-----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, HkeQBbTwRu064G2s5klcE4rF+aLI/erUlPVu35cmPMIss7KvnAmytfQiQkJKjqJA ZWF9l69wtt7kXp27bkkOjA== 0000950156-97-000419.txt : 19970501 0000950156-97-000419.hdr.sgml : 19970501 ACCESSION NUMBER: 0000950156-97-000419 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19970430 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EV TRADITIONAL WORLDWIDE HEALTH SCIENCES FUND INC CENTRAL INDEX KEY: 0000760110 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 521378236 STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04196 FILM NUMBER: 97590819 BUSINESS ADDRESS: STREET 1: 24 FEDERAL STREET STREET 2: SUITE 4100 CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: (617) 482-8260 MAIL ADDRESS: STREET 1: 5847 SAN FELIPE STREET 2: SUITE 4100 CITY: HOUSTON STATE: TX ZIP: 77057 FORMER COMPANY: FORMER CONFORMED NAME: MEDICAL RESEARCH INVESTMENT FUND INC DATE OF NAME CHANGE: 19920703 N-30D 1 EV TRADITIONAL WORLDWIDE HEALTH - SA SPONSOR AND MANAGER OF EV TRADITIONAL WORLDWIDE HEALTH SCIENCES FUND, INC. & ADMINISTRATOR OF WORLDWIDE HEALTH SCIENCES PORTFOLIO Eaton Vance Management 24 Federal Street Boston, MA 02110 ADVISER OF WORLDWIDE HEALTH SCIENCES PORTFOLIO Mehta and Isaly Asset Management, Inc. 41 Madison Avenue New York, NY 10010-2202 PRINCIPAL UNDERWRITER Eaton Vance Distributors, Inc. 24 Federal Street Boston, MA 02110 (617) 482-8260 CUSTODIAN Investors Bank & Trust Company 89 South Street P.O. Box 1537 Boston, MA 02205-1537 TRANSFER AGENT First Data Investors Services Group Attn: Eaton Vance Funds P.O. Box 5123 Westborough, MA 01581-5123 (800) 262-1122 This report must be preceded or accompanied by a current prospectus which contains more complete information on the Fund, including its distribution plan, sales charges and expenses. Please read the prospectus carefully before you invest or send money. EV TRADITIONAL WORLDWIDE HEALTH SCIENCES FUND, INC. 24 FEDERAL STREET BOSTON, MA 02110 T-HSSRC-4/97 EV TRADITIONAL [Logo] WORLDWIDE HEALTH SCIENCES FUND, INC. [Graphic Omitted] SEMI-ANNUAL SHAREHOLDER REPORT FEBRUARY 28, 1997 To Shareholders EV Traditional Worldwide Health Sciences Fund had a total return of 12.0% for the six months ended February 28, 1997. That return was the result of a rise in net asset value per share from $13.54 on August 31, 1996 to $14.49 on February 28, 1997, and the reinvestment of $0.61 per share in capital gains distributions. It does not include the Fund's maximum 4.75% sales charge. By comparison, the S&P 500 - an unmanaged index of U.S. common stocks - and the Morgan Stanley Capital International Europe, Australasia, and Far East Index - an unmanaged index of common stocks traded in key global markets - had returns of 22.6% and 2.4%, respectively, during the same period.* In evaluating performance, shareholders should keep in mind the Fund's global focus. As of February 28, more than half of the Fund's assets were invested in companies domiciled outside the U.S. THE PAST YEAR BROUGHT NEW PROGRESS IN DRUG RESEARCH, NEW HOPE FOR PATIENTS, AND NEW OPPORTUNITIES FOR BIOTECH INVESTORS ... The drug and biotech industries enjoyed another strong year in 1996, with impressive sales momentum and major advances in research. Sales in several existing drug categories continued to surge. For example, sales of antidepressants like Prozac and Zoloft have jumped 66% in the past two years alone. Meanwhile, on the research front, a new generation of cancer-fighting drugs - known as metalloproteinase inhibitors - has shown promise in halting the spread of the disease. And in the area of genetic research, the Swiss powerhouse Novartis continued to make progress in the field of gene therapy. This promising area treats disease by modifying genetic material within cells. The Federal Trade Commission has estimated that the market for gene therapy - a technology still in its infancy - could reach $45 billion by the year 2010. THE NEW HEALTH CARE FRONTIER EXTENDS ACROSS THE GLOBE ... Biotechnology and pharmaceuticals are increasingly global industries, with medical engineering breakthroughs as likely to come from Europe or Japan as from the U.S. Therefore, investment in biotech requires especially rigorous research. One of the major strengths of Worldwide Health Sciences Portfolio is the depth of research and experience provided by Mehta and Isaly Asset Management, Inc. the Portfolio's investment adviser. In the pages that follow, portfolio manager Samuel D. Isaly reviews the recent six month period and shares his outlook and insights on the Portfolio and the biotech industry. - -------------------------- Sincerely, /s/ James B. Hawkes, [Photo of James B. Hawkes] James B. Hawkes, President - -------------------------- April 10, 1997 * It is not possible to invest directly in the Indices. Management Discussion: Samuel D. Isaly An interview with Samuel D. Isaly, a Partner of Mehta and Isaly Asset Management, Inc., and Portfolio Manager of Worldwide Health Sciences Portfolio. Q: SAM, HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT FOR PHARMACEUTICAL AND BIOTECH STOCKS DURING THE PAST SIX MONTHS? A: From a stock market standpoint, the climate was somewhat challenging. U.S. large capitalization stocks were far and away the best performers, while specialty biotech companies and European and Far East issues lagged. The outperformance of large cap U.S. issues reflected, in part, the buoyant market conditions that existed throughout the year in the U.S., as well as investors' bias for large cap stocks. Given that the Portfolio is just 44% invested in North America and 60% invested in smaller, specialty companies, it was clearly an uphill climb. But the Fund's six-month performance more than met our expectations. Fundamentally, the industry dynamics remained fairly upbeat. Spurred by new introductions and improving market penetration, worldwide pharmaceutical sales rose 8% in 1996. Meanwhile, in the biotech sector, it now appears that the number of profitable companies will expand to thirteen in 1997 from just six in 1996. That's another encouraging sign. Q: DID YOU MAKE SIGNIFICANT CHANGES TO THE PORTFOLIO? A: We've stayed with a consistent investment strategy. That is, we've maintained a long-term outlook, continued to draw from a worldwide investment universe, and continued our efforts to mitigate risk by investing in a wide range of products and market segments. However, within those broad parameters, we did make a few changes. Among our North ------------------------- America large caps, we eliminated Biogen, which we felt had reached levels where it was fully valued. Our Genetics Institute position was eliminated in a takeover. We [Photo of Samuel D. Isaly] replaced those two issues with Pharmacia & Upjohn and Genzyme. Among U.S. specialty companies, we added to, or established new -------------------------- positions in, Agouron Pharmaceuticals, Cambridge Neuroscience, Immunex, Neurocrine BioScience, Premier Research and Tularik. These companies continue to show promise. Meanwhile, we sold our position in Cytel, which has failed to make the scientific progress we had hoped to see. ------------------------------------------------------------------------ Fund shares are not guaranteed by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested. ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- BIOTECH RESEARCH: SMALL COMPANIES AND NEW TECHNOLOGIES ARE IMPROVING INVESTORS' PROSPECTS FOR GROWTH. - -------------------------------------------------------------------------------- IN AN AREA ONCE DOMINATED BY MAJOR DRUG COMPANIES, BIOTECH COMPANIES TODAY GENERATE [Graphic Omitted] THE LION'S SHARE OF NEW DRUG RESEARCH. COMPANIES RESEARCH PROGRAMS % OF --------- ----------------- ----- TOTAL ----- Major drug companies: 20 1,100 32.2% Biotech companies: 390 2,320 67.8% Source: Mehta and Isaly Asset Management, Inc.; Data as of 8/96. - -------------------------------------------------------------------------------- Q: WHAT ABOUT YOUR OVERSEAS INVESTMENTS? A: There were no major changes among the European pharmaceutical companies. Swiss drug giants Sandoz and Ciba-Geigy merged to form a company renamed Novartis. Elsewhere, the Portfolio participated in a public offering for Cambridge Antibody Technologies. The offering was very well received by investors and the stock was an excellent performer for the Fund. Meanwhile, in the Far East, the Portfolio added Fujisawa Pharmaceutical and Amrad. Q: CAN WE LOOK AT SOME OF THE PORTFOLIO'S LARGEST HOLDINGS? A: Yes. The Portfolio's largest holding at February 28 was Swiss Serum Institute. Headquartered in Berne, Swiss Serum produces specialty vaccines and sera. Although it has a relatively small market capitalization of $200 million, the company maintains a powerful research and technology base that should enable it to become a more significant competitor in the vaccine segment of the market. The company's most promising project is a vaccine to treat hepatitus A. The vaccine is part of the company's leading product line, commonly referred to as traveller vaccines. In a global economy where trans-continental and cross-border travel is increasingly common, there is a growing need for vaccines to protect travellers from developed countries who may be exposed to exotic forms of disease in less-developed ones. Swiss Serum is a leading developer of these products. Q: WHAT ABOUT ONE OF THE PORTFOLIO'S U.S. HOLDINGS? A: Genzyme is a large, U.S.-based biotech company that we added during the period. The company is in the process of introducing a product based on a body chemical - hyaluronic acid - that can be used to treat complications that often accompany abdominal surgery. Marketed under the name Seprafilm, the product will reduce post-surgery adhesions, or scarring, of abdominal tissues. Left untreated, adhesions can produce a range of serious ailments, including chronic pain, bowel obstruction, and female infertility. The market for the product is important, because adhesions occur in more than 90% of patients following abdominal surgery. The stock was also attractive on a price-to-cash flow basis, a rarity among biotech companies. Coupled with the company's strong product introductions and impressive sales growth, its attractive valuation made the stock very compelling. Q: GENETIC RESEARCH HAS BEEN MUCH IN THE NEWS IN RECENT MONTHS. ARE YOU DRAWN TO ANY COMPANIES BECAUSE OF THE NATURE OF THEIR RESEARCH? A: Absolutely. The fascinating aspect about biotech research is that it's so difficult to predict the outcome. I tend to view research in terms of "targets" and "arrows." One form of research may shed light on the nature of disease or genetics, thereby enhancing the "target." On the other hand, other disciplines may provide a widening array of treatments, or "arrows." While those two approaches may appear greatly divergent, they work hand-in-glove in terms of developing strong drug candidates. - ------------------------------------ WORLDWIDE HEALTH SCIENCES PORTFOLIO: ASSET ALLOCATION* North America Specialty 34.3% Far East Majors 16.5% Europe Majors 16.1% North America Majors 12.1% Europe Specialty 11.9% Far East Specialty 9.1% *Based on total market value as of February 28, 1997 Because the Portfolio is actively managed, geographical and sector allocations are subject to change. - ------------------------------------ Q: COULD YOU GIVE SOME EXAMPLES? A: Certainly. Two of the Portfolio's core holdings are Millennium Pharmaceuticals and Pharmacopeia, Inc. In my view, their respective approaches to research are central to the discovery of new drugs and applications, and are good examples of our target-and-arrow concept. Millennium focuses on genomics. That involves the study of the genetic structure of humans and other animal species. By researching genetic make-up and the nature of disease, the company seeks to identify areas where disease can be targeted most effectively. Pharmacopeia, on the other hand, is a leader in combinatorial chemistry. This approach involves combining chemicals found to be effective in a relatively wide range of applications. The research can potentially identify a large field of drug candidates for an application, thereby improving the odds of hitting the target. - ---------------------------------------------- Ten Largest Holdings* - ---------------------------------------------- Novartis 6.40% Swiss Serum Institute 5.82 Ares-Serono 4.63 Altana 4.46 Centocor, Inc. 3.83 Verex Pharmaceuticals, Inc. 3.63 SangStat Medical Corp. 3.59 Eisai Co. Ltd. 3.29 Banju Pharmaceutical Co. 3.28 Fujisawa Pharmaceutical 3.28 *By total net assets, as of February 28, 1997. - ---------------------------------------------- Q: IN THE RECENT MARKET CORRECTION, PHARMACEUTICAL AND BIOTECH STOCKS DECLINED WITH THE REST OF THE MARKET. LOOKING AHEAD, WHAT IS YOUR OUTLOOK FOR THE DRUG GROUP? A: Given their strong performance of the past year, it's not surprising that drug stocks have participated in the market correction. However, from a longer-term view, the health and biotech sector has broadly outperformed the world stock markets in the past decade, according to Datastream's World Pharmaceuticals Index. In my view, the reasons for that outperformance are fairly clear. First, the companies are in an extended growth phase and have benefited from consolidation within the industry. Second, the industry is a major beneficiary of changing demographics, both in the U.S. and abroad, that will see increased demand for pharmaceuticals from aging populations. Finally, the pace of research breakthroughs is gaining momentum among biotech companies at the same time that regulators are being encouraged to expedite the approval process. Therefore, it's very likely we will see the number of profitable biotech companies jump dramatically in coming years. Naturally, from a performance standpoint, past trends don't guarantee future results. And frankly, the drug sector, like the rest of the market, may very well remain volatile in the near-term. But given the favorable industry fundamentals, I'm confident that the industry has an exciting future. In my view, an investment in this industry should reward patient, long-term shareholders. EV TRADITIONAL WORLDWIDE HEALTH SCIENCES FUND, INC. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES - ------------------------------------------------------------------------------ February 28, 1997 (Unaudited) - ------------------------------------------------------------------------------ ASSETS: Investment in Worldwide Health Sciences Portfolio, at value (Note 1A) (identified cost, $52,258,018) $67,011,110 Receivable for Fund shares sold 475,988 Receivable from the Administrator (Note 3) 94,962 ----------- Total assets $67,582,060 ----------- LIABILITIES: Payable for Fund shares redeemed $ 85,038 Payable to affiliate for Directors' fees 260 Accrued expenses 23,086 ----------- Total liabilities $ 108,384 ----------- NET ASSETS for 4,654,963 shares of beneficial interest putstanding $67,473,676 =========== SOURCES OF NET ASSETS: Paid-in capital $51,812,064 Accumulated net realized gain on investment and foreign currency transactions (computed on the basis of identified cost) 1,439,296 Accumulated net investment loss (530,776) Unrealized appreciation of investments and foreign currency from Portfolio (computed on basis of identified cost) 14,753,092 ----------- Total $67,473,676 =========== NET ASSET VALUE AND REDEMPTION PRICE PER SHARE ($67,473,676 / 4,654,963 shares of beneficial interest outstanding) $14.49 ====== COMPUTATION OF OFFERING PRICE: Offering price per share (100 / 95.25 of $14.49) $15.21 ====== On sales of $100,000 or more, the offering price is reduced. STATEMENT OF OPERATIONS - ------------------------------------------------------------------------------ For the Six Months Ended February 28, 1997 (Unaudited) - ------------------------------------------------------------------------------ INVESTMENT INCOME: Dividend income allocated from Portfolio (net of foreign taxes, $5,122) $ 49,052 Expenses allocated from Portfolio (352,505) ---------- Total investment loss $ (303,453) Expenses -- Management fee (Note 3) $ 71,484 Distribution fees (Note 5) 71,484 Transfer and dividend disbursing agent fees 58,075 Registration costs 24,743 Printing and postage 21,962 Legal and accounting services 4,863 Miscellaneous 69,674 ---------- Total expenses $ 322,285 Less preliminary allocation of expenses to the Administrator (Note 3) 94,962 ---------- Net expenses 227,323 ---------- Net investment loss $ (530,776) ---------- REALIZED AND UNREALIZED GAIN FROM PORTFOLIO: Net realized gain -- Investment transactions (identified cost basis) $1,472,459 Foreign currency transactions 21,885 ---------- Net realized gain on investment transactions $1,494,344 Change in unrealized appreciation (depreciation) -- Investment transactions $5,695,120 Foreign currency transactions 4,771 ---------- Net change in unrealized appreciation of investments 5,699,891 ---------- Net realized and unrealized gain on investments $7,194,235 ---------- Net increase in net assets from operations $6,663,459 ========== See notes to financial statements STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------ SIX MONTHS ENDED FEBRUARY 28, YEAR ENDED 1997 AUGUST 31, (UNAUDITED) 1996 ----------- ---------- INCREASE (DECREASE) IN NET ASSETS: From operations -- Net investment loss $ (530,776) $ (653,017) Net realized gain on investments 1,494,344 4,038,381 Change in unrealized appreciation (depreciation) 5,699,891 4,934,158 ------------ ----------- Net increase in net assets resulting from operations $ 6,663,459 $ 8,319,522 ------------ ----------- Distributions to shareholders -- From net realized gain $ (2,517,447) $(2,558,056) ------------ ----------- Total distributions to shareholders $ (2,517,447) $(2,558,056) ------------ ----------- Transactions in shares of beneficial interest (Note 4) -- Proceeds from sale of shares $ 21,957,275 $68,676,368 Net asset value of shares issued to shareholders in payment of distributions declared 2,229,637 2,491,303 Cost of shares redeemed (15,875,090) (39,602,995) ------------ ----------- Net increase in net assets from Fund share transactions $ 8,311,822 $31,564,676 ------------ ----------- Net increase in net assets $ 12,457,834 $37,326,142 NET ASSETS: At beginning of period 55,015,842 17,689,700 ------------ ----------- At end of period (including net investment loss of $530,776 and $653,017, respectively) $ 67,473,676 $55,015,842 ============ =========== FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------
SIX MONTHS ENDED FEBRUARY 28, YEAR ENDED AUGUST 31, 1997 ------------------------------------------------------- (UNAUDITED) 1996 1995 1994 1993 1992 --------- ---- ---- ---- ---- ---- NET ASSET VALUE -- beginning of period $ 13.540 $ 11.710 $ 9.150 $ 9.640 $ 8.970 $ 8.570 -------- --------- -------- -------- -------- -------- INCOME (LOSS) FROM OPERATIONS: Net investment loss $ (0.094) $ (0.230) $ (0.170) $ (0.160) $ (0.130) $ (0.130) Net realized and unrealized gain on investments 1.654 3.460 3.410 0.430 1.860 1.150 -------- --------- -------- -------- -------- -------- Total income from operations $ 1.560 $ 3.230 $ 3.240 $ 0.270 $ 1.730 $ 1.020 -------- --------- -------- -------- -------- -------- LESS DISTRIBUTIONS: From net realized gain on investments $ (0.610) $ 1.400 $ 0.680 $ 0.760 $ 1.060 $ 0.620 -------- --------- --------- -------- -------- --------- Total distributions $ (0.610) $ 1.400 $ 0.680 $ 0.760 $ 1.060 $ 0.620 -------- --------- -------- -------- -------- --------- NET ASSET VALUE -- end of period $ 14.490 $ 13.540 $ 11.710 $ 9.150 $ 9.640 $ 8.970 ======== ========= ======== ======== ======== ======== TOTAL RETURN(1) 12.02% 31.04% 38.13% 2.69% 21.37% 12.04% PORTFOLIO TURNOVER(4) -- 66% 45% 49% 77% 71% AVERAGE COMMISSION RATE (PER SHARE OF SECURITY)(5) -- $ 0.0864 -- -- -- -- RATIOS/SUPPLEMENTAL DATA*: Net assets at end of period (000's omitted) $ 67,474 $ 55,016 $ 17,690 $ 13,231 $ 10,223 $ 11,415 Ratio of net expenses to average net assets(2)(3) 2.06%+ 2.21% 2.44% 2.50% 2.50% 2.48% Ratio of net expenses to average net assets after custodian fee reduction(2) 2.00%+ -- -- -- -- -- Ratio of net investment loss to average net assets (1.83)%+ (1.81)% (1.80)% (1.65)% (1.53)% (1.45)% *The expenses related to the operation of the fund reflect an assumption of expenses by the investment advisor. Had such action not been taken, the ratios would have been as follows: RATIOS/SUPPLEMENTAL DATA: Expenses(2)(3) 2.42%+ -- -- 2.67% 2.87% 2.59% Expenses after custodian fee reduction(2) 2.36%+ -- -- -- -- -- Net investment loss (2.19)%+ -- -- (1.82)% (1.90)% (1.56)% Net investment loss per share $ (0.112) -- -- -- -- --
+ Annualized. (1) Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the record date. Total return is not computed on an annualized basis. (2) Includes the Fund's share of Worldwide Health Sciences Portfolio's allocated expenses subsequent to September 1, 1996. (3) The expense ratios have been adjusted to reflect a change in reporting requirements. The new reporting guidelines require the Fund, as well as its corresponding Portfolio, to increase its expense ratio by the effect of any expenses offset arrangements with its service providers. (4) Portfolio Turnover represents the rate of portfolio activity for the period while the Fund was making investments directly in securities. The portfolio turnover for the period since the Fund transferred substantially all of its investable assets to the Portfolio is shown in the Portfolio's financial statements which are included elsewhere in this report. (5) Average commission rate (per share of security) as required by amended disclosure requirements effective September 1, 1995. Average commission rate for the period since the Fund transferred substantially all of its investable assets to the Portfolio is shown in the Portfolio's financial statements which are included elsewhere in this report. ------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- (1) SIGNIFICANT ACCOUNTING POLICIES EV Traditional Worldwide Health Sciences Fund, Inc. (the Fund) is a diversified, open-end management investment company. The Fund invests all of its investable assets in interests in Worldwide Health Sciences Portfolio (the Portfolio), a New York Trust, having the same investment objective as the Fund. The value of the Fund's investment in the Portfolio reflects the Fund's proportionate interest in the net assets of the Portfolio (75.2% at February 28, 1997). The performance of the Fund is directly affected by the performance of the Portfolio. The financial statements of the Portfolio, including the portfolio of investments, are included elsewhere in this report and should be read in conjunction with the Fund's financial statements. The following is a summary of the significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles.. A. INVESTMENT VALUATIONS -- Valuation of securities by the Portfolio is discussed in Note 1A of the Portfolio's Notes to Financial Statements which are included elsewhere in this report. B. INCOME -- The Fund's net investment income consists of the Fund's pro rata share of the net investment income of the Portfolio, less all actual and accrued expenses of the Fund determined in accordance with generally accepted accounting principles. C. EXPENSE REDUCTION -- Investors Bank & Trust Company (IBT) serves as custodian to the Fund and the Portfolio. Pursuant to the respective custodian agreements, IBT receives a fee reduced by credits which are determined based on the average daily cash balances the Fund or the Portfolio maintains with IBT. All significant credit balances used to reduce the Fund's custodian fees are reported as a reduction of expenses on the statement of operations. D. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year all of its net investment income, if any, and any net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. E. USE OF ESTIMATES -- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. F. OTHER -- Investment transactions are accounted for on a trade date basis. G. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to February 28, 1997 and for the six month period then ended have not been audited by independent certified public accountants, but in the opinion of the Fund's management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the financial statements. - ------------------------------------------------------------------------------ (2) DISTRIBUTIONS TO SHAREHOLDERS It is the present policy of the Fund to make at least one distribution annually (normally in December) of all or substantially all of the investment income allocated to the Fund by the Portfolio, less the Fund's direct and allocated expenses and at least one distribution annually of all or substantially all of the net realized capital gain (reduced by any available capital loss carry forwards from prior years) allocated by the Portfolio to the Fund, if any. Shareholders may reinvest all distributions in shares of the Fund at the per share net asset value as of the close of business on the record date. The Fund distinguishes between distributions on a tax basis and a financial reporting basis. Generally accepted accounting principles require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Differences in the recognition or classification of income between the financial statements and tax earnings and profits which result in over distributions for financial statement purposes are classified as distributions in excess of net investment income or accumulated net realized gains. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. - ------------------------------------------------------------------------------ (3) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES The management fee is earned by Eaton Vance Management (EVM) as compensation for management and administration of the business affairs of the Fund. The fee is based on a percentage if average daily net assets. For the six months ended February 28, 1997, the fee was equivalent to 0.25% of the Fund's average net assets for such period and amounted to $71,484. EVM has agreed that through August 31, 1999, if the annual aggregate expenses of the Fund (excluding extraordinary expenses) exceed 2.00% of average daily net assets, then EVM will reduce its fees and take other actions to the extent required to reduce the Fund's expenses. For the six months ended February 28, 1997, EVM made a preliminary waiver of its administration fee in the amount of $71,484 and $23,478 of expenses related to the operation of the Fund were allocated, on a preliminary basis, to EVM. Except as to Directors of the Fund who are not members of EVM's organization, officers and Directors receive remuneration for their services to the Fund out of such management fee. Certain officers and Directors/Trustees of the Fund and the Portfolio are officers and directors/ trustees of the above organizations. In addition, administrative fees are paid by the Portfolio to EVM. See Note 2 of the Portfolio's Notes to Financial Statements which are included elsewhere in the report. - ------------------------------------------------------------------------------ (4) CAPITAL STOCK Capital stock has been adjusted to reflect a 100% stock dividend declared to shareholders of record at the opening of business on September 23, 1996. Transactions in capital stock were as follows: SIX MONTHS ENDED FEBRUARY 28, 1997 YEAR ENDED (UNAUDITED) AUGUST 31, 1996 ------------------- ----------------- Sales sold 1,570,041 5,439,762 Shares issued to shareholders in reinvestment of distributions 170,983 236,367 Shares redeemed (1,149,994) (3,123,278) ---------- ---------- Net increase 591,030 2,552,851 ========== ========== - ------------------------------------------------------------------------------ (5) DISTRIBUTION PLAN The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Plan provides that the Fund will pay a monthly distribution fee to the Principal Underwriter, Eaton Vance Distributors, Inc. (EVD), in an amount equal to 0.25% on an annual basis of the Fund's average daily net assets. EVD may pay up to the entire amount of the distribution fee to Authorized Firms for providing personal services to shareholders. For the six months ended February 28, 1997, the Fund paid or accrued $71,484 to or payable to EVD. Certain officers and Directors of the Fund are officers or directors of EVD. - ------------------------------------------------------------------------------ (6) INVESTMENT TRANSACTIONS At the close of business, August 30, 1996, the Fund transferred substantially all of its assets to the Worldwide Health Sciences Portfolio in exchange for an interest in the Portfolio. Increases and decreases in the Fund's investment in the Portfolio for the six months ended February 28, 1997 aggregated $23,466,978 and $16,558,782, respectively. ------------------------------- WORLDWIDE HEALTH SCIENCES PORTFOLIO PORTFOLIO OF INVESTMENTS FEBRUARY 28, 1997 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------ COMMON STOCKS AND WARRANTS - 95.26% - ------------------------------------------------------------------------------------------------------ MARKET VALUE PERCENTAGE OF SECURITY SHARES (NOTE 1-A) NET ASSETS - ------------------------------------------------------------------------------------------------------ MAJOR CAPITALIZATION - NORTH AMERICA - 11.52% Centocor, Inc. (a) 90,000 $ 3,408,750 3.83% Genzyme (a) 90,000 2,317,500 2.60 Pharmacia & Upjohn (a) 50,000 1,843,750 2.07 Warner-Lambert Co. 32,000 2,688,000 3.02 ----------- ------ 10,258,000 11.52 ----------- ------ SPECIALTY CAPITALIZATION - NORTH AMERICA - 32.63% Agouron Pharmaceuticals, Inc. (a) 30,000 2,640,000 2.96 Alexion Pharmaceuticals, Inc. (a) 150,000 1,706,250 1.92 Arris Pharmaceutical Corp. (a) 130,000 1,706,250 1.92 Aviron (a) 125,000 1,281,250 1.44 Cambridge Neuroscience, Inc. (a) 110,000 1,375,000 1.54 CytoTherapeutics, Inc. (a) 120,000 1,020,000 1.15 Immnunex Corp. (a) 25,000 706,250 0.79 Incyte Pharmaceuticals, Inc. (a) 30,000 1,590,000 1.78 Isis Pharmaceuticals, Inc. (a) 150,000 2,906,250 3.26 Millennium Pharmaceuticals (a) 92,500 1,549,375 1.74 Neurocrine BioScience (a) 100,000 1,150,000 1.29 Pharmacopeia, Inc. (a) 100,000 1,737,500 1.95 Premier Research Worldwide (a) 70,000 1,548,750 1.74 SangStat Medical Corp. (a) 100,000 3,200,000 3.59 Sequana Therapeutics, Inc. (a) 60,000 915,000 1.03 Tularik, Inc. (a) 80,000 800,000 0.90 Vertex Pharmaceuticals, Inc. (a) 70,000 3,237,500 3.63 ----------- ------ 29,069,375 32.63 ----------- ------ MAJOR CAPITALIZATION - EUROPE - 15.32% Altana 4,500 3,817,858 4.29 Ares-Serono 4,000 4,126,650 4.63 Novartis 5,000 5,701,003 6.40 ----------- ------ 13,645,511 15.32 ----------- ------ SPECIALTY CAPITALIZATION - EUROPE - 11.31% Cambridge Antibody Technology, Ltd. (a) (Note 5) 61,408 1,412,384 1.59 Cambridge Antibody Technology, Ltd. - Warrants (a) 3,100 31,000 0.03 Ciba Spec. Chemical - Rights (a) 5,000 316,806 0.35 Celltech (a) 225,000 2,382,851 2.68 Ethical Holdings ADR (a) 150,000 750,000 0.84 Swiss Serum Institute (a) 700 5,190,552 5.82 ----------- ------ 10,083,593 11.31 ----------- ------ MAJOR CAPITALIZATION - FAR EAST - 15.70% Banyu Pharmaceutical Co. 200,000 2,925,410 3.28 Eisai Co. Ltd. 156,000 2,930,064 3.29 Fujisawa Pharmaceutical 335,000 2,923,333 3.28 Sankyo Co. Ltd. 100,000 2,792,437 3.13 Takeda Chemical Industries 120,000 2,413,464 2.72 ----------- ------ 13,984,708 15.70 ----------- ------ SPECIALTY CAPITALIZATION - FAR EAST - 8.78% Amrad (a) 1,000,000 1,444,941 1.62 Biota Holdings Limited (a) 644,640 2,298,620 2.58 Biota Holdings Limited - Warrants (a) 78,738 190,231 0.21 Rohto Pharmaceutical 191,000 1,793,725 2.01 Teikoku Hormone Manufacturing 160,000 2,087,679 2.36 ----------- ------ 7,815,196 8.78 ----------- ------ TOTAL INVESTMENTS (identified cost, $69,134,232) 84,856,383 95.26 OTHER ASSETS, LESS LIABILITIES 4,221,797 4.74 ----------- ------ NET ASSETS $89,078,180 100.00% =========== ====== (a) Non-income producing security.
See notes to financial statements ------------------------------- FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES - ------------------------------------------------------------------------------------------------ February 28, 1997 (Unaudited) - ------------------------------------------------------------------------------------------------ ASSETS: Investments, at value (Note 1A) (identified cost basis, $69,134,232) $84,856,383 Cash 5,936,387 Foreign currency, at value (identified cost, $654,434) 650,638 Dividends receivable 12,160 Deferred organization expenses 11,973 ----------- Total assets $91,467,541 LIABILITIES: Payable for investments purchased $2,377,080 Payable for open forward foreign currency contracts (Note 1H) 10,422 Payable to affiliate for Trustees' fees 1,190 Accrued expenses 669 ---------- Total liabilities 2,389,361 ----------- NET ASSETS applicable to investors' interest in Portfolio $89,078,180 =========== SOURCES OF NET ASSETS: Net proceeds from capital contributions and withdrawals $73,350,237 Net unrealized appreciation of investments and foreign currency (computed on the basis of identified cost) 15,727,943 ----------- Total $89,078,180 ===========
See notes to financial statements
STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------------------------- For the six months ended February 28, 1997 (Unaudited) - -------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends (net of foreign taxes, $5,157) $ 52,422 Expenses -- Investment adviser fee (Note 2) $ 294,731 Administration fee (Note 2) 80,887 Compensation of Trustees not members of the Administrator's organization 2,971 Custodian fee (Note 1D) 21,013 Legal and accounting services 3,602 Amortization of organization expenses (Note 1E) 1,250 Miscellaneous 11,194 ---------- Total expenses $ 415,648 Less reduction of custodian fee (Note 1D) 20,562 ---------- Net expenses 395,086 ---------- Net investment loss $ (342,664) ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) -- Investment transactions (identified cost basis) $1,655,953 Foreign currency transactions 23,867 ---------- Net realized gain on investment transactions $1,679,820 Change in unrealized appreciation (depreciation) -- Investments (identified cost basis) $6,668,950 Foreign currency transactions 5,792 ---------- Net change in unrealized appreciation of investments 6,674,742 ---------- Net realized and unrealized gain on investments $8,354,562 ---------- Net increase in net assets from operations $8,011,898 ==========
See notes to financial statements
STATEMENT OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------- SIX MONTHS ENDED FEBRUARY 28, 1997 (UNAUDITED) ----------------- INCREASE (DECREASE) IN NET ASSETS: From operations -- Net investment loss $ (342,664) Net realized gain on investments and foreign currency transactions 1,679,820 Change in unrealized appreciation (depreciation) 6,674,742 ------------ Net increase in net assets resulting from operations $ 8,011,898 ------------ Capital transactions -- Contributions $ 98,319,216 Withdrawals (17,352,934) ------------ Net increase in net assets resulting from capital transactions $ 80,966,282 ------------ Net increase in net assets $ 88,978,180 NET ASSETS: At beginning of period 100,000 ------------ At end of period $ 89,078,180 ============ - ------------------------------------------------------------------------------------------- SUPPLEMENTARY DATA - ------------------------------------------------------------------------------------------- SIX MONTHS ENDED FEBRUARY 28, 1997 (UNAUDITED) ----------------- RATIOS (to average daily net assets): Expenses 1.28%+ Net expenses, after custodian fee reduction 1.22%+ Net investment loss (1.06)%+ PORTFOLIO TURNOVER 15% NET ASSETS, end of period (000s omitted) $89,078 AVERAGE COMMISSION RATE (PER SHARE)(1) $0.0400 + Annualized. (1) Average commission rate paid is computed by dividing the total dollar amount of commissions paid during the period by the total number of shares purchased and sold during the period for which commissions were charged.
See notes to financial statements ------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- (1) SIGNIFICANT ACCOUNTING POLICIES Worldwide Health Sciences Portfolio (the Portfolio) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Portfolio, which was organized as a trust under the laws of the State of New York on March 26, 1996, seeks to provide long-term growth of capital by investing primarily in common stocks, and securities convertible into common stock, of domestic and foreign companies engaged in medical research and the health care industry. The Declaration of Trust permits the Trustees to issue interests in the Portfolio. Investment operations began on September 1, 1996, with the acquisition of securities with a value of $51,528,696, including unrealized appreciation of $9,053,201, in exchange for interest in the Portfolio by one of the Portfolio's investors. The following is a summary of significant accounting policies of the Portfolio. The policies are in conformity with generally accepted accounting principles. A. INVESTMENT VALUATIONS -- Securities listed on a recognized stock exchange, whether U.S. or foreign, are valued at the last reported sale price on that exchange prior to the time when assets are valued or prior to the close of trading on the New York Stock Exchange. In the event there are no sales, the last available sale price will be used. If a security is traded on more than one exchange, the security is valued at the last sale price on the exchange where the stock is primarily traded. Securities for which market quotations are not readily available and other assets are valued on a consistent basis at fair value as determined in good faith by or under the supervision of the Portfolio's officers in a manner specifically authorized by the Board of Directors. B. INCOME -- Dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities are recorded on the ex-dividend date or as soon thereafter as the Portfolio is informed of the dividend. C. FEDERAL TAXES -- The Portfolio has elected to be treated as a partnership for federal tax purposes. No provision is made by the Portfolio for federal or state taxes on any taxable income of the Portfolio because each investor in the Portfolio is ultimately responsible for the payment of any taxes. Since some of the Portfolio's investors are regulated investment companies that invest all or substantially all of their assets in the Portfolio, the Portfolio must satisfy the applicable source of income and diversification requirements (under the Code) in order for its investors to satisfy them. The Portfolio will allocate at least annually among its investors each investor's distributive share of the Portfolio's net investment income, net realized capital gains, and any other items of income, gain, loss, deduction or credit. D. EXPENSE REDUCTION -- Investors Bank & Trust Company (IBT) serves as custodian of the Portfolio. Pursuant to the custodian agreement, IBT receives a fee reduced by the credits which are determined based on the average daily cash balances the Portfolio maintains with IBT. Any significant credit balance used to reduce the Portfolio's custodian fee is reflected as a reduction of operating expenses on the Statement of Operations. E. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in connection with its organization are being amortized on the straight-line basis over five years. F. USE OF ESTIMATES -- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. G. FOREIGN CURRENCY TRANSLATION -- Investment valuations, other assets, and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions. Recognized gains or losses on investment transactions attributable to foreign currency rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that result from fluctuations in foreign currency exchange rates are not separately disclosed. H. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The Portfolio may enter into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. Risks may arise upon entering these contracts from the potential inability of counterparties to meet the terms of their contracts and from movements in the value of a foreign currency relative to the U.S. dollar. The Portfolio will enter into forward contracts for hedging purposes as well as non-hedging purposes. The forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains and losses are recorded for financial statement purposes as unrealized until such time as the contracts have been closed. I. OTHER -- Investment transactions are accounted for on a trade date basis. J. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to February 28, 1997 and for the six month period then ended have not been audited by independent certified public accountants, but in the opinion of the Portfolio's management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the financial statements. - -------------------------------------------------------------------------------- (2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES Pursuant to the Advisory Agreement, Mehta and Isaly Asset Management, Inc. ("M&I"), formerly G/A Capital Management, Inc., serve as the investment adviser of the Portfolio. Under this agreement M&I receive a monthly fee at the annual rate of 1% of the Portfolio's first $30 million in average net assets, 0.90% of the next $20 million in average net assets, and 0.75% of average net assets in excess of $50 million. The fee rate declines for net assets of $500 million and greater. Beginning September 1, 1997, M&I may receive a performance based adjustment of up to 0.25% of the average daily net assets of the Portfolio based upon the investment performance of the Portfolio compared to the Standard & Poor's Index of 500 Common Stocks over specified periods. For the six months ended February 28, 1997, the fee was equivalent to 0.91% (annualized) of the Portfolio's average daily net assets and amounted to $294,731. Under an Administration Agreement between the Portfolio and its Administrator, Eaton Vance Management (EVM), EVM manages and administers the affairs of the Portfolio. EVM earns a monthly fee in the amount of 1/48th of 1% (equal to 0.25% annually) of the average daily net assets of the Portfolio up to $500,000,000, and at reduced rates as daily net assets exceed that level. For the six months ended February 28, 1997, the administration fee was 0.25% of average net assets. Except as to Trustees of the Portfolio who are not members of the Adviser or EVM's organization, officers and Trustees receive remuneration for their services to the Portfolio out of such investment adviser and administrative fees. Certain of the officers and Trustees of the Portfolio are also officers or directors/trustees of the above organizations. Trustees of the Portfolio that are not affiliated with the Investment Adviser or Administrator may elect to defer receipt of all or a portion of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended February 28, 1997, no significant amounts have been deferred. - -------------------------------------------------------------------------------- (3) INVESTMENTS Purchases and sales of investments other than U.S. Government securities and short-term obligations aggregated $34,490,900 and $9,523,741, respectively. - -------------------------------------------------------------------------------- (4) FEDERAL INCOME TAX BASIS OF INVESTMENTS The cost and unrealized appreciation/depreciation in value of the investments owned at February 28, 1997, as computed on a federal income tax basis, were as follows: Aggregate cost $69,134,232 =========== Gross unrealized appreciation $17,576,664 Gross unrealized depreciation (1,854,513 ----------- Net unrealized appreciation $15,722,151 =========== - -------------------------------------------------------------------------------- (5) RESTRICTED SECURITIES In February 1993, the Portfolio acquired 9,000 shares of common stock of Cambridge Antibody Technology Limited ("CAT") at a cost of $297,000 by entering into a Subscription Agreement between the Portfolio, CAT and Peptide Technology Limited ("Peptech"). The Subscription Agreement granted to the Portfolio an option to require Peptech, the major shareholder of CAT, to purchase up to 85% of the CAT shares owned by the Portfolio on September 1, 1995 (the "Put Option"), subject to certain conditions. The Put Option was exercised by the Portfolio, but was canceled in December 1995 when the Portfolio received an additional 4,734 shares of CAT from Peptech in exchange for the Portfolio's withdrawal of the Put Options. In separate transactions that occurred in December 1995, August 1996 and October 1996, the Portfolio acquired an additional 47,674 shares of CAT, bringing the total number of shares owned by the Portfolio to 61,408. The value of the CAT shares and warrants at February 28, 1997 is $1,443,384, representing 1.6% of the Portfolio's net assets. Management has valued the common stock at $23 per share and $10 per warrant, which reflects recent market activity. Valuation of the security is continually monitored and is reviewed by the Board of Directors. - -------------------------------------------------------------------------------- (6) RISKS ASSOCIATED WITH FOREIGN INVESTMENTS Investing in securities issued by companies whose principal business activities are outside the United States may involve significant risks not present in domestic investments. For example, there is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Investments in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitation on the removal of funds or other assets of the Portfolio, political or financial instability or diplomatic and other developments which could affect such investments. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. companies. In general, there is less overall governmental supervision and regulation of foreign securities markets, broker-dealers, and issuers than in the United States. - -------------------------------------------------------------------------------- (7) FINANCIAL INSTRUMENTS The Portfolio regularly trades in financial instruments with off-balance sheet risk in the normal course of its investing activities to assist in managing exposure to various market risks. These financial instruments include written options, forward foreign currency exchange contracts and financial futures contracts and may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. The notional or contractual amounts of these instruments represent the investment the Portfolio has in particular classes of financial instruments and does not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. A summary of obligations under these financial instruments at February 28, 1997 is as follows: FORWARD FOREIGN CURRENCY EXCHANGE CONTRACT PURCHASES - --------
DELIVER SETTLEMENT (IN UNITED STATES NET UNREALIZED DATE IN EXCHANGE FOR DOLLARS) DEPRECIATION - ------ --------------- ----------------- -------------- 3/3/97 Swiss Franc 1,766,463 $1,209,740 $10,422 ========== =======
- -------------------------------------------------------------------------------- (8) LINE OF CREDIT The Portfolio participates with other portfolios and funds managed by EVM and its affiliates in a $120 million unsecured line of credit with a bank. Borrowings will be made by the Portfolio or Fund solely to facilitate the handling of unusual and/or unanticipated short-term cash requirements. Interest is charged to each participating portfolio or fund based on its borrowings at the bank's base rate or at an amount above either the banks' adjusted certificate of deposit rate, Eurodollar rate or federal funds effective rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the facility is allocated among the participating portfolios and funds at the end of each quarter. The Portfolio did not have any significant borrowings or allocated fees during the six months ended February 28, 1997. --------------------------------- INVESTMENT MANAGEMENT EV TRADITIONAL OFFICERS DIRECTORS WORLDWIDE HEALTH JAMES B. HAWKES DONALD R. DWIGHT SCIENCES FUND, INC. President, Director President, Dwight Partners, Inc. 24 Federal Street Chairman, Newspapers of Boston, MA 02110 M. DOZIER GARDNER New England, Inc. Vice President SAMUEL L. HAYES, III JAMES L. O'CONNOR Jacob H. Schiff Professor of Treasurer Investment Banking, Harvard University Graduate School of THOMAS OTIS Business Administration Secretary NORTON H. REAMER President and Director, United Asset Management Corporation JOHN L. THORNDIKE Formerly Director, Fiduciary Company Incorporated JACK L. TREYNOR Investment Adviser and Consultant --------------------------------------------------------------- WORLDWIDE HEALTH OFFICERS INDEPENDENT TRUSTEES SCIENCES PORTFOLIO JAMES B. HAWKES DONALD R. DWIGHT 24 Federal Street President, Trustee President, Dwight Partners, Inc. Boston, MA 02110 Chairman, Newspapers of SAMUEL D. ISALY New England, Inc. Vice President and Portfolio Manager SAMUEL L. HAYES, III Jacob H. Schiff Professor of VIREN MEHTA Investment Banking, Harvard Vice President University Graduate School of Business Administration WILLIAM CHISHOLM Vice President NORTON H. REAMER President and Director, United Asset RAYMOND O'NEILL Management Corporation Vice President JOHN L. THORNDIKE MICHEL NORMANDEAU Formerly Director, Fiduciary Company Vice President Incorporated JAMES L. O'CONNOR JACK L. TREYNOR Treasurer Investment Adviser and Consultant THOMAS OTIS Secretary
-----END PRIVACY-ENHANCED MESSAGE-----