<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-21400
Eaton Vance Tax-Advantaged Dividend Income Fund
-----------------------------------------------
(Exact Name of registrant as Specified in Charter)
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
-----------------------------------------------------------------------
(Address of Principal Executive Offices)
Alan R. Dynner
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
-----------------------------------------------------------------------
(Name and Address of Agent for Services)
(617) 482-8260
--------------
(registrant's Telephone Number)
August 31
---------
Date of Fiscal Year End
August 31, 2004
---------------
Date of Reporting Period
<Page>
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
[EV LOGO]
[GRAPHIC IMAGE]
ANNUAL REPORT AUGUST 31, 2004
[GRAPHIC IMAGE]
EATON VANCE
TAX-
ADVANTAGED
DIVIDEND
INCOME
FUND
[GRAPHIC IMAGE]
<Page>
EATON VANCE FUNDS
EATON VANCE MANAGEMENT
BOSTON MANAGEMENT AND RESEARCH
EATON VANCE DISTRIBUTORS, INC.
PRIVACY NOTICE
The Eaton Vance organization is committed to ensuring your financial privacy.
This notice is being sent to comply with privacy regulations of the Securities
and Exchange Commission. Each of the above financial institutions has in effect
the following policy with respect to nonpublic personal information about its
customers:
- - Only such information received from you, through application forms or
otherwise, and information about your Eaton Vance fund transactions will be
collected.
- - None of such information about you (or former customers) will be disclosed to
anyone, except as permitted by law (which includes disclosure to employees
necessary to service your account).
- - Policies and procedures (including physical, electronic and procedural
safeguards) are in place that are designed to protect the confidentiality of
such information.
For more information about Eaton Vance's privacy policies, call: 1-800-262-1122.
IMPORTANT NOTICE
REGARDING DELIVERY OF
SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission permits funds to deliver only one copy of
shareholder documents, including prospectuses, proxy statements and shareholder
reports, to fund investors with multiple accounts at the same residential or
post office box address. This practice is often called "householding" and it
helps eliminate duplicate mailings to shareholders.
EATON VANCE, OR YOUR FINANCIAL ADVISER, MAY HOUSEHOLD THE MAILING OF YOUR
DOCUMENTS INDEFINITELY UNLESS YOU INSTRUCT EATON VANCE, OR YOUR FINANCIAL
ADVISER, OTHERWISE.
If you would prefer that your Eaton Vance documents not be householded, please
contact Eaton Vance at 1-800-262-1122, or contact your financial adviser.
Your instructions that householding not apply to delivery of your Eaton Vance
documents will be effective within 30 days of receipt by Eaton Vance or your
financial adviser.
The Fund will file a schedule of its portfolio holdings on Form N-Q with the
Securities and Exchange Commission (the "SEC") for the first and third quarters
of each fiscal year. The Fund's Form N-Q will be available on the Eaton Vance
website www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the
EDGAR database on the SEC's website at www.sec.gov. Form N-Q may also be
reviewed and copied at the SEC's public reference room in Washington, D.C. (call
1-800-732-0330 for information on the operation of the public reference room).
From time to time, funds are required to vote proxies related to the securities
held by the funds. The Eaton Vance Funds or their underlying Portfolios vote
proxies according to a set of policies and procedures approved by the Funds' and
Portfolios' Boards. You may obtain a description of these policies and
procedures without charge, upon request, by calling 1-800-262-1122. This
description is also available on the Securities and Exchange Commission's
website at http://www.sec.gov.
<Page>
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND as of August 31, 2004
LETTER TO SHAREHOLDERS
[PHOTO OF THOMAS E. FAUST JR.]
Thomas E. Faust Jr.
President
We are pleased to welcome shareholders of Eaton Vance Tax-Advantaged Dividend
Income Fund (the "Fund"), a closed-end fund traded on the New York Stock
Exchange under the symbol EVT, with the Fund's first annual report. Among the
first equity income funds designed to take advantage of new favorable tax rates
on dividend income, the Fund's investment objective is to provide a high level
of after-tax total return, consisting primarily of tax-advantaged dividend
income and capital appreciation. The Fund invests primarily in a diversified
portfolio of common and preferred stocks that pay dividends that qualify for
federal income taxation at long-term capital gains rates.
Based on net asset value (NAV) per share for the period from inception on
September 30, 2003, through August 31, 2004, the Fund had a total return of
16.84%. This return resulted from an increase in NAV from $19.10 (offering
price, less all commissions and fees) on September 30, 2003, to $21.14 on August
31, 2004, and the distribution of $1.075 per share in dividend income.(1)
Based on share price trading on the New York Stock Exchange for the period from
inception on September 30, 2003, through August 31, 2004, the Fund had a total
return of 5.67%. This return resulted from an increase in share price from
$19.10 (offering price, less all commissions and fees) on September 30, 2003, to
$19.12 on August 31, 2004, and the distribution of $1.075 per share in dividend
income.(1) Based on the most recent dividend and a share price of $19.12, the
Fund had a market yield of 6.75% as of August 31, 2004.(2)
WITH TODAY'S LOWER TAX RATES, IT IS STILL IMPORTANT FOR INVESTORS TO CONSIDER
TAX EFFECTS...
Last year, Congress passed legislation that included several provisions that
affect individual investors. The most important aspects of the Jobs and Growth
Tax Relief Reconciliation Act of 2003 for individuals were a lowering of tax
rates for ordinary income and long-term capital gains and a change in the tax
treatment of qualifying dividend income, which is now taxed at the same rates as
long-term capital gains, rather than as ordinary income.
The biggest change for equity investors is that qualifying dividend income is
now taxed at much lower rates than other investment income and short-term gains
(maximum rate of 15% vs. 35%). The spread between short-term and long-term
capital gains tax rates has also increased. These changes increase the
importance of achieving a mix of returns that emphasizes long-term gains and
qualifying dividends over less favorably taxed short-term gains and
non-qualifying dividends and other investment income.
Taxes continue to be the single largest cost borne by long-term equity
investors. Strategies to help minimize tax effects can add real value to taxable
accounts. Just as before, it makes sense for taxpayers to invest in funds that
share their objective of after-tax returns.
Sincerely,
/s/ Thomas E. Faust Jr.
Thomas E. Faust Jr.
President
October 4, 2004
FUND INFORMATION
as of August 31, 2004
PERFORMANCE(1)
Average Annual Total Returns (by share price, New York Stock Exchange)
<Table>
Life of Fund (9/30/03) 5.67%
</Table>
AVERAGE ANNUAL TOTAL RETURNS (AT NET ASSET VALUE)
<Table>
Life of Fund (9/30/03) 16.84%
</Table>
FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED. YIELD WILL
VARY.
Past performance is no guarantee of future results. Returns are historical and
are calculated by determining the percentage change in net asset value or share
price (as applicable) with all distributions reinvested. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. Performance is for the stated time period
only; due to market volatility, the Fund's current performance may be lower or
higher than the quoted return.
(1) SHARE PRICE AND NET ASSET VALUE ON 9/30/03 ARE CALCULATED ASSUMING AN
OFFERING PRICE OF $20.00, LESS THE SALES LOAD OF $0.90 PER SHARE PAID BY THE
SHAREHOLDER. PERFORMANCE RESULTS REFLECT THE EFFECTS OF LEVERAGE RESULTING
FROM THE FUND'S ISSUANCE OF AUCTION PREFERRED SHARES ON DECEMBER 10, 2003.
(2) THE FUND'S MARKET YIELD IS CALCULATED BY DIVIDING THE MOST RECENT DIVIDEND
PER SHARE BY THE SHARE PRICE AT THE END OF THE PERIOD AND ANNUALIZING THE
RESULT.
2
<Page>
MANAGEMENT DISCUSSION
AN INTERVIEW WITH MICHAEL R. MACH, JUDITH A. SARYAN, AND THOMAS H. LUSTER,
PORTFOLIO MANAGERS OF EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
[PHOTO OF MICHAEL R. MACH, CFA]
Michael R. Mach, CFA
Portfolio Manager
Q: Michael, would you describe the economic and market environment since the
Fund's inception on September 30, 2003?
A: MR. MACH: Since the Fund's inception 11 months ago, the U.S. economy has
shown above-trend growth, driven by stimulative monetary and fiscal policy,
improving consumer confidence and a healthier employment picture. At the same
time, inflation has been generally on the increase, albeit rising slowly from
very low levels back toward the long-term average. Against this generally
positive economic backdrop, equity markets scored solid gains.
During the 11-month period ending August 31, 2004, the Fund provided
shareholders a total return of 16.84% on a net asset value (NAV) basis and
5.67% based on share price.* For comparative purposes, over this same period,
the Russell 1000 Value Index and the Merrill Lynch Preferred Index had total
returns of 18.68% and 5.04%, respectively.(1)
[PHOTO OF JUDITH A. SARYAN, CFA]
Judith A. Saryan, CFA
Portfolio Manager
Q: Judith, could you discuss how the Fund has been invested over the past 11
months?
A: MS. SARYAN: Based on the Fund's objective of providing a high level of
after-tax total return, consisting primarily of tax-advantaged dividend
income and capital appreciation, the Fund was primarily invested in
securities that generated a relatively high level of qualifying dividend
income (QDI). At the end of the period, the Fund had approximately 69.0% of
total investments invested in common stocks, approximately 30.3% of total
investments invested in preferred stocks, and 0.7% of total investments held
in cash equivalents. Within the common stock portfolio, the Fund had 34.1% of
total investments invested in utility and telecommunication stocks. An
additional 34.9% of the Fund's total investments were invested in common
stocks diversified across the consumer, industrial and financial sectors.(2)
Q: Judith, how would you characterize the performance of the Fund's utility and
telecommunication common stocks over this period?
A: MS. SARYAN: The utility and telecommunication stocks owned by the Fund
generally outperformed the overall markets for the 11-month period ending
August 31, 2004. Utility stocks rose during this period as longterm interest
rates declined. Historically, utility, telecommunication and other higher
yielding stocks have tended to do well during periods of declining long-term
interest rates. Also throughout this period, many of the utility and
telecommunication companies owned by the Fund experienced strong free cash
flow generation. This allowed many of the Fund's utility and
telecommunication holdings to increase their regular quarterly, semi-annual
or annual dividend payments. In a number of cases, companies held in the
Fund's portfolio also rewarded shareholders with special one-time dividend
payments.
(1) It is not possible to invest directly in an Index.
(2) Holdings are subject to change due to active management.
* Past performance is no guarantee of future results. Returns are historical and
are calculated by determining the percentage change in net asset value or
share price (as applicable) with all distributions reinvested. Investment
return and principal value will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost. Performance is for the stated
time period only; due to market volatility, the Fund's current performance may
be lower or higher than the quoted return.
3
<Page>
[PHOTO OF THOMAS H. LUSTER, CFA]
Thomas H. Luster, CFA
Portfolio Manager
Q: Michael, would you comment on the performance of the Fund's other common
stock holdings?
A: MR. MACH: In addition to the utility and telecommunication stocks mentioned
above, the Fund also benefited from being invested in a broadly diversified
basket of other dividend-paying common stocks. Consumer-related stocks held
by the Fund generally moved higher during the period, as consumer spending
benefited from tax rebates and strong new job creation. Growing demand and
increasing commodity prices generally benefited the Fund's holdings in the
energy and material sectors. And as improving corporate earnings and free
cash flow began to fuel a rebound in business spending, industrial stocks
held by the Fund also generally benefited.
Q: Tom, could you comment on the performance of the Fund's preferred stocks?
A: MR. LUSTER: During the period, preferred stocks owned by the Fund generated
mid-single digit returns. The performance of the Fund's preferred stock
holdings generally followed fixed-income benchmarks during the period,
posting positive returns during periods of stable or falling interest rates,
and negative returns during periods when yields moved higher. During the last
11 months, the volatility associated with owning preferred stocks was greater
than usual. The Fund's disciplined and research-intensive approach to
managing its preferred portfolio allowed it to navigate successfully through
this period of unusual volatility
Q: Judith, has the Fund invested in any non-U.S. securities since its 9/30/03
inception?
A: MS. SARYAN: Yes, the Fund has invested in non-U.S. securities in both its
common and preferred portfolios. These investments have provided the Fund
with international diversification and dividend yields often more attractive
than the yields available on stocks issued by similar domestic corporations.
As of August 31, 2004, approximately 23.4% of the Fund's total investments
were invested in non-US common stocks. In addition, approximately 16.9% of
the Fund's total investments were invested in "Yankee" preferreds, preferred
stocks generally issued by large, highly rated, European financial
institutions but denominated in U.S. dollars.(1)
Q: Tom, are there any unifying themes tying together Fund investments?
A: MR. LUSTER: Definitely. Our discipline is to buy dividend-paying stocks,
whether common or preferred, of companies characterized by strong business
franchises, backed by proven management teams and solid balance sheets. For
common stocks, we focus on companies that offer the potential for growth in
earnings, cash flow and dividends. For preferreds, we have generally favored
highly-rated, higher-yielding securities.
Q: Michael, have a significant number of the Fund's common stock holdings raised
their dividends since the Fund's inception?
A: MR. MACH: Yes. In fact, a majority of the Fund's common stock holdings raised
their dividends during this period. The Jobs and Growth Tax Reconciliation
Act of 2003 that President Bush signed into law in May of 2003 effectively
removed many of the disincentives previously associated with paying out
earnings as dividends. This has set the stage for the increases in dividend
payouts now emerging. We believe the growing number of dividend increases we
have seen in recent months also reflects companies achieving higher profits
and, in some cases, divesting non-core investments. This has provided greater
free cash flow that has been used by corporations to increase the dividends
paid to shareholders.
(1) Holdings are subject to change due to active management.
4
<Page>
Q: Judith, could you describe how the Fund's dividend capture strategy helps it
to generate incremental qualified dividend income?
A: MS. SARYAN: The Fund's dividend capture strategy is a trading strategy
designed to enhance the level of qualified, tax-advantaged dividend income
earned by the Fund. By implementing its dividend capture strategy, the Fund
has been able to collect a greater number of dividend payments over the last
11 months than it would have collected by simply adhering to a buy-and-hold
strategy.
On September 15, 2004, the Fund announced an increase in its monthly dividend
from $0.1075 per share to $0.1100 per share. This increase reflected both the
effective implementation of the Fund's dividend capture strategy and the
significant number of dividend increases by companies represented in the
Fund's common stock portfolio.(1)
Q: Judith, is it your expectation that all of the dividend income paid out by
the Fund will be QDI income through the end of 2004?
A: MS. SARYAN: At this point, we anticipate that virtually all of the income
paid out by the Fund will be considered QDI income, subject to taxation at
long-term capital gains rates no greater than 15%.
Q: Tom, would you review how the Fund has managed the maturities of the Auction
Preferred Shares (APS) that it has issued to leverage its initial assets?
A: MR. LUSTER: Since the Fund initially issued its APS in December 2003, we have
on a number of occasions moved to extend the maturities of these issues. As
of September 23, 2004, the Fund's $700 million in APS borrowings maintained a
weighted average maturity of 121 days. This compares against a weighted
average maturity of 21 days when the APS were first issued. By lengthening
the maturity of the Fund's APS in this manner, we believe the Fund has
lowered its sensitivity to rising short-term interest rates. Use of financial
leverage creates an opportunity for increased income, but, at the same time,
creates special risks (including the likelihood of greater volatility of net
asset value and market price of the common shares).
Q: Michael, do you have any final comments for our shareholders?
A: MR. MACH: In recent months, driven by a combination of the lower tax rate
applied to qualifying dividend income, strong corporate earnings and free
cash flow growth, and historically low dividend payout ratios, corporations
have meaningfully increased dividend payments made to shareholders of common
stock. We believe the Fund is positioned to benefit should this trend
continue.
[CHART]
ASSET ALLOCATION+
By total investments
<Table>
Common Stocks 69.0%
Preferred Stocks 30.3%
Short-Term Investments 0.7%
</Table>
+ As of August 31, 2004. Asset Allocation subject to change due to active
management.
(1) The amount of monthly dividend distributions may vary, depending on a number
of factors. As portfolio and market conditions change, the rate of dividends
could change.
THE VIEWS EXPRESSED IN THIS REPORT ARE THOSE OF THE PORTFOLIO MANAGERS AND ARE
CURRENT ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THESE VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER
CONDITIONS, AND EATON VANCE DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS.
THESE VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE INVESTMENT
DECISIONS FOR AN EATON VANCE FUND ARE BASED ON MANY FACTORS, MAY NOT BE RELIED
ON AS AN INDICATION OF TRADING INTENT ON BEHALF OF ANY EATON VANCE FUND.
5
<Page>
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND as of August 31, 2004
PORTFOLIO OF INVESTMENTS
COMMON STOCKS -- 99.9%
<Table>
<Caption>
SECURITY SHARES VALUE
- --------------------------------------------------------------------------------
APPAREL -- 0.9%
VF Corp. 275,000 $ 13,568,500
- --------------------------------------------------------------------------------
$ 13,568,500
- --------------------------------------------------------------------------------
APPLIANCES -- 0.4%
Whirlpool Corp. 100,000 $ 6,114,000
- --------------------------------------------------------------------------------
$ 6,114,000
- --------------------------------------------------------------------------------
AUTO AND PARTS -- 0.4%
General Motors Corp. 150,000 $ 6,196,500
- --------------------------------------------------------------------------------
$ 6,196,500
- --------------------------------------------------------------------------------
BEVERAGES -- 0.6%
Diageo PLC(1) 700,000 $ 8,630,019
- --------------------------------------------------------------------------------
$ 8,630,019
- --------------------------------------------------------------------------------
BUILDING MATERIALS -- 1.1%
Stanley Works (The) 400,000 $ 17,304,000
- --------------------------------------------------------------------------------
$ 17,304,000
- --------------------------------------------------------------------------------
CHEMICALS -- 2.0%
Dow Chemical Co. (The) 300,000 $ 12,843,000
Eastman Chemical Co. 100,000 4,653,000
Lyondell Chemical Co. 500,000 9,845,000
RPM, Inc. 250,000 3,952,500
- --------------------------------------------------------------------------------
$ 31,293,500
- --------------------------------------------------------------------------------
COAL -- 0.4%
Peabody Energy Corp. 125,000 $ 6,665,000
- --------------------------------------------------------------------------------
$ 6,665,000
- --------------------------------------------------------------------------------
COMMERCIAL BANKS -- 12.1%
ABN AMRO Holdings NV(1) 165,000 $ 3,513,688
Associated Banc-Corp 325,000 10,172,500
Bank of America Corp. 1,100,000 49,478,000
Bank of Hawaii Corp. 150,000 7,122,000
Bank of Nova Scotia(1) 500,000 13,705,000
Canadian Imperial Bank of Commerce(1) 200,000 10,166,970
Comerica, Inc. 150,000 9,022,500
Huntington Bancshares, Inc. 300,000 7,401,000
National City Corp. 250,000 $ 9,447,500
National Commerce Financial Corp. 143,200 4,817,248
North Fork Bancorporation, Inc. 35,000 1,467,900
PNC Financial Services Group, Inc. 275,000 14,759,250
Wachovia Corp. 975,000 45,737,250
- --------------------------------------------------------------------------------
$ 186,810,806
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES -- 1.2%
Donnelley (R.R.) & Sons Co. 450,000 $ 13,828,500
Landauer, Inc. 25,000 1,119,500
ServiceMaster Co. 310,000 3,853,300
- --------------------------------------------------------------------------------
$ 18,801,300
- --------------------------------------------------------------------------------
DISTRIBUTORS -- 0.6%
Genuine Parts Co. 250,000 $ 9,477,500
- --------------------------------------------------------------------------------
$ 9,477,500
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 21.5%
BellSouth Corp. 1,380,000 $ 36,928,800
BT Group PLC(1) 6,250,000 20,584,497
Citizens Communications Co. 1,500,000 18,945,000
SBC Communications, Inc. 1,800,000 46,422,000
Sprint Corp. (FON Group) 900,000 17,712,000
TDC A/S(1) 250,000 8,819,525
Telecom Italia Mobile SPA(1) 7,500,000 39,968,780
Telecom Italia SPA(1) 17,000,000 37,397,426
Telefonos de Mexico SA ADR 1,100,000 35,629,000
Verizon Communications, Inc. 1,400,000 54,950,000
Vodafone Group PLC ADR 600,000 13,740,000
- --------------------------------------------------------------------------------
$ 331,097,028
- --------------------------------------------------------------------------------
ELECTRICAL / ELECTRONIC MANUFACTURER -- 1.7%
Cooper Industries Ltd., Class A(1) 225,000 $ 12,424,500
Emerson Electric Co. 150,000 9,337,500
Hubbell, Inc. 100,000 4,315,000
- --------------------------------------------------------------------------------
$ 26,077,000
- --------------------------------------------------------------------------------
ELECTRONICS - INSTRUMENTS -- 0.7%
Raytheon Company 300,000 $ 10,419,000
- --------------------------------------------------------------------------------
$ 10,419,000
- --------------------------------------------------------------------------------
</Table>
See notes to financial statements
6
<Page>
<Table>
<Caption>
SECURITY SHARES VALUE
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 3.8%
Citigroup, Inc. 925,000 $ 43,086,500
JPMorgan Chase & Co. 375,000 14,842,500
- --------------------------------------------------------------------------------
$ 57,929,000
- --------------------------------------------------------------------------------
FOOD PRODUCTS -- 1.0%
Sara Lee Corp. 700,000 $ 15,491,000
- --------------------------------------------------------------------------------
$ 15,491,000
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS AND LEISURE -- 0.8%
Harrah's Entertainment, Inc. 250,000 $ 12,047,500
- --------------------------------------------------------------------------------
$ 12,047,500
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS -- 0.9%
Kimberly-Clark Corp. 200,000 $ 13,340,000
- --------------------------------------------------------------------------------
$ 13,340,000
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES -- 1.6%
General Electric Co. 450,000 $ 14,755,500
Honeywell International, Inc. 300,000 10,794,000
- --------------------------------------------------------------------------------
$ 25,549,500
- --------------------------------------------------------------------------------
INSURANCE -- 1.9%
Allstate Corp. (The) 200,000 $ 9,442,000
Mercury General Corp. 175,000 8,776,250
XL Capital Ltd., Class A(1) 150,000 10,530,000
- --------------------------------------------------------------------------------
$ 28,748,250
- --------------------------------------------------------------------------------
MACHINERY -- 0.8%
Caterpillar, Inc. 175,000 $ 12,722,500
- --------------------------------------------------------------------------------
$ 12,722,500
- --------------------------------------------------------------------------------
METALS AND MINING -- 1.6%
Cia Vale do Rio Doce ADR 162,500 $ 9,387,625
Freeport-McMoran Copper & Gold Inc., Class B 150,000 5,644,500
Rio Tinto PLC ADR 35,000 3,555,300
Worthington Industries, Inc. 300,000 6,105,000
- --------------------------------------------------------------------------------
$ 24,692,425
- --------------------------------------------------------------------------------
OIL AND GAS -- 9.8%
BP PLC ADR 790,000 $ 42,423,000
ChevronTexaco Corp. 450,000 43,875,000
ConocoPhillips 200,000 $ 14,886,000
Exxon Mobil Corp. 275,000 12,677,500
Marathon Oil Corp. 1,015,000 36,814,050
- --------------------------------------------------------------------------------
$ 150,675,550
- --------------------------------------------------------------------------------
PAPER AND FOREST PRODUCTS -- 0.2%
MeadWestvaco Corp. 98,500 $ 2,969,775
- --------------------------------------------------------------------------------
$ 2,969,775
- --------------------------------------------------------------------------------
PHARMACEUTICALS -- 1.9%
GlaxoSmithKline PLC(1) 300,000 $ 6,117,201
Merck & Co., Inc. 500,000 22,485,000
Wyeth Corp. 25,000 914,250
- --------------------------------------------------------------------------------
$ 29,516,451
- --------------------------------------------------------------------------------
RETAIL - SPECIALTY AND APPAREL -- 1.2%
Limited, Inc. (The) 900,000 $ 18,072,000
- --------------------------------------------------------------------------------
$ 18,072,000
- --------------------------------------------------------------------------------
SOFTWARE -- 0.4%
Microsoft Corp. 225,000 $ 6,142,500
- --------------------------------------------------------------------------------
$ 6,142,500
- --------------------------------------------------------------------------------
TOBACCO -- 2.5%
Altria Group, Inc. 800,000 $ 39,160,000
- --------------------------------------------------------------------------------
$ 39,160,000
- --------------------------------------------------------------------------------
UTILITIES - ELECTRICAL AND GAS -- 25.1%
Alliant Energy Corp. 300,000 $ 7,797,000
Ameren Corp. 132,000 6,176,280
American Electric Power Co., Inc. 50,000 1,636,500
Centerpoint Energy, Inc. 200,000 2,188,000
Centrica PLC(1) 3,000,000 13,308,540
Dominion Resources, Inc. 250,000 16,222,500
E.ON AG(1) 500,000 35,573,403
Edison International 1,200,000 32,256,000
Endesa SA(1) 300,000 5,565,133
Enel SPA(1) 4,200,000 32,506,710
Energy East Corp. 300,000 7,311,000
Entergy Corp. 50,000 3,015,000
Exelon Corp. 75,000 2,763,750
</Table>
See notes to financial statements
7
<Page>
<Table>
<Caption>
SECURITY SHARES VALUE
- --------------------------------------------------------------------------------
UTILITIES - ELECTRICAL AND GAS (CONTINUED)
FirstEnergy Corp. 750,000 $ 30,180,000
Fortum Oyj(1) 1,200,000 16,857,796
FPL Group, Inc. 250,000 17,300,000
National Grid Transco PLC(1) 3,500,000 29,326,771
Pepco Holdings, Inc. 1,000,000 20,640,000
Progress Energy, Inc. 250,000 10,972,500
RWE AG(1) 800,000 39,309,093
SCANA Corp. 200,000 7,588,000
Scottish Power PLC(1) 4,100,000 29,743,950
Sempra Energy 500,000 18,075,000
- --------------------------------------------------------------------------------
$ 386,312,926
- --------------------------------------------------------------------------------
WATER UTILITIES -- 2.8%
Severn Trent PLC(1) 1,000,000 $ 15,616,845
United Utilities PLC(1) 2,000,000 19,753,061
Veolia Environment(1) 300,000 7,762,195
- --------------------------------------------------------------------------------
$ 43,132,101
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $1,382,907,234) $ 1,538,955,631
- --------------------------------------------------------------------------------
</Table>
PREFERRED STOCKS -- 43.9%
<Table>
<Caption>
SECURITY SHARES VALUE
- --------------------------------------------------------------------------------
COMMERCIAL BANKS -- 17.1%
Abbey National Capital Trust I, 8.963%(1)(4) 155,000 $ 21,064,562
Abbey National PLC, 7.375%(1) 390,200 10,433,948
ABN AMRO Capital Funding Trust VII, 6.08%(1) 253,000 6,198,500
ABN AMRO North America, Inc., 7.150%(1)(2) 303,700 7,820,276
Barclays Bank PLC, 6.86%(1)(2)(4) 35,000 3,894,790
Barclays Bank PLC, 8.55%(1)(2)(4) 141,000 17,539,780
BNP Paribas, 9.003%(1)(2)(4) 123,950 15,656,521
BSCH Finance Ltd., 8.625%(1) 35,000 942,550
CA Preferred Fund Trust II, 7.00%(1)(4) 50,000 5,215,630
CA Preferred Fund Trust, 7.00%(1)(4) 255,000 26,534,459
Cobank, ABC, 7.00%(2) 400,000 22,216,800
Den Norske Bank, 7.729%(1)(2)(4) 160,000 18,960,096
First Republic Bank, 6.70% 576,700 14,475,170
HSBC Capital Funding LP, 10.176%(1)(2)(4) 70,000 10,546,613
HSBC Capital Funding LP, 9.547%(1)(2)(4) 120,000 15,340,704
Lloyds TSB Bank PLC, 6.90%(1)(4) 110,000 11,454,729
Royal Bank of Scotland Group PLC, 8.10%(1) 31,000 $ 866,450
Royal Bank of Scotland Group PLC, 8.50%(1) 3,500 91,315
Royal Bank of Scotland Group PLC, 9.118%(1)(4) 256,250 32,460,161
Standard Chartered PLC 8.90%(1)(4) 18,000 2,024,555
UBS Preferred Funding Trust I, 8.622%(1)(4) 150,000 18,710,535
- --------------------------------------------------------------------------------
$ 262,448,144
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 2.3%
BBVA Preferred Capital Ltd., 7.75%(1) 252,300 $ 6,796,962
Lehman Brothers Holdings, Inc., 3.00%(3) 100,000 2,522,000
Prudential PLC, 6.50%(1)(4) 265,000 25,760,809
- --------------------------------------------------------------------------------
$ 35,079,771
- --------------------------------------------------------------------------------
FOOD PRODUCTS -- 1.7%
Dairy Farmers of America, 7.875%(2) 220,000 $ 23,100,000
Ocean Spray Cranberries, Inc., 6.25%(2) 47,500 3,440,781
- --------------------------------------------------------------------------------
$ 26,540,781
- --------------------------------------------------------------------------------
INSURANCE -- 7.7%
Ace Ltd., 7.80%(1) 855,275 $ 22,989,792
AXA, 7.10%(1)(4) 200,000 20,755,600
ING Capital Funding Trust III, 8.439%(1)(4) 105,750 12,942,023
ING Groep NV, 7.05%(1) 308,200 8,087,168
ING Groep NV, 7.20%(1) 473,155 12,566,997
PartnerRe Ltd., 6.75%(1) 98,200 2,469,730
RenaissanceRe Holdings Ltd., 6.08%(1) 125,600 2,957,880
XL Capital Ltd., 7.625%(1) 476,140 12,974,815
XL Capital Ltd., Series A, 8.00%(1) 142,765 3,963,156
Zurich Regcaps Fund Trust I, 6.58%(1)(2) 6,000 6,268,128
Zurich Regcaps Fund Trust VI(1)(2)(3) 12,500 12,160,163
- --------------------------------------------------------------------------------
$ 118,135,452
- --------------------------------------------------------------------------------
REITS -- 13.1%
AMB Property Corp., 6.75% 426,000 $ 10,500,900
BRE Properties, 6.75% 480,000 11,760,000
Colonial Properties Trust, 8.125% 577,000 15,111,630
Developers Diversified Realty Corp., 7.35% 160,000 4,080,000
Developers Diversified Realty Corp., 8.00% 250,000 6,542,500
Federal Realty Investment, 8.50% 50,000 1,405,000
Health Care Property, 7.10% 200,000 5,094,000
Health Care REIT, Inc., 7.875% 170,100 4,456,620
Prologis Trust, 6.75% 1,500,000 37,485,000
</Table>
See notes to financial statements
8
<Page>
<Table>
<Caption>
SECURITY SHARES VALUE
- --------------------------------------------------------------------------------
REITS (CONTINUED)
PS Business Parks Inc., 7.00% 400,000 $ 9,760,000
PS Business Parks, Inc., 7.95% 400,000 10,440,000
Public Storage, Inc., 6.85% 1,600,000 40,800,000
Regency Centers Corp., 7.45% 45,000 1,152,000
Shurgard Storage Centers, 8.75% 20,000 534,000
Vornado Realty Trust, 7.00% 1,600,000 42,800,000
- --------------------------------------------------------------------------------
$ 201,921,650
- --------------------------------------------------------------------------------
UTILITIES - ELECTRICAL AND GAS -- 2.0%
Interstate Power & Light Co., 7.10% 181,400 $ 4,852,450
Southern Union Co., 7.55% 965,000 26,383,100
- --------------------------------------------------------------------------------
$ 31,235,550
- --------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST, $664,032,275) $ 675,361,348
- --------------------------------------------------------------------------------
</Table>
SHORT-TERM INVESTMENTS -- 1.0%
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- --------------------------------------------------------------------------------
Investors Bank and Trust Time Deposit,
1.58%, 9/1/04 $ 15,798 $ 15,798,000
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(AT AMORTIZED COST, $15,798,000) $ 15,798,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 144.8%
(IDENTIFIED COST, $2,062,737,509) $ 2,230,114,979
- --------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 0.7% $ 9,570,447
- --------------------------------------------------------------------------------
AUCTION PREFERRED SHARES PLUS
CUMULATIVE UNPAID
DIVIDENDS -- (45.5)% $ (700,068,473)
- --------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHARES -- 100.0% $ 1,539,616,953
- --------------------------------------------------------------------------------
</Table>
ADR - American Depositary Receipt
(1) Foreign security.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. At August 31,
2004, the aggregate value of the securities is $156,944,652 or 10.2% of the
Fund's net assets.
(3) Variable rate security.
(4) Security valued at fair value using methods determined in good faith by or
at the direction of the Trustees.
COUNTRY CONCENTRATION OF PORTFOLIO
<Table>
<Caption>
PERCENTAGE OF
COUNTRY TOTAL INVESTMENTS VALUE
- --------------------------------------------------------------------------------
United States 59.7% $ 1,331,749,554
United Kingdom 15.9 354,277,600
Italy 4.9 109,872,916
France 3.4 75,924,405
Germany 3.4 74,882,496
Bermuda 2.6 57,779,873
Holland (Netherlands) 2.3 51,128,652
Switzerland 1.7 37,138,826
Mexico 1.6 35,629,000
Canada 1.1 23,871,970
Norway 0.9 18,960,096
Finland 0.8 16,857,796
Spain 0.6 13,304,645
Other 1.3 28,737,150
- --------------------------------------------------------------------------------
Total 100% $ 2,230,114,979
- --------------------------------------------------------------------------------
</Table>
See notes to financial statements
9
<Page>
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND as of August 31, 2004
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AS OF AUGUST 31, 2004
<Table>
ASSETS
Investments, at value
(identified cost, $2,062,737,509) $ 2,230,114,979
Cash 10,012
Foreign currency, at value
(identified cost, $9,733,846) 9,814,645
Receivable for investments sold 42,226,844
Dividends and interest receivable 10,129,987
Prepaid expenses 373,360
Tax reclaim receivable 580,684
- --------------------------------------------------------------------------------
TOTAL ASSETS $ 2,293,250,511
- --------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased $ 45,520,284
Dividends payable 7,829,859
Accrued expenses 214,942
- --------------------------------------------------------------------------------
TOTAL LIABILITIES $ 53,565,085
- --------------------------------------------------------------------------------
AUCTION PREFERRED SHARES (28,000 SHARES OUTSTANDING) AT
LIQUIDATION VALUE PLUS CUMULATIVE UNPAID DIVIDENDS $ 700,068,473
- --------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES $ 1,539,616,953
- --------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Common Shares, $0.01 par value, unlimited number of shares
authorized, 72,835,900 shares issued and outstanding $ 728,359
Additional paid-in capital 1,382,213,413
Accumulated net realized loss (computed on the basis
of identified cost) (19,355,261)
Accumulated undistributed net investment income 8,582,249
Net unrealized appreciation (computed on the basis
of identified cost) 167,448,193
- --------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES $ 1,539,616,953
- --------------------------------------------------------------------------------
NET ASSET VALUE PER COMMON SHARE
($1,539,616,953 DIVIDED BY 72,835,900 COMMON SHARES
ISSUED AND OUTSTANDING) $ 21.14
- --------------------------------------------------------------------------------
</Table>
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED
AUGUST 31, 2004(1)
<Table>
INVESTMENT INCOME
Dividends (net of foreign taxes, $4,536,351) $ 108,133,511
Interest 994,002
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 109,127,513
- --------------------------------------------------------------------------------
EXPENSES
Investment adviser fee $ 15,853,685
Trustees' fees and expenses 22,309
Preferred shares remarketing agent fee 1,271,858
Custodian fee 386,453
Legal and accounting services 370,846
Printing and postage 189,370
Transfer and dividend disbursing agent fees 55,268
Organization expenses 7,500
Miscellaneous 101,739
- --------------------------------------------------------------------------------
TOTAL EXPENSES $ 18,259,028
- --------------------------------------------------------------------------------
Deduct --
Reductions of investment adviser fee $ 3,751,577
Expense reimbursement from investment adviser 7,500
- --------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 3,759,077
- --------------------------------------------------------------------------------
NET EXPENSES $ 14,499,951
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 94,627,562
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) --
Investment transactions (identified cost basis) $ (20,085,038)
Foreign currency transactions (337,310)
- --------------------------------------------------------------------------------
NET REALIZED LOSS $ (20,422,348)
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments (identified cost basis) $ 167,377,470
Foreign currency 70,723
- --------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $ 167,448,193
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 147,025,845
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM INCOME $ (6,684,593)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 234,968,814
- --------------------------------------------------------------------------------
</Table>
(1) For the period from the start of business, September 30, 2003, to
August 31, 2004.
See notes to financial statements
10
<Page>
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
INCREASE (DECREASE) PERIOD ENDED
IN NET ASSETS AUGUST 31, 2004(1)
- --------------------------------------------------------------------------------
From operations --
Net investment income $ 94,627,562
Net realized loss from investment transactions and foreign
currency transactions (20,422,348)
Net change in unrealized appreciation (depreciation)
of investments and foreign currency 167,448,193
Distributions to preferred shareholders from net
investment income (6,684,593)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 234,968,814
- --------------------------------------------------------------------------------
Distributions to common shareholders --
From net investment income $ (78,293,633)
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS $ (78,293,633)
- --------------------------------------------------------------------------------
Capital share transactions --
Proceeds from sale of common shares(2) $ 1,390,188,935
Reinvestment of distributions to common shareholders 920,480
Offering costs and preferred shares underwriting discounts (8,267,643)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS $ 1,382,841,772
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 1,539,516,953
- --------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES
At beginning of period $ 100,000
- --------------------------------------------------------------------------------
AT END OF PERIOD $ 1,539,616,953
- --------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME INCLUDED IN NET
ASSETS APPLICABLE TO COMMON SHARES
AT END OF PERIOD $ 8,582,249
- --------------------------------------------------------------------------------
</Table>
(1) For the period from the start of business, September 30, 2003, to
August 31, 2004.
(2) Proceeds from sales of shares net of sales load paid of $65,506,285.
See notes to financial statements
11
<Page>
FINANCIAL HIGHLIGHTS
Selected data for a common share outstanding during the period
<Table>
<Caption>
PERIOD ENDED
AUGUST 31, 2004(1)(2)
- -------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period (Common shares)(3) $ 19.100
- -------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 1.314
Net realized and unrealized gain 2.009
Distribution to preferred shareholders from net investment income (0.093)
- -------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 3.230
- -------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income $ (1.075)
- -------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS $ (1.075)
- -------------------------------------------------------------------------------------------------------------
PREFERRED AND COMMON SHARES OFFERING COSTS CHARGED TO PAID-IN CAPITAL $ (0.018)
- -------------------------------------------------------------------------------------------------------------
PREFERRED SHARES UNDERWRITING DISCOUNTS $ (0.097)
- -------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD (COMMON SHARES) $ 21.140
- -------------------------------------------------------------------------------------------------------------
MARKET VALUE -- END OF PERIOD (COMMON SHARES) $ 19.120
- -------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN ON NET ASSET VALUE(4) 16.84%
- -------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN ON MARKET VALUE(4) 5.67%
- -------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
12
<Page>
<Table>
<Caption>
PERIOD ENDED
AUGUST 31, 2004(1)
- -------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA+ ++
Net assets applicable to common shares, end of period (000's omitted) $1,539,617
Ratios (As a percentage of average net assets applicable to common shares):
Net expenses(5) 1.07%(6)
Net investment income(5) 6.97%(6)
Portfolio Turnover 87%
- -------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund reflect reductions of the investment
adviser fee. Had such actions not been taken, the ratios and net investment
income per share would have been as follows:
Ratios (As a percentage of average net assets applicable to common shares):
Expenses(5) 1.35%(6)
Net investment income(5) 6.69%(6)
Net investment income per share $ 1.261
- -------------------------------------------------------------------------------------------------------------
++ The ratios reported are based on net assets applicable solely to common
shares. The ratios based on net assets, including amounts related to
preferred shares, are as follows:
Ratios (As a percentage of average total net assets):+++
Net expenses 0.78%(6)
Net investment income 5.07%(6)
- -------------------------------------------------------------------------------------------------------------
+++ The operating expenses of the Fund reflect reductions of the investment
adviser fee. Had such actions not been taken, the ratios would have been as
follows:
Ratios (As a percentage of average total net assets):
Expenses 0.98%(6)
Net investment income 4.87%(6)
- -------------------------------------------------------------------------------------------------------------
Senior Securities:
Total preferred shares outstanding 28,000
Asset coverage per preferred share(7) $ 79,989
Involuntary liquidation preference per preferred share(8) $ 25,000
Approximate market value per preferred share(8) $ 25,000
- -------------------------------------------------------------------------------------------------------------
</Table>
(1) For the period from the start of business, September 30, 2003, to
August 31, 2004.
(2) Computed using average common shares outstanding.
(3) Net asset value at beginning of period reflects the deduction of the sales
load of $0.900 per share paid by the shareholder from the $20.00 offering
price.
(4) Total investment return on net asset value is calculated assuming a
purchase at the offering price of $20.00 less the sales load of $0.90 per
share paid by the shareholder on the first day and a sale at the net aset
value on the last day of the period reported. Total investment return on
market value is calculated assuming a purchase at the offering price of
$20.00 less the sales load of $0.90 per share paid by the shareholder on
the first day and a sale at the current market price on the last day of the
period reported. Total investment return on net asset value and total
investment return on market value are not computed on an annualized basis.
(5) Ratios do not reflect the effect of dividend payments to preferred
shareholders. Ratios to average net assets applicable to common shares
reflect the Fund's leveraged capital structure.
(6) Annualized.
(7) Calculated by subtracting the Fund's total liabilities (not including the
preferred shares) from the Fund's total assets, and dividing this by the
number of preferred shares outstanding.
(8) Plus accumulated and unpaid dividends.
See notes to financial statements
13
<Page>
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND as of August 31, 2004
NOTES TO FINANCIAL STATEMENTS
1 SIGNIFICANT ACCOUNTING POLICIES
Eaton Vance Tax-Advantaged Dividend Income Fund (the Fund) is registered
under the Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Fund was organized under the
laws of the Commonwealth of Massachusetts by an Agreement and Declaration of
Trust dated July 10, 2003. The Fund's investment objective is to provide a
high level of after-tax total return consisting primarily of tax-advantaged
dividend income and capital appreciation. The Fund pursues its objective by
investing primarily in dividend-paying common and preferred stocks. The
following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in
the United States of America.
A INVESTMENT VALUATION -- Securities listed on a U.S. securities exchange
generally are valued at the last sale price on the day of valuation or, if no
sales took place on such date, at the mean between the closing bid and asked
prices therefore on the exchange where such securities are principally
traded. Equity securities listed on the NASDAQ National Market System
generally are valued at the official NASDAQ closing price. Unlisted or listed
securities for which closing sales prices or closing quotations are not
available are valued at the mean between the latest available bid and asked
prices 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. The
value of preferred equity securities that are valued by a pricing service on
a bond basis will be adjusted by an income factor, to be determined by the
investment adviser, to reflect the next anticipated regular dividend.
Exchange-traded options are valued at the last sale price for the day of
valuation as quoted on the principal exchange or board of trade on which the
options are traded or, in the absence of sales on such date, at the mean
between the latest bid and asked prices therefore. Futures positions on
securities and currencies generally are valued at closing settlement prices.
Short-term debt securities with a remaining maturity of 60 days or less are
valued at amortized cost. If short-term debt securities were acquired with a
remaining maturity of more than 60 days, their amortized cost value will be
based on their value on the sixty-first day prior to maturity. Other fixed
income and debt securities, including listed securities and securities for
which price quotations are available, will normally be valued on the basis of
valuations furnished by a pricing service. The daily valuation of foreign
securities generally is determined as of the close of trading on the
principal exchange on which such securities trade. Events occurring after the
close of trading on foreign exchanges may result in adjustments to the
valuation of foreign securities to more accurately reflect their fair value
as of the close of regular trading on the New York Stock Exchange. The Fund
may rely on an independent fair valuation service in adjusting the valuations
of foreign securities. Foreign securities and currencies are valued in U.S.
dollars, based on foreign currency exchange rate quotations supplied by an
independent quotation service. Investments held by the Fund for which
valuations or market quotations are unavailable are valued at fair value
using methods determined in good faith by or at the direction of the Trustees
of the Fund considering relevant factors, data and information including the
market value of freely tradable securities of the same class in the principal
market on which such securities are normally traded.
B INCOME -- Dividend income is recorded on the ex-dividend date for dividends
received in cash and/or securities. However, if the ex-dividend date has
passed, certain dividends from foreign securities are recorded as the Fund is
informed of the ex-dividend date. Interest income is recorded on the accrual
basis.
C FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable income, including any
net realized gain on investments. Accordingly, no provision for federal
income or excise tax is necessary. At August 31, 2004, the Fund, for federal
income tax purposes, had a capital loss carryover of $3,388,959, which will
reduce the Fund's taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Internal Revenue Code,
and thus will reduce the amount of distributions to shareholders which would
otherwise be necessary to relieve the Fund of any liability for federal
income or excise tax. Such capital loss carryover will expire August 31,
2012. Additionally, at August 31, 2004, the Fund had net capital losses of
$15,134,158 attributable to security transactions incurred after October 31,
2003. These capital losses are treated as arising on the first day of the
Fund's taxable year ended August 31, 2005.
D OFFERING COSTS -- Costs incurred by the Fund in connection with the
offering of the common shares and preferred shares were recorded as a
reduction of capital paid in excess of par applicable to common shares.
14
<Page>
E WRITTEN OPTIONS -- Upon the writing of a call or a put option, an amount
equal to the premium received by the Fund is included in the Statement of
Assets and Liabilities as a liability. The amount of the liability is
subsequently marked-to-market to reflect the current value of the option
written in accordance with the Fund's policies on investment valuations
discussed above. Premiums received from writing options which expire are
treated as realized gains. Premiums received from writing options which are
exercised or are closed are added to or offset against the proceeds or amount
paid on the transaction to determine the realized gain or loss. If a put
option is exercised, the premium reduces the cost basis of the securities
purchased by the Fund. The Fund, as writer of an option, may have no control
over whether the underlying securities may be sold (call) or purchased (put)
and, as a result, bears the market risk of an unfavorable change in the price
of the securities underlying the written option.
F PURCHASED OPTIONS -- Upon the purchase of a call or put option, the premium
paid by the Fund is included in the Statement of Assets and Liabilities as an
investment. The amount of the investment is subsequently marked-to-market to
reflect the current market value of the option purchased, in accordance with
the Fund's policies on investment valuations discussed above. If an option
which the Fund has purchased expires on the stipulated expiration date, the
Fund will realize a loss in the amount of the cost of the option. If the Fund
enters into a closing sale transaction, the Fund will realize a gain or loss,
depending on whether the sales proceeds from the closing sale transaction are
greater or less than the cost of the option. If a Fund exercises a put
option, it will realize a gain or loss from the sale of the underlying
security, and the proceeds from such sale will be decreased by the premium
originally paid. If the Fund exercises a call option, the cost of the
security which the Fund purchases upon exercise will be increased by the
premium originally paid.
G SWAP AGREEMENTS -- The Fund may enter into swap agreements to hedge against
fluctuations in securities prices, interest rates or market conditions, to
change the duration of the overall portfolio, to mitigate non-payment or
default risk, or to gain exposure to particular securities, baskets of
securities, indices or currencies. In a standard swap transaction, two
parties agree to exchange the returns (or differentials in rates of return)
to be exchanged or swapped between the parties, which returns are calculated
with respect to a notional amount (i.e., the return on or increase in value
of a particular dollar amount invested at a particular interest rate or in a
"basket" of securities representing a particular index). The Fund will enter
into swaps on a net basis. If the other party to a swap defaults, the Fund's
risk of loss consists of the net amount of payments that the Fund is
contractually entitled to receive. The Fund will not enter into any swap
unless the claims-paying ability of the other party thereto is considered to
be investment grade by the Adviser. The Fund is exposed to credit loss in the
event of non-performance by the counterparty. These instruments are traded in
the over-the-counter market. If the Adviser is incorrect in its forecasts of
market values, interest rates and other applicable factors, the investment
performance of the Fund would be unfavorably affected.
H FOREIGN CURRENCY TRANSLATION -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing on
the respective dates of such transactions. Recognized gains or losses on
investment transactions attributable to foreign currency exchange rates are
recorded for financial statement purposes as net realized gains and losses on
investments. That portion of unrealized gains and losses on investments that
results from fluctuations in foreign currency exchange rates is not
separately disclosed.
I USE OF ESTIMATES -- The preparation of the financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expense during the
reporting period. Actual results could differ from those estimates.
J INDEMNIFICATIONS -- Under the Fund's organizational documents, its officers
and Trustees may be indemnified against certain liabilities and expenses
arising out of the performance of their duties to the Fund and shareholders
are indemnified against personal liability for obligations of the Fund.
Additionally, in the normal course of business, the Fund enters into
agreements with service providers that may contain indemnification clauses.
The Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred.
K OTHER -- Investment transactions are accounted for on a trade date basis.
Realized gains and losses are computed on the specific identification of the
securities sold.
15
<Page>
L EXPENSE REDUCTION -- Investors Bank & Trust Company (IBT) serves as
custodian of the Fund. Pursuant to the custodian agreement, IBT receives a
fee reduced by credits which are determined based on the average daily cash
balance the Fund maintains with IBT. All credit balances used to reduce the
Fund's custodian fees are reported as a reduction of total expenses in the
Statement of Operations.
2 AUCTION PREFERRED SHARES
The Fund issued 4,000 shares of Auction Preferred Shares (APS) Series A,
4,000 shares of APS Series B, 4,000 shares of APS Series C, 4,000 shares of
APS Series D, 4,000 shares of APS Series E, 4,000 shares of APS Series F and
4,000 shares of APS Series G on December 10, 2003 in a public offering. The
underwriting discount and other offering costs were recorded as a reduction
of the capital of the common shares. Dividends of the APS, which accrue
daily, are cumulative at a rate which was established at the offering of the
APS and have been reset by an auction based on the dividend period of each
Series. Rates are reset weekly for Series A and Series B, annually for
Series C, Series D and Series F, approximately monthly for Series E and
approximately bi-monthly for Series G. The reset period for Series C,
Series D and Series F was changed after the initial public offering for each
such series. Subsequent to August 31, 2004, the reset period for Series A was
changed to an annual reset period. Dividends are generally paid on the day
following the end of the dividend period for Series A, Series B and Series E.
Series C, Series D, Series F and Series G pay accumulated dividends on the
first business day of each month and on the day following the end of the
dividend period.
Dividend rate ranges for the period from the commencement of the offering,
December 10, 2003, to August 31, 2004 are as indicated below:
<Table>
<Caption>
SERIES DIVIDEND RATE RANGES
------------------------------------------------------
Series A 1.03% - 1.70%
Series B 1.03% - 1.65%
Series C 1.08% - 1.75%
Series D 1.07% - 1.75%
Series E 1.08% - 1.65%
Series F 1.099% - 1.225%
Series G 1.10% - 1.82%
------------------------------------------------------
</Table>
The APS are redeemable at the option of the Fund, at a redemption price equal
to $25,000 per share, plus accumulated and unpaid dividends on any dividend
payment date. The APS are also subject to mandatory redemption at a
redemption price equal to $25,000 per share, plus accumulated and unpaid
dividends, if the Fund is in default for an extended period on its asset
maintenance requirements with respect to the APS. If the dividends on the APS
shall remain unpaid in an amount equal to two full years' dividends, the
holders of the APS as a class have the right to elect a majority of the Board
of Trustees. In general, the holders of the APS and the common shares have
equal voting rights of one vote per share, except that the holders of the
APS, as a separate class, have the right to elect at least two members of the
Board of Trustees. The APS have a liquidation preference of $25,000 per
share, plus accumulated and unpaid dividends. The Fund is required to
maintain certain asset coverage with respect to the APS as defined in the
Fund's By-Laws and the Investment Company Act of 1940. The Fund pays an
annual fee equivalent to 0.25% of the preferred shares' liquidation value for
the remarketing efforts associated with the preferred auctions.
3 DISTRIBUTION TO SHAREHOLDERS
The Fund intends to make monthly distributions of net investment income,
after payment of any dividends on any outstanding Auction Preferred Shares.
In addition, at least annually, the Funds intends to distribute net capital
gain, if any. Distributions are recorded on the ex-dividend date. The
applicable dividend rates for APS on August 31, 2004 are listed below. For
the period from the commencement of the offering, the amount of dividends
each Series paid to Auction Preferred shareholders and average APS dividend
rates for such period were as follows:
<Table>
<Caption>
APS DIVIDEND DIVIDENDS PAID TO AVERAGE APS
RATES AS OF PREFERRED SHAREHOLDERS DIVIDEND RATES
AUGUST 31, FOR THE PERIOD ENDED FOR THE PERIOD ENDED
SERIES 2004 AUGUST 31, 2004(1) AUGUST 31, 2004(1)
-----------------------------------------------------------------------
Series A 1.550% $ 941,866 1.280%
Series B 1.648% $ 933,160 1.273%
Series C 1.399% $ 1,010,440 1.323%
Series D 1.390% $ 1,005,600 1.324%
Series E 1.650% $ 938,927 1.290%
Series F 1.225% $ 889,400 1.203%
Series G 1.820% $ 965,200 1.322%
-----------------------------------------------------------------------
</Table>
(1) For the period from the commencement of offering, December 10, 2003, to
August 31, 2004.
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis. Accounting principles generally accepted in the United
States of America require
16
<Page>
that only distributions in excess of tax basis earnings and profits be
reported in the financial statements as a return of capital.
The tax character of the distributions declared for the period from the start
of business, September 30, 2003, to August 31, 2004, was as follows:
<Table>
<Caption>
PERIOD ENDED
AUGUST 31, 2004
-----------------------------------------------------------------------------
Distributions declared from:
Ordinary income $ 84,978,226
</Table>
During the period from the start of business, September 30, 2003, to August
31, 2004, accumulated undistributed net investment income was decreased by
$1,067,087, and accumulated net realized loss on investments decreased by
$1,067,087 due to differences between book and tax accounting for investment
transactions. This change had no effect on the net assets or the net asset
value per share.
As of August 31, 2004, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
<Table>
Undistributed ordinary income $ 16,412,108
Capital loss carryforwards $ (3,388,959)
Unrealized appreciation $ 166,616,049
Other temporary differences $ (22,964,017)
</Table>
4 INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by Eaton Vance Management (EVM), as
compensation for management and investment advisory services rendered to the
Fund. Under the advisory agreement, EVM receives a monthly advisory fee in
the amount equal to 0.85% annually of average daily gross assets of the Fund.
For the period from the start of business, September 30, 2003, to August 31,
2004, the advisory fee amounted to $15,853,685. EVM serves as the
administrator of the Fund , but currently receives no compensation for
providing administrative services to the Fund.
In addition, the Adviser has contractually agreed to reimburse the Fund for
fees and other expenses in the amount of 0.20% of the average daily gross
assets for the first five years of the Fund's operations, 0.15% of average
daily gross assets in year six, 0.10% in year seven and 0.05% in year eight.
For the period from the start of business, September 30, 2003, to August 31,
2004 the Investment Adviser waived $3,730,279 of its advisory fee. The
Adviser has also agreed to reduce the investment adviser fee by an amount
equal to that portion of commissions paid to broker dealers in execution of
Fund portfolio transactions that is consideration for third-party research
services. For the period from May 1, 2004, to August 31, 2004, the Investment
Adviser waived $21,298 of its advisory fee.
EVM has agreed to reimburse the Fund for costs incurred in the Fund's
organization. For the period from the start of business, September 30, 2003,
to August 31, 2004, EVM reimbursed the Fund $7,500 in organization expenses.
Trustees of the Fund who are not affiliated with EVM may elect to defer
receipt of all or a percentage of their annual fees in accordance with the
terms of the Trustees Deferred Compensation Plan. For the period from the
start of business, September 30, 2003, to August 31, 2004, no significant
amounts have been deferred.
Certain officers and Trustees of the Fund are officers of the above
organization.
During the period ended August 31, 2004, the Fund engaged in a sale
transaction in the amount of $19,988,874 with a Portfolio which utilizes
Boston Management and Research, a wholly-owned subsidiary of EVM, as
investment adviser. This sale transaction complied with Rule 17a-7 under the
Investment Company Act of 1940.
5 PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term obligations,
aggregated $3,703,900,312 and $1,636,877,076, respectively, for the period
from the start of business, September 30, 2003, to August 31, 2004.
6 FEDERAL INCOME TAX BASIS OF UNREALIZED APPRECIATION (DEPRECIATION)
The cost and unrealized appreciation (depreciation) in value of investments
owned by the Fund at August 31, 2004, as computed on a Federal income tax
basis, were as follows:
<Table>
AGGREGATE COST $ 2,063,569,653
---------------------------------------------------------------------
Gross unrealized appreciation $ 176,479,100
Gross unrealized depreciation (9,933,774)
---------------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 166,545,326
---------------------------------------------------------------------
</Table>
17
<Page>
7 COMMON SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Fund to issue an unlimited number of
full and fractional $0.01 par value common shares of beneficial interest.
Transactions in common shares were as follows:
<Table>
<Caption>
PERIOD ENDED
AUGUST 31, 2004(1)
-----------------------------------------------------------------------
Sales 72,789,761
Issued to shareholders electing to
receive payments of distributions
in Fund shares 46,139
-----------------------------------------------------------------------
NET INCREASE 72,835,900
-----------------------------------------------------------------------
</Table>
(1) For the period from the start of business, September 30, 2003, to
August 31, 2004.
8 RISKS ASSOCIATED WITH FOREIGN INVESTMENTS
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks not
present in domestic investments. For example, there is generally less
publicly available information about foreign companies, particularly those
not subject to the disclosure and reporting requirements of the U.S.
securities laws. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and standards of
practice comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in
investment or exchange control regulations, expropriation or confiscatory
taxation, limitation on the removal of funds or other assets of the Fund,
political or financial instability or diplomatic and other developments which
could affect such investments. Foreign stock markets, while growing in volume
and sophistication, are generally not as developed as those in the United
States, and securities of some foreign issuers (particularly those in
developing countries) may be less liquid and more volatile than securities of
comparable U.S. companies. In general, there is less overall governmental
supervision and regulation of foreign securities markets, broker-dealers, and
issuers than in the United States.
9 FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk in
the normal course of its investing activities to assist in managing exposure
to various market risks. These financial instruments include written options,
forward foreign currency exchange contracts, and financial futures contracts
and may involve, to a varying degree, elements of risk in excess of the
amounts recognized for financial statement purposes. The notional or
contractual amounts of these instruments represent the investment the Fund
has in particular classes of financial instruments and does not necessarily
represent the amounts potentially subject to risk. The measurement of the
risks associated with these instruments is meaningful only when all related
and offsetting transactions are considered. The Fund did not have any open
obligations under these financial instruments at August 31, 2004.
10 ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
The Fund held its Annual Meeting of Shareholders on June 25, 2004. The
following action was taken by the shareholders:
ITEM 1: The election of Lynn Stout and Samuel L. Hayes, III as Trustees of
the Fund for a three-year term expiring in 2007. Mr. Hayes was
designated the Nominee to be elected solely by APS shareholders:
<Table>
<Caption>
NOMINEE FOR TRUSTEE NUMBER OF SHARES
-----------------------
ELECTED BY ALL SHAREHOLDERS FOR WITHHELD
-----------------------------------------------------------------------
Lynn Stout 56,885,056 573,544
<Caption>
NOMINEE FOR TRUSTEE NUMBER OF SHARES
-----------------------
ELECTED BY APS SHAREHOLDERS FOR WITHHELD
-----------------------------------------------------------------------
Samuel L. Hayes, III 21,906 211
</Table>
18
<Page>
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND as of August 31, 2004
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE TRUSTEES AND SHAREHOLDERS OF EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME
FUND:
We have audited the accompanying statement of assets and liabilities of Eaton
Vance Tax-Advantaged Dividend Income Fund (the "Fund"), including the portfolio
of investments, as of August 31, 2004, and the related statement of operations,
the statements of changes in net assets, and the financial highlights for the
period from the start of business September 30, 2003, to August 31, 2004. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in 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 audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at August 31, 2004 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights present
fairly, in all material respects, the financial position of the Eaton Vance
Tax-Advantaged Dividend Income Fund at August 31, 2004, the results of its
operations, the changes in its net assets and the financial highlights from the
start of business, September 30, 2003, to August 31, 2004, in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
October 19, 2004
19
<Page>
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND as of August 31, 2004
FEDERAL TAX INFORMATION (Unaudited)
The Form 1099-DIV you receive in January 2005 will show the tax status of all
distributions paid to your account in calendar year 2004. Shareholders are
advised to consult their own tax adviser with respect to the tax consequences of
their investment in the Fund. As required by the Internal Revenue Code
regulations, shareholders must be notified within 60 days of the Fund's fiscal
year end regarding the status of qualified dividend income for individuals, the
dividends received deduction for corporations, and the foreign tax credit.
QUALIFIED DIVIDEND INCOME. The Fund designates approximately $95,879,722, or up
to the maximum amount of such dividends allowable pursuant to the Internal
Revenue Code, as qualified dividend income eligible for the reduced tax rate of
15%.
DIVIDENDS RECEIVED DEDUCTION. Corporate shareholders are generally entitled to
take the dividends received deduction on the portion of the Fund's dividend
distribution that qualifies under tax law. For the Fund's fiscal year 2004
ordinary income dividends, 54.76% qualifies for the corporate dividends received
deduction.20
20
<Page>
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
DIVIDEND REINVESTMENT PLAN
The Fund offers a dividend reinvestment plan (the Plan) pursuant to which
shareholders may elect to have dividends and capital gains distributions
automatically reinvested in common shares (the Shares) of the Fund. You may
elect to participate in the Plan by completing the Dividend Reinvestment Plan
Application Form. If you do not participate, you will receive all distributions
in cash paid by check mailed directly to you by PFPC Inc. as dividend paying
agent. On the distribution payment date, if the net asset value per Share is
equal to or less than the market price per Share plus estimated brokerage
commissions then new Shares will be issued. The number of Shares shall be
determined by the greater of the net asset value per Share or 95% of the market
price. Otherwise, Shares generally will be purchased on the open market by the
Plan Agent. Distributions subject to income tax (if any) are taxable whether or
not shares are reinvested. If your shares are in the name of a brokerage firm,
bank, or other nominee, you can ask the firm or nominee to participate in the
Plan on your behalf. If the nominee does not offer the Plan, you will need to
request that your shares be re-registered in your name with the Fund's transfer
agent, PFPC, Inc. or you will not be able to participate.
The Plan Agent's service fee for handling distributions will be paid by the
Fund. Each participant will be charged their pro rata share of brokerage
commissions on all open-market purchases.
Plan participants may withdraw from the Plan at any time by writing to the Plan
Agent at the address noted on the following page. If you withdraw, you will
receive shares in your name for all Shares credited to your account under the
Plan. If a participant elects by written notice to the Plan Agent to have the
Plan Agent sell part or all of his or her Shares and remit the proceeds, the
Plan Agent is authorized to deduct a $5.00 fee plus brokerage commissions from
the proceeds.
If you wish to participate in the Plan and your shares are held in your own
name, you may complete the form on the following page and deliver it to the Plan
Agent.
Any inquires regarding the Plan can be directed to the Plan Agent, PFPC, Inc.,
at 1-800-331-1710.
21
<Page>
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
APPLICATION FOR PARTICIPATION IN DIVIDEND REINVESTMENT PLAN
This form is for shareholders who hold their common shares in their own names.
If your common shares are held in the name of a brokerage firm, bank, or other
nominee, you should contact your nominee to see if it will participate in the
Plan on your behalf. If you wish to participate in the Plan, but your brokerage
firm, bank, or nominee is unable to participate on your behalf, you should
request that your common shares be re-registered in your own name which will
enable your participation in the Plan.
The following authorization and appointment is given with the understanding that
I may terminate it at any time by terminating my participation in the Plan as
provided in the terms and conditions of the Plan.
--------------------------------------------------
Please print exact name on account:
--------------------------------------------------
Shareholder signature Date
--------------------------------------------------
Shareholder signature Date
Please sign exactly as your common shares are
registered. All persons whose names appear on the
share certificate must sign.
YOU SHOULD NOT RETURN THIS FORM IF YOU WISH TO RECEIVE YOUR DIVIDENDS AND
DISTRIBUTIONS IN CASH. THIS IS NOT A PROXY.
THIS AUTHORIZATION FORM, WHEN SIGNED, SHOULD BE MAILED TO THE FOLLOWING ADDRESS:
Eaton Vance Tax-Advantaged Dividend Income Fund
c/o PFPC, Inc.
P.O. Box 43027
Providence, RI 02940-3027
800-331-1710
NUMBER OF EMPLOYEES
The Fund is organized as a Massachusetts business trust and is registered under
the Investment Company Act of 1940, as amended, as a diversified closed-end
management investment company and has no employees.
NUMBER OF SHAREHOLDERS
As of August 31, 2004, our records indicate that there are 51 registered
shareholders and approximately 66,195 shareholders owning the Fund shares in
street name, such as through brokers, banks, and financial intermediaries.
If you are a street name shareholder and wish to receive our reports directly,
which contain important information about the Fund, please write or call:
Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
1-800-225-6265
NEW YORK STOCK EXCHANGE SYMBOL
The New York Stock Exchange Symbol is EVT.
22
<Page>
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
MANAGEMENT AND ORGANIZATION
FUND MANAGEMENT. The Trustees of Eaton Vance Tax-Advantaged Dividend Income Fund
(the Fund) are responsible for the overall management and supervision of the
Fund's affairs. The Trustees and officers of the Fund are listed below. Except
as indicated, each individual has held the office shown or other offices in the
same company for the last five years. Trustees and officers of the Fund hold
indefinite terms of office. The "noninterested Trustees" consist of those
Trustees who are not "interested persons" of the Fund, as that term is defined
under the 1940 Act. The business address of each Trustee and officer is The
Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109. As used
below, "EVC" refers to Eaton Vance Corp., "EV" refers to Eaton Vance, Inc.,
"EVM" refers to Eaton Vance Management, "BMR" refers to Boston Management and
Research and "EVD" refers to Eaton Vance Distributors, Inc. EVC and EV are the
corporate parent and trustee, respectively, of EVM and BMR. EVD is the Fund's
principal underwriter and a wholly-owned subsidiary of EVM.
<Table>
<Caption>
TERM OF NUMBER OF PORTFOLIOS
POSITION(S) OFFICE AND IN FUND COMPLEX
NAME AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY
DATE OF BIRTH FUND SERVICE DURING PAST FIVE YEARS TRUSTEE(1) OTHER DIRECTORSHIPS HELD
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
James B. Hawkes Trustee and Until 2005. Chairman, President and 195 Director of EVC
11/9/41 Vice 3 years. Chief Executive Officer of
President Trustee since BMR, EVC, EVM and EV;
2003 Director of EV; Vice
President and Director of
EVD. Trustee and/or officer
of 196 registered investment
companies in the Eaton Vance
Fund Complex. Mr. Hawkes is
an interested person because
of his positions with BMR,
EVM, EVC and EV, which are
affiliates of the Fund.
NONINTERESTED TRUSTEE(S)
Samuel L. Hayes, III Trustee Until 2007. Jacob H. Schiff Professor of 195 Director of Tiffany & Co.
2/23/35 3 years. Investment Banking Emeritus, (specialty retailer) and
Trustee since Harvard University Graduate Telect, Inc.
2003 School of Business (telecommunication
Administration. services company)
William H. Park Trustee Until 2005. President and Chief 194 None
9/19/47 3 years. Executive Officer, Prizm
Trustee since Capital Management, LLC
2003 (investment management firm)
(since 2002). Executive Vice
President and Chief
Financial Officer, United
Asset Management Corporation
(a holding company owning
institutional investment
management firms)
(1982-2001).
Ronald A. Pearlman Trustee Until 2006. Professor of Law, Georgetown 194 None
7/10/40 3 years. University Law Center (since
Trustee since 1999). Tax Partner,
2003 Covington & Burling,
Washington, DC (1991-2000).
Norton H. Reamer Trustee Until 2006. President, Chief Executive 195 None
9/21/35 3 years. Officer and a Director of
Trustee since Asset Management Finance
2003 Corp. (a specialty finance
company serving the
investment management
industry) (since
October 2003). President,
Unicorn Corporation (an
investment and financial
advisory services company)
(since September 2000).
Formerly, Chairman, Hellman,
Jordan Management Co., Inc.
(an investment management
company) (2000-2003).
Formerly, Advisory Director
of Berkshire Capital
Corporation (investment
banking firm) (2002-2003).
Formerly, Chairman of the
Board, United Asset
Management Corporation (a
holding company owning
institutional investment
management firms) and
Chairman, President and
Director, UAM Funds (mutual
funds) (1980-2000).
Lynn A. Stout Trustee Until 2007. Professor of Law, 195 None
9/14/57 3 years. University of California
Trustee since at Los Angeles School of
2003 Law (since July 2001).
Formerly, Professor of
Law, Georgetown University
Law Center.
</Table>
23
<Page>
PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES
<Table>
<Caption>
TERM OF
POSITION(S) OFFICE AND
NAME AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S)
DATE OF BIRTH FUND SERVICE DURING PAST FIVE YEARS
- -------------------------------------------------------------------------------------------------------
Thomas E. Faust Jr. President Since 2003 Executive Vice President of EVM, BMR, EVC and EV;
5/31/58 Chief Investment Officer of EVM
and BMR and Director of EVC. Chief Executive
Officer of Belair Capital Fund LLC, Belcrest
Capital Fund LLC, Belmar Capital Fund LLC, Belport
Capital Fund LLC and Belrose Capital Fund LLC
(private investment companies sponsored by EVM).
Officer of 57 registered investment companies
managed by EVM or BMR.
Thomas H. Luster Vice President Since 2003 Vice President of EVM and BMR. Officer of 16
4/8/62 registered investment companies
managed by EVM or BMR.
Michael R. Mach Vice President Since 2003 Vice President of EVM and BMR. Previously,
7/15/47 Managing Director and Senior Analyst for
Robertson Stephens (1998-1999). Officer of 27
registered investment companies managed by EVM or
BMR.
Judith A. Saryan Vice President Since 2003 Vice President of EVM and BMR. Officer of 26
8/21/54 registered investment companies
managed by EVM or BMR.
Alan R. Dynner Secretary Since 2003 Vice President, Secretary and Chief Legal Officer
10/10/40 of BMR, EVM, EVD, EV and EVC.
Officer of 195 registered investment companies
managed by EVM or BMR.
James L. O'Connor Treasurer Since 2003 Vice President of BMR, EVM and EVD. Officer of 116
4/1/45 registered investment companies
managed by EVM or BMR.
</Table>
(1)Includes both master and feeder funds in a master-feeder structure.
In accordance with Section 303A.12 (a) of the New York Stock Exchange Listed
Company Manual, the Fund's Annual CEO Certification certifying as to compliance
with NYSE's Corporate Governance Listing Standards was submitted to the Exchange
on July 21, 2004.
24
<Page>
This Page Intentionally Left Blank
<Page>
INVESTMENT ADVISER AND ADMINISTRATOR OF TAX-ADVANTAGED DIVIDEND INCOME FUND
EATON VANCE MANAGEMENT
The Eaton Vance Building
255 State Street
Boston, MA 02109
CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
PFPC INC.
Attn: Eaton Vance Funds
P.O. Box 43027
Providence, RI 02940-3027
(800) 331-1710
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
200 Berkeley Street
Boston, MA 02116-5022
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
<Page>
2004-10/04 CE-TADISRC
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (investment management
firm). Previously, he served as Executive Vice President and Chief Financial
Officer of United Asset Management Corporation ("UAM") (a holding company owning
institutional investment management firms). Mr. Hayes is the Jacob H. Schiff
Professor of Investment Banking Emeritus of the Harvard University Graduate
School of Business Administration. Mr. Reamer is the President, Chief Executive
Officer and a Director of Asset Management Finance Corp. (a specialty finance
company serving the investment management industry) and is President of Unicorn
Corporation (an investment and financial advisory services company). Formerly,
Mr. Reamer was Chairman of Hellman, Jordan Management Co., Inc. (an investment
management company) and Advisory Director of Berkshire Capital Corporation (an
investment banking firm), Chairman of the Board of UAM and Chairman, President
and Director of the UAM Funds (mutual funds).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a)-(d)
The following table presents aggregate fees billed to the registrant for it's
first fiscal year ended August 31, 2004 by the registrant's principal accountant
for professional services rendered for the audit of the registrant's annual
financial statements and fees billed for other services rendered by the
principal accountant during those periods.
<Table>
<Caption>
FISCAL YEAR ENDED 8/31/2004
- ----------------------------------------------
Audit Fees $ 67,362
Audit-Related Fees(1) $ 34,505
Tax Fees(2) $ 8,000
All Other Fees(3) $ 0
---------
Total $ 109,867
=========
</Table>
(1) Audit-related fees consist of the aggregate fees billed for assurance and
related services that are reasonably related to the performance of the
audit of financial statements and are not reported under the category of
audit fees and specifically includes fees for the performance of certain
agreed-upon procedures relating to the registrant's auction preferred
shares.
<Page>
(2) Tax fees consist of the aggregate fees billed for professional services
rendered by the principal accountant relating to tax compliance, tax
advice, and tax planning and specifically include fees for tax return
preparation.
(3) All other fees consist of the aggregate fees billed for products and
services provided by the principal accountant other than audit,
audit-related, and tax services.
During the fiscal year ended August 31, 2004, $35,000 was billed by Deloitte &
Touche LLP, the registrant's principal accountant, for work done in connection
with its Rule 17Ad-13 examination of Eaton Vance Management's assertion that it
has maintained an effective internal control structure over the sub-transfer
agent and registrar functions, such services being pre-approved in accordance
with Rule 2-01(c) (7) (ii) of Regulation S-X.
(e)(1) The registrant's audit committee has adopted policies and procedures
relating to the pre-approval of services provided by the registrant's principal
accountant (the "Pre-Approval Policies"). The Pre-Approval Policies establish a
framework intended to assist the audit committee in the proper discharge of its
pre-approval responsibilities. As a general matter, the Pre-Approval Policies
(i) specify certain types of audit, audit-related, tax, and other services
determined to be pre-approved by the audit committee; and (ii) delineate
specific procedures governing the mechanics of the pre-approval process,
including the approval and monitoring of audit and non-audit service fees.
Unless a service is specifically pre-approved under the Pre-Approval Policies,
it must be separately pre-approved by the audit committee.
The Pre-Approval Policies and the types of audit and non-audit services
pre-approved therein must be reviewed and ratified by the registrant's audit
committee at least annually. The registrant's audit committee maintains full
responsibility for the appointment, compensation, and oversight of the work of
the registrant's principal accountant.
(e)(2) No services described in paragraphs (b)-(d) above were approved by the
registrant's audit committee pursuant to the "de minimis exception" set forth in
Rule 2-01(c)(7)(i)(C) of Regulation S-X.
(f) Not applicable.
(g) Aggregate non-audit fees (i.e., fees for audit-related, tax, and other
services) billed by the registrant's principal accountant for services rendered
to the registrant for it's fiscal year ended August 31, 2004 were $42,505.
Aggregate non-audit fees (i.e., fees for audit-related, tax, and other services)
billed by the registrant's principal accountant for services rendered to the
Eaton Vance organization (which includes the registrant's investment adviser and
any entity controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant) for the registrant's first
fiscal year ended August 31, 2004 were $291,084.
(h) The registrant's audit committee has considered whether the provision by the
registrant's principal accountant of non-audit services to the registrant's
investment adviser and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the registrant that
were not pre-approved pursuant to Rule 2-01(c) (7) (ii) of Regulation S-X is
compatible with maintaining the principal accountant's independence.
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ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
The registrant has a separately-designated standing audit committee established
in accordance with Section 3(a)(58)(A) of the Securities and Exchange Act of
1934, as amended. Norton H. Reamer (Chair), Samuel L. Hayes, III, William H.
Park and Lynn A. Stout are the members of the registrant's audit committee.
ITEM 6. SCHEDULE OF INVESTMENTS
Please see schedule of investments contained in the Report to Stockholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
The Board of Trustees of the Trust has adopted a proxy voting policy and
procedure (the "Fund Policy"), pursuant to which the Trustees have delegated
proxy voting responsibility to the Fund's investment adviser and adopted the
investment adviser's proxy voting policies and procedures (the "Policies") which
are described below. The Trustees will review the Fund's proxy voting records
from time to time and will annually consider approving the Policies for the
upcoming year. In the event that a conflict of interest arises between the
Fund's shareholders and the investment adviser, the administrator, or any of
their affiliates or any affiliate of the Fund, the investment adviser will
generally refrain from voting the proxies related to the companies giving rise
to such conflict until it consults with the Board of the Fund except as
contemplated under the Fund Policy. The Board's Special Committee will instruct
the investment adviser on the appropriate course of action.
The Policies are designed to promote accountability of a company's management to
its shareholders and to align the interests of management with those
shareholders. The investment adviser will generally support company management
on proposals relating to environmental and social policy issues and on matters
regarding the state of organization of the company. On all other matters, the
investment adviser will take management's proposals under advisement but will
consider each matter in light of the guidelines set forth in the Policies.
Except in the instance of routine matters related to corporate administration
which are not expected to have a significant economic impact on the company or
its shareholders (on which the investment adviser will routinely vote with
management), the investment adviser will review each matter on a case-by-case
basis and reserves the right to deviate from the Policies guidelines when it
believes the situation warrants such a deviation. The Policy includes voting
guidelines for matters relating to, among other things, the election of
directors, approval of independent auditors, executive compensation, corporate
structure and anti-takeover defenses. The investment adviser may abstain from
voting from time to time where it determines that the costs associated with
voting a proxy outweighs the benefits derived from exercising the right to vote.
In addition, the investment adviser will monitor situations that may result in a
conflict of interest between the Fund's shareholders and the investment adviser,
the administrator, or any of their affiliates
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or any affiliate of the Fund by maintaining a list of significant existing and
prospective corporate clients. The investment adviser's personnel responsible
for reviewing and voting proxies on behalf of the Fund will report any proxy
received or expected to be received from a company included on that list to the
investment adviser's general counsel or chief equity investment officer. The
general counsel or chief equity investment officer will determine if a conflict
exists. If a conflict does exist, the proxy will either be voted strictly in
accordance with the Policy or the investment adviser will seek instruction on
how to vote from the Board.
Effective August 31, 2004, information on how the Fund voted proxies relating to
portfolio securities during the 12 month period ended June 30, 2004 [is/will be]
available (1) without charge, upon request, by calling 1-800-262-1122, and (2)
on the Securities and Exchange Commission's website at http://www.sec.gov.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
None
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Effective February 9, 2004, the Governance Committee of the Board of Trustees
formalized the procedures by which a Fund's shareholders may recommend nominees
to the registrant's Board of Trustees. The Governance Committee shall, when
identifying candidates for the position of Independent Trustee, consider any
such candidate recommended by a shareholder of a Fund if such recommendation
contains sufficient background information concerning the candidate, and is
received in a sufficiently timely manner (and in any event no later than the
date specified for receipt of shareholder proposals in any applicable proxy
statement with respect to a Fund). Shareholders shall be directed to address any
such recommendations to the attention of the Governance Committee, c/o the
Secretary of the Fund.
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
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ITEM 11. EXHIBITS
(a)(1) Registrant's Code of Ethics - Not applicable (please see Item 2).
(a)(2)(i) Treasurer's Section 302 certification.
(a)(2)(ii) President's Section 302 certification.
(b) Combined Section 906 certification.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
EATON VANCE TAX-ADVANTAGED DIVIDEND INCOME FUND
By: /S/ Thomas E. Faust, Jr.
------------------------
Thomas E. Faust, Jr.
President
Date: October 19, 2004
----------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /S/ James L. O'Connor
---------------------
James L. O'Connor
Treasurer
Date: October 19, 2004
----------------
By: /S/ Thomas E. Faust, Jr.
------------------------
Thomas E. Faust, Jr.
President
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Date: October 19, 2004
----------------