Eaton Vance Pennsylvania Municipal Income Trust
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
811-09151
Investment Company Act File Number
Eaton Vance Pennsylvania Municipal Income Trust
(Exact Name of Registrant as Specified in Charter)
Two International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices)
Maureen A. Gemma
Two International Place, Boston, Massachusetts 02110
(Name and Address of Agent for Services)
(617) 482-8260
(Registrant’s Telephone Number, Including Area Code)
November 30
Date of Fiscal Year End
August 31, 2010
Date of Reporting Period
 
 

 

 

Item 1. Schedule of Investments

 

 

Eaton Vance Pennsylvania Municipal Income Trust as of August 31, 2010
 
PORTFOLIO OF INVESTMENTS (Unaudited)
 
Tax-Exempt Investments — 161.3%
 
                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
Bond Bank — 3.0%
$ 1,000    
Delaware Valley Regional Finance Authority, 5.75%, 7/1/32
  $ 1,135,650  
                 
            $ 1,135,650  
                 
Cogeneration — 2.7%
$ 300    
Pennsylvania Economic Development Financing Authority, (Northampton Generating), (AMT), 6.50%, 1/1/13
  $ 191,328  
  500    
Pennsylvania Economic Development Financing Authority, (Northampton Generating), (AMT), 6.60%, 1/1/19
    284,050  
  575    
Pennsylvania Economic Development Financing Authority, (Resource Recovery-Colver), (AMT), 5.125%, 12/1/15
    556,462  
                 
            $ 1,031,840  
                 
Education — 10.5%
$ 500    
Bucks County Industrial Development Authority, (George School), 5.00%, 9/15/39
  $ 528,855  
  1,200    
Cumberland County Municipal Authority, (Dickinson College), 5.00%, 11/1/39
    1,221,120  
  500    
Northampton County General Purpose Authority, (Lehigh University), 5.00%, 11/15/39
    533,580  
  625    
Pennsylvania Higher Educational Facilities Authority, (Thomas Jefferson University), 5.00%, 3/1/40
    661,325  
  500    
Pennsylvania State University, 5.00%, 3/1/40
    546,845  
  500    
Washington County Industrial Development Authority, (Washington and Jefferson College), 5.25%, 11/1/30
    539,680  
                 
            $ 4,031,405  
                 
Electric Utilities — 2.8%
$ 435    
Pennsylvania Economic Development Financing Authority, (Reliant Energy, Inc.), (AMT), 6.75%, 12/1/36
  $ 451,208  
  600    
York County Industrial Development Authority, Pollution Control Revenue, (Public Service Enterprise Group, Inc.), 5.50%, 9/1/20
    617,394  
                 
            $ 1,068,602  
                 
Escrowed/Prerefunded — 1.7%
$ 600    
Bucks County Industrial Development Authority, (Pennswood Village), Prerefunded to 10/1/12, 6.00%, 10/1/27
  $ 672,966  
                 
            $ 672,966  
                 
General Obligations — 7.2%
$ 500    
Chester County, 5.00%, 7/15/27(1)
  $ 575,900  
  1,000    
Daniel Boone Area School District, 5.00%, 8/15/32
    1,072,830  
  1,000    
Philadelphia School District, 6.00%, 9/1/38
    1,104,790  
                 
            $ 2,753,520  
                 
Hospital — 20.2%
$ 500    
Allegheny County Hospital Development Authority, (University of Pittsburgh Medical Center), 5.50%, 8/15/34
  $ 524,850  
  750    
Dauphin County General Authority, (Pinnacle Health System), 6.00%, 6/1/29
    818,100  
  1,215    
Lehigh County General Purpose Authority, (Lehigh Valley Health Network), 5.25%, 7/1/32
    1,239,300  
  750    
Lycoming County Authority, (Susquehanna Health System), 5.75%, 7/1/39
    777,247  
  1,500    
Monroe County Hospital Authority, (Pocono Medical Center), 5.25%, 1/1/43
    1,514,355  
  250    
Northampton County General Purpose Authority, (Saint Luke’s Hospital), 5.50%, 8/15/33
    257,528  
  1,000    
Pennsylvania Higher Educational Facilities Authority, (University of Pennsylvania Health System), 6.00%, 8/15/26(2)
    1,157,240  
  675    
Pennsylvania Higher Educational Facilities Authority, (UPMC Health System), 5.00%, 5/15/31
    699,644  
  250    
South Fork Municipal Authority, (Conemaugh Health System), 5.50%, 7/1/29
    254,350  
  500    
Washington County Hospital Authority, (Monongahela Hospital), 5.50%, 6/1/17
    519,685  
                 
            $ 7,762,299  
                 
 
1

 

                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
Housing — 15.8%
$ 495    
Allegheny County Residential Finance Authority, SFMR, (AMT), 4.95%, 11/1/37
  $ 498,322  
  1,160    
Allegheny County Residential Finance Authority, SFMR, (AMT), 5.00%, 5/1/35
    1,183,420  
  920    
Pennsylvania Housing Finance Agency, SFMR, (AMT), 4.70%, 10/1/37
    915,777  
  950    
Pennsylvania Housing Finance Agency, SFMR, (AMT), 4.875%, 4/1/26
    963,395  
  500    
Pennsylvania Housing Finance Agency, SFMR, (AMT), 4.875%, 10/1/31
    502,775  
  1,000    
Pennsylvania Housing Finance Agency, SFMR, (AMT), 4.90%, 10/1/37
    1,007,560  
  960    
Pennsylvania Housing Finance Agency, SFMR, (AMT), 5.15%, 10/1/37
    973,661  
                 
            $ 6,044,910  
                 
Industrial Development Revenue — 11.9%
$ 200    
Luzerne County Industrial Development Authority, (Pennsylvania-American Water Co.), 5.50%, 12/1/39
  $ 211,876  
  750    
Montgomery County Industrial Development Authority, (Aqua Pennsylvania, Inc.), (AMT), 5.25%, 7/1/42
    779,460  
  500    
New Morgan Industrial Development Authority, (Browning-Ferris Industries, Inc.), (AMT), 6.50%, 4/1/19
    500,455  
  250    
Pennsylvania Economic Development Financing Authority, (Pennsylvania-American Water Co.), 6.20%, 4/1/39
    277,343  
  1,000    
Pennsylvania Economic Development Financing Authority, (Procter & Gamble Paper Products Co.), (AMT), 5.375%, 3/1/31
    1,100,050  
  500    
Pennsylvania Economic Development Financing Authority, (Waste Management, Inc.), (AMT), 5.10%, 10/1/27
    506,350  
  1,365    
Puerto Rico Port Authority, (American Airlines, Inc.), (AMT), 6.25%, 6/1/26
    1,171,511  
                 
            $ 4,547,045  
                 
Insured-Education — 16.5%
$ 500    
Lycoming County Authority, (Pennsylvania College of Technology), (AGC), 5.50%, 10/1/37
  $ 535,950  
  1,675    
Lycoming County Authority, (Pennsylvania College of Technology), (AMBAC), 5.25%, 5/1/32
    1,677,378  
  1,115    
Pennsylvania Higher Educational Facilities Authority, (Drexel University), (NPFG), 5.00%, 5/1/37
    1,167,539  
  1,000    
Pennsylvania Higher Educational Facilities Authority, (Temple University), (NPFG), 5.00%, 4/1/33
    1,049,560  
  500    
State Public School Building Authority, (Delaware County Community College), (AGM), 5.00%, 10/1/27
    551,485  
  375    
State Public School Building Authority, (Delaware County Community College), (AGM), 5.00%, 10/1/29
    408,390  
  875    
State Public School Building Authority, (Delaware County Community College), (AGM), 5.00%, 10/1/32
    936,740  
                 
            $ 6,327,042  
                 
Insured-Escrowed/Prerefunded — 8.4%
$ 1,600    
Pennsylvania Turnpike Commission, Oil Franchise Tax, (AMBAC), Escrowed to Maturity, 4.75%, 12/1/27
  $ 1,618,224  
  2,000    
Westmoreland Municipal Authority, (FGIC), Escrowed to Maturity, 0.00%, 8/15/19
    1,593,680  
                 
            $ 3,211,904  
                 
Insured-General Obligations — 4.5%
$ 500    
Beaver County, (AGM), 5.55%, 11/15/31
  $ 553,110  
  750    
Bethlehem Area School District, (AGM), 5.25%, 1/15/25
    841,013  
  300    
West Mifflin Area School District, (AGM), 5.125%, 4/1/31
    325,803  
                 
            $ 1,719,926  
                 
Insured-Hospital — 10.7%
$ 250    
Allegheny County Hospital Development Authority, (UPMC Health System), (NPFG), 6.00%, 7/1/24
  $ 306,308  
  355    
Delaware County General Authority, (Catholic Health East), (AMBAC), 4.875%, 11/15/26
    355,351  
  1,440    
Lehigh County General Purpose Authority, (Lehigh Valley Health Network), (AGM), 5.00%, 7/1/35(2)
    1,494,576  
 
2

 

                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
$ 35    
Lehigh County General Purpose Authority, (Lehigh Valley Health Network), (NPFG), 5.25%, 7/1/29
  $ 35,010  
  1,900    
Montgomery County Higher Education and Health Authority, (Abington Memorial Hospital), (AMBAC), 5.00%, 6/1/28
    1,900,589  
                 
            $ 4,091,834  
                 
Insured-Lease Revenue/Certificates of Participation — 4.7%
$ 500    
Commonwealth Financing Authority, (AGC), 5.00%, 6/1/31
  $ 536,580  
  1,195    
Philadelphia Authority for Industrial Development, (One Benjamin Franklin), (AGM), 4.75%, 2/15/27
    1,278,088  
                 
            $ 1,814,668  
                 
Insured-Special Tax Revenue — 6.8%
$ 1,000    
Pittsburgh and Allegheny County Public Auditorium Authority, (AMBAC), 5.00%, 2/1/24
  $ 1,000,950  
  9,870    
Puerto Rico Sales Tax Financing Corp., (AMBAC), 0.00%, 8/1/54
    680,339  
  1,690    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/44
    232,865  
  3,350    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45
    429,973  
  2,100    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/46
    250,887  
                 
            $ 2,595,014  
                 
Insured-Transportation — 14.6%
$ 1,000    
Pennsylvania Turnpike Commission, (AGC), 5.00%, 6/1/38
  $ 1,048,340  
  1,000    
Pennsylvania Turnpike Commission, (AGC), 5.00%, 6/1/39
    1,054,260  
  500    
Philadelphia, Airport Revenue, (AGM), (AMT), 5.00%, 6/15/27
    512,245  
  1,005    
Philadelphia Parking Authority, (AMBAC), 5.25%, 2/15/29
    1,005,714  
  1,800    
Puerto Rico Highway and Transportation Authority, (AGC), (CIFG), 5.25%, 7/1/41(2)
    1,975,842  
                 
            $ 5,596,401  
                 
Insured-Water and Sewer — 6.8%
$ 275    
Allegheny County Sanitation Authority, (BHAC), (NPFG), 5.00%, 12/1/22
  $ 303,306  
  535    
Chester County Industrial Development Authority, (Aqua Pennsylvania, Inc.), (FGIC), (NPFG), (AMT), 5.00%, 2/1/40
    546,010  
  875    
Delaware County Industrial Development Authority, (Aqua Pennsylvania, Inc.), (FGIC), (NPFG), (AMT), 5.00%, 11/1/36
    893,095  
  500    
Delaware County Industrial Development Authority, (Water Facilities), (FGIC), (NPFG), (AMT), 6.00%, 6/1/29
    500,675  
  360    
Philadelphia, Water and Wastewater Revenue, (FGIC), (NPFG), 5.00%, 11/1/31
    366,185  
                 
            $ 2,609,271  
                 
Senior Living/Life Care — 3.7%
$ 1,000    
Cliff House Trust, (AMT), 6.625%, 6/1/27
  $ 525,880  
  500    
Lancaster County Hospital Authority, (Willow Valley Retirement Communities), 5.875%, 6/1/31
    507,680  
  200    
Montgomery County Industrial Development Authority, (Foulkeways at Gwynedd), 5.00%, 12/1/24
    202,878  
  200    
Montgomery County Industrial Development Authority, (Foulkeways at Gwynedd), 5.00%, 12/1/30
    199,984  
                 
            $ 1,436,422  
                 
Special Tax Revenue — 0.3%
$ 110    
Virgin Islands Public Finance Authority, 6.75%, 10/1/37
  $ 124,666  
                 
            $ 124,666  
                 
Transportation — 4.9%
$ 465    
Delaware River Port Authority of Pennsylvania and New Jersey, 5.00%, 1/1/35
  $ 488,320  
  285    
Delaware River Port Authority of Pennsylvania and New Jersey, 5.00%, 1/1/40
    298,848  
  270    
Pennsylvania Economic Development Financing Authority, (Amtrak), (AMT), 6.25%, 11/1/31
    274,792  
  750    
Pennsylvania Turnpike Commission, 5.625%, 6/1/29
    830,475  
                 
            $ 1,892,435  
                 
Utilities — 1.6%
$ 600    
Philadelphia Gas Works, 5.25%, 8/1/40
  $ 614,844  
                 
            $ 614,844  
                 
 
3

 

                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
Water and Sewer — 2.0%
$ 750    
Harrisburg Water Authority, 5.25%, 7/15/31
  $ 767,670  
                 
            $ 767,670  
                 
         
Total Tax-Exempt Investments — 161.3%
(identified cost $59,886,206)
  $ 61,850,334  
         
         
Auction Preferred Shares Plus Cumulative Unpaid Dividends — (55.2)%
  $ (21,175,229 )
         
         
Other Assets, Less Liabilities — (6.1)%
  $ (2,339,639 )
         
         
Net Assets Applicable to Common Shares — 100.0%
  $ 38,335,466  
         
             
 
The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.
             
             
AGC
  -   Assured Guaranty Corp.
         
AGM
  -   Assured Guaranty Municipal Corp.
         
AMBAC
  -   AMBAC Financial Group, Inc.
         
AMT
  -   Interest earned from these securities may be considered a tax preference item for purposes of the Federal Alternative Minimum Tax.
         
BHAC
  -   Berkshire Hathaway Assurance Corp.
         
CIFG
  -   CIFG Assurance North America, Inc.
         
FGIC
  -   Financial Guaranty Insurance Company
         
NPFG
  -   National Public Finance Guaranty Corp.
         
SFMR
  -   Single Family Mortgage Revenue
 
The Trust invests primarily in debt securities issued by Pennsylvania municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at August 31, 2010, 45.2% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution ranged from 0.5% to 13.3% of total investments.
         
(1)
      Security (or a portion thereof) has been pledged to cover margin requirements on open financial futures contracts.
         
(2)
      Security represents the underlying municipal bond of an inverse floater.
 
4

 

A summary of open financial instruments at August 31, 2010 is as follows:
 
Futures Contracts
 
                                 
Expiration
 		          Aggregate
 		          Net Unrealized
 		 
Date   Contracts   Position   Cost     Value     Depreciation  
12/10
  50 U.S. 30-Year Treasury Bond   Short   $ (6,693,966 )   $ (6,751,563 )   $ (57,597 )
 
Interest Rate Swaps
 
                                 
          Annual
 		    Floating
 		  Effective Date/
 		     
    Notional
 		    Fixed Rate
 		    Rate
 		  Termination
 		  Net Unrealized
 		 
Counterparty   Amount     Paid By Trust     Paid To Trust   Date   Depreciation  
JPMorgan Chase Co. 
  $ 912,500       4.046 %   3-month USD-
LIBOR-BBA 		  September 17, 2010 /
September 17, 2040 		  $ (162,405 )
Merrill Lynch Capital Services, Inc. 
    1,000,000       3.374     3-month USD-
LIBOR-BBA 		  November 24, 2010 /
November 24, 2040 		    (38,706 )
                                 
                            $ (201,111 )
                                 
 
The effective date represents the date on which the Trust and the counterparty to the interest rate swap contract begin interest payment accruals.
 
At August 31, 2010, the Trust had sufficient cash and/or securities to cover commitments under these contracts.
 
The Trust is subject to interest rate risk in the normal course of pursuing its investment objectives. Because the Trust holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. To hedge against this risk, the Trust may enter into interest rate swap contracts. The Trust may also purchase and sell U.S. Treasury futures contracts to hedge against changes in interest rates.
 
At August 31, 2010, the aggregate fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in a liability position and whose primary underlying risk exposure is interest rate risk was $258,708.
 
The cost and unrealized appreciation (depreciation) of investments of the Trust at August 31, 2010, as determined on a federal income tax basis, were as follows:
 
         
Aggregate cost
  $ 57,485,305  
         
Gross unrealized appreciation
  $ 3,274,712  
Gross unrealized depreciation
    (1,279,683 )
         
Net unrealized appreciation
  $ 1,995,029  
         
 
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
 
  •   Level 1 — quoted prices in active markets for identical investments
 
  •   Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
 
  •   Level 3 — significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments)
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
 
5

 

At August 31, 2010, the inputs used in valuing the Trust’s investments, which are carried at value, were as follows:
 
                                 
    Quoted Prices in
 		                   
    Active Markets for
 		    Significant Other
 		    Significant
 		       
    Identical Assets     Observable Inputs     Unobservable Inputs        
       
Asset Description   (Level 1)     (Level 2)     (Level 3)     Total  
   
Tax-Exempt Investments
  $ —     $ 61,850,334     $ —     $ 61,850,334  
 
 
Total Investments
  $ —     $ 61,850,334     $ —     $ 61,850,334  
 
 
                                 
Liability Description                        
   
Futures Contracts
  $ (57,597 )   $ —     $ —     $ (57,597 )
Interest Rate Swaps
    —       (201,111 )     —       (201,111 )
 
 
Total
  $ (57,597 )   $ (201,111 )   $ —     $ (258,708 )
 
 
 
The Trust held no investments or other financial instruments as of November 30, 2009 whose fair value was determined using Level 3 inputs.
 
For information on the Trust’s policy regarding the valuation of investments and other significant accounting policies, please refer to the Trust’s most recent financial statements included in its semiannual or annual report to shareholders.
 
6

 

Item 2. 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 on this Form N-Q 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 on this Form N-Q 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 fiscal quarter for which the report is being filed that have materially affected, or are reasonably likely to materially affect the registrant’s internal control over financial reporting.

 

 

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 Pennsylvania Municipal Income Trust
         
 
        
By:
  /s/ Cynthia J. Clemson
 
Cynthia J. Clemson 		   
 
  President    
 
        
Date:
  October 25, 2010    
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/ Cynthia J. Clemson
 
Cynthia J. Clemson 		   
 
  President    
 
        
Date:
  October 25, 2010    
 
        
By:
  /s/ Barbara E. Campbell    
 
       
 
  Barbara E. Campbell    
 
  Treasurer    
 
        
Date:
  October 25, 2010