<PAGE>
[LOGO OF EATON VANCE Investing
APPEARS HERE]
for the
21st [PHOTO OF STATUTE OF
LIBERTY APPEARS HERE]
Century(R)
Semiannual Report June 30, 1998
EATON VANCE
[PHOTO OF ROMAN TEMPLE STYLE GOVERNMENT
APPEARS HERE]
OBLIGATIONS
FUND
Eaton Vance
Global Management-Global Distribution
[PHOTO OF U.S. FLAG APPEARS HERE]
<PAGE>
Eaton Vance Government Obligations Fund as of June 30, 1998
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INVESTMENT UPDATE
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[PHOTO OF SUSAN SCHIFF APPEARS HERE]
Susan Schiff,
Portfolio Manager
Investment Environment
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The Economy
. Despite continued strong economic growth in the six months ended June 30,
inflation remained well under control. Reflecting the tame inflation outlook,
interest rates declined slightly, with three-year Treasury bond yields falling
from 5.67% on December 31 to 5.50% on June 30.
. To date, 1998 has been one of the most difficult years on record for the
mortgage securities (MBS) market, characterized by an unusually large widening
of yield spreads - the yield differential of mortgage securities over Treasury
bonds. Generic MBS spreads have widened as much as 50 basis points, causing
returns to lag those of Treasuries with comparable maturities.
. The seasoned sector of the MBS market - the Portfolio's primary investment
universe - was not immune from the decline, as investors feared a rise in
prepayment rates. Nonetheless, seasoned prepay rates remained well below those
of generic MBS.
The Fund
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Performance for the Past Six Months
. The Fund's Class A shares had a total return of 2.1% during the six months
ended June 30, 1998./1/ This return resulted from a decrease in net asset
value per share (NAV) to $10.44 on June 30, 1998 from $10.62 on December 31,
1997, and the reinvestment of $0.399 in dividends.
. The Fund's Class B shares had a total return of 1.6% during the six months
ended June 30, 1998./1/ This return resulted from a decrease in NAV to $8.98
on June 30, 1998 from $9.14 on December 31, 1997, and the reinvestment of
$0.309 in dividends.
. The Fund's Class C shares had a total return of 1.8% during the six months
ended June 30, 1998./1/ This return resulted from a decrease in NAV to $8.99
on June 30, 1998 from $9.13 on December 31, 1997, and the reinvestment of
$0.305 in dividends.
Management Discussion
. Mortgage securities typically lag the Treasury market in a declining rate
environment. Not surprisingly, the widening of quality spreads constrained the
Fund's performance during the six-month period. The Fund was also negatively
impacted by the underperformance of the short end of the yield curve. As an
indication of that underperformance, yields for three-year bonds declined only
17 basis points while 30-year Treasury bonds yields fell nearly 28 basis
points.
. The seasoned MBS sector was hurt by the anticipation of sharply rising
prepayment rates. In fact, while generic prepayment rates surged to more than
40%, seasoned prepay rates - at their peak - remained a modest 20%. Given the
unwarranted market reaction, management has viewed the recent correction as an
attractive buying opportunity within the seasoned
segment of the market.
. The majority (55%) of the Portfolio's investments remained in seasoned
low-coupon MBS. These low interest rate mortgages provide relatively stable
cash flows, and borrowers have little incentive to refinance.
. Another major segment of the Portfolio (27%) was invested in seasoned
high-coupon MBS. With coupons in the 12-to-16% range, these securities
provided a significant yield advantage over Treasury securities with similar
maturities.
. The Portfolio had a duration of 2.6 years at June 30. That was slightly
shorter than the Fund's 3.3-year duration at December 31 and at the low end of
the Fund's duration range. Duration is a measure of interest rate sensitivity
that factors average maturity and future cash flows. The adjustment occurred
in March and was a response to increasing signs of strength in the economy.
. The Lehman Brothers Intermediate Government Bond Index/2/ - an unmanaged index
of intermediate-maturity U.S. government bond issues - had a total return of
3.4% during the period.
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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.
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Fund Information
as of June 30, 1998
Performance/3/ Class A Class B Class C
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Average Annual Total Returns (at net asset value)
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One Year 6.5% 5.7% 5.6%
Five Years 5.5 N.A. N.A.
Ten Years 7.8 N.A. N.A.
Life of Fund+ 8.8 4.9 4.7
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
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One Year 1.4% 0.7% 4.6%
Five Years 4.5 N.A. N.A.
Ten Years 7.3 N.A. N.A.
Life of Fund+ 8.5 4.6 4.7
+Inception dates: Class A: 8/24/84; Class B & Class C: 11/1/93
/1/ These returns do not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charges (CDSC)
for the Fund's Class B and Class C shares. /2/ It is not possible to invest
directly in an Index. /3/ Returns are historical and are calculated by
determining the percentage change in net asset value with all distributions
reinvested. SEC average annual returns for Class A reflect a 4.75% sales
charge; for Class B, returns reflect applicable CDSC based on the following
schedule: 5%-1st and 2nd years; 4%-3rd year; 3%-4th year; 2%-5th year; 1%-
6th year; for Class C, the one-year return reflects a 1% 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
<PAGE>
Eaton Vance Government Obligations Fund as of June 30, 1998
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of June 30, 1998
Assets
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Investment in Government Obligations Portfolio,
at value (identified cost, $408,512,358) $ 426,171,462
Receivable for Fund shares sold 411,244
Deferred organization expenses 3,253
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Total assets $ 426,585,959
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Liabilities
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Dividends payable $ 1,246,606
Payable for Fund shares redeemed 755,874
Payable to affiliate for Trustees' fees 1,943
Other accrued expenses 238,083
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Total liabilities $ 2,242,506
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Net Assets $ 424,343,453
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Sources of Net Assets
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Paid-in capital $ 478,122,709
Accumulated net realized loss from Portfolio
(computed on the basis of identified cost) (70,255,682)
Accumulated distributions in excess of net investment income (1,182,678)
Net unrealized appreciation from Portfolio
(computed on the basis of identified cost) 17,659,104
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Total $ 424,343,453
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Class A Shares
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Net Assets $ 273,062,481
Shares Outstanding 26,167,917
Net Asset Value and Redemption Price Per Share
(net assets / shares of beneficial interest outstanding)
$ 10.44
Maximum Offering Price Per Share
(100 / 95.25 of $10.44) $ 10.96
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Class B Shares
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Net Assets $116,452,698
Shares Outstanding 12,972,143
Net Asset Value, Offering Price and Redemption Price Per Share
(net assets / shares of beneficial interest outstanding) $ 8.98
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Class C Shares
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Net Assets $ 34,828,274
Shares Outstanding 3,873,275
Net Asset Value, Offering Price and Redemption Price Per Share
(net assets / shares of beneficial interest outstanding) $ 8.99
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On sales of $25,000 or more, the offering price of Class A shares is reduced.
Statement of Operations
For the Six Months Ended
June 30, 1998
Investment Income
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Interest allocated from Portfolio $ 19,875,484
Expenses allocated from Portfolio (2,044,936)
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Net investment income from Portfolio $ 17,830,548
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Expenses
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Trustees fees and expenses $ 1,162
Distribution and service fees
Class A 356,185
Class B 603,296
Class C 182,703
Transfer and dividend disbursing agent fees 218,045
Registration fees 41,122
Printing and postage 25,519
Custodian fee 18,091
Legal and accounting services 9,918
Amortization of organization expenses 4,668
Miscellaneous 19,441
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Total expenses $ 1,480,150
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Net investment income $ 16,350,398
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Realized and Unrealized
Gain (Loss) from Portfolio
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Net realized gain (loss) --
Investment transactions (identified cost basis) $ (3,338,016)
Financial futures contracts (1,826,886)
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Net realized loss $ (5,164,902)
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Change in unrealized appreciation (depreciation) --
Investments $ (2,874,782)
Financial futures contracts 41,350
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Net change in unrealized appreciation (depreciation) $ (2,833,432)
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Net realized and unrealized loss $ (7,998,334)
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Net increase in net assets from operations $ 8,352,064
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See notes to financial statements.
3
<PAGE>
Eaton Vance Government Obligations Fund as of June 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
Six Months Ended
Increase (Decrease) June 30, 1998 Year Ended
in Net Assets (Unaudited) December 31, 1997
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From operations --
Net investment income $ 16,350,398 $ 21,973,623
Net realized loss (5,164,902) (4,427,703)
Net change in unrealized
appreciation (depreciation) (2,833,432) 2,763,952
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Net increase in net
assets from operations $ 8,352,064 $ 20,309,872
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Distributions to shareholders --
From net investment income
Class A $ (10,889,971) $ (21,945,228)
Class B (4,070,477) --
Class C (1,240,906) --
From tax return of capital
Class A -- (174,478)
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Total distributions to shareholders $ (16,201,354) $ (22,119,706)
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Transactions in shares of
beneficial interest --
Proceeds from sale of shares
Class A $ 64,856,788 $ 85,503,535
Class B 29,547,789 --
Class C 5,816,410 --
Net asset value of
shares issued to
shareholders in
payment of
distributions declared
Class A 4,769,217 9,983,362
Class B 1,615,475 --
Class C 684,208 --
Cost of shares redeemed
Class A (68,199,786) (119,859,247)
Class B (34,425,077) --
Class C (7,633,461) --
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Net decrease in net assets from Fund
share transactions $ (2,968,437) $ (24,372,350)
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Contribution from EV Marathon and
EV Classic Government
Obligations Funds $ 158,379,953 $ --
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Net increase (decrease) in net assets $ 147,562,226 $ (26,182,184)
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Six Months Ended
June 30, 1998 Year Ended
Net Assets (Unaudited) December 31, 1997
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At beginning of period $ 276,781,227 $ 302,963,411
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At end of period $ 424,343,453 $ 276,781,227
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Accumulated
distributions in excess
of net investment income
included in net assets
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At end of period $ (1,182,678) $ (916,967)
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See notes to financial statements
4
<PAGE>
Eaton Vance Government Obligations Fund as of June 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1998 ------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
----------------------------- ------------------------------------------------------
Class A Class B Class C Class A Class A Class A Class A Class A
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--Beginning of period $ 10.620 $ 9.140 $ 9.130 $ 10.680 $ 11.020 $ 10.420 $ 11.480 $ 11.380
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Income (loss) from operations
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Net investment income $ 0.399 $ 0.308 $ 0.321 $ 0.799 $ 0.810 $ 0.807 $ 0.805 $ 0.919
Net realized and unrealized gain (loss) (0.182) (0.160) (0.157) (0.051) (0.340) 0.603 (1.029) 0.106
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Total income (loss) from operations $ 0.217 $ 0.148 $ 0.164 $ 0.748 $ 0.470 $ 1.410 $ (0.224) $ 1.025
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Less distributions
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From net investment income $ (0.397) $ (0.308) $ (0.304) $ (0.801) $ (0.810) $ (0.810) $ (0.805) $ (0.919)
In excess of net investment income -- -- -- -- -- -- (0.031) (0.006)
From tax return of capital -- -- -- (0.007) -- -- -- --
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Total distributions $ (0.397) $ (0.308) $ (0.304) $ (0.808) $ (0.810) $ (0.810) $ (0.836) $ (0.925)
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Net asset value--End of period $ 10.440 $ 8.980 $ 8.990 $ 10.620 $ 10.680 $ 11.020 $ 10.420 $ 11.480
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return (1) 2.08% 1.64% 1.83% 7.26% 4.52% 13.97% (2.03)% 9.26%
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Ratios/Supplemental Data
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Net assets, end of period (000's omitted) $273,062 $116,453 $ 34,828 $276,781 $302,963 $359,738 $386,186 $503,150
Ratios (As a percentage of average daily
net assets):
Expenses (2) 1.32%+ 2.08%+ 2.12%+ 1.24% 1.16% 1.16% 1.17% 1.12%
Net investment income 7.65%+ 6.84%+ 7.14%+ 7.57% 7.59% 7.53% 7.70% 7.86%
Portfolio turnover (3) -- -- -- -- -- -- -- 52%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
(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
reinvested at the net asset value on the reinvestment date. Total
return is not computed on an annualized basis.
(2) Includes the Fund's share of its Portfolio's allocated expenses.
(3) Portfolio Turnover represents the rate of portfolio activity for the
period while the Fund was making investments directly in securities.
The portfolio turnover rate for the period since the Fund transferred
all of its investable assets to the Portfolio is shown in the
Portfolio's financial statements which are included elsewhere in this
report.
See notes to financial statements
5
<PAGE>
Eaton Vance Government Obligations Fund as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
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Eaton Vance Government Obligations Fund (the Fund) is a diversified 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
management investment company. The Fund is a series of Eaton Vance Mutual
Funds Trust. The Fund offers three classes of shares. Class A shares are sold
subject to a sales charge imposed at the time of purchase. Class B and Class
C shares are sold at net asset value and are subject to a contingent deferred
sale charge (see Note 7). All classes of shares have equal rights to assets
and voting privileges. Realized and unrealized gains and losses and net
investment income, other than class specific expenses, are allocated daily to
each class of shares based on the relative net assets of each class to the
total net assets of the Fund. Each class of shares differs in its
distribution plan and certain other class specific expenses. The Fund invests
all of its investable assets in interests in the Government Obligations
Portfolio (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
(100.0% at June 30, 1998). 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.
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.
C Federal Taxes -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable income, including any
net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary.
At December 31, 1997, the Fund, for federal income tax purposes, had a
capital loss carryover of $50,147,204 which will reduce the Fund's taxable
income arising from future net realized gain on investment transactions, if
any, to the extent permitted by the Internal Revenue Code and thus will
reduce the amount of distributions to shareholders which would otherwise be
necessary to relieve the Fund of any liability for federal income tax. A
portion of such capital loss carryovers were acquired through the Fund
Reorganization (see Note 8) and may be subject to certain limitations. Such
capital loss carryovers will expire on December 31, 1998 ($6,941,299),
December 31, 1999 ($1,545,746), December 31, 2000 ($5,952,987), December 31,
2001 ($70,869), December 31, 2002 ($17,954,518), December 31, 2003
($2,688,390), December 31, 2004 ($10,207,058), and December 31, 2005
($4,786,337).
D Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Fund and the Portfolio. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by credits which are determined based
on the average cash balances the Fund or the Portfolio maintains with IBT.
All significant credit balances used to reduce the Fund's custodian fees are
reflected as a reduction of operating expenses on the Statement of
Operations.
E 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 income and expense during the reporting period. Actual results could
differ from those estimates.
F Interim Financial Information -- The interim financial statements relating
to June 30, 1998 and for the six-month period then ended have not been
audited by independent certified public accountants, but in the opinion of
the Fund's management, reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Distributions to Shareholders
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The net income of the Fund is determined daily and substantially all of the
net income so determined is declared as a dividend to shareholders of record
at the time
6
<PAGE>
Eaton Vance Government Obligations Fund as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
of declaration. Distributions are paid monthly. Distributions of allocated
realized capital gains, if any, are made at least annually. Shareholders may
reinvest capital gain distributions in additional shares of the Fund at the
net asset value as of the ex-dividend date. Distributions are paid in the
form of additional shares or, at the election of the shareholder, in cash.
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 statements and tax earnings
and profits which result in over-distributions for financial statement
purposes only are classified as distributions in excess of net investment
income or accumulated net realized gain on investments. Permanent differences
between book and tax accounting relating to distributions are reclassified to
paid-in capital.
3 Shares of Beneficial Interest
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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:
Six Months
Ended Year Ended
June 30, 1998 December 31, 1997
Class A (Unaudited)
Sales 6,128,262 8,049,910
Issued to shareholders electing
to receive payments of
distributions in Fund shares 451,877 940,639
Redemptions (6,485,292) (11,297,910)
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Net increase (decrease) 94,847 (2,307,361)
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Six Months Ended
June 30, 1998
Class B (Unaudited)
Sales 3,261,797
Issued to shareholders electing to receive payments of
distributions in Fund shares 177,945
Redemptions (3,804,077)
Issued to EV Marathon
Government 13,336,478
Obligations Fund
Shareholders
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Net increase 12,972,143
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Six Months Ended
June 30, 1998
Class C (Unaudited)
Sales 640,522
Issued to shareholders electing to
receive payment of distributions in 75,421
Fund shares
Redemptions (843,136)
Issued to EV Classic
Government 4,000,468
Obligations Fund
Shareholders
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Net increase 3,873,275
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4 Investment Transactions
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Increases and decreases in the Fund's investment in the Portfolio for the six
months ended June 30, 1998, aggregated $104,875,594 and $121,643,319,
respectively.
5 Transactions with Affiliates
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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 3 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report. Eaton Vance Distributors, Inc. (EVD), a
subsidiary of EVM and the Fund's principal underwriter, received $14,889 as
its portion of the sales charge on sales of Class A shares for the period
ended June 30, 1998. Certain of the officers and Trustees of the Fund and
Portfolio are officers and trustees of the above organizations. Except as to
Trustees of the Fund and the Portfolio who are not members of EVM's of BMR's
organization, officers and Trustees receive remuneration for their services
to the Fund out of the investment adviser fee earned by BMR.
6 Distribution and Service Plans
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The Fund has adopted distribution plans (Class B Plan and Class C Plan, the
Plans) pursuant to Rule 12b-1 under the Investment Company Act of 1940 and a
service plan (Class A Plan). The Plans require the Fund to pay the Principal
Underwriter, Eaton Vance Distributors, Inc. (EVD) amounts equal to 1/365 of
0.75% of the Fund's average daily net assets attributable to Class B and
Class C shares 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) 5.00% and 6.25% of the aggregate
amount received by the Fund for the Class B and Class C shares sold,
respectively, plus (ii) distribution fees calculated by applying the rate of
1% over the prevailing prime rate to the outstanding balance of Uncovered
7
<PAGE>
Eaton Vance Government Obligations Fund as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
Distribution Charges of EVD of each respective class reduced by the aggregate
amount of contingent deferred sales charges (see Note 7) and daily amounts
theretofore paid to EVD by each respective class. The Fund paid or accrued
$444,989 and $137,027 for Class B and Class C shares, respectively, for the
six months ended June 30, 1998, to or payable to EVD representing 0.75%
(annualized) of average daily net assets for Class B and Class C shares. At
June 30, 1998, the amount of Uncovered Distribution Charges of EVD calculated
under the Plan was approximately $4,178,000 and $9,182,000 for Class B and
Class C shares, respectively.
In addition, the Plans authorize the Fund to make 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 attributable to Class
A (Service Plan), Class B and Class C shares for each fiscal year. The
Trustees have initially implemented the Plans by authorizing the Fund to make
quarterly service fee payments 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 attributable to Class A and Class B shares based on the
value of Fund shares sold by such persons and remaining outstanding for at
least twelve months. The Class C Plan permits the Fund to make monthly
payments of service fees in amounts not expected to exceed 0.25% of the
Fund's average daily net assets attributable to Class C shares for any fiscal
year. Such payments are made for personal services and/or the maintenance of
shareholder accounts. Service fees are separate and distinct from the sales
commissions and distributions fees payable by the Fund to EVD, and as such
are not subject to automatic discontinuance when there are no outstanding
Uncovered Distribution Charges of EVD. Service fee payments for the six
months ended June 30, 1998 amounted to $356,185, $158,307 and $45,676 for
Class A, Class B and Class C shares, respectively.
7 Contingent Deferred Sales Charge
-----------------------------------------------------------------------------
A contingent deferred sales charge (CDSC) is imposed on any redemption of
Class B shares made within six years of purchase. A CDSC of 1% is imposed on
any redemption of Class C shares made within one year 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 gain distributions. The Class B CDSC is imposed at
declining rates that begin at 5% in the first and second year of redemption
after purchase, declining one percentage point in each subsequent year. Class
C shares will be subject to a 1% CDSC if redeemed within one year of
purchase. 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 Plans (see Note 6). CDSC charges received when
no Uncovered Distribution Charges exist will be credited to the Fund. EVD
received approximately $264,000 and $3,000 of CDSC paid by shareholders for
Class B shares and Class C shares, respectively for the six months ended June
30, 1998.
8 Transfer of Net Assets
-----------------------------------------------------------------------------
On January 1, 1998, EV Traditional Government Obligations Fund acquired the
net assets of the EV Marathon Government Obligations Fund and EV Classic
Government Obligations Fund pursuant to an Agreement and Plan of
Reorganization dated June 23, 1997. In accordance with the agreement, EV
Traditional Government Obligations Fund, at the closing, issued 13,336,478
Class B shares and 4,000,468 Class C shares of the Fund having an aggregate
value of $121,843,468 and $36,536,485, respectively. As a result, the Fund
issued one Class B share and one Class C share for each share of EV Marathon
Government Obligations Fund and EV Classic Government Obligations Fund,
respectively. The transaction was structured for tax purposes to qualify as a
tax free reorganization under the Internal Revenue Code. The EV Marathon
Government Obligations Fund's and EV Classic Government Obligations Fund's
net assets at the date of the transaction were $121,843,468 and $36,536,485,
respectively, including $2,093,697 and $(697,901) of unrealized appreciation
(depreciation). Directly after the merger, the combined net assets of the
Eaton Vance Government Obligations Fund (formerly "EV Traditional Government
Obligations Fund") were $435,161,180 with a net asset value of $10.62, $9.14
and $9.13 for Class A, Class B and Class C, respectively.
9 Name Change
-----------------------------------------------------------------------------
Effective January 1, 1998, EV Traditional Government Obligations Fund changed
its name to Eaton Vance Government Obligations Fund.
8
<PAGE>
Government Obligations Portfolio as of June 30, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Mortgage Pass-throughs -- 94.6%
<TABLE>
<CAPTION>
Principal
Amount
(000's omitted) Value
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Mortgage Corp.:
4.75%, with maturity at 2000 $ 2 $ 1,878
5.00%, with various maturities to 2003 271 267,217
5.25%, with various maturities to 2005 136 134,210
5.50%, with various maturities to 2011 499 492,584
6.00%, with various maturities to 2022 1,835 1,828,824
6.25%, with various maturities to 2013 486 485,620
6.50%, with various maturities to 2022 5,895 5,937,059
6.75%, with various maturities to 2008 478 480,198
7.00%, with various maturities to 2019 8,444 8,570,941
7.25%, with maturity at 2003 926 938,563
7.50%, with various maturities to 2020 10,599 10,886,052
7.75%, with various maturities to 2018 2,514 2,591,966
8.00%, with various maturities to 2026 36,731 38,123,021
8.25%, with various maturities to 2013 16,380 17,024,451
8.50%, with various maturities to 2018 13,529 14,166,625
8.75%, with various maturities to 2016 15,000 15,784,028
9.00%, with various maturities to 2020 21,821 23,136,198
9.25%, with various maturities to 2010 6,951 7,485,514
9.50%, with various maturities to 2016 3,985 4,263,850
10.00%, with various maturities to 2017 186 200,952
11.00%, with various maturities to 2019 4,328 4,832,699
12.00%, with various maturities to 2019 1,754 2,010,333
12.25%, with various maturities to 2019 2,378 2,761,202
12.50%, with various maturities to 2019 13,875 16,237,934
12.75%, with various maturities to 2015 885 1,032,178
13.00%, with various maturities to 2019 2,861 3,376,726
13.25%, with various maturities to 2019 242 287,442
13.50%, with various maturities to 2015 3,505 4,135,710
13.75%, with maturity at 2010 26 30,060
14.00%, with various maturities to 2016 1,695 2,012,759
14.50%, with various maturities to 2014 164 195,454
14.75%, with maturity at 2010 657 780,786
15.00%, with various maturities to 2013 751 914,695
15.25%, with maturity at 2012 143 175,506
15.50%, with various maturities to 2012 144 175,769
16.00%, with various maturities to 2012 73 90,349
16.25%, with various maturities to 2012 193 238,923
- ------------------------------------------------------------------------------------------
$192,088,276
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
(000's omitted) Value
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Federal National Mortgage Assn.:
0.25%, with maturity at 2014 $ 126 $ 109,123
3.50%, with maturity at 2007 87 82,087
4.50%, with maturity at 1999 1 1,377
5.00%, with various maturities to 2017 445 435,303
5.25%, with various maturities to 2006 118 115,078
5.50%, with various maturities to 2006 188 185,523
5.75%, with maturity at 2003 67 66,416
6.00%, with various maturities to 2010 1,077 1,070,702
6.25%, with various maturities to 2007 328 328,203
6.50%, with various maturities to 2017 847 855,315
6.75%, with various maturities to 2007 611 614,518
7.00%, with various maturities to 2018 2,369 2,410,490
7.25%, with various maturities to 2017 1,339 1,370,966
7.50%, with various maturities to 2020 9,913 10,211,063
7.75%, with various maturities to 2008 932 961,500
8.00%, with various maturities to 2017 27,600 28,764,112
8.25%, with various maturities to 2020 11,514 12,009,060
8.50%, with various maturities to 2020 20,959 22,024,101
8.75%, with various maturities to 2017 1,058 1,116,363
9.00%, with various maturities to 2020 11,246 11,965,331
9.25%, with various maturities to 2016 3,377 3,622,289
9.50%, with maturity at 2009 219 236,874
9.75%, with maturity at 2019 324 354,703
11.00%, with various maturities to 2019 2,015 2,269,172
11.50%, with various maturities to 2016 4,591 5,238,109
11.75%, with various maturities to 2015 1,551 1,774,430
12.00%, with various maturities to 2020 10,033 11,545,943
12.25%, with various maturities to 2015 2,422 2,817,001
12.50%, with various maturities to 2027 12,216 14,250,760
12.75%, with various maturities to 2014 1,199 1,399,618
13.00%, with various maturities to 2019 10,209 12,156,350
13.25%, with various maturities to 2015 1,683 1,998,611
13.50%, with various maturities to 2015 3,445 4,141,618
13.75%, with various maturities to 2014 127 151,559
14.00%, with various maturities to 2014 503 601,470
14.25%, with various maturities to 2014 156 188,551
14.50%, with various maturities to 2014 212 255,733
14.75%, with various maturities to 2012 2,975 3,646,608
15.00%, with various maturities to 2013 2,478 3,055,350
15.50%, with various maturities to 2012 740 911,363
15.75%, with maturity at 2011 21 26,314
16.00%, with various maturities to 2012 251 311,465
- ------------------------------------------------------------------------------------------
$165,650,522
- ------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
9
<PAGE>
Government Obligations Portfolio as of June 30, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Principal
Amount
(000's omitted) Value
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Government National Mortgage Assn.:
6.50%, with various maturities to 2002 $ 343 $ 343,713
7.25%, with various maturities to 2022 3,508 3,659,912
7.50%, with maturity at 2017 852 901,149
8.00%, with various maturities to 2017 15,049 15,776,299
8.25%, with various maturities to 2008 405 425,212
8.50%, with various maturities to 2018 2,432 2,576,372
9.00%, with maturity at 2011 352 378,738
11.50%, with maturity at 2013 187 213,204
12.00%, with various maturities to 2015 2,675 3,097,068
12.50%, with various maturities to 2019 11,961 13,997,507
13.00%, with various maturities to 2014 919 1,087,909
13.50%, with various maturities to 2013 184 218,641
14.00%, with various maturities to 2015 86 104,749
14.50%, with various maturities to 2014 325 400,611
15.00%, with various maturities to 2013 476 592,627
16.00%, with various maturities to 2012 248 314,236
- ------------------------------------------------------------------------------------------
$ 44,087,947
- ------------------------------------------------------------------------------------------
Collateralized Mortgage Obligations:
Federal Home Loan Mortgage Corp.
Series B Class 3, 12.5%, due 2013
Collateral 100% FHLMC PC $ 135 $ 144,060
Salomon Brothers Mortgage Securities II,
Inc. 11.5%, due 2015 1,045 1,110,040
- ------------------------------------------------------------------------------------------
$ 1,254,100
- ------------------------------------------------------------------------------------------
Total Mortgage Pass-Throughs
(identified cost, $398,946,345) $403,080,845
- ------------------------------------------------------------------------------------------
</TABLE>
U.S. Treasury Obligations -- 19.0%
<TABLE>
<CAPTION>
Principal
Amount
(000's omitted) Value
- ------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Bond, 7.125%, 2/15/23 + $ 6,000 $ 7,093,127
U.S. Treasury Bond, 12.00%, 8/15/13 ++ 50,000 74,132,799
- ------------------------------------------------------------------------------------------
Total U.S. Treasury Obligations
(identified cost, $67,368,569) $ 81,225,926
- ------------------------------------------------------------------------------------------
Total Investments -- 113.6%
(identified cost $466,314,914) $484,306,771
- ------------------------------------------------------------------------------------------
Other Assets, Less Liabilities -- (13.6)% $(58,135,289)
- ------------------------------------------------------------------------------------------
Net Assets -- 100% $426,171,482
- ------------------------------------------------------------------------------------------
</TABLE>
+ Security (or a portion thereof) has been pledged as collateral for futures
contracts.
++ A portion of this security is on loan at June 30, 1998 (See Note 5).
See notes to financial statements
10
<PAGE>
Government Obligations Portfolio as of June 30, 1998
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of June 30, 1998
Assets
- ------------------------------------------------------------------------------
Investments, at value
(identified cost, $466,314,914) $ 484,306,771
Cash 639
Receivable for investments sold 2,277,572
Interest receivable 6,019,592
Deferred organization expenses 1,251
- ------------------------------------------------------------------------------
Total assets $ 492,605,825
- ------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------
Payable for investments purchased $ 803,757
Demand note payable 3,312,000
Payable for daily variation margin on open
financial futures contracts 132,197
Collateral for securities loaned 62,118,000
Payable to affiliate for Trustees' fees 10,794
Other accrued expenses 57,595
- ------------------------------------------------------------------------------
Total liabilities $ 66,434,343
- ------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $ 426,171,482
- ------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $ 408,505,343
Net unrealized appreciation (computed on the basis of 17,666,139
identified cost)
- ------------------------------------------------------------------------------
Total $ 426,171,482
Statement of Operations
For the Six Months
Ended June 30, 1998
Investment Income
- -----------------------------------------------------------------------------
Interest $ 19,875,484
- ------------------------------------------------------------------------------
Total investment income $ 19,875,484
- ------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------
Investment adviser fee $ 1,678,746
Trustees fees and expenses 17,201
Interest 210,387
Custodian fee 113,064
Legal and accounting services 15,228
Amortization of organization expenses 1,890
Miscellaneous 8,420
- ------------------------------------------------------------------------------
Total expenses $ 2,044,936
- ------------------------------------------------------------------------------
Net investment income $ 17,830,548
- ------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss)
Net realized gain (loss) --
Investment transactions (identified cost basis) $ (3,338,016)
Financial futures contracts (1,826,886)
- ------------------------------------------------------------------------------
Net realized loss $ (5,164,902)
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ (2,875,102)
Financial futures contracts 41,669
- ------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ (2,833,433)
- ------------------------------------------------------------------------------
Net realized and unrealized loss $ (7,998,335)
- ------------------------------------------------------------------------------
Net increase in net assets from operations $ 9,832,213
- ------------------------------------------------------------------------------
See note to financial statements
11
<PAGE>
Government Obligations Portfolio as of June 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
Six Months Ended
Increase (Decrease) June 30, 1998 Year Ended
in Net Assets (Unaudited) December 31, 1997
- --------------------------------------------------------------------------------
From operations --
Net investment income $ 17,830,548 $ 35,025,042
Net realized loss (5,164,902) (6,844,606)
Net change in unrealized
appreciation (depreciation) (2,833,433) 4,415,017
- --------------------------------------------------------------------------------
Net increase in net assets
from operations $ 9,832,213 $ 32,595,453
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 104,875,594 $ 163,961,740
Withdrawals (121,643,319) (218,972,747)
- --------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $ (16,767,725) $ (55,011,007)
- --------------------------------------------------------------------------------
Net decrease in net assets $ (6,935,512) $ (22,415,554)
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 433,106,994 $ 455,522,548
- --------------------------------------------------------------------------------
At end of period $ 426,171,482 $ 433,106,994
- --------------------------------------------------------------------------------
See notes to financial statements
12
<PAGE>
Government Obligations Portfolio as of June 30, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1998 ------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses 0.92%+ 0.83% 0.82% 0.82% 0.80% 0.86%+
Net investment income 8.03%+ 7.95% 7.88% 7.82% 8.03% 8.46%+
Portfolio Turnover 21% 20% 11% 19% 35% 42%
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $426,171 $433,107 $455,523 $521,789 $515,670 $537,297
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, October 28, 1993, to
December 31, 1993.
See notes to financial statements
13
<PAGE>
Government Obligations Portfolio as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
-------------------------------------------------------------------------------
Government Obligations 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 in
1992. The Declaration of Trust permits the Trustees to issue beneficial
interests in the Portfolio. The following is a summary of significant
accounting policies of the Portfolio. The policies are in conformity with
generally accepted accounting principles.
A Investment Valuation -- Mortgage backed, "pass-through" securities are
valued using an independent matrix pricing system applied by the adviser which
takes into account closing bond valuations, yield differentials, anticipated
prepayments and interest rates provided by dealers. Debt securities (other
than mortgage backed, "pass-through" securities) are normally valued at the
mean between the latest available bid and asked prices for securities for
which the over-the-counter market is the primary market. Debt securities may
also be valued on the basis of valuations furnished by a pricing service.
Options are valued at last sale price on a U.S. exchange or board of trade or,
in the absence of a sale, at the mean between the last bid and asked price.
Financial futures contracts listed on commodity exchanges are valued at
closing settlement prices. Securities for which there is no such quotation or
valuation are valued at fair value using methods determined in good faith by
or at the direction of the Trustees. Short-term obligations having remaining
maturities of less than 60 days are valued at amortized cost, which
approximates value.
B Income -- Interest income is determined on the basis of interest accrued and
discount earned, adjusted for amortization of discount when required for
federal income tax purposes.
C Gains and Losses From Security Transactions -- For book purposes, gains or
losses are not recognized until disposition. For federal tax purposes, the
Portfolio has elected, under Section 1092 of the Internal Revenue Code, to
utilize mixed straddle accounting for certain designated classes of activities
involving options and financial futures contracts in determining recognized
gains or losses. Under this method, Section 1256 positions (financial futures
contracts and options on investments or financial futures contracts) and
non-Section 1256 positions (bonds, etc.) are marked-to-market on a daily basis
resulting in the recognition of taxable gains or losses on a daily basis. Such
gains or losses are categorized as short-term or long-term based on
aggregation rules provided in the Code.
D 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. 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 Code) in order for its investors to satisfy them. The Portfolio
will allocate at least annually among its investors each investors'
distributive share of the Portfolio's net investment income, net realized
capital gains, and any other items of income, gain, loss, deduction or credit.
E Written Options -- Upon the writing of a call or a put option, an amount
equal to the premium received by the Portfolio is included in the Statement of
Assets and Liabilities as a liability. The amount of the liability is
subsequently marked-to-market to reflect the current value of the option
written in accordance with the Portfolio's policies on investment valuations
discussed above. Premiums received from writing options which expire are
treated as realized gains. Premiums received from writing options which are
exercised or are closed are added to or offset against the proceeds or amount
paid on the transaction to determine the realized gain or loss. If a put
option is exercised, the premium reduces the cost basis of the securities
purchased by the Portfolio. The Portfolio, as writer of an option, may have no
control over whether the underlying securities may be sold (call) or purchased
(put) and, as a result, bears the market risk of an unfavorable change in the
price of the securities underlying the written option.
F Purchased Options -- Upon the purchase of a call or put option, the premium
paid by the Portfolio is included in the Statement of Assets and Liabilities
as an investment. The amount of the investment is subsequently
marked-to-market to reflect the current market value of the option purchased,
in accordance with the Portfolio's policies on investment valuations discussed
above. If an option which the Portfolio has purchased expires on the
stipulated expiration date, the Portfolio will realize a loss in the amount of
the cost of the option. If the Portfolio enters into a closing sale
transaction, the Portfolio will realize a gain or
14
<PAGE>
Government Obligations Portfolio as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
loss, depending on whether the sales proceeds from the closing sale
transaction are greater or less than the cost of the option. If a Portfolio
exercises a put option, it will realize a gain or loss from the sale of the
underlying security, and the proceeds from such sale will be decreased by the
premium originally paid. If the Portfolio exercises a call option, the cost of
the security which the Portfolio purchases upon exercise will be increased by
the premium originally paid. For tax purposes, the Portfolio's options are
generally subject to the mixed straddle rules described in Note 1C, and
unrealized gains or losses are recognized on a daily basis.
G Financial Futures Contracts -- Upon entering into a financial futures
contract, the Portfolio is required to deposit an amount ("initial margin")
either in 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 securities, and are
recorded for book purposes as unrealized gains or losses by the Portfolio.
If 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 rates.
Should interest rates move unexpectedly, the Portfolio may not achieve the
anticipated benefits of the financial futures contracts and may realize a
loss. For tax purposes, such futures contracts are generally subject to the
mixed straddle rules described in Note 1C, and unrealized gains or losses are
recognized on a daily basis.
H Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
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 the credits which are determined based on the average 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
operating expense on the Statement of Operations.
J Other -- Investment transactions are accounted for on the date the
investments are purchased or sold.
K 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 income and expense during the reporting period. Actual results could differ
from those estimates.
L Interim Financial Information -- The interim financial statements relating
to June 30, 1998 and for the six-month period then ended have not been audited
by independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 Purchases and Sales of Investments
-------------------------------------------------------------------------------
Purchases, sales and paydowns of investments, other than short-term
obligations, aggregated $102,388,990, $48,884,320 and $56,040,537,
respectively.
3 Investment Adviser Fee and Other Transactions with Affiliates
-------------------------------------------------------------------------------
The investment adviser fee, computed at the monthly rate of 0.0625% (0.75% per
annum) of the Portfolio's average daily net assets up to $500 million and at
reduced rates as daily net assets exceed that level, 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. For the six months ended June 30, 1998,
the fee was equivalent to 0.75% (annualized) of the Portfolio's average net
assets for such period and amounted to $1,678,746. 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. Certain of the officers and Trustees of the Portfolio
are officers and directors/trustees of the above organizations. 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 six months ended
June 30, 1998, no significant amounts have been deferred.
15
<PAGE>
Government Obligations Portfolio as of June 30, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
4 Line of Credit
-------------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a committed $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 an amount above 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 average daily loan balance for the
six months ended June 30, 1998 was $6,828,343 and the average interest rate
was 6.2%. The maximum borrowing outstanding at any time during the six months
ended June 30, 1998 was $33,665,000.
5 Securities Lending Agreement
-------------------------------------------------------------------------------
The Portfolio has established a securities lending agreement with a broker in
which the Portfolio lends portfolio securities to the broker in exchange for
collateral consisting of either cash or U.S. government securities. Under the
agreement, the Portfolio continues to earn interest on the securities loaned.
Collateral received is generally cash, and the Portfolio invests the cash and
receives any interest on the amount invested but it must also pay the broker a
loan rebate fee computed as a varying percentage of the collateral received.
The loan rebate fee paid by the Fund offsets a portion of the interest income
received. At June 30, 1998, the value of the securities loaned and the value
of the collateral amounted to approximately $59,000,000 and $62,000,000,
respectively.
6 Federal Income Tax Basis of Investments
-------------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the investment
securities owned at June 30, 1998, as computed on a federal income tax basis,
were as follows:
Aggregate cost $481,618,804
------------------------------------------------------------------------------
Gross unrealized appreciation $ 5,973,336
Gross unrealized depreciation (3,285,369)
------------------------------------------------------------------------------
Net unrealized appreciation $ 2,687,967
------------------------------------------------------------------------------
7 Financial Instruments
-------------------------------------------------------------------------------
The Portfolio regularly trades 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 and financial futures contracts, and may involve, to a varying degree,
elements of risk in excess of the amounts recognized for financial statement
purposes. The notional or contractual amounts of these instruments represent
the investment the Fund has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
A summary of obligations under these financial instruments at June 30, 1998
is as follows:
Futures Contracts
------------------------------------------------------------------------------
Expiration Net Unrealized
Date Contracts Position Depreciation
------------------------------------------------------------------------------
9/98 300 US Treasury Five Year
Note Futures Short $ (325,718)
------------------------------------------------------------------------------
At June 30, 1998, the Portfolio had sufficient cash and/or securities to cover
margin requirements on any open futures contracts.
16
<PAGE>
Eaton Vance Government Obligations Fund as of June 30, 1998
INVESTMENT MANAGEMENT
Eaton Vance Government Obligations Fund
Officers
M. Dozier Gardner
President and Trustee
James B. Hawkes
Vice President and Trustee
William H. Ahern, Jr.
Vice President
Thomas J. Fetter
Vice President
Michael B. Terry
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer, United Asset
Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
Government Obligations Portfolio
Officers
M. Dozier Gardner
President and Trustee
James B. Hawkes
Vice President and Trustee
Susan Schiff
Vice President and
Portfolio Manager
Mark S. Venezia
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer, United Asset
Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
17
<PAGE>
This Page Intentionally Left Blank
<PAGE>
This Page Intentionally Left Blank
<PAGE>
Investment Adviser of
Government Obligations Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of Eaton Vance
Government Obligations 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, 16th Floor
Boston, MA 02116
Transfer Agent
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
Eaton Vance Government
Obligations 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.
- --------------------------------------------------------------------------------
GOSRC-8/98
