<PAGE>
[EATON VANCE Investing
LOGO APPEARS
HERE] for the
21st
Century
[PHOTO OF EARTH
APPEARS HERE]
Annual Report August 31, 1997
EV
MARATHON
[PHOTO OF FOREST MARATHON
APPEARS HERE]
WORLDWIDE
DEVELOPING
RESOURCES FUND
Eaton Vance
Global Management-Global Distribution
[PHOTO OF OIL
RIGS APPEARS
HERE]
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
LETTER TO SHAREHOLDERS
[PHOTO APPEARS HERE]
During the year ended August 31, 1997, EV Marathon Worldwide Developing
Resources Fund had a total return of -14.5%./1/ This return resulted from a
decrease in net asset value to $15.57 per share on August 31, 1997 from $21.58
per share on August 31, 1996 and the reinvestment of $3.335 per share in capital
gains distributions. By comparison, the average total return for mutual funds in
the Lipper Natural Resource Funds Category was 23.3% during this period.*
While the economic environment in the past year has helped push stock prices to
new highs...
Over the past year, the sustained growth of the U.S. economy and low inflation
have produced a near-perfect investment environment in which prices of large
capitalization stocks have soared to record levels. An increase in volatility
has accompanied higher stock valuations, however. Within a six-week period in
March and April, the S&P 500 Index declined almost 10% and then fully recovered
to reach new record highs. In August, the S&P 500 declined almost 7% but again
recovered this loss by the end of September.*
Short-term interest rates rose on March 25 when the Federal Reserve raised the
Fed Funds Rate 0.25% to 5.50%. Long-term bonds sold off in the first quarter but
rallied in the second and third quarters when inflation fears were quelled. From
a peak of over 7% at the end of March, the yield on the 30-year Treasury bond
has generally trended downward, reaching a level of 6.23% on July 30 before
closing the period at 6.61% on August 29. By reducing the cost of borrowing,
lower interest rates have fueled mergers and acquisitions activity and increased
corporate profitability -- both of which have contributed to stock gains.
...There has been a worldwide correction in natural resource stocks...
After several years of above-average annual returns, culminating in an
outstanding year in 1996, natural resource stocks corrected severely in the
early spring of 1997. Since then, however, many have recovered in price. While
volatility in the stock market -- or in specific sectors of the market -- can be
disconcerting, Eaton Vance recognizes that it is a normal and even healthy part
of the investment process, and that it is always important to take a long-term
view. In the pages that follow, Co-Portfolio Managers William D. Burt and
Barclay Tittmann discuss the past 12 months and offer their outlook for the
months ahead.
Sincerely,
/s/ James B. Hawkes
James B. Hawkes,
President
October 7, 1997
- --------------------------------------------------------------------------------
Sector Distribution/2/
- -----------------------------------------
As a percentage of total net assets
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Oil & Gas 40.6%
Gold 25.4%
Metals 13.6%
Minerals 2.6%
Paper & Forest 0.5%
Commercial Paper 10.8%
Warrants 2.6%
Other 3.9%
</TABLE>
<TABLE>
<CAPTION>
Ten Largest Equity Holdings/3/
- -----------------------------------------
As a percentage of total net assets
<S> <C>
American Exploration Co. 3.2%
Anadarko Petroleum 2.5%
Crystallex International 2.4%
Coho Energy 2.3%
Ranger Oil Ltd. 2.3%
Arakis Energy Corp. 2.3%
Cairn Energy USA 2.2%
Harcor Energy 2.2%
Petsec Energy 2.2%
Etruscan Enterprises Ltd. 2.1%
</TABLE>
/1/This return does not include the maximum applicable 5% contingent deferred
sales charge (CDSC). Past performance is no guarantee of future results.
Investment return and principal value will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
/2/Sectors are as of 8/31/97 and may not be representative of the Portfolio's
current or future investments. Equity sectors accounted for 82.7% of the
Portfolio's total investments, determined by dividing the total market value
of the holdings by the total net assets.
/3/Ten largest equity holdings are as of 8/31/97 and may not be representative
of the Portfolio's current or future investments. Holdings accounted for
23.6% of the Portfolio's total investments, determined by dividing the total
market value of the holdings by the total net assets.
* It is not possible to invest directly in an index, average, or Lipper
Category.
- --------------------------------------------------------------------------------
Mutual 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.
- --------------------------------------------------------------------------------
2
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
MANAGEMENT DISCUSSION
An interview with William D. Burt and Barclay Tittmann, Co-Portfolio Managers of
the Worldwide Developing Resources Portfolio.
[PHOTO APPEARS HERE]
William D. Burt,
Co-Portfolio Manager
Q: Bill, the past year has been a turbulent one for the oil & gas industries.
Can you outline the major events that occurred during this period?
A: Mr. Burt: Beginning last winter, energy stocks were in an optimal period,
performing well through the end of the year and into January as oil and gas
commodity prices rose. From that January high point, energy stock prices
began to decline across the board, reaching a low in April. We held our
core positions through this correction and added stocks at advantageous
prices. From that low point, however, the sector has almost fully
recovered.
This correction, ending in the second quarter of 1997, reflected a major
change in sentiment toward the smaller petroleum companies in particular.
First, petroleum stocks had become fully, if not speculatively, valued
early in 1997. Then, with some notable exploration or operating failures of
prominent companies, investors became acutely aware of the associated risks
of the energy sector. Accordingly, I trimmed back on several of the Fund's
smaller market capitalization holdings and tightened our requirements for
such small companies. We still very much like the "new" small company yet
uninstitutionalized, but we are imposing stricter standards of valuation
and quality.
[PHOTO APPEARS HERE]
Barclay Tittmann,
Co-Portfolio Manager
Q: Barclay, how would you summarize the year in the gold and metals sectors?
A: Mr. Tittmann: There were two events that weighed heavily on the gold sector
during the last 12 months. The first was an increase in gold selling by
central banks around the world, and, in particular, the announcement by the
central bank of Australia that they had sold a large portion of their gold.
Australia is a natural resource economy and is home to many gold-producing
companies, so the central bank's decision to sell was a psychological shock
to the gold market. Offsetting the oversupply of gold was a significant
increase in demand, primarily driven by a big market for jewelry in
developing countries like India. However, the rise in demand was not enough
to counteract central bank selling and the price of gold recently reached a
12-year low.
The second major event affecting the price of gold was the Bre-X scandal.
Until this enormous hoax was discovered, Bre-X was touted
- --------------------------------------------------------------------------------
The decline in gold prices began in the fall of 1996...
Monthly Price of Gold
October, 1995 -- September, 1997*
[LINE GRAPH APPEARS HERE]
<TABLE>
<S> <C>
10/02/95 383.25
11/01/95 381.95
12/01/95 386.20
01/02/96 389.15
02/01/96 409.10
03/01/96 398.35
04/01/96 394.20
05/01/96 392.30
06/03/96 390.70
07/01/96 381.55
08/01/96 386.25
09/03/96 386.60
10/01/96 378.65
11/01/96 377.60
12/02/96 370.75
01/02/97 366.55
02/03/97 344.30
03/03/97 362.15
04/01/97 350.00
05/01/97 339.25
06/02/97 343.90
07/01/97 333.70
08/01/97 324.10
09/02/97 322.40
</TABLE>
*London Gold P.M. Fixing Price
Prices as of first trading day of each month
...While oil prices began to decline
in January, 1997...
Monthly Price of Oil
October, 1995 -- September, 1997*
[LINE GRAPH APPEARS HERE]
<TABLE>
<S> <C>
10/02/95 17.63
11/01/95 17.68
12/01/95 18.43
01/02/96 19.83
02/01/96 17.78
03/01/96 18.48
04/01/96 22.28
05/01/96 20.83
06/03/96 19.83
07/01/96 21.53
08/01/96 21.03
09/03/96 23.38
10/01/96 24.13
11/01/96 23.03
12/02/96 24.80
01/02/97 25.68
02/03/97 24.15
03/03/97 20.25
04/01/97 20.83
05/01/97 19.93
06/02/97 21.10
07/01/97 20.13
08/01/97 20.28
09/02/97 19.73
</TABLE>
*Texas Spot Crude Oil Price (per barrel)
Prices as of first trading day of each month
3
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
MANAGEMENT DISCUSSION CONT'D
as the shining example of how investors could make great profits in the
exploration sector. The company's stock was trading at $1.00 or so when
they made the "discovery," and at one point it reached nearly $300. Of
course, it is now worthless. It was supposed to be the biggest gold find of
the 20th century and, as we now know, turned out to be a classic case of
systematic fraud. That had a huge psychological effect on all exploration
stocks across the board. The market punished these companies severely and
indiscriminately - even ones with sound reputations, good financials, and
proven findings - and a good many lost 50% to 80% of their value
practically overnight. This is a major reason for the poor performance of
this Fund and others like it since then. The market did stabilize in July,
and during August the Fund outperformed the S&P 500 by about 6%.
Q: Barclay, how long do you think the Bre-X scandal will affect the price of
gold mining stocks?
A: Mr. Tittmann: The psychological effect of Bre-X will probably continue
until we have a few - or even just one - major gold find that is
legitimate. A small company which accomplishes this should generate a great
deal of excitement in the stock market, which would probably be enough to
make investors realize that Bre-X was an aberration. In 1996 we had several
such finds, and it helped the market tremendously. The next big one should
have the same positive effect and should go a long way in helping erase the
bad memories of Bre-X. An acquisition of a small company at a big premium
would also help, as would a significant rally in the price of gold.
Q: Barclay, what are the major factors determining the price of gold?
A: Mr. Tittmann: As a commodity, gold is governed by the same laws of supply
and demand as any other commodity. It happens that annual production from
all the world's gold mines is sufficient for only about 80% of annual
demand, mostly for jewelry. Therefore every year the shortfall has to be
made up by selling from holders of gold, who are primarily central banks.
Now the banks have a very large reserve relative to annual demand, and
therefore the supply part of the equation is determined by central bank
willingness to sell. In recent years the pace of central bank selling has
been picking up as more and more governments are questioning the economics
of holding gold, and therefore the price of gold has been flat or down. All
this makes predicting the price of gold extremely difficult, if not
impossible.
Q: Bill, the Fund is now heavily invested in oil and gas stocks. What is your
current outlook for these sectors?
A: Mr. Burt: I am generally optimistic. I see general stability in the oil and
gas markets, with oil prices plus or minus $20/barrel for the next several
months. For natural gas, the fundamentals have improved. North American
natural gas drilling has increased substantially this year, but natural gas
production is up only slightly. Companies are investing aggressively to
increase natural gas production, but inventories and supplies are still
very tight. Spot prices are therefore high, which has benefited companies
held in the Fund. Shortly, as we enter winter, we will reassess company
valuations and market dynamics and determine if we need to trim back any
holdings.
Q: Bill, there appears to be a consolidation occurring in the oil exploration
sector. Can you comment on this?
A: Mr. Burt: There has been a tremendous amount of merger activity in North
America, primarily as a result of two developments. First, commodity prices
are higher, resulting in an increased cash flow for acquiring companies and
increasing lender confidence as well. Second, interest rates are low, which
is fueling mergers and acquisitions activity generally. Acquisitions in the
resource sector
4
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
MANAGEMENT DISCUSSION CONT'D
make sense because companies reach a point where it is better to invest
money in other companies which have active projects than to continue
investing in new projects where success is less certain. Our biggest
holding is the combination of Cairn Energy and Meridian Resources. We
bought Cairn as an independent operating company on its cheap valuation.
Its acquisition by Meridian has been a real positive for the Fund.
Q: Bill, are there any recent additions in the oil and gas sectors that you
would like to comment on?
A: Mr. Burt: Surely. Petsec, a recent addition, is an Australian company with
most of its assets and fast-growing operations in the Gulf of Mexico. This
is a classic case of a smallish company in the process of being discovered
by investors. Pease Oil and Gas, which was added earlier in the year, is a
small but highly leveraged producer based in the southern U.S. Probe, a
Canadian exploration company, has recently purchased several valuable
properties from Imperial Oil and has appreciated several hundred percent
this year alone. Finally, we took a 2% position in Meridian Resources which
appreciated nicely as a result of the rise in natural gas prices and its
advantageous upcoming merger with Cairn Energy.
Q: Barclay, how about in the gold or metals sectors?
A: Mr. Tittmann: We recently added Oregon Metallurgical, a titanium company,
to take advantage of increasing activity in the aerospace manufacturing
industry. The stock was very inexpensive due to temporary setbacks, and our
analysis indicated it was undervalued. Another new holding is Breakwater
Resources, a Canadian company which is the fourth largest zinc producer in
the world. Breakwater has had terrific growth through acquisition and
through a New Brunswick mine that they helped make profitable. Zinc should
be one of the better performing base metals over the next few years, as it
is no longer in oversupply. Strengthening demand in its two main markets
automotive manufacturing and construction, where it is used for galvanizing
metal - could cause shortages.
Q: This Fund has an excellent long-term track record. Do the current market
conditions portend a buying opportunity, and/or a good time to start dollar
cost averaging?
A: Both: Without question. We have recently seen significant investments in
natural resource stocks - particularly by large investors in Europe. With
prices down, and with some volatility in the prices of resource stocks,
making investments at regular intervals through dollar cost averaging also
makes a great deal of sense. Many of the small companies that we currently
own have significant potential, to the tune of providing returns of several
times. Not all of them will realize their potential, and, of course, past
performance is no guarantee of future results, but even if a few do it
would certainly be worthwhile for this Fund's shareholders.
5
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
FUND PERFORMANCE
Comparison of Change in Value of a $10,000 Investment in the Fund vs. the
S&P 500, and the Consumer Prices Indexes*
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
EV Marathon Worldwide
Date Developing Resources Fund S&P 500 Index CPI
- -------- ------------------------- ------------- ---------
<S> <C> <C> <C>
10/31/87 $10,000 $10,000 $10,000
11/30/87 $10,230 $9,147 $10,009
12/31/87 $10,990 $9,901 $10,009
1/31/88 $10,187 $10,301 $10,035
2/28/88 $10,899 $10,732 $10,061
3/31/88 $11,592 $10,464 $10,104
4/30/88 $11,723 $10,563 $10,156
5/31/88 $11,723 $10,596 $10,191
6/30/88 $12,307 $11,157 $10,234
7/31/88 $12,155 $11,097 $10,278
8/31/88 $11,680 $10,669 $10,321
9/30/88 $11,539 $11,193 $10,390
10/31/88 $11,863 $11,483 $10,425
11/30/88 $11,945 $11,266 $10,434
12/31/88 $12,070 $11,534 $10,451
1/31/89 $12,926 $12,354 $10,503
2/28/89 $13,062 $11,997 $10,546
3/31/89 $13,082 $12,350 $10,607
4/30/89 $13,249 $12,969 $10,676
5/31/89 $12,768 $13,424 $10,737
6/30/89 $12,716 $13,438 $10,763
7/31/89 $13,304 $14,625 $10,789
8/31/89 $14,155 $14,852 $10,807
9/30/89 $14,188 $14,875 $10,841
10/31/89 $13,830 $14,500 $10,893
11/30/89 $14,515 $14,740 $10,919
12/31/89 $14,923 $15,178 $10,937
1/31/90 $14,541 $14,133 $11,049
2/28/90 $14,656 $14,254 $11,101
3/31/90 $14,574 $14,718 $11,162
4/30/90 $13,657 $14,323 $11,180
5/31/90 $14,574 $15,640 $11,206
6/30/90 $14,075 $15,640 $11,266
7/31/90 $15,194 $15,559 $11,310
8/31/90 $14,681 $14,091 $11,414
9/30/90 $14,190 $13,501 $11,509
10/31/90 $12,775 $13,411 $11,578
11/30/90 $12,670 $14,214 $11,605
12/31/90 $13,271 $14,705 $11,605
1/31/91 $12,944 $15,315 $11,674
2/28/91 $13,911 $16,346 $11,691
3/31/91 $13,851 $16,833 $11,709
4/30/91 $13,669 $16,839 $11,726
5/31/91 $14,093 $17,488 $11,761
6/30/91 $14,105 $16,796 $11,795
7/31/91 $14,457 $17,550 $11,813
8/31/91 $13,971 $17,894 $11,847
9/30/91 $13,571 $17,694 $11,899
10/31/91 $14,302 $17,903 $11,917
11/30/91 $13,498 $17,117 $11,951
12/31/91 $14,130 $19,166 $11,960
1/31/92 $14,753 $18,784 $11,977
2/28/92 $14,753 $18,964 $12,021
3/31/92 $14,229 $18,684 $12,082
4/30/92 $14,454 $19,205 $12,099
5/31/92 $14,866 $19,223 $12,116
6/30/92 $15,042 $19,040 $12,160
7/31/92 $15,367 $19,789 $12,186
8/31/92 $14,979 $19,314 $12,220
9/30/92 $14,853 $19,639 $12,255
10/31/92 $14,715 $19,681 $12,298
11/30/92 $14,364 $20,276 $12,316
12/31/92 $14,778 $20,624 $12,307
1/31/92 $14,878 $20,769 $12,368
2/28/93 $15,668 $20,987 $12,411
3/31/93 $16,031 $21,522 $12,454
4/30/93 $16,332 $20,975 $12,489
5/31/93 $16,796 $21,451 $12,507
6/30/93 $17,310 $21,624 $12,524
7/31/93 $17,648 $21,508 $12,524
8/31/93 $17,573 $22,249 $12,559
9/30/93 $16,595 $22,180 $12,585
10/31/93 $17,347 $22,611 $12,637
11/30/93 $17,285 $22,319 $12,645
12/31/93 $18,556 $22,693 $12,645
1/31/94 $19,590 $23,431 $12,680
2/28/94 $18,609 $22,727 $12,723
3/31/94 $17,683 $21,840 $12,767
4/30/94 $17,576 $22,092 $12,784
5/31/94 $18,180 $22,366 $12,793
6/30/94 $18,019 $21,933 $12,836
7/31/94 $18,663 $22,624 $12,871
8/31/94 $19,375 $23,475 $12,923
9/30/94 $19,992 $23,005 $12,958
10/31/94 $19,173 $23,486 $12,966
11/30/94 $17,710 $22,558 $12,984
12/31/94 $18,166 $23,001 $12,984
1/31/95 $17,226 $23,560 $13,036
2/28/95 $18,193 $24,410 $13,088
3/31/95 $19,455 $25,234 $13,131
4/30/95 $19,402 $25,939 $13,174
5/31/95 $20,194 $26,881 $13,200
6/30/95 $20,946 $27,635 $13,226
7/31/95 $22,006 $28,513 $13,226
8/31/95 $22,047 $28,504 $13,261
9/30/95 $21,523 $29,824 $13,287
10/31/95 $20,167 $29,676 $13,330
11/30/95 $21,442 $30,894 $13,322
12/31/95 $22,120 $31,614 $13,313
1/31/96 $23,319 $32,645 $13,391
2/28/96 $24,375 $32,872 $13,435
3/31/96 $25,074 $33,309 $13,504
4/30/96 $27,443 $33,756 $13,556
5/31/96 $29,441 $34,528 $13,582
6/30/96 $26,216 $34,800 $13,591
7/31/96 $25,830 $33,208 $13,617
8/31/96 $30,797 $33,833 $13,643
9/30/96 $31,353 $35,869 $13,686
10/31/96 $31,011 $36,805 $13,729
11/30/96 $32,466 $39,505 $13,755
12/31/96 $32,495 $38,854 $13,755
1/31/97 $32,790 $41,236 $13,799
2/28/97 $32,527 $41,480 $13,842
3/31/97 $29,127 $39,902 $13,877
4/30/97 $27,073 $42,233 $13,894
5/31/97 $28,338 $44,706 $13,886
6/30/97 $26,712 $46,853 $13,903
7/31/97 $25,956 $50,513 $13,920
8/31/97 $26,334 $47,612 $13,946
</TABLE>
<TABLE>
<CAPTION>
Performance+
- --------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------
<S> <C>
One Year -14.5%
Five Years 12.0
Life of Fund (10/21/87) 10.3
<CAPTION>
SEC Average Annual Total Returns (including applicable
contingent deferred sales charge)
- --------------------------------------------------------
<S> <C>
One Year -18.1%
Five Years 11.7
Life of Fund (10/21/87) 10.3
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced
10/21/87. Index information is available only at month-end; therefore, the
line comparison begins at the next month-end following the commencement of the
Fund's investment operations. Past performance is no guarantee of future
results. Investment return and principal value will fluctuate so that shares,
when redeemed, are worth more or less their original cost.
The performance chart above compares the Fund's total return with that of a
broad-based securities market index. The lines on the chart represent the
total returns of $10,000 hypothetical investments in the Fund, the Consumer
Price Index, and the S&P 500 Stock Index, a broad-based, widely recognized,
unmanaged index of 500 common stocks. The S&P 500 Index's total return does
not reflect any commissions or expenses that would have been incurred if an
investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an index.
**This figure represents the Fund's performance including the Fund's
applicable contingent deferred sales charge (CDSC) deducted at redemption as
follows: 5% - 1st year; 5% - 2nd year; 4% - 3rd year; 3% - 4th year; 2% - 5th
year; and 1% - 6th year.
+ Returns are calculated by determining the percentage change in net asset value
(NAV) with all distributions reinvested. SEC Returns reflect applicable
contingent deferred sales charge (CDSC).
6
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of August 31, 1997
Assets
- --------------------------------------------------------------------------------
<S> <C>
Investment in Worldwide Developing Resources Portfolio, at value
(Note 1A) (identified cost, $23,819,138) $ 23,272,943
Receivable for Fund shares sold 95,575
Deferred organization expenses (Note 1E) 6,424
- --------------------------------------------------------------------------------
Total assets $ 23,374,942
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Dividends payable $ 669,109
Payable for Fund shares redeemed 11,844
Accrued expenses 29,495
- --------------------------------------------------------------------------------
Total liabilities $ 710,448
- --------------------------------------------------------------------------------
Net Assets for 1,455,880 shares of beneficial interest
outstanding $ 22,664,494
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Paid-in capital $ 23,704,209
Accumulated net realized loss on investments (computed on the
basis of identified cost) (491,812)
Accumulated net investment loss (1,708)
Net unrealized depreciation of investments (computed on the
basis of identified cost) (546,195)
- --------------------------------------------------------------------------------
Total $ 22,664,494
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption Price Per Share (Note 6)
- --------------------------------------------------------------------------------
($22,664,494 / 1,455,880 shares of beneficial interest
outstanding) $ 15.57
- --------------------------------------------------------------------------------
<CAPTION>
Statement of Operations
For the Year Ended
August 31, 1997
Investment Income (Note 1B)
- --------------------------------------------------------------------------------
<S> <C>
Dividend income (net of foreign taxes, $1,466) $ 36,124
Interest income 54,403
Dividend income allocated from Portfolio (net of foreign
taxes, $2,259) 17,662
Interest income allocated from Portfolio 15,365
Expenses allocated from Portfolio (116,812)
- --------------------------------------------------------------------------------
Total investment income $ 6,742
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 4) $ 119,433
Compensation of Trustees not members of the
Administrator's organization (Note 4) 607
Distribution and service fees (Note 5) 230,258
Transfer and dividend disbursing agent fees 41,583
Printing and postage 35,335
Legal and accounting services 28,402
Registration fees 17,384
Custodian fee (Note 1D) 13,806
Amortization of organization expenses (Note 1E) 576
Miscellaneous 16,690
- --------------------------------------------------------------------------------
Total expenses $ 504,074
- --------------------------------------------------------------------------------
Net investment loss $ (497,332)
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- --------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 207,800
Foreign currency translations 1,315
Net realized gain (loss) from Portfolio --
Investment transactions (identified cost basis) 824,385
Foreign currency translations (4,106)
- --------------------------------------------------------------------------------
Net realized gain on investment transactions $ 1,029,394
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investment transactions $ (3,105,238)
Foreign currency transactions (77)
Change in unrealized appreciation (depreciation) from Portfolio --
Investment transactions (2,306,027)
Foreign currency transactions (3)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments from Portfolio $ (5,411,345)
- --------------------------------------------------------------------------------
Net realized and unrealized loss on investments $ (4,381,951)
- --------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (4,879,283)
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
7
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
FINANCIAL STATEMENTS CONT'D
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended Year Ended
in Net Assets August 31, 1997 August 31, 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment loss $ (497,332) $ (243,462)
Net realized gain on investments 1,029,394 3,284,714
Net change in unrealized
appreciation (depreciation) (5,411,345) 2,237,334
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations $ (4,879,283) $ 5,278,586
- ---------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net realized gain on investments $ (4,169,529) $ (821,177)
- ---------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (4,169,529) $ (821,177)
- ---------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest (Note 3) --
Proceeds from sale of shares $ 22,007,503 $ 7,441,573
Net asset value of shares issued
to shareholders in payment of
distributions declared 2,940,572 639,300
Cost of shares redeemed (13,363,551) (7,668,233)
- ---------------------------------------------------------------------------------------------------
Net increase in net assets from
Fund share transactions $ 11,584,524 $ 412,640
- ---------------------------------------------------------------------------------------------------
Net increase in net assets $ 2,535,712 $ 4,870,049
- ---------------------------------------------------------------------------------------------------
Net Assets
- ---------------------------------------------------------------------------------------------------
At beginning of period $ 20,128,782 $ 15,258,733
- ---------------------------------------------------------------------------------------------------
At end of period $ 22,664,494 $ 20,128,782
- ---------------------------------------------------------------------------------------------------
Accumulated net
investment loss
included in net assets
- ---------------------------------------------------------------------------------------------------
At end of period $ (1,708) $ (243,462)
- ---------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
8
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Year Ended August 31,
----------------------------------------------------
1997 1996 1995 *
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value -- Beginning of period $ 21.580 $16.420 $14.890
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- --------------------------------------------------------------------------------------------------------------------
Net investment loss $ (0.248) $(0.261) $(0.100)++
Net realized and unrealized gain (loss) on investments (2.427) 6.371 1.630++
- --------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ (2.675) $ 6.110 $ 1.530
- --------------------------------------------------------------------------------------------------------------------
Less distributions:
- --------------------------------------------------------------------------------------------------------------------
In excess of net investment loss $ -- $ -- $ --
From net realized gain on investments (3.335) (0.950) --
In excess of net realized gain on investments -- -- --
- --------------------------------------------------------------------------------------------------------------------
Total distributions $ (3.335) $(0.950) $ --
- --------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 15.570 $21.580 $16.420
- --------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ (14.49)% 39.69% 10.28%
- --------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+++
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 22,664 $20,129 $15,259
Ratio of net expenses to average daily net assets/(2)/ 2.44%+ 2.49% 2.43%+
Ratio of net expenses to average daily net assets after
custodian fee reduction/(2)/ 2.40%+ 2.47% --
Ratio of net investment loss to average daily net assets (1.92)%+ (1.60)% (0.74)%+
Portfolio Turnover/(3)/ -- 86% 49%
- --------------------------------------------------------------------------------------------------------------------
Average commission rate paid/(4)/ -- $0.0382 --
- --------------------------------------------------------------------------------------------------------------------
+++ The operating expenses of the Fund may reflect a reduction of the Investment Adviser fee, an allocation of
expenses to the Administrator, or both. Had such actions not been taken, the ratios and net investment loss per
share would have been as follows:
Ratios/Supplemental Data:
Expenses -- -- --
Net investment loss -- -- --
Net investment loss per share -- -- --
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended September 30,
--------------------------------------------
1994 1993 1992
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value -- Beginning of period $ 13.240 $11.850 $11.140
- ------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------
Net investment loss $ (0.050) $(0.090) $(0.083)
Net realized and unrealized gain (loss) on investments 2.650 1.480 1.103
- ------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 2.600 $ 1.390 $ 1.020
- ------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------
In excess of net investment loss $ (0.020) $ -- $(0.250)
From net realized gain on investments -- -- (0.060)
In excess of net realized gain on investments (0.930) -- --
- ------------------------------------------------------------------------------------------------------------
Total distributions $ (0.950) $ -- $(0.310)
- ------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 14.890 $13.240 $11.850
- ------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 20.47% 11.73% 9.44%
- ------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+++
- ------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 13,055 $ 5,792 $ 3,775
Ratio of net expenses to average daily net assets/(2)/ 2.64% 3.15% 3.26%
Ratio of net expenses to average daily net assets after
custodian fee reduction/(2)/ -- -- --
Ratio of net investment loss to average daily net assets (0.96)% (0.92)% (0.67)%
Portfolio Turnover/(3)/ 17% 57% 32%
- ------------------------------------------------------------------------------------------------------------
Average commission rate paid/(4)/ -- -- --
- ------------------------------------------------------------------------------------------------------------
+++ The operating expenses of the Fund may reflect a reduction of the Investment Adviser fee, an allocation
of expenses to the Administrator, or both. Had such actions not been taken, the ratios and net investment
loss per share would have been as follows:
Ratios/Supplemental Data:
Expenses -- 3.90% 4.65%
Net investment loss -- (1.67)% (2.06)%
Net investment loss per share -- $(0.210) $(0.240)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ Computed using average shares outstanding throughout the period.
* For the eleven months ended August 31, 1995.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the ex-dividend date. Total return is
not computed on an annualized basis.
/(2)/ The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require each Fund, as well as
its corresponding Portfolio, to increase its expense ratio by the effect
of any expense offset arrangements with its service providers. The expense
ratios for each of the periods ended on or before August 31, 1995 have not
been adjusted to reflect this change.
/(3)/ Portfolio Turnover represents the rate of portfolio activity for the
period while the Fund was making investments directly in securities. The
Portfolio Turnover for the period since the Fund transferred substantially
all of its assets to the Portfolio is shown in the Portfolio's financial
statements which are included elsewhere in this report.
/(4)/ Average commission rate paid is computed dividing the total dollar amount
of commissions paid during the period in which the fund was making
investments directly in securities by the total number of shares purchased
and sold during the period for which commissions were charged. For fiscal
years beginning on or after September 1, 1995, a Fund is required to
disclose its average commission rate per share for security trades on
which commissions were charged.
See notes to financial statements
9
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
------------------------------------------------------------------------------
EV Marathon Worldwide Developing Resources Fund (the Fund) is a diversified
series of Eaton Vance Growth Trust (the Trust). The Fund is an entity of the
type commonly known as a Massachusetts business trust and is registered under
the Investment Company Act of 1940, as amended, as an open-end investment
management company. On April 10, 1997, the Fund transferred substantially all
of its investable assets to the Worldwide Developing Resources Portfolio (the
Portfolio). The Fund invests all of its investable assets in interests in the
Portfolio, a New York Trust, having the same investment objective as the Fund.
The value of the Fund's investment in the Portfolio reflects the Fund's
proportionate interest in the net assets of the Portfolio (73.9% at August 31,
1997). The performance of the Fund is directly affected by the performance of
the Portfolio. The financial statements of the Portfolio, including the
portfolio of investments, are included elsewhere in this report and should be
read in conjunction with the Fund's financial statements.
On June 23, 1997, the Board of Trustees of the Trust adopted a multiple class
plan for the Fund which permits the Fund to issue more than one class of
shares. Initially, the Fund will offer two classes of shares. Effective
September 1, 1997, the existing shares of the Fund will be designated Class B
shares. On June 23, 1997, the Board of Trustees also approved a Plan of
Reorganization (the "Plan") for the Trust. Under the terms of the Plan, the
Fund will acquire substantially all of the assets and liabilities of the EV
Traditional Worldwide Developing Resources Fund. The transaction will be
structured for tax purposes to qualify as a tax free reorganization under the
Internal Revenue Code. As a result of the reorganization, shareholders of the
Traditional Fund will receive Class A shares of the Fund. The reorganization
will occur after the close of business, August 31, 1997.
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.
A Investment Valuation -- Valuation of securities by the Portfolio is
discussed in Note 1A of the Portfolio's Notes to Financial Statements which
are included elsewhere in this report.
B Income -- The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund determined in accordance with generally accepted
accounting principles. Prior to the Fund's investment in the Portfolio, the
Fund held its investments directly.
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.
D 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
balances the Fund maintains with IBT. All significant credit balances used to
reduce the Fund's custodian fees are reported as a reduction of expenses on
the Statement of Operations.
E Deferred Organization Expenses -- Costs incurred by the Fund in connection
with its organization, including registration costs, are being amortized on
the straight-line basis over five years.
F 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.
G Other -- Investment transactions are accounted for on a trade date basis.
Gain or loss on the sale of investments is determined on the identified cost
basis.
2 Distributions to Shareholders
------------------------------------------------------------------------------
It is the present policy of the Fund to make (a) at least one distribution
annually (normally in December) of all or substantially all of the investment
income allocated to the Fund by the Portfolio, if any, less the Fund's direct
and allocated expenses and (b) at least one distribution annually of all or
substantially all of the net realized capital gains allocated by the Portfolio
to the Fund, if any (reduced by any available capital loss carryforwards from
prior years). Shareholders may reinvest all distributions in shares of the
Fund without a sales charge at the per share
10
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
net asset value as of the close of business on the
ex-dividend date.
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis. Generally accepted accounting principles require that only
distributions in excess of tax basis earnings and profits be reported in the
financial statements as a return of capital. Differences in the recognition or
classification of income between the financial statement and tax earnings and
profits which result in temporary over distributions for financial statement
purposes are classified as distributions in excess of net investment income or
accumulated net realized losses. Permanent differences between book and tax
accounting are reclassified to paid-in capital.
3 Shares of Beneficial Interest
------------------------------------------------------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Year Ended August 31,
1997 1996
- -----------------------------------------------------------------
<S> <C> <C>
Shares sold
1,108,712 409,901
Shares issued to
shareholders in
reinvestment of
distributions 154,604 42,310
Shares redeemed (740,328) (448,638)
- -----------------------------------------------------------------
Net Increase 522,988 3,573
- -----------------------------------------------------------------
</TABLE>
4 Transactions with Affiliates
-----------------------------------------------------------------------------
Eaton Vance Management (EVM) serves as the Administrator of the Fund, but
receives no compensation. The Portfolio has engaged Boston Management and
Research (BMR), a subsidiary of EVM, to render investment advisory services.
See Note 2 of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report.
Except as to Trustees of the Fund who are not members of EVM's organization,
officers and Trustees receive remuneration for their services to the Fund out
of such management fee.
Eaton Vance Distributors, Inc., (EVD), a subsidiary of EVM and the Fund's
principal underwriter, received approximately $882,000 as its portion of the
sales charge on sales of Fund shares for the year ended August 31, 1997.
Certain officers and Trustees of the Fund and the Portfolio are
directors/trustees of the above organizations.
5 Distribution Plan
------------------------------------------------------------------------------
The Fund has adopted a distribution plan (the Plan) pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plan requires the Fund to pay
the Principal Underwriter, Eaton Vance Distributors, Inc. (EVD) amounts equal
to 1/365 of 0.75% of the Fund's daily net assets, for providing ongoing
distribution services and facilities to the Fund. The Fund will automatically
discontinue payments to EVD during any period in which there are no
outstanding Uncovered Distribution Charges, which are equivalent to the sum of
(i) 5% of the aggregate amount received by the Fund for the shares sold plus,
(ii) distribution fees calculated by applying the rate of 1% over the
prevailing prime rate to the outstanding balance of Uncovered Distribution
Charges of EVD, reduced by the aggregate amount of contingent deferred sales
charges (see Note 6), and daily amounts theretofore paid to EVD. The amount
payable to EVD with respect to each day is accrued on such day as a liability
of the Fund and, accordingly, reduces the Fund's net assets. The Fund paid or
accrued $194,212 as payable to EVD for the period ended August 31, 1997,
representing 0.75% (annualized) of average daily net assets. At August 31,
1997, the amount of Uncovered Distribution Charges EVD calculated under the
Plan was approximately $882,130.
In addition, the Plan authorizes the Fund to make monthly payments of service
fees to the Principal Underwriter, Authorized Firms and other persons in
amounts not exceeding 0.25% of the Fund's average daily net assets for any
fiscal year. The Trustees have initially implemented the Plan by authorizing
the Fund to make quarterly payments of service fees to the Principal
Underwriter and Authorized Firms in amounts not expected to exceed 0.25% per
annum, of the Fund's average daily net assets based on the value of Fund
shares sold by such persons and remaining outstanding for at least one year.
Service fee payments will be made for personal services and/or the maintenance
of shareholder accounts. Service fees are separate and distinct from the sales
commissions and distribution fees payable by the Fund to EVD, and, as such are
not subject to automatic discontinuance when there are
11
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
no outstanding Uncovered Distribution Charges of EVD. Service fee payments
for the year ended August 31, 1997 amounted to $36,046.
6 Contingent Deferred Sales Charge
-----------------------------------------------------------------------------
A contingent deferred sales charge (CDSC) is imposed on any redemption of Fund
shares made within six years of purchase. Generally, the CDSC is based upon
the lower of the net asset value at date of redemption or date of purchase. No
charge is levied on shares acquired by reinvestment of dividends or capital
gains distributions. The CDSC is imposed at declining rates that begin at 5%
in the case of redemptions in the first and second year after purchase,
declining one percentage point each subsequent year. No CDSC is levied on
shares which have been sold to EVM or its affiliates or to their respective
employees or clients. CDSC charges are paid to EVD to reduce the amount of
Uncovered Distribution Charges calculated under the Fund's Distribution Plan.
CDSC charges received when no Uncovered Distribution Charges exist will be
credited to the Fund. For the year ended August 31, 1997, EVD received
approximately $169,436 of CDSC paid by shareholders.
7 Investment Transactions
-----------------------------------------------------------------------------
For the year ended August 31, 1997, increases and decreases in the Fund's
investment in the Portfolio aggregated $4,288,303 and $7,347,257,
respectively.
8 Subsequent Event
-----------------------------------------------------------------------------
Effective September 1, 1997 the EV Marathon Worldwide Developing Resources
Fund will change its name to Eaton Vance Worldwide Developing Resources Fund
and the shares of the Fund will be designated Class B shares. One additional
class of shares will also be offered.
12
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of EV Marathon
Worldwide Developing Resources Fund
- -------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of EV Marathon Worldwide Developing Resources Fund
(the Fund) (one of the series of Eaton Vance Growth Trust) as of August 31,
1997, and the related statement of operations for year then ended, the statement
of changes in net assets for the years ended August 31, 1997 and 1996 and the
financial highlights for the years ended August 31, 1997 and 1996, the eleven
months ended August 31, 1995, and for each of the years in the three year period
ended September 30, 1994. 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 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 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. 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 financial highlights present
fairly, in all material respects, the financial position of EV Marathon
Worldwide Developing Resources Fund at August 31, 1997, the results of its
operations, the changes in its net assets and its financial highlights for the
respective stated periods, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
October 10, 1997
13
<PAGE>
Worldwide Developing Resources Portfolio as of August 31, 1997
PORTFOLIO OF INVESTMENTS
(Expressed in United States Dollars)
Common Stocks -- 82.7%
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Metals - Gold -- 25.4%
- --------------------------------------------------------------------------------
Argosy Mining Corp.* 100,000 $ 54,010
Ashanti Goldfields Co., Ltd.* 8,889 90,821
Barrick Gold Corp.* 15,000 341,250
Bema Gold Corp. 20,000 105,000
Cambior Inc. 17,000 182,750
Canarc Resource Corp. 150,000 63,735
Crystallex International Corp.* 150,000 740,625
Dayton Mining Corp. 100,000 318,750
Eldorado Gold Corp., Ltd.* 60,000 168,941
Etruscan Enterprises, Ltd. 150,000 669,795
Getchell Gold Corp. 15,000 510,000
Global Pacific Minerals, Inc. 200,000 144,040
Golden Gram Resources, Inc. 250,000 288,075
Gran Colombia Resources, Inc.* 100,000 23,764
Greenstone Resources, Ltd. 50,000 475,000
International Ballatar Resources Inc. 300,000 408,360
Intrepid Minerals Corp. 300,000 101,537
Kazakhstan Minerals Corp. 40,000 42,000
Meridian Gold 120,000 535,836
Minorca Resources Inc. 50,000 45,010
Nevada Pacific Mining Co.+++ 40,000 300,000
Queenstake Resources, Ltd. 150,000 187,965
Repadre Capital Corp. 70,000 378,112
Rio Narcea Gold Mines Ltd.* 120,000 380,268
Romarco Minerals, Inc.* 100,000 298,851
South Pacific Resources Corp.* 100,000 32,410
Southwestern Gold Corp.* 40,000 239,112
Steppe Gold Resources, Ltd. 200,000 60,480
Sutton Resources Ltd. 20,000 189,418
Tombstone Explorations Co., Ltd.* 225,000 259,268
Triton Mining Corp. 80,000 115,232
TVX Gold, Inc. 50,000 259,375
- --------------------------------------------------------------------------------
$ 8,009,790
- --------------------------------------------------------------------------------
Metals - Industrial -- 13.6%
- --------------------------------------------------------------------------------
AMT International Mining Corp.* 817,200 $ 517,860
Billiton, PLC 75,000 291,870
Colossal Resources Corp. 120,000 138,744
Corriente Resources, Inc.* 159,500 287,180
First Quantum Minerals 100,000 276,560
Freeport McMoran Copper & Gold, Inc. 16,300 436,025
Inco, Ltd. 5,600 151,550
Ispat International 15,000 402,188
Nucor Corp. 5,000 283,438
Oregon Metallurgical 30,000 660,000
Steel Dynamics 20,000 505,000
Tiomin Resources, Inc.* 200,000 316,880
- --------------------------------------------------------------------------------
$ 4,267,295
- --------------------------------------------------------------------------------
Metals and Minerals -- 2.6%
- --------------------------------------------------------------------------------
Diamondworks, Ltd.+++ 150,000 $ 175,005
Namibian Minerals Corp. 75,000 276,563
Potash Corp. of Saskatchewan 5,000 369,688
- --------------------------------------------------------------------------------
$ 821,256
- --------------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 1.1%
- --------------------------------------------------------------------------------
Noble Drilling Corp. 12,000 $ 341,250
- --------------------------------------------------------------------------------
$ 341,250
- --------------------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 39.5%
- --------------------------------------------------------------------------------
Abacan Resources Corp. 85,000 $ 233,750
American Exploration Co. 60,000 1,012,500
Anadarko Petroleum Corp. 10,700 785,781
Arakis Energy Corp. 200,000 725,000
Beau Canada Exploration, Ltd.* 170,000 389,351
Cairn Energy USA, Inc. 60,000 686,250
Coho Energy Inc. 75,000 731,250
Enserch Exploration, Inc. 35,000 315,000
Evergreen Resources, Inc. 15,000 202,500
FX Energy, Inc. 70,000 638,750
Harcor Energy Inc. 135,000 683,438
Mercantile International Petroleum* 400,000 384,000
Meridian Resource Corp. 50,000 546,875
Nevsun Resources, Ltd. 40,000 149,804
Pease Oil and Gas Co. 150,000 375,000
Petsec Energy Ltd., ADR 28,000 682,500
Probe Exploration Inc. 100,000 316,890
Ranger Oil Ltd. 75,000 726,563
Seven Seas Petroleum Co.* 45,000 612,000
Swift Energy Co. 25,000 648,438
TransTexas Gas Corp. 17,000 244,375
Triton Energy Ltd. 8,700 334,950
Tusk Energy, Inc.* 400,000 409,030
United Meridian Corp. 5,000 195,938
Vastar Resources Inc. 10,000 426,875
- --------------------------------------------------------------------------------
$12,456,808
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
14
<PAGE>
Worldwide Developing Resources Portfolio as of August 31, 1997
PORTFOLIO OF INVESTMENTS CONT'D
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Paper and Forest Products -- 0.5%
- --------------------------------------------------------------------------------
Saint Laurent Paperboard Inc. 10,000 $ 170,309
- --------------------------------------------------------------------------------
$ 170,309
- --------------------------------------------------------------------------------
Total Common Stocks
(identified cost $26,318,377) $26,066,708
- --------------------------------------------------------------------------------
<CAPTION>
Warrants -- 2.6%
Security Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Metals - Gold -- 1.8%
- --------------------------------------------------------------------------------
Argosy Mining Corp. 50,000 $ --
Black Swan Gold Mines, Ltd. 200,000 115,364
Canarc Resource Corp. 75,000 --
Etruscan Enerprises, Ltd. 100,000 140,477
Golden Gram Resources, Inc. 250,000 --
Gran Colombia Resources, Inc. 50,000 --
Intrepid Minerals Corp. 150,000 --
Minorca Resources Inc. 12,500 --
Queenstake Resources, Ltd. 75,000 --
Quincunx Gold Exploration+++* 300,000 324,056
Steppe Gold Resources, Ltd. 100,000 --
- --------------------------------------------------------------------------------
$ 579,897
- --------------------------------------------------------------------------------
Metals - Industrial -- 0.2%
- --------------------------------------------------------------------------------
First Quantum Minerals 50,000 $ --
Panorama Resources 400,000 54,394
- --------------------------------------------------------------------------------
$ 54,394
- --------------------------------------------------------------------------------
Metals and Minerals -- 0.6%
- --------------------------------------------------------------------------------
Diamondworks, Ltd. 150,000 $ 174,990
- --------------------------------------------------------------------------------
$ 174,990
- --------------------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 0.0%
- --------------------------------------------------------------------------------
Seven Seas Petroleum Co. 5,000 $ --
- --------------------------------------------------------------------------------
Total Warrants (identified cost $1,038,604) $ 809,281
- --------------------------------------------------------------------------------
<CAPTION>
Commercial Paper -- 10.8%
Principal
Amount
Security (000 omitted) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Ford Motor Credit Co., 5.53%, 9/3/97 $ 1,079 $ 1,078,337
General Electric Capital Corp., 5.6%, 9/2/97 320 319,851
Norwest Financial Inc., 5.55%, 9/3/97 1,000 999,383
Prudential Funding Corp., 5.54%, 9/3/97 1,000 999,384
- --------------------------------------------------------------------------------
Total Commercial Paper
(amortized cost $3,396,955) $ 3,396,955
- --------------------------------------------------------------------------------
Total Investments -- 96.1%
(identified cost $30,753,936) $30,272,944
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 3.9% $ 1,235,918
- --------------------------------------------------------------------------------
Net Assets -- 100% $31,508,862
- --------------------------------------------------------------------------------
</TABLE>
ADR -- American Depositary Receipt
* Foreign Security
+++ Restricted Security
See notes to financial statements
15
<PAGE>
Worldwide Developing Resources Portfolio as of August 31, 1997
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of August 31, 1997
(Expressed in United States Dollars)
Assets
- --------------------------------------------------------------------------------
<S> <C>
Investments, at value (Note 1A)
(identified cost, $30,753,936) $30,272,944
Cash 400
Receivable for investments sold 2,546,949
Interest and dividends receivable 2,325
Deferred organization expenses (Note 1F) 13,812
- --------------------------------------------------------------------------------
Total assets $32,836,430
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable for investments purchased $ 1,292,860
Accrued expenses 34,708
- --------------------------------------------------------------------------------
Total liabilities $ 1,327,568
- --------------------------------------------------------------------------------
Net Assets applicable to investors' interest
in Portfolio $31,508,862
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital contributions and $31,989,854
withdrawals
Net unrealized depreciation of investments (computed
on the basis of identified cost) (480,992)
- --------------------------------------------------------------------------------
Total $31,508,862
- --------------------------------------------------------------------------------
</TABLE>
Statement of Operations
<TABLE>
<CAPTION>
For the period ended
August 31, 1997 *
(Expressed in United States Dollars)
Investment Income (Note 1G)
- --------------------------------------------------------------------------------
<S> <C>
Dividends (net of foreign taxes, $2,310) $ 19,005
Interest income 18,374
- --------------------------------------------------------------------------------
Total income $ 37,379
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 81,301
Custodian fee (Note 1I) 21,786
Legal and accounting services 17,696
Amortization of organization expenses (Note 1F) 1,188
Miscellaneous 7,733
- --------------------------------------------------------------------------------
Total expenses $ 129,704
- --------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1I) $ 4,064
- --------------------------------------------------------------------------------
Total expense reductions $ 4,064
- --------------------------------------------------------------------------------
Net expenses $ 125,640
- --------------------------------------------------------------------------------
Net investment loss $ (88,261)
- --------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- --------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 844,696
Foreign currency translations (4,744)
- --------------------------------------------------------------------------------
Net realized gain on investments $ 839,952
- --------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ (480,992)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ (480,992)
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 358,960
- --------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 270,699
- --------------------------------------------------------------------------------
</TABLE>
* For the period from the start of business April 10, 1997, to August 31,
1997.
See notes to financial statements
16
<PAGE>
Worldwide Developing Resources Portfolio as of August 31, 1997
FINANCIAL STATEMENTS CONT'D
Statement of Changes in Net Assets (Expressed in United States Dollars)
<TABLE>
<CAPTION>
Increase (Decrease) For the period ended
in Net Assets August 31, 1997 *
- --------------------------------------------------------------------------------
<S> <C>
From operations --
Net investment loss $ (88,261)
Net realized gain on investments 839,952
Net change in unrealized (480,992)
appreciation (depreciation)
- --------------------------------------------------------------------------------
Net increase in net assets from operations $ 270,699
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $38,738,578
Withdrawals (7,500,415)
- --------------------------------------------------------------------------------
Net increase in net assets from capital transactions $31,238,163
- --------------------------------------------------------------------------------
Net increase in net assets $31,508,862
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ --
- --------------------------------------------------------------------------------
At end of period $31,508,862
- --------------------------------------------------------------------------------
</TABLE>
* For the period from the start of business, April 10, 1997, to August 31,
1997.
See notes to financial statements
17
<PAGE>
Worldwide Developing Resources Portfolio as of August 31, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data (Expressed in United States Dollars)
<TABLE>
<CAPTION>
For the Period Ended
August 31, 1997*
- -------------------------------------------------------------------------------
<S> <C>
Ratios to average daily net assets
- -------------------------------------------------------------------------------
Expenses 1.19%+
Net expenses, after custodian fee reduction 1.15%+
Net investment loss (0.81)%+
Portfolio Turnover 63%
- -------------------------------------------------------------------------------
Average commission rate (per share)/(1)/ $ 0.0325
- -------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $ 31,509
- -------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, April 10, 1997, to August 31,
1997.
/(1)/ Average commission rate paid is computed by dividing the total dollar
amount of commissions paid during the fiscal year by the total number of
shares purchased and sold during the fiscal year for which commissions
were charged.
See notes to financial statements
18
<PAGE>
Worldwide Developing Resources Portfolio as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS
(Expressed in United States Dollars)
1 Significant Accounting Policies
------------------------------------------------------------------------------
Worldwide Developing Resources Portfolio (the Portfolio) is registered under
the Investment Company Act of 1940 as a diversified, open-end investment
company which was organized as a trust under the laws of the State of New
York. The Declaration of Trust permits the Trustees to issue beneficial
interests in the Portfolio. Investment operations began on April 10, 1997,
with the acquisition of net assets of $26,141,520 in exchange for an interest
in the Portfolio by one of the Portfolio's investors. The following is a
summary of significant accounting policies of the Portfolio. The policies are
in conformity with accounting principles generally accepted in the United
States of America.
A Investment Valuation -- Securities listed on securities exchanges or in the
NASDAQ National Market System are valued at closing sale prices or, if there
has been no sale, at the mean between the closing bid and asked prices.
Unlisted securities are valued at the mean between the latest bid and asked
prices. Options and financial futures contracts are valued at the last sale
price, as quoted on the principal exchange or board of trade on which such
options or contracts are traded or, in the absence of a sale, the mean between
the last bid and asked prices. Short term obligations, maturing in 60 days or
less, are valued at amortized cost, which approximates the value. Securities
for which market quotations are unavailable are appraised at their fair value
as 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 Financial Futures Contracts -- Upon the entering of a financial futures
contract, the Portfolio is required to deposit an amount ("initial margin")
either of cash or securities 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
the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by the Portfolio.
When the Portfolio enters into a closing transaction, the Portfolio will
realize for book purposes a gain or loss equal to the difference between the
value of the financial futures contract to sell and the financial futures
contract to buy. The Portfolio's investment in financial futures contracts is
designed only to hedge against anticipated future changes in interest or
currency exchange rates. Should interest or currency exchange rates move
unexpectedly, the Portfolio may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss.
D 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 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
result from fluctuation in foreign currency exchange rates are not separately
disclosed.
E Forward Foreign Currency Exchange Contracts -- The Portfolio may enter into
forward foreign currency exchange contracts for the purchase or sale of a
specific foreign currency at a fixed price on a future date. Risk may arise
upon entering these contracts from the potential inability of counterparties
to meet the terms of their contracts and from movements in the value of a
foreign currency relative to the U.S. dollar. The Portfolio will enter into
forward contracts for hedging purposes as well as non-hedging purposes. The
forward foreign currency exchange contracts are adjusted by the daily exchange
rate of the underlying currency and any gains or losses are recorded for
financial statement purposes as unrealized until such time as the contracts
have been closed or offset.
19
<PAGE>
Worldwide Developing Resources Portfolio as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
(Expressed in United States Dollars)
F Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization, including registration costs, are being
amortized on the straight-line basis over five years.
G Other -- Investment transactions are accounted for on the date the
investments are purchased or sold. Interest income is determined on the basis
of interest accrued. Dividend income is recorded on the ex-dividend date.
Realized gains and losses on the sale of investments are determined on the
identified cost basis.
H Use of Estimates -- The preparation of 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.
I Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT receives
a fee reduced by credits which are determined based on the average daily cash
balances the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reflected as a reduction of
expense in 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, the Adviser receives a monthly fee of 0.0625% (0.75%
annually) of the average daily net assets of the Portfolio up to $500 million,
and at reduced rates as daily net assets exceed that level. For the year ended
August 31, 1997, the adviser fee was 0.75% (annualized) of average net assets.
Except as to Trustees of the Portfolio who are not members of the Adviser or
EVM'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 Adviser may elect to defer receipt
of all or a percentage of their annual fees in accordance with the terms of
the Trustee Deferred
Compensation Plan. For the period ended August 31, 1997 no significant
amounts have been deferred.
Certain of the officers and Trustees of the Portfolio are officers and
directors/trustees of the above organizations.
3 Line of Credit
------------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by EVM and
its affiliates in a committed $120 million unsecured line of credit agreement
with a group of banks. The Fund 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 an amount above
either the bank's adjusted certificate of deposit rate, Eurodollar rate or
federal funds rate. In addition, a fee computed at an annual rate of 0.15% on
the daily unused portion of the $120 million line of credit is allocated among
the participating funds and portfolios at the end of each quarter. The Fund
did not have significant borrowings or allocated fees during the period ended
August 31, 1997.
4 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at August 31, 1997, as computed on a federal income tax
basis, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate cost $30,753,936
-------------------------------------------------------
Gross unrealized appreciation $ 4,683,237
Gross unrealized depreciation (5,164,229)
-------------------------------------------------------
Net unrealized depreciation $ (480,992)
-------------------------------------------------------
</TABLE>
5 Investment Transactions
------------------------------------------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $9,365,660 and $8,881,923, respectively.
20
<PAGE>
Worldwide Developing Resources Portfolio as of August 31, 1997
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders
of Worldwide Developing Resources Portfolio
- -----------------------------------------------
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Worldwide Developing Resources Portfolio (the
Portfolio) as of August 31, 1997, and the related statement of operations, the
statement of changes in net assets and the supplementary data for the period
from April 10, 1997, (start of business) to August 31, 1997 (all expressed in
United States Dollars). These financial statements and supplementary data are
the responsibility of the Portfolio's management. Our responsibility is to
express an opinion on these financial statements and supplementary data based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 held as of August 31, 1997 by correspondence with the custodian and
brokers. 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, such financial statements and supplementary data present fairly,
in all material respects, the financial position of the Portfolio at August 31,
1997, and the results of its operations, the changes in its net assets and its
supplementary data for the period from April 10, 1997, (start of business) to
August 31, 1997 (all expressed in United States Dollars), in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE
Grand Cayman, Cayman Islands
British West Indies
October 10, 1997
21
<PAGE>
EV Marathon Worldwide Developing Resources Fund as of August 31, 1997
INVESTMENT MANAGEMENT
EV Marathon Worldwide Developing Resources Fund
Officers
James B. Hawkes
President and Director
M. Dozier Gardner
Vice President
William D. Burt
Vice President and
Co-Portfolio Manager
Barclay Tittmann
Vice President and
Co-Portfolio Manager
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School
of Business Administration
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
Worldwide Developing Resources Portfolio
Officers
James B. Hawkes
President and Trustee
M. Dozier Gardner
Vice President
William D. Burt
Vice President and
Co-Portfolio Manager
Barclay Tittmann
Vice President and
Co-Portfolio Manager
James L. O'Connor
Vice President and Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School
of Business Administration
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
22
<PAGE>
This Page Intentionally Left Blank
<PAGE>
Investment Advisor of
Worldwide Developing Resources Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of
EV Marathon Worldwide
Developing Resources Fund
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
Boston, MA 02116
Transfer Agent
First Data Investor Services Group, Inc.
Attn: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
(800) 262-1122
Independent Auditors
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
EV Marathon
Worldwide Developing Resources Fund
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------
M-DRSRC-11/97
