|UNITED STATES SECURITIES AND
      EXCHANGE COMMISSIONWashington, D.C.
      20549
|----------------------------------------------------------------------------------



|FORM
10-K
|---------



|ANNUAL REPORT PURSUANT TO SECTION 13OF THE SECURITIES EXCHANGE ACT OF 1934 (THE
      ACT)For the Fiscal Year Ended December 31,
      2005Commission File No.000-32633
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Belmar Capital Fund LLC (the
      Fund)(Exact name of registrant as specified
      inits
    charter)
|-------------------------------------------------------------------------------------------------------

Delaware
    
    04-3508106(State of organization)
    
    (I.R.S. Employer Identification No.)




|The Eaton Vance
      Building255 State StreetBoston, Massachusetts 02109(Address
      and zip code of principal executive
offices)
|------------------------------------------------------------------------------------------------------------------------------------



|617-482-8260(Registrants telephone number)
|-------------------------------------------

Securities registered pursuant to Section 12(g) of
the Act:Limited Liability Company Interests in the Fund
(Shares)

Indicate by check mark if Registrant is a well-known
seasoned issuer as defined in Rule 405 of the Securities Act of 1933. [X] Yes [
] No

Indicate by check mark if Registrant is not required
to file reports pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [ X]
No

Indicate by check mark whether Registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Act during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No

Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of Registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]

Indicate by check mark whether the Registrant is a
large accelerated filer, an accelerated filer or a non-accelerated filer (as
defined in Rule 12b-2 of the Act). Large Accelerated Filer [X] Accelerated Filer
[ ] Non-accelerated Filer [ ]

Indicate by check mark whether the Registrant is a
shell company (as defined in Rule 12b-2 of the Act).Yes [ ] No [X]

Aggregate market value of the Shares held by
non-affiliates of Registrant, based on the closing net asset value on June 30,
2005 was $1,815,355,649. Calculation of holdings by non-affiliates is based upon
the assumption, for these purposes only, that the Registrants manager, its
executive officers and directors and persons holding 5% or more of the
Registrants Shares are affiliates.



|Incorporations by Reference:None.
|---------------------------------



|The Exhibit Index is located on page
      80.
|----------------------------------------------

Belmar Capital Fund LLC

Index to Form 10-K

|Item |  |                                                                                                                                              |  | Page
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|     |  | PART I                                                                                                                                       |  |     
|    
|1    |  | Business 
      ............................................................................................................................ |  | 1   
|     |  | Fund Overview 
      ........................................................................................................                |  | 1   
|     |  | Structure of the Fund 
      ......................................................................................                          |  | 1   
|     |  | Fund
      Management 
      ..........................................................................................                      |  | 1   
|     |  | The
      Funds Offering 
      ........................................................................................                    |  | 2   
|    
|     |  | The Funds Investment in Belvedere
      Capital Fund Company LLC and                                                                        |  |     
|     |  | Tax-Managed Growth
      Portfolio 
      ..............................................................................                     |  | 2   
|     |  | Belvedere Company 
      ......................................................................................                              |  | 2   
|     |  | The
      Portfolio 
      ....................................................................................................              |  | 2   
|     |  | The
      Portfolios Investment Objective and Policies 
      ............................................                                  |  | 3   
|     |  | The
      Portfolios Tax-Sensitive Management Strategies 
      ......................................                                      |  | 3   
|    
|     |  | The Funds Real Estate
      Investments 
      ...........................................................................                  |  | 4   
|     |  | Real
      Estate Joint Venture Investments 
      ..............................................................                            |  | 4   
|     |  | Partnership Preference Units 
      ............................................................................                             |  | 5   
|     |  | Net
      Leased Properties 
      .....................................................................................                     |  |     
|     |  | Organization of the Funds Controlled Subsidiaries 
      ..........................................                                         |  | 6   
|    
|     |  | Fund Borrowings 
      ......................................................................................................                |  | 6   
|     |  | Interest Rate Swap Agreements 
      .....................................................................                                   |  | 7   
|    
|     |  | The Eaton Vance
      Organization 
      ..................................................................................                 |  | 7   
|     |  | Conflicts of Interest 
      .........................................................................................                       |  | 7   
|    
|1A   |  | Risk Factors 
      ......................................................................................................................   |  | 7   
|    
|1B   |  | Unresolved Staff Comments 
      ................................................................................................            |  | 8   
|    
|2    |  | Properties 
      .......................................................................................................................... |  | 8   
|    
|3    |  | Legal Proceedings 
      ..............................................................................................................      |  | 8   
|    
|4    |  | Submission of Matters to a Vote of Security Holders 
      ...........................................................                       |  | 8   
|    
|     |  | PART II                                                                                                                                      |  |     
|    
|5    |  | Determining Net Asset Value, Market for Fund Shares,                                                                                         |  |     
|     |  | Related Shareholder Matters and Issuer Purchases of Equity
      Securities  ...............................                                 |  | 9   
|     |  | Market Information, Restrictions on
      Transfers and Redemption of Shares  ...................                                            |  | 9   
|     |  | Transfers of Fund Shares 
      ................................................................................                             |  | 9   
|     |  | Redemption of Fund Shares 
      ............................................................................                                |  | 9   
|     |  | Determining Net Asset Value 
      ..........................................................................                                |  | 10  
|     |  | Historic Net Asset Values 
      ................................................................................                            |  | 11  
|     |  | Record Holders of Shares of the
      Fund 
      ......................................................................                     |  | 11  
|     |  | Distributions 
      ..............................................................................................................          |  | 12  
|     |  | Income and Capital Gain Distributions 
      ..............................................................                                  |  | 12  
|     |  | Special Distributions 
      ........................................................................................                        |  | 12  



|6  |  | Selected Financial Data 
      .......................................................................................................    |  | 12
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------- |  | --
|   |  | Table of Selected Financial
      Data 
      .................................................................................           |  | 12
|  
|7  |  | Managements Discussion and Analysis of Financial Condition
      (MD&A)                                                                  |  |   
|   |  | and Results of Operations 
      ...................................................................................................      |  | 13
|   |  | Results of Operations 
      ..................................................................................................           |  | 14
|   |  | MD&A and Results of Operations for
      the Year Ended December 31, 2005                                                                 |  |   
|   |  | Compared to the Year Ended
      December 31, 2004 
      ...................................................                             |  | 14
|   |  | Performance of the Fund 
      ..................................................................................                         |  | 14
|   |  | Performance of the Portfolio 
      ..............................................................................                        |  | 15
|   |  | Performance of Real Estate Investments 
      ............................................................                                |  | 15
|   |  | Performance of Interest Rate Swap Agreements 
      ................................................                                      |  | 17
|   |  | MD&A and Results of Operations for
      the Year Ended December 31, 2004                                                                 |  |   
|   |  | Compared to the Year Ended
      December 31, 2003 
      ...................................................                             |  | 17
|   |  | Performance of the Fund 
      ..................................................................................                         |  | 17
|   |  | Performance of the Portfolio 
      .............................................................................                         |  | 17
|   |  | Performance of Real Estate Investments 
      ............................................................                                |  | 18
|   |  | Performance of Interest Rate Swap Agreements 
      ................................................                                      |  | 19
|   |  | Liquidity and Capital
      Resources 
      ..................................................................................           |  | 20
|   |  | Outstanding Borrowings 
      ....................................................................................                        |  | 20
|   |  | Liquidity 
      ..........................................................................................................               |  | 20
|   |  | Off-Balance Sheet
      Arrangements 
      ................................................................................              |  | 20
|   |  | The Funds Contractual
      Obligations 
      .............................................................................             |  | 21
|   |  | Critical Accounting
      Estimates 
      .....................................................................................          |  | 21
|  
|7A |  | Quantitative and Qualitative Disclosures About Market
      Risk  ..................................................                      |  | 24
|   |  | Quantitative Information About Market
      Risk 
      ................................................................                  |  | 24
|   |  | Interest Rate
      Risk ..............................................................................................                   |  | 24
|   |  | Qualitative Information About Market
      Risk 
      .................................................................                  |  | 26
|   |  | Risks
      Associated with Equity Investing 
      ..............................................................                        |  | 26
|   |  | Risks
      of Investing in Foreign Securities 
      ...............................................................                     |  | 26
|   |  | Risks
      of Certain Investment Techniques 
      .............................................................                         |  | 26
|   |  | Risks
      of Real Estate Investments 
      .......................................................................                     |  | 27
|   |  | Risks
      of Interest Rate Swap Agreements 
      ...........................................................                           |  | 29
|   |  | Risks
      of Leverage 
      .............................................................................................              |  | 29
|  
|8  |  | Financial Statements and Supplementary Data 
      .......................................................................                |  | 30
|  
|9  |  | Changes in and Disagreements with Accountants on                                                                                          |  |   
|   |  | Accounting and Financial Disclosure 
      ..................................................................................             |  | 30
|  
|9A |  | Controls and Procedures 
      ......................................................................................................     |  | 30
|   |  | Fund
      Governance ........................................................................................................            |  | 30
|   |  | Disclosure Controls and
      Procedures 
      ............................................................................              |  | 30
|   |  | Internal Control Over Financial
      Reporting 
      ....................................................................               |  | 31
|  
|9B |  | Other Information 
      ................................................................................................................ |  | 31

|                                                                                                                                                       |  | PART III                                                                                                                      |  |   
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------- |  | --
|                                                                                                                                                      
|10                                                                                                                                                     |  | Directors and Executive Officers of the Registrant 
      ...........................................................         |  | 32
|                                                                                                                                                       |  | Management 
      ........................................................................................................    |  | 32
|                                                                                                                                                       |  | Compliance with Section 16(a) of the
      Securities Exchange Act of 1934  ..................                                |  | 33
|                                                                                                                                                       |  | Code of Ethics 
      .....................................................................................................   |  | 33
|                                                                                                                                                      
|11                                                                                                                                                     |  | Executive Compensation 
      ............................................................................................... |  | 33
|                                                                                                                                                      
|12                                                                                                                                                     |  | Security Ownership of Certain Beneficial Owners and
      Management                                                          |  |   
|                                                                                                                                                       |  | and Related Shareholder Matters 
      ..................................................................................     |  | 33
|                                                                                                                                                       |  | Security Ownership of Certain Beneficial
      Owners  .................................................                      |  | 33
|                                                                                                                                                       |  | Security Ownership of
      Management 
      ......................................................................          |  | 33
|                                                                                                                                                       |  | Changes in Control 
      ...............................................................................................     |  | 33
|                                                                                                                                                      
|13                                                                                                                                                     |  | Certain Relationships and Related Transactions 
      ..............................................................          |  | 33
|                                                                                                                                                       |  | The Funds Investment Advisory and
      Administrative Fee  ......................................                           |  | 34
|                                                                                                                                                       |  | Belmar Realtys Management
      Fee 
      ........................................................................          |  | 34
|                                                                                                                                                       |  | The Portfolios Investment Advisory
      Fee 
      ..............................................................           |  | 35
|                                                                                                                                                       |  | Servicing Fees Paid by the
      Fund 
      ..........................................................................       |  | 35
|                                                                                                                                                       |  | Servicing Fees Paid by Belvedere
      Company 
      .........................................................               |  | 35
|                                                                                                                                                       |  | Distribution Fees Paid to EV
      Distributors 
      ...............................................................        |  | 35
|                                                                                                                                                       |  | Certain Real Estate Investment
      Transactions 
      .........................................................            |  | 35
|                                                                                                                                                      
|14                                                                                                                                                     |  | Principal Accountant Fees and Services 
      .........................................................................       |  | 36
|                                                                                                                                                      
|                                                                                                                                                       |  | PART IV                                                                                                                       |  |   
|                                                                                                                                                      
|15                                                                                                                                                     |  | Exhibits and Financial Statement Schedules 
      ...................................................................         |  | 37
|                                                                                                                                                      
|APPENDIX A 
      .................................................................................................................................... |  | 38                                                                                                                           
|                                                                                                                                                      
|FINANCIAL STATEMENTS 
      ............................................................................................................               |  | 39                                                                                                                           
|                                                                                                                                                      
|SIGNATURES 
      ..................................................................................................................................   |  | 79                                                                                                                           
|                                                                                                                                                      
|EXHIBIT INDEX 
      ...............................................................................................................................   |  | 80                                                                                                                           



|PART
  I
|--------



|Item 1.
  Business.
|-------------------

Fund Overview.Belmar Capital Fund LLC (the Fund) is a private investment company
organized by Eaton Vance Management (Eaton Vance) to provide diversification and
tax-sensitive investment management to investors holding large and concentrated
positions in equity securities of selected public companies. The Funds
investment objective is to achieve long-term, after-tax returns for persons who
have invested in the Fund (Shareholders). The Fund, a Delaware limited liability
company, commenced its investment operations on March 17, 2000. Limited
liability company interests of the Fund (Shares) were issued to Shareholders at
five closings during 2000. At each Fund closing, the Fund accepted contributions
of stock from investors in exchange for Shares of the Fund. The Fund
discontinued offering Shares on November 29, 2000 and, while the Fund is not
prohibited from doing so, no future offering is anticipated. As of December 31,
2005, the Fund had net assets of approximately $1.9 billion.

Structure of the Fund.The Fund is structured to provide tax-free diversification and
tax-sensitive investment management to Shareholders. To meet the objective of
tax-free diversification, the Fund must satisfy specific requirements of the
Internal Revenue Code of 1986, as amended (the Code). In order for the
contributions of appreciated stock to the Fund by Shareholders to be nontaxable,
not more than 80% of the Funds assets (calculated in the manner prescribed) may
consist of stocks and securities as defined in the Code. To meet this
requirement, the Fund invests at least 20% of its assets as so determined in
certain real estate investments (see The Funds Real Estate Investments
below). The Fund invests up to 80% of its assets in a diversified portfolio of
common stocks (see The Funds Investment in Belvedere Capital Fund Company LLC
and Tax-Managed Growth Portfolio below). The Fund acquired its real estate
investments with borrowed funds, as described below under Fund Borrowings. See
Appendix A for a chart detailing the investment structure of the
Fund.

In its investment program, the Fund balances
investment considerations and tax considerations, and takes into account the
taxes payable by Shareholders on allocated investment income and realized
capital gains. See The Funds Investment in Belvedere Capital Fund Company LLC
and Tax-Managed Growth Portfolio below.

There is no trading market for the Funds Shares. As
described further under Redemption of Fund Shares in Item 5(a), Fund Shares
may be redeemed on any business day. The Fund satisfies redemption requests
principally by distributing securities, but may also distribute cash. The value
of securities and cash distributed to satisfy a redemption will equal the net
asset value of the number of Shares redeemed. Under most circumstances, a
redemption from the Fund that is met by distributing securities as described
herein will not result in the recognition of capital gains by the Fund or by the
redeeming Shareholder. The redeeming Shareholder would generally recognize
capital gains upon the sale of the securities received upon the redemption.

The Fund intends to distribute at the end of each
year, or shortly thereafter, all of its net investment income for such year, if
any. The Fund also intends to make annual capital gain distributions equal to
approximately 18% of the amount of its net realized capital gains, if any, other
than certain precontribution gains. The Funds distributions generally are based
on determinations of net investment income and net realized capital gains for
federal income tax purposes. Such amounts may differ from net investment income
or loss and net realized gain or loss as set forth in the Funds consolidated
financial statements due to differences in the treatment of various income,
gain, loss, expense and other items for federal income tax purposes and under
generally accepted accounting principles (GAAP). The Fund intends to pay any
distributions on the last business day of each fiscal year of the Fund (which
concludes on December 31) or shortly thereafter. SeeDistributions in Item 5(c).

Fund Management.The manager of the Fund is Eaton Vance, a Massachusetts business trust
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended (the Advisers Act). Eaton Vance and its subsidiary, Boston Management
and Research (Boston Management), provide management and advisory services to
the Fund, its real estate subsidiary and the investment portfolio in which the
Fund invests. Boston Management is also registered as an investment adviser
under the Advisers Act. Eaton Vance and Boston Management provide advisory,
administration and/or management services to over 150 investment companies, as
well as separate accounts managed for individual and institutional investors. As
of December 31, 2005, Eaton Vance and its affiliates managed more than $110
billion on behalf of clients. The fees payable to the Eaton Vance organization,
as well as other fees payable by the Fund, are described in Item 13. The Eaton
Vance organization is subject to certain conflicts of interest in providing
services to the Fund, its subsidiaries and the investment portfolio in which the
Fund invests. See The Eaton Vance Organization  Conflicts of Interest"
below.

1

The Funds Offering.Shares of the Fund were privately offered and sold only to accredited
investors as defined in Rule 501(a) under the Securities Act of 1933, as
amended (the Securities Act), who were qualified purchasers (as defined in
Section 2(a)(51)(A) of the Investment Company Act of 1940, as amended (the 1940
Act)). The offering was conducted by Eaton Vance Distributors, Inc. (EV
Distributors), a wholly-owned subsidiary of Eaton Vance, as placement agent and
by certain subagents appointed by EV Distributors. The Shares were offered and
sold in reliance upon an exemption from registration provided by Rule 506 under
the Securities Act. The Fund issued Shares to Shareholders at closings taking
place on March 17, 2000, May 16, 2000, July 19, 2000, September 27, 2000 and
November 29, 2000. At the five closings, an aggregate of 25,888,893 Shares were
issued in exchange for Shareholder contributions totaling approximately $2.6
billion.

The Fund is registered under the Securities Exchange
Act of 1934, as amended (the 1934 Act), and files periodic reports (such as
reports on Form 10-Q and Form 10-K) thereunder. Copies of the reports filed by
the Fund are available: at the public reference room of the Securities and
Exchange Commission (SEC) in Washington, DC (call 1-202-942-8090 for information
on the operation of the public reference room); on the EDGAR Database on the
SECs Internet site (http:// www.sec.gov); or, upon payment of copying fees, by
writing to the SECs public reference section, Washington, DC 20549-0102, or by
electronic mail at publicinfo@sec.gov. The Fund does not have a website. The
Fund intends to provide Shareholders with an annual and semiannual report
containing the Funds consolidated financial statements, audited by the Funds
independent registered public accounting firm in the case of the annual
report.

The Funds Investment in Belvedere Capital
Fund Company LLC and Tax-Managed Growth Portfolio.At each Fund closing, all of the securities accepted for contribution to
the Fund were contributed by the Fund to Belvedere Capital Fund Company LLC
(Belvedere Company), a Massachusetts limited liability company, in exchange for
shares of Belvedere Company. Belvedere Company, in turn, immediately thereafter
contributed the securities received from the Fund to Tax-Managed Growth
Portfolio (the Portfolio) in exchange for an interest in the Portfolio. The
Portfolio is a diversified, open-end management investment company registered
under the 1940 Act with net assets of approximately $19.0 billion as of December
31, 2005. As of December 31, 2005, the Funds investment in the Portfolio
through Belvedere Company had a value of approximately $2.0 billion (equal to
approximately 74.6% of the Funds total assets on a consolidated
basis).

Belvedere Company.Belvedere Company was organized in 1997 by Eaton Vance to offer tax-free
diversification and tax-sensitive investment management to certain qualified
investors who contributed diversified portfolios of equity securities. As of
December 31, 2005, the investment assets of Belvedere Company consisted
exclusively of an interest inthe Portfolio with a value of approximately $13.4 billion. As of such
date, the Fund owned approximately 14.8% of Belvedere Companys outstanding
shares. As of December 31, 2005, the other investors in Belvedere Company
included ten other investment funds sponsored by the Eaton Vance organization
(investment fund investors), as well as qualified individual investors who
acquired shares of Belvedere Company in exchange for portfolios of acceptable
securities (non-investment fund investors).

Belvedere Company considers for acceptance equity
securities that (i) are listed on the New York Stock Exchange (NYSE), the
American Stock Exchange, the NASDAQ National Market or a major foreign exchange,
(ii) have a trading price of at least $10.00 per share and (iii) are issued by
issuers having an equity market capitalization of at least $500 million. Because
Belvedere Company only accepts contributions of diversified baskets of
securities (as described below), it is not subject to the requirement that not
more than 80% of its assets consist of stocks and securities as defined in the
Code. For investors that own a diversified basket of securities, investing in
Belvedere Company (rather than in the Fund) avoids the costs and risks of
investing in real estate and the associated financial leverage to which the Fund
is subject. See "Risks of Real Estate Investments" and "Risks of Leverage" in
Item 7A(b).

Belvedere Company provides a vehicle through which
investment fund and non-investment fund investors contributing a diversified
basket of securities can acquire an indirect interest in the Portfolio. A
diversified basket of securities means a group of securities that is
diversified such that not more than 25% of the value of the securities are
investments in the securities of any one issuer and not more than 50% of the
value of the securities are investments in the securities of five or fewer
issuers. The securities contributed to Belvedere Company at each Fund closing
constituted a diversified basket of securities. Because the Fund is required to
hold a percentage of its investments in non-Portfolio assets in order to meet
certain tax requirements (see Structure of the Fund above and The Funds Real
Estate Investments below), it does not satisfy the conditions of the 1940 Act
for investing directly in the Portfolio.

The Portfolio.The Portfolio was organized in 1995 by Eaton Vance as the successor to
the investment operations of Eaton Vance Tax-Managed Growth Fund 1.0
(Tax-Managed Growth 1.0), a mutual fund established in 1966 by Eaton Vance and

2

managed from inception for long-term, after-tax
returns. As of December 31, 2005, investors in the Portfolio included six
investors in addition to Belvedere Company and Tax-Managed Growth 1.0, each of
which acquired or is acquiring on a continuous basis interests in the Portfolio
with cash. All investors in the Portfolio are sponsored by or affiliated with
Eaton Vance. As of December 31, 2005, Belvedere Company owned approximately
70.4% of the Portfolio.

The Fund invests in the Portfolio (on an indirect
basis through Belvedere Company) because it is a well-established investment
portfolio that has an investment objective and policies that are compatible to
those of the Fund. Investing in the Portfolio enables the Fund to participate in
a substantially larger and more diversified investment portfolio than it could
achieve by managing the contributed securities directly. The audited financial
statements of the Portfolio for the year ended December 31, 2005 are included as
pages 62 to 78 of this Annual Report on Form 10-K. The Portfolios audited
financial statements include information about the assets and liabilities of the
Portfolio, including Portfolio expenses. For a discussion of the Portfolios
performance for the year ended December 31, 2005, see Performance of the
Portfolio in Item 7. For a description of the investment advisory fee payable
by the Portfolio, see "The Portfolios Investment Advisory Fee" in Item
13.

The Portfolios Investment Objective and
Policies.The investment objective of the Portfolio
is to achieve long-term, after-tax returns for its investors by investing in a
diversified portfolio of equity securities. The Portfolio invests primarily in
common stocks of domestic and foreign growth companies that are considered by
its investment adviser to be high in quality and attractive in their long-term
investment prospects. The Portfolio seeks to invest in a broadly diversified
portfolio of stocks and to invest primarily in established companies with
characteristics of above-average growth, predictability and stability that are
acquired with the expectation of being held for a period of years. Under normal
market conditions, the Portfolio invests primarily in common stocks. The
Portfolio has acquired securities through contributions from Belvedere Company,
Tax-Managed Growth 1.0 and Tax-Managed Growth Fund 1.1, and through purchases of
securities with cash invested in the Portfolio by other investors.

Although the Portfolio may, in addition to investing
in common stocks, invest in investment-grade preferred stocks and debt
securities, purchases of such securities are normally limited to securities
convertible into common stocks and temporary investments in short-term notes and
government obligations. During periods in which the investment adviser to the
Portfolio believes that returns on common stock investments may be unfavorable,
the Portfolio may invest a portion of its assets in U.S. government obligations
and high quality short-term notes. The Portfolios holdings represent a number
of different industries. Not more than 25% of the Portfolios assets may be
invested inthe securities of
issuers having their principal business activity in the same industry,
determined as of the time of acquisition of any such securities.

The Portfolios Tax-Sensitive Management
Strategies.In its operations, the Portfolio seeks
to achieve long-term, after-tax returns in part by minimizing the taxes incurred
by investors in the Portfolio in connection with the Portfolios investment
income and realized capital gains. Taxes on investment incomeare minimized by investing primarily in
lower-yielding securities and stocks that pay dividends that qualify for
favorable federal tax treatment. Taxes on realized capital gains are minimized
by avoiding or minimizing the sale of securities holdings with large accumulated
capital gains. The Portfolio generally seeks to avoid net realized short-term
capital gains.

When the Portfolio decides to sell a particular
appreciated security, the Portfolio will select for sale the share lots
resulting in the most favorable tax treatment, generally those with holding
periods sufficient to qualify for long-term capital gain treatment that have the
highest cost basis. The Portfolio may, when deemed prudent by its investment
adviser, sell securities to realize capital losses that can be used to offset
realized gains. While the Portfolio generally retains the securities contributed
to the Portfolio by Belvedere Company, the Portfolio has the flexibility to sell
contributed securities. Securities acquired by the Portfolio with cash may be
sold in accordance with its management strategies. In lieu of selling a
security, the Portfolio may hedge its exposure to that security by using the
techniques described below. The Portfolio also disposes of contributed
securities through its practice of settling redemptions by investors in the
Portfolio that contributed securities primarily by distributing securities as
described in Item 5(a) under Redemption of Fund Shares. As described in Item
5(a), settling redemptions with securities can result in certain tax benefits to
the Portfolio, Belvedere Company, the Fund and the redeeming
Shareholder.

To reduce its exposure to adverse price movements in
individual securities or groups of securities holdings with large accumulated
gains, the Portfolio may use various investment techniques, including, but not
limited to, the purchase of put options on securities held, equity collars
(combining the purchase of a put option and the sale of a call option), equity
swaps, short sales of individual securities held, short sales of index or basket
securities whose constituents are held in whole or in part, forward sales of
stocks held, and the purchase and sale of futures contracts on stocks and stock
indexes

3

and options thereon. By using these techniques
rather than selling such securities, the Portfolio can, within certain limits,
reduce its exposure to price declines in the securities without realizing
substantial capital gains under current tax law.

The Portfolios ability to utilize covered short
sales, certain equity swaps, forward sales, futures contracts and certain equity
collar strategies as a tax-efficient management technique with respect to
holdings of appreciated securities is limited to circumstances in which the
hedging transaction isclosed
out within 30 days after the end of the Portfolios taxable year in which the
hedging transaction was initiated and the underlying appreciated securities
position is held unhedged for at least the next 60 days after such hedging
transaction is closed. In addition, dividends received on stock for which the
Portfolio is obligated to make related payments (pursuant to a short sale or
otherwise) with respect to positions in substantially similar or related
property are subject to federal income tax at ordinary rates and do not qualify
for favorable tax treatment. Also, the holding periods required to receive
tax-advantaged treatment of qualified dividends on a stock are suspended
whenever the Portfolio has an option (other than a qualified covered call option
not in the money when written) or contractual obligation to sell or an open
short sale of substantially identical stock, is the grantor of an option (other
than a qualified covered call option not in the money when written) to buy
substantially identical stock or has diminished risk of loss in such stock by
holding positions with respect to substantially similar or related property. The
use of these investment techniques may require the Portfolio to commit or make
available cash and, therefore, may not be available at such times as the
Portfolio has limited holdings of cash. At December 31, 2005, the Portfolio held
no short positions. The Portfolio did not otherwise employ any of the techniques
described above on securities holdings during the year ended December 31, 2005.
See "Risks of Certain Investment Techniques" in Item 7A(b).

The Funds Real Estate Investments.Separate from its investment in the Portfolio
through Belvedere Company, the Fund invests in certain real estate investments
through Belmar Realty Corporation (Belmar Realty). The ownership structure of
Belmar Realty is described below under Organization of the Funds Controlled
Subsidiaries. As referred to above under Fund Overview  Structure of the
Fund, the Fund invests in real estate investments to satisfy certain
requirements of the Code for contributions of appreciated stocks to the Fund by
Shareholders to be nontaxable. As of December 31, 2005, the consolidated real
estate investments of Belmar Realty totaled approximately $652.1 million and
represented 24.5% of the Funds assets on a consolidated basis. The Fund
acquired its real estate investments with borrowed funds, as described below
under Fund Borrowings. The Fund seeks a return on its real estate investments
over the long term that exceeds the cost of the borrowings incurred to acquire
such investments. For a description of material real estate investment
transactions during the year ended December 31, 2005, see "Performance of Real
Estate Investments" in Item 7(a).

At December 31, 2005, Belmar Realty held investments
in a real estate joint venture (Real Estate Joint Venture) that is controlled by
Belmar Realty, in a portfolio of income producing preferred equity interests in
real estate operating partnerships that generally are affiliated with real
estate investment trusts (REITs) that are publicly-traded (Partnership
Preference Units), in property subject to a long-term triple net lease (Net
Leased Property) and in certain other real estate investments. Certain of the
Partnership Preference Units are held indirectly through Belvorn Holdings LLC
(Belvorn). Belvorn is a Delaware limited liability company formed in 2005 and
treated as a partnership for tax purposes. At December 31, 2005, Belvorns sole
investment was Partnership Preference Units issued by Vornado Realty, L.P. At
December 31, 2005, Belmar Realty owned 20.0% of Belvorns outstanding units.
Information included herein about Belmar Realtys Partnership Preference Units
includes the Partnership Preference Units held directly through Belmar Realty
and indirectly through Belvorn. As of December 31, 2005, approximately 47.1% of
the consolidated real estate investments of the Fund consisted of its
investments in the Real Estate Joint Venture, approximately 8.3% was investments
in Partnership Preference Units, approximately 44.5% was investments in the Net
Leased Property and approximately 0.1% was an investment in other real
estate.

In the future, Belmar Realty may invest in other
types of real estate investments. Belmar Realty may purchase real estate
investments from, and sell them to, real estate investment affiliates of other
investment funds advised by Boston Management. See "Certain Real Estate
Investment Transactions" in Item 13.

Boston Management serves as manager of Belmar
Realty. In that capacity, Boston Management manages the investment and
reinvestment of Belmar Realtys assets and administers its affairs. See "Belmar
Realtys Management Fee" in Item 13 for a description of the management fee
payable by Belmar Realty to Boston Management.

Real Estate Joint Venture Investments.At December 31, 2005, Belmar Realty owned a
controlling interest in a Real Estate Joint Venture, Brazos Property Trust
(Brazos). Brazos owns real property through its interest in ProLogis Six Rivers
Limited Partnership and the ProLogis Brazos Fund L.P. Belmar Realty owns a
majority economic interest in Brazos and controls a majority of the board.
Belmar Realtys approval is required for all major decisions affecting
Brazos.

4

The day-to-day operating management of the real
properties owned by Brazos is provided by the real estate operating company that
is the principal minority investor in Brazos or an affiliated company thereof
(the Operating Partner). The Operating Partner receives certain fees from Brazos
(including property management fees and fees for administration, construction
management, leasing, acquisitions, dispositions, debt placement, tax
preparation, legal and other services) and, in addition, is reimbursed for
payroll and other direct expenses incurred. For the year ended December 31,
2005, such fees totaled approximately $2.1 million.

At December 31, 2005, the assets of Brazos consisted
of 23 industrial distribution properties acquired from or in conjunction with
the Operating Partner thereof. See Item 2. Distributable cash flows from Brazos
are allocated in a manner that provides Belmar Realty: 1) a priority position
versus the Operating Partner with respect to a fixed annual preferred return;
and 2) participation on a pro rata or reduced basis in distributable cash flows
in excess of the annual preferred return of Belmar Realty and the subordinated
preferred return of the Operating Partner. A portion of Belmar Realtys
investment in Brazos represents a partial interest in a property management
contract pursuant to which Brazos may receive cash flows from management fes and
certain other fees over the life of the contract.

Financing for Brazos consists primarily of
fixed-rate secured mortgage debt obligations of Brazos that are without recourse
to Belmar Realty, the Fund and the Fund Shareholders. Both Belmar Realty and the
Operating Partner invested equity in Brazos. Belmar Realtys equity in Brazos
was acquired using the proceeds of Fund borrowings.

A board of trustees controlled by Belmar Realty
oversees the performance of the Operating Partner and controls the major
decisions of Brazos. The persons serving as trustees on behalf of Belmar Realty
are employees of Boston Management. See Directors and Executive Officers in
Item 10(a). No director of Belmar Realty or trustee of Brazos is a Shareholder
of the Fund. The Operating Partner of Brazos also serves as an operating partner
of other Real Estate Joint Ventures that are majority owned by real estate
affiliates of other investment funds advised by Boston Management. Eaton Vance
and its affiliates do not have a material financial interest in
Brazos.

The Operating Partner of Brazos is ProLogis, a
publicly owned REIT. Common shares of ProLogis are traded on the NYSE under the
symbol "PLD". ProLogis owns 20% of the voting shares of Brazos. Belmar Realty
owns the balance of such shares. Pursuant to an agreement with ProLogis, from
and after August 4, 2014 either Belmar Realty or ProLogis may cause a
liquidation of Brazos. If Belmar Realty elects to liquidate Brazos, ProLogis
will have the right either to purchase the shares of Brazos owned by Belmar
Realty or to acquire the assets of Brazos, in either case at a price determined
through an independent appraisal of the assets of Brazos. The Brazos operative
documents prohibit any transfer of shares that would adversely affect Brazos
qualification as a REIT.

The liquidation agreement applicable to Brazos
continues indefinitely, but could be terminated upon the receipt of the
requisite approval of the owners of the voting interests therein. The sale to
Belmar Realty by ProLogis of its interest in Brazos would not affect the REIT
qualification of Brazos. If Belmar Realty were to dispose of its interest in
Brazos pursuant to the liquidation agreement or otherwise, it may acquire an
interest in a different real estate investment to replace the investment
sold.

Partnership Preference Units.Belmar Realtys investments in Partnership
Preference Units represent preferred equity interests in real estate operating
partnerships. The assets of the partnerships that issued the Partnership
Preference Units owned by Belmar Realty on December 31, 2005 consisted primarily
of direct or indirect ownership interests in real properties, including
manufactured home communities, self-storage facilities, office buildings and
shopping centers. The Partnership Preference Units owned by Belmar Realty as of
December 31, 2005 are listed in Item 7A(a) and in the consolidated portfolio of
investments included in the Funds consolidated financial statements, which are
included as pages 39 to 61 of this Annual Report on Form 10-K. Eaton Vance is
not, and has not been, involved in the management or operation of the real
estate operating partnerships that issued the Partnership Preference Units owned
by Belmar Realty.

The Partnership Preference Units held by Belmar
Realty were issued by partnerships that are not publicly-traded partnerships
within the meaning of Code Section 7704(b). The Partnership Preference Units are
perpetual life instruments (subject to call provisions) and are not, by their
terms, readily convertible or exchangeable into cash or securities of the
affiliated public company. Partnership Preference Units are not rated by a
nationally-recognized rating agency, and such interests may not be as high in
quality as issues that are rated investment grade.

Each issue of Partnership Preference Units held by
Belmar Realty pays regular quarterly distributions at fixed rates from the net
profits or gross income of the issuing partnership, with preferential rights
over common and other subordinated

5

units. None of the Partnership Preference Units is
or will be registered under the Securities Act and each issue is thus subject to
restrictions on transfer.

Net Leased Properties.At December 31, 2005, Belmar Realty owned a Net Leased Property
consisting of leasehold improvements in an office building and attached
facilities leased to a single tenant under a triple net lease. Belmar Realty
owns these interests in leasehold improvements through its subsidiary, Bel
Stamford Investors LLC (Bel Stamford). Bel Stamfords property is financed by
fixed-rate secured mortgage debt obligations of Bel Stamford that generally are
without recourse to Belmar Realty and the Fund. Belmar Realtys equity in Bel
Stamford was acquired using the proceeds of Fund borrowings.

The Bel Stamford property is leased on a long-term
basis to one tenant that is obligated to pay rent sufficient to service the
associated mortgage debt and to pay all costs and expenses associated with
operation and maintenance of the property, including real estate taxes, repairs
and insurance. The tenant has also generally indemnified Bel Stamford against
certain liabilities in connection with the property. Because all or
substantially all of the rental payments are dedicated to debt service, realized
returns on Belmar Realtys investment in the Bel Stamford property generally
will be deferred until the property is sold or re-leased following the initial
lease term.

Organization of the Funds Controlled
Subsidiaries.Belmar Realty and Brazos operate in
such a manner as to qualify for taxation as REITs under the Code. As REITs,
Belmar Realty and Brazos generally are not subject to federal income tax on that
portion of their ordinary income or taxable gain that is distributed to
stockholders each year. The Fund owns 100% of the common stock issued by Belmar
Realty, and intends to hold all of the common stock at all times. Belmar Realty
and ProLogis own all of the common shares of Brazos.

Belmar Realty and Brazos also have issued preferred
shares to satisfy certain provisions of the Code, which require that a REIT be
beneficially owned in the aggregate by 100 or more persons. The preferred shares
of each such entity are owned by not less than 100 charitable organizations that
received the preferred shares as gifts. Each charitable organization that
received a preferred share was an accredited investor (as defined in the
Securities Act) with total assets in excess of $5 million at the time the
organization received the preferred shares. Eaton Vance selected the charitable
organizations from the charities for which it has matched employee contributions
and/or based on suggestions from its employees or ProLogis. As of December 31,
2005, the total value of the preferred shares outstanding of Belmar Realty and
Brazos was $210,000 and $240,000, respectively. Dividends on preferred shares
are cumulative and payable annually at a dividend rate of 8% per year for Belmar
Realty and 6% per year for Brazos. The dividends paid on preferred shares have
priority over payments on common shares. For the year ended December 31, 2005,
Belmar Realty and Brazos paid distributions to preferred shareholders of $16,800
and $13,027, respectively.

Fund Borrowings.To finance its real estate investments, the Fund has entered into credit
arrangements with DrKW Holdings, Inc. (the DrKW Credit Facility) and Merrill
Lynch Mortgage Capital, Inc. (the MLMC Credit Facility) (collectively, the
Credit Facility). The Credit Facility is secured by a pledge of the Funds
assets, excluding the assets of Brazos and Bel Stamford, and expires in June
2010. At December 31, 2005, the total principal amount outstanding under the
Credit Facility was $304.0 million. The Credit Facility is also used to provide
for selling commissions, organizational expenses and any liquidity needs of the
Fund. Under certain circumstances, the Fund may increase the size of the Credit
Facility (subject to lender consent) and the amount of outstanding borrowings
thereunder.

The DrKW Credit Facility is a term credit agreement.
Borrowings under the DrKW Credit Facility accrue interest at a rate of one-month
LIBOR plus 0.20% per annum. As of December 31, 2005, outstanding borrowings
under the DrKW Credit Facility totaled $290.0 million.

The MLMC Credit Facility is a revolving credit
agreement. The Fund may borrow up to $118.5 million under the MLMC Credit
Facility, of which up to $10.0 million may be letters of credit. Borrowings
under the MLMC Credit Facility accrue interest at a rate of one-month LIBOR plus
0.38% per annum. As of December 31, 2005, outstanding borrowings under the MLMC
Credit Facility totaled $14.0 million. There were no letters of credit issued as
of December 31, 2005. The unused loan commitment amount totaled $104.5 million.
A commitment fee of 0.10% per annum is paid on the unused commitment amount. The
Fund pays all fees associated with issuing letters of credit.

Obligations under the Credit Facility are without
recourse to Fund Shareholders. As described above, financing for Brazos and Bel
Stamford consists primarily of fixed-rate secured mortgage debt obligations of
Brazos and Bel Stamford that are without recourse to Fund Shareholders and
generally are without recourse to Belmar Realty and the Fund, as described under
"Risks of Real Estate Investments" in Item 7A(b).

6

Interest Rate Swap Agreements.The Fund has entered into interest rate swap
agreements with Merrill Lynch Capital Services, Inc. (MLCS) to fix the cost of
borrowings under the Credit Facility used to acquire equity in real estate
investments. Pursuant to the interest rate swap agreements, the Fund makes cash
payments to MLCS at fixed rates in exchange for floating rate payments from MLCS
that fluctuate with one-month LIBOR. The interest rate swap agreements currently
in effect with respect to Belmar Realtys real estate investments extend until
June 25, 2010, subject to the Funds earlier termination rights in the case of
certain swaps, and provide for the Fund to make payments to MLCS at fixed rates
averaging 4.53% . See Note 7 to the Funds consolidated financial statements
included as pages 39 to 61 of this Annual Report on Form 10-K.

The Eaton Vance
Organization.The Eaton
Vance organization sponsors the Fund. Eaton Vance serves as the Funds manager.
Boston Management serves as the Funds investment adviser and as manager of
Belmar Realty. EV Distributors served as the Funds placement agent. The Funds
business affairs are conducted by Eaton Vance (as its manager) and its
investment operations are conducted by Boston Management (as its investment
adviser). The Funds officers are employees of Eaton Vance. Eaton Vance, Boston
Management and EV Distributors are wholly-owned subsidiaries of Eaton Vance
Corp., a publicly-traded holding company that, through its affiliates and
subsidiaries, engages primarily in investment management, administration and
marketing activities.

As described above, the Fund pursues its objective
primarily by investing in Belvedere Company. Belvedere Company invests
exclusively in the Portfolio. Boston Management acts as investment adviser of
the Portfolio and manager of Belvedere Company. EV Distributors acts as
placement agent for Belvedere Company and the Portfolio. As of December 31,
2005, the assets of the Fund represented approximately 2.4% of assets under
management by Eaton Vance and its affiliates. The offices of the Fund, Eaton
Vance, Boston Management and EV Distributors are located at 255 State Street,
Boston, Massachusetts 02109.

Conflicts of Interest.Boston Management and other Eaton Vance affiliates are subject to
certain conflicts of interest in their dealings with the Fund, Belmar Realty,
Belvedere Company and the Portfolio, as well as with other investment companies
advised by Boston Management that invest in the Portfolio. Eaton Vance and
Boston Management have determined and will determine which of their sponsored
investment companies invest in the Portfolio, the securities each of them
contributes to the Portfolio when making an investment therein and, subject to
the rights of redeeming investors in the Portfolio, the securities and/or cash
received in redemptions from the Portfolio. Such determinations are inherently
subject to potential conflicts of interest. In addition, Portfolio management
activities with respect to securities contributed to the Portfolio may have
different tax consequences for the contributing investor in the Portfolio than
for other investors in the Portfolio. Boston Management manages the Portfolio in
pursuit of long-term, after-tax returns for all investors in the Portfolio and,
with respect to contributed securities, takes into account the tax position of
the contributing investor in the Portfolio. Whenever conflicts of interest
arise, Eaton Vance, Boston Management and other Eaton Vance affiliates will
endeavor to exercise their discretion in a manner that they believe is equitable
to all interested persons.

Belmar Realty may purchase real estate investments
from real estate affiliates of other investment funds that are advised by Boston
Management. Belmar Realty may also co-invest with such entities in real estate
investments and sell real estate investments to such entities. In any such
transaction, the assets purchased and sold will be valued in good faith by
Boston Management, after consideration of factors, data and information that
Boston Management considers relevant. Transaction prices generally will include
an allocation of the original costs incurred in creating and acquiring the
transferred real estate investments. Real estate investments are often difficult
to value and others could in good faith arrive at valuations different from
those of Boston Management. See "Critical Accounting Estimates" in Item 7(e).



|Item 1A. Risk
  Factors.
|------------------------

The Fund invests primarily in a diversified
portfolio of common stocks and is thereby subject to general stock market risk.
There can be no assurance that the performance of the Fund will match that of
the U.S. stock market or that of other equity funds. In managing the Portfolio
for long-term, after-tax returns, Boston Management generally seeks to avoid or
minimize sales of securities with large accumulated capital gains, including
contributed securities. Such securities constitute a substantial portion of the
assets of the Portfolio. Although the Portfolio may utilize certain management
strategies in lieu of selling appreciated securities, the Portfolios, and hence
the Funds, exposure to losses during stock market declines may nonetheless be
higher than funds that do not follow a general policy of avoiding sales of
highly-appreciated securities. The Fund is also subject to risks associated with
real estate investments and certain other risks, which are described under
"Qualitative Information About Market Risk" in Item 7A(b).

7

Item 1B. Unresolved Staff
Comments.

None.

Item 2. Properties.

The Fund does not own any physical properties, other
than indirectly through Belmar Realtys investments. At December 31, 2005,
Belmar Realty held investments in Partnership Preference Units of three issuers,
owned a controlling interest in Brazos, and Bel Stamford, whose assets are
reflected in the consolidated financial statements of the Fund. At December 31,
2005, Brazos owned 23 industrial distribution properties located in eight states
(Florida, Indiana, New Jersey, North Carolina, Ohio, Pennsylvania, South
Carolina and Tennessee). Bel Stamford owns an interest in leashold improvements
of an office building and attached facilities in Stamford,
Connecticut.



|Item 3. Legal
      Proceedings.
|--------------------------------

Although in the ordinary course of business, the
Fund and its directly and indirectly controlled subsidiaries may become involved
in legal proceedings, the Fund is not aware of any material pending legal
proceedings to which they are subject.

Item 4. Submission of Matters to a Vote of
Security Holders.

No matters were submitted to a vote of security
holders during the quarter ended December 31, 2005.

8



|PART
  II
|---------

Item 5. Determining Net Asset Value, Market
for Fund Shares, Related Shareholder Matters and Issuer Purchases of Equity
Securities.

This Item and other Items in this report contain
summaries of certain provisions contained in the Limited Liability Company
Agreement of the Fund (the LLC Agreement), which was filed as an exhibit to the
Funds registration statement on Form 10. All such summaries are qualified in
their entirety by the actual provisions of the LLC Agreement, which are
incorporated by reference herein.

(a) Market Information, Restrictions on
Transfers and Redemption of Shares.

Transfers of Fund Shares.There is no established public trading market for the Shares of the
Fund. Other than transfers to the Fund in a redemption, transfers of Shares are
expressly prohibited by the LLC Agreement without the consent of Eaton Vance.
Eaton Vances consent to a transfer may be withheld in its sole discretion for
any reason or for no reason.

The Shares have not been and will not be registered
under the Securities Act, and may not be resold unless an exemption from such
registration is available. Shareholders have no right to require registration of
the Shares and the Fund does not intend to register the Shares under the
Securities Act or take any action to cause an exemption (whether pursuant to
Rule 144 of the Securities Act or otherwise) to be available.

The Fund is not and will not be registered under the
1940 Act, and no transfer of Shares may be made if, as determined by Eaton Vance
or counsel to the Fund, such transfer would result in the Fund being required to
be registered under the 1940 Act. In addition, no transfer of Shares may be made
unless, in the opinion of counsel to the Fund, such transfer would not result in
termination of the Fund for purposes of Section 708 of the Code or result in the
classification of the Fund as an association or a publicly traded partnership
taxable as a corporation under the Code.

In no event shall all or any part of a Shareholders
Shares be assigned to a minor or an incompetent, unless in trust for the benefit
of such person. Shares may be sold, transferred, assigned or otherwise disposed
of by a Shareholder only if it is determined by Eaton Vance or counsel to the
Fund that such transfer, assignment or disposition would not violate federal
securities or state securities or blue sky laws (including investor
qualification standards).

There are no outstanding options or warrants to
purchase, or securities convertible into, Shares of the Fund. Shares of the Fund
cannot be sold pursuant to Rule 144 under the Securities Act, and the Fund does
not propose to publicly offer any of its Shares at any time.

Redemption of Fund Shares.Shares of the Fund may be redeemed on any business
day. The redemption price of Shares that are redeemed is based on the Funds net
asset value next computed after receipt of the redemption request. During each
month in the quarter ended December 31, 2005, the total number of Shares
redeemed and the average price paid per Share were as follows:

Total No. of Shares
    
    Average Price PaidMonth Ended
    
    Redeemed(1)
    
    Per ShareOctober
    
    293,881.142
    
    $89.46November
    
    33,571.912
    
    $92.93December
    
    208,021.196
    
    $95.51Total
    
    535,474.250
    
    $94.30


|(1) | All Shares redeemed during the periods were
      redeemed at the option of Shareholders pursuant to the Funds redemption
      policy. The Fund has not announced any plans or programs to repurchase
      Shares other than at the option of Shareholders.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

The Fund satisfies redemption requests principally
by distributing securities drawn from the Portfolio, but may also distribute
cash. If requested by a redeeming Shareholder, the Fund will satisfy a
redemption request by distributing securities that were contributed by the
redeeming Shareholder, provided that such securities are held in the Portfolio
at the time of redemption. The securities contributed by a Shareholder will not
be distributed to any other Shareholder in the

9

Fund (or to any other investor in Belvedere Company
or the Portfolio) during the first seven years following their contribution
unless the contributing Shareholder has withdrawn from the Fund.

Under most circumstances, a redemption from the Fund
that is settled with securities as described herein will not result in the
recognition of capital gains by the Fund or by the redeeming Shareholder. The
redeeming Shareholder would generally recognize capital gains upon the sale of
the securities received through redemption. If a redeeming Shareholder receives
cash in addition to securities to settle a redemption, the amount of cash
received will be taxable to the Shareholder to the extent it exceeds such
Shareholders tax basis in Fund Shares. Shareholders should consult their tax
advisors about the tax consequences of redeeming Fund Shares.

A Shareholder redemption request within seven years
of a contribution of securities by such Shareholder is ordinarily satisfied by
distributing securities that were contributed by such Shareholder, prior to
distributing to such Shareholder any other securities held in the Portfolio.
Securities contributed by a Shareholder may be distributed to other Shareholders
in the Fund (or to other investors in Belvedere Company or the Portfolio) after
a holding period of at least seven years and, if so distributed, would not be
available to meet subsequent redemption requests made by the contributing
Shareholder.

If requested by a redeeming Shareholder making a
redemption of at least $1 million occurring more than seven years after such
Shareholders final contribution of securities to the Fund, the Fund will
generally distribute to the redeeming Shareholder a diversified basket of
securities representing a range of industry groups that is drawn from the
Portfolio, but the selection of individual securities would be made by Boston
Management in its sole discretion. No interests in Real Estate Joint Ventures,
Partnership Preference Units, Net Leased Property or other real estate
investments will be distributed to meet a redemption request, and restricted
securities will be distributed only to the Shareholder who contributed such
securities or such Shareholders successor in interest.

Other than as set forth above, the allocation of
each redemption between securities and cash and the selection of securities to
be distributed will be at the sole discretion of Boston Management. Distributed
securities may include securities contributed by Shareholders as well as other
readily marketable securities held in the Portfolio. The value of securities and
cash distributed to meet a redemption will equal the net asset value of the
number of Shares being redeemed. The Funds Credit Facility prohibits the Fund
from honoring redemption requests while there is an event of default outstanding
under the Credit Facility.

The Fund may compulsorily redeem all or a portion of
the Shares of a Shareholder if the Fund has determined that such redemption is
necessary or appropriate to avoid registration of the Fund or Belvedere Company
under the 1940 Act, or to avoid adverse tax or other consequences to the
Portfolio, Belvedere Company, the Fund or Shareholders, including those arising
as the result of applicable anti-money laundering requirements.

The right of a Shareholder to redeem can be
suspended and the payment of the redemption price may be deferred while there is
an outstanding event of default under the Credit Facility, when the NYSE is
closed, during periods when trading on the NYSE is restricted or during any
emergency as determined by the SEC, at any time when it is impracticable for the
Portfolio or the Fund to dispose of or value its assets, or during any other
period permitted by order of the SEC for the protection of investors.

A capital account for each Shareholder is maintained
on the books of the Fund. The account reflects the value of such Shareholders
interest in the Fund, which is adjusted for profits, liabilities and
distributions allocable to such account in accordance with Article 6 of the
Funds LLC Agreement.

Subject to the consent of the manager of the Fund, a
Shareholder may make an estate freeze election pursuant to which all or a
portion of such Shareholders Shares will be divided into Preferred Shares and
Common Shares (Estate Freeze Shares). Such division will be made in accordance
with the terms of the LLC Agreement. Estate Freeze Shares are not transferable
without the consent of the Funds manager and have no redemption rights or
voting or consent rights.

Determining Net Asset Value.Boston Management, as investment adviser, is
responsible for determining the value of the Funds assets. The Funds
custodian, Investors Bank & Trust Company, calculates the value of the
assets of the Fund, Belvedere Company and the Portfolio each day that the NYSE
is open for trading, as of the close of regular trading on the NYSE. The Funds
net asset value per Share is calculated by dividing the value of the Funds
total assets, less its liabilities, by the number of Shares
outstanding.

10

The Funds net assets are valued in accordance with
the Funds valuation procedures and reflect the value of its directly-held
assets and liabilities, as well as the net asset value of the Funds investment
in the Portfolio held through Belvedere Company and in real estate investments
held through Belmar Realty. The trustees of the Portfolio have established
procedures for the valuation of the Portfolios assets under normal market
conditions. Pursuant to these procedures, marketable securities listed on U.S.
securities exchanges generally are valued at the last sale price on the day of
the valuation or, if there were no sales, at the mean between the closing bid
and asked prices therefor on the exchange where such securities are principally
traded. Marketable securities listed on the NASDAQ National Market generally are
valued at the NASDAQ official closing price. Unlisted or listed securities for
which closing sale prices are not available are valued at the mean between the
last available bid and asked prices or by an independent pricing service.
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 a sale on such day, at the mean between
the latest bid and asked prices therefor. Futures positions on securities or
currencies are generally 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.

Foreign securities and currencies held by the
Portfolio are valued in U.S. dollars, as calculated by the Portfolios custodian
based on foreign currency exchange rate quotations supplied by an independent
quotation service. Valuation of foreign securities may be adjusted from prices
in effect at the close of trading on foreign exchanges to more accurately
reflect their fair value as of the close of regular trading on the NYSE. The
Portfolio may rely on an independent fair valuation service in adjusting the
valuation of foreign equity securities. All securities for which market prices
are not readily available are valued at fair value as determined in good faith
by or at the direction of the Portfolios trustees, considering relevant
factors, data and information including, in the case of restricted securities,
the market value of freely tradable securities of the same class in the
principal market on which such securities are normally traded.

The Funds real estate investments are valued each
day as determined in good faith by Boston Management after consideration of
relevant factors, data and information. The procedures for valuing real estate
investments are described under "Critical Accounting Estimates" in Item 7(e).
Boston Management values the Funds interest rate swap agreements based upon
dealer and counterparty quotes and pricing models that take into consideration
the market trading prices of interest rate swap agreements that have similar
terms to the Funds interest rate swap agreements. Fixed liabilities of the Fund
generally are stated at principal value.

Historic Net Asset Values.Set forth below are the high and low net asset
values per Share (NAVs) of the Fund for each full quarter during the two years
ended December 31, 2005 and 2004, the closing NAV on the last business day of
each full quarter, and the percentage change in NAV during each such
quarter.

|              |  |          |  |         |  | NAV at      |  | Quarterly %     
|------------- |  | -------- |  | ------- |  | ----------- |  | ----------------
|Quarter Ended |  | High NAV |  | Low NAV |  | Quarter End |  | Change in NAV(1)
|12/31/05      |  | $96.79   |  | $88.67  |  | $95.66      |  | 3.36%           
|9/30/05       |  | $93.70   |  | $89.19  |  | $92.55      |  | 4.14%           
|6/30/05       |  | $90.58   |  | $84.90  |  | $88.87      |  | 0.17%           
|3/31/05       |  | $91.98   |  | $87.42  |  | $88.72      |  | -3.04%          
|12/31/04      |  | $93.34   |  | $84.00  |  | $91.50      |  | 6.59%           
|9/30/04       |  | $87.42   |  | $81.49  |  | $85.84      |  | -2.75%          
|6/30/04       |  | $88.82   |  | $83.79  |  | $88.27      |  | 1.85%           
|3/31/04       |  | $88.81   |  | $84.07  |  | $86.67      |  | 0.45%           

|(1) | Past performance is no guarantee of future
      results. Investment return and principal value will fluctuate so that
      Shares, when redeemed, may be worth more or less than their original cost.
      Changes in NAV are historical. Performance is for the stated time period
      only; due to market volatility, the Funds current performance may be
      lower or higher. For more information about the performance of the Fund,
      see Managements Discussion and Analysis of Financial Condition
      (MD&A) and Results of Operations in Item 7.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

11



|(b) Record Holders of Shares of the
  Fund.
|-------------------------------------------

As of February 28, 2006, there were 671 record holders of Shares
of the Fund.



|(c) Distributions.
|------------------

Income and Capital Gain Distributions. The Fund
intends to distribute each year the amount of its net investment income for such
year, if any. The Fund also intends to make annual capital gain distributions
equal to approximately 18% of the amount of its net realized capital gains, if
any, other than certain precontribution gains allocated to a Shareholder in
connection with a taxable tender offer or other taxable corporate event for a
security contributed to the Fund by that Shareholder or that Shareholders
predecessor in interest. The Funds net investment income and net realized gains
include the Funds allocated share of the net investment income and net realized
gains of Belvedere Company and, indirectly, the Portfolio, as well as income and
capital gains, if any, distributed by Belmar Realty. The Funds distributions
generally are based on determinations of net investment income and net realized
capital gains for federal income tax purposes. Such amounts may differ from net
investment income or loss and net realized gain or loss as set forth in the
Funds consolidated financial statements due to differences in the treatment of
various income, gain, loss, expense and other items for federal income tax
purposes and under GAAP. The Fund intends to pay distributions (if any) on the
last business day of each fiscal year of the Fund (which concludes on December
31) or shortly thereafter. The Funds distribution rates with respect to
realized gains may be adjusted in the future to reflect changes in the effective
maximum marginal individual federal tax rate applicable to long-term capital
gains.

Shareholder distributions with respect to net investment income,
realized post-contribution gains and certain other realized gains are made pro
rata in proportion to the number of Shares held as of the record date of the
distribution. All income and capital gain distributions (including Special
Distributions described below) are paid by the Fund in cash. Distributions are
generally not taxable to the recipient Shareholder unless the distributions
exceed the recipient Shareholders tax basis in Fund Shares. The Funds Credit
Facility prohibits the Fund from making any distribution to Shareholders while
there is an event of default outstanding under the Credit Facility.

On January 26, 2006, the Fund made a distribution of $0.74 per
Share to Shareholders of record on January 25, 2006. On January 27, 2005, the
Fund made a distribution of $1.12 per Share to Shareholders of record on January
26, 2005. On January 14, 2004, the Fund made a distribution of $1.15 per Share
to Shareholders of record on January 13, 2004.

Special Distributions. In addition to the pro rata
income and capital gain distributions described above, the Fund also makes
distributions to Shareholders allocated precontribution gain (other than certain
precontribution gains allocated to a Shareholder in connection with a taxable
tender offer or other taxable corporate event involving a security contributed
by such Shareholder or such Shareholders predecessor in interest) (a Special
Distribution). Special Distributions generally equal approximately 18% of the
amount of realized precontribution gains plus approximately 4% of the allocated
precontribution gain or such other percentage as deemed appropriate to
compensate Shareholders receiving such distributions for taxes that may be due
on income specially allocated in connection with the precontribution gain and
Special Distributions. Special Distributions are made solely to the Shareholders
to whom the precontribution gain is allocated. The Fund does not intend to make
Special Distributions to a Shareholder in respect of realized precontribution
gain allocated to a Shareholder or such Shareholders predecessor in interest in
connection with a taxable tender offer or other taxable corporate event
involving a security contributed by such Shareholder or such Shareholders
predecessor in interest. The Fund made no Special Distributions during the years
ended December 31, 2005 and 2004.



|Item 6. Selected Financial
Data.
|--------------------------------

Table of Selected Financial Data. The consolidated data referred to below reflects the Funds
historical results for the years ended December 31, 2005, 2004, 2003, 2002 and
2001. The following information should be read in conjunction with all of the
consolidated financial statements and related notes appearing on pages 39 to 78
of this Annual Report on Form 10-K. The other consolidated data referred to
below is as of each period end.

|                              |  |                   |  | Year
    Ended    |  |                   |  | Year
    Ended    |  |                   |  | Year
    Ended |  |   |  | Year
    Ended |  |   |  | Year
    Ended
|----------------------------- |  | ----------------- |  | ----------------- |  | ----------------- |  | ----------------- |  | ----------------- |  | -------------- |  | - |  | -------------- |  | - |  | --------------
|                              |  | December 31, 2005 |  | December 31, 2004 |  | December 31, 2003 |  | December 31, 2002 |  | December 31, 2001
|Total
      investment income |  | $                 |  | 69,685,247        |  | $                 |  | 92,676,501        |  | $                 |  | 94,906,482     |  | $ |  | 99,814,835     |  | $ |  | 103,489,725   
|Interest
      expense        |  | $                 |  | 36,990,138        |  | $                 |  | 36,451,042        |  | $                 |  | 22,974,061     |  | $ |  | 28,506,573     |  | $ |  | 45,447,387    

12

|                                                                               |   |                       |             | Year Ended            |   |                       |             | Year Ended                 |   |                         |             | Year Ended  |   |   |               | Year Ended   |   |   |               | Year Ended  
|------------------------------------------------------------------------------ | - | --------------------- | ----------- | --------------------- | - | --------------------- | ----------- | -------------------------- | - | ----------------------- | ----------- | ----------- | - | - | ------------- | ------------ | - | - | ------------- | ------------
|                                                                               |   | December 31,
    2005 |             | December 31,
    2004 |   | December 31,
    2003 |             | December 31,
      2002    |   | December 31,
      2001
|Net expenses
      (including  interest expense)                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|                                                                               | $ |                       | 54,655,060  |                       | $ |                       | 66,204,475  |                            | $ |                         | 50,746,633  |             | $ |   | 56,644,137    |              | $ |   | 76,754,182   
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Net investment income                                                          |   | $                     |             | 13,834,048            |   | $                     |             | 25,224,494                 |   | $                       |             | 43,724,019  |   | $ |               | 42,746,644   |   | $ |               | 26,515,171  
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Minority interests in
      net income of controlled  subsidiaries             |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |              
|                                                                               | $ |                       | (1,196,139) |                       | $ |                       | (1,247,532) |                            | $ |                         | (435,830)   |             | $ |   | (424,054)     |              | $ |   | (220,372)    
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Net realized gain (loss)                                                       |   | $                     |             | 53,868,381            |   | $                     |             | 57,671,882                 |   | $                       |             | 5,911,089   |   | $ |               | (41,522,684) |   | $ |               | (35,955,721)
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Net change in
      unrealized  appreciation  (depreciation)                   |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |              
|                                                                               | $ |                       | 36,848,809  |                       | $ |                       | 52,072,410  |                            | $ |                         | 362,154,142 |             | $ |   | (417,581,832) |              | $ |   | (230,675,625)
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Net increase (decrease)
      in  net assets from  operations                  |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |              
|                                                                               | $ |                       | 104,551,238 |                       | $ |                       | 134,968,786 |                            | $ |                         | 411,789,250 |             | $ |   | (416,357,872) |              | $ |   | (240,116,175)
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                        
|Total assets                                                                   |   | $2,658,246,433        |             | $2,677,042,933        |   | $2,611,939,419        |             | $2,445,639,296             |   | $2,967,430,657         
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Loan payable--Credit 
      Facility                                           |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|                                                                               | $ |                       | 304,000,000 |                       | $ |                       | 290,000,000 |                            | $ |                         | 513,000,000 |             | $ |   | 596,500,000   |              | $ |   | 613,500,000  
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Mortgages payable                                                              |   | $                     |             | 450,367,515           |   | $                     |             | 455,098,913                |   | $                       |             | 161,157,192 |   | $ |               | 162,461,900  |   | $ |               | 175,470,843 
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                        
|Net assets                                                                     |   | $      1,876,369,119  |             | $      1,910,487,498  |   | $      1,920,611,857  |             | $       
    1,620,229,805 |   | $       2,108,684,133  
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Shares outstanding                                                             |   |                       |             | 19,614,094            |   |                       |             | 20,880,411                 |   |                         |             | 22,261,334  |   |   |               | 23,190,678   |   |   |               | 24,134,504  
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Net asset value and 
      redemption price  per Share                         |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |              
|                                                                               | $ |                       | 95.66       |                       | $ |                       | 91.50       |                            | $ |                         | 86.28       |             | $ |   | 69.87         |              | $ |   | 87.37        
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Net increase (decrease)
      in  net assets from  operations per
    Share(6) |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |              
|                                                                               | $ |                       | 5.28        |                       | $ |                       | 6.37        |                            | $ |                         | 18.11       |             | $ |   | (17.50)       |              | $ |   | (9.67)       
|                                                                               |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|Distribution paid per 
      Share                                             |   |                       |             |                       |   |                       |             |                            |   |                         |             |             |   |   |               |              |   |   |               |             
|                                                                               | $ |                       | 1.12(5)     |                       | $ |                       | 1.15(4)     |                            | $ |                         | 1.70(3)     |             | $ |   | 0.00(2)       |              | $ |   | 0.79(1)      

|(1) | The Fund also makes Special Distributions, which are not
      made on a pro rata basis. See Item 5(c). Special Distributions of $0.073
      per Share were paid for the year ended December 31, 2001.            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | On January 17, 2003, the Fund made a distribution of
      $1.70 per Share to Shareholders of record on January 16, 2003 relating to
      net investment income and net realized capital gains recorded in
  2002.
|   
|(3) | On January 14, 2004, the Fund made a distribution of
      $1.15 per Share to Shareholders of record on January 13, 2004 relating to
      net investment income and net realized capital gains recorded in
  2003.
|   
|(4) | On January 27, 2005, the Fund made a distribution of
      $1.12 per Share to Shareholders of record on January 26, 2005 relating to
      net investment income and net realized capital gains recorded in
  2004.
|   
|(5) | On January 26, 2006, the Fund made a distribution of
      $0.74 per Share to Shareholders of record on January 25, 2006 relating to
      net investment income and net realized capital gains recorded in
  2005.
|   
|(6) | Based on average Shares outstanding.                                                                                                                                                                               
|   

Item 7. Managements Discussion and Analysis of Financial
Condition (MD&A) and Results of Operations.

The information in this report contains forward-looking
statements within the meaning of the federal securities laws. Forward-looking
statements typically are identified by use of terms such as may, will,
should, might, expect, anticipate, estimate, and similar words,
although some forward-looking statements are expressed differently. The actual
results of the Fund could differ materially from those contained in the
forward-looking statements due to a number of factors. The Fund undertakes no
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events, or otherwise, except as required by
applicable law. Factors that could affect the Funds performance include a
decline in the U.S. stock markets or in general economic conditions, adverse
developments affecting the real estate industry, or fluctuations in interest
rates. See "Qualitative Information About Market Risk" in Item 7A(b)
below.

13

The following discussion should be read in
conjunction with the Funds consolidated financial statements and related notes
appearing on pages 39 to 78 of this Annual Report on Form 10-K.



|(a) Results of
      Operations.
|--------------------------------

Increases and decreases in the Funds net asset
value per share are based on net investment income or loss and realized and
unrealized gains and losses on investments. The Funds net investment income or
loss is determined by subtracting the Funds total expenses from its investment
income and then deducting the net investment income or loss attributable to the
minority interest in the controlled subsidiaries of Belmar Realty. The Funds
investment income generally includes the net investment income allocated to the
Fund from Belvedere Company, rental income from the properties owned by Belmar
Realtys controlled subsidiaries, partnership income allocated to the
Partnership Preference Units owned directly or indirectly by Belmar Realty and
interest earned on the Funds short-term investments (if any). The net
investment income of Belvedere Company allocated to the Fund includes dividends,
interest and expenses allocated to Belvedere Company by the Portfolio less the
expenses of Belvedere Company allocated to the Fund. The Funds total expenses
include the Funds investment advisory and administrative fees, distribution and
servicing fees, interest expense from mortgages on properties owned by Belmar
Realtys controlled subsidiaries, interest expense on the Funds Credit
Facility, property management fees, property taxes, insurance, maintenance and
other expenses relating to the properties owned by Belmar Realtys controlled
subsidiaries, and other miscellaneous expenses. The Funds realized and
unrealized gains and losses are the result of transactions in, or changes in
value of, security investments held through the Funds indirect interest
(through Belvedere Company) in the Portfolio, real estate investments held
through Belmar Realty, the Funds interest rate swap agreements and any other
direct investments of the Fund, as well as periodic payments made by the Fund
pursuant to interest rate swap agreements.

Realized and unrealized gains and losses on
investments have the most significant impact on the Funds net asset value per
share and result primarily from sales of such investments and changes in their
underlying value. The investments of the Portfolio consist primarily of common
stocks of domestic and foreign growth companies that are considered by its
investment adviser to be high in quality and attractive in their long-term
investment prospects. Because the securities holdings of the Portfolio are
broadly diversified, the performance of the Portfolio cannot be attributed to
one particular stock or one particular industry or market sector. The
performance of the Portfolio and the Fund are substantially influenced by the
overall performance of the U.S. stock market, as well as by the relative
performance versus the overall market of specific stocks and classes of stocks
in which the Portfolio maintains large positions.

MD&A and Results of Operations for the
Year Ended December 31, 2005 Compared to the Year Ended December 31,
2004.

Performance of the
Fund.(1)The Funds
investment objective is to achieve long-term, after-tax returns for
Shareholders. Eaton Vance, as the Funds manager, measures the Funds success in
achieving its objective based on the investment returns of the Fund, using the
S&P 500 Index as the Funds primary performance benchmark. The S&P 500
Index is a broad-based unmanaged index of common stocks commonly used as a
measure of U.S. stock market performance. Eaton Vances primary focus in
pursuing total return is on the Funds common stock portfolio, which consists of
its indirect interest in the Portfolio. In measuring the performance of the
Funds real estate investments, Eaton Vance considers whether, through current
returns and changes in valuation, the real estate investments achieve returns
that over the long-term exceed the cost of the borrowing incurred to acquire
such investments and thereby add to Fund returns. The Fund has entered into
interest rate swap agreements to fix the cost of its borrowings under the Credit
Facility used to acquire equity in real estate investments and to mitigate in
part the impact of interest rate changes on the Funds net asset
value.

The Funds total return for the year ended December
31, 2005 was 5.89% . This return reflects an increase in the Funds net asset
value per Share from $91.50 to $95.66 and a distribution of $1.12 per Share
during the period. For comparison, the S&P 500 Index had a total return of
4.91% over the same period. The combined impact on performance of the Funds
investment activities outside of the Portfolio was positive for the year ended
December 31, 2005. The performance of the Fund exceeded that of the Portfolio by
approximately 1.19% for the year.

|(1) | Past performance is no guarantee of future
      results. Investment return and principal value will fluctuate so that
      Shares, when redeemed, may be worth more or less than their original cost.
      Total returns are historical and are calculated by determining the
      percentage change in net asset value with all distributions reinvested.
      The Portfolios total return for the period reflects the total return of
      another fund that invests in the Portfolio adjusted for non-Portfolio
      expenses of that fund. Performance is for the stated time period only; due
      to market volatility, the Funds current performance may be lower or
      higher. The performance of the Fund and the Portfolio is compared to that
      of their benchmark, the S&P 500 Index. It is not possible to invest
      directly in an Index.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

14

The Fund had a total return of 7.48% for the year ended December 31, 2004. This return reflected an increase in the Funds net asset value per Share from $86.28 to $91.50 and a distribution of $1.15 per Share during the
period. For comparison, the S&P 500 Index had a total return of 10.87% over the same period. For the year ended December 31, 2004, the performance of the Fund trailed that of the Portfolio by approximately 2.19% .

Performance of the Portfolio.A late year surge helped the stock market conclude 2005 on a positive note, locking in its third consecutive annual gain. The S&P 500 Index had a positive, albeit modest, total
return for the year, despite investor angst over rising interest rates, record-level energy prices and a flattening yield curve. These factors were offset by resilient consumer spending and healthy corporate profits. Double-digit growth in dividend
payouts and share buybacks, coupled with continued strength in merger and acquisition activity, provided additional support for equities.

For the year ended December 31, 2005, energy and utilities were the top performing sectors in the S&P 500 Index. The energy sector was up 31% in 2005 and the utility sector rose over 16% for the same period. In contrast, each of the eight
remaining sectors in the S&P 500 Index recorded single-digit or negative returns. The more growth-oriented consumer discretionary, telecommunications and technology sectors were the worst performers for the year. Also, small- and
mid-capitalization stocks outperformed large-cap stocks.

The Portfolio invests on a long-term basis in a broadly diversified portfolio consisting primarily of common stocks of growth companies. The Portfolios performance for the year ended December 31, 2005 was 4.70%, trailing the return of
the S&P 500 Index by 0.21%, due in part to differences in sector allocation and stock selection. The total return of the Portfolio for the year ended December 31, 2004 was 9.67% . The Portfolio remained overweighted in the industrials and energy
sectors, while continuing to underweight the technology, telecommunication and utilities sectors. The Portfolios energy emphasis was additive to performance as stocks there advanced on record-high commodity prices. Financials also experienced
solid gains in 2005, and the Fund's performance benefited from the Portfolio's overweighting of capital markets and insurance industries and de-emphasis of mortgage finance stocks. Telecommunications stocks continued to struggle through the year,
and the Portfolios underweighted position there was beneficial to returns.

The Portfolios worst performance came from the industrials and information technology sectors. Capacity and pricing issues plagued information technology holdings, and investments within computers and peripherals were notable
underperformers. An overweighting in lagging machinery and building products stocks within the industrials sector was also detrimental to performance. In addition, de-emphasis of the slower-growth, high-dividend-yielding areas, such as utilities,
also detracted from returns, as investors favored these defensive investments for much of 2005.

Performance of Real Estate Investments.The Funds real estate investments are held through Belmar Realty. As of December 31, 2005, real estate investments included a majority interest in a Real Estate Joint
Venture, Brazos, a Net Leased Property, Bel Stamford, and a portfolio of Partnership Preference Units. Brazos owns industrial distribution properties and Bel Stamford owns an interest in leasehold improvements of an office building and attached
facilities. As of December 31, 2005, the estimated fair value of the Funds real estate investments represented 24.5% of the Funds total assets on a consolidated basis. After adjusting for the minority interest in Brazos, the Funds
real estate investments represented 31.7% of the Funds net assets as of December 31, 2005.

On September 30, 2005, a property management contract in which Brazos held an interest was terminated, resulting in a gain of approximately $1.6 million for Belmar Realty.

During the year ended December 31, 2005, rental income from real estate operations was approximately $45.0 million compared to approximately $57.2 million for the year ended December 31, 2004, a decrease of $12.2 million or 21%.
This decrease in rental income was principally due to Belmar Realtys sale of its interest in an industrial distribution Real Estate Joint Venture, Cimmaron Property Trust (Cimmaron), in September 2004 and its sale of all of the properties held
by a multifamily Real Estate Joint Venture, Bel Alliance Apartments, LLC (Bel Apartments), in October 2004. The properties sold provided 53% of consolidated rental income for the year ended December 31, 2004. The decline in rental income due to the
aforementioned sales was offset in part by the rental income of Brazos, which was acquired in 2004. For the year ended December 31, 2005, Brazos rental income was negatively affected by a less favorable leasing environment than expected.
During the year ended December 31, 2004, rental income increased due to income from the industrial distribution properties acquired by Brazos and Cimmaron in June and August 2004 and income from Bel Stamford, offset in part by a modest decline in
income from multifamily properties. Multifamily income decreased primarily due to the sale of the properties of Bel Apartments in October 2004. Prior to the sale of its properties, Bel Apartments experienced lower rental revenues as the result of
reduced apartment rental rates, increased rent concessions and lower occupancy levels.

15

During the year ended December 31, 2005, property operating expenses were approximately $7.8 million compared to approximately $18.0 million for the year ended December 31, 2004, a decrease of $10.2 million or 57% (property
operating expenses are before certain operating expenses of Belmar Realty of approximately $4.3 million for the year ended December 31, 2005 and $6.0 million for the year ended December 31, 2004). The decrease in property operating expenses
was principally due to the asset sales referenced in the preceding paragraph, offset in part by the operating expenses of Brazos, which was acquired in 2004.

For the year ended December 31, 2005, Brazos property operating expenses were in line with expectations. Belmar Realty does not record property operating expenses for Bel Stamford, as such expenses are assumed by the tenant under the
lease agreement. During 2004, the decrease in property operating expenses was principally due to the sale of Bel Apartments properties in October 2004, offset in part by the expenses of the industrial distribution properties acquired in 2004.
For many industrial distribution properties, rent levels are expected to see minimal growth over the near term. Boston Management expects that improvements in industrial distribution property operating performance will occur over the longer
term.

At December 31, 2005, the estimated fair value of the real properties indirectly held through Belmar Realty was approximately $597.3 million compared to approximately $576.5 million at December 31, 2004, an increase of $20.8
million or 3.6% . The increase in estimated real property values at December 31, 2005 as compared to December 31, 2004 was principally due to modest increases in the estimated net values of properties held by Brazos and Bel Stamford.

During the year ended December 31, 2005, the Fund saw net unrealized appreciation of the estimated fair value of its other real estate investments (which includes Brazos and Bel Stamford) of approximately $20.7 million, compared to net
unrealized depreciation of approximately $15.8 million during the year ended December 31, 2004. Net unrealized appreciation of approximately $20.7 million during the year ended December 31, 2005 was due to increases in the estimated fair
value of properties owned by Brazos. Despite weak operating conditions over the past several years, estimated property values increased during 2005 as lower near-term property earnings expectations generally were offset by lower capitalization and
discount rates applied in valuing properties. Capitalization and discount rates, terms commonly used in the real estate industry, are rate of return percentages applied to actual or projected income levels to estimate the value of real estate
investments. The Funds net unrealized depreciation for the year ended December 31, 2004 was attributable to a net decrease in estimated industrial distribution property values.

During the year ended December 31, 2005, Belmar Realty acquired interests in additional Partnership Preference Units (including acquisitions from real estate investment affiliates of other investment funds advised by Boston Management) for a
total of approximately $20.0 million. During the year ended December 31, 2005, Belmar Realty also sold certain of its Partnership Preference Units for a total of approximately $30.6 million, recognizing a gain of approximately $4.3
million on the redemptions. At December 31, 2005, the estimated fair value of Belmar Realtys Partnership Preference Units totaled approximately $54.3 million compared to approximately $63.7 million at December 31, 2004, a net decrease
of $9.4 million or 15%. The net decrease in value was principally due to fewer Partnership Preference Units held at December 31, 2005 as compared to December 31, 2004. During 2004, the estimated fair value of Partnership Preference Unit
investments decreased principally due to fewer Partnership Preference Units held. In the low interest rate environment of 2004, many issuers redeemed Partnership Preference Units as call protections expired or restructured the terms of outstanding
Partnership Preference Units in advance of their call dates.

During the year ended December 31, 2005, the Fund saw net unrealized depreciation of the estimated fair value of its Partnership Preference Units of approximately $3.2 million compared to net unrealized depreciation of
approximately$44.9million during the year ended December 31, 2004. The net unrealized depreciation of approximately $3.2 million during the year ended December 31, 2005
consisted of approximately $0.9 million of unrealized appreciation as a result of increases in the per unit values of the Partnership Preference Units held by Belmar Realty at December 31, 2005, and approximately $4.1 million of unrealized
depreciation resulting from the recharacterization of previously recorded unrealized appreciation as realized gains due to the sales of Partnership Preference Units. During 2005, estimated fair values for Partnership Preference Units were positively
affected by tighter credit spreads for credit-sensitive income securities, including real estate-related securities. The net unrealized depreciation of approximately $44.9 million during the year ended December 31, 2004 consisted of
approximately $5.3 million of unrealized depreciation resulting from decreases in per unit values of the Partnership Preference Units held by Belmar Realty and approximately $39.6 million of unrealized depreciation resulting from the
recharacterization of previously recorded unrealized appreciation to realized gains due to sales of Partnership Preference Units during the year. The decrease in per unit values was principally due to restructurings of certain Partnership Preference
Units, which resulted in a special cash distribution and renegotiated lower

16

subsequent distribution rates. The decrease was also due to modest decreases in values for certain other Partnership Preference Units held at December 31, 2004 as these issues approached their call protection expiration dates.

Distributions from Partnership Preference Units for the year ended December 31, 2005 totaled approximately $2.5 million compared to approximately $14.7 million for the year ended December 31, 2004, a decrease of $12.2 million or
83%. The decrease was due principally to a decreased investment in Partnership Preference Units on average during the year, as well as lower average distribution rates for the Partnership Preference Units held. The decrease in average distribution
rates of Partnership Preference Units was primarily due to the restructuring of certain Partnership Preference Units (reflecting lower market rates for preferred securities) as they neared their potential call dates. During the year ended December
31, 2004, distributions from Partnership Preference Units decreased principally due to fewer Partnership Preference Units held on average, as well as lower average distribution rates for the Partnership Preference Units held.

Performance of Interest Rate Swap Agreements.For the year ended December 31, 2005, net realized and unrealized gains on the Funds interest rate swap agreements totaled approximately
$3.6 million, compared to approximately $13.4 million of net realized and unrealized losses for the year ended December 31, 2004. Net realized and unrealized gains on swap agreements in 2005 consisted of $7.6 million of net realized and
unrealized gains due to changes in swap agreement valuations, offset in part by $4.0 million of periodic payments made pursuant to outstanding swap agreements (and classified as net realized losses on interest rate swap agreements in the
Funds consolidated financial statements). In 2004, the Fund had net realized and unrealized losses of $1.8 million due to swap agreement valuation changes and $11.6 million of swap agreement periodic payments. The positive contribution
to Fund performance from changes in swap agreement valuations in 2005 was attributable to a rise in swap rates during the year for swaps with maturities comparable to those of the Funds swaps. The negative contribution to Fund performance from
changes in swap agreement valuations in 2004 was due to the timing of terminating certain outstanding swap agreements, offset in part by swaps held throughout the year increasing modestly in value as a result of increases in swap rates on swaps with
maturities comparable to those of the Funds swaps.

During the year ended December 31, 2004, the Fund terminated certain outstanding swap agreements and realized a loss of approximately $2.4 million.

MD&A and Results of Operations for the Year Ended December 31, 2004 Compared to the Year Ended December 31, 2003.

Performance of the Fund.The Fund had a total return of 7.48% for the year ended December 31, 2004. This return reflected an increase in the Funds net asset value per Share from $86.28 to $91.50 and a
distribution of $1.15 per Share during the period. For comparison, the S&P 500 Index had a total return of 10.87% over the same period. For the year ended December 31, 2004, the performance of the Fund trailed that of the Portfolio by
approximately 2.19% .

The Fund had a total return of 26.48% for the year ended December 31, 2003. This return reflected an increase in the Funds net asset value per Share from $69.87 to $86.28 and a distribution of $1.70 per Share during the
period. For comparison, the S&P 500 Index had a total return of 28.67% over the same period. For the year ended December 31, 2003, the performance of the Fund exceeded that of the Portfolio by approximately 2.60% .

Performance of the Portfolio.Economic pressures lingered for much of 2004, but the lifting of some political uncertainty ignited a late-year market rally, helping U.S. equities lock in a second consecutive year of
gains. Strength in the broader market toward year-end was a function of several economic and fundamental factors: historically low interest rates, decisive election results, retreating oil prices and solid earnings growth. A wave of merger and
acquisition activity provided additional support for equities, as companies across technology, telecommunications and health care sectors announced multi-billion dollar combinations. The Federal Reserve raised its key interest-rate target five times
in 2004, increasing the federal funds target rate to 2.25% . The Portfolios performance for the year ended December 31, 2004 was 9.67%, trailing the S&P 500 Index, which had a total return of 10.87% for the year. The total return of the
Portfolio for the year ended December 31, 2003 was 23.88% .

In 2004, value stocks outperformed growth stocks and small-caps and mid-caps outperformed large-caps. The best performing market sectors were energy, utilities, telecom services and industrials. Lagging the overall market were the health care,
technology, and consumer staples sectors.

During the year, the Portfolios sector allocation shifted slightly from 2003, as it increased positions in energy and industrial stocks and reduced exposure to the technology, health care and consumer discretionary sectors. The
Portfolios

17

performance versus the S&P 500 Index benefited
from relative overweightings in the strong performing energy and industrial
sectors and favorable stock selection among consumer staples. The Portfolios
relative performance versus the S&P 500 Index was hampered by
underweightings in the utilities and telecom services sectors and adverse
selection among technology, health care and consumer discretionary stocks. Among
industry groups, the Portfolio benefited from overweightings of air freight and
logistics, oil and gas, and building products and underweightings of
semiconductors and pharmaceuticals. Industry groups adversely affecting the
Portfolios relative performance included the overweighted insurance and media
groups and the underweighted health services and internet groups.

Performance of Real Estate Investments.As of December 31, 2004, real estate investments
included a majority interest in a Real Estate Joint Venture (Brazos), a Net
Leased Property (Bel Stamford) and a portfolio of Partnership Preference Units.
Brazos operates industrial distribution properties.

In January 2004, Belmar Realty acquired Bel Stamford
for approximately $16.1 million (including transaction costs). During the year
ended December 31, 2004, Belmar Realty acquired a majority interest in Brazos.
In transactions occurring in June and August 2004, Brazos acquired 100% of the
economic interest in 23 industrial distribution properties located in eight
states. Brazos acquired the properties for approximately $382.9 million.
ProLogis owns a minority interest in Brazos and manages the properties. Brazos
obtained first mortgage financing in October 2004, which is secured by the
properties it owns and without recourse to Belmar Realty, the Fund or
Shareholders.

In September 2004, Belmar Realty sold its interest
in Cimmaron for approximately $159.1 million to the real estate subsidiary of
another fund advised by Boston Management. Belmar Realty recognized a gain of
approximately $0.9 million on the sale. Belmar Realty acquired its interest in
Cimmaron in May 2004 and Cimmaron acquired industrial distribution properties on
June 30, 2004 and August 4, 2004.

In October 2004, Bel Apartments sold all of its
multifamily properties to an affiliate of the former Operating Partner of Bel
Apartments, receiving net proceeds of approximately $23.5 million. Belmar Realty
recognized a loss of approximately $19.4 million on the sale. Concurrent with
this sale, Belmar Realty acquired the outstanding minority interest in Bel
Apartments for a nominal amount. On December 15, 2004, Belmar Realty sold Bel
Apartments, which then held a portfolio of Partnership Preference Units, to the
real estate subsidiary of another fund advised by Boston Management. Belmar
Realty recognized a gain of approximately $0.5 million on the sale.

During the year ended December 31, 2004, rental
income from real estate operations was approximately $57.2 million compared to
approximately $34.0 million for the year ended December 31, 2003, an increase of
$23.2 million or 68%. This increase in rental income was due to income from the
industrial distribution properties acquired in 2004 and from the Bel Stamford
property acquired in January 2004, offset in part by a decline in income from
multifamily properties.Multifamily income decreased
primarily due to the sale of Bel Apartments properties in October 2004. Prior
to the sale of its properties, Bel Apartments experienced lower rental revenues
as the result of reduced apartment rental rates, increased rent concessions and
lower occupancy levels during 2004. For the year ended December 31, 2003, rental
income decreased principally due to increased rent concessions or reduced
apartment rental rates and lower occupancy levels at multifamily
properties.

During the year ended December 31, 2004, property
operating expenses were approximately $17.7 million compared to approximately
$17.9 million for the year ended December 31, 2003, a decrease of $0.2 million
or 1.1% (property operating expenses are before certain operating expenses of
Belmar Realty of approximately $6.2 million for the year ended December 31, 2004
and $4.8 million for the year ended December 31, 2003). During 2004, the
decrease in property operating expenses was principally due to the sale of Bel
Apartments properties in October 2004, offset in part by the expenses of the
industrial distribution properties acquired in 2004. During the year ended
December 31, 2003, property operating expenses increased principally due to 17%
increase in property taxes and insurance expenses for Bel Apartments during the
year, offset in part by a 1% decrease in property and maintenance expenses.
Belmar Realty does not record operating expenses for Bel Stamford because
expenses are assumed by the tenant under the terms of the lease
agreement.

At December 31, 2004, the estimated fair value of
the real properties indirectly held through Belmar Realty was approximately
$579.5 million compared to approximately $185.1 million at December 31, 2003, a
net increase of $394.4 million, or 213%. The net increase in estimated real
property values at December 31, 2004 as compared to December 31, 2003 was
principally due to the January 2004 acquisition of Bel Stamford and the
properties acquired by Brazos in June and August 2004, offset in part by the
sale of Bel Apartments properties in October 2004. The decrease in estimated
property values at December 31, 2003 was due to declines in near-term earnings
expectations for the multifamily properties held, partially offset by decreases
in capitalization rates.

18

During the year ended December 31, 2004, the Fund saw unrealized depreciation of the estimated fair value of its other real estate investments (which includes Brazos and Bel Stamford) of approximately $15.8 million compared to unrealized
depreciation of approximately $18.5 million during the year ended December 31, 2003. Net unrealized depreciation of approximately $15.8 million during the year ended December 31, 2004 was attributable to a net decrease in estimated
industrial distribution property values. The net decrease in industrial distribution property values reflected the results of initial independent appraisals of newly acquired properties and adjustments in the value of unappraised industrial
distribution properties to reflect appraisal results for similar properties, in accordance with the Funds valuation procedures (described in "The Real Estate Joint Venture" under "Critical Accounting Estimates" in Item 7(e) below). Initial
appraised values of newly acquired properties differed from transaction values due primarily to differences in discount and capitalization rates applied in valuing the properties.Unrealized depreciation during the year
ended December 31, 2003 was due to modest decreases in estimated multifamily property values during the year.

During the year ended December 31, 2004, Belmar Realty sold (or experienced scheduled redemptions of) certain of its Partnership Preference Units totaling approximately $470.4 million (including sales to real estate subsidiaries of other
investment funds advised by Boston Management), recognizing a net gain of approximately $45.8 million on the transactions. During the year ended December 31, 2004, Belmar Realty also acquired interests in additional Partnership Preference Units
(representing acquisitions from real estate subsidiaries of other investment funds advised by Boston Management) for a total of approximately $108.4 million.

At December 31, 2004, the estimated fair value of Belmar Realtys Partnership Preference Units totaled approximately $63.7 million compared to approximately $424.8 million at December 31, 2003, a net decrease of $361.1 million
or 85%. The net decrease in the value of Partnership Preference Units at December 31, 2004 was principally due to fewer Partnership Preference Units held as compared to December 31, 2003. In the prevailing low interest rate environment, many issuers
redeemed Partnership Preference Units as call protections expired or restructured the terms of outstanding Partnership Preference Units in advance of their call dates. At December 31, 2003, the estimated fair value of Partnership Preference Units
decreased principally due to fewer units held. The per unit value of the remaining Partnership Preference Units also declined slightly during 2003.

During the year ended December 31, 2004, the Fund saw net unrealized depreciation of the estimated fair value of its Partnership Preference Units of approximately $44.9 million compared to unrealized depreciation of approximately $12.3
million during the year ended December 31, 2003. The net unrealized depreciation of approximately $44.9 million during 2004 consisted of approximately $5.3 million of unrealized depreciation resulting from decreases in per unit values of the
Partnership Preference Units held by Belmar Realty at December 31, 2004, and approximately $39.6 million of unrealized depreciation resulting from the recharacterization of previously recorded unrealized appreciation to realized gains due to
sales of Partnership Preference Units during the year ended December 31, 2004. The decrease in per unit values was principally due to restructurings of certain Partnership Preference Units, which resulted in a special cash distribution and
renegotiated lower subsequent distribution rates. The decrease was also due to modest decreases in values for certain other Partnership Preference Units held at December 31, 2004 as these issues approach their call protection expiration dates.
During 2003, the Fund had net unrealized depreciation of approximately $12.3 million consisting of approximately $8.6 million of unrealized appreciation as a result of increases in the per unit value of Partnership Preference Units held by
Belmar Realty, offset by reclassifications of previously unrealized appreciation as realized gains due to sales of Partnership Preference Units in the amount of approximately $20.9 million.

Distributions from Partnership Preference Units for the year ended December 31, 2004 totaled approximately $14.7 million compared to approximately $45.0 million for the year ended December 31, 2003, a decrease of $30.3 million or
67%. The decrease was principally due to fewer Partnership Preference Units held on average, as well as lower average distribution rates on Partnership Preference Units held during the year ended December 31, 2004. During the year ended December 31,
2003, distributions from Partnership Preference Units decreased due to fewer Partnership Preference Units held.

Performance of Interest Rate Swap Agreements.For the year ended December 31, 2004, net realized and unrealized losses on the Funds interest rate swap agreements totaled approximately
$13.4 million, compared to approximately $7.2 million of net realized and unrealized losses for the year ended December 31, 2003. Net realized and unrealized losses on swap agreements in 2004 consisted of $1.8 million of net realized and
unrealized losses due to changes in swap agreement valuations and $11.6 million of periodic payments made pursuant to outstanding swap agreements (and classified as net realized losses on interest rate swap agreements in the Funds
consolidated financial statements). In 2003, the Fund had net realized and unrealized gains of $22.4 million due to swap agreement valuation changes, offset by $29.6 million of swap agreement periodic payments. The negative contribution to
Fund performance from changes in swap agreement valuations

19

in 2004 was due to the timing of terminating certain
outstanding swap agreements, offset in part by swaps held throughout the year
increasing modestly in value as a result of increases in swap rates on swap
agreements with maturities comparable to those of the Funds swap agreements.
The positive contribution to 2003 Fund performance from changes in swap
agreement valuations was attributable to a rise in swap rates during the year
and, in 2003, swap agreements entered into by the Fund approaching their
optional termination dates.

During the year ended December 31, 2004, the Fund
terminated certain outstanding swap agreements and realized a loss of
approximately $2.4 million



|(b) Liquidity and Capital
      Resources.
|------------------------------------------

Outstanding Borrowings.The Fund has entered into the Credit Facility primarily to finance the
Funds real estate investments and to satisfy the liquidity needs of the Fund.
In the future, the Fund may increase the size of the Credit Facility (subject to
lender consent) and the amount of outstanding borrowings thereunder. As of
December 31, 2005, the Fund had outstanding borrowings of $304.0 million and
unused loan commitments of $104.5 million under the Credit Facility.

As of December 31, 2005, Brazos and Bel Stamford had
outstanding borrowings consisting of fixed-rate secured mortgage debt
obligations of $229.2 million and $221.2 million, respectively.

Liquidity.The
Fund may redeem shares of Belvedere Company at any time. Both Belvedere Company
and the Portfolio normally follow the practice of satisfying redemptions
primarily by distributing securities drawn from the Portfolio. Belvedere Company
and the Portfolio may also satisfy redemptions by distributing cash. As of
December 31, 2005, the Portfolio had cash totaling $0.1 million. The Portfolio
participates in a $150.0 million multi-fund unsecured line of credit agreement
with a group of banks. The Portfolio may temporarily borrow from the line of
credit to satisfy redemption requests in cash or to settle investment
transactions. The Portfolio had borrowings of $8.0 million outstanding at
December 31, 2005. To ensure liquidity for investors in the Portfolio, the
Portfolio may not invest more than 15% of its net assets in illiquid assets. As
of December 31, 2005, illiquid assets (consisting of restricted securities not
available for current public sale) constituted 0.03% of the net assets of the
Portfolio.

The liquidity of Belmar Realtys investment in
Brazos is extremely limited, and relies principally upon the liquidation
agreement with ProLogis that is described in "Real Estate Joint Venture
Investments" under "The Funds Real Estate Investments" in Item 1. Transfers of
Belmar Realtys interest in Brazos to parties other than ProLogis are restricted
by terms of Brazos operative agreements and lender consent requirements. The
Partnership Preference Units held by Belmar Realty are not registered under the
Securities Act and are subject to substantial restrictions on transfer. As such,
they are considered illiquid. The liquidity of Bel Stamford is also extremely
limited.



|(c) Off-Balance Sheet
      Arrangements.
|-----------------------------------------

The Fund is required to disclose off-balance sheet
arrangements that either have, or are reasonably likely to have, a current or
future effect on its financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that is material to Shareholders. An off-balance sheet
arrangement includes any contractual arrangement to which an unconsolidated
entity is a party and under which the Fund has certain specified obligations. As
of December 31, 2005, the Fund did not have any such off-balance sheet
arrangements.

20

(d) The Funds Contractual
Obligations.

The following table sets forth the amounts of
payments due under the specified contractual obligations outstanding on December
31, 2005:

|                                          |  |              |  |             |  |             |  | Payments due: |  |              |  |              |  |      
|----------------------------------------- |  | ------------ |  | ----------- |  | ----------- |  | ------------- |  | ------------ |  | ------------ |  | -----
|                                         
|                                          |  |              |  | Less than 1 |  |             |  |               |  |              |  | More than 5 
|Type of Obligation                        |  | Total        |  |             |  | Year        |  | 1-3 Years     |  | 3-5 Years    |  |              |  | Years
|                                         
|Long Term Debt:                           |  |              |  |             |  |             |  |               |  |              |  |              |  |      
|Mortgage Debt(1)                          |  | $450,367,515 |  | $5,044,219  |  | $11,019,555 |  | $12,480,212   |  | $421,823,529
|Borrowings under Credit
      Facility(2) |  | $304,000,000 |  | $           |  |            |  | $             |  |             |  | $304,000,000 |  | $    
|Purchase Obligations(3)                   |  |              |  |             |  |             |  |               |  |              |  |              |  |      
|Other Long Term Liabilities:              |  |              |  |             |  |             |  |               |  |              |  |              |  |      
|Interest Rate Swap
      Agreements(4)    |  | $78,953,468  |  | $17,614,924 |  | $35,229,848 |  | $26,108,696   |  | $            |  |            
|                                         
|Total                                     |  | $833,320,983 |  | $22,659,143 |  | $46,249,403 |  | $342,588,908  |  | $421,823,529
|                                          |  |              |  |             |  |             |  |               |  |             

|(1) | The property held by Belmar Realty is
      financed in part through mortgage notes issued to Brazos and Bel Stamford.
      The mortgage notes are secured by the underlying property and are without
      recourse to the other assets of the Fund or Belmar Realty, as described in
      "Risks of Real Estate Investments" in Item 7A(b). The mortgage notes
      mature between 2012 and 2016. The mortgage notes cannot be prepaid or
      otherwise disposed of without incurring a substantial prepayment penalty
      unless in conjunction with the sale of the associated property.                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | To finance its real estate investments, the
      Fund has entered into a Credit Facility as described in "Liquidity and
      Capital Resources" above. The Credit Facility is secured by a pledge of
      the Funds assets, excluding the assets of Brazos and Bel Stamford, and
      expires on June 25, 2010. The Credit Facility is primarily used to finance
      the Funds equity in its real estate investments and will continue to be
      used for such purpose in the future.                                                                                                                                                                                                                                                                                          
|   
|(3) | The Fund and Belmar Realty have entered
      into agreements with certain service providers pursuant to which the Fund
      and Belmar Realty pay fees as a percentage of assets. These fees include
      fees paid to Eaton Vance and its affiliates (which are described in Item
      13). These agreements generally continue indefinitely unless terminated by
      the Fund or Belmar Realty (as applicable) or the service provider. For the
      year ended December 31, 2005, fees paid to Eaton Vance and its affiliates
      equaled approximately 1.08% of the Funds net assets. Because these fees
      are based on the Funds assets (which will fluctuate over time) it is not
      possible to specify the dollar amounts payable in the future.               
|   
|(4) | The Fund has entered into interest rate
      swap agreements to fix the cost of borrowings under the Credit Facility
      used to acquire equity in real estate investments. Pursuant to the
      interest rate swap agreements, the Fund makes cash payments to MLCS at
      fixed rates in exchange for floating rate payments from MLCS that
      fluctuate with one-month LIBOR. The amounts disclosed in the table
      represent the fixed interest amounts payable by the Fund. The periodic
      floating rate payments that the Fund expects to receive pursuant to the
      agreements reduce the fixed interest cost to the Fund. The swap agreements
      expire on June 25, 2010, subject to the Funds right to terminate earlier
      in the case of some swaps.
|   



|(e) Critical Accounting
      Estimates.
|----------------------------------------

The Funds consolidated financial statements are
prepared in accordance with GAAP. The preparation of these financial statements
requires the Fund to make estimates, judgments and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses. Estimates are
deemed critical when a different estimate could have reasonably been used or
where changes in the estimate are reasonably likely to occur from period to
period, and where such different or changed estimates would materially impact
the Funds financial condition, changes in financial condition or results of
operations. The Funds significant accounting policies are discussed in Note 2
of the notes to the consolidated financial statements; critical estimates
inherent in these accounting policies are discussed in the following
paragraphs.

The Fund has determined that the valuation of the
Funds real estate investments (including properties and other assets owned by
Belmar Realtys controlled subsidiaries, the allocation of equity interest in
Real Estate Joint Ventures, the Partnership Prefrence Units and the Net Leased
Property) involve critical estimates. The Funds investments in real estate are
an important component of its total investment program. Market prices for these
investments are not readily available and therefore the investments are stated
in the Funds consolidated financial statements at estimated fair value. The
estimated fair value of an investment represents the amount at which Boston
Management believes the investment could be

21

sold in a current transaction between willing
parties in an orderly disposition, that is, other than in a forced or
liquidation sale. The Fund reports the estimated fair value of its real estate
investments on its consolidated statement of assets and liabilities, with any
changes to estimated fair value charged to unrealized appreciation or
depreciation in the Funds consolidated statement of operations.

The need to estimate the fair value of the Funds
real estate investments introduces uncertainty into the Funds reported
financial condition and performance because:

- such assets are, by their nature, difficult to value and
  estimated values may not accurately reflect what the Fund could realize in a current sale between willing parties;
- property appraisals and other factors used to determine the
  estimated fair value of the Funds real estate investments depend on estimates of future operating results and supply
  and demand assumptions that may not reflect actual
  current market conditions and full consideration of all factors relevant to
  valuations;
- property appraisals and other factors used to determine the
  estimated fair value of the Funds real estate investments are not continuously updated and therefore may not be
  current as of specific dates; and
- if the Fund were forced to sell illiquid assets on a
  distressed basis, the proceeds may be substantially less than stated values.

As of December 31, 2005, the estimated fair value of
the Funds real estate investments represented 24.5% of the Funds total assets.
As of December 31, 2005, adjusting for the minority interest of ProLogis, the
principal minority investor in Brazos, the Funds real estate investments
represented 31.7% of the Funds net assets. The estimated fair value of the
Funds real estate investments may change due to changes in market conditions
and changes in valuation assumptions made by property appraisers and third party
valuation service providers as described below.

As noted in Item 1, to satisfy certain requirements
of the Code, the Fund invests at least 20% of its gross assets (calculated in
the manner prescribed) in real estate investments (the 20% requirement). Should
the estimated fair value of the Funds real estate investments decrease, the
Fund may be required to acquire additional real estate investments to satisfy
the 20% requirement. Because the Fund acquires real estate investments with
borrowings, acquisitions of additional real estate investments would increase
the Funds borrowings under the Credit Facility and reduce the amounts otherwise
available to the Fund thereunder. Should the estimated fair value of the Funds
real estate investments increase, real estate investments could represent a
larger percentage of the Funds investment portfolio.

Partnership Preference Units.Boston Management determines the estimated fair
value of the Funds Partnership Preference Units based on analysis and
calculations performed primarily on a monthly basis by a third party service
provider. The service provider calculates an estimated price and yield (before
accrued distributions) for each issue of Partnership Preference Units based on
descriptions of such issue provided by Boston Management and certain publicly
available information including, but not limited to, the trading prices of
publicly issued debt and/or preferred stock instruments of the same or similar
issuers, which may be adjusted to reflect the illiquidity and other structural
characteristics of the Partnership Preference Units (such as call provisions).
Daily valuations of Partnership Preference Units are determined by adjusting
prices from the service provider to account for accrued distributions under the
terms of the Partnership Preference Units. If changes in relevant markets,
events that materially affect an issuer or other events that have a significant
effect on the price or yield of Partnership Preference Units occur, relevant
prices or yields may be adjusted to take such occurrences into
account.

Valuations of Partnership Preference Units are
inherently uncertain because they are based on adjustments from the market
prices of publicly-traded debt and/or preferred stock instruments of the same or
similar issuers to account for the Partnership Preference Units illiquidity,
structural features (such as call provisions) and other relevant factors. Each
month Boston Management reviews the analysis and calculations performed by the
service provider. Boston Management generally relies on the assumptions and
judgments made by the service provider in estimating the fair value of the
Partnership Preference Units. If the assumptions and estimates used by the
service provider to calculate prices for Partnership Preference Units were to
change, it could materially impact the estimated fair value of the Funds
holdings of Partnership Preference Units.

Real Estate Joint
Ventures.Boston
Management determines the estimated fair value of the Funds interests in Real
Estate Joint Ventures based primarily on annual appraisals of the properties
owned by such Real Estate Joint Ventures (provided

22

such appraisals are available) and an allocation of the equity value of a Real Estate Joint Venture between the Fund and the Operating Partner. Appraisals of Real Estate Joint Venture properties may be conducted more frequently than once a
year if Boston Management determines that significant changes in economic circumstances that may materially impact estimated property values have occurred since the most recent appraisal.

In deriving the estimated value of a property, an appraiser considers numerous factors, including the expected future cash flows from the property, recent sale prices for similar properties and, if applicable, the replacement cost of the
property, in order to derive an indication of the amount that a prudent, informed purchaser-investor would pay for the property. More specifically, the appraiser considers the revenues and expenses of the property and the estimated future growth or
decline thereof, which may be based on tenant quality, property condition, change in market or submarket conditions, market trends, interest rates, inflation rates or other factors deemed relevant by the appraiser. The appraiser estimates operating
cash flows from the property and the sale proceeds of a hypothetical transaction at the end of a hypothetical holding period. The cash flows are discounted to their present values using a market-derived discount rate and are added together to obtain
a value indication. This value indication is compared to the value indication that results from applying a market-derived capitalization rate to a single years stabilized net operating income for the property. The assumed capitalization rate
may be extracted from local market transactions or, when transaction evidence is lacking, obtained from trade sources. The appraiser considers the value indications derived by these two methods, as well as the value indicated by recent market
transactions involving similar properties, in order to produce a final value estimate for the property.

Appraisals of properties owned by Real Estate Joint Ventures are conducted by independent appraisers who are licensed in their respective states and not affiliated with Eaton Vance or the Operating Partner. Each appraisal is conducted in
accordance with the Uniform Standards Board and the Code of Professional Appraisal Practice of the Appraisal Institute (as well as other relevant standards). Boston Management reviews the appraisal of each property and generally relies on the
assumptions and judgments made by the appraiser. Property appraisals are inherently uncertain because they apply assumed discount rates, capitalization rates, growth rates and inflation rates to the appraisers estimated stabilized cash flows,
and due to the unique characteristics of a property, which may affect its value but may not be taken into account. If the assumptions and estimates used by the appraisers to determine the value of the properties owned by the Real Estate Joint
Ventures were to change, it could materially impact the estimated fair value of the Real Estate Joint Ventures. When a property owned by a Real Estate Joint Venture has not been appraised (such as when the Real Estate Joint Venture recently acquired
the property), Boston Management determines the estimated fair value of the property based on the transaction value of the property, which equals the total acquisition cost of the property exclusive of certain legal and transaction costs, provided
such amount is deemed indicative of fair value. Once an appraisal of a property has been conducted, Boston Management bases the estimated fair value of the property principally on the estimated value as determined by the appraiser. Appraisals of
newly acquired properties are conducted in the year following the acquisition. If the initial appraised value of a newly acquired property differs significantly from the transaction value of the property, it may materially impact the estimated fair
value of the Real Estate Joint Venture that holds the property. Interim valuations of Real Estate Joint Venture assets may be adjusted to reflect significant changes in economic circumstances or recent evaluations of similar properties, and the
results of operations and distributions. As of December 31, 2005, all of the properties owned by Brazos were appraised during the year.

Boston Management determines the estimated fair value of the Funds equity interest in a Real Estate Joint Venture based on an estimate of the allocation of equity interests between the Fund and the Operating Partner. This allocation is
generally calculated by a third party specialist, using current appraisals of the properties owned by the Real Estate Joint Venture. The specialist uses a financial model that considers (i) the terms of the joint venture agreement relating to
allocation of distributable cash flow, (ii) the expected duration of the joint venture, and (iii) the projected property values and cash flows from the properties based on estimates used in the independent valuations. The estimated allocation of
equity interests between the Fund and the Operating Partner of a Real Estate Joint Venture is prepared quarterly and reviewed by Boston Management. If the estimate of the allocation of equity interests in the Real Estate Joint Venture were to change
(for example, because the appraisers estimate of property values or projected cash flows of the Real Estate Joint Venture changed), it may materially impact the estimated fair value of the Funds equity interest in the Real Estate Joint
Venture.

Net Leased Property.Boston Management determines the estimated fair value of Net Leased Property based on an annual appraisal of the leased fee market value of the property. These appraisals are conducted by
independent, licensed appraisers in a manner similar to the appraisals of the properties owned by a Real Estate Joint Venture (described above). In deriving a leased fee market value for Net Leased Property, an appraiser considers the owners
rights as specified by the contract terms of the lease with the tenant of the properties as well as the probability of the tenant performing its lease obligations based in part on the tenants financial status. This form of appraisal assumes
that the amount that a prudent,

23

informed purchaser-investor would pay for Net Leased
Property relates to the predictability of the expected income stream and that a
more predictable income stream would result in a higher estimated
value.

Boston Management reviews the appraisal of Net
Leased Property and generally relies on the assumptions and judgments made by
the appraiser. Appraisals of Net Leased Property may be conducted more
frequently than once a year if Boston Management determines that significant
changes in economic circumstances have occurred since the most recent appraisal.
Appraisals of Net Leased Property are inherently uncertain because they apply
assumed discount rates, capitalization rates, growth rates and inflation rates
to the expected income stream from the property as defined by the contract terms
of the lease, and due to the unique characteristics of the property, which may
affect its value but cannot be taken into account. If the assumptions and
estimates used by the appraisers to determine the value of the property owned by
the Funds subsidiary were to change, it could materially impact the estimated
fair value of the Funds equity interest in Net Leased Property.

Item 7A. Quantitative and Qualitative
Disclosures About Market Risk.

(a) Quantitative Information About Market
Risk.

Interest Rate Risk.The Funds primary exposure to interest rate risk arises from its real
estate investments that are financed by the Fund with floating rate borrowings
under the Credit Facility and by fixed-rate secured mortgage debt obligations of
Brazos and Bel Stamford. Partnership Preference Units are fixed rate instruments
whose values will generally decrease when interest rates rise and increase when
interest rates fall. The interest rates on borrowings under the Credit Facility
are reset at regular intervals based on one-month LIBOR. The Fund has entered
into interest rate swap agreements to fix the cost of a substantial portion of
its borrowings under the Credit Facility used to acquire equity in real estate
investments and to mitigate in part the impact of interest rate changes on the
Funds net asset value. Under the terms of the interest rate swap agreements,
the Fund makes cash payments at fixed rates in exchange for floating rate
payments that fluctuate with one-month LIBOR. The Funds interest rate swap
agreements will generally increase in value when interest rates rise and
decrease in value when interest rates fall. In the future, the Fund may use
other interest rate hedging arrangements (such as caps, floors and collars) to
fix or limit borrowing costs. The use of interest rate hedging arrangements is a
specialized activity that can expose the Fund to significant loss.

The following table summarizes the contractual
maturities and weighted-average interest rates associated with the Funds
significant non-trading financial instruments. The Fund has no market risk
sensitive instruments held for trading purposes. This information should be read
in conjunction with Notes 7 and 8 to the Funds consolidated financial
statements appearing on pages 39 to 61 of this Annual Report on Form
10-K.

24

|                                                     |  |                                                                                                                               |  |            |  |                                           |  | Interest Rate Sensitivity                 |  |              |  |            |  |              |  |             
|---------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------- |  | ---------- |  | ----------------------------------------- |  | ----------------------------------------- |  | ------------ |  | ---------- |  | ------------ |  | ------------
|                                                     |  |                                                                                                                               |  |            |  |                                           |  | Cost,
      Principal (Notional) Amount   |  |              |  |            |  |              |  |             
|                                                     |  |                                                                                                                               |  |            |  |                                           |  | by Contractual Maturity and Callable Date |  |              |  |            |  |             
|                                                     |  |                                                                                                                               |  |            |  | for the Twelve Months Ended December 31,* |  |                                           |  |              |  |           
|                                                    
|                                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|                                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|                                                     |  |                                                                                                                               |  | 2006       |  | 2007                                      |  | 2008                                      |  | 2009         |  |            |  | 2010         |  | Thereafter  
|                                                    
|Rate sensitive liabilities:                          |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|                                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Long-term debt:                                      |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|                                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Fixed-rate mortgages                                 |  | $5,044,219                                                                                                                    |  | $5,360,226 |  | $5,659,329                                |  | $6,050,578                                |  | $            |  | 6,429,634  |  | $421,823,529 |  | $450,367,515
|Average interest rate                                |  | 6.01%                                                                                                                         |  | 6.01%      |  | 6.01%                                     |  | 6.01%                                     |  |              |  | 6.01%      |  | 5.70%        |  |             
|                                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Variable-rate Credit Facility                        |  |                                                                                                                               |  |            |  |                                           |  |                                           |  | $304,000,000 |  |            |  | $304,000,000 |  | $304,000,000
|Average interest rate                                |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  | 4.60 %     |  |              |  |             
|                                                    
|Rate sensitive derivative                            |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|financial instruments:                               |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|                                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Pay fixed / receive variable                         |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|interest rate swap agreements                        |  |                                                                                                                               |  |            |  |                                           |  |                                           |  | $388,668,000 |  |            |  | $388,668,000 |  | $ 10,303,043
|Average pay rate                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  | 4.53%      |  |              |  |             
|Average receive rate                                 |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  | 4.59%      |  |              |  |             
|                                                    
|Rate sensitive investments:                          |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|                                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Fixed-rate Partnership                               |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Preference Units:                                    |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|                                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|MHC Operating Limited                                |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Partnership, 8.0625% Series                          |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|D Cumulative Redeemable                              |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Perpetual Preference Units,                          |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Callable 3/24/10, Current                            |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Yield: 7.97%                                         |  |                                                                                                                               |  |            |  |                                           |  |                                           |  | $            |  | 20,544,240 |  |              |  | $           
|                                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|PSA Institutional Partners,                          |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|L.P., 6.4% Series NN                                 |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Cumulative Redeemable                                |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Perpetual Preferred Units,                           |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Callable 3/17/10, Current                            |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Yield: 6.54%                                         |  |                                                                                                                               |  |            |  |                                           |  |                                           |  | $            |  | 13,387,322 |  |              |  | $           
|                                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Vornado Realty, L.P., 6.75%                          |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Series D-14 Cumulative                               |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Redeemable Preferred Units,                          |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Callable 9/9/10,                                     |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |              |  |             
|Current Yield: 6.59%(1)                              |  |                                                                                                                               |  |            |  |                                           |  |                                           |  | $            |  | 20,001,000 |  |              |  | $           
|                                                    
|*                                                    |  | The amounts listed reflect the Funds
      positions as of December 31, 2005. The Funds current positions may
      differ. |  |            |  |                                          
|(1)                                                  |  | Belmar Realtys interest in these
      Partnership Preference Units is held through Belvorn.                                 |  |            |  |                                           |  |                                          
|                                                    
|(b)
      Qualitative Information About Market Risk. |  |                                                                                                                               |  |            |  |                                           |  |                                           |  |              |  |            |  |             

Risks Associated with Equity Investing.The Fund invests primarily in a diversified
portfolio of common stocks and is thereby subject to general stock market risk.
There can be no assurance that the performance of the Fund will match that
of

25

the U.S. stock market or that of other equity funds. In managing the Portfolio for long-term, after-tax returns, Boston Management generally seeks to avoid or minimize sales of securities with large accumulated capital gains, including
contributed securities. Such securities constitute a substantial portion of the assets of the Portfolio. Although the Portfolio may utilize certain management strategies in lieu of selling appreciated securities, the Portfolios, and hence the
Funds, exposure to losses during stock market declines may nonetheless be higher than funds that do not follow a general policy of avoiding sales of highly-appreciated securities.

Risks of Investing in Foreign Securities.The Portfolio invests in securities issued by foreign companies and the Fund may acquire foreign investments. Foreign investments involve considerations and possible risks
not typically associated with investing in the United States. The value of foreign investments to U.S. investors may be adversely affected by changes in currency rates. Foreign brokerage commissions, custody fees and other costs of investing are
generally higher than in the United States, and foreign investments may be less liquid, more volatile and subject to more government regulation than in the United States. Foreign investments could be adversely affected by other factors not present
in the United States, including expropriation, confiscatory taxation, lack of uniform accounting and auditing standards, armed conflict, and potential difficulty in enforcing contractual obligations. These risks can be more significant for
investments in emerging markets.

Risks of Certain Investment Techniques.In managing the Portfolio, Boston Management may purchase or sell derivative instruments (which derive their value by reference to other securities, indexes, instruments or
currencies) to hedge against securities price declines and currency movements, to add investment exposure to individual securities and groups of securities and to enhance returns. Such transactions may include, without limitation, the purchase and
sale of futures contracts on stocks and stock indexes and options thereon, the purchase of put options and the sale of call options on securities held, equity swaps, forward sales of stocks, and the purchase and sale of forward currency exchange
contracts and currency futures. The Portfolio may engage in short sales of individual securities held and short sales of index or basket securities whose constituents are held in whole or in part. The Portfolio may enter into private contracts for
the forward sale of stock held and may also lend portfolio securities.

The use of these investment techniques is a specialized activity that may be considered speculative and which can expose the Fund and the Portfolio to significant risk of loss. Successful use of these investment techniques is subject to the
ability and performance of the investment adviser. The Funds and the Portfolios ability to achieve their investment objectives may be adversely affected by the use of these techniques. The writer of an option or a party to an equity swap
may incur losses that substantially exceed the payments, if any, received from a counterparty. Forward sales, swaps, caps, floors, collars and over-the-counter options are private contracts in which there is also a risk of loss in the event of a
default on an obligation to pay by the counterparty. Such instruments may be difficult to value, may be illiquid and may be subject to wide swings in valuation caused by changes in the price of the underlying security, index, instrument or currency.
In addition, if the Fund or the Portfolio has insufficient cash to meet margin, collateral or settlement requirements, it may have to sell assets to meet such requirements. Alternatively, should the Fund or the Portfolio fail to meet these
requirements, the counterparty or broker may liquidate positions of the Fund or the Portfolio. The Portfolio may also have to sell or deliver securities holdings in the event that it is not able to purchase securities on the open market to cover its
short positions or to close out or satisfy an exercise notice with respect to options positions it has sold. In any of these cases, such sales may be made at prices or in circumstances that Boston Management considers unfavorable.

The Portfolios ability to utilize covered short sales, certain equity swaps, forward sales, futures and certain equity collar strategies (combining the purchase of a put option and the sale of a call option) as a tax-efficient management
technique with respect to holdings of appreciated securities is limited to circumstances in which the hedging transaction is closed out within 30 days of the end of the Portfolios taxable year in which the hedging transaction was initiated and
the underlying appreciated securities position is held unhedged for at least the next 60 days after such hedging transaction is closed. In addition, dividends received on stock for which the Portfolio is obligated to make related payments (pursuant
to a short sale or otherwise) with respect to positions in substantially similar or related property are subject to federal income taxation at ordinary rates and do not qualify for favorable tax treatment. Also, holding periods required to receive
tax-advantaged treatment of qualified dividends on a stock are suspended whenever the Portfolio has an option (other than a qualified covered call option not in the money when written) or contractual obligation to sell or an open short sale of
substantially identical stock, is the grantor of an option (other than a qualified covered call option not in the money when written) to buy substantially identical stock or has diminished risk of loss in such stock by holding positions with respect
to substantially similar or related property. There can be no assurance that counterparties will at all times be willing to enter into covered short sales, forward sales of stocks, interest rate hedges, equity swaps and other derivative instrument
transactions on terms satisfactory to the Fund or the Portfolio. The Funds and the Portfolios ability to enter into such transactions may also be

26

limited by covenants under the Funds Credit
Facility, the federal margin regulations and other laws and regulations. The
Portfolios use of certain investment techniques may be constrained because the
Portfolio is a diversified, open-end management investment company registered
under the 1940 Act and because other investors in the Portfolio are regulated
investment companies under Subchapter M of the Code. Moreover, the Fund and the
Portfolio are subject to restrictions under the federal securities laws on their
ability to enter into transactions in respect of securities that are subject to
restrictions on transfer pursuant to the Securities Act.

Risks of Real Estate Investments.The success of the Funds real estate investments
depends in part on many factors related to the real estate market. These factors
include, without limitation, general economic conditions, the supply and demand
for different types of real properties, the financial health of tenants,
changing transportation and logistics patterns (in the case of industrial
distribution properties), the timing of lease expirations and terminations,
fluctuations in rental rates and operating costs, exposure to adverse
environmental conditions and losses from casualty or condemnation, fluctuations
in interest rates, availability of financing, managerial performance, government
rules and regulations, and acts of God (whether or not insured against). There
can be no assurance that Belmar Realtys ownership of real estate investments
will be an economic success.

The success of investments in Partnership Preference
Units depends upon factors relating to the issuing partnerships that may affect
such partnerships profitability and their ability to make distributions to
holders of Partnership Preference Units. Interests in Real Estate Joint Ventures
and Partnership Preference Units are not registered under the federal securities
laws and are subject to restrictions on transfer. Due to their illiquidity, they
may be difficult to value and the ongoing value of the investments is uncertain.
See "Critical Accounting Estimates" in Item 7(e). Investments in Partnership
Preference Units are valued primarily by referencing market trading prices for
comparable preferred equity securities or other fixed-rate instruments having
similar investment characteristics. The valuations of Partnership Preference
Units fluctuate over time to reflect, among other factors, changes in interest
rates, changes in the perceived riskiness of such units (including call risk),
changes in the perceived riskiness of comparable or similar securities trading
in the public market and the relationship between supply and demand for
comparable or similar securities trading in the public market. The valuation of
Partnership Preference Units will be adversely affected by increases in interest
rates and increases in the perceived riskiness of such units or comparable or
similar securities. Fluctuations in the value of Partnership Preference Units
derived from changes in general interest rates can be expected to be offset in
part (but not entirely) by changes in the value of interest rate swap agreements
or other interest rate hedges entered into by the Fund with respect to its
borrowings under the Credit Facility. Fluctuations in the value of Partnership
Preference Units that are derived from other factors besides general interest
rate movements (including issuer-specific and sector-specific credit concerns,
property or tenant-specific concerns, and changes in interest rate spread
relationships) will not be offset by changes in the value of interest rate swap
agreements or other interest rate hedges entered into by the Fund. Because the
Partnership Preference Units are not rated by a nationally-recognized rating
agency, they may be subject to more credit risk than securities that are rated
investment grade.

The performance of Real Estate Joint Ventures is
substantially influenced by the property management capabilities of the
Operating Partner and conditions in the specific real estate sub-markets in
which the properties owned by the Real Estate Joint Ventures are located. The
Operating Partner is subject to substantial conflicts of interest in
structuring, operating and winding up the Real Estate Joint Ventures. The
Operating Partner has an economic incentive to maximize the prices at which it
sells properties to the Real Estate Joint Venture and has a similar incentive to
minimize the prices at which it may acquire properties from the Real Estate
Joint Venture. The Operating Partner may devote greater attention or more
resources to managing its wholly-owned properties than properties held by the
Real Estate Joint Ventures. Future investment opportunities identified by the
Operating Partner will more likely be pursued independently, rather than
through, the Real Estate Joint Ventures. Financial difficulties encountered by
the Operating Partner in its other businesses may interfere with the operations
of the Real Estate Joint Ventures.

Belmar Realtys investment in Real Estate Joint
Ventures may be significantly concentrated in terms of geographic regions,
property types and operators, increasing the Funds exposure to regional,
property type and operator-specific risks. Given a lack of stand-alone operating
history and relatively high financial leverage, the Real Estate Joint Ventures
is not equivalent in quality to real estate companies whose preferred equity or
senior debt securities are rated investment grade. Distributable cash flows from
a Real Estate Joint Ventures may not be sufficient for Belmar Realty to receive
its fixed annual preferred return, or any returns in excess thereof.

The debt of Brazos is fixed-rate, secured by the
underlying properties and without recourse to Belmar Realty, the Fund and
Shareholders. In connection with Real Estate Ventures that may be acquired in
the future, Belmar Realty and the Fund may be directly or indirectly responsible
for certain liabilities constituting exceptions to the generally non-recourse
nature of the

27

mortgage indebtedness, including liabilities associated with fraud, misrepresentation, misappropriation of funds, or breach of material covenants, and liabilities arising from environmental conditions involving or affecting Real Estate Joint
Venture properties. To the extent practicable, the Fund and Belmar Realty will seek indemnification from Operating Partners for certain of such potential liabilities. The availability of financing and other financial conditions can have a material
impact on property values and therefore on the value of Real Estate Joint Venture assets. Mortgage debt of the Real Estate Joint Ventures normally cannot be refinanced prior to maturity without substantial penalties.

The ongoing value of Belmar Realtys investments in Brazos is substantially uncertain. The real property held through Brazos is stated at the estimated fair value as described in Item 7(e). The policies for valuing real estate investments
involve significant judgments that are based upon a number of factors, which may include, without limitation, general economic conditions, the supply and demand for different types of real properties, the financial health of tenants, the timing of
lease expirations and terminations, fluctuations in rental rates and operating costs, exposure to adverse environmental conditions and losses from casualty or condemnation, interest rates, availability of financing, managerial performance and
government rules and regulations. Given that such valuations include many assumptions, values may differ from amounts ultimately realized.

Belmar Realtys investments in Net Leased Property are subject to general real estate market risks similar to Real Estate Joint Ventures. Investments in Net Leased Property are also subject to risks specific to this type of investment,
including a concentration of risk exposure to specific real estate submarkets and individual properties and tenants. Principal among the risks of investing in the Net Leased Property is the risk that a major tenant fails to satisfy its lease
obligations due to financial distress or other reasons. A tenants failure to meet its lease obligations would expose Belmar Realty to substantial loss of income without a commensurate reduction in debt service costs and other expenses, and
would transfer to Belmar Realty all the costs, expenses and liabilities of property ownership and management borne by the tenant under the terms of the lease. Re-leasing a property could involve considerable time and expense. Re-leasing
opportunities may be limited by the nature and location of the property, which may not be well suited to the needs of other possible tenants. Even if a property is re-leased, the property may not generate sufficient rental income to cover debt
service and other expenses.

Net Leased Property is generally illiquid, and the ongoing value of Belmar Realtys investments in Net Leased Property is substantially uncertain. Net Leased Property held is generally stated at estimated fair value based on annual
appraisals. See "Critical Accounting Estimates" in Item 7(e). Because the value of Bel Stamford reflects in part the creditworthiness of its principal tenant, any change in the financial status of the tenant could effect the appraised value of the
property and the value realized upon the disposition of such property. Tenants may hold rights to renew or extend expiring leases, and exercise of such rights would extend Belmar Realtys risk exposure to a particular tenant beyond the initial
lease term. A tenant may also hold options to purchase Net Leased Property, including options to purchase at below market levels. The value received upon the disposition of Net Leased Property will depend on real estate market conditions, lease and
mortgage terms, tenant credit quality, tenant purchase options, lender approvals and other factors affecting valuation as may then apply. Because a sale of Net Leased Property is not expected to occur for many years, market conditions and other
valuation factors at the time of sale cannot be predicted. Since the valuations of Net Leased Property assume an orderly disposition of assets, amounts realized in a distressed sale may differ substantially from stated values.

The mortgage debt associated with Net Leased Property is generally without recourse to Belmar Realty and the Fund, except certain liabilities associated with fraud, misrepresentation, misappropriation of funds, or breach of material covenants.
Mortgage debt associated with Net Leased Property generally cannot be refinanced prior to maturity without substantial penalties. The terms of the outstanding lease and mortgage debt obligations and restrictions on refinancing such debt may limit
Belmar Realtys ability to dispose of Net Leased Property.

Because the mortgage debt obligation of Bel Stamford is generally without recourse to Belmar Realty, the Fund and Shareholders, the potential loss from Belmar Realtys investments in Bel Stamford is normally limited to the amount of its
equity investment. The Fund and Belmar Realty may, however, be directly or indirectly responsible for certain liabilities constituting exceptions to the generally non-recourse nature of the mortgage indebtedness, including liabilities associated
with fraud, misrepresentation, misappropriation of funds, or breach of material covenants, and liabilities arising from environmental conditions involving or affecting Bel Stamford, increasing the potential for loss under extraordinary
circumstances.

Because all or substantially all of the rental payments on Net Leased Property generally is dedicated to servicing the associated mortgage debt, during the initial lease term Belmar Realty will not generate significant cash flow from the
investments to offset Belmar Realtys operating expenses and the cost of Fund borrowings used to finance Belmar Realtys

28

equity therein. Such costs and expenses must be provided from other sources of cash flow for Belmar Realty and the Fund, which may include additional Fund borrowings under the Credit Facility. Realized returns on investments in Net Leased
Property generally are deferred until the properties are sold or re-leased following the initial lease term.

Changes in the value of real estate investments and other factors will cause the performance of the Fund to deviate from the performance of the Portfolio. Over time, the performance of the Fund can be expected to be more volatile than the
performance of the Portfolio.

Risks of Interest Rate Swap Agreements.Interest rate swap agreements are subject to changes in valuation caused principally by movements in interest rates. Interest rate swap agreements are
private contracts in which there is a risk of loss in the event of a default on an obligation to pay by the counterparty. Interest rate swap agreements may be difficult to value and may be illiquid. Fluctuations in the value of Partnership
Preference Units derived from changes in general interest rates can be expected to be offset in part (but not entirely) by changes in the value of interest rate swap agreements applying to those Partnership Preference Units for which they were
purchased, or other interest rate hedges that may be entered into by the Fund with respect to its borrowings.

Risks of Leverage.Although intended to add to returns, the borrowing of funds to purchase real estate investments exposes the Fund to the risk that the returns achieved on the real estate investments will be lower
than the cost of borrowing to purchase such assets and that the leveraging of the Fund to buy such assets will therefore diminish the returns achieved by the Fund as a whole. In addition, there is a risk that the availability of financing will be
interrupted at some future time, requiring the Fund to sell assets to repay outstanding borrowings or a portion thereof. It may be necessary to make such sales at unfavorable prices. The Funds obligations under the Credit Facility are secured
by a pledge of its assets, excluding the assets of Brazos, and Bel Stamford. In the event of default, the lender could elect to sell assets of the Fund without regard to consequences of such action for Shareholders. The rights of the lender to
receive payments of interest on and repayments of principal of borrowings under the Credit Facility are senior to the rights of the Shareholders.

Under the terms of the Credit Facility, the Fund is not permitted to make distributions of cash or securities while there is an event of default outstanding under the Credit Facility. During such periods, the Fund would not be able to honor
redemption requests or make cash distributions. In addition, the rights of lenders under the mortgages used to finance Real Estate Joint Venture properties are senior to Belmar Realtys right to receive these distributions from the Real Estate
Joint Ventures.

29



|Item 8. Financial Statements and
      Supplementary Data.
|----------------------------------------------------------

The consolidated financial statements required by
Item 8 are contained on pages 39 to 78 of this Annual Report on Form 10-K. The
following is a summary of unaudited quarterly results of operations of the Fund
for the years ended December 31, 2005 and 2004.

|                                                                 |  |               |  |                 |  |                |  | 2005           |  |               |  |               |  |  
|---------------------------------------------------------------- |  | ------------- |  | --------------- |  | -------------- |  | -------------- |  | ------------- |  | ------------- |  | -
|                                                                 |  |              
|                                                                 |  |               |  | First           |  |                |  | Second         |  |               |  | Third         |  |  
|                                                                 |  |               |  | Quarter         |  |                |  | Quarter        |  |               |  | Quarter       |  |  
|                                                                 |  |              
|Investment income                                                |  | $ 17,100,772  |  | $17,818,390     |  | $16,781,782    |  | $  17,984,303 
|Minority interest in net income of controlled
      subsidiaries |  | $             |  | (236,262)       |  | $              |  | (233,619)      |  | $             |  | (289,744)     |  | $
|Net investment income                                            |  | $             |  | 3,540,718       |  | $              |  | 4,264,096      |  | $  3,118,039  |  | $   2,911,195
|Net increase (decrease) in net assets from operations            |  | $(34,347,079) |  | $               |  | 2,973,510      |  | $74,928,385    |  | $  60,996,422
|                                                                
|Per share data:(1)                                               |  |               |  |                 |  |                |  |                |  |               |  |               |  |  
|Investment income                                                |  | $             |  | 0.82            |  | $              |  | 0.87           |  | $             |  | 0.83          |  | $
|Net investment income                                            |  | $             |  | 0.17            |  | $              |  | 0.21           |  | $             |  | 0.15          |  | $
|Net increase (decrease) in net assets from operations            |  | $             |  | (1.65)          |  | $              |  | 0.14           |  | $             |  | 3.69          |  | $
|                                                                
|                                                                
|                                                                 |  |               |  |                 |  |                |  | 2004           |  |               |  |               |  |  
|                                                                 |  |              
|                                                                 |  |               |  | First           |  |                |  | Second         |  |               |  | Third         |  |  
|                                                                 |  |               |  | Quarter         |  | Quarter        |  | Quarter        |  | Quarter(2)   
|                                                                 |  |              
|Investment income                                                |  | $  22,676,223 |  | $21,556,022     |  | $   25,613,813 |  | $   22,830,443
|Minority interest in net income of controlled
      subsidiaries |  | $             |  | (48,115)        |  | $              |  | 46,387         |  | $             |  | (854,163)     |  | $
|Net investment income                                            |  | $   7,053,996 |  | $    
6,439,572 |  | $              |  | 5,704,716      |  | $             |  | 6,026,210    
|Net increase (decrease) in net assets from operations            |  | $  34,515,612 |  | $   34,699,315  |  | $(52,781,248)  |  | $118,535,107  
|                                                                
|Per share data:(1)                                               |  |               |  |                 |  |                |  |                |  |               |  |               |  |  
|Investment income                                                |  | $             |  | 1.02            |  | $              |  | 0.99           |  | $             |  | 1.20          |  | $
|Net investment income                                            |  | $             |  | 0.32            |  | $              |  | 0.30           |  | $             |  | 0.27          |  | $
|Net increase (decrease) in net assets from operations            |  | $             |  | 1.56            |  | $              |  | 1.59           |  | $             |  | (2.47)        |  | $

|(1) | Based on average Shares outstanding.                                                                                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | Certain amounts have been reclassified to
      conform with current year presentation. Amounts disclosed for minority
      interest in net income of controlled subsidiaries and net investment
      income for the year ended December 31, 2004 in the fourth quarter reflect
      a correction of a typographical error filed in the prior year.
|   

Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure.

There have been no changes in, or disagreements
with, accountants on accounting and financial disclosure.



|Item 9A. Controls and
      Procedures.
|---------------------------------------

Fund Governance.As the Funds manager, the complete and entire management, control and
operation of the Fund are vested in Eaton Vance. The Funds Chief Executive
Officer and Chief Financial Officer intend to report to the Board of Directors
of Eaton Vance, Inc. (the sole trustee of Eaton Vance) any significant
deficiency in the design or operation of internal control over financial
reporting which could adversely affect the Funds ability to record, process,
summarize and report financial data, and any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Funds internal control over financial reporting.

Disclosure Controls and Procedures.Eaton Vance, as the Funds manager, evaluated the
effectiveness of the Funds disclosure controls and procedures (as defined by
Rule 13a-15(e) of the 1934 Act) as of the end of the period covered by this
report, with the participation of the Funds Chief Executive Officer and Chief
Financial Officer. The Funds disclosure controls and procedures are the
controls and other procedures that the Fund designed to ensure that it records,
processes, summarizes and reports in a timely manner the information that the
Fund must disclose in reports that it files or submits to

30

the Securities and Exchange Commission. Based on
that evaluation, the Funds Chief Executive Officer and Chief Financial Officer
concluded that, as of December 31, 2005, the Funds disclosure controls and
procedures were effective.

Internal Control Over Financial Reporting.The Funds Chief Executive Officer and Chief
Financial Officer have established and maintain internal control over financial
reporting as defined in Rules 13a-15(f) and 15d-15(f) of the 1934 Act. Fund
managements report on internal control over financial reporting, including its
assessment of the Funds internal control over financial reporting, appears on
page 61 of this Annual Report on Form 10-K.



|Item 9B. Other
      Information.
|---------------------------------



|None.
|-----

31



|PART
  III
|----------

Item 10. Directors and Executive Officers of
the Registrant.



|(a)
  Management.
|-----------------

Pursuant to the Funds LLC Agreement, the Funds
manager, Eaton Vance, has the authority to conduct the Funds business. Eaton
Vance appointed Thomas E. Faust Jr. and Michelle A. Green to serve indefinitely
as the Funds Chief Executive Officer and Chief Financial Officer, respectively,
on October 16, 2002. Information about Mr. Faust appears below. Ms. Green, 36,
is a Vice President of Eaton Vance and Boston Management. She also serves as
Chief Financial Officer of Belair Capital Fund LLC, Belcrest Capital Fund LLC,
Belport Capital Fund LLC and Belrose Capital Fund LLC and as an officer of
various other investment companies managed by Eaton Vance or Boston Management.
Ms. Green has been an employee of Eaton Vance since 1997. As members of the
Eaton Vance organization, Mr. Faust and Ms. Green receive no compensation from
the Fund for serving as Fund officers. There are no other officers of the Fund.
The Fund does not have a board of directors or similar governing
body.

The Board of Directors of Eaton Vance, Inc., the
sole trustee of Eaton Vance, oversees the accounting and financial reporting
processes of the Fund and audits of the Funds financial statements. The
directors of Eaton Vance, Inc. are James B. Hawkes and William M. Steul. The
Funds audit committee financial expert (as that term is defined in Item
7(d)(3)(iv) of Schedule 14A under the Exchange Act) is Mr. Steul. Messrs. Hawkes
and Steul are senior officers of Eaton Vance and, as such, are not independent
of Fund management. Information about Mr. Hawkes and Mr. Steul appears
below.

Boston Management is investment adviser to the Fund
and the Portfolio and manager of Belmar Realty. The portfolio manager of the
Fund and the Portfolio is Duncan W. Richardson, Executive Vice President and
Chief Equity Investment Officer of Eaton Vance and Boston Management. Mr.
Richardson has been employed by the Eaton Vance organization since 1987 and has
served as portfolio manager of the Fund since its inception and of the Portfolio
and its predecessor since 1990. A majority of Mr. Richardsons time is spent
managing the Portfolio and related entities. Boston Management has an
experienced team of analysts that provides Mr. Richardson with research and
recommendations on investments.

The directors of Belmar Realty are Mr. Faust and
Alan R. Dynner, each of whom is described below. William R. Cross is the
President and portfolio manager of Belmar Realty and the head of Boston
Managements real estate investment group which has primary responsibility for
providing research and analysis relating to the Funds real estate investments
held through Belmar Realty. Mr. Cross is a Vice President of Eaton Vance and
Boston Management and has been employed by the Eaton Vance organization since
1996. A majority of Mr. Crosss time is spent managing the real estate
investments of Belmar Realty and the real estate affiliates of other investment
funds advised by Boston Management. Mr. Cross, Mr. Carlson and Mr. Dynner serve
as trustees of Brazos owned by Belmar Realty. Mr. Cross is also Chairman and
President of the Real Estate Joint Venture. Mr. Calson is a Vice President of
Eaton Vance and Boston Management and has been employed by the Eaton Vance
organization since 2001. Prior to joining Eaton Vance, Mr. Carlson was President
of ILM Holding, Inc., a real estate holding company. Information about Mr.
Dynner appears below.

As disclosed under The Eaton Vance Organization in
Item 1, Eaton Vance and Boston Management are wholly-owned subsidiaries of Eaton
Vance Corp. The non-voting common stock of Eaton Vance Corp. is listed and
traded on the NYSE. All shares of the voting common stock of Eaton Vance Corp.
are held in a voting trust, the voting trustees of which are senior officers of
the Eaton Vance organization. Eaton Vance, Inc., a wholly-owned subsidiary of
Eaton Vance Corp., is the sole trustee of Eaton Vance and of Boston Management,
each of which is a Massachusetts business trust. The names of the executive
officers and the directors of Eaton Vance, Inc. and their ages and principal
occupations (in addition to their responsibilities described above) are set
forth below.

James B. Hawkes (64) is Chairman, Chief Executive
Officer and a Director of Eaton Vance Corp. and Chief Executive Officer of Eaton
Vance, Boston Management and Eaton Vance, Inc., and a Director of Eaton Vance,
Inc. He is Vice President and Director of EV Distributors. He is also a Trustee
and an officer of various investment companies managed by Eaton Vance or Boston
Management and has been employed by Eaton Vance since 1970.

Thomas E. Faust Jr. (47) is President and Chief
Investment Officer of Eaton Vance and Boston Management, President of Eaton
Vance, Inc., and a Director, President and Chief Investment Officer of Eaton
Vance Corp. He is also Chief Executive Officer of Belair Capital Fund LLC,
Belcrest Capital Fund LLC, Belport Capital Fund LLC and Belrose Capital Fund LLC
and is an officer of various other investment companies managed by Eaton Vance
or Boston Management. Mr. Faust has been employed by Eaton Vance since
1985.

32

Alan R. Dynner (65) is Vice President, Chief Legal
Officer and Secretary of Eaton Vance, Boston Management, Eaton Vance Corp., EV
Distributors and Eaton Vance, Inc. He is also an officer of various investment
companies managed by Eaton Vance or Boston Management and has been employed by
Eaton Vance since 1996.

William M. Steul (63) is Vice President and Chief
Financial Officer of Eaton Vance, Boston Management, Eaton Vance Corp. and Eaton
Vance, Inc. and a Director of Eaton Vance, Inc. He is also Vice President of EV
Distributors. He has been employed by Eaton Vance since 1994.

(b) Compliance with Section 16(a) of the
Securities Exchange Act of 1934.

Section 16(a) of the 1934 Act requires the Funds
officers and directors and persons who own more than ten percent of the Funds
Shares to file forms reporting their affiliation with the Fund and reports of
ownership and changes in ownership of the Funds Shares with the SEC. Eaton
Vance, as manager of the Fund, and the Directors and executive officers of Eaton
Vance, Inc., the sole trustee of Eaton Vance, also comply with Section 16(a).
These persons and entities are required by SEC regulations to furnish the Fund
with copies of all Section 16(a) forms they file. To the best of the Funds
knowledge, during the year ended December 31, 2005 no Section 16(a) filings were
required by such persons or entities.



|(c) Code of
  Ethics.
|---------------------

The Fund has adopted a Code of Ethics that applies
to the principal executive officer and principal financial officer (who is also
the Funds principal accounting officer). A copy of the Code of Ethics is
available at no cost by request to the Funds Chief Financial Officer, 255 State
Street, Boston, MA 02109 or by calling (800) 225-6265. If the Fund makes any
substantive amendments to the Code of Ethics or grants any waiver, including an
implicit waiver, from a provision of the Code of Ethics as applicable to the
principal executive officer or principal financial officer, the Fund will
disclose the nature of such amendment or waiver in a report on Form
8-K.



|Item 11. Executive
      Compensation.
|--------------------------------------

As noted in Item 10, the officers of the Fund
receive no compensation from the Fund. The Funds manager, Eaton Vance, and its
affiliates receive certain fees from the Fund for services provided to the Fund,
which are described in Item 13 below.

Item 12. Security Ownership of Certain
Beneficial Owners and Management and Related Shareholder Matters. Security
Ownership of Certain Beneficial Owners.To the
knowledge of the Fund, no person beneficially owns more than 5% of the Shares of
the Fund.

Security Ownership of
Management.As of
February 28, 2006, Eaton Vance, the manager of the Fund, beneficially owned
1,126 Shares of the Fund. The Shares owned by Eaton Vance represent less than 1%
of the outstanding Shares of the Fund as of February 28, 2006. None of the other
entities or individuals named in response to Item 10 above beneficially owned
Shares of the Fund as of such date.

Changes in Control.Not applicable.

Item 13. Certain Relationships and Related
Transactions.

The table below sets forth the fees paid or payable
by, or allocable to, the Fund and Belmar Realty for the years ended December 31,
2005 and 2004 in connection with services rendered by Eaton Vance and its
affiliates. Each fee is described following the table.

33

|                                                                     |  | Year ended        |  | Year ended       
|-------------------------------------------------------------------- |  | ----------------- |  | -----------------
|                                                                     |  | December 31, 2005 |  | December 31, 2004
|                                                                    
|Fund Advisory and Administrative Fees*                               |  | $1,589,045        |  | $1,684,719       
|                                                                    
|Belmar Realty Management Fees*                                       |  | $3,508,467        |  | $4,389,001       
|                                                                    
|Funds Allocable Portion of the Portfolios Advisory
      Fees**    |  | $8,484,011        |  | $8,392,976       
|                                                                    
|Fund Servicing Fees                                                  |  | $1,674,343        |  | $1,778,204       
|                                                                    
|Funds Allocable Portion of Belvedere Companys Servicing
      Fees |  | $2,947,791        |  | $2,908,588       
|                                                                    
|Fund Distribution Fees*                                              |  | $1,851,096        |  | $1,874,514       
|                                                                    
|Aggregate Compensation Paid by the Fund to Eaton Vance
      and     |  |                   |  |                  
|its Affiliates                                                       |  | $6,948,608        |  | $7,948,234       
|                                                                    

|*  | Boston Management has agreed to waive the
      portion of the investment advisory and administrative fee payable by the
      Fund to the extent that such fee, together with the distribution fee
      payable by the Fund exceeds 0.60% of the average daily gross assets of the
      Fund reduced by that portion of the advisory or management fees payable by
      the Portfolio and Belmar Realty that is attributable to the value of the
      Funds direct and indirect investments therein. The amount shown is net of
      amounts waived by Boston Management.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|** | For the years ended December 31, 2005 and
      2004, advisory fees paid or payable by the Portfolio totaled $80,617,092
      and $77,609,178, respectively. For the year ended December 31, 2005,
      Belvedere Companys allocable portion of that fee was $55,259,100 of which
      $8,484,011 was allocable to the Fund. For the year ended December 31,
      2004, Belvedere Companys allocable portion of that fee was $50,252,861,
      of which $8,392,976 was allocable to the Fund.                                                                            
|  

The Funds Investment Advisory and
Administrative Fee.Under the terms of the Funds
investment advisory and administrative agreement, Boston Management is entitled
to receive, subject to the fee waiver described in the next sentence, a monthly
advisory and administrative fee at the rate of 1/20 of 1% (equivalent to 0.60%
annually) of the average daily gross assets of the Fund, reduced by the portion
of the monthly advisory or management fees for such months payable by the
Portfolio and Belmar Realty that is attributable to the Funds direct or
indirect investments therein (but no such reduction shall be made to the extent
that any such fee or portion thereof has been waived by Boston Management).
Boston Management has agreed to waive that portion of the monthly investment
advisory and administrative fee payable by the Fund to the extent that such fee,
together with the distribution fees payable by the Fund (see "Distribution Fees
Paid to EV Distributors" below) and that portion of the monthly advisory or
management fees for such month payable by the Portfolio and Belmar Realty that
is attributable to the value of the Funds direct or indirect investments
therein exceeds 1/20 of 1% of the average daily gross assets of the Fund. The
term gross assets of the Fund means the value of all Fund assets (including
the Funds interest in Belvedere Company and the Funds ratable share of the
assets of its controlled subsidiaries), without reduction by any
liabilities.

Belmar Realtys Management
Fee.Under the terms of Belmar Realtys
management agreement with Boston Management, Boston Management receives a
monthly management fee at the rate of 1/20 of 1% (equivalent to 0.60% annually)
of the average daily gross assets of Belmar Realty. The term gross assets of
Belmar Realty means the current value of all assets of Belmar Realty, including
Belmar Realtys ratable share of the assets of its controlled subsidiaries,
without reduction by any liabilities. For this purpose, the assets and
liablilities of Belmar Realtys controlled subsidiaries are reduced by the
proportionate interest therein of investors other than Belmar Realty.

34

The Portfolios Investment Advisory Fee.Under the terms of the Portfolios investment
advisory agreement with Boston Management, Boston Management receives a monthly
advisory fee as follows:

Annual Fee RateAverage Daily Net Assets for the Month
    
    (for each level)Up to $500 million
    
    0.6250%$500 million but less than $1 billion
    
    0.5625%$1 billion but less than $1.5 billion
    
    0.5000%$1.5 billion but less than $7 billion
    
    0.4375%$7 billion but less than $10 billion
    
    0.4250%$10 billion but less than $15 billion
    
    0.4125%$15 billion and over
    
    0.4000%


In accordance with the terms of the 1940 Act, the
Portfolios Board of Trustees considers the continuation of the Portfolios
investment advisory agreement annually.

Servicing Fees Paid by the
Fund.Pursuant to a servicing agreement between
the Fund and EV Distributors, the Fund pays a servicing fee to EV Distributors
for providing certain services and information to the Shareholders of the Fund.
The servicing fee is paid on a quarterly basis at an annual rate of 0.25% of the
Funds average daily net assets. With respect to Shareholders who subscribed
through a subagent, EV Distributors has assigned servicing responsibilities and
fees to the applicable subagent, beginning twelve months after the issuance of
Shares of the Fund to such persons. The Funds allocated share of the servicing
fee paid by Belvedere Company is credited toward the Funds servicing fee
payment, thereby reducing the amount of the servicing fee payable by the
Fund.

Servicing Fees Paid by Belvedere
Company.Pursuant to a servicing agreement between
Belvedere Company and EV Distributors, Belvedere Company pays a servicing fee to
EV Distributors for providing certain services and information to direct and
indirect investors in Belvedere Company. The servicing fee is paid on a
quarterly basis, at an annual rate of 0.15% of Belvedere Companys average daily
net assets. With respect to investors in Belvedere Company andShareholders of the Fund who subscribed through a subagent, EV
Distributors has assigned servicing responsibilities and fees to the applicable
subagent, beginning twelve months after the issuance of shares of Belvedere
Company or Shares of the Fund to such persons. The Fund assumes its allocated
share of Belvedere Companys servicing fee. The servicing fee payable in respect
of the Funds investment in Belvedere Company is credited toward the Fund
servicing fee described above.

Distribution Fees Paid to EV
Distributors.Under the terms of the Funds placement
agreement with EV Distributors, EV Distributors receives a monthly distribution
fee at an annual rate of 0.10% of the average daily net assets of the Fund as
compensation for its services as placement agent. The distribution fee accrued
from the Funds initial closing and will continue for a period of ten years
(subject to the annual approval of Eaton Vance, Inc.).

Certain Real Estate Investment Transactions.During the year ended December 31, 2005, Belmar
Realty did not enter into any real estate investment transactions with real
estate affiliates of other investment funds managed by Eaton Vance and advised
by Boston Management or any entities owned by such real estate
affiliate.

35



|Item 14. Principal Accountant Fees and
      Services.
|------------------------------------------------------

The following table presents fees for the
professional audit services rendered by Deloitte & Touche LLP for the audit
of the Funds annual financial statements for the years ended December 31, 2005
and 2004 and fees billed for other services rendered by Deloitte & Touche
LLP during those periods, including fees charged by Deloitte & Touche LLP to
the Funds consolidated subsidiaries.

Year ended December 31,2005
    
    
    
    2004(2)Audit fees
    
    $246,028
    
    $
    
    239,148Tax fees(1)
    
    269,783
    
    
    
    328,703Total
    
    $515,811
    
    $
    
    567,851


|(1) | Tax fees consist of the aggregate fees
      billed for professional services rendered by Deloitte & Touche LLP for
      tax compliance, tax advice and tax planning.             
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | Certain amounts have been reclassified to
      conform with current year presentation. Amounts disclosed as audit-related
      fees in 2004 have been reclassified as audit fees.
|   

The Funds Audit Committee reviews all audit,
audit-related, tax and other fees of Deloitte & Touche LLP at least
annually. The Audit Committee pre-approved all audit and tax services for the
years ended December 31, 2005 and 2004 in accordance with the Funds
pre-approval policies. The Audit Committee has concluded that the provision of
the tax services listed above is compatible with maintaining the independence of
Deloitte & Touche LLP.

36



|PART
  IV
|---------



|Item 15. Exhibits and Financial Statement
      Schedules.
|----------------------------------------------------------

|(a) | Please see the Funds consolidated
      financial statements on pages 39 to 61 of this Annual Report on Form 10-K.
      Please see the Portfolios financial statements on pages 62 to 78 of this
      Annual Report on Form 10- K.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | Reports on Form 8-K: None.                                                                                                                                                                                                            
|   
|(c) | A list of the exhibits filed as a part of
      this Form 10-K is included in the Exhibit Index appearing on page 80
      hereof.                                                                                                    
|   

Appendix A

T h e   F u n d s   I n v e s
tm e n t   S tru c tu r e   a s   o f 
 D e c e m b e r   3 1 ,   2 0 0 5



|(A )  Eaton Vance is the manager of the
      Fund; Boston Management is the Fund's investment adviser.                                                 
|--------------------------------------------------------------------------------------------------------------------------------------------------------
|(B )  Boston Management is the manager
      of Belvedere Company.                                                                                      
|(C )  Boston Management is the
      Portfolio's investment adviser.                                                                                    
|(D )  Boston Management is the manager
      of Belmar Realty.  Belmar Realty also holds direct investments in
      Partnership Preference Units.      
|
|(E )  Belmar Realty owns a majority
      interest in this Real Estate Joint
      Venture.                                                             
|(F )  Bel Stamford is a wholly-owned
      subsidiary of Belmar Realty.                                                                                 
|(G )  Belmar Realty owns a minority
      interest in Belvorn Holdings LLC, which owns Partnership Preference Units
      issued by Vornado Realty, L.P.
|



38



|Belmar Capital Fund LLCCONSOLIDATED PORTFOLIOS OF INVESTMENTSAs of December 31, 2005
|------------------------------------------------------------------------------------

|Investment in Belvedere Capital Fund                      
|----------------------------------------------------------
|Company LLC 
      75.1%                                 
|Security                                                  
|                                                          
|Investment in Belvedere Capital Fund
      Company LLC    
|(Belvedere Company)                                       
|                                                          
|                                                          
|Total Investmentin Belvedere Company                      
|(identified cost,
      $2,244,473,217)                   
|                                                          
|                                                          
|Partnership Preference Units  2.1%                       
|Security                                                  
|                                                          
|Belvorn Holdings LLC(1)(2)                               
|MHC Operating Limited Partnership,
      L.P.             
|(Illinois Limited Partnership affiliate of
      Equity   
|Lifestyle Properties, Inc.), 8.0625% Series
      D       
|Cumulative Redeemable Perpetual Preference
      Units,   
|Callable from 3/24/10(2)                                 
|PSA Institutional Partners, L.P.
      (California Limited
|Partnership affiliate of Public Storage,
      Inc.),     
|6.4% Series NN Cumulative
      Redeemable                
|Perpetual Preferred Units, Callable from
      3/17/10(2)
|                                                          
|                                                          
|Total Partnership Preference Units                        
|(identified cost,
      $53,932,562)                      
|                                                          
|                                                          
|Other Real Estate Investments  22.7%                     
|Description                                               
|                                                          
|Bel Stamford(2)(3)                                        
|Rental property(2)(4)                                     
|Investment in management
      contracts(2)(5)            
|                                                          
|                                                          
|Total Other Real Estate
      Investments                 
|(identified cost,
      $636,854,211)                     
|                                                          
|                                                          
|Commercial Paper  0.0%                                   
|                                                          
|Security                                                  
|                                                          
|General Electric Capital
      Corporation,               
|4.20%, 1/3/06                                             
|                                                          
|                                                          
|Total Commercial Paper                                    
|(at amortized cost, $1,549,638)                           
|                                                          

|Other Short-TermInvestments
       0.1%
|----------------------------------------
|                                        
|Security                                
|                                        
|Investors Bank & Trust Company         
|Time Deposit, 4.23%, 1/3/06             
|                                        
|                                        
|Total Other Short-Term Investments      
|(at amortized cost, $2,000,000)         
|                                        
|                                        
|Total Investments  100.0%              
|(identified cost,
      $2,938,809,628) 
|                                        



|See  notes  to 
      consolidated 
financial  statements
|---------------------------------------------------------

39



|Belmar Capital Fund LLCCONSOLIDATED PORTFOLIOS OF INVESTMENTSCONTDAs of December 31,
  2004
|--------------------------------------------------------------------------------------------

|Investment in Belvedere Capital Fund                      
|----------------------------------------------------------
|Company LLC 
      75.7%                                 
|Security                                                  
|                                                          
|Investment in Belvedere Capital Fund
      Company LLC    
|(Belvedere Company)                                       
|                                                          
|                                                          
|Total Investmentin Belvedere Company                      
|(identified cost,
      $2,289,690,157)                   
|                                                          
|                                                          
|Partnership Preference Units
       2.4%                 
|Security                                                  
|                                                          
|MHC Operating Limited Partnership,
      L.P.             
|(Illinois Limited Partnership affiliate of
      Equity   
|Lifestyle Properties, Inc.), 9% Series
      D            
|Cumulative Redeemable Perpetual Preference
      Units,   
|Callable from 9/29/04(2)                                 
|PSA Institutional Partners, L.P.
      (California Limited
|Partnership affiliate of Public Storage,
      Inc.),     
|6.4% Series NN Cumulative
      Redeemable                
|Perpetual Preferred Units, Callable from
      3/17/10(2)
|Sun Communities Operating, L.P. (Michigan
      Limited   
|Partnership affiliate of Sun Communities,
      Inc.),    
|8.875% Series A Cumulative Redeemable
      Perpetual     
|Preferred Units, Callable from
      9/29/04(2)          
|                                                          
|                                                          
|Total Partnership Preference Units                        
|(identified cost,
      $60,158,761)                      
|                                                          
|                                                          
|Other Real Estate Investments  21.8
      %              
|Description                                               
|                                                          
|Bel Stamford(2)(3)                                        
|Rental property(2)(4)                                     
|Investment in management
      contracts(2)(5)            
|                                                          
|                                                          
|Total Other Real Estate
      Investments                 
|(identified cost,
      $638,556,732)                     
|                                                          

|Short - Term Investments  0.1%                                   
|------------------------------------------------------------------
|                                                                  
|                                                                  
|Security                                                          
|                                                                  
|Investors Bank & Trust Company
                                  
|Time Deposit, 2.25%, 1/3/05                                       
|                                                                  
|                                                                  
|Total Short-Term Investments                                      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Total Investments  100.0%                                        
|                                                                  
|                                                                  
|                                                                  
|The following footnotes are for the years ended
      December 31,
|2005 and December 31, 2004:                                       
|                                                                 
|                                                                  
|                                                                  
|                                                                  
|(1)                                                               
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|(2)                                                               
|                                                                  
|                                                                  
|(3)                                                               
|                                                                  
|(4)                                                               
|                                                                  
|                                                                  
|                                                                  
|(5)                                                               



|See notes to consolidated financial
      statements
|----------------------------------------------------

40



|Belmar Capital Fund LLCCONSOLIDATED FINANCIAL STATEMENTSConsolidated Statements of Assets and
  Liabilities
|-----------------------------------------------------------------------------------------------------------

|Assets                                                                                         |  | December 31, 2005 |  | December 31, 2004
|---------------------------------------------------------------------------------------------- |  | ----------------- |  | -----------------
|                                                                                              
|Investments, at value (identified cost, $2,938,809,628 and
      $2,990,105,650, respectively) |  | $2,637,981,319    |  | $2,660,755,803   
|Cash                                                                                           |  | 2,506,864         |  | 6,789,395        
|Open interest rate swap agreements, at value                                                   |  | 10,303,043        |  | 2,701,342        
|Distributions and interest receivable                                                          |  | 804               |  | 6,511            
|Swap interest receivable                                                                       |  | 3,020             |  |                 
|Other assets                                                                                   |  | 7,451,383         |  | 6,789,882        
|                                                                                              
|                                                                                              
|Total assets                                                                                   |  | $2,658,246,433    |  | $2,677,042,933   
|                                                                                              
|                                                                                              
|                                                                                              
|Liabilities                                                                                    |  |                   |  |                  
|                                                                                              
|Loan payable  Credit Facility                                                                 |  | $304,000,000      |  | $290,000,000     
|Mortgages payable                                                                              |  |                   |  | 450,367,515      
|Payable for Fund Shares redeemed                                                               |  |                   |  | 3,955,363        
|Payable to affiliate for investment advisory and administrative
      fees                     |  |                   |  | 426,843          
|Payable to affiliate for distribution and servicing
      fees                                 |  |                   |  | 584,430          
|Security deposits                                                                              |  |                   |  | 612,548          
|Accrued expenses:                                                                              |  |                   |  |                  
|Swap interest expense                                                                          |  |                   |  |                 
|Interest expense                                                                               |  |                   |  | 1,986,278        
|Property taxes                                                                                 |  |                   |  | 597,284          
|Other expenses and liabilities                                                                 |  |                   |  | 3,862,376        
|Minority interests in controlled subsidiaries                                                  |  |                   |  | 15,484,677       
|                                                                                              
|                                                                                              
|Total liabilities                                                                              |  | $781,877,314      |  | $766,555,435     
|                                                                                              
|                                                                                              
|Net Assets                                                                                     |  | $1,876,369,119    |  | $1,910,487,498   
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|ShareholdersCapital                                                                           |  | $1,876,369,119    |  | $1,910,487,498   
|                                                                                              
|                                                                                              
|                                                                                              
|Fund Shares Outstanding                                                                        |  |                   |  | 19,614,094       
|                                                                                              
|                                                                                              
|                                                                                              
|Net Asset Value and Redemption Price Per Share (Note
      4)                                  |  | $95.66            |  | $91.50           
|                                                                                              



|See notes to consolidated
      financial statements
|----------------------------------------------------

41



| | Belmar Capital Fund LLCCONSOLIDATED FINANCIAL STATEMENTSCONTDConsolidated Statements of
      Operations
| | ---------------------------------------------------------------------------------------------------------

|                                                                                                                                        |  |                   |  |                   |  | For the Year Ended |  |              |  |             
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- |  | ----------------- |  | ------------------ |  | ------------ |  | ------------
|                                                                                                                                        |  |                  
|Investment Income                                                                                                                       |  | December 31, 2005 |  | December 31, 2004 |  | December 31, 2003 
|                                                                                                                                       
|Dividends allocated from Belvedere Company                                                                                              |  |                   |  |                   |  |                    |  |              |  |             
|(net of foreign taxes, $500,815, $410,963 and
      $301,745, respectively)                                                             |  | $33,101,264       |  | $31,399,615       |  | $25,889,334       
|Interest allocated from Belvedere Company                                                                                               |  |                   |  | 161,340           |  |                    |  | 136,313      |  |             
|Expenses allocated from Belvedere Company                                                                                               |  |                   |  | (11,797,045)      |  |                    |  | (11,656,198) |  |             
|                                                                                                                                       
|Net investment income allocated from Belvedere
      Company                                                                            |  | $21,465,559       |  | $19,879,730       |  | $15,714,154       
|Rental income                                                                                                                           |  |                   |  | 45,040,273        |  |                    |  | 57,195,941   |  |             
|Distributions from Partnership Preference Units                                                                                         |  |                   |  | 2,543,208         |  |                    |  | 14,708,477   |  |             
|Interest                                                                                                                                |  |                   |  | 636,207           |  |                    |  | 633,453      |  |             
|Other income                                                                                                                            |  |                   |  |                  |  |                    |  | 258,900      |  |             
|                                                                                                                                       
|Total investment income                                                                                                                 |  | $69,685,247       |  | $92,676,501       |  | $94,906,482       
|                                                                                                                                       
|                                                                                                                                       
|Expenses                                                                                                                                |  |                   |  |                   |  |                    |  |              |  |             
|                                                                                                                                       
|Investment advisory and administrative fees                                                                                             |  | $6,948,608        |  | $7,948,234        |  | $7,049,704        
|Property management and administrative fees                                                                                             |  |                   |  | 1,576,591         |  |                    |  | 1,679,045    |  |             
|Distribution and servicing fees                                                                                                         |  |                   |  | 3,525,439         |  |                    |  | 3,652,718    |  |             
|Interest expense on mortgages                                                                                                           |  |                   |  | 26,168,107        |  |                    |  | 28,190,253   |  |             
|Interest expense on Credit Facility                                                                                                     |  |                   |  | 10,822,031        |  |                    |  | 8,260,789    |  |             
|Property and maintenance expenses                                                                                                       |  |                   |  | 2,393,274         |  |                    |  | 10,854,510   |  |             
|Property taxes and insurance                                                                                                            |  |                   |  | 3,864,544         |  |                    |  | 5,475,612    |  |             
|Miscellaneous                                                                                                                           |  |                   |  | 1,207,562         |  |                    |  | 2,017,828    |  |             
|                                                                                                                                       
|Total expenses                                                                                                                          |  |                   |  | $56,506,156       |  |                    |  | $68,078,989  |  |             
|                                                                                                                                       
|Deduct                                                                                                                                 |  |                   |  |                   |  |                    |  |              |  |             
|Reduction of investment advisory and
      administrative fees                                                                          |  |                   |  | $1,851,096        |  |                    |  | $1,874,514   |  |             
|                                                                                                                                       
|Net expenses                                                                                                                            |  |                   |  | $54,655,060       |  |                    |  | $66,204,475  |  |             
|                                                                                                                                       
|Net investment income before minority interests in net income of
      controlled subsidiaries                                          |  |                   |  | $15,030,187       |  |                    |  | $26,472,026  |  |             
|Minority interests in net income of controlled
      subsidiaries                                                                       |  |                   |  | (1,196,139)       |  |                    |  | (1,247,532)  |  |             
|                                                                                                                                       
|                                                                                                                                       
|Net investment income                                                                                                                   |  |                   |  | $13,834,048       |  |                    |  | $25,224,494  |  |             
|                                                                                                                                       
|                                                                                                                                       
|Realized and
      Unrealized Gain (Loss)                                                                                               |  |                   |  |                   |  |                    |  |              |  |             
|                                                                                                                                       
|Net realized gain (loss)                                                                                                               |  |                   |  |                   |  |                    |  |              |  |             
|Investment transactions, securities sold short
      and foreign currency transactions allocated from                                   |  |                   |  |                   |  |                    |  |              |  |             
|Belvedere Company
      (identified cost basis)                                                                                         |  |                   |  | 451,940,972       |  |                    |  | 445,278,877  |  |             
|Investment transactions in Partnership
      Preference Units (identified cost basis)                                                   |  |                   |  | 4,349,676         |  |                    |  | 45,834,076   |  |             
|Investment transactions in other real estate
      (net of minority interest in realized gain (loss) of                                 |  |                   |  |                   |  |                    |  |              |  |             
|controlled subsidiaries of
      $307,905, $(27,592,937) and $0, respectively)                                                          |  |                   |  | 1,616,502         |  |                    |  | (19,408,521) |  |             
|Interest rate swap agreements(1)                                                                                                        |  |                   |  | (4,038,769)       |  |                    |  | (14,032,550) |  |             
|                                                                                                                                       
|Net realized gain                                                                                                                       |  |                   |  | 453,868,381       |  |                    |  | 457,671,882  |  |             
|                                                                                                                                       
|Change in unrealized appreciation (depreciation)                                                                                       |  |                   |  |                   |  |                    |  |              |  |             
|Investments, securities sold short and foreign
      currency allocated from Belvedere Company (identified cost
      basis)            |  |                   |  | $411,722,241      |  | $112,083,513       |  | $343,808,846
|Investments in Partnership Preference Units
      (identified cost basis)                                                               |  |                   |  | (3,186,143)       |  |                    |  | (44,857,377) |  |             
|Investments in other real estate (net of
      minority interest in unrealized appreciation (depreciation)                              |  |                   |  |                   |  |                    |  |              |  |             
|of controlled subsidiaries
      of $(725,571), $1,505,726 and $(1,889,589), respectively)                                              |  |                   |  | 20,711,010        |  |                    |  | (15,764,223) |  |             
|Interest rate swap agreements                                                                                                           |  |                   |  | 7,601,701         |  |                    |  | 610,497      |  |             
|                                                                                                                                       
|Net change in unrealized appreciation (depreciation)                                                                                    |  |                   |  | $36,848,809       |  |                    |  | $52,072,410  |  | $362,154,142
|                                                                                                                                       
|Net realized and unrealized gain                                                                                                        |  |                   |  | $90,717,190       |  | $109,744,292       |  | $368,065,231
|                                                                                                                                       
|Net increase in net assets from operations                                                                                              |  | $104,551,238      |  | $134,968,786      |  | $411,789,250      
|                                                                                                                                       
|                                                                                                                                       
|(1)Amountsinclude netinterest expenseincurredin connection
      withinterest rate swap agreements of $4,038,769,
      $11,595,294 and
|$29,626,765, respectively (Note 2).                                                                                                     |  |                   |  |                   |  |                    |  |              |  |             



|See notes to consolidated financial
      statements
|----------------------------------------------------

42



|Belmar Capital Fund LLCCONSOLIDATED FINANCIAL STATEMENTSCONTDConsolidated Statements of
      Changes in Net Assets
|--------------------------------------------------------------------------------------------------------------------

|                                                                                |  |                   |  |                   |  |                   |  | Year Ended    |  |  |  |             
|------------------------------------------------------------------------------- |  | ----------------- |  | ----------------- |  | ----------------- |  | ------------- |  |  |  | ------------
|                                                                                |  |                  
|Increase (Decrease)in
      Net Assets                                          |  | December 31, 2005 |  | December 31, 2004 |  | December 31, 2003
|                                                                               
|From operations                                                                |  |                   |  |                   |  |                   |  |               |  |  |  |             
|Net investment income                                                           |  | $13,834,048       |  | $25,224,494       |  | $43,724,019      
|Net realized gain from investment transactions,
      securities sold short,    |  |                   |  |                   |  |                   |  |               |  |  |  |             
|foreign currency
      transactions and interest rate swap agreements           |  |                   |  | 53,868,381        |  |                   |  | 57,671,882    |  |  |  | 5,911,089   
|Net change in unrealized appreciation
      (depreciation) of investments,      |  |                   |  |                   |  |                   |  |               |  |  |  |             
|securities sold short,
      foreign currency and interest rate swap agreements |  |                   |  | 36,848,809        |  |                   |  | 52,072,410    |  |  |  | 362,154,142 
|                                                                               
|Net increase in net assets from operations                                      |  | $104,551,238      |  | $134,968,786      |  | $411,789,250     
|                                                                               
|Transactions in Fund Shares                                                    |  |                   |  |                   |  |                   |  |               |  |  |  |             
|Net asset value of Fund Shares issued to
      Shareholders in payment of       |  |                   |  |                   |  |                   |  |               |  |  |  |             
|distributions
      declared                                                    |  | $9,834,087        |  | $10,101,552       |  | $18,603,373      
|Net asset value of Fund Shares
      redeemed                                   |  |                   |  | (125,134,403)     |  |                   |  | (129,608,009) |  |  |  | (90,690,145)
|                                                                               
|Net decrease in net assets from Fund Share
      transactions                   |  | $(115,300,316)    |  | $(119,506,457)    |  | $(72,086,772)    
|                                                                               
|Distributions                                                                  |  |                   |  |                   |  |                   |  |               |  |  |  |             
|Distributions to Shareholders                                                   |  | $(23,369,301)     |  | $(25,586,688)     |  | $(39,320,426)    
|                                                                               
|Total distributions                                                             |  | $(23,369,301)     |  | $(25,586,688)     |  | $(39,320,426)    
|                                                                               
|                                                                               
|                                                                               
|Net increase (decrease) in net assets                                           |  | $(34,118,379)     |  | $(10,124,359)     |  | $300,382,052     
|                                                                               
|                                                                               
|                                                                               
|Net Assets                                                                      |  |                   |  |                   |  |                   |  |               |  |  |  |             
|                                                                               
|At beginning of year                                                            |  | $1,910,487,498    |  | $1,920,611,857    |  | $1,620,229,805   
|                                                                               
|At end of year                                                                  |  | $1,876,369,119    |  | $1,910,487,498    |  | $1,920,611,857   
|                                                                               



|See notes to consolidated
      financial statements
|----------------------------------------------------

43



| | Belmar Capital Fund LLCCONSOLIDATED FINANCIAL STATEMENTSCONTDConsolidated Statements of Cash
      Flows
| | ---------------------------------------------------------------------------------------------------------

|                                                                                                                                                      |  |                   |  |                   |  |                   |  | Year Ended    |  |                |  |              
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- |  | ----------------- |  | ----------------- |  | ------------- |  | -------------- |  | -------------
|                                                                                                                                                      |  |                  
|Increase (Decrease)in
      Cash                                                                                                                      |  | December 31, 2005 |  | December 31, 2004 |  | December 31, 2003
|                                                                                                                                                     
|Cash Flows From (For) Operating Activities                                                                                                           |  |                   |  |                   |  |                   |  |               |  |                |  |              
|Net increase in net assets from operations                                                                                                            |  | $104,551,238      |  | $                 |  | 134,968,786       |  | $             |  | 411,789,250   
|Adjustments to reconcile net increase in net assets from
      operations to net cash flows from                                                      |  |                   |  |                   |  |                   |  |               |  |                |  |              
|operating activities                                                                                                                                 |  |                   |  |                   |  |                   |  |               |  |                |  |              
|Net investment income allocated from Belvedere
      Company                                                                                          |  |                   |  | (21,465,559)      |  |                   |  | (19,879,730)  |  |                |  | (15,714,154) 
|(Increase) decrease in escrow
      deposits                                                                                                          |  |                   |  |                  |  |                   |  | (504,789)     |  |                |  | 766,420      
|Decrease in receivable for securities
      sold                                                                                                      |  |                   |  |                  |  |                   |  |              |  |                |  | 29,285,540   
|Increase in interest receivable for open swap
      agreements                                                                                        |  |                   |  | (3,020)           |  |                   |  |              |  |                |  |             
|(Increase) decrease in other
      assets                                                                                                             |  |                   |  | 1,051,796         |  |                   |  | (1,003,263)   |  |                |  | (52,977)     
|Decrease in distributions and interest
      receivable                                                                                               |  |                   |  | 5,707             |  |                   |  | 1,953,807     |  |                |  | 496,052      
|Decrease in interest payable for open swap
      agreements                                                                                           |  |                   |  | (144,508)         |  |                   |  | (97,775)      |  |                |  | (1,454,186)  
|Increase in payable to affiliate for investment
      advisory and administrative fees                                                                |  |                   |  | 426,843           |  |                   |  |              |  |                |  |             
|Increase in payable to affiliate for
      distribution and servicing fees                                                                            |  |                   |  | 584,430           |  |                   |  |              |  |                |  |             
|Increase (decrease) in security deposits,
      accrued interest and accrued other expenses and liabilities                                           |  |                   |  | 1,175,548         |  |                   |  | 4,324,537     |  |                |  | (1,110,446)  
|Increase (decrease) in accrued property
      taxes                                                                                                   |  |                   |  | 566,445           |  |                   |  | (614,721)     |  |                |  | 138,152      
|Purchases of Partnership Preference
      Units                                                                                                       |  |                   |  | (20,001,000)      |  |                   |  | (108,352,710) |  |                |  | (75,672,618) 
|Proceeds from sales of Partnership Preference
      Units                                                                                             |  |                   |  | 30,576,875        |  |                   |  | 470,422,252   |  |                |  | 228,888,304  
|Payments for investments in other real
      estate                                                                                                   |  |                   |  |                  |  |                   |  | (479,708,008) |  |                |  |             
|Proceeds from sales of investment in other real
      estate                                                                                          |  |                   |  | 4,078,517         |  |                   |  | 182,557,032   |  |                |  |             
|Cash assumed in connection with acquisition of
      other real estate                                                                                |  |                   |  |                  |  |                   |  | 15,051        |  |                |  |             
|Decrease in cash due to sale of other real
      estate                                                                                               |  |                   |  |                  |  |                   |  | (1,297,376)   |  |                |  |             
|(Increase) decrease in short-term
      investments                                                                                                   |  |                   |  | (1,849,638)       |  |                   |  | 15,273,476    |  |                |  | (16,973,476) 
|Improvements to rental property                                                                                                                       |  |                   |  | (2,164,886)       |  |                   |  | (1,217,999)   |  |                |  | (1,567,752)  
|Net increase in investment in Belvedere
      Company                                                                                                 |  |                   |  |                  |  |                   |  |              |  |                |  | (25,866,250) 
|Interest incurred on interest rate swap
      agreements, net of payments received                                                                    |  |                   |  | (4,038,769)       |  |                   |  | (11,595,294)  |  |                |  | (29,626,765) 
|Payments for termination of interest rate swap
      agreements                                                                                       |  |                   |  |                  |  |                   |  | (2,437,256)   |  |                |  | (26,751,841) 
|Minority interests in net income of controlled
      subsidiaries                                                                                     |  |                   |  | 1,196,139         |  |                   |  | 1,247,532     |  |                |  | 435,830      
|Net realized gain from investment transactions,
      securities sold short, foreign currency                                                         |  |                   |  |                   |  |                   |  |               |  |                |  |              
|transactions and interest
      rate swap agreements                                                                                                  |  |                   |  | (53,868,381)      |  |                   |  | (57,671,882)  |  |                |  | (5,911,089)  
|Net change in unrealized (appreciation)
      depreciation of investments,                                                                            |  |                   |  |                   |  |                   |  |               |  |                |  |              
|foreign currency,
      securities sold short and interest rate swap agreements                                                                       |  |                   |  | (36,848,809)      |  |                   |  | (52,072,410)  |  |                |  | (362,154,142)
|                                                                                                                                                     
|Net cash flows from operating activities                                                                                                              |  |                   |  | $3,828,968        |  |                   |  | $74,309,260   |  |                |  | $108,943,852 
|                                                                                                                                                     
|Cash Flows From (For) Financing Activities                                                                                                           |  |                   |  |                   |  |                   |  |               |  |                |  |              
|Proceeds from Credit Facility                                                                                                                         |  |                   |  | $33,000,000       |  | $347,000,000      |  |               |  | $3,500,000    
|Repayments of Credit Facility                                                                                                                         |  |                   |  | (19,000,000)      |  |                   |  | (570,000,000) |  |                |  | (87,000,000) 
|Issuance of real estate joint venture preferred
      shares                                                                                          |  |                   |  | 240,000           |  |                   |  |              |  |                |  |             
|Proceeds from mortgage                                                                                                                                |  |                   |  |                  |  |                   |  | 215,000,000   |  |                |  |             
|Repayments of mortgage                                                                                                                                |  |                   |  | (4,731,398)       |  |                   |  | (5,174,535)   |  |                |  | (1,304,708)  
|Payments for Fund Shares redeemed                                                                                                                     |  |                   |  | (2,555,569)       |  |                   |  | (2,687,952)   |  |                |  | (3,265,017)  
|Decrease in minority interest                                                                                                                         |  |                   |  |                  |  |                   |  | (210,000)     |  |                |  |             
|Distributions paid to Shareholders                                                                                                                    |  |                   |  | (13,535,214)      |  |                   |  | (15,485,136)  |  |                |  | (20,717,053) 
|Distributions paid to minority
      shareholders                                                                                                     |  |                   |  | (1,529,318)       |  |                   |  | (446,326)     |  |                |  |             
|Return of capital distributed to minority
      shareholder                                                                                           |  |                   |  |                  |  |                   |  | (43,000,000)  |  |                |  |             
|Capital contributed to controlled
      subsidiary                                                                                                    |  |                   |  |                  |  |                   |  | 878,988       |  |                |  | 298,926      
|                                                                                                                                                     
|Net cash flows for financing activities                                                                                                               |  |                   |  | $(8,111,499)      |  |                   |  | $(74,124,961) |  | $(108,487,852)
|                                                                                                                                                     
|Net increase (decrease) in cash                                                                                                                       |  |                   |  | $(4,282,531)      |  |                   |  | $184,299      |  |                |  | $456,000     
|                                                                                                                                                     
|Cash at beginning of year                                                                                                                             |  |                   |  | $6,789,395        |  |                   |  | $6,605,096    |  |                |  | $6,149,096   
|                                                                                                                                                     
|Cash at end of year                                                                                                                                   |  |                   |  | $2,506,864        |  |                   |  | $6,789,395    |  |                |  | $6,605,096   
|                                                                                                                                                     
|                                                                                                                                                     
|Supplemental Disclosure and Non-cash Investing and Financing Activities                                                                               |  |                   |  |                   |  |                   |  |              
|                                                                                                                                                     
|Interest paid on loan  Credit Facility                                                                                                               |  |                   |  | $10,624,517       |  |                   |  | $8,234,733    |  |                |  | $8,248,335   
|Interest paid on mortgages                                                                                                                            |  |                   |  | $26,039,457       |  |                   |  | $26,002,996   |  |                |  | $13,933,726  
|Interest paid on swap agreements, net of interest
      received                                                                                      |  |                   |  | $4,183,277        |  |                   |  | $11,693,069   |  |                |  | $31,080,951  
|Market value of securities distributed in payment of
      redemptions                                                                                |  | $118,623,471      |  |                   |  | $128,281,460      |  |               |  | $86,063,725   
|Market value of real property and other assets, net of current
      liabilities, assumed in conjunction with the acquisitions of
      other         |  |                   |  |                   |  |                   |  |               |  |                |  |              
|real estate                                                                                                                                           |  |                   |  | $                |  | $840,381,023      |  |               |  | $            
|Mortgages assumed in conjunction with the acquisitions of other
      real estate                                                                     |  |                   |  | $                |  |                   |  | $244,129,496  |  |                |  | $           
|Market value of minority interests assumed in conjunction with the
      acquisitions of other real estate                                            |  |                   |  | $                |  |                   |  | $116,686,185  |  |                |  | $           
|Market value of real property and other
      assets, net of current liabilities, disposed of in conjunction with the
      sale of other real estate |  | $                |  |                   |  | $379,783,597      |  |               |  | $            
|Mortgage disposed of in conjunction with the sale of other real
      estate                                                                          |  |                   |  | $                |  |                   |  | $160,013,240  |  |                |  | $           
|Market value of minority interests disposed of in conjunction with
      the sale of other real estate                                                |  |                   |  | $                |  |                   |  | $40,158,768   |  |                |  | $           
|Non-cash change in working capital of real estate
      investments                                                                                   |  |                   |  | $1,713,297        |  |                   |  | $            |  |                |  | $           
|                                                                                                                                                     

See notes to consolidated financial
statements

44



| | Belmar Capital Fund LLCCONSOLIDATED FINANCIAL STATEMENTSCONTDFinancial
  Highlights
| | ------------------------------------------------------------------------------------

|                                                                         |  |                                                                                                                                                                    |  |                         |  |                         |  |                         |  | Year
      Ended |  |          |  |      
|------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------- |  | ----------------------- |  | ----------------------- |  | ---------------- |  | -------- |  | -----
|                                                                         |  |                                                                                                                                                                    |  |                        
|                                                                         |  |                                                                                                                                                                    |  | December 31,
      2005 |  | December 31,
      2004 |  | December 31,
      2003
|                                                                        
|                                                                        
|Net asset
      value  Beginning of year                                |  | $91.500                                                                                                                                                            |  | $86.280                 |  | $69.870                
|                                                                        
|                                                                        
|Income (loss)
      from operations                                      |  |                                                                                                                                                                    |  |                         |  |                         |  |                         |  |                  |  |         
|                                                                        
|Net
      investment income(1)                                           |  | $0.678                                                                                                                                                             |  | $1.170                  |  | $1.905                 
|Net realized
      and unrealized gain                                   |  |                                                                                                                                                                    |  | 4.602                   |  |                         |  | 5.200                   |  |                  |  | 16.205  
|                                                                        
|Total income
      from operations                                       |  | $5.280                                                                                                                                                             |  | $6.370                  |  | $18.110                
|                                                                        
|                                                                        
|Distributions                                                            |  |                                                                                                                                                                    |  |                         |  |                         |  |                         |  |                  |  |         
|                                                                        
|Distributions
      to Shareholders                                      |  |                                                                                                                                                                    |  | $(1.120)                |  |                         |  | $(1.150)                |  |                  |  | $(1.700)
|                                                                        
|Total
      distributions                                                |  |                                                                                                                                                                    |  | $(1.120)                |  |                         |  | $(1.150)                |  |                  |  | $(1.700)
|                                                                        
|                                                                        
|Net asset
      value  End of year                                      |  |                                                                                                                                                                    |  | $95.660                 |  |                         |  | $91.500                 |  |                  |  | $86.280 
|                                                                        
|                                                                        
|Total
      Return(2)                                                    |  |                                                                                                                                                                    |  | 5.89%                   |  |                         |  | 7.48%                   |  |                  |  | 26.48%  
|                                                                        
|                                                                        
|Ratios as percentage of
      average net assets(3):                     |  |                                                                                                                                                                    |  |                         |  |                         |  |                         |  |                  |  |         
|                                                                        
|Expenses of
      Consolidated Real Property Subsidiaries                |  |                                                                                                                                                                    |  |                         |  |                         |  |                         |  |                  |  |         
|                                                                         |  | Interest and
      other borrowing costs(4)                                                                                                                        |  |                         |  | 1.29%                   |  |                         |  | 1.47%            |  |          |  | 0.58%
|                                                                         |  | Operating
      expenses(4)                                                                                                                                        |  |                         |  | 0.36%                   |  |                         |  | 0.94%            |  |          |  | 0.74%
|Belmar
      Capital Fund LLC Expenses                                   |  |                                                                                                                                                                    |  |                         |  |                         |  |                         |  |                  |  |         
|                                                                         |  | Interest and
      other borrowing costs(5)(6)                                                                                                                     |  |                         |  | 0.58%                   |  |                         |  | 0.44%            |  |          |  | 0.51%
|                                                                         |  | Investment
      advisory and administrative fees, distribution and servicing fees and
      other                                                                 |  |                         |  |                         |  |                         |  |                  |  |          |  |      
|                                                                         |  | Fund operating expenses(5)(7)                                                                                                                                      |  |                         |  | 1.15%                   |  |                         |  | 1.23%            |  |          |  | 1.17%
|                                                                         |  |                                                                                                                                                                    |  |                        
|Total
      expenses                                                     |  |                                                                                                                                                                    |  | 3.38%                   |  |                         |  | 4.08%                   |  |                  |  | 3.00%   
|Net
      investment income                                              |  |                                                                                                                                                                    |  | 0.75%                   |  |                         |  | 1.34%                   |  |                  |  | 2.55%   
|                                                                        
|                                                                        
|                                                                        
|Ratios as percentage of
      average gross assets(3)(8):                |  |                                                                                                                                                                    |  |                         |  |                         |  |                         |  |                  |  |         
|                                                                        
|Expenses of
      Consolidated Real Property Subsidiaries                |  |                                                                                                                                                                    |  |                         |  |                         |  |                         |  |                  |  |         
|                                                                         |  | Interest and
      other borrowing costs(4)                                                                                                                        |  |                         |  | 0.93%                   |  |                         |  | 1.01%            |  |          |  | 0.41%
|                                                                         |  | Operating
      expenses(4)                                                                                                                                        |  |                         |  | 0.26%                   |  |                         |  | 0.64%            |  |          |  | 0.52%
|Belmar
      Capital Fund LLC Expenses                                   |  |                                                                                                                                                                    |  |                         |  |                         |  |                         |  |                  |  |         
|                                                                         |  | Interest and
      other borrowing costs(5)(6)                                                                                                                     |  |                         |  | 0.42%                   |  |                         |  | 0.30%            |  |          |  | 0.35%
|                                                                         |  | Investment
      advisory and administrative fees, distribution and servicing fees and
      other                                                                 |  |                         |  |                         |  |                         |  |                  |  |          |  |      
|                                                                         |  | Fund operating expenses(5)(7)                                                                                                                                      |  |                         |  | 0.83%                   |  |                         |  | 0.86%            |  |          |  | 0.82%
|                                                                         |  |                                                                                                                                                                    |  |                        
|Total
      expenses                                                     |  |                                                                                                                                                                    |  | 2.44%                   |  |                         |  | 2.81%                   |  |                  |  | 2.10%   
|Net
      investment income                                              |  |                                                                                                                                                                    |  | 0.54%                   |  |                         |  | 0.93%                   |  |                  |  | 1.79%   
|                                                                        
|                                                                        
|                                                                        
|Supplemental
      Data                                                  |  |                                                                                                                                                                    |  |                         |  |                         |  |                         |  |                  |  |         
|                                                                        
|Net assets,
      end of year (000s omitted)                            |  | $1,876,369                                                                                                                                                         |  | $1,910,487              |  | $1,920,612             
|Portfolio
      turnover of Tax-Managed Growth Portfolio (the Portfolio) |  |                                                                                                                                                                    |  | 0%(9)                   |  |                         |  | 3%                      |  |                  |  | 15%     
|                                                                        
|(1)                                                                      |  | Calculated
      using average shares
      outstanding.                                                                                                           |  |                         |  |                         |  |                         |  |                  |  |          |  |      
|(2)                                                                      |  | Returns are
      calculated by determining the percentage
      changein net asset value
      with all distributions reinvested.                                 |  |                         |  |                        
|(3)                                                                      |  | For the
      purpose of calculating
      ratios, theincome and expenses of Belmar Realty
      Corporations (Belmar Realty) controlled
      subsidiaries are  
|                                                                         |  | reduced by
      the proportionateinterest therein ofinvestors other than Belmar Realty.                                                                           |  |                         |  |                         |  |                         |  |                 
|(4)                                                                      |  | Includes
      Belmar Realtys
      proportional share of expensesincurred byits controlled subsidiaries.                                                         |  |                         |  |                         |  |                         |  |                 
|(5)                                                                      |  | Includes the
      expenses of Belmar Capital Fund
      LLC (Belmar Capital) and Belmar
      Realty.Does notinclude expenses of Belmar Realtys                 
|                                                                         |  | controlled
      subsidiaries.                                                                                                                                     |  |                         |  |                         |  |                         |  |                  |  |          |  |      
|(6)                                                                      |  | Ratios do notincludeinterestincurredin
      connection withinterest rate swap agreements.Had such amounts beenincluded, ratios would be
      higher.            
|(7)                                                                      |  | Includes
      Belmar Capitals share of Belvedere Capital Fund Company LLCs (Belvedere Company) allocated expenses,including those expenses                     
|                                                                         |  | allocated
      from the Portfolio.                                                                                                                                |  |                         |  |                         |  |                         |  |                  |  |          |  |      
|(8)                                                                      |  | Average gross
      assetsis defined as the average daily amount of all assets of Belmar
      Capital (including Belmar Capitalsinterestin Belvedere            
|                                                                         |  | Company and
      Belmar Capitals ratable share of the assets ofits directly andindirectly controlled subsidiaries), without reduction by
      any              
|                                                                         |  | liabilities.For this purpose, the
      assets of Belmar Realtys
      controlled subsidiaries are reduced by the proportionateinterest
      therein ofinvestors
|                                                                         |  | other than
      Belmar Realty.                                                                                                                                    |  |                         |  |                         |  |                         |  |                  |  |          |  |      
|(9)                                                                      |  | Amounts to
      less than 1%.                                                                                                                                     |  |                         |  |                         |  |                         |  |                  |  |          |  |      



|See notes to consolidated
      financial statements
|----------------------------------------------------

45



|Belmar Capital Fund LLCNOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS
|-------------------------------------------------------------------



|1Organization
|-------------

AInvestment
Objective 

Belmar Capital Fund LLC (Belmar Capital)is
a Delaware limited liability company established to offer diversification
and tax-sensitiveinvestment management toinvestors holding large and
concentrated positionsin
equity securities of
selected publicly-traded
companies.Theinvestment objective of Belmar Capitalis to achieve long-term, after-tax returns for Belmar
Capital shareholders
(Shareholders).Belmar Capital pursues this objective primarily byinvestingindirectlyin Tax-Managed Growth
Portfolio (the Portfolio), a diversified, open-end managementinvestment company registered under the Investment Company Act of 1940,
as amended.The Portfoliois
organized as a trust under the laws of
the state of New York.Belmar
Capital maintainsitsinvestmentin the
Portfolio byinvestingin Belvedere Capital Fund Company LLC (Belvedere Company), a
separate Massachusetts limited liability company thatinvests exclusivelyin the Portfolio.The
performance of Belmar Capital and
Belvedere Companyis directly and substantially affected by the performance of the
Portfolio.The audited
financial statements of the Portfolio,including the
Portfolio of Investments, areincluded elsewherein this
report and should be readin
conjunction with
these financial statements.

Separate fromitsinvestmentin the Portfolio through Belvedere Company, Belmar Capitalinvestsin real estate assets
through a controlled subsidiary, Belmar Realty
Corporation (Belmar
Realty).Suchinvestmentsincludeincome-producing preferred
equityinterestsin real estate operating
partnerships (Partnership Preference Units) affiliated with publicly-traded real estateinvestment trusts (REITs),interestsin leaseholdimprovements held through Bel Stamford Investors LLC (Bel Stamford) and
aninterestin real property held through a real estatejoint venture thatis a
controlled subsidiary of Belmar Realty.

BSubsidiaries 

Belmar Realty invests directly and indirectlyin Partnership Preference Units andin real property through controlled
subsidiaries,
Bel Stamford, Brazos Property Trust (Brazos), Bel Alliance Apartments, LLC (Bel Apartments) and
Cimmaron Property Trust (Cimmaron) (for the period during which Belmar Realty
maintained aninterestin Bel Apartments and
Cimmaron).Belmar Realtysinvestmentsin Partnership Preference Units are held
directly except foritsindirectinvestmentin Partnership Preference
Units of Vornado Realty, L.P.(a
Delaware limited partnership), whichis held throughits 20%investmentin Belvorn Holdings LLC at December 31, 2005.Vornado Realty, L.P.is the
soleinvestment of Belvorn
Holdings LLC.

Belmar Realty  Belmar Capital owns 100% of the common stockissued by Belmar Realty andintends to hold all of Belmar Realtys common stock at all times.

Additionally, 2,100 shares of
preferred stock of Belmar Realty are outstanding at December 31, 2005 and 2004.The preferred stock has a par value of $0.01 per share andis redeemable by Belmar Realty at a
redemption price of $100 per share.Dividends on the preferred stock
are cumulative and payable annually
equal to $8 per share.Theinterestin preferred stockis recorded as minorityinterest on the Consolidated Statements of Assets and Liabilities.

Bel Stamford  Bel Stamford, a wholly-owned
subsidiary of Belmar Realty since January 2004, owns a 100%indirectinterestin leaseholdimprovements of an office
building and attached facilitiesin Stamford, Connecticut.The
real propertyis leased to a
single tenant on a triple net lease basis (Net Leased Property) pursuant to a
non-cancelable, fixed term
operating lease expiringin December 2017, with options to extend for renewal periods extending no later than
December 2057.The Net Leased Propertyis 100% leased at December 31,
2005.

Brazos  Brazos, a controlled subsidiary of
Belmar since June 2004, owns
twenty-threeindustrial distribution propertiesin eight states (Florida, Indiana, New Jersey, North
Carolina, Ohio, Pennsylvania, South Carolina and
Tennessee).The average occupancy rateis approximately 94% at December 31, 2005.Belmar Realty owns 100% of the Class A shares of
Brazos, representing 80% of the
votinginterestsin Brazos and a minority shareholder (the Brazos
Minority Shareholder) owns 100% of the Class B shares,
representing 20% of the
votinginterestsin Brazos.The Class B
equityinterestis recorded as minorityinterest on the Consolidated Statements of Assets and Liabilities.The
primary distinctions between the two
classes of shares are the distribution priority and voting rights.Class A shares have
priorityin
distributions
and greater voting rights than Class B shares.From and after August 4, 2014, either Belmar Realty or the Brazos Minority
Shareholder may cause a liquidation of Brazos and,if Belmar Realty makes that election, the Brazos Minority Shareholder has the
right either to purchase the shares of Brazos owned by
Belmar Realty or to acquire the assets
of Brazos,in either case at a price determined through an appraisal of
the assets of Brazos.

Bel Apartments  Bel Apartments, formerly a
controlled subsidiary of Belmar Realty since September 2000, sold all ofits 19 multifamily residential
properties consisting of
5,403 units (collectively, the Bel Apartment Properties) locatedin eight states, to an
affiliate of the Bel Apartments

46



|Belmar Capital Fund LLCNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTD
|-----------------------------------------------------------------------

minority shareholder (the Bel
Apartments Minority Shareholder)in October 2004.Concurrent
with this sale, Belmar Realty acquired the outstanding minorityinterestin Bel Apartments for
a nominal amount.Prior
to acquiring theinterest of the Bel Apartments Minority Shareholder, Belmar
Realty owned 100% of the Class A units
of Bel Apartments, representing 60% of
the votinginterestsin Bel Apartments, and the Bel Apartments Minority
Shareholder owned 100% of the Class B units, representing 40% of the
votinginterestsin Bel Apartments.In December
2004, Belmar Realty solditsinterestin Bel Apartments to the real estate
affiliate of anotherinvestment fund advised by
Boston Management and Research (Boston Management), accordingly, Belmar Realty did not own aninterestin Bel Apartments at
December 31, 2004 or anytime
thereafter.

Cimmaron 
Cimmaron, formerly a controlled
subsidiary of Belmar Realty was acquiredin
June 2004.Belmar Realty subsequently
solditsinterestin Cimmaronin September 2004.Cimmaron owns twenty-fourindustrial distribution properties (collectively the
Cimmaron Properties) locatedin eight states.Belmar Realty owned 100% of the Class A shares of
Cimmaron, representing 80% of the votinginterestsin Cimmaron and a minority shareholder (the
Cimmaron Minority
Shareholder) owned 100% of the Class B shares, representing 20% of the votinginterestsin Cimmaron.Belmar Realty did not own aninterestin Cimmaron at December 31, 2004 or anytime thereafter.

2Significant Accounting Policies

The followingis a summary of
significant accounting policies consistently followedin the preparation of the consolidated
financial statements.The policies arein conformity with accounting principles generally acceptedin the United States of America
(GAAP).

APrinciples of Consolidation 

The consolidated financial statementsinclude the accounts of Belmar
Capital andits controlled subsidiaries for the periods during which Belmar
Capital wasinvestedin such controlled subsidiaries.Belmar Capital and Belmar
Realty consolidate allinvestmentsin affiliates that are controlled by ownership of a majority votinginterest.

The accompanying consolidated financial
statementsinclude the accounts of
Belmar Capital, Belmar Realty, Bel
Stamford, Brazos, Bel Apartments, and Cimmaron (for the period
during which Belmar Realty maintained
aninterestin Bel Apartments and Cimmaron) (collectively, the Fund).

All materialintercompany accounts and
transactions have been eliminated.

BBasis of
Presentation 

Belmar Cpiatal is an investment
company and, as such, presentsits
assets at fair value.Fixed
liabilities are generally stated at their principal value.

CCash 

The Fund considers cash in banks that can be
liquidated without prior notice or penalty to be cash.Approximately $3,500,000 and
$3,100,000 of cashis
restricted for use andis held by Brazos.Such amounts are classified as other assets for the
years ended December 31, 2005 and 2004, respectively.

DInvestment Costs 

The Fundsinvestment assets were principally
acquired through contributions
of common stock by Shareholdersin
exchange for Shares of the Fund, through purchases of Partnership Preference Units and other real estateinvestments, and through contributions of real estateinvestments by each
respective Minority
Shareholderin exchange for cash and a
minorityinterestin controlled
subsidiaries.Upon receipt of common stock from Shareholders, Belmar
Capitalimmediately exchanged the contributed securitiesinto
Belvedere Company for shares thereof, and Belvedere Company,in turn,immediately thereafter
exchanged the contributed
securitiesinto
the Portfolio for aninterestin the Portfolio.Theinitial financial reporting cost basis of the Fundsinvestmentsin contributed
securitiesis
the value of the contributed
securities as of the close of business on the day prior to their contribution to the Fund.Theinitial tax
basis of the Fundsinvestmentin the
Portfolio through Belvedere Companyis the same as the contributing
Shareholdersbasisin
securities contributed to the Fund.Theinitial tax and financial
reporting cost basis of the Fundsinvestmentsin Partnership Preference Units and other
real estateinvestments purchased by
the Fundis the purchase
cost.Theinitial financial
reporting cost basis of the Fundsinvestmentsin real estate contributed to the Fundis the estimated fair value on
contribution date.Theinitial tax
basis of real estateinvestments contributed to the Fundis the
contributors ta x basis at the time of
contribution or the fair value at the time of
contribution, depending on the taxability of the contribution.

EInvestment and Other
Valuations 

The Fund's investments may consist of shares of Belvedere Company,
Partnership Preference Units, real propertyinvestments,investmentsin management
contracts and short-term debt securities.Belvedere Companys onlyinvestmentis aninterestin the Portfolio, the value of
whichis derived from

47



|Belmar Capital Fund LLCNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTD
|-----------------------------------------------------------------------

a proportionalinterest
therein.Valuation of securities by the Portfoliois
discussedin Note 1A of the Portfolios
Notes to Financial Statements, which areincluded elsewherein
this report.Additionally, Belmar
Capital has enteredintointerest rate swap agreements (Note 7).The valuation policies
followed by the Fund are as follows:

Market prices for the Funds real estateinvestments (including
Partnership Preference Units,investmentsin management
contracts,joint ventures and Net Leased Properties) are not readily available and therefore
such statements are statedin the
Funds consolidated financial statements at
estimated fair value.The estimated fair value of aninvestment represents the amount at which Boston Management, as manager of Belmar Realty, believes theinvestment could be soldin a
current transaction between
willing partiesin an orderly disposition, thatis, other thanin a forced or
liquidation sale.In valuing theseinvestments, Boston
Management considers relevant factors,
data andinformation.With respect toinvestmentsin Partnership Preference
Units, Boston Management
considersinformation from dealers and similar firms with
knowledge of suchissues and/or the
prices of comparable preferred
equity securities and
other fixed or adjustable rateinstruments having
similarinvestment
characteristics.With respect toinvestmentsin management contracts, Boston Management determines the estimated fair value based upon
discounting expected cash flows over the terms of the
contracts.Real estateinvestments, other than Partnership Preference Units, are primarily valued based uponindependent valuations (i.e.appraisals) that represent the amount at which Boston Management believes theinvestments could be soldin a
current transaction between
willing parties and assume an
orderly disposition,
thatis, other thanin a forced or liquidation sale.Detailed real property
valuations are performed at least
annually and reviewed periodically.When a property has not
been appraised (such as when a
property has been recently acquired),
Boston Management determines the
estimated fair value of the property based on the transaction value of the property, which equals the total acquisition cost of the property,
exclusive of certain legal and transaction costs, provided such amountis deemedindicative of fair value.Once an appraisal of a
property has been conducted, Boston Management bases the estimated fair value of the property principally on the
estimated value as determined by the appraiser.Appraisals of newly acquired properties are generally conductedin
the year following the
acquisition.Interim valuations of properties may be
adjusted to reflect significant changesin economic circumstances or recent
evaluations of similar
properties, and the results of
operations and distributions.

The fair
value of Belmar Realtys
equityinterestin each real estatejoint ventureis estimated using a financial
model that considers (i) the terms of thejoint
venture agreements relating to the
allocation of distributable cash flow, (ii) the
expected duration of thejoint
venture, and (iii) the projected property values and cash flows from the
properties based on estimates usedin theindependent
valuations.If detailedindependent real property
valuations have not been performed on
every property within ajoint venture (such as when ajoint venture recently acquired
the properties) Boston Management
allocates equityinterestin the real estatejoint venture based on the
contractual ownershipinterest of Belmar Realty and the
respective Minority
Shareholder.Interim valuations reflect results of operations and distributions,
and may be adjustedif there has been a significant changein economic circumstances or recent
evaluations of similar
properties.

The valuation of real estateinvestmentsincludes many assumptions,including, but not
limited to, a current transaction
between willing parties and an orderly disposition of assets.If the assumptions used to
value a real estateinvestment change,it may materiallyimpact the estimated
fair value of thatinvestment.

If a rental property securing a mortgage note payable has an estimated fair value thatis less than the
outstanding principal
balance, the mortgage note payable may be adjusted to the estimated
fair value of the property
securing the mortgage note.No such adjustment has been made to mortgage notes payable at December 31, 2005 and
2004.

Interest rate swap agreements are valued by Boston
Management, asinvestment
adviser of Belmar Capital, based upon dealer and counterparty quotes and
pricing models which takeinto consideration
the market trading prices ofinterest rate swap agreements that have similar
terms to theinterest rate swap
agreements Belmar Capital has
entered.

Changesin
the fair value of the Fundsinvestments are recorded as unrealized appreciation or depreciationin the Consolidated Statements of Operations.

FInterest Rate Swaps 

Belmar Capital has entered intointerest rate swap agreements with respect toits borrowings and real estateinvestments.Pursuant to these agreements, Belmar
Capital makes periodic
payments to the counterparty at predetermined fixed ratesin exchange for floating-rate payments from the counterparty at a
predetermined spread to one-month
LIBOR.Netinterest paid and accrued or received and
earnedis recorded as

48



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realized
gains or losses and changesin the underlying values of the swaps are recorded as
unrealized appreciation
(depreciation), eachin the Consolidated Statements
of Operations.Belmar Capitalis exposed to
credit lossin the event of non-performance by the swap
counterparty.Risks may arise from the unanticipated movementsininterest rates.

GRental
Operations 

The apartment units held by Bel Apartments (for the
period during which
Belmar Realty maintained aninterestin the
properties of Bel Apartments) were
leased to residents generally for a
term averaging approximately one year, with monthly payments duein advance.

Bel Stamford holds aninterestin leaseholdimprovements
leased to a single tenant on a
triple net lease basis pursuant to a non-cancelable, fixed-term operating lease expiringin
December 2017, with options to extend for renewal periods extending no later than December 2057.During theinitial lease term the rentalincome from the office building and attached
facilities,
together with any related payments
received, are expected to equal the
payments due under the mortgage.

The properties held by Brazos and Cimmaron
(for the period during which
Belmar Realty maintained aninterestin Cimmaron) are leased under fixed long-term operating leases.

At December 31, 2005, the minimum
lease payments from leases with lease
periods greater than one year are as
follows:

|Year Ending December 31, |  | Amount       
|------------------------ |  | -------------
|                        
|2006                     |  | $            
|2007                     |  |              
|2008                     |  |              
|2009                     |  |              
|2010                     |  |              
|Thereafter               |  |              
|                        
|                         |  | $ 279,691,667
|                        

Certain of
the costsincurredin connection with acquisitions of properties have been capitalized.Significant betterments andimprovements are capitalized
as part of real property.

HIncome


Dividend income and distributions from
Partnership Preference Units are recorded on the ex-dividend
date andinterestincomeis
recorded on theaccrual basis.Rentalincomeis recorded on the accrual basis based upon the terms of the lease
agreements.

Belvedere Companys netinvestmentincome or loss consists of Belvedere Companys pro rata share of the netinvestmentincome or loss of the Portfolio, less all actual or accrued expenses of Belvedere Company,
determinedin accordance with GAAP.The Funds netinvestmentincome or loss
consists of the Funds pro rata share of the netinvestmentincome or loss of Belvedere Company, plus allincome earned on the Funds direct
andindirectinvestments (including Partnership Preference Units and real
property), less all actual and accrued expenses of the Fund determinedin
accordance with GAAP.

IDeferred Costs


Mortgage origination expenses incurredin connection with
the financing of real estatejoint
ventures are capitalized and amortized over the terms of the respective loans.Deferred loan costs
areincludedin other assets and amortization
expenseisincludedin mortgageinterest expensein the accompanying consolidated financial statements.

JIncome Taxes 

Belmar Capital, Belvedere Company and the
Portfolio are treated as
partnerships for federalincome tax purposes.As a result, Belmar Capital, Belvedere Company and the Portfolio do notincur federalincome tax
liability, and the shareholders and
partners thereof areindividually
responsible for taxes onitems of partnershipincome, gain, loss and
deduction.The policy of Belmar Realty, Brazos, Bel Apartments and Cimmaron (for the period during which Belmar Realty
maintained aninterestin Bel Apartments and
Cimmaron)is to comply with the Internal Revenue Code of 1986, as amended, applicable to REITs.Belmar Realty, Brazos, Bel Apartments and Cimmaron will generally not be subject to
federalincome tax to the extent that
they distribute their earnings to their stockholders each year and maintain
their qualification as a REIT.Bel Stamfordis a single member
liability company treated as a
pass-through entity for federal tax
purposes.

Netinvestmentincome and
capital gains determinedin accordance
withincome tax regulations may differ from such amounts determinedin accordance
with GAAP.Such differences could be significant and are primarily due to differencesin the cost basis of
securities and other contributedinvestments, depreciation of real estate assets,
periodic payments madein connection withinterest rate swap agreements and the character of distributions received from REITs and Partnership Preference Units.

KOther 

Investment transactions are accounted for on a
trade-date basis.

49



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LUse of
Estimates 

The preparation of financial statementsin conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial
statements and the reported amounts ofincome and expense during the
reporting period.Actual results could differ from those
estimates.

MIndemnifications 

Under Belmar Capital's Limited
Liability Company Agreement, Belmar
Capitals officers,its manager,investment adviser, and any affiliate, associate, officer, employee or trustee thereof, and any manager, director, officer or employee of Belmar Realty or any other controlled
subsidiary may beindemnified against certain liabilities and expenses arising out
of their duties to the Fund.Shareholders also may beindemnified against personal liability for
the liabilities of Belmar Capital.

Additionally,in the normal course of business, the Fund entersinto agreements with service providers, lenders and counterparties that may containindemnification
clauses.The Funds maximum exposure under these arrangementsis unknown as this wouldinvolve future claims that may be made against the Fund that have not yet
occurred.

3Distributions to Shareholders

Belmar Capitalintends to distribute
at the end of each year, or shortly thereafter, all ofits netinvestmentincome for the year,if any, and approximately 18% ofits net realized
capital gains for such year (reduced during the year ended December 31, 2003 from 22% to
reflect the reductionin federal long-term capital gains tax rates),if any, other
than precontribution gains
allocated to a Shareholderin
connection with a taxable tender offer or other taxable
corporate event with respect to a
security contributed by that Shareholder or such
Shareholders predecessorininterest.In addition,
whenever a distributionin respect of a precontribution
gainis made, Belmar Capitalintends to make a supplemental distribution to compensate Shareholders receiving
such distributions
for taxes that may be due onincome
specially allocatedin connection with the
precontribution gain
and supplemental distributions.Capital gain
distributions
that are made with respect to
realized precontribution
gains and the associated supplemental distributions (collectively, Special Distributions)
are made solely to the Shareholders to whom such realized precontribution gainis
allocated.There were no
Special Distributions paid or accrued during the years ended December 31, 2005, 2004 and 2003.

The Funds
distributions
generally are based on determinations of netinvestmentincome and net realized
capital gains for federalincome tax purposes.Such
amounts may differ from netinvestmentincome or loss and net realized gain
or loss as set forthin the
Fundsfinancial statements due to differencesin the treatment of variousincome, gain, loss, expense and otheritems for federalincome tax purposes and under GAAP.

In addition, Belmar Realty and Brazosintend to distribute
substantially all of their taxableincome earned by the respective
entities during the year.

Distributions made to Shareholders electing the Funds Estate Freeze feature (Note 4) will be paid, first, to holders of Preferred Shares to the extent
of the unpaid cumulative annual priority return of the Preferred
Shares and, second, to the holders of the associated Common Shares.

Distributions madein respect of any realized
precontribution gains
and associated supplemental
distributions
will be apportioned between Preferred Shares and Common Shares
consistent with the allocation to the Preferred Shares and Common Shares of such realized precontribution gains.Itis expected that substantially all Belmar Capital distributionsin
respect of Estate Freeze Shares will
be paid to holders of Preferred Shares
rather than holders of Common Shares.Distributions
on Estate Freeze Shares may be reinvestedin Belmar
Capital to purchase undivided
Fund Shares at the Funds net asset
value per share on the date of reinvestment.

4Shareholder
Transactions

Belmar Capital mayissue an
unlimited number of full and fractional Fund Shares.Transactionsin Fund Shares were as follows:

|                                   |  |                   |  | Year Ended        |  |                  
|---------------------------------- |  | ----------------- |  | ----------------- |  | -----------------
|                                   |  |                  
|                                   |  | December 31, 2005 |  | December 31, 2004 |  | December 31, 2003
|                                  
|Issued to Shareholders electing to |  |                   |  |                   |  |                  
|receive payment of distributions   |  |                   |  |                   |  |                  
|in Fund
      Shares               |  | 112,299           |  | 118,507           |  | 253,148          
|Redemptions                        |  | (1,378,616)       |  | (1,499,430)       |  | (1,182,492)      
|                                  
|Net decrease                       |  | (1,266,317)       |  | (1,380,923)       |  | (929,344)        
|                                  

Redemptions of Fund Shares held less than three years are generally
subject to a redemption fee of 1% of the net asset value of Fund Shares
redeemed.The redemption feeis paid to Eaton Vance
Distributors, Inc.(EV Distributors) by Belmar Capital on behalf of the redeeming Shareholder.No chargeis levied on redemptions of Fund Shares acquired
through the reinvestment of
distributions,
Fund Shares redeemedin
connection with a taxable tender offer or other taxable
corporate event or Fund Shares redeemed following the death of all theinitial holders of the Fund Shares redeemed.In addition, no fee applies to redemptions made pursuant to a Systematic Redemption Plan, whereby a
Shareholder can redeem up to 2% of Fund Shares held on a

50



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quarterly basis.There were no
redemption fees received by EV Distributors for the years ended
December 31, 2005 and 2004.For the
year ended December 31, 2003, EVDistributors receieved $340,087in redemption fees.

Shareholdersin Belmar Capital are
entitled to restructure
their Fund Shareinterests under whatis termed an Estate Freeze Election.Under this election, Fund Shares are dividedinto Preferred Shares and Common
Shares.Preferred Shares have a
preferential right over the corresponding Common Shares equal to (i) 95% of the original capital contribution madein respect of the undivided
Shares from which the Preferred Shares
and Common Shares were derived, plus
(ii) an annuity priority return equal to
8.5% of the Preferred
Sharespreferentialinterestin the original
capital contribution
of the undivided Fund Shares.The associated Common Shares
are entitled to the remaining 5%
of the original capital contributionin
respect of the undivided Fund Shares, plus any returns thereonin excess of the fixed annual priority of the Preferred
Shares.The existence of restructured Fund Shares does not
adversely affect Shareholders who do not make an election nor do the restructured Fund Shares have
preferential rights to Fund Shares that have not been
restructured.Shareholders who
subdivide Fund Shares under this election sacrifice certain rights and privileges
that they would otherwise have
with respect to the Fund Shares so
divided,including redemption rights and voting and consent rights.Upon the
twentieth anniversary of theissuance of the associated
undivided Fund Shares to the original
holders thereof, Preferred and Common Shares will automatically convertinto full and fractional undivided Fund Shares.

The allocation of Belmar Capitals net asset value per
Share of $95.66 and $91.50 as of December 31, 2005 and 2004,
respectively, between Preferred and
Common Shares that have been restructuredis as follows:

|                     |  |                   |  | Per Share Value
      At |  |          
|-------------------- |  | ----------------- |  | ------------------------ |  | ---------
|                     |  |                  
|                     |  | December 31, 2005 |  | December 31, 2004       
|                     |  |                  
|                     |  | Preferred         |  | Common                   |  | Preferred
|Date of Contribution |  | Shares            |  | Shares                   |  | Shares   
|                    
|March 17, 2000       |  | $95.00            |  | $0.66                    |  | $91.50   
|May 16, 2000         |  | $94.80            |  | $0.86                    |  | $91.50   
|July 19, 2000        |  | $95.66            |  | $0.00                    |  | $91.50   
|                    

5Investment
Transactions

The following table summarizes the
Fundsinvestment transactions, other than short-term obligations,
for the years ended December 31, 2005, 2004 and 2003:

|                                     |  |                   |  |                    |  | Year Ended        |  |  |  | 
|------------------------------------ |  | ----------------- |  | ------------------ |  | ----------------- |  |  |  | 
|                                     |  |                  
|                                     |  | December 31, 2005 |  | December 31,  2004 |  | December 31, 2003
|Investment Transactions              |  |                   |  |                    |  |                   |  |  |  | 
|                                    
|Increases in investment in           |  |                   |  |                    |  |                   |  |  |  | 
|Belvedere Company                    |  | $                |  | $                 |  | $25,000,000      
|Decreases in investment in           |  |                   |  |                    |  |                   |  |  |  | 
|Belvedere Company                    |  | $118,623,471      |  | $128,281,460       |  | $85,197,475      
|Acquisitions of other real estate(1) |  | $                |  | $479,708,008       |  | $               
|Sales of other real estate(2)        |  | $4,078,517        |  | $182,557,032       |  | $               
|Purchases of Partnership             |  |                   |  |                    |  |                   |  |  |  | 
|Preference Units(3)                  |  | $20,001,000       |  | $108,352,710       |  | $75,672,618      
|Sales of Partnership                 |  |                   |  |                    |  |                   |  |  |  | 
|Preference Units(4)                  |  | $30,576,875       |  | $470,422,252       |  | $228,888,304     
|                                    

|(1) | In January 2004, Belmar Realty purchasedindirectinvestmentsin real
      property throughits
      wholly-owned subsidiary, Bel Stamford for
      $16,058,060.                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | In 2004, Belmar Realty purchasedindirectinvestmentsin real
      property through two controlled subsidiaries, Brazos and Cimmaron, for $306,432,708 and $157,217,240,
      respectively (Note
      1).                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(2) | On September 30, 2005, Brazos
      received compensation foritsinterestin the Contracts (as defined below) from an affiliate of the Brazos Minority Shareholder for
      which Belmar Realty
      recognized a gain of $1,616,502.                                                                                                                                                                                                                                                                                                                                                     
|   
|    | On September 29, 2004, Belmar Realty solditsinterestin Cimmaron to the real
      estateinvestment
      affiliate of anotherinvestment fund advised by Boston Management for proceeds of
      $159,062,857 and for which a
      gain of $908,060 was
      recognized on the
      transaction.                                                                                                                                                                                                                                                                                        
|   
|    | In May 2004, Bel Apartments agreed to sell
      all ofits multifamily residential properties to an affiliate of the Bel
      Apartments Minority Shareholder.In October 2004, the sale transaction was completed and Bel Apartments
      received proceeds of $23,494,175
      as consideration for allitsinterestin the
      mutlifamily properties and did not
      retain any contingent liabilities associated
      with the mortgage debt secured
      by the properties or other
      liabilites.The Fund
      recognized a loss of $20,316,581
      on this transaction.
|   
|    | Concurrent with this sale, Belmar Realty acquired the outstanding
      minorityinterestin Bel
      Apartments for a nominal
      amount.In December 2004, the
      Fund soldits remaininginterestin Bel Apartments to the real estateinvestment affiliate of anotherinvestment fund advised
      by Boston Management and recognized a gain of $433,833
      whichisincludedin the net
      gains recognized from sales of Partnership Preference Units (included belowin note
      4).                                                                                           
|   
|(3) | Purchases of Partnership Preference Units for the years ended December 31, 2005,
      2004 and 2003 represent purchases of Partership Preference Units from real estateinvestment affiliates of otherinvestment
      funds advised by Boston
      Management.                                                                                                                                                                                                                                                                                                                          
|   

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|(4) | Sales of Partnership Preference Units for the years ended December 31, 2004 and
      2003include
      Partnership Preference
      Units sold to real estateinvestment affiliates of otherinvestment
      funds advised by Boston
      Management for which net
      gains of $33,340,051 and
      $7,239,933 were recognized,
      respectively.There were no sales of
      Partnership Preference
      Units to real estateinvestment affiliates of otherinvestment
      funds advised by Boston
      Management for the year ended December 31, 2005.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

A portion
of Belmar Realtysinvestmentin Brazos represents aninterestin certain property management contracts (the Contracts)
pertaining to properties of which the Fund does not
own a direct orindirectinterest.Otherinterested parties to the
Contractsinclude an affiliate of
the Brazos Minority Shareholder.The Contracts provide for
Brazos to receive cash flows from
management fees and certain other fees
over the life of the Contractsin amounts that exceed
certain preferred payments to otherinterested parties.In
September 2005, one of the Contracts was terminated (as described
above).The estimated fair value of Brazossinterestin the Contract(s)is $449,758 and $2,990,359 as of December 31, 2005
and 2004, respectively, andis estimated based upon discounting expected cash flows over the terms of the Contract(s).

6Indirect
Investmentin
the Portfolio

The following table summarizes the
Fundsinvestmentin the Portfolio through
Belvedere Company for the years ended December 31, 2005, 2004 and 2003,including allocations ofincome, expenses, and
net realized and unrealized gains (losses) for the years then ended:

|                                  |  |                   |  |                   |  |                   |  | Year Ended |  |  |  | 
|--------------------------------- |  | ----------------- |  | ----------------- |  | ----------------- |  | ---------- |  |  |  | 
|                                  |  |                  
|                                  |  | December 31, 2005 |  | December 31, 2004 |  | December 31, 2003
|                                 
|Expenses allocated to the         |  |                   |  |                   |  |                   |  |            |  |  |  | 
|Fund from                         |  |                   |  |                   |  |                   |  |            |  |  |  | 
|Belvedere Company(3)              |  | $11,797,045       |  | $11,656,198       |  | $10,585,603      
|Net realized gain from            |  |                   |  |                   |  |                   |  |            |  |  |  | 
|investment transactions,          |  |                   |  |                   |  |                   |  |            |  |  |  | 
|securities sold short             |  |                   |  |                   |  |                   |  |            |  |  |  | 
|and foreign currency              |  |                   |  |                   |  |                   |  |            |  |  |  | 
|transactions allocated            |  |                   |  |                   |  |                   |  |            |  |  |  | 
|to Belvedere Company              |  |                   |  |                   |  |                   |  |            |  |  |  | 
|from the Portfolio                |  | $341,680,818      |  | $276,250,393      |  | $128,352,887     
|Net realized gain from            |  |                   |  |                   |  |                   |  |            |  |  |  | 
|investment transactions,          |  |                   |  |                   |  |                   |  |            |  |  |  | 
|securities sold short             |  |                   |  |                   |  |                   |  |            |  |  |  | 
|and foreign currency              |  |                   |  |                   |  |                   |  |            |  |  |  | 
|transactions allocated            |  |                   |  |                   |  |                   |  |            |  |  |  | 
|to the Fund from                  |  |                   |  |                   |  |                   |  |            |  |  |  | 
|Belvedere Company                 |  | $51,940,972       |  | $45,278,877       |  | $22,323,706      
|Net change in unrealized          |  |                   |  |                   |  |                   |  |            |  |  |  | 
|appreciation
      (depreciation) |  |                   |  |                   |  |                   |  |            |  |  |  | 
|of investments, securities        |  |                   |  |                   |  |                   |  |            |  |  |  | 
|sold short and foreign            |  |                   |  |                   |  |                   |  |            |  |  |  | 
|currency allocated to             |  |                   |  |                   |  |                   |  |            |  |  |  | 
|Belvedere Company                 |  |                   |  |                   |  |                   |  |            |  |  |  | 
|from the Portfolio                |  | $100,866,308      |  | $691,783,587      |  | $1,892,271,872   
|Net change in unrealized          |  |                   |  |                   |  |                   |  |            |  |  |  | 
|appreciation
      (depreciation) |  |                   |  |                   |  |                   |  |            |  |  |  | 
|of investments, securities        |  |                   |  |                   |  |                   |  |            |  |  |  | 
|sold short and foreign            |  |                   |  |                   |  |                   |  |            |  |  |  | 
|currency allocated to             |  |                   |  |                   |  |                   |  |            |  |  |  | 
|the Fund from                     |  |                   |  |                   |  |                   |  |            |  |  |  | 
|Belvedere Company                 |  | $11,722,241       |  | $112,083,513      |  | $343,808,846     
|                                 

|                         |  |                   |  |                   |  |                   |  | Year Ended     |  |                |  |             
|------------------------ |  | ----------------- |  | ----------------- |  | ----------------- |  | -------------- |  | -------------- |  | ------------
|                         |  |                  
|                         |  | December 31, 2005 |  | December 31, 2004 |  | December 31, 2003
|                        
|Belvedere Companys      |  |                   |  |                   |  |                   |  |                |  |                |  |             
|interest in              |  |                   |  |                   |  |                   |  |                |  |                |  |             
|the Portfolio(1)         |  | $13,400,922,141   |  | $12,806,516,230   |  | $11,100,012,615  
|The Funds investment in |  |                   |  |                   |  |                   |  |                |  |                |  |             
|Belvedere Company(2)     |  |                   |  | $1,982,377,145    |  |                   |  | $2,015,871,844 |  | $1,966,911,184
|Income allocated to      |  |                   |  |                   |  |                   |  |                |  |                |  |             
|Belvedere Company        |  |                   |  |                   |  |                   |  |                |  |                |  |             
|from the Portfolio       |  |                   |  | $216,731,361      |  |                   |  | $189,728,234   |  |                |  | $143,671,130
|Income allocated to the  |  |                   |  |                   |  |                   |  |                |  |                |  |             
|Fund from                |  |                   |  |                   |  |                   |  |                |  |                |  |             
|Belvedere Company        |  |                   |  | $33,262,604       |  |                   |  | $31,535,928    |  |                |  | $26,299,757 
|Expenses allocated to    |  |                   |  |                   |  |                   |  |                |  |                |  |             
|Belvedere Company from   |  |                   |  |                   |  |                   |  |                |  |                |  |             
|the Portfolio            |  |                   |  | $57,207,392       |  |                   |  | $51,953,817    |  |                |  | $43,085,940 

|(1) | As of December 31, 2005, 2004 and 2003, the
      value of Belvedere Companysinterestin the Portfolio represents 70.4%, 66.9% and 63.0% of the
      Portfolios net assets, respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | As of December 31, 2005, 2004 and 2003, the
      Fundsinvestmentin Belvedere Company represents 14.8%, 15.7% and 17.7% of
      Belvedere Companys net assets,
      respectively.      
|   
|(3) | Allocated expensesinclude:                                                                                                                                                                 
|   

|                                |  |                         |  | Year
      Ended        |  |                        
|------------------------------- |  | ----------------------- |  | ----------------------- |  | -----------------------
|                                |  |                        
|                                |  | December 31,
      2005 |  | December
      31, 2004 |  | December
      31, 2003
|                               
|Expenses
      allocated from   |  |                         |  |                         |  |                        
|the
      Portfolio             |  | $8,781,934              |  | $8,676,304              |  | $7,893,121             
|Service fees
      (see Note 9) |  | $2,947,791              |  | $2,908,588              |  | $2,617,051             
|Operating
      expenses        |  | $67,320                 |  | $71,305                 |  | $75,431                
|                               

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7Interest Rate Swap
Agreements

Belmar Capital has enteredintointerest rate swap agreements
with Merrill Lynch Capital Services, Inc.in
connection withits
real estateinvestments and the
associated borrowings.Under such agreements, Belmar Capital
has agreed to make periodic payments at fixed ratesin exchange for
payments at floating rates.The notional or contractual amounts of theseinstruments may not necessarily
represent the amounts potentially
subject to risk.The
measurement of the risks
associated with theseinvestmentsis meaningful only when consideredin
conjunction with
all related assets, liabilities and
agreements.Interest rate swap
agreementsin place at December 31,
2005 and 2004 are listed
below.

|          |  |   |  |          |  |        |  |          |  | Initial  |  |        |  |                 |  |             
|--------- |  | - |  | -------- |  | ------ |  | -------- |  | -------- |  | ------ |  | --------------- |  | ------------
|          |  |   |  | Notional |  |        |  |          |  | Optional |  | Final  |  | Unrealized     
|          |  |   |  | Amount   |  |        |  |          |  | Termi-   |  | Termi- |  | Appreciation at
|Effective |  |   |  | (000's   |  | Fixed  |  | Floating |  | nation   |  | nation |  | December 31,    |  | December 31,
|Date      |  |   |  | omitted) |  | Rate   |  | Rate     |  | Date     |  | Date   |  | 2005            |  | 2004        
|         
|          |  |   |  |          |  |        |  | LIBOR +  |  |          |  |        |  |                 |  |             
|10/03     |  | $ |  | 55,831   |  | 4.875% |  | 0.20%    |  | 4/04     |  | 6/10   |  | $993,983        |  | $136,605    
|          |  |   |  |          |  |        |  | LIBOR +  |  |          |  |        |  |                 |  |             
|10/03     |  |   |  | 43,010   |  | 4.755% |  | 0.20%    |  | 7/04     |  | 6/10   |  | 903,390         |  | 203,743     
|          |  |   |  |          |  |        |  | LIBOR +  |  |          |  |        |  |                 |  |             
|10/03     |  |   |  | 56,978   |  | 4.695% |  | 0.20%    |  | 9/04     |  | 6/10   |  | 1,291,358       |  | 341,914     
|          |  |   |  |          |  |        |  | LIBOR +  |  |          |  |        |  |                 |  |             
|10/03     |  |   |  | 64,418   |  | 4.565% |  | 0.20%    |  | 3/05     |  | 6/10   |  | 1,699,842       |  | 581,263     
|          |  |   |  |          |  |        |  | LIBOR +  |  |          |  |        |  |                 |  |             
|10/03     |  |   |  | 110,068  |  | 3.973% |  | 0.20%    |  |         |  | 6/10   |  | 4,412,734       |  | 1,307,852   
|          |  |   |  |          |  |        |  | LIBOR +  |  |          |  |        |  |                 |  |             
|02/04     |  |   |  | 58,363   |  | 4.90%  |  | 0.20%    |  | 8/04     |  | 6/10   |  | 1,001,736       |  | 129,965     
|          |  |   |  |          |  |        |  | LIBOR +  |  |          |  |        |  |                 |  |             
|06/04     |  |   |  | 279,760  |  | 4.875% |  | 0.00%    |  |         |  | 6/12   |  |                |  | (1)        
|         
|         
|          |  |   |  |          |  |        |  |          |  |          |  |        |  | $10,303,043     |  | $2,701,342  
|         

Bel Stamford and Brazos and are generally
without recourse to Belmar
Capital and Belmar Realty, except,in the case of Bel Stamford, where
there may be recourse for certain
liabilities associated with fraud, misrepresentation, misappropriation of
funds, or breach of material
convenants.

The estimated fair value of the
aggregate rental property securing the
mortgage notesis approximately $597,330,000 and $576,506,000 at December
31, 2005 and 2004, respectively.Terms of the mortgage
notes payable and amounts outstanding
at December 31, 2005 and 2004 are as follows:

|                 |  |          |  | Monthly    |  |              |  |                
|---------------- |  | -------- |  | ---------- |  | ------------ |  | ---------------
|                 |  |          |  | Principal  |  |              |  |                
|                 |  | Annual   |  | and        |  | Balance at  
|Maturity         |  | Interest |  | Interest   |  | December 31, |  | December 31,   
|Date             |  | Rate     |  | Payment    |  | 2005         |  | 2004           
|                
|October 11, 2016 |  | 6.00%    |  | $1,513,419 |  | $221,197,696 |  | $225,751,737(1)
|January 1, 2013  |  | 6.29%    |  | 90,893     |  | 14,169,819   |  | 14,347,176(2)  
|November 1, 2012 |  | 5.40%    |  | 967,500    |  | 215,000,000  |  | 215,000,000(3) 
|                
|                
|                 |  |          |  | $2,571,812 |  | $450,367,515 |  | $455,098,913   
|                

|(1) | In January 2004, a wholly-owned
      subsidiary of Belmar Realty, Bel Stamford, assumed
      a mortgage note to financeitsinterestin leaseholdimprovements
      of an office building and attached facilities.The mortgage note balance at the date of the transaction was $229,674,914.  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | In connection with the acquisition of real properties on June 30, 2004, Brazos assumed an
      existing mortgage note with a principal balance of
      $14,454,582.Principal andinterest
      payments are due monthly with a
      balloon payment of $12,395,774 due on January 1, 2013.
|   
|(3) | In October 2004, Brazos obtained first mortgage financing foritsinvestmentin real
      propertiesin the amount of $215,000,000.Interest payments are due monthly,
      with the entire principal balance due on
      the maturity date.                                                   
|   

|(1) | On May 3, 2004, Belmar Caplital enteredinto a forwardinterest rate swap agreement with Merrill Lynch Capital
      Services, Inc. in anticipation ofitsinvestmentin controlled subsidiaries, Brazos and
      Cimmaron, for the purpose of
      hedging Belmar
      Realtys proportionate share of theinterest rate of substantially all of the expected fixed-rate mortgage financing of the real property over the expected 8-year term.Such agreement was terminatedin July 2004 and the Fund realized a loss of $2,437,256 upon termination.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

8Debt

AMortgages Rental property held by
Belmar

Realtys
controlled subsidiariesis financed through mortgage notesissued to the controlled subsidiaries.The
mortgage notes are secured by the real property ofScheduled principal payments of the mortgages for the years
subsequent to December 31, 2005 are as follows:

|Year Ending December 31, |  | Amount       
|------------------------ |  | -------------
|                        
|2006                     |  | $            
|2007                     |  |              
|2008                     |  |              
|2009                     |  |              
|2010                     |  |              
|Thereafter               |  |              
|                        
|                         |  | $ 450,367,515
|                        

53



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The estimated market value of the mortgage notes payableis approximately $458,700,000 and $463,100,000 at December 31, 2005 and 2004,
respectively.The mortgage notes payable cannot be
prepaid or otherwise disposed of withoutincurring
a substantial prepayment penalty or
without the sale of the rental
property financed by the mortgage
notes payable.Management generally
has no current plans to prepay or otherwise dispose of the mortgage
notes payable or sell the related rental property prior to the maturity date.The market value of
the mortgage notesis based on
estimates using discounted cash flow analysis
and currently prevailing rates.Considerablejudgmentis necessaryininterpreting market data to develop estimates of market value.The use
of different assumptions or estimation methodologies may have a material effect on the estimated market value.

BCredit
Facility 

Belmar Capital has entered into credit arrangements with DrKW Holdings,
Inc.(DrKW) and Merrill Lynch Mortgage Capital, Inc.(Merrill Lynch)
(collectively, the Credit Facility).The Credit Facility has a seven-year maturity and will expire on June 25,
2010.Belmar Capitals
obligations under the Credit Facility are secured by a pledge
ofits assets, excluding the assets of Bel Stamford and
Brazos.

The credit
arrangement with DrKWis a term loan facility
that accruesinterest at a rate of
one-month LIBOR plus 0.20% per annum.

The credit
arrangement with Merrill Lynchis a revolving loan
facilityin
the amount of $118,500,000,including the ability toissue letters of credit up to $10,000,000.This
credit arrangement accruesinterest at a rate of one-month LIBOR
plus 0.38% per annum.A commitment fee of0.10% per annumis
paid on the unused commitment amount.Belmar Capital pays all fees
associated withissuing the letters of
credit.

Among other borrowings made during the
period,in August 2004, Belmar Capital made borrowings underits credit arrangement with Merrill Lynchin the amount of$118,500,000.At that
time, Belmar Capital alsoincreased the amount available
underits credit arrangement with Merrill Lynch under a
temporary arrangement (the Temporary Arrangement) by $213,500,000 and borrowed
that amount.Belmar Capital used the proceeds from these
borrowings to finance the Fundsinvestmentin Brazos and Cimmaron (Note 5).The
borrowing under the Temporary
Arrangement accruedinterest at a rate
of one-month LIBOR plus 0.90% and was
for a term of sixty days,
subject to a thirty-day extension.Any unused amount of theincrease pertaining to
the Temporary Arrangement was subject
to a commitment fee of 0.10% per annum.

On October 21, 2004, Brazos obtained first mortgage financing foritsinvestmentin real
propertiesin the amount of $215,000,000.The proceeds from this financing were distributed to Belmar Realty and the Brazos Minority
Shareholderin accordance
with their equityinterests.Belmar Realtys
proceeds from this
transaction along with other funds available were used to repay Belmar Capitals
borrowings under the Temporary
Arrangement as well as a portion of
other borrowings under the
Credit Facility.Pursuant toits terms, the Temporary Arrangement
expired on October 29,
2004.

The following table summarizes Belmar
CapitalCredit
Facility:

|At December 31, 2005                 |  | At December 31, 2004
|------------------------------------ |  | --------------------
|                                    
|Total amount available under         |  |                     
|the Credit Facility                  |  | $408,500,000        
|DrKW borrowings outstanding          |  | $290,000,000        
|Merrill Lynch borrowings outstanding |  | $14,000,000         
|Outstanding letters of credit        |  | $                  
|                                    

Borrowings
under the Credit Facility
have been used to purchase the Fundsinterestsin real estateinvestments, to pay selling
commissions and organizational expenses and to
provide for the liquidity needs of the
Fund.Additional
borrowings under the Credit Facility may be madein the future for these purposes.

CNotes Payable 

During 2001, the Bel Apartments Minority Shareholder and Belmar
Realty, respectively, loaned $700,000
and $1,050,000, to Bel Apartments.Interest on the notes was payable at a rate of 10% per annum.The remaining principal
balance of the notes plus accruedinterest thereon was duein
August 2004 and December 2004.All
balances and transactions related to
the notes made by Belmar Realty have been eliminated through
consolidation of the financial statements.

In October 2004, the liability of Bel Apartments for
such notes payable was relieved upon
the sale of Bel Apartmentsinterestsin the multifamily
properties (Note 5).

9Management Fee and Other
Transactions
with Affiliates

Belmar Capital and the Portfolio have
engaged Boston Management asinvestment adviser.Under the terms of the advisory agreement with the Portfolio, Boston
Management receives a monthly
advisory fee of 5/96 of1% (0.625% annually) of the
average daily net assets of the
Portfolio up to $500,000,000 and at
reduced rates as

54



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daily net
assets exceed that level.Certain of the advisory fee rate reductions are pursuant to an agreement between the
Portfolios Board of Trustees and Boston
Management.Those reductions may not be changed without Trustee andinterestholder approval.For the years ended December 31, 2005, 2004 and
2003, the advisory fee
applicable to the Portfolio was 0.43%, 0.43% and 0.44% of average daily net assets, respectively.

In addition, Boston Managementis, subject to the fee cap described below, entitled to receive a monthly
advisory and administrative fee of 1/20 of 1%
(0.60% annually) of the average
daily gross assets of Belmar
Capital.The term gross assets with respect to Belmar Capitalis
defined toinclude the current value of all of Belmar
Capitals assetsincluding Belmar
Capitalsinterestin Belvedere Company
and Belmar Capitals ratable share of the assets ofits directly andindirectly controlled subsidiaries, without reduction by any liabilities.The advisory fee payable to the Portfolioin respect of Belmar
Capitalsindirectinvestmentin the Portfoliois credited towards Belmar Capitals advisory and administrative fee payment.Belmar Realty pays Boston Management a monthly management fee at a rate
of 1/20 of 1% (equivalent to
0.60% annually) of the average
daily gross assets of Belmar
Realty.The term gross assets
with respect to Belmar Realtyis defined toinclude the current value of all assets of Belmar Realty,including
Belmar Realtys ratable share of the
assets ofits controlled
subsidiaries,
without reduction by any liabilities.For this purpose, the assets of Belmar Realtys controlled subsidiaries are reduced by the
proportionateinterest therein ofinvestors other than
Belmar Realty.

Eaton Vance Management and Boston Management do not
receive separate compensation for serving as manager of Belmar Capital and manager of Belvedere Company, respectively.

As compensation forits services as Placement Agent, Belmar Capital pays EV Distributors a monthly
distribution
fee at a rate of 1/120 of 1% (equivalent to 0.10% annually) of
Belmar Capitals average daily net assets.

Payments to the Eaton Vance organization
forinvestment advisory, management, administration and distribution services made by orin respect of Belmar Capital on
a direct orindirect
basis are subject to a monthly fee cap at a rate of 1/20 of 1%
(equivalent to 0.60% annually) of the average daily gross assets of Belmar Capital (as defined above).Payments
subject to the monthly fee cap are the
distribution
fee paid to EV Distributors, Belmar Capitals attributable share of the advisory and management fees paid by the

Portfolio
and Belmar Realty, and Belmar Capitals advisory and administrative fee.Boston Management has agreed to waive
a portion of the monthly
advisory and administrative fee
otherwise payable by Belmar
Capital as necessary to comply
with the monthly fee cap.

Pursuant to a servicing agreement between
Belvedere Company and EV Distributors, Belvedere Company
pays a servicing fee to EV Distributors for
providing certain services andinformation to Shareholders.The
servicing feeis paid on a quarterly
basis at an annual rate of
0.15% of Belvedere Companys average daily net assets.Pursuant to a
servicing agreement between Belmar Capital and EV Distributors, Belmar
Capital pays a servicing fee
to EV Distributors on a quarterly basis at an annual rate of 0.25% of Belmar Capitals
average daily net assets, less Belmar
Capitals allocated share of the servicing fee
payable by Belvedere Company.With respect to Shareholders who
subscribe through a subagent, EV
Distributors has assigned servicing responsibilities and
fees to the applicable subagent
beginning twelve months after theissuance of Fund Shares to such persons.

Management services for the real property held by Brazos, Bel Apartments and
Cimmaron (for the period during which Belmar Realty
maintained aninterestin Bel Apartments and
Cimmaron) are provided by an affiliate of each
respective entitys
Minority Shareholder (Note 1B).Each management agreement provides for a management fee and allows for
reimbursement of payroll and other
direct expensesincurred by the managersin conjunction with managing each respective
entitys properties (Note 1B).In
addition to the fees noted above, an affiliate of
the Brazos Minority Shareholder also receives administrative and other fees for administering the financial
and operating activities of the Brazos
Properties.

The table below sets forth the fees paid or payable by, or allocable to, the Fund and
Belmar Realty for the years ended December 31, 2005, 2004 and 2003in connection with the services rendered by Eaton Vance,its affiliates, and affiliates
of Belmar Realtys controlled
subsidiaries.

|                          |  |                   |  | Year Ended        |  |                  
|------------------------- |  | ----------------- |  | ----------------- |  | -----------------
|                          |  |                  
|                          |  | December 31, 2005 |  | December 31, 2004 |  | December 31, 2003
|                         
|Advisory fee allocated to |  |                   |  |                   |  |                  
|Belvedere Company from    |  |                   |  |                   |  |                  
|the Portfolio             |  | $55,259,100       |  | $50,252,861       |  | $41,671,111      
|Advisory fee allocated to |  |                   |  |                   |  |                  
|the Fund from             |  |                   |  |                   |  |                  
|Belvedere Company         |  | $8,484,011        |  | $8,392,976        |  | $7,634,035       

55



|Belmar Capital Fund LLCNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTD
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|                            |  |              |  |              |  | Year Ended   |  |            |  |  
|--------------------------- |  | ------------ |  | ------------ |  | ------------ |  | ---------- |  | -
|                            |  |             
|                            |  | December 31, |  | December 31, |  | December 31,
|                            |  | 2005         |  | 2004         |  | 2003        
|                           
|Advisory and administrative |  |              |  |              |  |              |  |            |  |  
|fee and management          |  |              |  |              |  |              |  |            |  |  
|fee incurred directly       |  |              |  |              |  |              |  |            |  |  
|by the Fund                 |  | $            |  | 6,948,608    |  | $            |  | 7,948,234  |  | $
|Distribution fees incurred  |  |              |  |              |  |              |  |            |  |  
|directly by the Fund        |  | $            |  | 1,851,096    |  | $            |  | 1,874,514  |  | $
|Reduction of advisory       |  |              |  |              |  |              |  |            |  |  
|and administrative fees     |  | $            |  | 1,851,096    |  | $            |  | 1,874,514  |  | $
|Servicing fees of           |  |              |  |              |  |              |  |            |  |  
|Belvedere Company           |  | $            |  | 19,202,381   |  | $            |  | 17,418,515 |  | $
|Servicing fees allocated    |  |              |  |              |  |              |  |            |  |  
|to the Fund from            |  |              |  |              |  |              |  |            |  |  
|Belvedere Company           |  | $            |  | 2,947,791    |  | $            |  | 2,908,588  |  | $
|Servicing fees incurred     |  |              |  |              |  |              |  |            |  |  
|directly by the Fund        |  | $            |  | 1,674,343    |  | $            |  | 1,778,204  |  | $
|Servicing fees paid or      |  |              |  |              |  |              |  |            |  |  
|accrued to subagents        |  | $            |  | 4,593,893    |  | $            |  | 4,676,253  |  | $
|Property management,        |  |              |  |              |  |              |  |            |  |  
|administrative and          |  |              |  |              |  |              |  |            |  |  
|other fees                  |  | $            |  | 2,077,937    |  | $            |  | 1,804,248  |  | $
|                           

10Segment
Information

Belmar Capital pursuesitsinvestment objective primarily
byinvestingindirectlyin the Portfolio through Belvedere Company.The Portfoliois a diversifiedinvestment company that emphasizesinvestmentsin common stocks of domestic and foreign growth companies that are
considered byitsinvestment adviser to be
highin quality and attractivein their
long-terminvestment
prospects.Separate fromitsinvestmentin Belvedere
Company, Belmar Capitalinvestsin real estate assets throughits subsidiary Belmar Realty.Belmar Realtyinvests directly andindirectlyin
Partnership Preference Units andin real property through controlled subsidiaries, Bel Stamford, Brazos,
Bel Apartments and Cimmaron (for the
period during which
Belmar Realty maintained aninterestin the
properties of Bel Apartments and
Cimmaron) (Note 1B).

Belmar Capital evaluates performance of the reportable segments based on the netincrease (decrease)in net assets from operations of the respective segment, whichincludes netinvestmentincome (loss), net realized
gain (loss) and the net changein unrealized appreciation (depreciation).The accounting policies of the reportable
segments are thesame as those for Belmar Capital on a consolidated basis (Note
2).No reportable segments have been
aggregated.Reportableinformation by segmentis as
follows:

|                                  |  |              |  | Tax-          |  |              |  |             
|--------------------------------- |  | ------------ |  | ------------- |  | ------------ |  | ------------
|                                  |  |              |  | Managed       |  |              |  |             
|For the Year Ended                |  |              |  | Growth        |  | Real         |  |             
|December 31, 2005                 |  |              |  | Portfolio*    |  | Estate       |  | Total       
|                                 
|Revenue                           |  |              |  | $21,465,559   |  | $ 47,758,861 |  | $ 69,224,420
|Interest expense                  |  |              |  |               |  |              |  |             
|on mortgages                      |  |              |  |              |  | (26,168,107) |  | (26,168,107)
|Interest expense on               |  |              |  |               |  |              |  |             
|Credit Facility                   |  |              |  | (3,030,169)   |  | (5,627,456)  |  | (8,657,625) 
|Operating expenses                |  |              |  | (1,589,046)   |  | (12,157,981) |  | (13,747,027)
|Minority interests in net         |  |              |  |               |  |              |  |             
|income of                         |  |              |  |               |  |              |  |             
|controlled subsidiary             |  |              |  |              |  | (1,196,139)  |  | (1,196,139) 
|                                 
|                                 
|Net investment income             |  |              |  | $16,846,344   |  | $ 2,609,178  |  | $ 19,455,522
|Net realized gain                 |  |              |  | 51,940,972    |  | 1,927,409    |  | 53,868,381  
|Net change in unrealized          |  |              |  |               |  |              |  |             
|appreciation
      (depreciation) |  |              |  | 11,722,241    |  | 25,126,568   |  | 36,848,809  
|                                 
|                                 
|Net increase in net assets        |  |              |  |               |  |              |  |             
|from operations of                |  |              |  |               |  |              |  |             
|reportable segments               |  |              |  | $80,509,557   |  | $ 29,663,155 |  | $110,172,712
|                                 
|                                 
|                                  |  |              |  | Tax-          |  |              |  |             
|                                  |  |              |  | Managed       |  |              |  |             
|For the Year Ended                |  |              |  | Growth        |  | Real         |  |             
|December 31, 2004                 |  |              |  | Portfolio*    |  | Estate       |  | Total       
|                                 
|Revenue                           |  |              |  | $19,879,730   |  | $ 72,201,124 |  | $ 92,080,854
|Interest expense                  |  |              |  |               |  |              |  |             
|on mortgages                      |  |              |  |              |  | (28,190,253) |  | (28,190,253)
|Interest expense on               |  |              |  |               |  |              |  |             
|Credit Facility                   |  |              |  | (2,478,237)   |  | (4,873,866)  |  | (7,352,103) 
|Operating expenses                |  |              |  | (1,684,719)   |  | (23,969,912) |  | (25,654,631)
|Minority interests in net         |  |              |  |               |  |              |  |             
|income of                         |  |              |  |               |  |              |  |             
|controlled subsidiaries           |  |              |  |              |  | (1,247,532)  |  | (1,247,532) 
|                                 
|                                 
|Net investment income             |  |              |  | $15,716,774   |  | $ 13,919,561 |  | $ 29,636,335
|Net realized gain                 |  |              |  | 45,278,877    |  | 12,393,005   |  | 57,671,882  
|Net change in unrealized          |  |              |  |               |  |              |  |             
|appreciation
      (depreciation) |  |              |  | 112,083,513   |  | (60,011,103) |  | 52,072,410  
|                                 
|                                 
|Net increase (decrease) in        |  |              |  |               |  |              |  |             
|net assets from operations        |  |              |  |               |  |              |  |             
|of reportable segments            |  | $173,079,164 |  | $(33,698,537) |  | $139,380,627
|                                 

56



|Belmar Capital Fund LLCNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTD
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|                            |  | Tax-         |  |             |  |              |  | 
|--------------------------- |  | ------------ |  | ----------- |  | ------------ |  | 
|                            |  | Managed      |  |             |  |              |  | 
|For the Year Ended          |  | Growth       |  | Real        |  |              |  | 
|December 31, 2003           |  | Portfolio*   |  | Estate      |  | Total       
|                           
|Revenue                     |  |              |  | $15,714,154 |  | $78,922,925  |  | 
|Interest expense            |  |              |  |             |  |              |  | 
|on mortgages                |  |              |  |            |  | (14,303,813) |  | 
|Interest expense on         |  |              |  |             |  |              |  | 
|Credit Facility             |  |              |  | (1,473,942) |  | (6,676,091)  |  | 
|Operating expenses          |  |              |  | (1,277,920) |  | (22,735,245) |  | 
|Minority interests in net   |  |              |  |             |  |              |  | 
|income of                   |  |              |  |             |  |              |  | 
|controlled subsidiary       |  |              |  |            |  | (435,830)    |  | 
|                           
|                           
|Net investment income       |  |              |  | $12,962,292 |  | $34,771,946  |  | 
|Net realized gain (loss)    |  |              |  | 22,323,706  |  | (16,412,617) |  | 
|Net change in unrealized    |  |              |  |             |  |              |  | 
|appreciation (depreciation) |  |              |  | 343,808,846 |  | 18,345,296   |  | 
|                           
|                           
|Net increase in net assets  |  |              |  |             |  |              |  | 
|from operations of          |  |              |  |             |  |              |  | 
|reportable segments         |  | $379,094,844 |  | $36,704,625 |  | $415,799,469
|                           

*Belmar Capitalinvestsindirectlyin Tax-Managed Growth Portfolio
through Belvedere Capital.

The following tables reconcile the
reported segmentinformation to the consolidated financial statements for the periodsindicated:

|                              |  |              |  | Year Ended   |  |             
|----------------------------- |  | ------------ |  | ------------ |  | ------------
|                              |  |             
|                              |  | December 31, |  | December 31, |  | December 31,
|                              |  | 2005         |  | 2004         |  | 2003        
|                             
|Revenue:                      |  |              |  |              |  |             
|Revenue from reportable       |  |              |  |              |  |             
|segments                      |  | $69,224,420  |  | $92,080,854  |  | $94,637,079 
|Unallocated amounts:          |  |              |  |              |  |             
|Interest
      earned on cash |  |              |  |              |  |             
|not invested in the           |  |              |  |              |  |             
|Portfolio or in               |  |              |  |              |  |             
|controlled subsidiaries       |  | 460,827      |  | 595,647      |  | 269,403     
|                             
|Total revenue                 |  | $69,685,247  |  | $92,676,501  |  | $94,906,482 
|                             

|                                |  |              |  | Year Ended   |  |             
|------------------------------- |  | ------------ |  | ------------ |  | ------------
|                                |  |             
|                                |  | December 31, |  | December 31, |  | December 31,
|                                |  | 2005         |  | 2004         |  | 2003        
|                               
|Net increase (decrease) in net  |  |              |  |              |  |             
|assets from operations:         |  |              |  |              |  |             
|Net increase in net             |  |              |  |              |  |             
|assets from operations of       |  |              |  |              |  |             
|reportable segments             |  | $110,172,712 |  | $139,380,627 |  | $415,799,469
|Unallocated investment income:  |  |              |  |              |  |             
|Interest earned on cash         |  |              |  |              |  |             
|not invested in the             |  |              |  |              |  |             
|Portfolio or in                 |  |              |  |              |  |             
|controlled
      subsidiaries   |  | 460,827      |  | 595,647      |  | 269,403     
|Unallocated expenses(1):        |  |              |  |              |  |             
|Distribution and servicing fees |  | (3,525,439)  |  | (3,652,718)  |  | (3,370,528) 
|Interest expense on             |  |              |  |              |  |             
|Credit Facility                 |  | (2,164,406)  |  | (908,686)    |  | (520,215)   
|Audit, tax and legal fees       |  | (295,752)    |  | (326,449)    |  | (279,016)   
|Other operating expenses        |  | (96,704)     |  | (119,635)    |  | (109,863)   
|                               
|Net increase in net assets      |  |              |  |              |  |             
|from operations                 |  | $104,551,238 |  | $134,968,786 |  | $411,789,250
|                               

(1)Unallocated
expenses represent costsincurred that
pertain to the overall
operation of Belmar Capital, and do not pertain to either operating
segment.

The following tables reconcile the
reported segmentinformation to the consolidated financial statements as of December 31, 2005 and
2004:

|                               |  | Tax-           |  |              |  |               
|------------------------------ |  | -------------- |  | ------------ |  | --------------
|                               |  | Managed        |  |              |  |               
|                               |  | Growth         |  | Real         |  |               
|December 31,
      2005        |  | Portfolio*     |  | Estate       |  | Total         
|                              
|Segments
      assets          |  | $1,982,377,145 |  | $671,690,122 |  | $2,654,067,267
|Segment
      liabilities      |  | 90,132,227     |  | 631,447,177  |  | 721,579,404   
|                              
|                              
|Net assets of
      reportable |  |                |  |              |  |               
|segments                       |  | $1,892,244,918 |  | $ 40,242,945 |  | $1,932,487,863
|                              
|                              
|                               |  | Tax-           |  |              |  |               
|                               |  | Managed        |  |              |  |               
|                               |  | Growth         |  | Real         |  |               
|December 31,
      2004        |  | Portfolio*     |  | Estate       |  | Total         
|                              
|Segments
      assets          |  | $2,015,871,844 |  | $658,486,334 |  | $2,674,358,178
|Segment
      liabilities      |  | 86,021,161     |  | 648,751,089  |  | 734,772,250   
|                              
|                              
|Net assets of
      reportable |  |                |  |              |  |               
|segments                       |  | $1,929,850,683 |  | $9,735,245   |  | $1,939,585,928
|                              

|* | Belmar Capitalinvestsindirectlyin Tax-Managed Growth Portfolio through Belvedere Company.
|- | -----------------------------------------------------------------------------------------
| 

57



| | Belmar Capital Fund LLCNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTD
| | -----------------------------------------------------------------------

|                                      |  | December 31, 2005 |  | December 31, 2004
|------------------------------------- |  | ----------------- |  | -----------------
|                                     
|Net assets:                           |  |                   |  |                  
|Net assets of reportable segments     |  | $1,932,487,863    |  | $1,939,585,928   
|Uallocated amounts:                   |  |                   |  |                  
|Cash(1)                               |  | 629,528           |  | 984,755          
|Short-term investments(1)             |  | 3,549,638         |  | 1,700,000        
|Loan payable  Credit Facility(2)     |  | (59,446,955)      |  | (31,547,823)     
|Payable to affiliate for distribution |  |                   |  |                  
|and servicing fees                    |  | (584,430)         |  |                 
|Other liabilities                     |  | (266,525)         |  | (235,362)        
|                                     
|Net assets                            |  | $1,876,369,119    |  | $1,910,487,498   
|                                     

|(1) | Unallocated cash and short-terminvestments represent cash and
      cash equivalents notinvestedin the Portfolio or real estate assets.                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | Unallocated amount of loan payable 
      Credit Facility represents borrowings
      not specifically used to fund real estateinvestments.Such borrowings are generally used to pay selling commissions,
      organization expenses and other liquidity needs of the
      Fund.
|   

11Subsequent
Event

On January 26, 2006, the Fund made a distribution of $0.74 per share to Shareholders of record on January
25, 2006.

58



|Belmar Capital Fund LLCREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM
|------------------------------------------------------------------------------------

To the Shareholders of Belmar Capital Fund LLC and Subsidiaries

We have audited the accompanying
consolidated statements of assets and
liabilities,including the
consolidated portfolio ofinvestments, of Belmar Capital
Fund LLC and Subsidiaries,
(collectively, the Fund) as of
December 31, 2005 and 2004, and the related consolidated statements of operations, changesin net assets, cash flows, and financial highlights
for each of the three yearsin the
period ended December 31,
2005.These financial
statements and the financial highlights are the
responsibility of
the Funds management.Our responsibilityis to
express an opinion on these financial statements and
financial highlights based on our
audits.

We conducted our auditsin
accordance with standards of the
Public Company Accounting Oversight Board (United
States).Those standards
require that we plan and perform the
audit to obtain reasonable assurance about whether the
financial statements and financial
highlights are free of material misstatement.An auditincludes examining, on a test basis, evidence supporting the amounts
and disclosuresin the financial statements.Our proceduresincluded confirmation of securities owned as of December 31,
2005 and 2004 by correspondence with
the custodian.An audit alsoincludes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial
statement presentation.We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements and
financial highlights referred to above
present fairly,in all material respects, the financial position of
the Fund as of December 31, 2005 and 2004, and the results ofits operations, the changesinits net assets,its cash flows, and the financial
highlights for each of the three yearsin the period ended December 31, 2005in
conformity with accounting principles generally acceptedin the United States of America.

We have also audited,in accordance
with the standards of the
Public Company Accounting Oversight Board (United States), the
effectiveness of the Fundsinternal control over financial reporting as of December 31, 2005, based on the
criteria establishedinInternal Control  Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission
and our report dated March 10, 2006 expressed an unqualified
opinion on managements assessment
of the effectiveness of the
Fundsinternal control over financial
reporting and an unqualified
opinion on the effectiveness of the
Fundsinternal control over financial
reporting.



|DELOITTE & TOUCHE LLPBoston, MassachusettsMarch 10,
      2006
|--------------------------------------------------------------

59



|Belmar Capital Fund LLCMANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL
      REPORTING
|---------------------------------------------------------------------------------------------

Eaton Vance Management (Eaton Vance), as manager
of Belmar Capital Fund LLC (the
Fund), with the participation of the Funds Chief
Executive Officer and Chief Financial Officer, (collectively referred toin this report as management)is responsible for establishing and maintaining adequateinternal control over financial reporting as definedin Rules 13a-15(f) and
15d-15(f) under the 1934 Act.The
Fundsinternal control over financial
reportingis designed to provide reasonable
assurance regarding the
reliability of
financial reporting and the preparation of
financial statements for external purposesin accordance with generally accepted accounting principles.

Because ofitsinherent limitations,internal control over financial
reporting may not prevent or detect
misstatements.Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls
may becomeinadequate because of
changesin conditions,
or that the degree of compliance
with the policies or
procedures may deteriorate.

Management assessed the effectiveness of the Fundsinternal control over financial reporting as of December 31, 2005.In making this assessment, management
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway CommissioninInternal
Control-IntegratedFramework.Based onits
assessment and those criteria, management
believes that the Fund maintained
effectiveinternal control over financial
reporting as of December 31,
2005.

The Fundsindependent registered public accounting firm hasissued an attestation report on
managements assessment of the
Fundsinternal control over financial
reporting.That report appears on the following page.



|March 10, 2006
|--------------

60



|Belmar Capital Fund LLCREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM
|------------------------------------------------------------------------------------

To the Shareholders of Belmar Capital Fund LLC and Subsidiaries

We have audited managements assessment,includedin the accompanying Managements Report on
Internal Control Over Financial Reporting, that Belmar Capital Fund LLC and Subsidiaries (the Fund)
maintained effectiveinternal control over
financial reporting as of December 31, 2005, based on criteria
establishedinInternal Control 
Integrated Frameworkissued by the
Committee of Sponsoring Organizations of the Treadway
Commission.The
Funds managementis responsible for maintaining
effectiveinternal control over financial
reporting and forits assessment of the effectiveness ofinternal control over financial reporting.Our
responsibilityis to express an opinion on
managements assessment and an
opinion on the effectiveness of the
Fundsinternal control over financial
reporting based on our audit.

We conducted our auditin
accordance with the standards of the
Public Company Accounting Oversight Board (United
States).Those standards
require that we plan and perform the
audit to obtain reasonable assurance about whether
effectiveinternal control over financial
reporting was maintainedin all material respects.Our auditincluded obtaining an understanding ofinternal control over financial reporting, evaluating managements assessment,
testing and evaluating the design and operating
effectiveness ofinternal control, and performing such other procedures as we considered necessaryin the circumstances.We
believe that our audit provides a reasonable basis for our
opinions.

A companysinternal control over
financial reportingis a process
designed by, or under the
supervision of, the companys principal executive and principal financial
officers, or persons
performing similar
functions, and effected by the
companys board of directors, management, and other personnel to
provide reasonable assurance
regarding the reliability of financial
reporting and the preparation of financial statements for
external purposesin accordance
with generally accepted
accounting principles.A companysinternal control over financial reportingincludes those policies and procedures that (1)
pertain to the maintenance of records that,in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statementsin accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made onlyin accordance with
authorizations of management and directors of the company;and (3) provide reasonable assurance regarding prevention or timely detection

of unauthorized acquisition,
use, or disposition of
the companys assets that could have a
material effect on the financial
statements.

Because of theinherent limitations
ofinternal control over financial
reporting,including
the possibility of
collusion orimproper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a
timely basis.Also,
projections of any evaluation of the effectiveness of theinternal control
over financial reporting to future periods are
subject to the risk that the controls may becomeinadequate because of changesin conditions, or that the degree of
compliance with the policies or procedures may
deteriorate.

In our opinion, managements assessment that the Fund maintained
effectiveinternal control over financial
reporting as of December 31, 2005,is fairly stated,in all material respects, based
on the criteria establishedinInternal Control  Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.Alsoin our opinion, the Fund maintained,in all material respects, effectiveinternal control over financial reporting as of December 31, 2005, based on the
criteria establishedinInternal Control  Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited,in accordance
with the standards of the
Public Company Accounting Oversight Board (United States), the
consolidated financial
statements as of and for the year ended December 31, 2005 of the Fund and our
report dated March 10, 2006 expressed an unqualified
opinion on those financial statements.



|DELOITTE & TOUCHE LLPBoston, MassachusettsMarch 10,
      2006
|--------------------------------------------------------------

61

Tax-Managed Growth Portfolioa
s   o f   D e c e m b e r   3 1 ,   2 0
0 5

P O R T F O L I O   O F   I N
V E S T M E N T S

|C o m m o n S t o c k s   9 9 . 7
      % |  |  |  |           |  |      
|------------------------------------------ |  |  |  | --------- |  | -----
|                                           |  |  |  |           |  |      
|Security                                   |  |  |  | Shares    |  | Value
|                                          
|Aerospace & Defense  3.0%                 |  |  |  |           |  |      
|                                          
|Boeing Company (The)                       |  |  |  | 798,441   |  | $    
|General Dynamics Corp.                     |  |  |  | 735,000   |  |      
|Honeywell International, Inc.              |  |  |  | 289,748   |  |      
|Northrop Grumman Corp.                     |  |  |  | 3,090,955 |  |      
|Raytheon Co.                               |  |  |  | 345,300   |  |      
|Rockwell Collins, Inc.                     |  |  |  | 156,972   |  |      
|Teledyne Technologies, Inc.(1)             |  |  |  | 6,117     |  |      
|United Technologies Corp.                  |  |  |  | 3,660,728 |  |      
|                                          
|                                           |  |  |  |           |  | $    
|                                          
|Air Freight & Logistics  2.9%             |  |  |  |           |  |      
|                                          
|C.H. Robinson Worldwide, Inc.              |  |  |  | 2,079,406 |  | $    
|FedEx Corp.                                |  |  |  | 2,226,609 |  |      
|United Parcel Service, Inc., Class B       |  |  |  | 3,231,607 |  |      
|                                          
|                                           |  |  |  |           |  | $    
|                                          
|Airlines  0.0%                            |  |  |  |           |  |      
|                                          
|Southwest Airlines Co.                     |  |  |  | 386,112   |  | $    
|                                          
|                                           |  |  |  |           |  | $    
|                                          
|Auto Components  0.1%                     |  |  |  |           |  |      
|                                          
|ArvinMeritor, Inc.                         |  |  |  | 8,000     |  | $    
|BorgWarner, Inc.                           |  |  |  | 180,098   |  |      
|Delphi Corp.                               |  |  |  | 5,361     |  |      
|Johnson Controls, Inc.                     |  |  |  | 233,221   |  |      
|Visteon Corp.(1)                           |  |  |  | 9,828     |  |      
|                                          
|                                           |  |  |  |           |  | $    
|                                          
|Automobiles 
      0.1%                   |  |  |  |           |  |      
|                                          
|DaimlerChrysler AG(2)                      |  |  |  | 7,000     |  | $    
|Ford Motor Co.                             |  |  |  | 83,266    |  |      
|General Motors Corp.                       |  |  |  | 34,443    |  |      
|Harley-Davidson, Inc.                      |  |  |  | 140,700   |  |      
|Honda Motor Co. Ltd. (ADR)                 |  |  |  | 20,000    |  |      
|                                          
|                                           |  |  |  |           |  | $    
|                                          
|Beverages  4.2%                           |  |  |  |           |  |      
|                                          
|Anheuser-Busch Companies, Inc.             |  |  |  | 4,702,340 |  | $    
|Brown-Forman Corp., Class A                |  |  |  | 547,732   |  |      
|Brown-Forman Corp., Class B                |  |  |  | 45,820    |  |      

|Security                                 |  | Shares    |  | Value
|---------------------------------------- |  | --------- |  | -----
|                                        
|Beverages (continued)                    |  |           |  |      
|                                        
|Coca-Cola Co.                            |  | 3,696,347 |  | $    
|Coca-Cola Enterprises, Inc.              |  | 1,756,930 |  |      
|PepsiCo, Inc.                            |  | 6,217,904 |  |      
|                                        
|                                         |  |           |  | $    
|                                        
|Biotechnology 
      2.2%               |  |           |  |      
|                                        
|Amgen, Inc.(1)                           |  | 4,322,439 |  | $    
|Applera Corp. - Celera Genomics Group(1) |  | 26,000    |  |      
|Biogen Idec, Inc.(1)                     |  | 11,200    |  |      
|Genzyme Corp.(1)                         |  | 476,887   |  |      
|Gilead Sciences, Inc.(1)                 |  | 115,482   |  |      
|Incyte Corp.(1)                          |  | 14,294    |  |      
|Invitrogen Corp.(1)                      |  | 429,910   |  |      
|Vertex Pharmaceuticals, Inc.(1)          |  | 13,000    |  |      
|                                        
|                                         |  |           |  | $    
|                                        
|Building Products  0.8%                 |  |           |  |      
|                                        
|American Standard Companies, Inc.        |  | 975,691   |  | $    
|Masco Corp.                              |  | 3,815,892 |  |      
|Water Pik Technologies, Inc.(1)          |  | 2,141     |  |      
|                                        
|                                         |  |           |  | $    
|                                        
|Capital Markets 
      4.6%             |  |           |  |      
|                                        
|Affiliated Managers Group, Inc.(1)       |  | 20,520    |  | $    
|Ameriprise Financial, Inc.               |  | 123,241   |  |      
|Bank of New York Co., Inc. (The)         |  | 399,053   |  |      
|Bear Stearns Companies, Inc.             |  | 88,001    |  |      
|Charles Schwab Corp. (The)               |  | 857,261   |  |      
|Credit Suisse Group(2)                   |  | 155,136   |  |      
|Federated Investors, Inc.                |  | 1,666,768 |  |      
|Franklin Resources, Inc.                 |  | 1,448,649 |  |      
|Goldman Sachs Group, Inc.                |  | 1,014,997 |  |      
|Investors Financial Services Corp.       |  | 453,428   |  |      
|Knight Capital Group, Inc., Class A(1)   |  | 1,750,000 |  |      
|Legg Mason, Inc.                         |  | 26,461    |  |      
|Lehman Brothers Holdings, Inc.           |  | 96,237    |  |      
|Mellon Financial Corp.                   |  | 250,087   |  |      
|Merrill Lynch & Co., Inc.                |  | 2,109,325 |  |      
|Morgan Stanley                           |  | 3,713,173 |  |      
|Northern Trust Corp.                     |  | 726,812   |  |      
|Nuveen Investments, Class A              |  | 150,000   |  |      
|Piper Jaffray Cos., Inc.(1)              |  | 27,967    |  |      

S e e   n o t e s   t
o   f i n a n c i a l   s t a t e m e n t s

62



|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5P O R T F O L I
      O   O F   I N V E S T M E N T SC O N TD
|---------------------------------------------------------------------------------------------------------------------------------------------

|Security                                 |  | Shares    |  | Value
|---------------------------------------- |  | --------- |  | -----
|                                        
|Capital Markets
      (continued)        |  |           |  |      
|                                        
|Raymond James Financial, Inc.            |  | 147,337   |  | $    
|State Street Corp.                       |  | 150,434   |  |      
|T. Rowe Price Group, Inc.                |  | 163,648   |  |      
|UBS AG(2)                                |  | 83,392    |  |      
|Waddell & Reed Financial, Inc., Class A  |  | 273,635   |  |      
|                                        
|                                         |  |           |  | $    
|                                        
|Chemicals 
      0.8%                   |  |           |  |      
|                                        
|Airgas, Inc.                             |  | 117,613   |  | $    
|Arch Chemicals, Inc.                     |  | 4,950     |  |      
|Ashland, Inc.                            |  | 116,107   |  |      
|Bayer AG (ADR)                           |  | 40,000    |  |      
|Dow Chemical Co. (The)                   |  | 257,005   |  |      
|E.I. du Pont de Nemours and Co.          |  | 1,069,852 |  |      
|Ecolab, Inc.                             |  | 305,627   |  |      
|MacDermid, Inc.                          |  | 61,937    |  |      
|Monsanto Co.                             |  | 19,181    |  |      
|Olin Corp.                               |  | 9,900     |  |      
|PPG Industries, Inc.                     |  | 23,542    |  |      
|Rohm and Haas Co.                        |  | 2,601     |  |      
|RPM International, Inc.                  |  | 70,138    |  |      
|Sigma-Aldrich Corp.                      |  | 630,897   |  |      
|Solutia, Inc.(1)                         |  | 11,510    |  |      
|Valspar Corp. (The)                      |  | 1,289,459 |  |      
|                                        
|                                         |  |           |  | $    
|                                        
|Commercial Banks 
      8.4%            |  |           |  |      
|                                        
|AmSouth Bancorporation                   |  | 586,114   |  | $    
|Associated Banc-Corp.                    |  | 991,726   |  |      
|Bank of America Corp.                    |  | 4,813,556 |  |      
|Bank of Hawaii Corp.                     |  | 69,735    |  |      
|Bank of Montreal(2)                      |  | 257,366   |  |      
|BB&T Corp.                               |  | 1,715,782 |  |      
|City National Corp.                      |  | 184,221   |  |      
|Colonial BancGroup, Inc. (The)           |  | 253,936   |  |      
|Comerica, Inc.                           |  | 333,089   |  |      
|Commerce Bancshares, Inc.                |  | 162,911   |  |      
|Compass Bancshares, Inc.                 |  | 297,054   |  |      
|Fifth Third Bancorp                      |  | 1,973,171 |  |      
|First Citizens BancShares, Inc., Class A |  | 30,600    |  |      
|First Financial Bancorp.                 |  | 47,933    |  |      
|First Horizon National Corp.             |  | 152,267   |  |      

|Security                                    |  | Shares    |  | Value
|------------------------------------------- |  | --------- |  | -----
|                                           
|Commercial Banks
      (continued)          |  |           |  |      
|                                           
|First Midwest Bancorp, Inc.                 |  | 523,358   |  | $    
|HSBC Holdings PLC (ADR)                     |  | 601,671   |  |      
|Huntington Bancshares, Inc.                 |  | 630,239   |  |      
|KeyCorp                                     |  | 799,881   |  |      
|M&T Bank Corp.                              |  | 64,486    |  |      
|Marshall & Ilsley Corp.                     |  | 589,899   |  |      
|National City Corp.                         |  | 1,784,322 |  |      
|North Fork Bancorporation, Inc.             |  | 1,865,892 |  |      
|PNC Financial Services Group, Inc.          |  | 149,958   |  |      
|Popular, Inc.(2)                            |  | 1,432     |  |      
|Regions Financial Corp.                     |  | 1,653,747 |  |      
|Royal Bank of Canada(2)                     |  | 288,465   |  |      
|Royal Bank of Scotland Group PLC(2)         |  | 50,837    |  |      
|S&T Bancorp, Inc.                           |  | 100,000   |  |      
|Societe Generale(2)                         |  | 1,152,974 |  |      
|SunTrust Banks, Inc.                        |  | 1,373,393 |  |      
|Synovus Financial Corp.                     |  | 1,369,351 |  |      
|TCF Financial Corp.                         |  | 72,500    |  |      
|Trustmark Corp.                             |  | 205,425   |  |      
|U.S. Bancorp                                |  | 4,364,242 |  |      
|Valley National Bancorp.                    |  | 104,601   |  |      
|Wachovia Corp.                              |  | 2,190,523 |  |      
|Wells Fargo & Co.                           |  | 2,313,285 |  |      
|Westamerica Bancorporation                  |  | 268,474   |  |      
|Whitney Holding Corp.                       |  | 383,436   |  |      
|Zions Bancorporation                        |  | 620,420   |  |      
|                                           
|                                            |  |           |  | $    
|                                           
|Commercial
      Services & Supplies  1.4% |  |           |  |      
|                                           
|Acco Brands Corp.(1)                        |  | 30,117    |  | $    
|Allied Waste Industries, Inc.(1)            |  | 1,626,411 |  |      
|Avery Dennison Corp.                        |  | 851,315   |  |      
|Banta Corp.                                 |  | 42,341    |  |      
|CBIZ, Inc.(1)                               |  | 185,000   |  |      
|Cendant Corp.                               |  | 584,731   |  |      
|Cintas Corp.                                |  | 1,531,435 |  |      
|Consolidated Graphics, Inc.(1)              |  | 70,215    |  |      
|Deluxe Corp.                                |  | 32,000    |  |      
|Donnelley (R.R.) & Sons Co.                 |  | 91,260    |  |      
|Equifax, Inc.                               |  | 80,000    |  |      
|Herman Miller, Inc.                         |  | 541,800   |  |      
|HNI Corp.                                   |  | 1,121,592 |  |      

S e e   n o t e s   t o 
 f i n a n c i a l   s t a t e m e n t s

63



|Tax-Managed Growth Portfolioa s o f D
      e c e m b e r 3 1 , 2 0 0 5P O R T F O L I O O
      F I N V E S T M E N T SC O N TD
|---------------------------------------------------------------------------------------------------------------------------------

|Security                                         |  | Shares    |  | Value
|------------------------------------------------ |  | --------- |  | -----
|                                                
|Commercial
      Services & Supplies (continued)
|                                                
|Hudson Highland Group, Inc.(1)                   |  | 10,262    |  | $    
|Ikon Office Solutions, Inc.                      |  | 56,287    |  |      
|Manpower, Inc.                                   |  | 2,000     |  |      
|Monster Worldwide, Inc.(1)                       |  | 68,426    |  |      
|Navigant Consulting, Inc.(1)                     |  | 238,641   |  |      
|PHH Corp.(1)                                     |  | 27,467    |  |      
|Pitney Bowes, Inc.                               |  | 22,857    |  |      
|School Specialty, Inc.(1)                        |  | 49,197    |  |      
|Steelcase, Inc., Class A                         |  | 123,000   |  |      
|Waste Management, Inc.                           |  | 911,032   |  |      
|                                                
|                                                 |  |           |  | $    
|                                                
|Communications Equipment  1.4%                  |  |           |  |      
|                                                
|3Com Corp.(1)                                    |  | 664,106   |  | $    
|ADC Telecommunications, Inc.(1)                  |  | 41,693    |  |      
|Alcatel SA (ADR)(1)                              |  | 43,728    |  |      
|Avaya, Inc.(1)                                   |  | 31,239    |  |      
|Ciena Corp.(1)                                   |  | 375,431   |  |      
|Cisco Systems, Inc.(1)                           |  | 5,089,042 |  |      
|Comverse Technology, Inc.(1)                     |  | 293,654   |  |      
|Corning, Inc.(1)                                 |  | 3,633,999 |  |      
|Dycom Industries, Inc.(1)                        |  | 143,116   |  |      
|Enterasys Networks, Inc.(1)                      |  | 12,356    |  |      
|JDS Uniphase Corp.(1)                            |  | 52,451    |  |      
|Juniper Networks, Inc.(1)                        |  | 35,691    |  |      
|Lucent Technologies, Inc.(1)                     |  | 255,464   |  |      
|Motorola, Inc.                                   |  | 1,282,326 |  |      
|Nokia Oyj (ADR)                                  |  | 2,042,478 |  |      
|Nortel Networks Corp.(1)(2)                      |  | 739,418   |  |      
|QUALCOMM, Inc.                                   |  | 562,096   |  |      
|Riverstone Networks, Inc.(1)                     |  | 28,706    |  |      
|Tellabs, Inc.(1)                                 |  | 106,674   |  |      
|                                                
|                                                 |  |           |  | $    
|                                                
|Computers & Peripherals  2.2%                   |  |           |  |      
|                                                
|Dell, Inc.(1)                                    |  | 4,471,715 |  | $    
|EMC Corp.(1)                                     |  | 1,770,402 |  |      
|Gateway, Inc.(1)                                 |  | 79,938    |  |      
|Hewlett-Packard Co.                              |  | 906,807   |  |      
|International Business Machines Corp.            |  | 1,712,254 |  |      
|Lexmark International, Inc., Class A(1)          |  | 1,714,509 |  |      
|McDATA Corp., Class A(1)                         |  | 17,915    |  |      

|Security                                   |  | Shares    |  | Value
|------------------------------------------ |  | --------- |  | -----
|                                          
|Computers & Peripherals (continued)        |  |           |  |      
|                                          
|Network Appliance, Inc.(1)                 |  | 488,000   |  | $    
|Palm, Inc.(1)                              |  | 64,913    |  |      
|Sun Microsystems, Inc.(1)                  |  | 319,180   |  |      
|                                          
|                                           |  |           |  | $    
|                                          
|Construction &
      Engineering  0.1%    |  |           |  |      
|                                          
|Jacobs Engineering Group, Inc.(1)          |  | 160,823   |  | $    
|                                          
|                                           |  |           |  | $    
|                                          
|Construction
      Materials  0.2%        |  |           |  |      
|                                          
|CRH PLC(2)                                 |  | 329,450   |  | $    
|Vulcan Materials Co.                       |  | 206,614   |  |      
|                                          
|                                           |  |           |  | $    
|                                          
|Consumer Finance 
      1.1%              |  |           |  |      
|                                          
|American Express Co.                       |  | 617,258   |  | $    
|Capital One Financial Corp.                |  | 1,429,006 |  |      
|MBNA Corp.                                 |  | 411,292   |  |      
|SLM Corp.                                  |  | 916,399   |  |      
|                                          
|                                           |  |           |  | $    
|                                          
|Containers &
      Packaging  0.1%        |  |           |  |      
|                                          
|Bemis Co., Inc.                            |  | 295,186   |  | $    
|Caraustar Industries, Inc.(1)              |  | 167,599   |  |      
|Sealed Air Corp.(1)                        |  | 37,014    |  |      
|Sonoco Products Co.                        |  | 148,033   |  |      
|Temple-Inland, Inc.                        |  | 115,924   |  |      
|                                          
|                                           |  |           |  | $    
|                                          
|Distributors  0.1%                        |  |           |  |      
|                                          
|Genuine Parts Co.                          |  | 347,293   |  | $    
|                                          
|                                           |  |           |  | $    
|                                          
|Diversified Consumer Services 
      0.4% |  |           |  |      
|                                          
|Apollo Group, Inc., Class A(1)             |  | 49,852    |  | $    
|H&R Block, Inc.                            |  | 1,575,244 |  |      
|Laureate Education, Inc.(1)                |  | 520,213   |  |      
|Service Corp. International                |  | 142,389   |  |      
|ServiceMaster Co. (The)                    |  | 1,156,537 |  |      
|Stewart Enterprises, Inc.                  |  | 114,000   |  |      
|                                          
|                                           |  |           |  | $    
|                                          

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64



|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5P O R T F O L I
      O   O F   I N V E S T M E N T SC O N TD
|---------------------------------------------------------------------------------------------------------------------------------------------

|Security                                      |  | Shares    |  | Value
|--------------------------------------------- |  | --------- |  | -----
|                                             
|Diversified Financial Services  1.9%         |  |           |  |      
|                                             
|Citigroup, Inc.                               |  | 4,327,010 |  | $    
|FINOVA Group, Inc. (The)(1)                   |  | 175,587   |  |      
|ING Groep N.V. (ADR)                          |  | 257,281   |  |      
|JPMorgan Chase & Co.                          |  | 3,164,955 |  |      
|Moodys Corp.                                 |  | 155,397   |  |      
|Principal Financial Group, Inc.               |  | 113,328   |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Diversified Telecommunication Services  1.3%
|                                             
|AT&T, Inc.                                    |  | 1,678,472 |  | $    
|BCE, Inc.(2)                                  |  | 3,100,000 |  |      
|BellSouth Corp.                               |  | 161,722   |  |      
|Cincinnati Bell, Inc.(1)                      |  | 169,013   |  |      
|Citizens Communications Co.                   |  | 12,231    |  |      
|Deutsche Telekom AG (ADR)                     |  | 2,006,790 |  |      
|McLeod USA, Inc., Class A(1)                  |  | 947       |  |      
|Qwest Communications International, Inc.(1)   |  | 38,011    |  |      
|RSL Communications, Ltd., Class A(1)(2)(3)    |  | 247,161   |  |      
|Telefonos de Mexico SA de CV (ADR)            |  | 3,051,574 |  |      
|Verizon Communications, Inc.                  |  | 459,935   |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Electric Utilities  0.3%                     |  |           |  |      
|                                             
|American Electric Power Co., Inc.             |  | 960       |  | $    
|Exelon Corp.                                  |  | 1,002,600 |  |      
|Southern Co. (The)                            |  | 65,985    |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Electrical Components 
      0.0%            |  |           |  |      
|                                             
|Molex, Inc., Class A                          |  | 61,319    |  | $    
|                                             
|                                              |  |           |  | $    
|                                             
|Electrical
      Equipment  0.6%             |  |           |  |      
|                                             
|American Power Conversion Corp.               |  | 30,856    |  | $    
|Baldor Electric Co.                           |  | 149,060   |  |      
|Emerson Electric Co.                          |  | 1,143,636 |  |      
|Rockwell Automation, Inc.                     |  | 250,649   |  |      
|Roper Industries, Inc.                        |  | 46,244    |  |      
|Thomas & Betts Corp.(1)                       |  | 114,600   |  |      
|                                             
|                                              |  |           |  | $    
|                                             

|Security                                              |  | Shares    |  | Value
|----------------------------------------------------- |  | --------- |  | -----
|                                                     
|Electronic
      Equipment & Instruments 
      0.7%
|                                                     
|Agilent Technologies, Inc.(1)                         |  | 461,244   |  | $    
|Arrow Electronics, Inc.(1)                            |  | 8,750     |  |      
|Flextronics International, Ltd.(1)(2)                 |  | 441,607   |  |      
|Jabil Circuit, Inc.(1)                                |  | 2,127,971 |  |      
|National Instruments Corp.                            |  | 735,687   |  |      
|Plexus Corp.(1)                                       |  | 150,776   |  |      
|Sanmina-SCI Corp.(1)                                  |  | 1,140,602 |  |      
|Solectron Corp.(1)                                    |  | 1,707,596 |  |      
|                                                     
|                                                      |  |           |  | $    
|                                                     
|Energy Equipment &
      Services  0.8%              |  |           |  |      
|                                                     
|Baker Hughes, Inc.                                    |  | 358,482   |  | $    
|Core Laboratories N.V.(1)(2)                          |  | 20,244    |  |      
|Grant Prideco, Inc.(1)                                |  | 11,694    |  |      
|Halliburton Co.                                       |  | 644,762   |  |      
|National-Oilwell Varco, Inc.(1)                       |  | 311,875   |  |      
|Schlumberger, Ltd.(2)                                 |  | 557,887   |  |      
|Smith International, Inc.                             |  | 191,739   |  |      
|Transocean, Inc.(1)(2)                                |  | 103,602   |  |      
|                                                     
|                                                      |  |           |  | $    
|                                                     
|Food & Staples Retailing  1.8%                       |  |           |  |      
|                                                     
|Albertsons, Inc.                                     |  | 853,255   |  | $    
|Caseys General Stores, Inc.                          |  | 12,551    |  |      
|Costco Wholesale Corp.                                |  | 928,292   |  |      
|CVS Corp.                                             |  | 266,910   |  |      
|Kroger Co. (The)(1)                                   |  | 1,348,478 |  |      
|Safeway, Inc.                                         |  | 1,190,841 |  |      
|Sysco Corp.                                           |  | 2,053,288 |  |      
|Sysco Corp.(3)(4)                                     |  | 60,000    |  |      
|Walgreen Co.                                          |  | 988,481   |  |      
|Wal-Mart Stores, Inc.                                 |  | 2,119,018 |  |      
|Winn-Dixie Stores, Inc.(1)                            |  | 137,447   |  |      
|                                                     
|                                                      |  |           |  | $    
|Food Products  2.6%                                 
|
|                                                     
|Archer-Daniels-Midland Co.                            |  | 977,204   |  | $    
|Campbell Soup Co.                                     |  | 1,274,493 |  |      
|ConAgra Foods, Inc.                                   |  | 1,048,341 |  |      
|Dean Foods Co.(1)                                     |  | 304,629   |  |      
|Del Monte Foods Co.(1)                                |  | 99,492    |  |      
|General Mills, Inc.                                   |  | 151,037   |  |      

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|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5P O R T F O L I O 
       O F   I N V E S T M E N T SC O N TD
|---------------------------------------------------------------------------------------------------------------------------------------------

|Security                                      |  | Shares    |  | Value
|--------------------------------------------- |  | --------- |  | -----
|                                             
|Food Products (continued)                     |  |           |  |      
|                                             
|H.J. Heinz Co.                                |  | 299,708   |  | $    
|Hershey Co. (The)                             |  | 505,557   |  |      
|J.M. Smucker Co. (The)                        |  | 7,276     |  |      
|Kellogg Co.                                   |  | 54,076    |  |      
|Kraft Foods, Inc.                             |  | 465       |  |      
|Nestle SA(2)                                  |  | 275,000   |  |      
|Sara Lee Corp.                                |  | 4,771,143 |  |      
|Smithfield Foods, Inc.(1)                     |  | 3,845,278 |  |      
|TreeHouse Foods, Inc.(1)                      |  | 64,797    |  |      
|Tyson Foods, Inc., Class A                    |  | 265,272   |  |      
|Wm. Wrigley Jr. Co.                           |  | 839,317   |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Gas Utilities  0.0%                          |  |           |  |      
|                                             
|National Fuel Gas Co.                         |  | 4,000     |  | $    
|                                             
|                                              |  |           |  | $    
|                                             
|Health Care Equipment
      & Supplies  1.3% |  |          
|                                             
|Advanced Medical Optics, Inc.(1)              |  | 31,158    |  | $    
|Bausch & Lomb, Inc.                           |  | 29,250    |  |      
|Baxter International, Inc.                    |  | 229,317   |  |      
|Becton, Dickinson and Co.                     |  | 64,173    |  |      
|Biomet, Inc.                                  |  | 419,890   |  |      
|Boston Scientific Corp.(1)                    |  | 1,109,134 |  |      
|DENTSPLY International, Inc.                  |  | 6,927     |  |      
|Dionex Corp.(1)                               |  | 37,300    |  |      
|Edwards Lifesciences Corp.(1)                 |  | 10,353    |  |      
|Guidant Corp.                                 |  | 57,206    |  |      
|Hillenbrand Industries, Inc.                  |  | 342,176   |  |      
|Hospira, Inc.(1)                              |  | 126,372   |  |      
|Lumenis, Ltd.(1)(2)                           |  | 100,000   |  |      
|Medtronic, Inc.                               |  | 2,079,834 |  |      
|PerkinElmer, Inc.                             |  | 254,526   |  |      
|St. Jude Medical, Inc.(1)                     |  | 48,028    |  |      
|Steris Corp.                                  |  | 718       |  |      
|Stryker Corp.                                 |  | 71,556    |  |      
|Waters Corp.(1)                               |  | 165,841   |  |      
|Zimmer Holdings, Inc.(1)                      |  | 320,941   |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Health Care Providers
      & Services  2.1% |  |          
|                                             
|AmerisourceBergen Corp.                       |  | 348,354   |  | $    

|Security                                           |  | Shares    |  | Value
|-------------------------------------------------- |  | --------- |  | -----
|                                                  
|Health Care Providers
      & Services (continued)
|                                                  
|Beverly Enterprises, Inc.(1)                       |  | 50,586    |  | $    
|Cardinal Health, Inc.                              |  | 1,784,669 |  |      
|Caremark Rx, Inc.(1)                               |  | 801,471   |  |      
|CIGNA Corp.                                        |  | 11,836    |  |      
|Express Scripts, Inc.(1)                           |  | 53,316    |  |      
|HCA, Inc.                                          |  | 140       |  |      
|Health Management Associates, Inc., Class A        |  | 131,615   |  |      
|Henry Schein, Inc.(1)                              |  | 1,904,253 |  |      
|IDX Systems Corp.(1)                               |  | 60,000    |  |      
|IMS Health, Inc.                                   |  | 280,530   |  |      
|McKesson Corp.                                     |  | 2,631     |  |      
|Medco Health Solutions, Inc.(1)                    |  | 182,743   |  |      
|PAREXEL International Corp.(1)                     |  | 27,837    |  |      
|Renal Care Group, Inc.(1)                          |  | 239,856   |  |      
|Sunrise Senior Living, Inc.(1)                     |  | 288,000   |  |      
|Tenet Healthcare Corp.(1)                          |  | 3,961     |  |      
|UnitedHealth Group, Inc.                           |  | 426,716   |  |      
|Ventiv Health, Inc.(1)                             |  | 13,170    |  |      
|WellPoint, Inc.(1)                                 |  | 809,292   |  |      
|                                                  
|                                                   |  |           |  | $    
|                                                  
|Hotels, Restaurants & Leisure  1.7%               |  |           |  |      
|                                                  
|Bob Evans Farms, Inc.                              |  | 50,957    |  | $    
|Brinker International, Inc.                        |  | 198,438   |  |      
|Carnival Corp.(2)                                  |  | 561,335   |  |      
|CBRL Group, Inc.                                   |  | 62,047    |  |      
|Darden Restaurants, Inc.                           |  | 184,714   |  |      
|Gaylord Entertainment Co.(1)                       |  | 428,482   |  |      
|International Game Technology                      |  | 400,000   |  |      
|International Speedway Corp., Class A              |  | 118,344   |  |      
|Jack in the Box, Inc.(1)                           |  | 500,000   |  |      
|Lone Star Steakhouse & Saloon, Inc.                |  | 145,981   |  |      
|Marriott International, Inc., Class A              |  | 185,766   |  |      
|McDonalds Corp.                                   |  | 863,972   |  |      
|MGM MIRAGE(1)                                      |  | 188,890   |  |      
|Navigant International, Inc.(1)                    |  | 38,258    |  |      
|Outback Steakhouse, Inc.                           |  | 1,360,076 |  |      
|Papa Johns International, Inc.(1)                 |  | 188,800   |  |      
|Royal Caribbean Cruises, Ltd.(2)                   |  | 397,428   |  |      
|Sonic Corp.(1)                                     |  | 159,765   |  |      
|Starbucks Corp.(1)                                 |  | 2,343,463 |  |      
|Yum! Brands, Inc.                                  |  | 236,553   |  |      
|                                                  
|                                                   |  |           |  | $    
|                                                  

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|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5P O R T F O L I
      O   O F   I N V E S T M E N T SC O N TD
|---------------------------------------------------------------------------------------------------------------------------------------------

|Security                              |  | Shares     |  | Value
|------------------------------------- |  | ---------- |  | -----
|                                     
|Household Durables  0.5%             |  |            |  |      
|                                     
|Blyth, Inc.                           |  | 699,869    |  | $    
|D.R. Horton, Inc.                     |  | 625,255    |  |      
|Fortune Brands, Inc.                  |  | 126,932    |  |      
|Helen of Troy, Ltd.(1)(2)             |  | 20,000     |  |      
|Interface, Inc., Class A(1)           |  | 75,467     |  |      
|Leggett & Platt, Inc.                 |  | 1,799,370  |  |      
|Lenox Group, Inc.(1)                  |  | 5,455      |  |      
|Newell Rubbermaid, Inc.               |  | 411,393    |  |      
|Snap-On, Inc.                         |  | 42,453     |  |      
|                                     
|                                      |  |            |  | $    
|                                     
|Household Products  2.9%             |  |            |  |      
|                                     
|Clorox Co. (The)                      |  | 53,688     |  | $    
|Colgate-Palmolive Co.                 |  | 713,670    |  |      
|Energizer Holdings, Inc.(1)           |  | 168,981    |  |      
|Kimberly-Clark Corp.                  |  | 1,484,938  |  |      
|Procter & Gamble Co. (The)            |  | 7,098,400  |  |      
|                                     
|                                      |  |            |  | $    
|                                     
|Independent Power Producers &         |  |            |  |      
|Energy Traders  0.2%                 |  |            |  |      
|                                     
|AES Corp. (The)(1)                    |  | 49,542     |  | $    
|Duke Energy Corp.                     |  | 417,250    |  |      
|Dynegy, Inc., Class A(1)              |  | 22,688     |  |      
|TXU Corp.                             |  | 327,916    |  |      
|                                     
|                                      |  |            |  | $    
|                                     
|Industrial Conglomerates
       3.0% |  |            |  |      
|                                     
|3M Co.                                |  | 913,513    |  | $    
|General Electric Co.                  |  | 13,345,070 |  |      
|Teleflex, Inc.                        |  | 23,700     |  |      
|Tyco International, Ltd.(2)           |  | 1,147,900  |  |      
|                                     
|                                      |  |            |  | $    
|                                     
|Insurance  6.2%                      |  |            |  |      
|                                     
|21st Century Insurance Group          |  | 70,700     |  | $    
|Aegon, N.V. (ADR)                     |  | 5,182,849  |  |      
|AFLAC, Inc.                           |  | 2,196,373  |  |      
|Allstate Corp. (The)                  |  | 189,192    |  |      
|American International Group, Inc.    |  | 5,154,370  |  |      
|AON Corp.                             |  | 550,106    |  |      
|Arthur J. Gallagher & Co.             |  | 647,017    |  |      

|Security                                      |  | Shares    |  | Value
|--------------------------------------------- |  | --------- |  | -----
|                                             
|Insurance (continued)                         |  |           |  |      
|                                             
|Berkshire Hathaway, Inc., Class A(1)          |  | 639       |  | $    
|Berkshire Hathaway, Inc., Class B(1)          |  | 41,253    |  |      
|Chubb Corp. (The)                             |  | 16,099    |  |      
|Commerce Group, Inc. (The)                    |  | 120,000   |  |      
|Hartford Financial Services Group, Inc. (The) |  | 46,382    |  |      
|Jefferson-Pilot Corp.                         |  | 150,301   |  |      
|Lincoln National Corp.                        |  | 52,903    |  |      
|Manulife Financial Corp.(2)                   |  | 74,958    |  |      
|Marsh & McLennan Cos., Inc.                   |  | 686,159   |  |      
|MetLife, Inc.                                 |  | 1,824,271 |  |      
|Old Republic International Corp.              |  | 240,548   |  |      
|Progressive Corp. (The)(3)(4)                 |  | 9,470     |  |      
|Progressive Corp. (The)                       |  | 1,725,948 |  |      
|SAFECO Corp.                                  |  | 161,000   |  |      
|St. Paul Travelers Companies, Inc., (The)     |  | 333,134   |  |      
|Torchmark Corp.                               |  | 324,638   |  |      
|UICI                                          |  | 43,597    |  |      
|UnumProvident Corp.                           |  | 53,710    |  |      
|XL Capital Ltd., Class A(2)                   |  | 187,100   |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Internet & Catalog Retail  0.1%              |  |           |  |      
|                                             
|Amazon.com, Inc.(1)                           |  | 23,500    |  | $    
|Expedia, Inc.(1)                              |  | 403,096   |  |      
|IAC/InterActiveCorp(1)                        |  | 403,096   |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Internet Software & Services  0.3%           |  |           |  |      
|                                             
|eBay, Inc.(1)                                 |  | 1,257,244 |  | $    
|                                             
|                                              |  |           |  | $    
|                                             
|IT Services 
      2.5%                      |  |           |  |      
|                                             
|Accenture Ltd., Class A(2)                    |  | 2,738,000 |  | $    
|Acxiom Corp.                                  |  | 616,809   |  |      
|Affiliated Computer Services, Inc.(1)         |  | 183,730   |  |      
|Automatic Data Processing, Inc.               |  | 1,560,553 |  |      
|BISYS Group, Inc. (The)(1)                    |  | 65,000    |  |      
|Ceridian Corp.(1)                             |  | 26,632    |  |      
|Certegy, Inc.                                 |  | 42,862    |  |      
|Computer Sciences Corp.(1)                    |  | 226,702   |  |      
|CSG Systems International, Inc.(1)            |  | 25,200    |  |      
|DST Systems, Inc.(1)                          |  | 231,544   |  |      

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|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5P O R T F O L I O 
       O F   I N V E S T M E N T SC O N TD
|---------------------------------------------------------------------------------------------------------------------------------------------

|Security                              |  | Shares    |  | Value
|------------------------------------- |  | --------- |  | -----
|                                     
|IT Services
      (continued)         |  |           |  |      
|                                     
|eFunds Corp.(1)                       |  | 1         |  | $    
|Electronic Data Systems Corp.         |  | 1,252     |  |      
|First Data Corp.                      |  | 3,759,930 |  |      
|Fiserv, Inc.(1)                       |  | 832,355   |  |      
|Gartner, Inc.(1)                      |  | 30,576    |  |      
|Paychex, Inc.                         |  | 1,597,890 |  |      
|Perot Systems Corp.(1)                |  | 684,871   |  |      
|Safeguard Scientifics, Inc.(1)        |  | 26,579    |  |      
|                                     
|                                      |  |           |  | $    
|                                     
|Leisure Equipment & Products  0.0%   |  |           |  |      
|                                     
|Eastman Kodak Co.                     |  | 90,761    |  | $    
|Mattel, Inc.                          |  | 30,514    |  |      
|                                     
|                                      |  |           |  | $    
|                                     
|Machinery 
      3.0%                |  |           |  |      
|                                     
|Caterpillar, Inc.(3)(4)               |  | 34,186    |  | $    
|Caterpillar, Inc.                     |  | 110,120   |  |      
|Danaher Corp.                         |  | 4,031,970 |  |      
|Deere & Co.                           |  | 3,350,000 |  |      
|Donaldson Co., Inc.                   |  | 79,326    |  |      
|Dover Corp.                           |  | 367,670   |  |      
|Federal Signal Corp.                  |  | 218,345   |  |      
|Illinois Tool Works, Inc.             |  | 756,673   |  |      
|ITT Industries, Inc.                  |  | 4,214     |  |      
|Nordson Corp.                         |  | 163,978   |  |      
|Parker Hannifin Corp.                 |  | 43,632    |  |      
|Tecumseh Products Co., Class A        |  | 125,700   |  |      
|Wabtec Corp.                          |  | 94,504    |  |      
|                                     
|                                      |  |           |  | $    
|                                     
|Media  4.3%                          |  |           |  |      
|                                     
|ADVO, Inc.                            |  | 750,000   |  | $    
|Arbitron, Inc.                        |  | 11,555    |  |      
|Belo Corp., Class A                   |  | 542,924   |  |      
|Cablevision Systems Corp., Class A(1) |  | 207,410   |  |      
|Catalina Marketing Corp.              |  | 87,095    |  |      
|CCE Spinco, Inc.(1)                   |  | 16,410    |  |      
|Clear Channel Communications, Inc.    |  | 131,283   |  |      
|Comcast Corp., Class A(1)             |  | 1,979,556 |  |      
|Comcast Corp., Class A Special(1)     |  | 1,424,823 |  |      
|Discovery Holding Co., Class A(1)     |  | 131,304   |  |      

|Security                                      |  | Shares    |  | Value
|--------------------------------------------- |  | --------- |  | -----
|                                             
|Media (continued)                             |  |           |  |      
|                                             
|Discovery Holding Co., Class B(1)             |  | 3,287     |  | $    
|E.W. Scripps Co. (The), Class A               |  | 51,066    |  |      
|EchoStar Communications Corp., Class A(1)     |  | 35,150    |  |      
|Entercom Communications Corp.(1)              |  | 220,000   |  |      
|Gannett Co., Inc.                             |  | 701,567   |  |      
|Havas SA (ADR)                                |  | 3,142,938 |  |      
|Interpublic Group of Companies, Inc. (The)(1) |  | 976,936   |  |      
|Knight Ridder, Inc.                           |  | 19,023    |  |      
|Lamar Advertising Co.(1)                      |  | 241,409   |  |      
|Liberty Global, Inc., Class A(1)              |  | 50,655    |  |      
|Liberty Global, Inc., Class B(1)              |  | 1,643     |  |      
|Liberty Global, Inc., Class C(1)              |  | 52,298    |  |      
|Liberty Media Corp., Class A(1)               |  | 1,313,041 |  |      
|Liberty Media Corp., Class B(1)               |  | 32,876    |  |      
|McClatchy Co., (The), Class A                 |  | 48,066    |  |      
|McGraw-Hill Companies, Inc., (The)            |  | 472,484   |  |      
|New York Times Co. (The), Class A             |  | 300,468   |  |      
|News Corp., Class A                           |  | 187,934   |  |      
|Omnicom Group, Inc.                           |  | 2,326,246 |  |      
|ProQuest Co.(1)                               |  | 95,464    |  |      
|Publicis Groupe(2)                            |  | 329,132   |  |      
|Reuters Group PLC (ADR)                       |  | 1,431     |  |      
|Time Warner, Inc.                             |  | 4,153,197 |  |      
|Tribune Co.                                   |  | 1,601,074 |  |      
|Univision Communications, Inc., Class A(1)    |  | 401,298   |  |      
|Viacom, Inc., Class A                         |  | 29,774    |  |      
|Viacom, Inc., Class B                         |  | 965,189   |  |      
|Vivendi Universal SA (ADR)                    |  | 417,045   |  |      
|Walt Disney Co., (The)                        |  | 4,904,830 |  |      
|Washington Post Co. (The), Class B            |  | 16,470    |  |      
|Westwood One, Inc.                            |  | 122,400   |  |      
|WPP Group PLC(2)                              |  | 139,450   |  |      
|WPP Group PLC (ADR)                           |  | 256,051   |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Metals & Mining  0.3%                        |  |           |  |      
|                                             
|Alcoa, Inc.                                   |  | 85,947    |  | $    
|Allegheny Technologies, Inc.                  |  | 21,408    |  |      
|Inco, Ltd.(1)(2)                              |  | 200,000   |  |      
|Nucor Corp.                                   |  | 421,662   |  |      
|Phelps Dodge Corp.                            |  | 14,862    |  |      
|Steel Dynamics, Inc.                          |  | 311,800   |  |      
|                                             
|                                              |  |           |  | $    
|                                             

S e e   n o t e s   t o 
 f i n a n c i a l   s t a t e m e n t s

68



|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5P O R T F O L I
      O   O F   I N V E S T M E N T SC O N TD
|---------------------------------------------------------------------------------------------------------------------------------------------

|Security                                  |  | Shares    |  | Value
|----------------------------------------- |  | --------- |  | -----
|                                         
|Multiline Retail  1.6%                   |  |           |  |      
|                                         
|99 Cents Only Stores(1)                   |  | 1,142,232 |  | $    
|Dollar General Corp.                      |  | 101,456   |  |      
|Dollar Tree Stores, Inc.(1)               |  | 659,218   |  |      
|Family Dollar Stores, Inc.                |  | 2,618,411 |  |      
|Federated Department Stores, Inc.         |  | 130,024   |  |      
|J.C. Penney Company, Inc.                 |  | 130,816   |  |      
|Kohls Corp.(1)                           |  | 55        |  |      
|Nordstrom, Inc.                           |  | 131,384   |  |      
|Sears Holdings Corp.(1)                   |  | 5,747     |  |      
|Target Corp.                              |  | 3,498,908 |  |      
|                                         
|                                          |  |           |  | $    
|                                         
|Multi-Utilities  0.0%                    |  |           |  |      
|                                         
|Ameren Corp.                              |  | 5,000     |  | $    
|Dominion Resources, Inc.                  |  | 3,249     |  |      
|PG&E Corp.                                |  | 47,705    |  |      
|TECO Energy, Inc.                         |  | 34,145    |  |      
|Wisconsin Energy Corp.                    |  | 9,576     |  |      
|                                         
|                                          |  |           |  | $    
|                                         
|Office
      Electronics  0.0%           |  |           |  |      
|                                         
|Xerox Corp.(1)                            |  | 42,878    |  | $    
|Zebra Technologies Corp., Class A(1)      |  | 13,500    |  |      
|                                         
|                                          |  |           |  | $    
|                                         
|Oil, Gas &
      Consumable Fuels  10.5% |  |           |  |      
|                                         
|Amerada Hess Corp.                        |  | 18,947    |  | $    
|Anadarko Petroleum Corp.                  |  | 2,559,141 |  |      
|Apache Corp.                              |  | 2,073,929 |  |      
|BP PLC (ADR)                              |  | 5,008,980 |  |      
|Burlington Resources, Inc.                |  | 4,335,883 |  |      
|Chevron Corp.                             |  | 409,158   |  |      
|ConocoPhillips                            |  | 3,329,274 |  |      
|Devon Energy Corp.                        |  | 1,015,400 |  |      
|El Paso Corp.                             |  | 148,709   |  |      
|Exxon Mobil Corp.                         |  | 6,579,287 |  |      
|Kerr-McGee Corp.                          |  | 267,327   |  |      
|Kinder Morgan, Inc.                       |  | 1,781,672 |  |      
|Marathon Oil Corp.                        |  | 30,098    |  |      
|Murphy Oil Corp.                          |  | 39,036    |  |      
|Newfield Exploration Co.(1)               |  | 120,000   |  |      
|Royal Dutch Shell PLC (ADR)               |  | 118,194   |  |      

|Security                                      |  | Shares    |  | Value
|--------------------------------------------- |  | --------- |  | -----
|                                             
|Oil, Gas &
      Consumable Fuels (continued) |  |          
|                                             
|Total SA (ADR)                                |  | 400,000   |  | $    
|Valero Energy Corp.                           |  | 206,040   |  |      
|Williams Cos., Inc. (The)                     |  | 219,065   |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Paper and Forest Products  0.1%              |  |           |  |      
|                                             
|International Paper Co.                       |  | 111,913   |  | $    
|Louisiana-Pacific Corp.                       |  | 70,750    |  |      
|MeadWestvaco Corp.                            |  | 73,347    |  |      
|Neenah Paper, Inc.                            |  | 38,811    |  |      
|Weyerhaeuser Co.                              |  | 89,778    |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Personal Products  0.4%                      |  |           |  |      
|                                             
|Avon Products, Inc.                           |  | 173,400   |  | $    
|Estee Lauder Cos., Inc. (The), Class A        |  | 2,092,312 |  |      
|                                             
|                                              |  |           |  | $    
|                                             
|Pharmaceuticals 
      6.1%                  |  |           |  |      
|                                             
|Abbott Laboratories                           |  | 3,078,014 |  | $    
|Allergan, Inc.                                |  | 38,300    |  |      
|Andrx Corp.(1)                                |  | 180,170   |  |      
|Bristol-Myers Squibb Co.                      |  | 4,973,196 |  |      
|Elan Corp. PLC (ADR)(1)                       |  | 31,838    |  |      
|Eli Lilly & Co.                               |  | 3,585,323 |  |      
|Forest Laboratories, Inc.(1)                  |  | 56,800    |  |      
|GlaxoSmithKline PLC (ADR)                     |  | 434,293   |  |      
|Johnson & Johnson                             |  | 3,505,021 |  |      
|King Pharmaceuticals, Inc.(1)                 |  | 505,637   |  |      
|Merck & Co., Inc.                             |  | 2,605,384 |  |      
|Mylan Laboratories, Inc.                      |  | 27,992    |  |      
|Novo Nordisk A/S (ADR)                        |  | 292,277   |  |      
|Pfizer, Inc.                                  |  | 8,223,321 |  |      
|Schering-Plough Corp.                         |  | 2,461,993 |  |      
|Sepracor, Inc.(1)                             |  | 4,000     |  |      
|Shering AG (ADR)                              |  | 25,000    |  |      
|Teva Pharmaceutical Industries, Ltd. (ADR)    |  | 1,676,190 |  |      
|Watson Pharmaceuticals, Inc.(1)               |  | 668,041   |  |      
|Wyeth                                         |  | 890,144   |  |      
|                                             
|                                              |  |           |  | $    
|                                             

S e e   n o t e s   t
o   f i n a n c i a l   s t a t e m e n t s

69



|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5P O R T F O L I O 
       O F   I N V E S T M E N T SC O N TD
|---------------------------------------------------------------------------------------------------------------------------------------------

|Security                                              |  | Shares     |  | Value
|----------------------------------------------------- |  | ---------- |  | -----
|                                                     
|Real Estate  0.1%                                    |  |            |  |      
|                                                     
|AvalonBay Communities, Inc.                           |  | 28,867     |  | $    
|Forest City Enterprises, Inc., Class A                |  | 77,326     |  |      
|Jones Lang LaSalle, Inc.                              |  | 1,835      |  |      
|Plum Creek Timber Co., Inc.                           |  | 198,791    |  |      
|ProLogis                                              |  | 126,355    |  |      
|Trammell Crow Co.(1)                                  |  | 65,491     |  |      
|                                                     
|                                                      |  |            |  | $    
|                                                     
|Road & Rail 
      0.2%                              |  |            |  |      
|                                                     
|ANC Rental Corp.(1)                                   |  | 50,667     |  | $    
|Burlington Northern Santa Fe Corp.                    |  | 194,233    |  |      
|CSX Corp.                                             |  | 38,134     |  |      
|Florida East Coast Industries, Inc.                   |  | 121,978    |  |      
|Heartland Express, Inc.                               |  | 653,154    |  |      
|Kansas City Southern(1)                               |  | 15,215     |  |      
|Norfolk Southern Corp.                                |  | 3,990      |  |      
|Union Pacific Corp.                                   |  | 10,453     |  |      
|                                                     
|                                                      |  |            |  | $    
|                                                     
|Semiconductors &
      Semiconductor Equipment  2.2%
|                                                     
|Agere Systems, Inc.(1)                                |  | 8,329      |  | $    
|Altera Corp.(1)                                       |  | 66,116     |  |      
|Analog Devices, Inc.                                  |  | 574,160    |  |      
|Applied Materials, Inc.                               |  | 1,123,242  |  |      
|Broadcom Corp., Class A(1)                            |  | 576,281    |  |      
|Conexant Systems, Inc.(1)                             |  | 134,174    |  |      
|Cypress Semiconductor Corp.(1)                        |  | 152,742    |  |      
|Freescale Semiconductor, Inc., Class B(1)             |  | 101,523    |  |      
|Intel Corp.                                           |  | 10,662,764 |  |      
|KLA-Tencor Corp.                                      |  | 148,373    |  |      
|Linear Technology Corp.                               |  | 95,760     |  |      
|LSI Logic Corp.(1)                                    |  | 132,810    |  |      
|Maxim Integrated Products, Inc.                       |  | 304,351    |  |      
|Mindspeed Technologies, Inc.(1)                       |  | 44,724     |  |      
|Skyworks Solutions, Inc.(1)                           |  | 98,685     |  |      
|Taiwan Semiconductor Manufacturing Co., Ltd. (ADR)    |  | 909        |  |      
|Teradyne, Inc.(1)                                     |  | 27,996     |  |      
|Texas Instruments, Inc.                               |  | 1,820,303  |  |      
|Xilinx, Inc.                                          |  | 58,684     |  |      
|                                                     
|                                                      |  |            |  | $    
|                                                     

|Security                                 |  | Shares    |  | Value
|---------------------------------------- |  | --------- |  | -----
|                                        
|Software  1.7%                          |  |           |  |      
|                                        
|Adobe Systems, Inc.                      |  | 608,276   |  | $    
|Cadence Design Systems, Inc.(1)          |  | 450,000   |  |      
|Cognos, Inc.(1)(2)                       |  | 77,000    |  |      
|Computer Associates International, Inc.  |  | 38,744    |  |      
|Compuware Corp.(1)                       |  | 150,944   |  |      
|Electronic Arts, Inc.(1)                 |  | 21,405    |  |      
|Fair Isaac Corp.                         |  | 564,515   |  |      
|Intuit, Inc.(1)                          |  | 573,111   |  |      
|Jack Henry & Associates, Inc.            |  | 201,006   |  |      
|Microsoft Corp.                          |  | 7,149,319 |  |      
|Oracle Corp.(1)                          |  | 1,014,698 |  |      
|Parametric Technology Corp.(1)           |  | 94,600    |  |      
|Reynolds and Reynolds Co. (The), Class A |  | 216,412   |  |      
|SAP AG (ADR)                             |  | 400,000   |  |      
|Siebel Systems, Inc.                     |  | 179,184   |  |      
|Symantec Corp.(1)                        |  | 90,220    |  |      
|Wind River Systems, Inc.(1)              |  | 91,910    |  |      
|                                        
|                                         |  |           |  | $    
|                                        
|Specialty
      Retail  2.0%            |  |           |  |      
|                                        
|Abercrombie & Fitch Co., Class A         |  | 11,225    |  | $    
|AutoNation, Inc.(1)                      |  | 1,370,088 |  |      
|Best Buy Co., Inc.                       |  | 170,415   |  |      
|Burlington Coat Factory Warehouse Corp.  |  | 95,284    |  |      
|CarMax, Inc.(1)                          |  | 67,797    |  |      
|Circuit City Stores, Inc.                |  | 216,000   |  |      
|Gap, Inc. (The)                          |  | 540,888   |  |      
|Home Depot, Inc. (The)                   |  | 4,485,692 |  |      
|Limited Brands, Inc.                     |  | 692,655   |  |      
|Lowes Companies, Inc.                   |  | 879,145   |  |      
|Office Depot, Inc.(1)                    |  | 80,276    |  |      
|OfficeMax, Inc.                          |  | 2,192     |  |      
|Payless ShoeSource, Inc.(1)              |  | 23,100    |  |      
|Pep Boys (The) - Manny, Moe & Jack       |  | 62,500    |  |      
|RadioShack Corp.                         |  | 625,064   |  |      
|Sherwin-Williams Co. (The)               |  | 53,386    |  |      
|Staples, Inc.                            |  | 300,587   |  |      
|Tiffany & Co.                            |  | 57,286    |  |      
|TJX Companies, Inc. (The)                |  | 1,716,834 |  |      
|Too, Inc.(1)                             |  | 38,284    |  |      
|                                        
|                                         |  |           |  | $    
|                                        



|S e e   n o t e s   t
      o   f i n a n c i a l   s t a t e m e n t
    s
|---------------------------------------------------------------------------

Tax-Managed Growth Portfolioa
s   o f   D e c e m b e r   3 1 ,   2 0
0 5

P O R T F O L I O   O F   I N
V E S T M E N T SC O N TD

|Security                                                                 |  | Shares    |  | Value          
|------------------------------------------------------------------------ |  | --------- |  | ---------------
|                                                                        
|Textiles, Apparel &
      Luxury Goods  0.8%                            |  |          
|                                                                        
|Coach, Inc.(1)                                                           |  | 731,440   |  | $              
|NIKE, Inc., Class B                                                      |  | 1,529,222 |  |                
|                                                                        
|                                                                         |  |           |  | $              
|                                                                        
|Thrifts & Mortgage
      Finance  0.6%                                  |  |           |  |                
|                                                                        
|Countrywide Financial Corp.                                              |  | 999,998   |  | $              
|Fannie Mae                                                               |  | 335,606   |  |                
|Freddie Mac                                                              |  | 151,086   |  |                
|Golden West Financial Corp.                                              |  | 89,168    |  |                
|MGIC Investment Corp.                                                    |  | 85,000    |  |                
|Radian Group, Inc.                                                       |  | 1,796     |  |                
|Washington Mutual, Inc.                                                  |  | 875,535   |  |                
|                                                                        
|                                                                         |  |           |  | $              
|                                                                        
|Tobacco  0.3%                                                           |  |           |  |                
|                                                                        
|Altria Group, Inc.                                                       |  | 700,409   |  | $              
|                                                                        
|                                                                         |  |           |  | $              
|                                                                        
|Trading
      Companies & Distributors  0.0%                            |  |          
|                                                                        
|United Rentals, Inc.(1)                                                  |  | 397,333   |  | $              
|                                                                        
|                                                                         |  |           |  | $              
|                                                                        
|Wireless
      Telecommunication Services  0.6%                        
|                                                                        
|Alltel Corp.                                                             |  | 1,682,674 |  | $              
|Sprint Nextel Corp.                                                      |  | 297,303   |  |                
|Telephone & Data Systems, Inc., Special Shares                           |  | 25,844    |  |                
|Telephone and Data Systems, Inc.                                         |  | 25,844    |  |                
|Vodafone Group PLC (ADR)                                                 |  | 332,062   |  |                
|                                                                        
|                                                                         |  |           |  | $              
|                                                                        
|Total Common Stocks                                                      |  |           |  |                
|(identified cost $14,184,947,956)                                        |  |           |  | $18,969,682,297
|                                                                        
|C o n v e r t i b l e   P r e f e r r e d   S
      t o c k s   0 . 0 %
|                                                                         |  |           |  |                
|Security                                                                 |  | Shares    |  | Value          
|                                                                        
|Oil, Gas &
      Consumable Fuels  0.0%                                 |  |           |  |                
|                                                                        
|Enron Corp.(1)(3)                                                        |  | 11,050    |  | $              
|                                                                        
|                                                                         |  |           |  | $              
|                                                                        
|Total Convertible
      Preferred Stocks                                 |  |           |  |                
|(identified cost $16,626,069)                                            |  |           |  | $              
|                                                                        

|P r e f e r r e d S t o c k s  0 . 0 %            |  |                                                                     |  |                 |  |                
|-------------------------------------------------- |  | ------------------------------------------------------------------- |  | --------------- |  | ---------------
|                                                   |  |                                                                     |  |                 |  |                
|Security                                           |  | Shares                                                              |  | Value           |  |                
|                                                   |  |                                                                     |  |                 |  |                
|Commercial Banks 
      0.0%                      |  |                                                                     |  |                 |  |                
|                                                   |  |                                                                     |  |                 |  |                
|Wachovia Corp. (Dividend Equalization              |  |                                                                     |  |                 |  |                
|Preferred Shares)(1)                               |  | 166,518                                                             |  | $               |  | 666            
|                                                   |  |                                                                     |  |                 |  |                
|                                                   |  |                                                                     |  |                 |  | $              
|                                                  
|Total Preferred Stocks                             |  |                                                                     |  |                 |  |                
|                                                   |  | (identified cost $39,407)                                           |  |                 |  | $              
|                                                  
|R i g h t s  0 . 0 %                              |  |                                                                     |  |                 |  |                
|                                                   |  |                                                                     |  |                 |  |                
|Security                                           |  | Shares                                                              |  | Value           |  |                
|                                                  
|Computers and Business
      Equipment  0.0%     
|                                                  
|Seagate Technology, Inc. (Tax Refund Rights)(1)(3) |  | 197,392                                                             |  | $               |  | 0              
|                                                  
|                                                   |  |                                                                     |  |                 |  | $              
|                                                  
|Diversified Telecommunication Services  0.0%     
|                                                  
|McLeodUSA, Inc., (Escrow Rights)(1)(3)             |  | 1,592,200                                                           |  | $               |  | 0              
|                                                  
|                                                   |  |                                                                     |  |                 |  | $              
|                                                  
|Total Rights                                       |  |                                                                     |  |                 |  |                
|                                                   |  | (identified cost $0)                                                |  |                 |  | $              
|                                                  
|W a r r a n t s  0 . 0 %                          |  |                                                                     |  |                 |  |                
|                                                   |  |                                                                     |  |                 |  |                
|Security                                           |  | Shares                                                              |  | Value           |  |                
|                                                  
|Communications Equipment  0.0%                    |  |                                                                     |  |                
|                                                  
|Lucent Technologies, Inc.(1)                       |  | 18,106                                                              |  | $               |  | 10,230         
|                                                  
|                                                   |  |                                                                     |  |                 |  | $              
|                                                  
|Total Warrants                                     |  |                                                                     |  |                 |  |                
|                                                   |  | (identified cost $0)                                                |  |                 |  | $              
|                                                  
|Total Investments  99.7%                          |  |                                                                     |  |                 |  |                
|                                                   |  | (identified cost $14,201,613,432)                                   |  |                 |  | $18,969,693,193
|                                                  
|Other Assets, Less Liabilities  0.3%              |  | $                                                                   |  | 62,913,660     
|                                                  
|Net Assets  100.0%                                |  |                                                                     |  | $19,032,606,853
|                                                  
|ADR - American
      Depository Receipt            |  |                                                                     |  |                 |  |                
|(1)                                                |  | Non-income
      producing security.                                |  |                 |  |                
|(2)                                                |  | Foreign
      security.                                             |  |                 |  |                
|(3)                                                |  | Security valued at
      fair value using methods determinedin good
|                                                   |  | faith by or at the
      direction of the Trustees.                 |  |                 |  |                
|(4)                                                |  | Security subject to restrictions on resale (see Note 7).            |  |                

S e e   n o t e s   t o 
 f i n a n c i a l   s t a t e m e n t s

71



|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5F I N A N C I A
      L   S T A T E M E N T S
|----------------------------------------------------------------------------------------------------------------------------

|S t a t e m e n t   o f   A s s e t
      s   a n d   L i a b i l i t i e s  |  |                 
|---------------------------------------------------------------------------- |  | ----------------
|As of December 31, 2005                                                      |  |                 
|Assets                                                                       |  |                 
|                                                                            
|Investments, at value (identified cost,
      $14,201,613,432)               |  | $ 18,969,693,193
|Cash                                                                         |  |                 
|Receivable for investments sold                                              |  |                 
|Dividends and interest receivable                                            |  |                 
|Tax reclaim receivable                                                       |  |                 
|                                                                            
|Total assets                                                                 |  | $ 19,048,190,777
|                                                                            
|Liabilities                                                                  |  |                 
|                                                                            
|Demand note payable                                                          |  | $               
|Payable to affiliate for investment adviser fee                              |  |                 
|Payable to affiliate for Trustees fees                                      |  |                 
|Accrued expenses                                                             |  |                 
|                                                                            
|Total liabilities                                                            |  | $               
|                                                                            
|Net Assets applicable to investors interest in
      Portfolio              |  | $ 19,032,606,853
|                                                                            
|Sources of Net Assets                                                        |  |                 
|                                                                            
|Net proceeds from capital contributions and
      withdrawals                |  | $ 14,264,573,420
|Net unrealized appreciation (computed on the basis of identified
      cost) |  |                 
|                                                                            
|Total                                                                        |  | $ 19,032,606,853
|                                                                            

|S
      t a t e m e n t   o f   O p e r a t i o n
      s |  |                 |  |             
|--------------------------------------------------------- |  | --------------- |  | ------------
|For the Year Ended                                        |  |                 |  |             
|December 31, 2005                                         |  |                 |  |             
|Investment Income                                         |  |                 |  |             
|                                                         
|Dividends (net of foreign taxes, $4,483,174)              |  | $   314,591,123
|Interest                                                  |  |                 |  | 1,772,594   
|                                                         
|Total investment income                                   |  | $   316,363,717
|                                                         
|Expenses                                                  |  |                 |  |             
|                                                         
|Investment adviser fee                                    |  | $               |  | 80,617,092  
|Trustees fees and expenses                               |  |                 |  | 34,741      
|Custodian fee                                             |  |                 |  | 2,335,402   
|Legal and accounting services                             |  |                 |  | 107,743     
|Miscellaneous                                             |  |                 |  | 453,249     
|                                                         
|Total expenses                                            |  | $               |  | 83,548,227  
|                                                         
|Deduct                                                   |  |                 |  |             
|Reduction of custodian fee                                |  | $               |  | 267         
|Reduction of investment adviser fee                       |  |                 |  | 88,889      
|                                                         
|Total expense reductions                                  |  | $               |  | 89,156      
|                                                         
|Net expenses                                              |  | $               |  | 83,459,071  
|                                                         
|Net investment income                                     |  | $   232,904,646
|                                                         
|Realized and
      Unrealized Gain (Loss)                 |  |                 |  |             
|                                                         
|Net realized gain (loss)                                 |  |                 |  |             
|Investment transactions (identified cost
      basis)     |  | $   101,182,645
|Securities sold short                                     |  |                 |  | (30,244,833)
|Foreign currency transactions                             |  |                 |  | (48,663)    
|                                                         
|Net realized gain                                         |  | $               |  | 70,889,149  
|                                                         
|Change in unrealized appreciation (depreciation)         |  |                 |  |             
|Investments (identified cost basis)                       |  | $   523,919,934
|Securities sold short                                     |  |                 |  | 27,299,373  
|Foreign currency                                          |  |                 |  | (199,704)   
|                                                         
|Net change in unrealized appreciation (depreciation)      |  | $   551,019,603
|                                                         
|Net realized and unrealized gain                          |  | $   621,908,752
|                                                         
|Net increase in net assets from operations                |  | $   854,813,398
|                                                         



|S e e   n o t e s   t o 
       f i n a n c i a l   s t a t e m e n t
  s
|-------------------------------------------------------------------------



|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5F I N A N C I A L 
       S T A T E M E N T SC O N TDS t a t e m e n t s   o
      f   C h a n g e s   i n   N e t  
      A s s e t s
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Increase (Decrease)                        |  | Year Ended        |  | Year Ended       
|------------------------------------------ |  | ----------------- |  | -----------------
|in Net Assets                              |  | December 31, 2005 |  | December 31, 2004
|                                          
|From operations                           |  |                   |  |                  
|Net investment income                      |  | $                 |  | 232,904,646      
|Net realized gain from investment          |  |                   |  |                  
|transactions, securities sold
      short  |  |                   |  |                  
|and foreign currency
      transactions    |  |                   |  | 70,889,149       
|Net change in unrealized                   |  |                   |  |                  
|appreciation
      (depreciation)          |  |                   |  |                  
|of investments, securities
      sold      |  |                   |  |                  
|short and foreign
      currency           |  |                   |  | 551,019,603      
|                                          
|Net increase in net assets from operations |  | $                 |  | 854,813,398      
|                                          
|Capital transactions                      |  |                   |  |                  
|Contributions                              |  | $                 |  | 1,237,495,815    
|Withdrawals                                |  |                   |  | (2,200,844,762)  
|                                          
|Net decrease in net assets from            |  |                   |  |                  
|capital transactions                       |  | $                 |  | (963,348,947)    
|                                          
|Net increase (decrease) in net assets      |  | $                 |  | (108,535,549)    
|                                          
|Net Assets                                 |  |                   |  |                  
|                                          
|At beginning of year                       |  | $19,141,142,402   |  | $17,609,589,005  
|                                          
|At end of year                             |  | $19,032,606,853   |  | $19,141,142,402  
|                                          

S e e   n o t e s   t o 
 f i n a n c i a l   s t a t e m e n t s

73



|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5F I N A N C I A L 
       S T A T E M E N T SC O N TDS u p p l e m e n t a r
      y   D a t a
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                      |  | Year Ended December 31,
|----------------------------------------------------- |  | -----------------------
|                                                      |  |                        
|                                                      |  | 2005                   
|                                                     
|Ratios/Supplemental
      Data                        |  |                        
|                                                     
|Ratios (As a percentage of average daily net assets): |  |                        
|Expenses                                              |  | 0.45%                 
|Expenses after custodian fee
      reduction          |  | 0.45%                 
|Net investment income                                 |  | 1.25%                 
|Portfolio Turnover                                    |  | 0%(1)                  
|                                                     
|Total Return                                          |  | 4.70%                  
|                                                     
|Net assets, end of year (000s omitted)               |  | $19,032,607            
|                                                     

|   |  | The operating expenses of the Portfolio reflect a reduction of theinvestment adviser
      fee.Had such action not been taken, the ratios would have
      changed by less than 0.005%.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | 
|(1) |  | Amounts to less than 1%.                                                                                                                                                               



|S e e   n o t e s   t o 
       f i n a n c i a l   s t a t e m e n t
  s
|-------------------------------------------------------------------------



|Tax-Managed Growth Portfolioa
      s   o f   D e c e m b e r   3 1
      ,   2 0 0 5N O T E S   T O   F I N A
      N C I A L   S T A T E M E N T S
|----------------------------------------------------------------------------------------------------------------------------------------------------

1 Significant Accounting Policies

Tax-Managed Growth Portfolio (the Portfolio) is registered under
the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Portfolio, which was
organized as a trust under the laws of the State of New York on December 1,
1995, seeks to achieve long-term, after-tax returns for its interestholders
through investing in a diversified portfolio of equity
securities. The Declaration of Trust permits the Trustees
to issue interests in the Portfolio. The following is
summary of significant accounting policies consistently
followed by the Portfolio 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 Valuations -- 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 or, in the case of preferred equity
securities that are not listed or traded in the over-the-counter market, by an
independent pricing service. 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. Foreign securities and currencies are valued in
U.S. dollars, based on foreign currency exchange rate quotations supplied by an
independent quotat< /FONT>ion service.
The daily valuation of exchange-traded 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. When valuing foreign equity
securities that meet certain
criteria, the Trustees have approved the use of a fair
value service that values such securities to reflect market trading that occurs after the close of the
applicable foreign markets of comparable securities or other instruments that have a
strong correlation to the fair-valued securities. Investments held by the Portfolio 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 Portfolio
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 Taxes -- The Portfolio is
treated as a partnership for federal tax purposes. No provision is made by the Portfolio for federal or
state taxes on any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment
of any taxes on its share of such taxable income. Since some of
the Portfolios investors are regulated investment
companies that invest all or
substantially all of their assets
in the Portfolio, the Portfolio normally must satisfy the applicable source of income and diversification requirements (under the Internal Revenue
Code) in order for its investors to satisfy them. The Portfolio will
allocate, at least annually among its investors, each investors distributive share of the Portfolios net investment income, net realized capital gains, and any other items of income, gain,
loss, deduction or credit.

C Futures contracts -- Upon the entering of a financial futures contract, the Portfolio is
required to deposit either in cash or
securities an amount (initial
margin) equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent
payments are made or received by the Portfolio (margin
maintenance) each day, dependent on daily fluctuations in the value of the underlying
security, and are recorded for book purposes as unrealized
gains or losses by the Portfolio. The Portfolios investment in financial futures contracts is designed to
hedge against anticipated future
changes in the price of current or anticipated portfolio positions. Should prices move unexpectedly, the Portfolio may not achieve the anticipated
benefits of the financial futures
contracts and may realize a loss.

D Put Options -- Upon the purchase of
a put option by the Portfolio, the premium paid is recorded as an investment, the value of which is marked-to-market daily.

75



|Tax-Managed Growth Portfolio a
      s   o f   D e c e m b e r   3 1
      ,   2 0 0 5N O T E S   T O   F I N A
      N C I A L   S T A T E M E N T SC O N T
       D
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------

When a purchased option expires, the Portfolio will realize a loss
in the amount of the cost of the option. When the Portfolio enters into a
closing sale transaction, the Portfolio 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. When the Portfolio exercises a put option,
settlement is made in cash. The risk associated with purchasing options is limited to the premium originally paid.

E Securities Sold Short -- The Portfolio may sell a
security short if it owns at least an equal amount of the security sold short or
another security exchangeable for an equal amount of the security sold short in
anticipation of a decline in the market price of the securities or in order to
hedge portfolio positions. The Portfolio will generally borrow the security sold
in order to make delivery to the buyer. Upon executing the transaction, the
Portfolio records the proceeds as deposits with brokers in
the Statement of Assets and Liabilities and establishes an offsetting payable
for securities sold short for the securities due on settlement. The proceeds are
retained by the broker as collateral for the short position. The liability is
marked-to-market and the Portfolio is required to pay the lending broker any
dividend or interest income earned while the short position is open. A gain or loss is recorded when the security is delivered to
the broker. The Portfolio may recognize a loss on the transaction if the market
value of the securities sold increases before the securities are delivered.

F 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.

G Indemnifications -- Under the Portfolio'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
Portfolio. Interestholders in the Portfolio are jointly and severally liable for
the liabilities and obligations of the Portfolio in the
event that the Portfolio fails to satisfy such liabilities and obligations;
provided, however, that, to the extent assets are available in the Portfolio,
the Portfolio may, under certain circumstances, indemnify interestholders from
and against any claim or liability to which such holder may become subject by
reason of being or having been an interestholder in the Portfolio. Additionally,
in the normal course of business, the Portfolio enters into
agreements with service providers that may contain indemnification clauses. The
Portfolios maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Portfolio that have not yet
occurred.

H Other -- Investment transactions are accounted for on a
trade-date basis. Dividend income is recorded on the ex-dividend date. However,
if the ex-dividend date has passed, certain dividends from foreign securities
are recorded as the Portfolio is informed of the ex-dividend date. Interest
income is recorded on the accrual basis.

I Expense Reduction -- Investors Bank & Trust Company
(IBT) serves as custodian of the Portfolio. Pursuant to the custodian agreement,
IBT receives a fee reduced by credits which are determined based on the average
daily cash balances the Portfolio maintains with IBT. All credit balances used
to reduce the Portfolios custodian fees are reported as a reduction of expenses
on the Statement of Operations. For the year ended December 31, 2005, there were
$267 in credit balances used to reduce the Portfolios custodian fee.

J 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.

2 Investment Adviser Fee and Other Transactions with
Affiliates

The investment adviser fee is earned by Boston Management and
Research (BMR), a wholly-owned subsidiary of Eaton Vance Management (EVM), as
compensation for management and investment advisory services rendered to the
Portfolio. Under the advisory agreement, BMR receives a monthly advisory fee of
5/96 of 1% (0.625% annually) of the average daily net assets of the Portfolio up
to $500,000,000, and at reduced rates as daily net assets exceed that level.
Certain of the advisory fee rate reductions are pursuant to an agreement
between

76



|Tax-Managed Growth Portfolioa s o f D
      e c e m b e r 3 1 , 2 0 0 5N O T E S T O F I N
      A N C I A L S T A T E M E N T SC O N TD
|-----------------------------------------------------------------------------------------------------------------------------------------

the Portfolios Board of Trustees and
BMR.Those reductions may not be changed without Trustee andinterestholder approval.For the year ended December 31, 2005, the
advisory fee was 0.43% of the Portfolios
average daily net assets.BMR has also agreed to reduce theinvestment adviser fee by an amount equal to that portion of commissions paid to broker dealersin execution of Portfolio
security transactions thatis consideration for third-party research services.For the year ended
December 31, 2005, BMR waived $88,889
ofits advisory fee.Except for Trustees of the Portfolio who are not members of EVMs
or BMRs organization,
officers and Trustees receive remuneration for their services to the Portfolio out of suchinvestment adviser
fee.Trustees of the
Portfolio that are not affiliated
with theinvestment adviser may elect to defer receipt
of all or a percentage of their annual
feesin accordance with the terms of the Trustees Deferred
Compensation Plan.For the year ended December 31, 2005, no
significant amounts have been
deferred.

Certain
officers and Trustees of the
Portfolio are officers of the above organizations.

3 Investment Transactions

For the year ended December 31, 2005, purchases and
sales ofinvestments, other than
short-term obligations, aggregated $58,765,480 and $774,871,275,
respectively.In addition,investments having an aggregate market value of $1,057,904,697 at dates of withdrawal were distributedin payment for capital withdrawals andinvestors
contributed securities
with a value of $1,009,478,984,
during the year ended December 31,
2005.

4 Federal Income Tax Basis of UnrealizedAppreciation (Depreciation)

The cost and unrealized appreciation (depreciation)in value of theinvestments owned at December 31, 2005 as computed
on a federalincome tax
basis, were as follows:

|Aggregate cost                |  | $ 4,152,013,829
|----------------------------- |  | ---------------
|                             
|Gross unrealized appreciation |  | $14,819,049,235
|Gross unrealized depreciation |  | (1,369,871)    
|                             
|Net unrealized appreciation   |  | $14,817,679,364
|                             

Unrealized
depreciation on foreign currencyis
$46,328.

5 Financial Instruments

The Portfolio may tradein financialinstruments with off-balance sheet riskin
the normal course ofitsinvesting
activities to
assistin managing exposure to various marketrisks.These financialinstrumentsinclude written options, forward foreign currency exchange contracts and financial
futures contracts and mayinvolve, to
a varying degree, elements of
riskin excess of the amounts recognized for financial statement
purposes.

The notional or contractual amounts of theseinstruments represent theinvestment the Portfolio hasin particular classes of financialinstruments and does not
necessarily represent the amounts
potentially subject to risk.The measurement of the
risks associated with theseinstrumentsis meaningful only when all related and
offsetting transactions are considered.The Portfolio did
not have any open obligations under these financialinstruments at December 31,
2005.

6 Line of Credit

The Portfolio participates with other portfolios and funds
managed by BMR and EVM andits
affiliatesin
a $150 million unsecured line of credit agreement
with a group of banks.Borrowings will be made by the
Portfolio solely to facilitate
the handling of unusual and/or
unanticipated short-term cash requirements.Interestis charged to each
participating
portfolio or fund based onits borrowings at an amount above either the Eurodollar rate or Federal Funds
rate.In addition, a
fee computed at an annual rate of 0.10% on the daily unused
portion of the line of creditis allocated among the
participating
portfolios and funds at the end of
each quarter.At December 31, 2005 the
Portfolio had a balance
outstanding pursuant to this line
of credit of $8,000,000.The Portfolio did not have any
significant borrowings or allocated fees during the year ended December 31, 2005.

7 Restricted Securities

At December 31, 2005, the Portfolio owned the following securities (representing 0.03%
of net assets) which were
restricted as to public resale and not registered under the Securities Act
of 1933.The securities are
valued at fair value using methods determinedin
good faith by or at the direction
of the Trustees.

|                  |  | Date of     |  | Eligible   |  |        |  |            |  |           
|----------------- |  | ----------- |  | ---------- |  | ------ |  | ---------- |  | ----------
|Common Stocks     |  | Acquisition |  | for Resale |  | Shares |  | Cost       |  | Fair Value
|                 
|Caterpillar, Inc. |  | 2/17/05     |  | 2/18/06    |  | 34,186 |  | $1,580,520 |  | $1,974,662
|Progressive Corp. |  | 10/14/05    |  | 10/15/06   |  | 9,470  |  | 1,031,533  |  | 1,104,524 
|Sysco Corp.       |  | 5/19/05     |  | 5/20/06    |  | 60,000 |  | 2,220,777  |  | 1,862,224 
|                 
|                  |  |             |  |            |  |        |  | $4,832,830 |  | $4,941,410
|                 



|Tax-Managed Growth Portfolioa s   o f   D e c e m b e r   3 1
      ,   2 0 0 5REPORT OF INDEPENDENT
      REGISTERED PUBLIC ACCOUNTING FIRM
|--------------------------------------------------------------------------------------------------------------------------------------------

To the Trustees and Investors of Tax-Managed Growth
Portfolio:

We have audited the accompanying statement
of assets and liabilities of Tax-Managed Growth
Portfolio (the Portfolio),including the
portfolio ofinvestments, as of December 31, 2005, and the
related statement of operations for
the year then ended, the statements of changesin net assets for each of the two yearsin the period then ended, and the supplementary data for each
of the five yearsin the period then ended.These
financial statements and supplementary data are the
responsibility of
the Portfolios management.Our responsibilityis to express an opinion on
these financial statements and supplementary data based on our
audits.

We conducted our auditsin
accordance with the standards of the
Public Company Accounting Oversight Board (United
States).Those standards
require that we plan and perform the
audits to obtain reasonable assurance about whether the
financial statements and supplementary data are free of
material misstatement.The Portfoliois not required to have, nor were we engaged to perform, an audit ofitsinternal control over financial
reporting.Our auditsincluded consideration
ofinternal control over financial
reporting as a basis for designing audit procedures that are appropriatein
the circumstances, but not for the
purpose of expressing an
opinion on the effectiveness of the
Portfoliosinternal control over financial reporting.Accordingly, we express no such
opinion.An audit alsoincludes examining, on a test basis, evidence supporting the amounts
and disclosuresin the financial statements,
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial
statement presentation.Our proceduresincluded confirmation of securities owned as of December 31,
2005 by correspondence with the
custodian and brokers; where
replies were not received from brokers, we performed other
auditing procedures.We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such financial
statements and supplementary data referred to above present fairly,in
all material respects, the
financial position of Tax-Managed Growth
Portfolio as of December 31, 2005, the
results ofits operations for the year then ended, the changesinits net assets for each of the two yearsin the period then ended, and the supplementary data for each of the five yearsin the period then ended,in conformity with
accounting principles
generally acceptedin the
United States of America.



|DELOITTE & TOUCHE LLPBoston, MassachusettsFebruary 17,
      2006
|-----------------------------------------------------------------

Belmar Capital Fund LLC

Investment Adviser of

Tax-Managed Growth Portfolio and
Belmar Capital Fund LLC



| | Boston Management and ResearchThe Eaton Vance Building255 State StreetBoston, MA
      02109
| | --------------------------------------------------------------------------------------------

Manager of Belmar Realty Corporation



| | Boston Management and ResearchThe Eaton Vance Building255 State StreetBoston, MA
      02109
| | --------------------------------------------------------------------------------------------

Manager of Belmar Capital Fund
LLC



| | Eaton Vance ManagementThe Eaton Vance Building255 State StreetBoston, MA
      02109
| | ------------------------------------------------------------------------------------



| | Custodian and Transfer AgentInvestors Bank &
      Trust Company200 Clarendon StreetBoston, MA 02116
| | ----------------------------------------------------------------------------------------------------

Independent Registered
Public Accounting Firm



| | Deloitte & Touche LLP200 Berkeley
      StreetBoston, MA
02116
| | --------------------------------------------------------------



|SIGNATURES
|----------

Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

BELMAR CAPITAL FUND LLC(Registrant)By:
    
    /s/ Michelle A. GreenMichelle A. GreenDuly Authorized Officer andPrincipal Accounting Officer




|Date: March 15,
2006
|--------------------

Pursuant to the requirements of the Securities
Exchange Act of 1934, 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/ Thomas E. Faust Jr.Thomas E. Faust Jr.Chief Executive Officer




|Date: March 15,
2006
|--------------------

By:
    
    /s/ Michelle A. GreenMichelle A. GreenChief Financial Officer




|Date: March 15,
2006
|--------------------

80

EXHIBIT INDEX

|Exhibit
      No. |  | Description                                                                                                                                                                                                                                                                                           
|----------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                  |  |                                                                                                                                                                                                                                                                                                       
|3                 |  | Copy of Limited Liability Company Agreement
      of the Fund dated March 17, 2000 filed as Exhibit 3 to the                                                                                                                                                                                          
|                  |  | Funds Initial Registration Statement on
      Form 10 and incorporated herein by reference. (Note: the LLC                                                                                                                                                                                           
|                  |  | Agreement also defines the rights of the
      holders of Shares of the Fund.)                                                                                                                                                                                                                        
|                 
|3(a)              |  | Copy of Amendment No. 1 to the Funds
      Limited Liability Company Agreement dated December 30,
      2003 filed as Exhibit 3(a) to the Funds Report
      on Form 10-K for the period ended December 31, 2003.                                                                                   
|                  | 
|                  |  |                                                                                                                                                                                                                                                                                                       
|4.1               |  | Copy of Loan and Security Agreement between
      the Fund and DrKW Holdings, Inc., as lender, dated June 25, 2003 filed as Exhibit 4.1 to the Funds Report on Form 10-Q
      for the period ended June 30, 2003 and incorporated herein by reference.                                              
|                  | 
|                  | 
|                  |  |                                                                                                                                                                                                                                                                                                       
|4.1(a)            |  | Copy of Amendment No. 1 to the Loan and
      Security Agreement between the Fund and DrKW Holdings,                                                                                                                                                                                                  
|                  |  | Inc. dated December 15, 2005 filed
      herewith.                                                                                                                                                                                                                                                    
|                  |  |                                                                                                                                                                                                                                                                                                       
|4.2               |  | Copy of Loan and Security Agreement between
      the Fund and MLMC, as Agent, and MLCS dated June 25, 2003 filed as Exhibit 4.2 to the Funds Report on Form 10-Q for
      the period ended June 30, 2003 and  incorporated
      herein by reference.                                              
|                  | 
|                  | 
|                  |  |                                                                                                                                                                                                                                                                                                       
|4.2(a)            |  | Copy of Amendment No. 1 dated August 3,
      2004 to Loan and Security Agreement among the Fund,                                                                                                                                                                                                     
|                  |  | Merrill Lynch Mortgage Capital, Inc., as
      Agent, the Lenders referred to therein and Merrill Lynch
      Capital                                                                                                                                                                                 
|                  |  | Services, Inc. filed as Exhibit 4.2(a) to
      the Funds Report on Form 10-Q for the period ended September                                                                                                                                                                                         
|                  |  | 30, 2004 and incorporated herein by
      reference.                                                                                                                                                                                                                                                  
|                  |  |                                                                                                                                                                                                                                                                                                       
|10(1)             |  | Copy of Investment Advisory and
      Administration Agreement between the Fund and Boston
      Management                                                                                                                                                                                           
|                  |  | and Research dated March 10, 2000 filed as
      Exhibit 10(1) to the Funds Initial Registration Statement on                                                                                                                                                                                        
|                  |  | Form 10 and incorporated herein by
      reference.                                                                                                                                                                                                                                                   
|                  |  |                                                                                                                                                                                                                                                                                                       
|10(2)             |  | Copy of Management Agreement between Belmar
      Realty Corporation and Boston Management and  Research dated March 10, 2000 filed as Exhibit 10(2) to the Funds
      Initial Registration Statement on Form 10 and
      incorporated herein by reference.                                        
|                  | 
|                  | 
|                  |  |                                                                                                                                                                                                                                                                                                       
|10(2)(a)          |  | Copy of Amendment No. 1 to Management
      Agreement between Belmar Realty Corporation and Boston                                                                                                                                                                                                    
|                  |  | Management and Research dated as of January
      2, 2001 filed as Exhibit 10(2)(a) to the Funds Report on                                                                                                                                                                                           
|                  |  | Form 10-Q for the period ended September
      30, 2001 and incorporated herein by reference.                                                                                                                                                                                                         
|                  |  |                                                                                                                                                                                                                                                                                                       
|10(3)             |  | Copy of Investor Servicing Agreement
      between the Fund and Eaton Vance Distributors, Inc. dated                                                                                                                                                                                                  
|                  |  | December 15, 1999 filed as Exhibit 10(3) to
      the Funds Initial Registration Statement on Form 10 and                                                                                                                                                                                            
|                  |  | incorporated herein by
      reference.                                                                                                                                                                                                                                                               
|                  |  |                                                                                                                                                                                                                                                                                                       
|10(4)             |  | Copy of Custody and Transfer Agency
      Agreement between the Fund and Investors Bank & Trust                                                                                                                                                                                                       
|                  |  | Company dated December 15, 1999 filed as
      Exhibit 10(4) to the Funds Initial Registration Statement on                                                                                                                                                                                          
|                  |  | Form 10 and incorporated herein by
      reference.                                                                                                                                                                                                                                                   
|                  |  |                                                                                                                                                                                                                                                                                                       
|10(4)(a)          |  | Copy of Amendment dated March 29, 2005 to
      Custody and Transfer Agency Agreement between the Fund and Investors Bank & Trust Company filed as Exhibit 10(4)(a)
      to the Funds report on Form 10-Q filed for the
      period ended June 30, 2005 and incorporated herein by
      reference.
|                  | 
|                  | 
|                  |  |                                                                                                                                                                                                                                                                                                       
|21                |  | List of Subsidiaries of the Fund filed
      herewith.                                                                                                                                                                                                                                                
|                  |  |                                                                                                                                                                                                                                                                                                       
|31.1              |  | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 302 of the Sarbanes-                                                                                                                                                                                           
|                  |  | Oxley Act of 2002 filed
      herewith.                                                                                                                                                                                                                                                               
|                  |  |                                                                                                                                                                                                                                                                                                       
|31.2              |  | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 302 of the Sarbanes-                                                                                                                                                                                           
|                  |  | Oxley Act of 2002 filed
      herewith.                                                                                                                                                                                                                                                               
|                  |  |                                                                                                                                                                                                                                                                                                       
|32.1              |  | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 906 of the Sarbanes-                                                                                                                                                                                           
|                  |  | Oxley Act of 2002 filed
      herewith.                                                                                                                                                                                                                                                               

81

|32.2 |  | Certification Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 906 of the Sarbanes- 
      Oxley Act of 2002 filed herewith.                                                                                                                                                                           
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|     |  |                                                                                                                                                                                                                                                                                                                                
|99.3 |  | Form N-CSR of Eaton Vance Tax-Managed Growth
      Portfolio (File No. 811-7409) for its year ended  December 31, 2005 filed electronically with the Securities and
      Exchange Commission under the  Investment
      Company Act of 1940 on March 8, 2006 incorporated herein by reference
      pursuant to Rule  12b-32.
|     | 
|     | 
|     | 

82