NOTES TO FINANCIAL STATEMENTS
Evergreen Income Advantage Fund (the “Fund”) was organized as a statutory trust under the laws of the state of
Delaware on December 3, 2002 and is registered as a diversified closed-end management investment company
under the Investment Company Act of 1940, as amended. The primary investment objective of the Fund is to
seek a high level of current income. The Fund may, as a secondary objective, also seek capital appreciation to
the extent consistent with its investment objective.
2. SIGNIFICANT ACCOUNTING POLICIES
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 generally accepted accounting principles in the
United States of America, which require management to make estimates and assumptions that affect amounts
reported herein. Actual results could differ from these estimates.
a. Valuation of investments
Portfolio debt securities acquired with more than 60 days to maturity are fair valued using matrix pricing methods
determined by an independent pricing service which takes into consideration such factors as similar security
prices, yields, maturities, liquidity and ratings. Securities for which valuations are not readily available from an
independent pricing service may be valued by brokers which use prices provided by market makers or estimates
of fair market value obtained from yield data relating to investments or securities with similar characteristics.
Listed equity securities are usually valued at the last sales price or official closing price on the national securities
exchange where the securities are principally traded.
Short-term securities of sufficient credit quality with remaining maturities of 60 days or less at the time of purchase
are valued at amortized cost, which approximates fair value.
Investments in open-end mutual funds are valued at net asset value. Securities for which market quotati