-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FF8nCydcsN0dxP2o/KZSbf0sgJ6QwnXsP8OsaPGww18SOsuaPhfxUv4Rp7yYbGmQ wLnbGMCeV5Qw2jLbR4jOEA== 0000950156-97-000533.txt : 19970630 0000950156-97-000533.hdr.sgml : 19970630 ACCESSION NUMBER: 0000950156-97-000533 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970627 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAPITAL EXCHANGE FUND INC CENTRAL INDEX KEY: 0000017147 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042385053 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-01339 FILM NUMBER: 97631943 BUSINESS ADDRESS: STREET 1: 24 FEDERAL ST CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6174828260 MAIL ADDRESS: STREET 1: 24 FEDERAL ST STREET 2: 11TH FLOOR CITY: BOSTON STATE: MA ZIP: 02110 N-30D 1 CAPITAL EXCHANGE FUND SA CAPITAL EXCHANGE FUND, INC. PERFORMANCE RESULTS+ - ------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (STANDARDIZED SEC PERFORMANCE DATA FOR THE PERIODS ENDED APRIL 30, 1997) - ------------------------------------------------------------------------------- Adjusted Total Total Return Return* - ------------------------------------------------------------------------------- Six months 12.7% 12.7% - ------------------------------------------------------------------------------- One year 23.5% 23.5% - ------------------------------------------------------------------------------- Five years 16.9% 17.2% - ------------------------------------------------------------------------------- Ten years 13.1% 13.6% - ------------------------------------------------------------------------------- Life of Fund (3/17/67) 10.8% 11.3% - ------------------------------------------------------------------------------- CUMULATIVE TOTAL RETURN LIFE OF FUND (3/17/67 TO 4/30/97) - ------------------------------------------------------------------------------- Capital Exchange Fund 2350.7% - ------------------------------------------------------------------------------- Dow Jones Industrial Average 2624.1% - ------------------------------------------------------------------------------- Standard & Poor's 500 2790.2% - ------------------------------------------------------------------------------- +Past performance is no guarantee of future results. Investment returns and principal will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The Dow Jones Industrial Average and the Standard &Poor's 500 are unmanaged lists of common stocks. This report must be preceded or accompanied by a prospectus which contains more complete information on the Fund including its distribution plan, sales charges and expenses. Please read the prospectus carefully before investing. *These total return figures have been adjusted to reflect the Fund's election to retain its long-term capital gain during the period and to pay the federal tax thereon on behalf of shareholders. SEC standardized total return figures treat such payments as an expense of the Fund while the adjusted figures treat such payments as a distribution to shareholders (who receive a tax credit in the amount of the allocable share of the taxes paid by the Fund). [LOGO] EATON VANCE The Boston Tradition Funds offered through Eaton Vance Distributors, Inc. 24 Federal Street, Boston, Massachusetts 02110 6/97 CAPITAL EXCHANGE FUND An Eaton Vance Exchange Fund Semi-Annual Report April 30, 1997 [LOGO] ------------------------- To Shareholders FOR THE SIX MONTHS ENDED APRIL 30, 1997, CAPITAL EXCHANGE FUND, INC. HAD A TOTAL RETURN OF 12.7%. That return resulted from an increase in net asset value to $315.06 per share from $280.57 per share, and the reinvestment of $1.14 in income dividends. This return compares favorably to the average total return of mutual funds in the Lipper Growth Fund Category, which was 7.15% during the period.* - ----------------------------------------- For the six months ended April 30, 1997, Capital Exchange Fund, Inc. had a total return of 12.7%. *It is not possible to invest in a Lipper category. AFTER EXPERIENCING MODERATE GROWTH IN THE FOURTH QUARTER OF 1996, THE U.S. ECONOMY IN THE FIRST QUARTER OF 1997 HAS BEEN MARKED BY STRONGER-THAN-EXPECTED GROWTH, A TIGHTENING LABOR MARKET, AND UNEASINESS OVER INFLATION. First quarter Gross Domestic Product (GDP) grew at a remarkably fast 5.8% annualized rate, the strongest quarterly growth in over a decade, while unemployment dropped to 4.9% in April, the lowest it has been since 1973. Inflation, which has been low throughout the period, remains benign. Producer, or wholesale, prices declined 0.6% during the month of April, while consumer prices showed a modest increase of 0.1%. A report on a surging productivity increase of 2.0% in April, the highest monthly rise in three years, may help explain why the continued economic strength has not yet led to a rise in inflation. THE STOCK MARKET HAS SHOWN INCREASED VOLATILITY IN 1997, RESPONDING TO A ROBUST ECONOMY, AN INCREASE IN SHORT-TERM INTEREST RATES IN MARCH, AND CONCERNS OVER FURTHER RATE HIKES BY THE FEDERAL RESERVE. Within a six-week period in March and April, the Dow Jones Industrial Average declined almost 10%, and then fully recovered to reach new record highs. High-quality, blue chip stocks have generally continued to perform well, while the performance of small capitalization stocks has lagged. THE INVESTMENT CLIMATE DURING THE PAST SIX MONTHS HAS BEEN FAVORABLE FOR THIS FUND. Strong earnings reports from Portfolio companies and a bullish market for large capitalization blue chip stocks have combined to produce solid returns for shareholders. We have taken advantage of the recent volatility in the equity market. Volatility benefits this Fund because it allows us to build up existing positions and to add new positions - at advantageous prices - in companies we believe have strong long-term growth prospects. Over the last six months, we have increased positions in the oil and gas exploration, health care services, and financial sectors where we feel the growth prospects remain quite strong. THE INVESTMENT OF CAPITAL EXCHANGE FUND, INC. INTO THE TAX-MANAGED GROWTH PORTFOLIO IN THE WINTER OF 1995 CONTINUES TO BENEFIT SHAREHOLDERS. As part of the Tax-Managed Growth Portfolio, through Hub & Spoke(R), shareholders of the Fund benefit from a greater diversification among stocks, industries, and sectors, and from the Portfolio's lower expense ratio, increased management flexibility, and greater potential for future capital appreciation. Opening the Portfolio to new investors allows management to add new growth companies to the Portfolio. ONE RESULT OF THE NEW STRUCTURE, A LOWER DIVIDEND, CAN BE ATTRIBUTED TO THE INVESTMENT OF NEW FUNDS IN THE PORTFOLIO INTO A STOCK MARKET WITH A LOWER OVERALL DIVIDEND YIELD. Shareholders who wish to receive an income percentage larger than that provided by the current dividend may find that a systematic withdrawal plan meets their needs. In addition to providing a fixed, dependable income stream, a systematic withdrawal may be taxed at capital gains rates, which are lower than income rates for many shareholders. Sincerely, - ------------------------ [Photo of Landon T. Clay] /s/ LANDON T. CLAY - ------------------------ Landon T. Clay President June 9, 1997 - ----------------------------------------- "Strong earnings reports from Portfolio companies and a bullish market for large capitalization blue chip stocks have combined to produce solid returns for shareholders." - -------------------------------------------------------------------------------- Fund shares are not guaranteed 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. - -------------------------------------------------------------------------------- CAPITAL EXCHANGE FUND FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES - -------------------------------------------------------------------------------- April 30, 1997 (Unaudited) - -------------------------------------------------------------------------------- ASSET: Investment in Tax-Managed Growth Portfolio (Portfolio), at value (Note 1A) (Identified cost, $4,270,393) $131,426,607 LIABILITIES: Payable to affiliate -- Directors' fees (Note 4) $ 264 Accrued expenses 5,249 ------ Total liabilities 5,513 ------------ NET ASSETS for 417,126 shares of capital stock outstanding $131,421,094 ============ SOURCES OF NET ASSETS: Accumulated undistributed net realized gain on investment transactions (computed on the basis of identified cost), less the excess of cost of capital stock redeemed over proceeds from sales of capital stock (including shares issued to shareholders electing to receive payment of distributions in capital stock) $ 13,428,391 Accumulated undistributed net investment income 184,603 Federal tax on undistributed net realized long-term capital gain, paid on behalf of shareholders (Note 1C) (9,348,114) Unrealized appreciation from Portfolio (computed on the basis of identified cost) 127,156,214 ------------ Total $131,421,094 ============ NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (NOTE 6) ($131,421,094 / 417,126 shares of capital stock outstanding) $315.06 ======= See notes to financial statements STATEMENT OF OPERATIONS - ----------------------------------------------------------------------------------------------- For the Six Months Ended April 30, 1997 (Unaudited) - ----------------------------------------------------------------------------------------------- INVESTMENT INCOME (NOTE 1B): Income -- Dividend income allocated from Portfolio (net of foreign taxes withheld of, $7,935) $ 954,091 Interest income allocated from Portfolio 147,182 Expenses allocated from Portfolio (418,131) ----------- Net investment income from Portfolio $ 683,142 Expenses -- Compensation of Directors not members of the Administrator's organization (Note 4) $ 1,616 Custodian fee 6,664 Transfer and dividend disbursing agent fees 7,500 Printing and postage 15,700 Legal and accounting services 11,757 ----------- Total expenses 43,237 ----------- Net investment income $ 639,905 ----------- REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO: Net realized gain from Portfolio (identified cost basis) $ 5,680,044 Increase in unrealized appreciation -- Investment transactions $10,144,190 Securities sold short 42,805 ----------- Increase in unrealized appreciation 10,186,995 ----------- Net realized and unrealized gain $15,867,039 ----------- Net increase in net assets from operations $16,506,944 ===========
See notes to financial statements STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------ SIX MONTHS ENDED APRIL 30, YEAR ENDED 1997 OCTOBER 31, (UNAUDITED) 1996 ------------- ------------- INCREASE (DECREASE) IN NET ASSETS: From operations -- Net investment income $ 639,905 $ 1,252,899 Net realized gain 5,680,044 2,848,000 Increase in unrealized appreciation 10,186,995 21,470,324 ------------ ------------ Net increase in net assets from operations $ 16,506,944 $ 25,571,223 Distributions to shareholders -- From net investment income (510,198) (1,223,371) Net decrease in net assets from capital stock transactions (Note 2) (20,449,994) (3,116,725) ------------ ------------ Net increase (decrease) in net assets $(4,453,248) $ 21,231,127 NET ASSETS: At beginning of period 135,874,342 114,643,215 ------------ ------------ At end of period $131,421,094 $135,874,342 ============ ============ ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS: At end of period $ 184,603 $ 54,896 ============ ============ See notes to financial statements
FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 1997 ---------------------------------------------------------------------- (UNAUDITED) 1996 1995 1994 1993 1992 ------------ ---------- ------------ ------------ ------------ ------------ NET ASSET VALUE, beginning of period $280.570 $230.960 $176.610 $164.860 $156.030 $142.810 -------- -------- -------- -------- -------- -------- INCOME (LOSS) FROM OPERATIONS: Net investment income $ 1.469 $ 2.562 $ 2.657 $ 2.521 $ 2.334 $ 2.178 Net realized and unrealized gain on investments 34.161 49.548 56.480 11.869 9.533 13.332 -------- -------- -------- -------- -------- -------- Total income from operations $ 35.630 $ 52.110 $ 59.137 $ 14.390 $ 11.867 $ 15.510 -------- -------- -------- -------- -------- -------- LESS DISTRIBUTIONS: From net investment income $ (1.140) $ (2.500) $ (2.700) $ (2.490) $ (2.550) $ (2.130) From net realized gain on investments -- -- (0.025) (0.150) -- (0.160) -------- -------- -------- -------- -------- -------- Total distributions $ (1.140) $ (2.500) $ (2.725) $ (2.640) $ (2.550) $ (2.290) -------- -------- -------- -------- -------- -------- PROVISION FOR FEDERAL TAX ON UNDISTRIBUTED NET REALIZED LONG-TERM GAIN (NOTE 1C) $ -- $ -- $(2.062) $ -- $ (0.487) $ -- -------- -------- -------- -------- -------- -------- NET ASSET VALUE, end of period $315.060 $280.570 $230.960 $176.610 $164.860 $156.030 ======== ======== ======== ======== ======== ======== TOTAL RETURN(1) 12.72% 22.67% 32.56% 8.80% 7.33% 10.94% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $131,421 $135,874 $114,643 $ 91,289 $ 89,593 $ 88,632 Ratio of net expenses to average net assets(2) 0.69%+ 0.76% 0.76% 0.76% 0.78% 0.78% Ratio of net investment income to average net assets 0.96%+ 1.01% 1.32% 1.49% 1.46% 1.44% PORTFOLIO TURNOVER(3) -- 0% 2% 2% 2% 0% + Annualized. (1) Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the payable date. Total return is not computed on an annualized basis. (2) Includes the Fund's share of its corresponding Portfolio's allocated expenses for the period the Fund was investing in the Portfolio. (3) Portfolio Turnover represents the rate of portfolio activity for the period while the Fund was making investments directly in securities. The Portfolio turnover rate for the period since the Fund transferred substantially all of its investable assets to the Portfolio is shown in the Portfolio's financial statements which are included elsewhere in this report.
See notes to financial statements NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - ------------------------------------------------------------------------------- (1) SIGNIFICANT ACCOUNTING POLICIES The Capital Exchange Fund, Inc. (the Fund) is registered under the Investment Company Act of 1940, as amended, as a diversified open-end management investment company. The Fund invests all of its investable assets in interests in the Tax-Managed Growth Portfolio (the Portfolio), a New York Trust, having the same investment objective as the Fund. The value of the Fund's investment in the Portfolio reflects the Fund's proportionate interest in the net assets of the Portfolio (10.5% at April 30, 1997). The performance of the Fund is directly affected by the performance of the Portfolio. The financial statements of the Portfolio, including the portfolio of investments, are included elsewhere in this report and should be read in conjunction with the Fund's financial statements. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. A. INVESTMENT VALUATION -- Valuation of securities by the Portfolio is discussed in Note 1 of the Portfolio's Notes to Financial Statements which are included elsewhere in this report. B. INCOME -- The Fund's net investment income consists of the Fund's pro rata share of the net investment income of the Portfolio, less all actual and accrued expenses of the Fund determined in accordance with generally accepted accounting principles. C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year all of its net investment income and net realized short-term capital gain. Accordingly, no provision for federal income or excise tax is necessary. At October 31, 1996, the Fund, for federal income purposes, had a capital loss carryover of $371,741 which will reduce the 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 Fund of any liability for federal income tax. Such capital loss carryover will expire on October 31, 2004. The Fund generally designates as undistributed any taxable net realized long-term gain (but reserves the right to distribute such gain in any year) and pays the federal tax thereon on behalf of shareholders. Provision for such tax is recorded on the Fund's records on the last business day of the Fund's fiscal year because the Internal Revenue Code provides that such tax is allocated among shareholders of record on that date. D. OTHER -- Investment transactions are accounted for on a trade-date basis. Dividends to shareholders are recorded on the ex-dividend date. E. DISTRIBUTIONS -- Generally accepted accounting principles require that differences in the recognition or classification of income between the financial statements and tax earnings and profits which result in temporary over-distributions for financial statement purposes, be classified as distributions in excess of net investment income or accumulated net realized gains. F. USE OF ESTIMATES -- The preparation of 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. G. EXPENSE REDUCTION -- Investors Bank & Trust Company (IBT) serves as custodian to the Fund and the Portfolio. Pursuant to the respective custodian agreements, IBT receives a fee reduced by credits which are determined based on the average cash balances the Fund or the Portfolio maintains with IBT. All significant credit balances used to reduce the Fund's custodian fees are reported as a reduction of operating expenses on the Statement of Operations. H. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to April 30, 1997 and for the six months then ended have not been audited by independent certified public accountants, but in the opinion of the Fund's management reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements. - ------------------------------------------------------------------------------- (2) CAPITAL STOCK At April 30, 1997, there were 4,000,000 shares of $1.00 par value capital stock authorized. Transactions in capital stock were as follows:
SIX MONTHS ENDED APRIL 30, 1997 YEAR ENDED (UNAUDITED) OCTOBER 31, 1996 ------------------------------- ------------------------------ SHARES AMOUNT SHARES AMOUNT ------------ ----------------- ------------ ---------------- Issued to shareholders electing to receive payment of distributions in capital stock 399 $ 119,531 1,033 $ 263,774 Redemptions (67,550) (20,569,525) (13,140) (3,380,499) ------- ------------ ------- ----------- Net decrease (67,151) $(20,449,994) (12,107) $(3,116,725) ======= ============ ======= =========== - ----------------------------------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS Decreases in the Fund's investment in the Portfolio aggregated $21,006,509, for the six months ended April 30, 1997. There were no increases in the Fund's investment in the Portfolio for the six months ended April 30, 1997. In addition, investments were distributed in payment for capital stock redeemed for the six months ended April 30, 1997 resulting in capital gains for book purposes, of $12,586,342. (4) TRANSACTIONS WITH AFFILIATES Eaton Vance Management (EVM) serves as the administrator of the Fund, but receives no compensation. The Portfolio has engaged Boston Management and Research (BMR), a subsidiary of EVM, to render investment advisory services. See Note 2 of the Portfolio's Notes to Financial Statements which are included elsewhere in this report. Except as to directors of the Fund who are not members of EVM's organization, officers and directors receive remuneration for their services to the Fund out of such investment adviser fee. Certain of the officers and directors of the Fund are officers and directors/trustees of the above organizations. TAX-MANAGED GROWTH PORTFOLIO PORTFOLIO OF INVESTMENTS APRIL 30, 1997 (UNAUDITED) - ------------------------------------------------------------------------------- COMMON STOCKS - 94.7% - ------------------------------------------------------------------------------- NAME OF COMPANY SHARES VALUE - ------------------------------------------------------------------------------- ADVERTISING 1.3% Interpublic Group Companies., Inc. 131,000 $ 7,417,875 Omnicom Group, Inc. 170,000 9,010,000 ---------------- $ 16,427,875 ---------------- AEROSPACE AND DEFENSE - 2.0% Boeing Company (The) 155,370 $ 15,323,366 Raytheon Co. 226,544 9,882,982 ---------------- $ 25,206,348 ---------------- BANKS - REGIONAL - 1.2% BankAmerica Corporation 20,812 $ 2,432,403 First Chicago NBD Corporation 43,007 2,419,139 Norwest Corporation 210,000 10,473,750 ---------------- $ 15,325,292 ---------------- BANKS AND MONEY SERVICES - 1.1% Citicorp 115,000 $ 12,951,875 Wells Fargo & Co. 4,265 1,137,689 ---------------- $ 14,089,564 ---------------- BEVERAGES - 5.4% Anheuser-Busch Cos., Inc. 210,260 $ 9,014,898 Coca-Cola Co. 430,883 27,414,930 PepsiCo, Inc. 896,292 31,258,183 ---------------- $ 67,688,011 ---------------- BROADCASTING AND CABLE - 0.2% Cox Communications Inc., Class A* 93,319 $ 1,819,721 ---------------- BUILDING MATERIALS - 0.3% Masco Corporation 55,540 $ 2,096,635 Stanley Works (The) 40,490 1,574,049 ---------------- $ 3,670,684 ---------------- BUSINESS SERVICES - MISCELLANEOUS - 0.8% ACNielson Corp. 45,669 $ 685,030 Cognizant Corp. 137,006 4,469,821 Manpower, Inc. 110,000 4,413,750 ---------------- $ 9,568,601 ---------------- CHEMICALS - 2.5% Bayer AG Sponsored American Depositary Receipt ADR 40,000 $ 1,591,528 Dow Chemical Co. (The) 25,248 2,142,924 E.I. Du Pont de Nemours & Co., Inc. 44,800 4,754,400 Illinois Tool Works, Inc. 10,000 913,750 Monsanto Co. 506,680 21,660,569 ---------------- $ 31,063,171 ---------------- COMMUNICATIONS EQUIPMENT - 2.0% L.M. Ericsson Telephone Co. ADR 66,000 $ 2,219,250 Nokia Corp. ADR Class A 280,000 18,094,999 Northern Telecom Ltd. 55,870 4,057,559 ---------------- $ 24,371,808 ---------------- COMPUTER SOFTWARE - 2.1% Computer Associates International, Inc. 195,000 $ 10,140,000 Digital Equipment Corp.* 37,680 1,125,690 Microsoft Corp.* 40,000 4,860,000 Oracle Corp.* 250,000 9,937,500 ---------------- $ 26,063,190 ---------------- COMPUTERS AND BUSINESS EQUIPMENT - 3.5% Hewlett-Packard Co. 479,528 $ 25,175,219 Imation Corporation* 2,628 62,087 International Business Machines Corp. 53,051 8,527,948 Xerox Corp. 160,000 9,840,000 ---------------- $ 43,605,254 ---------------- CONTAINERS AND PACKAGING - 0.9% Crown Cork & Seal Co., Inc. 215,000 $ 11,771,250 ---------------- DISTRIBUTION - 0.9% Supervalu, Inc. 51,506 $ 1,577,371 Sysco Corp. 277,760 9,860,480 ---------------- $ 11,437,851 ---------------- DRUGS - 10.4% Allegiance Corporation* 22,661 $ 501,375 Amgen, Inc. 80,000 4,710,000 Astra AB Class A 420,000 17,184,384 Astra AB Class B 60,000 2,382,252 Bristol-Myers Squibb Co. 113,720 7,448,660 Elan Corp., PLC ADR* 330,000 11,220,000 Genentech, Inc.* 80,000 4,690,000 Genzyme Corp. 380,000 8,787,500 Merck & Co., Inc. 239,075 21,636,287 Pfizer, Inc. 290,752 27,912,191 Schering-Plough Corp. 138,120 11,049,600 Smithkline Beecham PLC ADR 37,520 3,025,050 Warner-Lambert Co. 94,644 9,275,112 ---------------- $ 129,822,411 ---------------- ELECTRIC UTILITIES - 0.1% Citizens Utilities Corp., Class A* 57,198 $ 664,931 ---------------- ELECTRICAL EQUIPMENT - 1.4% Emerson Electric Co. 150,948 $ 7,660,611 General Electric Co. 74,114 8,217,390 Lincoln Electric Co. 19,700 758,450 Lincoln Electric Co. Class A 19,700 630,400 ---------------- $ 17,266,851 ---------------- ELECTRONICS - INSTRUMENTS - 1 0% AMP Inc. 112,340 $ 4,030,198 Thermo Electron Corp. 250,000 8,625,000 ---------------- $ 12,655,198 ---------------- ELECTRONICS - SEMICONDUCTORS - 4.8% Intel Corp. 343,948 $ 52,667,037 Texas Instruments, Inc. 84,390 7,531,808 ---------------- $ 60,198,845 ---------------- ENTERTAINMENT - 0.2% Walt Disney Company (The) 26,600 $ 2,181,200 ---------------- ENVIRONMENTAL SERVICES - 0.3% Gilbert Associates, Inc. Class A 78,125 $ 1,035,156 WMX Technologies, Inc. 77,930 2,289,194 ---------------- $ 3,324,350 ---------------- FINANCIAL - MISCELLANEOUS - 2 5% American Express Co. 76,798 $ 5,059,068 Federal National Mortgage Association 428,820 17,635,223 MGIC Investment Corp. 105,000 8,531,250 ---------------- $ 31,225,541 ---------------- FOODS - 1.5% Earthgrains Company (The) 4,204 $ 240,679 McCormick & Co., Inc., Non-voting 229,298 5,417,165 Pioneer Hi-Bred International, Inc. 107,000 7,556,875 Unilever ADR 25,000 4,906,250 ---------------- $ 18,120,969 ---------------- HEALTH SERVICES - 0.1% Covance, Inc. 31,250 $ 460,938 Medpartners, Inc.* 17,696 322,952 Quest Diagnostics, Inc. 15,625 275,391 ---------------- $ 1,059,281 ---------------- HOUSEHOLD PRODUCTS - 1.4% Colgate-Palmolive Co. 21,826 $ 2,422,686 Gillette Company 90,400 7,684,000 Kimberley-Clark Corp. 114,620 5,874,275 Rubbermaid, Inc. 78,920 1,894,080 ---------------- $ 17,875,041 ---------------- INDUSTRIAL EQUIPMENT - 2.2% Dover Corp. 164,580 $ 8,722,740 General Signal Corp. 68,600 2,692,550 Goulds Pumps, Inc. 110,539 4,034,674 Parker-Hannifin Corp. 76,099 3,785,925 Tecumseh Products Co. Class A 135,290 7,305,660 Tecumseh Products Co. Class B 5,000 260,000 ---------------- $ 26,801,549 ---------------- INFORMATION SERVICES - 3.6% Automatic Data Processing, Inc. 326,040 $ 14,753,310 Dun & Bradstreet Corp. (The) 132,196 3,255,327 Electronic Data Systems Corp. 180,000 6,007,500 Reuters Holdings PLC, ADR 355,090 21,882,420 ---------------- $ 45,898,557 ---------------- INSURANCE - 8.7% American International Group, Inc. 226,633 $ 29,122,340 Berkshire Hathaway Inc. Class A 50 1,900,000 Berkshire Hathaway Inc. Class B 21 26,691 Chubb Corporation 101,050 5,835,638 General RE Corp. 112,446 18,806,593 Highlands Insurance Group, Inc.* 5,070 89,359 Kansas City Life Insurance Co. 35,400 2,389,500 Marsh & McLennan Cos., Inc. 137,172 16,529,226 Mutual Risk Management Ltd. 165,000 6,063,750 Progressive Corp. 170,000 12,941,250 Provident Companies, Inc. 9,599 536,344 Providian Corp. 46,794 2,702,354 Seafield Capital Corp. 35,960 1,141,730 St. Paul Companies, Inc. (The) 130,280 8,728,760 Torchmark Corp. 31,425 1,952,278 ---------------- $ 108,765,813 ---------------- MEDICAL PRODUCTS - 6.3% Abbott Laboratories 80,000 $ 4,880,000 Bausch & Lomb Inc. 145,574 5,877,550 Baxter International, Inc. 265,828 12,726,516 Boston Scientific Corporation* 255,000 12,303,750 Johnson & Johnson 449,040 27,503,699 Medtronic, Inc. 122,000 8,448,500 Sofamor Danek Group, Inc.* 173,000 6,747,000 ---------------- $ 78,487,015 ---------------- METALS - INDUSTRIAL - 0.5% Inco Ltd 124,000 $ 3,968,000 Nucor Corp. 40,000 1,990,000 ---------------- $ 5,958,000 ---------------- METALS AND MINERALS - 0.7% Potash Corp. of Saskatchewan 120,000 $ 9,225,000 ---------------- OIL AND GAS - EQUIPMENT AND SERVICES - 2.4% Baker Hughes, Inc. 39,234 $ 1,353,573 Chevron Corporation 55,600 3,808,600 Dresser Industries, Inc. 79,800 2,384,025 Halliburton Company 50,700 3,580,688 Schlumberger Ltd. 168,203 18,628,481 ---------------- $ 29,755,367 ---------------- OIL AND GAS - EXPLORATION AND PRODUCTION - 2.3% Anadarko Petroleum Corp. 211,000 $ 11,578,625 Apache Corporation 156,440 5,318,965 Louisiana Land & Exploration Corp. 25,000 1,250,000 Triton Energy Ltd.* 230,000 8,452,500 Union Pacific Resources Co. 79,795 2,164,439 ---------------- $ 28,764,529 ---------------- OIL AND GAS - INTEGRATED - 2.5% Amoco Corporation 47,928 $ 4,007,979 Atlantic Richfield Company 20,883 2,842,698 Enron Oil & Gas 100,000 1,862,500 Exxon Corp. 164,318 9,304,507 Mobil Corp. 74,333 9,663,290 Murphy Oil Corporation 29,700 1,291,950 Sonat Inc. 27,200 1,553,800 ---------------- $ 30,526,724 ---------------- PAPER AND FOREST PRODUCTS - 0 9% Champion International Corp. 41,484 $ 1,929,006 Deltic Timber Corp. 8,486 215,325 Minnesota Mining & Manufacturing Co. 26,288 2,287,056 Union Camp Corp. 80,309 3,905,025 Weyerhauser Co. 61,630 2,819,573 ---------------- $ 11,155,985 ---------------- PHOTOGRAPHY - 1.0% Eastman Kodak Co. 152,181 $ 12,707,114 ---------------- PRINTING AND BUSINESS PRODUCTS - 0.8% American Business Products, Inc. 146,497 $ 3,515,928 Bowne & Company 91,770 2,431,905 Deluxe Corporation 51,750 1,584,844 Donnelley & Sons 47,896 1,640,438 John H. Harland Co. 51,540 1,063,013 ---------------- $ 10,236,128 ---------------- PUBLISHING - 3.0% Dow Jones & Co. 180,000 $ 7,290,000 Gannett Co., Inc. 130,450 11,381,763 Harcourt General Inc. 90,000 4,162,500 Houghton Mifflin Co. 63,700 3,575,163 McGraw-Hill Companies, Inc. (The) 60,608 3,083,432 Times Mirror Co. Class A 151,670 8,379,768 ---------------- $ 37,872,626 ---------------- REAL ESTATE INVESTMENT TRUST - 0.0% SLH Corp. 8,990 $ 395,560 ---------------- RESTAURANTS - 0.7% McDonald's Corp. 168,100 $ 9,014,363 ---------------- RETAIL - FOOD AND DRUG - 0.9% Albertson's, Inc. 341,048 $ 11,254,584 ---------------- RETAIL - GENERAL - 2.3% Procter & Gamble Co. 166,600 $ 20,949,949 Wal-Mart Stores, Inc. 294,390 8,316,518 ---------------- $ 29,266,467 ---------------- RETAIL - SPECIALTY AND APPAREL - 2.2% Home Depot, Inc. (The) 370,000 $ 21,459,999 Toys "R" Us, Inc.* 201,605 5,745,743 ---------------- $ 27,205,742 ---------------- SPECIALTY CHEMICALS AND MATERIALS - 5.3% Corning, Inc. 125,000 $ 6,031,250 Dexter Corp. 47,829 1,428,891 Dionex Corp.* 181,070 8,849,796 Ecolab Inc. 132,620 5,404,265 Great Lakes Chemical Corp. 62,780 2,660,303 International Flavors & Fragrances, Inc. 148,101 6,238,755 International Specialty Products Inc.* 59,000 767,000 Memtec Ltd. ADR 77,500 1,792,188 Millipore Corporation 256,440 9,680,610 Nalco Chemical Co. 196,020 7,056,720 Sealed Air Corp.* 325,000 15,031,250 ---------------- $ 64,941,028 ---------------- TOBACCO - 0.0% Schweitzer-Mauduit International, Inc. 5,731 $ 186,974 ---------------- TRANSPORTATION - 0.5% CSX Corp. 15,270 $ 711,964 Union Pacific Corp. 94,210 6,005,888 ---------------- $ 6,717,852 ---------------- TOTAL COMMON STOCKS (IDENTIFIED COST, $423,651,466) $ 1,181,640,215 ---------------- - -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 5.1% - -------------------------------------------------------------------------------- FACE AMOUNT NAME OF COMPANY (000 OMITTED) VALUE - ------------------------------------------------------------------------------- American General Finance Commercial Paper, 5.65%, $ 20,000 $ 20,000,000 Cit Group Holdings Commercial Paper, 5.62%, 5/1/97 11,369 11,369,000 Ford Motor Credit Company Commercial Paper, 5.50%, 5/7/97 13,000 12,988,083 Prudential Funding Commercial Paper, 5.50%, 5/7/97 20,000 19,981,667 ---------------- TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $64,338,750) $ 64,338,750 ---------------- TOTAL INVESTMENTS - 99.8% (identified cost $487,990,216) $1,245,978,965 ---------------- - ------------------------------------------------------------------------------- LESS SECURITIES SOLD SHORT - 1.6% - -------------------------------------------------------------------------------- NAME OF COMPANY SHARES VALUE - ------------------------------------------------------------------------------- Intel Corp. 100,000 $ (15,312,500) Hewlett-Packard Co. 100,000 (5,250,000) ---------------- TOTAL SECURITIES RECEIVED SOLD SHORT (proceeds $20,873,654) $ (20,562,500) ---------------- OTHER ASSETS, LESS LIABILITIES EXCLUDING SECURITIES SOLD SHORT - 1.8% $ 22,661,229 ---------------- NET ASSETS - 100% $ 1,248,077,694 ================ *Non-income producing security. See notes to financial statements FINANCIAL STATEMENTS Statement of Assets and Liabilities - ------------------------------------------------------------------------------- April 30, 1997 (Unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (Note 1A) (identified cost, $487,990,216) $1,245,978,965 Cash 40,630 Deposits with brokers for securities sold short (Note 1E) 20,873,654 Receivable for investments sold 13,500 Dividends and interest receivable 1,713,885 Tax reclaim receivable 68,444 Deferred organization expenses (Note 1C) 7,800 -------------- Total assets $1,268,696,878 LIABILITIES: Payable to affiliate -- Trustees' fees $ 1,912 Securities sold short, at value (proceeds received of $20,873,654) (Note 1E) 20,562,500 Accrued expenses 54,772 ----------- Total liabilities 20,619,184 -------------- NET ASSETS APPLICABLE TO INVESTORS' INTEREST IN PORTFOLIO $1,248,077,694 ============== SOURCES OF NET ASSETS: Net proceeds from capital contributions and withdrawals $ 489,773,690 Unrealized appreciation of investments (computed on the basis of identified cost) 758,304,004 -------------- Total $1,248,077,694 ============== See notes to financial statements FINANCIAL STATEMENTS (Continued) STATEMENT OF OPERATIONS - ------------------------------------------------------------------------------- For the Six Months Ended April 30, 1997 (Unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (NOTE 1B): Income -- Dividends (net of foreign taxes withheld of, $73,293) $ 7,748,085 Interest 1,233,595 ------------ Total income $ 8,981,680 Expenses -- Investment adviser fee (Note 2) $ 3,154,717 Compensation of Trustees not members of the Investment Adviser's organization (Note 2) 12,632 Custodian fee 150,883 Legal and accounting services 41,163 Dividends on securities sold short 17,000 Amortization of organization expenses (Note 1C) 1,079 Miscellaneous 7,692 ----------- Total expenses 3,385,166 ------------ Net investment income $ 5,596,514 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investment transactions (identified cost basis) $ 41,834,150 Increase in unrealized appreciation -- Investments (identified cost basis) $78,269,110 Securities sold short 311,154 ----------- Net change in unrealized appreciation 78,580,264 ------------ Net realized and unrealized gain $120,414,414 ------------ Net increase in net assets from operations $126,010,928 ============ See notes to financial statements
STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, 1997 YEAR ENDED (UNAUDITED) OCTOBER 31, 1996* ------------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: From operations -- Net investment income $ 5,596,514 $ 3,104,708 Net realized gain 41,834,150 9,582,500 Increase in unrealized appreciation 78,580,264 70,637,961 -------------- ------------ Net increase in net assets from operations $ 126,010,928 $ 83,325,169 -------------- ------------ Capital transactions -- Contributions $ 244,553,683 $871,076,582 Withdrawals (59,286,487) (17,702,191) -------------- ------------ Net increase in net assets from capital transactions $ 185,267,196 $853,374,391 -------------- ------------ Total increase in net assets $ 311,278,124 $936,699,560 NET ASSETS: At beginning of period 936,799,570 100,010 -------------- ------------ At end of period $1,248,077,694 $936,799,570 ============== ============ * For the period from the start of business, December 1, 1995, to October 31, 1996.
- ------------------------------------------------------------------------------- SUPPLEMENTARY DATA - ------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED APRIL 30, 1997 OCTOBER 31, (UNAUDITED) 1996* -------------- ----------- RATIOS (AS A PERCENTAGE OF NET ASSETS): Expenses 0.62%+ 0.66%+ Net investment income gain 1.03%+ 0.91%+ PORTFOLIO TURNOVER 3% 6% AVERAGE COMMISSION RATE (PER SHARE)(1) $0.0589 $0.0585 * For the period from the start of business, December 1, 1995, to October 31, 1996. + Annualized. (1) Average commission rate paid is computed by dividing the total dollar amount of commissions paid during the fiscal year by the total number of shares purchased and sold during the fiscal year for which commissions were charged. See notes to financial statements NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - ------------------------------------------------------------------------------- (1) SIGNIFICANT ACCOUNTING POLICIES Tax-Managed Growth Portfolio (the Portfolio) is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Portfolio, which was organized as a trust under the laws of the State of New York on December 1, 1995, seeks to provide long-term after-tax returns by investing in a diversified portfolio of equity securities. The Declaration of Trust permits the Trustees to issue interests in the Portfolio. The following is a summary of significant accounting policies consistently followed by the Portfolio in the preparation of its financial statements. The polices are in conformity with generally accepted accounting principles. A. INVESTMENT VALUATIONS -- Marketable securities, including options, that are listed on foreign or U.S. securities exchanges or in the NASDAQ National Market System are valued at closing sale prices, on the exchange where such securities are principally traded. Futures positions on securities or currencies are generally valued at closing settlement prices. Unlisted or listed securities for which closing sale prices are not available are valued at the mean between the latest bid and asked prices. Short-term debt securities with a remaining maturity of 60 days or less are valued at amortized cost, which approximates value. Other fixed income and debt securities, including listed securities and securities for which price quotations are available, will normally be valued on the basis of valuations furnished by a pricing service. Investments for which valuations or market quotations are unavailable are valued at fair value using methods determined in good faith by or at the direction of the Trustees. B. INCOME 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 on its share of such income. 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 Internal Revenue Code) in order for its investors to satisfy them. The Portfolio will allocate, at least annually among its investors, each investor's 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. FUTURES CONTRACTS -- Upon the entering of a financial futures contract, the Portfolio is required to deposit either in cash or securities an amount ("initial margin") 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 daily fluctuations in the value of the underlying security, and are recorded for book purposes as unrealized gains or losses by the Portfolio. The Portfolio's investment in financial futures contracts is designed to hedge against anticipated future changes in price of current or anticipated portfolio positions. Should prices move unexpectedly, the Portfolio may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. E. SECURITIES SOLD SHORT -- The Portfolio may sell securities short where it owns an equal amount of the security sold short or another security convertible or exchangeable for an equal amount of the security sold short (a short sale against-the-box). The Portfolio may do this in anticipation of a decline in the market price of the securities or in order to hedge portfolio positions. The Portfolio will generally borrow the security sold in order to make delivery to the buyer. Upon executing the transaction, the Portfolio records the proceeds as deposits with brokers in the Statement of Assets and Liabilities and establishes an offsetting payable for securities sold short for the securities due on settlement. The security sold short is segregated as collateral for the short position. The liability is marked to market and the Portfolio is required to pay the lending broker any dividend or interest income earned while the short position is open. A gain or loss is realized when the security is delivered to the broker. The Portfolio may recognize a loss on the transaction if the market value of the securities sold increases before the securities are delivered. F. OTHER -- Investment transactions are accounted for on the date the investments are purchased or sold. Dividend income is recorded on the ex- dividend date. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the Portfolio is informed of the ex- dividend date. Interest income is recorded on the accrual basis. G. USE OF ESTIMATES -- The preparation of 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. H. EXPENSE REDUCTION -- Investors Bank & Trust Company (IBT) serves as custodian of the Portfolio. 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 Portfolio's custodian fees are reflected as a reduction of expenses on the Statement of Operations. I. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to April 30, 1997 and for the six month period then ended have not been audited by independent certified public accountants, but in the opinion of the Fund's management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements. - ------------------------------------------------------------------------------- (2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES The investment adviser fee is earned by Boston Management and Research (BMR), a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation for management and investment advisory services rendered to the Portfolio. Under the advisory agreement, BMR receives a monthly advisory fee of 5/96 of 1% (0.625% annually) of the average daily net assets of the Portfolio up to $500,000,000, and at reduced rates as daily net assets exceed the level. For the six months ended April 30, 1997 the adviser fee was 0.58% of the Portfolio's average net assets (annualized). 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. 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 six months ended April 30, 1997, no significant amounts have been deferred. Certain of the officers and Trustees of the Portfolio are officers or directors/trustees of the above organizations. - ------------------------------------------------------------------------------- (3) INVESTMENT TRANSACTIONS Purchases and sales of investments, other than short-term obligations, aggregated $225,853,920 and $36,084,420, respectively. - ------------------------------------------------------------------------------- (4) FEDERAL INCOME TAX BASIS OF INVESTMENT The cost and unrealized appreciation (depreciation) in value of the investments owned at April 30, 1997, as computed on a federal income tax basis, are as follows: Aggregate cost $487,990,216 ============ Gross unrealized appreciation $762,365,329 Gross unrealized depreciation (4,376,580) ------------ Net unrealized appreciation $757,988,749 ============ - ------------------------------------------------------------------------------- (5) 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. The Portfolio had no obligations under these financial instruments at April 30, 1997. - ------------------------------------------------------------------------------- (6) 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 group of banks. 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 or fund based on its borrowings at the bank's base rate or an amount above either the bank's adjusted certificate of deposit rate, a Eurodollar rate, or federal funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. The Portfolio did not have any significant borrowings or allocated fees during the six months ended April 30, 1997. INVESTMENT MANAGEMENT CAPITAL EXCHANGE OFFICERS INDEPENDENT TRUSTEES FUND, INC. 24 Federal Street LANDON T. CLAY DONALD R. DWIGHT Boston, MA 02110 President and President, Dwight Director Partners, Inc. Chairman, Newspapers of JAMES B. HAWKES New England, Inc. Vice President, Director SAMUEL L. HAYES, III Jacob H. Schiff JAMES L. O'CONNOR Professor of Treasurer Investment Banking, Harvard University THOMAS OTIS Graduate School of Secretary Business Administration NORTON H. REAMER President and Director, United Asset Management Corporation JOHN L. THORNDIKE Formerly Director, Fiduciary Company Incorporated JACK L. TREYNOR Investment Adviser and Consultant --------------------------------------------- TAX-MANAGED OFFICERS INDEPENDENT TRUSTEES GROWTH PORTFOLIO 24 Federal Street LANDON T. CLAY DONALD R. DWIGHT Boston, MA 02110 President, Trustee President, Dwight Partners, Inc. JAMES B. HAWKES Chairman, Newspapers of Vice President, New England, Inc. Trustee SAMUEL L. HAYES, III DUNCAN W. Jacob H. Schiff RICHARDSON Professor of Vice President and Investment Banking, Portfolio Manager Harvard University Graduate School of JAMES L. O'CONNOR Business Administration Treasurer NORTON H. REAMER THOMAS OTIS President and Director, Secretary United Asset Management Corporation JOHN L. THORNDIKE Formerly Director, Fiduciary Company Incorporated JACK L. TREYNOR Investment Adviser and Consultant INVESTMENT ADVISER OF TAX-MANAGED GROWTH PORTFOLIO Boston Management and Research 24 Federal Street Boston, MA 02110 ADMINISTRATOR OF CAPITAL EXCHANGE FUND, INC. Eaton Vance Management 24 Federal Street Boston, MA 02110 CUSTODIAN Investors Bank & Trust Company 89 South Street P.O. Box 1537 Boston, MA 02205-1537 TRANSFER AND DIVIDEND DISBURSING AGENT First Data Investor Services Group Attn: Eaton Vance Funds P.O. Box 5123 Westborough, MA 01581-5123 -----END PRIVACY-ENHANCED MESSAGE-----