Eaton Vance California 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
811-09157
Investment Company Act File Number
Eaton Vance California 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 California Municipal Income Trust as of August 31, 2010
 
PORTFOLIO OF INVESTMENTS (Unaudited)
 
Tax-Exempt Investments — 171.2%
 
                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
Education — 18.0%
$ 1,000    
California Educational Facilities Authority, (California Institute of Technology), 5.00%, 11/1/39
  $ 1,106,380  
  2,000    
California Educational Facilities Authority, (Claremont McKenna College), 5.00%, 1/1/39
    2,133,880  
  745    
California Educational Facilities Authority, (Loyola Marymount University), 5.00%, 10/1/30
    783,844  
  2,770    
California Educational Facilities Authority, (Lutheran University), 5.00%, 10/1/29
    2,780,027  
  1,105    
California Educational Facilities Authority, (Pomona College), 5.00%, 7/1/45
    1,156,283  
  1,350    
California Educational Facilities Authority, (Santa Clara University), 5.00%, 9/1/23
    1,567,418  
  4,000    
California Educational Facilities Authority, (Stanford University), 5.125%, 1/1/31(1)
    4,013,400  
  2,500    
San Diego County, Certificates of Participation, (University of San Diego), 5.375%, 10/1/41
    2,510,300  
  1,250    
University of California, 5.25%, 5/15/39
    1,381,738  
                 
            $ 17,433,270  
                 
Electric Utilities — 7.1%
$ 270    
Chula Vista, (San Diego Gas and Electric), 5.875%, 2/15/34
  $ 305,556  
  2,275    
Chula Vista, (San Diego Gas and Electric), (AMT), 5.00%, 12/1/27
    2,343,842  
  1,020    
Los Angeles Department of Water and Power, 5.25%, 7/1/38
    1,113,197  
  1,500    
Northern California Power Agency, 5.25%, 8/1/24
    1,673,295  
  1,300    
Vernon, Electric System Revenue, 5.125%, 8/1/21
    1,406,405  
                 
            $ 6,842,295  
                 
General Obligations — 15.4%
$ 750    
California, 6.00%, 4/1/38
  $ 837,540  
  1,590    
California, (AMT), 5.05%, 12/1/36
    1,563,749  
  3,655    
Palo Alto, (Election of 2008), 5.00%, 8/1/40
    4,019,221  
  4,770    
San Francisco Bay Area Rapid Transit District, (Election of 2004), 4.75%, 8/1/37(2)
    5,003,253  
  3,180    
Santa Clara County, (Election of 2008), 5.00%, 8/1/39(2)(3)
    3,452,431  
                 
            $ 14,876,194  
                 
Hospital — 27.5%
$ 1,000    
California Health Facilities Financing Authority, (Catholic Healthcare West), 5.625%, 7/1/32
  $ 1,043,020  
  2,310    
California Health Facilities Financing Authority, (Cedars-Sinai Medical Center), 5.00%, 8/15/39
    2,346,613  
  1,500    
California Health Facilities Financing Authority, (Providence Health System), 6.50%, 10/1/38
    1,742,145  
  3,480    
California Health Facilities Financing Authority, (Sutter Health), 5.25%, 11/15/46(2)
    3,526,771  
  750    
California Infrastructure and Economic Development Bank, (Kaiser Hospital), 5.50%, 8/1/31
    763,080  
  2,810    
California Statewide Communities Development Authority, (Huntington Memorial Hospital), 5.00%, 7/1/35
    2,812,192  
  1,150    
California Statewide Communities Development Authority, (John Muir Health), 5.00%, 8/15/34
    1,158,798  
  1,650    
California Statewide Communities Development Authority, (John Muir Health), 5.00%, 8/15/36
    1,663,480  
  1,565    
California Statewide Communities Development Authority, (Kaiser Permanente), 5.50%, 11/1/32
    1,588,788  
  1,750    
California Statewide Communities Development Authority, (Sonoma County Indian Health), 6.40%, 9/1/29
    1,759,730  
  1,500    
California Statewide Communities Development Authority, (Sutter Health), 5.50%, 8/15/28
    1,589,355  
  1,900    
Torrance Hospital, (Torrance Memorial Medical Center), 5.50%, 6/1/31
    1,929,241  
  1,220    
Turlock, (Emanuel Medical Center, Inc.), 5.375%, 10/15/34
    1,180,704  
  700    
Washington Health Care Facilities Authority, (Providence Health Care), 5.25%, 7/1/29
    701,757  
  2,780    
Washington Township Health Care District, 5.00%, 7/1/32
    2,772,494  
                 
            $ 26,578,168  
                 
Housing — 2.6%
$ 1,750    
California Housing Finance Agency, (AMT), 4.75%, 8/1/42
  $ 1,409,170  
  707    
Commerce, (Hermitage III Senior Apartments), 6.50%, 12/1/29
    704,405  
  414    
Commerce, (Hermitage III Senior Apartments), 6.85%, 12/1/29
    404,308  
                 
            $ 2,517,883  
                 
 
1

 

                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
Industrial Development Revenue — 3.2%
$ 1,235    
California Pollution Control Financing Authority, (Waste Management, Inc.), (AMT), 5.125%, 11/1/23
  $ 1,257,514  
  2,000    
California Statewide Communities Development Authority, (Anheuser-Busch Cos., Inc.), (AMT), 4.80%, 9/1/46
    1,878,100  
                 
            $ 3,135,614  
                 
Insured-Education — 5.2%
$ 495    
California Educational Facilities Authority, (Pepperdine University), (AMBAC), 5.00%, 12/1/35
  $ 508,870  
  1,250    
California Educational Facilities Authority, (Santa Clara University), (NPFG), 5.00%, 9/1/23
    1,451,313  
  3,000    
California State University, (AMBAC), 5.00%, 11/1/33
    3,047,100  
                 
            $ 5,007,283  
                 
Insured-Electric Utilities — 6.1%
$ 2,500    
California Pollution Control Financing Authority, (Pacific Gas and Electric), (NPFG), (AMT), 5.35%, 12/1/16
  $ 2,589,625  
  3,250    
California Pollution Control Financing Authority, (Southern California Edison Co.), (NPFG), (AMT), 5.55%, 9/1/31
    3,262,350  
                 
            $ 5,851,975  
                 
Insured-Escrowed/Prerefunded — 3.2%
$ 5,130    
Foothill/Eastern Transportation Corridor Agency, Toll Road Bonds, (AGM), (RADIAN), Escrowed to Maturity, 0.00%, 1/1/26
  $ 3,105,702  
                 
            $ 3,105,702  
                 
Insured-General Obligations — 6.8%
$ 7,000    
Coast Community College District, (Election of 2002), (AGM), 0.00%, 8/1/34
  $ 1,711,850  
  4,825    
Coast Community College District, (Election of 2002), (AGM), 0.00%, 8/1/35
    1,107,917  
  7,995    
Sweetwater Union High School District, (Election of 2000), (AGM), 0.00%, 8/1/25
    3,761,008  
                 
            $ 6,580,775  
                 
Insured-Hospital — 13.8%
$ 2,900    
California Health Facilities Financing Authority, (Kaiser Permanente), (BHAC), 5.00%, 4/1/37
  $ 2,996,077  
  640    
California Statewide Communities Development Authority, (Children’s Hospital Los Angeles), (NPFG), 5.25%, 8/15/29
    642,496  
  750    
California Statewide Communities Development Authority, (Kaiser Permanente), (BHAC), 5.00%, 3/1/41(2)
    770,482  
  3,750    
California Statewide Communities Development Authority, (Sutter Health), (AGM), 5.75%, 8/15/27(2)
    3,771,902  
  5,000    
California Statewide Communities Development Authority, (Sutter Health), (AMBAC), (BHAC), 5.00%, 11/15/38(2)
    5,173,700  
                 
            $ 13,354,657  
                 
Insured-Lease Revenue/Certificates of Participation — 11.0%
$ 5,510    
Anaheim Public Financing Authority, (Public Improvements), (AGM), 0.00%, 9/1/17
  $ 4,366,675  
  2,000    
Puerto Rico Public Finance Corp., (AMBAC), Escrowed to Maturity, 5.50%, 8/1/27
    2,538,360  
  3,500    
San Diego County Water Authority, Certificates of Participation, (AGM), 5.00%, 5/1/38(2)
    3,699,360  
                 
            $ 10,604,395  
                 
Insured-Special Tax Revenue — 3.9%
$ 21,285    
Puerto Rico Sales Tax Financing Corp., (AMBAC), 0.00%, 8/1/54
  $ 1,467,175  
  4,220    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/44
    581,474  
  8,355    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45
    1,072,364  
  5,270    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/46
    629,607  
                 
            $ 3,750,620  
                 
Insured-Transportation — 9.5%
$ 5,000    
Alameda Corridor Transportation Authority, (AMBAC), 0.00%, 10/1/29
  $ 1,562,200  
  8,000    
Alameda Corridor Transportation Authority, (NPFG), 0.00%, 10/1/31
    2,244,480  
  740    
Puerto Rico Highway and Transportation Authority, (AGC), (CIFG), 5.25%, 7/1/41(2)
    812,291  
 
2

 

                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
$ 10,000    
San Joaquin Hills Transportation Corridor Agency, Toll Road Bonds, (NPFG), 0.00%, 1/15/32
  $ 1,787,700  
  1,320    
San Jose Airport, (AGM), (AMBAC), (BHAC), (AMT), 5.00%, 3/1/37
    1,353,475  
  1,350    
San Jose Airport, (AGM), (AMBAC), (BHAC), (AMT), 6.00%, 3/1/47
    1,462,401  
                 
            $ 9,222,547  
                 
Insured-Water and Sewer — 5.7%
$ 1,600    
East Bay Municipal Utility District, Water System Revenue, (FGIC), (NPFG), 5.00%, 6/1/32
  $ 1,733,584  
  4,400    
Los Angeles Department of Water and Power, (NPFG), 3.00%, 7/1/30
    3,771,416  
                 
            $ 5,505,000  
                 
Other Revenue — 2.1%
$ 385    
California Infrastructure and Economic Development Bank, (Performing Arts Center of Los Angeles), 5.00%, 12/1/32
  $ 390,698  
  580    
California Infrastructure and Economic Development Bank, (Performing Arts Center of Los Angeles), 5.00%, 12/1/37
    582,581  
  980    
Golden State Tobacco Securitization Corp., 5.30%, (0.00% until 12/1/12), 6/1/37
    614,822  
  640    
Golden State Tobacco Securitization Corp., 5.75%, 6/1/47
    479,405  
                 
            $ 2,067,506  
                 
Senior Living/Life Care — 1.5%
$ 175    
California Statewide Communities Development Authority, (Senior Living - Presbyterian Homes), 4.75%, 11/15/26
  $ 164,806  
  700    
California Statewide Communities Development Authority, (Senior Living - Presbyterian Homes), 4.875%, 11/15/36
    626,220  
  600    
California Statewide Communities Development Authority, (Senior Living - Presbyterian Homes), 7.25%, 11/15/41
    669,018  
                 
            $ 1,460,044  
                 
Special Tax Revenue — 16.4%
$ 1,000    
Bonita Canyon Public Financing Authority, 5.375%, 9/1/28
  $ 978,010  
  285    
Brentwood Infrastructure Financing Authority, 5.00%, 9/2/26
    244,638  
  460    
Brentwood Infrastructure Financing Authority, 5.00%, 9/2/34
    365,893  
  970    
Corona Public Financing Authority, 5.80%, 9/1/20
    971,183  
  200    
Eastern California Municipal Water District, Special Tax Revenue, District No. 2004-27 Cottonwood, 5.00%, 9/1/27
    182,850  
  500    
Eastern California Municipal Water District, Special Tax Revenue, District No. 2004-27 Cottonwood, 5.00%, 9/1/36
    428,160  
  1,590    
Fontana Redevelopment Agency, (Jurupa Hills), 5.60%, 10/1/27
    1,598,538  
  895    
Lincoln Public Financing Authority, Improvement Bond Act of 1915, (Twelve Bridges), 6.20%, 9/2/25
    902,590  
  420    
Moreno Valley Unified School District, (Community School District No. 2003-2), 5.75%, 9/1/24
    421,940  
  750    
Moreno Valley Unified School District, (Community School District No. 2003-2), 5.90%, 9/1/29
    752,595  
  2,245    
Oakland Joint Powers Financing Authority, 5.40%, 9/2/18
    2,296,613  
  930    
Oakland Joint Powers Financing Authority, 5.50%, 9/2/24
    947,205  
  1,325    
San Pablo Redevelopment Agency, 5.65%, 12/1/23
    1,341,788  
  1,095    
Santa Margarita Water District, 6.20%, 9/1/20
    1,124,543  
  250    
Santaluz Community Facilities District No. 2, 6.10%, 9/1/21
    251,170  
  490    
Santaluz Community Facilities District No. 2, 6.20%, 9/1/30
    491,191  
  250    
Temecula Unified School District, 5.00%, 9/1/27
    235,518  
  400    
Temecula Unified School District, 5.00%, 9/1/37
    354,624  
  500    
Turlock Public Financing Authority, 5.45%, 9/1/24
    503,770  
  500    
Tustin Community Facilities District, 6.00%, 9/1/37
    507,120  
  1,000    
Whittier Public Financing Authority, (Greenleaf Avenue Redevelopment), 5.50%, 11/1/23
    1,005,380  
                 
            $ 15,905,319  
                 
Transportation — 7.3%
$ 2,000    
Bay Area Toll Authority, Toll Bridge Revenue, (San Francisco Bay Area), 5.00%, 4/1/31
  $ 2,114,200  
  2,120    
Los Angeles Department of Airports, (Los Angeles International Airport),
5.00%, 5/15/35(2)(3)
    2,229,731  
  1,500    
Los Angeles Department of Airports, (Los Angeles International Airport), (AMT), 5.375%, 5/15/30
    1,594,095  
  1,170    
Port of Redwood City, (AMT), 5.125%, 6/1/30
    1,171,147  
                 
            $ 7,109,173  
                 
 
3

 

                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
Water and Sewer — 4.9%
$ 1,840    
California Department of Water Resources, 5.00%, 12/1/29
  $ 2,048,950  
  2,500    
Metropolitan Water District of Southern California, (Waterworks Revenue Authorization), 5.00%, 1/1/34
    2,730,175  
                 
            $ 4,779,125  
                 
         
Total Tax-Exempt Investments — 171.2%
(identified cost $162,460,588)
  $ 165,687,545  
         
         
Auction Preferred Shares Plus Cumulative Unpaid Dividends — (51.6)%
  $ (49,976,237 )
         
         
Other Assets, Less Liabilities — (19.6)%
  $ (18,913,542 )
         
         
Net Assets Applicable to Common Shares — 100.0%
  $ 96,797,766  
         
             
 
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.
         
RADIAN
  -   Radian Group, Inc.
 
The Trust invests primarily in debt securities issued by California 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, 38.0% 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 14.7% 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.
         
(3)
      Security (or a portion thereof) has been pledged as collateral for inverse floating-rate security transactions. The aggregate value of such collateral is $1,707,162.
 
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
  32 U.S. 30-Year Treasury Bond   Short   $ (4,300,144 )   $ (4,321,000 )   $ (20,856 )
 
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. 
  $ 2,125,000       4.046 %   3-month USD-
LIBOR-BBA 		  September 17, 2010 /
September 17, 2040 		  $ (378,203 )
Merrill Lynch Capital Services, Inc. 
    3,412,500       3.374     3-month USD-
LIBOR-BBA 		  November 24, 2010 /
November 24, 2040 		    (132,085 )
                                 
                            $ (510,288 )
                                 
 
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 $531,144.
 
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
  $ 141,199,531  
         
Gross unrealized appreciation
  $ 8,905,147  
Gross unrealized depreciation
    (4,952,133 )
         
Net unrealized appreciation
  $ 3,953,014  
         
 
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
  $ —     $ 165,687,545     $ —     $ 165,687,545  
 
 
Total Investments
  $ —     $ 165,687,545     $ —     $ 165,687,545  
 
 
                                 
Liability Description                        
   
Futures Contracts
  $ (20,856 )   $ —     $ —     $ (20,856 )
Interest Rate Swaps
    —       (510,288 )     —       (510,288 )
 
 
Total
  $ (20,856 )   $ (510,288 )   $ —     $ (531,144 )
 
 
 
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 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 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 California 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