<PAGE>
[LOGO OF EATON VANCE APPEARS HERE]
Investing for the 21st Century
[PHOTO OF THE U.S. FLAG APPEARS HERE]
Annual Report December 31, 1997
EATON VANCE
[PHOTO OF STATUE OF COMBINED
LIBERTY APPEARS HERE]
MONEY
Cash Management Fund
MARKET FUNDS
REPORT
Liquid Assets Trust
Global Management-Global Distribution
Money Market Fund
[PHOTO OF COLUMNS
APPEARS HERE]
<PAGE>
EV Money Market Funds as of December 31, 1997
INVESTMENT UPDATE
[PHOTO OF M. DOZIER GARDNER APPEARS HERE]
M. Dozier Gardner,
President
Investment Environment
- -------------------------------------------------------------------------------
The Economy
. 1997 was a very good year for the U.S. economy, with gross domestic product
(GDP) increasing at a 3.8% rate. This exceeded the 2%-2.5% forecasted at the
beginning of the year.
. Inflation was very low. The Consumer Price Index declined to 1.7% from 3.3%
in 1996, while wholesale prices fell by 1.2%, the largest decline since 1986.
. The growing economy continued to generate new jobs at a healthy rate, and
unemployment remained low throughout the year, dropping to 4.7% in December
from 5.4% in January.
. The combination of continued economic growth, low unemployment, and declining
inflation has been unusual. Many economists, including Federal Reserve
Chairman Alan Greenspan, attribute it to increasing global competition and
higher productivity brought on by advances in technology.
The Market
. Interest rates rose in the first quarter as a result of stronger-than-
expected economic growth and a continued decline in the unemployment rate.
The Federal Reserve raised the Fed Funds rate 0.25% to 5.5% in March,
resulting in a corresponding increase in 60-day commercial paper rates (see
chart).
. Declining federal budget deficits and falling inflation combined to produce a
decline in long-term interest rates during the remainder of the year.
Commercial paper rates remained stable in the middle part of the year, rising
in the final quarter.
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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.
- --------------------------------------------------------------------------------
The Portfolio
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About The Portfolio
. The Portfolio continues to invest only in securities of the highest quality.
Each of its commercial paper holdings has been given the top credit rating by
at least two nationally recognized statistical rating organizations.
. 60-day commercial paper is a commonly used liquid investment for money market
funds. On average, approximately 80% of the assets of the Eaton Vance Money
Market Portfolio is invested in high-quality commercial paper.
. The Portfolio also invests in U.S. Government agency securities, which are
not rated officially but are considered to be of high quality.*
. On average, the Portfolio's investments have maturities ranging between 30
and 40 days.
[LINE GRAPH APPEARS HERE]
60 Day Commercial Paper Rates In 1997
1.1.97 5.37
5.33
5.32
5.33
5.33
5.31
5.28
5.26
5.32
5.33
5.34
5.48
5.58
5.55
5.54
5.55
5.57
5.57
5.59
5.59
5.55
5.57
5.56
5.55
5.56
5.55
5.53
5.49
5.5
5.48
5.5
5.5
5.51
5.5
5.52
5.51
5.51
5.51
5.52
5.51
5.52
5.51
5.55
5.57
5.58
5.66
5.66
5.71
5.76
5.74
5.78
12.31.97 5.79
- --------------------------------------------------------------------------------
* An investment in one of the Portfolio's money market funds is neither
insured nor guaranteed by the U.S. Government, and there can be no assurance
that the Funds will be able to maintain a stable net asset value of $1.00 per
share.
2
<PAGE>
EV Money Market Funds as of December 31, 1997
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
As of December 31, 1997
<TABLE>
<CAPTION>
Cash Liquid Money
Management Fund Assets Fund Market Fund
- -----------------------------------------------------------------------------------------------------------------------
Assets
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment in Cash Management Portfolio, at value (Note 1A) $146,829,175 $ 13,148,390 $ 23,762,638
Receivable for Fund shares sold 1,206,136 334 129,748
Receivable from the Administrator (Note 4) -- -- 22,883
Deferred organization expenses (Note 1D) -- -- 15,635
- -----------------------------------------------------------------------------------------------------------------------
Total assets $148,035,311 $ 13,148,724 $ 23,930,904
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Liabilities
- -----------------------------------------------------------------------------------------------------------------------
Dividends payable $ 137,420 $ 9,335 $ 11,210
Payable for Fund shares redeemed 1,146,930 118,383 97,126
Payable to affiliate for Trustees' fees (Note 4) 438 46 46
Accrued expenses 7,279 20,233 13,820
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Total liabilities $ 1,292,067 $ 147,997 $ 122,202
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Net Assets (represented by paid-in capital) $146,743,244 $ 13,000,727 $ 23,808,702
- -----------------------------------------------------------------------------------------------------------------------
Shares of Beneficial Interest Outstanding (Note 3)
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146,743,244 13,000,727 23,808,702
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Net Asset Value, Offering and Redemption
Price Per Share (Note 6)
- -----------------------------------------------------------------------------------------------------------------------
(Net assets / shares of beneficial interest outstanding) $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
3
<PAGE>
EV Money Market Funds as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Cash Liquid Money
Management Fund Assets Fund Market Fund
- ------------------------------------------------------------------------------------------------------------------------------
Investment Income (Note 1B)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income allocated from Portfolio $ 5,602,128 $ 897,747 $ 1,548,404
Expenses allocated from Portfolio (599,796) (96,493) (165,828)
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $ 5,002,332 $ 801,254 $ 1,382,576
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Expenses
- ------------------------------------------------------------------------------------------------------------------------------
Compensation of Trustees not members of the Administrator's
organization (Note 4) $ 2,487 $ 169 $ 170
Distribution and service fees (Note 5) -- 40,353 243,735
Transfer and dividend disbursing agent fees 101,642 17,281 26,197
Custodian fee 11,879 5,760 4,465
Legal and accounting services 14,450 13,889 13,952
Registration fees 34,453 32,767 34,664
Amortization of organization expenses (Note 1D) -- -- 6,961
Printing and postage 15,107 4,213 5,941
Miscellaneous 5,107 7,280 3,706
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Total expenses $ 185,125 $ 121,712 $ 339,791
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Deduct --
Allocation of expenses to the Administrator (Note 4) $ -- $ -- $ 22,883
- ------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ -- $ -- $ 22,883
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Net expenses $ 185,125 $ 121,712 $ 316,908
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 4,817,207 $ 679,542 $ 1,065,668
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
4
<PAGE>
EV Money Market Funds as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Cash Liquid Money
Increase (Decrease) in Net Assets Management Fund Assets Fund Market Fund
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
From operations --
Net investment income $ 4,817,207 $ 679,542 $ 1,065,668
- -------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net investment income $ (4,817,207) $ (679,542) $ (1,065,668)
- -------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares $ 553,471,378 $ 138,284 $ 224,831,973
Net asset value of shares issued to shareholders in payment
of distributions declared 2,926,310 394,175 646,729
Cost of shares redeemed (561,345,354) (7,442,068) (232,920,194)
- -------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Fund share transactions $ (4,947,666) $ (6,909,609) $ (7,441,492)
- -------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (4,947,666) $ (6,909,609) $ (7,441,492)
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 151,690,910 $ 19,910,336 $ 31,250,194
- -------------------------------------------------------------------------------------------------------------------------------
At end of year $ 146,743,244 $ 13,000,727 $ 23,808,702
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</TABLE>
See notes to financial statements
5
<PAGE>
EV Money Market Funds as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Cash Liquid Money
Increase (Decrease) in Net Assets Management Fund Assets Fund Market Fund
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
From operations --
Net investment income $ 6,465,054 $ 1,072,334 $ 918,209
- ------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net investment income $ (6,465,054) $ (1,072,334) $ (918,209)
- ------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares $ 614,892,840 $ 49,292 $ 474,121,094
Net asset value of shares issued to shareholders in
payment of distributions declared 4,425,531 660,755 490,977
Cost of shares redeemed (622,878,579) (14,825,975) (456,313,118)
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions $ (3,560,208) $ (14,115,928) $ 18,298,953
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Net increase (decrease) in net assets $ (3,560,208) $ (14,115,928) $ 18,298,953
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 155,251,118 $ 34,026,264 $ 12,951,241
- ------------------------------------------------------------------------------------------------------------------------------
At end of year $ 151,690,910 $ 19,910,336 $ 31,250,194
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
6
<PAGE>
EV Money Market Funds as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Cash Management Fund
-----------------------------------------------------------------
Year Ended December 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value -- Beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.0478 $ 0.0470 $ 0.0522 $ 0.0345 $ 0.0251
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.0478) $ (0.0470) $ (0.0522) $ (0.0345) $ (0.0251)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 4.89% 4.82% 5.35% 3.49% 2.54%
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Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000 omitted) $ 146,743 $ 151,691 $ 155,251 $ 111,622 $ 112,200
Ratio of expenses to average daily net assets/(2)/ 0.78% 0.74% 0.74% 0.84% 0.67%
Ratio of net investment income to average daily net assets 4.79% 4.70% 5.22% 3.40% 2.51%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/(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-date.
/(2)/ Includes the Fund's share of the Portfolio's allocated expenses for the
period while the Fund was investing directly in the Portfolio.
See notes to financial statements
7
<PAGE>
EV Money Market Funds as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Liquid Assets Fund
-----------------------------------------------------------------------------------
Year Ended December 31, Year Ended
-------------------------------------------------------------------- March 31,
1997 1996 1995 1994 1993* 1993++
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
Income from operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.0420 $ 0.0432 $ 0.0505 $ 0.0328 $ 0.0113 $ 0.0217
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.0420) $ (0.0432) $ (0.0505) $ (0.0328) $ (0.0113) $ (0.0217)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 4.29% 4.41% 5.16% 3.29% 1.14% 2.35%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 13,001 $ 19,910 $ 34,026 $ 118,599 $ 10,566 $ 18,553
Ratio of net expenses to average daily
net assets /(2)/ 1.35% 1.13% 0.91% 0.94% 1.49%+ 0.92%
Ratio of net investment income to average
daily net assets 4.21% 4.31% 5.11% 3.55% 1.66%+ 2.33%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ For the periods presented below, the operating expenses of the Fund reflect
an allocation of expenses to the Administrator. Had such action not been
taken, the ratios and net investment income per share would have been as
follows:
<TABLE>
<CAPTION>
Ratios (As a percentage of
average daily net assets):
<S> <C> <C> <C> <C> <C> <C>
Expenses /(2)/ -- -- -- -- 1.80%+ 1.42%
Net investment income -- -- -- -- 1.35%+ 1.85%
Net investment income per share -- -- -- -- $ 0.0092 $ 0.0171
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ Audited by the Fund's previous auditors.
* For the nine months ended December 31, 1993. The Liquid Assets Fund
changed its fiscal year end from March 31 to December 31, effective
December 31, 1993.
/(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-date. Total return is not
computed on an annualized basis.
/(2)/ Includes the Fund's share of the Portfolio's allocated expenses for the
period while the Fund was investing directly in the Portfolio.
See notes to financial statements
8
<PAGE>
EV Money Market Funds as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Money Market Fund
--------------------------------------------
Year Ended December 31,
--------------------------------------------
1997 1996 1995*
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value -- Beginning of period $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------------------------------------------
Income from operations
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.0381 $ 0.0370 $ 0.0312
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.0381) $ (0.0370) $ (0.0312)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 3.88% 3.77% 3.17%
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data++
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 23,809 $ 31,250 $ 12,951
Ratio of net expenses to average daily net assets /(2)/ 1.73% 1.73% 1.68%+
Ratio of net investment income to average daily net assets 3.83% 3.70% 4.19%+
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Fund may reflect an allocation of expenses to
the Administrator. Had such action not been taken, the ratios and net
investment income per share would have been as follows:
<TABLE>
<CAPTION>
Ratios (As a percentage of average daily net assets):
<S> <C> <C> <C>
Expenses /(2)/ 1.82% 1.76% 1.85%+
Net investment income 3.74% 3.66% 4.03%+
Net investment income per share $ 0.0372 $ 0.0367 $ 0.0300
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, April 5, 1995, to December 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 payable date. Total return is not
computed on an annualized basis.
/(2)/ Includes the Fund's share of the Portfolio's allocated expenses for the
period while the Fund was investing directly in the Portfolio.
See notes to financial statements
9
<PAGE>
EV Money Market Funds as of December 31, 1997
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
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Eaton Vance Mutual Funds Trust (the Trust) 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 (1940 Act), as an open-end
management investment company. The Trust presently consists of fifteen
Series, three of which are included in these financial statements. They
include Eaton Vance Cash Management Fund ("Cash Management Fund"), Eaton
Vance Liquid Assets Fund ("Liquid Assets Fund") and Eaton Vance Money Market
Fund ("Money Market Fund") (individually, the "Fund", collectively the
"Funds") each of which is registered under the 1940 Act, as diversified,
open-end management investment companies seeking high income consistent with
the preservation of capital and maintenance of liquidity.
The Funds invest all of their investable assets in interests in the Cash
Management Portfolio (the Portfolio), a New York Trust, having the same
investment objective as the Funds. The value of each Fund's investment in the
Portfolio reflects the Fund's proportionate interest in the net assets of the
Portfolio (79.9% for Cash Management Fund, 7.1% for Liquid Assets Fund and
13.0% for Money Market Fund at December 31, 1997). The performance of each
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 Funds in the preparation of
their financial statements. The policies are in conformity with generally
accepted accounting principles.
A Investment Valuation -- Valuation of securities by the Portfolios is
discussed in Note 1A of the Portfolio's Notes to Financial Statements which
are included elsewhere in this report.
B Income -- The Funds' net investment income consists of the Funds' pro rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of each Fund determined in accordance with generally
accepted accounting principles.
C Federal Taxes -- The Funds' 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 investment transactions. Accordingly, no provision for
federal income or excise tax is necessary. At December 31, 1997, Liquid
Assets Fund, for federal income tax purposes, had a capital loss carryover of
$6,926, 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 the
distributions to shareholders which would otherwise be necessary to relieve
the Fund of any liability for federal income. Such capital loss carryover
will expire on December 31, 2001.
D Deferred Organization Expenses -- Costs incurred by the Money Market Fund
in connection with its organization, including registration costs, are being
amortized on the straight-line basis over five years.
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 Other -- Investment transactions are accounted for on a trade date basis.
2 Distributions to Shareholders
-----------------------------------------------------------------------------
The net investment income of each 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 of declaration. Dividends are paid monthly. Dividends
are paid in the form of additional shares or, at the election of the
shareholder, in cash.
The Funds distinguish 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 temporary over distributions for financial
statement purposes are classified as distributions in excess of net
investment income or accumulated net realized gains. Permanent differences
between book and tax accounting relating to distributions are reclassified to
paid-in capital.
10
<PAGE>
EV Money Market Funds as of December 31, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
3 Shares of Beneficial Interest
---------------------------------------------------------------------------
The Funds' Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest, with no par
value. Transactions in Fund shares were as follows:
Cash Management Fund
-----------------------------------
Year Ended December 31,
-----------------------------------
1997 1996
-----------------------------------
Sales 553,471,378 614,892,840
Issued to shareholders electing
to receive payments of
distributions in Fund shares 2,926,310 4,425,531
Redemptions (561,345,354) (622,878,579)
----------------------------------------------------------------------
Net decrease (4,947,666) (3,560,208)
----------------------------------------------------------------------
Liquid Assets Fund
-----------------------------------
Year Ended December 31,
-----------------------------------
1997 1996
-----------------------------------
Sales 138,284 49,292
Issued to shareholders electing
to receive payments of
distributions in Fund shares 394,175 660,755
Redemptions (7,442,068) (14,825,975)
----------------------------------------------------------------------
Net decrease (6,909,609) (14,115,928)
----------------------------------------------------------------------
Money Market Fund
-----------------------------------
Year Ended December 31,
-----------------------------------
1997 1996
-----------------------------------
Sales 224,831,973 474,121,094
Issued to shareholders electing
to receive payments of
distributions in Fund shares 646,729 490,977
Redemptions (232,920,194) (456,313,118)
----------------------------------------------------------------------
Net increase (decrease) (7,441,492) 18,298,953
----------------------------------------------------------------------
4 Transactions with Affiliates
-----------------------------------------------------------------------------
Eaton Vance Management (EVM) serves as the administrator of the Funds, 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. To enhance the net income of the Money
Market Fund for the year ended December 31, 1997, $22,883 of expenses related
to the operation of the Fund were allocated to EVM. Except as to Trustees of
the Funds and the Portfolio who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services
to each fund out of such investment adviser fee. Certain of the officers and
Trustees of the Funds and Portfolio are officers and directors/trustees of
the above organizations (Note 5).
5 Distribution Plan
-----------------------------------------------------------------------------
Money Market Fund and Liquid Assets Fund have adopted distribution plans
(individually the "Plan" and collectively the "Plans") pursuant to Rule 12b-1
under the 1940 Act. The Plan for Money Market Fund requires the Fund to pay
the Principal Underwriter, Eaton Vance Distributors, Inc. (EVD), amounts
equal to 0.75% of the Fund's average 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. The Plan for Liquid Assets Fund
does not provide for annual payments to EVD for providing such services and
facilities, however the Plan does require the Fund to calculate outstanding
Uncovered Distribution Charges. Each Fund's balance of Uncovered Distribution
Charges is equivalent to the sum of (i) 6.25% (5% for Liquid Assets Fund) of
the aggregate amount received by the Fund for share 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
(Note 6) and amounts theretofore paid to EVD. For the year ended December 31,
1997, Money Market Fund paid $209,055 to EVD, representing 0.75% of the
Fund's average daily net assets. At December 31, 1997, the amount of
Uncovered Distribution Charges of EVD calculated under the Plan for Money
Market Fund and Liquid Assets Fund were approximately $3,974,000 and
$2,186,000, respectively.
11
<PAGE>
EV Money Market Funds as of December 31, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
In addition, the Plan authorized the Funds to make payments of service fees
to the Principal Underwriter, Authorized Firms and other persons in amounts
not exceeding 0.25% of each Fund's average daily net assets. The Trustees of
the Funds had initially implemented the Plans by authorizing the Funds to
make quarterly service fee payments to the Principal Underwriter and
Authorized Firms in amounts not expected to exceed 0.15% (0.25% for Liquid
Assets Fund) per annum of each Fund's average daily net assets based on the
value of the Fund shares sold by such persons and remaining outstanding for
at least one year. For the year ended December 31, 1997, Money Market Fund
and Liquid Assets Fund paid service fees to EVD and Authorized Firms in the
amount of $34,680 and $40,353 respectively. Service fee payments are made for
personal services and/or maintenance of shareholder accounts. Service fees
paid to EVD and Authorized Firms were 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 no outstanding
Uncovered Distribution Charges of EVD.
Certain of the officers and Trustees of the Funds are officers or directors
of EVD.
6 Contingent Deferred Sales Charge
----------------------------------------------------------------------------
A contingent deferred sales charges (CDSC) is imposed on any redemption of
shares from either Money Market Fund or Liquid Assets Fund 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 rates that begin 5% in the case of redemptions in the
first and second year after purchase, declining one percentage point
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. EVD received
approximately $257,000 and $49,000 of CDSC paid by shareholders for the year
ended December 31, 1997 for the Money Market Fund and Liquid Assets Fund,
respectively.
7 Investment Transactions
----------------------------------------------------------------------------
Increases and decreases in the Funds' investment in the Portfolio for the
year ended December 31, 1997 were as follows:
Cash Management Fund
---------------------------------------------------------------------------
Increases $556,548,113
Decreases 565,176,682
Liquid Assets Fund
---------------------------------------------------------------------------
Increases $ 173,430
Decreases 7,825,713
Money Market Fund
---------------------------------------------------------------------------
Increases $234,991,617
Decreases 233,816,627
12
<PAGE>
EV Money Market Funds as of December 31, 1997
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders
of Eaton Vance Mutual Funds Trust:
- -------------------------------------------------------------------------------
We have audited the accompanying statements of assets and liabilities of Eaton
Vance Cash Management Fund, Eaton Vance Liquid Assets Fund, and Eaton Vance
Money Market Fund (certain of the series constituting Eaton Vance Mutual Funds
Trust) as of December 31, 1997, and the related statements of operations for
year then ended, the statements of changes in net assets for each of the two
years in the period then ended and the financial highlights for each period
indicated on the statements herein. 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 referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned series of Eaton Vance Mutual Funds Trust as of December
31, 1997, the results of their operations for the year then ended, the changes
in their net assets for the two years in the period then ended and their
financial highlights for each of the periods indicated on the statements herein,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 6, 1998
13
<PAGE>
Cash Management Portfolio as of December 31, 1997
PORTFOLIO OF INVESTMENTS
Commercial Paper -- 48.2%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ---------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Agricultural Services -- 1.3%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,500 Cargill, Inc., 5.65%, 3/23/98 $ 2,468,219
- -----------------------------------------------------------------------------------------
$ 2,468,219
- -----------------------------------------------------------------------------------------
Banking and Finance -- 19.6%
- -----------------------------------------------------------------------------------------
P-1 A-1 $ 2,500 American Express Credit Corp.,
5.83%, 1/7/98 $ 2,497,571
P-1 A-1+ 1,400 Asset Securitization Coop.
Corp., 5.61%, 1/8/98/(1)/ 1,398,473
P-1 A-1+ 2,000 Asset Securitization Coop.
Corp., 5.73%, 2/26/98/(1)/ 1,982,173
P-1 A-1+ 2,700 Associates Corp. of No.
America, 5.66%, 2/11/98 2,682,595
P-1 A-1+ 1,600 Associates Corp. of No.
America, 5.68%, 2/13/98 1,589,145
P-1 A-1+ 2,900 Central Corporate Credit
Union, 5.90%, 1/12/98 2,894,772
P-1 A-1+ 2,000 CIESCO, 5.60%, 1/30/98 1,990,978
P-1 A-1+ 2,000 CIESCO, 5.65%, 2/10/98 1,987,445
P-1 A-1+ 2,500 CIT Group Holdings, Inc.,
5.83%, 1/21/98 2,491,903
P-1 A-1+ 2,500 Corporate Asset Funding Co.,
5.77%, 2/13/98 2,482,770
P-1 A-1 2,000 Corporate Receivables Corp.,
5.875%, 1/14/98(2) 1,995,757
P-1 A-1+ 2,000 CXC, Inc., 5.73%, 1/16/98/(1)/ 1,995,225
P-1 A-1+ 1,500 Delaware Funding Corp.,
5.63%, 1/15/98/(1)/ 1,496,716
P-1 A-1+ 1,000 Delaware Funding Corp.,
5.90%, 1/30/98/(2)/ 995,247
P-1 A-1+ 4,000 Norwest Financial, Inc.,
5.53%, 2/12/98 3,974,193
P-1 A-1+ 3,500 U.S. Central Credit Union,
5.75%, 2/17/98 3,473,726
- -----------------------------------------------------------------------------------------
$ 35,928,689
- -----------------------------------------------------------------------------------------
Business Products and Services -- 1.3%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,300 Pitney Bowes Credit Corp.,
5.85%, 1/21/98 $ 2,292,525
- -----------------------------------------------------------------------------------------
$ 2,292,525
- -----------------------------------------------------------------------------------------
Chemicals -- 1.4%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 630 E.I. Dupont de Nemours & Co.,
5.51%, 1/12/98 $ 628,940
P-1 A-1+ 2,000 E.I. Dupont de Nemours & Co.,
5.73%, 2/6/98/(2)/ 1,988,540
- -----------------------------------------------------------------------------------------
$ 2,617,480
- -----------------------------------------------------------------------------------------
Communications Equipment -- 3.3%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,000 Ameritech Corp.,
5.55%, 1/26/98/(1)/ $ 1,992,291
P-1 A-1+ 1,700 Ameritech Corp.,
5.72%, 2/4/98/(1)/ 1,690,816
P-1 A-1+ 2,500 AT&T Corp., 5.65%, 3/27/98 2,466,649
- -----------------------------------------------------------------------------------------
$ 6,149,756
- -----------------------------------------------------------------------------------------
Electric Utilities -- 2.9%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,800 National Rural Utilities Coop.
Finance Corp., 5.58%, 1/15/98 $ 2,793,924
P-1 A-1+ 2,500 Teco Finance, Inc.,
5.72%, 2/18/98/(1)/ 2,480,933
- -----------------------------------------------------------------------------------------
$ 5,274,857
- -----------------------------------------------------------------------------------------
Electrical and Electronic Equipment -- 3.6%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,000 General Electric Capital
Corp., 5.69%, 2/20/98 $ 1,984,194
P-1 A-1+ 1,500 General Electric Capital
Corp., 5.70%, 1/28/98 1,493,588
P-1 A-1+ 1,400 General Electric Capital
Corp., 5.70%, 3/20/98 1,382,710
P-1 A-1+ 1,765 Motorola Credit Corp.,
5.70%, 2/24/98 1,749,909
- -----------------------------------------------------------------------------------------
$ 6,610,401
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
14
<PAGE>
Cash Management Portfolio as of December 31, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ---------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Food and Beverages -- 2.2%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 4,100 Coca-Cola Co.,
5.51%, 1/12/98/(1)/ $ 4,093,097
- -----------------------------------------------------------------------------------------
$ 4,093,097
- -----------------------------------------------------------------------------------------
Household Products -- 0.8%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 1,460 Procter & Gamble Co.,
5.70%, 3/11/98 $ 1,444,050
- -----------------------------------------------------------------------------------------
$ 1,444,050
- -----------------------------------------------------------------------------------------
Insurance -- 8.8%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,500 AI Credit Corp., 5.55%, 1/13/98 $ 2,495,375
P-1 A-1+ 1,900 AI Credit Corp., 5.55%, 1/13/98 1,896,485
P-1 A-1 2,500 American General Corp.,
5.75%, 2/27/98 2,477,240
P-1 A-1+ 2,000 APC Funding Corp.,
5.75%, 3/3/98 1,980,514
P-1 A-1+ 1,620 MetLife Funding Inc.,
5.67%, 1/20/98 1,615,152
P-1 A-1+ 1,459 MetLife Funding Inc.,
5.75%, 3/17/98 1,441,522
P-1 A-1+ 950 MetLife Funding Inc.,
5.90%, 2/5/98 944,551
P-1 A-1 1,000 Prudential Funding Corp.,
5.82%, 1/16/98 997,575
P-1 A-1+ 1,000 USAA Capital Corp.,
5.64%, 2/27/98 991,070
P-1 A-1+ 1,400 USAA Capital Corp.,
5.76%, 1/27/98 1,394,176
- -----------------------------------------------------------------------------------------
$ 16,233,660
- -----------------------------------------------------------------------------------------
Oil -- 1.7%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 785 Chevron Oil Finance Co.,
5.95%, 1/9/98 $ 783,962
P-1 A-1+ 2,380 Exxon Imperial U.S., Inc.,
5.85%, 1/8/98/(1)/ 2,377,293
- -----------------------------------------------------------------------------------------
$ 3,161,255
- -----------------------------------------------------------------------------------------
Pharmaceutical -- 1.3%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,315 Novartis Finance Corp.,
5.85%, 1/9/98/(1)/ $ 2,311,991
- -----------------------------------------------------------------------------------------
$ 2,311,991
- -----------------------------------------------------------------------------------------
Total Commercial Paper, at value
(identified cost $88,585,980) $ 88,585,980
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
15
<PAGE>
Cash Management Portfolio as of December 31, 1997
PORTFOLIO OF INVESTMENTS CONT'D
U.S. Government Obligations -- 51.8%
Principal
Amount
(000's
omitted) Security Value
- --------------------------------------------------------------------------
$ 60,000 FHLMC Discount Notes,
5.70%, 1/5/98 $ 59,961,999
10,000 FHLMC Discount Notes,
5.70%, 1/12/98 9,982,582
1,330 FNMA Discount Notes,
5.46%, 1/20/98 1,326,168
1,000 FHLB Discount Notes,
5.46%, 1/23/98 996,664
5,000 FHLMC Discount Notes,
5.49%, 1/23/98 4,983,225
5,500 FNMA Discount Notes,
5.48%, 1/29/98 5,476,557
5,000 FHLMC Discount Notes,
5.65%, 2/19/98 4,961,549
3,000 FNMA Discount Notes,
5.64%, 2/25/98 2,974,150
2,600 FNMA Discount Notes,
5.58%, 3/6/98 2,574,208
1,950 FNMA Discount Notes,
5.60%, 3/30/98 1,923,307
- --------------------------------------------------------------------------------
Total U.S. Government Obligations, at value
(identified cost $95,160,409) $ 95,160,409
- --------------------------------------------------------------------------------
Total Investments -- 100.0%
(identified cost $183,746,389) $183,746,389
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 0% $ (6,186)
- --------------------------------------------------------------------------------
Net Assets -- 100% $183,740,203
- --------------------------------------------------------------------------------
FHLB-Federal Home Loan Bank
FHLMC-Federal Home Mortgage Corporation (Freddie Mac)
FNMA-Federal National Mortgage Association (Fannie Mae)
/(1)/A security which has been issued under section 4(2) of the Securities Act
of 1933 and is generally regarded as restricted and illiquid. This security
may be resold in transactions exempt from registration or to the public if
the security is registered. All such securities held have been deemed by
the Portfolio's Trustees to be liquid and were purchased with the
expectation that resale would not be necessary. At December 31, 1997, the
value of these securities amounted to $21,819,008 or 11.9% of the
Portfolio's net assets.
/(2)/Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. It is the
Portfolio's intention to hold the security until maturity. At December 31,
1997, the value of these securities amounted to $4,979,544 or 2.7% of the
Portfolio's net assets.
See notes to financial statements
16
<PAGE>
Cash Management Portfolio as of December 31, 1997
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
As of December 31, 1997
Assets
- --------------------------------------------------------------------------------
Investments, at value (Note 1A) $183,746,389
Cash 19,962
Deferred organization expenses (Note 1D) 3,634
- --------------------------------------------------------------------------------
Total assets $183,769,985
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable to affiliate for Trustees' fees (Note 2) $ 1,637
Accrued expenses 28,145
- --------------------------------------------------------------------------------
Total liabilities $ 29,782
- --------------------------------------------------------------------------------
Net Assets (representing paid-in capital) $183,740,203
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $183,740,203
- --------------------------------------------------------------------------------
Total $183,740,203
- --------------------------------------------------------------------------------
Statement of Operations
For the Year Ended
December 31, 1997
Investment Income (Note 1B)
- --------------------------------------------------------------------------------
Interest income $ 8,048,280
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 724,890
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 5,663
Custodian fee 94,846
Legal and accounting services 29,679
Amortization of organization expenses (Note 1D) 2,727
Miscellaneous 4,479
- --------------------------------------------------------------------------------
Total expenses $ 862,284
- --------------------------------------------------------------------------------
Net investment income $ 7,185,996
- --------------------------------------------------------------------------------
See notes to financial statements
17
<PAGE>
Cash Management Portfolio as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
Increase (Decrease) Year Ended Year Ended
in Net Assets December 31, 1997 December 31, 1996
- -------------------------------------------------------------------------------
From operations --
Net investment income $ 7,185,996 $ 9,078,037
- -------------------------------------------------------------------------------
Capital transactions --
Contributions $ 791,713,159 $ 1,075,567,385
Withdrawals (806,819,022) (1,097,885,067)
- -------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $ (15,105,863) $ (22,317,682)
- -------------------------------------------------------------------------------
Net decrease in net assets $ (7,919,867) $ (13,239,645)
- -------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------
At beginning of year $ 191,660,070 $ 204,899,715
- -------------------------------------------------------------------------------
At end of year $ 183,740,203 $ 191,660,070
- -------------------------------------------------------------------------------
See notes to financial statements
18
<PAGE>
Cash Management Portfolio as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------
1997 1996 1995 1994*
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------------------
Expenses 0.59% 0.59% 0.60% 0.58%+
Net investment income 4.96% 4.83% 5.36% 4.22%+
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, May 2, 1994, to December 31, 1994.
See notes to financial statements
19
<PAGE>
Cash Management Portfolio as of December 31, 1997
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
-----------------------------------------------------------------------------
Cash Management Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company
which was organized as a trust under the laws of the State of New York on May
1, 1992. The Declaration of Trust permits the Trustees to issue 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 Security Valuation -- The Portfolio values investment securities utilizing
the amortized cost valuation technique permitted by Rule 2a-7 of the
Investment Company Act of 1940, pursuant to which the Portfolio must comply
with certain conditions. This technique involves initially valuing a
portfolio security at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium. It is the normal
practice of the Portfolio to hold portfolio securities to maturity and
realize par value unless such sale or other disposition is mandated by
withdrawal requests or other extraordinary circumstances.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or accretion of discount when required
for federal income tax purposes.
C 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 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 taxable investment
income, net realized capital gains, and any other items of income, gain,
loss, deduction or credit.
D Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Portfolio. Pursuant to the respective custodian agreements,
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 reported as
a reduction of operating expenses on the Statement of Operations.
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 income 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.
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.
The fee is computed at the rate of 1/2 of 1% per annum of the Portfolio's
average daily net assets and amounted to $724,890 for the year ended December
31, 1997. 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.
20
<PAGE>
Cash Management Portfolio as of December 31, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
3 Line of Credit
----------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR or
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 withdrawal requests or settle investment
transactions. Interest is charged to each participating 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 Portfolio
did not have any significant borrowings or allocated fees during the year
ended December 31, 1997.
4 Investments
----------------------------------------------------------------------------
Purchases and sales (including maturities) of investments, during the year
ended December 31, 1997, exclusive of U.S. Government securities aggregated
$1,103,278,435 and $1,059,766,438, respectively. Purchases and sales
(including maturities) of U.S. Government Agency securities aggregated
$431,080,785 and $490,559,838, respectively.
21
<PAGE>
Cash Management Portfolio as of December 31, 1997
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Investors
of Cash Management Portfolio:
- -------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities of Cash
Management Portfolio (the Portfolio), including the portfolio of investments, as
of December 31, 1997, and the related statement of operations for the year then
ended, the statements of changes in net assets for the two years in the period
then ended and the supplementary data for each of the three years in the period
then ended and for the period from May 2, 1994 (start of business) to December
31, 1994. 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
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1997 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and supplementary data referred to
above present fairly, in all material respects, the financial position of the
Portfolio, as of December 31, 1997, the results of its operations for the year
then ended, the changes in net assets for the two years in the period then ended
and supplementary data for each of the three years then ended and for the period
from May 2, 1994 (start of business) to December 31, 1994, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 6, 1998
22
<PAGE>
EV Money Market Funds as of December 31, 1997
INVESTMENT MANAGEMENT
Eaton Vance Mutual Funds Trust
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
President and Director, United Asset Management Corporation
John L. Thorndike
Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
Cash Management Portfolio
Officers
M. Dozier Gardner
President and Trustee
James B. Hawkes
Vice President and Trustee
Michael B. Terry
Vice President and Portfolio Manager
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
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
President and Director, United Asset Management Corporation
John L. Thorndike
Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
23
<PAGE>
Portfolio Investment Advisor
Boston Management and Research
24 Federal Street
Boston, MA 02110
Fund Administrator
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
Transfer Agent
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
Independent Accountants
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
Eaton Vance
Mutual Funds Trust
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.
- --------------------------------------------------------------------------------
MMSRC-2/98
