment to providers of natural
gas. The company has enjoyed strong revenue and cash flow growth amid
rising domestic demand for natural gas. Universal has also increased its
international business, including its first commitment in Mexico. The
recent acquisition of Weatherford Global Compression makes Universal the
world's second largest gas compression company and should enhance credit
quality dramatically.
Q: WHAT IS YOUR OUTLOOK FOR THE HIGH-YIELD BOND MARKET IN THE COMING YEAR?
A: MR. WEILHEIMER: Over the near-term, the high-yield market has some hurdles to
overcome, including softer corporate profits, weakness in the equity markets
and high oil prices. Those issues will need resolution for the market to make
a sustained advance. However, we believe that the market pullback has
uncovered some promising opportunities. Currently, high-yield bond spreads
remain extraordinarily wide by historical standards - around 800 basis points
(8.0%) over similar maturity Treasury bonds. As for the long-term outlook,
high-yield bonds remain an important financing mechanism for key industries.
We believe that over time, the current hurdles will be overcome and that the
Fund is well-positioned to take advantage of opportunities in coming years.
[EDGAR REPRESENTATION OF PRINTED GRAPHIC]
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE INCOME
FUND OF BOSTON, CLASS A VS. THE CS FIRST BOSTON GLOBAL HIGH YIELD BOND INDEX*
September 30, 1990 -- September 30, 2000
<TABLE>
<CAPTION>
DATE EVIBX EVIBX/SC CSFB INDEX
<S> <C> <C> <C>
9/30/1990 $10,000 $9,522 $10,000
10/31/1990 $9,705 $9,248 $9,749
11/30/1990 $9,538 $9,089 $9,945
12/31/1990 $9,500 $9,053 $9,992
1/31/1991 $9,477 $9,030 $10,266
2/28/1991 $10,085 $9,610 $11,152
3/31/1991 $10,630 $10,130 $11,843
4/30/1991 $11,463 $10,924 $12,334
5/31/1991 $11,524 $10,982 $12,396
6/30/1991 $11,858 $11,299 $12,721
7/31/1991 $12,348 $11,766 $13,151
8/31/1991 $12,544 $11,953 $13,390
9/30/1991 $12,872 $12,266 $13,695
10/31/1991 $13,328 $12,701 $14,148
11/30/1991 $13,489 $12,854 $14,261
12/31/1991 $13,570 $12,931 $14,365
1/31/1992 $14,139 $13,473 $14,950
2/29/1992 $14,474 $13,792 $15,313
3/31/1992 $14,816 $14,118 $15,541
4/30/1992 $15,011 $14,304 $15,554
5/31/1992 $15,177 $14,462 $15,765
6/30/1992 $15,413 $14,687 $15,922
7/31/1992 $15,657 $14,919 $16,167
8/31/1992 $15,865 $15,118 $16,390
9/30/1992 $15,994 $15,241 $16,497
10/31/1992 $15,822 $15,077 $16,325
11/30/1992 $15,895 $15,147 $16,570
12/31/1992 $16,050 $15,294 $16,757
1/31/1993 $16,423 $15,650 $17,215
2/28/1993 $16,765 $15,976 $17,556
3/31/1993 $17,005 $16,204 $17,926
4/30/1993 $17,160 $16,352 $18,028
5/31/1993 $17,424 $16,604 $18,291
6/30/1993 $17,784 $16,947 $18,623
7/31/1993 $17,965 $17,119 $18,816
8/31/1993 $18,020 $17,172 $18,976
9/30/1993 $18,008 $17,160 $19,084
10/31/1993 $18,407 $17,540 $19,434
11/30/1993 $18,654 $17,775 $19,678
12/31/1993 $18,935 $18,043 $19,926
1/31/1994 $19,373 $18,461 $20,281
2/28/1994 $19,521 $18,602 $20,311
3/31/1994 $18,948 $18,056 $19,714
4/30/1994 $18,726 $17,844 $19,450
5/31/1994 $18,826 $17,939 $19,561
6/30/1994 $18,914 $18,023 $19,430
7/31/1994 $18,845 $17,958 $19,521
8/31/1994 $18,777 $17,892 $19,662
9/30/1994 $18,772 $17,888 $19,740
10/31/1994 $18,797 $17,912 $19,754
11/30/1994 $18,573 $17,699 $19,525
12/31/1994 $18,691 $17,811 $19,732
1/31/1995 $18,859 $17,971 $19,939
2/28/1995 $19,308 $18,398 $20,430
3/31/1995 $19,404 $18,490 $20,661
4/30/1995 $19,946 $19,007 $21,119
5/31/1995 $20,452 $19,489 $21,715
6/30/1995 $20,473 $19,509 $21,858
7/31/1995 $20,834 $19,853 $22,197
8/31/1995 $20,758 $19,780 $22,259
9/30/1995 $20,884 $19,900 $22,515
10/31/1995 $20,991 $20,002 $22,765
11/30/1995 $21,199 $20,200 $22,872
12/31/1995 $21,549 $20,534 $23,162
1/31/1996 $21,950 $20,916 $23,603
2/29/1996 $22,315 $21,264 $23,728
3/31/1996 $22,173 $21,128 $23,664
4/30/1996 $22,328 $21,277 $23,791
5/31/1996 $22,575 $21,512 $23,984
6/30/1996 $22,592 $21,528 $24,037
7/31/1996 $22,755 $21,683 $24,253
8/31/1996 $23,120 $22,031 $24,518
9/30/1996 $23,685 $22,570 $24,939
10/31/1996 $23,765 $22,645 $25,149
11/30/1996 $24,162 $23,024 $25,541
12/31/1996 $24,510 $23,356 $26,039
1/31/1997 $24,801 $23,634 $26,229
2/28/1997 $25,256 $24,067 $26,722
3/31/1997 $24,733 $23,568 $26,423
4/30/1997 $25,018 $23,840 $26,658
5/31/1997 $25,713 $24,502 $27,194
6/30/1997 $26,251 $25,015 $27,564
7/31/1997 $27,019 $25,747 $28,148
8/31/1997 $27,194 $25,913 $28,300
9/30/1997 $27,871 $26,559 $28,861
10/31/1997 $27,856 $26,544 $28,858
11/30/1997 $28,060 $26,738 $29,063
12/31/1997 $28,500 $27,157 $29,327
1/31/1998 $29,237 $27,861 $29,826
2/28/1998 $29,597 $28,203 $30,058
3/31/1998 $30,114 $28,696 $30,209
4/30/1998 $30,262 $28,836 $30,435
5/31/1998 $30,289 $28,863 $30,526
6/30/1998 $30,343 $28,915 $30,591
7/31/1998 $30,543 $29,104 $30,805
8/31/1998 $28,192 $26,865 $28,713
9/30/1998 $28,144 $26,818 $28,710
10/31/1998 $27,401 $26,111 $28,139
11/30/1998 $29,296 $27,917 $29,565
12/31/1998 $29,326 $27,945 $29,497
1/31/1999 $30,074 $28,658 $29,775
2/28/1999 $30,406 $28,974 $29,712
3/31/1999 $31,093 $29,629 $29,983
4/30/1999 $31,998 $30,491 $30,645
5/31/1999 $31,620 $30,131 $30,314
6/30/1999 $31,643 $30,153 $30,329
7/31/1999 $31,867 $30,366 $30,345
8/31/1999 $31,599 $30,111 $30,074
9/30/1999 $31,512 $30,028 $29,843
10/31/1999 $31,741 $30,247 $29,697
11/30/1999 $32,432 $30,905 $30,101
12/31/1999 $32,901 $31,352 $30,465
1/31/2000 $33,413 $31,839 $30,343
2/29/2000 $34,230 $32,618 $30,531
3/31/2000 $33,785 $32,194 $30,073
4/30/2000 $33,692 $32,105 $30,028
5/31/2000 $33,239 $31,674 $29,547
6/30/2000 $33,724 $32,136 $30,209
7/31/2000 $33,604 $32,021 $30,493
8/31/2000 $33,860 $32,265 $30,698
9/30/2000 $33,092 $31,534 $30,415
</TABLE>
<TABLE>
<CAPTION>
PERFORMANCE+ CLASS A CLASS I
--------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
--------------------------------------------------------------------------------
<S> <C> <C>
One Year 5.01% 5.07%
Five Years 9.64 N.A.
Ten Years 12.71 N.A.
Life of Fund++ 9.93 4.38%
SEC Average Annual Total Returns (including sales charge)
--------------------------------------------------------------------------------
One Year -0.03% 5.07%
Five Years 8.59 N.A.
Ten Years 12.17 N.A.
Life of Fund++ 9.74 4.38%
</TABLE>
++ Inception dates: Class A: 6/15/72; Class I: 7/1/99
* Source: TowersData, Bethesda, MD.; CS First Boston, Inc.
The chart compares the Fund's total return with that of the CS First Boston
Global High Yield Bond Index, a broad-based, unmanaged market index of
high-yield corporate bonds. The lines on the chart represent the total returns
of $10,000 hypothetical investments in the Fund and the Index. The Index's
total return does not reflect commissions or expenses that would have been
incurred if an investor individually purchased or sold the securities
represented in the Index. It is not possible to invest directly in an Index.
An investment in the Fund's Class I shares on 7/1/99 at net asset value would
have been worth $10,452 on September 30, 2000.
+ Returns are calculated by determining the percentage change in net asset
value (NAV) with all distributions reinvested. SEC returns reflect maximum
sales charge of 4.75%.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
5
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
PORTFOLIO OF INVESTMENTS
CORPORATE BONDS & NOTES -- 81.0%
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Aerospace and Defense -- 0.4%
-----------------------------------------------------------------------------
Dunlop Stand Aero Holdings, Sr. Notes,
11.875%, 5/15/09 $ 1,100 $ 1,112,375
Transdigm, Inc., 10.375%, 12/1/08 1,875 1,734,375
-----------------------------------------------------------------------------
$ 2,846,750
-----------------------------------------------------------------------------
Airlines -- 0.6%
-----------------------------------------------------------------------------
Northwest Airlines, Inc.,
7.875%, 3/15/08 $ 4,290 $ 3,885,123
-----------------------------------------------------------------------------
$ 3,885,123
-----------------------------------------------------------------------------
Apparel -- 1.1%
-----------------------------------------------------------------------------
William Carter Co., Sr. Sub. Notes,
10.375%, 12/1/06 $ 7,950 $ 7,721,437
-----------------------------------------------------------------------------
$ 7,721,437
-----------------------------------------------------------------------------
Auto and Parts -- 0.7%
-----------------------------------------------------------------------------
Delco Remy International,
10.625%, 8/1/06 $ 1,000 $ 985,000
Dura Operating Corp., 9.00%, 5/1/09 1,350 1,161,000
J.L. French Automative Casting,
11.50%, 6/1/09 1,920 1,430,400
Talon Automotive Group, Sr. Sub. Notes,
9.625%, 5/1/08 2,550 1,035,937
-----------------------------------------------------------------------------
$ 4,612,337
-----------------------------------------------------------------------------
Broadcasting and Cable -- 9.9%
-----------------------------------------------------------------------------
ACME Television Services, Inc.,
10.875%, (0% until 9/30/2000) 9/30/04 $ 2,000 $ 1,910,000
Charter Communication Holdings LLC,
10.00%, 4/1/09 500 491,875
Diamond Cable Communications Co., Sr.
Disc. Notes,
11.75%, (0% until 2000), 12/15/05 1,000 945,000
Echostar Broadband Corp., Sr. Notes,
10.375%, 10/1/07(1) 8,147 8,147,000
Gothic Production Corp.,
12.375%, 8/1/06 2,185 2,403,500
Granite Broadcasting Corp., Sr. Sub.
Notes, 8.875%, 5/15/08 2,000 1,410,000
Granite Broadcasting Corp., Sr. Sub.
Notes, 10.375%, 5/15/05 1,513 1,217,884
Muzak Holdings LLC, 9.875%, 3/15/09 4,800 4,272,000
Muzak Holdings LLC, Sr. Disc. Notes,
13.00%, (0% until 2004), 3/15/10 2,812 1,588,780
NTL Communications Corp.,
9.25%, 11/15/06 EUR 300 232,814
NTL Communications Corp., Sr. Notes,
11.50%, 10/1/08 575 562,062
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Broadcasting and Cable (continued)
-----------------------------------------------------------------------------
NTL Communications Corp., Sr. Notes,
11.875%, 10/1/10(1) $ 19,000 $ 18,572,500
NTL, Inc., 5.75%, 12/15/09(1) 2,450 1,708,875
NTL, Inc., Sr. Notes, Series B,
9.75%, (0% until 2003) 4/1/08 2,800 1,715,000
Ono Finance PLC, 13.00%, 5/1/09 3,940 3,565,700
Pegasus Communications Corp., Sr. Notes,
9.75%, 12/1/06 1,775 1,735,062
Pegasus Communications Corp., Sr. Notes,
12.50%, 8/1/07 1,440 1,548,000
RCN Corp., Sr. Disc. Notes,
9.80%, (0% until 2003) 2/15/08 750 363,750
RCN Corp., Sr. Disc. Notes,
11.00%, (0% until 2003) 7/1/08 1,175 575,750
Telemundo Holdings, Inc., Sr. Disc.
Notes,
11.50%, (0% until 2003), 8/15/08 4,700 3,313,500
Telewest Communication PLC, Debs.,
9.625%, 10/1/06 75 70,125
Telewest Communication PLC, Debs.,
11.00%, (0% until 2000), 10/1/07 1,960 1,881,600
Telewest Communication PLC, Sr. Disc.
Notes,
9.25%, (0% until 2004) 4/15/09 4,319 2,321,462
Telewest Communication PLC, Sr. Notes,
11.25%, 11/1/08 2,600 2,535,000
Telewest Communications, PLC,
9.875%, (0% until 2004) 4/15/09 GBP 2,425 1,790,746
United Pan Europe Communications, Sr.
Disc. Notes,
13.375%, (0% until 2004) 11/1/09 2,500 1,193,750
United Pan Europe Communications, Sr.
Notes, 11.25%, 11/1/09 EUR 1,760 1,312,340
United Pan Europe Communications, Sr.
Notes, 11.25%, 2/1/10 1,450 1,276,000
-----------------------------------------------------------------------------
$ 68,660,075
-----------------------------------------------------------------------------
Business Services - Miscellaneous -- 1.0%
-----------------------------------------------------------------------------
AP Holdings, Inc., Sr. Disc. Notes,
11.25%, (0% until 2003), 3/15/08 $ 2,450 $ 257,250
Coinmach Corp., Sr. Notes,
11.75%, 11/15/05 1,225 1,231,125
Federal Data Corp., Sr. Sub. Notes,
10.125%, 8/1/05 1,650 1,736,625
Intertek Finance PLC, Sr. Sub. Notes,
Series B, 10.25%, 11/1/06 1,400 497,000
Richmont Marketing Specialists,
10.125%, 12/15/07 4,445 2,244,725
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Business Services - Miscellaneous (continued)
-----------------------------------------------------------------------------
Tapco International Corp., Sr. Sub.
Notes, 12.50%, 8/1/09(1) $ 700 $ 682,500
-----------------------------------------------------------------------------
$ 6,649,225
-----------------------------------------------------------------------------
Business Services - Rental & Leasing -- 2.3%
-----------------------------------------------------------------------------
Anthony Crane Rental LP, Guaranteed Sr.
Notes, Series B, 10.375%, 8/1/08 $ 1,000 $ 505,000
NationsRent, Inc., Guaranteed Sr. Sub.
Notes, 10.375%, 12/15/08 2,650 1,974,250
Neff Corp., 10.25%, 6/1/08 1,950 887,250
Neff Corp., Guaranteed Sr. Sub. Notes,
10.25%, 6/1/08 625 284,375
Spectrasite Holdings, Inc., Sr. Disc.
Notes,
11.25%, (0% until 2004), 4/15/09 8,150 4,482,500
Spectrasite Holdings, Inc., Sr. Disc.
Notes,
12.00%, (0% until 2003), 7/15/08 1,150 764,750
Spectrasite Holdings, Inc., Sr. Disc.
Notes,
12.875%, (0% until 2005) 3/15/10 2,580 1,341,600
Spectrasite Holdings, Inc., Sr. Notes,
10.75%, 3/15/10 6,400 6,080,000
-----------------------------------------------------------------------------
$ 16,319,725
-----------------------------------------------------------------------------
Chemicals -- 2.0%
-----------------------------------------------------------------------------
Avecia Group PLC, 11.00%, 7/1/09 $ 2,350 $ 2,326,500
Lyondell Chemical Co., 9.875%, 5/1/07 1,400 1,370,250
Lyondell Chemical Co., Sr. Sub. Notes,
10.875%, 5/1/09 675 655,594
PCI Chemicals Canada, Inc.,
9.25%, 10/15/07 3,000 1,500,000
Sovereign Specialty Chemicals,
11.875%, 3/15/10 2,000 2,060,000
Sterling Chemicals, Inc., Sr. Sub.
Notes, 11.25%, 4/1/07 250 172,500
Sterling Chemicals, Inc., Sr. Sub.
Notes, 11.75%, 8/15/06 4,500 3,172,500
Texas Petrochemical Corp., Sr. Sub.
Notes, 11.125%, 7/1/06 1,225 1,022,875
Vantico Group, 12.00%, 8/1/10(1) EUR 2,130 1,825,671
-----------------------------------------------------------------------------
$ 14,105,890
-----------------------------------------------------------------------------
Consumer Products -- 1.7%
-----------------------------------------------------------------------------
Amscan Holdings, Inc., Sr. Sub. Notes,
9.875%, 12/15/07 $ 1,120 $ 912,800
Glenoit Corp., Sr. Sub. Notes,
11.00%, 4/15/07(2) 2,400 300,000
Icon Health and Fitness, Inc.,
12.00%, 9/27/05(1) 355 213,120
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Consumer Products (continued)
-----------------------------------------------------------------------------
Polaroid Corp., 6.75%, 1/15/02 $ 1,750 $ 1,678,661
Polaroid Corp., Sr. Notes,
11.50%, 2/15/06 3,000 2,925,000
Tekni-Plex, Inc., Sr. Sub. Notes,
12.75%, 6/15/10(1) 4,850 4,801,500
Weight Watcher International, Inc.,
13.00%, 10/1/09 1,100 1,160,500
-----------------------------------------------------------------------------
$ 11,991,581
-----------------------------------------------------------------------------
Containers and Packaging -- 0.7%
-----------------------------------------------------------------------------
Consumers International, Inc., Sr.
Notes, 10.25%, 4/1/05 $ 985 $ 379,225
Riverwood International Corp.,
10.875%, 4/1/08 3,000 2,760,000
Stone Container Corp., Sr. Notes,
12.58%, 8/1/16 1,800 1,867,500
-----------------------------------------------------------------------------
$ 5,006,725
-----------------------------------------------------------------------------
Drugs -- 0.8%
-----------------------------------------------------------------------------
King Pharmaceutical, Inc.,
10.75%, 2/15/09 $ 1,625 $ 1,722,500
Warner Chilcott, Inc.,
12.625%, 2/15/08(1) 3,675 3,803,625
-----------------------------------------------------------------------------
$ 5,526,125
-----------------------------------------------------------------------------
Electrical Equipment -- 2.1%
-----------------------------------------------------------------------------
AES Corp., Sr. Notes, 9.375%, 9/15/10 $ 5,650 $ 5,763,000
Calpine Corp., Sr. Notes,
8.625%, 8/15/10 7,700 7,709,794
Motors and Gears, Inc., Sr. Notes,
10.75%, 11/15/06 1,275 1,268,625
-----------------------------------------------------------------------------
$ 14,741,419
-----------------------------------------------------------------------------
Electronic Equipment -- 0.8%
-----------------------------------------------------------------------------
Cherokee International, Sr. Sub. Notes,
10.50%, 5/1/09 $ 580 $ 536,500
Flextronics International, Sr. Sub.
Notes, 9.875%, 7/1/10(1) 1,500 1,548,750
Viasystems, Inc., Sr. Sub. Notes,
9.75%, 6/1/07 900 852,750
Viasystems, Inc., Sr. Sub. Notes, Series
B, 9.75%, 6/1/07 3,010 2,851,975
-----------------------------------------------------------------------------
$ 5,789,975
-----------------------------------------------------------------------------
Energy Services -- 0.7%
-----------------------------------------------------------------------------
RBF Finance Co., 11.00%, 3/15/06 $ 2,300 $ 2,645,000
RBF Finance Co., 11.375%, 3/15/09 1,800 2,081,250
-----------------------------------------------------------------------------
$ 4,726,250
-----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Entertainment -- 0.9%
-----------------------------------------------------------------------------
Marvel Enterprise, Inc., 12.00%, 6/15/09 $ 2,963 $ 2,392,622
Premier Parks, Inc., Sr. Notes,
9.25%, 4/1/06 1,000 937,500
Premier Parks, Inc., Sr. Notes,
9.75%, 6/15/07 3,150 2,961,000
-----------------------------------------------------------------------------
$ 6,291,122
-----------------------------------------------------------------------------
Financial Services -- 0.2%
-----------------------------------------------------------------------------
Willis Corroon Corp., 9.00%, 2/1/09 $ 1,600 $ 1,484,000
-----------------------------------------------------------------------------
$ 1,484,000
-----------------------------------------------------------------------------
Foods -- 1.5%
-----------------------------------------------------------------------------
B & G Foods, Inc., Sub. Notes,
9.625%, 8/1/07 $ 1,360 $ 986,000
Del Monte Corp., Sr. Notes,
12.25%, 4/15/07 2,820 2,975,100
Del Monte Foods Co., Sr. Disc. Notes,
12.50%, (0% until 2002), 12/15/07 875 673,750
Luigino's, Inc., Sr. Sub. Notes,
10.00%, 2/1/06 825 655,875
Premier International Foods, Sr. Notes,
12.00%, 9/1/09 5,788 4,861,920
-----------------------------------------------------------------------------
$ 10,152,645
-----------------------------------------------------------------------------
Health Services -- 1.3%
-----------------------------------------------------------------------------
HCA - The Healthcare Co., 8.75%, 9/1/10 $ 5,200 $ 5,320,474
Lifepoint Hospitals Holding,
10.75%, 5/15/09 830 882,912
Tenet Healthcare Corp., Sr. Notes,
9.25%, 9/1/10(1) 3,000 3,150,000
-----------------------------------------------------------------------------
$ 9,353,386
-----------------------------------------------------------------------------
Information Technology Services -- 7.6%
-----------------------------------------------------------------------------
Covad Communication Group, Sr. Disc.
Notes,
13.50%, (0% until 2003) 3/15/08 $ 2,450 $ 1,139,250
Covad Communication Group, Sr. Notes,
12.00%, 2/15/10(1) 13,325 10,060,375
Covad Communication Group, Sr. Notes,
12.50%, 2/15/09 350 269,500
Cybernet Internet Services
International, Inc., Sr. Notes,
14.00%, 7/1/09 1,675 778,875
Diva Systems Corp., Sr. Notes,
12.625%, (0% until 2003) 3/1/08 6,175 2,809,625
Equinix, Inc., Sr. Notes,
13.00%, 12/1/07 1,500 1,205,625
Exodus Communications,
11.375%, 7/15/08(1) EUR 125 107,690
Exodus Communications, Inc., Sr. Notes,
10.75%, 12/15/09 2,367 2,307,825
Exodus Communications, Inc., Sr. Notes,
11.25%, 7/1/08 2,440 2,433,900
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Information Technology Services (continued)
-----------------------------------------------------------------------------
Exodus Communications, Inc., Sr. Notes,
11.625%, 7/15/10(1) $ 10,060 $ 10,135,450
Globix Corp., Sr. Notes, 12.50%, 2/1/10 6,200 4,433,000
IPCS, Inc.,
14.00%, (0% until 2005) 7/15/10(1) 4,650 2,580,750
IPCS, Inc.,
14.00%, (0% until 2005) 7/15/10(1) 2,400 1,224,000
Northpoint Communications Group, Inc.,
Sr. Notes, 12.875%, 2/15/10(1) 2,110 2,120,550
PSINet, Inc., Sr. Notes,
10.50%, 12/1/06 800 524,000
PSINet, Inc., Sr. Notes,
10.50%, 12/1/06 EUR 700 416,219
PSINet, Inc., Sr. Notes, 11.00%, 8/1/09 10,690 7,001,950
PSINet, Inc., Sr. Notes, 11.00%, 8/1/09 EUR 1,000 590,409
PSINet, Inc., Sr. Notes,
11.50%, 11/1/08 1,025 691,875
PSINet, Inc., Sr. Notes, Series B,
10.00%, 2/15/05 2,735 1,791,425
Rhythms Netconnection, Sr. Notes,
12.75%, 4/15/09 350 229,250
-----------------------------------------------------------------------------
$ 52,851,543
-----------------------------------------------------------------------------
Lodging and Gaming -- 8.0%
-----------------------------------------------------------------------------
Hollywood Casino Corp., 12.414%, 5/1/06 $ 4,375 $ 4,555,469
Hollywood Casino Shreveport, First
Mortgage Bonds, 13.00%, 8/1/06(1) 2,870 3,085,250
Majestic Star LLC, 10.875%, 7/1/06 1,750 1,548,750
Mandalay Resort Group, Sr. Notes,
9.50%, 8/1/08(1) 1,800 1,845,000
Mandalay Resort Group, Sr. Sub. Notes,
10.25%, 8/1/07(1) 7,700 7,979,125
MGM Mirage, Inc., 8.50%, 9/15/10 6,250 6,266,344
MGM Mirage, Inc., 9.75%, 6/1/07 6,000 6,240,000
Park Place Entertainment, Sr. Sub.
Notes, 8.875%, 9/15/08 12,250 12,188,750
Sun International Hotels,
8.625%, 12/15/07 1,500 1,383,750
Sun International Hotels, Sr. Sub.
Notes, 9.00%, 3/15/07 4,125 3,939,375
Trump Atlantic City Associates, Inc.,
11.25%, 5/1/06 2,813 1,955,035
Waterford Gaming LLC, Sr. Notes,
9.50%, 3/15/10(1) 5,061 4,985,085
-----------------------------------------------------------------------------
$ 55,971,933
-----------------------------------------------------------------------------
Machinery -- 0.5%
-----------------------------------------------------------------------------
Flowserve Corp., 12.25%, 8/15/10(1) $ 3,200 $ 3,288,000
-----------------------------------------------------------------------------
$ 3,288,000
-----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Manufacturing -- 1.4%
-----------------------------------------------------------------------------
Blount, Inc., 13.00%, 8/1/09 $ 1,000 $ 1,025,000
Insilco Corp., 12.00%, 8/15/07 6,600 6,558,750
Roller Bearing Holdings Co., Sr. Disc.
Notes,
13.00%, (0% until 2002), 6/15/09(1) 3,467 2,262,217
-----------------------------------------------------------------------------
$ 9,845,967
-----------------------------------------------------------------------------
Oil -- 0.9%
-----------------------------------------------------------------------------
Golden Sky DBS, Inc., Sr. Disc. Notes,
13.50%, (0% until 2004), 3/1/07 $ 2,855 $ 2,012,775
Gothic Production Corp.,
11.125%, 5/1/05 4,350 4,578,375
-----------------------------------------------------------------------------
$ 6,591,150
-----------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 1.3%
-----------------------------------------------------------------------------
Grant Geophysical, Inc., Sr. Notes,
Series B, 9.75%, 2/15/08 $ 1,000 $ 615,000
Key Energy Services, Inc.,
14.00%, 1/15/09 1,000 1,142,500
R&B Falcon Corp., 9.50%, 12/15/08 2,210 2,392,325
R&B Falcon Corp., 10.25%, 5/15/03 950 979,687
Universal Compression, Inc., Sr. Disc.
Notes,
9.875%, (0% until 2003), 2/15/08 5,175 4,023,563
-----------------------------------------------------------------------------
$ 9,153,075
-----------------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 2.9%
-----------------------------------------------------------------------------
Chesapeake Energy Corp., 9.125%, 4/15/06 $ 1,100 $ 1,075,250
Chesapeake Energy Corp., 9.625%, 5/1/05 1,875 1,870,313
Chesapeake Energy Corp., Sr. Notes,
7.875%, 3/15/04 330 313,500
Chesapeake Energy Corp., Sr. Notes,
8.50%, 3/15/12 3,170 2,884,700
Comstock Resources, Inc.,
11.25%, 5/1/07 2,350 2,479,250
Energy Corp. of America, Sr. Sub. Notes,
9.50%, 5/15/07 390 298,350
Plains Resources, Inc., 10.25%, 3/15/06 1,300 1,326,000
Plains Resources, Inc., Sr. Sub. Notes,
10.25%, 3/15/06 250 255,000
Plains Resources, Inc., Sr. Sub. Notes,
10.25%, 3/15/06(1) 1,400 1,428,000
Triton Energy Ltd., Sr. Notes,
8.875%, 10/1/07(1) 8,000 8,010,000
-----------------------------------------------------------------------------
$ 19,940,363
-----------------------------------------------------------------------------
Oil and Gas - Refining -- 0.0%
-----------------------------------------------------------------------------
Western Gas Resources, 10.00%, 6/15/09 $ 300 $ 315,000
-----------------------------------------------------------------------------
$ 315,000
-----------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Paper and Forest Products -- 0.2%
-----------------------------------------------------------------------------
Indah Kiat Finance Mauritius, Sr. Unsec.
Notes, 10.00%, 7/1/07 $ 850 $ 416,500
Pacifica Papers, Inc., 10.00%, 3/15/09 500 506,250
Pindo Deli Finance Mauritius, Ltd.,
Guaranteed Sr. Notes, 10.75%, 10/1/07 600 295,500
-----------------------------------------------------------------------------
$ 1,218,250
-----------------------------------------------------------------------------
Printing and Business Products -- 0.7%
-----------------------------------------------------------------------------
MDC Communications Corp., Sr. Sub.
Notes, 10.50%, 12/1/06 $ 4,150 $ 3,984,000
Merrill Corp., Series B, 12.00%, 5/1/09 1,750 1,216,250
-----------------------------------------------------------------------------
$ 5,200,250
-----------------------------------------------------------------------------
Publishing -- 1.2%
-----------------------------------------------------------------------------
American Lawyer Media Corp., Sr. Disc.
Notes, 12.25%, (0% to 2002), 12/15/08 $ 730 $ 489,100
Von Hoffman Press, Inc., Sr. Sub. Notes,
10.875%, 5/15/07(1) 1,275 1,204,875
Ziff Davis Media, Inc., Sr. Sub. Notes,
12.00%, 7/15/10(1) 6,550 6,517,250
-----------------------------------------------------------------------------
$ 8,211,225
-----------------------------------------------------------------------------
Restaurants -- 1.2%
-----------------------------------------------------------------------------
AFC Enterprises, Inc., Sr. Sub Notes,
10.25%, 5/15/07 $ 2,400 $ 2,424,000
Sbarro, Inc., 11.00%, 9/15/09 6,000 6,210,000
-----------------------------------------------------------------------------
$ 8,634,000
-----------------------------------------------------------------------------
Retail - Food and Drug -- 0.5%
-----------------------------------------------------------------------------
Pantry, Inc., Sr. Sub. Notes,
10.25%, 10/15/07 $ 3,270 $ 3,171,900
-----------------------------------------------------------------------------
$ 3,171,900
-----------------------------------------------------------------------------
Retail - General -- 0.2%
-----------------------------------------------------------------------------
Advance Holding Corp., Sr. Debs.,
12.875%, (0% until 2003), 4/15/09 $ 1,000 $ 390,000
Ames Department Stores, Sr. Notes,
10.00%, 4/15/06 650 302,250
Tuesday Morning Corp., Sr. Sub. Notes,
11.00%, 12/15/07 818 793,460
-----------------------------------------------------------------------------
$ 1,485,710
-----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Semiconductors -- 1.8%
-----------------------------------------------------------------------------
Amkor Technologies, Inc., Sr. Notes,
9.25%, 5/1/06 $ 2,650 $ 2,643,375
Amkor Technologies, Inc., Sr. Sub.
Notes, 10.50%, 5/1/09 2,750 2,801,563
Asat Finance LLC, Sr. Sub. Notes,
12.50%, 11/1/06(1) 2,535 3,035,663
Asat Finance LLC, Sub. Notes,
12.50%, 11/1/06(1) 585 618,638
Intersil Corp., 13.25%, 8/15/09 810 943,650
SCG Holding Corp., 12.00%, 8/1/09 2,435 2,568,925
-----------------------------------------------------------------------------
$ 12,611,814
-----------------------------------------------------------------------------
Services -- 0.6%
-----------------------------------------------------------------------------
Coyne International Enterprises, Sr.
Sub. Notes, 11.25%, 6/1/08 $ 840 $ 676,200
Crown Castle International Corp., Sr.
Notes, 9.00%, 5/15/11 1,500 1,432,500
Kindercare Learning Centers, Inc., Sr.
Sub. Notes, 9.50%, 2/15/09 1,850 1,725,125
-----------------------------------------------------------------------------
$ 3,833,825
-----------------------------------------------------------------------------
Transportation -- 1.1%
-----------------------------------------------------------------------------
Budget Group, Inc., Sr. Notes,
9.125%, 4/1/06 $ 1,065 $ 772,125
CHC Helicopter Corp., 11.75%, 7/15/07 EUR 2,350 2,146,062
Kansas City Southern, Sr. Notes,
9.50%, 10/1/08(1) 2,150 2,176,875
MTL, Inc., 11.47% Variable Rate, 6/15/06 400 273,000
Pacer International, Inc.,
11.75%, 6/1/07 2,336 2,336,000
-----------------------------------------------------------------------------
$ 7,704,062
-----------------------------------------------------------------------------
Waste Management -- 1.8%
-----------------------------------------------------------------------------
Allied Waste, 10.00%, 8/1/09 $ 11,825 $ 10,376,438
Stericycle, Inc., 12.375%, 11/15/09 2,200 2,343,000
-----------------------------------------------------------------------------
$ 12,719,438
-----------------------------------------------------------------------------
Wireless Communication Services -- 7.0%
-----------------------------------------------------------------------------
Alamosa PCS Holdings, Inc.,
12.875%, (0% until 2005) 2/15/10 $ 1,450 $ 790,250
Clearnet Communications, Inc.,
10.125%, 7/7/07(1) 1,500 1,560,000
Dobson Communications, Sr. Notes,
10.875%, 7/1/10 4,050 3,979,125
Dolphin Telecom PLC, Sr. Disc. Notes,
14.00%, (0% until 2004), 5/15/09 5,225 1,071,125
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Wireless Communication Services (continued)
-----------------------------------------------------------------------------
Leap Wireless International, Inc.,
12.50%, 4/15/10 $ 1,625 $ 1,275,625
Nextel Communications, Inc., Sr. Disc.
Notes,
10.65%, (0% until 2002), 9/15/07 2,160 1,782,000
Nextel Communications, Inc., Sr. Notes,
9.375%, 11/15/09 8,465 8,295,700
Nextel International, Sr. Notes,
12.75%, 8/1/10(1) 4,550 4,470,375
Nextel Partners, Inc., Sr. Notes,
11.00%, 3/15/10(1) 2,900 2,929,000
Nextel Partners, Inc., Sr. Notes,
11.00%, 3/15/10(1) 2,800 2,828,000
PTC International Finance II SA,
11.25%, 12/1/09 625 618,750
PTC International Finance II SA,
11.25%, 12/1/09 EUR 1,125 975,596
TeleCorp PCS, Inc., 8.50%, 10/23/09(1) 3,500 2,660,000
TeleCorp PCS, Inc.,
11.625%, (0% until 2004) 4/15/09 1,600 1,092,000
TeleCorp PCS, Inc., Sr. Sub. Notes,
10.625%, 7/15/10(1) 4,000 4,060,000
Teligent, Inc., Sr. Notes,
11.50%, 12/1/07 6,075 2,764,125
Ubiquitel Operating Co.,
14.00%, (0% until 2005) 4/15/10 9,175 4,449,875
Winstar Communications, Sr. Notes,
12.75%, 4/15/10(1) $ 4,150 $ 3,029,500
-----------------------------------------------------------------------------
$ 48,631,046
-----------------------------------------------------------------------------
Wireline Communication Services -- 13.4%
-----------------------------------------------------------------------------
360 Networks, Inc., Sr. Notes,
13.00%, 5/1/08 $ 6,710 $ 6,139,649
Allegiance Telecom, Inc., Sr. Notes,
12.875%, 5/15/08 2,020 2,020,000
Call-Net Enterprises, Inc., Sr. Notes,
8.00%, 8/15/08 1,685 800,375
Carrier1 International SA, Sr. Notes,
13.25%, 2/15/09 9,125 8,577,500
Completel Europe NV,
14.00%, (0% until 2004), 2/15/09 1,960 950,600
Esat Telecom Group PLC, Sr. Notes,
11.875%, 12/1/08 550 651,750
Esat Telecom Group PLC, Sr. Notes,
12.50%, (0% until 2002), 2/1/07 360 344,700
Esprit Telecom Group PLC, Sr. Notes,
11.50%, 12/15/07 3,150 1,118,250
Esprit Telecom Group PLC, Sr. Notes,
11.50%, 12/15/07 DEM 2,500 426,460
FLAG Telecom Holdings Ltd., Sr. Notes,
11.625%, 3/30/10(1) 5,000 4,300,000
Global Crossing Holding Ltd.,
9.125%, 11/15/06 2,250 2,238,750
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Wireline Communication Services (continued)
-----------------------------------------------------------------------------
Global Crossing Holding Ltd., Sr. Notes,
9.625%, 5/15/08 $ 125 $ 125,625
Global TeleSystems Group, Inc.,
11.00%, 12/1/09 EUR 1,250 527,754
GST Telecommunications, Sr. Sub. Notes,
12.75%, 11/15/07(2) 800 6,000
GT Group Telecom, Sr. Disc. Notes,
13.25%, (0% until 2005) 2/1/10 5,300 2,305,500
ICG Holdings, Inc.,
12.50%, (0% until 2001), 5/1/06 5,955 1,220,775
Intermedia Communications, Inc., Sr.
Disc. Notes,
11.25%, (0% until 2002) 7/15/07 6,212 5,187,020
Intermedia Communications, Inc., Sr.
Disc. Notes,
12.50%, (0% until 2001) 5/15/06 2,335 2,241,600
Jazztel PLC, Sr. Notes,
13.25%, 12/15/09 EUR 1,937 1,419,193
Jazztel PLC, Sr. Notes, 14.00%, 4/1/09 7,163 6,124,365
Jazztel PLC, Sr. Notes, 14.00%, 4/1/09 EUR 2,000 1,499,104
Level 3 Communications, Inc., Sr. Notes,
11.25%, 3/15/10 2,875 2,760,000
MGC Communications, Inc., Sr. Notes,
13.00%, 4/1/10 5,328 3,596,400
Nextlink Communications, Inc., Sr.
Notes, 12.50%, 4/15/06 2,530 2,479,400
Nextlink Communications, Sr. Disc.
Notes,
12.125%, (0% until 2004) 12/1/09 4,475 2,349,375
Nextlink Communications, Sr. Disc.
Notes,
12.25%, (0% until 2004) 6/1/09 1,000 565,000
PF.Net Communications, Sr. Notes,
13.75%, 5/15/10 4,200 4,137,000
Primus Telecommunications Group, Sr.
Notes, 11.25%, 1/15/09 750 420,000
Primus Telecommunications Group, Sr.
Notes, 11.75%, 8/1/04 1,150 649,750
RSL Communications PLC, 9.125%, 3/1/08 2,110 432,550
RSL Communications PLC,
10.125%, (0% until 2003) 3/1/08 3,500 542,500
RSL Communications PLC, 12.875%, 3/1/10 1,190 357,000
RSL Communications PLC, Sr. Notes,
12.25%, 11/15/06 1,015 248,675
Tele1 Europe BV, Sr. Notes,
11.875%, 12/1/09 EUR 2,469 2,026,148
Tele1 Europe BV, Sr. Notes,
13.00%, 5/15/09 950 926,250
Teligent, Inc., Sr. Disc. Notes,
11.50%, (0% until 2003) 3/1/08 3,400 901,000
Versatel Telecom BV, 4.00%, 3/30/05(1) EUR 2,375 1,680,730
Versatel Telecom BV, Sr. Notes,
11.875%, 7/15/09 4,044 3,518,280
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Wireline Communication Services (continued)
-----------------------------------------------------------------------------
Versatel Telecom BV, Sr. Notes,
13.25%, 5/15/08 $ 7,115 $ 6,403,500
Versatel Telecom BV, Sr. Notes,
13.25%, 5/15/08 1,540 1,386,000
Viatel, Inc., Sr. Disc. Notes,
12.50%, (0% until 2003), 4/15/08 1,260 321,300
Viatel, Inc., Sr. Notes,
11.25%, 4/15/08 520 241,800
Viatel, Inc., Sr. Notes,
11.50%, 3/15/09 1,075 499,875
Viatel, Inc., Sr. Notes,
11.50%, 3/15/09 4,430 2,059,950
World Access, Inc., Sr. Notes,
13.25%, 1/15/08 985 714,125
Worldwide Fiber, Inc., Sr. Notes,
12.00%, 8/1/09 6,300 5,638,500
-----------------------------------------------------------------------------
$ 93,080,078
-----------------------------------------------------------------------------
Total Corporate Bonds & Notes
(identified cost $619,817,292) $564,322,419
-----------------------------------------------------------------------------
</TABLE>
COMMON STOCKS, WARRANTS AND RIGHTS -- 1.1%
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Broadcasting and Cable -- 0.1%
-----------------------------------------------------------------------------
Ono Finance PLC, Warrants(3)(4) 3,440 $ 309,600
Ono Finance PLC, Warrants, Exp.
5/31/09(3)(4) EUR 1,200 94,943
Pegasus Communications Corp., Common(4) 5,458 263,690
UIH Australia/Pacific, Inc.,
Warrants(3)(4) 900 3,618
-----------------------------------------------------------------------------
$ 671,851
-----------------------------------------------------------------------------
Chemicals -- 0.0%
-----------------------------------------------------------------------------
Sterling Chemicals, Inc., Common(4) 2,400 $ 4,875
-----------------------------------------------------------------------------
$ 4,875
-----------------------------------------------------------------------------
Information Technology Services -- 0.0%
-----------------------------------------------------------------------------
Cybernet Internet Services
International, Inc., Warrants(3)(4) 1,675 $ 12,562
Diva Systems Corp., Warrants(3)(4) 18,525 0
Equinix, Inc., Warrants(3)(4) 1,500 195,000
-----------------------------------------------------------------------------
$ 207,562
-----------------------------------------------------------------------------
Lodging and Gaming -- 0.0%
-----------------------------------------------------------------------------
Peninsula Gaming LLC, Convertible
Preferred Membership Interests(3)(4) 6,338 $ 38,027
-----------------------------------------------------------------------------
$ 38,027
-----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Mobile Communications -- 0.0%
-----------------------------------------------------------------------------
Ubiquitel Operating Co., Warrants,
Exp. 4/15/10(1)(4) 6,025 $ 301,250
-----------------------------------------------------------------------------
$ 301,250
-----------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 0.2%
-----------------------------------------------------------------------------
Key Energy Services, Inc.,
Warrants(3)(4) 1,000 $ 60,000
R&B Falcon Corp., Warrants(4) 1,600 1,088,000
-----------------------------------------------------------------------------
$ 1,148,000
-----------------------------------------------------------------------------
Printing and Business Products -- 0.0%
-----------------------------------------------------------------------------
Merrill Corp., Warrants(4) 1,750 $ 0
-----------------------------------------------------------------------------
$ 0
-----------------------------------------------------------------------------
Retail - Food and Drug -- 0.3%
-----------------------------------------------------------------------------
Pathmark Stores Inc., Common 160,039 $ 1,965,000
-----------------------------------------------------------------------------
$ 1,965,000
-----------------------------------------------------------------------------
Services -- 0.0%
-----------------------------------------------------------------------------
HF Holdings, Inc., Warrants(3)(4) 3,400 $ 0
-----------------------------------------------------------------------------
$ 0
-----------------------------------------------------------------------------
Wireless Communication Services -- 0.0%
-----------------------------------------------------------------------------
Leap Wireless International,
Warrants(1)(4) 1,625 $ 4,063
-----------------------------------------------------------------------------
$ 4,063
-----------------------------------------------------------------------------
Wireline Communication Services -- 0.5%
-----------------------------------------------------------------------------
Carrier1 International SA, Common(4) 5,500 $ 194,133
Carrier1 International SA,
Warrants(3)(4)(5) 4,125 710,997
Completel Europe NV, Common(4) 98,000 735,000
GT Group Telecom, Warrants (1)(3)(4) 5,300 371,000
Intermedia Communications,
Inc., Common(4) 585 17,258
PF.Net Communications, Warrants(4) 4,200 0
Primus Telecommunications Group,
Warrants, Exp. 8/1/04(3)(4) 1,150 7,654
Tele1 Europe Holding AB-ADR, Common(4) 19,567 176,103
Versatel Telecom BV, Warrants(3)(4)(5) 3,500 946,753
World Access, Inc., Common(4) 2,645 14,300
-----------------------------------------------------------------------------
$ 3,173,198
-----------------------------------------------------------------------------
Total Common Stocks, Warrants and Rights
(identified cost $4,088,523) $ 7,513,826
-----------------------------------------------------------------------------
</TABLE>
PREFERRED STOCKS -- 5.2%
<TABLE>
<CAPTION>
SECURITY SHARES VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
Apparel -- 0.0%
-----------------------------------------------------------------------------
Cluett American Corp., 12.50%(1) 1 $ 27
Cluett American Corp., 12.50% (PIK) 47 1,574
-----------------------------------------------------------------------------
$ 1,601
-----------------------------------------------------------------------------
Broadcasting and Cable -- 1.6%
-----------------------------------------------------------------------------
Adelphia Communications Corp., 13% 12,000 $ 1,164,000
CSC Holdings, Inc., Series M,
11.125% (PIK) 34,739 3,831,060
Granite Broadcasting Corp., 12.75% (PIK) 2,526 1,676,633
Pegasus Communications Corp., Series A,
12.75% (PIK) 3,813 4,041,780
-----------------------------------------------------------------------------
$ 10,713,473
-----------------------------------------------------------------------------
Business Services - Rental & Leasing -- 0.4%
-----------------------------------------------------------------------------
Crown Castle International Corp.,
12.75% (PIK) 2,487 $ 2,511,870
-----------------------------------------------------------------------------
$ 2,511,870
-----------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 0.8%
-----------------------------------------------------------------------------
R&B Falcon Corp., 13.875% (PIK) 4,391 $ 5,620,480
-----------------------------------------------------------------------------
$ 5,620,480
-----------------------------------------------------------------------------
Wireless Communication Services -- 1.2%
-----------------------------------------------------------------------------
Dobson Communications Corp.,
12.25% (PIK) 1,751 $ 1,628,535
Nextel Communications, Inc.,
11.125% (PIK) 1,576 1,512,960
Rural Cellular Corp., 11.375% (PIK) 2,974 2,527,901
Rural Cellular Corp., 12.25% 3,400 2,890,000
-----------------------------------------------------------------------------
$ 8,559,396
-----------------------------------------------------------------------------
Wireline Communication Services -- 1.2%
-----------------------------------------------------------------------------
Broadwing Communications, Series B,
12.50% (PIK) 2,702 $ 2,729,020
Global Crossing Holding Ltd.,
10.5% (PIK) 28,000 2,814,000
Global Crossing Holding Ltd., 6.75% 10,350 2,571,975
Intermedia Communications, Inc., 7%(3) 18,750 481,641
Nextlink Communications, Inc.,
14% (PIK) 229 10,305
-----------------------------------------------------------------------------
$ 8,606,941
-----------------------------------------------------------------------------
Total Preferred Stocks
(identified cost $37,124,781) $ 36,013,761
-----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
PORTFOLIO OF INVESTMENTS CONT'D
COMMERCIAL PAPER -- 15.4%
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------
American Express Credit Corp.,
6.50%, 10/11/00 $ 21,080 $ 21,038,133
Associates Corp. of North America,
6.68%, 10/2/00 22,843 22,834,523
Corp. Asset Funding, 6.50%, 10/2/00 23,000 22,991,694
General Electric Capital Corp.,
6.70%, 10/2/00 22,844 22,835,497
GMAC, 6.54%, 10/6/00 17,673 17,653,736
-----------------------------------------------------------------------------
Total Commercial Paper
(at amortized cost, $107,353,584) $107,353,583
-----------------------------------------------------------------------------
Total Investments -- 102.7%
(identified cost $768,384,180) $715,203,589
-----------------------------------------------------------------------------
Other Assets, Less Liabilities -- (2.7)% $(19,115,083)
-----------------------------------------------------------------------------
Net Assets -- 100.0% $696,088,506
-----------------------------------------------------------------------------
</TABLE>
(PIK) - Payment in kind.
EUR - Euro Dollar
GBP - British Pound
DEM - Deutsche Mark
(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.
(2) Defaulted security.
(3) Restricted security.
(4) Non-income producing security.
(5) Security valued at fair value using methods determined in good faith by
or at the direction of the Trustees.
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 2000
<S> <C>
Assets
------------------------------------------------------
Investments, at value (identified cost,
$768,384,180) $715,203,589
Cash 25,956
Foreign currency, at value (cost
$25,242) 23,735
Receivable for investments sold 17,208,536
Receivable for Fund shares sold 7,563,381
Interest receivable 14,744,810
Receivable for open forward foreign
currency contracts 148,921
------------------------------------------------------
TOTAL ASSETS $754,918,928
------------------------------------------------------
Liabilities
------------------------------------------------------
Payable for investments purchased $ 54,562,814
Dividends payable 2,499,704
Payable for Fund shares redeemed 1,155,056
Payable to affiliate for service fees 115,469
Payable for open forward foreign
currency contracts 197,390
Payable for Trustees' fees 180
Accrued expenses 299,809
------------------------------------------------------
TOTAL LIABILITIES $ 58,830,422
------------------------------------------------------
NET ASSETS $696,088,506
------------------------------------------------------
Sources of Net Assets
------------------------------------------------------
Paid-in capital $752,535,815
Accumulated net realized loss (computed
on the basis of identified cost) (8,591,508)
Accumulated undistributed net investment
income 5,483,272
Net unrealized depreciation (computed on
the basis of identified cost) (53,339,073)
------------------------------------------------------
TOTAL $696,088,506
------------------------------------------------------
Class A Shares
------------------------------------------------------
NET ASSETS $685,322,245
SHARES OUTSTANDING 88,481,621
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 7.75
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of $7.75) $ 8.14
------------------------------------------------------
Class I Shares
------------------------------------------------------
NET ASSETS $ 10,766,261
SHARES OUTSTANDING 1,168,665
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.21
------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
SEPTEMBER 30, 2000
<S> <C>
Investment Income
------------------------------------------------------
Interest $ 50,737,537
Dividends 3,377,985
Miscellaneous 877,796
------------------------------------------------------
TOTAL INVESTMENT INCOME $ 54,993,318
------------------------------------------------------
Expenses
------------------------------------------------------
Investment adviser fee $ 3,059,889
Trustees fees and expenses 11,293
Service fees
Class A 882,681
Transfer and dividend disbursing agent
fees 492,798
Custodian fee 260,934
Registration fees 199,676
Legal and accounting services 60,315
Printing and postage 43,382
Miscellaneous 68,999
------------------------------------------------------
TOTAL EXPENSES $ 5,079,967
------------------------------------------------------
NET INVESTMENT INCOME $ 49,913,351
------------------------------------------------------
Realized and Unrealized Gain (Loss)
------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ (6,434,778)
Foreign currency and forward foreign
currency exchange
contract transactions 6,630,906
------------------------------------------------------
NET REALIZED GAIN $ 196,128
------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $(39,530,804)
Foreign currency and forward foreign
currency exchange contracts 349,634
------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $(39,181,170)
------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(38,985,042)
------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 10,928,309
------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INCREASE (DECREASE) YEAR ENDED YEAR ENDED
IN NET ASSETS SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
<S> <C> <C>
--------------------------------------------------------------------------------
From operations --
Net investment income $ 49,913,351 $ 27,554,216
Net realized gain 196,128 412,584
Net change in unrealized appreciation
(depreciation) (39,181,170) 729,410
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 10,928,309 $ 28,696,210
--------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (48,865,181) $ (26,817,740)
Class I (413,496) (3,186)
In excess of net investment income
Class I (438) --
--------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (49,279,115) $ (26,820,926)
--------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 500,767,783 $ 171,390,929
Class I 12,226,722 243,469
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 25,151,917 12,868,702
Class I 371,164 1,187
Cost of shares redeemed
Class A (133,999,322) (79,969,507)
Class I (1,441,856) (6,997)
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ 403,076,408 $ 104,527,783
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 364,725,602 $ 106,403,067
--------------------------------------------------------------------------------
Net Assets
--------------------------------------------------------------------------------
At beginning of year $ 331,362,904 $ 224,959,837
--------------------------------------------------------------------------------
AT END OF YEAR $ 696,088,506 $ 331,362,904
--------------------------------------------------------------------------------
Accumulated undistributed
net investement income
included in net assets
--------------------------------------------------------------------------------
AT END OF YEAR $ 5,483,272 $ 960,248
--------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------------------
2000(1) 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $ 8.160 $ 8.030 $ 8.700 $ 8.120 $ 7.920
-------------------------------------------------------------------------------------------------
Income (loss) from operations
-------------------------------------------------------------------------------------------------
Net investment income $ 0.833 $ 0.830 $ 0.810 $ 0.790 $ 0.800
Net realized and unrealized
gain (loss) (0.419) 0.110 (0.700) 0.570 0.210
-------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.414 $ 0.940 $ 0.110 $ 1.360 $ 1.010
-------------------------------------------------------------------------------------------------
Less distributions
-------------------------------------------------------------------------------------------------
From net investment income $ (0.824) $ (0.810) $ (0.780) $ (0.770) $ (0.800)
In excess of net investment
income -- -- -- (0.010) (0.010)
-------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.824) $ (0.810) $ (0.780) $ (0.780) $ (0.810)
-------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 7.750 $ 8.160 $ 8.030 $ 8.700 $ 8.120
-------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 5.01% 11.97% 0.98% 17.68% 13.41%
-------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $685,322 $331,130 $224,960 $207,522 $143,844
Ratios (As a percentage of
average daily net assets):
Expenses 1.04% 1.01% 1.04% 1.05% 1.07%
Net investment income 10.18% 9.97% 9.22% 9.32% 9.96%
Portfolio Turnover 98% 132% 141% 105% 81%
-------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS I
--------------------------
YEAR ENDED SEPTEMBER 30,
--------------------------
2000(1) 1999(2)
<S> <C> <C>
------------------------------------------------------------
Net asset value -- Beginning
of year $ 9.710 $10.000
------------------------------------------------------------
Income (loss) from operations
------------------------------------------------------------
Net investment income $ 0.995 $ 0.250
Net realized and unrealized
loss (0.498) (0.290)(3)
------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.497 $(0.040)
------------------------------------------------------------
Less distributions
------------------------------------------------------------
From net investment income $(0.996) $(0.250)
In excess of net investment
income (0.001) --
------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.997) $(0.250)
------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.210 $ 9.710
------------------------------------------------------------
TOTAL RETURN(4) 5.07% (0.44)%
------------------------------------------------------------
Ratios/Supplemental Data
------------------------------------------------------------
Net assets, end of year (000's
omitted) $10,766 $ 233
Ratios (As a percentage of
average daily net assets):
Expenses 0.84% 0.89%(5)
Net investment income 10.33% 10.12%(5)
Portfolio Turnover 98% 132%
------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the commencement of offering of Class I shares, July
1, 1999, to September 30, 1999.
(3) The per share amount is not in accord with the net realized and
unrealized gain (loss) on investments for the period because of the
timing of sales of Fund shares and the amount of the per share realized
and unrealized gains and losses at such time.
(4) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
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 Trust offers two
classes of shares: Class A shares and Class I shares. Class A shares are
generally sold subject to a sales charge imposed at time of purchase;
Class I shares are sold at net asset value. Each class represents a pro rata
interest in the Trust, but votes separately on class-specific matters and (as
noted below) is subject to different expenses. Realized and unrealized gains
and losses are allocated daily to each class of shares based on the relative
net assets of each class to the total net assets of the Trust. Net investment
income, other than class specific expenses, is allocated daily to each class
of shares based upon the ratio of the value of each class' paid shares to the
total value of all paid shares. Each class of shares differs in its
distribution plan and certain other class specific expenses. 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, 2000, the Trust, for federal income
tax purposes, had a capital loss carryover of $5,320,216 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 carryover will expire on
September 30, 2003 ($1,177), 2004 ($2,446,478) and 2008 ($2,872,561). At
September 30, 2000 net capital losses of $1,428,651 attributable to security
transactions incurred after October 31, 1999, are treated as arising on the
first day of the Trust's current taxable year.
D 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 income and expense during the reporting period. Actual results could
differ from those estimates.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to 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. All significant credit balances used to reduce the
Trust's custodian fees are reported as a reduction of expenses on the
Statement of Operations. For the year ended September 30, 2000, $4,685 credit
balances were used to reduce the Trust's custodian fee.
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 Foreign Currency Translation -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing on
the respective dates of such transactions. Recognized gains or losses on
investment transactions attributable to changes in foreign currency exchange
rates are recorded for financial statement purposes as net realized gains and
losses on investments. That portion of unrealized gains and losses on
investments that results from fluctuations in foreign currency exchange rates
is not separately disclosed.
2 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
18
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
NOTES TO FINANCIAL STATEMENTS CONT'D
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. These differences relate to expired capital loss
carryforwards.
3 Shares of Beneficial Interest
-------------------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Trust shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-------------------------
CLASS A 2000 1999
<S> <C> <C>
-------------------------------------------------------------------
Sales 61,113,218 20,633,005
Issued to shareholders electing to
receive payments of distributions in
Trust shares 3,098,008 1,551,930
Redemptions (16,311,518) (9,633,789)
-------------------------------------------------------------------
NET INCREASE 47,899,708 12,551,146
-------------------------------------------------------------------
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-------------------------
CLASS I 2000 1999(1)
<S> <C> <C>
-------------------------------------------------------------------
Sales 1,255,833 24,598
Issued to shareholders electing to
receive payments of distributions in
Trust shares 38,976 122
Redemptions (150,146) (718)
-------------------------------------------------------------------
NET INCREASE 1,144,663 24,002
-------------------------------------------------------------------
</TABLE>
(1) For the period from the commencement of offering of Class I shares,
July 1, 1999 to September 30, 1999.
4 Investment Adviser Fee and Other Transactions with Affiliates
-------------------------------------------
The investment adviser fee, computed at a monthly rate of 5/96 of 1% (0.625%
annually) of the Trust's average daily 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. The Fund
was informed that Eaton Vance Distributors, Inc. (EVD), a subsidiary of EVM
and the Trust's principal underwriter, received approximately $341,270 of the
sales charge on sales of Class A shares during the year ended September 30,
2000. Certain officers and Trustees of the Trust are officers of the above
organizations.
5 Service Plan
-------------------------------------------
The Trust has in effect a service plan for Class A shares (the Plan). The
Plan authorizes the Trust to make payments of service fees to EVD, investment
dealers and other persons in amounts not exceeding 0.25% of the Trust's
average daily net assets attributable to Class A shares for each fiscal year.
The Trustees initially implemented the Plan by authorizing the Trust to make
quarterly payments of service fees to EVD and investment dealers equal to
0.25% per annum of the Trust's average daily net assets attributable to
Class A shares based on the value of Trust shares sold on or after May 22,
1989 by such persons and remaining outstanding for at least one year. On
October 4, 1999, the Trustees approved service fee payments equal to 0.25%
per annum of the Trust's average daily net assets attributable to Class A
shares for any fiscal year on shares of the Trust sold on or after October
12, 1999. Service fee payments will be made for personal services and/or the
maintenance of shareholder accounts. Service fee payments for the year ended
September 30, 2000 amounted to $882,681 for Class A shares.
6 Financial Instruments
-------------------------------------------
The Trust regularly trades in financial instruments with off-balance sheet
risk in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include written
options, forward foreign currency exchange contracts and financial futures
contracts and may involve, to a varying degree, elements of risk in excess of
the amounts recognized for financial statement purposes. The notional or
contractual amounts of these instruments represent the investment the Trust
has in particular classes of financial instruments and does not necessarily
represent the amounts potentially subject to risk. The measurement of the
risks associated with these instruments is meaningful only when all related
and offsetting transactions are considered.
A summary of obligations under these financial instruments at September 30,
2000 is as follows:
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
SALES
-----------------------------------------------------------------------------------------
NET UNREALIZED
SETTLEMENT IN EXCHANGE FOR APPRECIATION
DATE(S) DELIVER (IN U.S. DOLLARS) (DEPRECIATION)
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------
10/25/00 British Pound Sterling
3,550,243 $ 5,051,783 $(176,351)
10/2/00- Euro Dollar
12/4/00 28,795,724 25,510,307 145,226
-----------------------------------------------------------------------------------------
$30,562,090 $ (31,125)
-----------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
PURCHASES
-----------------------------------------------------------------------------------------
NET UNREALIZED
SETTLEMENT DELIVER APPRECIATION
DATE(S) IN EXCHANGE FOR (IN U.S. DOLLARS) (DEPRECIATION)
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------
10/25/00 British Pound Sterling
294,810 $ 430,446 $ 3,695
10/02/00 Euro Dollar
6,214,786 5,485,305 (21,039)
-----------------------------------------------------------------------------------------
$ 5,915,751 $ (17,344)
-----------------------------------------------------------------------------------------
</TABLE>
7 Line of Credit
-------------------------------------------
The Trust participates with other portfolios and funds managed by Boston
Management Research (BMR) and EVM and its affiliates in a $150 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
participating portfolio or fund based on its borrowings at an amount above
either the Eurodollar rate or federal funds rate. In addition, a fee computed
at an annual rate of 0.10% on the daily unused portion of the line of credit
is allocated among the participating portfolios and funds at the end of each
quarter. The Trust did not have any significant borrowings or allocated fees
during the year ended September 30, 2000.
8 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 $761,065,622 and $422,764,628, respectively, for the
year ended September 30, 2000.
9 Federal Income Tax Basis of Investments
-------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investment securities at September 30, 2000, as computed on a federal income
tax basis, were as follows:
<TABLE>
<S> <C>
AGGREGATE COST $770,456,615
------------------------------------------------------
Gross unrealized appreciation $ 14,505,376
Gross unrealized depreciation (69,758,402)
------------------------------------------------------
NET UNREALIZED DEPRECIATION $(55,253,026)
------------------------------------------------------
</TABLE>
10 Restricted Securities
-------------------------------------------
At September 30, 2000, the Trust owned the following securities (representing
0.46% 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 SHARES/
DESCRIPTION ACQUISITION FACE COST FAIR VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
COMMON STOCKS, WARRANTS AND RIGHTS
Carrier1 International SA, Warrants 9/09/99- 4,125 $ 531,250 $ 710,997
2/25/00
Cybernet Internet Services 10/20/99-
International, Inc., Warrants 10/28/99 1,675 105,000 12,562
Diva Systems Corp., Warrants 12/30/98- 18,525 140 0
5/16/00
Equinix, Inc., Warrants 6/01/00 1,500 0 195,000
GT Group Telecom, Warrants 9/15/00 5,300 0 371,000
HF Holdings, Inc., Warrants 9/27/99 3,400 182,579 0
Key Energy Services, Inc., Warrants 7/14/99 1,000 15,000 60,000
Ono Finance PLC, Warrants 10/12/99- 3,440 0 309,600
11/5/99
Ono Finance PLC, Warrants, Exp. 5/31/09 10/12/99- 1,200 0 94,943
11/5/99
Peninsula Gaming LLC, Convertible
Preferred Membership Interests 8/19/99 6,338 0 38,027
Primus Telecommunications Group,
Warrants, Exp. 8/1/04 10/31/97 1,150 0 7,654
UIH Australia/Pacific, Inc., Warrants 3/05/98 900 0 3,618
Versatel Telecom BV, Warrants 8/11/98- 3,500 0 946,753
1/29/99
---------------------------------------------------------------------------------------
$ 833,969 $2,750,154
---------------------------------------------------------------------------------------
PREFERRED STOCKS
Intermedia Communications, Inc., 7% 10/24/97 18,750 $ 468,750 $ 481,641
---------------------------------------------------------------------------------------
$1,302,719 $3,231,795
---------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
INDEPENDENT ACCOUNTANTS' REPORT
TO THE TRUSTEES AND SHAREHOLDERS
OF EATON VANCE INCOME FUND OF BOSTON:
---------------------------------------------
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Eaton Vance Income Fund of
Boston (the "Fund") at September 30, 2000, and the results of its operations,
the changes in its net assets and the financial highlights for the periods
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at September 30, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 10, 2000
21
<PAGE>
EATON VANCE INCOME FUND OF BOSTON AS OF SEPTEMBER 30, 2000
INVESTMENT MANAGEMENT
EATON VANCE INCOME FUND OF BOSTON
Officers
James B. Hawkes
President and Trustee
Thomas P. Huggins
Vice President
Michael W. Weilheimer
Vice President and
Portfolio Manager
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Robert Gluck
Management Consultant
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking Emeritus, Harvard University
Graduate School of Business Administration
Norton H. Reamer
Chairman and Chief Operating Officer
Hellman, Jordan Management Co.
President, Jordan Simmons Capital LLC
and Unicorn
22
<PAGE>
INVESTMENT ADVISER OF EATON VANCE INCOME FUND OF BOSTON
Eaton Vance Management
The Eaton Vance Building
255 State Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
EATON VANCE DISTRIBUTORS, INC.
The Eaton Vance Building
255 State Street
Boston, MA 02109
(617) 482-8260
CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
PFPC, INC.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02904-9653
(800) 262-1122
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
160 Federal Street
Boston, MA 02110
EATON VANCE INCOME FUND OF BOSTON
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
--------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
--------------------------------------------------------------------------------
443-11/00 IBSRC
