Eaton Vance Investment Trust
For the Funds:
[bullet] EV Classic Florida Limited Maturity Municipals Fund
[bullet] EV Classic Massachusetts Limited Maturity Municipals Fund
[bullet] EV Classic New York Limited Maturity Municipals Fund
[bullet] EV Classic Pennsylvania Limited Maturity Municipals Fund
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[EATON VANCE LOGO]
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Annual Shareholder Report
March 31, 1997
<PAGE>
[box chart]
Results for the year
ended March 31, 1997
<TABLE>
<CAPTION>
Total Dividends NAV per Fund's If your The after-tax Tax
return paid by share at distribution combined equivalent Infor-
(One Fund (during 3/31/97 rate at Federal & yield you mation**
year period) 3/31/97 state tax would need
ended rate is... is...
3/31/97;
excl. 1%
CDSC on
redemptions
within
first
year.)*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EV Classic 1.9% $0.359 $9.44 3.79% [state map] 39.38% 6.25% 99.76%
Florida Limited
Maturity
Municipals Fund
EV Classic 2.7% $0.368 $9.57 3.83% [state map] 43.68% 6.80% 99.57%
Massachusetts Limited
Maturity
Municipals Fund
EV Classic 2.8% $0.359 $9.53 3.76% [state map] 40.38% 6.31% 99.93%
New York Limited
Maturity
Municipals Fund
EV Classic 2.9% $0.368 $9.57 3.83% [state map] 44.68% 6.90% 99.63%
Pennsylvania Limited
Maturity
Municipals Fund
</TABLE>
* Total returns do not include the effect of 1% contingent deferred sales charge
on shareholders redeeming within first year. **Percentages represent the portion
of the total dividends paid by the Funds from net investment income during the
year ended March 31, 1997, that have been designated as tax-exempt interest
dividends. Tax legislation eliminated the exception to the market discount rules
applicable to tax-exempt obligations. As a result, certain tax-exempt
obligations acquired by the Portfolio at market discounts may generate a small
amount of ordinary taxable income.
[boxed text]
Fund shares are not guaranteed by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
2
<PAGE>
To Shareholders:
The municipal bond market in 1996 was characterized by heightened volatility as
investors reacted to a seesaw interest rate environment and a
politically-charged debate over the possibility of a flat tax. After showing
signs of slowing at the year's outset, it became apparent in the first quarter
of 1996 that the economy was stronger than anticipated and that inflation, while
still modest, would bear further watching. Consequently, long-term bond yields
climbed steadily higher, reaching their peak in mid-June , 1996.
Investors were heartened by economic reports in the second half of the year that
showed a scenario of slow growth and low inflation. In addition, the federal
budget deficit, which had ballooned in the 1980s and had been so long the bane
of fixed-income investors, fell to just 1.5% of gross domestic product. Against
that favorable backdrop, bond yields finished the year at lower levels than at
mid-year.
The first quarter of 1997 has been marked by stronger-than-expected economic
growth, a tightening labor market, and increasing uneasiness over inflation,
which remains low. At its March 25 meeting, the Federal Reserve raised the
Federal Funds Rate 0.25% in an effort to slow the economy and make a preemptory
strike at inflation. In response to 1997's economic events, the bond market has
sold off somewhat, and the yield on the 30-year Treasury Bond - a widely-held
gauge of bond market sentiment - rose to 7.08% on March 31 from 6.64% at the end
of 1996.
Despite Changing Market Conditions, Municipal Bonds Remain
an Attractive Investment
According to the Public Securities Association, state and local governments sold
roughly $183 billion in securities in 1996, and will sell approximately the same
volume in 1997. That is sharply lower than the supply levels for 1995 and
earlier. With greatly reduced supply and increasing competition for bonds,
municipal bonds should retain their value among tax-conscious investors.
We believe an investment in municipal bonds continues to represent good value
for several reasons. First, Congress and the Clinton Administration have reached
a tentative agreement to balance the budget over the next five years - a
development viewed favorably by bond investors. Second, with the equity markets
having turned in two consecutive years of performances well above historical
averages, investors may look for alternatives within the bond markets. And
third, taxes remain a burden and, for most investors, municipal bonds are the
last remaining vehicle for tax relief. For these reasons, we believe that the
municipal market will continue to be a favored avenue for tax-conscious
investors. Eaton Vance's municipal bond department will continue to seek high,
tax-free current income for shareholders.
Sincerely,
[photo of Thomas J. Fetter] /s/ Thomas J. Fetter
Thomas J. Fetter,
President
May 9, 1997
3
<PAGE>
Management Discussion
An interview with William H. Ahern, Vice President, and Portfolio Manager of the
Florida and Massachusetts Limited Maturity Municipals Portfolios.
Q. Bill, what were your impressions of the economy over the past year?
A. The economy has shown a good deal of resilience in the past year. While
many economists expected the growth trend to slow in late 1996 or early
1997, it has maintained fairly strong momentum. The good news is that the
expansion has continued without significant inflation. The Federal Reserve
has monitored the situation closely and has acted to preempt inflation,
most recently in March, when it raised the Federal funds rates by 25 basis
points (.25 percentage point). In response to the robust economic news, the
bond market has been quite volatile.
Q. What was behind the market volatility?
A. The volatility appears to be more in response to shifting investor
sentiment toward the inflation outlook than to any empirical evidence.
While actual inflation data have been rather tame, the Fed has, for some
time, signalled a bias for higher interest rates. Interestingly, with the
exception of its March rate hike, the Fed has been fairly restrained in its
actions. But the market has still been waiting for the other shoe to drop.
Meanwhile, investors have tended to overreact to economic reports,
especially employment data. With job creation very strong, interest rates
have risen more at the short end of the yield curve than the long end. That
has produced a fairly volatile environment for the bond market. As evidence
of that volatility, Treasury yields, which were 7.2% a year ago, declined
to 6.35% in November before moving back up to 7.1% at March 31. That's a
fairly wild ride for bond investors.
Q. So the Fed has been "jawboning" interest rates higher?
A. That's correct. For many months, the Fed was able to accomplish much of the
rate increase through public comment alone. This jawboning can be very
effective over the short run, but runs the risk of losing credibility if it
is not followed by action. Thus, the March rate increase, while a
relatively mild action, can be seen as part of a larger Fed strategy to
contain inflation.
Q. Did you make any changes within the Portfolios during the period?
A. Yes. We've made a number of structural changes to the Portfolios. As the
market has become increasingly generic in recent years, these structural
subtleties have become much more critical to performance. Our efforts have
been aimed primarily at enhancing liquidity, improving the Portfolios' call
protection, and adjusting duration, or the Portfolio's responsiveness to
changes in interest rates.
By consolidating holdings, we have been able to reduce the number of bonds
in many of the Portfolios while increasing the average size of those
holdings. That helps to enhance the liquidity of the Portfolio. Call
protection, of course, continues to be an important consideration. By
increasing call protection, we have reduced the Portfolios' exposure to
untimely bond redemptions and increased upside potential. Finally, we have
used the market downturn as an opportunity to adjust the durations of the
Portfolios and improve the trading characteristics of our bonds. By keeping
an average duration generally in the 6.5-to-6.75 year range, we have
limited the damage during the recent downturn.
Q. Specifically, what is meant by a generic market?
A. That refers to the fact that in recent years, quality spreads - the yield
difference between bonds of varying quality - have become increasingly
narrow. That is largely a function of the widespread use of
[photo]
William Ahern
4
<PAGE>
insurance by municipal bond issuers. Bonds that, based on their underlying
fundamentals, would ordinarily carry an A-rating, receive a Aaa-rating due
to private insurance. The result is that the municipal market is
increasingly dominated by insured issues. Perhaps more than ever before,
investors must really do their homework to find good values.
Q. Has that affected your approach to the market?
A. Yes. I think the changing make-up of the market has made it necessary for
investors to expand their research efforts. For example, we have redoubled
our efforts in the non-rated sector of the market. The non-rated segment
typically consists of smaller issuers, such as colleges, nursing homes, or
private purpose industrial development bonds. Because these bonds lack
ratings from the major rating agencies, they may carry an unusually
attractive coupon. Naturally, investing in non-rated bonds requires
especially rigorous analysis. At Eaton Vance, we have dedicated more
resources and analysts to this area of the market. Equally as important,
we've developed our own internal criteria to make certain that these bonds
meet our strict standards of creditworth iness. By focusing on this segment
of the market, we have been able to add incrementally to our yields in an
era of declining spreads.
Q. Has the intermediate sector of the muni market performed in line with
expectations?
A. Yes. While the intermediate municipal market has declined with the rate
increases, it has characteristically declined less than the Treasury
market. The intermediate segment of the market was isolated from the
decline somewhat by shorter maturities as well as by the fact that price
changes in the municipal market are rarely as large as in the Treasury
market - either on the upside or the downside. Once again, the intermediate
bond market performed pretty much in line with expectations.
Q. Supply and demand has long been a major factor in the municipal market. Has
that been the case in the past year?
A. Issuance wasn't much of a factor in the municipal market in the past year.
New issuance in 1996 exceeded the levels of 1995, but not to the extent
that there was a glut. In addition to refundings that removed bonds from
the market in recent years, investor demand from individuals, mutual funds
and insurance companies was more than sufficient to meet new supply.
Q. Bill, as you look ahead to the rest of 1997, what is your view of the
municipal market?
A. I remain generally constructive on the outlook for municipal bonds. While
the economy has registered steady growth, inflation has been modest.
Continuing increases in productivity and global competition are helping to
keep inflation in check. Having said that, the Federal Reserve has been a
staunch inflation-fighter and, therefore, we can't rule out the possibility
of additional Fed rate hikes. That would be a potential hurdle over the
short-term. But it's important to remember that Federal tax rates remain
fairly onerous and municipal bonds are among the few ways for investors to
reduce their tax bills.
For the conservative investor, a major investment goal may be tax-free
income with lower volatility, the mandate of the Limited Municipals
Portfolios. While past performance is no guarantee of future results, the
intermediate sector has historically managed a good percentage of the yield
of long-term bonds, with roughly half of their volatility. I believe
intermediate municipals continue to merit consideration from conservative,
income-oriented investors.
[boxed text]
Included in the pages that follow are performance charts that compare your
Fund's total return with that of a broad-based securities market index. The
lines on the chart represent the total returns of $10,000 hypothetical
investments in your Fund and the unmanaged Lehman Brothers 7-year Municipal Bond
Index. Total returns for the Fund include the effect of the 1% contingent
deferred sales charge incurred by shareholders redeeming within the first year.
The solid line on the chart represents the Fund's performance. The Fund's total
return figure reflects fund expenses and portfolio transaction costs, and
assumes the reinvestment of income dividends and capital gain distributions. The
dotted line represents the performance of the Lehman Brothers 7-Year Municipal
Bond Index, a broad-based, widely recognized unmanaged index of municipal bonds.
Whereas the Fund's portfolio is comprised principally of bonds solely from your
individual state, the Index is composed of bonds from all 50 states and many
jurisdictions. The Index's total return does not reflect any commissions or
expenses that would be incurred if an investor individually purchased or sold
the securities represented in the Index. It is not possible to invest directly
in the Index.
5
<PAGE>
EV Classic Florida Limited Maturity Municipals Fund
Your investment at work [caduceus graphic]
Escambia County FL
Health Facilities Authority
Baptist Hospital, Inc.
Baptist Hospital is a major tertiary care center located in Pensacola. The
Hospital provides a wide range of inpatient and outpatient medical and surgical
services. In addition, the hospital provides specialty services in the areas of
obstetrics, behavioral medicine, psychiatry, substance abuse, diabetes,
hemodialysis, oncology, cardiology, and urology. This issue is a good example of
the Portfolio's efforts to find good value in non-rated or lower-rated
investment grade bonds. Rated BBB+ by Standard & Poor's, a major bond rating
agency, the bond carries an attractive 6% coupon.
Portfolio Overview
Based on market value as of March 31, 1997
[map of Florida graphic]
Number of issues.............................. 40
Average quality............................... AA
Investment grade.............................. 98.3%
Effective maturity (years).................... 11.44
Largest sectors:
General obligations....................... 17.0%
Escrowed.................................. 14.3
Utilities................................. 13.4
Insured - Hospital........................ 9.5*
Insured - Transportation.................. 9.3*
* Private insurance does not remove the market risks that are associated with
these investments.
The State of the State: Florida
Florida remains a major generator of jobs in the southeastern U.S. economy,
utilizing its attractive climate and growing reputation as an entertainment
center. The state's economy continued to post solid growth in the past year,
with unemployment reaching a low of 5% in the final quarter of 1996, the lowest
level since 1988. The service sectors have been especially strong, providing the
bulk of new job creation. Meanwhile, the manufacturing sector remained weak,
with the exception of some strength in the aircraft, electrical equipment, and
appliances segments. Tourism remained a source of strength for the Florida
economy. Theme park attendance in the Orlando area set new records, resulting in
rising hotel occupancy rates and prompting plans for park expansions.
The influx of retirees to Florida continues, although population growth has
subsided somewhat from the frantic pace set in the 1980s. In 1996, wage growth
outpaced overall income growth in Florida, reversing a trend in a state where
investment income of retirees has traditionally increased faster than wages.
Separately, Florida has done a good job of expanding its tax base and can look
forward to growing revenues from corporate, sales and use-tax revenues.
Comparison of Change in Value of a $10,000 Investment in EV Classic Florida
Limited Maturity Municipals Fund and the Lehman Brothers 7-Year Municipal Bond
Index
From December 31, 1993, through March 31, 1997
[line chart]
Date Fund LMBI
12/31/93+ $10,000 $10,000
1/31/94 $10,110 $10,106
2/28/94 $9,904 $9,887
3/31/94 $9,583 $9,623
4/30/94 $9,660 $9,693
5/31/94 $9,727 $9,741
6/30/94 $9,691 $9,724
7/31/94 $9,819 $9,861
8/31/94 $9,826 $9,913
9/30/94 $9,749 $9,818
10/31/94 $9,643 $9,719
11/30/94 $9,512 $9,577
12/31/94 $9,647 $9,723
1/31/95 $9,816 $9,905
2/28/95 $9,994 $10,128
3/31/95 $10,044 $10,233
4/30/95 $10,057 $10,261
5/31/95 $10,245 $10,534
6/30/95 $10,234 $10,524
7/31/95 $10,342 $10,658
8/31/95 $10,426 $10,784
9/30/95 $10,448 $10,825
10/31/95 $10,534 $10,920
11/30/95 $10,609 $11,040
12/31/95 $10,663 $11,098
1/31/96 $10,729 $11,206
2/28/96 $10,653 $11,168
3/31/96 $10,531 $11,059
4/30/96 $10,498 $11,038
5/31/96 $10,464 $11,022
6/30/96 $10,522 $11,107
7/31/96 $10,575 $11,198
8/31/96 $10,575 $11,205
9/30/96 $10,665 $11,306
10/31/96 $10,719 $11,427
11/30/96 $10,899 $11,618
12/31/96 $10,821 $11,583
1/31/97 $10,797 $11,625
2/28/97 $10,868 $11,721
3/31/97 $10,729 $11,569
AVERAGE ANNUAL 1 Life of Value at
RETURNS Year Fund* 3/31/97
With CDSC 0.9% 2.2% $10,729
Without CDSC 1.9% 2.2% $10,729
Past performance is not indicative of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Source: Towers Data Systems,
Bethesda, MD. *Investment operations commenced on 12/8/93. +Index information is
available only at month-end; therefore, the line comparison begins at the next
month-end following the commencement of the Fund's investment operations.
6
<PAGE>
EV Classic Massachusetts Limited Maturity Municipals Fund
Your investment at work [mortarboard graphic]
Massachusetts Industrial
Finance Agency
Park School
The Park School is a coeducational, independent day school located in Brookline,
with around 500 students enrolled in nursery school through ninth grade. Founded
in 1886, Park has a long tradition of excellence in primary education and has
earned a national reputation for its strong academics. Over the past five years,
the school's median scores were ranked higher than 95% of all students
nationally in both reading and math. Rated A/A- by Moody's and S&P,
respectively, this bond repre-sents the ability of the Portfolio to find value
in a lower-rated investment-grade bond.
Portfolio Overview
Based on market value as of March 31, 1997
[map of Massachusetts graphic]
Number of issues.............................. 37
Average quality............................... AA
Investment grade.............................. 94.2%
Effective maturity (years).................... 11.51
Largest sectors:
Insured housing........................... 17.3%*
Insured general obligations............... 10.4*
Hospitals................................. 9.8
General obligations....................... 9.4
Transportation............................ 8.6
* Private insurance does not remove the market risks that are associated with
these investments.
The State of the State: Massachusetts
The Massachusetts economy remained the pacesetter among the New England states
in the past year. Job creation has been swift, with continued strength in
financial services, biotechnology and selected areas of the technology sector.
The February unemployment rate was 3.8%, significantly lower than the national
rate of 5.3%. The Commonwealth realized a gain of 68,200 non-farm jobs in the
past year, according to the Division of Employment and Training. The service
sector continued to provide the bulk of new jobs, paced by retailing, wholesale,
and the financial sector. While Massachusetts remains a leader in quality health
care, major changes in the high technology and health care industries, both of
which are part of the core of the Massachusetts economy, could have an impact on
the Commonwealth's economy in coming years. However, it is expected that job
gains will continue to materialize in the software, education and biotechnology
sectors. Massachusetts' finances continue to be stable, though still burdened
with relatively high debt levels. However, Massachusetts enjoys a rating of
A1/A+, a major improvement from the Baa/BBB ratings of 1991.
Comparison of Change in Value of a $10,000 Investment in EV Classic
Massachusetts Limited Maturity Municipals Fund and the Lehman Brothers 7-Year
Municipal Bond Index
From December 31, 1993, through March 31, 1997
[line chart]
Date Fund LMBI
12/31/93+ $10,000 $10,000
1/31/94 $10,068 $10,106
2/28/94 $9,892 $9,887
3/31/94 $9,623 $9,623
4/30/94 $9,691 $9,693
5/31/94 $9,749 $9,741
6/30/94 $9,724 $9,724
7/31/94 $9,863 $9,861
8/31/94 $9,890 $9,913
9/30/94 $9,794 $9,818
10/31/94 $9,689 $9,719
11/30/94 $9,559 $9,577
12/31/94 $9,695 $9,723
1/31/95 $9,854 $9,905
2/28/95 $10,033 $10,128
3/31/95 $10,094 $10,233
4/30/95 $10,097 $10,261
5/31/95 $10,286 $10,534
6/30/95 $10,244 $10,524
7/31/95 $10,343 $10,658
8/31/95 $10,438 $10,784
9/30/95 $10,472 $10,825
10/31/95 $10,559 $10,920
11/30/95 $10,657 $11,040
12/31/95 $10,711 $11,098
1/31/96 $10,767 $11,206
2/28/96 $10,724 $11,168
3/31/96 $10,614 $11,059
4/30/96 $10,560 $11,038
5/31/96 $10,549 $11,022
6/30/96 $10,608 $11,107
7/31/96 $10,672 $11,198
8/31/96 $10,673 $11,205
9/30/96 $10,765 $11,306
10/31/96 $10,853 $11,427
11/30/96 $11,012 $11,618
12/31/96 $10,934 $11,583
1/31/97 $10,934 $11,625
2/28/97 $11,028 $11,721
3/31/97 $10,901 $11,569
AVERAGE ANNUAL 1 Life of Value at
RETURNS Year Fund* 3/31/97
With CDSC 1.7% 2.7% $10,901
Without CDSC 2.7% 2.7% $10,901
Past performance is not indicative of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Source: Towers Data Systems,
Bethesda, MD. *Investment operations commenced on 12/9/93. +Index information is
available only at month-end; therefore, the line comparison begins at the next
month-end following the commencement of the Fund's investment operations.
7
<PAGE>
EV Classic New York Limited Maturity Municipals Fund
Your Investment at Work [caduceus graphic]
Glen Cove, NY Industrial
Development Authority
The Regency at Glen Cove
These bonds were issued in 1992 to finance the construction of an Adult Home for
elderly residents who require assistance with daily living activities and other
rehabilitation care. Licensed by the New York Department of Social Services, the
project consists of 96 living units, dining facilities, a library, visiting
rooms, games rooms, administrative offices, and examination rooms for visiting
physicians. Communities are turning increasingly to facilities such as the
Regency for living care alternatives for our aging populations. The non-rated
bonds carry a very attractive 9.5% coupon.
Portfolio Overview
Based on market value as of March 31, 1997
[map of New York state graphic]
Number of issues................................ 41
Average quality................................. AA-
Investment grade................................ 97.8%
Effective maturity (years)...................... 11.81
Largest sectors:
Transportation.............................. 23.8%
Lease revenue/Certificate of participation.. 14.4
Insured transportation...................... 9.5*
Insured hospital............................ 9.5*
Housing..................................... 6.7
* Private insurance does not remove the market risks that are associated with
these investments.
The State of the State: New York
The New York economy remains in a slow-growth mode, although there have been
encouraging signs of strength in some sectors. The Wall Street boom that
produced record profits in 1996, continued into 1997 and led to employment
growth in financial services. The state real estate market continued to firm,
with construction of multi-family homes leading the way. Commercial construction
has also strengthened, with the office market seeing a gradual decline in
vacancy rates. For example, major projects underway in New York City include a
new terminal at Kennedy International Airport, a new state-of-the-art commodity
trading center, three major entertainment complexes, three new hotels, and a
number of new retail complexes. On the fiscal front, the state is expected to
end fiscal 1997 with a surplus, the result of higher-than-expected tax revenues
and successful efforts to restrain spending. Tax revenue growth exceeded
expectations due largely to capital gains from the rising stock market and from
bonus payments within the financial services industry. The effect of tax
reductions could significantly reduce state revenues. Continued cost controls
will likely be necessary to maintain an operating budget balance.
Comparison of Change in Value of a $10,000 Investment in EV Classic New York
Limited Maturity Municipals Fund and the Lehman Brothers 7-Year Municipal Bond
Index
From December 31, 1993, through March 31, 1997
[line chart]
Date Fund LMBI
12/31/93+ $10,000 $10,000
1/31/94 $10,100 $10,106
2/28/94 $9,903 $9,887
3/31/94 $9,612 $9,623
4/30/94 $9,679 $9,693
5/31/94 $9,746 $9,741
6/30/94 $9,710 $9,724
7/31/94 $9,828 $9,861
8/31/94 $9,845 $9,913
9/30/94 $9,737 $9,818
10/31/94 $9,631 $9,719
11/30/94 $9,458 $9,577
12/31/94 $9,604 $9,723
1/31/95 $9,773 $9,905
2/28/95 $9,972 $10,128
3/31/95 $10,022 $10,233
4/30/95 $10,035 $10,261
5/31/95 $10,223 $10,534
6/30/95 $10,191 $10,524
7/31/95 $10,299 $10,658
8/31/95 $10,383 $10,784
9/30/95 $10,416 $10,825
10/31/95 $10,503 $10,920
11/30/95 $10,610 $11,040
12/31/95 $10,664 $11,098
1/31/96 $10,729 $11,206
2/28/96 $10,664 $11,168
3/31/96 $10,542 $11,059
4/30/96 $10,510 $11,038
5/31/96 $10,487 $11,022
6/30/96 $10,545 $11,107
7/31/96 $10,608 $11,198
8/31/96 $10,586 $11,205
9/30/96 $10,699 $11,306
10/31/96 $10,775 $11,427
11/30/96 $10,955 $11,618
12/31/96 $10,888 $11,583
1/31/97 $10,865 $11,625
2/28/97 $10,947 $11,721
3/31/97 $10,842 $11,569
AVERAGE ANNUAL 1 Life of Value at
RETURNS Year Fund* 3/31/97
With CDSC 1.8% 2.5% $10,842
Without CDSC 2.8% 2.5% $10,842
Past performance is not indicative of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Source: Towers Data Systems,
Bethesda, MD. *Investment operations commenced on 12/8/93. +Index information is
available only at month-end; therefore, the line comparison begins at the next
month-end following the commencement of the Fund's investment operations.
8
<PAGE>
EV Classic Pennsylvania Limited Maturity Municipals Fund
Your investment at work [factory buildings graphic]
Erie County PA
Industrial Development Authority
International Paper Company
International Paper is one of the world's largest producers of paper products,
including writing and printing paper, paperboard and packaging, pulp, and wood
products. The company maintains facilities in the U.S., Canada, Europe, Asia,
and Latin America. These bonds were used to finance the acquisition and
construction costs of a sewage treatment facility at the Company's Erie Mill
plant. They are an excellent example of municipal bonds once again being used to
finance much needed public projects, while also encouraging private investment
in job-producing enterprises.
Portfolio Overview
Based on market value as of March 31, 1997
[map of Pennsylvania graphic]
Number of issues............................... 51
Average quality................................ AA-
Investment grade............................... 92.6%
Effective maturity (years)..................... 9.50
Largest sectors:
Hospitals.................................. 30.1%
Escrowed................................... 15.3
Insured hospitals.......................... 8.0*
Insured general obligations................ 7.2*
Transportation ............................ 7.1
* Private insurance does not remove the market risks that are associated with
these investments.
The State of the State: Pennsylvania
The Pennsylvania economy continued to make progress in 1996 and early 1997 as
the Commonwealth's employment grew significantly. The February unemployment rate
was 4.9%, a marked improvement from 5.9% in the previous year, and below the
national rate for the first time in five years. Services, retailing, and the
financial sector each experienced strong job growth, while mining,
manufacturing, and health care continued to suffer losses. Mining has been in a
long-term decline, although the job losses in 199 6 were relatively small
compared to the previous year. The manufacturing decline was also less severe
than in 1995, with durable goods remaining weak due to a national softening in
electrical machinery demand. Non-durables, such as paper and apparel, showed
some signs of a comeback. Meanwhile, the Commonwealth's large health care
industry continued its consolidation in response to an increasingly competitive
climate. By curtailing spending and utilizing better financial management,
Pennsylvania has made its capital needs significantly more manageable and put
itself in a better position to handle future economic and fiscal challenges.
Comparison of Change in Value of a $10,000 Investment in EV Classic
Pennsylvania Limited Maturity Municipals Fund and the Lehman Brothers 7-Year
Municipal Bond Index
From December 31, 1993, through March 31, 1997
[line chart]
Date Fund LMBI
12/31/93+ $10,000 $10,000
1/31/94 $10,111 $10,106
2/28/94 $9,925 $9,887
3/31/94 $9,625 $9,623
4/30/94 $9,703 $9,693
5/31/94 $9,761 $9,741
6/30/94 $9,736 $9,724
7/31/94 $9,854 $9,861
8/31/94 $9,872 $9,913
9/30/94 $9,776 $9,818
10/31/94 $9,681 $9,719
11/30/94 $9,540 $9,577
12/31/94 $9,686 $9,723
1/31/95 $9,846 $9,905
2/28/95 $10,035 $10,128
3/31/95 $10,086 $10,233
4/30/95 $10,100 $10,261
5/31/95 $10,288 $10,534
6/30/95 $10,247 $10,524
7/31/95 $10,335 $10,658
8/31/95 $10,420 $10,784
9/30/95 $10,453 $10,825
10/31/95 $10,541 $10,920
11/30/95 $10,638 $11,040
12/31/95 $10,693 $11,098
1/31/96 $10,759 $11,206
2/28/96 $10,695 $11,168
3/31/96 $10,595 $11,059
4/30/96 $10,530 $11,038
5/31/96 $10,508 $11,022
6/30/96 $10,567 $11,107
7/31/96 $10,632 $11,198
8/31/96 $10,643 $11,205
9/30/96 $10,746 $11,306
10/31/96 $10,812 $11,427
11/30/96 $10,971 $11,618
12/31/96 $10,927 $11,583
1/31/97 $10,950 $11,625
2/28/97 $11,033 $11,721
3/31/97 $10,905 $11,569
AVERAGE ANNUAL 1 Life of Value at
RETURNS Year Fund* 3/31/97
With CDSC 1.9% 2.7% $10,905
Without CDSC 2.9% 2.7% $10,905
Past performance is not indicative of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Source: Towers Data Systems,
Bethesda, MD. *Investment operations commenced on 12/8/93. +Index information is
available only at month-end; therefore, the line comparison begins at the next
month-end following the commencement of the Fund's investment operations.
9
<PAGE>
EV Classic Limited Maturity Municipals Funds
Financial Statements
Statements of Assets and Liabilities
- --------------------------------------------------------------------------------
March 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Classic Classic Classic Classic
Florida Massachusetts New York Pennsylvania
Limited Fund Limited Fund Limited Fund Limited Fund
-------------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
Assets:
Investment --
Identified cost $ 5,829,785 $4,588,904 $2,983,096 $5,748,389
Unrealized appreciation (depreciation) (47,954) 13,238 1,809 (25,429)
------------ ----------- ----------- -----------
Total investment in Portfolio, at value (Note 1A) $ 5,781,831 $4,602,142 $2,984,905 $5,722,960
Receivable from the Administrator (Note 4) 7,111 13,863 13,587 7,751
Deferred organization expenses (Note 1D) 3,862 3,704 3,439 3,388
------------ ----------- ----------- -----------
Total assets $ 5,792,804 $4,619,709 $3,001,931 $5,734,099
------------ ----------- ----------- -----------
Liabilities:
Distributions payable $ 4,225 $ 3,386 $ 2,168 $ 4,202
Payable for Fund shares redeemed -- -- 11,129 44,439
Payable to affiliate for Trustees' fees
(Note 4) 41 -- -- 41
Accrued expenses 1,825 1,485 1,315 1,902
------------ ----------- ----------- -----------
Total liabilities $ 6,091 $ 4,871 $ 14,612 $ 50,584
------------ ----------- ----------- -----------
Net Assets $ 5,786,713 $4,614,838 $2,987,319 $5,683,515
============ =========== =========== ===========
Sources of Net Assets:
Paid-in capital $ 6,956,999 $4,814,316 $3,275,874 $6,250,875
Accumulated net realized loss on investments
and financial futures contracts
(computed on basis of identified cost) (1,127,344) (214,643) (291,209) (547,322)
Accumulated undistributed net investment
income 5,012 1,927 845 5,391
Net unrealized appreciation (depreciation) of
investments and financial futures contracts
(computed on the basis of identified cost) (47,954) 13,238 1,809 (25,429)
------------ ----------- ----------- -----------
Total $ 5,786,713 $4,614,838 $2,987,319 $5,683,515
============ =========== =========== ===========
Shares of Beneficial Interest Outstanding 613,183 481,991 313,602 594,088
============ =========== =========== ===========
Net Asset Value, Offering and
Redemption Price Per Share (Note 6)
(net assets [divided by] shares of beneficial interest
outstanding) $ 9.44 $ 9.57 $ 9.53 $ 9.57
========== ======== ========= =========
</TABLE>
See notes to financial statements
10
<PAGE>
Statements of Operations
- --------------------------------------------------------------------------------
Year Ended March 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Classic Classic Classic Classic
Florida Massachusetts New York Pennsylvania
Limited Fund Limited Fund Limited Fund Limited Fund
-------------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B):
Interest income allocated from Portfolio $ 375,908 $ 264,928 $ 206,641 $ 369,256
Expenses allocated from Portfolio (39,018) (27,568) (21,303) (37,897)
----------- ---------- ---------- ----------
Net investment income from Portfolio $ 336,890 $ 237,360 $ 185,338 $ 331,359
----------- ---------- ---------- ----------
Expenses --
Compensation of Trustees not members of the
Administrator's organization (Note 4) $ 164 $ 41 $ -- $ 164
Distribution fees (Note 5) 61,778 42,974 34,271 58,267
Transfer and dividend disbursing agent fees 5,263 3,495 2,987 5,143
Printing and postage 5,850 5,730 4,810 5,989
Legal and accounting services 5,986 5,535 7,274 9,592
Custodian fee 3,000 2,759 2,999 2,966
Registration fees 167 1,000 -- --
Amortization of organization expenses
(Note 1D) 33 2,224 2,049 2,019
Miscellaneous 1,119 1,425 1,175 1,547
----------- ---------- ---------- ----------
Total expenses $ 83,360 $ 65,183 $ 55,565 $ 85,687
Deduct --
Allocation of expenses to the
Administrator (Note 4) 7,111 13,863 13,587 7,751
----------- ---------- ---------- ----------
Net expenses $ 76,249 $ 51,320 $ 41,978 $ 77,936
----------- ---------- ---------- ----------
Net investment income $ 260,641 $ 186,040 $ 143,360 $ 253,423
----------- ---------- ---------- ----------
Realized and Unrealized Gain (Loss) from Portfolio:
Net realized loss --
Investment transactions (identified cost basis) $ (95,699) $ (31,998) $ (37,171) $ (45,596)
Financial futures contracts (49,273) (24,903) (22,575) (40,686)
----------- ---------- ---------- ----------
Net realized loss $ (144,972) $ (56,901) $ (59,746) $ (86,282)
----------- ---------- ---------- ----------
Change in unrealized appreciation (depreciation) --
Investment transactions $ 7,183 $ (11,781) $ 16,595 $ 17,127
Financial futures contracts 12,811 11,837 11,051 --
----------- ---------- ---------- ----------
Net change in unrealized appreciation $ 19,994 $ 56 $ 27,646 $ 17,127
----------- ---------- ---------- ----------
Net realized and unrealized loss $ (124,978) $ (56,845) $ (32,100) $ (69,155)
----------- ---------- ---------- ----------
Net increase in net assets from
operations $ 135,663 $ 129,195 $ 111,260 $ 184,268
=========== ========== ========== ==========
</TABLE>
See notes to financial statements
11
<PAGE>
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
Year Ended March 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Classic Classic Classic Classic
Florida Massachusetts New York Pennsylvania
Limited Fund Limited Fund Limited Fund Limited Fund
-------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 260,641 $ 186,040 $ 143,360 $ 253,423
Net realized loss (144,972) (56,901) (59,746) (86,282)
Change in unrealized appreciation 19,994 56 27,646 17,127
------------- ---------- ------------- -------------
Net increase in net assets from operations $ 135,663 $ 129,195 $ 111,260 $ 184,268
------------- ---------- ------------- -------------
Distributions to shareholders (Note 2) --
From net investment income $ (256,923) $ (181,633) $ (142,062) $ (247,481)
------------- ---------- ------------- -------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares $ 344,966 $ 389,285 $ 1,372,700 $ 806,219
Net asset value of shares issued to shareholders in
payment of distributions declared 169,201 160,523 109,805 188,466
Cost of shares redeemed (2,904,733) (935,519) (2,528,853) (2,728,664)
------------- ---------- ------------- -------------
Net decrease in net assets from Fund share
transactions $ (2,390,566) $ (385,711) $ (1,046,348) $ (1,733,979)
------------- ---------- ------------- -------------
Net decrease in net assets $ (2,511,826) $ (438,149) $ (1,077,150) $ (1,797,192)
Net Assets:
At beginning of year 8,298,539 5,052,987 4,064,469 7,480,707
------------- ---------- ------------- -------------
At end of year $ 5,786,713 $ 4,614,838 $ 2,987,319 $ 5,683,515
============= ========== ============= =============
Accumulated undistributed net investment
income included in net assets at end of year $ 5,012 $ 1,927 $ 845 $ 5,391
============= ========== ============= =============
</TABLE>
See notes to financial statements
12
<PAGE>
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
Year Ended March 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Classic Classic Classic Classic
Florida Massachusetts New York Pennsylvania
Limited Fund Limited Fund Limited Fund Limited Fund
-------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 351,941 $ 208,852 $ 189,058 $ 314,689
Net realized loss (173,188) (33,260) (50,391) (136,499)
Change in unrealized appreciation 310,510 105,044 140,734 239,926
------------- ------------ ------------- -------------
Net increase in net assets from operations $ 489,263 $ 280,636 $ 279,401 $ 418,116
------------- ------------ ------------- -------------
Distributions to shareholders (Note 2) --
From net investment income $ (351,329) $ (207,640) $ (188,378) $ (309,256)
------------- ------------ ------------- -------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares $ 1,113,184 $ 901,869 $ 535,978 $ 1,234,275
Net asset value of shares issued to shareholders in
payment of distributions declared 230,154 165,278 165,662 249,490
Cost of shares redeemed (6,954,195) (1,465,165) (2,770,705) (3,864,821)
------------- ------------ ------------- -------------
Net decrease in net assets from Fund share
transactions $ (5,610,857) $ (398,018) $ (2,069,065) $ (2,381,056)
------------- ------------ ------------- -------------
Net decrease in net assets $ (5,472,923) $ (325,022) $ (1,978,042) $ (2,272,196)
Net Assets:
At beginning of year 13,771,462 5,378,009 6,042,511 9,752,903
------------- ------------ ------------- -------------
At end of year $ 8,298,539 $ 5,052,987 $ 4,064,469 $ 7,480,707
============= ============ ============= =============
Accumulated undistributed (distributions in
excess of) net investment income included in
net assets at end of year $ 1,294 $ (2,480) $ (453) $ (551)
============= ============ ============= =============
</TABLE>
See notes to financial statements
13
<PAGE>
Financial Highlights
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Classic Florida Limited
----------------------------------------------------
Year Ended March 31,
----------------------------------------------------
1997 1996 1995 1994*
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.620 $ 9.520 $ 9.480 $ 10.000
-------- --------- --------- ---------
Income (loss) from operations:
Net investment income $ 0.364 $ 0.359 $ 0.353 $ 0.103
Net realized and unrealized gain (loss)
on investments (0.187) 0.100 0.088 (0.495)
-------- --------- --------- ---------
Total income (loss) from
operations $ 0.177 $ 0.459 $ 0.441 $ (0.392)
-------- --------- --------- ---------
Less distributions:
From net investment income $ (0.357) $ (0.359) $ (0.353) $ (0.103)
In excess of net investment income -- -- (0.048) (0.025)
-------- --------- --------- ---------
Total distributions $ (0.357) $ (0.359) $ (0.401) $ (0.128)
-------- --------- --------- ---------
Net asset value, end of year $ 9.440 $ 9.620 $ 9.520 $ 9.480
======== ========= ========= =========
Total Return (1) 1.88 % 4.84 % 4.81 % (4.07 %)
Ratios/Supplemental Data+:
Net assets, end of year
(000 omitted) $ 5,787 $ 8,299 $ 13,771 $ 22,535
Ratio of net expenses to average daily
net assets (2)(3) 1.70 % 1.58 % 1.50 % 1.39 %+
Ratio of net expenses to average daily
net assets, after custodian fee reduction (2) 1.68 % 1.56 % -- --
Ratio of net investment income to
average daily net assets 3.80 % 3.75 % 3.81 % 3.25 %+
+ The operating expenses of the Funds and the Portfolios may reflect a reductio
of the Investment Adviser fee, an allocation of expenses to the Administrator,
or both. Had such actions not been taken, the ratios and net investment income
per share would have been as follows:
Ratios (As a percentage of average daily net assets):
Expenses (2)(3) 1.80 % 1.78 % 1.71 % 1.65 %+
Expenses after custodian fee reduction (2) 1.78 % 1.76 % -- --
Net investment income 3.70 % 3.55 % 3.60 % 2.99 %+
Net investment income per share $ 0.354 $ 0.340 $ 0.334 $ 0.095
======== ========= ========= ==========
<CAPTION>
Classic Massachusetts Limited
----------------------------------------------------
Year Ended March 31,
----------------------------------------------------
1997 1996 1995 1994**
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.680 $ 9.560 $ 9.520 $ 10.000
-------- --------- --------- --------
Income (loss) from operations:
Net investment income $ 0.376 $ 0.370 $ 0.359 $ 0.107
Net realized and unrealized gain (loss)
on investments (0.119) 0.118 0.092 (0.451)
-------- --------- --------- ---------
Total income (loss) from
operations $ 0.257 $ 0.488 $ 0.451 $ (0.344)
-------- --------- --------- ---------
Less distributions:
From net investment income $ (0.367) $ (0.368) $ (0.359) $ (0.107)
In excess of net investment income -- -- (0.052) (0.029)
-------- --------- --------- ---------
Total distributions $ (0.367) $ (0.368) $ (0.411) $ (0.136)
-------- --------- --------- ---------
Net asset value, end of year $ 9.570 $ 9.680 $ 9.560 $ 9.520
======== ========= ========= =========
Total Return (1) 2.70 % 5.16 % 4.90 % (3.67 %)
Ratios/Supplemental Data+:
Net assets, end of year
(000 omitted) $ 4,615 $ 5,053 $ 5,378 $ 4,967
Ratio of net expenses to average daily
net assets (2)(3) 1.67 % 1.47 % 1.63 % 1.49 %+
Ratio of net expenses to average daily
net assets, after custodian fee reduction (2) 1.65 % 1.46 % -- --
Ratio of net investment income to
average daily net assets 3.90 % 3.80 % 3.82 % 3.12 %+
+ The operating expenses of the Funds and the Portfolios may reflect a reduction
of the Investment Adviser fee, an allocation of expenses to the Administrator,
or both. Had such actions not been taken, the ratios and net investment income
per share would have been as follows:
Ratios (As a percentage of average daily
net assets):
Expenses (2)(3) 1.96 % 1.92 % 2.00 % 2.38 %+
Expenses after custodian fee reduction (2) 1.94 % 1.91 % -- --
Net investment income 3.61 % 3.35 % 3.45 % 2.23 %+
Net investment income per share $ 0.348 $ 0.326 $ 0.324 $ 0.077
======== ========= ========= ==========
</TABLE>
+ Annualized.
* For the period from the start of business, December 8, 1993, to March 31,
1994.
** For the period from the start of business, December 9, 1993, to March 31,
1994.
(1) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the payable date. Total return is not
computed on an annualized basis.
(2) Includes each Fund's share of its corresponding Portfolio's allocated
expenses.
(3) The expense ratios for the years ended March 31, 1996 and thereafter, have
been adjusted to reflect a change in reporting guidelines. The new reporting
guidelines require the Fund to increase its expense ratio by the effect of
any expense offset arrangements with its service providers or those of the
Portfolio. The expense ratios for each of the prior periods have not been
adjusted to reflect this change.
See notes to financial statements
14
<PAGE>
Financial Highlights
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Classic New York Limited
----------------------------------------------------
Year Ended March 31,
----------------------------------------------------
1997 1996 1995 1994*
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.620 $ 9.490 $ 9.500 $ 10.000
-------- --------- --------- ---------
Income (loss) from operations:
Net investment income $ 0.362 $ 0.359 $ 0.354 $ 0.100
Net realized and unrealized gain (loss)
on investments (0.094) 0.130 0.037++ (0.473)
-------- --------- --------- ---------
Total income (loss) from operations $ 0.268 $ 0.489 $ 0.391 $ (0.373)
-------- --------- --------- ---------
Less distributions:
From net investment income $ (0.358) $ (0.359) $ (0.354) $ (0.100)
In excess of net investment income -- -- (0.047) (0.027)
-------- --------- --------- ---------
Total distributions $ (0.358) $ (0.359) $ (0.401) $ (0.127)
-------- --------- --------- ---------
Net asset value, end of year $ 9.530 $ 9.620 $ 9.490 $ 9.500
======== ========= ========= =========
Total Return (1) 2.84 % 5.19 % 4.26 % (3.88 %)
Ratios/Supplemental Data+:
Net assets, end of year (000 omitted) $ 2,987 $ 4,064 $ 6,043 $ 6,325
Ratio of net expenses to average daily
net assets (2)(3) 1.68 % 1.48 % 1.52 % 1.61 %+
Ratio of net expenses to average daily
net assets, after custodian fee reduction (2) 1.66 % 1.46 % -- --
Ratio of net investment income to
average daily net assets 3.77 % 3.75 % 3.76 % 3.17 %+
+ The operating expenses of the Funds and the Portfolios may reflect a reduction
of the Investment Adviser fee, an allocation of expenses to the Administrator,
or both. Had such actions not been taken, the ratios and net investment income
per share would have been as follows:
Ratios (As a percentage of average daily
net assets):
Expenses (2)(3) 2.04 % 1.90 % 1.90 % 2.17 %+
Expenses after custodian fee reduction (2) 2.02 % 1.88 % -- --
Net investment income 3.41 % 3.33 % 3.38 % 2.61 %+
Net investment income per share $ 0.327 $ 0.319 $ 0.318 $ 0.082
======== ========= ========= ==========
<CAPTION>
Classic Pennsylvania Limited
----------------------------------------------------
Year Ended March 31,
----------------------------------------------------
1997 1996 1995 1994*
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.660 $ 9.550 $ 9.520 $ 10.000
-------- --------- --------- --------
Income (loss) from operations:
Net investment income $ 0.377 $ 0.373 $ 0.359 $ 0.103
Net realized and unrealized gain (loss)
on investments (0.100) 0.105++ 0.082 (0.453)
-------- --------- --------- ---------
Total income (loss) from operations $ 0.277 $ 0.478 $ 0.441 $ (0.350)
-------- --------- --------- ---------
Less distributions:
From net investment income $ (0.367) $ (0.368) $ (0.359) $ (0.103)
In excess of net investment income -- -- (0.052) (0.027)
-------- --------- --------- ---------
Total distributions $ (0.367) $ (0.368) $ (0.411) $ (0.130)
-------- --------- --------- ---------
Net asset value, end of year $ 9.570 $ 9.660 $ 9.550 $ 9.520
======== ========= ========= =========
Total Return (1) 2.93 % 5.05 % 4.79 % (3.65 %)
Ratios/Supplemental Data+:
Net assets, end of year (000 omitted) $ 5,684 $ 7,481 $ 9,753 $ 14,022
Ratio of net expenses to average daily
net assets (2)(3) 1.81 % 1.53 % 1.47 % 1.38 %+
Ratio of net expenses to average daily
net assets, after custodian fee reduction (2) 1.79 % 1.51 % -- --
Ratio of net investment income to
average daily net assets 3.92 % 3.87 % 3.83 % 3.29 %+
+ The operating expenses of the Funds and the Portfolios may reflect a reduction
of the Investment Adviser fee, an allocation of expenses to the Administrator,
or both. Had such actions not been taken, the ratios and net investment income
per share would have been as follows:
Ratios (As a percentage of average daily net assets):
Expenses (2)(3) 1.93 % 1.85 % 1.84 % 1.82 %+
Expenses after custodian fee reduction (2) 1.91 % 1.83 % -- --
Net investment income 3.80 % 3.55 % 3.46 % 2.85 %+
Net investment income per share $ 0.365 $ 0.342 $ 0.324 $ 0.089
======== ========= ========= ==========
</TABLE>
+ Annualized.
++ The per share amount is not in accord with the net realized and unrealized
gain (loss) 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.
* For the period from the start of business, December 8, 1993, to March 31,
1994.
(1) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the payable date. Total return is not
computed on an annualized basis.
(2) Includes each Fund's share of its corresponding Portfolio's allocated
expenses.
(3) The expense ratios for the years ended March 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund to increase its expense ratio by the
effect of any expense offset arrangements with its service providers or
those of the Portfolio. The expense ratios for each of the prior periods
have not been adjusted to reflect this change.
See notes to financial statements
15
<PAGE>
---------------------------------------------------------------------------
Notes to Financial Statements
(1) Significant Accounting Policies
Eaton Vance Investment Trust (the Trust) is an entity of the type commonly known
as a Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as an open-end investment management company. The Trust
presently consists of twenty-three Funds, four of which are included in these
financial statements. They include EV Classic Florida Limited Maturity
Municipals Fund ("Classic Florida Limited Fund"), EV Classic Massachusetts
Limited Maturity Municipals Fund ("Classic Massachusetts Limited Fund"), EV
Classic New York Limited Maturity Municipals Fund ("Classic New York Limited
Fund"), and EV Classic Pennsylvania Limited Maturity Municipals Fund ("Classic
Pennsylvania Limited Fund"). Each Fund invests all of its investable assets in
interests in a separate corresponding open-end management investment company (a
"Portfolio"), a New York Trust, having the same investment objective as its
corresponding Fund. The Classic Florida Limited Fund invests its assets in the
Florida Limited Maturity Municipals Portfolio, the Classic Massachusetts Limited
Fund invests its assets in the Massachusetts Limited Maturity Municipals
Portfolio, the Classic New York Limited Fund invests its assets in the New York
Limited Maturity Municipals Portfolio, and the Classic Pennsylvania Limited Fund
invests its assets in the Pennsylvania Limited Maturity Municipals Portfolio.
The value of each Fund's investment in its corresponding Portfolio reflects the
Fund's proportionate interest in the net assets of that Portfolio (6.2%, 6.6%,
3.0%, and 8.4% at March 31, 1997 for the Classic Florida Limited Fund, Classic
Massachusetts Limited Fund, Classic New York Limited Fund, and Classic
Pennsylvania Limited Fund, respectively). The performance of each Fund is
directly affected by the performance of its corresponding Portfolio. The
financial statements of each Portfolio, including the portfolio of investments,
are included elsewhere in this report and should be read in conjunction with
each Fund's financial statements. 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 - Valuation of securities by the Portfolios is
discussed in Note 1A of the Portfolios' Notes to Financial Statements which are
included elsewhere in this report.
B. Income - Each Fund's net investment income consists of the Fund's pro rata
share of the net investment income of its corresponding Portfolio, less all
actual and accrued expenses of each fund determined in accordance with generally
accepted accounting principles.
C. Federal Taxes - Each Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable and tax-exempt income,
including any net realized gain on investments. Accordingly, no provision for
federal income or excise tax is necessary. At March 31, 1997, the Funds, for
federal income tax purposes had capital loss carryovers which will reduce
taxable income arising from future net realized gain on investments, if any, to
the extent permitted by the Internal Revenue Code, and thus will reduce the
amount of the distributions to shareholders which would otherwise be necessary
to relieve the Funds of any liability for federal income or excise tax. The
amounts and expiration dates of the capital loss carryovers are as follows:
<TABLE>
<CAPTION>
Fund Amount Expires
- ------------------------------------ --------- ---------------
<S> <C> <C>
Classic Florida Limited Fund $47,151 March 31, 2005
560,185 March 31, 2004
175,896 March 31, 2003
Classic Massachusetts Limited Fund 30,086 March 31, 2005
98,981 March 31, 2004
35,341 March 31, 2003
58 March 31, 2002
Classic New York Limited Fund 20,866 March 31, 2005
151,250 March 31, 2004
42,307 March 31, 2003
195 March 31, 2002
Classic Pennsylvania Limited Fund 25,743 March 31, 2005
270,831 March 31, 2004
83,019 March 31, 2003
563 March 31, 2002
</TABLE>
Dividends paid by each Fund from net interest on tax-exempt municipal bonds
allocated from its corresponding Portfolio are not includable by shareholders as
gross income for federal income tax purposes because each Fund and Portfolio
intend to meet certain requirements of the Internal Revenue Code applicable to
regulated investment companies which will enable the Funds to pay tax-exempt
interest dividends. The portion of such interest, if any, earned on private
activity bonds issued after August 7, 1986 may be considered a tax preference
item to shareholders.
D. Deferred Organization Expenses - Costs incurred by a Fund in connection with
its organization, including registration costs, are being amortized on the
straight-line basis over five years beginning on the date each Fund commenced
operations.
E. Other - Investment transactions are accounted for on a trade date basis.
F. Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expense during the reporting period. Actual results could differ from those
estimates.
G. Expense Reduction - Investors Bank & Trust Company (IBT) serves as custodian
to the Funds and the Portfolios. Pursuant
16
<PAGE>
---------------------------------------------------------------------------
to the respective custodian agreements, IBT receives a fee reduced by credits
which are determined based on the average daily cash balances the Funds or the
Portfolios maintain with IBT. All significant credit balances used to reduce
each Fund's custodian fees are reported as a reduction of expenses on the
statement of operations.
(2) Distributions to Shareholders
The net income of each Fund is determined daily and substantially all of the net
income so determined is declared as a dividend to shareholders of record at the
time of declaration. Distributions are paid monthly. Distributions of allocated
realized capital gains, if any, are made at least annually. Shareholders may
reinvest income and capital gain distributions in additional shares of the Fund
at the net asset value as of the ex-dividend date. Distributions are paid in the
form of additional shares or, at the election of the shareholder, in cash. The
Funds distinguish between distributions on a tax basis and a financial reporting
basis. Generally accepted accounting principles require that only distributions
in excess of tax basis earnings and profits be reported in the financial
statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax earnings and
profits which result in temporary over distributions for financial statement
purposes are classified as distributions in excess of net investment income or
accumulated net realized gains. Permanent differences between book and tax
accounting relating to distributions are reclassified to paid-in capital.
The tax treatment of distributions for the calendar year will be reported to
shareholders prior to February 1, 1998 and will be based on tax accounting
methods which may differ from amounts determined for financial statement
purposes.
- ---------------------------------------------------------------------------
(3) Shares of Beneficial Interest
The Funds' Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Classic Florida Limited Fund Classic Massachusetts
----------------------------- Limited
Fund
----------------------------
Year Ended March 31, Year Ended March 31,
----------------------------- ----------------------------
1997 1996 1997 1996
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Sales 35,995 114,215 40,444 92,646
Issued to shareholders electing to receive
payments of distributions in Fund shares 17,701 23,721 16,648 16,994
Redemptions (303,371) (721,127) (97,183) (150,290)
---------- ---------- --------- ----------
Net Decrease (249,675) (583,191) (40,091) (40,650)
========== ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Classic New York Limited Fund Classic Pennsylvania Limited
----------------------------- Fund
-----------------------------
Year Ended March 31, Year Ended March 31,
----------------------------- -----------------------------
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Sales 142,963 55,514 84,241 126,168
Issued to shareholders electing to receive
payments of distributions in Fund shares 11,452 17,130 19,601 25,698
Redemptions (263,184) (286,755) (284,505) (398,779)
---------- ---------- ---------- ----------
Net Decrease (108,769) (214,111) (180,663) (246,913)
========== ========== ========== ==========
</TABLE>
- ---------------------------------------------------------------------------
(4) Transactions with Affiliates
Eaton Vance Management (EVM) serves as the administrator of each Fund, but
receives no compensation. The Portfolios have engaged Boston Management and
Research (BMR), a subsidiary of EVM, to render investment advisory services. See
Note 2 of the Portfolios' Notes to Financial Statements which are included
elsewhere in this report. To enhance the net income of the Funds, $7,111,
$13,863, $13,587, and $7,751, of expenses related to the operation of the
Classic Florida Limited Fund, Classic Massachusetts Limited Fund, Classic New
York Limited Fund, and Classic Pennsylvania Limited Fund, respectively, were
allocated to EVM. Except as to Trustees of the Funds and Portfolios who are not
members of EVM's or BMR's organization, officers and Trustees receive
remuneration for their services to each fund out of the investment advisor fee
earned by BMR. Certain of the officers and Trustees of the Funds and Portfolios
are officers and directors/trustees of the above organizations. (Note 5)
- ---------------------------------------------------------------------------
(5) Distribution Plan
Each Fund has adopted a distribution plan (the Plans) pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plans require the Funds to pay the
principal underwriter, Eaton Vance Distributors, Inc. (EVD), amounts equal to
1/365 of 0.75% of each Fund's daily net assets, for providing ongoing
distribution services and facilities to the respective Fund.
17
<PAGE>
---------------------------------------------------------------------------
(5) Distribution Plan (continued)
A Fund will automatically discontinue payments to EVD during any period in which
there are no outstanding Uncovered Distribution Charges, which are equivalent to
the sum of (i) 5% of the aggregate amount received by the Fund for shares sold
plus (ii) distribution fees calculated by applying the rate of 1% over the
prevailing prime rate to the outstanding balance of Uncovered Distribution
Charges of EVD reduced by the aggregate amount of contingent deferred sales
charges (Note 6) and amounts theretofore paid to EVD. The amount payable to EVD
with respect to each day is accrued on such day as a liability of each Fund and,
accordingly, reduces the Fund's net assets. For the year ended March 31, 1997,
Classic Florida Limited Fund, Classic Massachusetts Limited Fund, Classic New
York Limited Fund and Classic Pennsylvania Limited Fund, paid or accrued
$51,482, $35,812, $28,559 and $48,556, respectively, to or payable to EVD,
representing 0.75% of average daily net assets. At March 31, 1997, the amount of
Uncovered Distribution Charges of EVD calculated under the Plans for Classic
Florida Limited Fund, Classic Massachusetts Limited Fund, Classic New York
Limited Fund and Classic Pennsylvania Limited Fund were approximately
$3,383,200, $718,700, $876,900, and $1,625,500, respectively.
In addition, the Plans authorize the Funds to make payments of service fees to
the Principal Underwriter, Authorized Firms and other persons in amounts not
exceeding 0.25% of each Fund's average daily net assets for any fiscal year. The
Trustees have initially implemented the Plans by authorizing the Funds to make
quarterly service fee payments to the Principal Underwriter and Authorized Firms
in amounts not expected to exceed 0.20% per annum of each Fund's average daily
net assets based on the value of Fund shares sold by such persons and remaining
outstanding for at least one year. For the year ended March 31, 1997, Classic
Florida Limited Fund, Classic Massachusetts Limited Fund, Classic New York
Limited Fund and Classic Pennsylvania Limited Fund paid or accrued service fees
to or payable to EVD in the amount of $10,296, $7,162, $5,712, and $9,711,
respectively. Service fee payments are made for personal services and/or
maintenance of shareholder accounts. Service fees paid to EVD and authorized
firms are separate and distinct from the sales commissions and distribution fees
payable by each Fund to EVD, and as such are not subject to automatic
discontinuance when there are no outstanding Uncovered Distribution Charges of
EVD. Certain officers and Trustees of the Fund are officers or directors of EVD.
- ---------------------------------------------------------------------------
(6) Contingent Deferred Sales Charge
A contingent deferred sales charge (CDSC) of 1% is imposed on any redemption of
Fund shares made within one year of purchase. Generally, the CDSC is based upon
the lower of the net asset value at date of redemption or date of purchase. No
charge is levied on shares acquired by reinvestment of dividends or capital
gains distributions. The CDSC is imposed at declining rates that begin at 5% in
the case of redemptions in the first and second year after purchase, declining
one percentage point each subsequent year. No CDSC is levied on shares which
have been sold to EVD or its affiliates or to their respective employees or
clients. CDSC charges are paid to EVD to reduce the amount of Uncovered
Distribution Charges calculated under each Fund's Distribution Plans. CDSC
charges received when no Uncovered Distribution Charges exist will be credited
to the Funds. For the year ended, March 31, 1997, EVD received $3,250, $436, and
$6,098, respectively, of CDSC paid by shareholders of Classic Florida Limited
Fund, Classic Massachusetts Limited Fund, and Classic Pennsylvania Limited Fund.
No CDSC was paid to EVD by shareholders of Classic New York Limited Fund.
- ---------------------------------------------------------------------------
(7) Investment Transactions
Increases and decreases in each Fund's investment in its corresponding Portfolio
for the year ended March 31, 1997, were as follows:
<TABLE>
<CAPTION>
Classic Classic Classic Classic
Florida Massachusetts New York Pennsylvania
Limited Fund Limited Fund Limited Fund Limited Fund
-------------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
Increases $ 424,813 $ 476,597 $1,417,423 $ 872,356
Decreases 3,143,467 1,084,622 2,627,669 2,866,969
</TABLE>
18
<PAGE>
Independent Auditors' Report
---------------------------------------------------------------------------
To the Trustees and Shareholders of Eaton Vance Investment Trust:
We have audited the accompanying statements of assets and liabilities of EV
Classic Florida Limited Maturity Municipals Fund, EV Classic Massachusetts
Limited Maturity Municipals Fund, EV Classic New York Limited Maturity
Municipals Fund and EV Classic Pennsylvania Limited Maturity Municipals Fund
(the Funds) (series of Eaton Vance Investment Trust) as of March 31, 1997, the
related statements of operations for the year then ended, the statements of
changes in net assets for the years ended March 31, 1997 and 1996, and the
financial highlights for each of the years in the four-year period ended March
31, 1997. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
aforementioned funds of Eaton Vance Investment Trust at March 31, 1997, and the
results of their operations, the changes in their net assets and their financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 2, 1997
19
<PAGE>
Florida Limited Maturity Municipals Portfolio
Portfolio of Investments - March 31, 1997
---------------------------------------------------------------------------
Tax-Exempt Investments - 100%
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- -------------------------------- -------------
<S> <C> <C> <C> <C>
Escrowed - 14.3%
Aaa AAA $1,015 Dade County, FL,
Educational Facilities
Authority, (MBIA),
Prerefunded to 10/1/01,
7.00%, 10/1/08 $ 1,124,955
Aaa AAA 1,500 Dade County, FL, Local
School District, (FGIC),
Prerefunded to 8/1/01,
6.00%, 8/1/06 1,575,240
Aaa AAA 1,500 Florida Department of
Natural Resources,
Preservation 2000, (MBIA),
Prerefunded to 7/1/98,
7.25%, 7/1/08 1,587,945
Aaa AAA 3,000 Jacksonville Electric
Authority, Bulk Power
Supply System, Prerefunded
to 10/1/00, 6.75%, 10/1/16 3,247,260
Aaa AAA 3,250 Orlando Utility Community
Water & Electric,
Prerefunded to 10/1/01,
6.50%, 10/1/20 3,538,243
Baa1 AAA 1,750 Puerto Rico Aqueduct &
Sewer Authority, Prerefunded
to 7/1/98, 7.875%, 7/1/17 1,868,142
------------
$12,941,785
------------
General Obligations - 17.0%
Aa2 AA $4,000 Florida State Board of
Education, 5.00%, 6/1/14 $ 3,705,960
Aa2 AA 5,000 Florida State Board of
Education, 5.00%, 6/1/15 4,588,200
Aa2 AA 4,000 Florida State Board of
Education, 5.55%, 6/1/11 4,014,160
Baa1 A 1,000 Puerto Rico Public Building
Authority, 6.50%, 7/1/03 1,084,330
Baa1 A- 2,000 Puerto Rico Municipal
Finance Agency, 5.50%,
7/1/01 2,040,760
------------
$15,433,410
------------
Hospitals - 2.9%
NR BBB+ $1,250 Escambia County Health
Facilities Authority, (Baptist
Hospital, Inc., and Baptist
Manor, Inc.), 6.00%,
10/1/14 $ 1,237,600
Baa1 NR 425 Jacksonville Health Facilities
Authority, (National
Benevolent Association-
Cypress Village Project),
6.00%, 12/1/98 429,900
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- -------------------------------- -------------
Hospitals (continued)
Baa1 NR $ 450 Jacksonville Health Facilities
Authority, (National
Benevolent Association-
Cypress Village Project),
6.25%, 12/1/99 $ 457,223
Baa1 NR 480 Jacksonville Health Facilities
Authority, (National
Benevolent Association-
Cypress Village Project),
6.50%, 12/1/00 489,797
------------
$ 2,614,520
------------
Housing - 2.2%
Baa BBB $2,000 Puerto Rico Housing Bank
and Finance Agency, 5.10%,
12/1/03 $ 1,979,400
------------
Industrial Development
Revenue - 2.3%
B1 BB+ $2,000 Polk County, Florida,
Industrial Development
Authority, (IMC Fertilizer),
(AMT), 7.525%, 1/1/15 $ 2,124,520
------------
Insured Cogeneration - 2.2%
Aaa AAA $2,000 Dade County, Florida,
Resource Recovery Facilities,
(AMBAC), (AMT), 5.30%,
10/1/07 $ 1,975,320
------------
Insured General Obligation - 5.9%
Aaa AAA $2,000 Dade County Local School
District, (MBIA), 5.00%,
2/15/15 $ 1,821,240
Aaa AAA 4,000 Manatee County, FL,
(FGIC), 4.75%, 10/1/13 3,555,840
------------
$ 5,377,080
------------
Insured Hospital - 9.5%
Aaa AAA $4,000 Jacksonville Health Facilities
Authority, (Baptist Medical
Center Project), (MBIA),
7.25%, 6/1/25 (1) $ 4,269,080
Aaa AAA 3,500 Naples, Florida, Hospital
District, (Naples Community
Hospital) (MBIA), 5.50%,
10/1/16 3,368,470
Aaa AAA 1,000 Orange County Health
Facilities Authority,
(Adventist Health System/
Sunbelt Inc.) (CGIC), 5.50%,
11/15/02 1,031,100
------------
$ 8,668,650
------------
</TABLE>
20
<PAGE>
---------------------------------------------------------------------------
Tax-Exempt Investments (continued)
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ------------------------------- ------------
<S> <C> <C> <C> <C>
Insured Housing - 2.6%
Aaa AAA $1,240 Florida Housing Finance
Agency, (Leigh Meadows
Apartments), (AMBAC),
5.85%, 9/1/10 $ 1,246,076
Aaa AAA 1,140 Florida Housing Finance
Agency, (Stottert Arms
Apartments), (AMBAC),
5.90%, 9/1/10 1,150,305
------------
$ 2,396,381
------------
Insured Industrial Development
Revenue - 1.6%
Aaa AAA $1,500 Pinellas County, FL,
Resource Recovery, (MBIA),
5.125%, 10/1/04 $ 1,500,465
------------
Insured Miscellaneous - 1.8%
Aaa AAA $1,750 Hillsborough County Florida
Capital Improvement,
(MBIA), 5.00%, 7/1/13 $ 1,634,342
------------
Insured Special Tax - 4.3%
Aaa AAA $4,000 Florida Department of
Natural Resources, (MBIA),
5.25%, 7/1/10 $ 3,941,520
------------
Insured Transportation - 9.3%
Aaa AAA $2,000 Dade County, Florida,
Seaport Revenue, (MBIA),
5.125%, 10/1/16 $ 1,851,260
Aaa AAA 2,000 Florida State Turnpike
Authority - D.O.T., (FGIC),
5.00%, 7/1/19 1,790,920
Aaa AAA 3,120 Hillsborough County
Aviation Authority, Tampa
International Airport,
(FGIC), 6.85%, 10/1/06 3,325,577
Aaa AAA 1,500 Sarasota - Manatee County,
Florida, Airport, (MBIA),
5.375%, 8/1/14 1,455,465
------------
$ 8,423,222
------------
Insured Water & Sewer - 9.0%
Aaa AAA $5,000 Dade County FL, Water &
Sewer Revenue, (FGIC),
5.25%, 10/1/11 $ 4,893,300
Aaa AAA 2,000 Manatee County FL, Public
Utilities, (MBIA), 6.75%,
10/1/04 2,225,260
Aaa AAA 1,000 Pasco County FL, Water &
Sewer Revenue, (FGIC),
5.40%, 10/1/03 1,027,270
------------
$ 8,145,830
------------
Ratings (Unaudited) Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ------------------------------- ------------
Special Tax Revenue - 1.7%
NR NR $1,500 Virgin Islands Public Finance
Authority, 6.80%, 10/1/00 $ 1,569,570
------------
Utility - 13.4%
Aa AA $3,000 Gainesville, Florida Utility
System Revenue, 5.00%,
10/1/15 $ 2,747,400
Aa1 AA 6,000 Jacksonville Electric
Authority, St. John's River
Power Park, 5.25%, 10/1/20 5,468,580
Baa1 BBB+ 2,000 Puerto Rico Electric Power
Authority, 5.50%, 7/1/14 1,906,660
Aa AA- 2,000 City of Tallahassee, Electric
Refunding Bonds, 5.90%,
10/1/05 2,104,420
------------
$12,227,060
------------
Total Tax-Exempt
Investments (identified
cost, $90,512,005) $90,953,075
============
</TABLE>
- ------------------------------------
(1) Security has been segregated to cover margin requirements on open financial
futures contracts.
AMT--Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Florida
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at March 31, 1997, 51.0% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution range from 1.1% to 27.2% of total investments.
See notes to financial statements
21
<PAGE>
Massachusetts Limited Maturity Municipals Portfolio
Portfolio of Investments - March 31, 1997
---------------------------------------------------------------------------
Tax-Exempt Investments - 100%
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ----------------------------- -------------
<S> <C> <C> <C> <C>
Education - 3.3%
A1 A+ $1,200 Massachusetts Health and
Education Finance Authority,
Tufts University, 7.40%,
8/1/18 $ 1,268,268
A A- 1,030 Massachusetts Industrial
Finance Agency, Park School,
5.50% 9/1/16 991,324
------------
$ 2,259,592
------------
Escrowed/Prerefunded - 6.5%
Aaa AAA $2,000 Lynn, Massachusetts, Water
and Sewer Commission,
(MBIA), Prerefunded to
12/1/00, 7.25%, 12/1/10 $ 2,211,720
NR AAA 1,050 Massachusetts Health and
Educational Facilities
Authority, Jordan Hospital,
(FHA), Prerefunded to
8/15/98, 7.85%, 8/15/28 1,111,414
Aaa AAA 1,060 Massachusetts Health and
Educational Facilities
Authority, Berkshire Health
System, (MBIA), Prerefunded
to 10/1/98, 6.75%, 10/1/19 1,101,011
------------
$ 4,424,145
------------
General Obligations - 9.4%
A1 A+ $2,000 The Commonwealth of
Massachusetts, 5.00%,
11/1/14 $ 1,832,200
Baa1 A 4,000 Puerto Rico Aqueduct &
Sewer Authority, 5.00%,
7/1/15 3,610,960
Baa1 A 1,000 Puerto Rico Aqueduct &
Sewer Authority, 5.00%,
7/1/19 888,630
------------
$ 6,331,790
------------
Hospitals - 9.8%
Baa3 BB $1,130 Massachusetts Health and
Educational Facilities
Authority, Milford
Whitinsville Hospital,
7.125%, 7/15/02 $ 1,141,594
NR BBB- 1,845 Massachusetts Health and
Educational Facilities
Authority, North Adams
Regional Hospital, 6.25%,
7/1/04 1,877,011
Baa2 BBB 500 Massachusetts Health and
Educational Facilities
Authority, Sisters of
Providence Hospital, 6.00%,
11/15/00 508,895
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ----------------------------- -------------
Hospitals (continued)
Aa2 AA 3,000 Massachusetts Health and
Educational Facilities
Authority, Daughters of
Charity Issue, 5.75%, 7/1/02 3,101,100
------------
$ 6,628,600
------------
Insured Education - 1.5%
Aaa AAA $1,015 Massachusetts Industrial
Financing Authority -
Dexter School Project,
(MBIA), 5.40%, 5/1/13 $ 985,342
------------
Insured General Obligations - 10.4%
Aaa AAA $1,000 Bridgewater, Massachusetts,
(FGIC), 5.40%, 6/1/12 $ 981,760
Aaa AAA 1,000 Bridgewater, Massachusetts,
(FGIC), 5.50%, 6/1/16 969,410
Aaa AAA 2,000 The Commonwealth of
Massachusetts, (MBIA),
5.375%, 9/1/14 1,936,220
Aaa AAA 1,000 The Commonwealth of
Massachusetts, (FGIC),
6.50%, 6/1/01 1,067,510
Aaa AAA 1,000 Lowell, Massachusetts,
(AMBAC), 5.10%, 12/15/08 976,510
Aaa AAA 1,000 Town of Rockport,
Massachusetts, (AMBAC),
6.80%, 12/15/04 1,088,060
------------
$ 7,019,470
------------
Insured Hospital - 4.1%
Aaa AAA $3,000 Massachusetts Health and
Educational Facilities
Authority, Lowell General
Hospital, (FSA), 5.25%,
6/1/16 $ 2,785,800
------------
Insured Housing - 17.3%
Aaa AAA $1,900 Massachusetts Housing
Finance Agency, (AMBAC),
(AMT), 5.90%, 1/1/03 $ 1,965,189
Aaa AAA 4,800 Massachusetts Housing
Finance Agency, (AMBAC),
(AMT), (Harborpoint
Development), 6.20%,
12/1/10 4,935,840
Aaa AAA 4,730 Massachusetts Housing
Finance Agency, (MBIA),
6.125%, 12/1/11 4,822,377
------------
$11,723,406
------------
</TABLE>
22
<PAGE>
---------------------------------------------------------------------------
Tax-Exempt Investments (continued)
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ------------------------------- ------------
<S> <C> <C> <C> <C>
Insured Industrial Development
Revenue - 2.1%
Aaa AAA $1,400 Massachusetts IFA
(Nantucket Electric),
(AMBAC), (AMT), 5.30%,
7/1/04 $ 1,410,766
------------
Insured Transportation - 4.3%
Aaa AAA $3,000 Massachusetts Bay
Transportation Authority,
(AMBAC), 5.25%, 3/1/11 $ 2,920,470
------------
Insured Utility - 5.2%
Aaa AAA $2,000 Massachusetts Municipal
Wholesale Electric Company,
(AMBAC), 6.625%, 7/1/03 (1) $ 2,176,320
Aaa AAA 1,225 Massachusetts Municipal
Wholesale Electric Company,
(MBIA), 6.40%, 7/1/02 1,311,669
------------
$ 3,487,989
------------
Insured Water and Sewer - 7.8%
Aaa AAA $4,000 Massachusetts Water & Sewer
Authority, (FGIC), 5.50%,
11/1/14 $ 3,918,200
Aaa AAA 1,500 Massachusetts Water & Sewer
Authority, (MBIA), 5.00%,
12/1/16 1,361,010
------------
$ 5,279,210
------------
Lease Revenue/Certificate
of Participation - 2.4%
NR BBB $1,650 Puerto Rico ITEM & EC -
Guaynabo Lease Program,
5.375%, 7/1/06 $ 1,627,411
------------
Nursing Homes - 3.1%
NR NR $ 970 Massachusetts Health and
Educational Facilities,
(1st Mortgage - Fairview
Extended Care), 10.125%,
1/1/11 $ 1,091,192
NR NR 1,000 Massachusetts Industrial
Finance Agency, Health Care
Facilities, (Age Institute of
Massachusetts), 7.60%,
11/1/05 999,590
------------
$ 2,090,782
------------
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ------------------------------- ------------
Special Tax Revenue - 2.7%
NR NR $1,750 Virgin Islands Public Finance
Authority, 6.70%, 10/1/99 $ 1,817,112
------------
Transportation - 8.6%
A1 A+ $3,000 Massachusetts Bay
Transportation Authority,
5.75%, 3/1/18 $ 2,940,870
A1 A+ 2,000 Massachusetts Turnpike
Authority, 5.00%, 1/1/20 1,774,860
A1 A+ 1,000 Woods Hole, Martha's
Vineyard and Nantucket
Steamship Authority, 6.60%,
3/1/03 1,082,090
------------
$ 5,797,820
------------
Utilities - 1.5%
A BBB+ $1,000 Massachusetts Municipal
Wholesale Electric Company,
5.70%, 7/1/01 $ 1,027,960
------------
Total Tax-Exempt
Investments (identified
cost, $67,029,171) $67,617,665
============
</TABLE>
- ------------------------------------
(1) Security has been segregated to cover margin requirements on open financial
futures contracts.
AMT--Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Massachusetts
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at March 31, 1997, 57.6% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution range from 4.1% to 22.9% of total investments.
See notes to financial statements
23
<PAGE>
New York Limited Maturity Municipals Portfolio
Portfolio of Investments - March 31, 1997
---------------------------------------------------------------------------
Tax-Exempt Investments - 100%
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ------------------------------ ------------
<S> <C> <C> <C> <C>
Assisted Living--1.2%
NR NR $ 115 Glen Cove, New York,
Industrial Development
Authority, (The Regency at
Glen Cove), 9.50%, 7/1/97 $ 115,000
NR NR 560 Glen Cove, New York,
Industrial Development
Authority, (The Regency at
Glen Cove), 9.50%, 7/1/99 560,000
NR NR 500 Glen Cove, New York,
Industrial Development
Authority, (The Regency at
Glen Cove), 9.50%, 7/1/12 500,000
-----------
$1,175,000
-----------
Cogeneration - 1.0%
NR NR $ 950 Port Authority of New York
& New Jersey - KIAC
Project, 6.50%, 10/1/01 $ 978,054
-----------
Escrowed/Prerefunded - 2.1%
NR AA- $2,000 Power Authority of the State
of New York, Prerefunded
to 1/1/98, 8.00%, 1/1/17 $2,100,320
-----------
General Obligations - 3.6%
Baa1 BBB+ $1,500 The City of New York,
6.375%, 8/1/06 $1,541,325
A2 A- 2,000 State of New York, 5.25%,
7/15/09 1,966,100
-----------
$3,507,425
-----------
Hospitals - 4.0%
Baa1 B+ $2,000 Dormitory Authority of
New York, Department of
Health, 5.375%, 7/1/08 $1,929,480
Baa1 BBB+ 1,000 New York State Dormitory
Authority, Mental Health
Services, 5.30%, 2/15/04 991,990
Baa NR 1,000 New York State Dormitory
Authority, Nyack Hospital,
6.00%, 7/1/06 999,190
-----------
$3,920,660
-----------
Housing - 6.7%
Aa AA $5,100 New York City Housing
Development Corporation,
(Multi-Family), 5.625%,
5/1/12 $5,000,754
Aa2 NR 1,500 New York State Mortgage
Agency - Homeownership
Mortgage Bonds, (AMT),
6.45%, 10/1/21 1,540,875
-----------
$6,541,629
-----------
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ------------------------------ ------------
Insured Education - 3.2%
Aaa AAA $1,075 Dormitory Authority of the
State of New York, Mt.
Sinai School of Medicine,
(MBIA), 6.75%, 7/1/09 $1,164,193
Aaa AAA 2,000 Dormitory Authority of the
State of New York, State
University, (AMBAC),
5.25%, 5/15/10 1,980,260
-----------
$3,144,453
-----------
Insured General Obligations - 5.0%
Aaa AAA $2,000 Nassau County, New York,
(AMBAC), 5.25%, 11/1/12 $1,934,820
Aaa AAA 3,000 Nassau County, New York,
(AMBAC), 5.15%, 3/1/05 3,008,580
-----------
$4,943,400
-----------
Insured Hospital - 9.5%
Aaa AAA $2,000 New York State Dormitory
Authority, Montefiore
Medical Center, (AMBAC),
5.25%, 2/1/15 (1) $1,876,480
Aaa AAA 4,450 New York State Medical
Care Facilities Finance
Agency, New York State
Hospital, (AMBAC), 6.10%,
2/15/04 4,726,389
Aaa AAA 2,500 New York State Medical
Care Facilities Finance
Agency, New York State
Hospital, (AMBAC), 6.20%,
2/15/05 2,674,125
-----------
$9,276,994
-----------
Insured Lease Revenue/Certificate
of Participation - 2.0%
Aaa AAA $2,000 City University of New York
- John Jay College,
(AMBAC), 5.00%, 8/15/08 $1,943,300
-----------
Insured Transportation - 9.5%
Aaa AAA $1,500 Albany County New York
Airport, (FSA), 5.25%,
12/15/10 $1,440,390
Aaa AAA 2,240 Metropolitan Transportation
Authority of New York,
(FGIC), 5.70%, 7/1/10 2,263,139
Aaa AAA 1,500 New York State Thruway
Authority - Highway &
Bridge Project, (AMBAC),
5.25%, 4/1/13 1,444,230
Aaa AAA 1,750 The Port Authority of New
York and New Jersey,
(FGIC), (AMT), 5.40%,
7/15/10 1,731,713
</TABLE>
24
<PAGE>
---------------------------------------------------------------------------
Tax-Exempt Investments (continued)
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ----------------------------- ------------
<S> <C> <C> <C> <C>
Insured Transportation (continued)
Aaa AAA 2,290 Triborough Bridge and
Tunnel Authority, (FGIC),
5.80%, 1/1/02 2,391,470
------------
$ 9,270,942
------------
Insured Utility - 5.6%
Aaa AAA $5,000 New York State Energy
Research and Development
Authority, Central Hudson
Gas, (FGIC), 7.375%,
10/1/14 $ 5,437,500
------------
Insured Water and Sewer - 1.1%
Aaa AAA $1,000 New York City Municipal
Water Finance Authority,
(AMBAC), 5.80%, 6/15/03 $ 1,043,120
------------
Lease Revenue/
Certificates of Participation - 14.4%
A1 AA $3,500 Housing New York
Corporation, 6.00%,
11/1/03 $ 3,676,085
NR BBB 1,485 New York State Thruway
Authority, Capital
Appreciation Bonds, 0.00%,
1/1/04 1,012,844
Aaa AAA 5,250 New York Urban
Development Corporation,
Senior Lien, 5.50%, 7/1/16 5,047,665
Baa1 BBB 4,715 New York Urban
Development Corporation,
5.375%, 1/1/15 4,335,018
------------
$14,071,612
------------
Special Tax Revenue - 4.3%
A3 A $4,500 New York Local
Government Assistance
Corporation, 5.25%, 4/1/16 $ 4,249,395
------------
Transportation - 23.8%
Baa1 BBB $3,000 New York State Thruway
Authority, 5.75%, 4/1/16 $ 2,890,980
A1 AA- 3,000 Port Authority of New York
& New Jersey, (AMT),
6.00%, 7/1/14 3,058,710
A1 AA- 5,750 Port Authority of New York
& New Jersey, (AMT),
5.375%, 10/15/13 5,527,590
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ----------------------------- ------------
Transportation (continued)
A1 AA- 2,500 Port Authority of New York
& New Jersey, (AMT),
5.375%, 10/15/14 2,386,600
Baa3 BB+ 2,875 Port Authority of New York
& New Jersey, (Delta
Airlines), 6.95%, 6/1/08 3,050,778
Baa3 BB+ 1,700 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.25%, 6/1/26 1,732,674
Aa A+ 5,000 Triborough Bridge & Tunnel
Authority, 5.30%, 1/1/17 4,705,050
------------
$23,352,382
------------
Water & Sewer Revenue - 3.0%
A A- $1,825 New York City Municipal
Water Finance Authority,
5.70%, 6/15/02 $ 1,884,458
Aaa AAA 1,000 New York State
Environmental Facilities
Corporation, County of
Westchester Project, 5.60%,
9/15/13 1,012,120
------------
$ 2,896,578
------------
Total Tax-Exempt
Investments (identified
cost, $97,740,065) $97,852,764
============
</TABLE>
- ------------------------------------
(1) Security has been segregated to cover margin requirements on open financial
futures contracts.
AMT--Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by New York
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at March 31, 1997, 35.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution range from 1.2% to 21.1% of total investments.
See notes to financial statements
25
<PAGE>
Pennsylvania Limited Maturity Municipals Portfolio
Portfolio of Investments - March 31, 1997
---------------------------------------------------------------------------
Tax-Exempt Investments - 100%
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- -------------------------------- -------------
<S> <C> <C> <C> <C>
Assisted Living - 1.8%
NR NR $1,120 Delaware County,
Pennsylvania, Industrial
Development Authority,
(Glen Riddle Project),
(AMT), 8.125%, 9/1/05 $ 1,156,165
------------
Cogeneration - 5.1%
NR BBB- $2,000 Pennsylvania Economic
Development Financing
Authority, (Resource
Recovery - Culver Project),
(AMT), 7.05%, 12/1/10 $ 2,117,520
NR NR 1,200 Pennsylvania Economic
Development Financing
Authority, (Resource
Recovery for Northampton),
6.75%, 1/1/07 1,214,004
------------
$ 3,331,524
------------
Education - 1.1%
NR AAA $ 700 Montgomery County Higher
Education and Health
Authority, (Saint Joseph's
University), (CLEE), 6.00%,
12/15/02 $ 735,378
------------
Escrowed - 15.3%
Aaa AAA $1,485 Elizabeth, Pennsylvania,
School District, (MBIA),
Escrowed to Maturity, 0.00%,
9/1/15 $ 508,924
Aaa AAA 3,200 Philadelphia Municipal
Authority, Justice Lease
Revenue Bonds, (FGIC),
Prerefunded to 11/15/01,
7.10%, 11/15/11 3,563,040
Aaa NR 1,500 Philadelphia, Pennsylvania,
Hospital & Higher
Education, (Children's
Hospital), Prerefunded to
2/15/02, 6.50%, 2/15/21 1,631,610
Baa BBB 500 Pennsylvania State Higher
Education, (Medical College
of Pennsylvania), Prerefunded
to 3/1/01, 7.25%, 3/1/05 552,965
Aaa AAA 1,500 Somerset County, Pennsylvania,
General Authority, (FGIC),
Escrowed to Maturity, 6.50%,
10/15/01 1,608,225
Aaa AAA 1,000 Westmoreland County,
Pennsylvania, Municipal
Authority, Escrowed to
Maturity, 0.00%, 7/1/15 346,050
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- -------------------------------- -------------
Escrowed (continued)
Aaa AAA 7,000 Westmoreland County,
Pennsylvania, Municipal
Authority, Escrowed to
Maturity, 0.00%, 8/15/19 1,885,450
------------
$10,096,264
------------
Baa1 A $ 750 Puerto Rico Aqueduct &
Sewer Authority, 5.00%,
7/1/15 $ 677,055
------------
Hospitals - 30.1%
NR BBB- $2,355 Clearfield, Pennsylvania,
Hospital Authority,
(Clearfield Hospital), 6.875%,
6/1/16 $ 2,415,547
Aa AA 2,000 Geisinger, Pennsylvania,
Health System, 7.375%,
7/1/02 2,131,460
Baa3 BBB+ 650 Hazelton, Pennsylvania
Health Service Authority, St.
Joseph's Hospital, 5.85%,
7/1/06 649,012
NR AAA 1,030 Indiana County, Pennsylvania,
Hospital Authority, (Indiana
Hospital Project), (CLEE),
5.75%, 7/1/00 1,063,413
NR AAA 825 Indiana County, Pennsylvania,
Hospital Authority, (Indiana
Hospital Project), (CLEE),
5.875%, 7/1/01 859,625
A3 A 1,200 Lehigh County Pennsylvania
General Purpose Authority,
(Muhlenberg Hospital),
5.75%, 7/15/10 1,167,324
A BBB+ 1,000 Monroeville, Pennsylvania,
Hospital Authority, (Forbes
Health), 5.75%, 10/1/05 1,004,670
Baa NR 1,030 Montgomery County,
Pennsylvania, Higher
Education & Health
Authority, (Montgomery
Hospital), 6.25%, 7/1/06 1,043,946
Baa NR 1,100 Montgomery County,
Pennsylvania, Higher
Education & Health
Authority, (Montgomery
Hospital), 6.375%, 7/1/07 1,106,435
A NR 500 New Castle Area Hospital
Authority, (St. Francis
Hospital of New Castle),
5.90%, 11/15/00 513,045
NR BBB 380 Northampton County
Hospital Authority, (Easton
Hospital) 6.90%, 1/1/02 394,429
</TABLE>
26
<PAGE>
---------------------------------------------------------------------------
Tax-Exempt Investments (continued)
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ------------------------------ -------------
<S> <C> <C> <C> <C>
Hospitals (continued)
Baa1 BBB+ $1,500 The Hospitals and Higher
Education Facilities
Authority of Philadelphia,
(Graduate Health System),
7.00%, 7/1/05 $ 1,535,400
Baa1 BBB+ 1,500 Pennsylvania State Higher
Education, (Thomas Jefferson
Univ.), 5.90%, 8/15/00 1,557,330
Aa NR 4,750 Pottsville, PA, Hospital
Authority, (Daughters of
Charity), 5.00%, 8/15/12 4,382,492
------------
$19,824,129
------------
Industrial Development
Revenue - 3.2%
NR NR $ 885 Chester County, PA,
Industrial Development
Authority, 8.00%, 9/1/05 $ 900,204
A3 A- 1,200 Erie County Pennsylvania
IDA Pollution Control
Revenue, (International
Paper), (AMT), 5.85%,
12/1/20 1,174,620
------------
$ 2,074,824
------------
Insured General Obligations - 7.2%
Aaa AAA $2,000 Bucks County, Pennsylvania,
Technical School Authority,
(AMBAC), 5.375%, 8/15/15 $ 1,918,740
Aaa AAA 3,000 Commonwealth of
Pennsylvania, (AMBAC),
5.00%, 11/15/11 2,843,220
------------
$ 4,761,960
------------
Insured Hospitals - 8.0%
Aaa AAA $1,000 Allegheny County,
Pennsylvania, Hospital
Development Authority,
(South Hills Health),
(MBIA), 5.50%, 5/1/08 $ 1,011,120
Aaa AAA 1,000 The Hospital Authority of
Beaver County, Pennsylvania,
(The Medical Center of
Beaver, PA), (AMBAC),
5.90%, 7/1/00 1,036,910
Aaa AAA 1,000 Erie County, Pennsylvania,
Hospital Authority, (Hamot
Health System), (AMBAC),
7.10%, 2/15/10 1,086,400
Aaa AAA 2,050 Sayre Health Care Facilities
Authority, (Guthrie Medical
Center), (AMBAC), 6.50%,
3/1/00 2,151,660
------------
$ 5,286,090
------------
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ------------------------------ -------------
Insured Industrial Development
Revenue - 6.8%
Aaa AAA $2,000 Cambria County
Pennsylvania, IDA Pollution
Control Revenue, (PENN
Electric), (MBIA), 5.35%,
11/1/10 $ 1,985,620
Aaa AAA 2,500 Indiana County Pennsylvania,
IDA Pollution Control
Revenue, (PENN Electric),
(MBIA), 5.35%, 11/1/10 2,488,675
------------
$ 4,474,295
------------
Insured Lease Revenue/
Certificates of Participation - 6.5%
Aaa AAA $ 500 The Harrisburg Authority
(Dauphin County,
Pennsylvania), Lease Revenue
Bonds, (CGIC), 6.25%,
6/1/01 $ 528,705
Aaa AAA 1,000 Northumberland County
Authority, Pennsylvania,
Lease Revenue Bonds,
(MBIA), 6.50%, 10/15/01 1,072,150
Aaa AAA 2,750 Pennsylvania Intragovernment
Cooperative Authority,
(FGIC), 5.50%, 6/15/16 2,662,660
------------
$ 4,263,515
------------
Life Care - 1.1%
NR NR $ 245 Delaware County,
Pennsylvania, Authority,
(White Horse Village),
6.30%, 7/1/03 $ 246,098
NR NR 505 Delaware County,
Pennsylvania, Authority,
(White Horse Village),
6.40%, 7/1/04 507,838
------------
$ 753,936
------------
Nursing Home - 0.9%
NR NR $ 500 Wilkins Area, Pennsylvania,
Industrial Development
Authority, (Fairview
Extended Care), 10.25%,
1/1/21 $ 564,500
------------
Solid Waste - 2.8%
Baa A- $ 500 Greater Lebanon Refuse
Authority of Lebanon
County, Pennsylvania, Solid
Waste Revenue, 6.20%,
5/15/99 $ 514,115
</TABLE>
27
<PAGE>
Pennsylvania Limited Maturity Municipals Portfolio (continued)
---------------------------------------------------------------------------
Tax-Exempt Investments
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ------------------------------- ------------
<S> <C> <C> <C> <C>
Solid Waste (continued)
Baa A- $ 500 Greater Lebanon Refuse
Authority of Lebanon
County, Pennsylvania, Solid
Waste Revenue, 6.20%,
11/15/99 $ 517,195
Baa A- 300 Greater Lebanon Refuse
Authority of Lebanon
County, Pennsylvania, Solid
Waste Revenue, 6.40%,
5/15/00 311,367
Baa A- 500 Greater Lebanon Refuse
Authority of Lebanon
County, Pennsylvania, Solid
Waste Revenue, 6.40%,
11/15/00 521,720
------------
$ 1,864,397
------------
Special Tax Revenue - 0.4%
NR NR $ 250 Virgin Islands Public Finance
Authority, (V.I. General
Obligation/Matching Loan
Fund Notes), 6.70%,10/1/99 $ 259,588
------------
Transportation - 7.1%
A1 A $1,000 Pennsylvania Turnpike
Authority, 6.00%, 12/1/17 $ 987,430
Aa3 AA- 2,550 Southeastern Pennsylvania
Transportation Authority,
LOC: Canadian Imperial
Bank of Commerce, 6.00%,
6/1/99 2,629,280
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000
Moody's & Poor's omitted) Security Value
- --------- ---------- ----------- ------------------------------- ------------
Transportation (continued)
Aa3 AA- 1,000 Southeastern Pennsylvania
Transportation Authority,
LOC: Canadian Imperial
Bank of Commerce, 6.00%,
6/1/01 1,045,710
------------
$ 4,662,420
------------
Utility - 1.6%
NR NR $1,000 Virgin Islands Water & Sewer
Authority, 7.40%, 7/1/11 $ 1,060,100
------------
Total Tax-Exempt
Investments (identified
cost, $65,161,613) $65,846,138
============
</TABLE>
- ------------------------------------
AMT--Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Pennsylvania
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at March 31, 1997, 40.5% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution range from 0.8% to 15.3% of total investments.
See notes to financial statements
28
<PAGE>
Limited Maturity Municipals Portfolio
Financial Statements
Statements of Assets and Liabilities
---------------------------------------------------------------------------
March 31, 1997
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Florida Massachusetts New York Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
-------------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
Assets:
Investments --
Identified cost $ 90,512,005 $ 67,029,171 $ 97,740,065 $65,161,613
Unrealized appreciation 441,070 588,494 112,699 684,525
------------- ------------- ------------- ------------
Investments at value (Note 1A) $ 90,953,075 $ 67,617,665 $ 97,852,764 $65,846,138
Cash 778 112 265 509
Receivable for investments sold 1,827,129 1,386,820 632,741 1,730,184
Interest receivable 2,001,265 1,249,370 1,833,333 1,067,259
Receivable for variation margin on
open financial futures contracts(Note 1E) 11,719 10,156 21,094 --
Deferred organization expenses (Note 1D) 4,582 4,442 2,789 2,912
------------- ------------- ------------- ------------
Total assets $ 94,798,548 $ 70,268,565 $100,342,986 $68,647,002
------------- ------------- ------------- ------------
Liabilities:
Payable for investments purchased $ 1,834,573 $ -- $ -- $ --
Demand note payable (Note 5) 45,000 263,000 318,000 735,000
Payable to affiliate for Trustees' fees (Note 2) 2,256 1,781 2,256 1,781
Accrued expenses 7,527 33,848 8,982 34,614
------------- ------------- ------------- ------------
Total liabilities $ 1,889,356 $ 298,629 $ 329,238 $ 771,395
------------- ------------- ------------- ------------
Net Assets applicable to investors'
interest in Portfolio $ 92,909,192 $ 69,969,936 $100,013,748 $67,875,607
============= ============= ============= ============
Sources of Net Assets:
Net proceeds from capital contributions
and withdrawals $ 92,259,978 $ 69,201,051 $ 99,526,390 $67,191,082
Net unrealized appreciation of investments
and financial futures contracts (computed
on the basis of identified cost) 649,214 768,885 487,358 684,525
------------- ------------- ------------- ------------
Total $ 92,909,192 $ 69,969,936 $100,013,748 $67,875,607
============= ============= ============= ============
</TABLE>
See notes to financial statements
29
<PAGE>
Statements of Operations
---------------------------------------------------------------------------
Year Ended March 31, 1997
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Florida Massachusetts New York Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
--------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B):
Interest $ 5,988,431 $ 4,582,888 $ 6,539,821 $ 4,536,693
------------- ------------- ------------- -------------
Total investment income $ 5,988,431 $ 4,582,888 $ 6,539,821 $ 4,536,693
------------- ------------- ------------- -------------
Expenses
Investment adviser fee (Note 2) $ 508,203 $ 385,610 $ 557,305 $ 375,224
Compensation of Trustees not members of the
Administrator's organization (Note 2) 8,728 6,787 8,729 6,787
Custodian fee (Note 1H) 63,236 48,329 68,754 47,916
Legal and accounting services 23,929 23,940 23,944 23,939
Bond pricing 8,970 8,562 9,302 8,363
Amortization of organization expenses
(Note 1D) 4,205 4,088 2,570 2,671
Miscellaneous 24,387 17,725 23,382 19,531
------------- ------------- ------------- -------------
Total expenses $ 641,658 $ 495,041 $ 693,986 $ 484,431
Deduct --
Reduction of custodian fee (Note 1H) 21,381 17,201 18,973 17,860
------------- ------------- ------------- -------------
Net expenses $ 620,277 $ 477,840 $ 675,013 $ 466,571
------------- ------------- ------------- -------------
Net investment income $ 5,368,154 $ 4,105,048 $ 5,864,808 $ 4,070,122
------------- ------------- ------------- -------------
Realized and Unrealized Gain
(Loss) on Investments:
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 426,609 $ 335,925 $ 459,925 $ 910,989
Financial futures contracts (772,529) (458,656) (747,067) (503,490)
------------- ------------- ------------- -------------
Net realized gain (loss) $ (345,920) $ (122,731) $ (287,142) $ 407,499
------------- ------------- ------------- -------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ (1,862,868) $ (1,041,564) $ (1,269,739) $ (1,218,041)
Financial futures contracts 208,144 180,391 374,659 --
------------- ------------- ------------- -------------
Net change in unrealized appreciation $ (1,654,724) $ (861,173) $ (895,080) $ (1,218,041)
------------- ------------- ------------- -------------
Net realized and unrealized gain (loss) $ (2,000,644) $ (983,904) $ (1,182,222) $ (810,542)
------------- ------------- ------------- -------------
Net increase in net assets
from operations $ 3,367,510 $ 3,121,144 $ 4,682,586 $ 3,259,580
============= ============= ============= =============
</TABLE>
See notes to financial statements
30
<PAGE>
Statements of Changes in Net Assets
---------------------------------------------------------------------------
Year Ended March 31, 1997
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Florida Massachusetts New York Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
----------------- --------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 5,368,154 $ 4,105,048 $ 5,864,808 $ 4,070,122
Net realized gain (loss) on
investment transactions (345,920) (122,731) (287,142) 407,499
Change in unrealized appreciation (1,654,724) (861,173) (895,080) (1,218,041)
-------------- -------------- -------------- --------------
Net increase in net assets
from operations $ 3,367,510 $ 3,121,144 $ 4,682,586 $ 3,259,580
-------------- -------------- -------------- --------------
Capital transactions --
Contributions $ 4,859,506 $ 1,754,803 $ 3,989,610 $ 2,538,120
Withdrawals (43,152,835) (32,041,287) (47,386,927) (30,116,393)
-------------- -------------- -------------- --------------
Net decrease in net assets resulting
from capital transactions $ (38,293,329) $ (30,286,484) $ (43,397,317) $ (27,577,973)
-------------- -------------- -------------- --------------
Net decrease in net assets $ (34,925,819) $ (27,165,340) $ (38,714,731) $ (24,318,393)
Net Assets:
At beginning of year 127,835,011 97,135,276 138,728,479 92,194,000
-------------- -------------- -------------- --------------
At end of year $ 92,909,192 $ 69,969,936 $ 100,013,748 $ 67,875,607
============== ============== ============== ==============
</TABLE>
See notes to financial statements
31
<PAGE>
Statements of Changes in Net Assets
---------------------------------------------------------------------------
Year Ended March 31, 1996
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Florida Massachusetts New York Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 6,849,405 $ 5,212,102 $ 7,387,952 $ 4,991,356
Net realized gain (loss) on
investment transactions 295,731 (63,095) 217,916 (470,305)
Change in unrealized appreciation 1,590,260 1,762,463 2,312,427 1,828,795
-------------- -------------- -------------- --------------
Net increase in net assets
from operations $ 8,735,396 $ 6,911,470 $ 9,918,295 $ 6,349,846
-------------- -------------- -------------- --------------
Capital transactions --
Contributions $ 10,648,982 $ 4,408,033 $ 7,273,143 $ 4,976,577
Withdrawals (56,128,282) (33,303,769) (52,095,383) (32,738,468)
-------------- -------------- -------------- --------------
Net decrease in net assets resulting
from capital transactions $ (45,479,300) $ (28,895,736) $ (44,822,240) $ (27,761,891)
-------------- -------------- -------------- --------------
Net decrease in net assets $ (36,743,904) $ (21,984,266) $ (34,903,945) $ (21,412,045)
Net Assets:
At beginning of year 164,578,915 119,119,542 173,632,424 113,606,045
-------------- -------------- -------------- --------------
At end of year $ 127,835,011 $ 97,135,276 $ 138,728,479 $ 92,194,000
============== ============== ============== ==============
</TABLE>
See notes to financial statements
32
<PAGE>
Supplementary Data
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Florida Limited Portfolio Massachusetts Limited Portfolio
----------------------------------------------- ---------------------------------------------
Year Ended March 31, Year Ended March 31,
----------------------------------------------- ---------------------------------------------
1997 1996 1995 1994* 1997 1996 1995 1994*
---------- ----------- ----------- ------------ ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios to average daily net
assets:
Expenses (1) 0.59% 0.55% 0.52% 0.49%+ 0.60% 0.57% 0.54% 0.52%+
Net expenses, after custodian
fee reduction 0.57% 0.54% -- -- 0.58% 0.55% -- --
Net investment income 4.90% 4.73% 4.73% 4.53%+ 4.97% 4.72% 4.90% 4.57%+
Portfolio Turnover 66% 20% 44% 8% 60% 27% 46% 8%
Net Assets, end of period
(000 omitted) $ 92,909 $ 127,835 $ 164,579 $185,977 $ 69,970 $ 97,135 $ 119,120 $119,772
+ Annualized.
* For the period from the start of business, May 3, 1993, to March 31, 1994.
(1) The expense ratios for the years ended March 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the prior periods have not been adjusted to
reflect this change.
- ---------------------------------------------------------------------------
New York Limited Portfolio Pennsylvania Limited Portfolio
--------------------------------------------- --------------------------------------------
Year Ended March 31, Year Ended March 31,
--------------------------------------------- --------------------------------------------
1997 1996 1995 1994* 1997 1996 1995 1994*
-------- -------- -------- ------- ------- ------- -------- ----------
Ratios to average daily net
assets:
Expenses (1) 0.58% 0.55% 0.52% 0.47%+ 0.61% 0.58% 0.53% 0.50%+
Net expenses, after custodian
fee reduction 0.56% 0.53% -- -- 0.59% 0.56% -- --
Net investment income 4.87% 4.66% 4.79% 4.50%+ 5.11% 4.81% 4.77% 4.59%+
Portfolio Turnover 58% 32% 31% 5% 51% 24% 39% 12%
Net Assets, end of period
(000 omitted) $ 100,014 $ 138,728 $ 173,632 $183,768 $ 67,876 $ 92,194 $ 113,606 $123,620
+ Annualized.
* For the period from the start of business, May 3, 1993, to March 31, 1994.
(1) The expense ratios for the years ended March 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the prior periods have not been adjusted to
reflect this change.
</TABLE>
33
<PAGE>
Notes to Financial Statements
(1) Significant Accounting Policies
Florida Limited Maturity Municipals Portfolio (Florida Limited Portfolio),
Massachusetts Limited Maturity Municipals Portfolio (Massachusetts Limited
Portfolio), New York Limited Maturity Municipals Portfolio (New York Limited
Portfolio), and Pennsylvania Limited Maturity Municipals Portfolio
(Pennsylvania Limited Portfolio), collectively the Portfolios, are registered
under the Investment Company Act of 1940 as non-diversified open-end
management investment companies which were organized as trusts under the laws
of the State of New York on May 1, 1992. The Declarations of Trust permit the
Trustees to issue interests in the Portfolios. The following is a summary of
significant accounting policies of the Portfolios. The policies are in
conformity with generally accepted accounting principles.
A. Investment Valuations -- Municipal bonds are normally valued on the
basis of valuations furnished by a pricing service. Taxable obligations, if
any, for which price quotations are readily available are normally valued at
the mean between the latest bid and asked prices. Futures contracts listed on
commodity exchanges are valued at closing settlement prices. Short-term
obligations, maturing in sixty days or less, are valued at amortized cost,
which approximates value. Investments for which valuations or market
quotations are unavailable 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.
C. Federal Taxes -- The Portfolios are treated as partnerships for Federal
tax purposes. No provision is made by the Portfolios for federal or state
taxes on any taxable income of the Portfolios because each investor in the
Portfolios is ultimately responsible for the payment of any taxes. Since some
of the Portfolios' investors are regulated investment companies that invest
all or substantially all of their assets in the Portfolios, the Portfolios
normally must satisfy the applicable source of income and diversification
requirements (under the Internal Revenue Code) in order for their respective
investors to satisfy them. The Portfolios will allocate at least annually
among their respective investors each investor's distributive share of the
Portfolios' net taxable (if any) and tax-exempt investment income, net
realized capital gains, and any other items of income, gain, loss, deduction
or credit.
Interest income received by the Portfolios on investments in municipal
bonds, which is excludable from gross income under the Internal Revenue Code,
will retain its status as income exempt from federal income tax when
allocated to each Portfolio's investors. The portion of such interest, if
any, earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item for investors.
D. Deferred Organization Expenses -- Costs incurred by a Portfolio in connection
with its organization, including registration costs, are being amortized on a
straight-line basis over five years, beginning on the date each Fund commenced
operations.
E. Financial Futures Contracts -- Upon entering a financial futures contract, a
Portfolio is required to deposit ("initial margin") either in cash or securities
an amount equal to a certain percentage of the purchase price indicated in the
financial futures contract. Subsequent payments are made or received by a
Portfolio ("margin maintenance") each day, dependent on the daily fluctuations
in the value of the underlying security, and are recorded for book purposes as
unrealized gains or losses by a Portfolio. A Portfolio's investment in financial
futures contracts is designed only to hedge against anticipated future changes
in interest rates. Should interest rates move unexpectedly, a Portfolio may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss.
F. Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by a Portfolio, the premium paid is recorded as
an investment, the value of which is marked-to-market daily. When a purchased
option expires, a Portfolio will realize a loss in the amount of the cost of the
option. When a Portfolio enters into a closing sales transaction, the Portfolio
will realize a gain or loss depending on whether the sales proceeds from the
closing sales transaction is greater or less than the cost of the option. When a
Portfolio exercises a put option, settlement is made in cash. The risk
associated with purchasing options is limited to the premium originally paid.
G. When-issued and Delayed Delivery Transactions -- The Portfolios may
engage in when-issued and delayed delivery transactions. The Portfolios
record when-issued securities on trade date and maintain security positions
such that sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on
settlement date.
H. Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolios. Pursuant to the respective custodian agreements, IBT receives
a fee reduced by the credits which are determined based on the average daily
cash balances each Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolios' custodian fees are reflected as a reduction of
expense on the statement of operations.
34
<PAGE>
I. Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
J. Other -- Investment transactions are accounted for on a trade date basis.
- ----------------------------------------------------------------------------
(2) Invesment Adviser Fee and Other Transactions
with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to each Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e., income other than gains from the sale of
securities). For the year ended March 31, 1997, each Portfolio incurred
advisory fees as follows:
<TABLE>
<CAPTION>
Portfolio Amount Effective Rate
- --------- ------ --------------
<S> <C> <C>
Florida Limited $508,203 0.46%
Massachusetts Limited 385,610 0.47%
New York Limited 557,305 0.46%
Pennsylvania Limited 375,224 0.47%
</TABLE>
Except as to Trustees of the Portfolios who are not members of EVM's or
BMR's organization, officers and Trustees receive remuneration for their
services to the Portfolios out of such investment adviser fee. Trustees of
the Portfolios that are not affiliated with the Investment Adviser may elect
to defer receipt of all or a percentage of their annual fees in accordance
with the terms of the Trustees Deferred Compensation Plan. For the year ended
March 31, 1997, no significant amounts have been deferred.
Certain of the officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations.
- ----------------------------------------------------------------------------
(3) Investments
Purchases and sales of investments, other than U.S. Government securities,
put option transactions and short-term obligations, for the year ended March
31, 1997 were as follows:
<TABLE>
<CAPTION>
Florida Massachusetts New York Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Purchases $ 70,750,321 $50,757,550 $ 69,170,036 $39,990,076
Sales 102,106,262 82,537,912 106,987,883 64,446,380
</TABLE>
- -----------------------------------------------------------------------------
(4) Federal Income Tax Basis of Investments
The cost and unrealized appreciation/depreciation in value of the investments
owned by each Portfolio at March 31, 1997, as computed on a federal income
tax basis, are as follows:
<TABLE>
<CAPTION>
Florida Massachusetts New York Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Aggregate cost $90,512,005 $67,029,171 $97,740,065 $65,161,613
=========== =========== =========== ===========
Gross unrealized appreciation $ 1,291,406 $ 1,067,203 $ 961,923 $ 1,147,269
Gross unrealized depreciation (850,336) (478,709) (849,224) (462,744)
----------- ----------- ----------- -----------
Net unrealized appreciation $ 441,070 $ 588,494 $ 112,699 $ 684,525
=========== =========== =========== ===========
</TABLE>
35
<PAGE>
(5) Line of Credit
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and its affiliates in a $120 million unsecured line of credit with a
group of banks. Borrowings will be made by the Portfolios or Funds solely to
facilitate the handling of unusual or unanticipated short-term cash
requirements. Interest is charged to each portfolio or fund based on its
borrowings at the bank's base rate or at an amount above either the bank's
adjusted certificate of deposit rate, Eurodollar rate or federal funds
effective rate. In addition, a fee computed at an annual rate of 0.15% on the
daily unused portion of the facility is allocated among the participating
portfolios and funds at the end of each quarter. At March 31, 1997 the
Florida Limited Portfolio, Massachusetts Limited Portfolio, New York Limited
Portfolio, and Pennsylvania Limited Portfolio had a balance outstanding
pursuant to this line of credit of $45,000, $263,000, $318,000, and $735,000,
respectively. The Portfolios did not have any significant borrowings or
allocated fees during the year ended March 31, 1997.
- ------------------------------------------------------------------------------
(6) Financial Instruments
The Portfolios regularly trade in financial instruments with off-balance
sheet risk in the normal course of their investing activities to assist in
managing exposure to various market risks. These financial instruments
include 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 a Portfolio has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
A summary of obligations under these financial instruments at March 31, 1997,
were as follows:
<TABLE>
<CAPTION>
Future Contracts Net Unrealized
Limited Portfolio Expiration Date Contracts Position Appreciation
- ----------------- ---------------- --------- -------- --------------
<S> <C> <C> <C> <C>
Florida 6/97 75 U.S. Treasury Bonds Short $208,144
Massachusetts 6/97 65 U.S. Treasury Bonds Short 180,391
New York 6/97 135 U.S. Treasury Bonds Short 374,659
</TABLE>
At March 31, 1997, the Portfolios had sufficient cash and/or securities
segregated to cover margin requirements on open futures contracts.
36
<PAGE>
Independent Auditors' Report
To the Trustees and Investors of
Florida Limited Maturity Municipals Portfolio
Massachusetts Limited Maturity Municipals Portfolio
New York Limited Maturity Municipals Portfolio
Pennsylvania Limited Maturity Municipals Portfolio
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of Florida Limited Maturity
Municipals Portfolio, Massachusetts Limited Maturity Municipals Portfolio,
New York Limited Maturity Municipals Portfolio, and Pennsylvania Limited
Maturity Municipals Portfolio (the Portfolios), as of March 31, 1997, the
related statements of operations for the year then ended, and the statements
of changes in net assets for the years ended March 31, 1997 and 1996 and the
supplementary data for each of the years in the four-year period ended March
31, 1997. These financial statements and supplementary data are the
responsibility of the Trusts' management. Our responsibility is to express an
opinion on the financial statements and supplementary data based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
supplementary data are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned at March 31, 1997 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial position of the aforementioned
Portfolios, as of March 31, 1997, the results of their operations, the changes
in their net assets, and their supplementary data for the respective stated
periods in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 2, 1997
37
<PAGE>
Investment Management
- ----------------------------------------------------------------------------
EV Classic Limited Maturity Municipals Funds
Funds
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate
School of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
- ----------------------------------------------------------------------------
Limited Maturity Municipals Portfolios
Portfolios
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
William H. Ahern, Jr.
Vice President and Portfolio Manager
of Florida and Massachusetts Limited
Maturity Municipals Portfolio
Nicole Anderes
Vice President and Portfolio Manager
of New York Limited Maturity
Municipals Portfolio
Timothy T. Browse
Vice President and Portfolio Manager
of Pennsylvania Limited Maturity
Municipals Portfolio
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate
School of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
38
<PAGE>
Investment Adviser of Limited Maturity Tax Free Portfolios
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of EV Classic Limited Maturity Tax Free Funds
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
Transfer Agent
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
Independent Auditor
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
<PAGE>
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Funds, including distribution plan,
sales charges and expenses. Please read the prospectus carefully before you
invest or send money.
Eaton Vance Investment Trust
24 Federal Street
Boston, MA 02110
C-9LTFCSRC-5/97
