<PAGE>
PERFORMANCE HIGHLIGHTS
A CONSISTENT YIELD ADVANTAGE
THE FUND HAS PRODUCED A YIELD ADVANTAGE OVER 3-MONTH BANK CDS IN 1996.
EFFECTIVE YIELD SPREAD OVER 3-MONTH CD RATES
AVERAGE YIELD ADVANTAGE DURING PAST 12 MONTHS OF 3.28%
PRX eff Yld 3-mos CDs Spread
Jun-95 8 4.27 3.73
Jul-95 7.85 4.21 3.64
Aug-95 7.6 4.22 3.38
Sep-95 7.65 4.27 3.38
Oct-95 7.65 4.23 3.42
Nov-95 7.6 4.17 3.43
Dec-95 7.6 4.14 3.46
Jan-96 7.48 4.1 3.38
Feb-96 7.1 4.07 3.03
Mar-96 7.11 4.18 2.93
Apr-96 7.12 4.15 2.97
May-96 7.13 4.12 3.01
Jun-96 6.9 4.06 2.84
This bar chart shows the spread between the effective month-end
yields of Prime Rate Reserves CD yields from 6/30/95 through 6/30/96
All figures are as of 6/30/96. Prime Rate Reserves figure represents effective
yield (distribution for the latest 30-day period, annualized, divided by the net
asset value per share at the end of the period, and then compounded over a
12-month period). The Fund is not insured nor does it offer a fixed guaranteed
rate of return like bank certificates of deposit or bank money market funds, and
does not attempt to maintain a constant net asset value per share, as do money
market funds. Past performance is no guarantee of future results. Principal
value and investment return will fluctuate with changes in market conditions.
Sources: Eaton Vance Management, The Wall Street Journal
- -----------------------------------------------------------------------------
RELATIVE STABILITY OF NET ASSET VALUE
WHILE RISING INTEREST RATES SENT THE BOND MARKET TUMBLING, THE FUND AGAIN
LIMITED ITS PRICE FLUCTUATION TO A RELATIVELY NARROW RANGE.
MONTH-END NET ASSET VALUE PER SHARE
PRX
Jun-95 10.03
Jul-95 10.03
Aug-95 10.03
Sep-95 10.03
Oct-95 10.03
Nov-95 10.03
Dec-95 10.01
Jan-96 10.01
Feb-96 10.01
Mar-96 10
Apr-96 9.99
May-96 9.99
Jun-96 9.99
This line chart shows the relative stability of the
share price of Eaton Vance Prime Rate Reserves during the past
twelve months. Source: Eaton Vance Management
Uses month-end NAVs.
<PAGE>
TO SHAREHOLDERS
Eaton Vance Prime Rate Reserves paid shareholders distributions from net
investment income totaling $0.344 during the six months ended June 30, 1996.
Based on the Fund's closing net asset value of $9.99, the Fund had an effective
yield of 6.90% at June 30. The Fund's net asset value per share ended the year
only $0.02 changed from its $10.01 level on December 31, 1995.
Eaton Vance Prime Rate Reserves once again met its objective of maintaining a
high level of current income with a relatively stable net asset value.
PRIME RATE RESERVES CONTINUED ITS YIELD ADVANTAGE OVER OTHER SHORT-TERM,
FIXED-INCOME INVESTMENTS...
Despite signs of a stronger economy, the Federal Reserve has resisted pressures
to raise its benchmark federal funds rate - a key short-term interest rate
barometer. That has restrained short-term rates, even as the long end of the
yield curve has moved higher. In this environment, the Fund's yield represented
a significant advantage over money market mutual funds, 3-month certificates of
deposit, and bank money market accounts, which offered rates of 4.89%, 4.06%,
and 3.46%, respectively, as of June 30, 1996. Of course, unlike bank
certificates of deposit, the Fund is not insured and does not offer a fixed rate
of return; and unlike money market accounts, the Fund's principal value and
return can fluctuate with market conditions.
A CHANGE IN PORTFOLIO MANAGEMENT FOR SENIOR DEBT PORTFOLIO...
With this report, we bid farewell to Jeff Garner, who has served as portfolio
manager of Senior Debt Portfolio since its inception in 1989. Jeff has
contributed significantly to the Fund's success and to that of Eaton Vance in
recent years. We wish him well in his future endeavors.
Two Eaton Vance veterans, Scott H. Page and Payson F. Swaffield, have assumed
management of Senior Debt Portfolio. Scott and Payson each bring to their new
roles a broad background in the loan market, as well as many years of experience
as Senior Debt Portfolio analysts. Indeed, the Fund's performance has benefited
significantly in recent years from their loan analysis and company and industry
research. Under their leadership, Prime Rate Reserves will continue its mission
to provide shareholders with attractive yields and relative stability in senior
floating rate loans. In the pages that follow, the new managers share their
views and market outlook.
Sincerely,
[Photo of James B. Hawkes]
/s/ James B. Hawkes
James B. Hawkes
President
August 21, 1996
<PAGE>
MANAGEMENT DISCUSSION
Questions and answers with Scott H. Page and Payson F. Swaffield, Vice
Presidents and Co-Portfolio Managers, Senior Debt Portfolio.
Q: AS YOU ASSUME THE MANAGEMENT OF THE PORTFOLIO, YOU EACH BRING A WEALTH OF
EXPERIENCE AS LOAN MARKET ANALYSTS. THAT SHOULD BE A MAJOR STRENGTH, GIVEN
THE GROWING DIMENSION OF THE LOAN MARKET.
[Photo of Payson F. Swaffield]
PAYSON F. SWAFFIELD
Mr. Swaffield: I think that's a fair observation. In recent years, the loan
participation market has grown tremendously. Not surprisingly, during that
time, loan analysis has become an increasingly sophisticated discipline. As
one of the early and largest participants in this market, Eaton Vance has
emphasized loan analysis as a specialty. I think our experience in this
market - through the 1991-92 recession and during cyclical downturns in
certain industries - gives us a special perspective and has contributed to
the Fund's success to date.
Q: EQUALLY AS IMPORTANT, YOU'VE EACH BEEN INVOLVED WITH THE PORTFOLIO FOR MANY
YEARS. WON'T THAT ENSURE A SMOOTH MANAGEMENT TRANSITION?
Mr. Page: Yes, the transition should be a fairly seamless one from a management
standpoint. And I think that is important as well from the shareholders'
point of view. The Portfolio will be characterized by the same philosophy
that has shaped it through its history. We've each been closely involved,
not only in evaluating potential investments, but in decisions regarding
allocation and industry weightings. That means that there will be a
continuum in the decision-making process for the Portfolio.
Q: CAN YOU GIVE SOME EXAMPLES OF YOUR INVESTMENT FOCUS IN RECENT MONTHS?
Mr. Swaffield: As background, cyclical industries such as paper and
manufacturing have played a significant role in the Portfolio. During the
last recession, the Portfolio's loan interests in these industries performed
well. Today, these industries are likely to be beneficiaries of an economy
that has shown signs of better-than-expected growth. Stone Container, for
example, is among the largest holdings in the Portfolio. The company is one
of the leading producers of linerboard used in shipping manufactured goods.
As the economy has gathered steam, Stone Container has enjoyed a rising
demand for its products.
[Photo of Scott H. Page]
SCOTT H. PAGE
Q: NATURALLY, THE PORTFOLIO IS NOT DEVOTED ENTIRELY TO CYCLICAL ISSUES. WHERE
ELSE HAVE YOU INVESTED?
Mr. Page: That's correct. The consumer is well-represented, with investments in
the retail grocery, leisure, broadcast media, and cable television
industries. Viacom, Inc., for example, is a name familiar to many investors.
Viacom is a diversified entertainment company with interests in cable
television, publishing, music and video retail chains, television and radio
stations, theme parks and movie theaters. The company has increased its cash
flow in recent years as a result of acquisitions and is moving aggressively
to improve its balance sheet. Viacom's entertainment content and its
exposure to international markets could make it one of the world's
fastest-growing media companies.
- -------------------------------------------------------------------------------
PRIME RATE RESERVES:
THE FUND MAINTAINED A SIZABLE YIELD ADVANTAGE OVER OTHER POPULAR SHORT-TERM
INVESTMENT VEHICLES.
All figures are as of 6/30/96. Prime Rate Reserves figure represents effective
yield (distribution for the latest 30-day period, annualized, divided by the net
asset value per share at the end of the period, and then compounded over a
12-month period). The Fund is not insured by the FDIC nor does it offer a fixed
rate of return like bank certificates of deposit or bank money market funds, and
does not attempt to maintain a constant net asset value per share, as do money
market funds. Past performance is no guarantee of future results. Principal
value and investment return will fluctuate with changes in market conditions.
Sources: Eaton Vance Management, The Wall Street Journal
Prime Rate Reserves .............................. 6.90%
Money markets .................................... 4.89%
3-month CDs ...................................... 4.06%
Bank money market accounts ....................... 3.46%
- -------------------------------------------------------------------------------
Q: THE U.S. BOND MARKET HAD A FAIRLY ROCKY PERFORMANCE IN THE FIRST HALF OF
1996, WHILE THE FUND AGAIN POSTED A POSITIVE RETURN. WHAT CONTRIBUTED TO THE
FUND'S OUTPERFORMANCE?
Mr. Swaffield: Once again, the relative stability of the Fund's net asset value
helped the Fund outperform the bond market in a declining bond market. As is
characteristic in a rising interest rate environment, the bond market was
under pressure from the outset. With signs of a stronger economy, interest
rates rose in the first six months, and bonds responded by moving lower.
Q: IN WHAT OTHER RESPECTS ARE LOAN INTERESTS DIFFERENT FROM BONDS?
Mr. Page: There are several important differences. First, unlike bonds, which
tend to have a fixed interest rate, loan interests have floating rates that
are reset to reflect changes in prevailing interest rate conditions. Second,
loans are typically the most senior of a company's capital structure, while
some bonds may be subordinated. Finally, while some bonds may be unsecured
by any specific collateral, loan interests are typically backed by
collateral such as plants, equipment, and financial assets.
- -------------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS
June 30, 1996
GENERAL PORTFOLIO INFORMATION
Total net assets ....................................... $2,417 million
Assets invested in loan interests....................... $2,062 million
Number of borrowers ....................................... 108
Industries represented ..................................... 31
FUNDAMENTAL CHARACTERISTICS OF PORTFOLIO LOANS
Senior ................................................... 100%
Secured .................................................. 100%
Floating rate ............................................ 100%
Commercial & industrial .................................. 100%
AVERAGE PORTFOLIO STATISTICS
(DOLLAR-WEIGHTED)
Collateral coverage ratio ............................ 1.4 to 1*
Days to interest-rate reset ................................ 46
Maturity .................................................. 5.5 years
Size per borrower ....................................... $19.1 million
Average size as percent of total net assets ............. 0.79%
* At time of purchase
Source: Eaton Vance Management
- ------------------------------------------------------------------------------
Q: THE ECONOMY HAS BEEN HUMMING ALONG RATHER NICELY. ISN'T IT LIKELY THAT RATES
WILL MOVE HIGHER IN COMING MONTHS?
Mr. Swaffield: It's certainly possible. While the economy - growing a bit over
2% on an annualized basis - hasn't been exactly robust, it has nevertheless
exceeded expectations. As a result, investors are increasingly watching the
Federal Reserve for any bias toward higher rates. Fed Chairman Greenspan has
been careful not to tip his hand, but there is a growing sense that the next
move in rates will be higher. Because the loans that the Portfolio invests
in have periodic reset provisions, the Portfolio should be able to benefit
from a rise in short-term rates. The Portfolio maintains a relatively short
days-to-reset ratio, which affords us additional flexibility in responding
to interest rate changes.
Q: WHAT OTHER RISK MANAGEMENT TOOLS DO YOU EMPLOY?
Mr. Page: Diversification is a very important tool in limiting risk. With the
growth in the loan participation market in recent years, the number of
borrowers has increased dramatically. Equally as important, the number of
industries represented in the loan universe has grown. That is a favorable
development because it has given us the opportunity to diversify the
Portfolio's investments across a broader range of industry groups,
insulating the Portfolio against individual default risk or a downturn in
any one industry.
- ------------------------------------------------------------------------------
LOAN COLLATERAL CAN INCLUDE...
WORKING CAPITAL TANGIBLE FIXED INTANGIBLE SECURITY
ASSETS... ASSETS... ASSETS... INTERESTS...
[Graphic [Graphic showing [Graphic of [Graphic of
of computer] tall buildings] Register Mark] rolled stock certificate]
... ACCOUNTS ... REAL PROPERTY ...TRADEMARKS ... STOCK IN
RECEIVABLE AND BUILDINGS AND AND PATENTS COMPANY AND
INVENTORY EQUIPMENT SUBSIDIARIES
- -------------------------------------------------------------------------------
Q: LOOKING AHEAD TO THE REMAINDER OF THE YEAR, WHAT IS YOUR OUTLOOK FOR THE
LOAN MARKET?
Mr. Swaffield: The loan market continues to grow significantly in 1996. That
growth has been fueled by two factors: an expanding economy and a widening
acceptance of the loan syndication market as a vehicle for capital
formation. If the economy continues to strengthen, we could see higher
rates, which would likely be reflected in loan interest returns as interest
rates are reset. That would set the loan market apart from the bond market,
which will surely encounter further difficulties if interest rates rise.
That's a key consideration for investors for whom capital preservation is
important.
Mr. Page: Another important consideration is the impact of an improving economy
on the cash flows of borrowers. As a result of a stronger economy, many of
the companies in the loan interest universe are likely to see improving
balance sheets. They may find themselves with more breathing room in terms
of interest coverage and operating finances. In some cases, that may mean
improved creditworthiness for the borrower, a favorable development for
borrowers and lenders alike.
Moreover, the Fund should continue to enjoy its yield advantage over other
short-term vehicles. In today's economy, that is a major plus for conservative
investors. The Fund should continue to provide positive real returns and help
preserve investors' purchasing power.
<PAGE>
--------------------------
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------------------
June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
ASSETS:
Investment in Senior Debt Portfolio, at value
(Note 1A) (identified cost, $1,403,354,917) $1,396,945,860
Receivable for Trust shares sold 5,133,458
Prepaid expenses 297,348
--------------
Total assets $1,402,376,666
LIABILITIES:
Distributions payable $4,703,900
Payable for Trust shares reacquired 2,332
Payable to affiliate --
Trustees' fees 826
Accrued expenses 125,468
----------
Total liabilities 4,832,526
--------------
NET ASSETS for 139,857,584 shares of beneficial
interest outstanding $1,397,544,140
==============
SOURCES OF NET ASSETS:
Paid-in capital $1,404,215,420
Accumulated distributions in excess of
realized gain on investment transactions
(computed on the basis of identified cost) (278,534)
Unrealized depreciation of investments from
Portfolio (computed on the basis of
identified cost) (6,409,057)
Accumulated undistributed net investment income 16,311
--------------
Total $1,397,544,140
==============
NET ASSET VALUE PER SHARE (NOTE 5)
($1,397,544,140 / 139,857,584 shares of
beneficial interest) $9.99
=====
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS (Continued)
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------
For the Six Months Ended June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 1B):
Income allocated from Portfolio $52,300,224
Expenses allocated from Portfolio (6,517,774)
-----------
Total income $45,782,450
Expenses --
Administration fee (Note 4) $ 1,577,662
Compensation of Trustees not members of the
Administrator's organization 1,616
Transfer and dividend disbursing agent fees 421,590
Printing 63,591
Registration fees 115,716
Legal and accounting services 35,502
Custodian fee 12,500
Miscellaneous 196,308
-----------
Total expenses 2,424,485
-----------
Net investment income $43,357,965
REALIZED AND UNREALIZED LOSS FROM PORTFOLIO:
Net realized loss from Portfolio on investment
transactions (computed on the basis of
identified cost) $ (275,419)
Increase in unrealized depreciation of
investments (1,973,829)
-----------
Net realized and unrealized loss on
investments (2,249,248)
-----------
Net increase in net assets resulting
from operations $41,108,717
===========
See notes to financial statements
<PAGE>
STATEMENT OF CASH FLOWS
- ------------------------------------------------------------------------------
For the Six Months Ended June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH:
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES --
Purchases of interests in Senior Debt Portfolio $(357,384,708)
Withdrawal of interests in Senior Debt Portfolio 92,699,161
Operating expenses paid (2,354,957)
--------------
Net cash used for operating activities $(267,040,504)
--------------
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES --
Proceeds from shares sold $ 349,584,215
Payments for shares reacquired in tender offers (62,179,708)
Cash distributions paid (excluding reinvestments of
distributions of $23,388,371) (20,364,003)
--------------
Net cash provided from financing activities $ 267,040,504
--------------
Net increase (decrease) in cash $ --
CASH AT BEGINNING OF PERIOD --
--------------
CASH AT END OF PERIOD $ --
==============
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM
OPERATIONS TO NET CASH USED FOR OPERATING ACTIVITIES:
Net increase in net assets from operations $ 41,108,717
Decrease in prepaid expenses 34,490
Increase in payable to affiliate 826
Increase in accrued expenses and other liabilities 47,100
Net increase in investments (308,231,637)
--------------
Net cash used for operating activities $ (267,040,504)
==============
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS (Continued)
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
------- -------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 43,357,965 $ 61,634,148
Net realized gain (loss)
from Portfolio (275,419) 8,138,602
Increase in unrealized
depreciation from
Portfolio (1,973,829) (7,404,428)
-------------- --------------
Net increase in net assets
from operations $ 41,108,717 $ 62,368,322
-------------- --------------
Distributions to shareholders
(Note 2) --
From net investment income $ (43,357,965) $ (61,630,374)
In excess of net investment
income (9,163) --
From net realized gain on
investment transactions -- (2,248,433)
-------------- --------------
Total distributions to
shareholders $ (43,367,128) $ (63,878,807)
-------------- --------------
Transactions in shares of
beneficial interest (Note 3) --
Proceeds from sales of
shares $ 346,406,214 $ 533,176,796
Net asset value of shares
issued to shareholders in
payment of distributions
declared 23,388,371 34,679,501
Cost of shares reacquired in
tender offers (62,178,372) (85,746,992)
-------------- --------------
Net increase in net assets
from Trust share
transactions $ 307,616,213 $ 482,109,305
-------------- --------------
Net increase in net
assets $ 305,357,802 $ 480,598,820
NET ASSETS:
At beginning of period 1,092,186,338 611,587,518
-------------- --------------
At end of period (including
accumulated undistributed
net investment income of
$16,311 and $25,474,
respectively) $1,397,544,140 $1,092,186,338
============== ==============
See notes to financial statements
<PAGE>
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1996 -----------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------- --------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value and market value --
Beginning of period $ 10.01 $ 10.02 $ 10.03 $ 10.02 $ 9.96 $ 9.97
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income (c) $ 0.3439 $ 0.7694 $ 0.5966 $ 0.4970 $ 0.5415 $ 0.7500
Net realized and unrealized gain (loss) on
investments (0.0199) 0.0112 (0.0059) 0.0258 0.0575 (0.0035)(a)
-------- -------- -------- -------- -------- --------
Total income from investment operations $ 0.3240 $ 0.7806 $ 0.5907 $ 0.5228 $ 0.5990 $ 0.7465
-------- -------- -------- -------- -------- --------
Less Distributions:
From net investment income $(0.3439) $(0.7695) $(0.5966) $(0.5110) $(0.5296) $(0.7522)
In excess of net investment income (0.0001) -- (0.0041) -- -- --
From net realized gain on investments -- (0.0211) -- -- (0.0094) (0.0043)
In excess of net realized gain on investments -- -- -- (0.0018) -- --
-------- -------- -------- -------- -------- --------
Total distributions $(0.3440) $(0.7906) $(0.6007) $(0.5128) $(0.5390) $(0.7565)
-------- -------- -------- -------- -------- --------
Net asset value and market value --
End of period $ 9.99 $ 10.01 $ 10.02 $ 10.03 $ 10.02 $ 9.96
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN (b) 3.3% 8.1% 6.1% 5.3% 6.2% 7.8%
RATIOS (as a percentage of average daily net assets) (d):
Operating expenses (c) 1.37%+ 1.58% 1.63% 1.55% 1.44% 1.37%
Interest expense (c) 0.05%+ 0.03%(g) 0.21% 0.22% 0.18% 0.16%
Net investment income 6.87%+ 7.57% 5.95% 4.98% 5.33% 7.42%
SUPPLEMENTAL DATA:
Net Assets, End of Period (000 omitted) $1,397,544 $1,092,186 $611,588 $683,393 $1,011,006 $1,694,332
Portfolio Turnover (e) -- 5% 60% 37% 26% 16%
Number of Shares Outstanding at End of Period
(000 omitted) 139,858 109,108 61,040 68,165 100,877 170,032
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS (Continued)
FINANCIAL HIGHLIGHTS (continued)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LEVERAGE ANALYSIS:
Borrowings from issuance AMOUNT OF DEBT AVERAGE DAILY BALANCE AVERAGE DAILY BALANCE AVERAGE AMOUNT OF
of commercial paper: OUTSTANDING AT OF DEBT OUTSTANDING OF SHARES OUTSTANDING DEBT PER SHARE
YEAR ENDED END OF YEAR DURING YEAR DURING YEAR DURING YEAR
---------- -------------- ------------------- --------------------- -------------------
<S> <C> <C> <C> <C>
December 31, 1991 $ -- $34,893,000 189,758,055 $0.1839
December 31, 1992 $39,764,710 $37,304,000 132,343,142 $0.2819
December 31, 1993 $17,981,224 $24,585,000 85,859,000 $0.2863
December 31, 1994 $20,403,169 $10,236,000 63,465,000 $0.1613
December 31, 1995 (f) $ -- $ 9,688,000 62,118,000 $0.1560
<FN>
- ------------
+ Annualized.
(a) The per share amount is not in accordance with the net realized and unrealized gain for the period because of the timing
of sales of Trust shares and the amount of per share realized and unrealized gains and losses at such time.
(b) Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net
asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at
the net asset value on the payable date. Total investment return is not computed on an annualized basis.
(c) Includes the Trust's share of Senior Debt Portfolio's allocated expenses for the six months ended June 30, 1996 and for
the period from February 22, 1995 to December 31, 1995.
(d) For the year ended December 31, 1991, the expenses related to the operation of the Trust were reduced by a reduction of
the investment advisory fee. Had such action not been taken, the ratios would have been as follows:
YEAR ENDED
DECEMBER 31,
1991
------------
RATIOS (as a percentage of average daily net assets):
Operating expenses 1.40%
Interest expense 0.16%
Net investment income 7.39%
(e) Portfolio Turnover represents the rate of portfolio activity for the period while the Trust was making investments
directly in securities. The portfolio turnover for the period since the Trust transferred substantially all of its
investable assets to the Portfolio is shown in the Portfolio's financial statements which are included elsewhere in this
report.
(f) The Leverage Analysis is for the period January 1, 1995 to February 21, 1995, when the Trust transferred the Commercial
Paper program to the Portfolio.
(g) Interest expense is for the period from January 1, 1995 to February 21, 1995.
</TABLE>
See notes to financial statements
<PAGE>
--------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) SIGNIFICANT ACCOUNTING POLICIES
Eaton Vance Prime Rate Reserves (the Trust) is a non-diversified closed-end
management investment company. 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. On February 22, 1995, the Trust transferred
substantially all of its investable assets to the Senior Debt Portfolio (the
Portfolio) in exchange for an interest in the Portfolio. The Trust invests all
of its investable assets in interests in the Portfolio, a New York Trust, having
the same investment objective as the Trust. The value of the Trust's investment
in the Portfolio reflects the Trust's proportionate interest in the net assets
of the Portfolio (57.8% at June 30, 1996). The performance of the Trust is
directly affected by the performance of the Portfolio. The financial statements
of the Portfolio, including the portfolio of investments, are included elsewhere
in this report and should be read in conjunction with the Trust'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 VALUATION -- Valuation of securities by the Portfolio is discussed
in Note 1 of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report.
B. INCOME -- The Trust's net investment income consists of the Trust's pro rata
share of the net investment income of the Portfolio, less all actual and accrued
expenses of the Trust determined in accordance with generally accepted
accounting principles.
C. FEDERAL TAXES -- The Trust's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net realized
gain on investments. Accordingly, no provision for federal income or excise tax
is necessary.
D. OTHER -- Investment transactions are accounted for on a trade date basis.
E. USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
F. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to
June 30, 1996 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting of normal recurring adjustments,
necesssary for the fair presentation of the financial statements.
- ------------------------------------------------------------------------------
(2) DISTRIBUTIONS TO SHAREHOLDERS
The net investment income of the Trust is determined daily, and substantially
all of the net investment income so determined is declared daily as a dividend
to shareholders of record at the time of declaration. Such daily dividends will
be paid monthly. Distributions of realized capital gains, if any, are made at
least annually. Shareholders may reinvest capital gain distributions in
additional shares of the Trust at the net asset value as of the ex-dividend
date. Distributions are paid in the form of additional shares of the Trust or,
at the election of the shareholder, in cash. The Trust distinguishes between
distributions on a tax basis and a financial reporting basis. Generally accepted
accounting principles require that only distributions in excess of tax basis
earnings and profits be reported in the financial statements as a return of
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in
over-distributions for financial statement purposes only 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, 1997 and will be based on tax accounting methods which may differ
from amounts determined for financial statement purposes.
- ------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). The Trust
may from time to time, at its discretion, make tender offers at net asset value
for the purchase of all or a portion of its shares. The price will be
established at the close of business on the last day the tender offer is open.
(An early withdrawal charge will be imposed on most shares accepted for tender
which have been held less than four years.) (See Note 5.) The Trustees approved
tender offers for the periods from January 22, 1996 to February 16, 1996, from
April 22, 1996 to May 17, 1996, and from July 22, 1996 to August 16, 1996.
Transactions in Trust shares were as follows:
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
--------------- ----------------
Sales 34,629,245 53,156,612
Issued to shareholders
electing to receive
payments of distributions
in Trust shares 2,339,040 3,457,871
Reacquired in tender offers (6,218,713) (8,546,528)
---------- ----------
Net increase 30,749,572 48,067,955
========== ==========
- ------------------------------------------------------------------------------
(4) ADMINISTRATION FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Eaton Vance Management (EVM) serves as the administrator of the Fund. An
administration fee, computed at the monthly rate of 1/48 of 1% (0.25% per annum)
of the average daily gross assets of the Portfolio attributable to the Trust, is
paid to EVM for managing and administering business affairs of the Trust. The
Portfolio has engaged Boston Management and Research (BMR), a subsidiary of EVM,
to render investment advisory services. See Note 2 of the Portfolio's Notes to
Financial Statements which are included elsewhere in this report. Except as to
Trustees of the Trust and the Portfolio who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services to
the Trust out of such investment adviser fee. Certain of the officers and
Trustees of the Trust and Portfolio are officers and directors/trustees of the
above organizations (Note 5).
- ------------------------------------------------------------------------------
(5) EARLY WITHDRAWAL CHARGE
Eaton Vance Distributors, Inc. (EVD), a subsidiary of EVM, serves as the Trust's
principal underwriter. EVD compensates authorized dealers for sales commissions
at a rate of 3% of the purchase price of shares purchased through such dealers.
EVD also pays additional compensation to each dealer ranging from 0.10% to 0.30%
per annum of the value of Trust shares sold by such dealer that are outstanding
for specified periods of time. An early withdrawal charge to recover
distribution expenses will be charged to redeeming shareholders and paid to EVD
in connection with most shares held for less than four years which are accepted
by the Trust for repurchase pursuant to tender offers. The early withdrawal
charge is imposed at declining rates that begin at 3% in the case of redemptions
in the first year after purchase, declining to 2.5%, 2%, 1% and 0% in the
second, third and fourth year and thereafter, respectively. The early withdrawal
charge will be imposed on those shares accepted for tender, the value of which
exceeds the aggregate value at the time the tender is accepted of: (a) all
shares in the account purchased more than four years prior to such acceptance,
(b) all shares in the account acquired through reinvestment of distributions,
and (c) the increase, if any, in value of all other shares in the account
(namely those purchased within the four years preceding the acceptance) over the
purchase price of such shares. In determining whether an early withdrawal charge
is payable, it is assumed that the acceptance of a repurchase offer is made from
the earliest purchase of shares. The total early withdrawal charges received by
EVD for the six months ended June 30, 1996 amounted to approximately $505,500.
- ------------------------------------------------------------------------------
(6) INVESTMENT TRANSACTIONS
Increases and decreases in the Trust's investment in the Portfolio for the six
months ended June 30, 1996 aggregated $357,384,708 and $92,699,161,
respectively.
<PAGE>
--------------------------
SENIOR DEBT PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1996
(EXPRESSED IN UNITED STATES DOLLARS)
- --------------------------------------------------------------------------------
SENIOR, SECURED, FLOATING-RATE INTERESTS - 85.3%
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT BORROWER/BUSINESS DESCRIPTION VALUE
- --------------------------------------------------------------------------------
AEROSPACE/DEFENSE - 2.7%
FIBERITE, INC.
$ 9,432,143 Term loan, maturing December 31, 2001 $ 9,432,143
Manufactures composite materials
for the aerospace industry
HOWMET CORPORATION
14,896,804 Term loan, maturing November 20, 2002 14,896,804
8,082,727 Term loan, maturing May 20, 2003 8,082,727
Manufactures and refurbishes airfoils
for turbine engines
SHARED TECHNOLOGY FAIRCHILD
COMMUNICATIONS, INC.
4,825,000 Term loan, maturing March 30, 2001 4,825,000
Aerospace and specialty fasteners,
and plastics industry tooling systems
TRACOR, INC.
10,970,667 Term loan, maturing October 31, 2000 10,970,667
10,971,053 Term loan, maturing April 30, 2001 10,971,053
Technical services to defense companies
TRANSTECHNOLOGY CORPORATION
7,500,000 Term loan, maturing June 30, 2002 7,500,000
Aerospace and specialty fasteners,
rescue winches, and hoists
--------------
$ 66,678,394
AUTOMOTIVE - 1.4% --------------
CAMBRIDGE INDUSTRIES, INC.
$ 7,583,656 Term loan, maturing May 17, 2002 $ 7,583,656
8,531,440 Term loan, maturing November 17, 2003 8,531,440
3,791,790 Term loan, maturing May 17, 2004 3,791,790
Original equipment manufacturer of
plastic auto parts
SCHRADER, INC.
2,925,000 Term loan, maturing February 28, 2001 2,925,000
2,989,286 Term loan, maturing November 30, 2002 2,989,286
Produces tire valves and accesories,
and pneumatic connectors
STANADYNE AUTOMOTIVE CORP.
7,406,250 Term loan, maturing December 31, 2001 7,406,250
Auto and light truck fuel injection
equipment
--------------
$ 33,227,422
BROADCAST MEDIA - 9.2% --------------
BENEDEK BROADCASTING CORPORATION, INC.
$ 7,000,000 Term loan, maturing May 1, 2001 $ 7,000,000
7,000,000 Term loan, maturing November 1, 2002 7,000,000
Broadcast television operator
CABLEVISION OF CLEVELAND, G.P., INC.
12,000,000 Term loan, maturing December 31, 2005 12,000,000
Cable television provider
CHANCELLOR RADIO BROADCASTING COMPANY
5,982,857 Term loan, maturing September 1, 2003 5,982,857
Radio broadcasting
CHARTER COMMUNICATIONS ENTERTAINMENT I, L.P.
5,000,000 Term loan, maturing December 31, 2003 5,000,000
Cable television provider
CHARTER COMMUNICATIONS ENTERTAINMENT II, L.P.
10,000,000 Term loan, maturing September 30, 2004 10,000,000
Cable television provider
CHELSEA COMMUNICATIONS, INC.
10,000,000 Term loan, maturing December 31, 2004 10,000,000
Cable television provider
CLASSIC CABLE, INC.
3,529,412 Term loan, maturing June 30,2004 3,529,412
11,470,588 Term loan, maturing June 30, 2005 11,470,588
Cable television provider
COAXIAL COMMUNICATIONS, INC.
21,814,844 Term loan, maturing December 31, 1999 21,814,844
Midwest cable television provider
ELLIS COMMUNICATIONS, INC.
10,086,383 Term loan, maturing March 31, 2003 10,086,383
Broadcast television operator
FALCON CABLE MEDIA
22,000,000 Term loan, maturing June 15, 2003 22,000,000
Cable television provider
MARCUS CABLE OPERATING COMPANY, L.P.
500,000 Revolving loan, maturing December 31, 2002 500,000
20,062,500 Term loan, maturing December 31, 2002 20,062,500
28,000,000 Term loan, maturing April 30,2004 28,000,000
Cable television provider
NORTHLAND CABLE TELEVISION, INC.
7,009,505 Term loan, maturing March 31, 2002 7,009,505
3,500,000 Term loan, maturing September 30, 2003 3,500,000
Cable television provider
SINCLAIR BROADCASTING GROUP, INC.
20,000,000 Term loan, maturing November 30, 2003 20,000,000
Broadcast television operator
SULLIVAN BROADCASTING COMPANY, INC.
17,563,830 Term loan, maturing December 31, 2003 17,563,830
Broadcast television operator
--------------
$ 222,519,919
BUILDING MATERIALS - 1.8% --------------
NATIONAL GYPSUM COMPANY
$ 45,000,000 Term loan, maturing September 20, 2003 $ 45,000,000
Produces and supplies gypsum wallboard --------------
CHEMICALS - 3.0%
FREEDOM CHEMICAL COMPANY
$ 13,034,902 Term loan, maturing June 30,2002 $ 13,034,902
Organic dyes, pigments,textile
chemicals, and other specialty
chemicals
HARRIS SPECIALTY CHEMICALS, INC.
1,479,184 Term loan, maturing December 31, 1999 1,479,184
5,624,331 Term loan, maturing December 31, 2001 5,624,331
5,260,783 Term loan, maturing December 31, 2002 5,260,783
Construction chemicals
INDSPEC CHEMICAL CORP.
6,152,478 Term loan, maturing December 2, 2000 6,152,478
Resorcinol and other specialty
chemical products
LILLY INDUSTRIES, INC.
20,000,000 Term loan, maturing November 30, 2003 20,000,000
Housing paints and industrial
and specialty coatings
POLYMER GROUP, INC.
20,000,000 Term loan, maturing March 31, 2002 20,000,000
Produces nonwoven fabrics
--------------
$ 71,551,678
COMMERCIAL SERVICES - 4.5% --------------
ADVO, INC.
$ 14,000,000 Term loan, maturing March 31, 2004 $ 14,000,000
Shared advertising distributor
AVIALL, INC.
2,957,888 Term loan, maturing November 30, 2000 2,957,888
Turbine engine repair and
parts distribution
BORG-WARNER SECURITY CORPORATION
5,000,000 Term loan, maturing December 31, 1998 5,000,000
Provides security and alarm services
ELLER MEDIA COMPANY
10,000,000 Term loan, maturing June 30, 2002 10,000,000
31,903,409 Term loan, maturing December 21, 2003 31,903,409
Outdoor advertising
HOSIERY CORPORATION OF AMERICA, INC.
3,045,886 Term loan, maturing October 17, 1999 3,045,886
4,550,000 Term loan, maturing July 31, 2001 4,550,000
Women's hosiery
IRON MOUNTAIN INFORMATION SERVICES, INC.
4,443,750 Term loan, maturing October 31, 2002 4,443,750
Document archive services
NBC MERGER SUB, INC.
7,480,000 Term loan, maturing August 31, 2003 7,480,000
Used college textbook wholesaler
PSI ACQUISITION CORPORATION
2,456,358 Term loan, maturing December 31, 1998 2,456,358
12,750,000 Term loan, maturing December 31, 2000 12,750,000
Diversified consulting services
SELECT BEVERAGES, INC.
4,000,000 Term loan, maturing June 30, 2001 4,000,000
6,000,000 Term loan, maturing June 30, 2002 6,000,000
Soft drink bottler
--------------
$ 108,587,291
COMMUNICATION EQUIPMENT - 1.2% --------------
COMMUNICATIONS & POWER INDUSTRIES, INC.
$ 1,958,333 Term loan, maturing August 11, 2000 $ 1,958,333
5,633,333 Term loan, maturing August 12, 2002 5,633,333
Microwave, electronic, and radio
frequency components
DICTAPHONE ACQUISITION INC.
14,000,000 Term loan, maturing June 30, 2002 14,000,000
Manufactures, markets, and
services communication systems
K-TEC HOLDINGS, INC.
3,485,634 Term loan, maturing January 31, 2003 3,485,634
3,983,824 Term loan, maturing January 31, 2004 3,983,824
Manufactures and services
telephone, television, and
wireless communications equipment
--------------
$ 29,061,124
CONGLOMERATES - 3.7% --------------
FENWAY HOLDINGS, L.L.C.
$ 8,518,818 Term loan, maturing September 15, 2002 $ 8,518,818
Manufactures and distributes billiard
tables, dart machines, wood mouldings,
windows, doors, artificial flowers,
archery bows, and plastics.
SPALDING & EVENFLO COMPANIES, INC.
12,256,944 Term loan, maturing October 13, 2002 12,256,944
Sporting goods and infant products
WALTER INDUSTRIES, INC.
20,000,000 Term loan, maturing January 22, 2002 20,000,000
9,958,333 Term loan, maturing January 22, 2003 9,958,333
Homebuilding and financing,
pipe manufacturing and coal mining
WESTINGHOUSE ELECTRIC CORPORATION
38,700,000 Term loan, maturing September 12, 2002 38,700,000
Television and radio broadcasting,
defense, electronics and other
manufacturing
--------------
$ 89,434,095
COMPUTER SYSTEMS - 0.4% --------------
GENICOM CORPORATION
$ 9,937,500 Term loan, maturing December 31, 2002 $ 9,937,500
Produces computer printers and --------------
supplies, and provides multivendor
servicing
CONTAINERS - METAL & GLASS - 2.4%
CALMAR, INC.
$ 8,507,143 Term loan, maturing September 15, 2003 $ 8,507,143
6,380,357 Term loan, maturing March 15, 2004 6,380,357
Plastic sprayers and dispensers
SILGAN CORP.
16,537,847 Term loan, maturing December 31, 2000 16,537,847
26,870,343 Term loan, maturing March 15, 2002 26,870,343
Metal and plastic packaging products
--------------
$ 58,295,690
CONTAINERS - PAPER - 7.6% --------------
IPC, INC.
$ 8,625,000 Term loan, maturing September 30, 2001 $ 8,625,000
Plastic and paper packaging products
JEFFERSON SMURFIT CORP.
844,444 Revolving loan, maturing April 30, 2001 844,444
18,263,307 Term loan, maturing April 30, 2001 18,263,307
23,738,355 Term loan, maturing April 30, 2002 23,738,355
11,400,000 Term loan, maturing October 31, 2002 11,400,000
Liner board and other paper board
products
RIC HOLDING, INC.
5,000,000 Term loan, maturing February 28, 2003 5,000,000
32,142,857 Term loan, maturing February 28, 2004 32,142,857
12,857,143 Term loan, maturing August 31, 2004 12,857,143
Liner board, lumber and paper
packaging products
STONE CONTAINER CORPORATION
39,467,356 Term loan, maturing April 1, 2000 39,467,356
30,920,000 Term loan, maturing October 1,2003 30,920,000
Commodity pulp, paper and
packaging products
--------------
$ 183,258,462
COSMETICS - 0.8% --------------
MARY KAY COSMETICS, INC.
$ 10,000,000 Term loan, maturing December 6, 2002 $ 10,000,000
Cosmetics, skin and hair care,
and perfume products
REVLON CONSUMER PRODUCTS COMPANY
10,000,000 Term loan, maturing March 31, 1999 10,000,000
Cosmetics, skin and hair care,
and perfume products
--------------
$ 20,000,000
ELECTRONICS - INSTRUMENTATION - 0.6% --------------
DETAILS, INC.
$ 14,491,525 Term loan, maturing January 31, 2001 $ 14,491,525
Manufactures prototype printed --------------
circuit boards
FOOD WHOLESALERS - 5.4%
CATERAIR INTERNATIONAL CORPORATION
$ 9,049,454 Term loan, maturing September 15, 2001 $ 9,049,454
Food service to airlines
FAVORITE BRANDS INTERNATIONAL, INC.
478,710 Revolving loan, maturing September
30, 2002 478,710
11,696,774 Term loan, maturing September 30, 2002 11,696,774
Manufactures and markets marshmallows
and caramels
KEEBLER HOLDING CORPORATION
16,547,100 Term loan, maturing July 31, 2003 16,547,100
11,952,900 Term loan, maturing July 31, 2004 11,952,900
Manufactures and distributes
cookies and crackers
RYKOFF-SEXTON, INC.
10,135,135 Term loan, maturing October 31, 2002 10,135,135
4,864,865 Term loan, maturing April 30, 2003 4,864,865
Manufactures and distributes food products
SC INTERNATIONAL SERVICES, INC.
11,283,368 Term loan, maturing September 15, 2002 11,283,368
2,484,396 Term loan, maturing September 15, 2003 2,484,396
Food service to airlines
SPECIALTY FOODS CORPORATION
34,900,000 Term loan, maturing April 30, 2001 34,900,000
Bread and cheese products
VOLUME SERVICES, INC.
9,989,300 Term loan, maturing October 31, 2002 9,989,300
7,491,938 Term loan, maturing October 31, 2003 7,491,938
Provides food services for civic centers
and sports facilities
--------------
$ 130,873,940
HOUSEHOLD FURNISHINGS - 0.6% --------------
KNOLL, INC.
$ 7,057,087 Term loan, maturing August 31, 2003 $ 7,057,087
Office furniture and accesories
SIMMONS COMPANY
7,000,000 Term loan, maturing March 31, 2003 7,000,000
Manufactures bedding
--------------
$ 14,057,087
LEISURE - 6.3% --------------
AMF GROUP, INC.
$ 16,847,222 Term loan, maturing March 31, 2001 $ 16,847,222
17,924,528 Term loan, maturing March 31, 2003 17,924,528
7,075,472 Term loan, maturing March 31, 2004 7,075,472
Manufactures and operates
bowling equipment and supplies
AMFAC PARKS, INC.
8,333,333 Term loan, maturing September 30, 2002 8,333,333
Provides lodging, food and beverage
services to national and state parks
METRO-GOLDWYN-MAYER,INC.
25,000,000 Term loan, maturing April 15, 1997 25,000,000
Film and television production
and distribution
ORION PICTURES CORPORATION
14,437,057 Term loan, maturing December 31, 2000 14,437,057
Film production and distribution
SIX FLAGS THEME PARKS, INC.
11,730,000 Term loan, maturing June 23, 2003 11,730,000
Amusement parks
VIACOM, INC.
50,000,000 Term loan, maturing December 31, 1996 50,000,000
Television and motion picture
entertainment
--------------
$ 151,347,612
MACHINERY - 1.2% --------------
MERKLE KORFF INDUSTRIES, INC.
$ 969,231 Term loan, maturing September 22, 2001 $ 969,231
13,396,306 Term loan, maturing March 15, 2003 13,396,306
1,995,000 Term loan, maturing June 15, 2003 1,995,000
Manufactures fractional horsepower
motors
NUMATICS, INCORPORATED
4,861,111 Term loan, maturing January 3, 2002 4,861,111
7,988,889 Term loan, maturing January 3, 2004 7,988,889
Manufactures air valves, cylinders,
and air filtration and drying devices
--------------
$ 29,210,537
MANUFACTURING - DIVERSIFIED - 3.3% --------------
IMO INDUSTRIES, INC.
$ 10,000,000 Term loan, maturing April 30, 2003 $ 10,000,000
Manufactures pumps, gears and speed
reducers, and elecronic control
products and instrumentation.
INTERLAKE CORP.
8,190,048 Term loan, maturing September 27, 1996 8,190,048
Engineered materials
INTERMETRO INDUSTRIES CORPORATION
3,343,090 Term loan, maturing June 30, 2001 3,343,090
4,790,179 Term loan, maturing December 31, 2002 4,790,179
Shelving
INTERNATIONAL WIRE GROUP, INC.
9,969,697 Term loan, maturing September 30, 2002 9,969,697
19,973,684 Term loan, maturing September 30, 2003 19,973,684
Manufactures and markets copper wire
and harnesses
INTESYS TECHNOLOGIES, INC.
4,390,244 Term loan, maturing December 31, 2001 4,390,244
Plastic injection molding and
fabricated battery packs
JACKSON PRODUCTS, INC.
7,441,303 Term loan, maturing September 1, 2002 7,441,303
7,443,750 Term loan, maturing September 1, 2003 7,443,750
Manufactures and distributes safety
equipment and reflective beads
PRECISE TECHNOLOGY, INC.
5,000,000 Term loan, maturing March 31, 2003 5,000,000
Plastic injection molding
--------------
$ 80,541,995
MEDICAL PRODUCTS - 0.7% --------------
GRAPHIC CONTROLS CORPORATION
$ 15,922,982 Term loan, maturing September 28, 2003 $ 15,922,982
Recording and monitoring --------------
devices
METALS - 0.4%
U.S. SILICA COMPANY
$ 5,000,000 Term loan, maturing December 31, 2001 $ 5,000,000
4,000,000 Term loan, maturing December 31, 2003 4,000,000
Producer of industrial silica
--------------
$ 9,000,000
OFFICE EQUIPMENT - 1.4% --------------
MAIL-WELL CORPORATION
$ 4,375,495 Term loan, maturing July 31, 2003 $ 4,375,495
Manufactures envelopes
SUPREMEX, INC.
2,174,250 Term loan, maturing July 31, 2003 2,174,250
Manufactures envelopes
WILLIAMHOUSE-REGENCY OF DELAWARE, INC.
12,133,333 Term loan, maturing October 31, 2002 12,133,333
8,400,000 Term loan, maturing October 31, 2003 8,400,000
7,466,667 Term loan, maturing February 28, 2004 7,466,667
Paper-based office products
--------------
$ 34,549,745
PAPER AND FOREST PRODUCTS - 4.5% --------------
CROWN PAPER CO.
$ 24,812,500 Term loan maturing August 22, 2003 $ 24,812,500
Manufactures coated groundwood
and uncoated free paper
FORT HOWARD CORPORATION
985,345 Revolving loan, maturing March 8, 2002 985,345
49,030,771 Term loan, maturing March 8, 2002 49,030,771
8,921,212 Term loan, maturing December 31, 2002 8,921,212
Sanitary tissue paper products
S.D. WARREN COMPANY
25,000,000 Term loan, maturing December 20, 2002 25,000,000
Major U.S. producer of coated free paper
--------------
$ 108,749,828
PUBLISHING - NEWSPAPERS - 1.8% --------------
AMERICAN MEDIA OPERATIONS, INC.
$ 4,419,036 Term loan, maturing September 30, 2002 $ 4,419,036
Weekly periodical publisher
JOURNAL NEWS, INC.
23,758,612 Term loan, maturing December 31, 2001 23,758,612
14,732,827 Term loan, maturing May 1, 2003 14,732,827
Suburban newspaper
--------------
$ 42,910,475
RESTAURANTS - 1.1% --------------
AMERICA'S FAVORITE CHICKEN COMPANY
$ 14,233,266 Term loan, maturing October 31, 2001 $ 14,233,266
Church's Fried Chicken and Popeye's
restaurants
LONG JOHN SILVER'S RESTAURANTS, INC.
12,723,749 Term loan, maturing December 31, 1996 12,723,749
Seafood restaurants
--------------
$ 26,957,015
RETAIL - SPECIALTY - 0.5% --------------
CAMELOT MUSIC, INC.
$ 4,924,057 Term loan, maturing February 28, 2001 $ 2,314,307
Music stores
GRIFFITH CONSUMERS COMPANY
10,541,667 Term loan, maturing December 31, 2002 10,541,667
Retail petroleum distributor
--------------
$ 12,855,974
RETAIL STORES - DEPARTMENT STORES - 4.0% --------------
FEDERATED DEPARTMENT STORES, INC.
$ 46,601,589 Term loan, maturing January 31, 2000 $ 46,601,589
3,931,132 Revolving loan, maturing March 31, 2000 3,931,132
Retail department store
KMART CORPORATION
45,000,000 Term loan, maturing June 6, 1999 45,000,000
Retail department store
--------------
$ 95,532,721
RETAIL STORES - DRUG STORES - 0.2% --------------
DUANE READE, INC.
$ 4,662,500 Term loan, maturing December 31, 1997 $ 4,662,500
Retail drug stores --------------
RETAIL STORES - FOOD CHAINS - 7.7%
DOMINICK'S FINER FOODS, INC.
$ 3,300,362 Term loan, maturing March 31, 2002 $ 3,300,362
8,181,721 Term loan, maturing March 31, 2003 8,181,721
9,171,659 Term loan, maturing September 30, 2003 9,171,659
Supermarket chain in Chicago
GRAND UNION COMPANY
16,628,890 Term loan, maturing June 15, 2002 16,628,890
Supermarket chain in the Northeast
PATHMARK STORES, INC.
36,237,037 Term loan, maturing October 31, 1999 36,237,037
Supermarket chain in mid-Atlantic states
RALPHS GROCERY COMPANY
2,322,302 Revolving loan, maturing June 15, 2001 2,322,302
10,651,345 Term loan, maturing June 15, 2001 10,651,345
16,820,753 Term loan, maturing June 15, 2002 16,820,753
10,801,910 Term loan, maturing June 15, 2003 10,801,910
8,508,943 Term loan, maturing June 15, 2004 8,508,943
Third largest supermarket chain in
Southern California
SMITH'S FOOD & DRUG CENTERS, INC.
9,466,019 Term loan, maturing August 31, 2002 9,466,019
13,333,333 Term loan, maturing November 30, 2003 13,333,333
13,333,333 Term loan, maturing November 30, 2004 13,333,333
13,333,333 Term loan, maturing August 31, 2005 13,333,333
Supermarket and drug store chain
STAR MARKET COMPANY, INC.
10,073,684 Term loan, maturing December 31, 2001 10,073,684
4,402,632 Term loan, maturing December 31, 2002 4,402,632
Supermarket chain in Massachusetts
--------------
$ 186,567,256
STEEL - 0.5% --------------
UCAR INTERNATIONAL, INC.
$ 12,608,383 Term loan, maturing December 31, 2002 $ 12,608,383
Processing materials for steel --------------
industry
TELECOMMUNICATIONS - 5.0%
ARCH COMMUNICATIONS ENTERPRISES, INC.
$ 10,500,000 Term loan, maturing December 31, 2003 $ 10,500,000
Paging service provider
COMCAST CELLULAR COMMUNICATIONS, INC.
28,316,000 Term loan, maturing September 30, 2004 28,316,000
Wireless communications provider
WORLDCOM, INC.
56,656,892 Term loan, maturing December 31, 1996 56,656,892
Long distance telecommunications
provider
MOBILEMEDIA COMMUNICATIONS, INC.
13,333,333 Term loan, maturing June 30, 2002 13,333,333
11,666,667 Term loan, maturing June 30, 2003 11,666,667
Paging service provider
--------------
$ 120,472,892
TEXTILES - 1.4% --------------
COLLINS & AIKMAN PRODUCTS COMPANY
$ 24,841,370 Term loan, maturing December 31, 2002 $ 24,841,370
Automotive products, residential
upholstery fabrics, and wallcoverings
LONDON FOG INDUSTRIES, INC.
9,582,314 Term loan, maturing May 31, 2002 6,899,266
1,971,219 Term loan, maturing May 31, 2002* 1,419,278
Outerwear
--------------
$ 33,159,914
TOTAL LOAN INTERESTS (IDENTIFIED --------------
COST, $2,067,857,800) $2,062,023,956
--------------
- -----------------------------------------------------------------------------
COMMON STOCKS - 0.1%
- -----------------------------------------------------------------------------
SHARES SECURITY VALUE
- -----------------------------------------------------------------------------
806,708 America's Favorite Chicken Company,
Common Stock* $ 2,675,850
4,380,486 London Fog Industries, Inc.
0
--------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $0) $ 2,675,850
--------------
- -----------------------------------------------------------------------------
PREFERRED STOCKS - 0.2%
- -----------------------------------------------------------------------------
54,895 America's Favorite Chicken Company,
10% Preferred Stock $ 5,489,500
5,845,956 London Fog Industries, Inc.
17.5% Preferred Stock* 0
--------------
TOTAL PREFERRED STOCKS (IDENTIFIED COST,
$10,014,473) $ 5,489,500
- -----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 13.7%
- -----------------------------------------------------------------------------
PRINCIPAL
AMOUNT DESCRIPTION
- -----------------------------------------------------------------------------
$ 49,300,000 AIG Funding, Inc., 5.47%, 7/1/96 $ 49,300,000
74,860,000 Associates of North America, 5.51%, 7/1/96 74,860,000
41,000,000 CXC Incorporated, 5.60%, 7/1/96 41,000,000
31,550,000 Corporate Receivable Corporation,
5.55%, 7/1/96 31,550,000
95,000,000 Ford Motor Credit Company, 5.37%, 7/3/96 94,971,659
38,907,000 USAA Capital Corporation, 5.50%, 7/1/96 38,907,000
--------------
TOTAL SHORT-TERM INVESTMENTS, AT
AMORTIZED COST $ 330,588,659
--------------
TOTAL INVESTMENTS (IDENTIFIED
COST, $2,408,460,932) - 99.3% $2,400,777,965
OTHER ASSETS, LESS LIABILITIES - 0.7% 16,154,535
--------------
TOTAL NET ASSETS - 100% $2,416,932,500
==============
*Non-income producing security.
Note: The description of the principal business for each security set forth
above is unaudited.
See notes to financial statements
<PAGE>
-----------------------------------
SENIOR DEBT PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
June 30, 1996
(Expressed in United States Dollars)
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$2,408,460,932) $2,400,777,965
Cash 9,673,501
Receivable for investments sold 174,074
Interest receivable 14,769,442
Deferred organization expenses (Note 1D) 40,946
Prepaid expenses 673,517
Other receivables 76,791
--------------
Total assets $2,426,186,236
LIABILITIES:
Deferred facility fee income (Note 1B) $9,039,242
Trustees' fees payable 6,813
Accrued expenses 207,681
----------
Total liabilities 9,253,736
--------------
NET ASSETS applicable to investors' interest
in Portfolio $2,416,932,500
==============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $2,424,615,467
Unrealized depreciation of investments
(computed on the basis of identified cost) (7,682,967)
--------------
Total $2,416,932,500
==============
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS (Continued)
<TABLE>
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------------------
For the Six Months Ended June 30, 1996
(Expressed in United States Dollars)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME (NOTE 1B):
Interest income $82,401,572
Facility fees earned 2,410,890
-----------
Total income $84,812,462
Expenses --
Investment advisory fee (Note 2) $ 9,318,578
Compensation of Trustees not members of the Investment
Adviser's organization (Note 2) 14,490
Custodian fee (Note 2) 356,712
Interest expense 542,824
Legal and accounting services 101,567
Amoritization of organization expenses (Note 1D) 3,094
Miscellaneous 210,237
-----------
Total expenses 10,547,502
-----------
Net investment income $74,264,960
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investment transactions $ (457,941)
Change in unrealized depreciation of investments (3,197,610)
-----------
Net realized and unrealized loss on investments (3,655,551)
-----------
Net increase in net assets from operations $70,609,409
===========
See notes to financial statements
</TABLE>
<PAGE>
STATEMENT OF CASH FLOWS
- ------------------------------------------------------------------------------
For the Six Months Ended June 30, 1996
(Expressed in United States Dollars)
- ------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH:
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES --
Purchase of loan interests $(1,232,176,097)
Proceeds from sales and principal repayments 584,003,007
Interest received 78,675,312
Facility fees received 4,214,132
Interest paid (566,098)
Operating expenses paid (9,696,257)
Net increase in short-term investments (146,823,245)
---------------
Net cash used for operating activities $ (722,369,246)
---------------
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES --
Proceeds from capital contributions $ 868,755,552
Payments for capital withdrawals (143,771,313)
---------------
Net cash provided from financing activities $ 724,984,239
---------------
Net increase in cash $ 2,614,993
CASH AT BEGINNING OF PERIOD 7,058,508
---------------
CASH AT END OF PERIOD $ 9,673,501
===============
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM
OPERATIONS TO NET CASH FROM OPERATING ACTIVITIES:
Net increase in net assets from operations $ 70,609,409
Decrease in receivable for investments sold 172,273
Increase in interest receivable (3,726,260)
Increase in prepaid expenses (17,699)
Decrease in deferred organization expenses 3,094
Increase in other receivables (76,791)
Increase in deferred facility fee income 1,803,242
Increase in accrued expenses and other liabilities 88,398
Net increase in investments (791,224,912)
---------------
Net cash used for operating activities $ (722,369,246)
===============
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS (Continued)
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------
(Expressed in United States Dollars)
- ------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1996 1995*
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 74,264,960 $ 72,119,692
Net realized gain (loss) on investments (457,941) 1,214,316
Change in unrealized appreciation of
investments (3,197,610) (1,760,430)
-------------- --------------
Net increase in net assets from
operations $ 70,609,409 $ 71,573,578
-------------- --------------
Capital transactions --
Contributions
$ 868,755,552 $1,684,280,868
Withdrawals (143,771,313) (134,615,604)
-------------- --------------
Increase in net assets from capital
transactions $ 724,984,239 $1,549,665,264
-------------- --------------
Net increase in net assets
$ 795,593,648 $1,621,238,842
NET ASSETS:
At beginning of period 1,621,338,852 100,010
-------------- --------------
At end of period
$2,416,932,500 $1,621,338,852
============== ==============
*For the period from the start of business, February 22, 1995, to December 31,
1995.
- ------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- ------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1996 1995*
-------------- ------------
RATIOS (to average daily net assets):
Operating expenses 0.98%+ 1.01%+
Interest expense 0.05%+ 0.13%+
Net investment income 7.27%+ 7.95%+
PORTFOLIO TURNOVER 33% 39%
+Annualized.
*For the period from the start of business, February 22, 1995, to December 31,
1995.
See notes to financial statements
<PAGE>
-------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
Senior Debt Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940 as a non-diversified closed-end investment company which
was organized as a trust under the laws of the State of New York on May 1,
1992. The Declaration of Trust permits the Trustees to issue interests in the
Portfolio. Investment operations began on February 22, 1995, with the
acquisition of securities with a value of $583,240,521, including unrealized
depreciation of $2,724,927, in exchange for an interest in the Portfolio by
one of the Portfolio's investors. The following is a summary of significant
accounting policies of the Portfolio. The policies are in conformity with
accounting principles generally accepted in the United States of America.
A. INVESTMENT VALUATION -- The Portfolio's investments in interests in loans
(Loan Interests) are valued at fair value by the Portfolio's investment
adviser, Boston Management and Research, under procedures established by the
Trustees as permitted by Section 2(a)(41) of the Investment Company Act of
1940. Such procedures include the consideration of relevant factors, data and
information relating to fair value, including (i) the characteristics of and
fundamental analytical data relating to the Loan Interest, including the cost,
size, current interest rate, period until next interest rate reset, maturity
and base lending rate of the Loan Interest, the terms and conditions of the
loan and any related agreements and the position of the loan in the borrower's
debt structure; (ii) the nature, adequacy and value of the collateral,
including the Portfolio's rights, remedies and interests with respect to the
collateral; (iii) the creditworthiness of the borrower, based on evaluations
of its financial condition, financial statements and information about the
borrower's business, cash flows, capital structure and future prospects; (iv)
information relating to the market for the Loan Interest including price
quotations for and trading in the Loan Interest and interests in similar loans
and the market environment and investor attitudes towards the Loan Interest
and interests in similar loans; (v) the reputation and financial condition of
the agent bank and any intermediate participant in the loan; and (vi) general
economic and market conditions affecting the fair value of the Loan Interest.
Other portfolio securities (other than short-term obligations, but including
listed issues) may be valued on the basis of prices furnished by one or more
pricing services which determine prices for normal, institutional-sized
trading units of such securities using market information, transactions for
comparable securities and various relationships between securities which are
generally recognized by institutional traders. In certain circumstances,
portfolio securities will be valued at the last sales price on the exchange
that is the primary market for such securities, or the last quoted bid price
for those securities for which the over-the-counter market is the primary
market or for listed securities in which there were no sales during the day.
The value of interest rate swaps will be determined in accordance with a
discounted present value formula and then confirmed by obtaining a bank
quotation. Short-term obligations which mature in sixty days or less are
valued at amortized cost, if their original term to maturity when acquired by
the Portfolio was 60 days or less, or are valued at amortized cost using their
value on the 61st day prior to maturity, if their original term to maturity
when acquired by the Portfolio was more than 60 days, unless in each case this
is determined not to represent fair value. Repurchase agreements are valued at
cost plus accrued interest. Other portfolio securities for which there are no
quotations or valuations are valued at fair value as determined in good faith
by or on behalf of the Trustees.
B. INCOME -- Interest income from Loan Interests is recorded on the accrual
basis at the then-current interest rate, while all other interest income is
determined on the basis of interest accrued, adjusted for amortization of
premium or discount when required for federal income tax purposes. Facility
fees received are recognized as income over the expected term of the loan.
C. INCOME TAXES -- The Portfolio is treated as a partnership for federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes. Since some of the
Portfolio's investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolio, the Portfolio normally
must satisfy the applicable source of income and diversification requirements
(under the Internal Revenue Code) in order for its investors to satisfy them.
The Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net investment income, net
realized capital gains, and any other items of income, gain, loss, deductions
or credit.
D. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
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.
- ------------------------------------------------------------------------------
(2) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment advisory fee is earned by Boston Management and Research (BMR)
as compensation for investment advisory services rendered to the Portfolio.
The fee is computed at the monthly rate of 19/240 of 1% (0.95% per annum) of
the Portfolio's average daily gross assets up to and including $1 billion and
at reduced rates as daily gross assets exceed that level. For the six months
ended June 30, 1996, the effective annual rate, based on average daily gross
assets, was .91% (annualized) and amounted to $9,318,578. Except as to
Trustees of the Portfolio who are not members of BMR's organization, officers
and Trustees receive remuneration for their services to the Portfolio out of
such investment advisory fee. Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Prior to November 10, 1995, IBT was an affiliate
of EVM. Pursuant to the custodian agreement, IBT receives a fee reduced by
credits which are determined based on average daily cash balances the
Portfolio maintains with IBT. All significant credit balances are reported as
a reduction of expenses in the statement of operations. Certain of the
officers and Trustees of the Portfolio are officers and directors/trustees of
the above organizations. Trustees of the Portfolio that are not affiliated
with the Investment Advisor 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 six months ended June 30, 1996, no significant
amounts have been deferred.
- ------------------------------------------------------------------------------
(3) INVESTMENTS
The Portfolio invests primarily in Loan Interests. The ability of the issuers
of the Loan Interests to meet their obligations may be affected by economic
developments in a specific industry. The cost of purchases and the proceeds
from principal repayments and sales of Loan Interests for the six months ended
June 30, 1996 aggregated $1,232,176,097 and $583,830,734, respectively.
- ------------------------------------------------------------------------------
(4) SHORT-TERM DEBT AND CREDIT AGREEMENTS
The Portfolio participates with other funds and portfolios managed by BMR and
Eaton Vance Management (EVM) in a $120 million unsecured line of credit
agreement with a bank. The line of credit consists of a $20 million committed
facility and a $100 million discretionary facility. Borrowings will be made by
the Portfolio solely to facilitate the handling of unusual and/or
unanticipated short-term cash requirements. Interest is charged to each
portfolio based on its borrowings at an amount above either the bank's
adjusted certificate of deposit rate, a variable adjusted certificate of
deposit rate, or a federal funds effective rate. In addition, a fee computed
at an annual rate of 1/4 of 1% on the $20 million committed facility and on
the daily unused portion of the $100 million discretionary facility is
allocated among the participating funds and portfolios at the end of each
quarter. The Portfolio did not have any significant borrowings or allocated
fees under this agreement during the period.
The Portfolio has also entered into a revolving credit agreement, that will
allow the Portfolio to borrow an additional $245 million to support the
issuance of commercial paper and to permit the Portfolio to invest in
accordance with its investment practices. Interest is charged under the
revolving credit agreement at the bank's base rate or at an amount above
either the bank's adjusted Libor rate or adjusted certificate of deposit rate.
Interest expense includes a commitment fee of approximately $320,912 which is
computed at the annual rate of 1/4 of 1% on the unused portion of the
revolving credit agreement. There were no borrowings under this agreement
during the six months ended June 30, 1996. As of June 30, 1996, the Portfolio
had no commercial paper outstanding.
- ------------------------------------------------------------------------------
(5) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation/depreciation in the value of investments
owned at June 30, 1996, as computed on a federal income tax basis, were as
follows:
Aggregate cost $ 2,408,460,932
===============
Gross unrealized appreciation $ 3,996,833
Gross unrealized depreciation (11,679,800)
---------------
Net unrealized depreciation $ (7,682,967)
===============
<PAGE>
INDEPENDENT AUDITORS' REPORT
- ------------------------------------------------------------------------------
TO THE TRUSTEES AND INVESTORS OF
SENIOR DEBT PORTFOLIO:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Senior Debt Portfolio as of June
30, 1996, the related statements of operations and cash flows for the six
months then ended, and the statements of changes in net assets and the
supplementary data for the six months ended June 30, 1996 and for the period
from the start of business, February 22, 1995, to December 31, 1995 (all
expressed in United States dollars). These financial statements and
supplementary data are the responsibility of the Portfolio's management. Our
responsibility is to express an opinion on these financial statements and
supplementary data based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 and Loan Interests owned at June 30, 1996, by
correspondence with the custodian and selling or agent banks; where replies
were not received from selling or agent banks, we performed other auditing
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 Senior Debt
Portfolio as of June 30, 1996, the results of its operations and its cash
flows, the changes in its net assets, and its supplementary data for the
respective stated periods in conformity with accounting principles generally
accepted in the United States of America.
As discussed in Note 1A, the financial statements include Loan Interests and
certain other securities held by Senior Debt Portfolio valued at $2,070,189,306
(86% of net assets of the Portfolio), which values are fair values determined by
the Portfolio's investment adviser in the absence of actual market values.
Determination of fair value involves subjective judgment, as the actual market
value of a particular Loan Interest or security can be established only by
negotiation between the parties in a sales transaction. We have reviewed the
procedures established by the Trustees and used by the Portfolio's investment
adviser in determining the fair values of such Loan Interests and securities and
have inspected underlying documentation, and in the circumstances, we believe
that the procedures are reasonable and the documentation appropriate.
DELOITTE & TOUCHE
GRAND CAYMAN, CAYMAN ISLANDS
BRITISH WEST INDIES
AUGUST 9, 1996
<PAGE>
--------------------------
INVESTMENT MANAGEMENT
EATON VANCE OFFICERS INDEPENDENT TRUSTEES
PRIME RATE
RESERVES JAMES B. HAWKES DONALD R. DWIGHT
24 Federal Street President and Trustee President, Dwight Partners, Inc.
Boston, MA 02110 Chairman, Newspapers of
M. DOZIER GARDNER New England, Inc.
Vice President and Trustee
SAMUEL L. HAYES, III
JAMES L. O'CONNOR Jacob H. Schiff Professor of
Treasurer Investment Banking, Harvard
University Graduate School of
THOMAS OTIS Business Administration
Secretary
NORTON H. REAMER
President and Director,
United Asset
Management Corporation
JOHN L. THORNDIKE
Director, Fiduciary Company
Incorporated
JACK L. TREYNOR
Investment Adviser and
Consultant
---------------------------------------------------------
SENIOR DEBT OFFICERS INDEPENDENT TRUSTEES
PORTFOLIO
24 Federal Street JAMES B. HAWKES DONALD R. DWIGHT
Boston, MA 02110 President and Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of
M. DOZIER GARDNER New England, Inc.
Vice President and Trustee
SAMUEL L. HAYES, III
WILLIAM CHISHOLM Jacob H. Schiff Professor of
Vice President Investment Banking, Harvard
University Graduate School of
RAYMOND O'NEILL Business Administration
Vice President
NORTON H. REAMER
MICHEL NORMANDEAU President and Director,
Vice President United Asset
Management Corporation
JAMES L. O'CONNOR
Treasurer JOHN L. THORNDIKE
Director, Fiduciary Company
THOMAS OTIS Incorporated
Secretary
JACK L. TREYNOR
PORTFOLIO MANAGERS Investment Adviser and
Consultant
SCOTT H. PAGE
Vice President
PAYSON F. SWAFFIELD
Vice President
<PAGE>
INVESTMENT ADVISER OF
SENIOR DEBT PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EATON VANCE PRIME RATE RESERVES
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
CUSTODIAN
Investors Bank & Trust Company
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
TRANSFER AGENT
First Data Investor Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
BANKING COUNSEL
Mayer, Brown &Platt
787 Seventh Avenue
New York, NY 10019
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution plan,
sales charges and expenses. Please read the prospectus carefully before you
invest or send money.
EATON VANCE
PRIME RATE RESERVES
24 FEDERAL STREET
BOSTON, MA 02110
M-PRSRC-8/96
EATON VANCE
PRIME RATE
RESERVES
SEMI-ANNUAL
SHAREHOLDER REPORT
JUNE 30, 1996
