The Eaton Vance Investment Trust
For the Limited Maturity Municipals Portfolio
[LOGO]
Annual Shareholder Report
March 31, 1997
<TABLE>
<S> <C> <C>
Portfolios Officers Independent Trustees
Thomas J. Fetter Donald R. Dwight
President President, Dwight Partners, Inc.
Chairman, Newspapers of
James B. Hawkes New England, Inc.
Vice President and Trustee
Samuel L. Hayes, III
Robert B. MacIntosh Jacob H. Schiff Professor of Investment
Vice President Banking, Harvard University Graduate
School of Business Administration
William H. Ahern, Jr.
Vice President and Portfolio Manager of Norton H. Reamer
Connecticut, Florida, Massachusetts President and Director,
Michigan, New Jersey, and Ohio Limited United Asset Management Corporation
Maturity Municipals Portfolios
John L. Thorndike
Nicole Anderes Director, Fiduciary Company Incorporated
Vice President and Portfolio Manager
of Pennsylvania Limited Maturity Jack L. Treynor
Municipals Portfolio Investment Adviser
and Consultant
Timothy T. Browse
Vice President and Portfolio Manager
of Pennsylvania Limited Maturity
Municipals Portfolio
Cynthia J. Clemson
Vice President and Portfolio Manager
of California Limited Maturity
Municipals Portfolio
James L. O'Connor
Treasurer
Thomas Otis
Secretary
</TABLE>
<PAGE>
Limited Maturity Municipals Portfolio
Financial Statements
Statements of Assets and Liabilities
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March 31, 1997
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New Jersey
Limited
Portfolio
-------------
Assets:
Investments --
Identified cost $56,492,991
Unrealized appreciation 1,107,202
------------
Investments at value (Note 1A) $57,600,193
Cash 181
Receivable for investments sold 1,285,363
Interest receivable 1,001,651
Receivable for variation margin
on open financial futures contracts
(Note 1E) --
Prepaid expenses 2,345
Deferred organization expenses (Note 1D) 1,893
------------
Total assets $59,891,626
------------
Liabilities:
Payable for investments purchased $ 1,385,559
Payable for when-issued securities
(Note 1G) --
Demand note payable (Note 5) 206,000
Payable to affiliate for Trustees' fees
(Note 2) 1,781
Accrued expenses 32,347
------------
Total liabilities $ 1,625,687
------------
Net Assets applicable to investors'
interest in Portfolio $58,265,939
============
Sources of Net Assets:
Net proceeds from capital
contributions and withdrawals $57,158,737
Net unrealized appreciation of
investments and financial futures
contracts (computed on the basis of
identified cost) 1,107,202
------------
Total $58,265,939
============
See notes to financial statements
60
<PAGE>
Statements of Operations
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Year Ended March 31, 1997
- ---------------------------------------------------------------------------
New Jersey
Limited
Portfolio
--------------
Investment Income (Note 1B):
Interest income $ 3,854,081
------------
Expenses --
Investment adviser fee (Note 2) $ 324,454
Compensation of Trustees not
members of the Administrator's
organization (Note 2) 6,412
Custodian fee (Note 1H) 43,642
Legal and accounting services 21,851
Bond pricing 10,126
Amortization of organization
expenses (Note 1D) 1,789
Miscellaneous 14,436
------------
Total expenses $ 422,710
Deduct --
Reduction of custodian fee
(Note 1H) 19,776
------------
Net expenses $ 402,934
------------
Net investment income $ 3,451,147
------------
Realized and Unrealized Gain
(Loss) on Investments:
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 393,991
Financial futures contracts (321,525)
------------
Net realized gain (loss) $ 72,466
------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ (383,438)
Financial futures contracts 13,389
------------
Net change in unrealized
appreciation $ (370,049)
------------
Net realized and unrealized
loss $ (297,583)
------------
Net increase in net assets
from operations $ 3,153,564
============
See notes to financial statements
61
<PAGE>
Statements of Changes in Net Assets
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Year Ended March 31, 1997
- ---------------------------------------------------------------------------
New Jersey
Limited
Portfolio
-----------------
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 3,451,147
Net realized gain (loss) on
investment transactions 72,466
Change in unrealized
appreciation (370,049)
--------------
Net increase in net assets
from operations $ 3,153,564
--------------
Capital transactions --
Contributions $ 1,862,282
Withdrawals (26,922,483)
--------------
Net decrease in net assets resulting
from capital transactions $ (25,060,201)
--------------
Net decrease in net assets $ (21,906,637)
Net Assets:
At beginning of year 80,172,576
--------------
At end of year $ 58,265,939
==============
See notes to financial statements
62
<PAGE>
Statements of Changes in Net Assets
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Year Ended March 31, 1996
- ---------------------------------------------------------------------------
New Jersey
Limited
Portfolio
----------------
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 4,281,726
Net realized gain (loss) on
investment transactions 83,359
Change in unrealized appreciation 875,687
--------------
Net increase in net assets
from operations $ 5,240,772
--------------
Capital transactions --
Contributions $ 2,138,038
Withdrawals (24,485,909)
--------------
Net decrease in net assets resulting
from capital transactions $ (22,347,871)
--------------
Net decrease in net assets $ (17,107,099)
Net Assets:
At beginning of year 97,279,675
--------------
At end of year $ 80,172,576
==============
See notes to financial statements
63
<PAGE>
Supplementary Data
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New Jersey Limited Portfolio
-------------------------------------------
Year Ended March 31,
-------------------------------------------
1997 1996 1995 1994**
--------- ---------- ---------- -----------
Ratios to average daily net
assets:
Expenses (1) 0.61% 0.57% 0.54% 0.54%+
Net expenses, after custodian
fee reduction 0.58% 0.55% -- --
Net investment income 4.96% 4.78% 4.73% 4.53%+
Portfolio Turnover 37% 42% 44% 10%
Net Assets, end of period
(000 omitted) $58,266 $80,173 $97,280 $102,948
+ Annualized.
* For the period from the start of business, April 16, 1993, to March 31,
1994.
** For the period from the start of business, May 3, 1993, to March 31, 1994.
(1) The expense ratios for the years ended March 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the prior periods have not been adjusted to
reflect this change.
See notes to financial statements
64
<PAGE>
Notes to Financial Statements
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(1) Significant Accounting Policies
California Limited Maturity Municipals Portfolio (California Limited Portfolio),
Connecticut Limited Maturity Municipals Portfolio (Connecticut Limited
Portfolio), Florida Limited Maturity Municipals Portfolio (Florida Limited
Portfolio), Massachusetts Limited Maturity Municipals Portfolio (Massachusetts
Limited Portfolio), Michigan Limited Maturity Municipals Portfolio (Michigan
Limited Portfolio), New Jersey Limited Maturity Municipals Portfolio (New Jersey
Limited Portfolio), New York Limited Maturity Municipals Portfolio (New York
Limited Portfolio), Ohio Limited Maturity Municipals Portfolio (Ohio Limited
Portfolio) and Pennsylvania Limited Maturity Municipals Portfolio (Pennsylvania
Limited Portfolio), collectively the Portfolios, are registered under the
Investment Company Act of 1940 as non-diversified open-end management investment
companies which were organized as trusts under the laws of the State of New York
on May 1, 1992. The Declarations of Trust permit the Trustees to issue interests
in the Portfolios. The following is a summary of significant accounting policies
of the Portfolios. The policies are in conformity with generally accepted
accounting principles.
A. Investment Valuations -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts listed on commodity
exchanges are valued at closing settlement prices. Short-term obligations,
maturing in sixty days or less, are valued at amortized cost, which approximates
value. Investments for which valuations or market quotations are unavailable are
valued at fair value using methods determined in good faith by or at the
direction of the Trustees.
B. Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C. Federal Taxes -- The Portfolios are treated as partnerships
for Federal tax purposes. No provision is made by the Portfolios for federal or
state taxes on any taxable income of the Portfolios because each investor in the
Portfolios is ultimately responsible for the payment of any taxes. Since some of
the Portfolios' investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolios, the Portfolios normally
must satisfy the applicable source of income and diversification requirements
(under the Internal Revenue Code) in order for their respective investors to
satisfy them. The Portfolios will allocate at least annually among their
respective investors each investor's distributive share of the Portfolios' net
taxable (if any) and tax-exempt investment income, net realized capital gains,
and any other items of income, gain, loss, deduction or credit.
Interest income received by the Portfolios on investments in municipal bonds,
which is excludable from gross income under the Internal Revenue Code, will
retain its status as income exempt from federal income tax when allocated to
each Portfolio's investors. The portion of such interest, if any, earned on
private activity bonds issued after August 7, 1986, may be considered a tax
preference item for investors.
D. Deferred Organization Expenses -- Costs incurred by a Portfolio in connection
with its organization, including registration costs, are being amortized on a
straight-line basis over five years, beginning on the date each Fund commenced
operations.
E. Financial Futures Contracts -- Upon entering a financial futures contract, a
Portfolio is required to deposit ("initial margin") either in cash or securities
an amount equal to a certain percentage of the purchase price indicated in the
financial futures contract. Subsequent payments are made or received by a
Portfolio ("margin maintenance") each day, dependent on the daily fluctuations
in the value of the underlying security, and are recorded for book purposes as
unrealized gains or losses by a Portfolio. A Portfolio's investment in financial
futures contracts is designed only to hedge against anticipated future changes
in interest rates. Should interest rates move unexpectedly, a Portfolio may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss.
F. Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by a Portfolio, the premium paid is recorded as
an investment, the value of which is marked-to-market daily. When a purchased
option expires, a Portfolio will realize a loss in the amount of the cost of the
option. When a Portfolio enters into a closing sales transaction, the Portfolio
will realize a gain or loss depending on whether the sales proceeds from the
closing sales transaction is greater or less than the cost of the option. When a
Portfolio exercises a put option, settlement is made in cash. The risk
associated with purchasing options is limited to the premium originally paid.
G. When-issued and Delayed Delivery Transactions -- The Portfolios may engage in
when-issued and delayed delivery transactions. The Portfolios record when-issued
securities on trade date and maintain security positions such that sufficient
liquid assets will be available to make payment for the securities purchased.
Securities purchased on a when-issued or delayed delivery basis are marked to
market daily and begin earning interest on settlement date.
H. Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolios. Pursuant to the custodian agreements, IBT receives a fee
reduced by credits
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which are determined based on the average daily cash balances each Portfolio
maintains with IBT. All significant credit balances used to reduce the
Portfolios' custodian fees are reflected as a reduction of expenses on the
statement of operations.
I. Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
J. Other -- Investment transactions are accounted for on a trade date basis.
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(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 each Portfolio. The fee
is based upon a percentage of average daily net assets plus a percentage of
gross income (i.e., income other than gains from the sale of securities). For
the year ended March 31, 1997, each Portfolio incurred advisory fees as follows:
Portfolio Amount Effective Rate
- ----------------------- ---------- ---------------
California Limited $239,320 0.47%
Connecticut Limited 64,492 0.47%
Florida Limited 508,203 0.46%
Massachusetts Limited 385,610 0.47%
Michigan Limited 83,756 0.48%
New Jersey Limited 324,454 0.47%
New York Limited 557,305 0.46%
Ohio Limited 146,515 0.48%
Pennsylvania Limited 375,224 0.47%
To enhance the net income of the Connecticut Limited Portfolio, BMR made a
reduction of its fee in the amount of $32,497.
Except as to Trustees of the Portfolios who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services to
the Portfolios out of such investment adviser fee. Trustees of the Portfolios
that are not affiliated with the Investment Adviser may elect to defer receipt
of all or a percentage of their annual fees in accordance with the terms of the
Trustees Deferred Compensation Plan. For the year ended March 31, 1997, no
significant amounts have been deferred.
Certain of the officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations.
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(3) Investments
Purchases and sales of investments, other than U.S. Government securities, put
option transactions and short-term obligations, for the year ended March 31,
1997 were as follows:
<TABLE>
<CAPTION>
California Connecticut Florida Massachusetts Michigan
Limited Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio Portfolio
------------- ------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Purchases $28,784,757 $6,190,195 $70,750,321 $50,757,550 $4,839,639
Sales 46,006,048 8,563,337 102,106,262 82,537,912 10,872,883
</TABLE>
New Jersey New York Ohio Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
------------- -------------- ------------- -------------
Purchases $25,394,155 $ 69,170,036 $10,295,734 $39,990,076
Sales 46,414,717 106,987,883 14,960,465 64,446,380
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<PAGE>
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(4) Federal Income Tax Basis of Investments
The cost and unrealized appreciation/depreciation in value of the investments
owned by each Portfolio at March 31, 1997, as computed on a federal income tax
basis, are as follows:
<TABLE>
<CAPTION>
California Connecticut Florida Massachusetts Michigan
Limited Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio Portfolio
------------- ------------- -------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Aggregate cost $41,774,003 $11,956,737 $90,512,005 $67,029,171 $14,096,910
============ ============ ============ ============ ============
Gross unrealized appreciation $ 832,712 $ 187,375 $ 1,291,406 $ 1,067,203 $ 495,155
Gross unrealized depreciation (217,833) (78,496) (850,336) (478,709) (101,931)
------------ ------------ ------------ ------------ ------------
Net unrealized appreciation $ 614,879 $ 108,879 $ 441,070 $ 588,494 $ 393,224
============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
New Jersey New York Ohio Pennsylvania
Limited Limited Limited Limited
Portfolio Portfolio Portfolio Portfolio
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Aggregate cost $56,492,991 $97,740,065 $27,768,855 $65,161,613
============ ============ ============ ============
Gross unrealized appreciation $ 1,372,834 $ 961,923 $ 519,339 $ 1,147,269
Gross unrealized depreciation (265,632) (849,224) (134,051) (462,744)
------------ ------------ ------------ ------------
Net unrealized appreciation $ 1,107,202 $ 112,699 $ 385,288 $ 684,525
============ ============ ============ ============
</TABLE>
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(5) Line of Credit
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and its affiliates in a $120 million unsecured line of credit with a group
of banks. Borrowings will be made by the Portfolios or Funds solely to
facilitate the handling of unusual or unanticipated short-term cash
requirements. Interest is charged to each portfolio or fund based on its
borrowings at the bank's base rate or at an amount above either the bank's
adjusted certificate of deposit rate, Eurodollar rate or federal funds effective
rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused
portion of the facility is allocated among the participating portfolios and
funds at the end of each quarter. At March 31, 1997 the California Limited
Portfolio, Florida Limited Portfolio, Massachusetts Limited Portfolio, New
Jersey Limited Portfolio, New York Limited Portfolio, and Pennsylvania Limited
Portfolio had a balance outstanding pursuant to this line of credit of $907,000,
$45,000, $263,000, $206,000, $318,000, and $735,000, respectively. The
Portfolios did not have any significant borrowings or allocated fees during the
year ended March 31, 1997.
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(6) Financial Instruments
The Portfolios regularly trade in financial instruments with off-balance sheet
risk in the normal course of their investing activities to assist in managing
exposure to various market risks. These financial instruments include futures
contracts and may involve, to a varying degree, elements of risk in excess of
the amounts recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment a Portfolio has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
A summary of obligations under these financial instruments at March 31, 1997,
were as follows:
<TABLE>
<CAPTION>
Futures Contracts Net Unrealized
Limited Portfolio Expiration Date Contracts Position Appreciation
- ------------------- ------------------- ------------------------- ---------- ---------------
<S> <C> <C> <C> <C>
California 6/97 35 U.S. Treasury Bonds Short $ 97,135
Florida 6/97 75 U.S. Treasury Bonds Short 208,144
Massachusetts 6/97 65 U.S. Treasury Bonds Short 180,391
New York 6/97 135 U.S. Treasury Bonds Short 374,659
</TABLE>
At March 31, 1997, the Portfolios had sufficient cash and/or securities
segregated to cover margin requirements on open futures contracts.
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<PAGE>
Independent Auditors' Report
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To the Trustees and Investors of
California Limited Maturity Municipals Portfolio
Connecticut Limited Maturity Municipals Portfolio
Florida Limited Maturity Municipals Portfolio
Massachusetts Limited Maturity Municipals Portfolio
Michigan Limited Maturity Municipals Portfolio
New Jersey Limited Maturity Municipals Portfolio
New York Limited Maturity Municipals Portfolio
Ohio Limited Maturity Municipals Portfolio
Pennsylvania Limited Maturity Municipals Portfolio
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of California Limited Maturity Municipals
Portfolio, Connecticut Limited Maturity Municipals Portfolio, Florida Limited
Maturity Municipals Portfolio, Massachusetts Limited Maturity Municipals
Portfolio, Michigan Limited Maturity Municipals Portfolio, New Jersey Limited
Maturity Municipals Portfolio, New York Limited Maturity Municipals Portfolio,
Ohio Limited Maturity Municipals Portfolio, and Pennsylvania Limited Maturity
Municipals Portfolio (the Portfolios) as of March 31, 1997, the related
statements of operations for the year then ended, the statements of changes in
net assets for the years ended March 31, 1997 and 1996 and the supplementary
data for each of the years in the four year period ended March 31, 1997. These
financial statements and supplementary data are the responsibility of the
Trusts' management. Our responsibility is to express an opinion on the financial
statements and supplementary data based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at March
31, 1997 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other audit procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial position of the aforementioned
Portfolios as of March 31, 1997, the results of their operations, the changes in
their net assets, and their supplementary data for the respective stated periods
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 2, 1997
68
