-----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, Gc+UsJRJAZmbZX5esIS9vrd42+/43OV35qm5slZiVRFC50MoUjBmPDk6oBz0CDEH iuJy2Y0D4O67MiD6HmTLrA== 0000950168-97-002381.txt : 19970820 0000950168-97-002381.hdr.sgml : 19970820 ACCESSION NUMBER: 0000950168-97-002381 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970819 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN GROWTH & INCOME FUND /NY/ CENTRAL INDEX KEY: 0000795891 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 136873263 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04715 FILM NUMBER: 97666144 BUSINESS ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9146412020 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVENUE CITY: PURCHASE STATE: NY ZIP: 10577 FORMER COMPANY: FORMER CONFORMED NAME: EVERGREEN VALUE TIMING FUND DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN INVESTMENT TRUST CENTRAL INDEX KEY: 0000757440 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046599663 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04154 FILM NUMBER: 97666145 BUSINESS ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9146412305 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS/ DATE OF NAME CHANGE: 19940628 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION HIGH GRADE TAX FREE PORT DATE OF NAME CHANGE: 19940519 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS DATE OF NAME CHANGE: 19921230 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN AMERICAN RETIREMENT TRUST CENTRAL INDEX KEY: 0000826733 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133442767 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05434 FILM NUMBER: 97666146 BUSINESS ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9146942020 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 N-30D 1 EVERGREEN GROWTH AND INCOME FUND (Evergreen Cone Tree G&I logo appears here) FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, (UNAUDITED) 1996 1995* CLASS A SHARES NET ASSET VALUE BEGINNING OF PERIOD......................................................... $ 22.53 $ 18.63 $14.48 INCOME FROM INVESTMENT OPERATIONS Net investment income....................................................................... 0.06 0.12 0.13 Net realized and unrealized gain on investments............................................. 3.28 4.26 4.64 Total from investment operations............................................................ 3.34 4.38 4.77 LESS DISTRIBUTIONS FROM Net investment income....................................................................... (0.06) (0.13) (0.14) Net realized gain on investments............................................................ (0.01) (0.35) (0.48) Total distributions......................................................................... (0.07) (0.48) (0.62) NET ASSET VALUE END OF PERIOD............................................................... $ 25.80 $ 22.53 $18.63 Total return +.............................................................................. 14.84% 23.50% 33.00% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............................................................................ 1.47%++ 1.41% 1.55%++ Total expenses, excluding indirectly paid expenses........................................ 1.47%++ 1.41% N/A Total expenses, excluding fee waiver & expense reimbursement.............................. N/A N/A 1.64%++ Net investment income..................................................................... 0.57%++ 0.70% 0.99%++ Portfolio turnover rate..................................................................... 4% 14% 17% Average commission rate paid per share...................................................... $0.0566 $0.0566 N/A NET ASSETS END OF PERIOD (MILLIONS)......................................................... $ 149 $ 85 $ 19
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from January 3, 1995 (commencement of Class operations) to December 31, 1995.
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, (UNAUDITED) 1996 1995* CLASS B SHARES NET ASSET VALUE BEGINNING OF PERIOD......................................................... $ 22.43 $ 18.59 $14.48 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)................................................................ (0.01) 0# 0.05 Net realized and unrealized gain on investments............................................. 3.24 4.20 4.61 Total from investment operations............................................................ 3.23 4.20 4.66 LESS DISTRIBUTIONS FROM Net investment income....................................................................... 0 (0.01) (0.07) Net realized gain on investments............................................................ 0 (0.35) (0.48) Total distributions......................................................................... 0 (0.36) (0.55) NET ASSET VALUE END OF PERIOD............................................................... $ 25.66 $ 22.43 $18.59 Total return+............................................................................... 14.40% 22.60% 32.20% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............................................................................ 2.22%++ 2.17% 2.24%++ Total expenses, excluding indirectly paid expenses........................................ 2.22%++ 2.17% N/A Total expenses, excluding fee waiver & expense reimbursement.............................. N/A N/A 2.26%++ Net investment income (loss).............................................................. (0.17%)++ (0.06%) 0.30%++ Portfolio turnover rate..................................................................... 4% 14% 17% Average commission rate paid per share...................................................... $0.0566 $0.0566 N/A NET ASSETS END OF PERIOD (MILLIONS)......................................................... $ 481 $ 245 $ 46
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from January 3, 1995 (commencement of Class operations) to December 31, 1995. # Less than one cent per share. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 1 EVERGREEN GROWTH AND INCOME FUND (Evergreen Cone Tree G&I logo appears here) FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, (UNAUDITED) 1996 1995* CLASS C SHARES NET ASSET VALUE BEGINNING OF PERIOD......................................................... $ 22.43 $ 18.58 $14.48 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)................................................................ (0.01) 0# 0.06 Net realized and unrealized gain on investments............................................. 3.24 4.21 4.60 Total from investment operations............................................................ 3.23 4.21 4.66 LESS DISTRIBUTIONS FROM Net investment income....................................................................... 0 (0.01) (0.08) Net realized gain on investments............................................................ 0 (0.35) (0.48) Total distributions......................................................................... 0 (0.36) (0.56) NET ASSET VALUE END OF PERIOD............................................................... $ 25.66 $ 22.43 $18.58 Total return+............................................................................... 14.40% 22.60% 32.20% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............................................................................ 2.21%++ 2.17% 2.15%++ Total expenses, excluding indirectly paid expenses........................................ 2.21%++ 2.17% N/A Total expenses, excluding fee waiver & expense reimbursement.............................. N/A N/A 4.94%++ Net investment income..................................................................... (0.17%)++ (0.06%) 0.35%++ Portfolio turnover rate..................................................................... 4% 14% 17% Average commission rate paid per share...................................................... $0.0566 $0.0566 N/A NET ASSETS END OF PERIOD (MILLIONS)......................................................... $ 21 $ 10 $ 2
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from January 3, 1995 (commencement of Class operations) to December 31, 1995. # Less than one cent per share.
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, (UNAUDITED) 1996 1995 1994 1993 1992 1991 1990 1989 CLASS Y SHARES NET ASSET VALUE BEGINNING OF PERIOD..................... $ 22.55 $ 18.64 $ 14.52 $15.41 $14.18 $12.99 $10.72 $12.03 $10.62 INCOME FROM INVESTMENT OPERATIONS Net investment income........ 0.09 0.18 0.18 0.14 0.14 0.15 0.19 0.30 0.52 Net realized and unrealized gain (loss) on investments................ 3.28 4.25 4.59 0.12 1.91 1.65 2.58 (0.84) 2.17 Total from investment operations................. 3.37 4.43 4.77 0.26 2.05 1.80 2.77 (0.54) 2.69 LESS DISTRIBUTIONS FROM Net investment income........ (0.09) (0.17) (0.17) (0.14) (0.14) (0.15) (0.19) (0.30) (0.52) Net realized gain on investments................ (0.01) (0.35) (0.48) (1.01) (0.68) (0.46) (0.31) (0.47) (0.76) Total distributions.......... (0.10) (0.52) (0.65) (1.15) (0.82) (0.61) (0.50) (0.77) (1.28) NET ASSET VALUE END OF PERIOD..................... $ 25.82 $ 22.55 $ 18.64 $14.52 $15.41 $14.18 $12.99 $10.72 $12.03 Total return+................ 14.97% 23.80% 32.90% 1.70% 14.40% 13.80% 25.80% (4.50%) 25.40% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............. 1.22%++ 1.16% 1.27% 1.33% 1.26% 1.33% 1.41% 1.50% 1.54% Total expenses, excluding indirectly paid expenses................. 1.22%++ 1.16% N/A N/A N/A N/A N/A N/A N/A Net investment income...... 1.07%++ 0.93% 1.11% 0.96% 0.99% 1.18% 1.55% 2.62% 4.13% Portfolio turnover rate...... 4% 14% 17% 29% 28% 30% 23% 41% 53% Average commission rate paid per share.................. $0.0566 $0.0566 N/A N/A N/A N/A N/A N/A N/A NET ASSETS END OF PERIOD (MILLIONS)................. $ 568 $ 442 $ 141 $ 73 $ 77 $ 64 $ 48 $ 36 $ 32 YEAR ENDED DECEMBER 31, 1988* CLASS Y SHARES NET ASSET VALUE BEGINNING OF PERIOD..................... $ 9.38 INCOME FROM INVESTMENT OPERATIONS Net investment income........ 0.19 Net realized and unrealized gain (loss) on investments................ 2.10 Total from investment operations................. 2.29 LESS DISTRIBUTIONS FROM Net investment income........ (0.19) Net realized gain on investments................ (0.86) Total distributions.......... (1.05) NET ASSET VALUE END OF PERIOD..................... $10.62 Total return+................ 24.60% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............. 1.56% Total expenses, excluding indirectly paid expenses................. N/A Net investment income...... 1.70% Portfolio turnover rate...... 41% Average commission rate paid per share.................. N/A NET ASSETS END OF PERIOD (MILLIONS)................. $ 24
* Net investment income is based on the average monthly shares outstanding for the periods indicated. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 2 EVERGREEN SMALL CAP EQUITY INCOME FUND (Evergreen Cone Tree Maple Leaf logo appears here) FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, (UNAUDITED) 1996 1995* CLASS A SHARES NET ASSET VALUE BEGINNING OF PERIOD......................................................... $ 13.10 $ 11.57 $ 9.64 INCOME FROM INVESTMENT OPERATIONS Net investment income....................................................................... 0.16 0.34 0.34 Net realized and unrealized gain on investments............................................. 1.79 2.13 2.45 Total from investment operations............................................................ 1.95 2.47 2.79 LESS DISTRIBUTIONS FROM Net investment income....................................................................... (0.14) (0.34) (0.37) Net realized gain on investments............................................................ 0 (0.60) (0.49) Total distributions......................................................................... (0.14) (0.94) (0.86) NET ASSET VALUE END OF PERIOD............................................................... $ 14.91 $ 13.10 $11.57 Total return+............................................................................... 14.97% 22.00% 29.50% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............................................................................ 1.67%++ 1.75% 1.75%++ Total expenses, excluding indirectly paid expenses........................................ 1.66%++ N/A N/A Total expenses, excluding fee waiver & expense reimbursement.............................. 2.00%++ 5.03% 24.45%++ Net investment income..................................................................... 2.94%++ 3.08% 3.39%++ Portfolio turnover rate..................................................................... 12% 50% 48% Average commission rate paid per share...................................................... $0.0588 $0.0635 N/A NET ASSETS END OF PERIOD (THOUSANDS)........................................................ $ 2,747 $ 336 $ 216
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from January 3, 1995 (commencement of Class operations) to December 31, 1995.
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, (UNAUDITED) 1996 1995* CLASS B SHARES NET ASSET VALUE BEGINNING OF PERIOD......................................................... $ 13.09 $ 11.57 $ 9.64 INCOME FROM INVESTMENT OPERATIONS Net investment income....................................................................... 0.11 0.27 0.28 Net realized and unrealized gain on investments............................................. 1.78 2.11 2.43 Total from investment operations............................................................ 1.89 2.38 2.71 LESS DISTRIBUTIONS FROM Net investment income....................................................................... (0.10) (0.26) (0.29) Net realized gain on investments............................................................ 0 (0.60) (0.49) Total distributions......................................................................... (0.10) (0.86) (0.78) NET ASSET VALUE END OF PERIOD............................................................... $ 14.88 $ 13.09 $11.57 Total return+............................................................................... 14.52% 21.10% 28.70% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............................................................................ 2.41%++ 2.50% 2.50%++ Total expenses, excluding indirectly paid expenses........................................ 2.40%++ N/A N/A Total expenses, excluding fee waiver & expense reimbursement.............................. 2.75%++ 5.72% 20.90%++ Net investment income..................................................................... 2.15%++ 2.39% 2.67%++ Portfolio turnover rate..................................................................... 12% 50% 48% Average commission rate paid per share...................................................... $0.0588 $0.0635 N/A NET ASSETS END OF PERIOD (THOUSANDS)........................................................ $ 5,659 $ 692 $ 266
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from January 3, 1995 (commencement of Class operations) to December 31, 1995. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 3 EVERGREEN SMALL CAP EQUITY INCOME FUND (Evergreen Cone Tree Maple Leaf logo appears here) FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, (UNAUDITED) 1996 1995* CLASS C SHARES NET ASSET VALUE BEGINNING OF PERIOD......................................................... $ 13.09 $ 11.56 $ 9.74 INCOME FROM INVESTMENT OPERATIONS Net investment income....................................................................... 0.09 0.28 0.28 Net realized and unrealized gain on investments............................................. 1.79 2.10 2.33 Total from investment operations............................................................ 1.88 2.38 2.61 LESS DISTRIBUTIONS FROM: Net investment income....................................................................... (0.10) (0.25) (0.30) Net realized gain on investments............................................................ 0 (0.60) (0.49) Total distributions......................................................................... (0.10) (0.85) (0.79) NET ASSET VALUE END OF PERIOD............................................................... $ 14.87 $ 13.09 $11.56 Total return+............................................................................... 14.45% 21.10% 27.30% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............................................................................ 2.42%++ 2.50% 2.50%++ Total expenses, excluding indirectly paid expenses........................................ 2.41%++ N/A N/A Total expenses, excluding fee waiver & expense reimbursement.............................. 2.71%++ 5.77% 187.29%++ Net investment income..................................................................... 2.01%++ 2.33% 2.63%++ Portfolio turnover rate..................................................................... 12% 50% 48% Average commission rate paid per share...................................................... $0.0588 $0.0635 N/A NET ASSETS END OF PERIOD (THOUSANDS)........................................................ $ 1,851 $ 56 $ 24
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from January 24, 1995 (commencement of Class operations) to December 31, 1995.
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, (UNAUDITED) 1996 1995 1994 1993* CLASS Y SHARES NET ASSET VALUE BEGINNING OF PERIOD.................................... $ 13.12 $ 11.58 $ 9.70 $10.15 $10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income.................................................. 0.19 0.38 0.38 0.34 0.10 Net realized and unrealized gain (loss) on investments................. 1.78 2.13 2.38 (0.41) 0.15 Total from investment operations....................................... 1.97 2.51 2.76 (0.07) 0.25 LESS DISTRIBUTIONS FROM Net investment income.................................................. (0.16) (0.37) (0.38) (0.33) (0.10) Net realized gain on investments....................................... 0 (0.60) (0.50) (0.05) 0 Total distributions.................................................... (0.16) (0.97) (0.88) (0.38) (0.10) NET ASSET VALUE END OF PERIOD.......................................... $ 14.93 $ 13.12 $11.58 $ 9.70 $10.15 Total return........................................................... 15.08% 22.40% 29.10% (0.70%) 2.50% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses....................................................... 1.35%++ 1.50% 1.50% 1.48% 0%++ Total expenses, excluding indirectly paid expenses................... 1.34%++ N/A N/A N/A N/A Total expenses, excluding fee waiver & expense reimbursement......... 1.75%++ 4.75% 4.34% 4.68% 4.39%++ Net investment income................................................ 2.93%++ 3.36% 3.56% 3.72% 4.07%++ Portfolio turnover rate................................................ 12% 50% 48% 9% 15% Average commission rate paid per share................................. $0.0588 $0.0635 N/A N/A N/A NET ASSETS END OF PERIOD (THOUSANDS)................................... $37,631 $ 8,592 $4,806 $3,613 $2,236
++ Annualized. * For the period from October 1, 1993 (commencement of operations) to December 31, 1993. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 4 EVERGREEN UTILITY FUND (Evergreen Cone Tree Light Bulb logo appears here) FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, (UNAUDITED) 1996 1995 1994* CLASS A SHARES NET ASSET VALUE BEGINNING OF PERIOD............................................ $ 10.57 $ 10.80 $ 9.00 $10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income.......................................................... 0.21 0.41 0.44 0.45 Net realized and unrealized gain (loss) on investments......................... 0.66 0.05 2.25 (1.01) Total from investment operations............................................... 0.87 0.46 2.69 (0.56) LESS DISTRIBUTIONS FROM Net investment income.......................................................... (0.20) (0.41) (0.44) (0.44) Net realized gain on investments............................................... 0 (0.28) (0.45) 0 Total distributions............................................................ (0.20) (0.69) (0.89) (0.44) NET ASSET VALUE END OF PERIOD.................................................. $ 11.24 $ 10.57 $ 10.80 $ 9.00 Total return+.................................................................. 8.23% 4.40% 30.70% 5.60% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............................................................... 1.00%++ 0.87% 0.79% 0.53%++ Total expenses, excluding indirectly paid expenses........................... 0.99%++ N/A N/A N/A Total expenses, excluding fee waiver & expense reimbursement................. 1.19%++ 1.15% 1.18% 1.43%++ Net investment income........................................................ 3.89%++ 3.87% 4.51% 5.07%++ Portfolio turnover rate........................................................ 42% 59% 88% 23% Average commission rate paid per share......................................... $0.0592 $0.0605 N/A N/A NET ASSETS END OF PERIOD (THOUSANDS)........................................... $91,467 $96,243 $107,872 $4,190
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from January 4, 1994 (commencement of Class operations) to December 31, 1994.
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, (UNAUDITED) 1996 1995 1994* CLASS B SHARES NET ASSET VALUE BEGINNING OF PERIOD............................................ $ 10.58 $ 10.81 $ 9.00 $ 10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income.......................................................... 0.17 0.33 0.37 0.39 Net realized and unrealized gain (loss) on investments......................... 0.65 0.05 2.26 (1.01) Total from investment operations............................................... 0.82 0.38 2.63 (0.62) LESS DISTRIBUTIONS FROM Net investment income.......................................................... (0.16) (0.33) (0.37) (0.38) Net realized gain on investments............................................... 0 (0.28) (0.45) 0 Total distributions............................................................ (0.16) (0.61) (0.82) (0.38) NET ASSET VALUE END OF PERIOD.................................................. $ 11.24 $ 10.58 $ 10.81 $ 9.00 Total return+.................................................................. 7.80% 3.60% 29.90% (6.20%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............................................................... 1.75%++ 1.62% 1.53% 1.27%++ Total expenses, excluding indirectly paid expenses........................... 1.74%++ N/A N/A N/A Total expenses, excluding fee waiver & expense reimbursement................. 1.94%++ 1.89% 1.93% 2.11%++ Net investment income........................................................ 3.13%++ 3.12% 3.78% 4.19%++ Portfolio turnover rate........................................................ 42% 59% 88% 23% Average commission rate paid per share......................................... $0.0592 $0.0605 N/A N/A NET ASSETS END OF PERIOD (THOUSANDS)........................................... $36,299 $38,511 $35,662 $28,792
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from January 4, 1994 (commencement of Class operations) to December 31, 1994. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 5 EVERGREEN UTILITY FUND (Evergreen Cone Tree Light Bulb logo appears here) FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, (UNAUDITED) 1996 1995 1994* CLASS C SHARES NET ASSET VALUE BEGINNING OF PERIOD.............................................. $ 10.58 $ 10.82 $ 9.01 $ 9.33 INCOME FROM INVESTMENT OPERATIONS Net investment income............................................................ 0.17 0.33 0.37 0.12 Net realized and unrealized gain (loss) on investments........................... 0.65 0.04 2.26 (0.33) Total from investment operations................................................. 0.82 0.37 2.63 (0.21) LESS DISTRIBUTIONS FROM Net investment income............................................................ (0.16) (0.33) (0.37) (0.11) Net realized gain on investments................................................. 0 (0.28) (0.45) 0 Total distributions.............................................................. (0.16) (0.61) (0.82) (0.11) NET ASSET VALUE END OF PERIOD.................................................... $ 11.24 $ 10.58 $10.82 $ 9.01 Total return+.................................................................... 7.80% 3.50% 29.80% (2.20%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses................................................................. 1.75%++ 1.63% 1.54% 1.94%++ Total expenses, excluding indirectly paid expenses............................. 1.74%++ N/A N/A N/A Total expenses, excluding fee waiver & expense reimbursement................... 1.94%++ 1.90% 1.93% 2.78%++ Net investment income.......................................................... 3.14%++ 3.13% 3.76% 3.96%++ Portfolio turnover rate........................................................ 42% 59% 88% 23% Average commission rate paid per share........................................... $0.0592 $0.0605 N/A N/A NET ASSETS END OF PERIOD (THOUSANDS)............................................. $ 367 $ 396 $ 246 $ 128
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from September 2, 1994 (commencement of Class operations) to December 31, 1994.
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, (UNAUDITED) 1996 1995 1994* CLASS Y SHARES NET ASSET VALUE BEGINNING OF PERIOD.............................................. $ 10.58 $ 10.82 $ 9.00 $ 9.51 INCOME FROM INVESTMENT OPERATIONS Net investment income............................................................ 0.21 0.44 0.47 0.37 Net realized and unrealized gain (loss) on investments........................... 0.66 0.03 2.27 (0.50) Total from investment operations................................................. 0.87 0.47 2.74 (0.13) LESS DISTRIBUTIONS FROM Net investment income............................................................ (0.21) (0.43) (0.47) (0.37) In excess of net investment income............................................... 0 0 0 (0.01) Net realized gain on investments................................................. 0 (0.28) (0.45) 0 Total distributions.............................................................. (0.21) (0.71) (0.92) (0.38) NET ASSET VALUE END OF PERIOD.................................................... $ 11.24 $ 10.58 $10.82 $ 9.00 Total return..................................................................... 8.34% 4.50% 31.30% (1.60%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses................................................................. 0.74%++ 0.61% 0.54% 0.40%++ Total expenses, excluding indirectly paid expenses............................. 0.73%++ N/A N/A N/A Total expenses, excluding fee waiver & expense reimbursement................... 0.94%++ 0.89% 0.93% 1.24%++ Net investment income.......................................................... 4.08%++ 4.01% 4.76% 4.93%++ Portfolio turnover rate.......................................................... 42% 59% 88% 23% Average commission rate paid per share........................................... $0.0592 $0.0605 N/A N/A NET ASSETS END OF PERIOD (THOUSANDS)............................................. $ 1,529 $ 2,000 $7,791 $5,201
++ Annualized. * For the period from February 28, 1994 (commencement of Class operations) to December 31, 1994. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 6 EVERGREEN VALUE FUND (Evergreen Cone Tree logo appears here) FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, (UNAUDITED) 1996 1995 1994 1993 CLASS A SHARES NET ASSET VALUE BEGINNING OF PERIOD...................................... $ 20.57 $ 20.45 $ 16.62 $17.63 $17.11 INCOME FROM INVESTMENT OPERATIONS Net investment income.................................................... 0.18 0.38 0.55 0.52 0.47 Net realized and unrealized gain (loss) on investments................... 2.45 3.49 4.69 (0.20) 1.10 Total from investment operations......................................... 2.63 3.87 5.24 0.32 1.57 LESS DISTRIBUTIONS FROM Net investment income.................................................... (0.19) (0.41) (0.51) (0.51) (0.47) Net realized gain on investments......................................... 0 (3.32) (0.90) (0.82) (0.58) In excess of net investment income....................................... 0** (0.02) 0 0 0 Total distributions...................................................... (0.19) (3.75) (1.41) (1.33) (1.05) NET ASSET VALUE END OF PERIOD............................................ $ 23.01 $ 20.57 $ 20.45 $16.62 $17.63 Total return+............................................................ 12.79% 18.90% 31.80% 1.90% 9.30% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses......................................................... 0.92%++ 0.91% 0.90% 0.93% 0.99% Total expenses, excluding indirectly paid expenses..................... 0.92%++ N/A N/A N/A N/A Total expenses, excluding fee waiver & expense reimbursement........... N/A N/A N/A N/A N/A Net investment income.................................................. 1.67%++ 1.77% 2.78% 2.96% 2.63% Portfolio turnover rate.................................................. 6% 91% 53% 70% 46% Average commission rate paid per share................................... $0.0592 $0.0588 N/A N/A N/A NET ASSETS END OF PERIOD (MILLIONS)...................................... $ 365 $ 328 $ 292 $ 189 $ 190
YEAR ENDED MARCH YEAR ENDED DECEMBER 31, 31, 1992 1991 1990* 1990 1989 CLASS A SHARES (CONTINUED) NET ASSET VALUE BEGINNING OF PERIOD................................... $17.08 $14.61 $15.12 $14.45 $12.83 INCOME FROM INVESTMENT OPERATIONS Net investment income................................................. 0.44 0.46 0.36 0.54 0.36 Net realized and unrealized gain (loss) on investments................ 0.89 3.17 (0.44) 1.70 2.11 Total from investment operations...................................... 1.33 3.63 (0.08) 2.24 2.47 LESS DISTRIBUTIONS FROM Net investment income................................................. (0.43) (0.43) (0.36) (0.57) (0.38) Net realized gain on investments...................................... (0.87) (0.73) (0.02) (1.00) (0.47) In excess of net investment income.................................... 0 0 (0.05) 0 0 Total distributions................................................... (1.30) (1.16) (0.43) (1.57) (0.85) NET ASSET VALUE END OF PERIOD......................................... $17.11 $17.08 $14.61 $15.12 $14.45 Total return+......................................................... 8.00% 25.10% (0.50%) 15.50% 19.70% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses...................................................... 1.01% 0.96% 1.39%++ 1.55% 1.71% Total expenses, excluding indirectly paid expenses.................. N/A N/A N/A N/A N/A Total expenses, excluding fee waiver & expense reimbursement........ 1.02% 1.05% N/A N/A N/A Net investment income............................................... 2.37% 2.78% 3.28%++ 3.42% 2.72% Portfolio turnover rate............................................... 56% 69% 13% 11% 24% Average commission rate paid per share................................ N/A N/A N/A N/A N/A NET ASSETS END OF PERIOD (MILLIONS)................................... $ 169 $ 136 $ 105 $ 96 $ 83 1988 CLASS A SHARES (CONTINUED) NET ASSET VALUE BEGINNING OF PERIOD................................... $14.66 INCOME FROM INVESTMENT OPERATIONS Net investment income................................................. 0.26 Net realized and unrealized gain (loss) on investments................ (1.30) Total from investment operations...................................... (1.04) LESS DISTRIBUTIONS FROM Net investment income................................................. (0.26) Net realized gain on investments...................................... (0.53) In excess of net investment income.................................... 0 Total distributions................................................... (0.79) NET ASSET VALUE END OF PERIOD......................................... $12.83 Total return+......................................................... (7.10%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses...................................................... 1.74% Total expenses, excluding indirectly paid expenses.................. N/A Total expenses, excluding fee waiver & expense reimbursement........ N/A Net investment income............................................... 1.92% Portfolio turnover rate............................................... 24% Average commission rate paid per share................................ N/A NET ASSETS END OF PERIOD (MILLIONS)................................... $ 22
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * The Fund changed its fiscal year end from March 31 to December 31, effective December 31, 1990. ** Less than one cent per share. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 7 EVERGREEN VALUE FUND (Evergreen Cone Tree logo appears here) FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, (UNAUDITED) 1996 1995 1994 1993* CLASS B SHARES NET ASSET VALUE BEGINNING OF PERIOD............................... $ 20.58 $ 20.45 $ 16.62 $ 17.63 $ 17.24 INCOME FROM INVESTMENT OPERATIONS Net investment income............................................. 0.10 0.22 0.39 0.42 0.35 Net realized and unrealized gain (loss) on investments............ 2.44 3.50 4.70 (0.20) 1.01 Total from investment operations.................................. 2.54 3.72 5.09 0.22 1.36 LESS DISTRIBUTIONS FROM Net investment income............................................. (0.10) (0.25) (0.36) (0.41) (0.35) Net realized gain on investments.................................. 0 (3.32) (0.90) (0.82) (0.58) In excess of net investment income................................ 0** 0 0 0 (0.04) In excess of net realized gain on investments..................... 0 (0.02) 0 0 0 Total distributions............................................... (0.10) (3.59) (1.26) (1.23) (0.97) NET ASSET VALUE END OF PERIOD..................................... $ 23.02 $ 20.58 $ 20.45 $ 16.62 $ 17.63 Total return+..................................................... 12.37% 18.10% 30.90% 1.30% 8.00% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses.................................................. 1.65%++ 1.66% 1.65% 1.53% 1.48%++ Total expenses, excluding indirectly paid expenses.............. 1.65%++ N/A N/A N/A N/A Net investment income........................................... 0.93%++ 1.01% 2.04% 2.36% 2.09%++ Portfolio turnover rate........................................... 6% 91% 53% 70% 46% Average commission rate paid per share............................ $ 0.0592 $ 0.0588 N/A N/A N/A NET ASSETS END OF PERIOD (THOUSANDS) $ 254,154 $197,411 $141,072 $104,297 $59,953
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from February 2, 1993 (commencement of Class operations) to December 31, 1993. ** Less than one cent per share
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, (UNAUDITED) 1996 1995 1994* CLASS C SHARES NET ASSET VALUE BEGINNING OF PERIOD............................................. $ 20.56 $ 20.44 $16.61 $ 18.28 INCOME FROM INVESTMENT OPERATIONS Net investment income........................................................... 0.11 0.22 0.39 0.19 Net realized and unrealized gain (loss) on investments.......................... 2.43 3.50 4.70 (0.81) Total from investment operations................................................ 2.54 3.72 5.09 (0.62) LESS DISTRIBUTIONS FROM Net investment income........................................................... (0.10) (0.26) (0.36) (0.19) Net realized gain on investments................................................ 0 (3.32) (0.90) (0.82) In excess of net investment income.............................................. 0** 0 0 (0.04) In excess of net realized gain on investments................................... 0 (0.02) 0 0 Total distributions............................................................. (0.10) (3.60) (1.26) (1.05) NET ASSET VALUE END OF PERIOD................................................... $ 23.00 $ 20.56 $20.44 $ 16.61 Total return+................................................................... 12.38% 18.10% 30.90% (3.40%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses................................................................ 1.64%++ 1.67% 1.65% 1.68%++ Total expenses, excluding indirectly paid expenses............................ 1.64%++ N/A N/A N/A Net investment income......................................................... 0.95%++ 1.00% 2.03% 2.16%++ Portfolio turnover rate......................................................... 6% 91% 53% 70% Average commission rate paid per share.......................................... $0.0592 $0.0588 N/A N/A NET ASSETS END OF PERIOD (THOUSANDS)............................................ $ 2,306 $ 1,458 $ 811 $ 485
+ Initial sales charge or contingent deferred sales charge is not reflected. ++ Annualized. * For the period from September 2, 1994 (commencement of operations) to December 31, 1994. ** Less than one cent per share SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 8 EVERGREEN VALUE FUND (Evergreen Cone Tree logo appears here) FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED DECEMBER 31, (UNAUDITED) 1996 1995 1994 1993 1992 CLASS Y SHARES NET ASSET VALUE BEGINNING OF PERIOD..................... $ 20.57 $ 20.45 $ 16.61 $17.63 $17.11 $17.08 INCOME FROM INVESTMENT OPERATIONS Net investment income................................... 0.21 0.44 0.57 0.56 0.52 0.49 Net realized and unrealized gain (loss) on investments........................................... 2.44 3.49 4.72 (0.20) 1.12 0.90 Total from investment operations........................ 2.65 3.93 5.29 0.36 1.64 1.39 LESS DISTRIBUTIONS FROM Net investment income................................... (0.21) (0.47) (0.55) (0.56) (0.52) (0.49) Net realized gain on investments........................ 0 (3.32) (0.90) (0.82) (0.58) (0.87) In excess of net investment income...................... 0** 0 0 0 (0.02) 0 In excess of net realized gain on investments........... 0 (0.02) 0 0 0 0 Total distributions..................................... (0.21) (3.81) (1.45) (1.38) (1.12) (1.36) NET ASSET VALUE END OF PERIOD........................... $ 23.01 $ 20.57 $ 20.45 $16.61 $17.63 $17.11 Total return+........................................... 12.93% 19.20% 32.20% 2.10% 9.70% 8.30% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses........................................ 0.67%++ 0.66% 0.65% 0.68% 0.65% 0.68% Total expenses, excluding indirectly paid expenses.... 0.67%++ N/A N/A N/A N/A N/A Total expenses, excluding fee waiver & expense reimbursement....................................... N/A N/A N/A N/A N/A 0.69% Net investment income................................. 1.92%++ 2.02% 3.02% 3.21% 2.98% 2.90% Portfolio turnover rate................................. 6% 91% 53% 70% 46% 56% Average commission rate paid per share.................. $0.0592 $0.0588 N/A N/A N/A N/A NET ASSETS END OF PERIOD (MILLIONS)..................... $ 1,075 $ 996 $ 761 $ 507 $ 463 $ 326 YEAR ENDED DECEMBER 31, 1991* CLASS Y SHARES NET ASSET VALUE BEGINNING OF PERIOD..................... $14.28 INCOME FROM INVESTMENT OPERATIONS Net investment income................................... 0.47 Net realized and unrealized gain (loss) on investments........................................... 3.53 Total from investment operations........................ 4.00 LESS DISTRIBUTIONS FROM Net investment income................................... (0.47) Net realized gain on investments........................ (0.73) In excess of net investment income...................... 0 In excess of net realized gain on investments........... 0 Total distributions..................................... (1.20) NET ASSET VALUE END OF PERIOD........................... $17.08 Total return+........................................... 25.40% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses........................................ 0.69%++ Total expenses, excluding indirectly paid expenses.... N/A Total expenses, excluding fee waiver & expense reimbursement....................................... 0.77%++ Net investment income................................. 3.04%++ Portfolio turnover rate................................. 69% Average commission rate paid per share.................. N/A NET ASSETS END OF PERIOD (MILLIONS)..................... $ 271
++ Annualized. * For the period from January 3, 1991 (commencement of Class operations) to December 31, 1991. ** Less than one cent per share. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 9 EVERGREEN GROWTH & INCOME FUND (Evergreen Cone Tree G&I logo appears here) SCHEDULE OF INVESTMENTS June 30, 1997 (UNAUDITED)
SHARES VALUE COMMON STOCKS-- 78.5% BANKS-- 4.4% 118,440 Banc One Corp................... $ 5,736,938 80,000 Bank of New York Co., Inc. (The)......................... 3,480,000 180,600 BSB Bancorp, Inc................ 6,907,950 101,250 Central Fidelity Banks, Inc..... 3,594,375 41,750 Crestar Financial Corp.......... 1,623,031 45,000 Cullen/Frost Bankers, Inc....... 1,906,875 157,500 First Security Corp............. 4,301,719 39,700 First Virginia Banks, Inc....... 2,394,406 210,000 Hibernia Corp. Cl. A............ 2,926,875 83,700 Norwest Corp.................... 4,708,125 65,000 Peoples Heritage Financial Group......................... 2,461,875 110,000 State Street Boston Corp........ 5,087,500 45,000 Summit Bancorp.................. 2,255,625 72,600 Susquehanna Bancshares, Inc..... 2,849,550 13,800 Wells Fargo & Co................ 3,719,100 53,953,944 BUILDING, CONSTRUCTION & FURNISHINGS-- 1.2% 320,000 * Furniture Brands International, Inc........................... 6,200,000 113,000 Lone Star Industries, Inc....... 5,120,313 80,000 Medusa Corp..................... 3,070,000 14,390,313 BUSINESS EQUIPMENT & SERVICES-- 12.6% 335,000 Air Express International Corp.......................... 13,316,250 675,000 Circle International Group, Inc........................... 17,803,125 48,000 * Cisco Systems, Inc.............. 3,222,000 350,000 Computer Associates International, Inc............ 19,490,625 120,000 * Compuware Corp.................. 5,730,000 133,000 Equifax, Inc.................... 4,945,938 290,000 * Medic Computer Systems, Inc..... 6,452,500 450,000 * Metromail Corp.................. 11,137,500 10,000 * MSC Industrial Direct Co., Inc........................... 401,250 78,000 * Oracle Systems Corp............. 3,929,250 565,000 Pittston Brink's Group.......... 16,950,000 639,500 Pittston Burlington Group....... 17,985,937 500,000 * Platinum Technology Corp........ 6,625,000 212,500 * Policy Management Systems Corp.......................... 9,987,500 900,000 Reynolds & Reynolds Co. (The), Cl. A......................... 14,175,000 50,000 Wackenhut Corp. (The) Cl. B..... 996,875 153,148,750 COMMON STOCKS-- CONTINUED CHEMICAL & AGRICULTURAL PRODUCTS-- 3.9% 65,000 Air Products & Chemicals, Inc... $ 5,281,250 79,000 Du Pont (E. I.) De Nemours & Co............................ 4,967,125 265,000 Engelhard Corp.................. 5,548,437 165,000 Grace (W.R.) & Co............... 9,095,625 42,300 H.B. Fuller Co.................. 2,326,500 79,000 Pioneer Hi-Bred International, Inc........................... 6,320,000 260,000 Praxair, Inc.................... 14,560,000 48,098,937 COMMUNICATION SYSTEMS & SERVICES-- 0.7% 160,000 * AirTouch Communications......... 4,380,000 168,000 * Aspect Telecommunications Corp.......................... 3,738,000 8,118,000 CONSUMER PRODUCTS & SERVICES-- 2.7% 96,000 Campbell Soup Co................ 4,800,000 90,000 Colgate-Palmolive Co............ 5,872,500 45,000 CPC International, Inc.......... 4,154,062 52,000 Gillette Co. (The).............. 4,927,000 72,000 Harley-Davidson, Inc............ 3,451,500 150,000 Philip Morris Companies, Inc.... 6,656,250 105,000 UST, Inc........................ 2,913,750 32,775,062 DIVERSIFIED COMPANIES-- 1.3% 70,200 General Electric Co............. 4,589,325 35,000 * ITT Corp........................ 2,137,188 195,000 ITT Industries, Inc............. 5,021,250 125,000 Morton International, Inc....... 3,773,437 15,521,200 ELECTRICAL EQUIPMENT & SERVICES-- 5.3% 57,000 * 3Com Corp....................... 2,565,000 80,000 * Adaptec, Inc.................... 2,780,000 42,000 * Applied Materials, Inc.......... 2,974,125 191,000 AVX Corp........................ 5,157,000 165,000 Baldor Electric Co.............. 4,877,813 205,000 Belden, Inc..................... 6,982,812 70,000 Dallas Semiconductor Corp....... 2,747,500 36,000 Intel Corp...................... 5,105,250 210,000 * KLA Instruments Corp............ 10,237,500 85,000 * Lam Research Corp............... 3,150,313 42,000 * LSI Logic Corp.................. 1,344,000 3,875 * NCR Corp........................ 115,281
(CONTINUED) 10 EVERGREEN GROWTH & INCOME FUND (Evergreen Cone Tree G&I logo appears here) SCHEDULE OF INVESTMENTS (CONTINUED) June 30, 1997 (UNAUDITED)
SHARES VALUE COMMON STOCKS-- CONTINUED ELECTRICAL EQUIPMENT & SERVICES-- CONTINUED 500,000 Sensormatic Electronics Corp.... $ 6,437,500 189,900 * Unitrode Corp................... 9,566,212 64,040,306 ENERGY-- 6.4% 25,000 Anadarko Petroleum Corp......... 1,500,000 134,000 * Atwood Oceanics, Inc............ 8,978,000 250,000 Berry Petroleum Co. Cl. A....... 4,750,000 45,000 Coastal Corp. (The)............. 2,393,437 165,000 * Denbury Resources, Inc.......... 2,763,750 31,570 Halliburton Co.................. 2,501,922 100,000 * Houston Exploration, Co. (The).. 1,556,250 25,000 Kerr-McGee Corp................. 1,584,375 95,000 Murphy Oil Corp................. 4,631,250 425,000 * Oryx Energy Co.................. 8,978,125 108,300 Petroleum Helicopters, Inc. Voting........................ 1,854,638 775,000 Reading & Bates Corp............ 20,731,250 150,000 * Santa Fe Energy Resources, Inc........................... 2,203,125 350,000 Southwestern Energy Co.......... 4,550,000 100,000 Tosco Corp...................... 2,993,750 63,520 Union Pacific Resource Group, Inc........................... 1,580,060 87,000 Williams Companies, Inc. (The).. 3,806,250 77,356,182 FINANCE & INSURANCE-- 3.5% 340,000 Federal Home Loan Mortgage Corp.......................... 11,687,500 290,000 Federal National Mortgage Association................... 12,651,250 100,000 Hartford Financial Services Group, Inc. (The)............. 8,275,000 115,000 LaSalle Re Holdings, Ltd........ 3,392,500 67,500 Meadowbrook Insurance Group, Inc........................... 1,683,281 106,000 Price (T.) Rowe & Associates, Inc........................... 5,472,250 43,161,781 FOOD RETAILING & DISTRIBUTION-- 0.1% 50,000 * Dominick's Supermarkets, Inc.... 1,331,250 FOREST PRODUCTS-- 0.3% 120,000 Deltic Timber Corp.............. 3,517,500 HEALTHCARE PRODUCTS & SERVICES-- 11.7% 110,000 Abbott Laboratories............. 7,342,500 65,000 * Amgen, Inc...................... 3,778,125 110,000 * Elan Corp, plc.................. 4,977,500 COMMON STOCKS-- CONTINUED HEALTHCARE PRODUCTS & SERVICES-- CONTINUED 425,000 * Foundation Health Systems, Inc. Cl. A......................... $ 12,882,812 178,500 * Health Management Associates, Inc. Cl. A.................... 5,087,250 55,000 * HealthCare COMPARE Corp......... 2,880,625 206,000 * HEALTHSOUTH Corp................ 5,137,125 24,000 Johnson & Johnson............... 1,545,000 130,000 * Laboratory Corp. of America Holdings...................... 341,250 265,000 * Lincare Holdings, Inc........... 11,395,000 235,000 * Living Centers of America, Inc........................... 9,282,500 20,000 Mallinckrodt, Inc............... 760,000 60,000 Manor Care, Inc................. 1,957,500 200,000 McKesson Corp................... 15,500,000 42,350 * MedPartners, Inc................ 915,819 49,600 Pfizer, Inc..................... 5,927,200 226,000 Schering-Plough Corp............ 10,819,750 225,000 Shared Medical System Corp...... 12,150,000 25,000 * Spacelabs Medical, Inc.......... 637,500 138,000 * Sybron International Corp....... 5,502,750 120,000 * Tenet Healthcare Corp........... 3,547,500 95,000 * Vencor, Inc..................... 4,013,750 34,000 Warner-Lambert Co............... 4,224,500 40,020 * Wellpoint Health Networks, Inc........................... 1,835,918 370,000 West Co., Inc. (The)............ 10,591,250 143,033,124 INDUSTRIAL SPECIALTY PRODUCTS & SERVICES-- 4.4% 42,625 * Autoliv, Inc.................... 1,667,703 150,000 Borg-Warner Automotive, Inc..... 8,109,375 42,000 Carpenter Technology Corp....... 1,921,500 65,500 Danaher Corp.................... 3,328,219 51,000 Dover Corp...................... 3,136,500 55,000 Ingersoll Rand Co............... 3,396,250 53,200 J & L Specialty Steel, Inc...... 638,400 525,000 JLG Industries, Inc............. 7,153,125 33,500 Magna Group, Inc................ 2,016,281 23,650 Newmont Mining Corp............. 922,350 300,000 * Strattec Security Corp.**....... 6,187,500 210,000 Sundstrand Corp................. 11,720,625 15,000 Tecumseh Products Co. Cl. A..... 898,125 25,000 Vulcan Materials Co............. 1,962,500 22,500 York International Corp......... 1,035,000 54,093,453
(CONTINUED) 11 EVERGREEN GROWTH & INCOME FUND (Evergreen Cone Tree G&I logo appears here) SCHEDULE OF INVESTMENTS (CONTINUED) June 30, 1997 (UNAUDITED)
SHARES VALUE COMMON STOCKS-- CONTINUED INFORMATION SERVICES & TECHNOLOGY-- 0.2% 63,436 First Data Corp.................. $ 2,787,219 LEISURE & TOURISM-- 1.9% 90,000 Carnival, Corp. Cl. A............ 3,712,500 60,000 * Choice Hotels Holdings, Inc...... 1,016,250 821,400 Gaylord Entertainment Co. Cl. A.. 18,943,537 23,672,287 PAPER & PACKAGING-- 0.2% 75,000 Westvaco Corp.................... 2,357,813 PUBLISHING, BROADCASTING & ENTERTAINMENT-- 7.4% 248,820 * American Radio Systems Corp. Cl. A.......................... 9,921,697 49,805 Comcast Corp..................... 1,064,582 39,000 Disney Walt Co. (The)............ 3,129,750 255,000 * Emmis Broadcasting Corp. Cl. A... 11,124,375 42,000 * Evergreen Media Corp. Cl. A...... 1,874,250 425,000 * Jacor Communications, Inc........ 16,256,250 174,000 * Jacor Communications, Inc. Warrants exp. 2001............. 609,000 100,000 * Katz Media Group, Inc............ 656,250 40,000 Knight-Ridder, Inc............... 1,962,500 275,000 * Lin Television Corp.............. 12,134,375 15,000 McGraw-Hill Companies, Inc....... 882,188 43,000 Scripps, (E.W.) , Inc............ 1,789,875 185,000 TCA Cable TV, Inc................ 6,960,625 250,000 Time Warner, Inc................. 12,062,500 50,000 * U S WEST Media Group............. 1,012,500 35,000 * Univision Communications, Inc. Cl. A.......................... 1,369,375 8,276 * Viacom Inc. Cl. A................ 243,625 2,800 Washington Post Co. (The)........ 1,114,400 168,000 * Young Broadcasting Inc. Cl. A.... 5,460,000 89,628,117 RETAILING & WHOLESALE-- 0.4% 109,800 * Carson Pirie Scott & Co.......... 3,486,150 12,500 Mercantile Stores Co., Inc....... 786,719 20,000 Sears, Roebuck & Co.............. 1,075,000 5,347,869 THRIFT INSTITUTIONS-- 2.5% 126,500 Washington Mutual, Inc........... 7,558,375 492,500 Webster Financial Corp........... 22,408,750 29,967,125 COMMON STOCKS-- CONTINUED TRANSPORTATION-- 5.3% 670,000 * Atlas Air, Inc................... $ 23,115,000 190,000 Burlington Northern Santa Fe..... 17,076,250 190,000 Kansas City Southern Industries, Inc............................ 12,255,000 170,000 Union Pacific Corp............... 11,985,000 64,431,250 UTILITIES-- 2.1% 62,000 AT & T Corp...................... 2,173,875 100,000 Century Telephone Enterprises, Inc............................ 3,368,750 64,000 Commonwealth Energy System....... 1,532,000 70,000 Houston Industries., Inc......... 1,500,625 50,000 Illinova Corp.................... 1,100,000 75,000 MCI Communications Corp.......... 2,871,094 40,000 Texas Utilities Co............... 1,377,500 393,200 TNP Enterprises, Inc............. 9,117,325 45,000 Unicom Corp...................... 1,001,250 60,000 * WorldCom, Inc.................... 1,920,000 25,962,419 TOTAL COMMON STOCKS (COST $655,473,750)............ 956,693,901 PREFERRED STOCKS-- 0.0% (A) HEALTHCARE PRODUCTS & SERVICES-- 0.0% 130,000 * Fresenius National Med Care, Inc. Series D....................... 7,475 TOTAL PREFERRED STOCKS (COST $22,741)................. 7,475 CONVERTIBLE PREFERRED-- 0.1% PUBLISHING, BROADCASTING & ENTERTAINMENT-- 0.1% 6,407 * TCI Communications, Inc. $2.125, Series A............... 659,921 TOTAL CONVERTIBLE PREFERRED (COST $622,947)................ 659,921 PRINCIPAL AMOUNT CORPORATE BONDS-- 0.1% ENERGY-- 0.0% Columbia Gas Systems, Inc. (The) $ 106,000 6.39%, 11/28/00.................. 105,020 101,000 6.61%, 11/28/02.................. 100,202 101,000 6.80%, 11/28/05.................. 99,569 101,000 7.05%, 11/28/07.................. 100,468 101,000 7.32%, 11/28/10.................. 100,647 101,000 7.42%, 11/28/15.................. 98,104 101,000 7.62%, 11/28/25.................. 97,870 701,880
(CONTINUED) 12 EVERGREEN GROWTH & INCOME FUND (Evergreen Cone Tree G&I logo appears here) SCHEDULE OF INVESTMENTS (CONTINUED) June 30, 1997 (UNAUDITED)
PRINCIPAL AMOUNT VALUE CORPORATE BONDS-- CONTINUED PUBLISHING, BROADCASTING & ENTERTAINMENT-- 0.1% Time Warner, Inc. $ 206,000 6.7725%, 8/15/97................ $ 206,266 123,000 7.975%, 8/15/04................. 127,097 247,000 8.11%, 8/15/06.................. 258,023 247,000 8.18%, 8/15/07.................. 258,630 92,000 Viacom Inc. 8.00%, 7/7/06................. 89,240 939,256 TOTAL CORPORATE BONDS (COST $1,595,465)............. 1,641,136 SHORT-TERM INVESTMENTS-- 21.2% COMMERCIAL PAPER-- 17.9% 12,325,000 AC Acquisition Holding CO. 5.58%, 8/21/97................ 12,227,571 6,000,000 American Home Food Products, Inc. 5.55%, 7/28/97................ 5,975,025 1,300,000 BankAmerica Corp. 5.52%, 8/5/97................. 1,293,023 1,800,000 Barton Capital Corp. 5.54%, 7/17/97................ 1,795,568 16,000,000 BIL North America, Inc. 5.55%, 7/1/97................. 16,000,000 13,600,000 BMW U.S. Capital Corp. 5.54%, 8/22/97................ 13,491,170 1,900,000 Chubb Capital Corp. 5.51%, 7/14/97................ 1,896,220 8,000,000 Columbia/HCA Healthcare Corp. 5.60%, 7/14/97................ 7,983,822 450,000 Equitable of Iowa Cos. 5.62%, 7/11/97................ 449,298 17,300,000 Great Lakes Chemical Corp. 5.50%, 7/7/97................. 17,284,142 2,100,000 Heinz (H.J.) Co. 5.52%, 7/3/97................. 2,099,356 950,000 Holy Cross Health System Corp. 5.58%, 7/21/97................ 947,055 19,750,000 IBM Credit Corp. 5.51%, 7/30/97................ 19,662,337 1,000,000 Island Finance Puerto Rico, Inc. 5.56%, 7/16/97................ 997,683 SHORT-TERM INVESTMENTS-- CONTINUED COMMERCIAL PAPER-- CONTINUED $21,500,000 Koch Industries, Inc. 5.51%, 7/18/97................ $ 21,444,058 2,500,000 Lucent Technologies, Inc. 5.49%, 8/8/97................. 2,485,512 3,400,000 Metropolitan Life, Inc. 5.53%, 8/12/97................ 3,378,064 2,400,000 Montana Blanc Capital Corp. 5.56%, 7/7/97................. 2,397,776 3,100,000 Morgan (J.P.) & Co., Inc. 5.51%, 7/2/97................. 3,099,526 12,325,000 Pepsico, Inc. 5.53%, 8/15/97................ 12,239,803 10,500,000 Sharp Electronics Corp. 5.56%, 7/25/97................ 10,461,080 6,400,000 Southland Corp. 5.57%, 8/7/97................. 6,363,362 9,150,000 Toyota Motor Credit Corp. 5.50%, 8/14/97................ 9,088,492 1,900,000 Tribune Co. 5.57%, 7/7/97................. 1,898,236 20,000,000 Warner Lambert Co. 5.51%, 7/30/97................ 19,911,228 22,900,000 Xerox Credit Corp. 5.55%, 7/9/97................. 22,871,757 217,741,164 GOVERNMENT AGENCY NOTES & BONDS-- 3.3% Federal Home Loan Bank 20,000,000 5.41%, 7/11/97.................. 19,969,944 20,000,000 5.40%, 7/18/97.................. 19,949,000 39,918,944 TOTAL SHORT-TERM INVESTMENTS (COST 257,660,108)............ 257,660,108
TOTAL INVESTMENTS-- (COST $915,375,011).... 99.9% 1,216,662,541 OTHER ASSETS AND LIABILITIES-- NET...... 0.1 1,780,470 NET ASSETS............... 100.0% $1,218,443,011
* Non-income producing securities. ** Investment in a non-controlled affiliate. The Fund owns over 5% of outstanding voting securities. The Fund has a cost basis of $4,482,537 in this issue at June 30, 1997. The Fund did not earn any income from this investment during the period ended June 30, 1997. (a) Less than one-tenth of a percent. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 13 EVERGREEN SMALL CAP EQUITY INCOME FUND (Evergreen Cone Tree Maple Leaf logo appears here) SCHEDULE OF INVESTMENTS June 30, 1997 (UNAUDITED)
SHARES VALUE COMMON STOCKS-- 71.8% AEROSPACE & DEFENSE-- 2.2% 18,000 Curtiss Wright Corp.................. $ 1,048,500 AUTOMOTIVE EQUIPMENT & MANUFACTURING-- 0.1% 6,000 Simpson Industries, Inc.............. 63,750 BANKS-- 11.9% 3,750 ABC Bancorp.......................... 63,750 21,000 Amcore Financial, Inc................ 572,250 3,000 BancorpSouth, Inc.................... 87,000 19,200 BSB Bancorp, Inc..................... 734,400 15,500 CB Bancshares, Inc................... 542,500 31,000 Commercial Bankshares, Inc........... 589,000 30,000 CU Bancorp........................... 457,500 6,000 First Essex Bancorp, Inc............. 105,000 2,500 First Midwest Bancorp, Inc........... 79,219 10,000 First Oak Brook Bancshares Inc. Cl. A.................................. 317,500 16,000 First Palm Beach Bancorp, Inc........ 544,000 4,761 First State Bancorp.................. 80,342 3,334 FNB Corp............................. 107,521 9,747 Hudson Chartered Bancorp, Inc........ 275,353 25,675 Independent Bancshares, Inc.......... 340,193 13,962 Interchange Financial Services Corp............................... 326,362 2,500 One Valley Bancorp of West Virginia, Inc................................ 105,000 8,160 State Financial Services Corp........ 173,400 5,000 Susquehanna Bancshares, Inc.......... 196,250 5,696,540 BUILDING, CONSTRUCTION & FURNISHINGS-- 3.0% 28,000 La-Z-Boy Chair Co.................... 1,008,000 30,100 Shelby Williams Industries, Inc...... 410,112 1,418,112 BUSINESS EQUIPMENT & SERVICES-- 2.0% 21,400 American Business Products, Inc...... 486,850 15,000 American List Corp................... 451,875 938,725 CHEMICAL & AGRICULTURAL PRODUCTS-- 0.5% 10,500 Stepan Co............................ 258,563 CONSUMER PRODUCTS & SERVICES-- 4.3% 50,000 General Housewares Corp.............. 493,750 52,000 Oneida, Ltd.......................... 1,387,750 6,000 Polaris Industries, Inc.............. 195,375 2,076,875 COMMON STOCKS-- CONTINUED DIVERSIFIED COMPANIES-- 2.4% 32,000 Mathews International Corp........... $ 1,168,000 ELECTRICAL EQUIPMENT & SERVICES-- 2.1% 27,600 Badger Meter, Inc.................... 817,650 8,100 Research, Inc........................ 73,913 10,000 Tech/OPS Sevcon, Inc................. 131,250 1,022,813 ENERGY-- 4.1% 2,800 Berry Petroleum Co. Cl. A............ 53,200 24,000 Enron Global Power & Pipelines LLC... 799,500 22,300 Penn Virginia Corp................... 1,092,700 1,945,400 FINANCE & INSURANCE-- 5.9% 800 American Heritage Life Investment Corp............................... 26,400 26,000 Arthur J. Gallagher & Co............. 981,500 2,350 Banc One Corp........................ 113,828 50,000 Horizon Financial Corp............... 812,500 5,000 LaSalle Re Holdings, Ltd............. 147,500 8,000 South Alabama Bancorp Inc............ 130,000 16,000 Trenwick Group, Inc.................. 600,000 2,811,728 FOOD & BEVERAGE PRODUCTS-- 4.0% 44,000 Bridgford Foods Corp................. 390,500 20,000 Lance, Inc........................... 382,500 16,000 Luby's Cafeterias, Inc............... 319,000 76,100 Piccadilly Cafeterias, Inc........... 808,563 1,900,563 HEALTHCARE PRODUCTS & SERVICES-- 1.3% 12,000 Kinetic Concepts, Inc................ 216,000 15,000 West Co., Inc. (The)................. 429,375 645,375 INDUSTRIAL SPECIALTY PRODUCTS & SERVICES-- 4.7% 32,000 BW/IP, Inc........................... 650,000 6,400 Met-Pro Corp......................... 96,800 1,000 Petrolite Corp....................... 61,875 25,200 Raven Industries, Inc................ 607,950 40,400 Spartech Corp........................ 525,200 8,000 Woodward Governor Co................. 289,000 2,230,825
(CONTINUED) 14 EVERGREEN SMALL CAP EQUITY INCOME FUND (Evergreen Cone Tree Maple Leaf logo appears here) SCHEDULE OF INVESTMENTS (CONTINUED) June 30, 1997 (UNAUDITED)
SHARES VALUE COMMON STOCKS-- CONTINUED MACHINERY-- DIVERSIFIED-- 1.2% 29,800 Gorman Rupp Co................... $536,400 1,000 Tennant Co....................... 33,250 569,650 METAL PRODUCTS & SERVICES-- 1.8% 126,000 UNR Industries, Inc.............. 866,250 REAL ESTATE-- 4.4% 891 Bradley Real Estate, Inc. REIT... 17,152 2,000 CBL & Associates Properties, Inc. REIT........................... 48,000 36,000 Columbus Realty Trust REIT....... 819,000 36,000 Evans Withycombe Residential, Inc. REIT...................... 747,000 1,000 Kranzco Realty Trust REIT........ 17,000 2,500 Sovran Self Storage, Inc. REIT... 73,125 4,000 Summit Properties, Inc. REIT..... 82,500 20,000 Sunstone Hotel Investors, Inc. REIT........................... 290,000 2,093,777 RETAILING & WHOLESALE-- 0.4% 2,800 Russ Berrie & Co., Inc........... 61,425 7,500 Schultz Sav O Stores Inc......... 133,125 194,550 TELECOMMUNICATION SERVICES & EQUIPMENT-- 2.4% 28,000 BGS Systems, Inc................. 770,000 37,500 Computer Language Research, Inc............................ 365,625 1,135,625 THRIFT INSTITUTIONS-- 3.1% 4,000 First Financial Holdings, Inc.... 128,000 38,000 Jacksonville Bancorp, Inc........ 572,375 12,000 Maryland Federal Bancorp, Inc.... 522,000 7,000 People's Savings Financial Corp........................... 263,375 1,485,750 UTILITIES-- ELECTRIC-- 4.1% 33,000 Madison Gas & Electric Co........ 676,500 26,000 Northwestern Public Service Co............................. 559,000 14,000 Otter Tail Power Co.............. 462,000 12,000 TNP Enterprises, Inc............. 278,250 1,975,750 COMMON STOCKS-- CONTINUED UTILITIES-- GAS-- 5.9% 29,100 Chesapeake Utilities Corp........ $ 494,700 30,000 Connecticut Energy Corp.......... 727,500 12,700 Delta Natural Gas Co., Inc....... 225,425 4,000 Energen Corp..................... 134,750 7,400 NUI Corp......................... 166,037 Public Service Company of North 26,000 Carolina, Inc.................. 498,875 26,000 Southwest Gas Corp............... 516,750 2,000 United Cities Gas Co............. 47,000 TOTAL COMMON STOCKS (COST $30,020,465)............. 2,811,037 34,358,158 CONVERTIBLE PREFERRED-- 6.7% ENERGY-- 1.2% 16,000 Callon Petroleum Co. 8.50%, Series A................ 588,000 FINANCE & INSURANCE-- 1.4% 12,000 American Heritage Life Investment Corp. 8.50%, PRIDES.................. 660,000 INDUSTRIAL SPECIALTY PRODUCTS & SERVICES-- 2.2% 63,000 Worthington Industries, Inc. 7.25%, DECS.................... 1,055,250 PUBLISHING, BROADCASTING & ENTERTAINMENT-- 0.3% 4,000 AMC Entertainment, Inc. $1.75.......................... 127,000 TRANSPORTATION-- 1.6% 15,000 Hvide Capital Trust 6.50%, 144A........................... 787,500 TOTAL CONVERTIBLE PREFERRED (COST $3,010,466).............. 3,217,750 PRINCIPAL AMOUNT CONVERTIBLE DEBENTURES-- 12.7% BANKS-- 1.6% $ 700,000 First State Bancorp. 7.50%, 4/30/17................. 768,250 BUILDING, CONSTRUCTION & FURNISHINGS-- 0.6% 270,000 Toll Corp. 4.75%, 1/15/04................. 272,700 BUSINESS EQUIPMENT & SERVICES-- 0.4% 200,000 Personnel Group Of America, Inc. 5.75%, 7/1/04, 144A............ 213,000
(CONTINUED) 15 EVERGREEN SMALL CAP EQUITY INCOME FUND (Evergreen Cone Tree Maple Leaf logo appears here) SCHEDULE OF INVESTMENTS (CONTINUED) June 30, 1997 (UNAUDITED)
PRINCIPAL AMOUNT VALUE CONVERTIBLE DEBENTURES-- CONTINUED ELECTRICAL EQUIPMENT & SERVICES-- 2.4% $1,050,000 Photronics, Inc. 6.00%, 6/1/04.................. $ 1,165,500 ENERGY-- 1.9% 250,000 Key Energy Group, Inc. 7.50%, 7/1/03, 144A............ 452,500 425,000 Offshore Logistics, Inc. 6.00%, 12/15/03, 144A.......... 456,875 909,375 HEALTHCARE PRODUCTS & SERVICES-- 1.2% 140,000 Maxxim Medical, Inc. 6.75%, 3/1/03.................. 150,150 480,000 Meridian Diagnostics, Inc. 7.00%, 9/1/06.................. 412,800 562,950 INDUSTRIAL SPECIALTY PRODUCTS & SERVICES-- 1.8% 610,000 Robbins & Myers, Inc. 6.50%, 9/1/03.................. 866,200 RETAILING & WHOLESALE-- 2.8% 500,000 Central Garden & Pet Co. 6.00%, 11/15/03, 144A.......... 550,000 750,000 Proffitt's, Inc. 4.75%, 11/1/03................. 806,250 1,356,250 TOTAL CONVERTIBLE DEBENTURES (COST $5,488,238).............. 6,114,225 SHORT-TERM INVESTMENTS-- 7.6% GOVERNMENT AGENCY NOTES & BONDS-- 7.6% $ 300,000 Federal Farm Credit Bank 5.42%, 7/1/97.................. $ 300,000 Federal Home Loan Bank 100,000 5.43%, 7/2/97.................... 99,985 100,000 5.41%, 7/11/97................... 99,850 1,350,000 5.40%, 7/18/97................... 1,346,557 Federal Home Loan Mortgage 540,000 5.40%, 7/9/97.................... 539,352 110,000 5.43%, 7/11/97................... 109,834 500,000 5.42%, 7/14/97................... 499,022 Federal National Mortgage Association 100,000 5.40%, 7/14/97................... 99,805 550,000 5.43%, 7/30/97................... 547,594 TOTAL SHORT-TERM INVESTMENTS (COST $3,641,999).............. 3,641,999
TOTAL INVESTMENTS-- (COST $42,161,168)......... 98.8% 47,332,132 OTHER ASSETS AND LIABILITIES-- NET.......... 1.2 556,383 NET ASSETS................... 100.0% $47,888,515
DECS-- Dividend Enhanced Convertible Stock. PRIDES-- Preferred Redeemable Increased Dividend Equity Securities. 144A-- Rule 144A securities are restricted as to resale to qualified institutional investors. REIT-- Real Estate Investment Trust SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 16 EVERGREEN UTILITY FUND (Evergreen Cone Tree Light Bulb logo appears here) SCHEDULE OF INVESTMENTS June 30, 1997 (UNAUDITED)
SHARES VALUE COMMON STOCKS-- 81.2% AUTOMOTIVE EQUIPMENT & MANUFACTURING-- 2.9% 100,000 Ford Motor Co..................... $ 3,775,000 OIL FIELD SERVICES-- 1.9% 250,000 Chesapeake Energy Corporation..... 2,453,125 TELECOMMUNICATION SERVICES & EQUIPMENT-- 2.8% 50,000 Nokia Corp........................ 3,687,500 UTILITIES-- ELECTRIC-- 48.1% 82,000 American Electric Power Co., Inc........................ 3,444,000 100,000 Central Hudson Gas & Electric Corp................... 3,443,750 100,000 CINergy Corp...................... 3,481,250 88,774 Duke Power Co..................... 4,255,604 150,000 Enova Corp........................ 3,609,375 80,000 FPL Group, Inc.................... 3,685,000 100,000 GPU, Inc.......................... 3,587,500 170,000 Houston Industries., Inc.......... 3,644,375 100,000 Illinova Corp..................... 2,200,000 125,000 Long Island Lighting Co........... 2,875,000 48,000 NIPSCO Industries, Inc............ 1,983,000 100,000 PacifiCorp........................ 2,200,000 100,000 Pinnacle West Capital Corp........ 3,006,250 110,000 Portland General Corp............. 4,365,625 150,000 PP&L Resources, Inc............... 2,990,625 100,000 Public Service Co. of Colorado.... 4,150,000 100,000 Public Service Enterprise Group, Inc...................... 2,500,000 100,000 Texas Utilities Co................ 3,443,750 120,000 UtiliCorp United, Inc............. 3,495,000 62,360,104 UTILITIES-- GAS-- 4.8% 105,000 NICOR Inc......................... 3,766,875 50,000 Northwest Natural Gas Co.......... 1,309,375 30,000 Peoples Energy Corp............... 1,123,125 6,199,375 UTILITIES-- TELEPHONE-- 20.7% 100,000 ALLTEL Corp....................... 3,343,750 40,000 Ameritech Corp.................... 2,717,500 70,000 BellSouth Corp.................... 3,246,250 80,000 GTE Corp.......................... 3,510,000 100,000 MCI Communications Corp........... 3,828,125 COMMON STOCKS-- CONTINUED UTILITIES-- TELEPHONE-- CONTINUED 50,000 SBC Communications, Inc........... $ 3,093,750 60,000 Sprint Corp....................... 3,157,500 105,000 U.S. West Communications Group, Inc............................. 3,957,187 26,854,062 TOTAL COMMON STOCKS (COST $90,775,011).............. 105,329,166 CONVERTIBLE PREFERRED-- 14.2% ENERGY-- 2.2% 50,000 Unocal Corp. 6.25% 144A...................... 2,887,500 UTILITIES-- ELECTRIC-- 2.3% 50,000 AES Trust I Series A 5.375% TECONS.......... 2,943,750 UTILITIES-- GAS-- 2.9% 70,000 MCN Financing III 8% PRIDES....................... 3,806,250 UTILITIES-- TELEPHONE-- 6.8% 125,000 AirTouch Communications, Inc. 6.0%, Series B.................. 3,562,500 24,000 Compania de Inversiones en Telecomunicaciones SA PRIDES* (exchangeable for ADS's of Telefonica de Argentina SA) 144A............................ 1,626,000 100,000 Sprint Corp. (SNG) 8.25%, DECS..................... 3,612,500 8,801,000 TOTAL CONVERTIBLE PREFERRED (COST $17,017,190).............. 18,438,500
PRINCIPAL AMOUNT REPURCHASE AGREEMENT-- 1.3% $1,635,331 Donaldson, Lufkin & Jenrette Securities Corp., 5.9%, 7/1/97 (a)............................. 1,635,331
TOTAL INVESTMENTS-- (COST $109,427,532)...... 96.7% 125,402,997 OTHER ASSETS AND LIABILITIES-- NET........ 3.3 4,257,940 NET ASSETS................. 100.0% $129,660,937
(a) Repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices on June 30, 1997. PRIDES-- Preferred Redeemable Increased Dividend Equity Securities. PRIDES*-- Provisionally Redeemable Income Debt Exchangeable for Stock. TECONS-- Term Convertible Shares. 144A-- Rule 144A securities are restricted as to resale to qualified institutional investors. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 17 EVERGREEN VALUE FUND (Evergreen Cone Tree logo appears here) SCHEDULE OF INVESTMENTS June 30, 1997 (UNAUDITED)
SHARES VALUE COMMON STOCKS-- 90.9% AUTOMOTIVE EQUIPMENT & MANUFACTURING-- 1.4% 626,500 Ford Motor Co................. $ 23,650,375 BANKS-- 15.4% 400,000 BankBoston Corp............... 28,825,000 380,000 Bankers Trust Corp............ 33,060,000 800,000 Central Fidelity Banks, Inc......................... 28,400,000 95,000 Chase Manhattan Corp.......... 9,220,937 75,000 Citicorp...................... 9,042,188 675,000 CoreStates Financial Corp..... 36,281,250 450,000 First Chicago NBD Corp........ 27,225,000 367,500 First Security Corp........... 10,037,344 425,000 First Tennessee National Corp........................ 20,400,000 405,000 NationsBank Corp.............. 26,122,500 230,000 SouthTrust Corp............... 9,516,250 240,000 Summit Bancorp................ 12,030,000 200,000 Union Planters Corp........... 10,375,000 260,535,469 BUSINESS EQUIPMENT & SERVICES-- 1.9% 841,610 * Cabletron Systems, Inc........ 23,828,083 100,000 International Business Machines Corp............... 9,018,750 32,846,833 CHEMICAL & AGRICULTURAL PRODUCTS-- 1.9% 366,200 Dow Chemical Co............... 31,905,175 COMMUNICATION SYSTEMS & SERVICES-- 0.9% 225,500 * Cisco Systems, Inc............ 15,136,688 CONSUMER PRODUCTS & SERVICES-- 2.3% 888,300 Philip Morris Companies, Inc......................... 39,418,313 DIVERSIFIED COMPANIES-- 9.0% 300,000 Fluor Corp.................... 16,556,250 808,200 Fortune Brands, Inc........... 30,155,962 1,000,000 Frontier Corp................. 19,937,500 673,200 General Electric Co........... 44,010,450 170,000 Loews Corp.................... 17,021,250 560,000 Tenneco, Inc.................. 25,305,000 152,986,412 COMMON STOCKS-- CONTINUED ELECTRICAL EQUIPMENT & SERVICES-- 7.3% 1,365,000 * ADT Ltd....................... $ 45,045,000 350,000 * Applied Materials, Inc........ 24,784,375 850,000 CINergy Corp.................. 29,590,625 463,900 Varian Associates, Inc........ 25,166,575 124,586,575 ENERGY-- 9.9% 1,027,500 Cabot Corp.................... 29,155,312 247,600 Mobil Corp.................... 17,301,050 637,500 Sonat, Inc.................... 32,671,875 154,800 Texaco, Inc................... 16,834,500 1,350,000 Tosco Corp.................... 40,415,625 700,000 Union Pacific Resource Group, Inc......................... 17,412,500 360,000 Unocal Corp................... 13,972,500 167,763,362 FINANCE & INSURANCE-- 2.7% 300,000 Hartford Financial Services Group, Inc. (The)........... 24,825,000 525,000 Travelers Property Casualty Corp. Cl. A................. 20,934,375 45,759,375 FOOD & BEVERAGE PRODUCTS-- 6.1% 740,750 American Stores Co............ 36,574,531 808,200 Gallaher Group Plc............ 14,901,188 644,400 General Mills, Inc............ 41,966,550 1,602,475 * Shoney's Inc.................. 9,514,695 102,956,964 HEALTHCARE PRODUCTS & SERVICES-- 7.9% 555,800 Bristol-Myers Squibb Co....... 45,019,800 790,300 Pharmacia & Upjohn, Inc....... 27,462,925 1,349,999 * Tenet Healthcare Corp......... 39,909,345 1,100,800 * Value Health, Inc............. 22,291,200 134,683,270
(CONTINUED) 18 EVERGREEN VALUE FUND (Evergreen Cone Tree logo appears here) SCHEDULE OF INVESTMENTS (CONTINUED) June 30, 1997 (UNAUDITED)
SHARES VALUE COMMON STOCKS-- CONTINUED INDUSTRIAL SPECIALTY PRODUCTS & SERVICES-- 1.0% 229,600 Aluminum Co. of America....... $ 17,306,100 INFORMATION SERVICES & TECHNOLOGY-- 1.0% 120,400 Intel Corp.................... 17,074,225 MANUFACTURING-- DISTRIBUTING-- 1.2% 500,000 * Teradyne, Inc................. 19,625,000 OIL-- 6.8% 342,900 Ashland Inc................... 15,901,988 200,000 Enron Corp.................... 8,162,500 370,000 Kerr-McGee Corp............... 23,448,750 965,000 Ultramar Diamond Shamrock Corp........................ 31,483,125 841,350 Williams Companies., Inc. (The)....................... 36,809,062 115,805,425 TELECOMMUNICATION SERVICES & EQUIPMENT-- 2.8% 646,600 Nokia Corp.................... 47,686,750 TRANSPORTATION-- 3.3% 262,100 Burlington Northern Santa Fe.. 23,556,238 322,900 Norfolk Southern Corp......... 32,532,175 56,088,413 UTILITIES-- 8.1% 500,000 CMS Energy Corp............... 17,625,000 700,000 GPU, Inc...................... 25,112,500 683,200 GTE Corp...................... 29,975,400 637,800 Houston Industries., Inc...... 13,672,837 1,200,000 Illinova Corp................. 26,400,000 671,800 NICOR Inc..................... 24,100,825 136,886,562 TOTAL COMMON STOCKS (COST $1,186,928,103)....... 1,542,701,286 CONVERTIBLE PREFERRED-- 1.7% ENERGY-- 0.8% 227,664 Unocal Corp. 6.25%, 144A................. $ 13,147,596 MANUFACTURING-- DISTRIBUTING-- 0.9% 98,200 Case Corp. 4.50%, Series A, 144A....... 15,491,050 TOTAL CONVERTIBLE PREFERRED (COST $24,199,251).......... 28,638,646
PRINCIPAL AMOUNT REPURCHASE AGREEMENT-- 7.9% $133,290,921 Donaldson, Lufkin & Jenrette Securities Corp., 5.9%, 7/1/97 (a)............ 133,290,921
TOTAL INVESTMENTS (COST $1,344,041,623)...... 100.5% 1,704,630,853 OTHER ASSETS AND LIABILITIES-- NET.... (0.5) (7,696,174) NET ASSETS............. 100.0% $1,696,934,679
* Non-income producing securities. (a) Repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market prices at June 30, 1997. 144A-- Rule 144A securities are restricted as to resale to qualified institutional investors. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 19 EVERGREEN KEYSTONE (Cone logo appears here) STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) June 30, 1997
(G&I Tree logo) (Maple leaf logo) (Light Bulb Tree logo) (Tree logo) GROWTH & SMALL CAP INCOME EQUITY INCOME UTILITY VALUE FUND FUND FUND FUND ASSETS Investments at value (identified cost-- $915,375,011, $42,161,168, $109,427,532, and $1,344,041,623, respectively)....................................... $1,216,662,541 $47,332,132 $125,402,997 $1,704,630,853 Cash.................................................. 324,393 49,941 3,455 0 Receivable for investments sold....................... 0 0 3,955,235 0 Receivable for Fund shares sold....................... 7,435,848 954,850 2,624 1,661,469 Dividends and interest receivable..................... 680,348 164,475 526,937 3,138,459 Unamortized organization expense...................... 0 8,688 0 0 Prepaid expenses...................................... 60,289 27,429 40,833 34,423 Total assets...................................... 1,225,163,419 48,537,515 129,932,081 1,709,465,204 LIABILITIES Payable for investments purchased..................... 3,483,168 556,348 0 0 Payable for Fund shares repurchased................... 1,699,965 889 164,667 11,227,141 Advisory & administration fees payable................ 916,903 55,199 37,075 748,106 Distribution fee payable.............................. 340,468 4,427 33,063 184,945 Due to affiliates..................................... 53,109 6,177 11,691 90,024 Accrued expenses and other liabilities................ 226,795 25,960 24,648 280,309 Total liabilities................................. 6,720,408 649,000 271,144 12,530,525 NET ASSETS.............................................. $1,218,443,011 $47,888,515 $129,660,937 $1,696,934,679 NET ASSETS REPRESENTED BY Paid-in capital....................................... $ 900,152,200 $41,895,691 $103,679,513 $1,278,697,944 Undistributed net investment income (accumulated distributions in excess of net investment income)... (494,577) 14,548 205,350 (28,950) Accumulated undistributed net realized gains on investments......................................... 17,497,858 807,312 9,800,609 57,676,455 Net unrealized appreciation on investments............ 301,287,530 5,170,964 15,975,465 360,589,230 Total net assets.................................. $1,218,443,011 $47,888,515 $129,660,937 $1,696,934,679 NET ASSETS CONSISTS OF Class A............................................... $ 148,641,486 $ 2,747,400 $ 91,466,785 $ 365,388,180 Class B............................................... 481,092,038 5,659,128 36,298,940 254,154,156 Class C............................................... 20,816,905 1,850,765 366,678 2,306,053 Class Y............................................... 567,892,582 37,631,222 1,528,534 1,075,086,290 Total net assets $1,218,443,011 $47,888,515 $129,660,937 $1,696,934,679 SHARES OUTSTANDING Class A............................................... 5,762,046 184,219 8,139,650 15,878,306 Class B............................................... 18,749,737 380,353 3,230,704 11,042,063 Class C............................................... 811,224 124,479 32,635 100,266 Class Y............................................... 21,993,331 2,520,558 136,044 46,725,299 NET ASSET VALUE PER SHARE Class A............................................... $ 25.80 $ 14.91 $ 11.24 $ 23.01 Class A-- Offering price (based on maximum initial sales charge of 4.75%).................................... $ 27.09 $ 15.65 $ 11.80 $ 24.16 Class B............................................... $ 25.66 $ 14.88 $ 11.24 $ 23.02 Class C............................................... $ 25.66 $ 14.87 $ 11.24 $ 23.00 Class Y............................................... $ 25.82 $ 14.93 $ 11.24 $ 23.01
SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 20 EVERGREEN KEYSTONE (Cone logo appears here) STATEMENTS OF OPERATIONS (UNAUDITED) June 30, 1997
(G&I Tree logo) (Maple leaf logo) (Light Bulb Tree logo) (Tree logo) GROWTH & SMALL CAP INCOME EQUITY INCOME UTILITY VALUE FUND FUND FUND FUND INVESTMENT INCOME Interest................................................... $ 5,435,349 $ 171,441 $ 241,621 $ 2,744,008 Dividends (net foreign withholding taxes of $2,188, $0, $13,865, and $66,594, respectively)...................... 4,458,640 407,213 2,948,263 17,960,916 TOTAL INCOME................................................. 9,893,989 578,654 3,189,884 20,704,924 EXPENSES Management fee............................................. 4,720,408 134,545 327,301 4,005,187 Distribution Plan expenses................................. 1,954,883 13,750 254,008 1,550,846 Transfer agent fees........................................ 717,809 17,131 89,297 518,987 Administration fees........................................ 0 0 24,649 300,719 Trustees fees.............................................. 4,702 2,525 1,346 17,628 Custodian fees............................................. 123,477 22,786 59,067 212,594 Professional fees.......................................... 16,448 13,407 13,727 28,729 Printing................................................... 203,647 4,715 42,412 157,451 Registration fees.......................................... 112,949 33,372 34,255 57,300 Amortization of organization expenses...................... 0 2,841 13,764 0 Other...................................................... 15,574 4,070 55,667 24,622 Total expenses......................................... 7,869,897 249,142 915,493 6,874,063 Less: Indirectly paid expenses............................. (2,717) (1,089) (8,049) (1,012) Fee waiver and/or expense reimbursement from Investment Adviser 0 (53,123) (125,650) 0 Net expenses........................................... 7,867,180 194,930 781,794 6,873,051 NET INVESTMENT INCOME...................................... 2,026,809 383,724 2,408,090 13,831,873 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain on investments........................... 17,542,203 767,649 9,823,916 58,756,371 Net change in unrealized appreciation on investments....... 123,944,285 3,665,972 (2,001,991) 122,323,851 Net realized and unrealized gain on investments............ 141,486,488 4,433,621 7,821,925 181,080,222 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $143,513,297 $ 4,817,345 $10,230,015 $194,912,095
SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 21 EVERGREEN KEYSTONE (Cone logo appears here) STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) June 30, 1997
(G&I Tree logo) (Maple leaf logo) (Light Bulb Tree logo) (Tree logo) GROWTH & SMALL CAP INCOME EQUITY INCOME UTILITY VALUE FUND FUND FUND FUND OPERATIONS Net investment income................................. $ 2,026,809 $ 383,724 $ 2,408,090 $ 13,831,873 Net realized gain on investments...................... 17,542,203 767,649 9,823,916 58,756,371 Net change in unrealized appreciation on investments.. 123,944,285 3,665,972 (2,001,991) 122,323,851 Net increase in net assets resulting from operations........................................ 143,513,297 4,817,345 10,230,015 194,912,095 DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income: Class A............................................. (288,051) (12,419) (1,723,113) (2,937,615) Class B............................................. 0 (19,871) (540,103) (1,096,350) Class C............................................. 0 (7,739) (5,334) (9,112) Class Y............................................. (1,738,758) (332,480) (34,907) (10,081,209) In excess of net investment income: Class A............................................. (69,425) 0 0 (6,021) Class B............................................. 0 0 0 (2,247) Class C............................................. 0 0 0 (19) Class Y............................................. (419,065) 0 0 (20,663) From net realized gain on investments: Class A............................................. 0 0 0 0 Class B............................................. 0 0 0 0 Class C............................................. 0 0 0 0 Class Y............................................. 0 0 0 0 In excess of net realized gain in investments: Class A............................................. 0 0 0 0 Class B............................................. 0 0 0 0 Class C............................................. 0 0 0 0 Class Y............................................. 0 0 0 0 Total distributions to shareholders................. (2,515,299) (372,509) (2,303,457) (14,153,236) CAPITAL SHARE TRANSACTIONS Proceeds from shares sold: Class A............................................. 59,141,605 2,264,755 311,194 16,853,741 Class B............................................. 199,540,153 4,649,918 1,093,985 43,576,272 Class C............................................. 10,056,102 1,697,907 3,626 938,841 Class Y............................................. 117,720,982 25,830,781 166,182 120,908,248 Payment for shares redeemed: Class A............................................. (12,202,690) (36,455) (12,132,503) (20,989,217) Class B............................................. (15,431,784) (63,548) (5,976,780) (13,179,109) Class C............................................. (1,047,360) (69,243) (60,342) (314,200) Class Y............................................. (63,775,238) (711,202) (755,193) (165,526,691) Net asset value of shares issued in reinvestment of distributions: Class A............................................. 352,217 12,209 1,419,684 2,835,381 Class B............................................. 0 19,444 492,000 1,086,555 Class C............................................. 0 7,415 4,963 9,201 Class Y............................................. 1,639,664 165,502 18,010 6,740,167 Net increase (decrease) in net assets resulting from capital share transactions........................ 295,993,651 33,767,483 (15,415,174) (7,060,811) Total increase (decrease) in net assets........... 436,991,649 38,212,319 (7,488,616) 173,698,048 NET ASSETS Beginning of period................................... 781,451,362 9,676,196 137,149,553 1,523,236,631 END OF PERIOD......................................... $1,218,443,011 $47,888,515 $129,660,937 $1,696,934,679 Undistributed (accumulated distributions in excess of) net investment income..................................... $ (494,577) $ 14,548 $ 205,350 $ (28,950)
SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 22 EVERGREEN KEYSTONE (Cone logo appears here) STATEMENTS OF CHANGES IN NET ASSETS Year Ended December 31, 1996
(G&I Tree logo) (Maple leaf logo) (Light Bulb Tree logo) (Tree logo) GROWTH & SMALL CAP INCOME EQUITY INCOME UTILITY VALUE FUND FUND FUND FUND OPERATIONS Net investment income................................... $ 3,525,699 $ 207,498 $ 5,338,113 $ 25,598,949 Net realized gain on investments........................ 11,660,346 329,191 3,459,558 216,135,176 Net change in unrealized appreciation (depreciation) on investments........................................ 102,653,116 833,605 (3,509,310) 11,014,356 Net increase in net assets resulting from operations.. 117,839,161 1,370,294 5,288,361 252,748,481 DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income: Class A............................................... (346,965) (7,618) (3,887,411) (5,758,586) Class B............................................... (65,442) (9,798) (1,173,301) (1,939,188) Class C............................................... (2,714) (710) (11,835) (14,165) Class Y............................................... (3,093,315) (186,039) (229,804) (19,538,457) In excess of net investment income: Class A............................................... (602) 0 0 0 Class B............................................... (114) 0 0 0 Class C............................................... (5) 0 0 0 Class Y............................................... (5,366) 0 0 0 From net realized gain on investment: Class A............................................... (1,255,570) (12,475) (2,465,668) (45,832,278) Class B............................................... (3,652,416) (27,933) (979,858) (27,532,324) Class C............................................... (141,822) (1,936) (10,055) (204,292) Class Y............................................... (6,629,223) (279,606) (53,192) (141,841,285) In excess of net realized gain in investment: Class A............................................... (4,767) 0 (16,378) (229,771) Class B............................................... (13,868) 0 (6,509) (138,028) Class C............................................... (538) 0 (67) (1,024) Class Y............................................... (25,172) 0 (353) (711,093) Total distributions to shareholders................... (15,237,899) (526,115) (8,834,431) (243,740,491) CAPITAL SHARE TRANSACTIONS Proceeds from shares sold: Class A............................................... 76,959,622 285,774 2,626,118 23,895,251 Class B............................................... 185,314,202 341,494 8,401,385 47,442,303 Class C............................................... 7,294,757 48,265 274,673 832,827 Class Y............................................... 200,509,060 3,628,792 1,120,499 324,801,783 Payment for shares redeemed: Class A............................................... (21,729,967) (213,193) (16,984,094) (39,736,035) Class B............................................... (13,411,376) (11,697) (6,652,890) (18,943,891) Class C............................................... (597,615) (22,125) (135,909) (377,207) Class Y............................................... (135,786,868) (912,038) (6,607,014) (316,060,052) Net asset value of shares issued in reinvestment of distributions: Class A............................................... 1,546,893 19,575 5,051,093 49,562,452 Class B............................................... 3,613,927 36,358 1,935,353 28,693,188 Class C............................................... 115,108 1,697 20,723 215,421 Class Y............................................... 7,729,161 316,899 74,971 108,890,530 Shares issued in acquistion of FFB Lexicon Capital Appreciation Fund Class Y............................................... 159,432,723 0 0 0 Shares issued in acquistion of FFB Lexicon Selct Value Fund Class Y............................................... 0 0 0 95,883,824 Shares issued in acquistion of FFB Lexicon Equity Fund Class Y............................................... 0 0 0 14,077,973 Net increase (decrease) in net assets resulting from capital share transactions.......................... 470,989,627 3,519,801 (10,875,092) 319,178,367 Total increase (decrease) in net assets............. 573,590,889 4,363,980 (14,421,162) 328,186,357 NET ASSETS Beginning of period..................................... 207,860,473 5,312,216 151,570,715 1,195,050,274 END OF PERIOD........................................... $781,451,362 $ 9,676,196 $137,149,553 $1,523,236,631 Undistributed (accumulated distributions in excess of) net investment income....................................... $ (6,087) $ 3,333 $ 100,717 $ 292,413
SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 23 EVERGREEN KEYSTONE (Cone logo appears here) COMBINED NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION AND NATURE OF ORGANIZATIONS The Evergreen Keystone Growth and Income Funds (the "Funds") consist of Evergreen Growth and Income Fund ("Growth and Income"), Evergreen Small Cap Equity Income Fund ("Small Cap"), Evergreen Utility Fund ("Utility") and Evergreen Value Fund ("Value") each of which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as diversified, open-end investment companies. Growth and Income is a Massachusetts business trust organized in 1986. Small Cap is a separate series of the Evergreen American Retirement Trust, a Massachusetts business trust organized in 1987. Utility and Value are separate series of the Evergreen Investment Trust (formerly the First Union Funds) a Massachusetts business trust organized in 1984. Evergreen Asset Management Corp. ("Evergreen Asset"), a wholly owned subsidiary of First Union National Bank of North Carolina, is the Investment Adviser for Growth & Income and Small Cap. First Union is the Investment Adviser for Utility and Value. Each Fund offers Class A, Class B, Class C and Class Y shares. Class A shares are offered at a public offering price which includes a maximum sales charge of 4.75% payable at the time of purchase. Class B shares are sold subject to a contingent deferred sales charge that is payable upon redemption and decreases depending on how long the shares have been held. Class C shares are sold subject to a contingent deferred sales charge payable on shares redeemed within one year after the month of purchase. Class Y shares are available without a front-end sales charge or contingent deferred sales charge only to investment advisory clients of First Union Corp. and its affiliates, certain institutional investors or Class Y shareholders of record of certain other funds managed by First Union Corp. and its affiliates as of December 30, 1994. 2. ACQUISITION INFORMATION Effective January 1, 1996, First Fidelity Bancorporation ("First Fidelity") merged with First Union National Carolina ("First Union"). Effective on the close of business on January 19, 1996, Growth and Income acquired substantially all of the net assets of FFB Lexicon Capital Appreciation Fund, an open-end investment company registered under the Act valued at $159,432,723. The net assets were exchanged through a non-taxable exchange for 8,631,861 Class Y shares of Growth and Income valued at $18.47 per share. The acquired net assets consisted primarily of portfolio securities with unrealized appreciation of $31,537,903. The aggregate net assets of Growth and Income upon the acquisition were $375,936,243. Effective on the close of business on January 19, 1996, Value acquired substantially all the net assets of FFB Lexicon Select Value Fund and FFB Equity Fund, open-end investment companies registered under the Act valued at $95,883,824 and $14,077,973, respectively. The net assets of these Funds were exchanged through a non-taxable exchange for 4,720,676 and 692,924 Class Y shares of Value at $20.31 per share. The acquired net assets consisted primarily of portfolio securities with unrealized appreciation of $12,858,729 and $2,218,691, respectively. The aggregate net assets of Value upon acquisitions were $1,310,431,335. 3. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles, which require management to make estimates and assumptions that affect amounts reported herein. Although actual results could differ from these estimates, any such differences are expected to be immaterial to the net assets of the Funds. A. VALUATION OF SECURITIES Investments in securities traded on a national securities exchange or included on the NASDAQ National Market System ("NMS") are valued at the last reported sales price. Securities traded on an exchange or NMS for which there has been no sale and other securities traded in the over-the-counter market are valued at the mean between the last reported bid and asked price. Debt securities (other than short term securities) are valued at prices provided by an independent pricing service. Securities for which market quotations are not available from an independent pricing service (including restricted securities) are valued at fair value as determined in good faith according to procedures approved by the Board of Trustees. Short-term investments with remaining maturities of 60 days or less are carried at amortized cost, which approximates market value. B. REPURCHASE AGREEMENTS Each Fund may invest in repurchase agreements. Securities pledged as collateral for repurchase agreements are held by the custodian on the Fund's behalf. Each Fund monitors the adequacy of the collateral daily and will require the seller to provide additional collateral in the event the market value of the securities pledged falls below the carrying value of the repurchase agreement, including accrued interest. Each Fund will only enter into repurchase agreements with banks and other financial institutions which are deemed by the investment adviser to be creditworthy pursuant to guidelines established by the Board of Trustees. 24 EVERGREEN KEYSTONE (Cone logo appears here) COMBINED NOTES TO FINANCIAL STATEMENTS (CONTINUED) C. FOREIGN CURRENCY The books and records of the Funds are maintained in United States (U.S.) dollars. Foreign currency amounts are translated into U.S. dollars as follows: market value of investments, assets and liabilities at the daily rate of exchange; purchases and sales of investments, income and expenses at the rate of exchange prevailing on the respective dates of such transactions. Net unrealized foreign exchange gain (loss) resulting from changes in foreign currency exchange rates is a component of net unrealized appreciation (depreciation) on investments and foreign currency related transactions. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions and foreign currency related transactions. Foreign currency gains and losses from the difference between the amounts of interest and dividends recorded on the books of the Fund and the amount actually received are included in dividend and interest income. The portion of foreign currency gains and losses related to fluctuations in exchange rates between the initial purchase trade date and subsequent sale trade date is included in realized gain (loss) on investments. D. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS The Funds may enter into forward foreign currency exchange contracts ("forward contracts") to settle portfolio purchases and sales of securities denominated in a foreign currency and to hedge certain foreign currency assets or liabilities. Forward contracts are recorded at the forward rate and marked-to-market daily. Realized gains and losses arising from such transactions are included in net realized gain (loss) on foreign currency related transactions. The Fund bears the risk of an unfavorable change in the foreign currency exchange rate underlying the forward contract and is subject to the credit risk that the other party will not fulfill their obligations under the contract. Forward contracts involve elements of market risk in excess of the amount reflected in the statement of assets and liabilities. E. SECURITY TRANSACTIONS AND INVESTMENT INCOME Securities transactions are accounted for no later than one business day after the trade date. Realized gains and losses are computed on the identified cost basis. Interest income is recorded on the accrual basis and includes amortization of discounts and accretion of premiums. Dividend income is recorded on the ex-dividend date. F. FEDERAL INCOME TAXES The Funds have qualified and intend to qualify in the future as regulated investment companies under the Internal Revenue Code of 1986, as amended (the "Code"). Thus, the Funds are relieved of any federal income tax liability by distributing all of their net taxable investment income and net taxable capital gains, if any, to their shareholders. The Funds also intend to avoid excise tax liability by making the required distributions under the Code. Accordingly, no provision for federal income taxes is required. To the extent that realized capital gains can be offset by capital loss carryforwards, it is each Fund's policy not to distribute such gains. G. DISTRIBUTIONS Distributions from net investment income for the Funds are declared and paid quarterly. Distributions from net realized capital gains, if any, are paid at least annually. Distributions to shareholders are recorded at the close of business on the ex-dividend date. Income and capital gains distributions to shareholders are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. The tax treatment of such distributions for the calendar year will be reported to shareholders prior to February 1, 1998. H. CLASS DESCRIPTIONS & ALLOCATIONS Income, expenses (other than class specific expenses) and realized and unrealized gains and losses are prorated among the classes based on the relative net assets of each class. Currently, class specific expenses are limited to expenses incurred under the Distribution Plans for each class. I. ORGANIZATION EXPENSES Organization expenses are amortized to operations over a five-year period on a straight-line basis. In the event any of the initial shares of the Funds are redeemed by First Union Corp. during the five-year amortization period, redemption proceeds will be reduced by any unamortized organization expenses in the same proportion as the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of the redemption. 2. CAPITAL SHARE TRANSACTIONS The Funds have an unlimited number of shares of beneficial interest authorized. The shares are divided into classes which are designated Class A, Class B, Class C and Class Y shares. The classes have identical voting, dividend, liquidation and other rights, except that Class A, Class B and Class C shares bear distribution expenses and have exclusive voting rights with respect to their distribution plans. Transactions in shares of the Funds were as follows: 25 EVERGREEN KEYSTONE (Cone logo appears here) COMBINED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
GROWTH AND INCOME SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, 1996 SHARES AMOUNT SHARES AMOUNT CLASS A Shares sold.......................................................... 2,500,896 $ 59,141,605 3,719,917 $ 76,959,622 Shares issued on reinvestment of distributions....................... 14,527 352,217 69,271 1,546,893 Shares redeemed...................................................... (517,994) (12,202,690) (1,044,500) (21,729,967) Net increase......................................................... 1,997,429 $ 47,291,132 2,744,688 $ 56,776,548 CLASS B Shares sold.......................................................... 8,490,566 $199,540,153 8,914,571 $185,314,202 Shares issued on reinvestment of distributions....................... 0 0 160,953 3,613,927 Shares redeemed...................................................... (656,203) (15,431,784) (646,461) (13,411,376) Net increase......................................................... 7,834,363 $184,108,369 8,429,063 $175,516,753 CLASS C Shares sold.......................................................... 427,163 $ 10,056,102 348,918 $ 7,294,757 Shares issued on reinvestment of distributions....................... -- -- 5,130 115,108 Shares redeemed...................................................... (44,428) (1,047,360) (29,065) (597,615) Net increase......................................................... 382,735 $ 9,008,742 324,983 $ 6,812,250 CLASS Y Shares sold.......................................................... 5,028,131 $117,720,982 9,899,164 $200,509,060 Shares issued in acquisition of FFB Lexicon Capital Appreciation Fund............................................................... -- -- 8,631,861 159,432,723 Shares issued on reinvestment of distributions....................... 67,503 1,639,664 349,251 7,729,161 Shares redeemed...................................................... (2,710,344) (63,775,238) (6,820,349) (135,786,868) Net increase......................................................... 2,385,290 55,585,408 12,059,927 231,884,076 Total net increase resulting from Fund share transactions............ 12,599,817 $295,993,651 23,558,661 $470,989,627
SMALL CAP
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, 1996 SHARES AMOUNT SHARES AMOUNT CLASS A Shares sold.................................................................. 160,273 $ 2,264,755 23,318 $ 285,774 Shares issued on reinvestment of distributions............................... 854 12,209 1,564 19,575 Shares redeemed.............................................................. (2,565) (36,455) (17,926) (213,193) Net increase................................................................. 158,562 $ 2,240,509 6,956 $ 92,156 CLASS B Shares sold.................................................................. 330,749 $ 4,649,918 27,963 $ 341,494 Shares issued on reinvestment of distributions............................... 1,365 19,444 2,883 36,358 Shares redeemed.............................................................. (4,618) (63,548) (966) (11,697) Net increase................................................................. 327,496 $ 4,605,814 29,880 $ 366,155 CLASS C Shares sold.................................................................. 124,589 $ 1,697,907 3,956 $ 48,265 Shares issued on reinvestment of distributions............................... 521 7,415 136 1,697 Shares redeemed.............................................................. (4,929) (69,243) (1,838) (22,125) Net increase................................................................. 120,181 $ 1,636,079 2,254 $ 27,837 CLASS Y Shares sold.................................................................. 1,905,879 $25,830,781 289,906 $3,628,792 Shares issued on reinvestment of distributions............................... 11,719 165,502 25,358 316,899 Shares redeemed.............................................................. (51,916) (711,202) (75,598) (912,038) Net increase................................................................. 1,865,682 25,285,081 239,666 3,033,653 Total net increase resulting from Fund share transactions.................... 2,471,921 $33,767,483 278,756 $3,519,801
26 EVERGREEN KEYSTONE (Cone logo appears here) COMBINED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
UTILITY SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, 1996 SHARES AMOUNT SHARES AMOUNT CLASS A Shares sold............................................................ 34,278 $ 311,194 246,512 $ 2,626,118 Shares issued on reinvestment of distributions......................... 125,700 1,419 684 478,287 5,051,093 Shares redeemed........................................................ (1,123,877) (12,132,503) (1,609,448) (16,984,094) Net decrease........................................................... (963,899) $(10,401,625) (884,649) $ (9,306,883) CLASS B Shares sold............................................................ 102,182 $ 1,093,985 787,800 $ 8,401,385 Shares issued on reinvestment of distributions......................... 44,548 492,000 183,056 1,935,353 Shares redeemed........................................................ (556,061) (5,976,780) (630,402) (6,652,890) Net increase (decrease)................................................ (409,331) $ (4,390,795) 340,454 $ 3,683,848 CLASS C Shares sold............................................................ 344 $ 3,626 25,812 $ 274,673 Shares issued on reinvestment of distributions......................... 453 4,963 1,963 20,723 Shares redeemed........................................................ (5,569) (60,342) (13,100) (135,909) Net increase (decrease)................................................ (4,772) $ (51,753) 14,675 $ 159,487 CLASS Y Shares sold............................................................ 15,690 $ 166,182 106,165 $ 1,120,499 Shares issued on reinvestment of distributions......................... 1,384 18,010 7,089 74,971 Shares redeemed........................................................ (70,043) (755,193) (644,560) (6,607,014) Net decrease........................................................... (52,969) (571,001) (531,306) (5,411,544) Total net decrease resulting from Fund share transactions.............. (1,430,971) $(15,415,174) (1,060,826) $(10,875,092)
VALUE
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, 1996 SHARES AMOUNT SHARES AMOUNT CLASS A Shares sold......................................................... 777,037 $ 16,853,741 1,109,850 $ 23,895,251 Shares issued on reinvestment of distributions...................... 127,037 2,835,381 2,371,895 49,562,452 Shares redeemed..................................................... (969,713) (20,989,217) (1,836,296) (39,736,035) Net increase (decrease)............................................. (65,639) $ (1,300,095) 1,645,449 $ 33,721,668 CLASS B Shares sold......................................................... 2,008,070 $ 43,576,272 2,197,426 $ 47,442,303 Shares issued on reinvestment of distributions...................... 48,526 1,086 555 1,374,236 28,693,188 Shares redeemed..................................................... (609,175) (13,179,109) (873,740) (18,943,891) Net increase........................................................ 1,447,421 $ 31,483,718 2,697,922 $ 57,191,600 CLASS C Shares sold......................................................... 43,467 $ 938,841 38,761 $ 832,827 Shares issued on reinvestment of distributions...................... 410 9,201 10,328 215,421 Shares redeemed..................................................... (14,552) (314,200) (17,818) (377,207) Net increase........................................................ 29,325 $ 633,842 31,271 $ 671,041 CLASS Y Shares sold......................................................... 5,578,856 $ 120,908,248 15,195,754 $ 324,801,783 Shares issued in acquisition of FFB Lexicon Select Value Fund....... -- -- 4,720,676 95,883,824 Shares issued in acquisition of FFB Equity Fund..................... -- -- 692,924 14,077,973 Shares issued on reinvestment of distributions...................... 302,051 6,740,167 5,208,388 108,890,530 Shares redeemed..................................................... (7,591,137) (165,526,691) (14,584,293) (316,060,052) Net increase (decrease)............................................. (1,710,230) (37,878,276) 11,233,449 227,594,058 Total net increase (decrease) resulting from Fund share transactions...................................................... (299,123) $ (7,060,811) 15,608,091 $ 319,178,367
27 EVERGREEN KEYSTONE (Cone logo appears here) COMBINED NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. SECURITIES TRANSACTIONS Cost of purchases and proceeds from sales of investment securities (excluding short-term securities) were as follows for the six months ended June 30, 1997:
COST OF PROCEEDS PURCHASES FROM SALES Growth and Income....................................................... $200,992,027 $ 33,318,259 Small Cap............................................................... 32,832,723 2,954,790 Utility................................................................. 54,865,860 75,307,264 Value................................................................... 87,747,842 159,700,282
4. DISTRIBUTION PLANS Each Fund bears some of the costs of selling its shares under Distribution Plans adopted for its Class A, B and C shares pursuant to Rule 12b-1 under the 1940 Act. Under the Distribution Plans, each Fund pays its principal underwriter amounts which are calculated and paid monthly. The Fund's have entered into distribution agreements with Evergreen Keystone Distributor, Inc. ("EKD"), a wholly-owned subsidiary of The BISYS Group Inc. ("BISYS"). The Class A Distribution Plan of the Funds provides for expenditures, which are currently limited to 0.25% annually of the average daily net assets of the Class A shares, to pay expenses related to the distribution of Class A shares. Pursuant to each Fund's Class B and Class C Distribution Plans, each Fund pays a distribution fee which may not exceed 1.00% annually of the average daily net assets of Class B and Class C shares, respectively. Of that amount, 0.75% is used to pay distribution expenses and 0.25% is used to pay service fees. EKD has entered into a Shareholder Services Agreement with First Union Brokerage Services ("FUBS"), an affiliate of First Union, whereby it will compensate FUBS for certain services provided to shareholders and /or maintenance of shareholder accounts relating to each of the Class B and Class C Shares of Growth and Income and Small Cap. During the six months ended June 30, 1997, amounts paid to EKD pursuant to each Fund's Class A, Class B and Class C Distribution Plans were as follows:
CLASS A CLASS B CLASS C Growth and Income........................... $141,839 $1,740,111 $72,933 Small Cap................................... 1,013 9,018 3,719 Utility..................................... 181,270 72,032 706 Value....................................... 429,529 1,112,429 8,888
EKD has advised the Funds that it has retained the following amounts from front-end sales charges resulting from the sales of Class A shares during the six months ended June 30, 1997 of $51,131, $1,272, $4,448 and $45,617 for Growth and Income, Small Cap, Utility and Value, respectively. Contingent deferred sales charges paid by redeeming shareholders are paid to EKD. 5. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND OTHER AFFILIATED TRANSACTIONS INVESTMENT ADVISORY AGREEMENTS-- First Union is entitled to an annual fee of .50 of 1% of Utility's and Value's average daily net assets pursuant to each Fund's investment advisory agreement. First Union voluntarily waived $125,650 of its fee for Utility for the six months ended June 30, 1997. Pursuant to an agreement with Growth and Income's and Small Cap's investment adviser, Evergreen Asset Management Corp. ("Evergreen Asset"), a wholly owned subsidiary of First Union, Evergreen Asset is entitled to an annual fee based on each of Growth and Income's and Small Cap's average daily net assets, respectively, in accordance with the following schedule: First $750 million 1.00% Next $250 million 0.90% Over $1 billion 0.80%
Evergreen Asset has agreed to reimburse Small Cap to the extent that the Fund's operating expenses (including the investment advisory fee and amortization of organizational expenses but excluding interest, taxes, brokerage commissions, 12b-1 distribution and shareholder services fees and extraordinary expenses) exceed 1.50% of its average daily net assets. Evergreen Asset waived advisory fee aggregating $53,123 for the six months ended June 30, 1997 pursuant to this agreement. First Union and Evergreen Asset can modify or terminate voluntary waivers at any time. Lieber & Company, an affiliate of First Union, is the investment sub-adviser to Growth and Income and Small Cap and also provides brokerage services with respect to substantially all security transactions of these Funds effected on the New York or American Stock Exchanges. For 28 EVERGREEN KEYSTONE (Cone logo appears here) COMBINED NOTES TO FINANCIAL STATEMENTS (CONTINUED) transactions executed during the six months ended June 30, 1997, Growth and Income and Small Cap incurred brokerage commissions of $323,608 and $43,097, respectively, with Lieber & Company. Lieber & Company is reimbursed by Evergreen Asset, at no additional expense to the Funds, for its cost of providing investment advisory services. ADMINISTRATION AGREEMENT-- Evergreen Keystone Investment Services, Inc. (EKIS), a subsidiary of First Union, furnishes Growth and Income and Small Cap with administrative services as part of the investment advisory agreements between the Funds and Evergreen Asset, and accordingly, these Funds do not pay a separate administration fee. BISYS is each of the Fund's sub-administrator. As sub-administrator, BISYS provides the officers of the Funds. For Growth and Income and Small Cap, BISYS' fee was paid by Evergreen Asset and was not a fund expense. EKIS is also Utility's and Value's administrator and BISYS is sub-administrator. EKIS's and BISYS' fees for Utility and Value were based on the average daily net assets of all of the funds administered by Evergreen Asset for which either First Union, or its investment advisory subsidiaries, is also the investment adviser. These fees were calculated at the following annual rates: ADMINISTRATION FEE AVERAGE DAILY NET ASSETS 0.050% on the first $7 billion 0.035% on the next $3 billion 0.030% on the next $5 billion 0.020% on the next $10 billion 0.015% on the next $5 billion 0.010% in excess of $30 billion SUB-ADMINISTRATION FEE AVERAGE DAILY NET ASSETS 0.0100% on the first $7 billion 0.0075% on the next $3 billion 0.0050% on the next $15 billion 0.0040% in excess of $25 billion
At June 30, 1997, assets for which Evergreen Asset was the administrator for which either First Union, or its investment advisory subsidiaries was investment adviser totaled approximately $30.0 billion. OTHER SERVICES WITH AFFILIATES-- Evergreen Keystone Service Company ("EKSC"), a wholly-owned subsidiary of Keystone Investment Management Company, a subsidiary of First Union, serves as the transfer and dividend disbursing agent for the Funds. Effective May 5, 1997, EKSC began providing transfer and dividend disbursing agent services for the Funds that were formerly provided by State Street Bank and Trust Company ("State Street"). For certain accounts in Growth and Income and Value, First Union had been sub-contracted by EKSC and State Street to maintain shareholder sub-account records, take fund purchase and redemption orders and answer inquiries. For each account, First Union earned a fee which in aggregate totaled $22,515 and $144,367 for Growth and Income and Value during the six months ended June 30, 1997. Officers of the Funds and affiliated Trustees receive no compensation directly from the Funds. 6. EXPENSE OFFSET ARRANGEMENT The Funds have entered into an expense offset arrangement with their custodian. The assets deposited with the custodian under this expense offset arrangement could have been invested in income-producing assets. 7. DEFERRED TRUSTEES' FEES Each Trustee may defer any or all compensation related to performance of duties as a Trustee. Each Trustee's deferred balances are allocated to deferral accounts which are included in the accrued expenses for the Fund. The investment performance of the deferral accounts are based on the investment performance of certain Evergreen Keystone Funds. Any gains earned or losses incurred in the deferral accounts are reported in the Fund's Trustees's fees and expenses. Trustees will be paid either in one lump sum or in quarterly installments for up to ten years at their election, not earlier than either the year in which the Trustee ceases to be a member of the Board of Trustees or January 1, 2000. As of June 30, 1997, the value of the Trustees deferral accounts were $10,565, $6,041, $5,566, and $54,678 for Growth and Income, Small Cap, Utility and Value. 8. FINANCING AGREEMENT A financing agreement is in place with all of the Evergreen Funds and State Street, Societe Generale and ABN Amro Bank N.V. (collectively, the "Banks"). Under this agreement, the Banks provide an unsecured credit facility in the aggregate amount of $225 million ($112.5 million committed and $112.5 million uncommitted) allocated evenly between the Banks. Borrowings under this facility bear interest at 0.75% per annum above the Federal Funds rate. A commitment fee of 0.10% per annum will be incurred on the unused portion of the committed facility which would be allocated to all participating funds. State Street acts as agent for the Banks, and as agent is entitled to a fee of $15,000 which is allocated to all of the Evergreen Funds. During the six months ended June 30, 1997, the Funds had no borrowings under this agreement. 29 -----END PRIVACY-ENHANCED MESSAGE-----