<PAGE>
The Eaton Vance Special Investment Trust
For the Total Return Portfolio
[LOGO]
Annual Shareholder Report
December 31, 1995
Investment Adviser of Growth Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Fund 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
Boston, MA 02110
Transfer Agent
First Data Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
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PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
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COMMON STOCKS - 81.2%
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Name of Company Shares Value
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BUSINESS SERVICES - 0.8%
U.S. Filter Corp.* 160,000 $ 4,260,000
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ELECTRIC UTILITIES - 44.9%
Baltimore Gas & Electric Co. 125,000 $ 3,562,500
Carolina Power & Light Co. 300,000 10,350,000
Central Louisiana Electric Co. 200,000 5,375,000
Cilcorp Inc. 58,900 2,495,887
Cinergy Corp. 850,000 26,031,250
DPL Inc. 675,000 16,706,250
DQE, Inc. 590,000 18,142,500
FPL Group, Inc. 550,000 25,506,250
General Public Utilities Corp. 250,000 8,500,000
Houston Industries, Inc. 150,000 3,637,500
LG & E Energy Corp. 87,200 3,684,200
London Electricity 200,000 1,782,380
National Grid Holdings* 706,155 2,187,245
National Power PLC 200,000 479,740
National Power PLC ADR 267,500 2,474,375
NIPSCO Industries, Inc. 400,000 15,300,000
Northern States Power Co. Minn. 50,000 2,456,250
Ohio Edison Co. 300,000 7,050,000
PECO Energy Co. 200,000 6,025,000
Pinnacle West Capital Corp. 300,000 8,625,000
Portland General Electric Corp. 290,000 8,446,250
PowerGen PLC 6,024 49,803
SCE Corp 750,000 13,312,500
Southern Co. 575,000 14,159,375
Teco Energy, Inc. 310,000 7,943,750
Templeton Global Utilities, Inc. 26,000 338,000
Texas Utilities Co. 156,500 6,436,062
Union Electric Co. 80,000 3,340,000
Wisconsin Energy Corp. 150,400 4,606,000
WPS Resources Corp. 125,000 4,250,000
Yorkshire Electric Group* 100,000 1,036,360
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$234,289,427
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ENERGY - 1.7%
ENI SPA* 250,000 $ 8,562,500
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FINANCIAL SERVICES - 7.3%
Fidelity Federal Bank Class A* 1,624,741 $ 3,757,214
First Defiance Financial 300,000 3,037,500
First Interstate Bancorp 141,000 19,246,500
GCR Holdings Ltd.* 205,000 4,612,500
Imperial Thrift & Loan Association* 45,000 551,250
Klamath First Bancorp, Inc.* 10,000 137,500
PMI Group, Inc.* 50,000 2,262,500
PNC Bank Corp. 90,000 2,902,500
St. Paul Bancorp, Inc. 68,000 1,734,000
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$ 38,241,464
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HEALTHCARE SERVICES - 0.4%
Emeritus Corp.* 180,000 $ 2,092,500
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NATURAL GAS UTILITIES - 2.1%
K N Energy 200,000 $ 5,825,000
MCN Corp. 87,000 2,022,750
Wicor Inc. 94,200 3,037,950
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$ 10,885,700
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REITS - 3.6%
Apartment Investment
& Management Co. Class A 100,000 $ 1,950,000
Cali Realty Corp. 150,000 3,281,250
Health Care Property Investors, Inc. 126,000 4,425,750
Healthcare Realty Trust 92,200 2,120,600
LTC Properties, Inc. 150,000 2,250,000
Redwood Trust, Inc. 100,000 1,825,000
Sun Communities Inc. 110,000 2,901,250
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$ 18,753,850
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RETAIL - 0.1%
Ingles Markets Class A 50,000 $ 556,250
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TELECOMMUNICATIONS - 1.2%
Alcatel Alsthon Sponsored ADR 50,000 $ 874,999
Home Shopping Network, Inc.* 400,000 3,600,000
Nokia Corp. 50,000 1,943,750
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$ 6,418,749
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TELEPHONE UTILITIES - 19.1%
Ameritech Corp. 150,000 $ 8,850,000
ACC Corp. 50,000 1,153,125
AT&T Corp. 50,000 3,237,500
CAI Wireless Systems, Inc.* 80,000 770,000
Cellular Communications, Inc.* 91,700 2,544,675
DST Systems Inc.* 60,000 1,710,000
Frontier Corp. 1,205,000 36,150,000
Globolstar Telecommunications* 5,000 188,750
GTE Corp. 75,000 3,300,000
Mannesmann A.G. Ord 5,000 1,594,730
Midcom Communications, Inc.* 89,700 1,637,025
NYNEX Corp. 150,000 8,100,000
SBC Communications, Inc. 225,000 12,937,500
Sprint Corp. 10,000 398,750
Tele Danmark A/S* 50,000 1,381,250
Telephone & Data Systems, Inc. 100,000 3,950,000
U.S. West Inc. 230,000 8,222,500
U.S. West Media Group* 185,000 3,515,000
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$ 99,640,805
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TOTAL COMMON STOCKS
(Identified cost, $329,651,929) $423,701,245
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CONVERTIBLE PREFERRED STOCKS - 7.8%
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Alco Standard Corp., 6.5s 10,000 $ 855,000
Allstate Corp., 6.76s 110,000 4,510,000
Enron Corp., 6.25s 30,000 720,000
Fidelity Federal Bank, 12s 250,000 6,406,250
First Washington Realty Trust, 9.75s 45,000 1,023,750
Freeport McMoRan Copper & Gold, 5s 90,000 2,452,500
Philippines Long Distance
Telephone, 7s 194,000 10,100,125
Prime Retail Inc. Series B, 8.5s 255,000 4,526,250
St. Paul Capital, 6s 75,000 4,218,750
Sovereign Bancorp, 6.25s 105,000 5,985,000
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TOTAL CONVERTIBLE PREFERRED STOCKS
(identified cost, $38,727,055) $ 40,797,625
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CONVERTIBLE BONDS - 6.5%
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Face Amount
Name of Company (000's Omitted) Value
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Assisted Living, 7s, 8/15/05 $ 2,000 $ 2,080,000
Cooper Industries, Inc., 6s,
"WYMN " DECS 115 1,581,250
Danka Business, 6.75s, 4/1/02 2,000 2,805,000
Fort Bend Holdings Corp.,
8s, 12/1/05 2,000 2,027,500
National Health Investment,
7.75s, 1/1/01 2,000 2,000,000
Novacare Inc., 5.5s, 1/15/00 10,000 8,162,500
Softkey International, Inc.,
5.5s, 11/1/00 3,000 2,205,000
Theratx Inc., 8s, 2/1/02 6,000 5,475,000
Thermo Electron Corp., 4.25s, 1/1/03** 1,000 1,000,000
VLSI Technology, 8.25%, 10/1/05 7,000 6,457,500
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TOTAL CONVERTIBLE BONDS
(identified cost, $33,339,744) $ 33,793,750
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SHORT-TERM OBLIGATION - 1.5%
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Face Amount
Name of Company (000's Omitted) Value
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Melville Corp., 5.9s, 1/2/96 $ 7,744 $ 7,742,730
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TOTAL SHORT-TERM OBLIGATION,
AT AMORTIZED COST $ 7,742,730
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TOTAL INVESTMENTS - 97.0%
(IDENTIFIED COST, $409,461,458) $506,035,350
OTHER ASSETS, LESS LIABILITIES - 3.0% 15,634,975
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NET ASSETS - 100% $521,670,325
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*Non-income producing security
**Security purchased on a delayed basis (Note 1E)
ADR - American Depository Receipt
REIT - Real Estate Investment Trust
The accompanying notes are an integral part
of the financial statements
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FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
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December 31, 1995
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ASSETS:
Investments, at value (Note 1A) (identified cost,
$409,461,458) $506,035,350
Cash 1,749,910
Receivable for investments sold 15,561,601
Dividends receivable 1,656,271
Interest receivable 763,215
Deferred organization expenses (Note 1F) 11,830
Foreign tax reclaim receivable 59,781
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Total assets $525,837,958
LIABILITIES:
Payable for investments purchased $4,101,362
Payable to affiliate --
Trustees' fees 4,640
Accrued expenses 61,631
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Total liabilities 4,167,633
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NET ASSETS applicable to investors' interest in Portfolio $521,670,325
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SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $425,079,473
Unrealized appreciation of investments
(computed on the basis of identified cost) 96,590,852
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Total net assets $521,670,325
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The accompanying notes are an integral part of the financial statements
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STATEMENT OF OPERATIONS
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For the Year Ended December 31, 1995
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INVESTMENT INCOME:
Dividend income (net of withholding taxes, $288,697) $ 25,020,308
Interest income 3,493,504
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Total income $ 28,513,812
Expenses --
Investment adviser fee (Note 3) $ 3,772,142
Compensation of Trustees not members
of the Investment Adviser's
organization (Note 3) 19,014
Custodian fee (Note 3) 196,160
Commitment fee 151,668
Printing and postage 272
Legal and accounting services 61,284
Amortization of deferred organization
expenses (Note 1F) 4,197
Miscellaneous 12,136
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Total expenses 4,216,873
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Net investment income $ 24,296,939
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss)
(identified cost basis) --
Investment transactions $25,034,154
Financial futures contracts (8,405,750)
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Net realized gain on investments
and financial futures contracts $16,628,404
Change in unrealized appreciation --
Investment transactions $80,813,152
Financial futures contracts 2,152,500
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Net change in unrealized appreciation 82,965,652
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Net realized and unrealized
gain on investments 99,594,056
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Net increase in net assets
resulting from operations $123,890,995
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The accompanying notes are an integral part of the financial statements
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STATEMENT OF CHANGES IN NET ASSETS
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YEAR ENDED DECEMBER 31,
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1995 1994
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INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 24,296,939 $ 28,785,986
Net realized gain (loss) on investment
transactions and financial
futures contracts 16,628,404 (15,151,998)
Change in unrealized appreciation of
investments 82,965,652 (89,492,365)
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Net increase (decrease) in net assets
resulting from operations $ 123,890,995 $ (75,858,377)
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Capital transactions --
Contributions $ 29,142,153 $ 97,021,559
Withdrawals (136,929,715) (152,162,876)
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Decrease in net assets resulting from
capital transactions $(107,787,562) $ (55,141,317)
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Total increase (decrease) in net
assets $ 16,103,433 $(130,999,694)
NET ASSETS:
At beginning of year 505,566,892 636,566,586
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At end of year $ 521,670,325 $ 505,566,892
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SUPPLEMENTARY DATA
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YEAR ENDED DECEMBER 31,
--------------------------
1995 1994 1993*
---- ---- -----
RATIOS (As a percentage of average
daily assets):
Expenses 0.84% 0.85% 0.91%+
Net investment income 4.83% 5.22% 4.57%+
PORTFOLIO TURNOVER 103% 107% 16%
LEVERAGE ANALYSIS:
Average daily balance of debt outstanding
during period (000's omitted) $232 $3,137 $15,452
+Computed on an annualized basis.
*For the period from the start of business,
October 28, 1993, to December 31, 1993.
The accompanying notes are an integral part of the financial statements
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NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
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(1) SIGNIFICANT ACCOUNTING POLICIES
Total Return Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940 as a diversified open-end investment company which was
organized as a trust under the laws of the State of New York on May 1, 1992. The
Declaration of Trust permits the Trustees to issue beneficial 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 VALUATIONS -- Securities listed on securities exchanges or in the
NASDAQ National Market are valued at closing sales prices or, if there has been
no sale, at the mean between the closing bid and asked prices. Unlisted
securities are valued at the mean between the latest available bid and asked
prices. Options and financial futures contracts are valued at the last sale
price, as quoted on the principal exchange or board of trade on which such
options or contracts are traded or, in the absence of a sale, the mean between
the last bid and asked prices. Short-term obligations, maturing in 60 days or
less, are valued at amortized cost, which approximates value. Securities for
which market quotations are unavailable are appraised at their fair value as
determined in good faith by or at the direction of the Trustees.
B. 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 Code) in order for its investors to satisfy them. The Portfolio will
allocate at least annually among its investors each investors' distributive
share of the Portfolio's net investment income, net realized capital gains, and
any other items of income, gain, loss, deduction or credit.
C. OPTION ACCOUNTING PRINCIPLES -- Upon the writing of a covered call option, an
amount equal to the premium received by the Portfolio is included in the
Statement of Assets and Liabilities as a liability. The amount of the liability
is subsequently marked-to-market to reflect the current market value of the
option written in accordance with the Portfolio's policies on investment
valuations discussed above. Premiums received from writing call options which
expire are treated as realized gains. Premiums received from writing call
options which are exercised or are closed are added to or offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. The Portfolio, as writer of a call option, may have no control over
whether the underlying securities may be sold and, as a result, bears the market
risk or an unfavorable change in the price of the securities underlying the
written option.
D. FINANCIAL FUTURES CONTRACTS -- Upon the entering of a financial futures
contract, the Portfolio is required to deposit an amount ("initial margin")
either in cash or securities 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. When the Portfolio
enters into a closing transaction, the Portfolio will realize for book purposes
a gain or loss equal to the difference between the value of the financial
futures contract to sell and the financial futures contract to buy. The
Portfolio's investment in financial futures contracts is designed only to hedge
against anticipated future changes in interest rates, security prices, commodity
prices or currency exchange rates. Should interest rates, security prices,
commodity prices or currency exchange rates move unexpectedly, the Portfolio may
not achieve the anticipated benefits of the financial futures contracts and may
realize a loss.
E. DELAYED DELIVERY TRANSACTIONS -- The Fund may purchase or sell securities on
a when-issued or forward committment basis. Payment and delivery may take place
at a period in time after the date of the transaction. At the time the
transaction is negotiated, the price of the security will be delivered and paid
for are fixed. Losses may arise due to changes in the market value of the
underlying securities if the counterparty does not perform under the contract.
F. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line basis
over five years.
G. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income is recorded on the ex-
dividend date. Realized gains and losses on the sale of investments are
determined on the identified cost basis.
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(2) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregrated $492,715,872 and $590,882,397, respectively.
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(3) 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 asets. For the year ended
December 31, 1995, the fee was equivalent to 0.75% of the Portfolio's average
net assets for such period and amounted to $3,772,142. 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), serves as
custodian of the Portfolio. Prior to November 10, 1995, IBT was an affiliate of
EVM. Pursuant to the custodian agreement, IBT receives a fee reduced by credits
which are determined based on the average daily cash balances the Portfolio
maintains with IBT. All significant credit balances used to reduce the Fund's
custody fees are reported as a reduction of expenses in the Statement of
Operations. Certain of the officers and Trustees of the Portfolio are officers
and directors/trustees of the above organizations. Trustees of the Portfolio
that are not affiliated with the Investment 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 December 31, 1995, no
significant amounts have been deferred.
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(4) LINE OF CREDIT
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates 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. The Portfolio expects to use the proceeds
of the advances primarily for leveraging purposes. Borrowings by the Portfolio
under the Credit Agreement will not exceed the lesser of 1/3 of the market value
of the net assets of the Portfolio or $60,000,000. Interest is charged to each
portfolio based on its borrrowings 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. At December 31, 1995 there were
no outstanding loans under the line of credit.
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(5) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation/depreciation in value of the investments
owned at December 31, 1995, as computed on a federal income tax basis, are as
follows:
Aggregate cost $410,032,499
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Gross unrealized appreciation $ 99,292,413
Gross unrealized depreciation 3,272,602
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Net unrealized appreciation $ 96,019,811
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(6) FINANCIAL INSTRUMENTS
The Portfolio may trade 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,
forward foreign currency exchange contracts, and financial 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. At December 31, 1995 there were no outstanding obligations under
these financial instruments.
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REPORT OF INDEPENDENT ACCOUNTANTS
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TO THE TRUSTEES AND INVESTORS OF
TOTAL RETURN PORTFOLIO:
We have audited the accompanying statement of assets and liabilities of Total
Return Portfolio, including the portfolio of investments, as of December 31,
1995, the related statement of operations for the year then ended and the
statement of changes in net assets for each of the two years then ended and
supplementary data for each of the two years then ended and for the period
from October 28, 1993 (start of business) to December 31, 1993. These
financial statements and supplementary data are the responsibility of the
Portfolio's management. Our responsibility is to express an opinion on these
financial statements and supplementary data based on our audits.
We conducted our audits in accordance with 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 as of December 31, 1995 by correspondence with the custodian and
brokers. 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, the financial statements and supplementary data referred to
above present fairly, in all material respects, the financial position of
Total Return Portfolio as of December 31, 1995, the results of its operations
for the year then ended and the changes in its net assets for each of the two
years then ended and the supplementary data for each of the two years then
ended, and for the period from October 28, 1993 (start of business), to
December 31, 1993, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 2, 1996
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INVESTMENT MANAGEMENT FOR TOTAL RETURN PORTFOLIO
OFFICERS INDEPENDENT TRUSTEES
JAMES B. HAWKES DONALD R. DWIGHT
President, Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
LANDON T. CLAY
Vice President, Trustee SAMUEL L. HAYES, III
Jacob H. Schiff Professor of Investment Banking,
M. DOZIER GARDNER Harvard University Graduate School of
Vice President Business Administration
PETER F. KIELY NORTON H. REAMER
Vice President and President and Director,
Portfolio Manager United Asset Management Corporation
JAMES L. O'CONNOR JOHN L. THORNDIKE
Treasurer Vice President and Director,
Fiduciary Company Incorporated
THOMAS OTIS
Secretary JACK L. TREYNOR
Investment Adviser and Consultant
