<PAGE>
The Eaton Vance Mutual Funds Trust
For the Tax-Managed Growth Portfolio
Annual Shareholder Report
October 30, 1997
Investment Advisor of Tax-Managed Growth Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Fund Administrator
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
Transfer Agent
First Data Investor Services Group, Inc.
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
Independent Auditors
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
<PAGE>
Tax-Managed Growth Portfolio as of October 31, 1997
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
- -------------------------------------------------------------------------------
Common Stocks -- 96.4%
Security Shares Value
- -------------------------------------------------------------------------------
Advertising -- 2.3%
- -------------------------------------------------------------------------------
AC Nielson Corp.* 45,668 $ 1,044,655
Advo Systems, Inc.* 170,000 3,814,375
Cognizant Corp. 249,006 9,757,923
Harte-Hanks Communications 72,302 2,512,495
Interpublic Group of Companies, Inc. 256,500 12,183,750
Interpublic Group of Companies, Inc.+ 82,350 3,905,758
Omnicom Group, Inc. 455,100 32,141,438
WPP Group 488,000 2,229,916
- -------------------------------------------------------------------------------
$ 67,590,310
- -------------------------------------------------------------------------------
Aerospace and Defense -- 1.3%
- -------------------------------------------------------------------------------
Boeing Co. 450,740 $ 21,579,178
Raytheon Co. 226,544 12,290,012
United Technologies Corp.+ 66,844 4,672,061
- -------------------------------------------------------------------------------
$ 38,541,251
- -------------------------------------------------------------------------------
Auto and Parts -- 0.9%
- -------------------------------------------------------------------------------
Borg-Warner Automotive, Inc. 80,000 $ 4,360,000
Chrysler Corp. 32,000 1,128,000
General Motors Corp. 2,100 134,794
Magna International, Inc. Class A ADR 275,000 18,115,625
Meritor Automotive, Inc.* 61,133 1,364,037
- -------------------------------------------------------------------------------
$ 25,102,456
- -------------------------------------------------------------------------------
Banks - Regional -- 3.3%
- -------------------------------------------------------------------------------
Banc One Corp. 193,558 $ 10,089,211
Bank of Granite Corp. 18,000 580,500
BB&T Corp. 33,235 1,809,230
Community First Bancshares+ 148,000 7,056,400
Compass Bancshares, Inc. 48,208 1,816,839
Corestates Financial Corp. 160,000 11,640,000
Fifth Third Bancorp 75,000 4,809,375
First Citizens Bancshares Class A 35,300 3,459,400
First Union Corp. 130,800 6,417,375
Fleet Financial Group, Inc. 20,500 1,318,406
Golden West Financial Corp. 7,000 607,250
Keycorp 17,400 1,064,663
Nationsbank Corp. 216,963 12,990,660
Norwest Corp. 730,000 23,405,625
PNC Bank Corp. 25,000 1,187,500
Signet Banking Corp. 16,500 887,906
Sovereign Bancorp, Inc. 305,000 5,413,750
- -------------------------------------------------------------------------------
$ 94,554,090
- -------------------------------------------------------------------------------
Banks and Money Services -- 2.1%
- -------------------------------------------------------------------------------
BankAmerica Corp. 41,624 $ 2,976,116
Chase Manhattan Corp. 32,562 3,756,841
Citicorp 340,000 42,521,250
First Chicago NBD Corp. 43,007 3,128,753
JP Morgan and Co., Inc. 15,000 1,646,250
Washington Mutual, Inc. 65,759 4,500,382
Wells Fargo & Co. 11,542 3,363,050
- -------------------------------------------------------------------------------
$ 61,892,642
- -------------------------------------------------------------------------------
Beverages -- 2.6%
- -------------------------------------------------------------------------------
Anheuser-Busch Cos., Inc. 238,700 $ 9,533,081
Coca-Cola Co. 405,090 22,887,585
PepsiCo, Inc. 1,172,156 43,149,993
- -------------------------------------------------------------------------------
$ 75,570,659
- -------------------------------------------------------------------------------
Broadcasting and Cable -- 0.8%
- -------------------------------------------------------------------------------
American Radio Systems Corp. 149,451 $ 7,285,736
Clear Channel Communications* 21,000 1,386,000
Comcast Corp. Class A 62,500 1,718,750
Cox Communications, Inc. Class A* 93,319 2,869,559
Liberty Media Group, Class A* 52,552 1,829,467
Tele-Communications, Inc.* 311,073 7,135,237
- -------------------------------------------------------------------------------
$ 22,224,749
- -------------------------------------------------------------------------------
Building Materials -- 0.2%
- -------------------------------------------------------------------------------
Interface, Inc.+ 62,500 $ 1,804,688
Masco Corp. 55,540 2,436,818
Sherwin Williams Co. 28,420 788,655
Sherwin Williams Co.+ 16,250 450,753
Stanley Works 16,270 687,408
- -------------------------------------------------------------------------------
$ 6,168,322
- -------------------------------------------------------------------------------
Business Services - Miscellaneous -- 0.5%
- -------------------------------------------------------------------------------
Corrections Corporation of America* 28,000 $ 854,000
Manpower, Inc. 110,000 4,221,250
Robert Half International, Inc.* 1,800 73,688
Sylvan Learning Systems, Inc.+* 196,789 8,258,650
- -------------------------------------------------------------------------------
$ 13,407,588
- -------------------------------------------------------------------------------
Chemicals -- 1.5%
- -------------------------------------------------------------------------------
Bayer AG ADR 40,000 $ 1,406,032
Dow Chemical Co. 28,360 2,573,670
E.I. Du Pont de Nemours & Co., Inc. 213,300 12,131,438
Eastman Chemical Co. 161 9,600
Monsanto Corp. 506,680 21,660,570
Solutia, Inc.* 200,336 4,432,434
- -------------------------------------------------------------------------------
$ 42,213,744
- -------------------------------------------------------------------------------
Communications Equipment -- 1.7%
- -------------------------------------------------------------------------------
Dialogic Corp.* 80,000 $ 3,300,000
L.M. Ericsson Telephone Co. ADR 86,000 3,805,500
Nokia Corp., Class A ADR 280,000 24,710,000
Northern Telecom Ltd. ADR 55,870 5,010,841
Pairgain Technologies, Inc.+* 210,000 5,923,601
Salient 3 Communications, Inc., Class A 78,125 908,203
Tellabs, Inc.* 110,193 5,950,422
- -------------------------------------------------------------------------------
$ 49,608,567
- -------------------------------------------------------------------------------
Communications Services -- 1.7%
- -------------------------------------------------------------------------------
Ameritech Corp. 1,500 $ 97,500
AT&T Corp. 28,000 1,370,250
BellSouth Corp. 4,000 189,250
Citizens Utilities Co., Class B* 43,545 432,725
Nextel Communications, Inc.* 75,830 1,990,538
SBC Communications, Inc. 1,000 63,625
Telecom Corp. of New Zealand ADR 8,000 311,500
Telephone & Data Systems, Inc. 86,756 3,687,130
Worldcom, Inc.* 1,175,000 39,509,375
- -------------------------------------------------------------------------------
$ 47,651,893
- -------------------------------------------------------------------------------
Computer Software -- 3.4%
- -------------------------------------------------------------------------------
BMC Software, Inc. 4,000 $ 241,500
Cadence Design Systems, Inc.* 28,000 1,491,000
Computer Associates International, Inc. 195,000 14,539,688
CSG Systems International, Inc.* 7,958 311,854
HNC Software, Inc. 50,000 1,850,000
HNC Software, Inc.+ 129,814 4,767,095
Intuit, Inc.* 266,667 8,700,011
Lexmark International Group, Inc.* 100,000 3,056,250
Microsoft Corp.* 63,850 8,300,500
Oracle Corp.* 815,000 29,161,678
PeopleSoft, Inc.* 50,000 3,143,750
PeopleSoft, Inc.+* 60,000 3,766,841
Sapient Corp.+* 161,938 8,590,862
Saville Systems PLC ADR+* 80,000 4,762,075
Saville Systems PLC ADR* 80,000 4,780,000
Security Dynamics Technology, Inc.* 40,000 1,355,000
- -------------------------------------------------------------------------------
$ 98,818,104
- -------------------------------------------------------------------------------
Computers and Business Equipment -- 3.6%
- -------------------------------------------------------------------------------
Cabletron Systems, Inc.* 28,572 $ 828,588
Cisco Systems, Inc.* 218,620 17,933,661
Cisco Systems, Inc.+* 77,375 6,337,647
Digital Equipment Corp.* 29,355 1,469,585
Hewlett-Packard Co. 448,238 27,650,682
International Business Machines Corp. 115,626 11,338,575
Xerox Corp. 485,000 38,466,563
- -------------------------------------------------------------------------------
$ 104,025,301
- -------------------------------------------------------------------------------
Conglomerates -- 0.8%
- -------------------------------------------------------------------------------
General Electric Co. 365,199 $ 23,578,160
- -------------------------------------------------------------------------------
$ 23,578,160
- -------------------------------------------------------------------------------
Consumer Services -- 0.0%
- -------------------------------------------------------------------------------
CUC International, Inc.* 42,000 $ 1,239,000
- -------------------------------------------------------------------------------
$ 1,239,000
- -------------------------------------------------------------------------------
Containers and Packaging -- 0.8%
- -------------------------------------------------------------------------------
Sealed Air Corp.* 425,000 $ 21,914,063
- -------------------------------------------------------------------------------
$ 21,914,063
- -------------------------------------------------------------------------------
Distribution -- 1.1%
- -------------------------------------------------------------------------------
Airgas, Inc.* 61,000 $ 949,313
Cardinal Health, Inc. 96,500 7,165,125
JP Food Service, Inc.* 146,973 4,693,950
Supervalu, Inc. 51,506 1,886,407
Sysco Corp. 367,760 14,710,400
Wilmar Industries, Inc.* 50,000 1,312,500
- -------------------------------------------------------------------------------
$ 30,717,695
- -------------------------------------------------------------------------------
Drugs -- 9.1%
- -------------------------------------------------------------------------------
Amgen, Inc. 201,532 $ 9,925,451
Astra AB Class A 1,074,400 17,370,143
Astra AB Class B ADR 160,000 2,500,000
Bristol-Myers Squibb Co. 340,720 29,898,180
Covance, Inc.* 31,250 552,734
Elan Corp., PLC ADR 381,676 19,036,091
Eli Lilly & Co. 94,440 6,315,675
Genentech, Inc.* 80,000 4,645,000
Genzyme Corp.* 12,150 104,794
Genzyme Corp. Class A* 650,000 17,793,750
Merck & Co., Inc. 526,315 46,973,614
Pfizer, Inc. 742,040 52,499,330
Quintiles Transnational Corp.* 37,210 2,697,725
Quintiles Transnational Corp.+* 50,000 3,619,563
Schering-Plough Corp. 276,240 15,486,705
Smithkline Beecham PLC ADR 98,040 4,669,155
Vertex Pharmaceuticals, Inc.* 85,000 2,507,500
Warner-Lambert Co. 104,644 14,983,713
Watson Pharmaceuticals, Inc.* 348,550 11,066,463
- -------------------------------------------------------------------------------
$ 262,645,586
- -------------------------------------------------------------------------------
Electrical Equipment -- 1.1%
- -------------------------------------------------------------------------------
American Power Conversion Corp.+* 200,000 $ 5,441,825
AMP, Inc. 112,340 5,055,300
Emerson Electric Co. 150,948 7,915,336
General Signal Corp. 68,600 2,752,575
Molex, Inc. Class A 28,000 981,750
Rockwell International Corp. 93,400 4,576,600
Rockwell International Corp.+ 90,000 4,403,385
Thomas & Betts Corp.+ 22,963 1,140,696
- -------------------------------------------------------------------------------
$ 32,267,467
- -------------------------------------------------------------------------------
Electronics - Instruments -- 1.0%
- -------------------------------------------------------------------------------
Analog Devices, Inc.* 50,000 $ 1,528,125
Dionex Corp.* 181,070 9,030,866
Thermo Electron Corp.* 390,000 14,551,875
Waters Corp.+* 29,580 1,299,568
X-Rite, Inc.+ 140,000 2,708,431
- -------------------------------------------------------------------------------
$ 29,118,865
- -------------------------------------------------------------------------------
Electronics - Semiconductors -- 3.6%
- -------------------------------------------------------------------------------
Burr-Brown Corp.+* 400,000 $ 12,081,850
Intel Corp. 637,798 49,110,446
Intel Corp.+ 70,002 5,382,069
KLA-Tencor Corp.* 36,000 1,581,750
Linear Technology Corp. 45,000 2,829,375
Maxim Integrated Products+* 20,000 1,323,013
Motorola, Inc. 55,768 3,443,674
National Semiconductor Corp.+* 79,368 2,852,962
Smart Modular Technologies+* 30,000 1,486,903
Speedfam International, Inc.+* 221,000 8,192,318
Texas Instruments, Inc. 86,890 9,270,077
Ultratech Stepper, Inc.+* 245,129 6,654,716
- -------------------------------------------------------------------------------
$ 104,209,153
- -------------------------------------------------------------------------------
Engineering and Construction -- 0.1%
- -------------------------------------------------------------------------------
Jacobs Engineering Group, Inc.* 45,000 $ 1,215,000
Jacobs Engineering Group, Inc.+* 32,230 868,905
- -------------------------------------------------------------------------------
$ 2,083,905
- -------------------------------------------------------------------------------
Entertainment -- 0.1%
- -------------------------------------------------------------------------------
Regal Cinemas, Inc.* 2,250 $ 51,750
Walt Disney Co. 26,600 2,187,850
- -------------------------------------------------------------------------------
$ 2,239,600
- -------------------------------------------------------------------------------
Environmental Services -- 0.3%
- -------------------------------------------------------------------------------
Browning-Ferris Industries, Inc. 127,000 $ 4,127,500
Waste Management, Inc. 143,504 3,354,406
- -------------------------------------------------------------------------------
$ 7,481,906
- -------------------------------------------------------------------------------
Financial - Miscellaneous -- 4.1%
- -------------------------------------------------------------------------------
American Express Co. 108,148 $ 8,435,544
American General Corp. 74,155 3,781,905
Capital One Financial Corp. 16,000 730,000
Federal Home Loan Mortgage Corp. 352,500 13,350,938
Federal National Mortgage Association 909,820 44,069,406
Household International, Inc. 10,600 1,200,450
MGIC Investment Corp. 210,000 12,665,625
Providian Financial Corp. 64,455 2,384,835
Sunamerica, Inc. 668,524 24,025,081
Travelers, Inc. 90,676 6,347,320
- -------------------------------------------------------------------------------
$ 116,991,104
- -------------------------------------------------------------------------------
Foods -- 2.7%
- -------------------------------------------------------------------------------
CPC International, Inc. 2,000 $ 198,000
Earthgrains Co. 3,545 145,788
Flowers Industries, Inc. 181,000 3,439,000
General Mills, Inc. 17,500 1,155,000
Kellogg Co. 44,714 1,925,497
McCormick & Co., Inc. 229,298 5,732,450
Pioneer Hi-Bred International, Inc. 149,900 13,734,588
Riviana Foods, Inc.+ 150,000 3,032,944
Sara Lee Corp. 269,972 13,802,319
Unilever ADR 490,000 26,153,750
WM. Wrigley, Jr. Co. 106,580 7,713,728
- -------------------------------------------------------------------------------
$ 77,033,064
- -------------------------------------------------------------------------------
Furniture and Appliances -- 0.8%
- -------------------------------------------------------------------------------
Herman Miller, Inc. 60,000 $ 2,932,500
HON Inds, Inc. 254,202 13,123,178
HON Inds, Inc.+ 67,465 3,477,656
Leggett & Platt, Inc. 31,150 1,300,513
Leggett & Platt, Inc.+ 29,420 1,226,443
- -------------------------------------------------------------------------------
$ 22,060,290
- -------------------------------------------------------------------------------
Health Services -- 1.1%
- -------------------------------------------------------------------------------
Aetna, Inc. 4,821 $ 342,592
Aetna, Inc.+ 55,000 3,902,575
FPA Medical Management, Inc.* 315,000 7,599,375
Healthsouth Corp.* 146,000 3,732,125
Integrated Health Services, Inc. 50,000 1,587,500
Medpartners, Inc.* 17,696 450,142
Orthodontic Centers of America, Inc.+* 100,000 1,693,595
Pacificare Health Systems, Inc., Class B* 19,500 1,262,625
Quest Diagnostics, Inc.* 15,625 260,742
Quorum Health Group, Inc.* 6,893 167,143
Quorum Health Group, Inc.+* 48,840 1,182,593
Response Oncology, Inc.* 44,761 458,800
Sunrise Assisted Living, Inc.+* 210,000 7,784,556
United Healthcare Corp. 20,000 926,250
Vencor, Inc.* 25,600 691,200
- -------------------------------------------------------------------------------
$ 32,041,813
- -------------------------------------------------------------------------------
Household Products -- 2.4%
- -------------------------------------------------------------------------------
Blyth Industries, Inc.* 222,000 $ 5,522,250
Blyth Industries, Inc.+* 300,000 7,434,516
Colgate-Palmolive Co. 43,652 2,826,467
Fortune Brands, Inc. 1,500 49,594
Gillette Co. 115,400 10,277,813
Kimberly-Clark Corp. 138,060 7,170,491
Procter & Gamble Co. 349,200 23,745,600
Rubbermaid, Inc. 463,920 11,163,075
- -------------------------------------------------------------------------------
$ 68,189,806
- -------------------------------------------------------------------------------
Industrial Equipment -- 1.2%
- -------------------------------------------------------------------------------
Dover Corp. 164,580 $ 11,109,150
Dover Corp.+ 23,000 1,550,171
Illinois Tool Works, Inc. 81,010 3,984,679
Parker-Hannifin Corp. 150,898 6,309,423
Regal Beloit Corp. 265,000 7,121,875
Tecumseh Products Co. Class A 108,145 5,610,022
Tecumseh Products Co. Class B 5,000 261,250
- -------------------------------------------------------------------------------
$ 35,946,570
- -------------------------------------------------------------------------------
Information Services -- 4.4%
- -------------------------------------------------------------------------------
Automatic Data Processing, Inc. 967,040 $ 49,439,920
Computer Sciences Corp.+* 140,000 9,916,353
Dun & Bradstreet Corp. 107,256 3,063,500
Electronic Data Systems Corp. 155,000 5,996,563
First Data Corp. 128,618 3,737,961
Paychex, Inc. 58,651 2,236,069
Reuters Holdings PLC ADR 791,090 52,014,168
- -------------------------------------------------------------------------------
$ 126,404,534
- -------------------------------------------------------------------------------
Insurance -- 6.6%
- -------------------------------------------------------------------------------
Aegon, N.V. ADR 28,246 $ 2,245,557
Allstate Corp. 20,208 1,676,001
American International Group, Inc. 429,950 43,881,721
AON Corp. 44,054 2,376,163
Berkshire Hathaway, Inc. Class A* 50 2,185,000
Berkshire Hathaway, Inc. Class B* 21 30,849
Chubb Corp. 101,050 6,694,563
General RE Corp. 192,446 37,947,946
Kansas City Life Insurance Co. 35,400 3,115,200
Laboratory Holdings, Inc. 35,960 899,000
Marsh & McLennan Cos., Inc. 474,344 33,678,424
Mutual Risk Management Ltd. 490,000 12,709,375
Progressive Corp. 190,000 19,807,500
Protective Life Corp. 34,012 1,798,385
Provident Companies, Inc. 19,198 640,733
Safeco Corp. 12,122 577,310
St. Paul Cos., Inc. 130,280 10,414,258
Torchmark Corp. 222,850 8,886,144
USF&G Corp. 15,005 303,851
- -------------------------------------------------------------------------------
$ 189,867,980
- -------------------------------------------------------------------------------
Investment Services -- 0.7%
- -------------------------------------------------------------------------------
Merrill Lynch & Co. 242,983 $ 16,431,725
Morgan Stanley Dean Witter Discover & Co. 23,704 1,161,496
T. Rowe Price Associates, Inc. 20,500 1,358,125
- -------------------------------------------------------------------------------
$ 18,951,346
- -------------------------------------------------------------------------------
Lodging and Gaming -- 0.0%
- -------------------------------------------------------------------------------
ITT Corp. 1,892 $ 141,309
- -------------------------------------------------------------------------------
$ 141,309
- -------------------------------------------------------------------------------
Medical Products -- 6.6%
- -------------------------------------------------------------------------------
Abbott Laboratories 150,000 $ 9,196,875
Allegiance Corp. 22,661 628,843
Ballard Medical Products+ 251,058 5,655,999
Bausch & Lomb, Inc. 145,574 5,713,780
Baxter International, Inc. 477,828 22,099,545
Becton Dickinson and Co. 2,000 92,125
Boston Scientific Corp.* 265,000 12,057,500
Dentsply International, Inc. 42,000 1,191,750
Heartport, Inc.* 41,026 1,030,778
Henry Schein, Inc.+* 225,700 7,408,758
Hillenbrand Industries, Inc. 385,029 16,459,990
Johnson & Johnson Co. 908,974 52,152,383
Marquette Medical Systems, Inc.* 55,000 1,416,250
Medtronics, Inc. 832,516 36,214,446
Medtronics, Inc.+ 29,472 1,280,109
Sofamor Danek Group, Inc.* 173,000 11,915,375
United States Surgical Corp. 150,000 4,040,625
- -------------------------------------------------------------------------------
$ 188,555,131
- -------------------------------------------------------------------------------
Metals - Gold -- 0.0%
- -------------------------------------------------------------------------------
Freeport-McMoran Copper & Gold, Inc. Class B 6,000 $ 143,625
- -------------------------------------------------------------------------------
$ 143,625
- -------------------------------------------------------------------------------
Metals - Industrial -- 0.5%
- -------------------------------------------------------------------------------
Cyprus Amax Minerals Co. 20,950 $ 438,641
Inco, Ltd. 124,000 2,557,500
Nucor Corp. 40,000 2,090,000
Potash Corp. of Saskatchewan 120,000 9,832,500
- -------------------------------------------------------------------------------
$ 14,918,641
- -------------------------------------------------------------------------------
Natural Gas Utilities -- 0.2%
- -------------------------------------------------------------------------------
NGC Corp. 290,000 $ 5,510,000
Sonat, Inc. 27,200 1,249,500
- -------------------------------------------------------------------------------
$ 6,759,500
- -------------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 2.2%
- -------------------------------------------------------------------------------
Baker Hughes, Inc. 39,234 $ 1,802,312
Dresser Industries, Inc. 79,800 3,361,575
EVI, Inc.* 33,000 2,118,188
Halliburton Co. 177,400 10,577,475
Noble Drilling, Inc.* 120,000 4,267,500
Patterson Energy, Inc.+ 100,000 5,478,200
Schlumberger Ltd. 406,722 35,588,175
- -------------------------------------------------------------------------------
$ 63,193,425
- -------------------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 1.0%
- -------------------------------------------------------------------------------
Anadarko Petroleum Corp. 246,000 $ 18,019,500
Apache Corp. 186,440 7,830,480
Burlington Resources, Inc. 38,125 1,865,742
Union Pacific Resources Group, Inc. 79,795 1,964,952
- -------------------------------------------------------------------------------
$ 29,680,674
- -------------------------------------------------------------------------------
Oil and Gas - Integrated -- 1.5%
- -------------------------------------------------------------------------------
Amoco Corp. 89,778 $ 8,231,520
Atlantic Richfield Co. 41,766 3,437,864
Chevron Corp. 55,600 4,611,325
Exxon Corp. 172,879 10,621,254
Mobil Corp. 186,368 13,569,920
Murphy Oil Corp. 29,700 1,720,744
- -------------------------------------------------------------------------------
$ 42,192,627
- -------------------------------------------------------------------------------
Paper and Forest Products -- 0.9%
- -------------------------------------------------------------------------------
Champion International Corp. 61,687 $ 3,404,351
Deltic Timber Corp. 8,486 239,191
Fort James Corp. 26,401 1,047,790
Georgia-Pacific Corp. 160,000 13,570,000
Mead Corp. 19,384 1,172,732
Union Camp Corp. 80,309 4,351,744
Weyerhauser Co. 61,755 2,948,801
- -------------------------------------------------------------------------------
$ 26,734,609
- -------------------------------------------------------------------------------
Photography -- 0.1%
- -------------------------------------------------------------------------------
Eastman Kodak Co. 31,698 $ 1,897,918
- -------------------------------------------------------------------------------
$ 1,897,918
- -------------------------------------------------------------------------------
Printing and Business Products -- 0.4%
- -------------------------------------------------------------------------------
American Business Products, Inc. 146,497 $ 2,939,096
Bowne & Co., Inc. 89,970 3,137,704
Deluxe Corp. 51,750 1,694,813
John H. Harland Co. 51,540 1,156,429
R.R. Donnelley & Sons Co. 47,896 1,562,607
- -------------------------------------------------------------------------------
$ 10,490,649
- -------------------------------------------------------------------------------
Publishing -- 2.2%
- -------------------------------------------------------------------------------
Dow Jones & Co., Inc. 465,000 $ 21,622,500
Gannett Co., Inc. 260,900 13,713,556
Houghton Mifflin Co. 127,400 4,522,700
McGraw-Hill Companies, Inc. 240,608 15,729,748
Times Mirror Co. Class A 151,670 8,209,139
- -------------------------------------------------------------------------------
$ 63,797,643
- -------------------------------------------------------------------------------
REITs -- 0.2%
- -------------------------------------------------------------------------------
Redwood Trust, Inc. 71,710 $ 1,801,714
Rouse Co. 127,700 3,543,675
SLH Corp.* 26,970 1,375,470
- -------------------------------------------------------------------------------
$ 6,720,859
- -------------------------------------------------------------------------------
Restaurants -- 1.1%
- -------------------------------------------------------------------------------
Boston Chicken, Inc.* 38,500 $ 344,094
Brinker International, Inc.* 354,000 4,956,000
McDonald's Corp. 263,100 11,790,169
Starbucks Corp.* 300,000 9,900,000
Tricon Global Restaurants* 117,216 3,553,098
- -------------------------------------------------------------------------------
$ 30,543,361
- -------------------------------------------------------------------------------
Retail - Food and Drug -- 2.1%
- -------------------------------------------------------------------------------
Albertson's, Inc. 974,744 $ 35,943,685
CVS Corp. 330,000 20,233,125
Hannaford Brothers Co. 30,849 1,166,478
Rite Aid Corp. 3,000 178,125
Safeway, Inc.* 50,000 2,906,250
- -------------------------------------------------------------------------------
$ 60,427,663
- -------------------------------------------------------------------------------
Retail - General -- 2.0%
- -------------------------------------------------------------------------------
Dollar Tree Stores, Inc.+* 195,000 $ 7,885,654
J.C. Penney Co., Inc. 543,510 31,897,243
May Department Stores Co. 104,008 5,603,431
Wal-Mart Stores, Inc. 344,390 12,096,699
- -------------------------------------------------------------------------------
$ 57,483,027
- -------------------------------------------------------------------------------
Retail - Specialty and Apparel -- 3.4%
- -------------------------------------------------------------------------------
Burlington Coat Factory Warehouse 205,200 $ 3,398,625
Burlington Coat Factory Warehouse+ 338,400 5,596,343
Harcourt General, Inc. 216,416 10,834,326
Home Depot, Inc. 989,500 55,040,938
Limited, Inc. 135,000 3,180,938
Lowe's Companies+ 30,000 1,246,877
Republic Industries, Inc. 343,457 10,131,982
The Pep Boys - Manny, Moe & Jack+ 35,476 892,211
Toys "R" Us, Inc.* 121,325 4,132,633
Unifi, Inc. 50,000 1,921,875
- -------------------------------------------------------------------------------
$ 96,376,748
- -------------------------------------------------------------------------------
Specialty Chemicals and Materials -- 3.3%
- -------------------------------------------------------------------------------
Corning, Inc. 125,000 $ 5,640,625
Dexter Corp. 47,829 1,877,288
Ecolab, Inc. 678,768 32,283,903
Great Lakes Chemical Corp. 62,780 2,950,660
International Flavors & Fragrances, Inc. 148,101 7,164,386
International Specialty Products, Inc. 59,000 881,313
Lam Research Corp.* 83,000 2,998,375
Memtec Ltd. ADR 77,500 2,557,500
Millipore Corp. 626,440 24,509,465
Minnesota Mining & Manufacturing Co. 26,288 2,405,352
Nalco Chemical Co. 196,020 7,840,800
Pall Corp. 216,000 4,468,500
- -------------------------------------------------------------------------------
$ 95,578,167
- -------------------------------------------------------------------------------
Tobacco -- 0.1%
- -------------------------------------------------------------------------------
Philip Morris Cos., Inc. 30,000 $ 1,188,750
Schweitzer-Mauduit International, Inc. 5,731 241,418
- -------------------------------------------------------------------------------
$ 1,430,168
- -------------------------------------------------------------------------------
Transportation -- 0.6%
- -------------------------------------------------------------------------------
Coach USA, Inc.* 94,666 $ 2,816,314
Coach USA, Inc.+* 74,223 2,204,822
CSX Corp. 9,970 545,234
Heartland Express+* 250,000 6,864,688
Union Pacific Corp. 93,140 5,704,825
- -------------------------------------------------------------------------------
$ 18,135,883
- -------------------------------------------------------------------------------
Trucks and Parts -- 0.1%
- -------------------------------------------------------------------------------
Paccar, Inc. 46,602 $ 2,100,003
- -------------------------------------------------------------------------------
$ 2,100,003
- -------------------------------------------------------------------------------
Total Common Stocks
(identified cost $1,718,891,645) $2,769,653,213
- -------------------------------------------------------------------------------
Convertible Preferred Stocks -- 0.8%
Entertainment -- 0.8%
- -------------------------------------------------------------------------------
Time Warner, Inc., Series J+(1) 166,978 $ 21,507,334
- -------------------------------------------------------------------------------
$ 21,507,334
- -------------------------------------------------------------------------------
Financial - Miscellaneous -- 0.0%
- -------------------------------------------------------------------------------
American General Corp., Series D 21,474 $ 946,198
- -------------------------------------------------------------------------------
$ 946,198
- -------------------------------------------------------------------------------
Insurance -- 0.0%
- -------------------------------------------------------------------------------
Aetna, Inc., Series C 449 $ 32,216
- -------------------------------------------------------------------------------
$ 32,216
- -------------------------------------------------------------------------------
Total Convertible Preferred Stocks
(identified cost $18,414,229) $ 22,485,748
- -------------------------------------------------------------------------------
Commercial Paper -- 4.3%
Face Amount
Name of Company (000 omitted) Value
- -------------------------------------------------------------------------------
General Electric Capital Corp., 5.68%, 11/3/97 $74,713 $ 74,677,636
Prudential Funding Corp., 5.56%, 11/5/97 48,000 47,948,083
- -------------------------------------------------------------------------------
Total Commercial Paper
(identified cost $122,625,719) $ 122,625,719
- -------------------------------------------------------------------------------
Total Investments -- 101.5%
(identified cost $1,859,931,593) $2,914,764,680
- -------------------------------------------------------------------------------
Other Assets, Less Liabilities -- (1.5)%
$ (43,318,862)
- -------------------------------------------------------------------------------
Net Assets -- 100.0%
$2,871,445,818
- -------------------------------------------------------------------------------
ADR -- American Depositary Receipt.
+ Security exempt from registration under Rule 144A or Rule 145 of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
October 31, 1997, the value of these securities amounted to $224,896,884 or
7.8% of net assets.
* Non-income producing security.
(1) Security valued using methods determined in good faith by or at the
direction of the Trustees.
See notes to financial statements
<PAGE>
Tax-Managed Growth Portfolio as of October 31, 1997
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities
As of October 31, 1997
Assets
- -------------------------------------------------------------------------------
Investments, at value (Note 1A)
(identified cost, $1,859,931,593) $2,914,764,680
Cash 113,692
Receivable for investments sold 70,718
Dividends and interest receivable 2,515,939
Tax reclaim receivable 38,097
Prepaid expenses 97,457
Deferred organization expenses (Note 1C) 6,704
- -------------------------------------------------------------------------------
Total assets $2,917,607,287
- -------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------
Payable for investments purchased $ 46,013,234
Payable to affiliate --
Trustees' fees (Note 2) 2,487
Accrued expenses 145,748
- --------------------------------------------------------------------------------
Total liabilities $ 46,161,469
- --------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $2,871,445,818
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $1,816,612,731
Net unrealized appreciation of investments
(computed on the basis of identified cost) 1,054,833,087
- --------------------------------------------------------------------------------
Total $2,871,445,818
- --------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
Statement of Operations
For the Year Ended
October 31, 1997
Investment Income (Note 1F)
- --------------------------------------------------------------------------------
Dividends (net of foreign taxes withheld of $207,276) $ 21,074,140
Interest income 3,332,220
- --------------------------------------------------------------------------------
Total income $ 24,406,360
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 9,455,900
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 27,835
Custodian fee 358,840
Legal and accounting services 87,829
Dividends on securities sold short (Note 1E) 17,000
Amortization of organization expenses (Note 1C) 7,726
Miscellaneous 51,615
- --------------------------------------------------------------------------------
Total expenses $ 10,006,745
- --------------------------------------------------------------------------------
Net investment income $ 14,399,615
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 51,570,685
Securities sold short 1,066,894
- --------------------------------------------------------------------------------
Net realized gain on investments $ 52,637,579
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investment transactions (identified cost basis) $ 375,109,348
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $ 375,109,348
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 427,746,927
- --------------------------------------------------------------------------------
Net increase in net assets from operations $ 442,146,542
- --------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
Tax-Managed Growth Portfolio as of October 31, 1997
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets
Increase (Decrease) Year Ended Period Ended
in Net Assets October 31, October 31,
1997 1996
- --------------------------------------------------------------------------------
From operations --
Net investment income $ 14,399,615 $ 3,104,708
Net realized gain on investments 52,637,579 9,582,500
Net change in unrealized appreciation
(depreciation) of investments 375,109,348 70,637,961
- --------------------------------------------------------------------------------
Net increase in net assets from operations $ 442,146,542 $ 83,325,169
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $1,907,707,281 $871,076,582
Withdrawals (415,207,575) (17,702,191)
- --------------------------------------------------------------------------------
Net increase in net assets from capital
transactions $1,492,499,706 $853,374,391
- --------------------------------------------------------------------------------
Net increase in net assets $1,934,646,248 $936,699,560
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 936,799,570 $ 100,010
- --------------------------------------------------------------------------------
At end of period $2,871,445,818 $936,799,570
- --------------------------------------------------------------------------------
* For the period from the start of business, December 1, 1995, to October 31,
1996.
See notes to financial statements
<PAGE>
Tax-Managed Growth Portfolio as of October 31, 1997
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
Supplementary Data
Year Ended Period Ended
October 31, October 31,
1997 1996
- -------------------------------------------------------------------------------
Ratios to average daily net assets
- -------------------------------------------------------------------------------
Expenses 0.56% 0.66%+
Net investment income 0.81% 0.91%+
Portfolio Turnover 14% 6%
- -------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $2,871,446 $936,800
Average commission rate (per share)(1) $ 0.0582 $ 0.0585
- --------------------------------------------------------------------------------
+ Annualized.
* For the period from the start of business, December 1, 1995, to October 31,
1996.
(1) Average commission rate paid is computed by dividing the total dollar amount
of commissions paid during the fiscal year by the t otal number of shares
purchased and sold during the fiscal year for which commissions were
charged.
See notes to financial statements
<PAGE>
Tax-Managed Growth Portfolio as of October 31, 1997
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1 Significant Accounting Policies
- --------------------------------------------------------------------------------
Tax-Managed Growth Portfolio (the Portfolio) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Portfolio, which was organized as a trust
under the laws of the State of New York on December 1, 1995, seeks to provide
long-term after-tax returns by investing in a diversified portfolio of equity
securities. The Declaration of Trust permits the Trustees to issue interests
in the Portfolio. Investment operations began on December 1, 1995, with the
acquisition of investments with a value of $115,586,248, including unrealized
appreciation of $96,618,064, in exchange for an interest in the Portfolio by
one of the Portfolio's investors. During the period from the start of
business, December 1, 1995 to October 31, 1996, additional investors
contributed securities with a value of $639,241,121, including unrealized
appreciation of $512,467,715. During the year ended October 31, 1997,
additional investors contributed securities with a value of $860,796,038. The
following is a summary of significant accounting policies consistently
followed by the Portfolio in the preparation of its financial statements. The
polices are in conformity with generally accepted accounting principles.
A Investment Valuations -- Marketable securities, including options, that are
listed on foreign or U.S. securities exchanges or in the NASDAQ National
Market System are valued at closing sale prices, on the exchange where such
securities are principally traded. Futures positions on securities or
currencies are generally valued at closing settlement prices. Unlisted or
listed securities for which closing sale prices are not available are valued
at the mean between the latest bid and asked prices. Short-term debt
securities with a remaining maturity of 60 days or less are valued at
amortized cost, which approximates value. 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. Investments 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.
B Income Taxes -- The Portfolio is treated as a partnership for Federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes on its share of such
income. Since some of the Portfolio's investors are regulated investment
companies that invest all or substantially all of their assets in the
Portfolio, the Portfolio normally must satisfy the applicable source of income
and diversification requirements (under the Internal Revenue Code) in order
for its investors to satisfy them. The Portfolio will allocate, at least
annually among its investors, each investor's distributive share of the
Portfolio's net investment income, net realized capital gains, and any other
items of income, gain, loss, deduction or credit.
C Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
D Futures Contracts -- Upon the entering of a financial futures contract, the
Portfolio is required to deposit either in cash or securities an amount
("initial margin") equal to a certain percentage of the purchase price
indicated in the financial futures contract. Subsequent payments are made or
received by the Portfolio ("margin maintenance") each day, dependent on daily
fluctuations in the value of the underlying security, and are recorded for
book purposes as unrealized gains or losses by the Portfolio. The Portfolio's
investment in financial futures contracts is designed to hedge against
anticipated future changes in price of current or anticipated portfolio
positions. Should prices move unexpectedly, the Portfolio may not achieve the
anticipated benefits of the financial futures contracts and may realize a
loss.
E Securities Sold Short -- The Portfolio may sell securities short where it
owns an equal amount of the security sold short or another security
convertible or exchangeable for an equal amount of the security sold short.
The Portfolio may do this in anticipation of a decline in the market price of
the securities or in order to hedge portfolio positions. The Portfolio will
generally borrow the security sold in order to make delivery to the buyer.
Upon executing the transaction, the Portfolio records the proceeds as deposits
with brokers in the Statement of Assets and Liabilities and establishes an
offsetting payable for securities sold short for the securities due on
settlement. The security sold short is segregated as collateral for the short
position. The liability is marked to market and the Portfolio is required to
pay the lending broker any dividend or interest income earned while the short
position is open. A gain or loss is realized when the security is delivered to
the broker. The Portfolio may recognize a loss on the transaction if the
market value of the securities sold increases before the securities are
delivered.
F Other -- Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income is recorded on the ex-
dividend date. However, if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as the Portfolio is informed of the
ex-dividend date. Interest income is recorded on the accrual basis.
G Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles 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 revenue and expense during the reporting period. Actual results could
differ from those estimates.
H Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT receives
a fee reduced by credits which are determined based on the average daily cash
balances the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reflected as a reduction of
expenses on the Statement of Operations.
2 Investment Adviser Fee and Other Transactions with Affiliates
- --------------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation for
management and investment advisory services rendered to the Portfolio. Under
the advisory agreement, BMR receives a monthly advisory fee of 5/96 of 1%
(0.625% annually) of the average daily net assets of the Portfolio up to
$500,000,000, and at reduced rates as daily net assets exceed that level. For
the year ended October 31, 1997 the adviser fee was 0.53% of the Portfolio's
average net assets (annualized). Except as to Trustees of the Portfolio who
are not members of EVM's or BMR's organization, officers and Trustees receive
remuneration for their services to the Portfolio out of such investment
adviser fee. Trustees of the Portfolio that are not affiliated with the
Investment Adviser 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 year ended October 31, 1997, no significant amounts have been
deferred. Certain of the officers and Trustees of the Portfolio are officers
or directors/trustees of the above organizations.
3 Investment Transactions
- --------------------------------------------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $831,449,166 and $172,736,800, respectively. In addition,
investments having an aggregate market value of $70,856,186 at dates of
withdrawal were distributed in payment for capital withdrawals resulting in
capital gains for book purposes of $63,185,375.
4 Federal Income Tax Basis of Investment
- --------------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at October 31, 1997, as computed on a federal income tax
basis, are as follows:
Aggregate cost $1,859,931,593
--------------------------------------------------------------------------
Gross unrealized appreciation $1,056,938,628
Gross unrealized depreciation (2,105,541)
--------------------------------------------------------------------------
Net unrealized appreciation $1,054,833,087
--------------------------------------------------------------------------
5 Financial Instruments
- --------------------------------------------------------------------------------
The Portfolio 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 Portfolio 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 Portfolio did not have any open obligations under these financial
instruments at October 31, 1997.
6 Line of Credit
- --------------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $100 million unsecured line of credit agreement
with a group of banks. The Portfolio may temporarily borrow from the line of
credit to satisfy redemption requests or settle investment transactions.
Interest is charged to each portfolio or fund based on its borrowings at the
Eurodollar rate or federal funds rate. In addition, a fee computed at an
annual rate of 0.10% on the daily unused portion of the line of credit is
allocated among the participating portfolios and funds at the end of each
quarter. The Portfolio did not have any significant borrowings or allocated
fees during the year ended October 31, 1997.
<PAGE>
Tax-Managed Growth Portfolio as of October 31, 1997
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Trustees and Investors
of Tax-Managed Growth Portfolio
- --------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Tax-Managed Growth Portfolio (the Portfolio) as
of October 31, 1997, the related statement of operations for the year then
ended, and the statements of changes in net assets, and the supplementary data
for the year ended October 31, 1997 and for the period from the start of
business, December 1, 1995 to October 31, 1996. These financial statements and
supplementary data are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
supplementary data based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data 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 as of
October 31, 1997 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other audit 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 audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and supplementary data referred to
above present fairly, in all material respects, the financial position of the
Portfolio, as of October 31, 1997, and the results of its operations, the
changes in its net assets and its supplementary data for the respective stated
periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 5, 1997
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Tax-Managed Growth Portfolio
<S> <C>
Officers Trustees
JAMES B. HAWKES LANDON T. CLAY
President
DUNCAN W. RICHARDSON DONALD R. DWIGHT
Vice President and President, Dwight Partners, Inc.
Portfolio Manager Chairman, Newspapers of New England, Inc.
JAMES L. O'CONNOR SAMUEL L. HAYES, III
Treasurer Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
ALAN R. DYNNER Business Administration
Secretary
NORTON H. REAMER
President and Director, United Asset
Management Corporation
JOHN L. THORNDIKE
Formerly Director, Fiduciary Company Incorporated
JACK L. TREYNOR
Investment Adviser and Consultant
</TABLE>
