UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-21400
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Eaton Vance Tax-Advantaged Dividend Income Fund
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(Exact Name of Registrant as Specified in Charter)
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Address of Principal Executive Offices)
Alan R. Dynner
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Name and Address of Agent for Services)
(617) 482-8260
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(Registrant's Telephone Number)
August 31
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Date of Fiscal Year End
February 29, 2004
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Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
[EATON VANCE LOGO]
[GRAPHIC]
SEMIANNUAL REPORT FEBRUARY 29, 2004
[GRAPHIC]
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
[GRAPHIC]
EATON VANCE FUNDS
EATON VANCE MANAGEMENT
BOSTON MANAGEMENT AND RESEARCH
EATON VANCE DISTRIBUTORS, INC.
PRIVACY NOTICE
The Eaton Vance organization is committed to ensuring your financial privacy.
This notice is being sent to comply with privacy regulations of the Securities
and Exchange Commission. Each of the above financial institutions has in effect
the following policy with respect to nonpublic personal information about its
customers:
- Only such information received from you, through application forms or
otherwise, and information about your Eaton Vance fund transactions will be
collected.
- 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).
- Policies and procedures (including physical, electronic and procedural
safeguards) are in place that are designed to protect the confidentiality of
such information.
For more information about Eaton Vance's privacy policies, call:
1-800-262-1122.
IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission 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 ADVISER, MAY HOUSEHOLD THE MAILING OF YOUR
DOCUMENTS INDEFINITELY UNLESS YOU INSTRUCT EATON VANCE, OR YOUR FINANCIAL
ADVISER, 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 adviser.
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 adviser.
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 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 without charge, upon request, by calling 1-800-262-1122. This
description is also available on the Securities and Exchange Commission's
website at http://www.sec.gov.
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF MICHAEL R. MACH]
Michael R. Mach, CFA
Co-Portfolio Manager
[PHOTO OF JUDITH A. SARYAN]
Judith A. Saryan, CFA
Co-Portfolio Manager
[PHOTO OF THOMAS H. LUSTER]
Thomas H. Luster, CFA
Co-Portfolio Manager
MANAGEMENT DISCUSSION
- We are pleased to welcome shareholders of Eaton Vance Tax-Advantaged Dividend
Income Fund (the "Fund"). The Fund's investment objective is to provide a
high level of after-tax total return, consisting primarily of tax-advantaged
dividend income and capital appreciation. The Fund pursues its objective by
investing its assets primarily in dividend-paying common and preferred
stocks.
- The Fund posted positive returns in its first five months of existence,
benefiting from a recovery during that time in the broad equity markets.
Factors helping to drive stocks higher in recent months included a
strengthening U.S. economy and an improved outlook for corporate earnings.
Low interest rates and low inflation also supported higher equity prices.
- Recent legislation provides that qualified dividend income received by
individual shareholders will generally be taxed at the same rates as
long-term capital gains (maximum 15%) rather than as ordinary income.
Qualifying dividend income generally includes dividends from domestic
corporations and dividends from foreign corporations that meet specified
criteria. To receive favorable tax treatment, investors in stocks paying
qualifying dividends must meet holding period and other requirements. Similar
requirements apply to shareholders who receive qualifying dividends from the
Fund.
- We believe that the Fund's income-producing holdings may provide an
attractive level of dividend income, while allowing shareholders to
participate in equity markets.
THE FUND
- Based on the Fund's February 2004 monthly dividend of $0.1075 and a closing
share price of $20.83, the Fund had a market yield of 6.19%.(1)
FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED. YIELD WILL
CHANGE.
THE VIEWS EXPRESSED IN THIS REPORT ARE THOSE OF THE PORTFOLIO MANAGERS AND ARE
CURRENT ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THESE VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER
CONDITIONS, AND EATON VANCE DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS.
THESE VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE INVESTMENT
DECISIONS FOR AN EATON VANCE FUND ARE BASED ON MANY FACTORS, MAY NOT BE RELIED
ON AS AN INDICATION OF TRADING INTENT ON BEHALF OF ANY EATON VANCE FUND.
FUND INFORMATION
as of February 29, 2004
PERFORMANCE(2)
Average Annual Total Returns (by share price, New York Stock Exchange)
Life of Fund (9/30/03) 11.37%
Average Annual Total Returns (at net asset value)
Life of Fund (9/30/03) 13.94%
[CHART]
FIVE LARGEST INDUSTRY GROUPS(3) By total investments
Commercial Banks 20.7%
Utilities - Electric and Gas 14.5%
Diversified Telecom Services 14.2%
REITS 10.9%
Oil and Gas 6.6%
(1) The Fund's yield is calculated by dividing the most recent dividend per
share by the share market price at the end of the period and annualizing
the result.
(2) Returns are historical and are calculated by determining the percentage
change in market value or net asset value with all distributions
reinvested.
(3) Five Largest Industry Groups accounted for 66.9% of the Fund's total
investments. Holdings are subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when sold, may be worth more or
less than their original cost. Performance is for the stated time period only;
due to market volatility, the Fund's current performance may be lower or higher
than the quoted return.
2
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
COMMON STOCKS -- 101.3%
SECURITY SHARES VALUE
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APPAREL -- 0.8%
VF Corp. 275,000 $ 12,355,750
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$ 12,355,750
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AUTO AND PARTS -- 0.1%
DaimlerChrysler(1) 50,000 $ 2,246,500
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$ 2,246,500
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BEVERAGES -- 0.4%
Diageo PLC(1) 400,000 $ 5,530,284
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$ 5,530,284
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BROADCASTING AND PUBLISHING -- 0.7%
Gruppo Editoriale L'Espresso SPA(1) 1,778,800 $ 11,006,592
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$ 11,006,592
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BUILDING MATERIALS -- 1.0%
Stanley Works (The) 400,000 $ 15,492,000
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$ 15,492,000
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CHEMICALS -- 2.8%
Dow Chemical Co. (The) 300,000 $ 13,041,000
DuPont (E.I.) 300,000 13,527,000
Eastman Chemical Co. 244,700 10,363,045
RPM, Inc. 375,000 6,090,000
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$ 43,021,045
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COMMERCIAL BANKS -- 15.4%
ABN AMRO Holdings NV(1) 500,000 $ 11,549,037
AmSouth Bancorporation 450,000 11,385,000
Associated Banc-Corp 175,000 7,768,250
Bank of America Corp. 200,000 16,384,000
Bank of Hawaii Corp. 175,000 7,987,000
Charter One Financial, Inc. 350,000 12,677,000
Comerica, Inc. 200,000 11,508,000
Compass Bancshares, Inc. 265,900 11,056,122
FleetBoston Financial Corp. 500,000 22,515,000
Huntington Bancshares, Inc. 250,000 5,782,500
National City Corp. 250,000 8,925,000
PNC Financial Services Group, Inc. 275,000 16,120,500
Regions Financial Corp. 200,000 $ 7,380,000
U.S. Bancorp 650,000 18,544,500
Wachovia Corp. 500,000 23,985,000
Washington Mutual, Inc. 700,000 31,458,000
Wells Fargo & Co. 250,000 14,337,500
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$ 239,362,409
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COMMERCIAL SERVICES AND SUPPLIES -- 1.4%
Donnelley (R.R.) & Sons Co. 500,000 $ 15,880,000
Landauer, Inc. 25,000 1,086,750
ServiceMaster Co. 375,000 4,128,750
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$ 21,095,500
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DISTRIBUTORS -- 0.7%
Genuine Parts Co. 300,000 $ 10,419,000
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$ 10,419,000
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DIVERSIFIED TELECOMMUNICATION SERVICES -- 20.8%
Aliant Inc.(1) 63,500 $ 1,492,670
BCE, Inc.(1) 1,400,000 30,632,000
BellSouth Corp. 950,000 26,182,000
BT Group PLC(1) 17,170,000 56,319,772
Koninklijke (Royal) KPN NV(1)(2) 1,500,000 11,834,813
SBC Communications, Inc. 1,800,000 43,218,000
Sprint Corp. (FON Group) 900,000 15,957,000
TDC A/S(1) 250,000 10,066,527
Telefonos de Mexico SA ADR 1,525,000 51,804,250
Telstra Corp. Ltd.(1) 6,000,000 22,128,054
Verizon Communications, Inc. 1,400,000 53,662,000
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$ 323,297,086
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ELECTRICAL / ELECTRONIC MANUFACTURER -- 1.2%
Cooper Industries Ltd. Class A(1) 210,000 $ 11,111,100
Hubbell, Inc. 200,000 7,940,000
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$ 19,051,100
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ELECTRONICS - INSTRUMENTS -- 0.5%
Raytheon Company 250,000 $ 7,600,000
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$ 7,600,000
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See notes to financial statements
3
SECURITY SHARES VALUE
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ENGINEERING AND CONSTRUCTION -- 0.5%
Bouygues(1) 222,873 $ 8,207,900
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$ 8,207,900
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FINANCIAL SERVICES -- 3.0%
Citigroup, Inc. 500,000 $ 25,130,000
Federal National Mortgage Association 65,000 4,868,500
J.P. Morgan Chase & Co. 400,000 16,408,000
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$ 46,406,500
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FOOD PRODUCTS -- 2.0%
ConAgra Foods, Inc. 350,000 $ 9,516,500
Sara Lee Corp. 1,000,000 21,820,000
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$ 31,336,500
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HOTELS, RESTAURANTS AND LEISURE -- 0.8%
Harrah's Entertainment, Inc. 225,000 $ 11,688,750
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$ 11,688,750
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HOUSEHOLD PRODUCTS -- 0.8%
Kimberly-Clark Corp. 200,000 $ 12,936,000
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$ 12,936,000
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INDUSTRIAL CONGLOMERATES -- 1.6%
ALLETE, Inc. 200,000 $ 6,464,000
General Electric Co. 250,000 8,130,000
Honeywell International, Inc. 300,000 10,515,000
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$ 25,109,000
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INSURANCE -- 2.2%
Allstate Corp. (The) 180,000 $ 8,213,400
Mercury General Corp. 200,000 10,220,000
St. Paul Cos., Inc. (The) 350,000 14,959,000
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$ 33,392,400
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METALS AND MINING -- 1.6%
Anglogold Ltd. ADR 176,700 $ 7,589,265
Cia Vale do Rio Doce ADR 200,000 11,580,000
Worthington Industries, Inc. 300,000 5,199,000
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$ 24,368,265
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MULTILINE RETAIL -- 1.0%
May Department Stores Co. (The) 450,000 $ 15,849,000
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$ 15,849,000
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OIL AND GAS -- 9.7%
BP PLC ADR 740,000 $ 36,408,000
ChevronTexaco Corp. 290,000 25,621,500
ConocoPhillips 200,000 13,774,000
Enbridge, Inc.(1) 300,000 11,661,000
Eni SPA(1) 625,000 12,246,391
Fortum Oyj(1) 524,600 5,553,468
Marathon Oil Corp. 700,000 24,598,000
NICOR, Inc. 300,000 10,842,000
TransCanada Corp.(1) 465,300 9,631,710
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$ 150,336,069
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PAPER AND FOREST PRODUCTS -- 0.7%
MeadWestvaco Corp. 250,000 $ 7,325,000
UPM-Kymmene Oyj(1) 175,000 3,446,384
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$ 10,771,384
--------------------------------------------------------------------------------------
PHARMACEUTICALS -- 2.2%
GlaxoSmithKline PLC ADR 450,000 $ 19,179,000
Merck & Co., Inc. 300,000 14,424,000
--------------------------------------------------------------------------------------
$ 33,603,000
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REITS -- 3.6%
AMB Property Corp. 200,000 $ 7,084,000
General Growth Properties, Inc. 600,000 18,756,000
Mills Corp. (The) 210,000 10,470,600
Vornado Realty Trust 350,000 19,915,000
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$ 56,225,600
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RETAIL - FOOD AND DRUG -- 0.1%
Albertson's, Inc. 90,000 $ 2,226,600
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$ 2,226,600
--------------------------------------------------------------------------------------
RETAIL - SPECIALTY AND APPAREL -- 0.6%
Limited, Inc. (The) 500,000 $ 9,875,000
--------------------------------------------------------------------------------------
$ 9,875,000
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See notes to financial statements
4
SECURITY SHARES VALUE
--------------------------------------------------------------------------------------
TELECOMMUNICATIONS - EQUIPMENT -- 0.1%
Nokia Oyj ADR 90,000 $ 1,959,300
--------------------------------------------------------------------------------------
$ 1,959,300
--------------------------------------------------------------------------------------
TOBACCO -- 2.4%
Altria Group, Inc. 650,000 $ 37,407,500
--------------------------------------------------------------------------------------
$ 37,407,500
--------------------------------------------------------------------------------------
UTILITIES - ELECTRICAL AND GAS -- 19.3%
Alliant Energy Corp. 150,000 $ 3,862,500
Ameren Corp. 605,000 28,677,000
Centerpoint Energy, Inc. 200,000 2,092,000
DTE Energy Co. 300,000 12,138,000
Duke Energy Corp. 750,000 16,470,000
Edison International 1,000,000 23,090,000
Endesa SA(1) 742,826 14,536,641
Enel SPA(1) 1,000,000 7,728,350
Energy East Corp. 271,600 6,561,856
FirstEnergy Corp. 350,000 13,520,500
Iberdrola SA(1) 200,000 4,125,100
National Grid Transco PLC(1) 1,694,983 13,557,318
NSTAR 72,500 3,708,375
OGE Energy Corp. 300,000 7,725,000
Pepco Holdings, Inc. 1,000,000 21,250,000
Public Service Enterprise Group, Inc. 300,000 14,142,000
Red Electrica de Espana(1) 83,524 1,421,766
Scottish and Southern Energy PLC(1) 2,300,000 29,216,787
Scottish Power PLC(1) 3,700,000 25,165,576
Sempra Energy 500,000 15,850,000
TransAlta Corp.(1) 200,000 2,670,000
Union Fenosa, S.A.(1) 22,524 462,330
Vectren Corp. 100,000 2,491,000
Xcel Energy, Inc. 1,700,000 29,699,000
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$ 300,161,099
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WATER UTILITIES -- 3.3%
Severn Trent PLC(1) 1,446,153 $ 19,886,741
United Utilities PLC(1) 2,702,090 25,323,420
Veolia Environment 200,000 5,976,425
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$ 51,186,586
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TOTAL COMMON STOCKS
(IDENTIFIED COST $1,411,875,416) $ 1,573,523,719
--------------------------------------------------------------------------------------
PREFERRED STOCKS -- 41.2%
SECURITY SHARES VALUE
--------------------------------------------------------------------------------------
COMMERCIAL BANKS -- 14.9%
Abbey National Capital Trust I, 8.963%(1)(3) 15,500,000 $ 21,330,983
Abbey National PLC, 7.375%(1) 390,200 10,554,910
ABN AMRO North America, Inc., 7.150%(4) 280,000 7,656,264
Barclays Bank PLC, 6.86%(1)(4) 9,500,000 10,799,510
Barclays Bank PLC, 8.55%(1) 14,100,000 17,953,960
BNP Paribas, 9.003%(3) 12,395,000 16,131,471
BSCH Finance Ltd., 8.625%(1) 35,000 961,450
CA Preferred Fund Trust II, 7.00%(1) 5,000,000 5,229,367
CA Preferred Fund Trust, 7.00%(1) 25,500,000 26,632,364
Cobank, ABC, 7.00%(4) 400,000 21,539,600
First Republic Bank, 6.70% 236,700 6,047,685
HSBC Capital Funding LP, 10.176%(1)(3) 17,000,000 25,974,480
Lloyds TSB Bank PLC, 6.90%(1) 11,000,000 11,557,348
Royal Bank of Scotland Group PLC, 7.648%(1)(3) 13,500,000 16,788,205
Royal Bank of Scotland Group PLC, 8.50%(1) 3,500 93,975
Royal Bank of Scotland Group PLC, 9.00%(1) 31,000 868,310
Royal Bank of Scotland Group PLC, 9.118%(1) 12,500,000 16,332,376
Standard Chartered PLC, 8.90%(1) 1,800,000 2,023,365
UBS Preferred Funding Trust I, 8.622%(3) 10,000,000 12,936,275
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$ 231,411,898
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FINANCIAL SERVICES -- 3.5%
BBVA Preferred Capital Ltd., 7.75%(1) 137,300 $ 3,844,400
Lehman Brothers Holdings, Inc., 3.00%(3) 100,000 2,540,000
Lehman Brothers Holdings, Inc., 6.50% 801,800 21,937,248
Prudential PLC, 6.50%(1) 26,500,000 26,042,242
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$ 54,363,890
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FOOD PRODUCTS -- 1.7%
Dairy Farmers of America, 7.875%(4) 220,000 $ 23,739,386
Ocean Spray Cranberries, Inc., 6.25%(4) 47,500 3,241,875
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$ 26,981,261
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See notes to financial statements
5
SECURITY SHARES VALUE
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INSURANCE -- 6.9%
Ace Ltd., 7.80%(1) 615,000 $ 16,881,750
AXA, 7.10%(1) 20,000,000 20,906,833
ING Capital Funding Trust III, 8.439%(3) 8,075,000 10,116,305
ING Groep NV, 7.05%(1) 258,200 6,971,400
ING Groep NV, 7.20%(1) 473,155 12,940,789
PartnerRe Ltd., 6.75%(1) 98,200 2,577,750
RenaisasnceRe Holdings Ltd., 7.30%(1) 22,000 593,560
XL Capital Ltd., 7.625%(1) 476,140 13,227,169
XL Capital Ltd., Series A, 8.00%(1) 142,765 3,991,710
Zurich Regcaps Fund Trust(3)(4) 12,500 11,621,100
Zurich Regcaps Fund Trust I, 6.58%(4) 6,000 6,375,000
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$ 106,203,366
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REITS -- 12.4%
AMB Property Corp., 6.75% 426,000 $ 10,735,200
CarrAmerica Realty Corp., 7.50% 470,000 12,652,400
Colonial Properties Trust, 8.125% 577,000 15,417,440
Developers Diversified Realty Corp., 7.35% 150,000 3,990,000
Developers Diversified Realty Corp., 8.00% 250,000 6,710,000
Federal Realty Investment, 8.50% 50,000 1,368,000
Health Care Property, 7.10% 200,000 5,154,000
Health Care Reit, Inc., 7.875% 125,000 3,287,500
Prologis Trust, 6.75% 1,500,000 38,100,000
PS Business Parks Inc., 7.00% 400,000 10,200,000
Public Storage, Inc., 6.85% 1,600,000 41,300,000
Regency Centers Corp., 7.45% 45,000 1,176,300
Shurgard Storage Centers, 8.75% 20,000 535,000
Vornado Realty Trust, 7.00% 1,600,000 41,200,000
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$ 191,825,840
--------------------------------------------------------------------------------------
UTILITIES - ELECTRICAL AND GAS -- 1.8%
Interstate Power & Light Co., 7.10% 181,400 $ 4,988,500
Southern Union Co., 7.55% 835,000 23,229,700
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$ 28,218,200
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TOTAL PREFERRED STOCKS
(IDENTIFIED COST $621,388,050) $ 639,004,455
--------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 3.8%
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
--------------------------------------------------------------------------------------
Investors Bank & Trust - Time Deposit,
1.06%, 3/1/04 $ 58,939 $ 58,939,000
--------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(AT AMORTIZED COST, $58,939,000) $ 58,939,000
--------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 146.3%
(IDENTIFIED COST $2,092,202,466) $ 2,271,467,174
--------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- (1.2)% $ (19,160,843)
--------------------------------------------------------------------------------------
AUCTION PREFERRED SHARES PLUS
CUMULATIVE UNPAID
DIVIDENDS-- (45.1)% $ (700,153,450)
--------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
COMMON SHARES -- 100.0% $ 1,552,152,881
--------------------------------------------------------------------------------------
ADR - American Depositary Receipt
(1) Foreign security.
(2) Non-income producing security.
(3) Variable rate security.
(4) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
See notes to financial statements
6
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND as of February 29, 2004
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
AS OF FEBRUARY 29, 2004
ASSETS
Investments, at value (identified cost, $2,092,202,466) $ 2,271,467,174
Cash 571
Receivable for investments sold 43,120,024
Dividends and interest receivable 6,649,002
Prepaid expenses 494,021
Tax reclaim receivable 46,625
----------------------------------------------------------------------------------------------
TOTAL ASSETS $ 2,321,777,417
----------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased $ 60,926,362
Dividends payable 7,829,859
Accrued offering costs 344,744
Accrued expenses 370,121
----------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 69,471,086
----------------------------------------------------------------------------------------------
AUCTION PREFERRED SHARES (28,000 SHARES OUTSTANDING)
AT LIQUIDATION VALUE PLUS CUMULATIVE UNPAID DIVIDENDS $ 700,153,450
----------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES $ 1,552,152,881
----------------------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Common Shares, $0.01 par value, unlimited number of
shares authorized, 72,835,900 shares issued and outstanding $ 728,359
Additional paid-in capital 1,382,178,448
Accumulated net realized loss (computed on the basis of identified cost) (6,784,246)
Accumulated distributions in excess of net investment income (3,237,820)
Net unrealized appreciation (computed on the basis of identified cost) 179,268,140
----------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES $ 1,552,152,881
----------------------------------------------------------------------------------------------
NET ASSET VALUE PER COMMON SHARE
($1,552,152,881 DIVIDED BY 72,835,900 COMMON SHARES
ISSUED AND OUTSTANDING) $ 21.31
----------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED
FEBRUARY 29, 2004(1)
INVESTMENT INCOME
Dividends (net of foreign taxes, $757,611) $ 35,336,487
Interest 697,712
----------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 36,034,199
----------------------------------------------------------------------------------------------
EXPENSES
Investment adviser fee $ 6,444,427
Trustees' fees and expenses 11,475
Preferred shares remarketing agent fee 392,077
Custodian fee 303,267
Legal and accounting services 250,708
Printing and postage 32,130
Transfer and dividend disbursing agent fees 25,092
Organization expenses 7,500
Miscellaneous 73,292
----------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 7,539,968
----------------------------------------------------------------------------------------------
Deduct --
Reduction of investment adviser fee $ 1,516,336
Expense reimbursement 7,500
----------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 1,523,836
----------------------------------------------------------------------------------------------
NET EXPENSES $ 6,016,132
----------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 30,018,067
----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss)--
Investment transactions (identified cost basis) $ (6,951,460)
Foreign currency transactions 167,214
----------------------------------------------------------------------------------------------
NET REALIZED LOSS $ (6,784,246)
----------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)--
Investments (identified cost basis) $ 179,264,708
Foreign currency 3,432
----------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $ 179,268,140
----------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 172,483,894
----------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS $ (1,941,410)
----------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 200,560,551
----------------------------------------------------------------------------------------------
(1) For the period from the start of business, September 30, 2003, to February
29, 2004.
See notes to financial statements
7
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED
FEBRUARY 29, 2004
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED)(1)
----------------------------------------------------------------------------------------------
From operations--
Net investment income $ 30,018,067
Net realized loss (6,784,246)
Net change in unrealized appreciation (depreciation) 179,268,140
Distributions to preferred shareholders (1,941,410)
----------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 200,560,551
----------------------------------------------------------------------------------------------
Distributions to common shareholders--
From net investment income $ (31,314,477)
----------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS $ (31,314,477)
----------------------------------------------------------------------------------------------
Capital share transactions
Proceeds from sale of common shares(2) $ 1,390,188,935
Reinvestment of distributions to common shareholders 920,480
Offering costs and preferred shares underwriting discounts (8,302,608)
----------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS $ 1,382,806,807
----------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 1,552,052,881
----------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES
At beginning of period $ 100,000
----------------------------------------------------------------------------------------------
AT END OF PERIOD $ 1,552,152,881
----------------------------------------------------------------------------------------------
ACCUMULATED DISTRIBUTIONS IN EXCESS OF
NET INVESTMENT INCOME INCLUDED IN NET
ASSETS APPLICABLE TO COMMON SHARES
AT END OF PERIOD $ (3,237,820)
----------------------------------------------------------------------------------------------
(1) For the period from the start of business, September 30, 2003, to February
29, 2004.
(2) Proceeds from sales of shares net of sales load paid of $65,506,285.
See notes to financial statements
8
FINANCIAL HIGHLIGHTS
Selected data for a common share outstanding during the period stated
PERIOD ENDED
FEBRUARY 29, 2004
(UNAUDITED)(1)(2)
----------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period (Common shares)(3) $ 19.100
----------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.423
Net realized and unrealized gain 2.361
Distribution to preferred shareholders (0.027)
----------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 2.757
----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income $ (0.430)
----------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS $ (0.430)
----------------------------------------------------------------------------------------------------
PREFERRED AND COMMON SHARES OFFERING COSTS CHARGED TO PAID-IN CAPITAL $ (0.018)
----------------------------------------------------------------------------------------------------
PREFERRED SHARES UNDERWRITING DISCOUNTS $ (0.099)
----------------------------------------------------------------------------------------------------
NET ASSET VALUE END OF PERIOD (COMMON SHARES) $ 21.310
----------------------------------------------------------------------------------------------------
MARKET VALUE END OF PERIOD (COMMON SHARES) $ 20.830
----------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN ON NET ASSET VALUE(4) 13.94%
----------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN ON MARKET VALUE(4) 11.37%
----------------------------------------------------------------------------------------------------
See notes to financial statements
9
Selected data for a common share outstanding during the period stated
PERIOD ENDED
FEBRUARY 29, 2004
(UNAUDITED)(1)(2)
----------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA+ ++
Net assets applicable to common shares, end of period (000's omitted) $ 1,552,153
Ratios (As a percentage of average net assets applicable to common shares):
Net expenses(5) 1.00%(6)
Net investment income(5) 4.97%(6)
Portfolio Turnover 26%
----------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund reflect a reduction of the investment
adviser fee and a reimbursement of expenses by the Adviser. Had such actions
not been taken, the ratios and net investment income per share would have
been as follows:
Ratios (As a percentage of average net assets applicable to common shares):
Expenses(5) 1.25%(6)
Net investment income(5) 4.72%(6)
Net investment income per share $ 0.402
----------------------------------------------------------------------------------------------------
++ The ratios reported are based on net assets applicable solely to common
shares. The ratios based on net assets, including amounts related to
preferred shares, are as follows:
Ratios (As a percentage of average total net assets):+++
Net expenses 0.79%(6)
Net investment income 3.94%(6)
----------------------------------------------------------------------------------------------------
+++The operating expenses of the Fund reflect a reduction of the investment
adviser fee and a reimbursement of expenses by the Adviser. Had such actions
not been taken, the ratios would have been as follows:
Ratios (As a percentage of average total net assets):
Expenses 0.99%(6)
Net investment income 3.74%(6)
----------------------------------------------------------------------------------------------------
Senior Securities:
Total preferred shares outstanding 28,000
Asset coverage per preferred share(7) $ 80,440
Involuntary liquidation preference per preferred share(8) $ 25,000
Approximate market value per preferred share(8) $ 25,000
----------------------------------------------------------------------------------------------------
(1) For the period from the start of business, September 30, 2003, to February
29, 2004.
(2) Computed using average common shares outstanding.
(3) Net asset value at beginning of period reflects the deduction of the sales
load of $0.90 per share paid by the shareholder from the $20.00 offering
price.
(4) Total investment return on net asset value is calculated assuming a
purchase at the offering price price of $20.00 less the sales load of $0.90
per share paid by the shareholder on the first day and a sale at the net
aset value on the last day of the period reported. Total investment return
on market value is calculated assuming a purchase at the offering price of
$20.00 less the sales load of $0.90 per share paid by the shareholder on
the first day and a sale at the current market price on the last day of the
period reported. Total investment return on net asset value and total
investment return on market value are not computed on an annualized basis.
(5) Ratios do not reflect the effect of dividend payments to preferred
shareholders. Ratios to average net assets applicable to common shares
reflect the Fund's leveraged capital structure.
(6) Annualized.
(7) Calculated by subtracting the Fund's total liabilities (not including the
preferred shares) from the Fund's total assets, and dividing this by the
number of preferred shares outstanding.
(8) Plus accumulated and unpaid dividends.
See notes to financial statements
10
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND as of February 29, 2004
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 SIGNIFICANT ACCOUNTING POLICIES
Eaton Vance Tax-Advantaged Dividend Income Fund (the Fund) is registered
under the Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Fund was organized under the
laws of the Commonwealth of Massachusetts by an Agreement and Declaration of
Trust dated July 10, 2003. The Fund's investment objective is to provide a
high level of after-tax total return consisting primarily of tax-advantaged
dividend income and capital appreciation. The Fund pursues its objective by
investing primarily in dividend-paying common and preferred stocks. The
following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in
the United States of America.
A INVESTMENT VALUATION -- Securities listed on a U.S. securities exchange
generally are valued at the last sale price on the day of valuation or, if no
sales took place on such date, at the mean between the closing bid and asked
prices therefore on the exchange where such securities are principally
traded. Equity securities listed on the NASDAQ National Market System
generally are valued at the official NASDAQ closing price. Unlisted or listed
securities for which closing sales prices or closing quotations are not
available are valued at the mean between the latest available bid and asked
prices. Exchange-traded options are valued at the last sale price for the day
of valuation as quoted on the principal exchange or board of trade on which
the options are traded or, in the absence of sales on such date, at the mean
between the latest bid and asked prices therefore. Futures positions on
securities and currencies generally are valued at closing settlement prices.
Short-term debt securities with a remaining maturity of 60 days or less are
valued at amortized cost. If short-term debt securities were acquired with a
remaining maturity of more than 60 days, their amortized cost value will be
based on their value on the sixty-first day prior to maturity. Other fixed
income and debt securities, including listed securities and securities for
which price quotations are available, will normally be valued on the basis of
valuations furnished by a pricing service. The daily valuation of foreign
securities generally is determined as of the close of trading on the
principal exchange on which such securities trade. Events occurring after the
close of trading on foreign exchanges may result in adjustments to the
valuation of foreign securities to more accurately reflect their fair value
as of the close of regular trading on the New York Stock Exchange. The Fund
may rely on an independent fair valuation service in adjusting the valuations
of foreign securities. Foreign securities and currencies are valued in U.S.
dollars, based on foreign currency exchange rate quotations supplied by an
independent quotation service. Investments held by the Fund for which
valuations or market quotations are unavailable are valued at fair value
using methods determined in good faith by or at the direction of the Trustees
of the Fund considering relevant factors, data and information including the
market value of freely tradable securities of the same class in the principal
market on which such securities are normally traded.
B INCOME -- Dividend income is recorded on the ex-dividend date for dividends
received in cash and/or securities. However, if the ex-dividend date has
passed, certain dividends from foreign securities are recorded as the Fund is
informed of the ex-dividend date. Interest income is recorded on the accrual
basis.
C FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable income, including any
net realized gain on investments. Accordingly, no provision for federal
income or excise tax is necessary.
D OFFERING COSTS -- Costs incurred by the Fund in connection with the
offering of the common shares and preferred shares were recorded as a
reduction of capital paid in excess of par applicable to common shares.
E WRITTEN OPTIONS -- Upon the writing of a call or a put option, an amount
equal to the premium received by the Fund is included in the Statement of
Assets and Liabilities as a liability. The amount of the liability is
subsequently marked-to-market to reflect the current value of the option
written in accordance with the Fund's policies on investment valuations
discussed above. Premiums received from writing options which expire are
treated as realized gains. Premiums received from writing options which are
exercised or are closed are added to or offset against the proceeds or amount
paid on the transaction to determine the realized gain or loss. If a put
option is exercised, the premium reduces the cost basis of the securities
purchased by the Fund. The Fund, as writer of an option, may have no control
over whether the underlying securities may be sold (call) or purchased (put)
and, as a result, bears the market risk of an unfavorable change in the price
of the securities underlying the written option.
F PURCHASED OPTIONS -- Upon the purchase of a call or put option, the premium
paid by the Fund is included in the Statement of Assets and Liabilities as an
investment.
11
The amount of the investment is subsequently marked-to-market to reflect the
current market value of the option purchased, in accordance with the Fund's
policies on investment valuations discussed above. If an option which the
Fund has purchased expires on the stipulated expiration date, the Fund will
realize a loss in the amount of the cost of the option. If the Fund enters
into a closing sale transaction, the Fund will realize a gain or loss,
depending on whether the sales proceeds from the closing sale transaction are
greater or less than the cost of the option. If a Fund exercises a put
option, it will realize a gain or loss from the sale of the underlying
security, and the proceeds from such sale will be decreased by the premium
originally paid. If the Fund exercises a call option, the cost of the
security which the Fund purchases upon exercise will be increased by the
premium originally paid.
G SWAP AGREEMENTS -- The Fund may enter into swap agreements to hedge against
fluctuations in securities prices, interest rates or market conditions, to
change the duration of the overall portfolio, to mitigate non-payment or
default risk, or to gain exposure to particular securities, baskets of
securities, indices or currencies. In a standard swap transaction, two
parties agree to exchange the returns (or differentials in rates of return)
to be exchanged or swapped between the parties, which returns are calculated
with respect to a notional amount (i.e., the return on or increase in value
of a particular dollar amount invested at a particular interest rate or in a
"basket" of securities representing a particular index). The Fund will enter
into swaps on a net basis. If the other party to a swap defaults, the Fund's
risk of loss consists of the net amount of payments that the Fund is
contractually entitled to receive. The Fund will not enter into any swap
unless the claims-paying ability of the other party thereto is considered to
be investment grade by the Adviser. These instruments are traded in the
over-the-counter market. If the Adviser is incorrect in its forecasts of
market values, interest rates and other applicable factors, the investment
performance of the Fund would be unfavorably affected.
H FOREIGN CURRENCY TRANSLATION -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing on
the respective dates of such transactions. Recognized gains or losses on
investment transactions attributable to foreign currency exchange rates are
recorded for financial statement purposes as net realized gains and losses on
investments. That portion of unrealized gains and losses on investments that
results from fluctuations in foreign currency exchange rates is not
separately disclosed.
I 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.
J INDEMNIFICATIONS -- Under the Fund's organizational documents, its officers
and Trustees may be indemnified against certain liabilities and expenses
arising out of the performance of their duties to the Fund. Additionally, in
the normal course of business, the Fund enters into agreements with service
providers that may contain indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown as this would involve future
claims that may be made against the Fund that have not yet occurred.
K OTHER -- Investment transactions are accounted for on a trade date basis.
Realized gains and losses are computed on the specific identification of the
securities sold.
L INTERIM FINANCIAL STATEMENTS -- The interim financial statements relating
to February 29, 2004 and for the period then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 AUCTION PREFERRED SHARES
The Fund issued 4,000 shares of Auction Preferred Shares (APS) Series A,
4,000 shares of APS Series B, 4,000 shares of APS Series C, 4,000 shares of
APS Series D, 4,000 shares of APS Series E, 4,000 shares of APS Series F and
4,000 shares of APS Series G on December 10, 2003 in a public offering. The
underwriting discount and other offering costs were recorded as a reduction
of the capital of the common shares. Dividends of the APS, which accrue
daily, are cumulative at a rate which was established at the offering of the
APS and have been reset by an auction based on the dividend period of each
Series. Rates are reset weekly for Series A and Series B, annually for Series
C and Series D, approximately monthly for Series E and Series F and
approximately bi-monthly for Series G. The reset period for
12
Series C and Series D was changed after the initial public offering for each
such series. Subsequent to February 29, 2004, the reset period for Series F
was changed to an annual reset period. Dividends are generally paid on the
day following the end of the dividend period for Series A, Series B, Series E
and Series F. Series C, Series D and Series G pay accumulated dividends on
the first business day of each month and on the day following the end of the
dividend period.
Dividend rate ranges for the period from the commencement of the offering,
December 10, 2003, to February 29, 2004 are as indicated below:
SERIES DIVIDEND RATE RANGES
--------------------------------------------------------
Series A 1.05% - 1.50%
Series B 1.05% - 1.50%
Series C 1.08% - 1.75%
Series D 1.07% - 1.75%
Series E 1.10% - 1.25%
Series F 1.099% - 1.22%
Series G 1.10% - 1.25%
The APS are redeemable at the option of the 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 the Fund is in default for an extended period on its asset
maintenance requirements with respect to the APS. If the dividends on the APS
shall 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. The Fund is required to
maintain certain asset coverage with respect to the APS as defined in the
Fund's By-Laws and the Investment Company Act of 1940. The Fund pays an
annual fee equivalent to 0.25% of the preferred shares' liquidation value for
the remarketing efforts associated with the preferred auctions.
3 DISTRIBUTION TO SHAREHOLDERS
The Fund intends to make monthly distributions of net investment income,
after payment of any dividends on any outstanding Auction Preferred Shares.
In addition, at least annually, the Fund intends to distribute net capital
gain, if any. Distributions are recorded on the ex-dividend date. The
applicable dividend rates for APS on February 29, 2004 are listed below. For
the period from the commencement of the offering, the amount of dividends
each Series paid to Auction Preferred shareholders and average APS dividend
rates for such period were as follows:
DIVIDENDS PAID TO AVERAGE APS
APS PREFERRED SHAREHOLDERS DIVIDEND RATES
DIVIDEND RATES FOR THE PERIOD FOR THE PERIOD
AS OF ENDED ENDED
FEBRUARY 29, FEBRUARY 29, FEBRUARY 29,
SERIES 2004 2004(1) 2004(1)
------------------------------------------------------------------------
Series A 1.085% $ 264,883 1.163%
Series B 1.120% $ 268,316 1.177%
Series C 1.399% $ 295,360 1.272%
Series D 1.390% $ 295,160 1.291%
Series E 1.100% $ 271,565 1.190%
Series F 1.099% $ 268,886 1.160%
Series G 1.100% $ 277,240 1.213%
(1) For the period from the commencement of offering, December 10, 2003, to
February 29, 2004.
4 INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by Eaton Vance Management (EVM), as
compensation for management and investment advisory services rendered to the
Fund. Under the advisory agreement, EVM receives a monthly advisory fee in
the amount equal to 0.85% annually of average daily gross assets of the Fund.
For the period from the start of business, September 30, 2003, to February
29, 2004, the advisory fee amounted to $6,444,427. EVM serves as the
administrator of the Fund, but currently receives no compensation for
providing administrative services to the Fund.
In addition, the Adviser has contractually agreed to reimburse the Fund for
fees and other expenses in the amount of 0.20% of the average daily gross
assets for the first five years of the Fund's operations, 0.15% of average
daily gross assets in year six, 0.10% in year seven and 0.05% in year eight.
For the period from the start of
13
business, September 30, 2003, to February 29, 2004 the Investment Adviser
waived $1,516,336 of its advisory fee.
Trustees of the Fund 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 period from the
start of business, September 30, 2003, to February 29, 2004, no significant
amounts have been deferred.
Certain officers and Trustees of the Fund are officers of the above
organization.
5 PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term obligations,
aggregated $2,476,338,423 and $427,475,424 respectively, for the period from
the start of business, September 30, 2003, to February 29, 2004.
6 FEDERAL INCOME TAX BASIS OF UNREALIZED APPRECIATION (DEPRECIATION)
The cost and unrealized appreciation (depreciation) in value of investments
owned by the Fund at February 29, 2004, as computed on a Federal income tax
basis, were as follows:
AGGREGATE COST $ 2,092,202,466
-------------------------------------------------------
Gross unrealized appreciation $ 182,705,413
Gross unrealized depreciation (3,440,705)
-------------------------------------------------------
NET UNREALIZED APPRECIATION $ 179,264,708
-------------------------------------------------------
7 COMMON SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Fund to issue an unlimited number of
full and fractional $0.01 par value common shares of beneficial interest.
Transactions in common shares were as follows:
PERIOD ENDED
FEBRUARY 29, 2004
(UNAUDITED)(1)
------------------------------------------------------------------------
Sales 72,784,761
Issued to shareholders electing to receive
payments of distributions in Fund shares 46,139
------------------------------------------------------------------------
NET INCREASE 72,830,900
------------------------------------------------------------------------
(1) For the period from the start of business, September 30, 2003, to
February 29, 2004.
8 FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk in
the normal course of its investing activities to assist in managing exposure
to various market risks. These financial instruments include written options,
forward foreign currency exchange contracts, and financial futures contracts
and may involve, to a varying degree, elements of risk in excess of the
amounts recognized for financial statement purposes. The notional or
contractual amounts of these instruments represent the investment the Fund
has in particular classes of financial instruments and does not necessarily
represent the amounts potentially subject to risk. The measurement of the
risks associated with these instruments is meaningful only when all related
and offsetting transactions are considered. The Fund did not have any open
obligations under these financial instruments at February 29, 2004.
14
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
DIVIDEND REINVESTMENT PLAN
The Fund offers a dividend reinvestment plan (the Plan) pursuant to which
shareholders may elect to have dividends and capital gains distributions
automatically reinvested in common shares (the 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 PFPC Inc. as dividend paying
agent. On the distribution payment date, if the net asset value 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 net asset value per Share or 95% of the market
price. Otherwise, Shares generally will be purchased on the open market by the
Plan 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 your shares be
re-registered in your name with the Fund's transfer agent, PFPC Inc., or you
will not be able to participate.
The Plan Agent's service fee for handling distributions will be paid by the
Fund. Each participant 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 Plan
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 Plan Agent to have the
Plan Agent sell part or all of his or her Shares and remit the proceeds, the
Plan 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 Plan
Agent.
Any inquiries regarding the Plan can be directed to the Plan Agent, PFPC Inc.,
at 1-800-331-1710.
15
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
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 DIVIDENDS AND
DISTRIBUTIONS IN CASH. THIS IS NOT A PROXY.
THIS AUTHORIZATION FORM, WHEN SIGNED, SHOULD BE MAILED TO THE FOLLOWING ADDRESS:
Eaton Vance Tax-Advantaged Dividend Income Fund
c/o PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027
800-331-1710
NUMBER OF EMPLOYEES
The Fund is organized as a Massachusetts business trust and is registered under
the Investment Company Act of 1940, as amended, as a diversified closed-end
management investment company and has no employees.
NUMBER OF SHAREHOLDERS
As of February 29, 2004, our records indicate that there are 78 registered
shareholders and approximately 64,295 shareholders owning the Fund shares in
street name, such as through brokers, banks, and financial intermediaries.
If you are a street name shareholder and wish to receive our reports directly,
which contain important information about the Fund, please write or call:
Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
1-800-225-6265
NEW YORK STOCK EXCHANGE SYMBOL
The New York Stock Exchange symbol is EVT.
16
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
INVESTMENT MANAGEMENT
OFFICERS
Thomas E. Faust Jr.
President and Chief Executive Officer
James B. Hawkes
Vice President and Trustee
Thomas H. Luster
Vice President
Michael R. Mach
Vice President
Judith A Saryan
Vice President
James L. O'Connor
Treasurer and Principal Financial
Accounting Officer
Alan R. Dynner
Secretary
TRUSTEES
Samuel L. Hayes, III
William H. Park
Ronald A. Pearlman
Norton H. Reamer
Lynn A. Stout
17
INVESTMENT ADVISER AND ADMINISTRATOR OF TAX-ADVANTAGED DIVIDEND INCOME FUND
EATON VANCE MANAGEMENT
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 CLARENDON STREET
BOSTON, MA 02116
TRANSFER AGENT
PFPC INC.
ATTN: EATON VANCE FUNDS
P.O. BOX 43027
PROVIDENCE, RI 02940-3027
(800) 331-1710
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
2004-4/04 CE-TADISRC
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company owning institutional investment management firms). Mr. Hayes is
the Jacob H. Schiff Professor of Investment Banking Emeritus of the Harvard
University Graduate School of Business Administration. Mr. Reamer is the
President, Chief Executive Officer and a Director of Asset Management Finance
Corp. (a specialty finance company serving the investment management industry)
and is President of Unicorn Corporation (an investment and financial advisory
services company). Formerly, Mr. Reamer was Chairman of Hellman, Jordan
Management Co., Inc. (an investment management company) and Advisory Director of
Berkshire Capital Corporation (an investment banking firm), Chairman of the
Board of UAM and Chairman, President and Director of the UAM Funds (mutual
funds).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
The registrant's Board has adopted a proxy voting policy and procedure (the
"Fund Policy"), pursuant to which the Trustees have delegated proxy voting
responsibility to the registrant's investment adviser and adopted the investment
adviser's proxy voting policies and procedures (the "Policies") which are
described below. The Trustees will review the registrant's proxy voting records
from time to time and will annually consider approving the Policies for the
upcoming year. In the event that a conflict of interest arises between the
registrant's shareholders and the investment adviser, the administrator, or any
of their affiliates or any affiliate of the registrant, the investment adviser
will generally refrain from
voting the proxies related to the companies giving rise to such conflict until
it consults with the Board's Special Committee except as contemplated under the
Fund Policy. The Special Committee will instruct the investment adviser on the
appropriate course of action.
The Policies are designed to promote accountability of a company's management to
its shareholders and to align the interests of management with those
shareholders. The investment adviser will generally support company management
on proposals relating to environmental and social policy issues and on matters
regarding the state of organization of the company. On all other matters, the
investment adviser will take management's proposals under advisement but will
consider each matter in light of the guidelines set forth in the Policies.
Except in the instance of routine matters related to corporate administration
which are not expected to have a significant economic impact on the company or
its shareholders (on which the investment adviser will routinely vote with
management), the investment adviser will review each matter on a case-by-case
basis and reserves the right to deviate from the Policies guidelines when it
believes the situation warrants such a deviation. The Policy includes voting
guidelines for matters relating to, among other things, the election of
directors, approval of independent auditors, executive compensation, corporate
structure and anti-takeover defenses. The investment adviser may abstain from
voting from time to time where it determines that the costs associated with
voting a proxy outweighs the benefits derived from exercising the right to vote.
In addition, the investment adviser will monitor situations that may result in a
conflict of interest between the registrant's shareholders and the investment
adviser, the administrator, or any of their affiliates or any affiliate of the
registrant by maintaining a list of significant existing and prospective
corporate clients. The investment adviser's personnel responsible for reviewing
and voting proxies on behalf of the registrant will report any proxy received or
expected to be received from a company included on that list to the investment
adviser's general counsel or chief equity investment officer. The general
counsel or chief equity investment officer will determine if a conflict exists.
If a conflict does exist, the proxy will either be voted strictly in accordance
with the Policy or the investment adviser will seek instruction on how to vote
from the Board.
Effective August 31, 2004, information on how the registrant voted proxies
relating to portfolio securities during the 12 month period ended June 30, 2004
will be available (1) without charge, upon request, by calling 1-800-262-1122,
and (2) on the Securities and Exchange Commission's website at
http://www.sec.gov.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. EXHIBITS
(a)(1) Registrant's Code of Ethics - Not applicable (please see Item 2).
(a)(2)(i) Treasurer's Section 302 certification.
(a)(2)(ii) President's Section 302 certification.
(b) Combined Section 906 certification.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
By: /S/ Thomas E. Faust, Jr.
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Thomas E. Faust, Jr.
President
Date: April 13, 2004
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /S/ James L. O'Connor
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James L. O'Connor
Treasurer
Date: April 13, 2004
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By: /S/ Thomas E. Faust, Jr.
------------------------
Thomas E. Faust, Jr.
President
Date: April 13, 2004
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