<PAGE>
Investing
[LOGO]
for the
EATON VANCE
================ 21st
Mutual Funds
Century
EDUCATION
[GRAPHIC OMITTED]
ANNUAL REPORT DECEMBER 31, 1998
THE
MASSACHUSETTS
[GRAPHIC OMITTED] HEALTH &
EDUCATION
TAX-EXEMPT
TRUST
Eaton Vance
Global Management-Global Distribution
[GRAPHIC OMITTED]
<PAGE>
The Massachusetts Health & Education Tax-Exempt Trust as of December 31, 1998
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
[Photo of Thomas J. Fetter]
Thomas J. Fetter
President
I am happy to report that The Massachusetts Health & Education Tax-Exempt Trust
had a total return of 12.05% for the year ended December 31, 1998. That return
was the result of a rise in share price from $13.938 on December 31, 1997 to
$14.875 on December 31, 1998, and the reinvestment of $0.744 in dividends.
MUNICIPAL BONDS PERFORMED WELL IN AN UNCERTAIN MARKET ENVIRONMENT...
Municipal bonds had another respectable year in 1998, but again trailed the
Treasury market, which rallied strongly as foreign and domestic investors sought
quality in an uncertain global economic outlook. In addition, a heavy new issue
calendar produced supply pressures for the tax-exempt market. More than $300
billion in new municipal issues came to market in 1998. Nonetheless, the
tax-exempt market performed well, with the Lehman Brothers Municipal Bond Index-
a widely recognized, unmanaged index of municipal bonds - posting a return of
6.5% for the year.(1)
MUNICIPAL BONDS ARE NOW AMONG THE MOST UNDERVALUED ASSET CLASSES...
As the year ended, municipal bonds represented one of the most undervalued asset
classes in the financial markets. Historically, municipal bond yields have
averaged around 85% of Treasury bond yields. However, in the flight to
Treasuries that characterized the bond market in late 1998, that ratio has been
skewed dramatically. At December 31, 1998, representative 30-year tax-exempt
bonds were yielding 5.1%, or 100% of 30-year Treasury yields! Considering their
tax-exemption, that is one of the true market anomalies of the decade. By any
measure of historical valuation, municipal bonds today represent a remarkable
bargain.
TAXES REMAIN HIGH, WHILE TAX REFORM IS AGAIN OFF THE POLITICAL AGENDA...
The election year promises of tax cuts appear to have been all but forgotten in
Washington. Meanwhile, it is estimated that the average American worked until
May 10 to pay his or her taxes in 1998, according to the Tax Foundation. That
poses an enormous financial burden - and an increasing challenge for those who
may be simultaneously paying for college tuition, caring for elderly parents, or
trying to plan for their own retirement.
Amid low inflation and growing federal budget surpluses, we believe that the
outlook for bonds remains attractive. At their recent levels, municipal bonds
are especially attractive. Moreover, municipal bonds remain an excellent
fixed-income alternative - to diversify one's investment portfolio and to lower
one's tax burden.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter
President
February 9, 1999
FUND INFORMATION
as of December 31, 1998
PERFORMANCE(2)
-------------------------------------------
Average Annual Total Returns
(at net asset value)
One year 6.2%
Five years 5.8
Life of Fund (7/30/93) 6.0
Average Annual Total Returns
(by market value, ASE)
-------------------------------------------
One year 12.1%
Five years 5.2
Life of Fund (7/30/93) 5.7
FIVE LARGEST SECTOR WEIGHTINGS(3)
- --------------------------------------------------------------------------------
By total investments
- --------------------------------------------------------------------------------
Insured Hospital* 19.1%
Hospital 18.3%
Escrowed Prerefunded 15.9%
Education 15.1%
Insured Education* 11.2%
(1) It is not possible to invest directly in an Index.
(2) Returns are calculated by determining the percentage change in net asset
value or share price with all distributions reinvested.
(3) Five largest sector weightings account for 79.6% of the Fund's investments,
determined by dividing the total market value of the holdings by the total
investments of the Fund. Holdings are subject to change.
* Private insurance does not remove the risk of loss of principal associated
with this investment due to changes in market conditions.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when sold, may be worth more
or less than their original cost.
<PAGE>
The Massachusetts Health & Education Tax-Exempt Trust as of December 31, 1998
MANAGEMENT DISCUSSION
[Photo of Robert B. MacIntosh]
Robert B. MacIntosh,
Portfolio Manager
INVESTMENT ENVIRONMENT
- --------------------------------------------------------------------------------
THE ECONOMY
o The Massachusetts economy generated strong growth in 1998. The December
jobless rate declined to just 3.2%, down from 3.8% a year earlier. Financial
services, construction and retail trade were among the largest sources of new
job creation.
o Inflation remained well in check during the year. The Consumer Price Index - a
widely recognized barometer of inflation at the consumer level - rose a modest
1.6% during the year. With the Asian and emerging economies in disarray and a
growing concern over the possibility of a global credit crunch, the Federal
Reserve pursued a looser monetary policy, lowering short-term interest rates
three times in the fall months.
o According to a Deloitte & Touche LLP study, Massachusetts is home to 55 of the
nation's fastest-growing technology companies, second only to California. The
Massachusetts economy generated more than 61,000 new jobs in 1998.
THE FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION
o In a declining rate environment, the Fund continued to upgrade call
protection. We sold some pre-refunded issues to improve the Fund's capital
appreciation potential.
o The Fund purchased its first inverse floater during the period. Such a bond
issue is divided into separate, low-yielding and high-yielding tranches. This
new issue provided the Fund a unique security with both an attractive yield
and enhanced upside potential.
o Finally, a recent change in its charter permitted the Fund to diversify its
holdings among a wider range of health and education issuers. The Fund used
that flexibility to add some attractive secondary school issues during the
period.
PERFORMANCE FOR THE PAST YEAR
o Based on net asset value, the Fund had a total return of 6.2% for the year
ended December 31, 1998. That return was the result of a rise in net asset
value per share (NAV) from $13.90 on December 31, 1997 to $14.06 on December
31, 1998, and the reinvestment of all distributions.
o Based on the most recent dividend and the December 31 NAV of $14.06, the Fund
had a distribution rate of 5.29%. To equal that in a taxable investment, a
Massachusetts taxpayer in the combined state and 36% federal tax bracket
(43.68% combined rate) would need a 9.39% distribution rate.
o On December 31, 1998, the Fund's share price on the American Stock Exchange
traded at a 5.8% premium to its underlying net asset value.
YOUR INVESTMENT AT WORK
- --------------------------------------------------------------------------------
MASSACHUSETTS STATE
DEVELOPMENT FINANCE AGENCY [Graphic Omitted]
YMCA OF GREATER BOSTON
o The YMCA of Greater Boston is a long-standing institution whose goal is to
provide the area with wholesome recreational opportunities for young people in
Eastern Massachusetts.
o These bonds were issued by the State Development Finance Agency to finance
infrastructural improvements to local branches of the Greater Boston YMCA.
Projects included the renovation of buildings for the Hyde Park, Charles
River, Reading/Wakefield, Roxbury and Allston/Brighton branches, as well as a
new soccer field for the Roxbury branch.
o This bond featured excellent call protection and an attractive 5.45% coupon in
a lower-rated, investment-grade bond, while providing funding projects that
will benefit Boston-area communities.
- --------------------------------------------------------------------------------
Mutual fund shares are not insured by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
- --------------------------------------------------------------------------------
Fund Ratings(1)
---------------------------------------
By total investments
AAA 40.3%
BBB 20.7%
AA 17.7%
Non-rated 12.8%
A 8.5%
FUND OVERVIEW(1)
---------------------------------------
Number of Issues 44
Average Maturity 19.4 Yrs.
Effective Maturity 7.6
Average Rating AA-
Average Call 6.8 Yrs.
Average Dollar Price $108.09
(1) Because the Fund is actively managed, Fund Ratings and Fund Overview are
subject to change. All bonds rated BBB or higher are investment grade.
Past performance is no guarantee of future results. The value of an
investment in the Fund will fluctuate so that shares, when sold, may be
worth more or less than their original cost. In addition, share price is
subject to market influences.
<PAGE>
<TABLE>
The Massachusetts Health & Education Tax-Exempt Trust as of December 31, 1998
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PORTFOLIO OF INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
Tax-Exempt Investments -- 100.0%
<CAPTION>
Ratings (Unaudited) Principal
- -------------------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------------------------------------------------
EDUCATION -- 15.1%
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR NR $1,700 Massachusetts HEFA, Wheaton College,
6.00%,1/1/18 $ 1,707,463
A(3) A- 1,500 Massachusetts IFA, Clark University,
7.00%, 7/1/12 1,623,315
Baa(1) BBB 2,110 Massachusetts IFA, Springfield College,
5.625%, 9/15/10 2,176,296
Baa(1) NR 400 Massachusetts IFA, Wentworth Inst of Tech,
5.75%, 10/1/28 413,964
NR A 400 Massachusetts IFA, Belmont Hill School,
5.25%, 9/1/28 398,480
- -------------------------------------------------------------------------------------------------------------------
$ 6,319,518
- -------------------------------------------------------------------------------------------------------------------
ESCROWED -- 15.9%
- -------------------------------------------------------------------------------------------------------------------
Aaa AAA $ 750 Massachusetts HEFA, University Hospital,
(MBIA), 7.25%, 7/1/19 $ 806,655
NR BBB+ 750 Massachusetts HEFA, Jordan Hospital,
6.875%, 10/1/22 841,606
Baa(3) NR 1,000 Massachusetts HEFA, Milford-Whitinsville
Hospital, 7.75%, 7/15/17 1,146,590
Aaa NR 800 Massachusetts HEFA, Sisters of Providence
Hospital, 6.625%, 11/15/22 897,992
Aaa AAA 1,380 Massachusetts HEFA, Boston College, (FGIC),
6.625%, 7/1/21 1,502,985
A(1) AA- 1,000 Massachusetts IFA, Holy Cross College,
6.45%, 1/1/12 1,096,380
Aaa NR 160 Massachusetts Turnpike Authority,
5.00%, 1/1/20 163,885
Aaa AAA 200 Massachusetts Turnpike Authority, (MBIA),
5.00%, 1/1/20 204,856
- -------------------------------------------------------------------------------------------------------------------
$ 6,660,949
- -------------------------------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 8.6%
- -------------------------------------------------------------------------------------------------------------------
Aa(3) AA+ $1,000 Massachusetts Water Pollution Abatement
Trust, 6.375%, 2/1/15 $ 1,115,020
Aa(3) A+ 2,000 University of Massachusetts Building
Authority, 6.875%, 5/1/14 2,458,220
- -------------------------------------------------------------------------------------------------------------------
$ 3,573,240
- -------------------------------------------------------------------------------------------------------------------
HOSPITALS -- 18.3%
- -------------------------------------------------------------------------------------------------------------------
NR NR $2,185 Massachusetts HEFA, Atlanticare Medical
Center, 8.00%, 12/1/13 $ 2,457,404
Baa(3) NR 250 Massachusetts HEFA, Central New England
Health, 6.125%, 8/1/13 260,900
Baa(3) NR 175 Massachusetts HEFA, Central New England
Health, 6.30%, 8/1/18 183,323
Aa(2) AA+ 1,500 Massachusetts HEFA, Daughters of Charity,
6.10%, 7/1/14 1,631,985
Baa(2) BBB- 500 Massachusetts HEFA, Milford-Whitinsville,
5.25%, 7/15/18 490,410
NR BBB- 400 Massachusetts HEFA, North Adams Hospital,
6.625%, 7/1/18 435,256
Aa(2) NR 1,000 Massachusetts HEFA, Youville House,
6.25%, 2/15/41 1,083,690
NR BBB+ 750 Massachusetts HEFA, Cape Cod Health,
5.45%, 11/15/23 750,270
Baa(2) BBB- 345 Massachusetts HEFA, Milford-Whitinsville,
5.375%, 7/15/28 341,764
- -------------------------------------------------------------------------------------------------------------------
$ 7,635,002
- -------------------------------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 3.7%
- -------------------------------------------------------------------------------------------------------------------
A(3) A $1,500 Massachusetts IFA, General Motors,
5.55%, 4/1/09 $ 1,526,640
- -------------------------------------------------------------------------------------------------------------------
INSURED EDUCATION -- 11.2%
- -------------------------------------------------------------------------------------------------------------------
Aaa AAA $ 40 Massachusetts HEFA, Boston College, (FGIC),
6.625%, 7/1/21 $ 43,264
Aaa AAA 1,765 Massachusetts HEFA, Northeastern University,
(MBIA), 6.55%, 10/1/22 1,951,225
Baa AAA 1,000 Massachusetts HEFA, Suffolk University,
(CLEE), 6.25%, 7/1/12 1,079,970
Aaa AAA 1,000 Massachusetts HEFA, Tufts University, (FGIC),
5.95%, 8/15/18 1,058,000
NR AAA 515 Massachusetts IFA, Assumption College,
(CLEE), 6.00%, 7/1/26 563,147
- -------------------------------------------------------------------------------------------------------------------
$ 4,695,606
- -------------------------------------------------------------------------------------------------------------------
INSURED HOSPITALS -- 19.1%
- -------------------------------------------------------------------------------------------------------------------
Aaa AAA $1,725 Massachusetts HEFA, Addison Gilbert Hospital,
(MBIA), 5.75%, 7/1/23 $ 1,815,097
Aaa AAA 800 Massachusetts HEFA, Baystate Medical Center,
(FSA), 6.00%, 7/1/26 877,456
Aaa AAA 1,000 Massachusetts HEFA, Berkshire Health System,
(MBIA), 6.00%, 10/1/19 1,098,260
Aaa AAA $1,250 Massachusetts HEFA, Dana Farber Cancer
Institute, (FGIC), 6.00%, 12/1/10 $ 1,377,575
Aaa AAA 500 Massachusetts HEFA, Mt. Auburn Hospital,
(MBIA), 6.25%, 8/15/14 556,690
Aaa AAA 1,000 Massachusetts HEFA, North Shore Medical
Center, (MBIA), 5.625%, 7/1/14 1,074,810
NR AAA 595 Massachusetts HEFA, Valley Regional Health
System, (CLEE), 5.75%, 7/1/18 626,999
NR AAA 500 Massachusetts HEFA, Winchester Hospital,
(CLEE), 5.80%, 7/1/09 548,175
- -------------------------------------------------------------------------------------------------------------------
$ 7,975,062
- -------------------------------------------------------------------------------------------------------------------
INSURED SPECIAL TAX -- 1.4%
- -------------------------------------------------------------------------------------------------------------------
NR AAA $ 600 Puerto Rico IFA Residuals, (AMBAC), Variable
Rate, 7/1/28 $ 592,662
- -------------------------------------------------------------------------------------------------------------------
LIFE CARE -- 0.8%
- -------------------------------------------------------------------------------------------------------------------
NR NR $ 350 Massachusetts IFA, Forge Hill,
6.75%, 04/1/30 $ 339,769
- -------------------------------------------------------------------------------------------------------------------
MISCELLANEOUS -- 1.5%
- -------------------------------------------------------------------------------------------------------------------
NR BBB+ $ 625 Massachusetts DFA, YMCA of Greater Boston,
5.45%, 11/1/28 $ 626,031
- -------------------------------------------------------------------------------------------------------------------
NURSING HOME -- 2.0%
- -------------------------------------------------------------------------------------------------------------------
NR NR $ 750 Massachusetts IFA, Age Institute of
Massachusetts, 8.05%, 11/1/25 $ 845,288
- -------------------------------------------------------------------------------------------------------------------
SOLID WASTE -- 2.4%
- -------------------------------------------------------------------------------------------------------------------
NR BBB $ 500 Massachusetts Development Res Recovery Ogden
Haverhill, 5.50%, 12/1/19 $ 500,190
NR BBB 500 Massachusetts IFA, Res Recovery Ogden
Haverhill, 5.60%, 12/1/19 504,520
- -------------------------------------------------------------------------------------------------------------------
$ 1,004,710
- -------------------------------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 100%
(IDENTIFIED COST $38,216,988) $41,794,477
- -------------------------------------------------------------------------------------------------------------------
NOTES TO PORTFOLIO:
(1). Portfolio Overview (Unaudited):
Number of Issues 44
Average Maturity (Years) 19.4 Yrs.
Effective Maturity (Years) 7.6 Yrs.
Average Call (Years) 6.8 Yrs.
Duration (Years) 5.9 Yrs.
Average Rating AA-
(2). Health and Educational Obligors - At December 31, 1998, the Trust held securities issued by health and
educational obligors with a value of $35,375,616 (representing 84.6% of total investments).
(3). Insured Investments - The Trust invests primarily in debt securities issued by the Commonwealth of Massachusetts
and its 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 December 31, 1998, 37.7% of the securities in the portfolio of investments
are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The
Trust's insured securities by financial institution are as follows:
PERCENTAGE
OF TOTAL
VALUE INVESTMENTS
------------------------------------------------------------------------------
Municipal Bond Insurance Association (MBIA) $ 7,507,593 18.0%
Financial Guaranty Insurance Company (FGIC) 3,981,824 9.5%
College Construction Loan Insurance Corporation
(CLEE) 2,818,291 6.7%
Financial Security Assurance Incorporated (FSA) 877,456 2.1%
American Municipal Bond Assurance Corporation
(AMBAC) 592,662 1.4%
------------------------------------------------------------------------------
Total Insured Securities $15,777,826 37.7%
------------------------------------------------------------------------------
(4). Summary of Ratings (Unaudited):
Percentage of
Number Total
Ratings of Issues Value Investments
------------------------------------------------------------------------------
AAA/Aaa 19 $16,839,703 40.3%
AA/Aa 5 7,385,295 17.7%
A/A 3 3,548,435 8.5%
BBB/Baa 13 8,671,120 20.7%
NR 4 5,349,924 12.8%
------------------------------------------------------------------------------
Total 44 $41,794,477 100.0%
------------------------------------------------------------------------------
The ratings indicated are the most recent Moody's and Standard & Poors ratings believed to be available at
December 31, 1998. NR indicates no rating is available for the security. Ratings are generally ascribed to
securities at time of issuance. While the rating agencies may from time to time revise such ratings, they
undertake no responsibility to do so, and the ratings indicated do not necessarily represent ratings the agencies
would ascribe to these securities at December 31, 1998.
(5). Private Placement Securities - Information relating to the initial acquisition and market valuation of the
private placement securities is presented below:
Acquisition Percentage
Cost Value of Net Assets
------------------------------------------------------------------------------
Massachusetts HEFA, Atlanticare
Medical Center "AMC"
(acquired 12/15/93) $2,450,000 $2,457,404 5.9%
Massachusetts HEFA, Wheaton College
(acquired 1/12/98) 1,750,000 1,707,463 4.1%
Puerto Rico IFA Residuals (AMBAC)
(acquired 12/17/98) 604,500 592,662 1.4%
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Total $4,757,529 11.4%
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AMC and Puerto Rico have no publicly offered securities of the same class as the private placement security held
by the trust. Wheaton College has outstanding publicly offered securities of the same class as the private
placement security held by the Trust. The Trust will bear the costs, if any, relating to the disposition of the
private placement securities, including costs associated with registering the securities under the Securities Act
of 1933, if necessary.
See notes to financial statements
</TABLE>
<PAGE>
The Massachusetts Health & Education Tax-Exempt Trust as of December 31, 1998
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
As of December 31, 1998
ASSETS
- -------------------------------------------------------------------------------
Total Investments, at value
(identified cost, $38,216,988) $41,794,477
Interest receivable 851,338
Receivable for securities sold 50,000
Receivable from the Administrator (Note 4) 6,127
Other assets 5,900
- -------------------------------------------------------------------------------
Total assets $42,707,842
- -------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Due to Bank $ 152,334
Accrued expenses and other liabilities 51,614
- -------------------------------------------------------------------------------
Total liabilities $ 203,948
- -------------------------------------------------------------------------------
Net Assets $42,503,894
- -------------------------------------------------------------------------------
NET ASSETS WERE COMPRISED OF:
- --------------------------------------------------------------------------------
Auction Preferred Shares, $0.01 par value; 400 shares
authorized, 200 shares issued and outstanding at
$50,000 per share liquidation preference (Note 2) $10,000,000
Common Shares, $0.01 par value; unlimited number of shares
authorized, 2,311,664 shares issued and outstanding 23,116
Additional paid-in capital 32,002,568
Accumulated net realized loss from investment transactions (3,123,387)
Undistributed net investment income 24,108
Unrealized appreciation of investments 3,577,489
- -------------------------------------------------------------------------------
Net Assets $42,503,894
- -------------------------------------------------------------------------------
Net Assets applicable to preferred shareholders -
Auction preferred shares at liquidation value $10,000,000
Cumulative undeclared dividends 959
- -------------------------------------------------------------------------------
$10,000,959
Net assets applicable to common shareholders $32,502,935
- -------------------------------------------------------------------------------
Total $42,503,894
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NET ASSET VALUE PER COMMON SHARE
- --------------------------------------------------------------------------------
($32,502,935 / 2,311,664 common shares issued and outstanding) $ 14.06
- -------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
The Massachusetts Health & Education Tax-Exempt Trust as of December 31, 1998
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Statement of Operations
For the Year Ended
December 31, 1998
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest income $2,428,675
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 148,165
Administration fee (Note 4) 63,500
Trustees fees (Note 4) 30,000
Custodian and transfer agent fees (Note 1) 63,820
Legal and accounting services 37,819
Preferred share remarketing agent fee 24,960
Printing and postage 20,199
Exchange membership fees 7,500
Preferred shares auction agent fees 5,300
Amortization of organization expenses 2,099
Miscellaneous 9,140
- --------------------------------------------------------------------------------
Total operating expenses $ 412,502
- --------------------------------------------------------------------------------
Deduct -
Waiver of expenses by the Administrator (Note 4) $ 6,127
Reduction of custody fees (Note 1) 4,232
- --------------------------------------------------------------------------------
Total $ 10,359
- --------------------------------------------------------------------------------
Net operating expenses $ 402,143
- --------------------------------------------------------------------------------
Net Investment Income $2,026,532
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain from investment transactions $ 412,882
Net change in unrealized appreciation of investments (20,854)
- --------------------------------------------------------------------------------
Net gain on investments $ 392,028
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations $2,418,560
- --------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
<TABLE>
The Massachusetts Health & Education Tax-Exempt Trust as of December 31, 1998
- -------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
<CAPTION>
INCREASE (DECREASE) YEAR ENDED YEAR ENDED
IN NET ASSETS DECEMBER 31, 1998 DECEMBER 31, 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
From operations -
Net investment income $ 2,026,532 $ 2,019,181
Net realized gain (loss) from investment
transactions 412,882 112,520
Net change in unrealized appreciation
(depreciation) of investments (20,854) 1,927,989
- -------------------------------------------------------------------------------------------------
Net increase in net assets from
operations $ 2,418,560 $ 4,059,690
- -------------------------------------------------------------------------------------------------
Dividends and Distributions:
Preferred Shareholders -
From net investment income $ (321,910) $ (316,776)
Common Shareholders -
From net investment income (1,718,628) (1,710,145)
- -------------------------------------------------------------------------------------------------
Total dividends and distributions to
shareholders $(2,040,538) $(2,026,921)
- -------------------------------------------------------------------------------------------------
Capital Share Transactions:
Reinvestment of distributions to shareholders $ 44,199 $ 10,149
- -------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions $ 44,199 $ 10,149
- -------------------------------------------------------------------------------------------------
Net Increase in Net Assets $ 422,221 $ 2,042,918
- -------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------
At beginning of year $42,081,673 $40,038,755
- -------------------------------------------------------------------------------------------------
At end of period, including undistributed net
investment income of $24,108
and $38,114, respectively $42,503,894 $42,081,673
- -------------------------------------------------------------------------------------------------
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
The Massachusetts Health & Education Tax-Exempt Trust as of December 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- ----------------------------------------------------------------------------------------------------------------------------
Financial Highlights
Selected data for a common share outstanding during each period
Year Ended December 31,
---------------------------------------------------------------------------------
1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period
(common shares) $ 13.90 $ 13.01 $ 13.24 $ 11.32 $ 14.24
- ----------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.88(e) $ 0.88(e) $ 0.88(e) $ 0.84 $ 0.88
Net realized and unrealized gain (loss)
on investments 0.16 0.89 (0.27) 1.94 (2.87)
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 1.04 $ 1.77 $ 0.61 $ 2.78 $ (1.99)
- ----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------------
Preferred Shareholders -
From net investment income $ (0.14) $ (0.14) $ (0.13) $ (0.15)(c) $ (0.12)
Common Shareholders -
From net investment income (0.74) (0.74) (0.71) (0.69) (0.81)
Distributions in excess of net
investment income -- -- -- (0.02) --
From net realized gains on
investments -- -- -- -- --
Distributions required for excise tax
purposes in excess net realized gains -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.88) $ (0.88) $ (0.84) $ (0.86) $ (0.93)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period (Common
shares) $ 14.06 $ 13.90 $ 13.01 $ 13.24 $ 11.32
- ----------------------------------------------------------------------------------------------------------------------------
Per share market value, end of period
(Common shares) $ 14.875 $ 13.938 $ 12.125 $ 11.125 $ 10.375
- ----------------------------------------------------------------------------------------------------------------------------
Total investment return at Market Value 12.05% 21.63% 15.61% 14.12% (28.66%)
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $42,504 $42,082 $40,039 $40,553 $36,125
Ratio: (as a percentage of average
total net assets)
Expenses(d) 0.96%(b) 0.96%(b) 1.00% 1.17%(b) 1.02%(b)
Expenses, after custodian fee
reduction 0.95%(b) 0.95%(b) 0.98% -- --
Net investment income 4.79%(b) 4.95%(b) 5.12% 5.01%(b) 5.25%(b)
Ratios: (as a percentage of average
common net assets)
Expenses(a)(d) 1.25%(b) 1.27%(b) 1.34% 1.58%(b) 1.37%(b)
Expenses, after custodian fee
reduction(a) 1.24%(b) 1.26%(b) 1.32% -- --
Net investment income(a) 6.27%(b) 6.57%(b) 6.86% 6.75%(b) 7.08%(b)
Portfolio turnover rate 28% 20% 44% 28% 123%
- -----------------------------------------------------------------------------------------------------------------------------
The Financial Highlights summarize the impact of net investment income, gains (losses) and distributions on the Trust's net
asset value per common share since commencement of operations. Additionally, important relationships between certain
financial statement items are expressed in ratio form.
(a) Ratios do not reflect the effect of dividend payments to preferred shareholders. Ratios to average common net assets
reflect the Trust's leveraged capital structure.
(b) Reflects expense waivers by the Advisor, Administrator, and/or Shareholder Servicing Agent during the period. If the Trust
had borne all expenses for the year ended December 31, 1998 and the year ended December 31, 1997, net investment income
per common share would have decreased by less than $0.01 during each period. If the Trust had borne all expenses for the
year ended December 31, 1995, the year ended December 31, 1994 and the period ended December 31, 1993, net investment
income per common share would have decreased by $0.05, $0.04 and $0.01, respectively.
(c) Includes distributions in excess of net investment income of $0.003 per common share.
(d) The expense ratios for the year ended December 31, 1996 and periods thereafter have been adjusted to reflect a change in
reporting requirements. The new reporting guidelines require the Trust to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratios for the two years in the period ended December
31, 1995 have not been adjusted to reflect this change.
(e) Computed using average shares outstanding throughout the period.
See notes to financial statements
</TABLE>
<PAGE>
The Massachusetts Health & Education Tax-Exempt Trust as of December 31, 1998
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1 GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
The Massachusetts Health & Education Tax-Exempt Trust (the "Trust") is an
entity commonly known as a Massachusetts business trust and is registered
under the Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. The Trust's investment objective is to earn a
high level of current income exempt from regular Federal income taxes and
Massachusetts personal income taxes consistent with preservation of capital.
The Trust seeks to achieve its objective by investing primarily in
Massachusetts "investment grade" tax-exempt obligations issued on behalf of
not-for-profit health and education institutions.
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements, in accordance with
generally accepted accounting principles.
SECURITIES VALUATION. Municipal securities are normally valued at the mean
between the quoted bid and asked prices obtained from a pricing service.
Municipal securities which are not valued by a pricing service will be
valued on the basis of three dealer quotes or, if such quotes are
unavailable, such other available market information. Short-term
obligations, maturing in sixty days or less, are valued at amortized cost,
which approximates value. Futures and options on futures contracts traded on
an exchange will be valued at last settlement price. In the event of unusual
market disruptions affecting valuation, the Pricing Committee of the
Trustees will be consulted.
SECURITIES TRANSACTIONS. Securities transactions are recorded on a trade
date basis. Realized gains and losses from such transactions are determined
using the specific identification method. Securities purchased or sold on a
when-issued or delayed delivery basis may be settled a month or more after
the transaction date. The securities so purchased are subject to market
fluctuations during this period. To the extent that when-issued or delayed
delivery purchases are outstanding, the Trust instructs the custodian to
segregate assets in a separate account, with a current value at least equal
to the amount of its purchase commitments.
INTEREST INCOME. Interest income is determined on the basis of interest
accrued and discount earned, adjusted for amortization of premium or
discount on long term debt securities when required for federal income tax
purposes.
FEDERAL INCOME TAXES. The Trust has complied and intends to comply with the
requirements of the Internal Revenue Code (the "Code") applicable to
regulated investment companies by distributing all of its income, including
any net realized gains from investments, to shareholders. Therefore, no
federal income tax provision is required. In addition, the Trust intends to
satisfy conditions which will enable it to designate distributions from the
interest income generated by its investments in municipal securities, which
are exempt from regular federal and Massachusetts income taxes when received
by the Trust, as exempt interest dividends.
At December 31, 1998, the Trust for federal income tax purposes had a
capital loss carryover of $3,006,142, which will reduce taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Internal Revenue Code, and thus will reduce the amount of
distributions to shareholders which would otherwise be necessary to relieve
the Trust of any liability for federal income or excise tax. Such capital
loss carryovers will expire on December 31, 2002 ($1,840,489) and December
31, 2003 ($1,165,653).
ORGANIZATION AND OFFERING COSTS. Costs incurred by the Trust in connection
with its organization have been capitalized and are being charged to
operations ratably over a period of 60 months. Costs incurred by the Trust
in connection with the offerings of the common shares and Auction Preferred
Shares were recorded as a reduction of capital paid in excess of par
applicable to common shares.
EXPENSE REDUCTIONS. Investors Bank & Trust Company (IBT) serves the Trust as
its Custodian and Transfer Agent. Pursuant to its service agreements, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balance the Trust maintains with IBT. All significant credits
used to reduce IBT's fee are reported as a reduction of expenses on the
statement of operations.
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.
2 AUCTION PREFERRED SHARES
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The Trust currently has 200 Auction Preferred Shares outstanding. The
Auction Preferred Shares are redeemable at the option of the Trust on any
dividend payment date at the redemption price of $50,000 per share, plus an
amount equal to any dividends accumulated on a daily basis unpaid through
the redemption date (whether or not such dividends have been declared).
Under the Investment Company Act of 1940, the Trust is required to maintain
asset coverage of at least 200% with respect to the Auction Preferred Shares
as of the last business day of each month in which any Auction Preferred
Shares are outstanding. Additionally, the Trust is required to meet more
stringent asset coverage requirements under the terms of the Auction
Preferred Shares and in accordance with the guidelines prescribed by the
rating agency. Should these requirements not be met, or should dividends
accrued on the Auction Preferred Shares not be paid, the Trust may be
restricted in its ability to declare dividends to common shareholders or may
be required to redeem certain of the Auction Preferred Shares. At December
31, 1998, there were no such restrictions on the Trust.
3 DISTRIBUTIONS TO SHAREHOLDERS
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Distributions to common shareholders are recorded on the ex-dividend date
and are paid on the last business day of each month. Distributions to
preferred shareholders are recorded daily and are payable at the end of each
dividend period. Each dividend payment period for the Auction Preferred
Shares is generally seven days. The applicable dividend rate for the Auction
Preferred Shares on December 31, 1998 was 3.50%. For the year ended December
31, 1998, the Trust paid dividends to Auction Preferred shareholders
amounting to $321,910, representing an average APS dividend rate for such
period of 3.22%.
4 INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
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The Trust has entered into an Advisory Agreement with Eaton Vance Management
("Eaton Vance"), under which Eaton Vance will furnish the Trust with
investment research and advisory services. For the year ended December 31,
1998, the fee paid for such services amounted to $148,165 and was equivalent
to 0.35% of the average daily net assets of the Trust, including net assets
attributable to any Auction Preferred Shares outstanding.
In addition, the Trust also entered into an Administration Agreement with
Eaton Vance, under which Eaton Vance will manage and administer the Trust's
business affairs and, in connection therewith, furnish for use of the Trust,
office space and all necessary office facilities, equipment, and personnel
for administering the affairs of the Trust. For the year ended December 31,
1998, the fee paid for such services amounted to $63,500 and was equivalent
to 0.15% of the average daily net assets of the Trust, including net assets
attributable to any Auction Preferred Shares outstanding. Eaton Vance is
obligated to waive all or a portion of its Administration fee if the normal
operating expenses of the Trust exceed 0.95% of average daily net assets.
During the year ended December 31, 1998, the fee waiver amounted to $6,127.
Trustees who are not affiliates of Eaton Vance, the Commonwealth of
Massachusetts Attorney General's office or Massachusetts Health and
Educational Facilities Authority (the "Authority") are eligible to receive
an annual fee of $7,500.
5 SECURITIES TRANSACTIONS
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Purchases and sales (including maturities) of portfolio securities during
the year ended December 31, 1998, aggregated $11,636,347 and $12,010,041
respectively. There were no purchases and sales of short-term municipal
securities during the year ended December 31, 1998.
The identified cost and unrealized appreciation (depreciation) in value of
the investments owned by the Trust at December 31, 1998, as computed for
federal income tax purposes, were as follows:
Identified cost $38,334,233
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Gross unrealized appreciation $ 3,472,833
Gross unrealized depreciation 12,589
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Net unrealized appreciation $ 3,460,244
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6 CAPITAL TRANSACTIONS
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The Declaration of Trust allows the Trustees to issue an unlimited number of
$0.01 par value shares of common stock. Transactions in common shares were
as follows:
Year Ended December 31,
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1998 1997
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Beginning shares 2,308,508 2,307,763
Shares issues pursuant to the Trust's dividend
reinvestment plan 3,156 745
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Ending shares 2,311,664 2,308,508
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7 ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
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The Trust held its annual meeting of Shareholders on May 19, 1998. 2,309,204
common shares and 200 Auction Preferred Shares (APS) were outstanding on
March 23, 1998, the record date for shares eligible to vote at the meeting.
2,185,062 (94.62% of the record date common shares) and 199 APS shares
(99.5% of the record date APS shares) were represented at the meeting. The
following actions were taken by the shareholders:
ITEM 1: The election of James F. Carlin, Thomas H. Green, III, Walter B.
Prince, Edward M. Murphy and James M. Storey as Trustees of the Trust.
Messrs. Carlin and Green were designated the Nominees that will represent
the APS shareholders:
Number of
Nominees for Trustee Shares
Representing APS Shareholders Affirmative Withheld
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James F. Carlin 199 --
Thomas H. Green, III 199 --
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Number of
Nominees for Trustee Shares
Representing All Shareholders Affirmative Withheld
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Walter B. Prince 2,168,815 16,446
Edward M. Murphy 2,168,815 16,446
James M. Storey 2,168,929 16,332
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ITEM 2: The ratification of the selection of PricewaterhouseCoopers LLP as
independent certified public accountants to the Trust for the fiscal year
ended December 31, 1998
Number of
Shares
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Affirmative 2,166,135
Against 9,937
Abstain 9,189
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8 QUARTERLY RESULTS FROM OPERATIONS (UNAUDITED)
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<TABLE>
<CAPTION>
Net Realized Net Increase
Gross Net and Unrealized (Decrease) in
Investment Investment Gain (Loss) on Net Assets from Market Price
Income Income Investments Operations on AMEX
------------------ ------------------- ------------------- ------------------- ------------------
Total Per Total Per Total Per Total Per
Quarter Ended (000's) Share (000's) Share (000's) Share (000's) Share High Low
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
March 31, 1995 $ 605 $0.26 $ 511 $0.22 $1,939 $0.84 $2,450 $1.06 $11.875 $10.500
June 30, 1995 593 0.26 493 0.21 265 0.12 758 0.33 11.750 10.375
September 30, 1995 595 0.26 495 0.21 650 0.28 1,145 0.49 11.750 10.875
December 31, 1995 592 0.25 434 0.20 1,618 0.70 2,052 0.90 11.500 10.875
- -----------------------------------------------------------------------------------------------------------------------------------
$2,385 $1.03 $1,933 $0.84 $4,472 $1.94 $6,405 $2.78
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March 31, 1996 $ 600 $0.26 $ 507 $0.22 ($1,533) ($0.66) ($1,026) ($0.44) $12.000 $11.125
June 30, 1996 602 0.26 508 0.22 (9) (0.01) 499 0.21 11.750 10.875
September 30, 1996 604 0.26 514 0.22 449 0.20 963 0.42 11.875 11.375
December 31, 1996 602 0.26 490 0.22 496 0.20 986 0.42 12.500 11.875
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$2,408 $1.04 $2,019 $0.88 ($ 597) ($0.27) $1,422 $0.61
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March 31, 1997 $ 603 $0.26 $ 509 $0.22 ($ 451) ($0.19) $ 58 $0.03 $12.500 $12.125
June 30, 1997 599 0.26 504 0.22 1,094 0.48 1,598 0.70 12.875 12.125
September 30, 1997 603 0.26 503 0.22 685 0.28 1,189 0.50 13.875 12.750
December 31, 1997 601 0.26 503 0.22 712 0.32 1,215 0.54 14.000 13.250
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$2,406 $1.04 $2,019 $0.88 $2,040 $0.89 $4,060 $1.77
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March 31, 1998 $ 607 $0.26 $ 508 $0.22 $ 68 $0.03 $ 576 $0.25 $14.875 $13.875
June 30, 1998 605 0.26 505 0.22 83 0.03 588 0.25 14.875 13.750
September 30, 1998 609 0.26 508 0.22 563 0.25 1,071 0.47 14.938 13.750
December 31, 1998 608 0.26 506 0.22 (322) (0.15) 184 0.07 15.375 13.750
- -----------------------------------------------------------------------------------------------------------------------------------
$2,429 $1.04 $2,027 $0.88 $ 392 $0.16 $2,419 $1.04
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</TABLE>
<PAGE>
The Massachusetts Health & Education Tax-Exempt Trust as of December 31, 1998
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INDEPENDENT AUDITORS' REPORT
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To the Trustees and Shareholders of
The Massachusetts Health & Education
Tax-Exempt Trust
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In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments (except for bond ratings), and the
related statements of operations and changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
The Massachusetts Health & Education Tax-Exempt Trust (the "Trust") at
December 31, 1998, the results of its operations for the year then ended, the
changes in its net assets and financial highlights for the periods indicated,
in conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1998 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 5, 1999
<PAGE>
The Massachusetts Health & Education Tax-Exempt Trust
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OTHER INFORMATION
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From time to time in the future, the Trust may effect redemptions and/or
repurchases of its Auction Preferred Shares as provided in the applicable
constituent instruments or as agreed upon by the Trust and holders of Auction
Preferred Shares. The Trust would effect such redemptions and/or repurchases
to the extent necessary to maintain applicable asset coverage requirements.
<PAGE>
The Massachusetts Health & Education Tax-Exempt Trust
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DIVIDEND REINVESTMENT PLAN
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The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
common shareholders may elect to have dividends and capital gains
distributions reinvested in common shares of the Trust. The Trust declares
dividends out of net investment income, and will distribute annually net
realized capital gains, if any. Common shareholders may join or withdraw from
the Plan at any time.
If you decide to participate in the Plan, Investors Bank & Trust Company, as
your Plan Agent, will automatically invest your dividends and capital gains
distributions in common shares of the Trust in your account.
HOW THE PLAN WORKS
Under the Plan, participants in the Plan will have their dividends reinvested
in common shares of the Trust on valuation date. If the market price per
common share on valuation date equals or exceeds net asset value per common
share on that date, the Trust will issue new common shares to participants at
the higher of net asset value or 95% of the market price. If net asset value
per common share on valuation date exceeds the market price per common share
on that date, or if the Board of Trustees should declare a dividend or capital
gains distribution payable to the common shareholders only in cash, the agent
will buy common shares in the open market on the American Stock Exchange, or
elsewhere. If, before the Plan Agent has completed its purchases, the market
price exceeds the net asset value per common share, the average per share
purchase price paid by the Plan Agent may exceed the net asset value of the
Trust's common shares, resulting in the acquisition of fewer common shares
than if the dividend or distribution had been paid in common shares issued by
the Trust.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmation of all transactions in the accounts, including
information needed by shareholders for tax records. Common shares in the
account of each Plan participant will be held by the Plan Agent in
noncertificated form in the name of the participant, and each shareholder's
proxy will include those shares received pursuant to the Plan. Holders of
common shares who do not elect to participate in the Plan will receive all
such amounts in cash paid by check mailed directly to the record shareholder
by Investors Bank & Trust Company, as dividend paying agent.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan.
COSTS OF THE PLAN
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. Each participant will pay a pro rata
share of brokerage commissions incurred with respect to the Plan Agent's open
market purchases in connection with the reinvestment of dividends or capital
gains distributions.
TAX IMPLICATIONS
Plan participants will receive tax information annually for personal records
and to help prepare federal income tax returns. The automatic reinvestment of
dividends and capital gains distributions does not relieve plan participants
of any income tax which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw from the Plan at any time by writing to the
Plan Agent at the above address. If you withdraw, you will receive a share
certificate in your name for all full common shares credited to your account
under the Plan and a cash payment for any fraction of a share credited to your
account. If you desire, the Plan Agent will sell your shares in the Plan and
send you the proceeds of the sale, less brokerage commissions and a $2.50
service fee.
HOW TO PARTICIPATE
If you wish to participate in the Plan and your shares are held in your own
name, you may complete the form on the following page and deliver it to the
Plan Agent.
If your shares are held in the name of a brokerage firm, bank, or other
nominee, you should contact your nominee to see if it will participate in the
Plan on your behalf. If you wish to participate in the Plan, but your
brokerage firm, bank or nominee is unable to participate on your behalf, you
should request that your shares be re-registered in your own name which will
enable your participation in the Plan.
Any inquiries regarding the Plan can be directed to Investors Bank & Trust
Company at 1-800-553-1916.
<PAGE>
The Massachusetts Health & Education Tax-Exempt Trust
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APPLICATION FOR PARTICIPATION IN DIVIDEND REINVESTMENT PLAN
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This form is for shareholders who hold their common shares in their own names.
If your common shares are held in the name of a brokerage firm, bank, or other
nominee, you should contact your nominee to see if it will participate in the
Plan on your behalf. If you wish to participate in the Plan, but your brokerage
firm, bank or nominee is unable to participate on your behalf, you should
request that your common shares be re-registered in your own name which will
enable your participation in the Plan.
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The following authorization and appointment is given with the understanding
that I may terminate it at any time by terminating my participation in the
Plan as provided in the terms and conditions of the Plan provided above.
--------------------------------------
Please print exact name on account:
--------------------------------------
Shareholder signature Date
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Shareholder signature Date
Please sign exactly as your common
shares are registered. All persons
whose names appear on the share
certificate must sign.
YOU SHOULD NOT RETURN THIS FORM IF YOU WISH TO RECEIVE YOUR DIVIDENDS AND
DISTRIBUTIONS IN CASH. THIS IS NOT A PROXY.
The authorization form, when signed, should be mailed to the following address:
Investors Bank & Trust Company
P.O. Box 1537, MFD23
Boston, MA 02205-1537
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<PAGE>
The Massachusetts Health & Education Tax-Exempt Trust as of December 31, 1998
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INVESTMENT MANAGEMENT
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The Massachusetts Health & Education Tax-Exempt Trust
OFFICERS BOARD OF TRUSTEES
THOMAS J. FETTER, CFA WALTER B. PRINCE, ESQ., CHAIRMAN
President Partner, Peckham, Lobel, Casey,
Prince & Tye
ROBERT B. MACINTOSH, CFA
Vice President and JAMES F. CARLIN
Portfolio Manager Chairman of the Massachusetts
Board of Higher Education and
Chairman & CEO of Carlin
JAMES L. O'CONNOR Consolidated, Inc.
Treasurer
THOMAS H. GREEN III, ESQ.
ERIC G. WOODBURY, ESQ. Director of Salomon Smith Barney,
Secretary Public Finance Department
KRISTIN S. ANAGNOST EDWARD M. MURPHY
Assistant Treasurer and Olympus Healthcare Group, Inc., and
Assistant Secretary Former Executive Director of the
Massachusetts Health & Education
Facilities Authority
JAMES M. STOREY, ESQ.
Trustee, various investment companies
<PAGE>
INVESMENT ADVISOR AND ADMINISTRATOR
Eaton Vance Management
24 Federal Street
Boston, MA 02110
CUSTODIAN, TRANSFER AGENT,
DIVIDEND DISBURSING AGENT AND REGISTRAR
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, MA 02110
The Massachusetts Health & Education Tax-Exempt Trust
24 Federal Street
Boston, MA 02110
1-800-225-6265
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This report must be prededed or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges.
Please read the prospectus carefully beofre you invest or send money.
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