Notes to Financial Statements
1 Significant Accounting Policies
Eaton Vance Municipal Income Trust (the Trust) is a
Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, closed-end management investment company. The Trust seeks to provide current income exempt from regular federal income
tax.
The following is a summary of significant accounting policies of the Trust. The policies are in conformity with accounting principles generally
accepted in the United States of America (U.S. GAAP). The Trust is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation The following methodologies are used to determine the
market value or fair value of investments.
Debt Obligations. Debt obligations 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 ask prices, broker/dealer quotations, prices or yields of securities with
similar characteristics, interest rates, anticipated prepayments, 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 debt obligations purchased with a remaining maturity of sixty days or less for which a valuation from a third party pricing service is not
readily available may be valued at amortized cost, which approximates fair value.
Fair Valuation. 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 the Trust in a manner that most fairly reflects the securitys fair
value, which is the amount that the Trust 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 companies or 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 companys or entitys financial statements, 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 The Trusts
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. The Trust intends to satisfy conditions which will enable it to designate distributions from the interest income generated
by its investments in non-taxable municipal securities, which are exempt from regular federal income tax when received by the Trust, as exempt-interest dividends. The portion of such interest, if any, earned on private activity bonds issued after
August 7, 1986, may be considered a tax preference item to shareholders.
As of November 30, 2019, the Trust had no uncertain tax positions
that would require financial statement recognition, de-recognition, or disclosure. The Trust 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 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.
E Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP 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.
F Indemnifications Under the Trusts organizational documents, its officers and Trustees may be indemnified against certain
liabilities and expenses arising out of the performance of their duties to the Trust. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal
liability for the obligations of the Trust. However, the Trusts Declaration of Trust contains an express disclaimer of liability on the part of Trust shareholders and the By-laws provide that the Trust shall assume, upon request by the
shareholder, the defense on behalf of any Trust shareholders. Moreover, the By-laws also provide for indemnification out of Trust 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, the Trust enters into agreements with service providers that may contain indemnification clauses. The Trusts maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Trust that have not yet occurred.
G Floating Rate
Notes Issued in Conjunction with Securities Held The Trust may invest in residual interest bonds, also referred to as inverse floating rate securities, whereby the Trust may sell a variable or
fixed rate bond for cash to a Special-Purpose Vehicle (the SPV), (which is generally organized as a trust),
Eaton Vance
Municipal Income Trust
November 30, 2019
Notes to Financial Statements continued
while at the same time, buying a residual interest in the assets and cash flows of the SPV. The bond is deposited into the SPV with the same CUSIP number as the bond sold to the SPV by the Trust, and which may have
been, but is not required to be, the bond purchased from the Trust (the Bond). The SPV also issues floating rate notes (Floating Rate Notes) which are sold to third-parties. The residual interest bond held by the Trust gives the Trust the right
(1) to cause the holders of the Floating Rate Notes to generally tender their notes at par, and (2) to have the Bond held by the SPV transferred to the Trust, thereby terminating the SPV. Should the Trust exercise such right, it would
generally pay the SPV 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 Trust accounts for the transaction described above as a secured borrowing by including the Bond in its Portfolio of Investments and the Floating Rate Notes (net of unamortized deferred debt issuance costs) as a
liability under the caption Payable for floating rate notes issued in its 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 SPV 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 6) at November 30, 2019. Interest expense related to the Trusts liability with respect to Floating Rate Notes is recorded as incurred. The SPV may be terminated by the Trust, as
noted above, or by 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, if any, are recorded as debt issuance costs and are amortized as interest expense to the expected maturity of the related trust. Unamortized structuring fees related
to a terminated SPV are recorded as a realized loss on extinguishment of debt. At November 30, 2019, the amounts of the Trusts Floating Rate Notes outstanding and the related collateral were $318,185,567 and $466,157,255, respectively.
The range of interest rates on the Floating Rate Notes outstanding at November 30, 2019 was 0.92% to 1.42%. For the year ended November 30, 2019, the Trusts average settled Floating Rate Notes outstanding and the average interest
rate including fees were $304,065,438 and 2.09%, respectively.
In certain circumstances, the Trust may enter into shortfall and forbearance agreements
with brokers by which the Trust agrees to reimburse the broker 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
Trust had no shortfalls as of November 30, 2019.
The Trust may also purchase residual interest bonds 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 Trusts 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 Trusts investment policies do not allow the
Trust to borrow money except as permitted by the 1940 Act. Management believes that the Trusts 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 Trusts 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 Trusts restrictions
apply. Residual interest bonds held by the Trust are securities exempt from registration under Rule 144A of the Securities Act of 1933.
2 Distributions to Shareholders and Income Tax Information
The Trust intends to make monthly distributions of net investment income to common shareholders. In addition, at least annually, the Trust intends to distribute all or substantially all of its net realized capital
gains. Distributions to shareholders are recorded on the ex-dividend date.
Distributions to shareholders are determined in accordance with income tax
regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are 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, including distributions on iMTP Shares that are treated as interest expense for financial reporting purposes, for the years ended November 30, 2019 and
November 30, 2018 was as follows:
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Year Ended November 30,
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2019
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2018
|
|
|
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Tax-exempt income
|
|
$
|
19,489,026
|
|
|
$
|
15,139,635
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|
|
|
|
Ordinary income
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|
$
|
1,448,968
|
|
|
$
|
1,473,195
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|
Eaton Vance
Municipal Income Trust
November 30, 2019
Notes to Financial Statements continued
During the year ended November 30, 2019, distributable earnings was increased by $12,736,837 and paid-in capital was decreased by $12,736,837 primarily due to expired capital loss carryforwards. These
reclassifications had no effect on the net assets or net asset value per share of the Trust.
As of November 30, 2019, the components of
distributable earnings (accumulated loss) on a tax basis were as follows:
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|
|
|
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Undistributed tax-exempt income
|
|
$
|
266,407
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|
|
|
Deferred capital losses
|
|
$
|
(418,458
|
)
|
|
|
Net unrealized appreciation
|
|
$
|
68,070,562
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|
During the year ended November 30, 2019, capital loss carryforwards of $1,875,625 were utilized to offset net realized gains by
the Trust.
At November 30, 2019, the Fund, for federal income tax purposes, had deferred capital losses of $418,458 which would reduce its taxable
income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus would reduce the amount of distributions to shareholders, which would otherwise be necessary to relieve
the Fund of any liability for federal income or excise tax. The deferred capital losses are treated as arising on the first day of the Funds next taxable year and retain the same short-term or long-term character as when originally deferred.
Of the deferred capital losses at November 30, 2019, $127,204 are short-term and $291,254 are long-term.
The Trusts use of net capital losses
acquired from reorganizations, which amounted to $418,458 at November 30, 2019, may be limited under certain tax provisions.
The cost and
unrealized appreciation (depreciation) of investments of the Trust at November 30, 2019, as determined on a federal income tax basis, were as follows:
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|
|
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Aggregate cost
|
|
$
|
467,368,586
|
|
|
|
Gross unrealized appreciation
|
|
$
|
72,703,660
|
|
|
|
Gross unrealized depreciation
|
|
|
(4,633,098
|
)
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|
|
Net unrealized appreciation
|
|
$
|
68,070,562
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|
3 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 the Trust. Pursuant to the
investment advisory agreement between the Trust and EVM, the investment advisory fee payable by the Trust is 0.70% of the Trusts average weekly gross assets and is payable monthly. Pursuant to a fee reduction agreement between the Trust and
EVM that commenced on May 1, 2010, the annual investment adviser fee was reduced by 0.015% and by an additional 0.015% every May 1 thereafter for the next nineteen years. Pursuant to an amended and restated fee reduction agreement between
the Trust and EVM that commenced on November 1, 2018, the annual investment adviser fee was reduced to 0.520% and by 0.015% every May 1 thereafter through 2029. The Trusts investment adviser fee currently is computed at an annual
rate of 0.505% (0.520% prior to May 1, 2019) of its average weekly gross assets and is payable monthly. The fee reduction cannot be terminated or reduced without the approval of a majority vote of the Trustees of the Trust who are not
interested persons of EVM or the Trust and by the vote of a majority of shareholders. Average weekly gross assets include the principal amount of any indebtedness for money borrowed, including debt securities issued by the Trust, and the amount of
any outstanding preferred shares issued by the Trust. Pursuant to a fee reduction agreement with EVM, average weekly gross assets are calculated by adding to net assets the amount payable by the Trust to floating rate note holders, such adjustment
being limited to the value of the Auction Preferred Shares (APS) outstanding prior to any APS redemptions by the Trust. The administration fee is earned by EVM for administering the business affairs of the Trust and is computed at an annual rate of
0.20% of the Trusts average weekly gross assets. For the year ended November 30, 2019, the investment adviser fee and administration fee were $3,931,730 and $1,540,411, respectively.
Trustees and officers of the Trust who are members of EVMs organization receive remuneration for their services to the Trust out of the investment adviser
fee. Trustees of the Trust who are not affiliated with EVM 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 November 30, 2019, no
significant amounts have been deferred. Certain officers and Trustees of the Trust are officers of EVM.
4 Purchases and
Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $130,947,985 and $136,418,883, respectively, for
the year ended November 30, 2019.
Eaton Vance
Municipal Income Trust
November 30, 2019
Notes to Financial Statements continued
5 Common Shares of Beneficial Interest and Shelf Offering
The Trust may issue common
shares pursuant to its dividend reinvestment plan. There were no common shares issued by the Trust for the years ended November 30, 2019 and November 30, 2018 pursuant to such plan.
Pursuant to a registration statement filed with the SEC, the Trust is authorized to issue up to an additional 2,610,553 common shares through an equity shelf offering program (the shelf offering). Under
the shelf offering, the Trust, subject to market conditions, may raise additional capital from time to time and in varying amounts and offering methods at a net price at or above the Trusts net asset value per common share. During the years
ended November 30, 2019 and November 30, 2018, there were no shares sold by the Trust pursuant to its shelf offering.
In November 2013, the
Board of Trustees initially approved a share repurchase program for the Trust. Pursuant to the reauthorization of the share repurchase program by the Board of Trustees in March 2019, the Trust is authorized to repurchase up to 10% of its common
shares outstanding as of the last day of the prior calendar year at market prices when shares are trading at a discount to net asset value. The share repurchase program does not obligate the Trust to purchase a specific amount of shares. There were
no repurchases of common shares by the Trust for the years ended November 30, 2019 and November 30, 2018.
In addition, the Trust issued
15,884,819 shares in connection with the reorganizations described below in Note 7 during the year ended November 30, 2019.
6 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.
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Level 1 quoted prices in active markets for identical investments
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Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
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Level 3 significant unobservable inputs (including a funds own assumptions in determining the fair value of investments)
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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 November 30, 2019, the hierarchy of inputs used in valuing the Trusts investments, which are carried at value, were as
follows:
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Asset Description
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Level 1
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Level 2
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Level 3
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Total
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Tax-Exempt Municipal Securities
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$
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|
|
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$
|
820,524,509
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|
|
$
|
|
|
|
$
|
820,524,509
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|
|
|
|
|
|
Taxable Municipal Securities
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|
|
|
|
|
|
25,493,586
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|
|
|
|
25,493,586
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Trust Units
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|
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692,693
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|
|
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|
|
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692,693
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Corporate Bonds & Notes
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|
|
|
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6,913,927
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|
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|
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6,913,927
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Total Investments
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$
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|
|
$
|
853,624,715
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|
$
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|
|
|
$
|
853,624,715
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7 Reorganizations
During the year ended November 30, 2019, the Trust acquired the net assets of Eaton Vance Michigan Municipal Income Trust (Michigan Trust), Eaton Vance Massachusetts Municipal Income Trust (Massachusetts
Trust), Eaton Vance Ohio Municipal Income Trust (Ohio Trust), Eaton Vance Pennsylvania Municipal Income Trust (Pennsylvania Trust) and Eaton Vance New Jersey Municipal Income Trust (New Jersey Trust), (collectively, the Acquired Trusts),
pursuant to Agreements and Plans of Reorganization (each, a Plan) approved by the respective shareholders of the Acquired Trusts. Under the terms of each Plan, the common shares of each Acquired Trust were, in effect, exchanged for new
common shares of the Trust with an equal aggregate net asset value. The purpose of each reorganization was to combine two funds managed by EVM with similar investment objectives and policies. Each reorganization was structured as a tax-free
reorganization under the Internal Revenue Code.
Eaton Vance
Municipal Income Trust
November 30, 2019
Notes to Financial Statements continued
The net assets and shares outstanding of each Acquired Trust as of the close of business on the closing date of each reorganization and the number of shares issued in each reorganization by the Trust were as
follows:
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Closing Date
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Acquired Trust
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Acquired Trust
Shares
Outstanding
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Acquired Trust
Net Assets
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Trust
Shares
Issued
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|
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December 14, 2018
|
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Michigan Trust
|
|
|
|
|
|
|
2,012,993
|
|
|
|
|
|
|
$
|
28,350,296
|
|
|
|
|
|
|
|
2,225,350
|
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|
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|
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January 18, 2019
|
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Massachusetts Trust
|
|
|
|
|
|
|
2,737,021
|
|
|
|
|
|
|
$
|
39,458,987
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|
|
|
|
|
|
|
3,072,268
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|
|
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January 18, 2019
|
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Ohio Trust
|
|
|
|
|
|
|
2,857,157
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|
|
|
|
|
|
$
|
40,950,334
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|
|
|
|
|
|
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3,188,385
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January 18, 2019
|
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Pennsylvania Trust
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|
|
|
|
|
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2,601,014
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|
|
|
|
|
|
$
|
34,007,282
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|
|
|
|
|
|
2,647,800
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|
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|
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February 22, 2019
|
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New Jersey Trust
|
|
|
|
|
|
|
4,598,158
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|
|
|
|
|
|
$
|
61,609,962
|
|
|
|
|
|
|
|
4,751,016
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The investment portfolios of the Acquired Trusts were the principal assets acquired by the Trust. For financial reporting purposes,
assets received and shares issued by the Trust were recorded at fair value; however, the identified cost of the investments received from the Acquired Trusts were carried forward to align ongoing reporting of the Trusts realized and unrealized
gains and losses with amounts distributable to shareholders for tax purposes.
Investments and net assets immediately before each reorganization and
combined net assets were as follows:
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Acquired Trust
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Trust
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Investments, at
value
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Investments,
at cost
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Net Assets
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Net Assets
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Combined Net
Assets
|
|
|
|
|
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|
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Michigan Trust
|
|
$
|
44,892,357
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|
|
$
|
44,148,855
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|
|
$
|
28,350,296
|
|
|
$
|
302,980,628
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|
|
$
|
331,330,924
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|
|
|
|
|
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Massachusetts Trust
|
|
$
|
59,742,970
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|
|
$
|
57,396,209
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|
|
$
|
39,458,987
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|
|
|
|
|
|
|
|
|
|
|
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Ohio Trust
|
|
$
|
61,325,033
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|
|
$
|
58,872,323
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|
|
$
|
40,950,334
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pennsylvania Trust
|
|
$
|
54,653,170
|
|
|
$
|
53,514,276
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|
|
$
|
34,007,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
175,721,173
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|
|
$
|
169,782,808
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|
|
$
|
114,416,603
|
|
|
$
|
334,032,029
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|
|
$
|
448,448,632
|
|
|
|
|
|
|
|
New Jersey Trust
|
|
$
|
93,352,282
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|
|
$
|
89,688,645
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|
|
$
|
61,609,962
|
|
|
$
|
452,778,473
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|
|
$
|
514,388,435
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Included in net assets of the Acquired Trusts immediately before each reorganization were accumulated net realized gain (loss) and
unrealized appreciation (depreciation) as follows:
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Accumulated
Net Realized
Gain (Loss)
|
|
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Unrealized
Appreciation
(Depreciation)
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|
|
|
|
Michigan Trust
|
|
$
|
63,537
|
|
|
$
|
743,502
|
|
|
|
|
Massachusetts Trust
|
|
$
|
30,866
|
|
|
$
|
2,346,761
|
|
|
|
|
Ohio Trust
|
|
$
|
25,810
|
|
|
$
|
2,452,710
|
|
|
|
|
Pennsylvania Trust
|
|
$
|
(1,151,503
|
)
|
|
$
|
1,138,894
|
|
|
|
|
New Jersey Trust
|
|
$
|
(778,784
|
)
|
|
$
|
3,663,637
|
|
Assuming each reorganization had been completed on December 1, 2018, the beginning of the Trusts annual reporting period,
the Trusts pro forma results of operations for the year ended November 30, 2019 are as follows:
|
|
|
|
|
|
|
Net investment income
|
|
$
|
21,152,288
|
|
|
|
Net realized and unrealized gain
|
|
$
|
52,166,934
|
|
|
|
Net increase in net assets from operations
|
|
$
|
73,319,222
|
|
Eaton Vance
Municipal Income Trust
November 30, 2019
Notes to Financial Statements continued
Because the combined investment portfolios have been managed as a single integrated portfolio since the closing of the reorganizations, it is not practicable to separate the amounts of revenue and earnings of each
Acquired Trust that have been included in the Trusts Statement of Operations since the time of each closing.
Eaton Vance
Municipal Income Trust
November 30, 2019
Report of Independent Registered Public Accounting Firm
To the Trustees and Shareholders of Eaton Vance Municipal Income Trust:
Opinion on the Financial
Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities of Eaton Vance Municipal Income Trust (the
Trust), including the portfolio of investments, as of November 30, 2019, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period
then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of
the Trust as of November 30, 2019, and the results of its operations and its cash flows for the year then ended, the changes in its 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.
Basis for
Opinion
These financial statements and financial highlights are the responsibility of the Trusts management. Our responsibility is to express an
opinion on the Trusts financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent
with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to
obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trusts internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities
owned as of November 30, 2019, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Boston,
Massachusetts
January 17, 2020
We have served as
the auditor of one or more Eaton Vance investment companies since 1959.
Eaton Vance
Municipal Income Trust
November 30, 2019
Federal Tax Information (Unaudited)
The Form 1099-DIV you receive in February 2020 will show the tax status of all distributions paid to your account in calendar year 2019. Shareholders are advised to consult their own tax adviser with respect to the
tax consequences of their investment in the Trust. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding exempt-interest dividends.
Exempt-Interest Dividends. For the fiscal year ended November 30, 2019, the Trust designates 93.08% of distributions from net investment income as an exempt-interest dividend.
Eaton Vance
Municipal Income Trust
November 30, 2019
Dividend Reinvestment Plan
The Trust offers a dividend reinvestment plan (Plan) pursuant to which shareholders automatically have distributions reinvested in common shares (Shares) of the Trust unless they elect otherwise through their
investment dealer. 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 American Stock Transfer & Trust Company, LLC, 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 Trusts 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 Trust. 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 Income Trust
November 30, 2019
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 Income Trust
c/o American Stock Transfer & Trust Company, LLC
P.O. Box 922
Wall Street Station
New York, NY 10269-0560
Eaton Vance
Municipal Income Trust
November 30, 2019
Management and Organization
Fund Management. The Trustees of Eaton Vance Municipal Income Trust (the Trust) are responsible for the overall management and supervision of the Trusts affairs. The Trustees and officers of
the Trust 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 159 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.
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|
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Name and Year of Birth
|
|
Position(s)
with the
Trust
|
|
Term Expiring;
Trustee
Since(1)
|
|
Principal Occupation(s) and Directorships
During Past Five Years and Other Relevant Experience
|
|
Interested Trustee
|
|
|
|
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Thomas E. Faust Jr.
1958
|
|
Class II
Trustee
|
|
Until 2022.
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 159 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 Trust.
Directorships in the Last Five Years. Director of EVC and Hexavest Inc. (investment management firm).
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Noninterested Trustees
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Mark R. Fetting
1954
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Class II
Trustee
|
|
Until 2022.
Trustee since 2016.
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|
Private investor. Formerly held various positions at Legg Mason, Inc. (investment management firm) (2000-2012), including President, Chief
Executive Officer, Director and Chairman (2008-2012), Senior Executive Vice President (2004-2008) and Executive Vice President (2001-2004). Formerly, President of Legg Mason family of funds (2001-2008). Formerly, Division President and Senior
Officer of Prudential Financial Group, Inc. and related companies (investment management firm) (1991-2000).
Other Directorships in the Last Five
Years. None.
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|
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Cynthia E. Frost
1961
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Class I
Trustee
|
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Until 2021.
Trustee since 2014.
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Private investor. Formerly, Chief Investment Officer of Brown University (university endowment) (2000-2012). Formerly, Portfolio Strategist for
Duke Management Company (university endowment manager) (1995-2000). Formerly, Managing Director, Cambridge Associates (investment consulting company) (1989-1995). Formerly, Consultant, Bain and Company (management consulting firm) (1987-1989). Formerly, Senior Equity Analyst, BA Investment Management Company (1983-1985).
Other Directorships in
the Last Five Years. None.
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|
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George J. Gorman
1952
|
|
Class I
Trustee
|
|
Until 2021.
Trustee since 2014.
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|
Principal at George J. Gorman LLC (consulting firm). Formerly, Senior Partner at Ernst & Young LLP (a registered public accounting firm)
(1974-2009).
Other Directorships in the Last Five Years. Formerly, Trustee of the BofA Funds Series Trust (11 funds) (2011-2014) and of the
Ashmore Funds (9 funds) (2010-2014).
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|
|
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Valerie A. Mosley
1960
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|
Class I
Trustee
|
|
Until 2021.
Trustee since
2014.
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|
Chairwoman and Chief Executive Officer of Valmo Ventures (a consulting and investment firm). Former Partner and Senior Vice President, Portfolio
Manager and Investment Strategist at Wellington Management Company, LLP (investment management firm) (1992-2012). Former Chief Investment Officer, PG Corbin Asset Management (1990-1992). Formerly worked in institutional corporate bond sales at
Kidder Peabody (1986-1990).
Other Directorships in the Last Five Years. Director of Envestnet, Inc. (provider of intelligent systems for wealth
management and financial wellness) (since 2018). Director of Dynex Capital, Inc. (mortgage REIT) (since 2013).
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Eaton Vance
Municipal Income Trust
November 30, 2019
Management and Organization continued
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|
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Name and Year of Birth
|
|
Position(s)
with the
Trust
|
|
Term Expiring;
Trustee
Since(1)
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|
Principal Occupation(s) and Directorships
During Past Five Years and Other Relevant Experience
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Noninterested Trustees (continued)
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William H. Park
1947
|
|
Chairperson of the Board and Class III
Trustee
|
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Until 2020.
Chairperson of the Board since 2016 and Trustee since 2003.
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|
Private investor. Formerly, Consultant (management and transactional) (2012-2014). 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) (a registered public accounting firm) (1972-1981).
Other Directorships in the Last Five
Years. None.
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Helen Frame Peters
1948
|
|
Class III
Trustee
|
|
Until 2020.
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).
Other Directorships in the Last Five Years. None.
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|
|
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Keith Quinton
1958
|
|
Class III
Trustee
|
|
Until 2020.
Trustee since 2018.
|
|
Independent Investment Committee Member at New Hampshire Retirement System (since 2017). Advisory Committee member at Northfield Information
Services, Inc. (risk management analytics provider) (since 2016). Formerly, Portfolio Manager and Senior Quantitative Analyst at Fidelity Investments (investment management firm) (2001-2014).
Other Directorships in the Last Five Years. Director of New Hampshire Municipal Bond Bank (since 2016).
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Marcus L. Smith
1966
|
|
Class III
Trustee
|
|
Until 2020.
Trustee since 2018.
|
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Member of Posse Boston Advisory Board (foundation) (since 2015). Trustee at University of Mount Union (since 2008). Formerly, Portfolio Manager at
MFS Investment Management (investment management firm) (1994-2017).
Other Directorships in the Last Five Years. Director of MSCI Inc. (global
provider of investment decision support tools) (since 2017). Formerly, Director of DCT Industrial Trust Inc. (logistics real estate company) (2017-2018).
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Susan J. Sutherland
1957
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|
Class I
Trustee
|
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Until 2021.
Trustee since 2015.
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|
Private investor. Formerly, Associate, Counsel and Partner at Skadden, Arps, Slate, Meagher & Flom LLP (law firm) (1982-2013).
Other Directorships in the Last Five Years. Formerly, Director of Montpelier Re Holdings Ltd. (global provider of customized insurance and reinsurance
products) (2013-2015).
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Scott E. Wennerholm
1959
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|
Class II
Trustee
|
|
Until 2022.
Trustee since 2016.
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Formerly, Trustee at Wheelock College (postsecondary institution) (2012-2018). Formerly, Consultant at GF Parish Group (executive recruiting firm)
(2016-2017). Formerly, Chief Operating Officer and Executive Vice President at BNY Mellon Asset Management (investment management firm) (2005-2011). Formerly, Chief Operating Officer and Chief Financial Officer at Natixis Global Asset Management
(investment management firm) (1997-2004). Formerly, Vice President at Fidelity Investments Institutional Services (investment management firm) (1994-1997).
Other Directorships in the Last Five Years. None.
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|
|
|
|
Name and Year of Birth
|
|
Position(s)
with the
Trust
|
|
Officer
Since(2)
|
|
Principal Occupation(s)
During Past Five Years
|
|
Principal Officers who are not Trustees
|
|
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Payson F. Swaffield
1956
|
|
President
|
|
2003
|
|
Vice President and Chief Income Investment Officer of EVM and BMR. Also Vice President of Calvert Research and Management (CRM).
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|
|
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Maureen A. Gemma
1960
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|
Vice President, Secretary and Chief Legal Officer
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|
2005
|
|
Vice President of EVM and BMR. Also Vice President of CRM.
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Eaton Vance
Municipal Income Trust
November 30, 2019
Management and Organization continued
|
|
|
|
|
|
|
Name and Year of Birth
|
|
Position(s)
with the
Trust
|
|
Officer
Since(2)
|
|
Principal Occupation(s)
During Past Five Years
|
|
Principal Officers who are not Trustees (continued)
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|
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James F. Kirchner
1967
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|
Treasurer
|
|
2007
|
|
Vice President of EVM and BMR. Also Vice President of CRM.
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|
|
|
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Richard F. Froio
1968
|
|
Chief Compliance Officer
|
|
2017
|
|
Vice President of EVM and BMR since 2017. Formerly Deputy Chief Compliance Officer (Adviser/Funds) and Chief Compliance Officer (Distribution) at PIMCO
(2012-2017) and Managing Director at BlackRock/Barclays Global Investors (2009-2012).
|
(1)
|
Year first appointed to serve as Trustee for a fund in the Eaton Vance family of funds. Each Trustee has served continuously since appointment unless indicated
otherwise. Each Trustee holds office until the annual meeting for the year in which his or her term expires and until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification or removal.
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(2)
|
Year first elected to serve as officer of a fund in the Eaton Vance family of funds when the officer has served continuously. Otherwise, year of most recent
election as an officer of a fund in the Eaton Vance family of funds. Titles may have changed since initial election. Each officer serves until his or her successor is elected.
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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.
|
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 Management (International) Limited, Eaton Vance Advisers
International Ltd., 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. American
Stock Transfer & Trust Company, LLC (AST), the closed-end funds transfer agent, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct AST, or your financial intermediary,
otherwise. If you would prefer that your Eaton Vance documents not be householded, please contact AST or your financial intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be
effective within 30 days of receipt by AST or your financial intermediary.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC for the
first and third quarters of each fiscal year. The Form N-PORT 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.
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.
Share Repurchase
Program. The Funds Board of Trustees has approved a share repurchase program authorizing the Fund to repurchase up to 10% of its common shares outstanding as of the last day of the
prior calendar year in open-market transactions at a discount to net asset value. The repurchase program does not obligate the Fund to purchase a specific amount of shares. The Funds repurchase activity, including the number of shares
purchased, average price and average discount to net asset value, is disclosed in the Funds annual and semi-annual reports to shareholders.
Additional Notice to Shareholders. If applicable, a Fund may also redeem or purchase its outstanding preferred shares 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. Eaton Vance closed-end funds make fund performance data and certain information about portfolio
characteristics available on the Eaton Vance website shortly after the end of each month. Other information about the funds is available on the website. The funds net asset value per share is readily accessible on the Eaton Vance website.
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.
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Investment Adviser and Administrator
Eaton Vance Management
Two International Place
Boston, MA 02110
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Boston, MA 02111
Transfer Agent
American Stock
Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
200 Berkeley
Street
Boston, MA 02116-5022
Fund Offices
Two International Place
Boston, MA 02110
151 11.30.19