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008 A000001 KEYSTONE INVESTMENT MANAGEMENT COMPANY
008 B000001 A
008 C000001 801-8327
008 D010001 BOSTON
008 D020001 MA
008 D030001 02116
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010 A000001 KEYSTONE INVESTMENT MANAGEMENT CO, INC
010 B000001 801-8327
010 C010001 BOSTON
010 C020001 MA
010 C030001 02116
010 C040001 5034
011 A000001 EVERGREEN KEYSTONE DISTRIBUTOR, INC.
011 B000001 8-46906
011 C010001 NEW YORK
011 C020001 NY
011 C030001 10019
<PAGE> PAGE 2
012 A000001 EVERGREEN KEYSTONE SERVICE COMPANY
012 B000001 84-1571
012 C010001 BOSTON
012 C020001 MA
012 C030001 02116
012 C040001 5034
013 A000001 KPMG PEAT MARWICK,LLP
013 B010001 BOSTON
013 B020001 MA
013 B030001 02110
015 A000001 STATE STREET BANK & TRUST
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015 C010001 BOSTON
015 C020001 MA
015 C030001 02110
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022 A000001 PAINE WEBBER, INC.
022 B000001 13-2638166
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<PAGE> PAGE 3
022 A000006 BNY/ITC DEALERS CLEARANCE
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022 A000007 ADAMS HARKNESS HILL
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SIGNATURE J.KEVIN KENELY
TITLE V.P. FUND ADMIN
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> KEYSTONE INTERMEDIATE TERM BOND FUND CLASS A
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 28,676,532
<INVESTMENTS-AT-VALUE> 28,570,120
<RECEIVABLES> 1,907,837
<ASSETS-OTHER> 77,477
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30,555,434
<PAYABLE-FOR-SECURITIES> 1,357,677
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 230,173
<TOTAL-LIABILITIES> 1,587,850
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,149,582
<SHARES-COMMON-STOCK> 1,157,517
<SHARES-COMMON-PRIOR> 1,484,576
<ACCUMULATED-NII-CURRENT> 125,162
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (2,110,581)
<ACCUM-APPREC-OR-DEPREC> 176,399
<NET-ASSETS> 10,340,562
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 800,701
<OTHER-INCOME> 0
<EXPENSES-NET> (117,411)
<NET-INVESTMENT-INCOME> 683,290
<REALIZED-GAINS-CURRENT> 30,731
<APPREC-INCREASE-CURRENT> 227,772
<NET-CHANGE-FROM-OPS> 941,793
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (666,667)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 175,221
<NUMBER-OF-SHARES-REDEEMED> (547,872)
<SHARES-REINVESTED> 45,592
<NET-CHANGE-IN-ASSETS> (2,617,710)
<ACCUMULATED-NII-PRIOR> 32,979
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (2,065,751)
<GROSS-ADVISORY-FEES> (69,081)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (117,411)
<AVERAGE-NET-ASSETS> 11,616,270
<PER-SHARE-NAV-BEGIN> 8.73
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> KEYSTONE INTERMEDIATE TERM BOND FUND CLASS B
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 28,676,532
<INVESTMENTS-AT-VALUE> 28,570,120
<RECEIVABLES> 1,907,837
<ASSETS-OTHER> 77,477
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<TOTAL-ASSETS> 30,555,434
<PAYABLE-FOR-SECURITIES> 1,357,677
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 230,173
<TOTAL-LIABILITIES> 1,587,850
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,471,896
<SHARES-COMMON-STOCK> 1,270,826
<SHARES-COMMON-PRIOR> 1,833,529
<ACCUMULATED-NII-CURRENT> 79,797
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (1,106,086)
<ACCUM-APPREC-OR-DEPREC> (77,154)
<NET-ASSETS> 11,368,453
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 977,785
<OTHER-INCOME> 0
<EXPENSES-NET> (240,622)
<NET-INVESTMENT-INCOME> 737,163
<REALIZED-GAINS-CURRENT> 47,009
<APPREC-INCREASE-CURRENT> 273,640
<NET-CHANGE-FROM-OPS> 1,057,812
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (719,674)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 170,620
<NUMBER-OF-SHARES-REDEEMED> (779,593)
<SHARES-REINVESTED> 46,270
<NET-CHANGE-IN-ASSETS> (4,665,314)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (29,974)
<OVERDIST-NET-GAINS-PRIOR> (1,060,814)
<GROSS-ADVISORY-FEES> (84,316)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (240,622)
<AVERAGE-NET-ASSETS> 14,184,961
<PER-SHARE-NAV-BEGIN> 8.74
<PER-SHARE-NII> 0.47
<PER-SHARE-GAIN-APPREC> 0.20
<PER-SHARE-DIVIDEND> (0.46)
<PER-SHARE-DISTRIBUTIONS> 0.00
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> KEYSTONE INTERMEDIATE TERM BOND FUND CLASS C
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 28,676,532
<INVESTMENTS-AT-VALUE> 28,570,120
<RECEIVABLES> 1,907,837
<ASSETS-OTHER> 77,477
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30,555,434
<PAYABLE-FOR-SECURITIES> 1,357,677
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 230,173
<TOTAL-LIABILITIES> 1,587,850
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,223,138
<SHARES-COMMON-STOCK> 811,659
<SHARES-COMMON-PRIOR> 1,039,274
<ACCUMULATED-NII-CURRENT> 37,828
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (833,349)
<ACCUM-APPREC-OR-DEPREC> (169,048)
<NET-ASSETS> 7,258,569
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 564,754
<OTHER-INCOME> 0
<EXPENSES-NET> (138,906)
<NET-INVESTMENT-INCOME> 425,848
<REALIZED-GAINS-CURRENT> 26,278
<APPREC-INCREASE-CURRENT> 168,343
<NET-CHANGE-FROM-OPS> 620,469
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (417,078)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 52,022
<NUMBER-OF-SHARES-REDEEMED> (311,128)
<SHARES-REINVESTED> 31,491
<NET-CHANGE-IN-ASSETS> (1,825,309)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (24,204)
<OVERDIST-NET-GAINS-PRIOR> (806,365)
<GROSS-ADVISORY-FEES> (48,705)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (138,906)
<AVERAGE-NET-ASSETS> 8,188,337
<PER-SHARE-NAV-BEGIN> 8.74
<PER-SHARE-NII> 0.46
<PER-SHARE-GAIN-APPREC> 0.20
<PER-SHARE-DIVIDEND> (0.46)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 8.94
<EXPENSE-RATIO> 1.87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
The Trustees and Shareholders
Keystone Capital Preservation and Income Fund
Evergreen Lexicon Trust
Keystone Intermediate Term Bond Fund
Evergreen Investment Trust
In planning and performing our audits of the financial statements of the
Evergreen Keystone Short and Intermediate Term Bond Funds (including Keystone
Capital Preservation and Income Fund, Evergreen Intermediate Term Bond Fund,
Keystone Intermediate Term Bond Fund, Evergreen Intermediate Term Government
Securities Fund and Evergreen Short-Intermediate Term Bond Fund) for the year or
period ended June 30, 1997, we considered their internal control structure,
including procedures for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on the financial
statements and to comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of the Evergreen Keystone Short and Intermediate Term Bond Funds
is responsible for establishing and maintaining an internal control structure.
In fulfilling this responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of internal control
structure policies and procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not absolute, assurance
that assets are safeguarded against loss from unauthorized use or disposition
and that transactions are executed in accordance with management's authorization
and recorded properly to permit preparation of financial statements in
conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risks that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
June 30, 1997.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
August 8, 1997
