<PAGE>
The Eaton Vance Special Investment Trust
For the Stock Portfolio
[LOGO]
Annual Shareholder Report
December 31, 1995
Investment Adviser of Stock 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
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
Transfer Agent
First Data Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
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STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
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COMMON STOCKS -- 86.5%
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SHARES SECURITY VALUE
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ADVERTISING - 3.1%
90,000 Omnicom Group $ 3,352,500
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AEROSPACE & DEFENSE - 1.8%
40,000 General Motors Corp. Class H $ 1,965,000
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AGRICULTURE EQUIPMENT - 2.0%
60,000 Deere & Co. $ 2,115,000
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AUTOMOTIVE - 0.4%
15,000 Ford Motor Co. $ 435,000
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BANKS - 4.3%
55,000 Bank of Boston Corp. $ 2,543,750
14,331 Citicorp 963,792
26,766 Fleet Financial Group, Inc. 1,090,714
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$ 4,598,256
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BROADCASTING - 2.0%
120,000 Comcast Corp. Class A $ 2,182,500
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CHEMICALS - 4.7%
20,000 DuPont (E.I.) deNemours & Co., Inc. $ 1,397,500
110,000 Praxair, Inc. 3,698,750
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$ 5,096,250
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CONSUMER GOODS & SERVICES - 11.7%
50,000 American Brands, Inc. $ 2,231,250
55,000 Eastman Kodak Co. 3,685,000
50,000 PepsiCo, Inc. 2,793,750
17,100 Procter & Gamble Co. 1,419,300
70,000 Seagram Co. Ltd. 2,423,750
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$ 12,553,050
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DRUGS & MEDICAL - 4.1%
25,000 Johnson & Johnson Co. $ 2,140,625
58,000 Pharmacia & Upjohn, Inc. 2,247,500
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$ 4,388,125
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FINANCE & INSURANCE - 9.5%
48,540 Allstate Corp. $ 1,996,208
50,000 American General Corp. 1,743,750
60,000 Block (H. & R.), Inc. 2,430,000
35,000 MGIC Investment Corp. Wisc. 1,898,750
45,000 Progressive Corp. 2,199,375
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$ 10,268,083
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FOOD - 2.3%
61,063 Conagra, Inc. $ 2,518,849
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FOREST PRODUCTS - 2.3%
75,000 Rayonier, Inc. $ 2,503,125
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INTEGRATED OIL - 4.1%
27,000 Exxon Corp. $ 2,163,375
65,000 Phillips Petroleum Co. 2,218,125
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$ 4,381,500
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INTERNATIONAL NEWS AGENCY - 0.8%
15,000 Reuters Holdings PLC ADR $ 826,875
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MANUFACTURING - DIVERSIFIED - 1.4%
25,000 Illinois Tool Works, Inc. $ 1,475,000
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METALS & MINING - 1.8%
100,000 J & L Specialty Steel, Inc. $ 1,875,000
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OIL & GAS EXPLORATION - 6.8%
50,000 Anadarko Petroleum Corp. $ 2,706,250
30,000 Texaco, Inc. 2,355,000
40,000 Triton Energy Corp. 2,295,000
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$ 7,356,250
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PUBLISHING - 4.2%
15,000 Dow Jones & Co., Inc. $ 598,125
30,000 Houghton Mifflin Co. 1,290,000
30,000 McGraw-Hill, Inc. 2,613,750
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$ 4,501,875
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REAL ESTATE INVESTMENT TRUSTS - 3.6%
20,000 Beacon Properties Corp. $ 460,000
16,000 Chelsea GCA Realty, Inc. 480,000
20,000 Equity Residential Properties Trust 612,500
20,000 Nationwide Health Properties, Inc. 840,000
10,000 Post Properties, Inc. 318,750
18,000 Redwood Trust, Inc. 328,500
20,000 ROC Communities, Inc. 480,000
14,200 Trinet Corporate Realty Trust, Inc. 386,950
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$ 3,906,700
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RETAIL - 2.0%
100,000 Toys "R" Us* $ 2,175,000
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SAVINGS & LOAN - 1.3%
55,000 Great Western Financial Corp. $ 1,402,500
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SEMICONDUCTORS - 3.6%
25,000 Intel Corp. $ 1,418,750
30,000 Motorola, Inc. 1,710,000
15,000 Texas Instruments, Inc. 776,250
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$ 3,905,000
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SPECIALTY CHEMICALS - 1.6%
35,000 Loctite Corp. $ 1,662,500
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TELECOMMUNICATIONS - 6.3%
35,000 Ameritech Corp. $ 2,065,000
100,000 Frontier Corp. 3,000,000
30,000 SBC Communications, Inc. 1,725,000
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$ 6,790,000
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UTILITIES - NATURAL GAS - 0.8%
50,000 Western Gas Resources $ 806,250
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TOTAL COMMON STOCKS
(IDENTIFIED COST, $73,217,574) $ 93,040,188
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CONVERTIBLE PREFERRED STOCKS - 5.3%
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10,000 Ford Motor Co., 8.4% $ 947,500
140,000 Freeport McMoRan Copper & Gold, 5% 3,815,000
10,000 Tejas Gas Corp., 5.25% 475,000
10,000 Valero Energy Corp., 6.25% 515,000
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST, $4,782,861) $ 5,752,500
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CONVERTIBLE BONDS - 4.2%
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FACE AMOUNT
(000'S OMITTED)
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$ 500 Beverly Enterprises, 7.625%, 3/15/03 $ 477,500
750 Beverly Enterprises, 5.5%, 8/1/18 708,750
1,920 INCO Ltd., 5.75%, 7/1/04 2,524,800
840 Scandinavian Broadcasting System,
7.25%, 8/1/05 863,100
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TOTAL CONVERTIBLE BONDS
(IDENTIFIED COST, $4,078,750) $ 4,574,150
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CORPORATE BOND - 0.0%
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FACE AMOUNT
(000'S OMITTED) VALUE
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$ 50 H.P. Hood & Son, 7.50%, 2/1/01 $ 39,400
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TOTAL CORPORATE BONDS
(IDENTIFIED COST, $50,000) $ 39,400
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SHORT TERM INVESTMENTS - 3.7%
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$3,056 General Electric Capital Corp.,
5.8%, 1/3/96 $ 3,055,014
933 Melville Corp., 5.9%, 1/2/96 932,849
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TOTAL SHORT TERM INVESTMENTS
AT AMORTIZED COST $ 3,987,863
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TOTAL INVESTMENTS - 99.7%
(IDENTIFIED COST, $86,117,048) $107,394,101
OTHER ASSETS, LESS LIABILITIES - 0.3% 323,174
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NET ASSETS - 100% $107,717,275
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ADR -- American Depository Receipt
Note: Percentages shown are based on net assets
The accompanying notes are an integral part of the financial statements
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STOCK PORTFOLIO
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,
$86,117,048) $107,394,101
Cash 970
Interest receivable 100,068
Dividends receivable 207,809
Deferred organization expenses (Note 1C) 11,719
Other receivables 21,656
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Total assets $107,736,323
LIABILITIES:
Payable to affiliates --
Trustees fees $ 1,396
Accrued expenses 17,652
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Total liabilities 19,048
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NET ASSETS applicable to investors' interest in Portfolio $107,717,275
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SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $ 86,440,222
Unrealized appreciation of investments (computed on
the basis of identified cost) 21,277,053
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Total net assets $107,717,275
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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:
Interest $ 462,813
Dividends (net of withholding tax of, $21,440) 2,496,020
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Total income 2,958,833
Expenses --
Investment adviser fee (Note 3) $ 606,215
Compensation of directors, not members of the
Investment Adviser's organization (Note 3) 7,482
Custodian fee (Note 3) 73,496
Printing and postage 332
Legal and accounting services 28,943
Amortization of organizational expenses
(Note 1C) 3,248
Miscellaneous 10,719
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Total expenses 730,435
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Net investment income 2,228,398
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain (identified cost basis) --
Investment transactions $9,926,132
Written option transactions 296,671
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Net realized gain $10,222,803
Change in unrealized appreciation on investments 14,953,494
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Net realized and unrealized gain on investments $25,176,297
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Net increase in net assets resulting from operations $27,404,695
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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 $ 2,228,398 $ 908,166
Net realized gain (loss) on investment
transactions 10,222,803 (2,035,741)
Change in unrealized appreciation of
investments 14,953,494 (1,601,217)
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Net increase (decrease) in net assets
resulting from operations $ 27,404,695 $(2,728,792)
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Capital transactions --
Contributions $ 13,753,042 $ 2,390,694
Withdrawals (18,959,497) (5,494,445)
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Decrease in net assets resulting from
capital transactions $ (5,206,455) $(3,103,751)
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Total increase (decrease) in net assets $ 22,198,240 $(5,832,543)
NET ASSETS:
At beginning of year 85,519,035 91,351,578
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At end of year $107,717,275 $85,519,035
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SUPPLEMENTARY DATA
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YEAR ENDED DECEMBER 31,
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1995 1994*
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RATIOS (to average daily net assets):
Expenses 0.75% 0.73%+
Net investment income 2.30% 2.45%+
PORTFOLIO TURNOVER 108% 28%
+ Computed on an annualized basis.
* For the period from the start of business, August 1, 1994 to December 31,
1994.
The accompanying notes are an integral part of the financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
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(1) SIGNIFICANT ACCOUNTING POLICIES
Stock 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. SECURITY VALUATIONS -- Investments in securities traded on a national
securities exchange or in the NASDAQ National Market are valued on the basis
of the last reported sales prices on the last business day of the period. If
no sale is reported on that date, a security is valued, if quoted on such a
day, at not lower than the old bid price nor higher than the asked prices.
Prices on such exchanges will not be used for valuing debt securities if in
the Trustees judgment, some other valuation method more accurately reflects
the fair market value of such a security. Securities for which over-the-
counter market quotations are readily available are valued on the basis of the
mean between the last bid and asked prices. Short-term securities are valued
at cost, which approximates market value. All other securities and assets are
appraised to reflect their fair value as determined in good faith by 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 invest- ment 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. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line basis
over five years.
D. 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.
E. WRITTEN OPTIONS -- The Fund may write call or put options for which premiums
are received and are recorded as liabilities, and are subsequently adjusted to
the current value of the options written. Premiums received from writing options
which expire are treated as realized gains. Premiums received from writing
options which are exercised or are closed are offset against the proceeds or
amount paid on the transaction to determine the realized gain or loss. If a put
option is exercised, the premium reduces the cost basis of the securities
purchased by the Fund. The Fund as a writer of an option may have no control
over whether the underlying securities may be sold (call) or purchased (put) and
as a result bears the market risk of an unfavorable change in the price of the
securities underlying the written option.
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(2) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregrated $99,400,340 and $102,585,387, 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 at the annual rate of 5/8 of 1% of average daily net assets. For the year
ended December 31, 1995, the fee amounted to $606,215. 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. Certain of the officers and Trustees of the Portfolio are
officers and directors/trustees of the above organizations. All significant
credit balances used to reduce the Funds custody fees are reported as a
reduction of expenses in the statement of operations. 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. Borrowings will be made by the Portfolio
solely to facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Interest is charged to each portfolio based on its borrowings
at an amount above either the bank's adjusted certificate of deposit rate, a
variable adjusted certificate of deposit rate, or a federal funds effective
rate. In addition, a fee computed at an annual rate of 1/4 of 1% on the $20
million committed facility and on the daily unused portion of the $100 million
discretionary facility is allocated among the participating funds and portfolios
at the end of each quarter. The Portfolio did not have any significant
borrowings or allocated fees during the period. At December 31, 1995, the Fund
did not have an outstanding balance pursuant to 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 $86,041,047
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Gross unrealized appreciation $22,128,189
Gross unrealized depreciation 775,135
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Net unrealized appreciation $21,353,054
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(6) FINANCIAL INSTRUMENTS
The Fund regularly trades in financial instruments with off-balance-sheet risk
in the normal course of its investing activities and to assist in managing
exposure to market risks such as interest rates and foreign currency exchange
rates. These financial instruments include written options. The notional or
contractual amounts of these instruments represent the investment the Fund has
in particular classes of financial instruments and do 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 December 31, 1995 is as follows:
Written Option Transactions
Transactions in written options for the year ended December 31, 1995 were as
follows:
PRINCIPAL AMOUNTS
OF CONTRACTS
(000'S OMITTED) PREMIUMS
--------------- --------
Outstanding, beginning of period -- --
Options written (990) ($296,671)
Options exercised 990 296,671
Options expired -- --
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Outstanding, end of period 0 $ 0
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REPORT OF INDEPENDENT ACCOUNTANTS
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TO THE TRUSTEES AND INVESTORS OF STOCK PORTFOLIO:
We have audited the accompanying statement of assets and liabilities of Stock
Portfolio, including the portfolio of investments, as of December 31, 1995,
the related statement of operations for the year then ended, and the changes
in net assets and supplementary data for the year ended December 31, 1995 and
for the period from August 1, 1994 (start of business) to December 31, 1994.
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 audits 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
Stock Portfolio as of December 31, 1995, the results of its operations for the
year then ended, and the changes in its net assets and supplementary data for
the year ended December 31, 1995 and for the period from August 1, 1994 (start
of business) to December 31, 1994, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 2, 1996
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INVESTMENT MANAGEMENT FOR STOCK 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
M. DOZIER GARDNER Investment Banking,
Vice President Harvard University Graduate School
of Business Administration
PETER F. KIELY
Vice President and NORTON H. REAMER
Portfolio Manager President and Director, United Asset
Management Corporation
JAMES L. O'CONNOR
Treasurer JOHN L. THORNDIKE
Vice President and Director,
THOMAS OTIS Fiduciary Company Incorporated
Secretary
JACK L. TREYNOR
Investment Adviser and Consultant
