The Eaton Vance Investment Trust
For the National Limited Maturity Tax Free Portfolio
[LOGO]
Semi-Annual Shareholder Report
September 30, 1995
Investment Adviser of National
Limited Maturity Tax Free Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator
Eaton Vance Management
24 Federal Street
Boston, MA 02110
(617) 482-8260
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
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<CAPTION>
National Limited Maturity Tax Free Portfolio
Portfolio of Investments
September 30, 1995
(Unaudited)
-----------------------------------------------------------------------------------------------------------
Tax-Exempt Investments--100%
-----------------------------------------------------------------------------------------------------------
Ratings (unaudited)
-------------------
Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
Education Revenue--12.6%
Aa NR $1,500 Arizona Educational Loan Marketing Corporation,
(AMT), 6.00%, 9/1/01 $ 1,570,365
A NR 1,000 Arizona Student Loan Acquisition Authority, (AMT),
7.625%, 5/1/10 1,094,240
Baa NR 500 Louisiana Public Facilities Authority, Louisiana
Association of Independent Colleges &
Universities, 6.20%, 12/1/99 508,535
A NR 1,970 Louisiana Public Facilities Authority Student Loan
Revenue Bonds, (AMT), 7.00%, 9/1/06 2,070,982
A A- 1,275 Massachusetts Industrial Financing Agency, Clark
University, 6.80%, 7/1/06 1,397,324
A1 A+ 1,730 Massachusetts Health and Educational Facilities
Authority, Tufts University Issue, 7.40%, 8/1/18 1,864,715
Aa AA 1,615 Metropolitan Government Nashville & Davidson
Counties, Tennessee, Health & Education
Facilities, (Vanderbilt Univ.), 7.625%, 5/1/08 1,754,003
Aaa NR 1,000 The New England Education Loan Marketing
Corporation, 5.80%, 3/1/02 1,045,020
Baa1 BBB+ 250 New York Dormitory Authority, State University
Education Facilities, 7.00%, 5/15/02 269,645
A1 A+ 1,000 State of New York Dormitory Authority, University
of Rochester, 6.50%, 7/1/09 1,037,690
A1 AA 1,000 Texas A & M University Revenue Bonds, 7.00%,
5/15/09 1,085,070
A NR 1,610 The State of Texas, Texas College Student Loan
Senior Lien, 7.45%, 10/1/06 1,739,331
Aa1 AA 2,000 University of Texas Financing System, 7.00%,
8/15/07 2,228,740
NR AA 1,500 Wyoming Student Loan Corporation, 6.25%, 12/1/99 1,556,385
---------
$19,222,045
---------
Escrowed--3.7%
Aaa AAA $1,720 Corpus Christi TX, (FGIC), Prerefunded to 3/1/02,
6.70%, 3/1/08 $ 1,908,340
Aaa A+ 2,000 The Commonwealth of Massachusetts, Prerefunded to
8/1/01, 6.75%, 8/1/06 2,248,060
Aaa AAA 1,350 Schuykill County, Pennsylvania, Redevelopment
Authority, (AMBAC), Prerefunded to 6/1/01,
6.75%, 6/1/02 1,491,926
---------
$ 5,648,326
---------
General Obligations--20.5%
Aa AA $2,150 Arlington, Texas, Permanent Improvement, 6.00%,
8/15/01 $ 2,325,956
Aaa AAA 1,500 Austin Independent School District of Travis
County, Texas, 5.20%, 8/1/01 1,556,280
12
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Tax-Exempt Investments (Continued)
-----------------------------------------------------------------------------------------------------------
Ratings (unaudited)
-------------------
Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
-----------------------------------------------------------------------------------------------------------
General Obligations--(Continued)
Aaa AA+ 1,500 Baltimore County, Maryland, 6.00%, 7/1/05 1,624,275
NR NR 1,000 Cleveland, Ohio, City School District, 6.50%,
6/15/97 1,005,120
Aaa AAA 1,000 Dallas County, Texas, Unlimited Tax (Road
Improvement), 6.50%, 8/15/08 1,072,200
Aa1 AAA 2,000 City of Dallas, Texas (Dallas, Denton and Collin
Counties), 5.90%, 2/15/01 2,133,960
Ba1 BBB 5,000 City of Detroit, Michigan, 6.50%, 4/1/02 5,206,200
Ba1 BBB 460 City of Detroit, Michigan, 6.75%, 4/1/03 485,387
Aaa AA+ 1,000 State of Georgia, 6.00%, 3/1/04 1,092,290
Aa AA 2,225 Harris County, Texas, 0.00%, 10/1/08 1,095,501
A1 AA- 3,500 State of Rhode Island and Providence Plantations,
6.00%, 5/15/01 3,746,925
Aa AA 1,200 Texas Public Finance Authority, 5.375%, 10/1/00 1,251,372
Aa AA 3,000 State of Texas, Veterans Program, (AMT), 7.625%,
12/1/13 3,311,160
Aa AA 1,000 City of Tulsa, Oklahoma, 6.20%, 6/1/03 1,077,610
NR NR 3,950 Youngstown, Ohio County School District, 6.40%,
7/1/00 4,082,878
---------
$31,067,114
---------
Health Care--2.3%
Baa BBB $1,500 Colorado Health Facilities Authority, (Rocky
Mountain Adventist Project), 6.00%, 2/1/98 $ 1,516,665
NR NR 475 Vermont Industrial Development Authority, (Wake
Robins Corp Project), 8.00%, 4/1/99 485,417
NR NR 1,550 St. Tammany Public Trust Finance Authority,
Louisiana, (Christwood Project), 8.75%, 11/15/05 1,534,438
---------
$ 3,536,520
---------
Hospitals--3.1%
A1 AA- $1,500 Anchorage, Alaska, Hospital Revenue Bonds, (Sisters
of Providence Project), 6.75%, 10/1/00 $ 1,620,870
A1 AA- 1,400 California Health Facilities Financing Authority,
(Sisters of Providence), 7.50%, 10/1/10 1,547,938
NR BBB+ 575 County of Lucas, Ohio, Hospital Facilities (Flower
Hospital) 5.70%, 12/1/00 575,966
NR BBB+ 425 County of Lucas, Ohio, Hospital Facilities (Flower
Hospital) 5.80%, 12/1/01 427,801
Baa1 BBB 500 Massachusetts Health and Educational Facilities
Authority, (Sisters of Providence Health System),
6.00%, 11/15/00 519,315
---------
$ 4,691,890
---------
13
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Portfolio of Investments (continued)
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Tax-Exempt Investments (Continued)
-----------------------------------------------------------------------------------------------------------
Ratings (unaudited)
-------------------
Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
-----------------------------------------------------------------------------------------------------------
Housing--5.0%
Aa AA+ $3,390 Minnesota Housing Finance Agency, (Single Family
Mortgage Bonds), (FHA), 7.55%, 7/1/04 $ 3,599,943
NR A+ 1,000 New Jersey Housing and Mortgage Finance Agency,
6.40%, 11/1/02 1,057,500
Aa AA 2,895 Wyoming Community Development Agency, (Single
Family Mortgage Bonds), (FHA/VA Mortgages), (AMT),
7.20%, 6/1/10 3,066,645
---------
$ 7,724,088
---------
Industrial Development Revenue--8.2%
Baa1 NR $ 400 Jackson, Alabama, Industrial Development Board,
Solid Waste Disposal (Boise Cascade), 7.875%,
8/1/00 $ 414,468
NR NR 5,325 Jackson, Tennessee, Industrial Development Board,
Solid Waste Disposal (Owens-Corning Fiberglass),
(AMT), 6.25%, 3/31/04 5,384,267
Baa2 BBB 2,000 Memphis-Shelby County, Tennessee, Airport, (Federal
Express), 6.75%, 9/1/12 2,089,580
NR A- 1,115 Ohio Economic Development Commission, (Ohio
Enterprise Board), (AMT), 5.60%, 6/1/02 1,121,668
NR A+ 300 Ohio Industrial Development Revenue Bonds, (Specko
Corporation) (AMT), 6.25%, 6/1/00 306,270
B1 BB+ 2,075 Polk County Florida, Industrial Development
Authority, (IMC Fertilizer), (AMT), 7.525%, 1/1/15 2,168,002
A1 A- 1,000 Richland County, South Carolina, Pollution Control
Revenue (Union Camp Corporation Project), 5.875%,
11/1/02 1,059,490
---------
$12,543,745
---------
Insured Transportation--1.8%
Aaa AAA $1,100 Metropolitan Washington D.C. Airport Authority,
(MBIA), 7.60%, 10/1/14 $ 1,211,342
Aaa AAA 1,500 Port of Houston Authority of Harris County, Texas,
(MBIA) 5.75%, 5/1/02 1,545,690
---------
$ 2,757,032
---------
Insured Education--3.5%
Aaa AAA $1,000 Alabama A&M University, (MBIA), 6.00%, 7/1/05 $ 1,076,700
Aaa AAA 2,150 Illinois State University Auxiliary Facilities
System, (MBIA), 6.20%, 4/1/01 2,314,174
Aaa AAA 1,840 Pennsylvania State Higher Education Assistance
Agency, (FGIC), 6.80%, 12/1/00 1,974,099
---------
$ 5,364,973
---------
Insured General Obligations--4.4%
Aaa AAA $1,280 Corpus Christi, Texas, (FGIC), 6.70%, 3/1/08 $ 1,389,952
14
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Tax-Exempt Investments (Continued)
-----------------------------------------------------------------------------------------------------------
Ratings (unaudited)
-------------------
Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
-----------------------------------------------------------------------------------------------------------
Insured General Obligations--(Continued)
Aaa AAA 1,000 District of Columbia, (MBIA), 6.00%, 6/1/01 1,058,770
Aaa AAA 1,500 Grand Ledge, Michigan, Public School District,
(MBIA), 7.875%, 5/1/11 1,773,315
Aaa AAA 3,760 Maricopa County, Arizona, School District #28,
(FGIC), 0.00%, 7/1/03 2,553,717
---------
$6,775,754
---------
Insured Hospitals--3.9%
Aaa AAA $3,430 Connecticut Development Authority, (Hartford
Hospital Real Estate Corporation Project), (MBIA),
(AMT), 6.875%, 10/1/06 $3,709,065
Aaa AAA 1,000 Kentucky Development Finance Authority, (St. Luke's
Hospital) (MBIA), 7.30%, 10/1/03 1,104,070
Aaa AAA 1,000 Massachusetts Health & Education Facilities
Authority, (Metro West Health Inc.), (AMBAC),
5.70%, 11/15/01 1,059,620
---------
$5,872,755
---------
Insured Housing--1.8%
Aaa AAA $1,610 Iowa Finance Authority, Single Family Mortgage,
(AMBAC), 5.55%, 7/1/00 $1,631,236
Aaa AAA 1,460 Massachusetts State Housing Finance Authority,
(AMBAC), (AMT), 6.00%, 1/1/04 1,038,040
---------
$2,669,276
---------
Insured Industrial Development Revenue--1.8%
Aaa AAA $1,500 Alabama Water Pollution Control Authority,
Revolving Fund (AMBAC), 6.50%, 8/15/04 $1,576,965
Aaa AAA 1,000 Illinois Development Finance Authority, Pollution
Control Revenue, (Commonwealth Edison), (MBIA),
7.25%, 6/1/11 1,091,560
---------
$2,668,525
---------
Insured Lease Revenue/Certificates of
Participation--2.2%
Aaa AAA $1,750 Anchorage, Alaska, Certificates of Participation,
(BIGI), 7.55%, 2/15/98 $1,806,718
Aaa AAA 1,500 Texas State Public Finance Authority, (AMBAC),
5.60%, 2/1/00 1,571,280
---------
$3,377,998
---------
Insured Utilities--2.2%
Aaa AAA $1,000 Intermountain Power Agency, Utah, (FGIC), 7.00%,
7/1/15 $1,051,030
Aaa AAA 2,150 Washington Public Power Supply System, Nuclear
Project No. 3, (FGIC), 7.00%, 7/1/05 2,335,954
---------
$3,386,984
15
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Portfolio of Investments (continued)
-----------------------------------------------------------------------------------------------------------
Tax-Exempt Investments (Continued)
-----------------------------------------------------------------------------------------------------------
Ratings (unaudited)
-------------------
Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
-----------------------------------------------------------------------------------------------------------
Insured Special Tax--1.4%
Aaa AAA $1,000 Arizona State Transportation Board, (Maricopa
County Area Regional Road Fund), (MBIA), 7.00%,
7/1/00 $1,103,140
Aaa AAA 1,000 Harris County Municipal Utility District No. 238,
(MBIA), 6.00%, 9/1/09 1,016,310
---------
$2,119,450
---------
Insured Water & Sewer--1.5%
Aaa AAA $1,000 Boston Water and Sewer Commission, (FSA), 5.50%,
11/1/01 $1,049,890
Aaa AAA 1,170 City of Vallejo, California, (Water Improvement
Project), (FGIC), 6.00%, 11/1/00 1,254,813
---------
$2,304,703
---------
Lease Revenue/Certificate of Participation--0.9%
NR NR $1,405 Los Angeles, California, Regional Airports
Improvement Corporation, (Trans World Airlines
Inc.), 6.125%, 5/15/00 $1,395,868
---------
Miscellaneous--2.0%
A A+ $1,000 Metropolitan Pier and Exposition Authority of
Illinois, McCormick Place Expansion Project, 5.75%,
6/15/02 $1,059,650
A A+ 500 Metropolitan Pier and Exposition Authority of
Illinois, McCormick Place Expansion Project, 5.90%,
6/15/03 535,005
Aa AA 1,400 Virginia State Public School Authority, 6.00%,
8/1/01 1,510,908
---------
$3,105,563
---------
Solid Waste--3.7%
NR A+ $1,500 Fairfax County Economic Development Authority,
(Ogden Martin Systems of Fairfax, Inc. Project),
(AMT), 7.75%, 2/1/11 $1,643,985
NR BBB- 2,120 New Jersey Economic Development Authority Heating &
Cooling, (Trigen-Trenton Project), (AMT), 6.10%,
12/1/04 2,127,441
NR NR 1,800 Pennsylvania Economic Development Authority,
Resource Recovery, (Northampton), 6.75%, 1/1/07 1,809,594
---------
$5,581,020
---------
Transportation--4.0%
Baa BB $2,000 Denver, Colorado City & County Airport, (AMT),
7.00%, 11/15/09 $2,118,740
Aa AA- 3,700 Los Angeles, California, Department of Airports,
7.40%, 5/1/10 3,922,000
---------
$6,040,740
---------
Utility Revenue--8.8%
Aa AA $1,545 Conservation and Renewable Energy System,
Washington Conservation Project, 5.55%, 10/1/02 $1,609,396
16
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Tax-Exempt Investments (Continued)
-----------------------------------------------------------------------------------------------------------
Ratings (unaudited)
-------------------
Principal
Standard Amount
Moody's & Poor's (000 omitted) Security Value
-----------------------------------------------------------------------------------------------------------
Utility Revenue--(Continued)
Aa3 AA- 1,000 Chicago, Illinois, Gas Supply Revenue Bonds, (The
Peoples Gas Light and Coke Company Project), 7.50%,
3/1/15 1,106,290
Aa AA 1,000 Intermountain Power Agency, Power Supply Revenue
Bonds, 7.20%, 7/1/11 1,088,950
Aa1 AA 1,000 Jacksonville Electric Authority, St. John's River
Power System, 6.75%, 10/1/05 1,111,600
Aa2 AA 2,500 Jefferson County, Kentucky, Louisville Gas and
Electric Company Project, 7.75%, 2/1/19 2,711,875
Aa3 AA- 1,000 Joliet Illinois, Gas Supply Revenue, Peoples Gas
Light & Coke, 8.00%, 6/1/99 1,106,100
Aa A+ 1,000 Platte River Power Authority (Colorado), 6.50%,
6/1/01 1,052,420
Aa AA- 1,000 Southern California Public Power Authority, 5.50%,
7/1/12 955,660
Aa AA 1,000 Washington Public Power Supply System, Nuclear
Project No. 3, 7.375%, 7/1/04 1,109,940
Aa AA 1,500 Washington Public Power Supply System, Nuclear
Project No. 1, 7.50%, 7/1/15 1,621,860
---------
$ 13,474,091
---------
Water & Sewer Revenue--0.7%
Aa AA+ $1,000 Harris County, Texas, Flood Control District,
7.125%, 10/1/00 $ 1,122,347
---------
Total Investments (identified cost, $148,688,833) $152,450,807
=========
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The Portfolio invests primarily in debt securities issued by 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 September 30, 1995, 24.5% 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 0.7% to 11.3% of total investments.
At September 30, 1995, the concentration of the Portfolio's investments in
the various states, determined as a percentage of total investments, is as
follows:
Texas 17%
Others, representing less than 7% individually 83%
See notes to financial statements
17
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Financial Statements
Statement of Assets and Liabilities
-----------------------------------------------------------------------------------------------------------
September 30, 1995 (unaudited)
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<S> <C> <C>
Assets:
Investments, at value (Note 1A) (identified cost, $148,688,833) $152,450,807
Cash 743,925
Receivable for investments sold 382,076
Interest receivable 2,762,222
Deferred organization expenses (Note 1D) 6,391
-----------
Total assets $156,345,421
Liabilities:
Payable for investments purchased $2,524,835
Payable to affiliates--
Trustees' fees 2,590
Custodian fee 1,353
Accrued expenses 3,599
-------
Total liabilities 2,532,377
-----------
Net Assets applicable to investors' interest in Portfolio $153,813,044
===========
Sources of Net Assets:
Net proceeds from capital contributions and withdrawals $150,051,070
Unrealized appreciation of investments (computed on the basis of identified
cost) 3,761,974
-----------
Total $153,813,044
===========
</TABLE>
See notes to financial statements
18
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<CAPTION>
Statement of Operations
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Six Months Ended September 30, 1995 (unaudited)
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<S> <C> <C>
Investment Income:
Interest income $4,481,895
Expenses--
Investment adviser fee (Note 2) $ 375,074
Compensation of Trustees not members of the Investment
Adviser's
organization 6,248
Custodian fees (Note 2) 37,833
Legal and accounting services 23,028
Amortization of organization expenses (Note 1D) 1,237
Miscellaneous 23,351
-------
Total expenses $ 466,771
Deduct reduction of custodian fee (Note 2) 9,482
-------
Net expenses 457,289
---------
Net investment income $4,024,606
---------
Realized and Unrealized Gain (Loss):
Net realized gain (loss)--
Investment transactions (identified cost basis) $ 751,633
Financial futures contracts (815,015)
-------
Net realized loss $ (63,382)
Change in unrealized appreciation of--
Investments $2,147,434
Financial futures contracts 144,506
-------
Net change in unrealized appreciation 2,291,940
---------
Net realized and unrealized gain $2,228,558
---------
Net increase in net assets from operations $6,253,164
=========
</TABLE>
See notes to financial statements
19
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<CAPTION>
Financial Statements (continued)
Statements of Changes in Net Assets
-------------------------------------------------------------------------------------------
Six Months Ended
September 30, 1995 Year Ended
(unaudited) March 31, 1995
----------------- ------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From operations--
Net investment income $ 4,024,606 $ 8,797,304
Net realized loss on investments (63,382) (4,509,177)
Change in unrealized appreciation of investments 2,291,940 4,668,165
----------------- ------------
Net increase in net assets from operations $ 6,253,164 $ 8,956,292
----------------- ------------
Capital transactions--
Contributions $ 8,039,635 $ 53,163,573
Withdrawals (30,100,559) (70,340,668)
----------------- ------------
Decrease in net assets resulting from capital
transactions $(22,060,924) $(17,177,095)
----------------- ------------
Total decrease in net assets $(15,807,760) $ (8,220,803)
Net Assets:
At beginning of period 169,620,804 177,841,607
----------------- ------------
At end of period $153,813,044 $169,620,804
================= ============
</TABLE>
<TABLE>
<CAPTION>
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Supplementary Data
- --------------------------------------------------------------------------------------------
Six Months Ended Year Ended March 31,
September 30, --------------------
1995** 1995 1994*
----------------- ----- -------
<S> <C> <C> <C>
Ratios (As a percentage of average daily net
assets):
Expenses 0.58%+ 0.53% 0.52%+
Net investment income 4.99%+ 5.02% 4.74%+
Portfolio Turnover 26% 56% 21%
Net Assets, end of period (000 omitted) $153,813 $169,621 $177,842
+Annualized.
*For the period from the start of business, May 3, 1993, to March 31, 1994.
**Unaudited.
</TABLE>
See notes to financial statements
20
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Notes to Financial Statements
(Unaudited)
-----------------------------------------------------------------------------
(1) Significant Accounting Policies
National Limited Maturity Tax Free Portfolio (the Portfolio) is registered under
the Investment Company Act of 1940 as a diversified open-end management
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. The following is a summary of significant accounting
policies of the Portfolio. The policies are in conformity with generally
accepted accounting principles.
A. Investment Valuation--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. 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 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 Portfolio 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 the 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 the Portfolio in connection
with its organization are being amortized on the straight-line basis over five
years.
E. Financial Futures Contracts--Upon the entering of a financial futures
contract, the 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 the 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 the Portfolio. The Portfolio's
investment in financial futures contracts is designed only to hedge against
anticipated future changes in interest rates. Should interest rates move
unexpectedly, the Portfolio may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss.
F. Other--Investment transactions are accounted for on a trade date basis.
G. Interim Financial Information--The interim financial statements relating to
September 30, 1995 and for the period then ended have not been audited by
independent certified public accountants, but in the opinion of the Portfolio's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
21
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Notes to Financial Statements (continued)
- -----------------------------------------------------------------------------
(2) Investment 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 the 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 six months ended September 30, 1995, the fee was equivalent to 0.47% of the
Portfolio's average net assets for such period and amounted to $375,074. Except
as to Trustees of the Portfolio who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services to
the Portfolio out of such investment adviser fee. Investors Bank & Trust Company
(IBT), an affiliate of EVM and BMR, serves as custodian of the Portfolio.
Pursuant to the custodian agreement, IBT receives a fee reduced by credits which
are determined based on the average daily cash balances the Portfolio maintains
with IBT. For the six months ended September 30, 1995, credits used to reduce
custodian fees amounted to $9,482. 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 September 30, 1995, no significant amounts have been deferred.
- -----------------------------------------------------------------------------
(3) Line of Credit
The Portfolio participates with other portfolios and funds managed by BMR or 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 or fund 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 during the period.
- -----------------------------------------------------------------------------
(4) Investments
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $41,356,131 and $57,615,122, respectively.
- -----------------------------------------------------------------------------
(5) Federal Income Tax Basis of Investments
The cost and unrealized appreciation/depreciation in value of the investments
owned at September 30, 1995, as computed on a federal income tax basis, were as
follows:
Aggregate cost $148,688,833
===========
Gross unrealized appreciation $ 3,954,214
Gross unrealized depreciation 192,240
-----------
Net unrealized appreciation $ 3,761,974
===========
- -----------------------------------------------------------------------------
(6) Financial Instruments
The Portfolio regularly trades in financial instruments with off-balance sheet
risk in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include written
options and futures contracts and may involve, to a varying degree, elements of
risk in excess of the amounts recognized for financial statement purposes. The
notional or contractual amounts of these instruments represent the investment
the 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. The Portfolio had no such
obligations outstanding at September 30, 1995.
22
<PAGE>
INVESTMENT MANAGEMENT FOR NATIONAL LIMITED MATURITY PORTFOLIO
OFFICERS INDEPENDENT TRUSTEES
M. DOZIER GARDNER DONALD R. DWIGHT
President, Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England,
JAMES B. HAWKES Inc.
Vice President,
Trustee
HOOKER TALCOTT, JR. SAMUEL L. HAYES, III
Vice President and Jacob H. Schiff Professor
Portfolio Manager of Investment Banking,
Harvard University
Graduate School of
Business Administration
JAMES L. O'CONNOR
Treasurer NORTON H. REAMER
President and Director,
THOMAS OTIS United Asset Management
Secretary Corporation
JOHN L. THORNDIKE
Vice President and Director
Fiduciary Company Incorporated
JACK L. TREYNOR
Investment Adviser and
Consultant
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