The Eaton Vance Special Investment Trust
For the Special Investment Portfolio
[Logo]
Annual Shareholder Report
December 31, 1995
Investment Adviser of Special Investment 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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SPECIAL INVESTMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
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COMMON STOCKS - 92.4%
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NAME OF COMPANY SHARES VALUE
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BUSINESS SERVICES - 9.9%
BISYS Group, Inc.* 22,000 $ 676,500
Services financial institutions with
computer, administrative and
marketing support data processing
services.
Ceridian Corp.* 40,000 1,650,000
Provides payroll processing and other
employer services, media and market
research.
Corestaff Inc.* 10,000 365,000
Temporary employment services agency.
Danka Business Systems PLC, ADR 20,000 740,000
An independent provider of
maintenance and service for office
copying machines.
FIserv Incorporated* 93,500 2,805,000
Provider of data processing services
to banks and savings institutions,
benefiting from outsourcing trend.
G&K Services, Inc. 42,200 1,076,100
Rents and launders uniforms and other
textile products.
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$ 7,312,600
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COMMUNICATIONS - 9.4%
Cellular Communications of Puerto
Rico* 15,000 $ 416,250
Provider of wireless cellular
telephone services.
Comcast Corp. 70,000 1,273,125
Cable TV and Cellular telephone
operator.
Evergreen Media Corp. Class A* 35,000 1,120,000
Operator of major market AM and FM
radio stations.
Frontier Corp. 55,000 1,650,000
Formerly Rochester Telephone Corp.,
provides local telephone and
communications services.
Intelcom Group, Inc.* 50,000 618,750
Provider of alternative access
telecommunication services and
international satellite uplink
teleports.
MFS Communications Co., Inc.* 20,000 1,065,000
Provider of fiber-optic based
telecommunications services
primarily to businesses.
Nokia Corp. 20,000 777,500
International wireless handset and
infrastructure equipment
manufacturer.
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$ 6,920,625
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COMPUTER EQUIPMENT - 1.1%
Motorola Inc. 15,000 $ 855,000
Leading worldwide producer of -----------
wireless communication systems and
equipment, major manufacturer of
semiconductors.
COMPUTER SOFTWARE - 8.7%
Banyan Inc.* 75,000 $ 768,750
Provider of networking software
products for large, complex
computer networks.
Checkfree Corp.* 2,000 43,000
Provider of electronic banking
software products and services.
3Com Corp.* 21,200 988,450
Designs, manufactures and distributes
intelligent hubs and other computer
networking products.
Davidson & Associates, Inc.* 25,000 550,000
Developer and distributor of
educational software products.
DST Systems, Inc.* 8,500 242,250
Provider of software and back office
computer services to the mutual
fund industry.
Inso Corp.* 20,000 850,000
Developer of software tools used for
proofing, reference and information
management.
Interleaf Inc.* 35,000 354,375
Provider of software used to compare,
edit and print complex documents.
Intersolv Inc.* 55,000 708,125
Provider of software development
tools.
Novell, Inc.* 40,000 570,000
Leading provider of network software
systems.
Objective Systems Integrator* 10,000 547,500
Provider of object-oriented, client
server software for network
operations, support and management.
Silicon Graphics, Inc.* 30,000 825,000
Produces computer systems used for
the design, analysis, and
simulation of three dimensional
objects.
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$ 6,447,450
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CONSUMER PRODUCTS - 0.3%
Boston Beer Co. Class A* 4,600 $ 109,250
Leading micro-brewery primarily under
the Samuel Adams brand-name.
Estee Lauder Companies* 3,800 132,525
International cosmetics company.
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$ 241,775
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ELECTRONICS & INSTRUMENTATION - 10.0%
Cisco Systems, Inc.* 25,000 $ 1,865,625
Manufacturer of routers that connect
computer networks.
Intel Corp. 25,000 1,418,750
World's leading semiconductor
manufacturer, also produces
microcomputer components, modules
and systems.
Linear Technology Corp. 20,000 785,000
Manufacturer of high performance
linear integrated circuits.
MEMC Electronic Materials, Inc.* 25,000 815,625
Leading producer of silicon wafers
used to create integrated circuits.
Mentor Graphics Corp.* 80,000 1,460,000
Developer of electronic design
automation systems used in complex
electronic products.
Microchip Technology, Inc.* 20,000 730,000
Leading producer of field
programmable micro-controllers.
Zoran Corp.* 15,000 311,250
Developer and marketer of integrated
circuits for digital video and
audio compression applications.
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$ 7,386,250
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ENERGY - 7.5%
Anadarko Petroleum Corp. 40,000 $ 2,165,000
A leading independent company in oil
and gas exploration, development
and production.
Pogo Producing Co. 50,000 1,412,500
Independent oil and gas exploration
and production company active in
the U.S. and Thailand
Triton Energy Corp. 35,000 2,008,125
Independent oil and gas exploration
and production company focusing on
international prospects especially
a major Colombian oil discovery.
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$ 5,585,625
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ENTERTAINMENT - 5.7%
Circus Circus Enterprises, Inc.* 47,000 $ 1,310,125
Major casino facilities in Las Vegas.
Also operates hotels.
Gaylord Entertainment 30,000 832,500
Producer of The Nashville Network and
Country Music Television Network
and operator of the Opryland
amusement park.
Mirage Resorts, Inc.* 25,000 862,500
Nevada based gaming resort operator.
Players International, Inc.* 42,500 454,219
Operates riverboat casinos in
Louisiana and Illinois and a
racetrack in Kentucky. Plans new
casino in Mesquite, Nevada.
Station Casinos, Inc.* 50,000 731,250
Owner and operator of gaming
enterprises.
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$ 4,190,594
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ENVIROMENTAL SERVICES - 2.6%
Sanfill Inc.* 26,000 $ 867,750
Operator of primarily solid-waste
facilities in 16 states.
United Waste Systems, Inc.* 10,000 372,500
Provider of collection and solid-
waste disposal services primarily
in secondary markets.
U.S.A. Waste Services, Inc.* 35,000 660,625
Operator of solid-waste land fills
and collection services,
integrating several large recent
acquisitions.
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$ 1,900,875
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FINANCE - 9.9%
Federal National Mortgage Association 30,000 $ 3,723,750
Leading factor in the secondary
mortgage market.
Franklin Resources, Inc. 20,000 1,007,500
One of the largest mutual fund
organizations in the U.S.
MBNA Corp. 30,000 1,106,250
Bank holding company and world's
leading issuer of Gold MasterCards.
T. Rowe Price Associates, Inc. 30,000 1,477,500
Investment adviser to mutual funds,
institutions and individuals.
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$ 7,315,000
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HEALTHCARE - 8.0%
Astra AB ADR Series B* 25,000 $ 992,118
Swedish based, multinational
pharmaceutical company.
Boston Scientific Corp.* 50,000 2,450,000
Medical device manufacturer focusing
primarily on disposable products
used in less invasive surgery
procedures.
MiniMed Inc.* 60,000 750,000
Developer and manufacturer of medical
devices focusing on diabetics.
Sofamor Danek Group, Inc.* 50,000 1,418,750
Leading developer/manufacturer of
spinal implant devices. Company
markets products internationally.
Vitalink Pharmacy Services, Inc.* 12,500 290,625
Provider of pharmacy services to
nursing homes and sub-acute care
medical facilities.
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$ 5,901,493
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HOMEBUILDING - 1.3%
Southern Energy Homes, Inc.* 55,625 $ 973,437
Produces customized manufactured -----------
homes in facilities located in
Alabama and Texas. Homes are sold
in 24 states.
HOTELS & RESTAURANTS - 0.5%
LaQuinta Inns, Inc. 15,000 $ 410,625
Owner/operator of modestly priced -----------
lodging chain.
INDUSTRIAL PRODUCTS - 2.6%
Greenfield Industries, Inc. 30,000 $ 937,500
A leading manufacturer of expendable
cutting tools and related products
used in industrial applications.
Loctite Corp. 20,600 978,500
International manufacturer of
adhesives, sealants and related
products.
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$ 1,916,000
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INSURANCE - 5.0%
American International Group 15,000 $ 1,387,500
One of the world's leading insurance
companies, operating in 130
countries.
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Mutual Risk Management Ltd. 40,000 1,830,000
Specialty insurer focusing on
workmen's compensation.
Renaissance Re Holdings Ltd. 15,500 470,812
Provider of catastrophy reinsurance
services.
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$ 3,688,312
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PUBLISHING - 2.1%
Scholastic Corp.* 20,000 $ 1,555,000
Publisher/distributor of children's -----------
books.
RETAILING - 3.4%
Consolidated Stores Corp.* 70,000 $ 1,522,500
Chain of close-out merchandise stores
operating primarily under the Odd/
Big Lots name.
Home Depot Inc. 20,000 957,500
Operator of a chain of retail
warehouse-type stores selling
building supply and home
improvement products.
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$ 2,480,000
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SPECIALTY CHEMICALS - 3.6%
Great Lakes Chemical Corp. 20,000 $ 1,440,000
Leading producer of flame retardant
and specialty intermediate
chemicals.
Millipore Corp. 30,000 1,233,750
Manufacturer of membrane technology
products used for chemical analysis
and purification.
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$ 2,673,750
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TRANSPORTATION - 0.8%
Midwest Express Holdings* 20,100 $ 557,775
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Business oriented airline with primary hub in Milwaukee.
TOTAL COMMON STOCKS
(IDENTIFIED COST, $47,644,606) $68,312,186
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SHORT-TERM OBLIGATIONS - 7.6%
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PRINCIPAL AMOUNT
(000'S OMITTED) VALUE
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Ford Motor Credit Co., 58s, 1/3/96 $2,641 $ 2,640,142
Melville Corp., 5.9s, 1/2/96 2,955 2,954,522
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TOTAL SHORT-TERM OBLIGATIONS, AT
AMORTIZED COST $ 5,594,664
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TOTAL INVESTMENTS (IDENTIFIED COST,
$53,239,270) $73,906,850
OTHER ASSETS, LESS LIABILITIES - 0.0% $ 33,425
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TOTAL NET ASSETS - 100% $73,940,275
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*Non-income producing security.
ADR -- American Depositary Receipt.
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,
$53,239,270) $73,906,850
Cash 2,862
Dividends receivable 32,795
Deferred organization expenses (Note 1D) 11,318
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Total assets $73,953,825
LIABILITIES:
Payable to affiliate --
Trustees' fees $ 1,400
Accrued expenses 12,150
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Total liabilities 13,550
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NET ASSETS applicable to investors' interest in Portfolio $73,940,275
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SOURCES OF NET ASSETS:
Net proceeds from capital contributions and withdrawals $53,272,695
Unrealized appreciation of investments (computed on
the basis of identified cost) 20,667,580
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Total net assets $73,940,275
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The accompanying notes are an integral part of the financial statements
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<TABLE>
STATEMENT OF OPERATIONS
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For the Year Ended December 31, 1995
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<S> <C> <C>
INVESTMENT INCOME:
Dividend income (net of foreign taxes, $244) $ 360,263
Interest income 308,573
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Total income $ 668,836
Expenses --
Investment adviser fee (Note 3) $ 435,400
Compensation of Directors not members of the Investment
Adviser's organization (Note 3) 7,486
Custodian fee (Note 3) 58,731
Printing and postage 620
Legal and accounting services 23,951
Amortization of organization expenses (Note 1D) 3,158
Miscellaneous 4,754
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Total expenses 534,100
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Net investment income 134,736
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments (identified cost basis) $ 4,131,300
Change in unrealized appreciation on investments 10,473,926
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Net realized and unrealized gain on investments 14,605,226
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Net increase in net assets resulting from operations $14,739,962
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The accompanying notes are an integral part of the financial statements
</TABLE>
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STATEMENT OF CHANGES IN NET ASSETS
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YEAR ENDED DECEMBER 31,
---------------------------------
1995 1994*
------------ -------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 134,736 $ 55,637
Net realized gain (loss) on
investment transactions 4,131,300 (986,284)
Change in unrealized appreciation
of investments 10,473,926 4,288,639
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Net increase in net assets from
operations $14,739,962 $ 3,357,992
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Capital transactions --
Contributions $14,400,870 $104,495,403
Withdrawals (19,642,929) (43,411,023)
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Increase (decrease) in net
assets resulting from capital
transactions $(5,242,059) $ 61,084,380
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Total increase in net assets $ 9,497,903 $ 64,442,372
NET ASSETS:
At beginning of year 64,442,372 --
----------- ------------
At end of year $73,940,275 $ 64,442,372
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SUPPLEMENTARY DATA
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RATIOS (As a percentage of average net assets):
Expenses 0.77% 0.74%+
Net investment income 0.19% 0.20%+
PORTFOLIO TURNOVER 81% 19%
+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
(1) SIGNIFICANT ACCOUNTING POLICIES
Special Investment 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 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. 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.
D. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
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(2) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregated $52,362,032 and $58,838,098, 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 $435,400. 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 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. 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 year. 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 $53,239,270
===========
Gross unrealized appreciation $22,100,411
Gross unrealized depreciation 1,432,881
-----------
Net unrealized appreciation $20,667,580
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REPORT OF INDEPENDENT ACCOUNTANTS
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TO THE TRUSTEES AND INVESTORS OF
SPECIAL INVESTMENT PORTFOLIO:
We have audited the accompanying statement of assets and liabilities of
Special Investment Portfolio, including the portfolio of investments, as of
December 31, 1995, the related statement of operations, changes in net assets
and supplementary data for the year then ended 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 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
Special Investment Portfolio as of December 31, 1995, the results of its
operations, changes in its net assets and supplementary data for the year then
ended 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
<PAGE>
INVESTMENT MANAGEMENT FOR SPECIAL EQUITIES PORTFOLIO
OFFICERS INDEPENDENT TRUSTEES
JAMES B. HAWKES DONALD R. DWIGHT
President, Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England,
LANDON T. CLAY Inc.
Vice President, Trustee
SAMUEL L. HAYES, III
M. DOZIER GARDNER Jacob H. Schiff Professor of
Vice President Investment Banking,
Harvard Unversity Graduate School
PETER F. KIELY of Business Administration
Vice President and
Portfolio Manager NORTON H. REAMER
President and Director, United Asset
JAMES L. O'CONNOR Management Corporation
Treasurer
JOHN L. THORNKIKE
THOMAS OTIS Vice President and Director,
Secretary Fiduciary Company Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
