Statements of Cash Flows*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30, 2012
|
|
Cash Flows From Operating Activities
|
|
Municipal Fund II
|
|
|
California Fund II
|
|
|
New York Fund II
|
|
Net increase in net assets from operations
|
|
$
|
21,977,038
|
|
|
$
|
9,580,053
|
|
|
$
|
4,934,805
|
|
Distributions to preferred shareholders
|
|
|
108,522
|
|
|
|
62,425
|
|
|
|
32,137
|
|
Net increase in net assets from operations excluding distributions to preferred shareholders
|
|
$
|
22,085,560
|
|
|
$
|
9,642,478
|
|
|
$
|
4,966,942
|
|
Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments purchased
|
|
|
(34,339,474
|
)
|
|
|
(14,398,705
|
)
|
|
|
(10,423,471
|
)
|
Investments sold
|
|
|
45,665,502
|
|
|
|
13,207,810
|
|
|
|
13,273,681
|
|
Net amortization/accretion of premium (discount)
|
|
|
(842,413
|
)
|
|
|
(441,067
|
)
|
|
|
(140,569
|
)
|
Amortization of deferred debt issuance costs
|
|
|
13,463
|
|
|
|
2,510
|
|
|
|
3,099
|
|
Increase in restricted cash
|
|
|
(217,000
|
)
|
|
|
(130,000
|
)
|
|
|
(80,000
|
)
|
Decrease (increase) in interest receivable
|
|
|
(11,886
|
)
|
|
|
(43,005
|
)
|
|
|
75,815
|
|
Increase in receivable for variation margin on open financial futures contracts
|
|
|
(7,250
|
)
|
|
|
(3,890
|
)
|
|
|
(2,750
|
)
|
Decrease (increase) in receivable from the transfer agent
|
|
|
6,127
|
|
|
|
2,056
|
|
|
|
(46
|
)
|
Decrease in payable for variation margin on open financial futures contracts
|
|
|
(27,203
|
)
|
|
|
(17,610
|
)
|
|
|
(4,375
|
)
|
Decrease in payable for open swap contracts
|
|
|
(352,540
|
)
|
|
|
(212,993
|
)
|
|
|
(235,027
|
)
|
Increase in payable to affiliate for investment adviser fee
|
|
|
6,727
|
|
|
|
2,756
|
|
|
|
402
|
|
Increase (decrease) in interest expense and fees payable
|
|
|
(18,269
|
)
|
|
|
3,058
|
|
|
|
(3,568
|
)
|
Increase in accrued expenses
|
|
|
11,194
|
|
|
|
6,110
|
|
|
|
8,557
|
|
Net change in unrealized (appreciation) depreciation from investments
|
|
|
(13,910,576
|
)
|
|
|
(7,123,212
|
)
|
|
|
(2,386,304
|
)
|
Net realized (gain) loss from investments
|
|
|
(952,223
|
)
|
|
|
268,458
|
|
|
|
(632,533
|
)
|
Net realized loss on extinguishment of debt
|
|
|
18,589
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
17,128,328
|
|
|
$
|
764,754
|
|
|
$
|
4,419,853
|
|
|
|
|
|
Cash Flows From Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions paid to common shareholders, net of reinvestments
|
|
$
|
(8,512,518
|
)
|
|
$
|
(3,052,205
|
)
|
|
$
|
(1,982,378
|
)
|
Cash distributions paid to preferred shareholders
|
|
|
(107,756
|
)
|
|
|
(61,998
|
)
|
|
|
(31,906
|
)
|
Proceeds from secured borrowings
|
|
|
2,500,000
|
|
|
|
|
|
|
|
2,200,000
|
|
Repayment of secured borrowings
|
|
|
(14,590,000
|
)
|
|
|
|
|
|
|
(5,145,000
|
)
|
Increase in due to custodian
|
|
|
|
|
|
|
81,896
|
|
|
|
95,588
|
|
Net cash used in financing activities
|
|
$
|
(20,710,274
|
)
|
|
$
|
(3,032,307
|
)
|
|
$
|
(4,863,696
|
)
|
|
|
|
|
Net decrease in cash
|
|
$
|
(3,581,946
|
)
|
|
$
|
(2,267,553
|
)
|
|
$
|
(443,843
|
)
|
|
|
|
|
Cash at beginning of year
|
|
$
|
3,661,490
|
|
|
$
|
2,267,553
|
|
|
$
|
443,843
|
|
|
|
|
|
Cash at end of year
|
|
$
|
79,544
|
|
|
$
|
|
|
|
$
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
Noncash financing activities not included herein consist of:
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinvestment of dividends and distributions
|
|
$
|
227,531
|
|
|
$
|
28,782
|
|
|
$
|
28,780
|
|
Cash paid for interest and fees
|
|
|
355,032
|
|
|
|
62,615
|
|
|
|
75,744
|
|
*
|
Statement of Cash Flows is not required for Massachusetts Fund, Michigan Fund, New Jersey Fund, Ohio Fund and Pennsylvania Fund.
|
|
|
|
|
|
|
|
43
|
|
See Notes to Financial Statements.
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Financial Highlights
Selected data for a common share outstanding during the
periods stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Fund II
|
|
|
|
Year Ended September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
Net asset value Beginning of year (Common
shares)
|
|
$
|
12.040
|
|
|
$
|
12.720
|
|
|
$
|
12.880
|
|
|
$
|
11.030
|
|
|
$
|
15.470
|
|
|
|
|
|
|
|
Income (Loss) From Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
(1)
|
|
$
|
0.778
|
|
|
$
|
0.929
|
|
|
$
|
0.961
|
|
|
$
|
0.943
|
|
|
$
|
1.037
|
|
Net realized and unrealized gain (loss)
|
|
|
1.437
|
|
|
|
(0.638
|
)
|
|
|
(0.164
|
)
|
|
|
1.813
|
|
|
|
(4.159
|
)
|
Distributions to preferred shareholders
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.011
|
)
|
|
|
(0.015
|
)
|
|
|
(0.018
|
)
|
|
|
(0.058
|
)
|
|
|
(0.168
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.117
|
)
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
$
|
2.204
|
|
|
$
|
0.276
|
|
|
$
|
0.779
|
|
|
$
|
2.698
|
|
|
$
|
(3.407
|
)
|
|
|
|
|
|
|
Less Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
$
|
(0.874
|
)
|
|
$
|
(0.956
|
)
|
|
$
|
(0.939
|
)
|
|
$
|
(0.848
|
)
|
|
$
|
(0.747
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.286
|
)
|
|
|
|
|
|
|
Total distributions to common shareholders
|
|
$
|
(0.874
|
)
|
|
$
|
(0.956
|
)
|
|
$
|
(0.939
|
)
|
|
$
|
(0.848
|
)
|
|
$
|
(1.033
|
)
|
|
|
|
|
|
|
Net asset value End of year (Common shares)
|
|
$
|
13.370
|
|
|
$
|
12.040
|
|
|
$
|
12.720
|
|
|
$
|
12.880
|
|
|
$
|
11.030
|
|
|
|
|
|
|
|
Market value End of year (Common shares)
|
|
$
|
13.880
|
|
|
$
|
13.280
|
|
|
$
|
14.010
|
|
|
$
|
13.370
|
|
|
$
|
11.650
|
|
|
|
|
|
|
|
Total Investment Return on Net Asset Value
(2)
|
|
|
18.56
|
%
|
|
|
2.45
|
%
|
|
|
6.26
|
%
|
|
|
26.08
|
%
|
|
|
(23.08
|
)%
|
|
|
|
|
|
|
Total Investment Return on Market Value
(2)
|
|
|
11.59
|
%
|
|
|
2.60
|
%
|
|
|
12.78
|
%
|
|
|
23.88
|
%
|
|
|
(13.61
|
)%
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to common shares, end of year (000s omitted)
|
|
$
|
133,772
|
|
|
$
|
120,308
|
|
|
$
|
126,814
|
|
|
$
|
128,150
|
|
|
$
|
109,648
|
|
Ratios (as a percentage of average daily net assets applicable to common shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.37
|
%
|
|
|
1.50
|
%
|
|
|
1.22
|
%
|
|
|
1.28
|
%
|
|
|
1.09
|
%
|
Interest and fee
expense
(4)
|
|
|
0.28
|
%
|
|
|
0.35
|
%
|
|
|
0.38
|
%
|
|
|
0.87
|
%
|
|
|
0.93
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.65
|
%
|
|
|
1.85
|
%
|
|
|
1.60
|
%
|
|
|
2.15
|
%
|
|
|
2.02
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
1.37
|
%
|
|
|
1.49
|
%
|
|
|
1.22
|
%
|
|
|
1.27
|
%
|
|
|
1.05
|
%
|
Net investment income
|
|
|
6.14
|
%
|
|
|
8.23
|
%
|
|
|
7.86
|
%
|
|
|
9.05
|
%
|
|
|
7.40
|
%
|
Portfolio Turnover
|
|
|
16
|
%
|
|
|
12
|
%
|
|
|
13
|
%
|
|
|
22
|
%
|
|
|
54
|
%
|
The ratios reported above are based on net assets applicable to common shares. The ratios based on net assets, including
amounts related to preferred shares, are as follows:
|
|
Ratios (as a percentage of average daily net assets applicable to common shares and preferred shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.02
|
%
|
|
|
1.07
|
%
|
|
|
0.89
|
%
|
|
|
0.89
|
%
|
|
|
0.69
|
%
|
Interest and fee
expense
(4)
|
|
|
0.20
|
%
|
|
|
0.25
|
%
|
|
|
0.28
|
%
|
|
|
0.61
|
%
|
|
|
0.60
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.22
|
%
|
|
|
1.32
|
%
|
|
|
1.17
|
%
|
|
|
1.50
|
%
|
|
|
1.29
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
1.02
|
%
|
|
|
1.07
|
%
|
|
|
0.89
|
%
|
|
|
0.89
|
%
|
|
|
0.67
|
%
|
Net investment income
|
|
|
4.54
|
%
|
|
|
5.89
|
%
|
|
|
5.75
|
%
|
|
|
6.32
|
%
|
|
|
4.73
|
%
|
Senior Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total preferred shares outstanding
|
|
|
1,788
|
|
|
|
1,788
|
|
|
|
1,788
|
|
|
|
1,788
|
|
|
|
1,788
|
|
Asset coverage per preferred share
(5)
|
|
$
|
99,818
|
|
|
$
|
92,287
|
|
|
$
|
95,926
|
|
|
$
|
96,674
|
|
|
$
|
86,356
|
|
Involuntary liquidation preference per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
Approximate market value per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
(1)
|
Computed using average common shares outstanding.
|
(2)
|
Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.
|
(3)
|
Ratios do not reflect the effect of dividend payments to preferred shareholders.
|
(4)
|
Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).
|
(5)
|
Calculated by subtracting the Funds total liabilities (not including the preferred shares) from the Funds total assets, and dividing the result by
the number of preferred shares outstanding.
|
(6)
|
Plus accumulated and unpaid dividends.
|
|
|
|
|
|
|
|
44
|
|
See Notes to Financial Statements.
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Financial Highlights continued
Selected data for a common share outstanding during the
periods stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California Fund II
|
|
|
|
Year Ended September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
Net asset value Beginning of year (Common
shares)
|
|
$
|
11.730
|
|
|
$
|
12.520
|
|
|
$
|
12.940
|
|
|
$
|
11.310
|
|
|
$
|
15.020
|
|
|
|
|
|
|
|
Income (Loss) From Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
(1)
|
|
$
|
0.777
|
|
|
$
|
0.855
|
|
|
$
|
0.898
|
|
|
$
|
0.877
|
|
|
$
|
0.983
|
|
Net realized and unrealized gain (loss)
|
|
|
1.712
|
|
|
|
(0.761
|
)
|
|
|
(0.433
|
)
|
|
|
1.601
|
|
|
|
(3.583
|
)
|
Distributions to preferred shareholders
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.016
|
)
|
|
|
(0.023
|
)
|
|
|
(0.027
|
)
|
|
|
(0.084
|
)
|
|
|
(0.233
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.053
|
)
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
$
|
2.473
|
|
|
$
|
0.071
|
|
|
$
|
0.438
|
|
|
$
|
2.394
|
|
|
$
|
(2.886
|
)
|
|
|
|
|
|
|
Less Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
$
|
(0.793
|
)
|
|
$
|
(0.861
|
)
|
|
$
|
(0.858
|
)
|
|
$
|
(0.764
|
)
|
|
$
|
(0.693
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.131
|
)
|
|
|
|
|
|
|
Total distributions to common shareholders
|
|
$
|
(0.793
|
)
|
|
$
|
(0.861
|
)
|
|
$
|
(0.858
|
)
|
|
$
|
(0.764
|
)
|
|
$
|
(0.824
|
)
|
|
|
|
|
|
|
Net asset value End of year (Common shares)
|
|
$
|
13.410
|
|
|
$
|
11.730
|
|
|
$
|
12.520
|
|
|
$
|
12.940
|
|
|
$
|
11.310
|
|
|
|
|
|
|
|
Market value End of year (Common shares)
|
|
$
|
13.630
|
|
|
$
|
12.260
|
|
|
$
|
13.250
|
|
|
$
|
12.500
|
|
|
$
|
10.250
|
|
|
|
|
|
|
|
Total Investment Return on Net Asset Value
(2)
|
|
|
21.62
|
%
|
|
|
1.31
|
%
|
|
|
3.93
|
%
|
|
|
23.06
|
%
|
|
|
(19.81
|
)%
|
|
|
|
|
|
|
Total Investment Return on Market Value
(2)
|
|
|
18.36
|
%
|
|
|
0.06
|
%
|
|
|
13.86
|
%
|
|
|
31.17
|
%
|
|
|
(23.40
|
)%
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to common shares, end of year (000s omitted)
|
|
$
|
52,063
|
|
|
$
|
45,535
|
|
|
$
|
48,529
|
|
|
$
|
50,080
|
|
|
$
|
43,718
|
|
Ratios (as a percentage of average daily net assets applicable to common shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.36
|
%
|
|
|
1.47
|
%
|
|
|
1.39
|
%
|
|
|
1.51
|
%
|
|
|
1.23
|
%
|
Interest and fee
expense
(4)
|
|
|
0.14
|
%
|
|
|
0.15
|
%
|
|
|
0.16
|
%
|
|
|
0.37
|
%
|
|
|
0.42
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.50
|
%
|
|
|
1.62
|
%
|
|
|
1.55
|
%
|
|
|
1.88
|
%
|
|
|
1.65
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
1.36
|
%
|
|
|
1.47
|
%
|
|
|
1.38
|
%
|
|
|
1.50
|
%
|
|
|
1.19
|
%
|
Net investment income
|
|
|
6.16
|
%
|
|
|
7.75
|
%
|
|
|
7.47
|
%
|
|
|
8.23
|
%
|
|
|
7.11
|
%
|
Portfolio Turnover
|
|
|
15
|
%
|
|
|
34
|
%
|
|
|
17
|
%
|
|
|
17
|
%
|
|
|
22
|
%
|
The ratios reported above are based on net assets applicable to common shares. The ratios based on net assets, including
amounts related to preferred shares, are as follows:
|
|
Ratios (as a percentage of average daily net assets applicable to common shares and preferred shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
0.89
|
%
|
|
|
0.92
|
%
|
|
|
0.89
|
%
|
|
|
0.93
|
%
|
|
|
0.76
|
%
|
Interest and fee
expense
(4)
|
|
|
0.09
|
%
|
|
|
0.09
|
%
|
|
|
0.11
|
%
|
|
|
0.23
|
%
|
|
|
0.26
|
%
|
Total expenses before custodian fee reduction
|
|
|
0.98
|
%
|
|
|
1.01
|
%
|
|
|
1.00
|
%
|
|
|
1.16
|
%
|
|
|
1.02
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
0.89
|
%
|
|
|
0.92
|
%
|
|
|
0.89
|
%
|
|
|
0.93
|
%
|
|
|
0.74
|
%
|
Net investment income
|
|
|
4.04
|
%
|
|
|
4.84
|
%
|
|
|
4.81
|
%
|
|
|
5.07
|
%
|
|
|
4.42
|
%
|
Senior Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total preferred shares outstanding
|
|
|
1,028
|
|
|
|
1,028
|
|
|
|
1,028
|
|
|
|
1,028
|
|
|
|
1,028
|
|
Asset coverage per preferred share
(5)
|
|
$
|
75,645
|
|
|
$
|
69,295
|
|
|
$
|
72,208
|
|
|
$
|
73,719
|
|
|
$
|
67,578
|
|
Involuntary liquidation preference per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
Approximate market value per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
(1)
|
Computed using average common shares outstanding.
|
(2)
|
Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.
|
(3)
|
Ratios do not reflect the effect of dividend payments to preferred shareholders.
|
(4)
|
Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).
|
(5)
|
Calculated by subtracting the Funds total liabilities (not including the preferred shares) from the Funds total assets, and dividing the result by
the number of preferred shares outstanding.
|
(6)
|
Plus accumulated and unpaid dividends.
|
|
|
|
|
|
|
|
45
|
|
See Notes to Financial Statements.
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Financial Highlights continued
Selected data for a common share outstanding during the
periods stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Massachusetts Fund
|
|
|
|
Year Ended September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
Net asset value Beginning of year (Common
shares)
|
|
$
|
14.230
|
|
|
$
|
14.710
|
|
|
$
|
14.660
|
|
|
$
|
12.130
|
|
|
$
|
15.090
|
|
|
|
|
|
|
|
Income (Loss) From Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
(1)
|
|
$
|
0.821
|
|
|
$
|
0.876
|
|
|
$
|
0.882
|
|
|
$
|
0.901
|
|
|
$
|
0.981
|
|
Net realized and unrealized gain (loss)
|
|
|
1.728
|
|
|
|
(0.490
|
)
|
|
|
0.036
|
|
|
|
2.486
|
|
|
|
(2.981
|
)
|
Distributions to preferred shareholders
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.019
|
)
|
|
|
(0.026
|
)
|
|
|
(0.031
|
)
|
|
|
(0.099
|
)
|
|
|
(0.289
|
)
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
$
|
2.530
|
|
|
$
|
0.360
|
|
|
$
|
0.887
|
|
|
$
|
3.288
|
|
|
$
|
(2.289
|
)
|
|
|
|
|
|
|
Less Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
$
|
(0.840
|
)
|
|
$
|
(0.840
|
)
|
|
$
|
(0.837
|
)
|
|
$
|
(0.758
|
)
|
|
$
|
(0.671
|
)
|
|
|
|
|
|
|
Total distributions to common shareholders
|
|
$
|
(0.840
|
)
|
|
$
|
(0.840
|
)
|
|
$
|
(0.837
|
)
|
|
$
|
(0.758
|
)
|
|
$
|
(0.671
|
)
|
|
|
|
|
|
|
Net asset value End of year (Common shares)
|
|
$
|
15.920
|
|
|
$
|
14.230
|
|
|
$
|
14.710
|
|
|
$
|
14.660
|
|
|
$
|
12.130
|
|
|
|
|
|
|
|
Market value End of year (Common shares)
|
|
$
|
16.510
|
|
|
$
|
14.320
|
|
|
$
|
15.160
|
|
|
$
|
15.250
|
|
|
$
|
13.780
|
|
|
|
|
|
|
|
Total Investment Return on Net Asset Value
(2)
|
|
|
18.26
|
%
|
|
|
3.06
|
%
|
|
|
6.43
|
%
|
|
|
28.42
|
%
|
|
|
(15.70
|
)%
|
|
|
|
|
|
|
Total Investment Return on Market Value
(2)
|
|
|
21.87
|
%
|
|
|
0.64
|
%
|
|
|
5.44
|
%
|
|
|
17.59
|
%
|
|
|
(2.46
|
)%
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to common shares, end of year (000s omitted)
|
|
$
|
28,138
|
|
|
$
|
25,134
|
|
|
$
|
25,920
|
|
|
$
|
25,771
|
|
|
$
|
21,311
|
|
Ratios (as a percentage of average daily net assets applicable to common shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.46
|
%
|
|
|
1.54
|
%
|
|
|
1.45
|
%
|
|
|
1.69
|
%
|
|
|
1.41
|
%
|
Interest and fee
expense
(4)
|
|
|
0.09
|
%
|
|
|
0.11
|
%
|
|
|
0.09
|
%
|
|
|
0.23
|
%
|
|
|
0.71
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.55
|
%
|
|
|
1.65
|
%
|
|
|
1.54
|
%
|
|
|
1.92
|
%
|
|
|
2.12
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
1.46
|
%
|
|
|
1.54
|
%
|
|
|
1.45
|
%
|
|
|
1.68
|
%
|
|
|
1.38
|
%
|
Net investment income
|
|
|
5.44
|
%
|
|
|
6.60
|
%
|
|
|
6.29
|
%
|
|
|
7.41
|
%
|
|
|
6.83
|
%
|
Portfolio Turnover
|
|
|
2
|
%
|
|
|
27
|
%
|
|
|
27
|
%
|
|
|
43
|
%
|
|
|
12
|
%
|
The ratios reported above are based on net assets applicable to common shares. The ratios based on net assets, including
amounts related to preferred shares, are as follows:
|
|
Ratios (as a percentage of average daily net assets applicable to common shares and preferred shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
0.97
|
%
|
|
|
0.97
|
%
|
|
|
0.94
|
%
|
|
|
1.03
|
%
|
|
|
0.88
|
%
|
Interest and fee
expense
(4)
|
|
|
0.06
|
%
|
|
|
0.07
|
%
|
|
|
0.05
|
%
|
|
|
0.14
|
%
|
|
|
0.45
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.03
|
%
|
|
|
1.04
|
%
|
|
|
0.99
|
%
|
|
|
1.17
|
%
|
|
|
1.33
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
0.97
|
%
|
|
|
0.97
|
%
|
|
|
0.94
|
%
|
|
|
1.03
|
%
|
|
|
0.87
|
%
|
Net investment income
|
|
|
3.61
|
%
|
|
|
4.18
|
%
|
|
|
4.06
|
%
|
|
|
4.53
|
%
|
|
|
4.27
|
%
|
Senior Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total preferred shares outstanding
|
|
|
543
|
|
|
|
543
|
|
|
|
543
|
|
|
|
543
|
|
|
|
543
|
|
Asset coverage per preferred share
(5)
|
|
$
|
76,820
|
|
|
$
|
71,288
|
|
|
$
|
72,737
|
|
|
$
|
72,462
|
|
|
$
|
64,287
|
|
Involuntary liquidation preference per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
Approximate market value per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
(1)
|
Computed using average common shares outstanding.
|
(2)
|
Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.
|
(3)
|
Ratios do not reflect the effect of dividend payments to preferred shareholders.
|
(4)
|
Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).
|
(5)
|
Calculated by subtracting the Funds total liabilities (not including the preferred shares) from the Funds total assets, and dividing the result by
the number of preferred shares outstanding.
|
(6)
|
Plus accumulated and unpaid dividends.
|
|
|
|
|
|
|
|
46
|
|
See Notes to Financial Statements.
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Financial Highlights continued
Selected data for a common share outstanding during the
periods stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michigan Fund
|
|
|
|
Year Ended September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
Net asset value Beginning of year (Common
shares)
|
|
$
|
14.040
|
|
|
$
|
14.540
|
|
|
$
|
14.730
|
|
|
$
|
12.570
|
|
|
$
|
15.150
|
|
|
|
|
|
|
|
Income (Loss) From Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
(1)
|
|
$
|
0.862
|
|
|
$
|
0.913
|
|
|
$
|
0.928
|
|
|
$
|
0.925
|
|
|
$
|
0.975
|
|
Net realized and unrealized gain (loss)
|
|
|
1.038
|
|
|
|
(0.496
|
)
|
|
|
(0.208
|
)
|
|
|
2.110
|
|
|
|
(2.590
|
)
|
Distributions to preferred shareholders
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.021
|
)
|
|
|
(0.030
|
)
|
|
|
(0.036
|
)
|
|
|
(0.113
|
)
|
|
|
(0.295
|
)
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
$
|
1.879
|
|
|
$
|
0.387
|
|
|
$
|
0.684
|
|
|
$
|
2.922
|
|
|
$
|
(1.910
|
)
|
|
|
|
|
|
|
Less Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
$
|
(0.889
|
)
|
|
$
|
(0.887
|
)
|
|
$
|
(0.874
|
)
|
|
$
|
(0.762
|
)
|
|
$
|
(0.670
|
)
|
|
|
|
|
|
|
Total distributions to common shareholders
|
|
$
|
(0.889
|
)
|
|
$
|
(0.887
|
)
|
|
$
|
(0.874
|
)
|
|
$
|
(0.762
|
)
|
|
$
|
(0.670
|
)
|
|
|
|
|
|
|
Net asset value End of year (Common shares)
|
|
$
|
15.030
|
|
|
$
|
14.040
|
|
|
$
|
14.540
|
|
|
$
|
14.730
|
|
|
$
|
12.570
|
|
|
|
|
|
|
|
Market value End of year (Common shares)
|
|
$
|
16.000
|
|
|
$
|
13.610
|
|
|
$
|
14.430
|
|
|
$
|
13.900
|
|
|
$
|
10.400
|
|
|
|
|
|
|
|
Total Investment Return on Net Asset Value
(2)
|
|
|
13.69
|
%
|
|
|
3.25
|
%
|
|
|
5.16
|
%
|
|
|
25.29
|
%
|
|
|
(12.66
|
)%
(3)
|
|
|
|
|
|
|
Total Investment Return on Market Value
(2)
|
|
|
24.85
|
%
|
|
|
0.85
|
%
|
|
|
10.60
|
%
|
|
|
42.90
|
%
|
|
|
(21.97
|
)%
(3)
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to common shares, end of year (000s omitted)
|
|
$
|
22,759
|
|
|
$
|
21,233
|
|
|
$
|
21,985
|
|
|
$
|
22,276
|
|
|
$
|
19,007
|
|
Ratios (as a percentage of average daily net assets applicable to common shares):
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.54
|
%
|
|
|
1.58
|
%
|
|
|
1.49
|
%
|
|
|
1.70
|
%
|
|
|
1.49
|
%
|
Interest and fee expense
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.54
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.54
|
%
|
|
|
1.58
|
%
|
|
|
1.49
|
%
|
|
|
1.70
|
%
|
|
|
2.03
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
1.54
|
%
|
|
|
1.58
|
%
|
|
|
1.49
|
%
|
|
|
1.69
|
%
|
|
|
1.48
|
%
|
Net investment income
|
|
|
5.90
|
%
|
|
|
6.76
|
%
|
|
|
6.55
|
%
|
|
|
7.30
|
%
|
|
|
6.72
|
%
|
Portfolio Turnover
|
|
|
19
|
%
|
|
|
5
|
%
|
|
|
2
|
%
|
|
|
9
|
%
|
|
|
11
|
%
|
The ratios reported above are based on net assets applicable to common shares. The ratios based on net assets, including
amounts related to preferred shares, are as follows:
|
|
Ratios (as a percentage of average daily net assets applicable to common shares and preferred shares):
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
0.96
|
%
|
|
|
0.96
|
%
|
|
|
0.92
|
%
|
|
|
1.00
|
%
|
|
|
0.93
|
%
|
Interest and fee expense
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.33
|
%
|
Total expenses before custodian fee reduction
|
|
|
0.96
|
%
|
|
|
0.96
|
%
|
|
|
0.92
|
%
|
|
|
1.00
|
%
|
|
|
1.26
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
0.96
|
%
|
|
|
0.96
|
%
|
|
|
0.92
|
%
|
|
|
1.00
|
%
|
|
|
0.92
|
%
|
Net investment income
|
|
|
3.68
|
%
|
|
|
4.09
|
%
|
|
|
4.04
|
%
|
|
|
4.30
|
%
|
|
|
4.16
|
%
|
Senior Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total preferred shares outstanding
|
|
|
533
|
|
|
|
533
|
|
|
|
533
|
|
|
|
533
|
|
|
|
540
|
|
Asset coverage per preferred share
(6)
|
|
$
|
67,701
|
|
|
$
|
64,837
|
|
|
$
|
66,248
|
|
|
$
|
66,794
|
|
|
$
|
60,199
|
|
Involuntary liquidation preference per preferred
share
(7)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
Approximate market value per preferred share
(7)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
(1)
|
Computed using average common shares outstanding.
|
(2)
|
Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.
|
(3)
|
During the year ended September 30, 2008, the investment adviser fully reimbursed the Fund for a realized loss on the disposal of an investment security
which did not meet investment guidelines. The loss had no effect on total return.
|
(4)
|
Ratios do not reflect the effect of dividend payments to preferred shareholders.
|
(5)
|
Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).
|
(6)
|
Calculated by subtracting the Funds total liabilities (not including the preferred shares) from the Funds total assets, and dividing the result by
the number of preferred shares outstanding.
|
(7)
|
Plus accumulated and unpaid dividends.
|
|
|
|
|
|
|
|
47
|
|
See Notes to Financial Statements.
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Financial Highlights continued
Selected data for a common share outstanding during the
periods stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey Fund
|
|
|
|
Year Ended September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
Net asset value Beginning of year (Common
shares)
|
|
$
|
13.180
|
|
|
$
|
14.410
|
|
|
$
|
14.620
|
|
|
$
|
11.980
|
|
|
$
|
15.690
|
|
|
|
|
|
|
|
Income (Loss) From Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
(1)
|
|
$
|
0.820
|
|
|
$
|
0.895
|
|
|
$
|
0.943
|
|
|
$
|
0.926
|
|
|
$
|
0.982
|
|
Net realized and unrealized gain (loss)
|
|
|
1.471
|
|
|
|
(1.179
|
)
|
|
|
(0.207
|
)
|
|
|
2.740
|
|
|
|
(3.393
|
)
|
Distributions to preferred shareholders
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.019
|
)
|
|
|
(0.026
|
)
|
|
|
(0.031
|
)
|
|
|
(0.088
|
)
|
|
|
(0.196
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.016
|
)
|
|
|
(0.114
|
)
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
$
|
2.272
|
|
|
$
|
(0.310
|
)
|
|
$
|
0.705
|
|
|
$
|
3.562
|
|
|
$
|
(2.721
|
)
|
|
|
|
|
|
|
Less Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
$
|
(0.812
|
)
|
|
$
|
(0.920
|
)
|
|
$
|
(0.915
|
)
|
|
$
|
(0.819
|
)
|
|
$
|
(0.706
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.103
|
)
|
|
|
(0.283
|
)
|
|
|
|
|
|
|
Total distributions to common shareholders
|
|
$
|
(0.812
|
)
|
|
$
|
(0.920
|
)
|
|
$
|
(0.915
|
)
|
|
$
|
(0.922
|
)
|
|
$
|
(0.989
|
)
|
|
|
|
|
|
|
Net asset value End of year (Common shares)
|
|
$
|
14.640
|
|
|
$
|
13.180
|
|
|
$
|
14.410
|
|
|
$
|
14.620
|
|
|
$
|
11.980
|
|
|
|
|
|
|
|
Market value End of year (Common shares)
|
|
$
|
15.090
|
|
|
$
|
13.370
|
|
|
$
|
15.350
|
|
|
$
|
14.730
|
|
|
$
|
11.880
|
|
|
|
|
|
|
|
Total Investment Return on Net Asset Value
(2)
|
|
|
17.69
|
%
|
|
|
(1.80
|
)%
|
|
|
5.10
|
%
|
|
|
31.84
|
%
|
|
|
(18.15
|
)%
|
|
|
|
|
|
|
Total Investment Return on Market Value
(2)
|
|
|
19.58
|
%
|
|
|
(6.49
|
)%
|
|
|
11.12
|
%
|
|
|
33.95
|
%
|
|
|
(13.88
|
)%
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to common shares, end of year (000s omitted)
|
|
$
|
38,140
|
|
|
$
|
34,186
|
|
|
$
|
37,222
|
|
|
$
|
37,628
|
|
|
$
|
30,776
|
|
Ratios (as a percentage of average daily net assets applicable to common shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.39
|
%
|
|
|
1.42
|
%
|
|
|
1.36
|
%
|
|
|
1.53
|
%
|
|
|
1.33
|
%
|
Interest and fee
expense
(4)
|
|
|
0.12
|
%
|
|
|
0.15
|
%
|
|
|
0.17
|
%
|
|
|
0.46
|
%
|
|
|
1.16
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.51
|
%
|
|
|
1.57
|
%
|
|
|
1.53
|
%
|
|
|
1.99
|
%
|
|
|
2.49
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
1.39
|
%
|
|
|
1.41
|
%
|
|
|
1.36
|
%
|
|
|
1.52
|
%
|
|
|
1.28
|
%
|
Net investment income
|
|
|
5.87
|
%
|
|
|
6.96
|
%
|
|
|
6.79
|
%
|
|
|
7.81
|
%
|
|
|
6.72
|
%
|
Portfolio Turnover
|
|
|
16
|
%
|
|
|
4
|
%
|
|
|
8
|
%
|
|
|
39
|
%
|
|
|
48
|
%
|
The ratios reported above are based on net assets applicable to common shares. The ratios based on net assets, including
amounts related to preferred shares, are as follows:
|
|
Ratios (as a percentage of average daily net assets applicable to common shares and preferred shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
0.90
|
%
|
|
|
0.90
|
%
|
|
|
0.88
|
%
|
|
|
0.93
|
%
|
|
|
0.84
|
%
|
Interest and fee
expense
(4)
|
|
|
0.08
|
%
|
|
|
0.09
|
%
|
|
|
0.11
|
%
|
|
|
0.28
|
%
|
|
|
0.73
|
%
|
Total expenses before custodian fee reduction
|
|
|
0.98
|
%
|
|
|
0.99
|
%
|
|
|
0.99
|
%
|
|
|
1.21
|
%
|
|
|
1.57
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
0.90
|
%
|
|
|
0.89
|
%
|
|
|
0.88
|
%
|
|
|
0.92
|
%
|
|
|
0.81
|
%
|
Net investment income
|
|
|
3.81
|
%
|
|
|
4.38
|
%
|
|
|
4.39
|
%
|
|
|
4.75
|
%
|
|
|
4.24
|
%
|
Senior Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total preferred shares outstanding
|
|
|
784
|
|
|
|
784
|
|
|
|
784
|
|
|
|
784
|
|
|
|
812
|
|
Asset coverage per preferred share
(5)
|
|
$
|
73,649
|
|
|
$
|
68,605
|
|
|
$
|
72,478
|
|
|
$
|
72,996
|
|
|
$
|
62,907
|
|
Involuntary liquidation preference per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
Approximate market value per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
(1)
|
Computed using average common shares outstanding.
|
(2)
|
Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.
|
(3)
|
Ratios do not reflect the effect of dividend payments to preferred shareholders.
|
(4)
|
Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).
|
(5)
|
Calculated by subtracting the Funds total liabilities (not including the preferred shares) from the Funds total assets, and dividing the result by
the number of preferred shares outstanding.
|
(6)
|
Plus accumulated and unpaid dividends.
|
|
|
|
|
|
|
|
48
|
|
See Notes to Financial Statements.
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Financial Highlights continued
Selected data for a common share outstanding during the
periods stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York Fund II
|
|
|
|
Year Ended September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
Net asset value Beginning of year (Common
shares)
|
|
$
|
12.760
|
|
|
$
|
13.400
|
|
|
$
|
13.620
|
|
|
$
|
11.530
|
|
|
$
|
15.240
|
|
|
|
|
|
|
|
Income (Loss) From Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
(1)
|
|
$
|
0.775
|
|
|
$
|
0.868
|
|
|
$
|
0.847
|
|
|
$
|
0.857
|
|
|
$
|
0.938
|
|
Net realized and unrealized gain (loss)
|
|
|
1.162
|
|
|
|
(0.621
|
)
|
|
|
(0.167
|
)
|
|
|
2.087
|
|
|
|
(3.483
|
)
|
Distributions to preferred shareholders
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.013
|
)
|
|
|
(0.018
|
)
|
|
|
(0.021
|
)
|
|
|
(0.066
|
)
|
|
|
(0.237
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.049
|
)
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
$
|
1.924
|
|
|
$
|
0.229
|
|
|
$
|
0.659
|
|
|
$
|
2.878
|
|
|
$
|
(2.831
|
)
|
|
|
|
|
|
|
Less Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
$
|
(0.784
|
)
|
|
$
|
(0.869
|
)
|
|
$
|
(0.879
|
)
|
|
$
|
(0.788
|
)
|
|
$
|
(0.699
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.180
|
)
|
|
|
|
|
|
|
Total distributions to common shareholders
|
|
$
|
(0.784
|
)
|
|
$
|
(0.869
|
)
|
|
$
|
(0.879
|
)
|
|
$
|
(0.788
|
)
|
|
$
|
(0.879
|
)
|
|
|
|
|
|
|
Net asset value End of year (Common shares)
|
|
$
|
13.900
|
|
|
$
|
12.760
|
|
|
$
|
13.400
|
|
|
$
|
13.620
|
|
|
$
|
11.530
|
|
|
|
|
|
|
|
Market value End of year (Common shares)
|
|
$
|
13.970
|
|
|
$
|
12.890
|
|
|
$
|
14.000
|
|
|
$
|
13.610
|
|
|
$
|
10.580
|
|
|
|
|
|
|
|
Total Investment Return on Net Asset Value
(2)
|
|
|
15.47
|
%
|
|
|
2.16
|
%
|
|
|
5.20
|
%
|
|
|
26.71
|
%
|
|
|
(19.25
|
)%
|
|
|
|
|
|
|
Total Investment Return on Market Value
(2)
|
|
|
14.89
|
%
|
|
|
(1.21
|
)%
|
|
|
9.99
|
%
|
|
|
37.98
|
%
|
|
|
(21.80
|
)%
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to common shares, end of year (000s omitted)
|
|
$
|
35,669
|
|
|
$
|
32,717
|
|
|
$
|
34,328
|
|
|
$
|
34,847
|
|
|
$
|
29,459
|
|
Ratios (as a percentage of average daily net assets applicable to common shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.42
|
%
|
|
|
1.47
|
%
|
|
|
1.41
|
%
|
|
|
1.51
|
%
|
|
|
1.33
|
%
|
Interest and fee
expense
(4)
|
|
|
0.22
|
%
|
|
|
0.28
|
%
|
|
|
0.28
|
%
|
|
|
0.63
|
%
|
|
|
0.46
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.64
|
%
|
|
|
1.75
|
%
|
|
|
1.69
|
%
|
|
|
2.14
|
%
|
|
|
1.79
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
1.42
|
%
|
|
|
1.46
|
%
|
|
|
1.41
|
%
|
|
|
1.50
|
%
|
|
|
1.28
|
%
|
Net investment income
|
|
|
5.80
|
%
|
|
|
7.07
|
%
|
|
|
6.49
|
%
|
|
|
7.67
|
%
|
|
|
6.67
|
%
|
Portfolio Turnover
|
|
|
18
|
%
|
|
|
17
|
%
|
|
|
13
|
%
|
|
|
30
|
%
|
|
|
44
|
%
|
The ratios reported above are based on net assets applicable to common shares. The ratios based on net assets, including
amounts related to preferred shares, are as follows:
|
|
Ratios (as a percentage of average daily net assets applicable to common shares and preferred shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.02
|
%
|
|
|
1.03
|
%
|
|
|
1.01
|
%
|
|
|
1.03
|
%
|
|
|
0.83
|
%
|
Interest and fee
expense
(4)
|
|
|
0.16
|
%
|
|
|
0.20
|
%
|
|
|
0.20
|
%
|
|
|
0.43
|
%
|
|
|
0.29
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.18
|
%
|
|
|
1.23
|
%
|
|
|
1.21
|
%
|
|
|
1.46
|
%
|
|
|
1.12
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
1.02
|
%
|
|
|
1.02
|
%
|
|
|
1.01
|
%
|
|
|
1.02
|
%
|
|
|
0.80
|
%
|
Net investment income
|
|
|
4.18
|
%
|
|
|
4.98
|
%
|
|
|
4.65
|
%
|
|
|
5.24
|
%
|
|
|
4.17
|
%
|
Senior Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total preferred shares outstanding
|
|
|
530
|
|
|
|
530
|
|
|
|
530
|
|
|
|
530
|
|
|
|
530
|
|
Asset coverage per preferred share
(5)
|
|
$
|
92,301
|
|
|
$
|
86,730
|
|
|
$
|
89,770
|
|
|
$
|
90,749
|
|
|
$
|
80,583
|
|
Involuntary liquidation preference per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
Approximate market value per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
(1)
|
Computed using average common shares outstanding.
|
(2)
|
Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.
|
(3)
|
Ratios do not reflect the effect of dividend payments to preferred shareholders.
|
(4)
|
Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).
|
(5)
|
Calculated by subtracting the Funds total liabilities (not including the preferred shares) from the Funds total assets, and dividing the result by
the number of preferred shares outstanding.
|
(6)
|
Plus accumulated and unpaid dividends.
|
|
|
|
|
|
|
|
49
|
|
See Notes to Financial Statements.
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Financial Highlights continued
Selected data for a common share outstanding during the
periods stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ohio Fund
|
|
|
|
Year Ended September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
Net asset value Beginning of year (Common
shares)
|
|
$
|
12.220
|
|
|
$
|
12.960
|
|
|
$
|
12.980
|
|
|
$
|
11.330
|
|
|
$
|
14.970
|
|
|
|
|
|
|
|
Income (Loss) From Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
(1)
|
|
$
|
0.762
|
|
|
$
|
0.814
|
|
|
$
|
0.828
|
|
|
$
|
0.846
|
|
|
$
|
0.948
|
|
Net realized and unrealized gain (loss)
|
|
|
1.606
|
|
|
|
(0.759
|
)
|
|
|
(0.058
|
)
|
|
|
1.592
|
|
|
|
(3.665
|
)
|
Distributions to preferred shareholders
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.016
|
)
|
|
|
(0.023
|
)
|
|
|
(0.028
|
)
|
|
|
(0.101
|
)
|
|
|
(0.298
|
)
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
$
|
2.352
|
|
|
$
|
0.032
|
|
|
$
|
0.742
|
|
|
$
|
2.337
|
|
|
$
|
(3.015
|
)
|
|
|
|
|
|
|
Less Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
$
|
(0.772
|
)
|
|
$
|
(0.772
|
)
|
|
$
|
(0.762
|
)
|
|
$
|
(0.687
|
)
|
|
$
|
(0.625
|
)
|
|
|
|
|
|
|
Total distributions to common shareholders
|
|
$
|
(0.772
|
)
|
|
$
|
(0.772
|
)
|
|
$
|
(0.762
|
)
|
|
$
|
(0.687
|
)
|
|
$
|
(0.625
|
)
|
|
|
|
|
|
|
Net asset value End of year (Common shares)
|
|
$
|
13.800
|
|
|
$
|
12.220
|
|
|
$
|
12.960
|
|
|
$
|
12.980
|
|
|
$
|
11.330
|
|
|
|
|
|
|
|
Market value End of year (Common shares)
|
|
$
|
15.200
|
|
|
$
|
12.780
|
|
|
$
|
14.100
|
|
|
$
|
13.250
|
|
|
$
|
11.250
|
|
|
|
|
|
|
|
Total Investment Return on Net Asset Value
(2)
|
|
|
19.50
|
%
|
|
|
0.65
|
%
|
|
|
6.04
|
%
|
|
|
22.05
|
%
|
|
|
(20.51
|
)%
|
|
|
|
|
|
|
Total Investment Return on Market Value
(2)
|
|
|
25.85
|
%
|
|
|
(3.25
|
)%
|
|
|
13.01
|
%
|
|
|
25.48
|
%
|
|
|
(13.81
|
)%
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to common shares, end of year (000s omitted)
|
|
$
|
34,985
|
|
|
$
|
30,922
|
|
|
$
|
32,726
|
|
|
$
|
32,710
|
|
|
$
|
28,495
|
|
Ratios (as a percentage of average daily net assets applicable to common shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.35
|
%
|
|
|
1.42
|
%
|
|
|
1.36
|
%
|
|
|
1.57
|
%
|
|
|
1.35
|
%
|
Interest and fee
expense
(4)
|
|
|
0.01
|
%
|
|
|
0.02
|
%
|
|
|
0.02
|
%
|
|
|
0.10
|
%
|
|
|
0.29
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.36
|
%
|
|
|
1.44
|
%
|
|
|
1.38
|
%
|
|
|
1.67
|
%
|
|
|
1.64
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
1.35
|
%
|
|
|
1.42
|
%
|
|
|
1.36
|
%
|
|
|
1.57
|
%
|
|
|
1.33
|
%
|
Net investment income
|
|
|
5.83
|
%
|
|
|
6.98
|
%
|
|
|
6.61
|
%
|
|
|
7.87
|
%
|
|
|
6.82
|
%
|
Portfolio Turnover
|
|
|
12
|
%
|
|
|
10
|
%
|
|
|
11
|
%
|
|
|
18
|
%
|
|
|
22
|
%
|
The ratios reported above are based on net assets applicable to common shares. The ratios based on net assets, including
amounts related to preferred shares, are as follows:
|
|
Ratios (as a percentage of average daily net assets applicable to common shares and preferred shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
0.89
|
%
|
|
|
0.90
|
%
|
|
|
0.88
|
%
|
|
|
0.95
|
%
|
|
|
0.83
|
%
|
Interest and fee
expense
(4)
|
|
|
0.01
|
%
|
|
|
0.01
|
%
|
|
|
0.01
|
%
|
|
|
0.06
|
%
|
|
|
0.18
|
%
|
Total expenses before custodian fee reduction
|
|
|
0.90
|
%
|
|
|
0.91
|
%
|
|
|
0.89
|
%
|
|
|
1.01
|
%
|
|
|
1.01
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
0.89
|
%
|
|
|
0.90
|
%
|
|
|
0.88
|
%
|
|
|
0.95
|
%
|
|
|
0.82
|
%
|
Net investment income
|
|
|
3.85
|
%
|
|
|
4.43
|
%
|
|
|
4.30
|
%
|
|
|
4.77
|
%
|
|
|
4.19
|
%
|
Senior Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total preferred shares outstanding
|
|
|
680
|
|
|
|
680
|
|
|
|
680
|
|
|
|
680
|
|
|
|
875
|
|
Asset coverage per preferred share
(5)
|
|
$
|
76,450
|
|
|
$
|
70,474
|
|
|
$
|
73,128
|
|
|
$
|
73,104
|
|
|
$
|
57,579
|
|
Involuntary liquidation preference per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
Approximate market value per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
(1)
|
Computed using average common shares outstanding.
|
(2)
|
Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.
|
(3)
|
Ratios do not reflect the effect of dividend payments to preferred shareholders.
|
(4)
|
Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).
|
(5)
|
Calculated by subtracting the Funds total liabilities (not including the preferred shares) from the Funds total assets, and dividing the result by
the number of preferred shares outstanding.
|
(6)
|
Plus accumulated and unpaid dividends.
|
|
|
|
|
|
|
|
50
|
|
See Notes to Financial Statements.
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Financial Highlights continued
Selected data for a common share outstanding during the
periods stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pennsylvania Fund
|
|
|
|
Year Ended September 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
Net asset value Beginning of year (Common
shares)
|
|
$
|
13.180
|
|
|
$
|
13.640
|
|
|
$
|
13.900
|
|
|
$
|
12.030
|
|
|
$
|
15.270
|
|
|
|
|
|
|
|
Income (Loss) From Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
(1)
|
|
$
|
0.829
|
|
|
$
|
0.893
|
|
|
$
|
0.878
|
|
|
$
|
0.889
|
|
|
$
|
0.995
|
|
Net realized and unrealized gain (loss)
|
|
|
1.342
|
|
|
|
(0.460
|
)
|
|
|
(0.270
|
)
|
|
|
2.123
|
|
|
|
(3.047
|
)
|
Distributions to preferred shareholders
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(0.018
|
)
|
|
|
(0.025
|
)
|
|
|
(0.030
|
)
|
|
|
(0.071
|
)
|
|
|
(0.236
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.045
|
)
|
|
|
(0.076
|
)
|
|
|
|
|
|
|
Total income (loss) from operations
|
|
$
|
2.153
|
|
|
$
|
0.408
|
|
|
$
|
0.578
|
|
|
$
|
2.896
|
|
|
$
|
(2.364
|
)
|
|
|
|
|
|
|
Less Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
$
|
(0.873
|
)
|
|
$
|
(0.868
|
)
|
|
$
|
(0.838
|
)
|
|
$
|
(0.753
|
)
|
|
$
|
(0.693
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.273
|
)
|
|
|
(0.183
|
)
|
|
|
|
|
|
|
Total distributions to common shareholders
|
|
$
|
(0.873
|
)
|
|
$
|
(0.868
|
)
|
|
$
|
(0.838
|
)
|
|
$
|
(1.026
|
)
|
|
$
|
(0.876
|
)
|
|
|
|
|
|
|
Net asset value End of year (Common shares)
|
|
$
|
14.460
|
|
|
$
|
13.180
|
|
|
$
|
13.640
|
|
|
$
|
13.900
|
|
|
$
|
12.030
|
|
|
|
|
|
|
|
Market value End of year (Common shares)
|
|
$
|
15.780
|
|
|
$
|
13.030
|
|
|
$
|
14.230
|
|
|
$
|
14.600
|
|
|
$
|
13.400
|
|
|
|
|
|
|
|
Total Investment Return on Net Asset Value
(2)
|
|
|
16.76
|
%
|
|
|
3.63
|
%
|
|
|
4.53
|
%
|
|
|
27.36
|
%
|
|
|
(16.07
|
)%
|
|
|
|
|
|
|
Total Investment Return on Market Value
(2)
|
|
|
28.88
|
%
|
|
|
(1.79
|
)%
|
|
|
3.82
|
%
|
|
|
20.09
|
%
|
|
|
0.88
|
%
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to common shares, end of year (000s omitted)
|
|
$
|
42,791
|
|
|
$
|
38,972
|
|
|
$
|
40,256
|
|
|
$
|
40,956
|
|
|
$
|
35,413
|
|
Ratios (as a percentage of average daily net assets applicable to common shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
1.33
|
%
|
|
|
1.41
|
%
|
|
|
1.36
|
%
|
|
|
1.52
|
%
|
|
|
1.30
|
%
|
Interest and fee
expense
(4)
|
|
|
0.04
|
%
|
|
|
0.08
|
%
|
|
|
0.07
|
%
|
|
|
0.17
|
%
|
|
|
1.03
|
%
|
Total expenses before custodian fee reduction
|
|
|
1.37
|
%
|
|
|
1.49
|
%
|
|
|
1.43
|
%
|
|
|
1.69
|
%
|
|
|
2.33
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
1.33
|
%
|
|
|
1.40
|
%
|
|
|
1.36
|
%
|
|
|
1.51
|
%
|
|
|
1.28
|
%
|
Net investment income
|
|
|
5.98
|
%
|
|
|
7.19
|
%
|
|
|
6.67
|
%
|
|
|
7.80
|
%
|
|
|
6.86
|
%
|
Portfolio Turnover
|
|
|
11
|
%
|
|
|
12
|
%
|
|
|
19
|
%
|
|
|
8
|
%
|
|
|
28
|
%
|
The ratios reported above are based on net assets applicable to common shares. The ratios based on net assets, including
amounts related to preferred shares, are as follows:
|
|
Ratios (as a percentage of average daily net assets applicable to common shares and preferred shares):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding interest and fees
|
|
|
0.87
|
%
|
|
|
0.88
|
%
|
|
|
0.87
|
%
|
|
|
0.91
|
%
|
|
|
0.81
|
%
|
Interest and fee
expense
(4)
|
|
|
0.03
|
%
|
|
|
0.05
|
%
|
|
|
0.05
|
%
|
|
|
0.10
|
%
|
|
|
0.64
|
%
|
Total expenses before custodian fee reduction
|
|
|
0.90
|
%
|
|
|
0.93
|
%
|
|
|
0.92
|
%
|
|
|
1.01
|
%
|
|
|
1.45
|
%
|
Expenses after custodian fee reduction excluding interest and fees
|
|
|
0.87
|
%
|
|
|
0.88
|
%
|
|
|
0.87
|
%
|
|
|
0.90
|
%
|
|
|
0.80
|
%
|
Net investment income
|
|
|
3.91
|
%
|
|
|
4.51
|
%
|
|
|
4.28
|
%
|
|
|
4.68
|
%
|
|
|
4.26
|
%
|
Senior Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total preferred shares outstanding
|
|
|
869
|
|
|
|
869
|
|
|
|
869
|
|
|
|
869
|
|
|
|
1,040
|
|
Asset coverage per preferred share
(5)
|
|
$
|
74,242
|
|
|
$
|
69,847
|
|
|
$
|
71,327
|
|
|
$
|
72,133
|
|
|
$
|
59,091
|
|
Involuntary liquidation preference per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
Approximate market value per preferred share
(6)
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
(1)
|
Computed using average common shares outstanding.
|
(2)
|
Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.
|
(3)
|
Ratios do not reflect the effect of dividend payments to preferred shareholders.
|
(4)
|
Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).
|
(5)
|
Calculated by subtracting the Funds total liabilities (not including the preferred shares) from the Funds total assets, and dividing the result by
the number of preferred shares outstanding.
|
(6)
|
Plus accumulated and unpaid dividends.
|
|
|
|
|
|
|
|
51
|
|
See Notes to Financial Statements.
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements
1 Significant Accounting Policies
Eaton Vance Municipal Bond Fund II (Municipal Fund II),
Eaton Vance California Municipal Bond Fund II (California Fund II), Eaton Vance Massachusetts Municipal Bond Fund (Massachusetts Fund), Eaton Vance Michigan Municipal Bond Fund (Michigan Fund), Eaton Vance New Jersey Municipal Bond Fund
(New Jersey Fund), Eaton Vance New York Municipal Bond Fund II (New York Fund II), Eaton Vance Ohio Municipal Bond Fund (Ohio Fund) and Eaton Vance Pennsylvania Municipal Bond Fund (Pennsylvania Fund), (each individually referred to as the
Fund, and collectively, the Funds), are Massachusetts business trusts registered under the Investment Company Act of 1940, as amended (the 1940 Act), as non-diversified, closed-end management investment companies, except for Municipal Fund II, which
is a diversified, closed-end management investment company. Each Fund seeks to provide current income exempt from regular federal income tax, including alternative minimum tax, and, in state specific funds, taxes in its specified state.
The following is a summary of significant accounting policies of the Funds. The policies are in conformity with accounting principles generally accepted in the
United States of America.
A Investment Valuation
Debt obligations (including short-term obligations with a remaining maturity of more than sixty days) are generally valued on the basis of valuations provided by third party pricing services, as
derived from such services pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and asked prices, broker/dealer quotations, prices or yields of securities with similar characteristics,
benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the
valuation for a security. Short-term obligations purchased with a remaining maturity of sixty days or less are generally valued at amortized cost, which approximates market value. Financial futures contracts are valued at the closing settlement
price established by the board of trade or exchange on which they are traded. Interest rate swaps are normally valued using valuations provided by a third party pricing service. Such pricing service valuations are based on the present value of fixed
and projected floating rate cash flows over the term of the swap contract. Future cash flows are discounted to their present value using swap rates provided by electronic data services or by broker/dealers. Investments for which valuations or market
quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of a Fund in a manner that fairly reflects the securitys value, or the amount
that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another.
These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the securitys disposition, the price and extent of public trading in similar securities of the issuer or of comparable
entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the
entitys financial condition, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions and Related Income
Investment transactions for financial
statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost. Interest income is recorded on the basis of interest accrued, adjusted for amortization of
premium or accretion of discount.
C Federal Taxes
Each Funds policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its
taxable, if any, and tax-exempt net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. Each Fund intends to satisfy conditions which will enable
it to designate distributions from the interest income generated by its investments in municipal obligations, which are exempt from regular federal income tax when received by each Fund, as exempt-interest dividends.
At September 30, 2012, the following Funds, for federal income tax purposes, had capital loss carryforwards and current year deferred capital losses which will
reduce the respective Funds taxable income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus will reduce the amount of distributions to shareholders, which
would otherwise be necessary to relieve the Funds of any liability for federal income or excise tax. The current year deferred capital losses are treated as arising on the first day of the Funds next taxable year and are treated as realized
prior to the utilization of the capital loss carryforward. The amounts and expiration dates of the capital loss carryforwards and the amounts of the current year deferred capital losses are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration Date
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
September 30, 2013
|
|
$
|
|
|
|
$
|
|
|
|
$
|
179,329
|
|
|
$
|
384,407
|
|
September 30, 2016
|
|
|
658,427
|
|
|
|
52,500
|
|
|
|
|
|
|
|
1,883
|
|
September 30, 2017
|
|
|
2,011,041
|
|
|
|
1,365,711
|
|
|
|
94,578
|
|
|
|
|
|
September 30, 2018
|
|
|
11,539,291
|
|
|
|
3,330,399
|
|
|
|
1,054,999
|
|
|
|
579,696
|
|
September 30, 2019
|
|
|
1,277,303
|
|
|
|
1,539,887
|
|
|
|
225,669
|
|
|
|
515,704
|
|
|
|
|
|
|
Total capital loss carryforward
|
|
$
|
15,486,062
|
|
|
$
|
6,288,497
|
|
|
$
|
1,554,575
|
|
|
$
|
1,481,690
|
|
|
|
|
|
|
Current year deferred capital losses
|
|
$
|
7,301,218
|
|
|
$
|
4,990,165
|
|
|
$
|
1,439,462
|
|
|
$
|
573,761
|
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration Date
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
September 30, 2013
|
|
$
|
|
|
|
$
|
|
|
|
$
|
321,978
|
|
|
$
|
|
|
September 30, 2016
|
|
|
|
|
|
|
41,818
|
|
|
|
83,319
|
|
|
|
|
|
September 30, 2017
|
|
|
244,927
|
|
|
|
1,233,356
|
|
|
|
1,620,085
|
|
|
|
|
|
September 30, 2018
|
|
|
2,060,337
|
|
|
|
1,545,637
|
|
|
|
3,381,936
|
|
|
|
1,949,047
|
|
September 30, 2019
|
|
|
1,369,694
|
|
|
|
1,548,104
|
|
|
|
669,118
|
|
|
|
925,899
|
|
|
|
|
|
|
Total capital loss carryforward
|
|
$
|
3,674,958
|
|
|
$
|
4,368,915
|
|
|
$
|
6,076,436
|
|
|
$
|
2,874,946
|
|
|
|
|
|
|
Current year deferred capital losses
|
|
$
|
2,266,743
|
|
|
$
|
1,493,090
|
|
|
$
|
1,081,868
|
|
|
$
|
2,071,926
|
|
As of September 30, 2012, the Funds had no uncertain tax positions that would require financial statement recognition,
de-recognition, or disclosure. Each Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
D Expense Reduction
State Street
Bank and Trust Company (SSBT) serves as custodian of the Funds. Pursuant to the custodian agreement, SSBT receives a fee reduced by credits, which are determined based on the average daily cash balance each Fund maintains with SSBT. All credit
balances, if any, used to reduce each Funds custodian fees are reported as a reduction of expenses in the Statements of Operations.
E Legal Fees
Legal fees and other related expenses incurred as part of negotiations of the terms and requirement of capital
infusions, or that are expected to result in the restructuring of, or a plan of reorganization for, an investment are recorded as realized losses. Ongoing expenditures to protect or enhance an investment are treated as operating expenses.
F Use of Estimates
The
preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America 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 income and expense during the reporting period. Actual results could differ from those estimates.
G Indemnifications
Under each Funds organizational documents, its officers and
Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to each Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as a Fund)
could be deemed to have personal liability for the obligations of the Fund. However, each Funds Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Fund shall
assume the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or
expense arising from such liability. Additionally, in the normal course of business, each Fund enters into agreements with service providers that may contain indemnification clauses. Each Funds maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against each Fund that have not yet occurred.
H Floating Rate Notes Issued in Conjunction with Securities Held
The Funds may invest in residual interest bonds, also referred to
as inverse floating rate securities, whereby a Fund may sell a variable or fixed rate bond to a broker for cash. At the same time, the Fund buys a residual interest in the assets and cash flows of a Special-Purpose Vehicle (the SPV), (which is
generally organized as a trust), set up by the broker. The broker deposits a bond into the SPV with the same CUSIP number as the bond sold to the broker by the Fund, and which may have been, but is not required to be, the bond purchased from the
Fund (the Bond). The SPV also issues floating rate notes (Floating Rate Notes) which are sold to third-parties. The residual interest bond held by a Fund gives the Fund the right (1) to cause the holders of the Floating Rate Notes to generally
tender their notes at par, and (2) to have the broker transfer the Bond held by the SPV to the Fund, thereby terminating the SPV. Should the Fund exercise such right, it would generally pay the broker the par amount due on the Floating Rate
Notes and exchange the residual interest bond for the underlying Bond. Pursuant to generally accepted accounting principles for transfers and servicing of financial assets and extinguishment of liabilities, the Funds account for the transaction
described above as a secured borrowing by including the Bond in their Portfolio of Investments and the Floating Rate Notes as a liability under the caption Payable for floating rate notes issued in their Statement of Assets and
Liabilities. The Floating Rate Notes have interest rates that generally reset weekly and their holders have the option to tender their notes to the broker for redemption at par at each reset date. Accordingly, the fair value of the payable for
floating rate notes issued approximates its carrying value. If measured at fair value, the payable for floating rate notes would have been considered as Level 2 in the fair value hierarchy (see Note 10) at September 30, 2012. Interest expense
related to the Funds liability with respect to Floating Rate Notes is recorded as incurred. The SPV may be terminated by the Fund, as noted above, or by the broker upon the occurrence of certain termination events as defined in the trust
agreement, such as a downgrade in the credit quality of the underlying Bond, bankruptcy of or payment failure by the issuer of the underlying Bond, the inability to remarket Floating Rate Notes that have been tendered due to insufficient buyers in
the market, or the failure by the SPV to obtain renewal of the liquidity agreement under which liquidity support is provided for the Floating Rate Notes up to one year. Structuring fees paid to the liquidity provider upon the creation of an SPV have
been recorded as debt issuance costs and are being amortized as interest expense to the expected maturity of the related trust.
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
Unamortized structuring fees related to a terminated SPV are recorded as a realized loss on extinguishment of debt. At September 30, 2012, the amounts of the Funds Floating Rate Notes
and related interest rates and collateral were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
|
|
|
Floating Rate Notes Outstanding
|
|
$
|
42,905,000
|
|
|
$
|
9,885,000
|
|
|
$
|
3,330,000
|
|
Interest Rate or Range of Interest Rates (%)
|
|
|
0.18 - 0.43
|
|
|
|
0.18 - 0.23
|
|
|
|
0.18 - 0.25
|
|
Collateral for Floating Rate Notes Outstanding
|
|
$
|
54,936,846
|
|
|
$
|
12,230,286
|
|
|
$
|
4,684,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Floating Rate Notes Outstanding
|
|
$
|
4,790,000
|
|
|
$
|
8,875,000
|
|
|
$
|
250,000
|
|
|
$
|
2,040,000
|
|
Interest Rate or Range of Interest Rates (%)
|
|
|
0.25 - 0.38
|
|
|
|
0.18 - 0.25
|
|
|
|
0.21 - 0.25
|
|
|
|
0.19 - 0.25
|
|
Collateral for Floating Rate Notes Outstanding
|
|
$
|
6,365,426
|
|
|
$
|
12,210,470
|
|
|
$
|
546,855
|
|
|
$
|
3,420,671
|
|
For the year ended September 30, 2012, the Funds average Floating Rate Notes outstanding and the average interest rate
including fees and amortization of deferred debt issuance costs were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
|
|
|
Average Floating Rate Notes Outstanding
|
|
$
|
48,599,413
|
|
|
$
|
9,885,000
|
|
|
$
|
3,330,000
|
|
Average Interest Rate
|
|
|
0.72
|
%
|
|
|
0.69
|
%
|
|
|
0.76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Average Floating Rate Notes Outstanding
|
|
$
|
4,790,000
|
|
|
$
|
10,350,041
|
|
|
$
|
250,000
|
|
|
$
|
2,040,000
|
|
Average Interest Rate
|
|
|
0.93
|
%
|
|
|
0.73
|
%
|
|
|
1.02
|
%
|
|
|
0.86
|
%
|
The Funds may enter into shortfall and forbearance agreements with the broker by which a Fund agrees to reimburse the broker, in
certain circumstances, for the difference between the liquidation value of the Bond held by the SPV and the liquidation value of the Floating Rate Notes, as well as any shortfalls in interest cash flows. The Funds had no shortfalls as of
September 30, 2012.
The Funds may also purchase residual interest bonds from brokers in a secondary market transaction without first owning the
underlying bond. Such transactions are not required to be treated as secured borrowings. Shortfall agreements, if any, related to residual interest bonds purchased in a secondary market transaction are disclosed in the Portfolio of Investments.
The Funds investment policies and restrictions expressly permit investments in residual interest bonds. Such bonds typically offer the potential
for yields exceeding the yields available on fixed rate bonds with comparable credit quality and maturity. These securities tend to underperform the market for fixed rate bonds in a rising long-term interest rate environment, but tend to outperform
the market for fixed rate bonds when long-term interest rates decline. The value and income of residual interest bonds are generally more volatile than that of a fixed rate bond. The Funds investment policies do not allow the Funds to borrow
money except as permitted by the 1940 Act. Management believes that the Funds restrictions on borrowing money and issuing senior securities (other than as specifically permitted) do not apply to Floating Rate Notes issued by the SPV and
included as a liability in the Funds Statement of Assets and Liabilities. As secured indebtedness issued by an SPV, Floating Rate Notes are distinct from the borrowings and senior securities to which the Funds restrictions apply.
Residual interest bonds held by the Funds are securities exempt from registration under Rule 144A of the Securities Act of 1933.
I Financial Futures Contracts
Upon entering into a financial futures contract, a Fund is required to deposit with the broker,
either in cash or securities, an amount equal to a certain percentage of the purchase price (initial margin). Subsequent payments, known as variation margin, are made or received by the Fund each business day, depending on the daily fluctuations in
the value of the underlying security, and are recorded as unrealized gains or losses by the Fund. Gains (losses) are realized upon the expiration or closing of the financial futures contracts. Should market conditions change unexpectedly, the
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. Futures contracts have minimal counterparty risk as they are exchange traded and the
clearinghouse for the exchange is substituted as the counterparty, guaranteeing counterparty performance.
J Interest Rate Swaps
Pursuant to interest rate swap agreements, a Fund makes periodic payments at a fixed interest rate and,
in exchange, receives payments based on the interest rate of a benchmark industry index. Payments received or made are recorded as realized gains or losses. During the term of the outstanding swap agreement, changes in the underlying value of the
swap are recorded as unrealized gains or losses. The value of the swap is determined by changes in the relationship between two rates of interest. A Fund is exposed to credit loss in the event of non-performance by the swap counterparty. Risk may
also arise from movements in interest rates.
K When-Issued Securities and
Delayed Delivery Transactions
The Funds may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period
for that security. At the time the transaction is negotiated, the price of the security that will be delivered is fixed. The Funds maintain security positions for these commitments such that sufficient liquid assets will be available to make
payments upon settlement. Securities purchased on a delayed delivery or when-issued basis are marked-to-market daily and begin earning interest on settlement date. Losses may arise due to changes in the market value of the underlying securities or
if the counterparty does not perform under the contract.
L Statement of Cash
Flows
The cash amount shown in the Statement of Cash Flows of a Fund is the amount included in the Funds Statement of Assets and Liabilities and represents the cash on hand at its
custodian and does not include any short-term investments.
2 Auction Preferred Shares
Each Fund issued Auction Preferred Shares (APS) on January 15, 2003 in a public offering. The underwriting discounts and other offering costs incurred in
connection with the offering were recorded as a reduction of the paid-in capital of the common shares of each respective Fund. Dividends on the APS, which accrue daily, are cumulative at rates which are reset every seven days by an auction, unless a
special dividend period has been set. If the APS auctions do not successfully clear, the dividend payment rate over the next period for the APS holders is set at a specified maximum applicable rate until such time as the APS auctions are successful.
The maximum applicable rate on the APS is 110% (150% for taxable distributions) of the greater of the 1) AA Financial Composite Commercial Paper Rate or 2) Taxable Equivalent of the Short-Term Municipal Obligation Rate on the date of the
auction. The stated spread over the reference benchmark rate is determined based on the credit rating of the APS. Series of APS are identical in all respects except for the reset dates of the dividend rates.
The APS are redeemable at the option of each Fund at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, on any dividend payment
date. The APS are also subject to mandatory redemption at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, if a Fund is in default for an extended period on its asset maintenance requirements with respect to the
APS. If the dividends on the APS remain unpaid in an amount equal to two full years dividends, the holders of the APS as a class have the right to elect a majority of the Board of Trustees. In general, the holders of the APS and the common
shares have equal voting rights of one vote per share, except that the holders of the APS, as a separate class, have the right to elect at least two members of the Board of Trustees. The APS have a liquidation preference of $25,000 per share, plus
accumulated and unpaid dividends. Each Fund is required to maintain certain asset coverage with respect to the APS as defined in the Funds By-laws and the 1940 Act. Each Fund pays an annual fee up to 0.15% of the liquidation value of the APS
to broker/dealers as a service fee if the auctions are unsuccessful; otherwise, the annual fee is 0.25%.
3 Distributions to
Shareholders
Each Fund intends to make monthly distributions of net investment income to common shareholders, after payment of any dividends on any
outstanding APS. In addition, at least annually, each Fund intends to distribute all or substantially all of its net realized capital gains (reduced by available capital loss carryforwards from prior years, if any). Distributions to common
shareholders are recorded on the ex-dividend date. Distributions to preferred shareholders are recorded daily and are payable at the end of each dividend period. The dividend rates for APS at September 30, 2012, and the amount of dividends
accrued (including capital gains, if any) to APS shareholders, average APS dividend rates, and dividend rate ranges for the year then ended were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
(Series A)
|
|
|
Municipal
Fund II
(Series B)
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
|
APS Dividend Rates at September 30, 2012
|
|
|
0.27
|
%
|
|
|
0.27
|
%
|
|
|
0.27
|
%
|
|
|
0.27
|
%
|
|
|
0.27
|
%
|
Dividends Accrued to APS Shareholders
|
|
$
|
54,288
|
|
|
$
|
54,234
|
|
|
$
|
62,425
|
|
|
$
|
32,805
|
|
|
$
|
32,152
|
|
Average APS Dividend Rates
|
|
|
0.24
|
%
|
|
|
0.24
|
%
|
|
|
0.24
|
%
|
|
|
0.24
|
%
|
|
|
0.24
|
%
|
Dividend Rate Ranges (%)
|
|
|
0.11 - 0.40
|
|
|
|
0.11 - 0.40
|
|
|
|
0.11 - 0.40
|
|
|
|
0.11 - 0.40
|
|
|
|
0.11 - 0.38
|
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
APS Dividend Rates at September 30, 2012
|
|
|
0.27
|
%
|
|
|
0.27
|
%
|
|
|
0.27
|
%
|
|
|
0.27
|
%
|
Dividends Accrued to APS Shareholders
|
|
$
|
48,133
|
|
|
$
|
32,137
|
|
|
$
|
41,252
|
|
|
$
|
52,771
|
|
Average APS Dividend Rates
|
|
|
0.25
|
%
|
|
|
0.24
|
%
|
|
|
0.24
|
%
|
|
|
0.24
|
%
|
Dividend Rate Ranges (%)
|
|
|
0.11 - 0.38
|
|
|
|
0.11 - 0.38
|
|
|
|
0.11 - 0.40
|
|
|
|
0.11 - 0.40
|
|
Beginning February 13, 2008 and consistent with the patterns in the broader market for auction-rate securities, the Funds
APS auctions were unsuccessful in clearing due to an imbalance of sell orders over bids to buy the APS. As a result, the dividend rates of the APS were reset to the maximum applicable rates. The table above reflects such maximum dividend rates for
each series as of September 30, 2012.
The Funds distinguish between distributions on a tax basis and a financial reporting basis. Accounting
principles generally accepted in the United States of America require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Permanent differences between book and tax
accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
The tax character of distributions declared for the years ended September 30, 2012 and September 30, 2011 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30, 2012
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
Distributions declared from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt income
|
|
$
|
8,837,775
|
|
|
$
|
3,139,020
|
|
|
$
|
1,516,786
|
|
|
$
|
1,377,492
|
|
Ordinary income
|
|
$
|
10,796
|
|
|
$
|
4,392
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30, 2012
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
Distributions declared from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt income
|
|
$
|
2,158,297
|
|
|
$
|
2,042,548
|
|
|
$
|
1,996,065
|
|
|
$
|
2,634,314
|
|
Ordinary income
|
|
$
|
|
|
|
$
|
747
|
|
|
$
|
592
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30, 2011
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
Distributions declared from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt income
|
|
$
|
9,690,853
|
|
|
$
|
3,412,033
|
|
|
$
|
1,528,173
|
|
|
$
|
1,387,537
|
|
Ordinary income
|
|
$
|
1,159
|
|
|
$
|
14,923
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30, 2011
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
Distributions declared from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt income
|
|
$
|
2,431,398
|
|
|
$
|
2,260,691
|
|
|
$
|
2,009,397
|
|
|
$
|
2,598,732
|
|
Ordinary income
|
|
$
|
17,275
|
|
|
$
|
10,998
|
|
|
$
|
1,336
|
|
|
$
|
39,044
|
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
During the year ended September 30, 2012, the following amounts were reclassified due to differences between book and tax accounting, primarily for accretion of market discount.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
Change in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated net realized loss
|
|
$
|
6,090
|
|
|
$
|
9,562
|
|
|
$
|
6,910
|
|
|
$
|
10,748
|
|
Accumulated undistributed (distributions in excess of) net investment income
|
|
$
|
(6,090
|
)
|
|
$
|
(9,562
|
)
|
|
$
|
(6,910
|
)
|
|
$
|
(10,748
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Change in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated net realized loss
|
|
$
|
12,041
|
|
|
$
|
14,479
|
|
|
$
|
46,196
|
|
|
$
|
21,252
|
|
Accumulated undistributed net investment income
|
|
$
|
(12,041
|
)
|
|
$
|
(14,479
|
)
|
|
$
|
(46,196
|
)
|
|
$
|
(21,252
|
)
|
These reclassifications had no effect on the net assets or net asset value per share of the Funds.
As of September 30, 2012, the components of distributable earnings (accumulated losses) and unrealized appreciation (depreciation) on a tax basis were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
Undistributed tax-exempt income
|
|
$
|
358,161
|
|
|
$
|
110,714
|
|
|
$
|
76,326
|
|
|
$
|
62,799
|
|
Capital loss carryforward and deferred capital losses
|
|
$
|
(22,787,280
|
)
|
|
$
|
(11,278,662
|
)
|
|
$
|
(2,994,037
|
)
|
|
$
|
(2,055,451
|
)
|
Net unrealized appreciation
|
|
$
|
14,339,376
|
|
|
$
|
8,195,758
|
|
|
$
|
5,990,770
|
|
|
$
|
3,293,620
|
|
Other temporary differences
|
|
$
|
(2,175
|
)
|
|
$
|
(770
|
)
|
|
$
|
(305
|
)
|
|
$
|
(499
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Undistributed tax-exempt income
|
|
$
|
92,337
|
|
|
$
|
49,029
|
|
|
$
|
103,221
|
|
|
$
|
205,398
|
|
Capital loss carryforward and deferred capital losses
|
|
$
|
(5,941,701
|
)
|
|
$
|
(5,862,005
|
)
|
|
$
|
(7,158,304
|
)
|
|
$
|
(4,946,872
|
)
|
Net unrealized appreciation
|
|
$
|
7,057,630
|
|
|
$
|
5,112,375
|
|
|
$
|
6,137,368
|
|
|
$
|
5,592,328
|
|
Other temporary differences
|
|
$
|
(880
|
)
|
|
$
|
(497
|
)
|
|
$
|
(1,145
|
)
|
|
$
|
(490
|
)
|
The differences between components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the
Statements of Assets and Liabilities are primarily due to wash sales, the timing of recognizing distributions to shareholders, futures contracts, accretion of market discount, expenditures on defaulted bonds and residual interest bonds.
4 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Eaton Vance Management (EVM) as compensation for investment advisory services rendered to each Fund. The fee is computed at an annual rate of 0.55% of each Funds
average weekly gross assets and is payable monthly. Average weekly gross assets include the principal amount of any indebtedness for money borrowed, including debt securities issued by a Fund, and the amount of any outstanding APS issued by the
Fund. Pursuant to a fee reduction agreement with EVM, average weekly gross assets are calculated by adding to net assets the liquidation value of a Funds APS then outstanding and the amount payable by the Fund to floating rate note holders,
such adjustment being limited to the value of the APS
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
outstanding prior to any APS redemptions by the Fund. EVM also serves as the administrator of each Fund, but receives no compensation. For the year ended September 30, 2012, the investment
adviser fees were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
Investment Adviser Fee
|
|
$
|
1,177,000
|
|
|
$
|
454,721
|
|
|
$
|
231,560
|
|
|
$
|
194,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Investment Adviser Fee
|
|
$
|
323,389
|
|
|
$
|
310,900
|
|
|
$
|
276,591
|
|
|
$
|
355,709
|
|
Officers and Trustees of the Funds who are members of EVMs organization receive remuneration for their services to the Funds
out of the investment adviser fee. Trustees of the Funds who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation
Plan. For the year ended September 30, 2012, no significant amounts have been deferred. Certain officers and Trustees of the Funds are officers of EVM.
5 Purchases and Sales of Investments
Purchases and sales of investments, other than
short-term obligations, for the year ended September 30, 2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
Purchases
|
|
$
|
34,339,474
|
|
|
$
|
12,216,245
|
|
|
$
|
898,229
|
|
|
$
|
6,642,469
|
|
Sales
|
|
$
|
45,573,815
|
|
|
$
|
12,348,238
|
|
|
$
|
692,906
|
|
|
$
|
6,721,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Purchases
|
|
$
|
11,830,394
|
|
|
$
|
10,423,471
|
|
|
$
|
5,891,845
|
|
|
$
|
6,683,193
|
|
Sales
|
|
$
|
9,473,583
|
|
|
$
|
13,245,990
|
|
|
$
|
6,311,274
|
|
|
$
|
7,469,361
|
|
6 Common Shares of Beneficial Interest
Common shares issued pursuant to the Funds dividend reinvestment plan for the years ended September 30, 2012 and September 30, 2011 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
Year Ended September 30, 2012
|
|
|
17,109
|
|
|
|
2,340
|
|
|
|
2,043
|
|
|
|
1,181
|
|
Year Ended September 30, 2011
|
|
|
19,997
|
|
|
|
6,283
|
|
|
|
3,205
|
|
|
|
372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Year Ended September 30, 2012
|
|
|
11,044
|
|
|
|
2,145
|
|
|
|
4,058
|
|
|
|
2,539
|
|
Year Ended September 30, 2011
|
|
|
11,653
|
|
|
|
2,773
|
|
|
|
4,815
|
|
|
|
4,284
|
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
7 Federal Income Tax Basis of Investments
The cost and unrealized appreciation
(depreciation) of investments of each Fund at September 30, 2012, as determined on a federal income tax basis, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
Aggregate cost
|
|
$
|
161,332,613
|
|
|
$
|
68,734,882
|
|
|
$
|
35,021,969
|
|
|
$
|
31,977,564
|
|
|
|
|
|
|
Gross unrealized appreciation
|
|
$
|
23,264,575
|
|
|
$
|
9,217,963
|
|
|
$
|
6,147,425
|
|
|
$
|
3,514,045
|
|
Gross unrealized depreciation
|
|
|
(8,925,199
|
)
|
|
|
(1,022,205
|
)
|
|
|
(156,655
|
)
|
|
|
(220,425
|
)
|
|
|
|
|
|
Net unrealized appreciation
|
|
$
|
14,339,376
|
|
|
$
|
8,195,758
|
|
|
$
|
5,990,770
|
|
|
$
|
3,293,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Aggregate cost
|
|
$
|
49,726,672
|
|
|
$
|
43,188,609
|
|
|
$
|
45,152,610
|
|
|
$
|
58,204,077
|
|
|
|
|
|
|
Gross unrealized appreciation
|
|
$
|
7,369,639
|
|
|
$
|
5,526,073
|
|
|
$
|
6,738,763
|
|
|
$
|
6,533,314
|
|
Gross unrealized depreciation
|
|
|
(312,009
|
)
|
|
|
(413,698
|
)
|
|
|
(601,395
|
)
|
|
|
(940,986
|
)
|
|
|
|
|
|
Net unrealized appreciation
|
|
$
|
7,057,630
|
|
|
$
|
5,112,375
|
|
|
$
|
6,137,368
|
|
|
$
|
5,592,328
|
|
8 Overdraft Advances
Pursuant to the custodian agreement, SSBT may, in its discretion, advance funds to the Funds to make properly authorized payments. When such payments result in an overdraft, the Funds are obligated to repay SSBT at
the current rate of interest charged by SSBT for secured loans (currently, the Federal Funds rate plus 2%). This obligation is payable on demand to SSBT. SSBT has a lien on a Funds assets to the extent of any overdraft. At September 30,
2012, California Fund II, New York Fund II, Ohio Fund and Pennsylvania Fund had payments due to SSBT pursuant to the foregoing arrangement of $81,896, $95,588, $68,950 and $119,053, respectively. Based on the short-term nature of these payments and
the variable interest rate, the carrying value of the overdraft advances approximated its fair value at September 30, 2012. If measured at fair value, overdraft advances would have been considered as Level 2 in the fair value hierarchy (see
Note 10) at September 30, 2012. The Funds average overdraft advances during the year ended September 30, 2012 were not significant.
9 Financial Instruments
The Funds may trade in financial instruments with off-balance
sheet risk in the normal course of their investing activities. These financial instruments may include financial futures contracts and interest rate swaps 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 a Fund has in particular classes of financial instruments and do not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered.
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
A summary of obligations under these financial instruments at September 30, 2012 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
|
|
Fund
|
|
Expiration
Month/Year
|
|
|
Contracts
|
|
Position
|
|
Aggregate
Cost
|
|
|
Value
|
|
|
Net Unrealized
Appreciation
(Depreciation)
|
|
|
|
|
|
|
|
|
Municipal II
|
|
|
12/12
|
|
|
58
U.S. 30-Year Treasury Bond
|
|
Short
|
|
$
|
(8,656,464
|
)
|
|
$
|
(8,663,750
|
)
|
|
$
|
(7,286
|
)
|
California II
|
|
|
12/12
|
|
|
25
U.S. 10-Year Treasury Note
|
|
Short
|
|
$
|
(3,318,118
|
)
|
|
$
|
(3,337,109
|
)
|
|
$
|
(18,991
|
)
|
|
|
|
12/12
|
|
|
28
U.S. 30-Year Treasury Bond
|
|
Short
|
|
|
(4,192,730
|
)
|
|
|
(4,182,500
|
)
|
|
|
10,230
|
|
Massachusetts
|
|
|
12/12
|
|
|
14
U.S. 30-Year Treasury Bond
|
|
Short
|
|
$
|
(2,096,365
|
)
|
|
$
|
(2,091,250
|
)
|
|
$
|
5,115
|
|
Michigan
|
|
|
12/12
|
|
|
3
U.S. 30-Year Treasury Bond
|
|
Short
|
|
$
|
(443,526
|
)
|
|
$
|
(448,125
|
)
|
|
$
|
(4,599
|
)
|
New Jersey
|
|
|
12/12
|
|
|
75
U.S. 30-Year Treasury Bond
|
|
Short
|
|
$
|
(11,230,527
|
)
|
|
$
|
(11,203,125
|
)
|
|
$
|
27,402
|
|
New York II
|
|
|
12/12
|
|
|
22
U.S. 30-Year Treasury Bond
|
|
Short
|
|
$
|
(3,294,288
|
)
|
|
$
|
(3,286,250
|
)
|
|
$
|
8,038
|
|
Ohio
|
|
|
12/12
|
|
|
16
U.S. 30-Year Treasury Bond
|
|
Short
|
|
$
|
(2,395,846
|
)
|
|
$
|
(2,390,000
|
)
|
|
$
|
5,846
|
|
Pennsylvania
|
|
|
12/12
|
|
|
60
U.S. 30-Year Treasury Bond
|
|
Short
|
|
$
|
(8,984,421
|
)
|
|
$
|
(8,962,500
|
)
|
|
$
|
21,921
|
|
At September 30, 2012, the Funds had sufficient cash and/or securities to cover commitments under these contracts.
Each Fund is subject to interest rate risk in the normal course of pursuing its investment objective. Because the Funds hold fixed-rate bonds, the value of these
bonds may decrease if interest rates rise. To hedge against this risk, the Funds entered into interest rate swap contracts. The Funds also purchase and sell U.S. Treasury futures contracts to hedge against changes in interest rates.
The fair values of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) and whose primary underlying risk
exposure is interest rate risk at September 30, 2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
Asset Derivative:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
|
|
|
$
|
10,230
|
(1)
|
|
$
|
5,115
|
(1)
|
|
$
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
10,230
|
|
|
$
|
5,115
|
|
|
$
|
|
|
|
|
|
|
|
Liability Derivative:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
(7,286
|
)
(1)
|
|
$
|
(18,991
|
)
(1)
|
|
$
|
|
|
|
$
|
(4,599
|
)
(1)
|
|
|
|
|
|
Total
|
|
$
|
(7,286
|
)
|
|
$
|
(18,991
|
)
|
|
$
|
|
|
|
$
|
(4,599
|
)
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Asset Derivative:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
27,402
|
(1)
|
|
$
|
8,038
|
(1)
|
|
$
|
5,846
|
(1)
|
|
$
|
21,921
|
(1)
|
|
|
|
|
|
Total
|
|
$
|
27,402
|
|
|
$
|
8,038
|
|
|
$
|
5,846
|
|
|
$
|
21,921
|
|
(1)
|
Amount represents cumulative unrealized appreciation or (depreciation) on futures contracts in the Futures Contracts table above. Only the current days
variation margin on open futures contracts is reported within the Statement of Assets and Liabilities as Receivable or Payable for variation margin, as applicable.
|
The effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) on the Statement of Operations and whose primary underlying risk exposure is interest rate risk for
the year ended September 30, 2012 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
Realized Gain (Loss) on Derivatives Recognized in Income
|
|
$
|
(1,226,231
|
)
(1)
|
|
$
|
(658,242
|
)
(1)
|
|
$
|
(192,881
|
)
(1)
|
|
$
|
(108,042
|
)
(1)
|
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in
Income
|
|
$
|
689,961
|
(2)
|
|
$
|
427,204
|
(2)
|
|
$
|
132,297
|
(2)
|
|
$
|
74,723
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Realized Gain (Loss) on Derivatives Recognized in Income
|
|
$
|
(1,185,082
|
)
(1)
|
|
$
|
(324,027
|
)
(1)
|
|
$
|
(349,226
|
)
(1)
|
|
$
|
(397,193
|
)
(1)
|
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in
Income
|
|
$
|
687,459
|
(2)
|
|
$
|
284,388
|
(2)
|
|
$
|
174,408
|
(2)
|
|
$
|
79,323
|
(2)
|
(1)
|
Statement of Operations location: Net realized gain (loss) Financial futures
contracts and Swap contracts.
|
(2)
|
Statement of Operations location: Change in unrealized appreciation (depreciation) Financial futures contracts and Swap contracts.
|
The average notional amounts of futures contracts and interest rate swaps outstanding during the year ended September 30, 2012,
which are indicative of the volume of these derivative types, were approximately as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal
Fund II
|
|
|
California
Fund II
|
|
|
Massachusetts
Fund
|
|
|
Michigan
Fund
|
|
|
|
|
|
|
Average Notional Amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
9,046,000
|
|
|
$
|
5,300,000
|
|
|
$
|
1,654,000
|
|
|
$
|
569,000
|
|
Interest Rate Swaps
|
|
$
|
231,000
|
|
|
$
|
139,000
|
|
|
$
|
66,000
|
|
|
$
|
52,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey
Fund
|
|
|
New York
Fund II
|
|
|
Ohio
Fund
|
|
|
Pennsylvania
Fund
|
|
|
|
|
|
|
Average Notional Amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
7,500,000
|
|
|
$
|
2,615,000
|
|
|
$
|
2,438,000
|
|
|
$
|
4,385,000
|
|
Interest Rate Swaps
|
|
$
|
96,000
|
|
|
$
|
154,000
|
|
|
$
|
58,000
|
|
|
$
|
77,000
|
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
10 Fair Value Measurements
Under generally accepted accounting principles for fair value
measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
|
|
Level 1 quoted prices in active markets for identical investments
|
|
|
Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
|
|
|
Level 3 significant unobservable inputs (including a funds own assumptions in determining the fair value of investments)
|
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is
determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those
securities.
At September 30, 2012, the hierarchy of inputs used in valuing the Funds investments and open derivative instruments, which are
carried at value, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Fund II
|
|
Asset Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Tax-Exempt Investments
|
|
$
|
|
|
|
$
|
218,576,989
|
|
|
$
|
|
|
|
$
|
218,576,989
|
|
|
|
|
|
|
Total Investments
|
|
$
|
|
|
|
$
|
218,576,989
|
|
|
$
|
|
|
|
$
|
218,576,989
|
|
|
|
|
|
|
Liability Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
(7,286
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(7,286
|
)
|
|
|
|
|
|
Total
|
|
$
|
(7,286
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(7,286
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California Fund II
|
|
Asset Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Tax-Exempt Investments
|
|
$
|
|
|
|
$
|
86,815,640
|
|
|
$
|
|
|
|
$
|
86,815,640
|
|
|
|
|
|
|
Total Investments
|
|
$
|
|
|
|
$
|
86,815,640
|
|
|
$
|
|
|
|
$
|
86,815,640
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
10,230
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
10,230
|
|
|
|
|
|
|
Total
|
|
$
|
10,230
|
|
|
$
|
86,815,640
|
|
|
$
|
|
|
|
$
|
86,825,870
|
|
|
|
|
|
|
Liability Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
(18,991
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(18,991
|
)
|
|
|
|
|
|
Total
|
|
$
|
(18,991
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(18,991
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Massachusetts Fund
|
|
Asset Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Tax-Exempt Investments
|
|
$
|
|
|
|
$
|
44,342,739
|
|
|
$
|
|
|
|
$
|
44,342,739
|
|
|
|
|
|
|
Total Investments
|
|
$
|
|
|
|
$
|
44,342,739
|
|
|
$
|
|
|
|
$
|
44,342,739
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
5,115
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,115
|
|
|
|
|
|
|
Total
|
|
$
|
5,115
|
|
|
$
|
44,342,739
|
|
|
$
|
|
|
|
$
|
44,347,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notes to Financial Statements continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michigan Fund
|
|
Asset Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Tax-Exempt Investments
|
|
$
|
|
|
|
$
|
35,271,184
|
|
|
$
|
|
|
|
$
|
35,271,184
|
|
|
|
|
|
|
Total Investments
|
|
$
|
|
|
|
$
|
35,271,184
|
|
|
$
|
|
|
|
$
|
35,271,184
|
|
|
|
|
|
|
Liability Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
(4,599
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(4,599
|
)
|
|
|
|
|
|
Total
|
|
$
|
(4,599
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(4,599
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey Fund
|
|
Asset Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Tax-Exempt Investments
|
|
$
|
|
|
|
$
|
61,574,302
|
|
|
$
|
|
|
|
$
|
61,574,302
|
|
|
|
|
|
|
Total Investments
|
|
$
|
|
|
|
$
|
61,574,302
|
|
|
$
|
|
|
|
$
|
61,574,302
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
27,402
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
27,402
|
|
|
|
|
|
|
Total
|
|
$
|
27,402
|
|
|
$
|
61,574,302
|
|
|
$
|
|
|
|
$
|
61,601,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York Fund II
|
|
Asset Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Tax-Exempt Investments
|
|
$
|
|
|
|
$
|
57,175,984
|
|
|
$
|
|
|
|
$
|
57,175,984
|
|
|
|
|
|
|
Total Investments
|
|
$
|
|
|
|
$
|
57,175,984
|
|
|
$
|
|
|
|
$
|
57,175,984
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
8,038
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
8,038
|
|
|
|
|
|
|
Total
|
|
$
|
8,038
|
|
|
$
|
57,175,984
|
|
|
$
|
|
|
|
$
|
57,184,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ohio Fund
|
|
Asset Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Tax-Exempt Investments
|
|
$
|
|
|
|
$
|
51,539,978
|
|
|
$
|
|
|
|
$
|
51,539,978
|
|
|
|
|
|
|
Total Investments
|
|
$
|
|
|
|
$
|
51,539,978
|
|
|
$
|
|
|
|
$
|
51,539,978
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
5,846
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,846
|
|
|
|
|
|
|
Total
|
|
$
|
5,846
|
|
|
$
|
51,539,978
|
|
|
$
|
|
|
|
$
|
51,545,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pennsylvania Fund
|
|
Asset Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
Tax-Exempt Investments
|
|
$
|
|
|
|
$
|
65,836,405
|
|
|
$
|
|
|
|
$
|
65,836,405
|
|
|
|
|
|
|
Total Investments
|
|
$
|
|
|
|
$
|
65,836,405
|
|
|
$
|
|
|
|
$
|
65,836,405
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
21,921
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
21,921
|
|
|
|
|
|
|
Total
|
|
$
|
21,921
|
|
|
$
|
65,836,405
|
|
|
$
|
|
|
|
$
|
65,858,326
|
|
The Funds held no investments or other financial instruments as of September 30, 2011 whose fair value was determined using
Level 3 inputs. At September 30, 2012, there were no investments transferred between Level 1 and Level 2 during the year then ended.
Eaton Vance
Municipal Bond Funds
September 30, 2012
Report of Independent Registered Public Accounting Firm
To the Trustees and Shareholders of Eaton Vance Municipal Bond Fund II, Eaton Vance California Municipal Bond Fund II, Eaton Vance Massachusetts Municipal Bond Fund, Eaton Vance Michigan Municipal Bond Fund, Eaton
Vance New Jersey Municipal Bond Fund, Eaton Vance New York Municipal Bond Fund II, Eaton Vance Ohio Municipal Bond Fund, and Eaton Vance Pennsylvania Municipal Bond Fund:
We have audited the accompanying statements of assets and liabilities of Eaton Vance Municipal Bond Fund II, Eaton Vance California Municipal Bond Fund II, Eaton Vance Massachusetts Municipal Bond Fund, Eaton Vance
Michigan Municipal Bond Fund, Eaton Vance New Jersey Municipal Bond Fund, Eaton Vance New York Municipal Bond Fund II, Eaton Vance Ohio Municipal Bond Fund, and Eaton Vance Pennsylvania Municipal Bond Fund (collectively, the Funds),
including the portfolios of investments, as of September 30, 2012, and the related statements of operations for the year then ended, the statements of cash flows of Eaton Vance Municipal Bond Fund II, Eaton Vance California Municipal Bond Fund
II, and Eaton Vance New York Municipal Bond Fund II for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the responsibility of the Funds management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal
control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Funds internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2012, by
correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Eaton Vance
Municipal Bond Fund II, Eaton Vance California Municipal Bond Fund II, Eaton Vance Massachusetts Municipal Bond Fund, Eaton Vance Michigan Municipal Bond Fund, Eaton Vance New Jersey Municipal Bond Fund, Eaton Vance New York Municipal Bond Fund II,
Eaton Vance Ohio Municipal Bond Fund, and Eaton Vance Pennsylvania Municipal Bond Fund as of September 30, 2012, the results of their operations for the year then ended, the cash flows of Eaton Vance Municipal Bond Fund II, Eaton Vance California
Municipal Bond Fund II, and Eaton Vance New York Municipal Bond Fund II for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 16, 2012
Eaton Vance
Municipal Bond Funds
September 30, 2012
Federal Tax Information (Unaudited)
The Form 1099-DIV you receive in January 2013 will show the tax status of all distributions paid to your account in calendar year 2012. Shareholders are advised to consult their own tax adviser with
respect to the tax consequences of their investment in the Funds. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding exempt-interest dividends.
Exempt-Interest Dividends.
The Funds designate the following percentages of dividends from net investment income as exempt-interest dividends:
|
|
|
|
|
Eaton Vance Municipal Bond Fund II
|
|
|
99.88
|
%
|
Eaton Vance California Municipal Bond Fund II
|
|
|
99.86
|
%
|
Eaton Vance Massachusetts Municipal Bond Fund
|
|
|
100.00
|
%
|
Eaton Vance Michigan Municipal Bond Fund
|
|
|
100.00
|
%
|
Eaton Vance New Jersey Municipal Bond Fund
|
|
|
100.00
|
%
|
Eaton Vance New York Municipal Bond Fund II
|
|
|
99.96
|
%
|
Eaton Vance Ohio Municipal Bond Fund
|
|
|
99.97
|
%
|
Eaton Vance Pennsylvania Municipal Bond Fund
|
|
|
100.00
|
%
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Notice to Shareholders (Unaudited)
At the August 8, 2011 Board Meeting, the Trustees approved the following defensive investing policy: During unusual market conditions, the Funds may invest up to 100% of assets in cash or cash equivalents
temporarily, which may be inconsistent with a Funds investment objective(s) and other policies.
Eaton Vance
Municipal Bond Funds
September 30, 2012
Annual Meeting of Shareholders (Unaudited)
The Funds held their Annual Meeting of Shareholders on July 20, 2012. The following action was taken by the shareholders:
Item 1:
The election of William H. Park, Lynn A. Stout and Ralph F. Verni as Class I Trustees of each Fund for a three-year term expiring in 2015, Scott E. Eston
as a Class II Trustee of each Fund for a one-year term expiring in 2013 and Harriett Tee Taggart as a Class III Trustee of each Fund for a two-year term expiring in 2014. Mr. Verni was elected solely by APS shareholders.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Nominee for
Class I Trustee
Elected by All
Shareholders:
William H. Park
|
|
|
Nominee for
Class I Trustee
Elected by All
Shareholders:
Lynn A. Stout
|
|
|
Nominee for
Class I Trustee
Elected by APS
Shareholders:
Ralph F. Verni
|
|
|
Nominee for
Class II Trustee
Elected by All
Shareholders:
Scott E. Eston
|
|
|
Nominee for
Class III Trustee
Elected by All
Shareholders:
Harriett Tee Taggart
|
|
Municipal Fund II
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
9,207,685
|
|
|
|
9,167,292
|
|
|
|
1,170
|
|
|
|
9,193,491
|
|
|
|
9,191,959
|
|
Withheld
|
|
|
343,201
|
|
|
|
383,594
|
|
|
|
49
|
|
|
|
357,395
|
|
|
|
358,927
|
|
California Fund II
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
3,452,421
|
|
|
|
3,432,375
|
|
|
|
624
|
|
|
|
3,452,421
|
|
|
|
3,452,421
|
|
Withheld
|
|
|
240,212
|
|
|
|
260,258
|
|
|
|
51
|
|
|
|
240,212
|
|
|
|
240,212
|
|
Massachusetts Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
1,671,433
|
|
|
|
1,671,433
|
|
|
|
452
|
|
|
|
1,671,433
|
|
|
|
1,669,940
|
|
Withheld
|
|
|
23,929
|
|
|
|
23,929
|
|
|
|
32
|
|
|
|
23,929
|
|
|
|
25,422
|
|
Michigan Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
1,452,043
|
|
|
|
1,444,060
|
|
|
|
413
|
|
|
|
1,451,182
|
|
|
|
1,450,751
|
|
Withheld
|
|
|
12,778
|
|
|
|
20,761
|
|
|
|
1
|
|
|
|
13,639
|
|
|
|
14,070
|
|
New Jersey Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
2,467,970
|
|
|
|
2,463,762
|
|
|
|
548
|
|
|
|
2,467,970
|
|
|
|
2,467,970
|
|
Withheld
|
|
|
82,783
|
|
|
|
86,991
|
|
|
|
13
|
|
|
|
82,783
|
|
|
|
82,783
|
|
New York Fund II
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
2,322,749
|
|
|
|
2,354,398
|
|
|
|
292
|
|
|
|
2,322,749
|
|
|
|
2,355,064
|
|
Withheld
|
|
|
119,297
|
|
|
|
87,648
|
|
|
|
25
|
|
|
|
119,297
|
|
|
|
86,982
|
|
Ohio Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
2,397,294
|
|
|
|
2,392,866
|
|
|
|
492
|
|
|
|
2,398,387
|
|
|
|
2,324,022
|
|
Withheld
|
|
|
35,335
|
|
|
|
39,763
|
|
|
|
17
|
|
|
|
34,242
|
|
|
|
108,607
|
|
Pennsylvania Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
2,771,442
|
|
|
|
2,766,658
|
|
|
|
657
|
|
|
|
2,775,101
|
|
|
|
2,769,173
|
|
Withheld
|
|
|
74,287
|
|
|
|
79,071
|
|
|
|
4
|
|
|
|
70,628
|
|
|
|
76,556
|
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Dividend Reinvestment Plan
Each Fund offers a dividend reinvestment plan (Plan) pursuant to which shareholders may elect to have distributions automatically reinvested in common shares (Shares) of the Fund. You may elect to participate in
the Plan by completing the Dividend Reinvestment Plan Application Form. If you do not participate, you will receive all distributions in cash paid by check mailed directly to you by American Stock Transfer & Trust Company (AST) as
dividend paying agent. On the distribution payment date, if the NAV per Share is equal to or less than the market price per Share plus estimated brokerage commissions, then new Shares will be issued. The number of Shares shall be determined by the
greater of the NAV per Share or 95% of the market price. Otherwise, Shares generally will be purchased on the open market by AST, the Plan agent (Agent). Distributions subject to income tax (if any) are taxable whether or not Shares are reinvested.
If your Shares are in the name of a brokerage firm, bank, or other nominee, you can ask the firm or nominee to participate in the Plan on your behalf.
If the nominee does not offer the Plan, you will need to request that the Funds transfer agent re-register your Shares in your name or you will not be able to participate.
The Agents service fee for handling distributions will be paid by the Fund. Plan participants will be charged their pro rata share of brokerage commissions on all open-market purchases.
Plan participants may withdraw from the Plan at any time by writing to the Agent at the address noted on the following page. If you withdraw, you will receive
Shares in your name for all Shares credited to your account under the Plan. If a participant elects by written notice to the Agent to sell part or all of his or her Shares and remit the proceeds, the Agent is authorized to deduct a $5.00 fee plus
brokerage commissions from the proceeds.
If you wish to participate in the Plan and your Shares are held in your own name, you may complete the form on
the following page and deliver it to the Agent. Any inquiries regarding the Plan can be directed to the Agent at 1-866-439-6787.
Eaton Vance
Municipal Bond Funds
September 30, 2012
Application for Participation in Dividend Reinvestment Plan
This form is for shareholders who hold their common shares in their own names. If your common shares are held in the
name of a brokerage firm, bank, or other nominee, you should contact your nominee to see if it will participate in the Plan on your behalf. If you wish to participate in the Plan, but your brokerage firm, bank, or nominee is unable to participate on
your behalf, you should request that your common shares be re-registered in your own name which will enable your participation in the Plan.
The following authorization and appointment is given with the understanding that I may terminate it at any time by terminating my participation in the Plan as provided in the terms and conditions of the Plan.
Please print exact name on account
Shareholder signature
Date
Shareholder signature
Date
Please sign exactly as your common
shares are registered. All persons whose names appear on the share certificate must sign.
YOU SHOULD NOT RETURN THIS FORM IF YOU
WISH TO RECEIVE YOUR DISTRIBUTIONS IN CASH. THIS IS NOT A PROXY.
This authorization form, when signed, should be mailed to the
following address:
Eaton Vance Municipal Bond Funds
c/o American Stock Transfer & Trust Company
P.O. Box 922
Wall Street Station
New York, NY
10269-0560
Number of Employees
Each
Fund is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company, and has no employees.
Number of Shareholders
As of
September 30, 2012, Fund records indicate that there are 67, 25, 18, 25, 22, 37, 48 and 101 registered shareholders for Municipal Fund II, California Fund II, Massachusetts Fund, Michigan Fund, New Jersey Fund, New York Fund II,
Ohio Fund and Pennsylvania Fund, respectively, and approximately 4,301, 1,271, 797, 823, 1,124, 1,061, 1,317 and 1,529 shareholders owning the Fund shares in street name, such as through brokers, banks and financial intermediaries for Municipal
Fund II, California Fund II, Massachusetts Fund, Michigan Fund, New Jersey Fund, New York Fund II, Ohio Fund and Pennsylvania Fund, respectively.
If you are a street name shareholder and wish to receive Fund reports directly, which contain important information about a Fund, please write or call:
Eaton Vance Distributors, Inc.
Two International Place
Boston,
MA 02110
1-800-262-1122
NYSE MKT symbols
|
|
|
Municipal Bond Fund II
|
|
EIV
|
California Municipal Bond Fund II
|
|
EIA
|
Massachusetts Municipal Bond Fund
|
|
MAB
|
Michigan Municipal Bond Fund
|
|
MIW
|
|
|
|
New Jersey Municipal Bond Fund
|
|
EMJ
|
New York Municipal Bond Fund II
|
|
NYH
|
Ohio Municipal Bond Fund
|
|
EIO
|
Pennsylvania Municipal Bond Fund
|
|
EIP
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Board of Trustees Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the
1940 Act), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuation is approved at least annually by the funds
board of trustees, including by a vote of a majority of the trustees who are not interested persons of the fund (Independent Trustees), cast in person at a meeting called for the purpose of considering such approval.
At a meeting of the Boards of Trustees (each a Board) of the Eaton Vance group of mutual funds (the Eaton Vance Funds) held on
April 23, 2012, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing advisory and sub-advisory agreements for the Eaton Vance Funds for an additional one-year period. In voting its approval, the
Board relied upon the affirmative recommendation of the Contract Review Committee of the Board, which is a committee comprised exclusively of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed
information furnished by each adviser to the Eaton Vance Funds (including information specifically requested by the Board) for a series of meetings of the Contract Review Committee held between February and April 2012, as well as information
considered during prior meetings of the committee. Such information included, among other things, the following:
Information about Fees, Performance
and Expenses
|
|
An independent report comparing the advisory and related fees paid by each fund with fees paid by comparable funds;
|
|
|
An independent report comparing each funds total expense ratio and its components to comparable funds;
|
|
|
An independent report comparing the investment performance of each fund (including, where relevant, yield data, Sharpe ratios and information ratios) to the
investment performance of comparable funds over various time periods;
|
|
|
Data regarding investment performance in comparison to benchmark indices and customized peer groups, in each case as approved by the Board with respect to the
funds;
|
|
|
For each fund, comparative information concerning the fees charged and the services provided by each adviser in managing other accounts (including mutual funds,
other collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund;
|
|
|
Profitability analyses for each adviser with respect to each fund;
|
Information about Portfolio Management and Trading
|
|
Descriptions of the investment management services provided to each fund, including the investment strategies and processes employed, and any changes in
portfolio management processes and personnel;
|
|
|
Information about the allocation of brokerage and the benefits received by each adviser as a result of brokerage allocation, including information concerning the
acquisition of research through client commission arrangements and the funds policies with respect to soft dollar arrangements;
|
|
|
Data relating to portfolio turnover rates of each fund;
|
|
|
The procedures and processes used to determine the fair value of fund assets and actions taken to monitor and test the effectiveness of such procedures and
processes;
|
|
|
Information about each advisers processes for monitoring best execution of portfolio transactions, and other policies and practices of each adviser with
respect to trading;
|
Information about each Adviser
|
|
Reports detailing the financial results and condition of each adviser;
|
|
|
Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and
investment research for the funds, and information relating to their compensation and responsibilities with respect to managing other mutual funds and investment accounts;
|
|
|
Copies of the Codes of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes;
|
|
|
Copies of or descriptions of each advisers policies and procedures relating to proxy voting, the handling of corporate actions and class actions;
|
|
|
Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates on behalf of the funds (including descriptions
of various compliance programs) and their record of compliance with investment policies and restrictions, including policies with respect to market-timing, late trading and selective portfolio disclosure, and with policies on personal securities
transactions;
|
|
|
Descriptions of the business continuity and disaster recovery plans of each adviser and its affiliates;
|
|
|
A description of Eaton Vance Managements procedures for overseeing third party advisers and sub-advisers, including with respect to regulatory and
compliance issues, investment management and other matters;
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Board of Trustees Contract Approval continued
Other Relevant Information
|
|
Information concerning the nature, cost and character of the administrative and other non-investment management services provided by Eaton Vance Management and
its affiliates;
|
|
|
Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds administrator;
and
|
|
|
The terms of each advisory agreement.
|
In
addition to the information identified above, the Contract Review Committee considered information provided from time to time by each adviser throughout the year at meetings of the Board and its committees. Over the course of the twelve-month period
ended April 30, 2012, with respect to one or more funds, the Board met ten times and the Contract Review Committee, the Audit Committee, the Governance Committee, the Portfolio Management Committee and the Compliance Reports and Regulatory
Matters Committee, each of which is a Committee comprised solely of Independent Trustees, met ten, nineteen, seven, eight and fourteen times respectively. At such meetings, the Trustees participated in investment and performance reviews with the
portfolio managers and other investment professionals of each adviser relating to each fund. The Board and its Committees considered the investment and trading strategies used in pursuing each funds investment objective, including, where
relevant, the use of derivative instruments, as well as risk management techniques. The Board and its Committees also evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with
respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management and other fund advisers with respect to such matters.
For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of advisory agreements. In addition, in cases where the
funds investment adviser has engaged a sub-adviser, the Board considered similar information about the sub-adviser when considering the approval of any sub-advisory agreement.
The Contract Review Committee was assisted throughout the contract review process by Goodwin Procter LLP, legal counsel for the Independent Trustees. The members of the Contract Review Committee relied upon the
advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect
to each advisory and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular
factors in reaching conclusions with respect to each advisory and sub-advisory agreement.
Results of the Process
Based on its consideration of the foregoing, and such other information as it deemed relevant, including the factors and conclusions described below, the Contract
Review Committee concluded that the continuation of the investment advisory agreements of the following funds:
|
|
Eaton Vance Municipal Bond Fund II
|
|
|
Eaton Vance California Municipal Bond Fund II
|
|
|
Eaton Vance Massachusetts Municipal Bond Fund
|
|
|
Eaton Vance Michigan Municipal Bond Fund
|
|
|
Eaton Vance New Jersey Municipal Bond Fund
|
|
|
Eaton Vance New York Municipal Bond Fund II
|
|
|
Eaton Vance Ohio Municipal Bond Fund
|
|
|
Eaton Vance Pennsylvania Municipal Bond Fund
|
(the Funds), each with Eaton Vance Management (the Adviser), including their fee structures, is in the interests of shareholders and,
therefore, the Contract Review Committee recommended to the Board approval of each agreement. The Board accepted the recommendation of the Contract Review Committee as well as the factors considered and conclusions reached by the Contract Review
Committee with respect to each agreement. Accordingly, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for each Fund.
Nature, Extent and Quality of Services
In
considering whether to approve the investment advisory agreements of the Funds, the Board evaluated the nature, extent and quality of services provided to the Funds by the Adviser.
The Board considered the Advisers management capabilities and investment process with respect to the types of investments held by each Fund, including the education, experience and number of its investment
professionals and other personnel who provide portfolio management, investment research, and similar services to the Funds. In particular, the Board considered, where relevant, the abilities and experience of such investment personnel in analyzing
factors such as credit risk, tax efficiency, and special considerations relevant to investing in municipal bonds. The Board considered the Advisers large municipal bond team, which includes portfolio managers and credit specialists who provide
services to the Funds. The Board also took into account the resources dedicated to portfolio management and other services, including the compensation methods of the Adviser to recruit and retain investment personnel, and the time and attention
devoted to each Fund by senior management.
Eaton Vance
Municipal Bond Funds
September 30, 2012
Board of Trustees Contract Approval continued
The Board reviewed the compliance programs of the Adviser and relevant affiliates thereof. Among other matters, the Board considered compliance and reporting matters relating to personal trading
by investment personnel, selective disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also evaluated the responses of the Adviser and
its affiliates to requests in recent years from regulatory authorities such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered shareholder and other administrative services provided or managed by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the
benefits to shareholders of investing in a fund that is a part of a large family of funds.
After consideration of the foregoing factors, among others,
the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreements.
Fund Performance
The Board compared each
Funds investment performance to a relevant universe of similarly managed funds identified by an independent data provider and appropriate benchmark indices and, where relevant, a peer group of similarly managed funds, and assessed each
Funds performance on the basis of total return and current income return. The Boards review included comparative performance data for the one-, three-, five- and ten-year periods ended September 30, 2011 for each Fund. The Board
considered the impact of extraordinary market conditions in recent years on each Funds performance relative to its peer universe in light of, among other things, the Advisers efforts to generate competitive levels of tax exempt current
income over time through investments in higher quality municipal bonds with longer maturities. The Board noted that the Adviser had taken action to restructure each Funds portfolio as part of a long-term strategy for managing interest rate
risk, consistent with each Funds objective of providing current income, and that performance had improved relative to peer funds over recent periods. The Board concluded that each Funds performance had been satisfactory on the basis of
current income return, and that it was appropriate to continue to monitor the effectiveness of the actions taken by the Adviser to improve Fund performance on the basis of total return, which it noted had improved for periods ended as of
December 31, 2011.
Management Fees and Expenses
The Board reviewed contractual investment advisory fee rates payable by each Fund (referred to as management fees). As part of its review, the Board considered the management fees and each Funds
total expense ratio for the year ended September 30, 2011, as compared to a group of similarly managed funds selected by an independent data provider. The Board also considered factors that had an impact on Fund expense ratios, as identified by
management in response to inquiries from the Contract Review Committee, as well as actions taken by management in recent years to reduce expenses at the Eaton Vance fund complex level, including the negotiation of reduced fees for transfer agency
and custody services.
After reviewing the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser,
the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability
The Board reviewed the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to each
Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to revenue sharing or other payments by the Adviser and its affiliates to third parties in respect of distribution services. The Board
also considered other direct or indirect benefits received by the Adviser and its affiliates in connection with their relationships with the Funds, including the benefits of research services that may be available to the Adviser as a result of
securities transactions effected for the Funds and other investment advisory clients.
The Board concluded that, in light of the foregoing factors and
the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are reasonable.
Economies of Scale
In reviewing management fees
and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and each Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of each Fund increase. The Board
acknowledged the difficulty in accurately measuring the benefits resulting from the economies of scale with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the
assets of each Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of each Fund and the profitability of the Adviser and its affiliates may have been affected by such
increases or decreases. Based upon the foregoing, the Board concluded that each Fund currently shares in the benefits from economies of scale. The Board also considered the fact that the Funds are not continuously offered and concluded that, in
light of the level of the Advisers profits with respect to each Fund, the implementation of breakpoints in each Funds advisory fee schedule is not appropriate at this time.
Eaton Vance
Municipal Bond Funds
September 30, 2012
Management and Organization
Fund Management.
The Trustees and officers of Eaton Vance Municipal Bond Fund II (EIV), Eaton Vance California Municipal Bond Fund II (EIA), Eaton Vance Massachusetts Municipal Bond Fund (MAB),
Eaton Vance Michigan Municipal Bond Fund (MIW), Eaton Vance New Jersey Municipal Bond Fund (EMJ), Eaton Vance New York Municipal Bond Fund II (NYH), Eaton Vance Ohio Municipal Bond Fund (EIO), and Eaton Vance Pennsylvania Municipal Bond Fund (EIP)
(the Funds) are responsible for the overall management and supervision of the Funds affairs. The Trustees and Officers of the Funds are listed below. Except as indicated, each individual has held the office shown or other offices in the same
company for the last five years. The Noninterested Trustees consist of those Trustees who are not interested persons of the Trust, as that term is defined under the 1940 Act. The business address of each Trustee and officer
is Two International Place, Boston, Massachusetts 02110. As used below, EVC refers to Eaton Vance Corp., EV refers to Eaton Vance, Inc., EVM refers to Eaton Vance Management, BMR refers to Boston
Management and Research and EVD refers to Eaton Vance Distributors, Inc. EVC and EV are the corporate parent and trustee, respectively, of EVM and BMR. EVD is a wholly-owned subsidiary of EVC. Each officer affiliated with Eaton Vance may
hold a position with other Eaton Vance affiliates that is comparable to his or her position with EVM listed below. Each Trustee oversees 186 portfolios in the Eaton Vance Complex (including all master and feeder funds in a master feeder structure).
Each officer serves as an officer of certain other Eaton Vance funds. Each Trustee serves for a three year term. Each officer serves until his or her successor is elected.
|
|
|
|
|
|
|
Name and Year of Birth
|
|
Position(s)
with the
Funds
|
|
Term of Office;
Length of
Service
|
|
Principal Occupation(s) and Directorships
During Past Five Years and Other Relevant Experience
|
Interested Trustee
|
|
|
|
|
|
|
|
|
|
|
Thomas E. Faust Jr.
1958
|
|
Class II
Trustee
|
|
Until 2013.
3 years.
Trustee
since 2007.
|
|
Chairman, Chief Executive Officer and President of EVC, Director and President of EV, Chief Executive Officer and President of EVM and BMR, and
Director of EVD. Trustee and/or officer of 186 registered investment companies. Mr. Faust is an interested person because of his positions with EVM, BMR, EVD, EVC and EV, which are affiliates of the Funds.
Directorships in the Last Five Years.
(1)
Director of EVC and Hexavest
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Noninterested Trustees
|
|
|
|
|
|
|
|
|
|
|
Scott E. Eston
1956
|
|
Class II
Trustee
|
|
Until 2013.
1 year.
Trustee
since 2011.
|
|
Private investor. Formerly held various positions at Grantham, Mayo, Van Otterloo and Co., L.L.C. (investment management firm) (1997-2009),
including Chief Operating Officer (2002-2009), Chief Financial Officer (1997-2009) and Chairman of the Executive Committee (2002-2008); President and Principal Executive Officer, GMO Trust (open-end registered investment company) (2006-2009). Former
Partner, Coopers and Lybrand L.L.P. (now PricewaterhouseCoopers) (public accounting firm) (1987-1997).
Directorships in the Last Five Years.
None.
|
|
|
|
|
Benjamin C. Esty
(A)
1963
|
|
Class II Trustee
|
|
Until 2013.
3 years.
Trustee
since 2005.
|
|
Roy and Elizabeth Simmons Professor of Business Administration and Finance Unit Head, Harvard University Graduate School of Business
Administration.
Directorships in the Last Five Years.
(1)
None.
|
|
|
|
|
Allen R. Freedman
1940
|
|
Class II Trustee
|
|
Until 2013.
3 years.
Trustee
since 2007.
|
|
Private Investor. Former Chairman (2002-2004) and a Director (1983-2004) of Systems & Computer Technology Corp. (provider of software to
higher education). Formerly, a Director of Loring Ward International (fund distributor) (2005-2007). Former Chairman and a Director of Indus International, Inc. (provider of enterprise management software to the power generating industry)
(2005-2007). Former Chief Executive Officer of Assurant, Inc. (insurance provider) (1979-2000).
Directorships in the Last Five Years.
(1)
Director of Stonemor Partners, L.P. (owner and operator of cemeteries). Formerly,
Director of Assurant, Inc. (insurance provider) (1979-2011).
|
|
|
|
|
William H. Park
1947
|
|
Class I
Trustee
|
|
Until 2015.
3 years.
Trustee
since 2003.
|
|
Consultant and private investor. Formerly, Chief Financial Officer, Aveon Group L.P. (investment management firm) (2010-2011). Formerly, Vice
Chairman, Commercial Industrial Finance Corp. (specialty finance company) (2006-2010). Formerly, President and Chief Executive Officer, Prizm Capital Management, LLC (investment management firm) (2002-2005). Formerly, Executive Vice President and
Chief Financial Officer, United Asset Management Corporation (investment management firm) (1982-2001). Formerly, Senior Manager, Price Waterhouse (now PricewaterhouseCoopers) (an independent registered public accounting firm) (1972-1981).
Directorships in the Last Five Years.
(1)
None.
|
Eaton Vance
Municipal Bond Funds
September 30, 2012
Management and Organization continued
|
|
|
|
|
|
|
Name and Year of Birth
|
|
Position(s)
with the
Funds
|
|
Term of Office;
Length of
Service
|
|
Principal Occupation(s) and Directorships
During Past Five Years and Other Relevant Experience
|
Noninterested Trustees (continued)
|
|
|
|
|
Ronald A. Pearlman
1940
|
|
Class III
Trustee
|
|
Until 2014.
3 years.
Trustee
since 2003.
|
|
Professor of Law, Georgetown University Law Center. Formerly, Deputy Assistant Secretary (Tax Policy) and Assistant Secretary (Tax Policy), U.S.
Department of the Treasury (1983-1985). Formerly, Chief of Staff, Joint Committee on Taxation, U.S. Congress (1988-1990).
Directorships in the Last
Five Years.
(1)
None.
|
|
|
|
|
Helen Frame Peters
1948
|
|
Class III
Trustee
|
|
Until 2014.
3 years.
Trustee
since 2008.
|
|
Professor of Finance, Carroll School of Management, Boston College. Formerly, Dean, Carroll School of Management, Boston College (2000-2002).
Formerly, Chief Investment Officer, Fixed Income, Scudder Kemper Investments (investment management firm) (1998-1999). Formerly, Chief Investment Officer, Equity and Fixed Income, Colonial Management Associates (investment management firm)
(1991-1998).
Directorships in the Last Five Years.
(1)
Formerly,
Director of BJs Wholesale Club, Inc. (wholesale club retailer) (2004-2011). Formerly, Trustee of SPDR Index Shares Funds and SPDR Series Trust (exchange traded funds) (2000-2009). Formerly, Director of Federal Home Loan Bank of Boston (a bank
for banks) (2007-2009).
|
|
|
|
|
Lynn A. Stout
1957
|
|
Class I
Trustee
|
|
Until 2015.
3 years.
Trustee
since 2002.
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Distinguished Professor of Corporate and Business Law, Jack G. Clarke Business Law Institute, Cornell University Law School. Formerly, the Paul
Hastings Professor of Corporate and Securities Law (2006-2012) and Professor of Law (2001-2006), University of California at Los Angeles School of Law.
Directorships in the Last Five Years.
(1)
None.
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Harriett Tee Taggart
1948
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Class III
Trustee
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Until 2014.
2 years.
Trustee
since 2011.
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Managing Director, Taggart Associates (a professional practice firm). Formerly, Partner and Senior Vice President, Wellington Management Company,
LLP (investment management firm) (1983-2006).
Directorships in the Last Five Years.
Director of Albemarle Corporation (chemicals
manufacturer) (since 2007) and The Hanover Group (specialty property and casualty insurance company) (since 2009). Formerly, Director of Lubrizol Corporation (specialty chemicals) (2007-2011).
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Ralph F. Verni
(A)
1943
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Chairman of the Board and
Class I Trustee
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Until 2015.
3 years.
Chairman of the Board since 2007 and Trustee
since 2005.
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Consultant and private investor. Formerly, Chief Investment Officer (1982-1992), Chief Financial Officer (1988-1990) and Director (1982-1992), New
England Life. Formerly, Chairperson, New England Mutual Funds (1982-1992). Formerly, President and Chief Executive Officer, State Street Management & Research (1992-2000). Formerly, Chairperson, State Street Research Mutual Funds (1992-2000).
Formerly, Director, W.P. Carey, LLC (1998-2004) and First Pioneer Farm Credit Corp. (2002-2006).
Directorships in the Last Five Years.
(1
)
None.
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Principal Officers who are not Trustees
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Name and Year of Birth
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Position(s)
with the
Funds
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|
Length of
Service
|
|
Principal Occupation(s)
During Past Five Years
|
|
|
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Cynthia J. Clemson
1963
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President of EIA, MIW, NYH, EIO and EIP
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|
Since 2005
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Vice President of EVM and BMR.
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|
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Thomas M. Metzold
1958
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|
President of MAB, EIV
and EMJ
|
|
Since 2010
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Vice President of EVM and BMR.
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|
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Payson F. Swaffield
1956
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|
Vice President
|
|
Since 2011
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Vice President and Chief Income Investment Officer of EVM and BMR.
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|
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Barbara E. Campbell
1957
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Treasurer
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Since 2005
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Vice President of EVM and BMR.
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Eaton Vance
Municipal Bond Funds
September 30, 2012
Management and Organization continued
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Name and Year of Birth
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|
Position(s)
with the
Funds
|
|
Length of
Service
|
|
Principal Occupation(s)
During Past Five Years
|
Principal Officers who are not Trustees (continued)
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Maureen A. Gemma
1960
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Vice President, Secretary and Chief Legal Officer
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Vice President since 2011, Secretary since 2007 and Chief Legal Officer since 2008
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|
Vice President of EVM and BMR.
|
|
|
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Paul M. ONeil
1953
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Chief Compliance Officer
|
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Since 2004
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Vice President of EVM and BMR.
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(1)
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During their respective tenures, the Trustees (except Mr. Eston and Ms. Taggart) also served as trustees of one or more of the following Eaton Vance
funds (which operated in the years noted): Eaton Vance Credit Opportunities Fund (launched in 2005 and terminated in 2010); Eaton Vance Insured Florida Plus Municipal Bond Fund (launched in 2002 and terminated in 2009); and Eaton Vance National
Municipal Income Trust (launched in 1998 and terminated in 2009).
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Eaton Vance Funds
IMPORTANT NOTICES
Privacy.
The Eaton Vance organization is committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the
following policy (Privacy Policy) with respect to nonpublic personal information about its customers:
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Only such information received from you, through application forms or otherwise, and information about your Eaton Vance fund transactions will be collected. This
may include information such as name, address, social security number, tax status, account balances and transactions.
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None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees
necessary to service your account). In the normal course of servicing a customers account, Eaton Vance may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and
broker-dealers.
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Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such
information.
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We reserve the right to change our Privacy Policy at any time upon proper notification to you. Customers may want to review our Privacy Policy periodically for
changes by accessing the link on our homepage: www.eatonvance.com.
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Our pledge of privacy applies to the following entities within the
Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Managements Real Estate Investment Group and Boston
Management and Research. In addition, our Privacy Policy applies only to those Eaton Vance customers who are individuals and who have a direct relationship with us. If a customers account (i.e., fund shares) is held in the name of a
third-party financial advisor/broker-dealer, it is likely that only such advisors privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Eaton Vances Privacy
Policy, please call 1-800-262-1122.
Delivery of Shareholder Documents.
The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements
and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called householding and it helps eliminate duplicate mailings to shareholders.
Eaton Vance,
or your financial advisor, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial advisor, otherwise.
If you would prefer that your Eaton Vance documents not be householded, please contact
Eaton Vance at 1-800-262-1122, or contact your financial advisor. Your instructions that householding not apply to delivery of your Eaton Vance documents will be effective within 30 days of receipt by Eaton Vance or your financial advisor.
Portfolio Holdings.
Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) will file a schedule of portfolio holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. The
Form N-Q will be available on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SECs website at www.sec.gov. Form N-Q may also be reviewed and copied at the
SECs public reference room in Washington, D.C. (call 1-800-732-0330 for information on the operation of the public reference room).
Proxy Voting.
From time to time, funds are required to vote proxies related to the
securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds and Portfolios Boards. You may obtain a description of
these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by
accessing the SECs website at www.sec.gov.
Additional Notice to
Shareholders.
A Fund also may purchase shares of its common stock in the open market when they trade at a discount to net asset value or
at other times if the Fund determines such purchases are advisable. There can be no assurance that a Fund will take such action or that such purchases would reduce the discount. If applicable, a Fund may also redeem or purchase its outstanding
auction preferred shares (APS) in order to maintain compliance with regulatory requirements, borrowing or rating agency requirements or for other purposes as it deems appropriate or necessary.
Closed-End Fund Information.
The Eaton Vance closed-end funds make certain fund performance data and information about portfolio characteristics (such as top holdings and asset allocation) available on the Eaton Vance website after
the end of each month. Certain fund performance data for the funds, including total returns, are posted to the website shortly after the end of each month. Portfolio holdings for the most recent month-end are also posted to the website approximately
30 days following the end of the month. This information is available at www.eatonvance.com on the fund information pages under Individual Investors Closed-End Funds.
Investment Adviser and Administrator
Eaton Vance Management
Two International Place
Boston, MA 02110
Custodian
State Street Bank and Trust Company
200 Clarendon Street
Boston, MA 02116
Transfer Agent
American Stock
Transfer & Trust Company
59 Maiden Lane
Plaza Level
New York, NY 10038
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
200 Berkeley
Street
Boston, MA 02116-5022
Fund Offices
Two International Place
Boston, MA 02110
1557-11/12 CE-8IMBIISRC