<PAGE>
[LOGO OF EATON VANCE APPEARS HERE] [EDUCATIONAL INSTITUTION APPEARS HERE]
Semiannual Report January 31, 1998
[PHOTO OF HIGHWAY APPEARS HERE] EATON VANCE Arizona
MUNICIPALS Colorado
TRUST Connecticut
Michigan
Minnesota
Global Management-Global Distribution New Jersey
Pennsylvania
[PHOTO OF BROOKLYN BRIDGE APPEARS HERE] Texas
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Eaton Vance Municipals Funds as of January 31, 1998
LETTER TO SHAREHOLDERS
[PHOTO OF THOMAS J. FETTER,
PRESIDENT APPEARS HERE]
The past year has been very favorable for the municipal bond market. Low
inflation and a declining interest rate environment produced strong returns for
the tax-exempt sector. As a measure of overall municipal bond market
performance, the Lehman Brothers Municipal Bond Index -- a widely recognized,
unmanaged index of municipal bonds -- had a return of 9.2% for the year.*
Amid volatile global markets, more investors were drawn to municipal bonds...
Against a backdrop of moderate economic growth and low inflation, investors
again focused on the unique advantages of municipals, which remain among the
best tax-advantaged vehicles. In addition, the municipal market attracted an
increasing number of crossover investors from other markets. Many investors
bought municipals in a flight to quality, as the domestic equity market reached
overvalued levels and emerging markets were caught up in the turmoil of the
Asian currency crisis.
A sound economy has resulted in improving municipal credits...
The upbeat economic climate of recent years has provided strong support for the
municipal market. Steady job growth has generated increased tax revenues for
states and local issuers. As a result, many areas hard-hit in the recessions of
the 1970s and 1980s have since made a significant economic comeback, a fact
reflected in the value of their bonds. We expect to see many more such stories
emerge in the coming year.
Municipal bond yield 88% of Treasury yields
5.13% 8.02%
30 Year Treasury Bond Taxable equivalent yield
General Obligation in 36% tax bracket
(GO) Bonds*
5.80%
30 Year Treasury bond
Principal and interest payments of Treasury securities are guaranteed by the
U.S. goverenment.
*GO yield are a compilation of a representative variety of general obligations
and are not necessarily representative of the Fund's yield. Statistics as of
January 31, 1998.
Past performance is no guarantee of future results. Source: Bloomberg, L.P.
1998 should bring more opportunities for municipal investors...
At present, there is little sign of inflation on the horizon, and, with the
Asian turmoil of recent months, it's possible that the economy may slow somewhat
in the next year. Meanwhile, the federal budget situation has improved
dramatically in the past several years.
Naturally, those conditions are subject to change over time. The market could be
vulnerable if the economy strengthens or the budget situation unexpectedly
worsens. We will, of course, continue to closely monitor economic progress.
As for the tax-exempt market, municipal bonds currently represent unusual value
relative to their taxable counterparts. We believe that municipals will continue
to serve their traditional function of financing vital public works, while
offering good opportunities for tax-conscious investors.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter
President
February 9, 1998
*It is not possible to invest directly in an Index.
Mutual Fund shares are not guaranteed by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
2
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Eaton Vance Arizona Municipals Fund as of January 31, 1998
INVESTMENT UPDATE
[PHOTO OF CYNTHIA J. CLEMSON
PORTFOLIO MANAGER APPEARS HERE]
Cynthia J. Clemson,
Portfolio Manager
The Economy
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. The Arizona economy gained momentum in the closing months of 1997. Reflecting
that strength, payroll employment increased at a 9.5% rate in October and
November, with notable job gains in electronics and computer manufacturing.
Arizona enjoyed the second-fastest job growth in the nation.
. Exports constituted a bright spot for Arizona in the past year. According to
the Federal Reserve Bank of San Francisco, exports were 54% higher than in
1996, boosted by a strong economic recovery in Mexico, Arizona's leading
export partner.
. Residential construction remained stable in 1997, as evidenced by 47,000 new
building permits. The construction mix favored single-family homes, reflecting
the increasingly favorable economics of home ownership. Average prices for
homes sold in the Metro Phoenix area rose 8% in 1997.
Management Update
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. We made some modest adjustments to the Portfolio during the period, including
reducing our exposure to insured hospital bonds at very attractive levels. We
used the proceeds to add industrial development bonds which offered very
competitive yields. These transactions improved the income component of the
Fund.
. Low issuance continued to be a factor in the Arizona market. Our extensive
contacts with broker/dealer networks were instrumental in maintaining access
to attractive issues.
. We continued to focus on upgrading call protection. By adding bonds with
longer call dates, we improved the performance characteristics of the Fund.
The Fund
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. During the six months ended January 31, 1998, the Fund's Class A and Class B
shares had total returns of 4.8% and 4.5%, respectively./1/
. For Class A, this return resulted from an increase in net asset value per
share to $10.31 on January 31, 1998 from $10.09 on July 31, 1997, and the
reinvestment of $0.26 per share in tax-free dividend income. For Class B, it
resulted from an increase to $11.47 from $11.22, and the reinvestment of
$0.247 per share in tax-free dividends./2/
. Based on the Fund's most recent dividend and a net asset value on January 31,
1998 of $10.31 for Class A and $11.47 for Class B, the distribution rates were
5.00% and 4.27%, respectively./3/
. The SEC 30-day yields at January 31 were 4.10% and 3.53%, respectively./4/
Your Investment at Work
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Navajo County, AZ
Pollution Control Corp. [UTILITIES GRAPHIC APPEARS HERE]
Arizona Public Service Company
. These bonds were issued to refund an earlier issue of the Navajo County
Project that financed pollution control equipment for an electric utility,
including a sanitary sewer system, a dust repression system and a water
reclamation unit.
. The bonds represent an investment in a project that will promote a cleaner
environment for the entire Navajo County community.
. The bonds have a 5.875% coupon and offer the Portfolio good call protection.
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Fund Information
as of January 31, 1998
Performance/5/
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Average Annual Total Returns (at net asset value)
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Class A Class B
------- -------
One Year 11.5% 10.8%
Five Years N/A 7.1
Life of Fund+ 5.9 8.0
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 6.1% 5.8%
Five Years N/A 6.8
Life of Fund+ 4.7 8.0
+Class A: (12/13/93); Class B: (7/25/91)
5 Largest Sectors/6/
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By total investments
[BAR GRAPH APPEARS HERE]
Escrowed 14.4%
Electric Utilities 15.2%
Insured - Hospital* 13.0%
Indust. Development/Pollution 9.2%
Education 7.0%
* Private insurance does not remove the interest rate risks that are associated
with these investments.
/1/ This return does not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC)
for the Fund's Class B shares. /2/ A portion of the Fund's income may be
subject to federal income and/or alternative minimum tax and state income
tax. /3/ The Fund's distribution rate represents actual distributions paid
to shareholders and is calculated daily by dividing the last distribution
per share (annualized) by the net asset value. /4/ The Fund's SEC yield is
calculated by dividing the net investment income per share for the 30-day
period by the offering price at the end of the period and annualizing the
result. /5/ Returns are calculated by determining the percentage change in
net asset value (NAV) with all distributions reinvested. SEC average annual
returns for Class A reflect a sales charge as noted and for Class B 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. /6/ Based on market value
as of 1/31/98. May not represent the Portfolio's current or future
investments. Five largest sectors represent 61.8% of the Portfolio's
investments.
Past performance is not indicative of future results. The value of an
investment in the Fund may fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
3
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Eaton Vance Colorado Municipals Fund as of January 31, 1998
INVESTMENT UPDATE
[PHOTO OF WILLIAM H. AHERN APPEARS HERE]
William H. Ahern,
Portfolio Manager
The Economy
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. Colorado's economy again out- paced the nation in 1997 and that expansion is
expected to continue into 1998. Meanwhile, population growth also remains
fairly strong. Finally, the state's Office of Planning and Budgeting estimates
that personal income of Colorado residents should grow 6.9% in the coming
year.
. With its well-educated workforce and attractive climate, Colorado remains a
top choice for companies looking to relocate. Amid strong demand for skilled
workers, unemployment was a modest 3.4% at year end, well below the national
rate.
. The Taxpayer Bill of Rights, a constitutional amendment that limits the growth
of state revenues, was invoked in 1997 for the first time since its passage in
1992. Having exceeded allowable revenue growth by $140 million, the excess
receipts will likely be returned to taxpayers in the form of refunds or tax
credits.
Management Update
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. Housing bonds provided a strong income component during the period. Issues
included Colorado Housing and Finance Authority bonds for single-family
housing, as well as select, local multi-family projects.
. Amid the strong market rally of the past year, the Portfolio's non-rated bonds
have performed especially well. The Portfolio benefited from the strong Eaton
Vance research commitment in the non-rated segment of the market.
. As concerns developed over the longer-term impact of the October Asian
currency crisis on the U.S. economy, we slightly lengthened the Portfolio's
average duration.
The Fund
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. During the six months ended January 31, 1998, the Fund's Class A and Class B
shares had total returns of 4.2% and 3.8%, respectively./1/
. For Class A, this return resulted from an increase in net asset value per
share to $10.07 on January 31, 1998 from $9.92 on July 31, 1997, and the
reinvestment of $0.26 per share in tax-free dividend income. For Class B, it
resulted from an increase to $10.96 from $10.80, and the reinvestment of
$0.244 per share in tax-free dividends./2/
. Based on the Fund's most recent dividend and a net asset value on January 31,
1998 of $10.07 for Class A and $10.96 for Class B, the distribution rates were
5.11% and 4.41%, respectively./3/
. The SEC 30-day yields at January 31 were 3.86% and 3.92%, respectively./4/
Your Investment at Work
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[MEDICAL SYMBOL LOGO APPEARS HERE]
Colorado Health Facilities Authority
Steamboat Springs Health
. This bond issue was used to finance renovations to health care facilities of
the Steamboat Springs Health Project.
. The Steamboat facilities provide a wide range of outpatient services, as well
as critical care facilities. The proceeds of the bond were used to fund
improvements to treatment facilities, consulting rooms for physicians, and
administrative offices.
. This non-rated bond represents the efforts of the Portfolio to add value
through smaller, non-rated issues within the Colorado health care sector.
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Fund Information
as of January 31, 1998
Performance/5/
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Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 11.7% 11.1%
Five Years N/A 6.5
Life of Fund+ 5.5 7.0
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 6.5% 6.1%
Five Years N/A 6.2
Life of Fund+ 4.3 6.8
+Class A: (12/10/93); Class B: (8/25/92)
[BAR GRAPH APPEARS HERE]
5 Largest Sectors/6/
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By total investments
Hospitals 23.1%
Escrowed/Prerefunded 15.2%
Housing 14.8%
Transportation 12.9%
Insured - General Obligations* 11.2%
* Private insurance does not remove the interest rate risks that are associated
with these investments.
/1/ This return does not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for
the Fund's Class B shares.
/2/ A portion of the Fund's income may be subject to federal income and/or
alternative minimum tax and state income tax.
/3/ The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.
/4/ The Fund's SEC yield is calculated by dividing the net investment income per
share for the 30-day period by the offering price at the end of the period
and annualizing the result.
/5/ Returns are calculated by determining the percentage change in net asset
value (NAV) with all distributions reinvested. SEC average annual returns
for Class A reflect a sales charge as noted and for Class B 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.
/6/ Based on market value as of 1/31/98. May not represent the Portfolio's
current or future investments. Five largest sectors represent 77.2% of the
Portfolio's investments.
Past performance is not indicative of future results. The value of an
investment in the Fund may fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
4
<PAGE>
Eaton Vance Connecticut Municipals Fund as of January 31, 1998
INVESTMENT UPDATE
[PHOTO OF WILLIAM H. AHERN APPEARS HERE]
William H. Ahern,
Portfolio Manager
The Economy
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. Connecticut's economy gathered strength in 1997, a trend that is likely to
continue in 1998, according to the University of Connecticut Center for
Economic Analysis. Most economic indicators showed healthy gains, including
total employment, personal income, business starts, retail sales, and consumer
confidence.
. The Connecticut housing sector was especially strong in 1997. Housing permits
rose 17%, marking the largest increase in eight years. Middlesex and New Haven
counties each registered growth over 25%.
. The state's economic expansion, now in its sixth year, is nearing that of the
most recent expansion, in the late 1980s. Consumer confidence, a key
determinant in the expansion, remains high. According to the U.S. Bureau of
Labor Statistics, consumer confidence in New England rose 54.4% in 1997.
Management Discussion
- --------------------------------------------------------------------------------
. Reflecting our positive market outlook, we increased the Portfolio's exposure
to zero coupon general obligations and deep discount issues. These provided
the Portfolio with increased positive convexity, or exposure to declining
interest rates.
. Management maintained a large exposure to nursing home bonds. The nursing home
sector fared very well, as quality spreads narrowed significantly during the
period.
. Housing bonds continued to play a major role in the Portfolio. Connecticut
Housing Finance Authority issues provided an excellent source of income.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended January 31, 1998, the Fund's Class A and Class B
shares had total returns of 4.0% and 3.5%, respectively./1/
. For Class A, this return resulted from an increase in net asset value per
share to $10.78 on January 31, 1998 from $10.64 on July 31, 1997, and the
reinvestment of $0.278 per share in tax-free dividend income. For Class B, it
resulted from an increase to $10.71 from $10.57, and the reinvestment of
$0.226 per share in tax-free dividends./2/
. Based on the Fund's most recent dividend and a net asset value on January 31,
1998 of $10.78 for Class A and $10.71 for Class B, the distribution rates were
5.10% and 4.18%, respectively./3/
. The SEC 30-day yields at January 31 were 3.68% and 3.19%, respectively./4/
Your Investment at Work
- --------------------------------------------------------------------------------
Connecticut Development Authority [AIRLINE GRAPHIC APPEARS HERE]
Airport Facility Revenue Bonds
Signature Flight Support Project
. These bonds were issued to finance the construction of a full-service airline
and aviation service center at Bradley International Airport.
. The project consists of two hangars, a maintenance building, fuel facilities,
ramps and tarmac, a parking lot, and areas for passenger services.
. This non-rated bond has an attractive 6.625% coupon and finances facilities
sorely needed to service Bradley's rising passenger traffic.
- --------------------------------------------------------------------------------
Fund Information
as of January 31, 1998
Performance/5/
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 10.5% 9.5%
Five Years N/A 5.7
Life of Fund+ 7.8 6.4
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 5.3% 4.5%
Five Years N/A 5.4
Life of Fund+ 6.4 6.3
+Class A: (4/19/94); Class B: (5/1/92)
5 Largest Sectors/6/
- --------------------------------------------------------------------------------
By total investments
[BAR GRAPH APPEARS HERE]
Nursing Homes 14.6%
Housing 12.5%
Solid Waste Disposal 10.6%
Education 9.3%
Hospitals 9.0%
/1/ This return does not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for
the Fund's Class B shares. /2/ A portion of the Fund's income may be subject
to federal income and/or alternative minimum tax and state income tax. /3/
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value. /4/ The Fund's SEC yield is
calculated by dividing the net investment income per share for the 30-day
period by the offering price at the end of the period and annualizing the
result. /5/ Returns are calculated by determining the percentage change in
net asset value (NAV) with all distributions reinvested. SEC average annual
returns for Class A reflect a sales charge as noted and for Class B 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. /6/ Based on market value
as of 1/31/98. May not represent the Portfolio's current or future
investments. Five largest sectors represent 56.0% of the Portfolio's
investments.
Past performance is not indicative of future results. The value of an
investment in the Fund may fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
5
<PAGE>
Eaton Vance Michigan Municipals Fund as of January 31, 1998
INVESTMENT UPDATE
[PHOTO OF TIMOTHY T. BROWSE APPEARS HERE]
Timothy T.Browse,
Portfolio Manager
The Economy
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. Economic activity continued to expand in Michigan in 1997, as the robust
national economy created strong demand for the state's manufacturing sector.
The City of Detroit continued its comeback, with unemployment declining and
new business starts gathering momentum.
. The pivotal auto industry enjoyed another strong year in 1997, albeit in an
increasingly competitive sales environment. Sales of U.S. cars and trucks
totalled 15.2 million units for the year.
. According to the Senate Fiscal Agency, Michigan continues to receive less than
a per-capita share of federal expenditures. With no major military
installation in the state, the state receives less in direct payments and
procurements than many other states. The shortfall has averaged more than 20%
over the past decade.
Management Update
- --------------------------------------------------------------------------------
. Trading activity within the Portfolio remained fairly quiet during the period.
That has been positive for the Portfolio because, with little trading
activity, we have had to rely less on lower-yielding par issues that tend to
dilute yield.
. We further diversified the Portfolio through school districts, continuing care
retirement communities, and industrial development bonds (IDB). General
Motors, Chrysler, and Crown Paper were among the companies represented by our
IDB holdings.
. The Portfolio continued its efforts to upgrade call protection. Call
protection has been an increasingly important consideration with the decline
in interest rates in the past year.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended January 31, 1998, the Fund's Class A and Class B
shares had total returns of 4.1% and 3.7%, respectively./1/
. For Class A, this return resulted from an increase in net asset value per
share to $9.89 on January 31, 1998 from $9.75 on July 31, 1997, and the
reinvestment of $0.25 per share in tax-free dividend income. For Class B, it
resulted from an increase to $11.03 from $10.87, and the reinvestment of
$0.234 per share in tax-free dividends./2/
. Based on the Fund's most recent dividend and a net asset value on January 31,
1998 of $9.89 for Class A and $11.03 for Class B, the distribution rates were
5.02% and 4.22%, respectively./3/
. The SEC 30-day yields at January 31 were 4.10% and 3.54%, respectively./4/
Your Investment at Work
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Michigan Strategic Fund
General Motors Corp.
[FACTORY GRAPHIC APPEARS HERE]
. The proceeds from these bonds were used to finance the construction of
pollution control and waste disposal facilities at several General Motors
plants in Michigan.
. The sites for the facilities include assembly plants, as well as plants that
manufacture automotive parts. General Motors remains the world's largest
producer of cars and trucks, with additional interests in aerospace and
electronics.
. The bonds are rated A3/A by Moody's and S&P. Given General Motors' prestige
and global auto industry profile, the bond's 6.2% coupon is very attractive.
- --------------------------------------------------------------------------------
Fund Information
as of January 31, 1998
Performance/5/
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 10.0% 9.8%
Five Years N/A 6.0
Life of Fund+ 4.9 7.0
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 4.8% 4.8%
Five Years N/A 5.7
Life of Fund+ 3.6 7.0
+Class A: (12/7/93); Class B: (4/19/91)
5 Largest Sectors/6/
- --------------------------------------------------------------------------------
By total investments
[BAR GRAPH APPEARS HERE]
Insured - General Obligations 14.3%
Hospitals 12.9%
Industrial Development 12.4%
Insured - Water & Sewer* 8.6%
Escrowed/Prerefunded 7.9%
* Private insurance does not remove the interest rate risks that are associated
with these investments.
/1/ This return does not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for
the Fund's Class B shares. /2/ A portion of the Fund's income may be subject
to federal income and/or alternative minimum tax and state income tax. /3/
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value. /4/ The Fund's SEC yield is
calculated by dividing the net investment income per share for the 30-day
period by the offering price at the end of the period and annualizing the
result. /5/ Returns are calculated by determining the percentage change in
net asset value (NAV) with all distributions reinvested. SEC average annual
returns for Class A reflect a sales charge as noted and for Class B 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. /6/ Based on market value
as of 1/31/98. May not represent the Portfolio's current or future
investments. Five largest sectors represent 56.1% of the Portfolio's
investments.
Past performance is not indicative of future results. The value of an
investment in the Fund may fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
6
<PAGE>
Eaton Vance Minnesota Municipals Fund as of January 31, 1998
INVESTMENT UPDATE
[PHOTO OF ROBERT B. MACINTOSH APPEARS HERE]
Robert B. MacIntosh,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. Boosted by a surging technology sector, the Minnesota economy continued its
strong growth in 1997. The state's unemployment rate was 2.9% at year-end,
well below the 4.4% national rate. Meanwhile, the state's personal income grew
1.6%, significantly faster than the 1.2% growth in national income.
. With the strong economy, many Minnesota employers have experienced a shortage
of workers, according to the Federal Reserve Bank of Minneapolis. Reflecting
that shortage, while Minnesota's job force has increased 2.3% annually in the
1990s, growth in workers for temporary personnel services has risen a
staggering 9.2%.
. Departing from national trends, the manufacturing segment of the Minnesota
economy posted job gains in 1997. The gains occurred predominantly in
computers, industrial machinery and paper products.
Management Update
- --------------------------------------------------------------------------------
. In a favorable market environment, the Portfolio added zero coupon bonds to
improve the Fund's upside potential. We meanwhile became increasingly
selective with respect to hospital bonds.
. We continued to emphasize good call protection, which can be challenging given
the nature of Minnesota issuance. A significant portion of new Minnesota
issuance is in school district bonds and housing bonds, which typically have
poor call characteristics.
. Colleges and universities again played an important role in the Portfolio.
These non-rated bonds provided attractive yields from issuers like St Olaf`s
College.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended January 31, 1998, the Fund's Class A and Class B
shares had total returns of 4.0% and 3.5%, respectively./1/
. For Class A, this return resulted from an increase in net asset value per
share to $9.89 on January 31, 1998 from $9.77 on July 31, 1997, and the
reinvestment of $0.26 per share in tax-free dividend income. For Class B, it
resulted from an increase to $10.62 from $10.49, and the reinvestment of
$0.232 per share in tax-free dividends./2/
. Based on the Fund's most recent dividend and a net asset value on January 31,
1998 of $9.89 for Class A and $10.62 for Class B, the distribution rates were
5.21% and 4.35%, respectively./3/
. The SEC 30-day yields at January 31 were 4.34% and 3.59%, respectively./4/
Your Investment at Work
- --------------------------------------------------------------------------------
State of Minnesota
Duluth Airport
[AIRPLANE GRAPHIC APPEARS HERE]
. The proceeds from this bond were used to finance the building and equipping of
a heavy aircraft maintenance facility at Duluth International Airport.
. The facility is being leased to Northwest Airlines, which operates a hub from
Minneapolis and serves as one of the nation's largest air passenger carriers.
In addition, in recent years, Northwest has increased the number of its
international routes originating from Minneapolis.
. The bonds are rated Aaa/AAA by Moody's and S&P, respectively, and carry an
attractive 6.2% coupon.
- --------------------------------------------------------------------------------
Fund Information
as of January 31, 1998
Performance/5/
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 10.5% 9.7%
Five Years N/A 5.6%
Life of Fund+ 5.0 6.3
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 5.3% 4.7%
Five Years N/A 5.3
Life of Fund+ 3.8 6.3
+Class A: (12/9/93); Class B: (7/29/91)
5 Largest Sectors/6/
- --------------------------------------------------------------------------------
By total investments
[BAR GRAPH APPEARS HERE]
Housing 23.9%
Insured - Electric Utilities* 15.1%
Hospitals 15.0%
General Obligations 7.9%
Indust. Development 7.7%
* Private insurance does not remove the interest rate risks that are associated
with these investments.
/1/ This return does not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for
the Fund's Class B shares. /2/ A portion of the Fund's income may be subject
to federal income and/or alternative minimum tax and state income tax. /3/
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value. /4/ The Fund's SEC yield is
calculated by dividing the net investment income per share for the 30-day
period by the offering price at the end of the period and annualizing the
result. /5/ Returns are calculated by determining the percentage change in
net asset value (NAV) with all distributions reinvested. SEC average annual
returns for Class A reflect a sales charge as noted and for Class B 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. /6/ Based on market value
as of 1/31/98. May not represent the Portfolio's current or future
investments. Five largest sectors represent 69.6% of the Portfolio's
investments.
Past performance is not indicative of future results. The value of an
investment in the Fund may fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
7
<PAGE>
Eaton Vance New Jersey Municipals Fund as of January 31, 1998
INVESTMENT UPDATE
[PHOTO OF ROBERT B. MACINTOSH APPEARS HERE]
Robert B. MacIntosh,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. The New Jersey economy continued its slow but steady improvement in 1997.
Total state employment rose by 68,000 jobs, for a 1.2% increase over the
year. Unemployment was 4.9% at year-end. The state's average jobless rate for
1997 was the lowest since 1990.
. Construction of single-family housing in New Jersey was very strong in 1997,
with new units totaling 23,011. That marked a 9% increase over the previous
year, the best showing in a decade for the residential construction industry.
. The fastest job growth remained in the services-related sectors in 1997.
Restaurants, temporary personnel agencies, computer-related businesses, data
processing, engineering, and financial services all posted strong job growth
in the past year.
Management Update
- --------------------------------------------------------------------------------
. The New Jersey hospital issue market has been especially impacted by a
narrowing of quality spreads - the difference between yields for bonds of
varying quality. Accordingly, we added to our positions in insured hospital
bonds.
. We reduced our exposure to the resource recovery sector, which was sent into
turmoil by court rulings. We have focused on higher-quality projects, one of
which, Mercer County, was redeemed during the year.
. A relatively high percentage of New Jersey issues were prerefunded during the
period. With those issues now backed by Treasury bonds, the effective quality
ratings of the Fund have been improved.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended January 31, 1998, the Fund's Class A and Class B
shares had total returns of 4.3% and 3.8%, respectively./1/
. For Class A, this return resulted from an increase in net asset value per
share to $10.68 on January 31, 1998 from $10.53 on July 31, 1997, and the
reinvestment of $0.292 per share in tax-free dividend income. For Class B, it
resulted from an increase to $11.10 from $10.94, and the reinvestment of $0.25
per share in tax-free dividends./2/
. Based on the Fund's most recent dividend and a net asset value on January 31,
1998 of $10.68 for Class A and $11.10 for Class B, the distribution rates were
5.43% and 4.50%, respectively./3/
. The SEC 30-day yields at January 31 were 4.16% and 3.52%, respectively./4/
Your Investment at Work
- --------------------------------------------------------------------------------
New Jersey Economic
Development Authority
National Association of Accountants
[FACTORY GRAPHIC APPEARS HERE]
. The New Jersey-based National Association of Accountants is the world's
largest association of management accountants and financial managers.
. This 1991 issue advance-refunded a previous 1983 industrial development bond
that was used to finance the purchase of land, building and fixtures for the
Association's corporate headquarters in Montvale.
. With a coupon of 7.65%, the bonds are representative of the Portfolio's
efforts to find value in the non-rated segment of the tax-exempt market.
- --------------------------------------------------------------------------------
Fund Information
as of January 31, 1998
Performance/5/
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 11.2% 10.3%
Five Years N/A 6.0%
Life of Fund+ 7.8 7.3
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 5.8% 5.3%
Five Years N/A 5.7
Life of Fund+ 6.4 7.3
+Class A: (4/13/94); Class B: (1/8/91)
[BAR GRAPH APPEARS HERE]
5 Largest Sectors/6/
- --------------------------------------------------------------------------------
By total investments
Transportation 18.0%
Hospitals 12.7%
Special Tax 11.3%
Industrial Development 7.6%
Insured - Transportation* 5.0%
* Private insurance does not remove the interest rate risks that are associated
with these investments.
/1/ This return does not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for
the Fund's Class B shares.
/2/ A portion of the Fund's income may be subject to federal income and/or
alternative minimum tax and state income tax.
/3/ The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.
/4/ The Fund's SEC yield is calculated by dividing the net investment income per
share for the 30-day period by the offering price at the end of the period
and annualizing the result.
/5/ Returns are calculated by determining the percentage change in net asset
value (NAV) with all distributions reinvested. SEC average annual returns
for Class A reflect a sales charge as noted and for Class B 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.
/6/ Based on market value as of 1/31/98. May not represent the Portfolio's
current or future investments. Five largest sectors represent 54.6% of the
Portfolio's investments.
Past performance is not indicative of future results. The value of an
investment in the Fund may fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
8
<PAGE>
Eaton Vance Pennsylvania Municipals Fund as of January 31, 1998
INVESTMENT UPDATE
[PHOTO OF TIMOTHY T. BROWSE APPEARS HERE]
Timothy T. Browse,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. Manufacturing, which has long been a sore spot for the Pennsylvania economy,
showed signs of a comeback in 1997, adding more than 4,000 jobs. Producers of
both durable and non-durable goods participated in the revival. Industrial
machinery and chemicals were two areas that were especially strong.
. The Commonwealth's jobless rate - at 4.8% - showed modest improvement from a
year ago. Construction employment increased sharply in 1997, rising by more
than 15,000 jobs, a 7% increase over 1996.
. Pennsylvania continues to diversify beyond its traditional industrial economic
base. In 1997, the Commonwealth spent more than $100 million on advanced
manufacturing research (AMR), which uses state-of-the-art technologies to
produce high valued-added products. Pennsylvania universities awarded more
than 1,100 AMR-related degrees.
Management Update
- --------------------------------------------------------------------------------
. In a constructive market environment, the Portfolio reduced its exposure to
par bonds while selectively adding discount bonds and zero coupons. These
issues are typically more sensitive to changes in interest rates.
. The Portfolio remained extremely selective in the Pennsylvania hospital
sector, especially in the overbedded Philadelphia market. We found good value
in stand-alone, BBB rated institutions located in rural locations.
. In an increasingly generic market, we sought opportunities among non-rated
and lower-rated bonds. Lower-rated school issues provided some attractive
situations.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended January 31, 1998, the Fund's Class A and Class B
shares had total returns of 4.1% and 3.7%, respectively./1/
. For Class A, this return resulted from an increase in net asset value per
share to $10.68 on January 31, 1998 from $10.55 on July 31, 1997, and the
reinvestment of $0.295 per share in tax-free dividend income. For Class B, it
resulted from an increase to $11.03 from $10.90, and the reinvestment of
$0.262 per share in tax-free dividends./2/
. Based on the Fund's most recent dividend and a net asset value on January 31,
1998 of $10.68 for Class A and $11.03 for Class B, the distribution rates were
5.48% and 4.71%, respectively./3/
. The SEC 30-day yields at January 31 were 4.52% and 3.96%, respectively./4/
Your Investment at Work
- --------------------------------------------------------------------------------
Lehigh County
General Purpose Authority
Cedar Crest College
[GRAPHIC OF GRADUATION CAP APPEARS HERE]
. These bonds were issued to provide loans financing the construction and
renovation costs of Cedar Crest College's Dorothy Rider Pool Science Center,
as well as to advance-refund outstanding issues of the College.
. Cedar Crest College is a liberal arts college for women with an enrollment of
1,600 students. The surrounding Lehigh Valley has a population of 650,000.
. The bonds are rated BBB by S&P and carry a coupon of 6.7%. They represent the
efforts of the Portfolio to add yield through smaller, research-driven, lower
investment-grade issues.
Fund Information
as of January 31, 1998
Performance/5/
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 10.3% 9.6%
Five Years N/A 6.0
Life of Fund+ 7.9 7.2
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 5.1% 4.6%
Five Years N/A 5.6
Life of Fund+ 6.4 7.2
+Class A: (6/1/94); Class B: (1/8/91)
5 Largest Sectors/6/
- --------------------------------------------------------------------------------
By total investments
[BAR GRAPH APPEARS HERE]
Industrial Development/Pollution Control 17.9%
Hospitals 15.2%
Escrowed/Prerefunded 8.0%
Insureds - GOs* 7.7%
Housing 6.1%
* Private insurance does not remove the interest rate risks that are associated
with these investments.
/1/ This return does not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for
the Fund's Class B shares. /2/ A portion of the Fund's income may be subject
to federal income and/or alternative minimum tax and state income tax. /3/
The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value. /4/ The Fund's SEC yield is
calculated by dividing the net investment income per share for the 30-day
period by the offering price at the end of the period and annualizing the
result. /5/ Returns are calculated by determining the percentage change in
net asset value (NAV) with all distributions reinvested. SEC average annual
returns for Class A reflect a sales charge as noted and for Class B 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. /6/ Based on market value
as of 1/31/98. May not represent the Portfolio's current or future
investments. Five largest sectors represent 54.9% of the Portfolio's
investments.
Past performance is not indicative of future results. The value of an
investment in the Fund may fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
9
<PAGE>
Eaton Vance Texas Municipals Fund as of January 31, 1998
INVESTMENT UPDATE
[PHOTO OF THOMAS M. METZOLD APPEARS HERE]
Thomas M. Metzold,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. The Texas economy continued to expand at a faster pace than the national
economy in the past year. According to the State Office of the Comptroller,
Texas gross state product rose 4.2% in 1997. Meanwhile personal income
demonstrated similar growth, rising a healthy 6.6%.
. Of the ten components in the Texas index of leading economic indicators, only
one - the price of energy - registered a decline in the past year. Oil prices
averaged $18.99 per barrel in 1997, a decline from $19.99 in the previous
year, while natural gas averaged $1.93, down from $2.03 a year earlier.
. The state's unemployment rate of 5.5% represented a continued improvement in
the jobless rate and reflected growing employment in the trade and services
sectors.
Management Update
- --------------------------------------------------------------------------------
. The Portfolio was well-positioned in the relatively quiet Texas market. We
added zero coupons and discount bonds, which added upside potential in a
favorable environment. The Portfolio's zero coupon issues included independent
school district and state-guaranteed Public School Funding bonds.
. Call protection remained a top priority. With the further decline in interest
rates, call protection has become increasingly important. Bonds with poor call
characteristics are likely to have restrained performance in a rising market.
. We increased our efforts to further consolidate positions within the Portfolio
into larger positions. That consolidation should enhance liquidity and improve
the flexibility of the Portfolio.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended January 31, 1998, the Fund's Class A and Class B
shares had total returns of 4.2% and 3.8%, respectively./1/
. For Class A, this return resulted from an increase in net asset value per
share to $9.92 on January 31, 1998 from $9.77 on July 31, 1997, and the
reinvestment of $0.255 per share in tax-free dividend income. For Class B, it
resulted from an increase to $11.12 from $10.96, and the reinvestment of $0.25
per share in tax-free dividends./2/
. Based on the Fund's most recent dividend and a net asset value on January 31,
1998 of $9.92 for Class A and $11.12 for Class B, the distribution rates were
5.09% and 4.46%, respectively./3/
. The SEC 30-day yields at January 31 were 4.23% and 3.68%, respectively./4/
Your Investment at Work
- --------------------------------------------------------------------------------
Abia Development Corp.
Austin Cargoport
[AIRLINE GRAPHIC APPEARS HERE]
. These bonds financed the construction of new cargo handling facilities at
Austin's Cargoport.
. In recent years, more sophisticated management of inventories has been
accompanied by a sharp rise in the use of air cargo facilities by freight
carriers like Fedex and UPS and other major carriers.
. These non-rated bonds enjoy a dependable revenue stream from a growing
business. With a very attractive yield of 9.25%, they represent the
Portfolio's efforts to add incrementally to the Portfolio's yield through
smaller, non-rated IDB issues.
- --------------------------------------------------------------------------------
Fund Information
as of January 31, 1998
Performance/5/
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 10.8% 10.1%
Five Years N/A 6.6
Life of Fund+ 5.2 7.3
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
Class A Class B
------- -------
One Year 5.6% 5.1%
Five Years N/A 6.3
Life of Fund+ 4.0 7.2
+Class A: (12/8/93); Class B: (3/24/92)
5 Largest Sectors/6/
- --------------------------------------------------------------------------------
By total investments
[BAR GRAPH APPEARS HERE]
Housing 18.8%
Industrial Development/Pollution Control 12.9%
General Obligation 12.5%
Insured - Electric Utilities* 12.4%
Hospitals 11.1%
* Private insurance does not remove the interest rate risks that are associated
with these investments.
/1/ This return does not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for
the Fund's Class B shares.
/2/ A portion of the Fund's income may be subject to federal income and/or
alternative minimum tax and state income tax.
/3/ The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution per
share (annualized) by the net asset value.
/4/ The Fund's SEC yield is calculated by dividing the net investment income per
share for the 30-day period by the offering price at the end of the period
and annualizing the result.
/5/ Returns are calculated by determining the percentage change in net asset
value (NAV) with all distributions reinvested. SEC average annual returns
for Class A reflect a sales charge as noted and for Class B 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.
/6/ Based on market value as of 1/31/98. May not represent the Portfolio's
current or future investments. Five largest sectors represent 67.7% of the
Portfolio's investments.
Past performance is not indicative of future results. The value of an
investment in the Fund may fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
10
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited)
Statements of Assets and Liabilities
As of January 31, 1998
<TABLE>
<CAPTION>
Arizona Fund Colorado Fund Connecticut Fund Michigan Fund
- -----------------------------------------------------------------------------------------------------------------------------
Assets
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment in Municipals Portfolio --
Identified cost $ 97,285,776 $ 36,247,056 $ 159,508,422 $ 127,413,718
Unrealized appreciation 10,884,481 4,349,819 11,557,480 13,281,755
- -----------------------------------------------------------------------------------------------------------------------------
Total investment, at value (Note 1A) $ 108,170,257 $ 40,596,875 $ 171,065,902 $ 140,695,473
- -----------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 298,257 $ 349,753 $ 29,383 $ 40,575
Deferred organization expenses (Note 1D) 172 -- 786 1,867
- -----------------------------------------------------------------------------------------------------------------------------
Total assets $ 108,468,686 $ 40,946,628 $ 171,096,071 $ 140,737,915
- -----------------------------------------------------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------
Distributions payable $ 208,328 $ 78,502 $ 317,773 $ 260,883
Payable for Fund shares redeemed 343,779 10,187 153,821 104,028
Payable to affiliate for Trustees' fees (Note 4) 264 22 348 264
Accrued expenses 43,502 17,354 65,440 59,164
- -----------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 595,873 $ 106,065 $ 537,382 $ 424,339
- -----------------------------------------------------------------------------------------------------------------------------
Net Assets $ 107,872,813 $ 40,840,563 $ 170,558,689 $ 140,313,576
- -----------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -----------------------------------------------------------------------------------------------------------------------------
Paid-in capital $ 99,874,884 $ 38,563,478 $ 164,431,195 $ 130,616,240
Accumulated net realized loss on investments from
Portfolio (computed on the basis of
identified cost) (2,785,263) (2,141,213) (5,031,764) (3,321,356)
Accumulated undistributed (distributions in
excess of) net investment income (101,289) 68,479 (398,222) (263,063)
Net unrealized appreciation of investments from
Portfolio (computed on the basis of
identified cost) 10,884,481 4,349,819 11,557,480 13,281,755
- -----------------------------------------------------------------------------------------------------------------------------
Total $ 107,872,813 $ 40,840,563 $ 170,558,689 $ 140,313,576
- -----------------------------------------------------------------------------------------------------------------------------
Class A Shares
- -----------------------------------------------------------------------------------------------------------------------------
Net Assets $ 2,857,983 $ 1,841,734 $ 3,014,888 $ 983,688
Shares Outstanding 277,270 182,907 279,688 99,488
Net Asset Value and Redemption Price Per Share
(Net assets/shares of beneficial interest
outstanding) $ 10.31 $ 10.07 $ 10.78 $ 9.89
Offering Price Per Share
(100 / 95.25 of net asset value per share) $ 10.82 $ 10.57 $ 11.32 $ 10.38
- -----------------------------------------------------------------------------------------------------------------------------
Class B Shares
- -----------------------------------------------------------------------------------------------------------------------------
Net Assets $ 105,014,830 $ 38,998,829 $ 167,543,801 $ 139,329,888
Shares Outstanding 9,158,125 3,557,840 15,645,795 12,632,930
Net Asset Value, Offering Price and Redemption
Price Per Share (Note 6)
(Net assets/shares of beneficial interest
outstanding) $ 11.47 $ 10.96 $ 10.71 $ 11.03
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
See notes to financial statements
11
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Assets and Liabilities
As of January 31, 1998
<TABLE>
<CAPTION>
Minnesota Fund New Jersey Fund Pennsylvania Fund Texas Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Investment in Municipals Portfolio --
Identified cost $62,777,157 $ 306,750,058 $ 348,275,279 $ 18,085,377
Unrealized appreciation 6,404,597 35,476,532 37,388,466 1,829,703
- ----------------------------------------------------------------------------------------------------------------------------------
Total investment, at value (Note 1A) $69,181,754 $ 342,226,590 $ 385,663,745 $ 19,915,080
- ----------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 257,376 $ 456,167 $ 355,919 $ 2,311
Deferred organization expenses (Note 1D) 2,278 2,054 -- 1,670
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets $69,441,408 $ 342,684,811 $ 386,019,664 $ 19,919,061
- ----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions payable $ 131,654 $ 679,216 $ 794,564 $ 39,106
Payable for Fund shares redeemed 38,967 841,722 477,053 29,512
Payable to affiliate for Trustees' fees (Note 4) 156 348 264 14
Accrued expenses 30,013 130,878 142,314 10,468
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 200,790 $ 1,652,164 $ 1,414,195 $ 79,100
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets $69,240,618 $ 341,032,647 $ 384,605,469 $ 19,839,961
- ----------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $67,105,173 $ 319,476,093 $ 364,383,206 $ 18,743,590
Accumulated net realized loss on investments from
Portfolio (computed on the basis of identified
cost) (4,155,375) (13,577,304) (17,553,756) (743,391)
Accumulated undistributed (distributions in excess
of) net investment income (113,777) (342,674) 387,553 10,059
Net unrealized appreciation of investments from
Portfolio (computed on the basis of identified
cost) 6,404,597 35,476,532 37,388,466 1,829,703
- ----------------------------------------------------------------------------------------------------------------------------------
Total $69,240,618 $ 341,032,647 $ 384,605,469 $ 19,839,961
- ----------------------------------------------------------------------------------------------------------------------------------
Class A Shares
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 2,889,699 $ 8,451,064 $ 6,546,783 $ 367,625
Shares Outstanding 292,161 791,583 612,722 37,070
Net Asset Value and Redemption Price Per Share
(Net assets / shares of beneficial interest
outstanding) $ 9.89 $ 10.68 $ 10.68 $ 9.92
Offering Price Per Share
(100/95.25 of net asset value per share) $ 10.38 $ 11.21 $ 11.21 $ 10.41
- ----------------------------------------------------------------------------------------------------------------------------------
Class B Shares
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets $66,350,919 $ 332,581,583 $ 378,058,686 $ 19,472,336
Shares Outstanding 6,247,924 29,958,642 34,280,882 1,751,815
Net Asset Value, Offering Price and Redemption
Price Per Share (Note 6)
(Net assets / shares of beneficial interest
outstanding) $ 10.62 $ 11.10 $ 11.03 $ 11.12
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
See notes to financial statements
12
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
For the Six Months Ended January 31, 1998
<TABLE>
<CAPTION>
Arizona Colorado Connecticut Michigan
Fund Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- -------------------------------------------------------------------------------------------------------------------------------
Interest income allocated from Portfolio $3,163,520 $1,216,849 $4,964,851 $ 4,166,524
Expenses allocated from Portfolio (264,078) (85,767) (443,520) (363,285)
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $2,899,442 $1,131,082 $4,521,331 $ 3,803,239
- -------------------------------------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------------------------------------
Compensation of Trustees not members of the
Administrator's organization (Note 4) $ 830 $ 49 $ 893 $ 809
Distribution and service fees (Note 5)
Class A 1,773 2,162 2,449 995
Class B 502,177 186,214 815,678 686,760
Transfer and dividend disbursing agent fees 40,434 19,412 79,919 65,076
Custodian fee 6,472 2,688 9,266 7,847
Printing and postage 4,053 1,272 3,809 4,549
Legal and accounting services 7,979 -- 127 7,699
Registration fees 4,049 518 925 2,883
Amortization of organization expenses (Note 1D) 2,657 2,366 2,765 1,098
Miscellaneous 2,126 1,253 7,607 3,086
- -------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 572,550 $ 215,934 $ 923,438 $ 780,802
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $2,326,892 $ 915,148 $3,597,893 $ 3,022,437
- -------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $2,250,315 $ 274,318 $ 447,145 $ 1,934,999
Financial futures contracts (746,662) (359,805) (802,375) (1,119,453)
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions $1,503,653 $ (85,487) $ (355,230) $ 815,546
- -------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $ 268,054 $ 464,800 $2,209,528 $ 343,050
Financial futures contracts 543,285 197,690 453,049 894,687
- -------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments $ 811,339 $ 662,490 $2,662,577 $ 1,237,737
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $2,314,992 $ 577,003 $2,307,347 $ 2,053,283
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $4,641,884 $1,492,151 $5,905,240 $ 5,075,720
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
13
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
For the Six Months Ended January 31, 1998
<TABLE>
<CAPTION>
Minnesota New Jersey Pennsylvania Texas
Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Income (Note 1B)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income allocated from Portfolio $2,035,076 $ 10,487,608 $ 12,036,112 $ 609,322
Expenses allocated from Portfolio (163,646) (901,745) (986,999) (40,108)
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $1,871,430 $ 9,585,863 $ 11,049,113 $ 569,214
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------------------------------------------
Compensation of Trustees not members of the
Administrator's organization (Note 4) $ 431 $ 893 $ 1,653 $ 41
Distribution and service fees (Note 5)
Class A 1,301 4,641 3,115 323
Class B 314,624 1,604,929 1,830,212 94,603
Transfer and dividend disbursing agent fees 32,433 149,809 169,490 8,971
Custodian fee 4,470 13,774 -- 2,029
Printing and postage 2,240 9,329 8,019 3,106
Legal and accounting services 427 2,227 8,354 --
Registration fees 1,004 746 3,364 --
Amortization of organization expenses (Note 1D) 1,364 857 -- 1,426
Miscellaneous 7,845 17,349 7,264 865
- ----------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 366,139 $ 1,804,554 $ 2,031,471 $ 111,364
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income $1,505,291 $ 7,781,309 $ 9,017,642 $ 457,850
- ----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $1,185,730 $ 2,879,125 $ 2,825,095 $ 285,123
Financial futures contracts (654,921) (1,542,911) (2,824,759) (91,792)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment transactions $ 530,809 $ 1,336,214 $ 336 $ 193,331
- ----------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $ (86,668) $ 2,924,910 $ 2,616,205 $ 323
Financial futures contracts 423,538 817,003 2,277,866 81,067
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments $ 336,870 $ 3,741,913 $ 4,894,071 $ 81,390
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 867,679 $ 5,078,127 $ 4,894,407 $ 274,721
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $2,372,970 $ 12,859,436 $ 13,912,049 $ 732,571
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
14
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended January 31, 1998
<TABLE>
<CAPTION>
Arizona Colorado Connecticut Michigan
Increase (Decrease) in Net Assets Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 2,326,892 $ 915,148 $ 3,597,893 $ 3,022,437
Net realized gain (loss) on investment transactions 1,503,653 (85,487) (355,230) 815,546
Net change in unrealized appreciation (depreciation)
of investments 811,339 662,490 2,662,577 1,237,737
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 4,641,884 $ 1,492,151 $ 5,905,240 $ 5,075,720
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net investment income
Class A $ (55,718) $ (43,800) $ (72,185) $ (26,930)
Class B (2,271,174) (879,568) (3,525,708) (2,996,417)
In excess of net investment income
Class A (667) -- (3,282) --
Class B (51,024) -- (70,340) (91,893)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (2,378,583) $ (923,368) $ (3,671,515) $ (3,115,240)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares
Class A $ 937,539 $ 405,592 $ 440,196 $ 19,301
Class B 2,660,849 1,932,867 2,662,715 1,615,100
Net asset value of shares issued to
shareholders in payment of distributions
declared
Class A 32,924 23,241 19,683 18,680
Class B 869,164 445,899 1,931,589 1,596,555
Cost of shares redeemed
Class A (42,902) (286,590) (231,084) (208,252)
Class B (10,100,918) (4,708,390) (10,878,400) (14,371,131)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Fund share
transactions $ (5,643,344) $ (2,187,381) $ (6,055,301) $ (11,329,747)
- ------------------------------------------------------------------------------------------------------------------------------------
Contribution from EV Traditional Municipals Fund $ 1,873,786 $ 1,672,995 $ 2,746,315 $ 1,141,339
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ (1,506,257) $ 54,397 $ (1,075,261) $ (8,227,928)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of period $109,379,070 $ 40,786,166 $ 171,633,950 $ 148,541,504
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $107,872,813 $ 40,840,563 $ 170,558,689 $ 140,313,576
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions
in excess of) net investment income
included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $ (101,289) $ 68,479 $ (398,222) $ (263,063)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
15
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended January 31, 1998
<TABLE>
<CAPTION>
Minnesota New Jersey Pennsylvania Texas
Increase (Decrease) in Net Assets Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 1,505,291 $ 7,781,309 $ 9,017,642 $ 457,850
Net realized gain on investment transactions 530,809 1,336,214 336 193,331
Net change in unrealized appreciation
(depreciation) of investments 336,870 3,741,913 4,894,071 81,390
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 2,372,970 $ 12,859,436 $ 13,912,049 $ 732,571
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net investment income
Class A $ (71,099) $ (191,536) $ (149,141) $ (9,295)
Class B (1,436,260) (7,589,773) (9,221,667) (456,236)
In excess of net investment income
Class A -- (7,684) (2,075) --
Class B (39,622) (138,805) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $(1,546,981) $ (7,927,798) $ (9,372,883) $ (465,531)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares
Class A $ 395,838 $ 2,836,530 $ 1,575,472 $ 40,054
Class B 1,976,340 8,018,947 8,299,298 390,914
Net asset value of shares issued to
shareholders in payment of distributions
declared
Class A 47,083 98,071 91,355 6,125
Class B 758,314 3,930,344 4,215,663 180,465
Cost of shares redeemed
Class A (126,757) (561,852) (298,099) (36,579)
Class B (4,953,143) (29,245,638) (34,895,745) (2,643,318)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Fund share transactions $(1,902,325) $ (14,923,598) $ (21,012,056) $ (2,062,339)
- ------------------------------------------------------------------------------------------------------------------------------------
Contribution from EV Traditional Municipals Fund $ 2,536,172 $ 5,945,100 $ 5,104,277 $ 352,637
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ 1,459,836 $ (4,046,860) $ (11,368,613) $ (1,442,662)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of period $67,780,782 $ 345,079,507 $ 395,974,082 $ 21,282,623
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $69,240,618 $ 341,032,647 $ 384,605,469 $ 19,839,961
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions
in excess of) net investment income
included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $ (113,777) $ (342,674) $ 387,553 $ 10,059
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
16
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended July 31, 1997
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets Arizona Fund Colorado Fund Connecticut Fund Michigan Fund
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 5,308,412 $ 1,949,565 $ 7,854,551 $ 7,008,394
Net realized gain on investment
transactions 777,524 436,388 470,342 22,544
Net change in unrealized
appreciation (depreciation)
of investments 4,874,791 1,988,534 6,896,585 6,437,778
- -----------------------------------------------------------------------------------------------------------
Net increase in net assets from
operations $ 10,960,727 $ 4,374,487 $ 15,221,478 $ 13,468,716
- -----------------------------------------------------------------------------------------------------------
Distributions to shareholders (Class B)
(Note 2) --
From net investment income $(5,284,385) $(1,920,578) $(7,825,912) $(7,008,394)
In excess of net investment
income -- -- -- (34,246)
- -----------------------------------------------------------------------------------------------------------
Total distributions to shareholders $(5,284,385) $(1,920,578) $(7,825,912) $(7,042,640)
- -----------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest (Class B) (Note 3) --
Proceeds from sale of shares $ 6,378,622 $ 3,160,432 $ 8,059,926 $ 2,876,721
Net asset value of shares issued
to shareholders in payment of
distributions declared 2,001,467 959,878 4,201,749 3,546,390
Cost of shares redeemed (32,357,879) (8,760,256) (29,631,741) (35,374,258)
- -----------------------------------------------------------------------------------------------------------
Net decrease in net assets from Fund
share transactions $ (23,977,790) $ (4,639,946) $ (17,370,066) $ (28,951,147)
- -----------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (18,301,448) $ (2,186,037) $ (9,974,500) $ (22,525,071)
- -----------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------
At beginning of year $ 127,680,518 $ 42,972,203 $ 181,608,450 $ 171,066,575
- -----------------------------------------------------------------------------------------------------------
At end of year $ 109,379,070 $ 40,786,166 $ 171,633,950 $ 148,541,504
- -----------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- -----------------------------------------------------------------------------------------------------------
At end of year $ (49,528) $ 72,147 $ (319,776) $ (175,786)
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
17
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended July 31, 1997
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets Minnesota Fund New Jersey Fund Pennsylvania Fund Texas Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 3,228,568 $ 17,363,224 $ 20,464,913 $ 1,029,099
Net realized gain (loss) on investment transactions 19,343 1,985,293 (1,051,109) (6,238)
Net change in unrealized appreciation (depreciation)
of investments 2,703,193 13,897,749 18,464,028 1,092,949
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 5,951,104 $ 33,246,266 $ 37,877,832 $ 2,115,810
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Class B) (Note 2) --
From net investment income $ (3,186,013) $ (17,073,929) $ (20,078,825) $ (1,046,385)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (3,186,013) $ (17,073,929) $ (20,078,825) $ (1,046,385)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest
(Class B) (Note 3) --
Proceeds from sale of shares $ 3,588,530 $ 16,690,868 $ 15,557,539 $ 1,640,887
Net asset value of shares issued to shareholders
in payment of distributions declared 1,654,522 8,710,206 9,150,623 396,839
Cost of shares redeemed (14,601,452) (75,142,843) (87,637,467) (5,820,480)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Fund share transactions $ (9,358,400) $ (49,741,769) $ (62,929,305) $ (3,782,754)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (6,593,309) $ (33,569,432) $ (45,130,298) $ (2,713,329)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 74,374,091 $ 378,648,939 $ 441,104,380 $ 23,995,952
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 67,780,782 $ 345,079,507 $ 395,974,082 $ 21,282,623
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ (82,513) $ (190,532) $ 741,627 $ 18,886
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
18
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Arizona Fund
---------------------------------------------------------------------------------------
Year Ended
-----------------------------------------------------------------
Six Months Ended July 31, September 30,
January 31, 1998 ----------------------------------------- ---------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992
-------------------- ----------------------------------------- ---------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 10.090 $ 11.220 $ 10.680 $ 10.530 $ 10.390 $ 11.570 $ 10.700 $ 10.320
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.258 $ 0.242 $ 0.486 $ 0.482 $ 0.492 $ 0.404 $ 0.496 $ 0.526
Net realized and unrealized gain (loss)
on investments 0.222 0.256 0.539 0.161 0.164 (0.862) 1.076 0.520
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.480 $ 0.498 $ 1.025 $ 0.643 $ 0.656 $ (0.458) $ 1.572 $ 1.046
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.258) $ (0.242) $ (0.485) $ (0.488) $ (0.492) $ (0.404) $ (0.496) $ (0.526)
In excess of net investment income (0.002) (0.006) -- (0.005) (0.024) (0.074) (0.127) (0.120)
From net realized gain on investment
transactions -- -- -- -- -- (0.233) (0.079) (0.020)
In excess of net realized gain on
investment transactions -- -- -- -- -- (0.011) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.260) $ (0.248) $ (0.485) $ (0.493) $ (0.516) $ (0.722) $ (0.702) $ (0.666)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 10.310 $ 11.470 $ 11.220 $ 10.680 $ 10.530 $ 10.390 $ 11.570 $ 10.700
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 4.84% 4.50% 9.85% 6.17% 6.64% (4.16)% 15.29% 10.43%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data++
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 2,858 $105,015 $109,379 $127,681 $141,859 $150,879 $135,524 $ 62,498
Ratio of net expenses to average daily
net assets/(2)(3)/ 0.77%+ 1.57%+ 1.58% 1.56% 1.53% 1.46%+ 1.53% 1.52%
Ratio of net expenses to average daily net
assets, after custodian fee reduction/(2)/ 0.76%+ 1.56%+ 1.57% 1.55% -- -- -- --
Ratio of net investment income to average
daily net assets 5.02%+ 4.28%+ 4.50% 4.49% 4.81% 4.47%+ 4.42% 4.83%
Portfolio Turnover/(4)/ -- -- -- -- -- -- 39% 133%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Fund and the Portfolio may reflect a reduction
of the Investment Advisor fee, an allocation of expenses to the Investment
Adviser, or both. Had such actions not been taken, net investment income per
share and the ratios would have been as follows:
<TABLE>
<CAPTION>
Ratios (As a percentage of average daily net assets):
<S> <C>
Expenses/(3)/ 1.64%
Net investment income 4.71%
Net investment income per share $ 0.513
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
/(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 its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for
each of the prior periods have not been adjusted to reflect this change.
/(4)/ 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
substantially 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
19
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Colorado Fund
------------------------------------------------------------------------------------
Year Ended
----------------------------------------------------------------
Six Months Ended July 31, September 30,
January 31, 1998 ----------------------------------------- ----------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992**
----------------- ----------------------------------------- ----------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of
period $ 9.920 $ 10.800 $ 10.170 $ 10.020 $ 10.010 $ 10.960 $ 10.060 $ 10.000
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.255 $ 0.243 $ 0.491 $ 0.480 $ 0.494 $ 0.403 $ 0.484 $ 0.026
Net realized and unrealized gain
(loss) on investments 0.155 0.161 0.621 0.162 0.033 (0.880) 0.996 0.082++
- -----------------------------------------------------------------------------------------------------------------------
Total income (loss) from
operations $ 0.410 $ 0.404 $ 1.112 $ 0.642 $ 0.527 $ (0.477) $ 1.480 $ 0.108
- -----------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.260) $ (0.244) $ (0.482) $ (0.492) $ (0.494) $ (0.403) $ (0.484) $ (0.026)
In excess of net investment
income -- -- -- -- (0.023) (0.070) (0.096) (0.022)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.260) $ (0.244) $ (0.482) $ (0.492) $ (0.517) $ (0.473) $ (0.580) $ (0.048)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 10.070 $ 10.960 $ 10.800 $ 10.170 $ 10.020 $ 10.010 $ 10.960 $ 10.060
- -----------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 4.20% 3.79% 11.26% 6.46% 5.58% (4.46)% 15.52% 0.60%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
20
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Colorado Fund
------------------------------------------------------------------------------------
Year Ended
----------------------------------------------------------------
Six Months Ended July 31, September 30,
January 31, 1998 ----------------------------------------- ----------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992**
------------------ ----------------------------------------- ----------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios/Supplemental Data+++
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's
omitted) $ 1,842 $ 38,999 $ 40,786 $ 42,972 $ 43,900 $ 42,085 $ 24,847 $ 2,464
Ratio of net expenses to average
daily net assets/(2)(3)/ 0.81%+ 1.50%+ 1.53% 1.49% 1.28% 1.09%+ 1.00% 1.00%+
Ratio of net expenses to average
daily net assets, after
custodian fee reduction/(2)/ 0.81%+ 1.50%+ 1.49% 1.45% -- -- -- --
Ratio of net investment income to
average daily net assets 5.12%+ 4.44%+ 4.75% 4.69% 5.03% 4.59%+ 4.49% 2.26%+
Portfolio Turnover/(4)/ -- -- -- -- -- -- 3% 0%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+++The operating expenses of the Fund and the Portfolio may reflect a reduction
of the Investment Adviser fee, an allocation of expenses to the Investment
Adviser or Administrator, or both. Had such actions not been taken, the net
investment income per share and ratios would have been as follows:
<TABLE>
<CAPTION>
Ratios (As a percentage of
average daily net assets):
<S> <C> <C> <C> <C> <C>
Expenses/(2)(3)/ 1.51% 1.43% 1.42%+ 1.90% 2.34%+
Expenses after custodian fee
reduction/(2)/ 1.46% -- -- -- --
Net investment income 4.67% 4.88% 4.26%+ 3.60% 0.92%+
Net investment income per share $0.478 $0.479 $0.373 $0.387 $0.011
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ The per share amount is not in accord with the net realized and unrealized
gain (loss) on investments for the period because of the timing of sales
of Fund shares and the amount of the per share realized and unrealized
gains and losses at such time.
* For the ten months ended July 31, 1994.
** For the period from the start of business, August 25, 1992, to September
30, 1992.
/(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 its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for
each of the prior periods have not been adjusted to reflect this change.
/(4)/ 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
substantially 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.
21
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Connecticut Fund
------------------------------------------------------------------------------------
Year Ended
---------------------------------------------------------------
Six Months Ended July 31, September 30,
January 31, 1998 ---------------------------------------- ---------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992**
------------------- ---------------------------------------- ---------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 10.640 $ 10.570 $ 10.120 $ 9.970 $ 10.050 $ 11.030 $ 10.270 $ 10.000
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.268 $ 0.221 $ 0.453 $ 0.452 $ 0.465 $ 0.388 $ 0.471 $ 0.192
Net realized and unrealized gain (loss) on
investments 0.150 0.145 0.450 0.169 (0.037) (0.883) 0.885 0.331++
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.418 $ 0.366 $ 0.903 $ 0.621 $ 0.428 $ (0.495) $ 1.356 $ 0.523
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.268) $ (0.221) $ (0.453) $ (0.452) $ (0.465) $ (0.388) $ (0.471) $ (0.192)
In excess of net investment income (0.010) (0.005) -- (0.019) (0.043) (0.079) (0.120) (0.061)
From net realized gain on investments -- -- -- -- -- (0.018) (0.005) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.278) $ (0.226) $ (0.453) $ (0.471) $ (0.508) $ (0.485) $ (0.596) $ (0.253)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 10.780 $ 10.710 $ 10.570 $ 10.120 $ 9.970 $ 10.050 $ 11.030 $ 10.270
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 3.99% 3.51% 9.17% 6.30% 4.55% (4.61)% 13.62% 5.00%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
22
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Connecticut Fund
--------------------------------------------------------------------------------------
Year Ended
------------------------------------------------------------------
Six Months Ended July 31, September 30,
January 31, 1998 ------------------------------------------ ----------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992**
------------------ ------------------------------------------ ----------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+++
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets, end of period (000's
omitted) $3,015 $167,544 $171,634 $181,608 $188,900 $188,453 $160,790 $50,031
Ratio of net expenses to average
daily net assets/(2)(3)/ 0.81%+ 1.60%+ 1.60% 1.58% 1.55% 1.43%+ 1.56% 1.35%+
Ratio of net expenses to average
daily net assets, after
custodian fee reduction/(2)/ 0.81%+ 1.60%+ 1.60% 1.57% -- -- -- --
Ratio of net investment income to
average daily net assets 4.95%+ 4.17%+ 4.45% 4.45% 4.77% 4.42%+ 4.33% 4.13%+
Portfolio Turnover/(4)/ -- -- -- -- -- -- 14% 16%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
+++ The operating expenses of the Fund and the Portfolio may reflect a
reduction of the Investment Adviser fee, an allocation of expenses to the
Investment Adviser, or both. Had such actions 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>
Expenses/(3)/ 1.52%+
Net investment income 3.96%+
Net investment income per share $0.184
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ The per share amount is not in accord with the net realized and
unrealized gain (loss) on investments for the period because of the
timing of sales of Fund shares and the amount of the per share realized
and unrealized gains and losses at such time.
* For the ten months ended July 31, 1994.
** For the period from the start of business, May 1, 1992, to September 30,
1992.
/(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 its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the year ended July 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as
its corresponding Portfolio, to increase its expense ratio by the effect
of any expense offset arrangements with its service providers. The
expense ratios for each of the prior periods have not been adjusted to
reflect this change.
/(4)/ 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
substantially all of its investable assets to its respective Portfolio is
shown in the Portfolio's financial statements which are included
elsewhere in this report.
See notes to financial statements
23
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Michigan Fund
---------------------------------------------------------------------------------------
Year Ended
------------------------------------------------------------------
Six Months Ended July 31, September 30,
January 31, 1998 ------------------------------------------ ----------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992
------------------ ------------------------------------------ ----------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 9.750 $ 10.870 $ 10.420 $ 10.250 $ 10.210 $ 11.110 $ 10.570 $ 10.220
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.249 $ 0.225 $ 0.460 $ 0.464 $ 0.486 $ 0.398 $ 0.480 $ 0.499
Net realized and unrealized gain
(loss) on investments 0.141 0.168 0.454 0.195 0.059 (0.794) 0.745 0.507
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.390 $ 0.393 $ 0.914 $ 0.659 $ 0.545 $ (0.396) $ 1.225 $ 1.006
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.250) $ (0.225) $ (0.462) $ (0.481) $ (0.486) $ (0.398) $ (0.480) $ (0.499)
In excess of net investment income -- (0.008) (0.002) (0.008) (0.019) (0.062) (0.114) (0.144)
From net realized gain on investments -- -- -- -- -- (0.028) (0.058) (0.013)
In excess of net realized gain on
investments -- -- -- -- -- (0.016) (0.033) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.250) $ (0.233) $ (0.464) $ (0.489) $ (0.505) $ (0.504) $ (0.685) $ (0.656)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 9.890 $ 11.030 $ 10.870 $ 10.420 $ 10.250 $ 10.210 $ 11.110 $ 10.570
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 4.07% 3.68% 9.01% 6.50% 5.61% (3.66)% 12.06% 10.13%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 984 $139,330 $148,542 $171,067 $186,363 $197,082 $188,290 $107,034
Ratio of expenses to average
daily net assets/(2)//(3)/ 0.84%+ 1.61%+ 1.60% 1.61% 1.51% 1.49%+ 1.54% 1.61%
Ratio of expenses to average
daily net assets, after
custodian fee reduction/(2)/ 0.82%+ 1.59%+ 1.58% 1.60% -- -- -- --
Ratio of net investment income to
average daily net assets 4.95%+ 4.17%+ 4.40% 4.44% 4.84% 4.49%+ 4.40% 4.65%
Portfolio Turnover/(4)/ -- -- -- -- -- -- 28% 72%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
/(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 its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for
each of the prior periods have not been adjusted to reflect this change.
/(4)/ 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
substantially 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
24
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Minnesota Fund
------------------------------------------------------------------------------------------
Year Ended
-------------------------------------------------------------------
Six Months Ended July 31, September 30,
January 31, 1998 ------------------------------------------- --------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992
------------------- ------------------------------------------- --------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 9.770 $ 10.490 $ 10.070 $ 9.950 $ 10.040 $ 10.910 $ 10.310 $ 10.080
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.248 $ 0.225 $ 0.466 $ 0.468 $ 0.470 $ 0.383 $ 0.473 $ 0.505
Net realized and unrealized gain
(loss) on investments 0.132 0.137 0.415 0.123 (0.053) (0.788) 0.749 0.361
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
operations $ 0.380 $ 0.362 $ 0.881 $ 0.591 $ 0.417 $ (0.405) $ 1.222 $ 0.866
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.260) $ (0.225) $ (0.461) $(0.468) $ (0.470) $ (0.383) $ (0.473) $ (0.505)
In excess of net investment income -- (0.007) -- (0.003) (0.037) (0.073) (0.125) (0.131)
From net realized gain on investments -- -- -- -- -- (0.009) -- --
In excess of net realized gain on
investments -- -- -- -- -- -- (0.024) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.260) $ (0.232) $ (0.461) $(0.471) $ (0.507) $ (0.465) $ (0.622) $ (0.636)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 9.890 $ 10.620 $ 10.490 $10.070 $ 9.950 $ 10.040 $ 10.910 $ 10.310
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 3.96% 3.52% 9.01% 6.00% 4.41% (3.81)% 12.28% 8.82%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data ++
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 2,890 $ 66,351 $ 67,781 $74,374 $ 78,970 $ 79,223 $ 68,004 $ 26,670
Ratio of net expenses to average
daily net assets/(2)//(3)/ 0.72%+ 1.57%+ 1.58% 1.56% 1.52% 1.54%+ 1.59% 1.42%
Ratio of net expenses to average
daily net assets, after
custodian fee reduction/(2)/ 0.71%+ 1.56%+ 1.55% 1.54% -- -- -- --
Ratio of net investment income to
average daily net assets 5.14%+ 4.31%+ 4.62% 4.63% 4.80% 4.38%+ 4.38% 4.74%
Portfolio Turnover/(4)/ -- -- -- -- -- -- 16% 25%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Fund and the Portfolio may reflect a reduction
of the Investment Adviser fee, an allocation of expenses to the Investment
Adviser or Administrator, or both. Had such actions 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>
Expenses/(2)//(3)/ 1.61% 2.05%
Net investment income 4.37% 4.11%
Net investment income per share $ 0.472 $ 0.438
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
/(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 its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for
each of the prior periods have not been adjusted to reflect this change.
/(4)/ 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
substantially 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
25
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
New Jersery Fund
---------------------------------------------------------------------------------------
Year Ended
Six Months Ended July 31, September 30,
January 31, 1998 ----------------------------------------- ---------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992
-------------------- ----------------------------------------- ---------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 10.530 $ 10.940 $ 10.440 $ 10.360 $ 10.410 $ 11.350 $ 10.680 $ 10.380
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.285 $ 0.245 $ 0.506 $ 0.505 $ 0.505 $ 0.421 $ 0.514 $ 0.516
Net realized and unrealized gain (loss)
on investments 0.157 0.165 0.493 0.084 (0.009) (0.836) 0.841 0.452
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.442 $ 0.410 $ 0.999 $ 0.589 $ 0.496 $ (0.415) $ 1.355 $ 0.968
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.285) $ (0.245) $ (0.499) $ (0.505) $ (0.505) $ (0.421) $ (0.514) $ (0.516)
In excess of net investment income (0.007) (0.005) -- (0.004) (0.035) (0.075) (0.112) (0.124)
From net realized gain on investments -- -- -- -- -- (0.029) (0.059) (0.028)
In excess of net realized gain on investments -- -- -- -- (0.006) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.292) $ (0.250) $ (0.499) $ (0.509) $ (0.546) $ (0.525) $ (0.685) $ (0.668)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 10.680 $ 11.100 $ 10.940 $ 10.440 $ 10.360 $ 10.410 $ 11.350 $ 10.680
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 4.28% 3.83% 9.85% 5.74% 5.04% (3.77)% 13.15% 9.64%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 8,451 $332,582 $345,080 $378,649 $404,861 $ 420,117 $395,421 $235,324
Ratio of expenses to average daily net
assets/(2)(3)/ 0.76%+ 1.59%+ 1.59% 1.57% 1.53% 1.48%+ 1.56% 1.63%
Ratio of expenses to average daily net
assets, after custodian fee reduction/(2)/ 0.76%+ 1.59%+ 1.57% 1.56% -- -- -- --
Ratio of net investment income to average
daily net assets 5.28%+ 4.50%+ 4.82% 4.80% 4.97% 4.64%+ 4.66% 4.83%
Portfolio Turnover/(4)/ -- -- -- -- -- -- 20% 74%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
/(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 its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for
each of the prior periods have not been adjusted to reflect this change.
/(4)/ 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
substantially 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
26
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Pennsylvania Fund
------------------------------------------------------------------------------------------
Year Ended
-------------------------------------------------------------------
Six Months Ended July 31, September 30,
January 31, 1998 --------------------------------------------- ------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992
------------------ --------------------------------------------- -----------------
Class A Class B Class B Class B Class B Class B Class B Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value-- Beginning of period $ 10.550 $ 10.900 $ 10.430 $ 10.320 $ 10.340 $ 11.310 $ 10.650 $ 10.350
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.290 $ 0.253 $ 0.522 $ 0.512 $ 0.507 $ 0.422 $ 0.520 $ 0.531
Net realized and unrealized gain
(loss) on investments 0.136 0.139 0.458 0.108 0.004+ (0.841) 0.794 0.430
- -----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.426 $ 0.392 $ 0.980 $ 0.620 $ 0.511 $ (0.419) $ 1.314 $ 0.961
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.290) $ (0.262) $ (0.510) $ (0.510) $ (0.507) $ (0.422) $ (0.520) $ (0.531)
In excess of net investment income (0.006) -- -- -- (0.024) (0.069) (0.115) (0.130)
From net realized gain on investments -- -- -- -- -- (0.042) (0.019) --
In excess of net realized gain on
investments -- -- -- -- -- (0.018) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.296) $ (0.262) $ (0.510) $ (0.510) $ (0.531) $ (0.551) $ (0.654) $ (0.661)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value-- End of period $ 10.680 $ 11.030 $ 10.900 $ 10.430 $ 10.320 $ 10.340 $ 11.310 $ 10.650
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 4.10% 3.65% 9.66% 6.08% 5.24% (3.84)% 12.76% 9.56%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 6,547 $378,059 $395,974 $ 441,104 $495,856 $ 530,115 $499,601 $280,193
Ratio of net expenses to average
daily net assets/(2)(3)/ 0.75%+ 1.59%+ 1.61% 1.58% 1.51% 1.46%+ 1.56% 1.64%
Ratio of net expenses to average
daily net assets, after
custodian fee reduction /(2)/ 0.72%+ 1.56%+ 1.56% 1.54% -- -- -- --
Ratio of net investment income to
average daily net assets 5.40%+ 4.61%+ 4.93% 4.89% 5.04% 4.68%+ 4.70% 4.92%
Portfolio Turnover/(4)/ -- -- -- -- -- -- 6% 15%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
++ The per share amount is not in accord with the net realized and unrealized
gain (loss) on investments for the period because of the timing of sales
of Fund shares and the amount of the per share realized and unrealized
gains and losses at such time.
* For the ten months ended July 31, 1994.
/(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 its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for
each of the prior periods have not been adjusted to reflect this change.
/(4)/ 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
substantially 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
27
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Texas Fund
----------------------------------------------------------------------------------------
Year Ended
------------------------------------------------------------------
Six Months Ended July 31, September 30,
January 31, 1998 ------------------------------------------ --------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992**
------------------ ------------------------------------------ --------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 9.770 $ 10.960 $ 10.440 $ 10.280 $ 10.210 $ 11.110 $ 10.450 $ 10.000
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.260 $ 0.247 $ 0.489 $ 0.492 $ 0.532 $ 0.436 $ 0.515 $ 0.255
Net realized and unrealized gain (loss)
on investments 0.146 0.163 0.526 0.177 0.084 (0.824) 0.787 0.516
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.406 $ 0.410 $ 1.015 $ 0.669 $ 0.616 $ (0.388) $ 1.302 $ 0.771
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.256) $ (0.250) $ (0.495) $ (0.509) $ (0.532) $ (0.436) $ (0.515) $ (0.255)
In excess of net investment income -- -- -- -- (0.014) (0.076) (0.106) (0.066)
In excess of net realized gain on
investments -- -- -- -- -- -- (0.021) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.256) $ (0.250) $ (0.495) $ (0.509) $ (0.546) $ (0.512) $ (0.642) $ (0.321)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 9.920 $ 11.120 $ 10.960 $ 10.440 $ 10.280 $ 10.210 $ 11.110 $ 10.450
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 4.21% 3.80% 10.00% 6.60% 6.36% (3.65)% 12.90% 7.51%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
28
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Texas Fund
---------------------------------------------------------------------------------------
Year Ended
------------------------------------------------------------------
Six Months Ended July 31, September 30,
January 31, 1998 ------------------------------------------- ---------------------
(Unaudited) 1997 1996 1995 1994* 1993 1992**
------------------- ------------------------------------------- ---------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratios/Supplemental Data++
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 368 $ 19,472 $ 21,283 $ 23,996 $ 27,762 $ 26,677 $ 16,338 $ 4,020
Ratio of net expenses to average daily net
assets/(2)(3)/ 0.74%+ 1.51%+ 1.57% 1.43% 0.99% 0.82%+ 1.06% 1.00%+
Ratio of net expenses to average daily net
assets, after custodian fee
reduction/(2)/ 0.72%+ 1.49%+ 1.55% 1.39% -- -- -- --
Ratio of net investment income to average
daily net assets 5.22%+ 4.46%+ 4.61% 4.70% 5.29% 4.81%+ 4.67% 4.61%+
Portfolio Turnover/(4)/ -- -- -- -- -- -- 7% 11%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Fund and the Portfolio may reflect a reduction
of the Investment Adviser fee, an allocation of expenses to the Investment
Adviser or Administrator, or both. Had such actions 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>
Expenses/(2)(3)/ 1.53% 1.44% 1.67%+ 2.55% 2.35%+
Expenses after custodian fee reduction/(2)/ 1.49% -- -- -- --
Net investment income 4.60% 4.84% 3.96%+ 3.18% 3.26%+
Net investment income per share $ 0.482 $ 0.487 $ 0.359 $ 0.350 $ 0.180
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
** For the period from the start of business, March 24, 1992, to September
30, 1992.
/(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 its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for
each of the prior periods have not been adjusted to reflect this change.
/(4)/ 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
substantially 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
29
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
----------------------------------------------------------------------------
Eaton Vance Municipals 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, as an open-end management
investment company. The Trust presently consists of twenty-nine Funds, eight
of the non-diversified funds are included in these financial statements.
They include Eaton Vance Arizona Municipals Fund ("Arizona Fund"), Eaton
Vance Colorado Municipals Fund ("Colorado Fund"), Eaton Vance Connecticut
Municipals Fund ("Connecticut Fund"), Eaton Vance Michigan Municipals Fund
("Michigan Fund"), Eaton Vance Minnesota Municipals Fund ("Minnesota Fund"),
Eaton Vance New Jersey Municipals Fund ("New Jersey Fund"), Eaton Vance
Pennsylvania Municipals Fund ("Pennsylvania Fund") and Eaton Vance Texas
Municipals Fund ("Texas Fund"). The Funds offer two classes of shares. Class
A shares are sold subject to a sales charge imposed at the time of purchase.
Class B shares are sold at net asset value and are subject to a declining
contingent deferred sales charge (See Note 6). 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.
Each Fund invests all of its investable assets in interests in a separate
corresponding open-end management investment company (a "Portfolio"), a New
York Trust, having the same investment objective as its corresponding Fund.
The Arizona Fund invests its assets in the Arizona Municipals Portfolio, the
Colorado Fund invests its assets in the Colorado Municipals Portfolio, the
Connecticut Fund invests its assets in the Connecticut Municipals Portfolio,
the Michigan Fund invests its assets in the Michigan Municipals Portfolio,
the Minnesota Fund invests its assets in the Minnesota Municipals Portfolio,
the New Jersey Fund invests its assets in the New Jersey Municipals
Portfolio, the Pennsylvania Fund invests its assets in the Pennsylvania
Municipals Portfolio and the Texas Fund invests its assets in the Texas
Municipals Portfolio. The value of each Fund's investment in its
corresponding Portfolio reflects the Fund's proportionate interest in the
net assets of that Portfolio (100% at January 31, 1998 for each Fund). The
performance of each Fund is directly affected by the performance of its
corresponding Portfolio. The financial statements of each Portfolio,
including the portfolio of investments, are included elsewhere in this
report and should be read in conjunction with each Fund's financial
statements.
The following is a summary of significant accounting policies consistently
followed by the Trust 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 Portfolios is
discussed in Note 1A of the Portfolios' Notes to Financial Statements which
are included elsewhere in this report.
B Income -- Each Fund's net investment income consists of the Fund's pro
rata share of the net investment income of its corresponding Portfolio, less
all actual and accrued expenses of each Fund determined in accordance with
generally accepted accounting principles.
C Federal Taxes -- Each 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 and tax-exempt
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary. At July 31, 1997,
the Funds, for federal income tax purposes, had capital loss carryovers
which will reduce taxable income arising from future net realized gain on
investments, 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 Funds of any liability for
federal income or excise tax. A portion of such capital loss carryovers were
acquired through the Fund Reorganization (see Note 8) and may be subject to
certain limitations. The amounts and expiration dates of the capital loss
carryovers are as follows:
Fund Amount Expires
---------------------------------------------------------------------------
Arizona Fund $4,880,609 July 31, 2004
6,850 July 31, 2003
4,854 July 31, 2002
Colorado Fund 2,089,815 July 31, 2004
172,973 July 31, 2003
15,872 July 31, 2002
Connecticut Fund 7,848 July 31, 2005
5,029,576 July 31, 2004
206,627 July 31, 2003
135 July 31, 2002
30
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
Fund Amount Expires
---------------------------------------------------------------------------
Michigan Fund $ 315,466 July 31, 2005
2,730,535 July 31, 2004
1,279,142 July 31, 2003
726,249 July 31, 2002
Minnesota Fund 329,867 July 31, 2005
3,926,544 July 31, 2004
842,788 July 31, 2003
33,555 July 31, 2002
New Jersey Fund 23,676 July 31, 2005
15,944,400 July 31, 2004
92 July 31, 2002
Pennsylvania Fund 1,933,493 July 31, 2005
12,988,102 July 31, 2004
4,209,137 July 31, 2003
439,448 July 31, 2002
Texas Fund 84,793 July 31, 2005
668,321 July 31, 2004
184,977 July 31, 2003
79,597 July 31, 2002
Additionally, net capital losses of $1,112, $17,464, $1,315 and $101 for the
Connecticut Fund, Pennsylvania Fund, New Jersey Fund and Texas Fund,
respectively, attributable to security transactions incurred after October
31, 1996, are treated as arising on the first day of the Fund's current
taxable year. Dividends paid by each Fund from net interest on tax-exempt
municipal bonds allocated from its corresponding Portfolio are not
includable by shareholders as gross income for federal income tax purposes
because each Fund and Portfolio intend to meet certain requirements of the
Internal Revenue Code applicable to regulated investment companies which
will enable the Funds to pay tax-exempt interest dividends. The portion of
such interest, if any, earned on private activity bonds issued after August
7, 1986 may be considered a tax preference item to shareholders.
D Deferred Organization Expenses -- Costs incurred by each Fund in
connection with its organization, including registration costs, are being
amortized on the straight-line basis over five years.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Funds and the Portfolios. Pursuant to the respective
custodian agreements, IBT receives a fee reduced by credits which are
determined based on the average daily cash balances the Funds or the
Portfolios maintain with IBT. All significant credit balances used to reduce
each Fund'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 revenue and expense during the reporting period. Actual results could
differ from those estimates.
G Other -- Investment transactions are accounted for on a trade date basis.
H Interim Financial Information-- The interim financial statements relating
to January 31, 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
----------------------------------------------------------------------------
The net 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. Distributions are paid monthly. Distributions
are paid in the form of additional shares or, at the election of the
shareholder, in cash. 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.
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.
31
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) 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 (without par
value). Such shares may be issued in a number of different classes.
Transactions in Fund shares were as follows:
Arizona Fund
-------------------------------------------
Six Months Ended
January 31, 1998 Year Ended
(Unaudited) July 31, 1997
-------------------------------------------
Class A Class B Class B
----------------------------------------------------------------------------
Sales 92,505 237,220 587,035
Issued to shareholders electing
to receive payments of
distributions in Fund shares 3,260 77,617 184,561
Redemptions (4,258) (902,324) (2,984,656)
Issued to EV Traditional
Municipals Fund shareholders 185,763 -- --
----------------------------------------------------------------------------
Net increase (decrease) 277,270 (587,487) (2,213,060)
----------------------------------------------------------------------------
Colorado Fund
-------------------------------------------
Six Months Ended
January 31, 1998 Year Ended
(Unaudited) July 31, 1997
-------------------------------------------
Class A Class B Class B
----------------------------------------------------------------------------
Sales 40,608 178,777 305,999
Issued to shareholders electing
to receive payments of
distributions in Fund shares 2,342 41,326 92,921
Redemptions (28,627) (437,704) (847,903)
Issued to EV Traditional
Municipals Fund shareholders 168,584 -- --
----------------------------------------------------------------------------
Net increase (decrease) 182,907 (217,601) (448,983)
----------------------------------------------------------------------------
Connecticut Fund
-------------------------------------------
Six Months Ended
January 31, 1998 Year Ended
(Unaudited) July 31, 1997
-------------------------------------------
Class A Class B Class B
----------------------------------------------------------------------------
Sales 41,448 251,615 785,303
Issued to shareholders electing
to receive payments of
distributions in Fund shares 1,849 183,072 410,380
Redemptions (21,612) (1,031,845) (2,893,701)
Issued to EV Traditional
Municipals Fund shareholders 258,003 -- --
----------------------------------------------------------------------------
Net increase (decrease) 279,688 (597,158) (1,698,018)
----------------------------------------------------------------------------
Michigan Fund
-------------------------------------------
Six Months Ended
January 31, 1998 Year Ended
(Unaudited) July 31, 1997
-------------------------------------------
Class A Class B Class B
----------------------------------------------------------------------------
Sales 1,994 149,725 273,591
Issued to shareholders electing
to receive payments of
distributions in Fund shares 1,922 147,369 336,586
Redemptions (21,500) (1,326,741) (3,360,285)
Issued to EV Traditional
Municipals Fund shareholders 117,072 -- --
----------------------------------------------------------------------------
Net increase (decrease) 99,488 (1,029,647) (2,750,108)
----------------------------------------------------------------------------
Minnesota Fund
-------------------------------------------
Six Months Ended
January 31, 1998 Year Ended
(Unaudited) July 31, 1997
-------------------------------------------
Class A Class B Class B
----------------------------------------------------------------------------
Sales 40,793 189,088 354,478
Issued to shareholders electing
to receive payments of
distributions in Fund shares 4,834 72,709 163,187
Redemptions (13,026) (475,480) (1,442,543)
Issued to EV Traditional
Municipal Fund shareholders 259,560 -- --
----------------------------------------------------------------------------
Net increase (decrease) 292,161 (213,683) (924,878)
----------------------------------------------------------------------------
New Jersey Fund
-------------------------------------------
Six Months Ended
January 31, 1998 Year Ended
(Unaudited) July 31, 1997
-------------------------------------------
Class A Class B Class B
----------------------------------------------------------------------------
Sales 270,697 732,008 1,576,459
Issued to shareholders electing
to receive payments of
distributions in Fund shares 9,318 360,176 824,152
Redemptions (53,252) (2,680,574) (7,114,631)
Issued to EV Traditional
Municipal Fund shareholders 564,820 -- --
----------------------------------------------------------------------------
Net increase (decrease) 791,583 (1,588,390) (4,714,020)
----------------------------------------------------------------------------
32
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
Pennsylvania Fund
-------------------------------------------
Six Months Ended
January 31, 1998 Year Ended
(Unaudited) July 31, 1997
-------------------------------------------
Class A Class B Class B
----------------------------------------------------------------------------
Sales 148,740 762,146 1,471,266
Issued to shareholders electing
to receive payments of
distributions in Fund shares 8,652 387,312 853,998
Redemptions (28,347) (3,209,919) (8,289,968)
Issued to EV Traditional
Municipal Fund shareholders 483,677 -- --
----------------------------------------------------------------------------
Net increase (decrease) 612,722 (2,060,461) (5,964,704)
----------------------------------------------------------------------------
Texas Fund
-------------------------------------------
Six Months Ended
January 31, 1998 Year Ended
(Unaudited) July 31, 1997
-------------------------------------------
Class A Class B Class B
----------------------------------------------------------------------------
Sales 4,120 35,650 156,332
Issued to shareholders electing
to receive payments of
distributions in Fund shares 626 16,475 37,478
Redemptions (3,767) (242,213) (549,906)
Issued to EV Traditional
Municipal Fund shareholders 36,091 -- --
----------------------------------------------------------------------------
Net increase (decrease) 37,070 (190,088) (356,096)
----------------------------------------------------------------------------
4 Transactions with Affiliates
----------------------------------------------------------------------------
Eaton Vance Management (EVM) serves as the Administrator of each Fund, but
receives no compensation. Each of the Portfolios have engaged Boston
Management and Research (BMR), a subsidiary of EVM, to render investment
advisory services. See Note 2 of the Portfolios' Notes to Financial
Statements which are included elsewhere in this report. Certain of the
officers and Trustees of the Funds and the Portfolios are officers and
directors/trustees of the above organizations. Except as to Trustees of the
Funds and Portfolios who are not members of EVM's or BMR's organization,
officers and Trustees receive remuneration for their services to each fund
out of the investment adviser fee earned by BMR. Eaton Vance Distributors,
Inc. (EVD), a subsidiary of EVM and the Funds' principal underwriter,
received $1,819, $1,042, $103, $19, $1,121, $5,034, $1,199 and $96 from the
Arizona Fund, Colorado Fund, Connecticut Fund, Michigan Fund, Minnesota
Fund, New Jersey Fund, Pennsylvania Fund and Texas Fund, respectively, as
its portion of the sales charge on sales of Class A shares for the six
months ended January 31, 1998.
5 Distribution Plan
----------------------------------------------------------------------------
Each Fund has adopted a distribution plan (the Plans) pursuant to Rule 12b-1
under the Investment Company Act of 1940 for each Fund's Class B shares. The
Plans require the Class B shares to pay the principal underwriter, Eaton
Vance Distributors, Inc. (EVD), amounts equal to 1/365 of 0.75% of each
Fund's Class B daily net assets, for providing ongoing distribution services
and facilities to the respective Fund. A Fund's Class B shares will
automatically discontinue payments to EVD during any period in which there
are no outstanding Uncovered Distribution Charges, which are equivalent to
the sum of (i) 5% of the aggregate amount received by the Fund for Class B
shares sold plus (ii) distribution fees calculated by applying the rate of
1% over the prevailing prime rate to the outstanding balance of Uncovered
Distribution Charges of EVD reduced by the aggregate amount of contingent
deferred sales charges (Note 6) and amounts theretofore paid to EVD. The
amount payable to EVD with respect to each day is accrued on such day as a
liability of each Class B and, accordingly, reduces the Class B's net
assets. For the six months ended January 31, 1998, the Class B shares of the
Arizona Fund, Colorado Fund, Connecticut Fund, Michigan Fund, Minnesota
Fund, New Jersey Fund, Pennsylvania Fund and Texas Fund paid $397,641,
$147,188, $634,931, $539,396, $249,728, $1,264,199, $1,438,171 and $75,373,
respectively, to EVD, representing 0.75% of each Fund's Class B average
daily net assets. At January 31, 1998, the amount of Uncovered Distribution
Charges of EVD calculated under the Class B Plans for Arizona Fund, Colorado
Fund, Connecticut Fund, Michigan Fund, Minnesota Fund, New Jersey Fund,
Pennsylvania Fund and Texas Fund were approximately $2,923,000, $1,412,000,
$4,888,000, $3,264,000, $1,880,000, $7,734,000, $9,329,000 and $476,000,
respectively.
In addition, the Plans authorize 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 for any fiscal
year. The Trustees have 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 0.20%
33
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
per annum of each Fund's average daily net assets attributable to both Class
A and Class B shares based on the value of Fund shares sold by such persons
and remaining outstanding for at least one year. For the six months ended
January 31, 1998, Arizona Fund, Colorado Fund, Connecticut Fund, Michigan
Fund, Minnesota Fund, New Jersey Fund, Pennsylvania Fund and Texas Fund paid
or accrued service fees to or payable to EVD in the amount of $1,773,
$2,162, $2,449, $995, $1,301, $4,641, $3,115 and $323, respectively, for
Class A shares, and $104,536, $39,026, $180,747, $147,364, $64,896,
$340,730, $384,237 and $19,230, respectively, for Class B shares. Service
fee payments are made for personal services and/or maintenance of
shareholder accounts. Service fees paid to EVD and Authorized Firms are
separate and distinct from the sales commissions and distribution fees
payable by each Fund to EVD, and as such are not subject to automatic
discontinuance when there are no outstanding Uncovered Distribution Charges
of EVD. Certain officers and Trustees of the Funds are officers or directors
of EVD.
6 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. 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 Class B shares acquired by reinvestment of
dividends or capital gains distributions. The CDSC is imposed at declining
rates that begin at 5% in the case of redemptions in the first and second
year after purchase, declining one percentage point each subsequent year. No
CDSC is levied on Class B shares which have been sold to EVD 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 each Fund's Class B Distribution Plan (see Note 5). CDSC
charges received when no Uncovered Distribution Charges exist will be
credited to the Fund. EVD received approximately $194,000, $108,000,
$149,000, $150,000, $90,000, $351,000, $409,000 and $47,000 of CDSC paid by
Class B shareholders of Arizona Fund, Colorado Fund, Connecticut Fund,
Michigan Fund, Minnesota Fund, New Jersey Fund, Pennsylvania Fund and Texas
Fund, respectively, for the six months ended January 31, 1998.
7 Investment Transactions
----------------------------------------------------------------------------
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the six months ended January 31, 1998 were as follows:
Arizona Fund
----------------------------------------------------------------------------
Increases $ 3,625,822
Decreases (13,141,768)
----------------------------------------------------------------------------
Colorado Fund
----------------------------------------------------------------------------
Increases $ 2,024,449
Decreases (5,760,082)
----------------------------------------------------------------------------
Connecticut Fund
----------------------------------------------------------------------------
Increases $ 3,499,677
Decreases (14,240,022)
----------------------------------------------------------------------------
Michigan Fund
----------------------------------------------------------------------------
Increases $ 2,168,583
Decreases (17,553,258)
----------------------------------------------------------------------------
Minnesota Fund
----------------------------------------------------------------------------
Increases $ 2,231,474
Decreases (6,462,481)
----------------------------------------------------------------------------
New Jersey Fund
----------------------------------------------------------------------------
Increases $ 11,118,150
Decreases (36,327,597)
----------------------------------------------------------------------------
Pennsylvania Fund
----------------------------------------------------------------------------
Increases $ 10,389,079
Decreases (42,889,571)
----------------------------------------------------------------------------
Texas Fund
----------------------------------------------------------------------------
Increases $ 487,593
Decreases (3,092,568)
----------------------------------------------------------------------------
8 Transfer of Assets
----------------------------------------------------------------------------
On August 1, 1997, EV Marathon Arizona Municipals Fund, EV Marathon Colorado
Municipals Fund, EV Marathon Connecticut Municipals Fund, EV Marathon
Michigan Municipals Fund, EV Marathon Minnesota Municipals Fund, EV Marathon
New Jersey Municipals Fund, EV Marathon Pennsylvania Municipals Fund and EV
Marathon Texas Municipals Fund acquired the net assets of EV Traditional
Arizona Municipals Fund, EV Traditional Colorado Municipals Fund, EV
Traditional Connecticut Municipals Fund, EV Traditional Michigan Municipals
Fund, EV Traditional Minnesota Municipals Fund, EV
34
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
Traditional New Jersey Municipals Fund, EV Traditional Pennsylvania
Municipals Fund and EV Traditional Texas Municipals Fund, respectively,
pursuant to an Agreement and Plan of Reorganization dated June 23, 1997. In
accordance with the agreement, the Funds, at the closing, issued Class A
shares as follows:
Class A shares Aggregate value Net asset value
Fund Issued of shares issued per share
----------------------------------------------------------------------------
Arizona Fund 185,763 $1,873,786 $10.09
Colorado Fund 168,584 1,672,995 9.92
Connecticut Fund 258,003 2,746,315 10.64
Michigan Fund 117,072 1,141,339 9.75
Minnesota Fund 259,560 2,536,172 9.77
New Jersey Fund 564,820 5,945,100 10.53
Pennsylvania Fund 483,677 5,104,277 10.55
Texas Fund 36,091 352,637 9.77
The transaction was structured for tax purposes to qualify as a tax free
reorganization under the Internal Revenue Code. The net assets acquired,
including unrealized appreciation at the date of the transaction were as
follows:
Fund Acquired net assets Unrealized appreciation
----------------------------------------------------------------------------
Arizona Fund $1,873,786 $105,967
Colorado Fund 1,672,995 154,386
Connecticut Fund 2,746,315 148,370
Michigan Fund 1,141,339 105,076
Minnesota Fund 2,536,172 208,144
New Jersey Fund 5,945,100 282,362
Pennsylvania Fund 5,104,277 214,513
Texas Fund 352,637 12,509
Directly after the merger, the combined net assets of the Funds and the net
asset value of Class A shares and Class B shares were as follows:
Class A net asset Class B net asset
Fund Combined net assets value per share value per share
----------------------------------------------------------------------------
Arizona Fund $111,252,856 $10.09 $11.22
Colorado Fund 42,459,161 9.92 10.80
Connecticut Fund 174,380,265 10.64 10.57
Michigan Fund 149,682,843 9.75 10.87
Minnesota Fund 70,316,954 9.77 10.49
New Jersey Fund 351,024,607 10.53 10.94
Pennsylvania Fund 401,078,359 10.55 10.90
Texas Fund 21,635,260 9.77 10.96
9 Name Change
----------------------------------------------------------------------------
Effective August 1, 1997, the EV Marathon Arizona Municipals Fund, EV
Marathon Colorado Municipals Fund, EV Marathon Connecticut Municipals Fund,
EV Marathon Michigan Municipals Fund, EV Marathon Minnesota Municipals Fund,
EV Marathon New Jersey Municipals Fund, EV Marathon Pennsylvania Municipals
Fund and EV Marathon Texas Municipals Fund changed their respective names to
Eaton Vance Arizona Municipals Fund, Eaton Vance Colorado Municipals Fund,
Eaton Vance Connecticut Municipals Fund, Eaton Vance Michigan Municipals
Fund, Eaton Vance Minnesota Municipals Fund, Eaton Vance New Jersey
Municipals Fund, Eaton Vance Pennsylvania Municipals Fund and Eaton Vance
Texas Municipals Fund.
35
<PAGE>
Arizona Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Assisted Living -- 1.7%
- --------------------------------------------------------------------------------
NR NR $ 1,800 Arizona Health Facilities
Authority, (Mesa Project),
7.625%, 1/1/26 $ 1,860,444
- --------------------------------------------------------------------------------
$ 1,860,444
- --------------------------------------------------------------------------------
Education -- 7.0%
- --------------------------------------------------------------------------------
Aa2 NR $ 2,000 Arizona Educational Loan
Marketing Corp., (AMT), 6.25%,
6/1/06 $ 2,205,820
NR NR 2,000 Arizona Educational Loan
Marketing Corp., (AMT), 6.30%,
12/1/08 2,145,280
A NR 1,500 Arizona Student Loan
Acquisition Authority, (AMT),
7.625%, 5/1/10 1,682,400
A1 AA 1,250 University of Arizona,
6.25%, 6/1/11 1,370,363
- --------------------------------------------------------------------------------
$ 7,403,863
- --------------------------------------------------------------------------------
Electric Utilities -- 15.2%
- --------------------------------------------------------------------------------
A A+ $ 1,000 Commonwealth of Puerto Rico,
Telephone Authority, Variable
Rate, 1/1/20/(1)/ $ 1,128,750
Ba2 BB+ 3,500 Maricopa County, AZ, Pollution
Control, 6.375%, 8/15/23 3,737,895
Baa1 A- 5,300 Navajo County, AZ, Pollution
Control, 5.875%, 8/15/28 5,498,961
B2 B 1,000 Pima County, AZ, IDA, (Tucson
Electric Power Co.),
6.00%, 9/1/29 1,029,480
Baa1 BBB+ 370 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 391,138
Aa2 AA 3,500 Salt River Project Agricultural
Improvement and Power District,
5.00%, 1/1/20 3,472,245
Aa2 AA 820 Salt River Project Agricultural
Improvement and Power District,
6.25%, 1/1/27 882,935
- --------------------------------------------------------------------------------
$ 16,141,404
- --------------------------------------------------------------------------------
Escrowed/Prerefunded -- 17.4%
- --------------------------------------------------------------------------------
Aaa AA $ 1,000 Arizona Transportation Board
Highway, 6.50%, 7/1/11 $ 1,113,550
NR AAA 1,000 Glendale, AZ, Industrial
Development Authority, 7.125%,
7/1/20 1,188,940
NR NR 2,250 Maricopa County, AZ, IDA,
(Greenery Apartments), 6.625%,
7/1/26 2,643,593
NR NR 3,000 Maricopa County, AZ, IDA,
Multi-family, 6.625%, 1/1/27 3,528,690
NR NR 1,250 Maricopa County, AZ, IDA, Place
Five and The Greenery Projects,
8.625%, 1/1/11 1,652,450
Aaa AAA 7,500 Maricopa County, AZ, Single
Family Mortgage, 0.00%, 2/1/16 3,031,800
Aaa AAA 1,750 Phoenix, AZ, Civic Improvement
Excise Tax, (MBIA),
6.60%, 7/1/08 2,007,705
Aaa AAA 5,000 Phoenix, AZ, Industrial
Development Authority, IDA,
Single Family, 0.00%, 12/1/14 2,182,450
NR AA 1,000 Phoenix, AZ, Street and Highway
User, 6.25%, 7/1/11 1,096,920
- --------------------------------------------------------------------------------
$ 18,446,098
- --------------------------------------------------------------------------------
General Obligations -- 6.0%
- --------------------------------------------------------------------------------
Baa1 A $ 1,125 Commonwealth of Puerto Rico,
0.00%, 7/1/17 $ 427,106
Aa1 AA+ 2,000 Phoenix, AZ, 5.25%, 7/1/20 2,030,840
Aa1 AA+ 1,500 Phoenix, AZ, 6.375%, 7/1/13 1,652,685
NR A 2,000 Tatum Ranch, AZ,
6.875%, 7/1/16 2,206,780
- --------------------------------------------------------------------------------
$ 6,317,411
- --------------------------------------------------------------------------------
Hospitals -- 4.6%
- --------------------------------------------------------------------------------
NR BBB $ 1,130 Arizona Health Facilities,
(Phoenix Memorial Hospital),
8.125%, 6/1/12 $ 1,244,175
NR BBB 1,250 Arizona Health Facilities,
(Phoenix Memorial Hospital),
8.20%, 6/1/21/(2)/ 1,379,150
Baa1 BBB- 1,000 Maricopa County, AZ, (Sun
Health Corporation), 8.125%,
4/1/12 1,169,830
NR NR 905 Winslow, AZ, Industrial
Development Authority, (Winslow
Memorial Hospital), 9.50%,
6/1/22 1,049,592
- --------------------------------------------------------------------------------
$ 4,842,747
- --------------------------------------------------------------------------------
Housing -- 5.0%
- --------------------------------------------------------------------------------
NR A $ 2,000 Maricopa County, AZ, IDA,
(Laguna Point Apartments),
6.75%, 7/1/19 $ 2,174,720
NR NR 1,000 Maricopa County, AZ, IDA,
Multifamily, (National Health
Facilities II Project), Series
B, 6.375%, 1/1/19 998,790
See notes to financial statements
36
<PAGE>
Arizona Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Housing (continued)
- --------------------------------------------------------------------------------
NR AA $ 1,000 Phoenix, AZ, (Woodstone and
Silver Springs Apartments),
Multi-family Housing, (Asset
Guaranty), 6.25%, 4/1/23 $ 1,042,650
NR AAA 1,000 Tempe, AZ, Industrial
Development Authority,
(Quadrangle Village
Apartments), 6.25%, 6/1/26 1,044,680
- --------------------------------------------------------------------------------
$ 5,260,840
- --------------------------------------------------------------------------------
Industrial Development Revenue/Pollution Control Revenue -- 9.2%
- --------------------------------------------------------------------------------
A1 NR $ 1,000 Casa Grande, AZ, Pollution
Control, (Frito Lay, Inc.),
6.60%, 12/1/10 $ 1,105,910
NR BBB- 2,000 Coconino County, AZ, Pollution
Control, (Nevada Power
Co.-Series B), (AMT), 5.80%,
11/1/32 2,068,100
Baa2 BBB 3,000 Gila County, AZ, Industrial
Development Authority, (Asarco,
Inc.), 5.55%, 1/1/27 3,069,510
A2 A 1,000 Greenlee County, AZ, Pollution
Control, (Phelps Dodge Corp.),
5.45%, 6/1/09 1,052,930
Ba1 BB+ 500 Maricopa County, AZ, Pollution
Control, (Public Service Co.),
5.75%, 11/1/22 518,780
Baa3 BBB- 1,750 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.25%, 6/1/26 1,903,773
- --------------------------------------------------------------------------------
$ 9,719,003
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 2.9%
- --------------------------------------------------------------------------------
Aaa AAA $ 2,715 Pima County, AZ, (Irvington
Power), (FGIC), 7.25%, 7/15/10 $ 3,059,669
- --------------------------------------------------------------------------------
$ 3,059,669
- --------------------------------------------------------------------------------
Insured-General Obligations -- 4.8%
- --------------------------------------------------------------------------------
NR AAA $ 1,500 Commonwealth of Puerto Rico
"RIBS", (AMBAC), Variable
Rate, 7/1/15/(1)/ $ 1,758,750
Aaa AAA 1,000 Commonwealth of Puerto Rico,
Variable Rate,
(FSA), 7/1/20/(1)/ 1,138,750
Aaa AAA 1,000 Maricopa County, AZ, Alhambra
School District, (AMBAC),
5.125%, 7/1/13 1,026,430
Aaa AAA 1,000 Puerto Rico (FSA), Variable
Rate, 7/1/22/(1)/ 1,151,250
- --------------------------------------------------------------------------------
$ 5,075,180
- --------------------------------------------------------------------------------
Insured-Hospitals -- 13.0%
- --------------------------------------------------------------------------------
Aaa AAA $ 2,000 Maricopa County, AZ, Hospital
District No. 1, (FGIC),
6.125%, 6/1/15 $ 2,169,360
Aaa AAA 2,000 Maricopa County, AZ, Samaritan
Health, (MBIA), 7.00%, 12/1/16 2,538,440
Aaa AAA 2,000 Mohave County, AZ, (Kingman
Regional Medical Center),
(FGIC), 6.50%, 6/1/15 2,187,200
Aaa AAA 1,000 Pima County, AZ, (Carondelet
Health Care Corp.), (MBIA),
5.25%, 7/1/12 1,065,740
Aaa AAA 1,000 Pima County, AZ, (Carondolet
Health Care Corp.), (MBIA),
5.25%, 7/1/11 1,069,170
Aaa AAA 1,500 Pima County, AZ, (Tucson
Medical Center), (MBIA), 5.00%,
4/1/15 1,502,895
Aaa AAA 1,500 Pima County, AZ, (Tucson
Medical Center), (MBIA),
6.375%, 4/1/12 1,638,450
Aaa AAA 1,500 Scottsdale, AZ, Industrial
Development Authority, (AMBAC),
6.125%, 9/1/17 1,653,270
- --------------------------------------------------------------------------------
$ 13,824,525
- --------------------------------------------------------------------------------
Insured-Housing -- 2.5%
- --------------------------------------------------------------------------------
Aaa AAA $ 2,500 Maricopa County, AZ, IDA,
Multifamily, (National Health
Facilities II Project), (FSA),
5.50%, 1/1/24 $ 2,649,900
- --------------------------------------------------------------------------------
$ 2,649,900
- --------------------------------------------------------------------------------
Insured-Water and Sewer -- 1.0%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,000 Chandler, AZ, Water and Sewer,
(FGIC), 6.25%, 7/1/13 $ 1,095,530
- --------------------------------------------------------------------------------
$ 1,095,530
- --------------------------------------------------------------------------------
Special Tax Revenue -- 1.1%
- --------------------------------------------------------------------------------
NR NR $ 1,000 Virgin Islands Public Finance
Authority, 7.25%, 10/1/18 $ 1,125,850
- --------------------------------------------------------------------------------
$ 1,125,850
- --------------------------------------------------------------------------------
Transportation -- 3.1%
- --------------------------------------------------------------------------------
NR BBB $ 3,000 Guam Airport Authority, (AMT),
6.70%, 10/1/23 $ 3,303,540
- --------------------------------------------------------------------------------
$ 3,303,540
- --------------------------------------------------------------------------------
See notes to financial statements
37
<PAGE>
Arizona Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Water and Sewer -- 5.5%
- --------------------------------------------------------------------------------
Aa1 AA+ $ 2,000 Arizona Wastewater Management
Authority, 6.80%, 7/1/11 $ 2,240,960
A1 AA- 1,000 Central Arizona Water
Conservation District, 5.50%,
11/1/09 1,100,510
Aa3 A 1,500 Phoenix, AZ, (Civic Improvement
Corp.), 4.75%, 7/1/23 1,417,455
A1 A+ 1,000 Tuscon, AZ, Water Systems,
6.50%, 7/1/16 1,083,520
- --------------------------------------------------------------------------------
$ 5,842,445
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $94,998,980) $105,968,449
- --------------------------------------------------------------------------------
AMT-Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio primarily invests in debt securities issued by Arizona
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1998, 26.1% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 1.0% to 9.4% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
38
<PAGE>
Colorado Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Electric Utilities -- 1.4%
- --------------------------------------------------------------------------------
NR BBB $ 500 Guam Power Authority,
6.625%, 10/1/14 $ 557,280
- --------------------------------------------------------------------------------
$ 557,280
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 15.2%
- --------------------------------------------------------------------------------
NR AAA $4,000 Colorado Health Facilities
Authority, (Liberty Heights),
(FSA), 0.00%, 7/15/24 $ 1,007,440
Aa2 NR 1,000 Colorado Housing and Finance
Authority, Retirement Housing,
(Liberty Heights Project),
(AMT), 7.55%, 11/1/27 1,134,690
Aaa NR 3,000 Dawson Ridge, Metropolitan
District #1, Douglas
County, CO, 0.00%, 10/1/22 835,410
Aaa NR 5,500 Dawson Ridge, Metropolitan
District Number 1, Douglas
County, CO, Escrowed to
Maturity, 0.00%, 10/1/22 1,531,585
Aaa BBB 160 Denver, CO, City And County
Airport Revenue, (AMT),
Prerefunded to 11/15/01,
7.00%, 11/15/25 176,571
Aaa BBB 85 Denver, CO, City And County
Airport Revenue, (AMT),
Prerefunded to 11/15/04,
7.50%, 11/15/23 102,503
Aaa BBB 1,185 Denver, CO, City And County
Airport Revenue, Prerefunded
to 11/15/02, (AMT), 6.75%,
11/15/22 1,289,399
- --------------------------------------------------------------------------------
$ 6,077,598
- --------------------------------------------------------------------------------
General Obligations -- 2.6%
- --------------------------------------------------------------------------------
Baa1 A $1,000 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/36 $ 1,063,420
- --------------------------------------------------------------------------------
$ 1,063,420
- --------------------------------------------------------------------------------
Hospitals -- 23.1%
- --------------------------------------------------------------------------------
NR NR $ 900 Colorado Health Facilities
Authority, (Cleo Wallace
Center), 7.00%, 8/1/15 $ 946,035
NR BBB- 650 Colorado Health Facilities
Authority, (National Jewish
Center For Immunology and
Respiratory Medicine),
6.875%, 2/15/12 690,833
Baa1 NR $2,000 Colorado Health Facilities
Authority, (Parkview Memorial
Hospital), 6.125%, 9/1/25 $ 2,130,400
Baa BBB 2,050 Colorado Health Facilities
Authority, (Rocky Mountain
Adventist Healthcare),
6.625%, 2/1/13 2,211,765
NR NR 600 Colorado Health Facilities
Authority, (Steamboat Springs
Health), 5.00%, 9/15/03 606,264
NR NR 500 Colorado Health Facilities
Authority, (Steamboat Springs
Health), 5.30%, 9/15/09 501,045
NR BBB 2,000 Colorado Health Facilities
Authority, (Vail Valley Medical
Center), 6.60%, 1/15/20 2,154,440
- --------------------------------------------------------------------------------
$ 9,240,782
- --------------------------------------------------------------------------------
Housing -- 14.8%
- --------------------------------------------------------------------------------
NR AAA $1,000 City of Lakewood,
Multifamily Housing, FHA
Insured Mortgage Loan,
(AMT), 6.65%, 10/1/25 $ 1,076,710
Aa AA 500 Colorado Housing and
Finance Authority,
Multifamily Mortgage
Revenue, MFMR, (AMT),
6.40%, 10/1/27 534,650
Aa2 NR 1,350 Colorado Housing and
Finance Authority, Single
Family Access Program,
7.90%, 12/1/24 1,516,860
Aa2 NR 710 Colorado Housing and
Finance Authority, Single
Family Access Program,
8.00%, 12/1/24 807,767
Aa2 NR 530 Colorado Housing and
Finance Authority, Single
Family Housing, (AMT),
7.65%, 12/1/25 600,140
NR AAA 1,000 Denver, CO, Multifamily
Housing, (Lofts Project),
(AMT), 6.15%, 12/1/16 1,052,670
NR NR 340 Lake Creek Affordable
Housing Corp., Multifamily,
8.00%, 12/1/23 359,094
- --------------------------------------------------------------------------------
$ 5,947,891
- --------------------------------------------------------------------------------
Industrial Development Revenue/Pollution
Control Revenue -- 6.5%
- --------------------------------------------------------------------------------
A2 NR $1,250 Puerto Rico Industrial,
Medical and Environmental
Pollution Control Facility
Finance Authority,
(American Home Products),
5.10%, 12/1/18 $ 1,243,563
See notes to financial statements
39
<PAGE>
Colorado Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Industrial Development Revenue/
Pollution Control Revenue (continued)
- --------------------------------------------------------------------------
Baa3 BBB- $1,250 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.25%, 6/1/26 $ 1,359,838
- --------------------------------------------------------------------------
$ 2,603,401
- --------------------------------------------------------------------------
Insured-Electric Utilities -- 2.2%
- --------------------------------------------------------------------------
Aaa AAA $ 500 Commonwealth of Puerto
Rico, Telephone Authority,
(MBIA), Variable Rate,
1/16/15/(1)/ $ 541,875
Aaa AAA 300 Puerto Rico Electric Power
Authority, "STRIPES",
(FSA), Variable
Rate, 7/1/03/(1)/ 347,625
- --------------------------------------------------------------------------
$ 889,500
- --------------------------------------------------------------------------
Insured-General Obligations -- 11.2%
- --------------------------------------------------------------------------
Aaa AAA $1,000 Douglas and Elbert
Counties, Douglas County
School District, (MBIA),
6.40%, 12/15/11 $ 1,141,190
Aaa AAA 1,750 Eagle, Garfield and Routt
Counties, School District
No. RE 50J, (FGIC), 6.30%,
12/1/12 1,963,693
Aaa AAA 1,160 Highlands Ranch
Metropolitan District No.
2, (FSA), 6.50%, 6/15/10/(2)/ 1,378,846
- --------------------------------------------------------------------------
$ 4,483,729
- --------------------------------------------------------------------------
Insured-Housing -- 2.7%
- --------------------------------------------------------------------------
Aaa AAA $1,000 City of Thornton, SCA
Realty MFMR, (FSA), 7.10%,
1/1/30 $ 1,096,730
- --------------------------------------------------------------------------
$ 1,096,730
- --------------------------------------------------------------------------
Insured-Special Tax Revenue -- 2.7%
- --------------------------------------------------------------------------
Aaa AAA $1,000 City of Broomfield Sales
and Use Tax, (AMBAC),
6.30%, 12/1/14 $ 1,090,060
- --------------------------------------------------------------------------
$ 1,090,060
- --------------------------------------------------------------------------
Insured-Transportation -- 2.0%
- --------------------------------------------------------------------------
Aaa AAA $ 750 Denver, CO, (Denver
International Airport),
(AMT), (MBIA),
5.75%, 11/15/15 $ 794,805
- --------------------------------------------------------------------------
$ 794,805
- --------------------------------------------------------------------------
Transportation -- 12.9%
- --------------------------------------------------------------------------
Baa3 BB+ $2,000 Denver, CO, (United
Airlines), (AMT), 6.875%,
10/1/32 $ 2,193,499
Aaa BBB 315 Denver, CO, City and County
Airport Revenue, (AMT),
6.75%, 11/15/22 356,659
Baa1 BBB 590 Denver, CO, City And County
Airport Revenue, (AMT),
7.00%, 11/15/25 637,849
Baa1 BBB 415 Denver, CO, City and County
Airport Revenue, (AMT),
7.50%, 11/15/23 480,275
NR NR 500 Eagle County, CO, (Eagle
County Airport Terminal
Project), (AMT), 7.50%,
5/1/21 546,820
NR BBB 750 Guam Airport Authority,
(AMT), 6.60%, 10/1/10 825,353
NR BBB 100 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 110,118
- --------------------------------------------------------------------------
$ 5,150,573
- --------------------------------------------------------------------------
Water and Sewer -- 2.7%
- --------------------------------------------------------------------------
NR NR $1,000 Cottonwood Water and
Sanitation District, 7.75%,
12/1/20 $ 1,070,840
- --------------------------------------------------------------------------
$ 1,070,840
- --------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $35,691,544) $40,066,609
- --------------------------------------------------------------------------
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Colorado
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1998, 23.3% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institutions ranged from 2.7% to 9.6% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
40
<PAGE>
Connecticut Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education -- 9.3%
- --------------------------------------------------------------------------------------
NR BBB- $4,775 Connecticut Health and Education
Facilities Authority, (Quinnipiac
College), 6.00%, 7/1/23 $ 4,895,235
Baa3 BBB- 1,000 Connecticut HEFA, (Sacred Heart
University), 5.80%, 7/1/23 1,007,130
Ba2 BBB- 5,500 Connecticut HEFA, (University of
Hartford), 6.80%, 7/1/22 5,890,225
Aaa AAA 3,400 Connecticut HEFA, (Yale University),
Variable Rate, 6/10/30/(1)/ 3,901,500
- --------------------------------------------------------------------------------------
$ 15,694,090
- --------------------------------------------------------------------------------------
Electric Utilities -- 5.2%
- --------------------------------------------------------------------------------------
NR BBB $1,100 Guam Power Authority,
6.625%, 10/1/14 $ 1,226,016
NR BBB 3,625 Guam Power Authority Revenue Bonds,
6.30%, 10/1/22 3,868,528
NR NR 3,365 Virgin Islands Water and Power
Authority, 7.40%, 7/1/11 3,696,049
- --------------------------------------------------------------------------------------
$ 8,790,593
- --------------------------------------------------------------------------------------
Escrowed/Prerefunded -- 1.5%
- --------------------------------------------------------------------------------------
NR A $1,000 Connecticut HEFA, (Sacred Heart
University), 6.80%, 7/1/12 $ 1,125,710
A1 AAA 645 Connecticut Special Tax Obligation
Bonds, (STOB), Transportation
Infrastructure Purposes,
6.50%, 7/1/09 682,204
NR AA- 650 State of Connecticut, General
Obligations Bonds,
6.875%, 7/15/10 707,285
- --------------------------------------------------------------------------------------
$ 2,515,199
- --------------------------------------------------------------------------------------
General Obligations -- 2.5%
- --------------------------------------------------------------------------------------
Aa2 AA $1,270 City of Danbury, 4.50%, 2/1/14 $ 1,237,475
Baa1 A 1,065 Commonwealth of Puerto Rico, Public
Improvement, 0.00%, 7/1/15 454,393
NR BBB 500 Government of Guam,
5.40%, 11/15/18 507,255
Aa3 AA- 1,000 State of Connecticut,
5.40%, 11/1/16 1,045,630
Aa3 AA- $1,750 State of Connecticut, Capital
Appreciation Bonds,
0.00%, 11/1/09 $ 1,026,025
- --------------------------------------------------------------------------------------
$ 4,270,778
- --------------------------------------------------------------------------------------
Hospitals -- 9.0%
- --------------------------------------------------------------------------------------
Baa2 NR $5,400 Connecticut HEFA, (Griffin Hospital),
5.75%, 7/1/23 $ 5,495,094
NR NR 2,000 Connecticut HEFA, (New Britan Memorial
Hospital), 7.75%, 7/1/22 2,320,820
NR A+ 1,100 Connecticut HEFA, (William W. Backus
Hospital), 6.00%, 7/1/12 1,169,344
NR A+ 5,780 Connecticut HEFA, (William W. Backus
Hospital), 6.375%, 7/1/22 6,148,706
- --------------------------------------------------------------------------------------
$ 15,133,964
- --------------------------------------------------------------------------------------
Housing -- 12.5%
- --------------------------------------------------------------------------------------
Aa AA $3,000 Connecticut HFA, MRB,
6.20%, 5/15/14 $ 3,170,550
Aa2 AA 1,695 Connecticut HFA, MRB,
6.35%, 5/15/17 1,814,175
Aa2 AA 210 Connecticut HFA, MRB,
6.55%, 11/15/13 224,597
Aa2 AA 2,515 Connecticut HFA, MRB,
6.60%, 11/15/23 2,690,648
Aa2 AA 5,315 Connecticut HFA, MRB,
6.70%, 11/15/12 5,715,485
Aa2 AA 1,705 Connecticut HFA, MRB,
6.75%, 11/15/23 1,827,283
Aa2 AA 200 Connecticut HFA, MRB,
7.00%, 11/15/09 214,514
Aa AA 15 Connecticut HFA, MRB,
7.625%, 11/15/17 15,343
Aa2 AA 4,735 Connecticut HFA, MRB, (AMT), 6.20%,
11/15/22 5,030,653
Aa2 AA 210 Connecticut HFA, MRB, (AMT), 6.90%,
5/15/20 224,916
Aa NR 100 Connecticut HFA, MRB, (AMT), 7.40%,
11/15/99 102,417
- --------------------------------------------------------------------------------------
$ 21,030,581
- --------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
41
<PAGE>
Connecticut Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Development Revenue/Pollution Control Revenue -- 3.3%
- --------------------------------------------------------------------------------------
Aaa AAA $1,000 Connecticut Development Authority PCR,
(Pfizer Inc.), 6.55%, 2/15/13 $ 1,101,990
NR NR 3,065 Connecticut Development Authority,
Airport Facility, (Signature Flight),
(AMT), 6.625%, 12/1/14 3,283,535
A3 A- 1,100 Sprague, CT, Environmental Improvement
Revenue, (International Paper Co.),
(AMT), 5.70%, 10/1/21 1,140,458
- --------------------------------------------------------------------------------------
$ 5,525,983
- --------------------------------------------------------------------------------------
Insured-Education -- 3.4%
- --------------------------------------------------------------------------------------
Aaa AAA $4,000 Connecticut HEFA, (Choate Rosemary
College), (MBIA),
5.00%, 7/1/27 $ 3,939,240
Aaa AAA 1,555 Connecticut HEFA, (Choate Rosemary
College), (MBIA),
6.80%, 7/1/15/(2)/ 1,792,371
- --------------------------------------------------------------------------------------
$ 5,731,611
- --------------------------------------------------------------------------------------
Insured-General Obligations -- 1.3%
- --------------------------------------------------------------------------------------
Aaa AAA $1,000 City of New Britain, (MBIA),
6.00%, 3/1/12 $ 1,139,450
Aaa AAA 1,000 Puerto Rico Commonwealth, (MBIA),
5.375%, 7/1/25 1,024,830
- --------------------------------------------------------------------------------------
$ 2,164,280
- --------------------------------------------------------------------------------------
Insured-Hospitals -- 8.6%
- --------------------------------------------------------------------------------------
Aaa AAA $1,000 Connecticut HEFA, (Bridgeport
Hospital), (MBIA),
6.625%, 7/1/18 $ 1,100,270
Aaa AAA 1,000 Connecticut HEFA, (Danbury Hospital),
(AMBAC), 5.375%, 7/1/17 1,019,600
Aaa AAA 1,000 Connecticut HEFA, (Hospital of St.
Raphael), (AMBAC),
6.50%, 7/1/11 1,191,410
Aaa AAA 1,500 Connecticut HEFA, (Hospital of St.
Raphael), (AMBAC),
6.625%, 7/1/14 1,627,665
Aaa AAA 2,350 Connecticut HEFA, (Lawrence and
Memorial Hospital), (MBIA),
5.00%, 7/1/22 2,298,042
Aaa NR 2,900 Connecticut HEFA, (Middlesex Hospital),
(MBIA), 5.125%, 7/1/27 2,884,601
Aaa AAA 2,000 Connecticut HEFA, (Veterans Memorial
Medical Center), (MBIA), 5.375%, 7/1/15 2,076,720
Aaa AAA $2,000 Connecticut HEFA, (Yale-New Haven
Hospital), (MBIA), 6.50%, 7/1/12 $ 2,190,620
- --------------------------------------------------------------------------------------
$ 14,388,928
- --------------------------------------------------------------------------------------
Insured-Housing -- 0.2%
- --------------------------------------------------------------------------------------
NR AA $ 305 Puerto Rico Housing Finance Corp.,
(AMBAC), 7.50%, 10/1/11 $ 317,850
- --------------------------------------------------------------------------------------
$ 317,850
- --------------------------------------------------------------------------------------
Insured-Transportation -- 5.8%
- --------------------------------------------------------------------------------------
Aaa AAA $8,200 State of Connecticut, Airport Revenue
Bonds, (Bradley International), (FGIC),
7.65%, 10/1/12 $ 9,719,951
- --------------------------------------------------------------------------------------
$ 9,719,951
- --------------------------------------------------------------------------------------
Nursing Homes -- 14.6%
- --------------------------------------------------------------------------------------
NR NR $1,240 Connecticut Development Authority,
(Baptist Homes), 9.00%, 9/1/22 $ 1,410,202
A2 NR 9,000 Connecticut Development Authority,
Health Care Bonds, (Duncaster), 6.75%,
9/1/15 9,785,249
A1 AA- 720 Connecticut HEFA, (NHP), (Highland
View), (AMT), 7.00%, 11/1/07 833,954
A1 AA- 1,305 Connecticut HEFA, (NHP), (Sharon
Healthcare), 6.25%, 11/1/14 1,443,043
A1 AA- 655 Connecticut HEFA, (NHP), (St.
Camillus), 6.25%, 11/1/18 718,280
A1 AA- 3,250 Connecticut HEFA, (NHP), (St. Joseph's
Manor), 6.25%, 11/1/16 3,593,785
A1 AA- 335 Connecticut HEFA, (NHP), (Wadsworth
Glen), (AMT), 7.00%, 11/1/07 388,020
A1 AA- 2,000 Connecticut HEFA, (NHP), (Wadsworth
Glen), (AMT), 7.50%, 11/1/16 2,361,340
A1 AA- 3,000 Connecticut HEFA, (NHP), (Windsor),
7.125%, 11/1/14 3,486,900
A1 AA- 500 Connecticut HEFA, (NHP), (Windsor),
7.125%, 11/1/24 579,565
- --------------------------------------------------------------------------------------
$ 24,600,338
- --------------------------------------------------------------------------------------
Solid Waste -- 10.6%
- --------------------------------------------------------------------------------------
A NR $2,500 Bristol Resource Recovery Facility
Operating Committee, (Ogden Martin
Systems), 6.50%, 7/1/14 $ 2,758,550
</TABLE>
See notes to financial statements
42
<PAGE>
Connecticut Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Solid Waste (continued)
- -----------------------------------------------------------------------------------------
A2 A $ 4,250 Connecticut Resources Recovery
Authority, (American REF-FUEL Co.),
(AMT), 6.45%, 11/15/22 $ 4,564,713
Baa1 AA- 450 Connecticut Resources Recovery
Authority, (American REF-FUEL Co.),
(AMT), 8.00%, 11/15/15 475,452
A2 A 1,000 Connecticut Resources Recovery
Authority, (American REF-FUEL Co.),
(AMT), 8.10%, 11/15/15 1,059,250
NR A- 8,970 Eastern Connecticut Resource Recovery
Authority, (Wheelabrator Lisbon),
(AMT), 5.50%, 1/1/20 8,924,342
- -----------------------------------------------------------------------------------------
$ 17,782,307
- -----------------------------------------------------------------------------------------
Special Tax Revenue -- 7.4%
- -----------------------------------------------------------------------------------------
Baa1 A $ 500 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/15 $ 537,905
Baa1 A 4,465 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/15 4,803,492
A1 AA- 3,180 State of Connecticut, (STOB), 6.125%,
9/1/12 3,650,735
A1 AA- 2,000 State of Connecticut, (STOB), 6.50%,
10/1/12 2,375,960
NR NR 1,000 Virgin Islands Public Finance
Authority, 7.25%, 10/1/18 1,125,850
- -----------------------------------------------------------------------------------------
$ 12,493,942
- -----------------------------------------------------------------------------------------
Student Loans -- 2.6%
- -----------------------------------------------------------------------------------------
A1 NR $ 1,220 Connecticut Higher Education
Supplemental Loan Authority Revenue
Bonds, (AMT), 6.20%, 11/15/09 $ 1,306,876
A1 NR 400 Connecticut Higher Education
Supplemental Loan Authority Revenue
Bonds, (AMT), 7.375%, 11/15/05 415,156
A1 NR 2,505 Connecticut Higher Education
Supplemental Loan Authority Revenue
Bonds, (AMT), 7.50%, 11/15/10 2,604,323
- -----------------------------------------------------------------------------------------
$ 4,326,355
- -----------------------------------------------------------------------------------------
Transportation -- 1.3%
- -----------------------------------------------------------------------------------------
NR BBB $ 2,000 Guam Airport Authority, (AMT), 6.70%,
10/1/23 $ 2,202,360
- -----------------------------------------------------------------------------------------
$ 2,202,360
- -----------------------------------------------------------------------------------------
Water and Sewer -- 0.9%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 1,250 State of Connecticut Clean Water Fund
Revenue Bonds, 6.00%, 10/1/12 $ 1,430,788
- -----------------------------------------------------------------------------------------
$ 1,430,788
- -----------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $156,324,927) $ 168,119,898
- -----------------------------------------------------------------------------------------
</TABLE>
AMT -- Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Connecticut
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1998, 19.3% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 2.3% to 11.1% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
43
<PAGE>
Michigan Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Education -- 0.7%
- --------------------------------------------------------------------------------
Aa2 NR $1,000 Oakland County, MI,
(Cranbrook Educational
Community Project), 5.00%,
11/1/17 $ 996,190
- --------------------------------------------------------------------------------
$ 996,190
- --------------------------------------------------------------------------------
Electric Utilities -- 2.9%
- --------------------------------------------------------------------------------
NR BBB $1,000 Guam Power Authority,
6.625%, 10/1/14 $ 1,114,560
Baa1 BBB+ 500 Michigan South Central
Power Agency Supply
System, 6.75%, 11/1/10 540,545
Baa1 BBB 1,780 Monroe County, MI, PCR,
(Detroit Edison Project),
(AMT), 7.75%, 12/1/19 1,928,078
Baa1 BBB+ 365 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 385,955
- --------------------------------------------------------------------------------
$ 3,969,138
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 7.9%
- --------------------------------------------------------------------------------
NR NR $2,550 Clintondale, MI, Community
Schools, 6.75%, 5/1/24 $ 2,890,017
Aaa AAA 1,000 Lake Orion, MI, School
District General
Obligations, (AMBAC),
7.00%, 5/1/20 1,178,410
Aaa AAA 450 Michigan HFA, (Detroit
Medical Center Obligated
Group), 7.50%, 8/15/11 509,580
Aaa AAA 4,130 Michigan HFA, (MidMichigan
Obligated Group),
6.625%, 6/1/10 4,382,012
NR NR 1,770 Michigan Strategic
Environmental Research
Institute, 6.375%, 8/15/12 1,942,681
- --------------------------------------------------------------------------------
$ 10,902,700
- --------------------------------------------------------------------------------
General Obligations -- 6.1%
- --------------------------------------------------------------------------------
Aa2 AA+ $ 500 Avondale School District,
MI, School Building and
Site, 6.75%, 5/1/14 $ 541,600
Baa1 A 500 Commonwealth of Puerto
Rico, Public Improvement,
0.00%, 7/1/16 201,335
Baa1 A 700 Commonwealth of Puerto
Rico, Public Improvement,
0.00%, 7/1/18 251,818
Baa2 BBB+ 5,295 Detroit, MI, 6.35%, 4/1/14 5,734,007
Aaa BBB+ $ 500 Detroit, MI, 6.70%, 4/1/10 $ 577,515
Aa2 AA+ 1,000 Mattawan, MI, Consolidated
Schools, 6.40%, 5/1/09 1,099,900
- --------------------------------------------------------------------------------
$ 8,406,175
- --------------------------------------------------------------------------------
Hospitals -- 12.9%
- --------------------------------------------------------------------------------
NR BBB $2,000 Michigan HFA, (Central
Michigan Community
Hospital), 6.25%, 10/1/27 $ 2,123,820
A2 A 2,975 Michigan HFA, (Detroit
Medical Center Obligated
Group), 5.50%, 8/15/23 3,017,424
A2 A 4,000 Michigan HFA, (Detroit
Medical Center Obligated
Group), 6.25%, 8/15/13 4,294,120
Aa AA 250 Michigan HFA, (Henry Ford
Continuing Care Corp.),
6.75%, 7/1/11 272,510
A1 NR 9,000 Michigan HFA, (McLaren
Obligated Group), 4.50%,
10/15/21 8,135,189
- --------------------------------------------------------------------------------
$ 17,843,063
- --------------------------------------------------------------------------------
Housing -- 1.3%
- --------------------------------------------------------------------------------
NR AA- $ 740 Michigan HDA Rental
Housing, (AMT), 7.15%,
4/1/10 $ 793,628
NR AA+ 1,000 Michigan HDA, SFMR, (AMT),
6.20%, 12/1/27 1,054,810
- --------------------------------------------------------------------------------
$ 1,848,438
- --------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 12.4%
- --------------------------------------------------------------------------------
Baa1 BBB $2,000 Dickinson, MI, PCR,
(Champion International),
5.85%, 10/1/18 $ 2,104,980
NR BB- 1,000 Michigan State Strategic
Fund, (Credon Paper),
(AMT), 6.50%, 8/1/21 1,029,140
A3 A 5,970 Michigan Strategic Fund,
(General Motors Corp.),
6.20%, 9/1/20 6,448,256
NR BB- 110 Michigan Strategic Fund,
(KMart Corp.), 6.80%,
12/15/07 116,410
NR NR 3,000 Michigan Strategic Fund,
(S.D. Warren Co.), (AMT),
7.375%, 1/15/22 3,338,550
Baa3 BBB- 2,750 Puerto Rico Port
Authority, (American
Airlines), (AMT), 6.25%,
6/1/26 2,991,643
Baa3 BBB- 490 Puerto Rico Port
Authority, (American
Airlines), (AMT), 6.30%,
6/1/23 524,261
See notes to financial statements
44
<PAGE>
Michigan Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Industrial Development Revenue /
Pollution Control Revenue (continued)
- --------------------------------------------------------------------------------
NR BB- $ 530 Richmond, MI, EDC, (Kmart
Corp.), 6.625%, 1/1/07 $ 565,309
- --------------------------------------------------------------------------------
$ 17,118,549
- --------------------------------------------------------------------------------
Insured-Colleges and Universities -- 5.3%
- --------------------------------------------------------------------------------
Aaa AAA $2,870 Eastern Michigan University,
(FGIC), 5.50%, 6/1/27 $ 2,993,611
Aaa AAA 2,750 Ferris State University,
MI, (MBIA), 5.25%, 10/1/20 2,770,735
Aaa AAA 1,000 Michigan State University-Grand
Valley, (MBIA), 5.25%, 10/1/17 1,016,270
Aaa AAA 500 Western Michigan University,
(AMBAC), 6.50%, 7/15/21 544,295
- --------------------------------------------------------------------------------
$ 7,324,911
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 3.9%
- --------------------------------------------------------------------------------
Aaa AAA $ 300 Michigan Strategic Fund,
(Detroit Edison Co.),
(FGIC), 6.95%, 5/1/11 $ 369,651
Aaa AAA 4,000 Michigan Strategic Fund,
(Detroit Edison Co.),
(FGIC), 6.95%, 9/1/21 4,394,799
Aaa AAA 550 Monroe County, MI, PCR,
(Detroit Edison Co.), (FGIC),
(AMT), 7.65%, 9/1/20 602,899
- --------------------------------------------------------------------------------
$ 5,367,349
- --------------------------------------------------------------------------------
Insured-General Obligations -- 14.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 500 Detroit, MI, (FGIC),
5.50%, 4/1/16 $ 518,490
Aaa AAA 1,000 Grand Ledge, MI, School District,
(MBIA), 5.375%, 5/1/24 1,021,480
Aaa AAA 2,000 Holland, MI, School District,
(AMBAC), 0.00%, 5/1/17 764,200
Aaa AAA 2,000 Kalamazoo, MI, Public Library,
(MBIA), 5.40%, 5/1/14 2,143,560
Aaa AAA 2,000 Lincoln Park, MI, School District,
(FGIC), 5.00%, 5/1/20 1,970,800
Aaa AAA 1,500 Lincoln Park, MI, School District,
(FGIC), 5.90%, 5/1/26 1,612,860
Aaa AAA 1,750 Livonia, MI, School District,
(FGIC), 5.125%, 5/1/22 1,746,238
Aaa AAA 2,610 Okemos, MI, Public Schools,
(MBIA), 0.00%, 5/1/16 1,057,755
Aaa AAA 4,740 South Redford, MI, School District,
(FGIC), 5.50%, 5/1/22 4,920,593
Aaa AAA 2,750 Ypsilanti, MI, School District,
(FGIC), 5.375%, 5/1/26 2,811,105
Aaa AAA 1,150 Zeeland, MI, Public Schools,
(MBIA), 5.25%, 5/1/24 1,159,971
- --------------------------------------------------------------------------------
$ 19,727,052
- --------------------------------------------------------------------------------
Insured-Hospitals -- 4.6%
- --------------------------------------------------------------------------------
Aaa AAA $2,500 Jackson, MI, HFA, (W.A.
Foote Memorial), (FGIC),
4.75%, 6/1/15 $ 2,413,875
Aaa AAA 3,500 Kent, MI, HFA,
(Butterworth Health
System), (MBIA),
6.125%, 1/15/16 3,852,170
- --------------------------------------------------------------------------------
$ 6,266,045
- --------------------------------------------------------------------------------
Insured-Housing -- 2.0%
- --------------------------------------------------------------------------------
Aaa AAA $ 500 Michigan HDA, (Parkway
Meadows Project), (FSA),
6.85%, 10/15/18 $ 537,710
Aaa AAA 2,075 Michigan HDA, SFMR, (AMBAC),
(AMT), 6.05%, 12/1/27 2,180,867
- --------------------------------------------------------------------------------
$ 2,718,577
- --------------------------------------------------------------------------------
Insured-Life Care -- 1.7%
- --------------------------------------------------------------------------------
Aaa AAA $2,250 Michigan State HFA,
(Midmichigan Obligation
Group-Series A), (FSA),
5.375%, 6/1/27 $ 2,292,278
- --------------------------------------------------------------------------------
$ 2,292,278
- --------------------------------------------------------------------------------
Insured-Water and Sewer -- 8.6%
- --------------------------------------------------------------------------------
Aaa AAA $ 400 Clinton Township, MI, Water
and Sewage System, (AMBAC),
4.75%, 7/1/11 $ 401,292
Aaa AAA 400 Clinton Township, MI, Water
and Sewage System, (AMBAC),
4.75%, 7/1/12 398,332
Aaa AAA 7,680 Detroit City, MI, Water
Supply System, (FGIC),
4.75%, 7/1/19 7,322,265
Aaa AAA 3,425 Detroit City, MI, Water
Supply System, (FGIC),
6.25%, 7/1/12 3,746,368
- --------------------------------------------------------------------------------
$ 11,868,257
- --------------------------------------------------------------------------------
Life Care -- 1.9%
- --------------------------------------------------------------------------------
NR BBB $1,500 Kalamazoo Michigan Economic
Development, 6.25%, 5/15/27 $ 1,596,795
See notes to financial statements
45
<PAGE>
Michigan Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Life Care (continued)
- --------------------------------------------------------------------------
NR NR $1,000 Michigan HFA,(Presbyterian
Village), 6.50%, 1/1/25 $ 1,079,580
- --------------------------------------------------------------------------
$ 2,676,375
- --------------------------------------------------------------------------
Miscellaneous -- 1.2%
- --------------------------------------------------------------------------
NR NR $1,500 Pittsfield Township, MI,
EDC, (Arbor Hospice
Project), 7.875%, 8/15/27 $ 1,583,640
- --------------------------------------------------------------------------
$ 1,583,640
- --------------------------------------------------------------------------
Pooled Loans -- 4.6%
- --------------------------------------------------------------------------
NR A $1,825 Michigan Muni Bond
Authority Local Government
Loan, 6.75%, 5/1/12 $ 2,042,504
NR A 590 Michigan Municipal Bond
Authority Local Government
Loan, 6.90%, 5/1/21 650,918
Aa2 AA+ 2,550 Michigan Municipal Bond
Authority Local Government
Loan-Qualified School,
6.50%, 5/1/07 2,850,186
Aa2 AA+ 760 Michigan Municipal Parking
Bond Authority, 6.50%,
11/1/08 845,971
- --------------------------------------------------------------------------
$ 6,389,579
- --------------------------------------------------------------------------
Solid Waste -- 0.8%
- --------------------------------------------------------------------------
Ba1 BBB- $1,000 Central Wayne County, MI,
Sanitation Authority,
6.50%, 7/1/07 $ 1,083,400
- --------------------------------------------------------------------------
$ 1,083,400
- --------------------------------------------------------------------------
Special Tax Revenue -- 6.9%
- --------------------------------------------------------------------------
NR BBB+ $ 250 Battle Creek, MI, Downtown
Development Authority Tax
Increment, 7.60%, 5/1/16 $ 299,003
NR BBB+ 1,315 Battle Creek, MI, Downtown
Development Authority Tax
Increment, 7.65%, 5/1/22 1,576,330
NR A 4,300 Detroit, MI, (Convention
Facility Cobo Hall
Expansion Project), 5.25%,
9/30/12/(1)/ 4,349,708
NR A- 3,050 Detroit, MI, Downtown Tax
Increment, 0.00%, 7/1/16 1,118,710
NR A- 2,000 Detroit, MI, Downtown Tax
Increment, 0.00%, 7/1/20 583,600
A3 A 1,500 Detroit, MI, Local
Development Finance
Authority, 5.375%, 5/1/21 1,523,295
- --------------------------------------------------------------------------
$ 9,450,646
- --------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $124,442,329) $ 137,832,362
- --------------------------------------------------------------------------
AMT - Interest earned from these securities may be considered a tax
preference item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Michigan
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1998, 41.2% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 2.1% to 26.0%.
/(1)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
46
<PAGE>
Minnesota Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Assisted Living -- 1.7%
- --------------------------------------------------------------------------
NR NR $ 1,000 St. Paul, MN, Housing and
Redevelopment, (Elder Care
Institute, Inc.), 8.75%,
11/1/24 $ 1,171,910
- --------------------------------------------------------------------------
$ 1,171,910
- --------------------------------------------------------------------------
Education -- 6.3%
- --------------------------------------------------------------------------
A2 NR $ 1,000 Hopkins, MN, (Blake
School), 5.50%, 9/1/24 $ 1,023,890
Baa2 NR 500 Minnesota Higher Education
Facilities Authority, (St.
Mary's College), 6.15%,
10/1/23 523,000
A3 NR 100 Minnesota State Higher
Education Facilities
Authority, (St. Olaf
College), 6.25%, 4/1/10 100,244
A3 NR 500 Minnesota State Higher
Education Facilities, (St.
John's University), 5.40%,
10/1/22 511,300
A2 NR 1,100 Minnesota State Higher
Education Facilities,
(University of St.
Thomas), 5.40%, 4/1/22 1,123,848
A2 NR 1,000 Minnesota State Higher
Education Facilities,
(University of St.
Thomas), 5.40%, 4/1/23 1,020,320
- --------------------------------------------------------------------------
$ 4,302,602
- --------------------------------------------------------------------------
Electric Utilities -- 2.5%
- --------------------------------------------------------------------------
Baa1 A $ 1,130 Bass Brook, MN, Pollution
Control Revenue,
(Minnesota Power and
Light), 6.00%, 7/1/22 $ 1,182,443
A2 A 500 Northern Municipal Power
Agency, Minnesota Electric,
7.25%, 1/1/16 523,960
- --------------------------------------------------------------------------
$ 1,706,403
- --------------------------------------------------------------------------
Escrowed / Prerefunded -- 3.3%
- --------------------------------------------------------------------------
Aaa AAA $ 150 Minnesota Public
Facilities Authority,
Pollution Control,
Prerefunded to 3/1/01,
6.70%, 3/1/13 $ 164,504
Aaa AAA 100 Minnesota Public
Facilities Authority,
Pollution Control,
Prerefunded to 3/1/99,
7.00%, 3/1/09 105,504
Aaa AAA 1,700 State of Minnesota,
Prerefunded to 8/1/02,
Variable
Rate, 8/1/11/(1)/ 1,995,375
- --------------------------------------------------------------------------
$ 2,265,383
- --------------------------------------------------------------------------
General Obligations -- 7.9%
- --------------------------------------------------------------------------
Aa2 NR $ 2,500 Lakeville, MN, Independent
School District, 5.125%,
2/1/22 $ 2,504,850
Aaa AAA 200 Minneapolis and St. Paul,
MN, Airports Commission,
(AMT),
6.60%, 1/1/09 215,972
Aaa AAA 300 Minneapolis and St. Paul,
MN, Airports Commission,
(AMT),
6.60%, 1/1/10 323,958
A1 AA- 200 St. Cloud, MN, Variable
Rate, 8/1/13/(1)/ 227,750
Aaa AAA 1,000 State of Minnesota,
5.40%, 8/1/13 1,034,570
Aaa AAA 1,000 State of Minnesota,
(Duluth Airport), (AMT),
6.25%, 8/1/14 1,095,070
- --------------------------------------------------------------------------
$ 5,402,170
- --------------------------------------------------------------------------
Hospitals -- 15.0%
- --------------------------------------------------------------------------
A A- $ 1,250 Minneapolis and St. Paul,
MN, Housing and
Redevelopment Authority,
(Group Health Plan, Inc.),
6.75%, 12/1/13 $ 1,380,713
A A- 250 Minneapolis and St. Paul,
MN, Housing and
Redevelopment Authority,
(Group Health Plan, Inc.),
6.90%, 10/15/22 276,715
NR BBB+ 2,120 Red Wing, MN, Health Care
Facilities, (River Region
Obligation Group), 6.50%,
9/1/22 2,294,582
NR AA+ 2,200 Rochester, MN, Health Care
Facilities, (Mayo Clinic),
(AMT), Variable
Rate, 11/15/15/(1)/ 2,579,500
Baa3 BBB 1,000 St. Paul, MN, Housing and
Redevelopment Authority,
(Healtheast), 6.625%,
11/1/17 1,078,630
Baa3 BBB 2,500 St. Paul, MN, Housing and
Redevelopment Authority,
(Healtheast), 6.625%,
11/1/17 2,696,574
- --------------------------------------------------------------------------
$10,306,714
- --------------------------------------------------------------------------
Housing -- 23.9%
- --------------------------------------------------------------------------
NR AAA $ 300 Coon Rapids, MN,
Multifamily Housing,
(Browns Meadow), (FHA),
(AMT), 6.85%, 8/1/33 $ 317,757
NR AAA 1,395 Dakota County, MN, Housing
and Redevelopment
Authority, (GNMA), 7.375%,
12/1/29/(2)/ 1,537,095
See notes to financial statements
47
<PAGE>
Minnesota Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------
Housing (continued)
- ---------------------------------------------------------------------------
Aaa NR $ 500 Eagan, MN, Multifamily
Revenue, (Woodridge
Apartments), (GNMA),
5.95%, 2/1/32 $ 519,225
NR AAA 500 Eden Prairie, MN,
Multifamily Housing,
(Edendale
Apartments-Series A),
5.60%, 12/1/32 512,140
Aaa NR 500 Little Canada, MN,
Facilities Revenue,
(Cedars Lakeside) (GNMA),
5.90%, 8/1/20 522,645
Aaa NR 500 Little Canada, MN,
Facilities Revenue,
(Cedars Lakeside) (GNMA),
5.95%, 2/1/32 520,485
Aa NR 1,200 Maplewood, MN, Multifamily
Housing, (Beaver Creek),
(FHA), 6.50%, 9/1/24 1,273,596
NR AAA 85 Minneapolis and St. Paul,
MN, Housing Finance Board,
SFM, (GNMA), (AMT), 7.30%,
8/1/31 89,992
Aa2 AA+ 400 Minnesota State Housing
Finance Agency, SFM,
6.95%, 7/1/16 430,312
Aa2 AA+ 3,975 Minnesota State Housing
Finance Agency, SFM,
(AMT), 6.50%, 1/1/26/(3)/ 4,203,323
Aa2 AA+ 1,000 Minnesota State Housing
Finance Agency, SFM,
(AMT), 6.75%, 7/1/12 1,060,080
Aa2 AA+ 650 Minnesota State Housing
Finance Agency, SFM,
(AMT), 6.75%, 1/1/26 690,183
Aa2 AA+ 1,235 Minnesota State Housing
Finance Agency, SFM,
(AMT), 6.85%, 1/1/24 1,311,484
Aa2 AA+ 380 Minnesota State Housing
Finance Agency, SFM,
(AMT), 7.05%, 7/1/22 399,099
Aa NR 1,250 St. Louis Park, MN,
Multifamily Revenue,
(Knollwood Apartments),
(FHA), 6.25%, 12/1/28 1,310,700
Aaa NR 1,685 St. Paul, MN, Housing and
Redevelopment Authority,
Multifamily Housing,
(Cliffe Apartments),
(GNMA), 6.00%, 1/1/31 1,747,362
- ---------------------------------------------------------------------------
$16,445,478
- ---------------------------------------------------------------------------
Industrial Development Revenue/Pollution
Control Revenue -- 7.7%
- ---------------------------------------------------------------------------
NR A- $ 1,000 Cloquet, MN, Pollution
Control Revenue, (Potlach
Corp.), 5.90%, 10/1/26 $ 1,062,500
NR A- $ 750 Minneapolis, MN, Community
Development Agency,
6.00%, 6/1/11 $ 778,800
NR A- 100 Minneapolis, MN, Community
Development Agency,
7.35%, 12/1/09 106,395
NR A- 1,250 Minneapolis, MN, Community
Development Agency,
7.40%, 12/1/21 1,328,513
NR A- 1,605 Minneapolis, MN, Community
Development Agency, (AMT),
6.80%, 12/1/24 1,743,672
NR A- 300 Minneapolis, MN, Community
Development Agency,
(Firemans Ins.), 6.40%,
12/1/04 310,899
- ---------------------------------------------------------------------------
$ 5,330,779
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 15.1%
- ---------------------------------------------------------------------------
Aaa AAA $ 1,050 Northern Municipal Power
Agency, (AMBAC), 5.30%,
1/1/21 $ 1,070,423
Aaa AAA 300 Northern Municipal Power
Agency, (AMBAC), 6.00%,
1/1/19 305,379
Aaa AAA 700 Northern Municipal Power
Agency, (FSA), 5.40%,
1/1/16/(4)/ 719,110
Aaa AAA 3,000 Southern Minnesota
Municipal Power Agency,
(MBIA), 0.00%, 10/1/21 945,900
Aaa AAA 10,000 Southern Minnesota
Municipal Power Agency,
(MBIA), 0.00%, 1/1/25 2,572,300
Aaa AAA 9,880 Southern Minnesota
Municipal Power Agency,
(MBIA), 0.00%, 1/1/26 2,408,546
Aaa AAA 4,800 Southern Minnesota
Municipal Power Agency,
(MBIA), 0.00%, 1/1/27 1,112,160
Aaa AAA 450 Southern Minnesota
Municipal Power Agency,
(MBIA), 5.00%, 1/1/12 454,698
Aaa AAA 300 Southern Minnesota
Municipal Power Agency,
(MBIA), (AMT), Variable
Rate, 1/1/18/(1)/ 323,250
Aaa AAA 510 Western Minnesota
Municipal Power Agency,
(MBIA), 5.50%, 1/1/15 510,209
- ---------------------------------------------------------------------------
$10,421,975
- ---------------------------------------------------------------------------
See notes to financial statements
48
<PAGE>
Minnesota Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------
Insured-General Obligations -- 2.2%
- ---------------------------------------------------------------------------
Aaa AAA $ 1,330 St. Francis, MN,
Independent School
District No. 15, (FGIC),
6.35%, 2/1/12 $ 1,510,268
- ---------------------------------------------------------------------------
$ 1,510,268
- ---------------------------------------------------------------------------
Insured-Hospitals -- 3.5%
- ---------------------------------------------------------------------------
Aaa AAA $ 100 Minneapolis and St. Paul,
MN, Health Care Systems,
(Health One), (MBIA),
7.40%, 8/15/11 $ 109,461
Aaa AAA 250 Minneapolis, MN, Hospital
Revenue, (Fairview
Hospital), (MBIA),
6.50%, 1/1/11 272,823
Aaa AAA 450 Minnesota Agricultural and
Economic Development,
(Fairview Hospital),
(MBIA), 5.75%, 11/15/26 481,829
Aaa AAA 450 Plymouth, MN, Health
Facilities, (Westhealth),
(CGIC), 6.25%, 6/1/16 497,646
Aaa AAA 1,000 St. Louis Park, MN, Health
Care Facilities, (AMBAC),
Variable Rate, 7/1/13/(1)/ 1,036,250
- ---------------------------------------------------------------------------
$ 2,398,009
- ---------------------------------------------------------------------------
Insured-Housing -- 2.4%
- ---------------------------------------------------------------------------
Aaa AAA $ 1,500 SCA MFMR Receipts,
Burnsville, MN, (FSA),
7.10%, 1/1/30 $ 1,645,095
- ---------------------------------------------------------------------------
$ 1,645,095
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 4.5%
- ---------------------------------------------------------------------------
Aaa AAA $ 3,000 St. Paul, MN, Housing and
Redevelopment Authority,
(Civic Center), (MBIA),
5.45%, 11/1/13 $ 3,116,129
- ---------------------------------------------------------------------------
$ 3,116,129
- ---------------------------------------------------------------------------
Lease Revenue/
Certificates of Participation -- 3.3%
- ---------------------------------------------------------------------------
Baa1 NR $ 350 Cambridge, MN, Economic
Development Authority,
6.25%, 2/1/14 $ 364,151
Aa2 AA 1,770 Hennepin County, MN,
6.80%, 5/1/17/(2)/ 1,925,087
- ---------------------------------------------------------------------------
$ 2,289,238
- ---------------------------------------------------------------------------
Solid Waste -- 0.7%
- ---------------------------------------------------------------------------
Aa3 A-1+ $ 450 Anoka County, MN, Solid
Waste Disposal, National
Rural Utility, (AMT),
6.95%, 12/1/08 $ 484,038
- ---------------------------------------------------------------------------
$ 484,038
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $62,345,476) $68,796,191
- ---------------------------------------------------------------------------
AMT -- Interest earned from these securities may be considered a tax
preference item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Minnesota
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1998, 27.7% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 2.0% to 18.0% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
/(3)/ Security has been segregated to cover when-issued securities.
/(4)/ When-issued security.
See notes to financial statements
49
<PAGE>
New Jersey Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Assisted Living -- 2.9%
- --------------------------------------------------------------------------
A2 A+ $ 1,455 New Jersey EDA, 7.05%,
3/1/16 $ 1,488,130
NR NR 3,750 New Jersey EDA, (Chelsea
at East Brunswick
Project), (AMT),
8.25%, 10/1/20 4,181,213
NR NR 3,630 New Jersey EDA, (Forsgate
Project), (AMT),
8.625%, 6/1/25 4,176,678
- --------------------------------------------------------------------------
$ 9,846,021
- --------------------------------------------------------------------------
Cogeneration -- 4.2%
- --------------------------------------------------------------------------
NR BB+ $12,750 New Jersey EDA, (Vineland
Cogeneration), (AMT),
7.875%, 6/1/19 $ 14,078,294
- --------------------------------------------------------------------------
$ 14,078,294
- --------------------------------------------------------------------------
Education -- 2.9%
- --------------------------------------------------------------------------
Baa1 BBB+ $ 2,480 New Jersey Education
Facilities Authority,
(Seton Hall Univ.),
7.00%, 7/1/21 $ 2,677,507
NR NR 8,800 New Jersey Higher
Educational Student Loan
Bonds, (AMT), 0.00%,
7/1/10 3,416,512
Aaa AAA 1,000 New Jersey State
Educational Facilities
Authority, (Princeton
Theological), 5.00%,
7/1/22 1,002,550
A1 AAA 2,500 Rutgers, The State
University of New Jersey,
6.85%, 5/1/21 2,758,800
- --------------------------------------------------------------------------
$ 9,855,369
- --------------------------------------------------------------------------
Electric Utilities -- 3.8%
- --------------------------------------------------------------------------
NR BBB $ 100 Guam Power Authority,
5.25%, 10/1/13 $ 100,494
NR BBB 750 Guam Power Authority,
5.25%, 10/1/23 747,848
NR BBB 3,000 Guam Power Authority,
6.75%, 10/1/24 3,364,830
Baa1 BBB+ 6,500 Puerto Rico Electric
Power Authority, 0.00%,
7/1/17 2,463,045
Baa1 BBB+ 2,000 Puerto Rico Electric
Power Authority, 0.00%,
7/1/17 752,140
NR NR 4,905 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 5,387,554
- --------------------------------------------------------------------------
$ 12,815,911
- --------------------------------------------------------------------------
Escrowed/Prerefunded -- 3.0%
- --------------------------------------------------------------------------
Aaa A+ $ 1,000 New Jersey EDA,
Performing Arts Center,
Prerefunded to 6/15/01,
6.75%, 6/15/12 $ 1,104,630
Aaa AAA 1,155 New Jersey Educational
Facilities Authority,
(Seton Hall University),
Prerefunded to 7/1/99,
6.85%, 7/1/19 1,226,864
Aa2 AAA 1,205 New Jersey Health Care
Facilities Financing
Authority, (Barnert
Hospital), Prerefunded to
8/1/01, 6.80%, 8/1/19 1,321,005
Aaa AA 1,040 New Jersey Wastewater
Treatment Trust,
Prerefunded to 5/15/98,
7.25%, 5/15/08 1,071,470
NR AA 920 New Jersey Wastewater
Treatment Trust,
Prerefunded to 6/15/00,
6.875%, 6/15/09 998,789
NR AA 230 New Jersey Wastewater
Treatment Trust,
Prerefunded to 6/15/00,
7.00%, 6/15/10 250,288
Aaa AAA 870 Newark, NJ, (AMBAC),
Prerefunded to 10/1/99,
7.375%, 10/1/07 937,164
NR NR 2,000 Passaic County, NJ,
Prerefunded to 9/1/99,
6.70%, 9/1/13 2,126,320
A3 AA- 1,000 University of Medicine
and Dentistry,
Prerefunded to 12/1/99,
7.20%, 12/1/19 1,078,770
- --------------------------------------------------------------------------
$ 10,115,300
- --------------------------------------------------------------------------
General Obligations -- 4.2%
- --------------------------------------------------------------------------
Baa1 A $ 1,400 Commonwealth of Puerto
Rico, Public Improvement,
0.00%, 7/1/18 $ 503,636
NR BBB 9,745 Government of Guam,
5.40%, 11/15/18 9,886,399
Aa2 NR 3,000 Mercer County Improvement
Authority, 0.00%, 4/1/10 1,710,570
NR BBB 400 Puerto Rico (Guaynabo
Municipal Government
Center Lease), 5.625%,
7/1/22 410,608
NR A+ 1,500 The Hudson County
Improvement Authority,
6.625%, 8/1/25 1,634,550
- --------------------------------------------------------------------------
$ 14,145,763
- --------------------------------------------------------------------------
Hospitals -- 12.7%
- --------------------------------------------------------------------------
Baa2 NR $ 5,250 Camden County, NJ,
Improvement Authority
Revenue, (Cooper Health
System), 6.00%, 2/15/27 $ 5,502,578
See notes to financial statements
50
<PAGE>
New Jersey Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Hospitals (continued)
- --------------------------------------------------------------------------------
A3 A- $ 2,300 New Jersey Health Care
Facilities Financing
Authority, (Atlantic City
Medical Center), 6.80%,
7/1/11 $ 2,543,639
Baa2 NR 5,875 New Jersey Health Care
Facilities Financing
Authority, (Deborah Heart
and Lung Center),
6.30%, 7/1/23 6,259,695
Baa1 NR 4,000 New Jersey Health Care
Facilities Financing
Authority, (Southern
Ocean County Hospital),
6.25%, 7/1/23 4,266,320
Aa2 AAA 9,585 New Jersey Health Care
Facilities Financing
Authority, (St.
Elizabeth's Hospital),
6.80%, 8/1/19 10,326,111
Baa1 A- 2,500 New Jersey Health Care
Facilities, (Capital
Health Systems),
5.25%, 7/1/17 2,493,850
Baa1 A- 1,250 New Jersey Health Care
Facilities, (Capital
Health Systems), 5.125%,
7/1/12 1,244,900
Baa2 BBB 5,400 New Jersey Health Care
Facilities, (Capital
Health Systems),
6.00%, 7/1/27 5,684,958
Baa1 A- 1,750 New Jersey Health Care
Facilities, (Capital
Health Systems),
5.25%, 7/1/27 1,734,373
NR BBB+ 2,720 New Jersey Health Care
Facilities, (Holy Name
Hospital), 6.00%, 7/1/25 2,863,534
- --------------------------------------------------------------------------------
$ 42,919,958
- --------------------------------------------------------------------------------
Housing -- 2.6%
- --------------------------------------------------------------------------------
NR AAA $ 2,000 New Jersey Housing and
Mortgage Finance Agency,
(Presidential Plaza),
(FHA), 6.95%, 5/1/13 $ 2,175,020
NR AAA 3,700 New Jersey Housing and
Mortgage Finance Agency,
(Presidential Plaza),
(FHA), 7.00%, 5/1/30 4,030,077
NR A+ 1,000 New Jersey Housing and
Mortgage Finance Agency,
Rental Housing, (AMT),
7.10%, 5/1/22 1,066,670
NR A+ 1,250 New Jersey Housing
Finance Agency, 7.25%,
11/1/22 1,321,338
Aaa AAA 190 Puerto Rico Housing
Finance Corp., Single
Family Mortgage Revenue,
(GNMA), 6.85%, 10/15/23 202,284
- --------------------------------------------------------------------------------
$ 8,795,389
- --------------------------------------------------------------------------------
Industrial Development Revenue/Pollution
Control Revenue -- 7.6%
- --------------------------------------------------------------------------------
NR NR $ 4,000 Middlesex County
Pollution Control
Financing Authority,
(Amerada Hess Corp.),
6.875%, 12/1/22 $ 4,389,840
NR NR 2,000 Middlesex County
Pollution Control
Financing Authority,
(Amerada Hess Corp.),
7.875%, 6/1/22 2,321,180
NR NR 5,640 New Jersey EDA, (777
Pattison Ave., Inc.),
8.95%, 12/15/18 6,323,681
Aa1 NR 3,000 New Jersey EDA, (Garden
State Paper Co.), 7.125%,
4/1/22 3,325,350
Baa1 BBB+ 2,135 New Jersey EDA, (GATX
Terminals Corp.), 7.30%,
9/1/19 2,444,831
NR NR 1,500 New Jersey EDA, (Holt
Hauling and Warehousing
System, Inc.), 7.90%,
3/1/27 1,701,960
NR NR 1,160 New Jersey EDA, (National
Association of Accountants),
7.65%, 7/1/09 1,247,731
NR NR 2,000 New Jersey EDA, (The
Seeing Eye, Inc.), 7.30%,
4/1/11 2,137,420
NR BBB- 1,725 New Jersey EDA, (Trigen
Trenton), (AMT), 6.20%,
12/1/07 1,830,501
- --------------------------------------------------------------------------------
$ 25,722,494
- --------------------------------------------------------------------------------
Insured-Education -- 0.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 845 New Jersey Educational
Facilities Authority,
(Seton Hall University),
(BIGI), 6.85%, 7/1/19 $ 894,821
- --------------------------------------------------------------------------------
$ 894,821
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 0.4%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,150 New Jersey EDA, New
Jersey American Water
Co., (AMT) (FGIC),
6.875%, 11/1/34 $ 1,312,150
- --------------------------------------------------------------------------------
$ 1,312,150
- --------------------------------------------------------------------------------
Insured-General Obligations -- 1.2%
- --------------------------------------------------------------------------------
Aaa AAA $ 3,815 Middletown Township, NJ,
Board of Education,
(MBIA), 5.80%, 8/1/23 $ 4,047,486
- --------------------------------------------------------------------------------
$ 4,047,486
- --------------------------------------------------------------------------------
See notes to financial statements
51
<PAGE>
New Jersey Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Insured-Hospitals -- 3.7%
- --------------------------------------------------------------------------
Aaa AAA $ 3,750 New Jersey EDA, (Clara
Mass Health Systems),
(FSA), 5.00%, 7/1/25 $ 3,683,925
Aaa NR 4,250 New Jersey EDA,
(Hillcrest Health
Services), (AMBAC),
0.00%, 1/1/19 1,497,190
Aaa NR 3,000 New Jersey EDA,
(Hillcrest Health
Services), (AMBAC),
0.00%, 1/1/21 956,520
Aaa NR 10,620 New Jersey EDA, (St.
Barnabas Project),
(MBIA), 0.00%, 7/1/26 2,558,889
Aaa AAA 1,570 New Jersey Health Care
Facilities Financing
Authority, (Cathedral
Health Services) (MBIA),
7.25%, 2/15/21 1,727,330
Aaa AAA 2,000 New Jersey Health Care
Facilities Financing
Authority, (Hackensack
Medical Center) (FGIC),
6.25%, 7/1/21 2,121,400
- --------------------------------------------------------------------------
$ 12,545,254
- --------------------------------------------------------------------------
Insured-Housing -- 0.8%
- --------------------------------------------------------------------------
Aaa AAA $ 1,070 New Jersey Housing and
Mortgage Finance Agency,
(AMT) (MBIA), 7.70%,
10/1/29 $ 1,122,120
Aaa AAA 1,620 Pennsauken Township,
Housing Finance Corp.,
(MBIA), 8.00%, 4/1/11 1,689,692
- --------------------------------------------------------------------------
$ 2,811,812
- --------------------------------------------------------------------------
Insured-Lease Revenue/Certificates of
Participation -- 4.0%
- --------------------------------------------------------------------------
Aaa AAA $ 3,900 County of Atlantic, NJ,
Public Facilities Lease
Agreement, (FGIC), 6.00%,
3/1/13 $ 4,447,872
Aaa AAA 1,750 Hudson County, NJ,
Correctional Facility,
(MBIA), 6.50%, 12/1/11 1,917,423
Aaa AAA 2,500 Hudson County, NJ,
Improvement Authority,
Secondary Yield Curve
Notes, (FGIC) Variable
Rate, 12/1/25/(1)/ 2,915,625
Aaa AAA 1,800 Middlesex County, NJ,
Certificates of
Participation, (MBIA),
6.125%, 2/15/19 1,961,262
Aaa AAA 2,020 University of Medicine
and Dentistry,
Certificates of
Participation, (MBIA),
6.75%, 12/1/09 2,150,654
- --------------------------------------------------------------------------
$ 13,392,836
- --------------------------------------------------------------------------
Insured-Transportation -- 5.0%
- --------------------------------------------------------------------------
NR AAA $ 5,000 New Jersey Turnpike
Authority, "RITES"
(MBIA), Variable
Rate, 1/1/16/(1)/ $ 6,931,250
Aaa AAA 7,450 New Jersey Turnpike
Authority, (MBIA), 6.50%,
1/1/16 8,915,266
Aaa AAA 1,000 New Jersey Turnpike
Authority, (MBIA), 6.50%,
1/1/16 1,196,680
- --------------------------------------------------------------------------
$ 17,043,196
- --------------------------------------------------------------------------
Insured-Water and Sewer -- 1.2%
- --------------------------------------------------------------------------
Aaa NR $ 1,000 Bayonne, NJ, Municipal
Utilities Authority Water
System, (MBIA), 5.00%,
1/1/17 $ 993,910
Aaa AAA 2,500 Middlesex County
Utilities Authority,
(MBIA), Variable
Rate, 8/15/10/(1)/ 2,924,950
- --------------------------------------------------------------------------
$ 3,918,860
- --------------------------------------------------------------------------
Lease Revenue/
Certificates of Participation -- 3.9%
- --------------------------------------------------------------------------
Baa1 A- $ 720 County of Atlantic, NJ,
Public Facilities Lease
Agreement, 8.875%, 1/15/14 $ 1,008,922
Baa1 A- 785 County of Atlantic, NJ,
Public Facilities Lease
Agreement, 8.875%, 1/15/15 1,106,897
Aa AA- 2,000 Mercer County Improvement
Authority, (Richard J.
Hughes Justice), 6.05%,
1/1/15 2,002,980
Aa AA- 1,500 Mercer County Improvement
Authority, (Richard J.
Hughes Justice), 6.05%,
1/1/16 1,502,235
Aa AA- 1,500 Mercer County Improvement
Authority, (Richard J.
Hughes Justice), 6.05%,
1/1/17 1,502,235
Aa2 AA- 2,591 New Jersey Building
Authority, (Garden State
Savings Bonds), 0.00%,
6/15/10 1,463,423
A1 A+ 5,500 New Jersey EDA, Economic
Recovery Fund, 0.00%,
3/15/13 2,602,105
A1 A+ 1,650 New Jersey EDA, State
Contract, 0.00%, 9/15/09 965,861
See notes to financial statements
52
<PAGE>
New Jersey Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Lease Revenue/
Certificates of Participation (continued)
- --------------------------------------------------------------------------
A1 NR $ 1,000 Township of Bedminster,
NJ, Board of Education,
7.125%, 9/1/10 $ 1,104,140
- --------------------------------------------------------------------------
$ 13,258,798
- --------------------------------------------------------------------------
Life Care -- 2.3%
- --------------------------------------------------------------------------
NR NR $ 615 New Jersey EDA, (Cadbury
Corp.), 7.50%, 7/1/21 $ 656,685
NR NR 2,000 New Jersey EDA, (Cadbury
Corp.), 8.00%, 7/1/15 2,169,260
NR NR 300 New Jersey EDA, (Cadbury
Corp.), 8.70%, 7/1/07 329,340
NR NR 4,000 New Jersey EDA, (Keswick
Pines Project), 8.75%,
1/1/24 4,632,120
- --------------------------------------------------------------------------
$ 7,787,405
- --------------------------------------------------------------------------
Nursing Homes -- 1.3%
- --------------------------------------------------------------------------
NR NR $ 1,400 New Jersey EDA,
(Claremont Health System,
Inc.), 9.10%, 9/1/22 $ 1,603,364
NR NR 2,500 New Jersey EDA, (Victoria
Health Corp.), 7.65%,
1/1/14 2,741,825
- --------------------------------------------------------------------------
$ 4,345,189
- --------------------------------------------------------------------------
Solid Waste -- 0.5%
- --------------------------------------------------------------------------
NR BB $ 1,750 Union County, NJ,
Utilities Authority,
(AMT), 7.20%, 6/15/14 $ 1,761,848
- --------------------------------------------------------------------------
$ 1,761,848
- --------------------------------------------------------------------------
Special Tax Revenue -- 11.3%
- --------------------------------------------------------------------------
NR NR $ 7,600 New Jersey Sports and
Exposition Authority,
(Monmouth Park Project),
8.00%, 1/1/25/(2)/ $ 8,699,948
Baa1 A 6,100 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/36 6,079,077
Baa1 A 7,825 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/36 8,321,262
NR NR 13,350 Virgin Islands Public
Finance Authority, 7.25%,
10/1/18 15,030,097
- --------------------------------------------------------------------------
$ 38,130,384
- --------------------------------------------------------------------------
Transportation -- 18.0%
- --------------------------------------------------------------------------
NR BBB $ 1,400 Guam Airport Authority,
6.50%, 10/1/23 $ 1,537,452
NR BBB 2,000 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 2,202,360
Aa3 A+ 3,500 New Jersey Turnpike
Authority, 5.00%, 6/15/17 3,491,180
A1 AA- 19,000 Port Authority of New
York and New Jersey,
6.125%, 6/1/24 22,108,969
A1 AA- 4,750 Port Authority of New
York and New Jersey,
(AMT), 6.25%, 1/15/27 5,033,100
Baa3 BBB- 5,100 Port Authority of New
York and New Jersey,
(Delta Airlines), 6.95%,
6/1/08 5,611,479
NR NR 5,000 Port Authority of New
York and New Jersey,
(KIAC), 6.75%, 10/1/19 5,585,550
Baa3 BBB- 2,250 Puerto Rico Port
Authority, (American
Airlines), (AMT), 6.25%,
6/1/26 2,447,708
Baa3 BBB- 5,550 Puerto Rico Port
Authority, (American
Airlines), (AMT), 6.30%,
6/1/23 5,938,056
NR BBB 1,520 South Jersey
Transportation Authority,
6.15%, 1/1/22 1,628,209
A1 AA- 5,000 The Port Authority of New
York and New Jersey,
5.375%, 3/1/28 5,314,200
- --------------------------------------------------------------------------
$ 60,898,263
- --------------------------------------------------------------------------
Water and Sewer -- 2.2%
- --------------------------------------------------------------------------
A1 AA- $ 2,000 Gloucester County
Utilities Authority,
6.50%, 1/1/21 $ 2,154,500
A3 A 4,500 New Jersey EDA,
Elizabethtown Water
Revenue, (AMT),
6.70%, 8/1/21 4,841,325
Aa2 AA 80 New Jersey Wastewater
Treatment Trust, 6.875%,
6/15/09 87,167
Aa2 AA 20 New Jersey Wastewater
Treatment Trust, 7.00%,
6/15/10 21,848
Aa3 AA 360 New Jersey Wastewater
Treatment Trust, 7.25%,
5/15/08 370,742
- --------------------------------------------------------------------------
$ 7,475,582
- --------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $302,127,280) $337,918,383
- --------------------------------------------------------------------------
See notes to financial statements
53
<PAGE>
New Jersey Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by New Jersey
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1998, 16.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 0.6% to 11.1% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
54
<PAGE>
Pennsylvania Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Assisted Living -- 3.8%
- --------------------------------------------------------------------------
NR NR $ 2,680 Chester, PA, IDA, (Senior
Life Choice of Paoli, L.P.),
8.05%, 1/1/24 $ 2,977,748
NR NR 5,000 Chester, PA, Industrial
Development Authority, IDA,
(Senior Life Choice
of Kimberton) (AMT),
8.50%, 9/1/25 5,724,000
NR NR 5,000 Delaware, PA, IDA,
(Senior Quarters Project)
(AMT), 8.625%, 9/1/25 5,744,750
- --------------------------------------------------------------------------
$ 14,446,498
- --------------------------------------------------------------------------
Cogeneration -- 3.3%
- --------------------------------------------------------------------------
NR NR $12,000 Pennsylvania Economic
Development Authority,
EDA, (Northampton
Generation Project)
(AMT), 6.50%, 1/1/13 $ 12,680,159
- --------------------------------------------------------------------------
$ 12,680,159
- --------------------------------------------------------------------------
Colleges and Universities -- 3.4%
- --------------------------------------------------------------------------
NR AAA $ 2,000 Lehigh, PA, (Allentown
College of St. Francis),
6.75%, 12/15/12 $ 2,180,080
NR BBB- 1,100 Lehigh, PA, (Cedar Crest
College), 6.70%, 4/1/26 1,201,464
NR BBB- 3,000 Pennsylvania HEFA,
(Gwynedd-Mercy College),
5.60%, 11/1/22/(1)/ 3,014,160
NR BBB+ 2,000 Pennsylvania Higher
Educational Facilities
Authority, HEFA,
5.90%, 1/1/27 2,089,980
NR A- 4,225 Scranton-Lackawanna, PA,
(University of Scranton),
6.40%, 3/1/07 4,553,959
- --------------------------------------------------------------------------
$ 13,039,643
- --------------------------------------------------------------------------
Electric Utilities -- 2.6%
- --------------------------------------------------------------------------
Baa3 BB- $ 500 Beaver, PA, IDA, (Ohio
Edison Co.), 7.75%, 9/1/24 $ 528,460
Baa1 BBB+ 3,250 Delaware, PA, IDA,
(Philadelphia Electric
Co.), 7.375%, 4/1/21 3,552,803
Baa2 BBB+ 4,070 Montgomery, PA, IDA,
(Philadelphia Electric
Co.) (AMT), 7.60%, 4/1/21 4,442,690
NR NR 1,445 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 1,587,159
- --------------------------------------------------------------------------
$ 10,111,112
- --------------------------------------------------------------------------
Escrowed/Prerefunded -- 8.0%
- --------------------------------------------------------------------------
Aaa AAA $ 5,600 Berks, PA, General
Obligations, (FGIC),
Variable
Rate, 11/10/20/(2)/ $ 6,846,000
NR A 2,000 Chester Upland, PA,
School District, 6.375%,
9/1/21 2,187,940
Aaa NR 1,750 Chester, PA, HEFA, (Bryn
Mar Hospitals), 6.75%,
7/1/14 1,968,313
NR NR 4,475 Hazelton Luzerne, PA
(Saint Joseph Medical
Center), 8.375%, 7/1/12 5,367,002
NR A- 1,000 Pennsylvania HEFA,
(Elizabeth College),
7.25%, 6/15/11 1,117,570
Baa2 NR 4,115 Somerset, PA, (Community
Hospital Project), 6.75%,
3/1/11 4,523,661
Aaa AAA 4,845 Westmoreland, PA,
Municipal Authority,
(FGIC), 0.00%, 8/15/19 1,616,873
Aaa AAA 5,400 Westmoreland, PA,
Municipal Authority,
(FGIC), 0.00%, 8/15/20 1,666,170
Aaa AAA 5,880 Westmoreland, PA,
Municipal Authority,
(FGIC), 0.00%, 8/15/20 1,864,783
NR NR 2,750 Wilkins Area, PA, IDA,
(Fairview Extended Care),
10.25%, 1/1/21 3,285,700
Aaa AAA 500 York, PA, Hospital
Authority, (AMBAC),
7.00%, 7/1/21 549,615
- --------------------------------------------------------------------------
$ 30,993,627
- --------------------------------------------------------------------------
General Obligations -- 1.9%
- --------------------------------------------------------------------------
Baa1 A $ 1,000 Commonwealth of Puerto
Rico, 4.50%, 7/1/23 $ 916,350
NR A 3,000 Dauphin, PA, 6.90%, 6/1/26 3,198,060
A1 A+ 2,050 Lower Providence
Township, PA, Sewer
Authority, 6.75%, 5/1/22 2,261,130
Aa3 AAA 465 Pennsylvania, 6.75%, 1/1/07 506,571
Aa3 AAA 500 Pennsylvania, 6.75%, 1/1/08 544,700
- --------------------------------------------------------------------------
$ 7,426,811
- --------------------------------------------------------------------------
See notes to financial statements
55
<PAGE>
Pennsylvania Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's ommitted) Security Value
- --------------------------------------------------------------------------------
Hospitals -- 15.2%
- --------------------------------------------------------------------------------
A3 NR $ 5,330 Allegheny County, PA,
Hospital Development
Authority, HDA,
5.75%, 5/15/27 $ 5,535,951
NR AAA 2,330 Allegheny, PA, Industrial
Development Authority,
(Presbyterian Medical Center),
6.75%, 2/1/26 2,570,293
Baa BBB 2,000 Dauphin, PA, (Community General
Osteopathic Hospital),
7.375%, 6/1/16 2,198,760
NR BBB 1,150 Horizon Hospital Systems
Authority, PA, 6.35%, 5/15/26 1,237,630
A NR 2,670 Indiana, PA, (Indiana Hospital),
7.125%, 7/1/23 2,953,207
A3 A 3,250 Lehigh, PA, (Muhlenberg Hospital),
6.60%, 7/15/22 3,511,658
NR BBB- 3,500 McKean, PA, (Bradford Hospital),
6.00%, 10/1/13 3,626,385
A3 A- 2,550 Monroeville, PA, (Forbes Health
System), 6.25%, 10/1/15 2,741,199
Baa2 NR 1,375 Montgomery, PA, (Montgomery
Hospital Medical Center),
6.60%, 7/1/10 1,491,724
NR BBB+ 2,615 Montgomery, PA, (Pottstown
Medical Center),
6.875%, 11/15/20 2,825,560
A BBB+ 8,500 Pennsylvania Hospital and Higher
Education, (Albert Einstein Medical
Center), 7.625%, 4/1/11 8,966,395
A3 A 500 Pennsylvania Hospital and Higher
Education, (Allegheny General
Hospital), 7.25%, 9/1/17 554,445
B2 BB 7,115 Pennsylvania Hospital and Higher
Education, (Graduate Health
System), 7.25%, 7/1/18 7,239,584
B2 BB 5,625 Philadelphia, PA, (Graduate Health
System), 6.625%, 7/1/21 5,575,050
A3 NR 7,000 Washington, PA, (Monongahela
Valley Hospital),
6.75%, 12/1/08 7,658,630
- --------------------------------------------------------------------------------
$ 58,686,471
- --------------------------------------------------------------------------------
Housing -- 6.1%
- --------------------------------------------------------------------------------
Aaa NR $ 1,950 Allegheny, PA, SFMR, (GNMA),
7.15%, 6/1/17 $ 2,046,272
NR AAA 2,885 Allegheny, PA, SFMR, (Ladies
Grand Army) (FHA),
6.35%, 10/1/36 3,115,079
Aa2 AA+ 2,000 Pennsylvania HFA, SFMR, (AMT),
6.15%, 10/1/27 2,103,820
Aa AA+ 8,350 Pennsylvania HFA, SFMR, (AMT),
7.50%, 10/1/25 9,127,217
Aa2 AA 1,000 Pennsylvania Housing and Finance
Authority, HFA, (AMT), Variable
Rate, 10/1/23/(2)/ 1,147,500
A1 AAA 1,000 Urban Redevelopment Authority
of Pittsburgh Mortgage,
7.125%, 4/1/15 1,053,540
Aa2 AAA 265 Urban Redevelopment Authority
of Pittsburgh Mortgage,
7.45%, 4/1/10 281,173
Aa2 AAA 3,385 Urban Redevelopment Authority
of Pittsburgh Mortgage, (AMT),
7.10%, 4/1/24 3,665,041
A1 AAA 1,055 Urban Redevelopment Authority
of Pittsburgh Mortgage, (AMT),
7.40%, 4/1/24 1,116,306
- --------------------------------------------------------------------------------
$ 23,655,948
- --------------------------------------------------------------------------------
Industrial Development Revenue/Pollution
Control Revenue -- 17.9%
- --------------------------------------------------------------------------------
A3 BBB+ $ 6,450 Butler, PA, (Witco Corp.),
5.85%, 12/1/23 $ 6,724,899
NR BB- 1,005 Clearfield, PA, (Kmart Corp.),
6.80%, 5/15/07 1,073,320
NR A 4,000 Franklin, PA, (Corning Inc.),
6.25%, 8/1/05 4,515,640
A2 A 12,000 New Morgan, PA, (New Morgan
Landfill) (AMT),
6.50%, 4/1/19/(3)/ 13,094,639
NR BBB- 9,000 Pennsylvania EDA, (Colver) (AMT),
7.125%, 12/1/15 10,073,249
NR BBB- 5,000 Pennsylvania EDA, (Colver) (AMT),
7.15%, 12/1/18 5,603,300
Baa2 BBB- 5,000 Pennsylvania, IDA, (MacMillan
Bloedel Project) (AMT),
7.60%, 12/1/20 5,546,700
Baa3 BBB 4,450 Pennsylvania, IDA, (Sun Company
Project), (AMT),
7.60%, 12/1/24 5,225,680
NR NR 6,500 Philadelphia, PA, (Refrigerated
Enterprises), (AMT),
9.05%, 12/1/19 7,367,100
Baa3 BBB- 5,000 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.25%, 6/1/26 5,439,350
Baa3 BBB- 2,800 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.30%, 6/1/23 2,995,776
See notes to financial statements
56
<PAGE>
Pennsylvania Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Industrial Development Revenue/
Pollution Control Revenue (continued)
- --------------------------------------------------------------------------
NR BB- $ 1,105 Shamokin, PA, (Kmart
Corp.), 6.70%, 7/1/07 $ 1,177,256
- --------------------------------------------------------------------------
$ 68,836,909
- --------------------------------------------------------------------------
Insured-Education -- 2.5%
- --------------------------------------------------------------------------
Aaa AAA $ 250 Pennsylvania HEFA,
(AMBAC), 5.625%, 6/15/19 $ 260,148
Aaa AAA 2,000 Pennsylvania HEFA,
(MBIA), 5.75%, 5/1/22 2,140,180
Aaa AAA 2,500 Pennsylvania Higher
Education Student Loan,
(AMBAC), (AMT), 7.15%,
9/1/21 2,670,475
Aaa AAA 1,500 Pennsylvania Higher
Education Student Loan,
(AMBAC), (AMT), Variable
Rate, 3/1/22/(2)/ 1,689,375
Aaa AAA 700 Pennsylvania Higher
Education Student Loan,
(AMBAC), (AMT), Variable
Rate, 9/1/26/(2)/ 817,250
Aaa AAA 2,000 University of Pittsburg,
(FGIC), 5.125%, 6/1/22 1,995,720
- --------------------------------------------------------------------------
$ 9,573,148
- --------------------------------------------------------------------------
Insured-Electric Utilities -- 5.3%
- --------------------------------------------------------------------------
Aaa AAA $ 4,000 Beaver, PA, IDA, (Ohio
Edison Co.) (FGIC),
7.00%, 6/1/21 $ 4,380,440
Aaa AAA 10,000 Beaver, PA, IDA, (Ohio
Edison Co.) (FGIC),
7.05%, 10/1/20 11,630,799
Aaa AAA 3,800 Puerto Rico Electric
Power Authority,
"STRIPES", (FSA),
Variable Rate, 7/1/02/(2)/ 4,298,750
- --------------------------------------------------------------------------
$ 20,309,989
- --------------------------------------------------------------------------
Insured-General Obligations -- 7.7%
- --------------------------------------------------------------------------
Aaa AAA $ 2,170 Elizabeth Forward, PA,
School District, (MBIA),
0.00%, 9/1/20 $ 686,653
Aaa AAA 2,170 Elizabeth Forward, PA,
School District, (MBIA),
0.00%, 9/1/21 652,389
Aaa AAA 2,170 Elizabeth Forward, PA,
School District, (MBIA),
0.00%, 9/1/22 619,687
Aaa AAA 2,170 Elizabeth Forward, PA,
School District, (MBIA),
0.00%, 9/1/23 588,591
Aaa AAA 2,500 Erie, PA, School
District, (MBIA), 0.00%,
5/1/19 846,675
Aaa AAA 2,625 Erie, PA, School
District, (MBIA), 0.00%,
5/1/20 844,856
Aaa AAA 2,625 Erie, PA, School
District, (MBIA), 0.00%,
5/1/21 802,699
Aaa AAA 3,625 Erie, PA, School
District, (MBIA), 0.00%,
5/1/22 1,052,918
Aaa AAA 5,000 Hampton Township, PA,
School District, (FGIC),
5.00%, 9/1/27 4,916,350
Aaa NR 2,365 Harrisburg, PA, (AMBAC),
0.00%, 3/15/17 899,339
Aaa AAA 5,175 Hazelton, PA, School
District, (FGIC), 0.00%,
3/1/21 1,596,332
Aaa NR 1,000 Hopewell, PA, School
District, (FSA), 0.00%,
9/1/22 285,570
Aaa AAA 7,500 Keystone Oaks, PA, School
District, (AMBAC),
Variable Rate, 9/1/16/(2)/ 8,812,500
Aaa AAA 1,430 Mars Area, PA, School
District, (MBIA), 0.00%,
3/1/14 649,191
Aaa AAA 1,900 Philadelphia, PA, (MBIA),
5.00%, 5/15/15 1,899,867
Aaa AAA 3,200 Philadelphia, PA, (MBIA),
5.00%, 5/15/20 3,153,248
Aaa AAA 655 Rochester Area, PA,
School District, (AMBAC),
0.00%, 5/1/10 371,595
Aaa AAA 1,000 Venango, PA, (AMBAC),
6.30%, 12/1/19 1,085,970
- --------------------------------------------------------------------------
$ 29,764,430
- --------------------------------------------------------------------------
Insured-Hospitals -- 5.9%
- --------------------------------------------------------------------------
Aaa AAA $ 2,000 Allegheny County, PA,
HDA, (MBIA), 5.625%,
4/1/27 $ 2,098,840
Aaa AAA 3,750 Allegheny, PA,
(Magee-Womens Hospital),
(FGIC), 0.00%, 10/1/15 1,561,575
Aaa AAA 1,170 Allegheny, PA,
(Children's Hospital of
Pittsburgh), (MBIA),
6.75%, 7/1/08 1,242,610
Aaa AAA 1,400 Armstrong, PA, (Saint
Francis Health Care),
(AMBAC), 6.25%, 6/1/13 1,523,732
Aaa AAA 2,500 Armstrong, PA, (Saint
Francis Health Care),
(AMBAC), 6.00%, 8/15/08 2,695,775
Aaa AAA 775 Carbon, PA, (Gnaden
Memorial Hospital),
(AMBAC), 7.00%, 11/15/14 842,975
See notes to financial statements
57
<PAGE>
Pennsylvania Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Insured-Hospitals (continued)
- --------------------------------------------------------------------------
Aaa AAA $ 750 Erie County, PA, Hospital
Authority, (Hamot Health
System), (AMBAC), 7.10%,
2/15/10 $ 819,960
Aaa AAA 1,000 Montgomery, PA, (Abington
Memorial Hospital),
(AMBAC), Variable Rate,
6/1/11/(2)/ 1,176,250
Aaa AAA 1,000 Northeastern, PA,
Hospital And Education
Authority, (Wyoming
Valley Health Care),
(AMBAC), 5.25%, 1/1/26 1,004,080
Aaa AAA 5,000 Philadelphia, PA,
Hospital and Higher
Education Authority,
(FGIC), Variable Rate,
2/15/12/(2)/ 5,337,500
Aaa AAA 2,550 Washington, PA,
(Shadyside Hospital),
(AMBAC), 5.75%, 12/15/14 2,739,516
Aaa AAA 1,500 Wayne County, PA,
Hospital And Health
Facilities Authority,
(MBIA), 5.25%, 7/1/24 1,505,685
- --------------------------------------------------------------------------
$ 22,548,498
- --------------------------------------------------------------------------
Insured-Industrial Development
Revenue -- 0.3%
- --------------------------------------------------------------------------
Aaa AAA $ 1,000 Delaware, PA,
(Philadelphia Water),
(AMT), (FGIC),
6.35%, 8/15/25 $ 1,108,380
- --------------------------------------------------------------------------
$ 1,108,380
- --------------------------------------------------------------------------
Insured-Lease Revenue/Certificates of
Participation -- 2.6%
- --------------------------------------------------------------------------
Aaa AAA $10,000 Commonwealth of
Pennsylvania, (AMBAC),
5.00%, 7/1/15/(4)/ $ 9,936,399
- --------------------------------------------------------------------------
$ 9,936,399
- --------------------------------------------------------------------------
Insured-Life Care -- 0.4%
- --------------------------------------------------------------------------
Aaa AAA $ 1,500 Montgomery County, PA,
Higher Education And
Health Authority, (Holy
Redeemer Health),
(AMBAC), 5.25%, 10/1/27 $ 1,506,390
- --------------------------------------------------------------------------
$ 1,506,390
- --------------------------------------------------------------------------
Insured-Transportation -- 1.3%
- --------------------------------------------------------------------------
Aaa AAA $ 3,000 Allegheny County Port
Authority, Airport
Revenue, (Pittsburgh
International Airport),
(MBIA), 5.00%, 1/1/19 $ 2,965,350
Aaa AAA 2,000 Allegheny County Port
Authority, Airport
Revenue, (Pittsburgh
International Airport),
(MBIA), (AMT), 5.25%,
1/1/16 2,021,460
- --------------------------------------------------------------------------
$ 4,986,810
- --------------------------------------------------------------------------
Insured-Water and Sewer -- 1.6%
- --------------------------------------------------------------------------
Aaa AAA $ 2,500 Philadelphia, PA, Water
and Wastewater, (CGIC),
Variable Rate, 6/15/12/(2)/ $ 2,765,625
Aaa AAA 3,490 Pittsburgh, PA, Water and
Sewer Authority, (FGIC),
4.75%, 9/1/16 3,380,938
- --------------------------------------------------------------------------
$ 6,146,563
- --------------------------------------------------------------------------
Life Care -- 3.0%
- --------------------------------------------------------------------------
NR NR $ 4,050 Delaware, PA, (White
Horse Village), 7.50%,
7/1/18 $ 4,376,673
NR BBB+ 3,620 Delaware, PA, HFA,
5.75%, 12/15/22 4,023,666
Baa2 BBB+ 3,060 Hazleton, PA, HFA,
(Hazelton General
Hospital), 5.50%, 7/1/27 3,066,273
- --------------------------------------------------------------------------
$ 11,466,612
- --------------------------------------------------------------------------
Nursing Homes -- 2.1%
- --------------------------------------------------------------------------
NR NR $ 3,500 Montgomery, PA, IDA,
(Advancement of Geriatric
Health Care Institute),
8.375%, 7/1/23 $ 3,798,375
NR NR 1,100 Philadelphia, PA, (The
Philadelphia Protestant
Home Project),
6.50%, 7/1/27 1,146,299
NR NR 1,190 Philadelphia, PA, (The
Philadelphia Protestant
Home Project), 8.625%,
7/1/21 1,380,210
NR NR 1,460 Westmoreland, PA,
(Highland Health Systems,
Inc.), 9.25%, 6/1/22 1,679,482
- --------------------------------------------------------------------------
$ 8,004,366
- --------------------------------------------------------------------------
See notes to financial statements
58
<PAGE>
Pennsylvania Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Pooled Loans -- 5.1%
- --------------------------------------------------------------------------
NR AA- $16,950 Pennsylvania Finance
Authority, Beaver County,
6.60%, 11/1/09/(3)/ $ 18,860,264
NR AA+ 870 Pennsylvania
Infrastructure Investment
Authority, (Pennvest),
6.80%, 9/1/10 965,848
- --------------------------------------------------------------------------
$ 19,826,112
- --------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $347,367,015) $385,054,875
- --------------------------------------------------------------------------
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Pennsylvania
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1998, 30.9% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 1.2% to 13.4%.
/(1)/ When-issued security.
/(2)/ Security has been issued as an inverse floater bond.
/(3)/ Security has been segregated to cover when-issued securities.
/(4)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
59
<PAGE>
Texas Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Assisted Living -- 2.8%
- --------------------------------------------------------------------------------
NR NR $ 500 Bell County, TX, Health
Facilities, (Care
Institute, Inc.),
9.00%, 11/1/24 $ 582,355
- --------------------------------------------------------------------------------
$ 582,355
- --------------------------------------------------------------------------------
Education -- 1.2%
- --------------------------------------------------------------------------------
A NR $ 240 Brazos, TX, Higher
Education Authority, (AMT),
6.50%, 6/1/04 $ 255,638
- --------------------------------------------------------------------------------
$ 255,638
- --------------------------------------------------------------------------------
Electric Utilities -- 2.4%
- --------------------------------------------------------------------------------
NR BBB $ 500 Guam Power Authority,
5.25%, 10/1/23 $ 498,565
- --------------------------------------------------------------------------------
$ 498,565
- --------------------------------------------------------------------------------
Escrowed/Prerefunded -- 3.7%
- --------------------------------------------------------------------------------
NR NR $ 200 Bexar County, TX, Health
Facilities, (St. Luke's
Lutheran), 7.00%, 5/1/21 $ 252,474
Aaa NR 100 Ector County, TX, Hospital
District, 7.30%, 4/15/12 114,036
Aaa AAA 200 Montgomery County, TX,
Hospital District, (FSA),
6.625%, 4/1/17 222,904
Aaa AAA 150 Texas National Research Lab
Super Collider, 6.95%,
12/1/12 180,405
- --------------------------------------------------------------------------------
$ 769,819
- --------------------------------------------------------------------------------
General Obligations -- 12.5%
- --------------------------------------------------------------------------------
Aaa AAA $1,000 Bastrop, TX, Independent
School District U.T.G.O.,
(PSF), 0.00%, 2/15/13 $ 479,970
Aaa AAA 1,000 Cypress-Fairbanks, TX,
Independent School
District, 0.00%, 2/15/15 428,160
NR NR 500 Leander, TX, 6.75%, 8/15/16 544,370
Aa2 AA 690 Texas Veterans' Housing
Assistance U.T., (AMT),
6.70%, 12/1/24 739,673
Aa2 AA 360 Texas Veterans' Housing
Assistance U.T., (AMT),
6.80%, 12/1/23 388,490
- --------------------------------------------------------------------------------
$ 2,580,663
- --------------------------------------------------------------------------------
Hospitals -- 11.1%
- --------------------------------------------------------------------------------
NR BBB+ $ 500 Denison, TX, Hospital
Authority, (Texoma Medical
Center), 7.10%, 8/15/24 $ 561,615
A3 NR 100 Harris County, TX, Hospital
District, (Memorial),
7.125%, 6/1/15 114,498
Aa NR 975 Port Arthur, TX, Health
Facilities, (FHA), 6.50%,
8/1/24 1,055,321
A2 NR 500 Tarrant County, TX,
Methodist Health System,
6.00%, 9/1/24 550,560
- --------------------------------------------------------------------------------
$ 2,281,994
- --------------------------------------------------------------------------------
Housing -- 18.8%
- --------------------------------------------------------------------------------
NR AAA $ 80 Bexar County, TX, HFC,
8.10%, 3/1/24 $ 85,207
NR AAA 500 Dallas, TX, HFC, (GNMA),
7.95%, 12/1/23 531,925
NR AAA 150 North Central, TX, HFC,
(GNMA), 7.875%, 10/1/22 159,081
NR AAA 1,000 Texas Department of Housing
And Community Affairs,
Multifamily, (Meadow Ridge
Apartments Project), (AMT),
5.55%, 8/1/30 1,010,790
NR A 500 Texas Department of Housing
and Community Affairs, NHP
Foundation-Asmara Project,
6.40%, 1/1/27 537,355
NR A 750 Travis County, TX, HFC
Multifamily, (Travis
Station Apartments),
6.75%, 4/1/19 796,260
NR AAA 695 Travis County, TX, HFC,
(GNMA) (FNMA), 7.05%,
12/1/25 745,151
- --------------------------------------------------------------------------------
$ 3,865,769
- --------------------------------------------------------------------------------
Industrial Development Revenue Pollution
Control Revenue -- 12.9%
- --------------------------------------------------------------------------------
Baa1 BBB $ 450 Gulf Coast, TX, Waste
Disposal Authority,
(Champion International),
(AMT), 7.25%, 4/1/17 $ 494,429
A2 A+ 1,000 Port Corpus Christi, TX,
(Hoechst Celanese Corp.),
(AMT), 6.875%, 4/1/17 1,089,720
NR A 1,000 Trinity River Authority,
TX, (PCR), (AMT), 6.20%,
3/1/20 1,072,790
- --------------------------------------------------------------------------------
$ 2,656,939
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 12.4%
- --------------------------------------------------------------------------------
Aaa AAA $1,000 Austin, TX, Combined
Utility, (AMBAC), 6.75%,
11/15/12/(1)/ $ 1,184,759
See notes to financial statements
60
<PAGE>
Texas Municipals Portfolio as of January 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Insured-Electric Utilities (continued)
- --------------------------------------------------------------------------------
Aaa AAA $1,000 Austin, TX, Utility System,
(FGIC), 6.25%, 5/15/16/(2)/ $ 1,111,160
Aaa AAA 500 Lower Colorado River
Authority Junior Lien, TX,
(FGIC), 0.00%, 1/1/12 255,915
- --------------------------------------------------------------------------------
$ 2,551,834
- --------------------------------------------------------------------------------
Insured-Hospitals -- 10.9%
- --------------------------------------------------------------------------------
Aaa AAA $ 500 Harris County, TX, HFC,
(Hermann Hospital), (MBIA),
6.375%, 10/1/24 $ 555,255
Aaa AAA 600 Tarrant County, TX, HFC,
(Health Resources
Systems-Series A), (MBIA),
5.25%, 2/15/22 602,646
Aaa AAA 1,000 Tyler County, TX, HFC,
(Mother Frances Hospital),
(FGIC), 6.50%, 7/1/22 1,097,420
- --------------------------------------------------------------------------------
$ 2,255,321
- --------------------------------------------------------------------------------
Lease Revenue/Certificates of Participation -- 1.3%
- --------------------------------------------------------------------------------
NR BBB- $ 250 Rio Grande, TX, Independent
School District Lease,
6.75%, 7/15/10 $ 274,820
- --------------------------------------------------------------------------------
$ 274,820
- --------------------------------------------------------------------------------
Transportation -- 10.0%
- --------------------------------------------------------------------------------
NR NR $ 250 Abia Dev. Corp., TX,
(Austin Cargoport), 9.25%,
10/1/21 $ 286,423
505 Alliance Airport Authority,
(American Airlines), (AMT),
7.50%, 12/1/29 551,935
Baa2 BBB- 225 Dallas-Fort Worth, TX,
Airport, (American
Airlines), (AMT),
7.50%, 11/1/25 245,455
Baa3 BB+ 100 Dallas-Fort Worth, TX,
Airport, (Delta Airlines),
(AMT), 7.125%, 11/1/26 107,959
NR BBB 755 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 831,391
Aa2 AA 25 Harris County, TX, Toll
Road Subordinate Lien,
6.75%, 8/1/14 27,532
- --------------------------------------------------------------------------------
$ 2,050,695
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $18,794,709) $20,624,412
- --------------------------------------------------------------------------------
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
HFC - Housing Finance Corporation
The Portfolio invests primarily in debt securities issued by Texas
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at January 31, 1998, 24.4% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 1.1% to 12.0% of total investments.
/(1)/ When-issued security.
/(2)/ Security has been segregated to cover when-issued securities.
See notes to financial statements
61
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited)
Statements of Assets and Liabilities
As of January 31, 1998
<TABLE>
<CAPTION>
Arizona Colorado Connecticut Michigan
Portfolio Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
- -------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $ 94,998,980 $ 35,691,544 $ 156,324,927 $ 124,442,329
Unrealized appreciation 10,969,469 4,375,065 11,794,971 13,390,033
- -------------------------------------------------------------------------------------------------------------------------
Investments, at value (Note 1A) $105,968,449 $ 40,066,609 $ 168,119,898 $ 137,832,362
- -------------------------------------------------------------------------------------------------------------------------
Cash $ 1,168,292 $ 839 $ 508,016 $ 143
Receivable for investments sold -- 65,857 493,052 2,860,103
Interest receivable 1,066,587 521,300 2,002,975 1,985,246
Deferred organization expenses (Note 1D) -- -- 260 258
- -------------------------------------------------------------------------------------------------------------------------
Total assets $108,203,328 $ 40,654,605 $ 171,124,201 $ 142,678,112
- -------------------------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------------------------
Demand note payable (Note 5) $ -- $ 43,000 $ -- $ 1,934,000
Payable for daily variation margin on open
financial futures contracts (Note 1E and 6) 23,640 8,344 35,044 33,571
Payable to affiliate for Trustees' fees (Note 2) 700 173 1,200 696
Accrued expenses 8,707 6,192 22,033 14,352
- -------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 33,047 $ 57,709 $ 58,277 $ 1,982,619
- -------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in
Portfolio $108,170,281 $ 40,596,896 $ 171,065,924 $ 140,695,493
- -------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and
withdrawals $ 97,285,800 $ 36,247,077 $ 159,376,987 $ 127,413,738
Net unrealized appreciation of investments
(computed on the basis of identified cost) 10,884,481 4,349,819 11,688,937 13,281,755
- -------------------------------------------------------------------------------------------------------------------------
Total $108,170,281 $ 40,596,896 $ 171,065,924 $ 140,695,493
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
62
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Assets and Liabilities
As of January 31, 1998
<TABLE>
<CAPTION>
Minnesota New Jersey Pennsylvania Texas
Portfolio Portfolio Portfolio Portfolio
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
- ---------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $62,345,476 $ 302,127,280 $ 347,367,015 $ 18,794,709
Unrealized appreciation 6,450,715 35,791,103 37,687,860 1,829,703
- ---------------------------------------------------------------------------------------------------------------------------
Investment at value (Note 1A) $68,796,191 $ 337,918,383 $ 385,054,875 $ 20,624,412
- ---------------------------------------------------------------------------------------------------------------------------
Cash $ 265,805 $ 190,248 $ 220 $ 20,386
Receivable for investments sold 5,000 -- 2,031,671 5,059
Interest receivable 824,232 4,201,651 4,862,744 312,954
Deferred organization expenses (Note 1D) -- 94 342 --
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $69,891,228 $ 342,310,376 $ 391,949,852 $ 20,962,811
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------------
Payable for when-issued securities (Note 1G) $ 688,793 $ -- $ 3,015,867 $ 1,046,570
Demand note payable (Note 5) -- -- 3,174,000 --
Payable for daily variation margin on open
financial futures contracts (Note 1E and 6) 12,187 60,937 94,788 --
Payable to affiliate for Trustees' fees (Note 2) 713 1,826 1,384 14
Accrued expenses 7,759 21,001 45 1,125
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 709,452 $ 83,764 $ 6,286,084 $ 1,047,709
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in
Portfolio $69,181,776 $ 342,226,612 $ 385,663,768 $ 19,915,102
- ---------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ---------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and
withdrawals $62,777,179 $ 306,666,097 $ 348,277,096 $ 18,085,399
Net unrealized appreciation of investments
(computed on the basis of identified cost) 6,404,597 35,560,515 37,386,672 1,829,703
- ---------------------------------------------------------------------------------------------------------------------------
Total $69,181,776 $ 342,226,612 $ 385,663,768 $ 19,915,102
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
63
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
<TABLE>
<CAPTION>
For the Six Months Ended January 31, 1998
Arizona Portfolio Colorado Portfolio Connecticut Portfolio Michigan Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest income $3,163,520 $1,216,849 $4,964,851 $4,166,524
- ------------------------------------------------------------------------------------------------------------------------------------
Total income $3,163,520 $1,216,849 $4,964,851 $4,166,524
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 208,913 $ 49,739 $ 358,484 $ 293,955
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 5,767 909 6,664 4,827
Custodian fee (Note 1I) 32,210 14,458 43,516 43,142
Legal and accounting services 22,209 17,554 23,029 21,981
Amortization of organization expenses (Note 1D) 887 229 1,314 1,250
Miscellaneous 3,840 2,878 10,513 11,334
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 273,826 $ 85,767 $ 443,520 $ 376,489
- ------------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1I) $ 9,748 $ -- $ -- $ 13,204
- ------------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 9,748 $ -- $ -- $ 13,204
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 264,078 $ 85,767 $ 443,520 $ 363,285
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $2,899,442 $1,131,082 $4,521,331 $3,803,239
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $2,250,315 $ 274,318 $ 429,388 $1,934,999
Financial futures contracts (746,662) (359,805) (801,288) (1,119,453)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions $1,503,653 $ (85,487) $ (371,900) $ 815,546
- ------------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 268,054 $ 464,800 $2,224,565 $ 343,050
Financial futures contracts 543,285 197,690 454,683 894,687
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $ 811,339 $ 662,490 $2,679,248 $1,237,737
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $2,314,992 $ 577,003 $2,307,348 $2,053,283
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $5,214,434 $1,708,085 $6,828,679 $5,856,522
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
64
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
For the Six Months Ended January 31, 1998
<TABLE>
<CAPTION>
Minnesota Portfolio New Jersey Portfolio Pennsylvania Portfolio Texas Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest income $2,035,076 $10,487,608 $12,036,112 $609,322
- ------------------------------------------------------------------------------------------------------------------------------------
Total income $2,035,076 $10,487,608 $12,036,112 $609,322
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 116,762 $ 780,245 $ 896,650 $ 16,686
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 3,811 9,789 8,647 125
Custodian fee (Note 1I) 19,882 53,949 67,209 6,944
Legal and accounting services 20,654 35,609 34,137 15,100
Amortization of organization expenses (Note 1D) 309 2,236 2,646 209
Miscellaneous 5,918 19,917 44,919 3,334
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 167,336 $ 901,745 $ 1,054,208 $ 42,398
- ------------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1I) $ 3,690 $ -- $ 67,209 $ 2,290
- ------------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 3,690 $ -- $ 67,209 $ 2,290
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 163,646 $ 901,745 $ 986,999 $ 40,108
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $1,871,430 $ 9,585,863 $11,049,113 $569,214
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $1,185,730 $ 2,879,125 $ 2,825,095 $285,123
Financial futures contracts (654,921) (1,542,911) (2,824,759) (91,792)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment transactions $ 530,809 $ 1,336,214 $ 336 $193,331
- ------------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ (86,668) $ 2,924,910 $ 2,616,205 $ 323
Financial futures contracts 423,538 817,002 2,277,866 81,068
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $ 336,870 $ 3,741,912 $ 4,894,071 $ 81,391
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 867,679 $ 5,078,126 $ 4,894,407 $274,722
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $2,739,109 $14,663,989 $15,943,520 $843,936
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
65
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended January 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets Arizona Portfolio Colorado Portfolio Connecticut Portfolio Michigan Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 2,899,442 $ 1,131,082 $ 4,521,331 $ 3,803,239
Net realized gain (loss) on 1,503,653 (85,487) (371,900) 815,546
investment transactions
Net change in unrealized
appreciation (depreciation) 811,339 662,490 2,679,248 1,237,737
of investments
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 5,214,434 $ 1,708,085 $ 6,828,679 $ 5,856,522
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 3,625,822 $ 2,024,449 $ 3,499,677 $ 2,168,583
Withdrawals (13,141,768) (5,760,082) (14,240,022) (17,553,258)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $ (9,515,946) $ (3,735,633) $ (10,740,345) $ (15,384,675)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (4,301,512) $ (2,027,548) $ (3,911,666) $ (9,528,153)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of period $ 112,471,793 $ 42,624,444 $ 174,977,590 $ 150,223,646
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $ 108,170,281 $ 40,596,896 $ 171,065,924 $ 140,695,493
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
66
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended January 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets Minnesota Portfolio New Jersey Portfolio Pennsylvania Portfolio Texas Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 1,871,430 $ 9,585,863 $ 11,049,113 $ 569,214
Net realized gain on investment transactions 530,809 1,336,214 336 193,331
Net change in unrealized appreciation
(depreciation) of investments 336,870 3,741,912 4,894,071 81,391
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 2,739,109 $ 14,663,989 $ 15,943,520 $ 843,936
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 2,231,474 $ 11,118,150 $ 10,389,079 $ 487,593
Withdrawals (6,462,481) (36,327,597) (42,889,571) (3,092,568)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $ (4,231,007) $(25,209,447) $(32,500,492) $ (2,604,975)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (1,491,898) $(10,545,458) $(16,556,972) $ (1,761,039)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of period $ 70,673,674 $352,772,070 $402,220,740 $ 21,676,141
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $ 69,181,776 $342,226,612 $385,663,768 $ 19,915,102
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
67
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended July 31, 1997
<TABLE>
<CAPTION>
Arizona Colorado Connecticut Michigan
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 6,682,773 $ 2,539,687 $ 9,925,507 $ 8,798,336
Net realized gain on investment transactions 799,157 446,628 472,294 36,033
Net change in unrealized appreciation
(depreciation) of investments 4,938,530 2,095,673 7,068,431 6,476,859
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 12,420,460 $ 5,081,988 $ 17,466,232 $ 15,311,228
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 7,001,783 $ 4,009,912 $ 9,762,822 $ 3,699,109
Withdrawals (36,811,997) (11,883,030) (39,868,349) (42,251,299)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $ (29,810,214) $ (7,873,118) $ (30,105,527) $ (38,552,190)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (17,389,754) $ (2,791,130) $ (12,639,295) $ (23,240,962)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 129,861,547 $ 45,415,574 $ 187,616,885 $ 173,464,608
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 112,471,793 $ 42,624,444 $ 174,977,590 $ 150,223,646
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
68
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended July 31, 1997
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets Minnesota Portfolio New Jersey Portfolio Pennsylvania Portfolio Texas Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 4,112,897 $ 21,484,047 $ 25,120,444 $ 1,316,730
Net realized gain (loss) on investment
transactions 28,621 1,984,468 (1,113,620) (11,999)
Net change in unrealized appreciation
(depreciation) of investments 2,786,157 14,203,930 18,755,709 1,114,403
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 6,927,675 $ 37,672,445 $ 42,762,533 $ 2,419,134
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 4,877,845 $ 20,443,481 $ 19,109,521 $ 1,759,693
Withdrawals (17,221,919) (91,588,197) (107,833,175) (6,869,522)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $(12,344,074) $ (71,144,716) $ (88,723,654) $ (5,109,829)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (5,416,399) $ (33,472,271) $ (45,961,121) $ (2,690,695)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 76,090,073 $ 386,244,341 $ 448,181,861 $ 24,366,836
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 70,673,674 $ 352,772,070 $ 402,220,740 $ 21,676,141
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
69
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Arizona Portfolio
-------------------------------------------------------------------------------
Year Ended
-------------------------------------------------------------
Six Months Ended July 31, Sept. 30,
January 31, 1998 ------------------------------------------------ ------------
(Unaudited) 1997 1996 1995 1994* 1993**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses /(1)/ 0.50%+ 0.50% 0.51% 0.52% 0.46%+ 0.42%+
Expenses after custodian fee reduction 0.49%+ 0.49% 0.50% -- -- --
Net investment income 5.34%+ 5.56% 5.53% 5.81% 5.43%+ 5.46%+
Portfolio Turnover 14% 10% 18% 22% 23% 107%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $108,170 $112,472 $129,862 $144,521 $154,068 $133,539
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
** For the period from the start of business, February 1, 1993 to September
30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the periods ended July 31, 1995
have not been adjusted to reflect this change.
See notes to financial statements
70
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Colorado Portfolio
-----------------------------------------------------------------------------
Year Ended
------------------------------------------------------------
Six Months Ended July 31, Sept. 30,
January 31, 1998 ------------------------------------------- --------------
(Unaudited) 1997 1996 1995 1994* 1993**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:++
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses/(1)/ 0.42%+ 0.40% 0.40% 0.25% 0.02%+ 0.06%+
Net expenses after custodian fee reduction 0.42%+ 0.36% 0.36% -- -- --
Net investment income 5.51%+ 5.86% 5.75% 6.05% 5.73%+ 5.60%+
Portfolio Turnover 9% 14% 53% 52% 23% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $40,597 $42,624 $45,416 $46,077 $44,399 $24,346
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Portfolio may reflect a reduction of the
Investment Adviser fee, an allocation of expenses to the Investment Adviser,
or both. Had such action not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C> <C> <C> <C>
Expenses /(1)/ 0.42% 0.40% 0.35%+ 0.35%+
Expenses after custodian fee reduction 0.38% -- -- --
Net investment income 5.73% 5.90% 5.40%+ 5.31%+
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
** For the period from the start of business, February 1, 1993 to September
30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the periods ended July 31, 1995
have not been adjusted to reflect this change.
See notes to financial statements
71
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Connecticut Portfolio
----------------------------------------------------------------------------------
Year Ended
----------------------------------------------------------------
Six Months Ended July 31, Sept. 30,
January 31, 1998 ------------------------------------------------ --------------
(Unaudited) 1997 1996 1995 1994* 1993**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.51%+ 0.53% 0.52% 0.53% 0.47%+ 0.46%+
Expenses after custodian fee reduction 0.51%+ 0.53% 0.50% -- -- --
Net investment income 5.24%+ 5.50% 5.49% 5.77% 5.40%+ 5.45%+
Portfolio Turnover 4% 11% 23% 29% 10% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $171,066 $174,978 $187,617 $195,276 $192,038 $159,848
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
** For the period from the start of business, February 1, 1993 to September
30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the periods ended July 31, 1995
have not been adjusted to reflect this change.
See notes to financial statements
72
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Michigan Portfolio
--------------------------------------------------------------------------------
Year Ended
--------------------------------------------------------------
Six Months Ended July 31, Sept. 30,
January 31, 1998 ---------------------------------------------- --------------
(Unaudited) 1997 1996 1995 1994* 1993**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.52%+ 0.52% 0.54% 0.48% 0.47%+ 0.44%+
Expenses after custodian fee reduction 0.50%+ 0.50% 0.52% -- -- --
Net investment income 5.23%+ 5.45% 5.50% 5.85% 5.48%+ 5.46%+
Portfolio Turnover 13% 16% 49% 54% 45% 20%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $140,695 $150,224 $173,465 $191,263 $204,032 $187,665
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
** For the period from the start of business, February 1, 1993 to September
30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the periods ended July 31, 1995
have not been adjusted to reflect this change.
See notes to financial statements
73
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Minnesota Portfolio
-----------------------------------------------------------------------------------
Year Ended
------------------------------------------------------------------
Six Months Ended July 31, Sept. 30,
January 31, 1998 ---------------------------------------------------- -----------
(Unaudited) 1997 1996 1995 1994* 1993**
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.48%+ 0.47% 0.48% 0.47% 0.45%+ 0.40%+
Expenses after custodian fee reduction 0.47%+ 0.44% 0.46% -- -- --
Net investment income 5.39%+ 5.71% 5.69% 5.83% 5.50%+ 5.58%+
Portfolio Turnover 12% 22% 45% 76% 20% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $69,182 $70,674 $76,090 $82,968 $84,005 $67,019
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
** For the period from the start of business, February 1, 1993 to September
30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the periods ended July 31, 1995
have not been adjusted to reflect this change.
See notes to financial statements
74
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
New Jersey Portfolio
---------------------------------------------------------------------------------
Year Ended
----------------------------------------------------------------
Six Months Ended July 31, Sept. 30,
January 31, 1998 ------------------------------------------------- -------------
(Unaudited) 1997 1996 1995 1994* 1993**
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Expenses/(1)/ 0.52%+ 0.54% 0.53% 0.52% 0.50%+ 0.50%+
Expenses after custodian fee reduction 0.52%+ 0.52% 0.52% -- -- --
Net investment income 5.55%+ 5.84% 5.82% 5.96% 5.62%+ 5.67%+
Portfolio Turnover 9% 24% 39% 54% 25% 12%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $342,227 $352,772 $386,244 $411,038 $423,854 $393,677
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
** For the period from the start of business, February 1, 1993 to
September 30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the periods ended July 31, 1995
have not been adjusted to reflect this change.
See notes to financial statements
75
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Pennsylvania Portfolio
---------------------------------------------------------------------------------
Year Ended
---------------------------------------------------------------
Six Months Ended July 31, Sept. 30,
January 31, 1998 ------------------------------------------------- ------------
(Unaudited) 1997 1996 1995 1994* 1993**
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.53%+ 0.55% 0.54% 0.49% 0.48%+ 0.50%+
Expenses after custodian fee reduction 0.50%+ 0.51% 0.50% -- -- --
Net investment income 5.63%+ 5.96% 5.90% 6.02% 5.66%+ 5.71%+
Portfolio Turnover 8% 17% 30% 44% 21% 17%
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $385,664 $402,221 $448,182 $502,250 $536,786 $497,001
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
** For the period from the start of business, February 1, 1993 to September
30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the periods ended July 31, 1995
have not been adjusted to reflect this change.
See notes to financial statements
76
<PAGE>
EV Municipals Portfolios as of January 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Texas Portfolio
-----------------------------------------------------------------------
Year Ended
----------------------------------------------------
Six Months Ended July 31, Sept. 30,
January 31, 1998 --------------------------------------- ----------
(Unaudited) 1997 1996 1995 1994* 1993**
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:++
- ----------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.41%+ 0.37% 0.32% 0.08% 0.00%+ 0.03%+
Net expenses, after custodian fee reduction 0.39%+ 0.35% 0.27% -- -- --
Net investment income 5.54%+ 5.79% 5.81% 6.20% 5.69%+ 5.82%+
Portfolio Turnover 12% 17% 39% 49% 27% 8%
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $19,915 $21,676 $24,367 $28,227 $27,589 $16,029
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Portfolio may reflect a reduction of the
Investment Adviser fee, an allocation of expenses to the Investment Adviser,
or both. Had such action not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C> <C> <C> <C>
Expenses/(1)/ 0.42% 0.35% 0.37%+ 0.42%+
Expenses, after custodian fee reduction 0.37% -- -- --
Net investment income 5.71% 5.93% 5.32%+ 5.43%+
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten months ended July 31, 1994.
** For the period from the start of business, February 1, 1993 to September
30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and thereafter have
been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the periods ended July 31, 1995
have not been adjusted to reflect this change.
See notes to financial statements
77
<PAGE>
EV Municipals Portfolio as of January 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
----------------------------------------------------------------------------
Arizona Municipals Portfolio (Arizona Portfolio), Colorado Municipals
Portfolio (Colorado Portfolio), Connecticut Municipals Portfolio
(Connecticut Portfolio), Michigan Municipals Portfolio (Michigan Portfolio),
Minnesota Municipals Portfolio (Minnesota Portfolio), New Jersey Municipals
Portfolio (New Jersey Portfolio), Pennsylvania Municipals Portfolio
(Pennsylvania Portfolio) and Texas Municipals Portfolio (Texas Portfolio),
collectively the Portfolios, are registered under the Investment Company Act
of 1940 as non-diversified open-end management investment companies which
were organized as trusts under the laws of the State of New York on May 1,
1992. The Declarations of Trust permit the Trustees to issue interests in
the Portfolios. The following is a summary of significant accounting
policies of the Portfolios. The policies are in conformity with generally
accepted accounting principles.
A Investment Valuations -- Municipal bonds are normally valued on the basis
of valuations furnished by a pricing service. Taxable obligations, if any,
for which price quotations are readily available are normally valued at the
mean between the latest bid and asked prices. Futures contracts and options
on futures contracts listed on commodity exchanges are valued at closing
settlement prices. Over-the-counter options on financial futures contracts
are normally valued at the mean between the latest bid and asked prices.
Short-term obligations, maturing in sixty days or less, are valued at
amortized cost, which approximates value. Investments for which valuations
or market quotations are unavailable are valued at fair value using methods
determined in good faith by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C Income Taxes -- The Portfolios are treated as partnerships for federal tax
purposes. No provision is made by the Portfolios for federal or state taxes
on any taxable income of the Portfolios because each investor in the
Portfolios is ultimately responsible for the payment of any taxes. Since
some of the Portfolios' investors are regulated investment companies that
invest all or substantially all of their assets in the Portfolios, the
Portfolios normally must satisfy the applicable source of income and
diversification requirements (under the Internal Revenue Code) in order for
their respective investors to satisfy them. The Portfolios will allocate at
least annually among their respective investors each investor's distributive
share of the Portfolios' net taxable (if any) and tax-exempt investment
income, net realized capital gains, and any other items of income, gain,
loss, deduction or credit. Interest income received by the Portfolios on
investments in municipal bonds, which is excludable from gross income under
the Internal Revenue Code, will retain its status as income exempt from
federal income tax when allocated to each Portfolio's investors. The portion
of such interest, if any, earned on private activity bonds issued after
August 7, 1986, may be considered a tax preference item for investors.
D Deferred Organization Expenses -- Costs incurred by a Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E Financial Futures Contracts -- Upon the entering of a financial futures
contract, a Portfolio is required to deposit ("initial margin") either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by a Portfolio ("margin maintenance") each day, dependent
on the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by a Portfolio. A
Portfolio's investment in financial futures contracts is designed only to
hedge against anticipated future changes in interest rates. Should interest
rates move unexpectedly, a Portfolio may not achieve the anticipated
benefits of the financial futures contracts and may realize a loss.
F Options on Financial Futures Contracts -- Upon the purchase of a put
option on a financial futures contract by a Portfolio, the premium paid is
recorded as an investment, the value of which is marked-to-market daily.
When a purchased option expires, a Portfolio will realize a loss in the
amount of the cost of the option. When a Portfolio enters into a closing
sale transaction, the Portfolio will realize a gain or loss depending on
whether the sales proceeds from the closing sale transaction are greater or
less than the cost of the option. When a Portfolio exercises a put option,
settlement is made in cash. The risk associated with purchasing options is
limited to the premium originally paid.
G When-issued and Delayed Delivery Transactions -- The Portfolios may engage
in when-issued or delayed delivery transactions. The Portfolios record
when-issued securities on trade date and maintain security positions such
that sufficient liquid assets will be available to make payments for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked-to-market daily and begin earning interest on
settlement date.
78
<PAGE>
EV Municipals Portfolio as of January 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
H Other -- Investment transactions are accounted for on a trade date basis.
I Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolios. Pursuant to the custodian agreements, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balances each Portfolio maintains with IBT. All significant
credit balances used to reduce each Portfolio's custodian fees are reported
as a reduction of operating expenses in the Statement of Operations.
J Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
K Interim Financial Information -- The interim financial statements relating
to January 31, 1998 and for the six-month period then ended have not been
audited by independent certified public accountants, but in the opinion of
the Portfolio's management, reflect all adjustments, consisting only of
normal recurring adjustments necessary for the fair presentation of the
financial statements.
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
each Portfolio. The fee is based upon a percentage of average daily net
assets plus a percentage of gross income (i.e., income other than gains from
the sale of securities). For the six-months ended January 31, 1998, each
Portfolio paid advisory fees as follows:
Portfolio Amount Effective Rate*
----------------------------------------------------------------------------
Arizona $ 208,913 0.38%
Colorado 49,739 0.24%
Connecticut 358,484 0.42%
Michigan 293,955 0.40%
Minnesota 116,762 0.34%
New Jersey 780,245 0.45%
Pennsylvania 896,650 0.45%
Texas 16,686 0.16%
* Advisory fees paid as a percentage of average daily net assets.
Except as to Trustees of the Portfolios who are not members of EVM's or
BMR's organization, officers and Trustees receive remuneration for their
services to the Portfolios out of such investment adviser fee.
Trustees of the Portfolios 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 January 31, 1998, no significant amounts have
been deferred.
Certain of the officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations.
3 Investments
----------------------------------------------------------------------------
Purchases and sales of investments, other than U.S. Government securities,
purchased options and short-term obligations, for the six-months ended
January 31, 1998 were as follows:
Arizona Portfolio
----------------------------------------------------------------------------
Purchases $15,331,699
Sales 23,039,900
Colorado Portfolio
----------------------------------------------------------------------------
Purchases $ 3,800,814
Sales 6,649,944
Connecticut Portfolio
----------------------------------------------------------------------------
Purchases $ 6,245,786
Sales 12,263,136
Michigan Portfolio
----------------------------------------------------------------------------
Purchases $18,914,301
Sales 29,911,810
Minnesota Portfolio
----------------------------------------------------------------------------
Purchases $ 8,163,983
Sales 10,242,400
New Jersey Portfolio
----------------------------------------------------------------------------
Purchases $30,873,234
Sales 48,228,544
Pennsylvania Portfolio
----------------------------------------------------------------------------
Purchases $32,871,204
Sales 48,427,852
Texas Portfolio
----------------------------------------------------------------------------
Purchases $ 2,510,105
Sales 4,215,121
79
<PAGE>
EV Municipals Portfolio as of January 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
4 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at January 31, 1998, as computed on a
federal income tax basis, are as follows:
Arizona Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 94,998,980
------------------------------------------------------------------------------
Gross unrealized appreciation $ 10,985,391
Gross unrealized depreciation (15,902)
------------------------------------------------------------------------------
Net unrealized appreciation $ 10,969,469
------------------------------------------------------------------------------
Colorado Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 35,691,544
------------------------------------------------------------------------------
Gross unrealized appreciation $ 4,375,065
Gross unrealized depreciation --
------------------------------------------------------------------------------
Net unrealized appreciation $ 4,375,065
------------------------------------------------------------------------------
Connecticut Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 156,324,927
------------------------------------------------------------------------------
Gross unrealized appreciation $ 11,801,349
Gross unrealized depreciation (6,378)
------------------------------------------------------------------------------
Net unrealized appreciation $ 11,794,971
------------------------------------------------------------------------------
Michigan Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 124,442,329
------------------------------------------------------------------------------
Gross unrealized appreciation $ 13,409,371
Gross unrealized depreciation (19,338)
------------------------------------------------------------------------------
Net unrealized appreciation $ 13,390,033
------------------------------------------------------------------------------
Minnesota Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 62,345,476
------------------------------------------------------------------------------
Gross unrealized appreciation $ 6,450,715
Gross unrealized depreciation --
------------------------------------------------------------------------------
Net unrealized appreciation $ 6,450,715
------------------------------------------------------------------------------
New Jersey Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 302,127,280
------------------------------------------------------------------------------
Gross unrealized appreciation $ 35,839,533
Gross unrealized depreciation (48,430)
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Net unrealized appreciation $ 35,791,103
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Pennsylvania Portfolio
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Aggregate Cost $ 347,367,015
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Gross unrealized appreciation $ 37,700,567
Gross unrealized depreciation (12,707)
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Net unrealized appreciation $ 37,687,860
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Texas Portfolio
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Aggregate Cost $ 18,794,709
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Gross unrealized appreciation $ 1,830,832
Gross unrealized depreciation (10,345)
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Net unrealized appreciation $ 1,829,703
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5 Line of Credit
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The Portfolios participate with other portfolios and funds managed by BMR and
EVM and their affiliates in a committed $100 million unsecured line of credit
agreement with a group of banks. Borrowings will be made by the portfolios or
funds solely to facilitate the handling of unusual and/or unanticipated short-
term cash requirements. Interest is charged to each portfolio or fund based on
its borrowings at an amount above either 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 facility is allocated among the participating portfolios
and funds at the end of each quarter. At January 31, 1998, the Colorado
Portfolio, Michigan Portfolio and Pennsylvania Portfolio had balances
outstanding pursuant to this line of credit of $43,000, $1,934,000, and
$3,174,000, respectively. The Portfolios did not have any significant
borrowings or allocated fees during the six-months ended January 31, 1998.
80
<PAGE>
EV Municipals Portfolio as of January 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
6 Financial Instruments
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The Portfolios regularly trade in financial instruments with off-balance sheet
risk in the normal course of their investing activities to assist in managing
exposure to various market risks. These financial instruments include 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 a Portfolio
has in particular classes of financial instruments and does not necessarily
represent the amounts potentially subject to risk. The measurement of the
risks associated with these instruments is meaningful only when all related
and offsetting transactions are considered.
A summary of obligations under these financial instruments at January 31,
1998, is as follows:
Futures
Contracts
Expiration Net Unrealized
Portfolio Date Contracts Position Depreciation
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Arizona 3/98 53 U.S. Treasury Bonds Short $ 84,988
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Colorado 3/98 15 U.S. Treasury Bonds Short 25,246
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Connecticut 3/98 63 U.S. Treasury Bonds Short 106,034
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Michigan 3/98 68 U.S. Treasury Bonds Short 108,278
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Minnesota 3/98 30 U.S. Treasury Bonds Short 46,118
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New Jersey 3/98 150 U.S. Treasury Bonds Short 230,588
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Pennsylvania 3/98 192 U.S. Treasury Bonds Short 301,188
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At January 31, 1998, the Portfolios had sufficient cash and/or securities to
cover margin requirements on open futures contracts.
81
<PAGE>
Eaton Vance Municipals Funds as of January 31, 1998
INVESTMENT MANAGEMENT
Eaton Vance Municipals Funds
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
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
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
Municipals Portfolios
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President of Arizona, Colorado, Connecticut, Michigan, Minnesota, New
Jersey, Pennsylvania and Texas Municipals Portfolios and Portfolio Manager of
Minnesota and New Jersey Municipals Portfolios
Cynthia J. Clemson
Vice President and Portfolio Manager of Arizona Municipals Portfolio
William H. Ahearn, Jr.
Vice President and Portfolio Manager of Colorado and Connecticut Municipals
Portfolios
Thomas M. Metzold
Vice President and Portfolio Manager of Texas Municipals Portfolio
Timothy T. Browse
Vice President and Portfolio Manager of Michigan and Pennsylvania Municipals
Portfolios
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
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
82
<PAGE>
This Page Intentionally Left Blank
<PAGE>
Investment Adviser of the Portfolios
Boston Management and Research
24 Federal Street
Boston, MA 02110
Administrator of the Funds
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617)482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
Transfer Agent
First Data Investor Services Group, Inc.
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
Eaton Vance Municipals Trust
24 Federal Street
Boston, MA 02110
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This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution plan,
sales charges and expenses. Please read the prospectus carefully before you
invest or send money.
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