<PAGE>
LOGO
APPEARS
HERE
"EDUCATION" Sign On Photo of Brick Wall
Annual Report September 30, 1998
EATON VANCE
MUNICIPALS
TRUST
[PHOTO OF NIGHTIME HIGHWAY APPEARS HERE]
[PHOTO OF SUSPENSION BRIDGE APPEARS HERE]
California
Florida
Massachusetts
Mississippi
New York
Ohio
Rhode Island
West Virginia
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
LETTER TO SHAREHOLDERS
[PHOTO OF THOMAS FETTER]
Thomas J. Fetter,
President
The municipal bond market has posted solid returns in 1998 in an economy
characterized by slower growth and continued low inflation. Second quarter GDP
rose at a modest 1.8% annualized rate, and was followed by a 3.3% pace in the
third quarter, a figure that likely overstates true growth. Meanwhile, the
annualized inflation rate has declined to around 1%. While there has been some
pressure on wages and benefit costs, commodity prices have continued to decline
dramatically due to a slowing world economy and slackening demand. As a
consequence, the Federal Reserve pursued an increasingly accomodative interest
rate policy, lowering the Federal funds rate three times since September 29.
Against that backdrop, municipal bonds have turned in positive returns, with the
Lehman Brothers Municipal Bond Index* - an unmanaged index of municipal
bonds - rising 8.7% during the year ended September 30, 1998.
After a generation of deficit spending, the federal budget will register a
surplus in fiscal year 1998
Bolstered by rising tax receipts, falling interest costs, and a renewed fiscal
discipline on the part of policy makers, the federal budget will register a
surplus this year for the first time in a generation. The surplus will likely
result in lower Treasury bond issuance in coming years, which should greatly
improve the outlook for interest rates.
With refundings producing heavy municipal supply, municipal bonds now offer
unusually good value
The past 12 months have been characterized by a continued wave of refundings, as
municipal issuers have redeemed high-coupon older bonds and replaced them with
lower-coupon bonds. The surge in supply has restrained the performance of
municipals relative to Treasury bonds.
Municipal bond yields nearly equal Treasury yields
4.97% 7.77%
30-Year AAA-rated Taxable equivalent yield
General Obligation (GO) Bonds* in 36% tax bracket
4.98%
30-Year Treasury bond
Principal and interest payments of Treasury securities are guaranteed by the
U.S. government.
*GO yields are a compilation of a representative variety of general obligations
and are not necessarily representative of the Fund's yield. Statistics as of
September 30, 1998.
As a result, municipal yields represented nearly 100% of Treasury yields at
September 30, according to Bloomberg, L.P. That ratio is very high by historical
standards and suggests that municipals may represent uncommonly good value. That
is an important consideration, especially given the recently overvalued status
of some other asset classes.
Following an extraordinary three-year run of 20%-plus annual returns, the stock
market has entered a period of severe volatility. Moreover, the slowdown in Asia
and the economic uncertainty in emerging markets like Russia have clouded the
outlook for corporate profits, while prompting many investors to diversify their
portfolios further with bond investments. Given their attractive valuations
relative to other fixed-income vehicles, municipals are receiving increased
attention. And, of course, municipal bonds remain a good way to lower one's
income tax burden. For those reasons, we believe that municipals continue to
merit strong consideration from tax-conscious investors.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter,
President
November 9, 1998
*It is not possible to invest directly in an Index.
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Mutual fund shares are not insured by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
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2
<PAGE>
EATON VANCE CALIFORNIA MUNICIPALS FUND as of September 30, 1998
INVESTMENT UPDATE
[PHOTO OF CYNTHIA CLEMSON]
Cynthia J. Clemson,
Portfolio Manager
The Economy
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. California's large and well diversified $1 trillion economy ranks 7th among
world economic powers. Moody's Investment Service recently upgraded
California's credit rating for the first time in nine years, to Aa3 from A1.
. The state continues to outpace the U.S. in employment and personal income
growth. Unemployment, at 5.8% at the end of August, hit an 8-year low in July
at 5.6%. Strong job growth continued in the construction and business services
sectors, while high-tech manufacturing employment slowed as a result of weak
Asian economies.
. In August, Gov. Pete Wilson signed legislation for the largest tax cut in
state history, worth $3.6 billion. Most comes from a 25% reduction in the car
tax, which represents $3.2 billion, with an additional $400 million in
targeted tax relief to stimulate economic growth.
Management Update
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. Because California is one of the largest issuers of municipal bonds, our
credit research department is the key to identifying undervalued bonds in a
saturated market. For example, when recent restructurings lowered ratings in
the hospital sector, our analysts scrutinized the field and found several
sound credits with good fundamentals and upside potential.
. Also providing a good opportunity were tax allocation and special assessment
districts. Because the credit behind these bonds can vary significantly, our
analysts conducted in-depth research to identify quality issues with upside
trading potential.
. We continued to seek call protection for the Portfolio, while balancing
discount bonds, for better overall returns, with premium bonds, for higher
income. This "barbell" approach helped to enhance the Portfolio's performance
in varying market conditions.
The Fund
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. For the year ended September 30, 1998, the Fund's Class A and Class B shares
had total returns of 9.7% and 8.8%, respectively.1 For Class A, this return
resulted from an increase in net asset value (NAV) per share to $11.34 on
September 30, 1998 from $10.90 on September 30, 1997, and the reinvestment of
$0.584 per share in tax-free income./2/ For Class B, this return resulted from
an increase in NAV to $10.42 from $10.01, and the reinvestment of $0.450 per
share in tax-free income./2/
. Based on the Fund's most recent dividends and NAVs on September 30, 1998 of
$11.34 per share for Class A and $10.42 for Class B, distribution rates were
5.05% and 4.32%, respectively./3/
. The SEC 30-day yields for Class A and B shares at September 30 were 4.12% and
3.42%, respectively./4/
Your Investment at Work
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California Communities Development Authority Special Facilities Lease Bonds -
United Air Lines, Inc. /San Francisco International Airport Projects
. The proceeds from these bonds will provide funds for the acquisition,
construction, and improvement by United Air Lines, Inc. of passenger and cargo
facilities at San Francisco International Airport.
. The facilities will be owned by the Airport Commission of the city of San
Francisco and leased to United.
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/1/ These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for Class
B shares. /2/ A portion of the Fund's income could be subject to federal
income tax and/or alternative minimum tax and state income tax. /3/ The
Fund's distribution rate represents actual distributions paid to
shareholders and is calculated 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 historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns for
Class A reflect the maximum 4.75% sales charge. SEC returns 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.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
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Fund Information
as of September 30, 1998
Performance/5/ Class A Class B
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Average Annual Total Returns (at net asset value)
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One Year 9.7% 8.8%
Five Years N.A. 5.5
Ten Years N.A. 6.9
Life of Fund+ 9.0 6.8
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 4.5% 3.8%
Five Years N.A. 5.1
Ten Years N.A. 6.9
Life of Fund+ 7.8 6.8
+Inception date: Class A: 5/27/94; Class B: 12/19/85
Comparison of Change in Value of a $10,000 Investment in
Eaton Vance California Municipals Fund, Class B vs. the
Lehman Brothers Municipal Bond Index*
September 30, 1988 - September 30, 1998
Date Fund/NAV LMBI
9/30/88 $10,000 $10,000
10/31/88 $10,174 $10,176
11/30/88 $10,024 $10,083
12/31/88 $10,164 $10,186
1/31/89 $10,361 $10,397
2/28/89 $10,314 $10,278
3/31/89 $10,283 $10,254
4/30/89 $10,485 $10,497
5/31/89 $10,689 $10,715
6/30/89 $10,793 $10,861
7/31/89 $10,932 $11,009
8/31/89 $10,784 $10,901
9/30/89 $10,779 $10,868
10/31/89 $10,862 $11,001
11/30/89 $11,021 $11,194
12/31/89 $11,082 $11,285
1/31/90 $10,966 $11,232
2/28/90 $11,096 $11,332
3/31/90 $11,086 $11,336
4/30/90 $10,936 $11,254
5/31/90 $11,200 $11,499
6/30/90 $11,299 $11,600
7/31/90 $11,490 $11,772
8/31/90 $11,195 $11,600
9/30/90 $11,171 $11,607
10/31/90 $11,359 $11,818
11/30/90 $11,614 $12,055
12/31/90 $11,635 $12,108
1/31/91 $11,793 $12,270
2/28/91 $11,834 $12,377
3/31/91 $11,798 $12,381
4/30/91 $11,962 $12,547
5/31/91 $12,050 $12,658
6/30/91 $11,998 $12,646
7/31/91 $12,144 $12,800
8/31/91 $12,272 $12,968
9/30/91 $12,466 $13,137
10/31/91 $12,578 $13,256
11/30/91 $12,519 $13,292
12/31/91 $12,725 $13,578
1/31/92 $12,663 $13,609
2/28/92 $12,699 $13,613
3/31/92 $12,669 $13,618
4/30/92 $12,785 $13,740
5/31/92 $12,929 $13,901
6/30/92 $13,155 $14,134
7/31/92 $13,536 $14,558
8/31/92 $13,307 $14,416
9/30/92 $13,346 $14,511
10/31/92 $12,976 $14,368
11/30/92 $13,303 $14,625
12/31/92 $13,502 $14,775
1/31/92 $13,669 $14,947
2/28/93 $14,250 $15,487
3/31/93 $14,039 $15,323
4/30/93 $14,193 $15,478
5/31/93 $14,239 $15,565
6/30/93 $14,444 $15,825
7/31/93 $14,415 $15,845
8/31/93 $14,784 $16,175
9/30/93 $14,936 $16,360
10/31/93 $14,933 $16,391
11/30/93 $14,760 $16,247
12/31/93 $15,048 $16,590
1/31/94 $15,210 $16,779
2/28/94 $14,805 $16,345
3/31/94 $14,116 $15,679
4/30/94 $14,111 $15,812
5/31/94 $14,181 $15,949
6/30/94 $14,038 $15,856
7/31/94 $14,286 $16,142
8/31/94 $14,341 $16,198
9/30/94 $14,124 $15,960
10/31/94 $13,800 $15,677
11/30/94 $13,439 $15,393
12/31/94 $13,680 $15,732
1/31/95 $14,170 $16,182
2/28/95 $14,641 $16,652
3/31/95 $14,811 $16,844
4/30/95 $14,784 $16,864
5/31/95 $15,273 $17,402
6/30/95 $14,971 $17,250
7/31/95 $15,055 $17,413
8/31/95 $15,166 $17,634
9/30/95 $15,295 $17,745
10/31/95 $15,620 $18,003
11/30/95 $15,978 $18,302
12/31/95 $16,206 $18,478
1/31/96 $16,256 $18,618
2/28/96 $16,105 $18,492
3/31/96 $15,819 $18,256
4/30/96 $15,736 $18,204
5/31/96 $15,733 $18,197
6/30/96 $15,872 $18,395
7/31/96 $16,051 $18,562
8/31/96 $16,049 $18,558
9/30/96 $16,288 $18,817
10/31/96 $16,419 $19,030
11/30/96 $16,744 $19,378
12/31/96 $16,640 $19,296
1/31/97 $16,707 $19,333
2/28/97 $16,903 $19,510
3/31/97 $16,647 $19,250
4/30/97 $16,816 $19,411
5/31/97 $17,057 $19,704
6/30/97 $17,286 $19,914
7/31/97 $17,846 $20,465
8/31/97 $17,613 $20,273
9/30/97 $17,913 $20,514
10/31/97 $17,998 $20,646
11/30/97 $18,125 $20,767
12/31/97 $18,440 $21,070
1/31/98 $18,617 $21,288
2/28/98 $18,618 $21,294
3/31/98 $18,624 $21,313
4/30/98 $18,435 $21,217
5/31/98 $18,760 $21,552
6/30/98 $18,793 $21,637
7/31/98 $18,806 $21,692
8/31/98 $19,217 $22,027
9/30/98 $19,489 $22,301
* Source: Towers Data Systems, Bethesda, MD. The chart compares the total return
of the Fund's Class B with that of the Lehman Brothers Municipal Bond Index, a
broad-based, unmanaged market index. Returns are calculated by determining the
percentage change in net asset value (NAV) with all distributions reinvested.
The lines on the chart represent total returns of $10,000 hypothetical
investments in the Fund and the Lehman Brothers Municipal Bond Index. An
investment in Class A shares on 5/31/94 at net asset value would have grown to
$14,580 on September 30, 1998; $13,884, including the 4.75% sales charge. The
Index's total return does not reflect commissions or expenses that would have
been incurred if an investor individually purchased or sold the securities
represented in the Index. It is not possible to invest directly in an Index.
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Federal income tax information on distributions. For federal income tax
purposes, 99.37% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1998 was designated as an
exempt-interest dividend.
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3
<PAGE>
Eaton Vance Florida Municipals Fund as of September 30, 1998
INVESTMENT UPDATE
[PHOTO OF THOMAS FETTER]
Thomas J. Fetter,
Portfolio Manager
The Economy
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. The robust Florida economy is a product of steady expansion in several
industries, rapid population growth, low interest rates and unemployment, and
increased consumer spending. The fastest growing areas were healthcare,
business services, engineering, and management.
. Tourism and business travel are vital parts of the Florida economy. Reports
from this sector indicate continued strength, with air traffic, cruises, and
hotel/motel operators all recording very strong business. In addition,
aerospace and defense contractors have won large contracts that should spur
manufacturing in those industries.
. As of August 1998, Florida's unemployment rate was 4.3%, lower than the
national rate of 4.5% and one of the lowest rates in Florida in 25 years.
Management Update
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. Management strives to maintain a balanced, "barbell" approach to the
portfolio: high-coupon bonds for income and lower coupons to add upside
trading potential. To increase call protection, we have sought opportunities
in non-callable bonds.
. Pre-refunded bonds constituted the largest commitment at September 30. Because
the bonds are pre-refunding to their approaching call dates, they provided
relatively stable performance in a volatile market climate, as well as an
excellent income stream.
. We are pleased to announce that as of November 1, 1998, the Portfolio will be
managed by Cynthia J. Clemson. Ms. Clemson currently manages seven other Eaton
Vance tax-exempt state municipal bond portfolios.
The Fund
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. For the year ended September 30, 1998, the Fund's Class A and Class B shares
had total returns of 10.2% and 9.3%, respectively./1/ For Class A, this return
resulted from an increase in net asset value (NAV) per share to $11.15 on
September 30, 1998 from $10.64 on September 30, 1997, and the reinvestment of
$0.55 per share in tax-free income./2/ For Class B, this return resulted from
an increase in NAV to $11.42 from $10.90, and the reinvestment of $0.474 per
share in tax-free income./2/
. Based on the Fund's most recent dividends and NAVs on September 30, 1998 of
$11.15 per share for Class A and $11.42 for Class B, distribution rates were
4.80% and 4.07%, respectively./3/
. The SEC 30-day yields for Class A and B shares at September 30 were 4.39% and
3.78%, respectively./4/
Your Investment at Work
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Dade County Water and Sewer System Revenue Bonds - Series 1997
. This bond issue provides funds for improvements to the Water and Sewer System,
which provides water and wastewater treatment to most of Dade County, the
largest county in the Southeastern U.S.
. The Water and Sewer Department achieved its long-term objective of expansion
to Countywide operation through the acquisition of all privately owned
utilities in the County.
/1/ These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for Class
B shares. /2/ Aportion of the Fund's income could be subject to federal
income tax and/or alternative minimum tax. /3/ The Fund's distribution rate
represents actual distributions paid to shareholders and is calculated 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 historical and are
calculated by determining the percentage change in net asset value with all
distributions reinvested. SEC returns for Class A reflect the maximum 4.75%
sales charge. SEC returns 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. Past performance is no guarantee of future
results. Investment return and principal value will fluctuate so that
shares, when redeemed, may be worth more or less than their original cost.
Fund Information
as of September 30, 1998
<TABLE>
<CAPTION>
Performance/5/ Class A Class B
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<S> <C> <C>
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 10.2% 9.3%
Five Years N.A. 4.7
Life of Fund+ 8.3 7.6
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 5.0% 4.3%
Five Years N.A. 4.3
Life of Fund+ 7.1 7.6
+Inception date: Class A: 4/5/94; Class B: 8/28/90
</TABLE>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EATON VANCE FLORIDA MUNICIPALS FUND, CLASS B VS. THE
LEHMAN BROTHERS MUNICIPAL BOND INDEX*
AUGUST 31, 1990 - SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Date Fund/NAV LMBI
<S> <C> <C>
8/31/90 $10,000 $10,000
9/30/90 $9,990 $10,006
10/31/90 $10,127 $10,187
11/30/90 $10,429 $10,392
12/31/90 $10,482 $10,437
1/31/91 $10,622 $10,577
2/28/91 $10,704 $10,670
3/31/91 $10,698 $10,673
4/30/91 $10,864 $10,816
5/31/91 $10,988 $10,912
6/30/91 $10,899 $10,901
7/31/91 $11,094 $11,034
8/31/91 $11,241 $11,179
9/30/91 $11,434 $11,325
10/31/91 $11,536 $11,427
11/30/91 $11,522 $11,459
12/31/91 $11,886 $11,704
1/31/92 $11,814 $11,731
2/28/92 $11,817 $11,735
3/31/92 $11,784 $11,739
4/30/92 $11,911 $11,844
5/31/92 $12,117 $11,983
6/30/92 $12,360 $12,184
7/31/92 $12,816 $12,550
8/31/92 $12,497 $12,427
9/30/92 $12,510 $12,509
10/31/92 $12,204 $12,386
11/30/92 $12,661 $12,608
12/31/92 $12,843 $12,736
1/31/92 $12,967 $12,884
2/28/93 $13,604 $13,350
3/31/93 $13,352 $13,209
4/30/93 $13,536 $13,342
5/31/93 $13,627 $13,417
6/30/93 $13,870 $13,642
7/31/93 $13,860 $13,659
8/31/93 $14,183 $13,944
9/30/93 $14,368 $14,103
10/31/93 $14,380 $14,130
11/30/93 $14,122 $14,005
12/31/93 $14,494 $14,301
1/31/94 $14,688 $14,464
2/28/94 $14,191 $14,090
3/31/94 $13,423 $13,516
4/30/94 $13,487 $13,630
5/31/94 $13,565 $13,748
6/30/94 $13,446 $13,668
7/31/94 $13,717 $13,915
8/31/94 $13,718 $13,963
9/30/94 $13,457 $13,758
10/31/94 $13,091 $13,514
11/30/94 $12,772 $13,269
12/31/94 $13,187 $13,562
1/31/95 $13,647 $13,949
2/28/95 $14,160 $14,355
3/31/95 $14,267 $14,520
4/30/95 $14,276 $14,537
5/31/95 $14,655 $15,001
6/30/95 $14,389 $14,870
7/31/95 $14,479 $15,011
8/31/95 $14,605 $15,201
9/30/95 $14,789 $15,297
10/31/95 $15,056 $15,519
11/30/95 $15,407 $15,777
12/31/95 $15,619 $15,929
1/31/96 $15,681 $16,049
2/28/96 $15,460 $15,941
3/31/96 $15,209 $15,737
4/30/96 $15,158 $15,692
5/31/96 $15,103 $15,686
6/30/96 $15,254 $15,857
7/31/96 $15,439 $16,001
8/31/96 $15,356 $15,997
9/30/96 $15,592 $16,221
10/31/96 $15,694 $16,404
11/30/96 $15,945 $16,705
12/31/96 $15,862 $16,634
1/31/97 $15,865 $16,666
2/28/97 $15,977 $16,819
3/31/97 $15,722 $16,594
4/30/97 $15,797 $16,733
5/31/97 $15,947 $16,985
6/30/97 $16,162 $17,166
7/31/97 $16,627 $17,642
8/31/97 $16,358 $17,476
9/30/97 $16,511 $17,683
10/31/97 $16,678 $17,797
11/30/97 $16,791 $17,902
12/31/97 $17,077 $18,163
1/31/98 $17,308 $18,351
2/28/98 $17,314 $18,356
3/31/98 $17,337 $18,372
4/30/98 $17,194 $18,290
5/31/98 $17,518 $18,579
6/30/98 $17,579 $18,652
7/31/98 $17,592 $18,699
8/31/98 $17,442 $18,988
9/30/98 $18,047 $19,224
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
8/28/90. Index information is available only at month-end, therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 04/31/94 at net asset value would have grown to $13,872 on
September 30, 1998; $13,218, including the 4.75% sales charge. The Index's
total return does not reflect commissions or expenses that would have been
incurred if an investor individually purchased or sold the securities
represented in the Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions. For federal income tax
purposes, 99.91% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1998 was designated as an
exempt-interest dividend.
- --------------------------------------------------------------------------------
4
<PAGE>
Eaton Vance Massachusetts Municipals Fund as of September 30, 1998
INVESTMENT UPDATE
[PHOTO OF ROBERT MACINTOSH APPEARS HERE]
Robert B. MacIntosh,
Portfolio Manager
The Economy
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. The gross state product of Massachusetts increased by 6.5% in September 1998
from a year ago. As of September, the unem- ployment rate was 3.3%; more
people are now working in Massachusetts than ever before. Job growth in the
high-technology industries was 4.1%, which out- paced the state average of
2.7%.
. Continued economic strength and low unemployment draw more people into the
Massachusetts labor pool each year. From September 1997 to September 1998,
the services sector added almost 40,000 jobs. Also, during the same time
period, there was a year-over-year increase of 5.2% for average weekly wages.
. This year Massachusetts was placed on the Corporation for Enterprise
Development's "Honor Roll" for the first time, one of only 7 states to be
named. This distinction is awarded based on economic performance, business
vitality, and development capacity.
Management Update
- --------------------------------------------------------------------------------
. With a budget surplus of over $1 billion this year, the Massachusetts
legislature passed a tax cut lowering the unearned income tax from 12% to
5.95%, the same level as earned income, effective January 1, 1999. Management
believes that any downside caused by the lower marginal tax rate will be
offset by continued strong demand for Massachusetts credits.
. Management opted to reduce exposure to state general obligation bonds, as
they have dramatically outperformed the market in recent years. To remain
fully invested, we have added uninsured hospital bonds selected by our
analysts for their sound credit quality.
. We continued to seek call protection for the Portfolio by investing in bonds
with attractive call features, including non-callable bonds whenever
possible.
The Fund
- -----------------------------------------------------------------------------
. For the year ended September 30, 1998, the Fund's Class A shares had a total
return of 9.1%./1/ This return resulted from an increase in net asset value
(NAV) per share to $9.94 on September 30, 1998 from $9.62 on September 30,
1997, and the reinvestment of $0.53 per share in tax-free income./2/
. The Fund's Class B shares had a total return of 8.3%,/1/ the result of an
increase in NAV to $11.07 from $10.69, and the reinvestment of $0.485 per
share in tax-free income./2/
. The Fund's Class I shares had a total return of 9.3%,/1/ the result of an
increase in NAV to $10.26 from $9.89, and the reinvestment of $0.53 per share
in tax-free income./2/
. Based on the Fund's most recent dividends and September 30th NAVs of $9.94
per share for Class A, $11.07 for Class B, and $10.26 for Class I, per share
distribution rates were 5.24%, 4.38%, and 5.17%, respectively./3/ The
SEC30-day yields for Class A, Class B, and Class I shares at September 30
were 4.39%, 3.72%, and 4.65%, respectively./4/
Your Investment at Work
- --------------------------------------------------------------------------------
Massachusetts Health and Educational Facilities Authority Revenue Bonds:
Cape Cod Healthcare
. This bond issue will finance the building of and improvements to an
ambulatory medical center and a transitional care unit at Cape Cod Hospital.
/1/These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for Class B
shares. There is no sales charge for Class Ishares. /2/Aportion of the Fund's
income could be subject to federal income tax and/or alternative minimum tax
and state income tax. /3/The Fund's distribution rate represents actual
distributions paid to shareholders and is calculated 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 historical and are calculated by determining the
percentage change in net asset value with all distributions reinvested. SEC
returns for Class A reflect the maximum 4.75% sales charge. SEC returns 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.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
Fund Information
as of September 30, 1998
Performance/5/ Class A Class B Class I
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 9.1% 8.3% 9.3%
Five Years N.A. 4.9 5.8
Life of Fund + 5.5 7.1 6.2
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 3.9% 3.3% 9.3
Five Years N.A. 4.5 5.8
Life of Fund+ 4.4 7.1 6.2
+ Inception date: Class A: 12/7/93; Class B: 4/18/91; Class I: 6/17/93
Comparison of Change in Value of a $10,000 Investment in
Eaton Vance Massachusetts Municipals Fund, Class B vs. the
Lehman Brothers Municipal Bond Index*
April 30, 1991 - September 30, 1998
Date Fund/NAV LMBI
4/30/91 $10,000 $10,000
5/31/91 $10,040 $10,089
6/30/91 $10,063 $10,079
7/31/91 $10,248 $10,202
8/31/91 $10,410 $10,336
9/30/91 $10,544 $10,471
10/31/91 $10,662 $10,565
11/30/91 $10,669 $10,594
12/31/91 $10,985 $10,822
1/31/92 $11,011 $10,846
2/28/92 $11,025 $10,850
3/31/92 $11,004 $10,854
4/30/92 $11,095 $10,951
5/31/92 $11,250 $11,080
6/30/92 $11,483 $11,265
7/31/92 $11,889 $11,603
8/31/92 $11,657 $11,490
9/30/92 $11,690 $11,565
10/31/92 $11,417 $11,451
11/30/92 $11,744 $11,657
12/31/92 $11,877 $11,776
1/31/92 $12,005 $11,913
2/28/93 $12,487 $12,343
3/31/93 $12,325 $12,213
4/30/93 $12,488 $12,336
5/31/93 $12,562 $12,405
6/30/93 $12,757 $12,613
7/31/93 $12,736 $12,629
8/31/93 $13,020 $12,892
9/30/93 $13,172 $13,039
10/31/93 $13,183 $13,064
11/30/93 $13,031 $12,949
12/31/93 $13,308 $13,222
1/31/94 $13,444 $13,373
2/28/94 $13,115 $13,027
3/31/94 $12,445 $12,496
4/30/94 $12,409 $12,602
5/31/94 $12,519 $12,711
6/30/94 $12,406 $12,637
7/31/94 $12,625 $12,866
8/31/94 $12,675 $12,910
9/30/94 $12,439 $12,721
10/31/94 $12,116 $12,495
11/30/94 $11,736 $12,269
12/31/94 $12,092 $12,539
1/31/95 $12,542 $12,897
2/28/95 $12,940 $13,272
3/31/95 $13,054 $13,425
4/30/95 $13,037 $13,441
5/31/95 $13,384 $13,870
6/30/95 $13,143 $13,748
7/31/95 $13,215 $13,878
8/31/95 $13,387 $14,055
9/30/95 $13,481 $14,143
10/31/95 $13,721 $14,349
11/30/95 $14,000 $14,587
12/31/95 $14,187 $14,727
1/31/96 $14,218 $14,839
2/28/96 $14,046 $14,738
3/31/96 $13,845 $14,550
4/30/96 $13,808 $14,509
5/31/96 $13,823 $14,503
6/30/96 $13,951 $14,661
7/31/96 $14,057 $14,794
8/31/96 $14,031 $14,791
9/30/96 $14,227 $14,997
10/31/96 $14,308 $15,167
11/30/96 $14,560 $15,445
12/31/96 $14,479 $15,380
1/31/97 $14,507 $15,409
2/28/97 $14,627 $15,550
3/31/97 $14,438 $15,343
4/30/97 $14,563 $15,471
5/31/97 $14,761 $15,704
6/30/97 $14,935 $15,871
7/31/97 $15,376 $16,311
8/31/97 $15,220 $16,158
9/30/97 $15,424 $16,350
10/31/97 $15,525 $16,455
11/30/97 $15,617 $16,552
12/31/97 $15,875 $16,793
1/31/98 $16,022 $16,966
2/28/98 $16,072 $16,972
3/31/98 $16,066 $16,987
4/30/98 $15,932 $16,910
5/31/98 $16,184 $17,178
6/30/98 $16,230 $17,245
7/31/98 $16,245 $17,289
8/31/98 $16,506 $17,556
9/30/98 $16,699 $17,775
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
4/18/91. Index information is available only at month-end; therefore, the
line comparison begins at the next month following the commencement of the
Fund's investment operations. The chart compares the total return of the
Fund's Class B with that of the Lehman Brothers Municipal Bond Index, a
broad-based, unmanaged market index. Returns are calculated by determining
the percentage change in net asset value (NAV) with all distributions
reinvested. The lines on the chart represent total returns of $10,000
hypothetical investments in the Fund and the Lehman Brothers Municipal Bond
Index. An investment in Class A shares on 12/31/93 at net asset value would
have grown to $12,869 on September 30, 1998; $12,258, including the 4.75%
sales charge. An investment in Class I shares on 6/30/93 at net asset value
would have grown to $13,663 on September 30, 1998. The Index's total return
does not reflect commissions or expenses that would have been incurred if an
investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
Federal income tax information on distributions. For federal income tax
purposes, 99.53% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1998 was designated as an
exempt-interest dividend.
5
<PAGE>
Eaton Vance Mississippi Municipals Fund as of September 30, 1998
INVESTMENT UPDATE
[Photo of Cynthia Clemson]
Cynthia J. Clemson,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. The Mississippi economy, which has been traditionally rooted in agriculture
and manufacturing, has been undergoing a transform- ation in the 1990s since
the introduction of gaming. While the expansion has slowed somewhat, casinos
and related businesses have marked a fundamental shift to the services sector.
. Mississippi is a favorite site among U.S. manufacturing employers such as
Whirlpool, Weyerhauser, and Hughes Aircraft: the state's location is an
advantage in reaching U.S. and international markets; the workforce boasts low
turnover and absenteeism rates; and the legislature passed incentives that
offer tax credits in exchange for jobs created.
. Mississippi had an unemployment rate in August of 5.6%, higher than the
national average of 4.5%. However, it is the fastest growing region in the
mid-South, and U.S. News & World Report ranked it Number One last year in
------------------------
terms of economic recovery.
Management Update
- --------------------------------------------------------------------------------
. With the supply of Mississippi municipal bonds so light this year, our credit
research analysts scrutinized the market and found several opportunities in
non-callable bonds at attractive price levels. Management also favored
Mississippi utilities bonds, which trade at a discount.
. With credit spreads narrowing, management was able to sell some of the
Portfolio's lower-rated holdings, thus upgrading its overall quality rating.
. We continued to seek call protection for the Portfolio, while balancing
discount bonds, for higher yields, with premium bonds, for better overall
returns. This "barbell" approach helped to enhance the Portfolio's performance
in varying market conditions.
The Fund
- --------------------------------------------------------------------------------
. For the year ended September 30, 1998, the Fund's Class A and Class B shares
had total returns of 8.5% and 7.8%, respectively./1/ For Class A, this return
resulted from an increase in net asset value (NAV) per share to $10.06 on
September 30, 1998 from $9.74 on September 30, 1997, and the reinvestment of
$0.485 per share in tax-free income./2/ For Class B, this return resulted from
an increase in NAV to $10.30 from $9.97, and the reinvestment of $0.426 per
share in tax-free income./2/
. Based on the Fund's most recent dividends and NAVs on September 30, 1998 of
$10.06 per share for Class A and $10.30 for Class B, distribution rates were
4.82% and 4.14%, respectively./3/
. The SEC 30-day yields for Class A and B shares at September 30 were 4.30% and
3.76%, respectively./4/
Your Investment at Work
- --------------------------------------------------------------------------------
Mississippi State University Educational Building Corp. Revenue Bonds
. The proceeds from this bond issue were used for building and improving
facilities on the Starkville campus. Projects include renovations to the
engineering building and the Humphrey Coliseum, as well as construction of
apartments for student housing and a veterinary medicine building.
. The bonds are non-callable and carry triple-A ratings from both Moody's and
Fitch's ratings services.
- --------------------------------------------------------------------------------
/1/ These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for Class
B shares. /2/ Aportion of the Fund's income could be subject to federal
income tax and/or alternative minimum tax and state income tax. /3/ The
Fund's distribution rate represents actual distributions paid to
shareholders and is calculated 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 historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns for
Class A reflect the maximum 4.75% sales charge. SEC returns 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.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
Fund Information
as of September 30, 1998
Performance/5/ Class A Class B
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 8.5% 7.8%
Five Years N.A. 5.0
Life of Fund+ 5.3 5.4
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 3.3% 2.8%
Five Years N.A. 4.6
Life of Fund+ 4.2 5.3
+Inception date: Class A: 12/7/93; Class B: 6/11/93
Comparison of Change in Value of a $10,000 Investment in
Eaton Vance Mississippi Municipals Fund, Class B vs. the
Lehman Brothers Municipal Bond Index*
June 30, 1993 - September 30, 1998
Date Fund/NAV LMBI
6/30/93 $10,000 $10,000
7/31/93 $9,950 $10,013
8/31/93 $10,249 $10,221
9/30/93 $10,385 $10,338
10/31/93 $10,369 $10,358
11/30/93 $10,244 $10,266
12/31/93 $10,522 $10,483
1/31/94 $10,644 $10,603
2/28/94 $10,295 $10,328
3/31/94 $9,640 $9,908
4/30/94 $9,717 $9,992
5/31/94 $9,816 $10,078
6/30/94 $9,733 $10,020
7/31/94 $9,925 $10,200
8/31/94 $9,919 $10,236
9/30/94 $9,741 $10,086
10/31/94 $9,500 $9,907
11/30/94 $9,254 $9,727
12/31/94 $9,477 $9,941
1/31/95 $9,835 $10,226
2/28/95 $10,214 $10,523
3/31/95 $10,296 $10,644
4/30/95 $10,274 $10,656
5/31/95 $10,577 $10,996
6/30/95 $10,408 $10,900
7/31/95 $10,474 $11,003
8/31/95 $10,593 $11,143
9/30/95 $10,658 $11,214
10/31/95 $10,857 $11,377
11/30/95 $11,103 $11,566
12/31/95 $11,235 $11,677
1/31/96 $11,290 $11,765
2/28/96 $11,150 $11,685
3/31/96 $10,950 $11,536
4/30/96 $10,913 $11,503
5/31/96 $10,932 $11,499
6/30/96 $11,047 $11,624
7/31/96 $11,145 $11,729
8/31/96 $11,141 $11,727
9/30/96 $11,315 $11,891
10/31/96 $11,402 $12,025
11/30/96 $11,588 $12,245
12/31/96 $11,537 $12,194
1/31/97 $11,616 $12,217
2/28/97 $11,736 $12,329
3/31/97 $11,583 $12,164
4/30/97 $11,661 $12,266
5/31/97 $11,825 $12,451
6/30/97 $11,956 $12,584
7/31/97 $12,279 $12,932
8/31/97 $12,177 $12,811
9/30/97 $12,271 $12,963
10/31/97 $12,326 $13,046
11/30/97 $12,386 $13,123
12/31/97 $12,588 $13,315
1/31/98 $12,707 $13,452
2/28/98 $12,705 $13,456
3/31/98 $12,720 $13,468
4/30/98 $12,638 $13,407
5/31/98 $12,833 $13,619
6/30/98 $12,841 $13,673
7/31/98 $12,860 $13,707
8/31/98 $13,050 $13,919
9/30/98 $13,122** $14,092
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
6/11/93. Index information is available only at month-end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 12/31/93 at net asset value would have grown to $12,761 on
September 30, 1998; $12,156, including the 4.75% sales charge. The Index's
total return does not reflect commissions or expenses that would have been
incurred if an investor individually purchased or sold the securities
represented in the Index. It is not possible to invest directly in an Index.
** Fund, assuming entire investment was redeemed at 9/30/98 and applicable CDSC
was applied.
- --------------------------------------------------------------------------------
Federal income tax information on distributions. For federal income tax
purposes, 99.44% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1998 was designated as an
exempt-interest dividend.
- --------------------------------------------------------------------------------
6
<PAGE>
Eaton Vance New York Municipals Fund as of September 30, 1998
INVESTMENT UPDATE
[PHOTO OF THOMAS FETTER]
Thomas J. Fetter
Portfolio Manager
The Economy
- -------------------------------------------------------------------------------
. New York's economy is the tenth largest in the world. Its gross state product
rose by 4.4% to $593 billion between August 1997 and August 1998. New York is
home to 65 Fortune 500 companies, more than any other state.
. The number of private sector jobs increased by 2.2%, or 148,000, between
August 1997 and August 1998, a record high for the state. Unemployment, at
5.3% in August, is at an 8-year low, though it lags the national average. Most
of the job growth was in the services sector, with air transport job growth up
19.8% and business services up 6.8%.
. Housing permits, a leading economic indicator, increased by 6.5% in August
1998 from a year ago. The related construction sector posted an employment
growth rate gain of 5.6%.
Management Update
- --------------------------------------------------------------------------------
. Management strives to maintain a balanced, "barbell"approach to the
portfolio:high-coupon bonds for income and lower coupons to add upside trading
potential. To increase call protection, we have sought opportunities to invest
in non-callable bonds.
. With the municipal market trading in a narrow range this year, management made
relatively few changes, concentrating on valuation and making adjustments to
increase upside trading potential.
. Education bonds were the Portfolio's largest sector weighting at September 30.
These bonds are in ample supply and are attractive due to their excellent
liquidity and high quality ratings.
The Fund
- --------------------------------------------------------------------------------
. For the year ended September 30, 1998, the Fund's Class A and Class B shares
had total returns of 9.6% and 8.8%, respectively./1/ For Class A, this return
resulted from an increase in net asset value (NAV) per share to $10.92 on
September 30, 1998 from $10.51 on September 30, 1997, and the reinvestment of
$0.574 per share in tax-free income./2/ For Class B, this return resulted from
an increase in NAV to $11.76 from $11.30, and the reinvestment of $0.507 per
share in tax-free income./2/
. Based on the Fund's most recent dividends and NAVs on September 30, 1998 of
$10.92 per share for Class A and $11.76 for Class B, distribution rates were
5.11% and 4.31%, respectively./3/
. The SEC 30-day yields for Class A and B shares at September 30 were 4.19% and
3.57%, respectively./4/
Your Investment at Work
- --------------------------------------------------------------------------------
Glen Cove Industrial Development Agency Civic Facility Revenue Bonds: The
Regency at Glen Cove
. These bonds were issued to finance the acquisition, construction, and
equipping of the Regency, a 96-unit licensed adult home for the elderly. The
Regency was designed for the frail elderly, and combines attractive living
arrangements with meal service, housekeeping, and other amenities.
. The Regency also offers cultural and recreational programs, and provides
special habilitational care.
- --------------------------------------------------------------------------------
/1/ These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for Class
B shares. /2/ Aportion of the Fund's income could be subject to federal
income tax and/or alternative minimum tax and state income tax. /3/ The
Fund's distribution rate represents actual distributions paid to
shareholders and is calculated 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 historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns for
Class A reflect the maximum 4.75% sales charge. SEC returns 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. Past
performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1998
Performance/5/ Class A Class B
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 9.6% 8.8%
Five Years N.A. 5.1
Life of Fund+ 8.1 8.0
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 4.5% 3.8%
Five Years N.A. 4.8
Life of Fund+ 7.0 8.0
+Inception date: Class A: 4/15/94; Class B: 8/30/90
Comparison of Change in Value of a $10,000 Investment in
Eaton Vance New York Municipals Fund, Class B vs. the
Lehman Brothers Municipal Bond Index*
August 31, 1990 - September 30, 1998
<TABLE>
<CAPTION>
Date Fund/NAV LMBI
<S> <C> <C>
8/31/90 $10,000 $10,000
9/30/90 $9,950 $10,006
10/31/90 $10,075 $10,187
11/30/90 $10,337 $10,392
12/31/90 $10,369 $10,437
1/31/91 $10,519 $10,577
2/28/91 $10,560 $10,670
3/31/91 $10,605 $10,673
4/30/91 $10,792 $10,816
5/31/91 $10,863 $10,912
6/30/91 $10,837 $10,901
7/31/91 $11,073 $11,034
8/31/91 $11,274 $11,179
9/30/91 $11,500 $11,325
10/31/91 $11,634 $11,427
11/30/91 $11,611 $11,459
12/31/91 $11,883 $11,704
1/31/92 $11,682 $11,731
2/28/92 $11,742 $11,735
3/31/92 $11,777 $11,739
4/30/92 $11,951 $11,844
5/31/92 $12,148 $11,983
6/30/92 $12,450 $12,184
7/31/92 $12,978 $12,550
8/31/92 $12,683 $12,427
9/30/92 $12,697 $12,509
10/31/92 $12,392 $12,386
11/30/92 $12,805 $12,608
12/31/92 $12,977 $12,736
1/31/92 $13,149 $12,884
2/28/93 $13,762 $13,350
3/31/93 $13,559 $13,209
4/30/93 $13,720 $13,342
5/31/93 $13,836 $13,417
6/30/93 $14,066 $13,642
7/31/93 $14,069 $13,659
8/31/93 $14,381 $13,944
9/30/93 $14,542 $14,103
10/31/93 $14,556 $14,130
11/30/93 $14,363 $14,005
12/31/93 $14,732 $14,301
1/31/94 $14,866 $14,464
2/28/94 $14,420 $14,090
3/31/94 $13,678 $13,516
4/30/94 $13,732 $13,630
5/31/94 $13,877 $13,748
6/30/94 $13,721 $13,668
7/31/94 $13,968 $13,915
8/31/94 $14,036 $13,963
9/30/94 $13,725 $13,758
10/31/94 $13,360 $13,514
11/30/94 $12,897 $13,269
12/31/94 $13,354 $13,562
1/31/95 $13,805 $13,949
2/28/95 $14,294 $14,355
3/31/95 $14,444 $14,520
4/30/95 $14,441 $14,537
5/31/95 $14,864 $15,001
6/30/95 $14,613 $14,870
7/31/95 $14,732 $15,011
8/31/95 $14,916 $15,201
9/30/95 $14,991 $15,297
10/31/95 $15,275 $15,519
11/30/95 $15,586 $15,777
12/31/95 $15,744 $15,929
1/31/96 $15,808 $16,049
2/28/96 $15,630 $15,941
3/31/96 $15,393 $15,737
4/30/96 $15,372 $15,692
5/31/96 $15,361 $15,686
6/30/96 $15,528 $15,857
7/31/96 $15,657 $16,001
8/31/96 $15,617 $15,997
9/30/96 $15,870 $16,221
10/31/96 $15,973 $16,404
11/30/96 $16,241 $16,705
12/31/96 $16,158 $16,634
1/31/97 $16,147 $16,666
2/28/97 $16,334 $16,819
3/31/97 $16,138 $16,594
4/30/97 $16,272 $16,733
5/31/97 $16,529 $16,985
6/30/97 $16,684 $17,166
7/31/97 $17,212 $17,642
8/31/97 $17,005 $17,476
9/30/97 $17,176 $17,683
10/31/97 $17,240 $17,797
11/30/97 $17,341 $17,902
12/31/97 $17,661 $18,163
1/31/98 $17,834 $18,351
2/28/98 $17,874 $18,356
3/31/98 $17,870 $18,372
4/30/98 $17,670 $18,290
5/31/98 $18,016 $18,579
6/30/98 $18,098 $18,652
7/31/98 $18,101 $18,699
8/31/98 $18,442 $18,988
9/30/98 $18,681 $19,224
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
8/30/90. Index information is available only at month-end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 04/30/94 at net asset value would have grown to $14,216 on
September 30, 1998; $13,537, including the 4.75% sales charge. The Index's
total return does not reflect commissions or expenses that would have been
incurred if an investor individually purchased or sold the securities
represented in the Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
Federal income tax information on distributions. For federal income tax
purposes, 99.75% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1998 was designated as an
exempt-interest dividend.
- --------------------------------------------------------------------------------
7
<PAGE>
Eaton Vance Ohio Municipals Fund as of September 30, 1998
INVESTMENT UPDATE
[PHOTO OF THOMAS J. FETTER]
Thomas J. Fetter,
Portfolio Manager
The Economy
- ------------------------------------------------------------------------------
. Ohio's economic performance continued strong in fiscal 1998, aided by the
overall strength of the national economy. State revenues, generated mainly
through personal income and sales taxes, exceeded budget fore- casts. Growth
in the service sector continues to help balance the state's overall economy.
. Unemployment in Ohio decreased by 0.2% over the past year to 4.3% in
September, versus the national average of 4.5%. Unemployment figures appear
to be returning to normal levels after the end of the General Motorsstrike;
manufacturing employment increased by 0.2% in August.
. Several economic figures for fiscal 1998 indicate positive growth trends in
Ohio:average hourly earnings were up 2.3%; housing permits increased 7.1%,
and gross state product rose 4.2% from a year ago.
Management Update
- ------------------------------------------------------------------------------
. Management strives to maintain a balanced, "barbell"approach to the
portfolio:high-coupon bonds for income and lower coupons to add upside
trading potential. To increase call protection, we have sought opportunities
to invest in non-callable bonds.
. With the municipal market trading in a narrow range this year, management
made relatively few changes, concentrating on valuation and making
adjustments to increase upside trading potential.
. Hospital bonds, particularly those in acute care, were the Portfolio's
largest sector holding. Management focused on institutions with strong
operating fundamentals and dominant market shares in their service areas or
specialties.
The Fund
- ------------------------------------------------------------------------------
. For the year ended September 30, 1998, the Fund's Class A and Class B shares
had total returns of 8.1% and 7.2%, respectively./1/ For Class A, this
return resulted from an increase in net asset value (NAV) per share to $9.93
on September 30, 1998 from $9.68 on September 30, 1997, and the reinvestment
of $0.513 per share in tax-free income./2/ For Class B, this return resulted
from an increase in NAV to $11.21 from $10.93, and the reinvestment of
$0.495 per share in tax-free income./2/
. Based on the Fund's most recent dividends and NAVs on September 30, 1998 of
$9.93 per share for Class A and $11.21 for Class B, distribution rates were
5.17% and 4.42%, respectively./3/
. The SEC 30-day yields for Class A and B shares at September 30 were 4.17%
and 3.65%, respectively./4/
Your Investment at Work
- -------------------------------------------------------------------------------
Cuyahoga County Health Care Facilities
Revenue Refunding Bonds - Series 1998:
The Benjamin Rose Institute Project
. The proceeds from this bond issue were used to refinance a project sponsored
by the Benjamin Rose Institute. The Project is the Kethley House, a 184-bed,
3-story nursing home in Cleveland.
. The Institute cares for the elderly and attempts to help them maintain an
independent lifestyle. It also operates an ongoing program of applied aging
research.
- --------------------------------------------------------------------------------
/1/ These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for Class
B shares. /2/ Aportion of the Fund's income could be subject to federal
income tax and/or alternative minimum tax and state income tax. /3/ The
Fund's distribution rate represents actual distributions paid to
shareholders and is calculated 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 historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns for
Class A reflect the maximum 4.75% sales charge. SEC returns 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.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
Fund Information
as of September 30, 1998
Performance/5/ Class AClass B
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 8.1% 7.2%
Five Years N.A. 4.9
Life of Fund+ 5.2 7.1
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 3.0% 2.2%
Five Years N.A. 4.5
Life of Fund+ 4.1 7.1
/+/Inception date: Class A: 12/7/93; Class B: 4/18/91
Comparison of Change in Value of a $10,000 Investment in
Eaton Vance Ohio Municipals Fund, Class B vs. the
Lehman Brothers Municipal Bond Index*
April 30, 1991 - September 30, 1998
Date Fund/NAV LMBI
4/30/91 $10,000 $10,000
5/31/91 $10,030 $10,089
6/30/91 $10,007 $10,079
7/31/91 $10,200 $10,202
8/31/91 $10,337 $10,336
9/30/91 $10,488 $10,471
10/31/91 $10,592 $10,565
11/30/91 $10,597 $10,594
12/31/91 $10,872 $10,822
1/31/92 $10,875 $10,846
2/28/92 $10,886 $10,850
3/31/92 $10,852 $10,854
4/30/92 $10,940 $10,951
5/31/92 $11,103 $11,080
6/30/92 $11,312 $11,265
7/31/92 $11,716 $11,603
8/31/92 $11,506 $11,490
9/30/92 $11,550 $11,565
10/31/92 $11,266 $11,451
11/30/92 $11,625 $11,657
12/31/92 $11,773 $11,776
1/31/92 $11,910 $11,913
2/28/93 $12,388 $12,343
3/31/93 $12,214 $12,213
4/30/93 $12,363 $12,336
5/31/93 $12,469 $12,405
6/30/93 $12,684 $12,613
7/31/93 $12,672 $12,629
8/31/93 $12,976 $12,892
9/30/93 $13,137 $13,039
10/31/93 $13,147 $13,064
11/30/93 $12,984 $12,949
12/31/93 $13,294 $13,222
1/31/94 $13,440 $13,373
2/28/94 $13,042 $13,027
3/31/94 $12,327 $12,496
4/30/94 $12,385 $12,602
5/31/94 $12,517 $12,711
6/30/94 $12,402 $12,637
7/31/94 $12,655 $12,866
8/31/94 $12,678 $12,910
9/30/94 $12,429 $12,721
10/31/94 $12,082 $12,495
11/30/94 $11,741 $12,269
12/31/94 $12,104 $12,539
1/31/95 $12,560 $12,897
2/28/95 $12,990 $13,272
3/31/95 $13,089 $13,425
4/30/95 $13,082 $13,441
5/31/95 $13,487 $13,870
6/30/95 $13,298 $13,748
7/31/95 $13,380 $13,878
8/31/95 $13,548 $14,055
9/30/95 $13,639 $14,143
10/31/95 $13,874 $14,349
11/30/95 $14,122 $14,587
12/31/95 $14,267 $14,727
1/31/96 $14,321 $14,839
2/28/96 $14,163 $14,738
3/31/96 $13,990 $14,550
4/30/96 $13,978 $14,509
5/31/96 $13,978 $14,503
6/30/96 $14,117 $14,661
7/31/96 $14,275 $14,794
8/31/96 $14,195 $14,791
9/30/96 $14,387 $14,997
10/31/96 $14,521 $15,167
11/30/96 $14,741 $15,445
12/31/96 $14,675 $15,380
1/31/97 $14,688 $15,409
2/28/97 $14,819 $15,550
3/31/97 $14,661 $15,343
4/30/97 $14,770 $15,471
5/31/97 $14,979 $15,704
6/30/97 $15,094 $15,871
7/31/97 $15,501 $16,311
8/31/97 $15,391 $16,158
9/30/97 $15,536 $16,350
10/31/97 $15,651 $16,455
11/30/97 $15,743 $16,552
12/31/97 $15,941 $16,793
1/31/98 $16,073 $16,966
2/28/98 $16,080 $16,972
3/31/98 $16,118 $16,987
4/30/98 $16,061 $16,910
5/31/98 $16,252 $17,178
6/30/98 $16,298 $17,245
7/31/98 $16,314 $17,289
8/31/98 $16,513 $17,556
9/30/98 $16,661 $17,775
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
4/18/91. Index information is available only at month-end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 12/31/93 at net asset value would have grown to $12,731 on
September 30, 1998; $12,127, including the 4.75% sales charge. The Index's
total return does not reflect commissions or expenses that would have been
incurred if an investor individually purchased or sold the securities
represented in the Index. It is not possible to invest directly in an Index.
Federal income tax information on distributions. For federal income tax
purposes, 99.98% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1998 was designated as an
exempt-interest dividend.
8
<PAGE>
Eaton Vance Rhode Island Municipals Fund as of September 30, 1998
INVESTMENT UPDATE
[Photo Of Robert MacIntosh]
Robert B. MacIntosh,
Portfolio Manager
The Economy
- -------------------------------------------------------------------------------
. Rhode Island made some modest economic gains in 1998, perform- ing relatively
well in a number of sectors. As of July, retail activity had increased at an
annualized rate of 13.2%, existing home sales rose at a 30.6% annual rate, and
construction grew at a double- digit rate for the fifth consecutive month. The
state also recorded its first budget surplus in many years.
. Rhode Island moved aggressively into the financial services area this year by
passing tax incentives to attract new businesses to Rhode Island, including
Fidelity Investments. Fleet Bank added over 1,000 new jobs in 1998.
. In August 1998, the unemployment rate was 4.8%, down from 5.2% a year earlier.
Job growth, however, tends to lag the national rate. Providence Place Mall is
under ongoing construction and should be a significant area employer in the
future.
Management Update
- -------------------------------------------------------------------
. We diversified the Portfolio across sectors and credit quality, combining
high-quality insured holdings, which provided upside trading performance, with
higher-yielding issues, which provided income. We have also continued to
maintain and improve the Portfolio's call protection.
. With the large number of insured holdings+ in the Rhode Island municipal
market, we continued to seek uninsured bonds to add yield and diversity. Our
research staff has been successful in locating sound opportunities among
uninsured bonds.
. Since zero-coupon bonds are not widely available in Rhode Island, management
has added zero-coupons from Puerto Rico, which are non-callable and add
diversity and liquidity.
The Fund
- ------------------------------------------------------------------------------
. For the year ended September 30, 1998, the Fund's Class A and Class B shares
had total returns of 8.5% and 7.9%, respectively./1/ For Class A, this return
resulted from an increase in net asset value (NAV) per share to $9.94 on
September 30, 1998 from $9.61 on September 30, 1997, and the reinvestment of
$0.469 per share in tax-free income./2/ For Class B, this return resulted from
an increase in NAV to $10.17 from $9.84, and the reinvestment of $0.427 per
share in tax-free income./2/
. Based on the Fund's most recent dividends and NAVs on September 30, 1998 of
$9.94 per share for Class A and $10.17 for Class B, distribution rates were
4.77% and 4.20%, respectively./3/
. The SEC 30-day yields for Class A and B shares at September 30 were 4.32% and
3.73%, respectively./4/
Your Investment at Work
- -------------------------------------------------------------------------------
Rhode Island General Obligation Bonds:
Consolidated Capital Development Loans - Series A
. The proceeds from this bond issue finance projects in capital improvement
programs. One such project is the Narragansett Bay Water Quality Management
District Commission, which operates and upgrades wastewater collection and
treatment facilities.
. Another program is the Clean Water Finance Agency, which lends funds to cities
and towns for improvements to water pollution control facilities.
/1/ These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for Class
B shares. /2/ Aportion of the Fund's income could be subject to federal
income tax and/or alternative minimum tax and state income tax. /3/ The
Fund's distribution rate represents actual distributions paid to
shareholders and is calculated 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 historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns for
Class A reflect the maximum 4.75% sales charge. SEC returns 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. /+/ Private
insurance does not decrease the risk of loss of principal associated with
this investment. Past performance is no guarantee of future results.
Investment return and principal value will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Fund Information
as of September 30, 1998
Performance/5/ Class A Class B
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 8.5% 7.9%
Five Years N.A. 4.7
Life of Fund/+/ 5.0 5.3
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 3.4% 2.9%
Five Years N.A. 4.3
Life of Fund/+/ 3.9 5.1
/+/Inception date: Class A: 12/7/93; Class B: 6/11/93
Comparison of Change in Value of a $10,000 Investment in
Eaton Vance Rhode Island Municipals Fund, Class B vs. the
Lehman Brothers Municipal Bond Index*
June 30, 1993 - September 30, 1998
Date Fund/NAV LMBI
6/30/93 $10,000 $10,000
7/31/93 $9,970 $10,013
8/31/93 $10,328 $10,221
9/30/93 $10,453 $10,338
10/31/93 $10,406 $10,358
11/30/93 $10,259 $10,266
12/31/93 $10,587 $10,483
1/31/94 $10,729 $10,603
2/28/94 $10,297 $10,328
3/31/94 $9,643 $9,908
4/30/94 $9,711 $9,992
5/31/94 $9,832 $10,078
6/30/94 $9,740 $10,020
7/31/94 $9,944 $10,200
8/31/94 $9,961 $10,236
9/30/94 $9,731 $10,086
10/31/94 $9,458 $9,907
11/30/94 $9,202 $9,727
12/31/94 $9,503 $9,941
1/31/95 $9,885 $10,226
2/28/95 $10,200 $10,523
3/31/95 $10,305 $10,644
4/30/95 $10,274 $10,656
5/31/95 $10,513 $10,996
6/30/95 $10,290 $10,900
7/31/95 $10,380 $11,003
8/31/95 $10,523 $11,143
9/30/95 $10,600 $11,214
10/31/95 $10,802 $11,377
11/30/95 $10,993 $11,566
12/31/95 $11,116 $11,677
1/31/96 $11,184 $11,765
2/28/96 $11,045 $11,685
3/31/96 $10,881 $11,536
4/30/96 $10,880 $11,503
5/31/96 $10,900 $11,499
6/30/96 $11,005 $11,624
7/31/96 $11,104 $11,729
8/31/96 $11,077 $11,727
9/30/96 $11,252 $11,891
10/31/96 $11,341 $12,025
11/30/96 $11,540 $12,245
12/31/96 $11,490 $12,194
1/31/97 $11,449 $12,217
2/28/97 $11,557 $12,329
3/31/97 $11,426 $12,164
4/30/97 $11,540 $12,266
5/31/97 $11,716 $12,451
6/30/97 $11,834 $12,584
7/31/97 $12,183 $12,932
8/31/97 $12,055 $12,811
9/30/97 $12,174 $12,963
10/31/97 $12,230 $13,046
11/30/97 $12,315 $13,123
12/31/97 $12,493 $13,315
1/31/98 $12,601 $13,452
2/28/98 $12,611 $13,456
3/31/98 $12,626 $13,468
4/30/98 $12,506 $13,407
5/31/98 $12,715 $13,619
6/30/98 $12,736 $13,673
7/31/98 $12,755 $13,707
8/31/98 $12,972 $13,919
9/30/98 $13,132 $14,092
$13,032**
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
6/11/93. Index information is available only at month-end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 12/31/93 at net asset value would have grown to $12,584 on
September 30, 1998; $11,986, including the 4.75% sales charge. The Index's
total return does not reflect commissions or expenses that would have been
incurred if an investor individually purchased or sold the securities
represented in the Index. It is not possible to invest directly in an Index.
** Fund, assuming entire investment was redeemed at 9/30/98 and applicable CDSC
was applied.
Federal income tax information on distributions. For federal income tax
purposes, 99.52% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1998 was designated as an
exempt-interest dividend.
9
<PAGE>
Eaton Vance West Virginia Municipals Fund as of September 30, 1998
INVESTMENT UPDATE
[PHOTO OF TIMOTHY T. BROWSE APPEARS HERE]
Timothy T. Browse,
Portfolio Manager
The Economy
- ----------------------------------------------------------------------------
. Since September of 1997, the number of payroll jobs in West Virginia has
increased by 8,300, with the greatest number of new jobs in the service
sector. Small gains were made in manufacturing and construction, although
these were not enough to offset losses in the goods-producing sector and the
beleaguered mining industry. The unemployment rate remained steady at 6.8% in
September 1998, unchanged from a year earlier.
. A controversial ballot question, which would have allowed local governments to
issue municipal bonds to help pay for economic development projects, was
defeated in the November elections. The proposal faced opposition from labor
groups, who claimed it would not benefit West Virginia's workforce.
. Another controversial topic is strip mining, the hotly debated practice that
accounts for one-third of the state's coal production. Mine operators are
doing battle with both government regulators and environmental activists.
Management Update
- ------------------------------------------------------------------------------
. With most investment activity focused on other assets this year, lower demand
for municipals led to historically attractive yield ratios. This environment
allowed us to minimize capital gains for shareholders while maximizing
distribution rates.
. Management seeks to diversify the Portfolio by being broadly distributed
across sectors. Our investment strategy balanced discount bonds, for potential
appreciation, with premium bonds, for attractive yields.
. In low-issuance states like West Virginia, low- or non-rated issues can be
difficult to find. We rely on our excellent research department to help
identify good investment opportunities in those market segments.
The Fund
- --------------------------------------------------------------------------------
. For the year ended September 30, 1998, the Fund's Class A and Class B shares
had total returns of 8.7% and 7.8%, respectively./1/ For Class A, this return
resulted from an increase in net asset value (NAV) per share to $10.12 on
September 30, 1998 from $9.79 on September 30, 1997, and the reinvestment of
$0.499 per share in tax-free income./2/ For Class B, this return resulted from
an increase in NAV to $10.32 from $9.97, and the reinvestment of $0.416 per
share in tax-free income./2/
. Based on the Fund's most recent dividends and NAVs on September 30, 1998 of
$10.12 per share for Class A and $10.32 for Class B, distribution rates were
4.87% and 4.03%, respectively.3
. The SEC 30-day yields for Class A and B shares at September 30 were 4.07% and
3.45%, respectively.4
Your Investment at Work
- --------------------------------------------------------------------------------
State of West Virginia General Obligation State Road Bonds - Series 1998
. The proceeds from this bond issue are being used to match available federal
funds for highway construction and general highway improvements in West
Virginia.
. The state has experienced a period of economic expansion and population
growth. By issuing these bonds, West Virginia aims to make a substantial
investment in furthering opportunities for economic development by improving
roads and bridges.
- --------------------------------------------------------------------------------
/1/ These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charges (CDSC) for Class
B shares. /2/Aportion of the Fund's income could be subject to federal
income tax and/or alternative minimum tax and state income tax. /3/The
Fund's distribution rate represents actual distributions paid to
shareholders and is calculated 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 historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns for
Class A reflect the maximum 4.75% sales charge. SEC returns 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.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of September 30, 1998
Performance /5/ Class A Class B
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 8.7% 7.8%
Five Years N.A. 5.0
Life of Fund+ 5.5 5.4
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 3.5% 2.8%
Five Years N.A. 4.7
Life of Fund+ 4.4 5.2
+Inception date: Class A: 12/13/93; Class B: 6/11/93
Comparison of Change in Value of a $10,000 Investment in
Eaton Vance West Virginia Municipals Fund, Class B vs. the
Lehman Brothers Municipal Bond Index*
June 30, 1993 - September 30, 1998
Date Fund/NAV LMBI
6/30/93 $10,000 $10,000
7/31/93 $9,910 $10,013
8/31/93 $10,201 $10,221
9/30/93 $10,347 $10,338
10/31/93 $10,321 $10,358
11/30/93 $10,184 $10,266
12/31/93 $10,483 $10,483
1/31/94 $10,614 $10,603
2/28/94 $10,294 $10,328
3/31/94 $9,691 $9,908
4/30/94 $9,726 $9,992
5/31/94 $9,835 $10,078
6/30/94 $9,710 $10,020
7/31/94 $9,934 $10,200
8/31/94 $9,949 $10,236
9/30/94 $9,761 $10,086
10/31/94 $9,519 $9,907
11/30/94 $9,231 $9,727
12/31/94 $9,508 $9,941
1/31/95 $9,844 $10,226
2/28/95 $10,212 $10,523
3/31/95 $10,304 $10,644
4/30/95 $10,305 $10,656
5/31/95 $10,607 $10,996
6/30/95 $10,417 $10,900
7/31/95 $10,483 $11,003
8/31/95 $10,624 $11,143
9/30/95 $10,678 $11,214
10/31/95 $10,889 $11,377
11/30/95 $11,101 $11,566
12/31/95 $11,257 $11,677
1/31/96 $11,301 $11,765
2/28/96 $11,172 $11,685
3/31/96 $10,985 $11,536
4/30/96 $10,948 $11,503
5/31/96 $10,956 $11,499
6/30/96 $11,047 $11,624
7/31/96 $11,154 $11,729
8/31/96 $11,137 $11,727
9/30/96 $11,321 $11,891
10/31/96 $11,419 $12,025
11/30/96 $11,615 $12,245
12/31/96 $11,563 $12,194
1/31/97 $11,557 $12,217
2/28/97 $11,663 $12,329
3/31/97 $11,508 $12,164
4/30/97 $11,621 $12,266
5/31/97 $11,783 $12,451
6/30/97 $11,888 $12,584
7/31/97 $12,221 $12,932
8/31/97 $12,118 $12,811
9/30/97 $12,247 $12,963
10/31/97 $12,302 $13,046
11/30/97 $12,410 $13,123
12/31/97 $12,610 $13,315
1/31/98 $12,728 $13,452
2/28/98 $12,738 $13,456
3/31/98 $12,739 $13,468
4/30/98 $12,631 $13,407
5/31/98 $12,837 $13,619
6/30/98 $12,856 $13,673
7/31/98 $12,874 $13,707
8/31/98 $13,075 $13,919
9/30/98 $13,207 $14,092
$13,107**
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
6/11/93. Index information is available only at month-end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 12/31/93 at net asset value would have grown to $12,857 on
September 30, 1998; $12,247, including the 4.75% sales charge. The Index's
total return does not reflect commissions or expenses that would have been
incurred if an investor individually purchased or sold the securities
represented in the Index. It is not possible to invest directly in an Index.
** Fund, assuming entire investment was redeemed at 9/30/98 and applicable CDSC
was applied.
Federal income tax information on distributions. For federal income tax
purposes, 99.80% of the total dividends paid by the Fund from net investment
income during the year ended September 30, 1998 was designated as an
exempt-interest dividend.
10
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
As of September 30, 1998
<TABLE>
<CAPTION>
California Fund Florida Fund Massachusetts Fund Mississippi Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment in Municipals Portfolio --
Identified cost $267,695,283 $411,186,727 $224,252,772 $18,498,840
Unrealized appreciation 44,313,379 44,833,072 26,473,656 2,101,122
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment in Portfolio, at value $312,008,662 $456,019,799 $250,726,428 $20,599,962
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 311,401 $ 121,645 $ 58,018 $ 400
Other assets 1,236 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $312,321,299 $456,141,444 $250,784,446 $20,600,362
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends payable $ 528,673 $ 772,475 $ 472,825 $ 34,789
Payable for Fund shares redeemed 915,266 422,035 72,479 5,055
Payable to affiliate for Trustees' fees 18 300 20 --
Other accrued expenses 223,196 319,003 146,802 12,976
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 1,667,153 $ 1,513,813 $ 692,126 $ 52,820
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $310,654,146 $454,627,631 $250,092,320 $20,547,542
- -----------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $287,854,352 $415,563,742 $235,268,365 $20,022,008
Accumulated net realized loss from Portfolio (computed on the
basis of identified cost) (20,984,912) (4,996,708) (11,176,876) (1,616,057)
Accumulated undistributed (distributions in excess of) net
investment income (528,673) (772,475) (472,825) 40,469
Net unrealized appreciation from Portfolio (computed on the basis
of identified cost) 44,313,379 44,833,072 26,473,656 2,101,122
- -----------------------------------------------------------------------------------------------------------------------------------
Total $310,654,146 $454,627,631 $250,092,320 $20,547,542
- -----------------------------------------------------------------------------------------------------------------------------------
Class A Shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 9,740,365 $ 11,764,203 $ 13,282,476 $ 1,932,150
Shares Outstanding 859,026 1,054,906 1,335,859 192,088
Net Asset Value and Redemption Price Per Share
(net assets / shares of beneficial interest outstanding) $ 11.34 $ 11.15 $ 9.94 $ 10.06
Maximum Offering Price Per Share
(100 / 95.25 of net assets value per share) $ 11.91 $ 11.71 $ 10.44 $ 10.56
- ------------------------------------------------------------------------------------------------------------------------------------
Class B Shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets $300,913,781 $442,863,428 $225,370,903 $18,615,392
Shares Outstanding 28,888,264 38,775,583 20,361,341 1,808,115
Net Asset Value, Offering Price and Redemption Price Per Share
(net assets / shares of beneficial interest outstanding) $ 10.42 $ 11.42 $ 11.07 $ 10.30
- ------------------------------------------------------------------------------------------------------------------------------------
Class I Shares
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets $ -- $ -- $ 11,438,941 $ --
Shares Outstanding -- -- 1,115,027 --
Net Asset Value, Offering Price and Redemption Price Per Share
(net assets / shares of beneficial interest outstanding) $ -- $ -- $ 10.26 $ --
- -----------------------------------------------------------------------------------------------------------------------------------
On sales of $25,000 or more, the offering price of Class A shares is reduced.
</TABLE>
See notes to financial statements
11
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Assets and Liabilities
As of September 30, 1998
<TABLE>
<CAPTION>
West
New York Ohio Rhode Virginia
Fund Fund Island Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
Assets
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment in Municipals Portfolio --
Identified cost $ 439,621,994 $ 235,532,260 $ 38,521,563 $ 29,173,831
Unrealized appreciation 46,441,999 19,498,167 3,410,875 2,606,403
- -----------------------------------------------------------------------------------------------------------------------
Total investment in Portfolio, at $ 486,063,993 $ 255,030,427 $ 41,932,438 $ 31,780,234
value
- -----------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 591,746 $ 114,940 $ 135,547 $ 38,968
Other assets 2,345 371 -- --
- -----------------------------------------------------------------------------------------------------------------------
Total assets $ 486,658,084 $ 255,145,738 $ 42,067,985 $ 31,819,202
- -----------------------------------------------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------------------------------------------
Dividends payable $ 854,083 $ 477,792 $ 74,763 $ 156,176
Payable for Fund shares redeemed 380,378 497,484 10,922 77,611
Payable to affiliate for Trustees'
fees 19 252 1 21
Other accrued expenses 308,008 181,543 24,554 22,910
- -----------------------------------------------------------------------------------------------------------------------
Total liabilities $ 1,542,488 $ 1,157,071 $110,240 $ 156,718
- -----------------------------------------------------------------------------------------------------------------------
Net Assets $ 485,115,596 $ 253,988,667 $ 41,957,745 $ 31,662,484
- -----------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -----------------------------------------------------------------------------------------------------------------------
Paid-in capital $ 433,433,795 $ 232,471,917 $ 40,685,358 $ 30,438,594
Accumulated net realized gain (loss)
from Portfolio (computed on
the basis of identified cost) 5,138,559 1,683,035 (2,063,725) (1,371,572)
Accumulated undistributed
(distributions in excess of) net
investment income 101,243 335,548 (74,763) (10,941)
Net unrealized appreciation from
Portfolio (computed
on the basis of identified cost) 46,441,999 19,498,167 3,410,875 2,606,403
- -----------------------------------------------------------------------------------------------------------------------
Total $ 485,115,596 $ 253,988,667 $ 41,957,745 $ 31,662,484
- -----------------------------------------------------------------------------------------------------------------------
Class A Shares
- -----------------------------------------------------------------------------------------------------------------------
Net Assets $ 11,719,998 $ 6,622,137 $ 2,200,105 $ 1,838,981
Shares Outstanding 1,073,380 666,674 221,257 181,665
Net Asset Value and Redemption Price
Per Share (net assets / shares
of beneficial interest outstanding) $ 10.92 $ 9.93 $ 9.94 $ 10.12
Maximum Offering Price Per Share
(100 / 95.25 of net assets value
per share) $ 11.46 $ 10.43 $ 10.44 $ 10.62
- -----------------------------------------------------------------------------------------------------------------------
Class B Shares
- -----------------------------------------------------------------------------------------------------------------------
Net Assets $ 473,395,598 $ 247,366,530 $ 39,757,640 $ 29,823,503
Shares Outstanding 40,245,085 22,070,618 3,909,596 2,889,876
Net Asset Value, Offering Price and
Redemption Price Per Share
(net assets / shares of beneficial
interest outstanding) $ 11.76 $ 11.21 $ 10.17 $ 10.32
- -----------------------------------------------------------------------------------------------------------------------
</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 September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
CALIFORNIA FLORIDA MASSACHUSETTS MISSISSIPPI
FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income
- ---------------------------------------------------------------------------------------------------------------------------------
Interest allocated from Portfolio $18,430,348 $26,699,762 $14,559,834 $1,162,525
Expenses allocated from Portfolio (1,680,361) (2,288,354) (1,280,692) (74,063)
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $16,749,987 $24,411,408 $13,279,142 $1,088,462
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------------------------------------------------------------
Trustees fees and expenses $ 3,657 $ 3,095 $ 2,773 $ 185
Distribution and Service fees
Class A 9,477 13,445 6,140 2,263
Class B 3,028,053 4,490,662 2,175,591 180,029
Custodian fee 26,341 -- 21,345 5,605
Transfer and dividend disbursing agent fees 295,640 355,744 218,648 18,923
Printing and postage 15,301 24,286 12,461 2,647
Legal and accounting services 3,850 3,172 4,332 4,754
Registration fees 855 7,399 6,161 366
Amortization of organization expenses 1,935 -- 2,335 2,677
Miscellaneous 5,231 44,987 25,502 4,572
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 3,390,340 $ 4,942,790 $ 2,475,288 $ 222,021
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $13,359,647 $19,468,618 $10,803,854 $ 866,441
- ---------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
- ---------------------------------------------------------------------------------------------------------------------------------
Investment transactions (identified cost basis) $ 7,546,724 $10,550,685 $ 6,941,642 $ 710,120
Financial futures contracts (2,057,580) 371,270 (1,360,303) (140,363)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain $ 5,489,144 $10,921,955 $ 5,581,339 $ 569,757
- ---------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
- ---------------------------------------------------------------------------------------------------------------------------------
Investments $ 7,591,987 $13,252,717 $ 3,184,951 $ 108,925
Financial futures contracts 13,453 (398,880) 233,177 4,533
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ 7,605,440 $12,853,837 $ 3,418,128 $ 113,458
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain $13,094,584 $23,775,792 $ 8,999,467 $ 683,215
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $26,454,231 $43,244,410 $19,803,321 $1,549,656
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
13
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
New York Fund Ohio Fund Rhode Island Fund West Virginia Fund
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income
- -------------------------------------------------------------------------------------------------------------------------------
Interest allocated from Portfolio $ 29,156,948 $ 15,942,763 $ 2,302,265 $ 1,837,573
Expenses allocated from Portfolio (2,579,055) (1,431,623) (145,117) (110,965)
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $ 26,577,893 $ 14,511,140 $ 2,157,148 $ 1,726,608
- -------------------------------------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------------------------------------
Trustees fees and expenses $ 2,814 $ 3,089 $ 143 $ 162
Distribution and Service fees
Class A 13,914 6,949 3,489 2,543
Class B 4,637,273 2,445,657 361,228 290,325
Custodian fee 27,870 22,063 6,518 3,592
Transfer and dividend disbursing agent fees 387,663 217,721 36,343 30,848
Printing and postage 32,255 12,464 2,729 2,708
Legal and accounting services 5,965 4,304 2,548 1,663
Registration fees 4,549 3,735 529 --
Amortization of organization expenses 3,034 2,080 2,422 2,743
Miscellaneous 41,260 21,785 6,012 6,860
- -------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 5,156,597 $ 2,739,847 $ 421,961 $ 341,444
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 21,421,296 $ 11,771,293 $ 1,735,187 $ 1,385,164
- -------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 18,847,137 $ 3,815,866 $ 387,084 $ 624,395
Financial futures contracts (2,012,754) 124,487 (448,165) (215,003)
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) $ 16,834,383 $ 3,940,353 $ (61,081) $ 409,392
- -------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $ 3,642,043 $ 2,700,465 $ 1,332,580 $ 677,727
Financial futures contracts 348,578 (129,637) 88,687 (11,062)
- -------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) $ 3,990,621 $ 2,570,828 $ 1,421,267 $ 666,665
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain $ 20,825,004 $ 6,511,181 $ 1,360,186 $ 1,076,057
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 42,246,300 $ 18,282,474 $ 3,095,373 $ 2,461,221
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
14
<PAGE>
EATON VANCE MUNICIPALS FUNDS as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets California Fund Florida Fund Massachusetts Fund Mississippi Fund
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 13,359,647 $ 19,468,618 $ 10,803,854 $ 866,441
Net realized gain 5,489,144 10,921,955 5,581,339 569,757
Net change in unrealized
appreciation (depreciation) 7,605,440 12,853,837 3,418,128 113,458
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 26,454,231 $ 43,244,410 $ 19,803,321 $ 1,549,656
- -----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (349,169) $ (512,609) $ (350,316) $ (68,227)
Class B (13,012,647) (18,956,009) (9,956,529) (819,630)
Class I -- -- (497,009) --
In excess of net investment
income
Class A (12,345) (21,465) (26,643) (965)
Class B (552,883) (1,113,013) (340,071) --
Class I -- -- (2,843) --
- -----------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $(13,927,044) $(20,603,096) $(11,173,411) $ (888,822)
- -----------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 5,371,312 $ 8,306,136 $ 9,591,753 $ 955,390
Class B 16,997,546 14,487,842 9,728,032 717,755
Class I -- -- 3,463,796 --
Issued in reorganization of EV
Traditional Municipals Funds
and Massachusetts Municipal
Bond Portfolio
Class A 4,827,782 8,168,505 4,721,026 1,021,041
Class I -- -- 8,170,080 --
Net asset value of shares issued
to shareholders in payment of
distributions declared
Class A 164,638 166,984 168,717 50,952
Class B 5,555,712 6,921,027 4,982,510 364,499
Class I -- -- 98,961 --
Cost of shares redeemed
Class A (930,390) (5,350,228) (1,482,737) (146,317)
Class B (55,016,987) (104,771,122) (37,177,268) (4,000,674)
Class I -- -- (640,646) --
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets from Fund
share transactions $(23,030,387) $(72,070,856) $ 1,624,224 $(1,037,354)
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $(10,503,200) $(49,429,542) $ 10,254,134 $ (376,520)
- -----------------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------
At beginning of year $321,157,346 $504,057,173 $239,838,186 $20,924,062
- -----------------------------------------------------------------------------------------------------------------------
At end of year $310,654,146 $454,627,631 $250,092,320 $20,547,542
- -----------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- -----------------------------------------------------------------------------------------------------------------------
At end of year $ (528,673) $ (772,475) $ (472,825) $ 40,469
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
15
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets New York Fund Ohio Fund Rhode Island Fund West Virginia Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 21,421,296 $ 11,771,293 $ 1,735,187 $ 1,385,164
Net realized gain (loss) 16,834,383 3,940,353 (61,081) 409,392
Net change in unrealized
appreciation (depreciation) 3,990,621 2,570,828 1,421,267 666,665
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
operations $ 42,246,300 $ 18,282,474 $ 3,095,373 $ 2,461,221
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
- ----------------------------------------------------------------------------------------------------------------------------------
From net investment income
Class A $ (487,219) $ (280,325) $ (91,312) $ (89,354)
Class B (20,794,773) (11,526,840) (1,643,506) (1,250,905)
In excess of net investment income
Class A (7,839) -- -- --
Class B -- -- (16,617) --
From net realized gain
Class A (24,818) -- -- --
Class B (930,508) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $(22,245,157) $(11,807,165) $(1,751,435) $ (1,340,259)
- ----------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 3,561,941 $ 3,535,313 $ 494,239 $ 343,079
Class B 17,645,544 7,298,183 5,222,931 1,494,042
Issued in reorganization of EV
Traditional Municipals Funds
Class A 8,651,176 3,163,408 1,738,315 1,777,064
Net asset value of shares issued
to shareholders in payment of
distributions declared
Class A 232,114 114,570 50,150 57,360
Class B 12,018,774 6,026,150 946,730 644,241
Cost of shares redeemed
Class A (1,121,100) (315,335) (149,368) (395,859)
Class B (93,267,140) (39,309,840) (5,923,048) (4,902,677)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from Fund share transactions $(52,278,691) $(19,487,551) $ 2,379,949 $ (982,750)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $(32,277,548) $(13,012,242) $ 3,723,887 $ 138,212
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
At beginning of year $517,393,144 $267,000,909 $38,233,858 $ 31,524,272
- ----------------------------------------------------------------------------------------------------------------------------------
At end of year $485,115,596 $253,988,667 $41,957,745 $ 31,662,484
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- ----------------------------------------------------------------------------------------------------------------------------------
At end of year $ 101,243 $ 335,548 $ (74,763) $ (10,941)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
16
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets California Fund Florida Fund Massachusetts Fund Mississippi Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 15,751,677 $ 25,087,074 $ 11,859,980 $ 993,621
Net realized gain 5,255,764 7,707,320 2,100,741 164,539
Net change in unrealized
appreciation (depreciation) 11,073,573 (1,373,046) 6,334,216 694,352
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 32,081,014 $ 31,421,348 $ 20,294,937 $ 1,852,512
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Class B)--
From net investment income $(15,751,677) $ (25,087,074) $(11,798,946) $(1,010,343)
In excess of net investment income (234,478) (818,995) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $(15,986,155) $ (25,906,069) $(11,798,946) $(1,010,343)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest (Class B)--
Proceeds from sale of shares $ 13,872,922 $ 22,791,638 $ 7,767,689 $ 912,811
Net asset value of shares issued
to shareholders in payment of
distributions declared 6,421,036 8,705,317 5,698,120 461,302
Cost of shares redeemed (76,486,859) (145,393,400) (49,521,970) (5,154,607)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from
Fund share transactions $(56,192,901) $(113,896,445) $(36,056,161) $(3,780,494)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(40,098,042) $(108,381,166) $(27,560,170) $(2,938,325)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $361,255,388 $ 612,438,339 $267,398,356 $23,862,387
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $321,157,346 $ 504,057,173 $239,838,186 $20,924,062
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ (595,098) $ (924,948) $ (425,502) $ 62,213
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
17
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets New York Fund Ohio Fund Rhode Island Fund West Virginia Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $25,190,320 $12,914,256 $1,695,926 $1,521,488
Net realized gain (loss) 9,726,733 3,893,563 138,859 (21,740)
Net change in unrealized
appreciation (depreciation) 8,452,408 4,595,564 1,153,611 1,248,927
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from $43,369,461 $21,403,383 $2,988,396 $2,748,675
operations
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Class B) --
From net investment income $(25,190,320) $(12,636,530) $(1,695,926) $(1,521,488)
In excess of net investment income (269,885) -- (17,054) (2,074)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $(25,460,205) $(12,636,530) $(1,712,980) $(1,523,562)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest (Class B) --
Proceeds from sale of shares $20,507,490 $8,511,310 $3,907,568 $1,120,114
Net asset value of shares issued
to shareholders in payment of
distributions declared 13,747,243 6,566,507 957,454 756,950
Cost of shares redeemed (125,168,165) (46,673,153) (7,394,931) (9,286,165)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Fund
share transactions $(90,913,432) $(31,595,336) $(2,529,909) $(7,409,101)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(73,004,176) $(22,828,483) $(1,254,493) $(6,183,988)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $590,397,320 $289,829,392 $39,488,351 $37,708,260
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $517,393,144 $267,000,909 $38,233,858 $31,524,272
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ (957,297) $ 369,315 $ (64,555) $ (54,213)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
18
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
California Fund
---------------------------------------------------------
Year Ended
---------------------------------------------------------
September 30,
---------------------------------------------------------
1998/(1)/ 1997 1996 1995
--------------------- ----------------------------------
Class A Class B Class B Class B Class B
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of year $ 10.900 $ 10.010 $ 9.540 $ 9.410 $ 9.290
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.556 $ 0.431 $ 0.451 $ 0.464 $ 0.475
Net realized and unrealized gain (loss) 0.468 0.428 0.477 0.135 0.253
- -----------------------------------------------------------------------------------------------------------------------
Total income from operations $ 1.024 $ 0.859 $ 0.928 $ 0.599 $ 0.728
- -----------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.564) $ (0.431) $ (0.451) $ (0.465) $ (0.475)
In excess of net investment income (0.020) (0.018) (0.007) (0.004) (0.016)
From net realized gain -- -- -- -- --
In excess of net realized gain -- -- -- -- (0.117)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.584) $ (0.449) $ (0.458) $ (0.469) $ (0.608)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value-- End of year $ 11.340 $ 10.420 $ 10.010 $ 9.540 $ 9.410
- -----------------------------------------------------------------------------------------------------------------------
Total Return/(3)/ 9.65% 8.80% 9.98% 6.49% 8.30%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $ 9,740 $300,914 $321,157 $361,255 $401,742
Ratios (As a percentage of average daily net assets):
Expenses/(4)//(5)/ 0.79% 1.66% 1.69% 1.66% 1.65%
Expenses after custodian fee reduction/(4)/ 0.77% 1.64% 1.68% 1.65% 1.64%
Net investment income 5.02% 4.25% 4.66% 4.87% 5.19%
Portfolio Turnover/(7)/ -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
California Fund
-----------------------------
Year Ended
-----------------------------
March 31,
-----------------------------
1994/(2)/ 1994
---------- -----------
Class B Class B
<S> <C> <C>
- -------------------------------------------------------------------------------------------
Net asset value -- Beginning of year $ 9.560 $ 10.200
- -------------------------------------------------------------------------------------------
Income (loss) from operations
- -------------------------------------------------------------------------------------------
Net investment income $ 0.240 $ 0.480
Net realized and unrealized gain (loss) (0.234) (0.395)
- -------------------------------------------------------------------------------------------
Total income from operations $ 0.006 $ 0.085
- -------------------------------------------------------------------------------------------
Less distributions
- -------------------------------------------------------------------------------------------
From net investment income $ (0.240) $ (0.480)
In excess of net investment income (0.036) (0.092)
From net realized gain -- (0.153)
In excess of net realized gain -- --
- -------------------------------------------------------------------------------------------
Total distributions $ (0.276) $ (0.725)
- -------------------------------------------------------------------------------------------
Net asset value-- End of year $ 9.290 $ 9.560
- -------------------------------------------------------------------------------------------
Total Return/(3)/ 0.06% 0.55%
- -------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $439,591 $ 463,414
Ratios (As a percentage of average daily net assets):
Expenses/(4)//(5)/ 1.63%/(6)/ 1.67%
Expenses after custodian fee reduction/(4)/ -- --
Net investment income 5.06%/(6)/ 4.64%
Portfolio Turnover/(7)/ -- 5%
- -------------------------------------------------------------------------------------------
</TABLE>
/(1)/ Net investment income per share was computed using average shares
outstanding.
/(2)/ For the six months ended September 30, 1994. The Fund changed its
fiscal year end from March 31 to September 30, effective September 30,
1994.
/(3)/ Total return is calculated assuming a purchase at the net asset value
on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total
return is not computed on an annualized basis.
/(4)/ Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
/(5)/ The expense ratios for the year ended September 30, 1995 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.
/(6)/ Annualized.
/(7)/ Portfolio Turnover represents the rate of portfolio activity for the
period while the Fund was making investments directly in securities.
The portfolio turnover rate for the period since the Fund transferred
all of its investable assets to the Portfolio is shown in the
Portfolio's financial statements which are included elsewhere in this
report.
See notes to financial statements
19
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Florida Fund
-----------------------------------------------------------------------
Year Ended September 30,
-----------------------------------------------------------------------
1998 /(1)/ 1997 1996 1995 1994
-------------------- ----------------------------------------------
Class A Class B Class B Class B Class B Class B
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value-- Beginning of year $10.640 $ 10.900 $ 10.780 $ 10.720 $ 10.270 $ 11.700
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.528 $ 0.447 $ 0.488 $ 0.505 $ 0.514 $ 0.514
Net realized and unrealized gain (loss) 0.532 0.546 0.136 0.067 0.469 (1.228)
- -----------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 1.060 $ 0.993 $ 0.624 $ 0.572 $ 0.983 $ (0.714)
- -----------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.528) $ (0.447) $ (0.488) $ (0.506) $ (0.514) $ (0.514)
In excess of net investment income (0.022) (0.026) (0.016) (0.006) (0.019) (0.082)
In excess of net realized gain -- -- -- -- -- (0.120)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions $(0.550) $ (0.473) $ (0.504) $ (0.512) $ (0.533) $ (0.716)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value-- End of year $11.150 $ 11.420 $ 10.900 $ 10.780 $ 10.720 $ 10.270
- -----------------------------------------------------------------------------------------------------------------------
Total Return /(2)/ 10.20% 9.30% 5.89% 5.43% 9.90% (6.34)%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $11,764 $442,863 $504,057 $612,438 $701,565 $760,867
Ratios (As a percentage of average daily
net assets):
Expenses /(3)//(4)/ 0.73% 1.55% 1.57% 1.55% 1.54% 1.44%
Expenses after custodian fee reduction /(3)/ 0.69% 1.51% 1.53% 1.52% 1.51% --
Net investment income 4.82% 4.01% 4.50% 4.67% 4.97% 4.70%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ Net investment income per share was computed using average shares
outstanding.
/(2)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
/(3)/ Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
/(4)/ The expense ratios for the year ended September 30, 1995 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.
See notes to financial statements
20
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Massachusetts Fund
---------------------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------------------
1998/(1)/ 1997 1996 1995 1994
Class A Class B Class I Class B Class B Class B Class B
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Net asset value--Beginning of year $ 9.620 $ 10.690 $ 9.890 $ 10.330 $ 10.270 $ 9.990 $ 11.250
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.493 $ 0.468 $ 0.527 $ 0.487 $ 0.491 $ 0.499 $ 0.505
Net realized and unrealized gain (loss) 0.357 0.396 0.373 0.360 0.066 0.307 (1.108)
- ----------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.850 $ 0.864 $ 0.900 $ 0.847 $ 0.557 $ 0.806 $ (0.603)
- ----------------------------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.493) $ (0.468) $ (0.527) $ (0.487) $ (0.492) $ (0.499) $ (0.505)
In excess of net investment income (0.037) (0.016) (0.003) -- (0.005) (0.027) (0.087)
In excess of net realized gain -- -- -- -- -- -- (0.065)
- ----------------------------------------------------------------------------------------------------------------------
Total distributions $(0.530) $ (0.484) $ (0.530) $ (0.487) $ (0.497) $ (0.526) $ (0.657)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value--End of year $ 9.940 $ 11.070 $ 10.260 $ 10.690 $ 10.330 $ 10.270 $ 9.990
- ----------------------------------------------------------------------------------------------------------------------
Total Return /(2)/ 9.07% 8.28% 9.34% 8.41% 5.53% 8.38% (5.57)%
- ----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $13,282 $225,371 $ 11,439 $239,838 $267,398 $291,114 $ 295,011
Ratios (As a percentage of average daily
net assets):
Expenses/(3//)(4)/ 0.74% 1.60% 0.66% 1.61% 1.59% 1.58% 1.50%
Expenses after custodian fee
reduction/(3)/ 0.72% 1.58% 0.64% 1.59% 1.58% 1.56% --
Net investment income 5.04% 4.32% 5.24% 4.70% 4.75% 5.00% 4.75%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ Net investment income per share was computed using average shares
outstanding.
/(2)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
/(3)/ Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
/(4)/ The expense ratios for the year ended September 30, 1995 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.
See notes to financial statements
21
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Mississippi Fund
-------------------------------------------------------------------------
Year Ended September 30,
-------------------------------------------------------------------------
1998 1997 1996 1995 1994
------------------- -------------------------------------------------
Class Class Class Class Class Class
A B B B B B
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of year $ 9.740 $ 9.970 $ 9.610 $ 9.480 $ 9.110 $ 10.260
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.474 $ 0.419 $ 0.433 $ 0.451 $ 0.449 $ 0.453
Net realized and unrealized gain (loss) 0.331 0.337 0.362 0.122 0.379 (1.072)
- ------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.805 $ 0.756 $ 0.795 $ 0.573 $ 0.828 $ (0.619)
- ------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.478) $ (0.426) $ (0.435) $ (0.443) $ (0.449) $ (0.453)
In excess of net investment income (0.007) -- -- -- (0.009) (0.071)
In excess of net realized gain -- -- -- -- -- (0.007)
- ------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.485) $ (0.426) $ (0.435) $ (0.443) $ (0.458) $ (0.531)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value-- End of year $ 10.060 $ 10.300 $ 9.970 $ 9.610 $ 9.480 $ 9.110
- ------------------------------------------------------------------------------------------------------------------------
Total Return (1) 8.47% 7.75% 8.45% 6.17% 9.40% (6.20)%
- ------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data +
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $ 1,932 $ 18,615 $ 20,924 $ 23,862 $ 26,756 $ 26,771
Ratios (As a percentage of average daily net
assets):
Net expenses (2)(3) 0.72% 1.50% 1.60% 1.44% 1.36% 0.99%
Net expenses after custodian fee
reduction (2) 0.70% 1.48% 1.59% 1.41% 1.33% --
Net investment income 4.77% 4.12% 4.39% 4.64% 4.89% 4.63%
- ------------------------------------------------------------------------------------------------------------------------
+ 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 the Administrator, or both. Had such action not been taken,
the ratios and net investment income per share would have been as follows:
Ratios (As a percentage of average daily net assets):
Expenses (2)(3) 1.55% 1.49% 1.45%
Expenses after custodian fee reduction (2) 1.52% 1.46% --
Net investment income 4.53% 4.76% 4.17%
Net investment income per share $ 0.440 $ 0.437 $ 0.407
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed reinvested at the
net asset value on the reinvestment date. Total return is not computed on an
annualized basis.
(2) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(3) The expense ratios for the year ended September 30, 1995 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.
See notes to financial statements
22
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
New York Fund
----------------------------------------------------------------------
Year Ended September 30,
----------------------------------------------------------------------
1998/(1)/ 1997 1996 1995 1994
--------------------- --------------------------------------------
Class A Class B Class B Class B Class B Class B
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value-- Beginning of year $10.510 $ 11.300 $ 10.930 $ 10.830 $ 10.450 $ 11.880
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.538 $ 0.488 $ 0.506 $ 0.506 $ 0.523 $ 0.528
Net realized and unrealized gain (loss) 0.446 0.478 0.375 0.116 0.406 (1.165)
- -----------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.984 $ 0.966 $ 0.881 $ 0.622 $ 0.929 $ (0.637)
- -----------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.538) $ (0.483) $ (0.506) $ (0.508) $ (0.523) $ (0.526)
In excess of net investment income (0.013) -- (0.005) (0.014) (0.026) (0.089)
From net realized gain (0.023) (0.023) -- -- -- --
In excess of net realized gain -- -- -- -- -- (0.176)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions $(0.574) $ (0.506) $ (0.511) $ (0.522) $ (0.549) $ (0.793)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value-- End of year $10.920 $ 11.760 $ 11.300 $ 10.930 $ 10.830 $ 10.450
- -----------------------------------------------------------------------------------------------------------------------
Total Return /(2)/ 9.62% 8.76% 8.23% 5.87% 9.23% (5.62)%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $11,720 $ 473,396 $517,393 $590,397 $640,605 $648,325
Ratios (As a percentage of average daily
net assets):
Expenses /(3)//(4)/ 0.77% 1.58% 1.63% 1.54% 1.55% 1.46%
Expenses after custodian fee reduction /(3)/ 0.75% 1.56% 1.63% 1.51% 1.51% --
Net investment income 5.03% 4.26% 4.56% 4.64% 4.99% 4.72%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ Net investment income per share was computed using average shares
outstanding.
/(2)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
/(3)/ Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
/(4)/ The expense ratios for the year ended September 30, 1995 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.
See notes to financial statements
23
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Ohio Fund
-------------------------------------------------------------------------
Year Ended September 30,
-------------------------------------------------------------------------
1998 1997 1996 1995 1994
--------------------- ------------------------------------------------
Class A Class B Class B Class B Class B Class B
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of year $ 9.680 $ 10.930 $ 10.590 $ 10.510 $ 10.070 $ 11.300
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.514 $ 0.495 $ 0.499 $ 0.494 $ 0.487 $ 0.494
Net realized and unrealized gain (loss) 0.249 0.280 0.328 0.071 0.461 (1.081)
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.763 $ 0.775 $ 0.827 $ 0.565 $ 0.948 $ (0.587)
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.513) $ (0.495) $ (0.487) $ (0.485) $ (0.487) $ (0.494)
In excess of net investment income -- -- -- -- (0.021) (0.084)
In excess of net realized gain -- -- -- -- -- (0.065)
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.513) $ (0.495) $ (0.487) $ (0.485) $ (0.508) $ (0.643)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of year $ 9.930 $ 11.210 $ 10.930 $ 10.590 $ 10.510 $ 10.070
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 8.07% 7.24% 7.98% 5.48% 9.74% (5.39)%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $ 6,622 $247,367 $267,001 $289,829 $315,891 $321,578
Ratios (As a percentage of average daily net assets):
Expenses /(2)//(3)/ 0.80% 1.62% 1.63% 1.63% 1.59% 1.50%
Expenses after custodian fee reduction /(2)/ 0.78% 1.60% 1.62% 1.61% 1.57% --
Net investment income 5.25% 4.46% 4.65% 4.66% 4.80% 4.62%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
/(2)/ Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the year ended September 30, 1995 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.
See notes to financial statements
24
<PAGE>
EATON VANCE MUNICIPALS FUNDS as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Rhode Island Fund
-----------------------------------------------------------------------
Year Ended September 30,
-----------------------------------------------------------------------
1998 1997 1996 1995 1994
-----------------------------------------------------------------------
Class A Class B Class B Class B Class B Class B
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value-- Beginning of year $ 9.610 $ 9.840 $ 9.510 $ 9.400 $ 9.090 $10.330
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.471 $ 0.422 $ 0.427 $ 0.440 $ 0.452 $ 0.454
Net realized and unrealized gain (loss) 0.328 0.334 0.334 0.125 0.332 (1.146)
- -------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.799 $ 0.756 $ 0.761 $ 0.565 $ 0.784 $(0.692)
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.469) $(0.422) $(0.427) $(0.444) $(0.452) $(0.454)
In excess of net investment income -- (0.004) (0.004) (0.011) (0.022) (0.078)
In excess of net realized gain -- -- -- -- -- (0.016)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.469) $(0.426) $(0.431) $(0.455) $(0.474) $(0.548)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value-- End of year $ 9.940 $10.170 $ 9.840 $ 9.510 $ 9.400 $ 9.090
- -------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 8.52% 7.87% 8.19% 6.14% 8.94% (6.91)%
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data +
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $ 2,200 $39,758 $38,234 $39,488 $39,864 $34,261
Ratios (As a percentage of average daily net assets):
Net expenses/(2)//(3)/ 0.69% 1.46% 1.40% 1.35% 1.33% 1.02%
Net expenses after custodian fee reduction/(2)/ 0.66% 1.43% 1.35% 1.32% 1.29% --
Net investment income 4.83% 4.23% 4.43% 4.63% 4.92% 4.65%
- -------------------------------------------------------------------------------------------------------------------------------
+ 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 the Administrator, or both. Had such action not been taken, the ratios and net
investment income per share would have been as follows:
Ratios (As a percentage of average daily net assets):
Expenses /(2)//(3)/ 1.52% 1.47% 1.46% 1.38%
Expenses after custodian fee reduction/(2)/ 1.47% 1.44% 1.42% --
Net investment income 4.31% 4.51% 4.79% 4.29%
Net investment income per share $ 0.415 $ 0.429 $ 0.440 $ 0.418
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
/(2)/ Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
/(3)/ The expense ratios for the year ended September 30, 1995 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.
See notes to financial statements
25
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
West Virginia Fund
-----------------------------------------------------------------------
Year Ended September 30,
-----------------------------------------------------------------------
1998 1997 1996 1995 1994
--------------------- ---------------------------------------------
Class A Class B Class B Class B Class B Class B
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value-- Beginning of year $ 9.790 $ 9.970 $ 9.620 $ 9.500 $ 9.130 $10.220
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.504 $ 0.430 $ 0.419 $ 0.420 $ 0.436 $ 0.450
Net realized and unrealized gain (loss) 0.325 0.336 0.351 0.147 0.393 (1.011)
- -----------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.829 $ 0.766 $ 0.770 $ 0.567 $ 0.829 $(0.561)
- -----------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.499) $(0.416) $(0.419) $(0.427) $(0.436) $(0.450)
In excess of net investment income -- -- (0.001) (0.020) (0.023) (0.069)
In excess of net realized gain -- -- -- -- -- (0.010)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions $(0.499) $(0.416) $(0.420) $(0.447) $(0.459) $(0.529)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value-- End of year $10.120 $10.320 $ 9.970 $ 9.620 $ 9.500 $ 9.130
- -----------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 8.68% 7.84% 8.18% 6.02% 9.39% (5.66)%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data +
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $ 1,839 $29,824 $31,524 $37,708 $39,569 $38,476
Ratios (As a percentage of average daily
net assets):
Net expenses /(2)(3)/ 0.66% 1.48% 1.53% 1.55% 1.40% 0.95%
Net expenses after custodian fee
reduction /(2)/ 0.63% 1.45% 1.51% 1.51% 1.38% --
Net investment income 5.06% 4.25% 4.31% 4.30% 4.74% 4.62%
- -----------------------------------------------------------------------------------------------------------------------
+ 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 the Administrator, or both. Had such action not been taken, the ratios and net investment
income per share would have been as follows:
Ratios (As a percentage of average daily net
assets):
Expenses /(2)(3)/ 1.48% 1.32%
Expenses after custodian fee reduction /(2)/ 1.46% --
Net investment income 4.66% 4.25%
Net investment income per share $0.429 $0.414
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
/(2)/Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
/(3)/The expense ratios for the year ended September 30, 1995 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.
See notes to financial statements
26
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS
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 California Municipals Fund ("California Fund"), Eaton Vance
Florida Municipals Fund ("Florida Fund"), Eaton Vance Massachusetts Municipals
Fund ("Massachusetts Fund"), Eaton Vance Mississippi Municipals Fund
("Mississippi Fund"), Eaton Vance New York Municipals Fund ("New York Fund"),
Eaton Vance Ohio Municipals Fund ("Ohio Fund"), Eaton Vance Rhode Island
Municipals Fund ("Rhode Island Fund") and Eaton Vance West Virginia Municipals
Fund ("West Virginia Fund"). The California Fund, the Florida Fund, the
Mississippi Fund, the New York Fund, the Ohio Fund, the Rhode Island Fund and
the West Virginia Fund offer two classes of shares. The Massachusetts Fund
offers three 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). Class I shares of the Massachusetts Fund are sold at net asset value.
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 California Fund invests its assets in the California
Municipals Portfolio, the Florida Fund invests its assets in the Florida
Municipals Portfolio, the Massachusetts Fund invests its assets in the
Massachusetts Municipals Portfolio, the Mississippi Fund invests its assets in
the Mississippi Municipals Portfolio, the New York Fund invests its assets in
the New York Municipals Portfolio, the Ohio Fund invests its assets in the
Ohio Municipals Portfolio, the Rhode Island Fund invests its assets in the
Rhode Island Municipals Portfolio and the West Virginia Fund invests its
assets in the West Virginia 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 (approximately 100% at September
30, 1998 for each Fund except Mississippi, Rhode Island and West Virginia
which were 99.3%, 99.7% and 99.6%, respectively). 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, if any, and tax-
exempt income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary. At September 30,
1998, 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
-------------------------------------------------------------------------
California Fund $18,822,061 September 30, 2004
1,123,064 September 30, 2003
573,068 September 30, 2002
Florida Fund 5,087,168 September 30, 2004
27
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
Fund Amount Expires
-------------------------------------------------------------
<S> <C> <C>
Massachusetts Fund $ 2,135 September 30, 2005
10,926,357 September 30, 2004
Mississippi Fund 1,574,492 September 30, 2004
66,903 September 30, 2003
Ohio Fund 68,805 September 30, 2004
4,540 September 30, 2003
1,296 September 30, 2002
Rhode Island Fund 34,703 September 30, 2005
1,523,162 September 30, 2004
426,784 September 30, 2003
78,891 September 30, 2002
West Virginia Fund 170,463 September 30, 2005
1,133,263 September 30, 2004
113,056 September 30, 2003
</TABLE>
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 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.
Pursuant to Section 852 of the Internal Revenue Code, the New York Fund
designates $955,326 of distributions from tax-exempt income as a long-term
capital gain distribution for its taxable year ended September 30, 1998.
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 the 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 reflected as a reduction of operating
expenses on the Statements 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.
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.
During the year ended September 30, 1998, the following reclassifications
were made due to permanent differences between book and tax accounting:
<TABLE>
<CAPTION>
Increase/
(decrease) California Florida Massachusetts Mississippi
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------
Accumulated
distributions
in excess
of net
investment
income $ 631,653 $ 1,294,410 $ 339,821 $ --
Accumulated
net
realized
gain (loss)
from Portfolio 1,449,145 105,749 (2,397) 803
Paid-in capital (2,080,798) (1,400,159) (337,424) (803)
</TABLE>
28
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
Increase/ New York Ohio Rhode Island West Virginia
(decrease) Fund Fund Fund Fund
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Accumulated
distributions
in excess
of net
investment
income $ 954,313 $ -- $ 6,102 $ --
Accumulated
net realized
gain (loss)
from Portfolio (1,123,334) (4,372) -- 542
Paid-in capital 169,021 4,372 (6,102) (542)
</TABLE>
Net investment income, net realized gains and net assets were not affected
by these reclassifications. The tax treatment of distributions for the
calendar year will be reported to shareholders prior to February 1, 1999
and will be based on tax accounting methods which may differ from amounts
determined for financial statement purposes.
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:
<TABLE>
<CAPTION>
California Fund
---------------------------------------
Year Ended Year Ended
Sept. 30, 1998 Sept. 30, 1997
---------------------------------------
Class A Class B Class B
------------------------------------------------------------------------
<S> <C> <C> <C>
Sales 485,031 1,670,870 1,432,515
Issued to shareholders electing
to receive payments of
distributions in Fund shares 14,845 546,791 661,973
Redemptions (83,712) (5,403,497) (7,897,702)
Issued to EV Traditional
Municipals Fund shareholders 442,862 -- --
------------------------------------------------------------------------
Net increase (decrease) 859,026 (3,185,836) (5,803,214)
------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Florida Fund
---------------------------------------
Year Ended Year Ended
Sept. 30, 1998 Sept. 30, 1997
---------------------------------------
Class A Class B Class B
-------------------------------------------------------------------------
<S> <C> <C> <C>
Sales 762,699 1,297,153 2,104,483
Issued to shareholders electing
to receive payments of
distributions in Fund shares 15,294 619,609 806,134
Redemptions (490,732) (9,391,711) (13,472,545)
Issued to EV Traditional
Municipals Fund shareholders 767,645 -- --
-------------------------------------------------------------------------
Net increase (decrease) 1,054,906 (7,474,949) (10,561,928)
-------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Massachusetts Fund
----------------------------------------
Year Ended Year Ended
Sept. 30, 1998 Sept. 30, 1997
----------------------------------------
Class A Class B Class B
-------------------------------------------------------------------------
<S> <C> <C> <C>
Sales 979,696 893,720 747,491
Issued to shareholders electing
to receive payments of
distributions in Fund shares 17,263 458,566 546,499
Redemptions (151,928) (3,429,412) (4,753,239)
Issued to EV Traditional
Municipals Fund shareholders 490,828 -- --
-------------------------------------------------------------------------
Net increase (decrease) 1,335,859 (2,077,126) (3,459,249)
-------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Massachusetts
Fund
--------------
Year Ended
Class I Sept. 30, 1998
-------------------------------------------------------------
<S> <C>
Sales 343,217
Issued to shareholders electing
to receive payments of
distributions in Fund shares 9,832
Redemptions (63,805)
Issued to Massachusetts
Municipal Bond
Portfolio shareholders 825,783
-------------------------------------------------------------
Net increase 1,115,027
-------------------------------------------------------------
</TABLE>
29
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
Mississippi Fund
----------------------------------------
Year Ended Year Ended
Sept. 30,1998 Sept. 30, 1997
----------------------------------------
Class A Class B Class B
---------------------------------------------------------------
<S> <C> <C> <C>
Sales 96,859 70,854 93,560
Issued to shareholders
electing
to receive payments
of distributions in
Fund shares 5,155 36,072 47,277
Redemptions
(14,766) (396,484) (526,804)
Issued to EV
Traditional
Municipals Fund
shareholders 104,840 -- --
---------------------------------------------------------------
Net increase (decrease) 192,088 (289,558) (385,967)
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
New York Fund
--------------------------------------
Year Ended Year Ended
Sept. 30,1998 Sept. 30, 1997
--------------------------------------
Class A Class B Class B
---------------------------------------------------------------
<S> <C> <C> <C>
Sales
333,561 1,537,239 1,854,790
Issued to shareholders
electing
to receive payments
of distributions in
Fund shares 21,769 1,046,249 1,243,630
Redemptions (105,365) (8,133,681) (11,329,986)
Issued to EV
Traditional
Municipal Fund
shareholders 823,415 -- --
---------------------------------------------------------------
Net increase (decrease) 1,073,380 (5,550,193) (8,231,566)
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Ohio Fund
----------------------------------------
Year Ended Year Ended
Sept. 30,1998 Sept. 30, 1997
----------------------------------------
Class A Class B Class B
-----------------------------------------------------------------
<S> <C> <C> <C>
Sales 360,320 658,482 795,756
Issued to shareholders
electing
to receive payments
of distributions in
Fund shares 11,676 544,097 612,550
Redemptions (32,078) (3,551,484) (4,355,129)
Issued to EV
Traditional
Municipal Fund
shareholders 326,756 -- --
-----------------------------------------------------------------
Net increase (decrease) 666,674 (2,348,905) (2,946,823)
-----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Rhode Island Fund
------------------------------------
Year Ended Year Ended
Sept. 30,1998 Sept. 30, 1997
------------------------------------
Class A Class B Class B
-----------------------------------------------------------
<S> <C> <C> <C>
Sales 50,651 523,695 405,304
Issued to shareholders
electing
to receive payments
of distributions in
Fund shares 5,151 94,909 99,538
Redemptions (15,351) (594,688) (770,050)
Issued to EV
Traditional
Municipal Fund
shareholders 180,806 -- --
-----------------------------------------------------------
Net increase (decrease) 221,257 23,916 (265,208)
-----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
West Virginia Fund
-------------------------------------
Year Ended Year Ended
Sept. 30,1998 Sept. 30, 1997
-------------------------------------
Class A Class B Class B
------------------------------------------------------------
<S> <C> <C> <C>
Sales 34,334 147,918 115,286
Issued to shareholders
electing
to receive payments
of distributions in
Fund shares 5,767 63,535 77,703
Redemptions (40,039) (484,146) (949,690)
Issued to EV
Traditional
Municipal Fund
shareholders 181,603 -- --
------------------------------------------------------------
Net increase (decrease) 181,665 (272,693) (756,701)
------------------------------------------------------------
</TABLE>
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
30
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
Funds' principal underwriter, received $7,859, $9,591, $2,124, $1,606,
$7,554, $1,957, $1,230 and $874 from the California Fund, Florida Fund,
Massachusetts Fund, Mississippi Fund, New York Fund, Ohio Fund, Rhode Island
Fund and West Virginia Fund, respectively as its portion of the sales charge
on sales of Class A shares for the year ended September 30, 1998.
5 Distribution and Service Plans
----------------------------------------------------------------------------
Each Fund has adopted a distribution plan (Class B Plans) pursuant to Rule
12b-1 under the Investment Company Act of 1940 and a service plan (Class A
Plans) (collectively, the Plans). The Plans require the Class B shares to
pay the principal underwriter, 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 share and, accordingly, reduces the Class B's net
assets. For the year ended September 30, 1998, California Fund, Florida
Fund, Massachusetts Fund, Mississippi Fund, New York Fund, Ohio Fund, Rhode
Island Fund and West Virginia Fund, paid $2,298,710, $3,545,272, $1,729,610,
$145,532, $3,689,920, $1,931,797, $291,173 and $228,496, respectively, to
EVD, representing 0.75% of each Fund's Class B average daily net assets. At
September 30, 1998, the amount of Uncovered Distribution Charges of EVD
calculated under the Class B Plans for California Fund, Florida Fund,
Massachusetts Fund, Mississippi Fund, New York Fund, Ohio Fund, Rhode Island
Fund and West Virginia Fund were approximately $66,000, $9,379,000,
$5,102,000, $684,000, $8,203,000, $5,374,000, $1,335,000 and $959,000,
respectively.
In addition, the Plans authorize the Funds to make payments of service fees
to EVD, Authorized Firms and other persons in amounts not exceeding 0.25% of
each Fund's average daily net assets attributable to Class A and Class B
shares for any fiscal year. The Trustees have initially implemented the
Plans by authorizing each class to make quarterly service fee payments to
EVD and Authorized Firms in amounts not expected to exceed 0.20% (0.25% for
the California Fund) 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 year ended September 30, 1998, California Fund, Florida Fund,
Massachusetts Fund, Mississippi Fund, New York Fund, Ohio Fund, Rhode Island
Fund and West Virginia Fund paid or accrued service fees to or payable to
EVD in the amount of $9,477, $13,445, $6,140, $2,263, $13,914, $6,949,
$3,489 and $2,543, respectively for Class A shares, and $729,343, $945,390,
$445,981, $34,497, $947,353, $513,860, $70,055 and $61,829, respectively,
for Class B shares. Service fee payments are made for personal services
and/or maintenance of shareholder accounts. Service fees 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 $392,000, $923,000,
$341,000, $67,000, $889,000, $387,000, $120,000 and $79,000 of CDSC paid by
Class B shareholders of California Fund, Florida Fund, Massachusetts Fund,
Mississippi Fund, New York Fund, Ohio Fund, Rhode Island Fund and West
Virginia, respectively, for the year ended September 30, 1998.
31
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
7 Investment Transactions
------------------------------------------------------------------------------
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the year ended September 30, 1998 were as follows:
California Fund
------------------------------------------------------------------------------
Increases $ 22,739,308
Decreases 67,441,064
Florida Fund
------------------------------------------------------------------------------
Increases $ 23,116,173
Decreases 129,509,414
Massachusetts Fund
------------------------------------------------------------------------------
Increases $ 23,126,655
Decreases 48,353,576
Mississippi Fund
------------------------------------------------------------------------------
Increases $ 1,791,601
Decreases 4,961,704
New York Fund
------------------------------------------------------------------------------
Increases $ 21,974,717
Decreases 110,917,114
Ohio Fund
------------------------------------------------------------------------------
Increases $ 12,482,885
Decreases 49,743,364
Rhode Island Fund
------------------------------------------------------------------------------
Increases $ 5,483,365
Decreases 7,158,442
West Virginia Fund
------------------------------------------------------------------------------
Increases $ 1,913,546
Decreases 6,311,147
8 Transfer of Assets
------------------------------------------------------------------------------
On October 1, 1997, EV Marathon California Municipals Fund, EV Marathon
Florida Municipals Fund, EV Marathon Massachusetts Municipals Fund, EV
Marathon Mississippi Municipals Fund, EV Marathon New York Municipals Fund, EV
Marathon Ohio Municipals Fund, EV Marathon Rhode Island Municipals Fund, EV
Marathon
West Virginia Municipals Fund, acquired the net assets of EV Traditional
California Municipals Fund, EV Traditional Florida Municipals Fund, EV
Traditional Massachusetts Municipals Fund, Massachusetts Municipal Bond
Portfolio, EV Traditional Mississippi Municipals Fund, EV Traditional New York
Municipals Fund, EV Traditional Ohio Municipals Fund, EV Traditional Rhode
Island Municipals Fund and EV Traditional West Virginia 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:
<TABLE>
<CAPTION>
Class A shares Aggregate value Net asset value
Fund issued of shares issued per share
----------------------------------------------------------------------------
<S> <C> <C> <C>
California Fund 442,862 $ 4,827,782 $ 10.90
Florida Fund 767,645 8,168,505 10.64
Massachusetts Fund 490,828 4,721,026 9.62
Mississippi Fund 104,840 1,021,041 9.74
New York Fund 823,415 8,651,176 10.51
Ohio Fund 326,756 3,163,408 9.68
Rhode Island Fund 180,806 1,738,315 9.61
West Virginia Fund 181,603 1,777,064 9.79
</TABLE>
The Massachusetts Fund also issued 825,783 Class I shares with an aggregate
value of $8,170,080 and a net asset value of $9.89.
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:
<TABLE>
<CAPTION>
Fund Acquired Net Assets Unrealized appreciation
--------------------------------------------------------------------------
<S> <C> <C>
California Fund $ 4,827,782 $ 411,207
Florida Fund 8,168,505 186,534
Massachusetts Fund 4,721,026 320,814
Mississippi Fund 1,021,041 121,850
New York Fund 8,651,176 360,034
Ohio Fund 3,163,408 59,995
Rhode Island Fund 1,738,315 78,130
West Virginia Fund 1,777,064 72,043
</TABLE>
32
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
The net assets acquired from the Massachusetts Municipal Bond Portfolio were
$8,170,080 and the unrealized appreciation was $375,818.
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:
<TABLE>
<CAPTION>
Class A net Class B net
asset value asset value
Fund Combined Net Assets per share per share
---------------------------------------------------------------------------
<S> <C> <C> <C>
California Fund $ 325,985,128 $ 10.90 $ 10.01
Florida Fund 512,225,678 10.64 10.90
Massachusetts Fund 252,729,292 9.62 10.69
Mississippi Fund 21,945,103 9.74 9.97
New York Fund 526,044,320 10.51 11.30
Ohio Fund 270,164,317 9.68 10.93
Rhode Island Fund 39,972,173 9.61 9.84
West Virginia Fund 33,301,336 9.79 9.97
</TABLE>
The Class I net asset value for the Massachusetts Fund was $9.89.
9 Name Change
----------------------------------------------------------------------------
Effective October 1, 1997, the EV Marathon California Municipals Fund, EV
Marathon Florida Municipals Fund, EV Marathon Massachusetts Municipals Fund,
EV Marathon Mississippi Municipals Fund, EV Marathon New York Municipals
Fund, EV Marathon Ohio Municipals Fund, EV Marathon Rhode Island Municipals
Fund and EV Marathon West Virginia Municipals Fund changed their respective
names to Eaton Vance California Municipals Fund, Eaton Vance Florida
Municipals Fund, Eaton Vance Massachusetts Municipals Fund, Eaton Vance
Mississippi Municipals Fund, Eaton Vance New York Municipals Fund, Eaton
Vance Ohio Municipals Fund, Eaton Vance Rhode Island Municipals Fund and
Eaton Vance West Virginia Municipals Fund.
33
<PAGE>
Eaton Vance Municipals Funds as of September 30, 1998
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders
of Eaton Vance Municipals Trust:
- -------------------------------------------------------------------------------
We have audited the accompanying statements of assets and liabilities of Eaton
Vance California Municipals Fund, Eaton Vance Florida Municipals Fund, Eaton
Vance Massachusetts Municipals Fund, Eaton Vance Mississippi Municipals Fund,
Eaton Vance New York Municipals Fund, Eaton Vance Ohio Municipals Fund, Eaton
Vance Rhode Island Municipals Fund and Eaton Vance West Virginia Municipals Fund
(the Funds) (certain of the series constituting Eaton Vance Municipals Trust) as
of September 30, 1998, the related statements of operations for the year then
ended, the statements of changes in net assets for the years ended September 30,
1998 and 1997 and the financial highlights for each of the years in the five
year period ended September 30, 1998. For the Eaton Vance California Municipals
Fund, the financial highlights are for each of the years in the four-year period
ended September 30, 1998, the six months ended September 30, 1994, and for the
year ended March 31, 1994. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of the
aforementioned Funds of Eaton Vance Municipals Trust at September 30, 1998, the
results of their operations, the changes in their net assets and their financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
October 30, 1998
34
<PAGE>
California Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------
Cogeneration -- 3.9%
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR BBB- $ 4,985 Central Valley
Financing
Authority, (Carson
Ice), 6.20%, 7/1/20 $ 5,615,204
NR BBB- 6,000 Sacramento Power
Authority,
Cogeneration
Project,
(Campbell's Soup),
6.00%, 7/1/22 6,501,360
- -----------------------------------------------------------------------
$ 12,116,564
- -----------------------------------------------------------------------
Electric Utilities -- 1.5%
- -----------------------------------------------------------------------
A2 A $ 4,100 California
Pollution Control
Financing
Authority, (San
Diego Gas &
Electric), 5.90%,
6/1/14 $ 4,682,774
- -----------------------------------------------------------------------
$ 4,682,774
- -----------------------------------------------------------------------
Escrowed / Prerefunded -- 29.8%
- -----------------------------------------------------------------------
NR NR $ 2,845 Commerce, Joint
Power Financing
Authority,
Multifamily,
Prerefunded
to 3/01/01,
8.00%, 3/1/22 $ 3,193,712
NR BBB 3,910 Fontana Public
Financing
Authority,
Prerefunded
to 10/1/02,
7.00%, 9/1/21 4,235,820
NR BBB+ 3,000 Fontana
Redevelopment
Agency, Jurupa
Hills, Prerefunded
to 10/1/02, 7.00%,
10/1/14 3,433,950
Aaa AAA 3,455 Northern California
Power Agency,
(MBIA), Prerefunded
to 9/03/02,
Variable Rate,
8/1/25 /(1)/ 4,258,288
Aaa AAA 6,400 Port Oakland,
Prerefunded to
5/1/99,
0.00%, 11/1/05 4,041,280
NR BBB- 10,900 Sacramento
Cogeneration
Authority, (Procter
& Gamble),
Prerefunded to
7/1/05, 6.50%,
7/1/21 12,817,309
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------
Escrowed / Prerefunded (continued)
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA $ 8,000 Sacramento County,
Single Family,
(AMT), (GNMA),
Escrowed to
Maturity, 8.125%,
7/1/16 /(2)//(3)/ $ 11,108,079
Aaa AAA 6,000 Sacramento County,
Single Family,
(AMT), (GNMA),
Escrowed to
Maturity, 8.25%,
1/1/21 /(2)/ 8,662,320
Aaa NR 14,285 Sacramento County,
Single Family,
(AMT), (GNMA),
Escrowed to
Maturity, 8.50%,
11/1/16 /(2)/ 20,526,687
Aaa AAA 12,000 San Joaquin Hills,
Transportation
Corridor Agency,
Toll Road Bonds,
Escrowed to
Maturity, 0.00%,
1/1/14 5,881,680
Aaa AAA 5,765 San Joaquin Hills,
Transportation
Corridor Agency,
Toll Road Bonds,
Escrowed to
Maturity, 0.00%,
1/1/26 1,553,495
Aaa AAA 35,975 San Joaquin Hills,
Transportation
Corridor Agency,
Toll Road Bonds,
Escrowed to
Maturity, 0.00%,
1/1/27 9,238,739
Aaa AAA 2,430 San Joaquin Hills,
Transportation
Corridor Agency,
Toll Road Bonds,
Escrowed to
Maturity, 7.00%,
1/1/30 2,797,270
- -----------------------------------------------------------------------
$ 91,748,629
- -----------------------------------------------------------------------
Hospital -- 2.0%
- -----------------------------------------------------------------------
NR NR $ 945 Eastern Plumas,
Health Care,
(District
Hospital), 7.50%,
8/1/07 $ 1,031,534
Ba2 NR 1,000 San Bernadino,
(San Bernadino
Community
Hospital), 7.875%,
12/1/08 1,047,060
Ba2 NR 3,000 San Bernadino,
(San Bernadino
Community
Hospital), 7.875%,
12/1/19 3,137,700
</TABLE>
See notes to financial statements
35
<PAGE>
California Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Hospital (continued)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR NR $ 1,000 San Gorgonio
Memorial Health
Care District,
5.75%, 5/1/20 $ 1,002,040
- --------------------------------------------------------------------------------
$ 6,218,334
- --------------------------------------------------------------------------------
Housing -- 5.9%
- --------------------------------------------------------------------------------
Aa AA- $ 2,730 California Housing
Finance Agency,
(AMT), 7.375%, 8/1/11 $ 2,820,882
Aa AA- 2,005 California Housing
Finance Agency,
(AMT), 7.40%, 8/1/26 2,197,861
Aa AA- 2,865 California Housing
Finance Agency,
(AMT), 7.50%, 8/1/25 3,154,451
Aa AA- 5,630 California Housing
Finance Agency,
(AMT), 7.65%, 8/1/23 5,822,828
NR NR 2,000 Los Angeles County,
Housing Authority,
Multifamily,
(Corporate Fund
for Housing),
10.50%, 12/1/29 1,851,940
A1 NR 700 Los Angeles County,
Single Family,
7.875%, 8/1/16 771,218
NR A+ 1,455 Oakland, Housing
Finance Agency,
7.10%, 1/1/10 1,542,329
- --------------------------------------------------------------------------------
$ 18,161,509
- --------------------------------------------------------------------------------
Industrial Development Revenue -- 4.2%
- --------------------------------------------------------------------------------
Baa1 A- $ 5,500 California
Pollution Control
Financing
Authority,
(Browning Ferris
Industries), (AMT),
5.80%, 12/1/16 $ 5,903,700
NR NR 3,000 California
Pollution Control
Financing
Authority, (Laidlaw
Environmental),
(AMT), 6.70%, 7/1/07 3,198,180
Baa3 BB+ 3,600 California
Statewide Community
Development
Authority, (United
Airlines), (AMT),
5.70%, 10/1/33 3,729,528
- --------------------------------------------------------------------------------
$ 12,831,408
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 5.8%
- --------------------------------------------------------------------------------
Aaa AAA $ 4,545 Northern California
Power Agency,
(MBIA), Variable
Rate, 8/1/25 /(1)/ $ 5,533,538
Aaa AAA 2,000 Southern California
Public Power
Authority, (FGIC),
Variable Rate,
7/1/12 /(1)/ 2,215,000
Aaa AAA 7,070 Southern California
Public Power
Authority, (MBIA),
0.00%, 7/1/15 3,196,488
Aaa AAA 6,915 Southern California
Public Power
Authority, (MBIA),
5.00%, 1/1/20 6,939,410
- --------------------------------------------------------------------------------
$ 17,884,436
- --------------------------------------------------------------------------------
Insured-Hospital -- 1.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 4,000 California Health
Facilities
Financing
Authority, Stanford
Health
Care, (AMBAC),
5.00%, 11/15/28 $ 4,008,800
- --------------------------------------------------------------------------------
$ 4,008,800
- --------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 3.1%
- --------------------------------------------------------------------------------
Aaa AAA $ 4,350 Stockton,
Wastewater
Treatment Plant,
(FGIC), 6.80%,
9/1/24 $ 5,149,530
Aaa AAA 13,985 Visalia Unified
School District,
(MBIA), 0.00%, 12/1/17 4,267,663
- --------------------------------------------------------------------------------
$ 9,417,193
- --------------------------------------------------------------------------------
Insured-Solid Waste -- 0.6%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,500 Inland Empire Solid
Waste Finance
Authority, (FSA),
(AMT), 6.25%, 8/1/11 $ 1,730,385
- --------------------------------------------------------------------------------
$ 1,730,385
- --------------------------------------------------------------------------------
Insured-Transportation -- 3.9%
- --------------------------------------------------------------------------------
Aaa AAA $ 3,125 Port Oakland,
(MBIA), (AMT),
5.375%, 11/1/25 $ 3,238,469
</TABLE>
See notes to financial statements
36
<PAGE>
CALIFORNIA MUNICIPALS PORTFOLIO as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ------------------------------------------------------------------------------------------------------------------------------------
Insured-Transportation (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA $ 2,000 San Francisco Airport,
(MBIA), 6.75%, 5/1/13 $ 2,275,660
Aaa AAA 16,800 San Joaquin Hills,
Transportation Corridor
Agency, Toll Road Bonds,
(MBIA), 0.00%, 1/15/24 4,874,184
Aaa AAA 6,000 San Joaquin Hills,
Transportation Corridor
Agency, Toll Road Bonds,
(MBIA), 0.00%, 1/15/25 1,655,100
- ------------------------------------------------------------------------------------------------------------------------------------
$ 12,043,413
- ------------------------------------------------------------------------------------------------------------------------------------
Insured-Water and Sewer -- 10.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $ 5,000 California State Department
Water Resources, (Central
Valley Water Systems),
(FGIC), 5.25%, 12/1/28 $ 5,148,750
Aaa AAA 5,000 Contra Costa County, Water
District, (MBIA),
5.00%, 10/1/24 5,031,100
Aaa AAA 5,000 East Bay, Municipal Utilities
District, Wastewater
Treatment System, (FGIC),
5.00%, 6/1/26 5,035,900
Aaa AAA 5,000 East Bay, Municipal Utilities
District, Water System,
(MBIA), Variable
Rate, 6/1/08/(1)/ 5,581,250
Aaa AAA 2,000 Metropolitan Water District,
Southern California
Waterworks, (MBIA),
5.00%, 7/1/27 2,011,940
Aaa AAA 5,000 Metropolitan Water District,
Southern California
Waterworks, (MBIA),
5.00%, 7/1/30 5,040,350
Aaa AAA 3,000 San Diego County Water
Authority, (FGIC), Variable
Rate, 4/22/09/(1)/ 3,750,000
- ------------------------------------------------------------------------------------------------------------------------------------
$ 31,599,290
- ------------------------------------------------------------------------------------------------------------------------------------
Lease Revenue /
Certificates of Participation -- 18.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Aa3 A+ $ 6,500 California Public Works,
(University of California),
5.00%, 6/1/23 $ 6,503,575
</TABLE>
<TABLE>
<CAPTION>
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ------------------------------------------------------------------------------------------------------------------------------------
Lease Revenue /
Certificates of Participation (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aa3 A+ $ 5,000 California Public Works,
(University of California),
5.25%, 6/1/20 $ 5,332,150
Aa3 A+ 8,000 California Public Works,
(University of California),
5.50%, 6/1/14 8,877,680
Baa3 BBB- 2,750 Inglewood, 7.00%, 8/1/19 2,970,578
Baa1 BBB 5,115 Los Angeles County,(Disney
Parking), 0.00%, 3/1/16 2,098,736
Baa1 BBB 1,925 Los Angeles County, (Disney
Parking), 0.00%, 3/1/17 747,786
Baa1 BBB 5,000 Los Angeles County, (Disney
Parking), 0.00%, 9/1/17 1,893,050
Baa1 BBB 5,370 Los Angeles County, (Disney
Parking), 0.00%, 3/1/18 1,970,414
Baa1 BBB 3,100 Los Angeles County, (Disney
Parking), 0.00%, 3/1/20 1,019,497
Baa1 BBB 6,925 Los Angeles County, (Disney
Parking), 0.00%, 9/1/20 2,219,047
Baa1 BBB 1,000 Los Angeles County, (Disney
Parking), 6.50%, 3/1/23 1,080,850
NR NR 7,000 Los Angeles County, (Marina
Del Ray), 6.50%, 7/1/08 7,685,230
A1 A+ 8,000 Pasadena Parking Facility,
6.25%, 1/1/18 9,262,159
A1 A+ 4,000 Sacramento City
Financing Authority,
5.40%, 11/1/20 4,298,840
- ------------------------------------------------------------------------------------------------------------------------------------
$ 55,959,592
- ------------------------------------------------------------------------------------------------------------------------------------
Nursing Home -- 1.0%
- ------------------------------------------------------------------------------------------------------------------------------------
NR NR $ 3,000 Banning, (San Gorgonio
Pass Convalescent),
9.50%, 12/1/11 $ 3,050,310
- ------------------------------------------------------------------------------------------------------------------------------------
$ 3,050,310
- ------------------------------------------------------------------------------------------------------------------------------------
Senior Living / Life Care -- 1.3%
- ------------------------------------------------------------------------------------------------------------------------------------
NR NR $ 4,000 San Benito Health Care
District, 5.40%,
10/1/20/(4)/ $ 3,964,400
- ------------------------------------------------------------------------------------------------------------------------------------
$ 3,964,400
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
37
<PAGE>
CALIFORNIA MUNICIPALS PORTFOLIO as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ------------------------------------------------------------------------------------------------------------------------------------
Special Tax Revenue -- 6.3%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR BBB $ 5,000 Contra Costa County, Public
Financing Authority,
7.10%, 8/1/22 $ 5,519,500
NR NR 1,955 Fairfield, North Cordelia
District, 7.375%, 9/2/18 2,026,358
NR NR 800 Fairfield, North Cordelia
District, 8.00%, 9/2/11 839,696
NR NR 3,325 Irvine, Improvement Bond
Act 1915, (Assessment
District North 97-16, Group
Two), 5.50%, 9/2/22 3,356,488
NR BBB 600 Rancho Mirage, Joint Power
Financing Authority,
7.50%, 4/1/17 653,862
NR NR 3,000 Riverside County Community
Facilities District,
7.55%, 9/1/17 3,280,380
NR BBB 2,500 Riverside County
Redevelopment Agency,
7.50%, 10/1/26 2,831,200
NR NR 1,000 Torrance Redevelopment
Agency, 5.625%, 9/1/28 1,015,320
- ------------------------------------------------------------------------------------------------------------------------------------
$ 19,522,804
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer -- 1.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $ 3,000 San Francisco City
and County Sewer,
(AMBAC), Variable
Rate, 10/1/21/(1)//(5)/ $ 3,311,430
- ------------------------------------------------------------------------------------------------------------------------------------
$ 3,311,430
- ------------------------------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $263,561,693) $308,251,271
- ------------------------------------------------------------------------------------------------------------------------------------
</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 California
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 September 30, 1998, 27.3% of 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 0.6% to 17.5% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover when-issued
securities.
/(3)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
/(4)/ When-issued security.
/(5)/ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September
30, 1998, the value of these securities amounted to $3,311,430 or 1.1% of
the Portfolio's net assets.
See notes to financial statements
38
<PAGE>
Florida Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS
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>
Cogeneration -- 2.8%
- ------------------------------------------------------------------------
NR NR $ 4,600 Palm Beach County,
(Okeelanta Power), (AMT),
6.85%, 2/15/21/(1)/ $ 3,680,000
NR NR 11,000 Palm Beach County,
(Osceola Power), (AMT),
6.95%, 1/1/22/(1)/ 8,690,000
- ------------------------------------------------------------------------
$ 12,370,000
- ------------------------------------------------------------------------
Electric Utilities -- 7.3%
- ------------------------------------------------------------------------
Aa2 AA $14,000 Jacksonville Electric
Authority, Bulk Power
Supply System Scherer 4,
5.25%, 10/1/21 $ 14,236,740
Aa1 AA 2,850 Orlando Utilities
Commission Water and
Electric, 5.125%, 10/1/19 2,877,503
Aa2 AA- 10,000 Orlando Utilities
Commission Water and
Electric, 5.60%, 10/6/17 10,679,200
Aa3 AA- 2,515 St. Lucie County Solid
Waste Disposal, (Florida
Power & Light Co.) (AMT),
6.70%, 5/1/27 2,763,759
NR NR 1,840 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 2,026,889
- ------------------------------------------------------------------------
$ 32,584,091
- ------------------------------------------------------------------------
Escrowed / Prerefunded -- 9.9%
- ------------------------------------------------------------------------
Aaa AAA $ 9,225 Dade County, (Baptist
Hospital of Miami),
Escrowed to Maturity,
5.75%, 5/1/21 $ 10,253,219
NR BBB+ 2,830 Escambia County Health
Facilities Authority,
(Baptist Hospital, Inc.
and Baptist Manor, Inc.),
Prerefunded to 10/01/03,
6.75%, 10/1/14 3,244,199
Aa2 AA+ 8,000 Florida Board of General
Services, Prerefunded to
7/1/02, 6.60%, 7/1/17 8,876,560
NR NR 1,675 Florida State, (Mid-Bay
Bridge Authority),
Escrowed to Maturity,
6.875%, 10/1/22 2,132,158
A3 A 7,255 Hillsborough County
Capital Improvement -
Museum of
Science, Prerefunded to
1/1/01, 6.45%, 1/1/22 7,650,325
- ------------------------------------------------------------------------
Escrowed / Prerefunded (continued)
- ------------------------------------------------------------------------
Aaa AAA $ 2,000 Lee County, (Memorial
Hospital), (MBIA),
Prerefunded to 4/1/01,
Variable Rate, 4/1/20/(2)/ $ 2,347,500
Aa3 AA- 3,000 Orlando, Prerefunded to
10/1/01, 6.00%, 10/1/22 3,256,650
Aaa AAA 5,600 St. Lucie Utility System,
Escrowed to Maturity,
6.00%, 10/1/20 6,427,848
- ------------------------------------------------------------------------
$ 44,188,459
- ------------------------------------------------------------------------
General Obligations -- 11.2%
- ------------------------------------------------------------------------
Aa2 AA+ $26,000 Florida Board of
Education,
4.75%, 6/1/22 $ 25,473,239
NR BBB 5,700 Guam, 5.40%, 11/15/18 5,809,269
A3 A- 15,000 New York City, NY,
5.00%, 8/1/22 14,926,499
Baa1 A 2,100 Puerto Rico, 0.00%, 7/1/16 906,297
Baa1 A 2,500 Puerto Rico Public
Building Authority,
6.00%, 7/1/12 2,542,400
- ------------------------------------------------------------------------
$ 49,657,704
- ------------------------------------------------------------------------
Hospital -- 1.2%
- ------------------------------------------------------------------------
NR AA+ $ 4,750 Jacksonville Health
Facilities Finance
Authority, (St. Luke's
Hospital Association),
6.75%, 11/15/13 $ 5,195,408
- ------------------------------------------------------------------------
$ 5,195,408
- ------------------------------------------------------------------------
Housing -- 10.7%
- ------------------------------------------------------------------------
Aaa NR $ 1,790 Broward County Housing
Finance Authority, Single
Family, (AMT), (GNMA/FNMA),
6.10%, 10/1/19 $ 1,922,120
NR AAA 1,300 Clay County Housing
Finance Authority,
Multifamily (GNMA),
7.40%, 12/1/25 1,376,128
Aaa NR 2,005 Clay County Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.55%, 3/1/28 2,159,325
Aaa NR 865 Dade County Housing
Finance Authority, Single
Family, (AMT), 7.75%,
9/1/22 909,210
</TABLE>
See notes financial statements
39
<PAGE>
Florida Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing (continued)
- ------------------------------------------------------------------------
NR AAA $ 5,850 Dade County Housing
Finance Authority, Single
Family, (GNMA), (AMT),
6.70%, 10/1/28 $ 6,304,019
Aaa NR 1,110 Dade County Housing
Finance Authority, Single
Family, (GNMA), (AMT),
7.25%, 9/1/19 1,171,028
Aaa AAA 1,480 Escambia County Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.90%, 10/1/21 1,611,098
Aaa AAA 1,725 Escambia County Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.95%, 10/1/27 1,879,491
Aaa NR 2,440 Escambia County Housing
Finance Authority, Single
Family (GNMA), (AMT),
7.40%, 10/1/23 2,576,713
NR AAA 1,065 Florida Housing Finance
Authority, 6.35%, 6/1/14 1,141,829
Aa3 AA 2,195 Florida Housing Finance
Authority, (AMT), 6.35%,
7/1/28 2,378,809
Aaa NR 700 Hillsborough County
Housing Finance
Authority, Single
Family (GNMA), (AMT),
7.875%, 5/1/23 738,871
NR NR 3,365 North Miami Health Care
Facilities, (The Imperial
Club), 9.25%, 1/1/13 3,830,918
NR AAA 6,205 Orange County Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.60%, 4/1/28 6,685,888
NR AAA 7,230 Orange County Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.85%, 10/1/27 7,843,176
NR AAA 1,695 Orange County Housing
Finance Authority, Single
Family (GNMA), (AMT),
7.375%, 9/1/24 1,801,802
Aaa NR 1,455 Polk County Housing
Finance Authority, Single
Family (GNMA), 7.15%,
9/1/23 1,533,788
Baa3 BBB 1,400 Puerto Rico Urban Renewal
and Housing Corp.,
7.875%, 10/1/04 1,477,714
- ------------------------------------------------------------------------
$ 47,341,927
- ------------------------------------------------------------------------
Industrial Development Revenue -- 1.1%
- ------------------------------------------------------------------------
Baa3 BBB- $ 4,500 Puerto Rico Port
Authority, (American
Airlines), (AMT), 6.25%,
6/1/26 $ 4,911,390
- ------------------------------------------------------------------------
$ 4,911,390
- ------------------------------------------------------------------------
Insured-Education -- 1.4%
- ------------------------------------------------------------------------
NR AAA $ 5,500 Volusia County
Educational Facilities,
(Embry-Riddle
Aeronautical University)
(CLEE), 6.625%, 10/15/22 $ 6,084,980
- ------------------------------------------------------------------------
$ 6,084,980
- ------------------------------------------------------------------------
Insured-Electric Utilities -- 5.1%
- ------------------------------------------------------------------------
Aaa AAA $ 5,000 Florida Municipal Power
Agency Stanton II (AMBAC)
Variable
Rate, 10/1/20/(2)//(3)/ $ 6,137,700
Aaa AAA 1,540 Manatee County Public
Utility, (FGIC), 0.00%,
10/1/12 828,104
Aaa AAA 2,200 Puerto Rico Electric
Power Authority,
"STRIPES", (FSA),
Variable Rate, 7/1/02/(2)/ 2,483,250
Aaa AAA 2,200 Puerto Rico Electric
Power Authority,
"STRIPES", (FSA),
Variable Rate, 7/1/03/(2)/ 2,554,750
Aaa AAA 3,000 Sunrise Utilities
Systems, (AMBAC), 5.00%,
10/1/28 3,090,270
Aaa AAA 7,000 Sunrise Utilities
Systems, (AMBAC), 5.20%,
10/1/22 7,408,520
- ------------------------------------------------------------------------
$ 22,502,594
- ------------------------------------------------------------------------
Insured-Hospital -- 10.1%
- ------------------------------------------------------------------------
Aaa AAA $ 8,000 Charlotte County Health
Care, (Bon-Secours Health
System) (FSA) Variable
Rate, 8/26/27/(2)/ $ 9,320,000
Aaa AAA 23,355 Jacksonville Health
Authority, (Daughters of
Charity) (MBIA), 5.00%,
11/15/15 23,837,513
Aaa AAA 3,000 Orange County Health
Facilities Authority
(Orlando Regional Medical
Center) (MBIA) Variable
Rate, 10/29/21/(2)/ 3,581,250
Aaa AAA 7,500 Sarasota County Public
Hospital Board, (Sarasota
Memorial Hospital),
(MBIA), 5.25%, 7/1/24 7,943,625
- ------------------------------------------------------------------------
$ 44,682,388
- ------------------------------------------------------------------------
</TABLE>
See notes financial statements
40
<PAGE>
Florida Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Housing -- 3.2%
- --------------------------------------------------------------------------------
Aaa AAA $ 725 Brevard County Housing
Finance Authority, Single
Family (FSA), 7.00%, 3/1/13 $ 768,660
Aaa AAA 3,000 Florida Health Facilities
Authority, (Brittany of
Rosemont) (AMBAC) (AMT),
6.875%, 8/1/26 3,325,110
Aaa AAA 6,530 Florida HFA, (Maitland
Club Apartments), (AMBAC),
(AMT), 6.875%, 8/1/26 7,237,656
Aaa AAA 2,675 Lee County Housing
Finance, SCA Multifamily
(FSA) (AMT), 7.05%, 1/1/30 2,964,997
- --------------------------------------------------------------------------------
$ 14,296,423
- --------------------------------------------------------------------------------
Insured-Miscellaneous -- 0.7%
- --------------------------------------------------------------------------------
Aaa AAA $ 2,000 Escambia County, (MBIA),
Prerefunded to 10/1/03,
7.20%, 1/1/15 $ 2,057,380
Aaa AAA 799 Osceola County, Industrial
Development Authority,
Community Provider Pooled
Loan Program (CGIC), 7.75%,
7/1/10 854,467
- --------------------------------------------------------------------------------
$ 2,911,847
- --------------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 0.1%
- --------------------------------------------------------------------------------
Aaa AAA $ 500 Alachua County Health
Facility, (Mental Health
Services) (CGIC), 7.75%,
7/1/10 $ 541,965
- --------------------------------------------------------------------------------
$ 541,965
- --------------------------------------------------------------------------------
Insured-Solid Waste -- 0.4%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,500 St. John's County Solid
Waste Disposal, (FGIC),
7.25%, 11/1/10 $ 1,623,975
- --------------------------------------------------------------------------------
$ 1,623,975
- --------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 7.0%
- --------------------------------------------------------------------------------
Aaa AAA $ 3,835 Dade County, Professional
Sports Franchise, (MBIA),
0.00%, 10/1/23 $ 1,151,267
Aaa AAA 1,000 Jacksonville Excise Tax,
(FGIC), (AMT), 0.00%,
10/1/11 558,530
- --------------------------------------------------------------------------------
Insured-Special Tax Revenue (continued)
- --------------------------------------------------------------------------------
Aaa AAA $ 2,000 Jacksonville Excise Tax,
(FGIC), (AMT), 0.00%,
10/1/12 $ 1,060,840
Aaa AAA 1,185 Opa-Locka Sales Tax,
(FGIC), 7.00%, 1/1/14 1,365,274
Aaa AAA 2,000 Sunrise Public Facilities,
(MBIA), 0.00%, 10/1/10 1,195,980
Aaa AAA 1,760 Sunrise Public Facilities,
(MBIA), 0.00%, 10/1/12 946,405
Aaa AAA 2,840 Sunrise Public Facilities,
(MBIA), 0.00%, 10/1/14 1,369,505
Aaa AAA 4,000 Sunrise Public Facilities,
(MBIA), 0.00%, 10/1/15 1,827,680
Aaa AAA 4,140 Sunrise Public Facilities,
(MBIA), 0.00%, 10/1/16 1,781,276
Aaa AAA 2,525 Sunrise Public Facilities,
(MBIA), 0.00%, 10/1/17 1,029,013
Aaa AAA 11,500 Tampa Sports Authority,
(MBIA), 5.25%, 1/1/17 12,082,590
Aaa AAA 6,800 Tampa Utility Tax,
(AMBAC), 0.00%, 4/1/19 2,571,284
Aaa AAA 5,000 Tampa Utility Tax,
(AMBAC), 0.00%, 10/1/19 1,846,350
Aaa AAA 2,000 Tampa Utility Tax,
(AMBAC), 0.00%, 10/1/20 775,940
Aaa AAA 4,000 Tampa Utility Tax,
(AMBAC), 0.00%, 10/1/20 1,405,640
- --------------------------------------------------------------------------------
$ 30,967,574
- --------------------------------------------------------------------------------
Insured-Transportation -- 5.6%
- --------------------------------------------------------------------------------
Aaa AAA $ 3,475 Dade County Aviation
Facilities, (MBIA),
(AMT), 6.00%, 10/1/24 $ 3,760,645
Aaa AAA 4,000 Dade County Aviation
Facilities, (MBIA),
(AMT),6.55%, 10/1/13 4,419,360
Aaa AAA 4,150 Dade County Aviation
Facilities, (MBIA),
(AMT), 6.60%, 10/1/22 4,584,547
Aaa AAA 8,650 Greater Orlando Aviation
Authority, (FGIC), (AMT),
6.375%, 10/1/21/(4)/ 9,518,460
Aaa AAA 2,000 Orlando and Orange
County, Expressway Authority
(FGIC), 8.25%, 7/1/14 2,824,680
- --------------------------------------------------------------------------------
$ 25,107,692
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
41
<PAGE>
Florida Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Water and Sewer -- 2.3%
- --------------------------------------------------------------------------------
Aaa AAA $10,000 Dade County, Water And
Sewer System, (FGIC),
5.25%, 10/1/26 $ 10,342,300
- --------------------------------------------------------------------------------
$ 10,342,300
- --------------------------------------------------------------------------------
Miscellaneous -- 1.2%
- --------------------------------------------------------------------------------
NR NR $ 5,000 Osceola County, IDA,
Community Pooled Loan-93,
7.75%, 7/1/17 $ 5,461,350
- --------------------------------------------------------------------------------
$ 5,461,350
- --------------------------------------------------------------------------------
Nursing Home -- 4.4%
- --------------------------------------------------------------------------------
NR NR $ 300 Broward County IDA,
(Beverly Enterprises),
9.80%, 11/1/10 $ 332,667
NR NR 410 Charlotte County IDA,
(Beverly Enterprises),
10.00%, 6/1/11 463,833
NR AAA 4,285 Dade County, IDA, (Club
Care Center), (GNMA),
6.60%, 1/20/18 4,652,010
NR AAA 5,075 Dade County, IDA, (Gramercy
Park Nursing Care), (FHA),
6.60%, 8/1/23 5,546,011
NR NR 1,850 Highlands County, IDA,
(Beverly Enterprises),
9.25%, 7/1/07 2,063,416
Baa1 NR 3,750 Jacksonville Health,
(Cypress Village), 7.00%,
12/1/22 4,133,100
NR NR 330 Okaloosa County, (Beverly
Enterprises), 10.75%, 337,917
10/1/03
NR NR 630 Orange County IDA, (Beverly
Enterprises), 9.25%, 8/1/10 704,724
NR NR 1,000 Winter Garden, (Beverly
Enterprises), 8.75%, 1,127,710
7/1/12
- --------------------------------------------------------------------------------
$ 19,361,388
- --------------------------------------------------------------------------------
Senior Living / Life Care -- 1.9%
- --------------------------------------------------------------------------------
NR NR $ 6,895 Atlantic Beach, Fixed
Rate Improvement, (Fleet
Landing), 8.00%, 10/1/24 $ 7,837,409
- --------------------------------------------------------------------------------
Senior Living / Life Care (continued)
- --------------------------------------------------------------------------------
NR BBB+ $ 770 Escambia County Health
Facilities Authority,
(Baptist Hospital, Inc.
and Baptist Manor, Inc.),
6.75%, 10/1/14 $ 827,896
- --------------------------------------------------------------------------------
$ 8,665,305
- --------------------------------------------------------------------------------
Solid Waste -- 0.8%
- --------------------------------------------------------------------------------
A3 A- $ 3,450 Broward County, (Waste
Energy Co., L.P. North),
7.95%, 12/1/08 $ 3,695,985
- --------------------------------------------------------------------------------
$ 3,695,985
- --------------------------------------------------------------------------------
Transportation -- 9.9%
- --------------------------------------------------------------------------------
Aa2 AA+ $ 7,500 Florida State,
(Jacksonville
Transportation), 5.00%,
7/1/27 $ 7,536,825
Aa2 AA+ 10,000 Florida State,
(Jacksonville
Transportation), 5.25%,
7/1/22 10,334,600
NR NR 10,140 Florida State, (Mid-Bay
Bridge Authority),
6.125%, 10/1/22 11,065,782
Baa1 A 5,000 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 4,907,550
Baa1 A 9,250 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/36 9,496,605
Baa1 A 700 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/36 764,645
- --------------------------------------------------------------------------------
$ 44,106,007
- --------------------------------------------------------------------------------
Water and Sewer -- 1.7%
- --------------------------------------------------------------------------------
Baa1 BBB+ $ 2,500 Hillsborough County
Utility, 6.625%, 8/1/11 $ 2,696,025
A1 A+ 5,000 Richmond, VA, Public
Utility Revenue, 5.125%,
1/15/28 5,025,150
- --------------------------------------------------------------------------------
$ 7,721,175
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $399,089,975) $444,321,927
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
42
<PAGE>
Florida Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS 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 Florida
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 September 30,1998, 36.3% 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 0.3% to 16.6% of total investments.
/(1)/ Non-income producing security.
/(2)/ Security has been issued as an inverse floater bond.
/(3)/ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September
30, 1998, the value of these securities amounted to $6,137,700 or 1.3% of
the Portfolio's net assets.
/(4)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
43
<PAGE>
Massachusetts Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS
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>
Assisted Living -- 0.7%
- ---------------------------------------------------------------------------------------------------------------
NR AAA $ 1,500 Massachusetts IFA,
(Briscoe House), (FHA),
7.125%, 2/1/36 $ 1,774,365
- ---------------------------------------------------------------------------------------------------------------
$ 1,774,365
- ---------------------------------------------------------------------------------------------------------------
Cogeneration -- 0.5%
- ---------------------------------------------------------------------------------------------------------------
NR BBB $ 1,250 Massachusetts IFA, (Ogden
Haverhill), (AMT),
5.60%, 12/1/19 $ 1,270,975
- ---------------------------------------------------------------------------------------------------------------
$ 1,270,975
- ---------------------------------------------------------------------------------------------------------------
Education -- 6.9%
- ---------------------------------------------------------------------------------------------------------------
Aa1 AA+ $ 1,625 Massachusetts HEFA,
(Amherst College), 6.80%, $ 1,800,110
11/1/21
Aa3 AA- 5,040 Massachusetts HEFA,
(Boston College), 4.75%,
6/1/31 4,873,277
NR AAA 3,300 Massachusetts HEFA,
(Merrimack College),
7.125%, 7/1/12 3,746,160
NR A 2,000 Massachusetts IFA,
(Belmont Hill School),
5.25%, 9/1/28 2,027,360
Baa3 BBB- 1,250 Massachusetts IFA, (Dana
Hall), 5.90%, 7/1/27 1,323,063
Baa1 BBB+ 1,000 Massachusetts IFA, (St.
Johns High School, Inc.), 1,009,870
5.35%, 6/1/28
A3 NR 2,000 New England Educational
Loan Marketing Corp.,
(AMT), 6.90%, 11/1/09 2,237,920
- ---------------------------------------------------------------------------------------------------------------
$ 17,017,760
- ---------------------------------------------------------------------------------------------------------------
Electric Utilities -- 6.5%
- ---------------------------------------------------------------------------------------------------------------
Baa2 BBB+ $ 5,060 Massachusetts Municipal
Wholesale Electric Co., $ 5,487,924
6.625%, 7/1/18
Baa2 BBB+ 3,500 Massachusetts Municipal
Wholesale Electric Co., 3,810,905
6.75%, 7/1/11
Baa1 BBB+ 3,000 Puerto Rico Electric Power
Authority, 0.00%, 7/1/17 1,234,830
Baa1 BBB+ 13,230 Puerto Rico Electric
Power Authority, 0.00%,
7/1/17 5,445,600
- ---------------------------------------------------------------------------------------------------------------
$ 15,979,259
- ---------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 18.9%
- ---------------------------------------------------------------------------------------------------------------
Aaa NR $ 2,400 Massachusetts HEFA,
(Fairview Care
Facilities), Prerefunded
to 1/1/01, 10.25%, 1/1/21 $ 2,803,392
NR BBB+ 3,055 Massachusetts HEFA,
(Jordan Hospital),
Prerefunded to 10/1/02,
6.875%, 10/1/22 3,446,651
Baa3 NR 5,500 Massachusetts HEFA,
(Milford-Whitinsville
Hospital), Prerefunded to
7/15/02, 7.75%, 7/15/17 6,354,040
Aaa BBB 2,085 Massachusetts HEFA,
(Sisters of Providence
Health System),
Prerefunded to 11/15/04,
6.625%, 11/15/22 2,344,457
Aaa AAA 1,380 Massachusetts Port
Authority, (FGIC),
Prerefunded to 7/1/00,
7.50%, 7/1/20 1,495,327
Aaa AAA 29,870 Massachusetts Turnpike
Authority, Escrowed to
Maturity, 0.00%, 1/1/28 7,266,774
Aaa NR 20,860 Massachusetts Turnpike
Authority, Escrowed to
Maturity, 5.00%, 1/1/20 21,622,641
NR AAA 1,000 Puerto Rico, "RIBS",
(AMBAC), Variable Rate,
Prerefunded to 7/1/02,
7/1/15/(1)//(2)/ 1,175,620
- ---------------------------------------------------------------------------------------------------------------
$ 46,508,902
- ---------------------------------------------------------------------------------------------------------------
General Obligations -- 0.8%
- ---------------------------------------------------------------------------------------------------------------
Aaa NR $ 1,700 Nantucket, 6.80%, 12/1/11 $ 1,887,476
- ---------------------------------------------------------------------------------------------------------------
$ 1,887,476
- ---------------------------------------------------------------------------------------------------------------
Hospital -- 17.3%
- ---------------------------------------------------------------------------------------------------------------
NR BBB+ $ 1,500 Massachusetts HEFA, (Cape
Cod Healthcare), 5.45%,
11/15/23 $ 1,519,845
A1 A 3,000 Massachusetts HEFA,
(Charlton Memorial
Hospital), 3,333,240
7.25%, 7/1/13
Aa2 AA+ 2,000 Massachusetts HEFA,
(Daughters
of Charity Health 2,195,160
System),
6.10%, 7/1/14
NR AA 1,465 Massachusetts HEFA,
(FHA), (Deutsches
Altenheim), 1,570,260
7.70%, 11/1/31
NR BBB+ 3,210 Massachusetts HEFA,
(Jordan Hospital), 5.25%, 3,198,926
10/1/23
</TABLE>
See notes to financial statements
44
<PAGE>
MASSACHUSETTS MUNICIPALS PORTFOLIO as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hospital (continued)
- --------------------------------------------------------------------------------
NR BBB+ $ 1,465 Massachusetts HEFA,
(Jordan Hospital),
5.375%, 10/1/28 $ 1,477,907
NR BBB+ 1,020 Massachusetts HEFA,
(Jordan Hospital),
6.875%, 10/1/15 1,109,036
Baa2 BBB- 500 Massachusetts HEFA,
(Milford-Whitinsville
Hospital), 5.25%, 7/15/18 501,265
Baa2 BBB- 1,500 Massachusetts HEFA,
(Milford-Whitinsville
Regional Hospital),
5.375%, 7/15/28 1,510,425
Ba1 NR 2,875 Massachusetts HEFA, (New
England Health Systems),
6.125%, 8/1/13 3,010,125
NR BBB- 2,600 Massachusetts HEFA,
(North Adams Hospital),
6.625%, 7/1/18 2,858,934
Aaa BBB 5,255 Massachusetts HEFA,
(Sisters of Providence
Health System), 6.50%,
11/15/08 5,884,129
A1 AA- 530 Massachusetts HEFA,
(Spaulding Rehabilitation
Hospital), 7.625%, 7/1/21 542,301
NR NR 8,000 Massachusetts IFA,
(Biomedical Research
Corp.), 0.00%, 8/1/08 5,065,680
NR NR 9,000 Massachusetts IFA,
(Biomedical Research
Corp.), 0.00%, 8/1/09 5,382,900
NR NR 6,000 Massachusetts IFA,
(Biomedical Research
Corp.), 0.00%, 8/1/10 3,383,040
- --------------------------------------------------------------------------------
$ 42,543,173
- --------------------------------------------------------------------------------
Housing -- 6.1%
- --------------------------------------------------------------------------------
Aa A+ $ 6,925 Massachusetts HFA, (AMT),
6.60%, 12/1/26 $ 7,447,560
Aa A+ 6,265 Massachusetts HFA, (AMT),
6.60%, 12/1/26 6,737,757
Aa A+ 860 Massachusetts HFA, (AMT),
8.10%, 12/1/21 883,968
- --------------------------------------------------------------------------------
$ 15,069,285
- --------------------------------------------------------------------------------
Industrial Development Revenue -- 4.0%
- --------------------------------------------------------------------------------
NR NR $ 3,000 Massachusetts IFA,
(Hingham Water Co.),
(AMT), 6.90%, 12/1/29 $ 3,340,920
- --------------------------------------------------------------------------------
Industrial Development Revenue (continued)
- --------------------------------------------------------------------------------
NR NR $ 2,075 Massachusetts IFA, (Mass
American Co.), (AMT),
6.60%, 12/1/15 $ 2,281,442
Baa3 BBB- 3,750 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.25%, 6/1/26 4,092,825
- --------------------------------------------------------------------------------
$ 9,715,187
- --------------------------------------------------------------------------------
Insured-Education -- 4.1%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,775 Massachusetts Educational
Finance Authority, (AMBAC),
(AMT), 7.30%, 1/1/12 $ 1,973,552
Aaa AAA 270 Massachusetts Educational
Finance Authority, (MBIA),
(AMT), 7.25%, 1/1/09 289,559
Aaa AAA 400 Massachusetts HEFA, (Boston
University) "RIBS", (MBIA),
Variable Rate, 10/1/31/(1)/ 474,000
Aaa AAA 2,000 Massachusetts IFA, (College
Of The Holy Cross), (MBIA),
5.00%, 9/1/23 2,002,580
Aaa AAA 5,460 Massachusetts IFA, (WGBH),
(AMBAC), 5.00%, 3/1/28 5,471,575
- --------------------------------------------------------------------------------
$ 10,211,266
- --------------------------------------------------------------------------------
Insured-Hospital -- 12.6%
- --------------------------------------------------------------------------------
Aaa AAA $ 3,750 Massachusetts HEFA, (Beth
Israel Hospital), (AMBAC),
(AMT), Variable Rate,
7/1/25/(1)/ $ 4,373,438
Aaa AAA 1,040 Massachusetts HEFA,
(Beverly Hospital),
(MBIA), 7.30%, 7/1/13 1,087,414
Aaa AAA 1,500 Massachusetts HEFA,
(Capital Assist Program),
(MBIA), 7.20%, 7/1/09 1,568,490
Aaa AAA 1,000 Massachusetts HEFA,
(Caregroup), (MBIA), 4.75%,
7/1/20 967,650
Aaa AAA 1,000 Massachusetts HEFA,
(Caregroup), (MBIA),
5.00%, 7/1/18 1,005,670
Aaa AAA 2,000 Massachusetts HEFA,
(Catholic Health East),
(AMBAC), 5.00%, 11/15/28 1,998,340
</TABLE>
See notes to financial statements
45
<PAGE>
Massachusetts Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Hospital (continued)
- --------------------------------------------------------------------------------
Aaa AAA $ 1,885 Massachusetts HEFA,
(Fallon Healthcare System),
(FSA), 6.75%, 6/1/20 $ 2,066,714
Aaa AAA 5,000 Massachusetts HEFA,
(Hallmark Health), (FSA),
5.00%, 7/1/27 4,988,250
Aaa AAA 2,000 Massachusetts HEFA, (St.
Elizabeth Hospital Issue)
"LEVRRS", (FSA), Variable
Rate, 8/12/21/(1)/ 2,362,500
Aaa AAA 2,600 Massachusetts HEFA, (St.
Luke's Hospital) "Yield
Curve Notes", (MBIA),
Variable Rate, 8/15/13/(1)/ 2,970,500
Aaa AAA 2,600 Massachusetts HEFA, (St.
Luke's Hospital) "Yield
Curve Notes", Variable
Rate, (MBIA), 8/15/23/(1)/ 2,947,750
Aaa AAA 3,000 Massachusetts HEFA, (The
Medical Center of Central
Massachusetts) (AMBAC),
"CARS", Variable Rate,
6/23/22/(1)/ 4,001,250
Aaa AAA 700 Massachusetts HEFA,
(University Hospital),
(MBIA), 7.25%, 7/1/19 756,056
- --------------------------------------------------------------------------------
$ 31,094,022
- --------------------------------------------------------------------------------
Insured-Transportation -- 2.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 4,480 Massachusetts Port
Authority, (FGIC), 7.50%,
7/1/20 $ 4,828,051
Aaa AAA 2,000 Massachusetts Turnpike
Authority, (MBIA), 0.00%,
1/1/19 757,760
- --------------------------------------------------------------------------------
$ 5,585,811
- --------------------------------------------------------------------------------
Insured-Water and Sewer -- 2.6%
- --------------------------------------------------------------------------------
Aaa AAA $ 5,000 Massachusetts Water
Resources Authority,
(FSA), 4.75%, 8/1/27 $ 4,888,300
Aaa AAA 1,500 Massachusetts Water
Resources Authority,
(MBIA), 4.75%, 12/1/21 1,468,950
- --------------------------------------------------------------------------------
$ 6,357,250
- --------------------------------------------------------------------------------
Lease Revenue /
Certificates of Participation -- 3.6%
- --------------------------------------------------------------------------------
NR AA- $ 7,800 Plymouth County, (Plymouth
County Correctional
Facility), 7.00%, 4/1/22 $ 8,779,913
- --------------------------------------------------------------------------------
$ 8,779,913
- --------------------------------------------------------------------------------
Nursing Home -- 1.5%
- --------------------------------------------------------------------------------
NR NR $ 3,225 Massachusetts IFA, (Age
Institute of Massachusetts),
8.05%, 11/1/25 $ 3,674,081
- --------------------------------------------------------------------------------
$ 3,674,081
- --------------------------------------------------------------------------------
Senior Living / Life Care -- 1.2%
- --------------------------------------------------------------------------------
NR AAA $ 1,000 Boston, IDA, (Alzheimers
Center), (FHA), 6.00%,
2/1/37 $ 1,076,940
NR NR 1,900 Massachusetts IFA, (Forge
Hill), (AMT), 6.75%, 4/1/30 1,879,214
- --------------------------------------------------------------------------------
$ 2,956,154
- --------------------------------------------------------------------------------
Solid Waste -- 0.4%
- --------------------------------------------------------------------------------
NR NR $ 1,035 Pittsfield, Solid Waste
Disposal, (Vicon Recovery
Associates), 7.95%, 11/1/04 $ 1,074,123
- --------------------------------------------------------------------------------
$ 1,074,123
- --------------------------------------------------------------------------------
Transportation -- 1.3%
- --------------------------------------------------------------------------------
Baa1 A $ 1,250 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 $ 1,226,888
Baa1 A 2,000 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/36 2,053,320
- --------------------------------------------------------------------------------
$ 3,280,208
- --------------------------------------------------------------------------------
Water and Sewer -- 8.7%
- --------------------------------------------------------------------------------
Baa1 BBB $12,185 Boston, IDA, (Harbor
Electric Energy Co.),
(AMT), 7.375%, 5/15/15 $ 13,219,627
A1 A 1,500 Massachusetts Water
Resources Authority, 1,554,870
5.25%, 3/1/13
</TABLE>
See notes to financial statements
46
<PAGE>
MASSACHUSETTS MUNICIPALS PORTFOLIO as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Water and Sewer (continued)
- --------------------------------------------------------------------------------
A1 A $ 4,165 Massachusetts Water
Resources Authority,
5.25%, 12/1/15 $ 4,445,305
NR NR 2,000 Virgin Islands Water and
Power Authority, 7.60%,
1/1/12 2,287,800
- --------------------------------------------------------------------------------
$ 21,507,602
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $219,810,305) $246,286,812
- --------------------------------------------------------------------------------
</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 Massachusetts
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 September 30, 1998, 22.7% 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 insured by financial institutions
ranged from 2.6% to 7.7% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security exempt from registration under Rule 144A of the Securities Act of
1933. These may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At September 30, 1998, the
value of these securities amounted to $1,175,620 or 0.5% of the
Portfolio's net assets.
See notes to financial statements
47
<PAGE>
Mississippi Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS
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 -- 2.6%
- --------------------------------------------------------------------------------
NR A $ 470 University of Mississippi
Educational Building Corp.
Athletic Facility,
6.20%, 6/1/16 $ 522,955
- --------------------------------------------------------------------------------
$ 522,955
- --------------------------------------------------------------------------------
Electric Utilities -- 6.9%
- --------------------------------------------------------------------------------
NR BBB $ 810 Guam Power Authority,
6.625%, 10/1/14 $ 907,743
Baa3 NR 450 Warren County, (Mississippi
Power & Light Co.), 7.00%,
4/1/22 501,305
- --------------------------------------------------------------------------------
$ 1,409,048
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 15.4%
- --------------------------------------------------------------------------------
Aaa AAA $ 750 Medical Center Building
Corp., (University of
Mississippi Medical
Center), (MBIA),
Prerefunded to 12/1/04,
5.80%, 12/1/14 $ 839,903
Aaa AAA 1,000 Mississippi Educational
Facilities Authority,
(Milsaps College), (MBIA),
Prerefunded to 11/1/04,
6.50%, 11/1/19 1,158,080
Aaa NR 2,500 Mississippi Housing Finance
Corp., Single Family,
(AMT), Escrowed to
Maturity, 0.00%, 6/1/15 1,143,100
- --------------------------------------------------------------------------------
$ 3,141,083
- --------------------------------------------------------------------------------
General Obligations -- 1.0%
- --------------------------------------------------------------------------------
Aa3 AA $ 200 Mississippi State, 5.10%, $ 214,492
11/15/12
- --------------------------------------------------------------------------------
$ 214,492
- --------------------------------------------------------------------------------
Hospital -- 6.3%
- --------------------------------------------------------------------------------
Baa3 NR $ 300 Corinth and Alcorn County,
(Magnolia Registered Health
Center),
5.50%, 10/1/21 $ 302,421
NR BBB+ 500 Jones County, (South
Central Regional Medical
Center), 5.50%, 12/1/17 506,100
Baa3 BBB- 450 Mississippi Hospital
Equipment and Facilities
Authority, (Rush Medical
Foundation), 6.00%, 1/1/22 470,462
- --------------------------------------------------------------------------------
$ 1,278,983
- --------------------------------------------------------------------------------
Housing -- 14.1%
- --------------------------------------------------------------------------------
Aa NR $ 500 Hinds County, (Woodridge
Apartments), (FHA),
6.25%, 11/1/27 $ 531,310
Aaa NR 500 Mississippi Home Corp.,
Single Family, Access
Program, (AMT), (GNMA),
6.625%, 4/1/27 540,285
Aaa NR 495 Mississippi Home Corp.,
Single Family, Access
Program, (AMT), (GNMA),
7.55%, 12/1/27 569,092
Aaa NR 355 Mississippi Home Corp.,
Single Family, Access
Program, (AMT), (GNMA),
8.10%, 12/1/24 400,802
Aaa NR 745 Mississippi Home Corp.,
Single Family, Access
Program, (AMT), (GNMA),
8.125%, 12/1/24 838,080
- --------------------------------------------------------------------------------
$ 2,879,569
- --------------------------------------------------------------------------------
Industrial Development Revenue -- 15.1%
- --------------------------------------------------------------------------------
Baa2 NR $ 500 Grenada County,
(Georgia-Pacific Corp.),
5.45%, 9/1/14 $ 505,785
A3 BBB+ 250 Jones County,
(International Paper Co.),
5.80%, 10/1/21 262,983
A2 A 1,000 Lowndes County,
(Weyerhaeuser Co.), 6.80%,
4/1/22 1,269,219
NR AA- 500 Mississippi Business
Finance Corp., (AMT),
7.15%, 5/1/16/(1)/ 546,965
A3 BBB+ 450 Warren County,
(International Paper Co.),
(AMT), 6.60%, 3/1/19 495,783
- --------------------------------------------------------------------------------
$ 3,080,735
- --------------------------------------------------------------------------------
Insured-Education -- 2.6%
- --------------------------------------------------------------------------------
Aaa NR $ 500 Mississippi State
University Educational
Building Corp., (MBIA),
5.25%, 8/1/17 $ 533,115
- --------------------------------------------------------------------------------
$ 533,115
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 1.7%
- --------------------------------------------------------------------------------
Aaa AAA $ 300 Puerto Rico Electric Power
Authority, "STRIPES",
(FSA), Variable
Rate, 7/1/03/(2)/ $ 348,375
- --------------------------------------------------------------------------------
$ 348,375
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
48
<PAGE>
Mississippi Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- --------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-General Obligations -- 2.9%
- --------------------------------------------------------------------------------
Aaa AAA $ 500 Hinds County, (MBIA),
6.25%, 3/1/11 $ 590,660
- --------------------------------------------------------------------------------
$ 590,660
- --------------------------------------------------------------------------------
Insured-Hospital -- 15.1%
- --------------------------------------------------------------------------------
Aaa AAA $1,000 Gulfport, (Gulfport
Memorial Hospital), (MBIA),
6.20%, 7/1/18 $ 1,114,490
Aaa AAA 1,275 Hinds County, (Mississippi
Methodist Hospital),
(AMBAC),
5.60%, 5/1/12 1,428,088
Aaa AAA 500 Mississippi Hospital
Equipment and Facilities
Authority (Mississippi
Baptist Medical Center),
(MBIA),
6.00%, 5/1/13 548,725
- --------------------------------------------------------------------------------
$ 3,091,303
- --------------------------------------------------------------------------------
Insured-Water and Sewer -- 2.0%
- --------------------------------------------------------------------------------
Aaa AAA $ 400 Mississippi Development
Bank, (Diberville Combined
Utility Water And Sewer),
(AMBAC), 5.00%, 7/1/23 $ 398,560
- --------------------------------------------------------------------------------
$ 398,560
- --------------------------------------------------------------------------------
Lease Revenue/
Certificates of Participation -- 10.6%
- --------------------------------------------------------------------------------
NR A $1,000 Mississippi Development
Bank, Golden Triangle Solid
Waste,
6.00%, 7/1/15 $ 1,078,890
A2 NR 1,000 Mississippi University
Educational Building Corp.,
Facilities Renovation,
6.15%, 6/15/15 1,091,230
- --------------------------------------------------------------------------------
$ 2,170,120
- --------------------------------------------------------------------------------
Nursing Home -- 1.6%
- --------------------------------------------------------------------------------
NR NR $ 300 Mississippi Business
Finance Corp., (Magnolia
Healthcare),
7.99%, 7/1/25 $ 328,752
- --------------------------------------------------------------------------------
$ 328,752
- --------------------------------------------------------------------------------
Senior Living / Life Care -- 1.1%
- --------------------------------------------------------------------------------
NR NR $ 200 Ridgeland, Urban Renewal,
(The Orchard), 7.75%,
12/1/15 $ 219,848
- --------------------------------------------------------------------------------
$ 219,848
- --------------------------------------------------------------------------------
Transportation -- 1.0%
- --------------------------------------------------------------------------------
Baa1 A $ 200 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/38 $ 198,786
- --------------------------------------------------------------------------------
$ 198,786
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $18,269,091) $20,406,384
- --------------------------------------------------------------------------------
</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 Mississippi
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 September 30,1998, 34.1% 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 institutions
ranged from 1.7% to 23.4% of total investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(2) Security has been issued as an inverse floater bond.
See notes to financial statements
49
<PAGE>
New York Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS
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>
Assisted Living -- 1.5%
NR NR $ 4,000 Glen Cove IDA, (Regency
at Glen Cove), 9.50%, 7/1/12 $ 4,261,040
NR NR 2,935 North Syracuse Village
Housing Authority, (AJM
Senior
Housing, Inc., Janus
Park),
8.00%, 6/1/24 3,098,538
- --------------------------------------------------------------------------------
$ 7,359,578
- --------------------------------------------------------------------------------
Cogeneration -- 1.3%
- --------------------------------------------------------------------------------
Baa3 BBB- $ 6,000 New York City IDA,
(Brooklyn
Navy Yard Cogeneration),
5.65%, 10/1/28 $ 6,174,000
- --------------------------------------------------------------------------------
$ 6,174,000
- --------------------------------------------------------------------------------
Education -- 19.6%
- --------------------------------------------------------------------------------
A NR $ 1,000 Dutchess County IDA,
(Bard College), 7.00%,
11/1/17 $ 1,123,220
A1 NR 5,890 Monroe County IDA,
(Wilmur Assoc.), 7.25%,
12/1/16 6,242,517
Baa2 NR 1,660 New Rochelle IDA,
(College of New
Rochelle), 6.75%, 7/1/22 1,802,660
Baa1 BBB+ 8,500 New York State Dormitory
Authority, (City
University),
6.00%, 7/1/20 9,772,790
Baa1 BBB 105 New York State Dormitory
Authority, (City
University), 6.375%,
7/1/08 114,641
Aaa AAA 2,500 New York State Dormitory
Authority, (Columbia
University), 5.00%, 7/1/22 2,514,175
NR AA 1,300 New York State Dormitory
Authority, (New York
Medical College) (Asset
Guaranty), 6.875%, 7/1/21 1,467,908
A3 A- 11,000 New York State Dormitory
Authority, (State
University Educational
Facilities),
5.125%, 5/15/21 11,116,160
A3 A- 9,985 New York State Dormitory
Authority, (State
University Educational
Facilities),
5.25%, 5/15/15 10,666,876
Education (continued)
- --------------------------------------------------------------------------------
A3 A- $28,775 New York State Dormitory
Authority, (State
University Educational
Facilities),
5.25%, 5/15/19 $ 30,437,331
A3 A- 14,680 New York State Dormitory
Authority, (State
University Educational
Facilities),
5.25%, 5/15/21 15,574,305
A3 A- 2,000 New York State Dormitory
Authority, (State
University Educational
Facilities),
5.50%, 5/15/19 2,180,520
A3 A- 1,300 New York State Dormitory
Authority, (State
University Educational
Facilities),
7.50%, 5/15/11 1,628,367
- --------------------------------------------------------------------------------
$ 94,641,470
- --------------------------------------------------------------------------------
Electric Utilities -- 11.7%
- --------------------------------------------------------------------------------
Baa1 A- $12,000 Long Island Power
Authority, Electric
System Revenue, Series A,
5.25%, 12/1/26 $ 12,288,600
Baa1 A- 11,550 Long Island Power
Authority, Electric
System Revenue, Series A,
5.50%, 12/1/23 12,191,256
Baa1 A- 11,760 Long Island Power
Authority, Electric
System Revenue, Series A,
5.50%, 12/1/29 12,191,592
A1 A+ 2,365 New York State Energy
Research and Development
Authority, (Consolidated
Edison) (AMT), 7.50%,
7/1/25 2,450,589
A2 A 2,500 New York State Energy
Research and Development
Authority, (Brooklyn
Union Gas), (RIBS),
(AMT), Variable Rate,
7/1/26/(1)/ 3,381,250
A1 A+ 1,000 New York State Energy
Research and Development
Authority, (Consolidated
Edison) (AMT), 7.50%,
1/1/26 1,051,340
NR NR 3,000 New York State Energy
Research and Development
Authority, (LILCO)
"RITES" (AMT), Variable
Rate, 8/1/22/(1)/ 3,601,980
</TABLE>
See notes to financial statements
50
<PAGE>
New York Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Electric Utilities (continued)
- -------------------------------------------------------------------------------
NR NR $ 2,450 New York State Energy
Research and Development
Authority, (LILCO),
"RITES" (AMT), Variable
Rate, 8/1/22/(1)/ $ 2,941,617
Baa3 A- 3,110 New York State Energy
Research and Development
Authority, (LILCO),
(AMT), 6.90%, 8/1/22 3,426,598
NR NR 2,760 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 3,040,333
- -------------------------------------------------------------------------------
$ 56,565,155
- -------------------------------------------------------------------------------
Escrowed / Prerefunded -- 1.1%
- -------------------------------------------------------------------------------
Aaa AAA $ 1,650 Dutchess County Resource
Recovery Solid Waste
(FGIC), Prerefunded to
1/1/00, 7.50%, 1/1/09 $ 1,761,359
Aaa AAA 110 New York City, (AMBAC),
Prerefunded to 8/1/02,
7.00%, 8/1/17 124,352
Baa1 BBB 145 New York State Dormitory
Authority, (City
University), Prerefunded
to 7/1/02, 6.375%, 7/1/08 160,911
NR AAA 1,000 New York State Dormitory
Authority, (St. Francis
Hospital), (FHA),
Prerefunded to 8/1/00,
7.65%, 8/1/30 1,090,800
Baa1 BBB+ 1,800 Syracuse IDA, (St.
Joseph's Hospital Health
Center), Prerefunded to
6/1/01, 7.50%, 6/1/18 2,006,568
- -------------------------------------------------------------------------------
$ 5,143,990
- -------------------------------------------------------------------------------
General Obligations -- 5.3%
- --------------------------------------------------------------------------------
A3 A- $ 8,000 New York City, 0.00%, $ 5,464,800
8/1/07
A3 A- 2,500 New York City, 0.00%, 1,623,100
8/1/97
A3 A- 1,750 New York City, 5.00%, 1,753,780
8/15/19
A3 A- 7,375 New York City, 5.00%, 7,338,125
8/1/23
A3 A- 5,000 New York City, 5.25%, 5,152,700
8/1/16
Aa2 AA 1,700 Onondaga County,
5.875%, 2/15/11 1,952,127
Aa2 AA 1,600 Onondaga County,
5.875%, 2/15/12 1,839,216
Baa1 A 1,200 Puerto Rico, 0.00%, 7/1/18 466,584
- --------------------------------------------------------------------------------
$ 25,590,432
- --------------------------------------------------------------------------------
Health Care -- 1.3%
NR NR $ 5,000 New York State Housing
Finance Agency, "RITES",
Variable Rate, 5/1/06/(1)//(2)/ $ 6,115,750
- --------------------------------------------------------------------------------
$ 6,115,750
- --------------------------------------------------------------------------------
Hospital -- 7.5%
- --------------------------------------------------------------------------------
Baa1 BBB+ $ 7,680 New York State Dormitory
Authority, (Jamaica
Hospital), 5.20%, 2/15/15 $ 7,896,883
A3 A- 7,300 New York State Dormitory
Authority, Mental Health
Facilities, 5.375%,
2/15/26 7,532,797
NR AA 9,000 New York State MCFFA,
Hospital and Nursing
Insured Mortgage (FHA),
6.70%, 8/15/23 9,856,260
Aa2 AA 2,190 New York State MCFFA,
Hospital and Nursing
Insured Mortgage (FHA),
7.00%, 8/15/32 2,448,924
Aa2 AA 6,600 New York State MCFFA,
Hospital and Nursing
Insured Mortgage (FHA),
7.25%, 2/15/31 7,458,858
Aa2 AA 940 New York State MCFFA,
Insured Mortgage, (FHA),
7.45%, 8/15/31 1,034,367
- --------------------------------------------------------------------------------
$ 36,228,089
- --------------------------------------------------------------------------------
Hotel -- 0.3%
- --------------------------------------------------------------------------------
NR NR $ 3,000 Niagara County IDA,
(Wintergarden Inn
Associates), 9.75%,
6/1/11/(3)/ 1,200,000
- --------------------------------------------------------------------------------
$ 1,200,000
- --------------------------------------------------------------------------------
Housing -- 5.7%
- --------------------------------------------------------------------------------
NR NR $ 4,488 New York City HDC,
Allerville, 6.50%,
11/15/18 $ 4,496,324
NR NR 1,956 New York City HDC,
Dayton, 6.50%, 11/15/18 2,054,717
NR AAA 2,550 New York City HDC,
Multi-Unit Management,
7.35%, 6/1/19/(4)/ 2,737,170
Aa2 AAA 235 New York State Housing
Finance Agency, Baytown,
7.10%, 8/15/35 251,664
Aaa NR 30,855 New York State Mortgage
Agency, 0.00%, 10/1/14 6,816,487
</TABLE>
See notes to financial statements
51
<PAGE>
New York Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing (continued)
- --------------------------------------------------------------------------------
Aa2 NR $ 500 New York State Mortgage
Agency, 6.65%, 4/1/22 $ 530,260
Aa2 NR 8,750 New York State Mortgage
Agency, 6.90%, 4/1/15 9,460,588
Aa2 NR 1,000 New York State Mortgage
Agency, 7.50%, 4/1/15 1,073,850
- -------------------------------------------------------------------------------
$ 27,421,060
- -------------------------------------------------------------------------------
Industrial Development Revenue -- 0.6%
- -------------------------------------------------------------------------------
Baa3 BBB- $ 2,800 Port Authority of New
York and New Jersey,
(Delta Airlines), 6.95%,
6/1/08 $ 3,060,540
- -------------------------------------------------------------------------------
$ 3,060,540
- -------------------------------------------------------------------------------
Insured-Electric Utilities -- 1.2%
- -------------------------------------------------------------------------------
Aaa AAA $ 5,000 Puerto Rico Telephone
Authority, (MBIA),
Variable Rate,
1/25/07/(1)//(2)/ $ 5,575,000
- -------------------------------------------------------------------------------
$ 5,575,000
- -------------------------------------------------------------------------------
Insured-General Obligations -- 4.8%
- -------------------------------------------------------------------------------
Aaa AAA $ 700 Bethlehem Central School
District, (AMBAC), 7.10%,
11/1/08 $ 873,530
Aaa AAA 700 Bethlehem Central School
District, (AMBAC), 7.10%,
11/1/09 882,189
Aaa AAA 770 Chautauqua County
Unlimited Tax, (FGIC),
6.40%, 9/15/09 921,667
Aaa AAA 1,035 Erie County Water
Authority, (AMBAC),
0.00%, 12/1/17 262,590
Aaa AAA 700 Jamestown, (Secondary
AMBAC), 7.10%, 3/15/09 873,950
Aaa AAA 700 Jamestown, (Secondary
AMBAC), 7.10%, 3/15/10 881,146
Aaa AAA 700 Jamestown, (Secondary
AMBAC), 7.10%, 3/15/11 886,963
Aaa AAA 675 Jamestown, (Secondary
AMBAC), 7.10%, 3/15/12 860,429
Aaa AAA 675 Jamestown, (Secondary
AMBAC), 7.10%, 3/15/13 863,710
Aaa AAA 515 Jamestown, (Secondary
AMBAC), 7.10%, 3/15/14 660,570
Aaa AAA 5,000 New York State Local
Government Assistance
Corp., (MBIA), 5.00%,
4/1/21 5,019,550
Aaa AAA $ 170 New York, (AMBAC),
7.00%, 8/1/17 $ 190,181
Aaa AAA 4,500 Puerto Rico, (FSA),
Variable Rate,
7/1/22/(1)//(2)/ 5,203,125
Aaa AAA 4,500 Syracuse, (FSA),
5.25%, 10/1/14 4,744,260
- -------------------------------------------------------------------------------
$ 23,123,860
- -------------------------------------------------------------------------------
Insured-Miscellaneous -- 0.5%
- -------------------------------------------------------------------------------
Aaa AAA $ 500 New York City IDA, (USTA
National Tennis Center,
Inc.), (FSA), 6.375%,
11/15/14 $ 564,615
Aaa AAA 1,600 New York City Trust
Cultural Resources,
(American Museum of
Natural History),
(MBIA), 5.65%, 4/1/22 1,726,240
- -------------------------------------------------------------------------------
$ 2,290,855
- -------------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 0.3%
- -------------------------------------------------------------------------------
Aaa AAA $ 1,400 New York State MCFFA,
Long Term Health Care,
(FSA), 6.80%, 11/1/14 $ 1,546,790
- -------------------------------------------------------------------------------
$ 1,546,790
- -------------------------------------------------------------------------------
Insured-Solid Waste -- 1.6%
- -------------------------------------------------------------------------------
Aaa AAA $ 6,795 Islip Resource Recovery
Agency, (MBIA), 6.50%,
7/1/09 $ 7,881,860
- -------------------------------------------------------------------------------
$ 7,881,860
- -------------------------------------------------------------------------------
Insured-Transportation -- 4.4%
- -------------------------------------------------------------------------------
Aaa AAA $ 6,000 New York State Thruway
Authority, (MBIA),
5.375%, 4/1/16 $ 6,396,060
Aaa AAA 3,000 Triborough Bridge and
Tunnel Authority, "RITES",
(AMBAC), Variable Rate,
1/1/12/(1)//(2)/ 3,496,470
NR AAA 3,000 Triborough Bridge and
Tunnel Authority, (MBIA),
Variable Rate,
1/1/19/(1)//(2)/ 3,254,130
NR NR 7,000 VRDC-IVRC Trust,
(NY MTA), Variable Rate,
(MBIA), 6/26/02/(1)//(2)/ 7,875,000
- -------------------------------------------------------------------------------
$ 21,021,660
- -------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
52
<PAGE>
New York Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lease Revenue/
Certificates of Participation -- 13.3%
- -------------------------------------------------------------------------------
Baa1 BBB+ $ 8,000 New York State Dormitory
Authority, (City
University), 5.625%,
7/1/16 $ 8,807,200
Baa1 BBB+ 5,100 New York State Dormitory
Authority, (City
University),
7.00%, 7/1/09 6,033,351
Baa1 BBB+ 4,325 New York State Dormitory
Authority, (City
University),
7.50%, 7/1/10 5,360,189
Baa1 BBB+ 3,380 New York State HFA Health
Facilities, 6.00%, 5/1/06 3,782,085
NR BBB 5,865 New York State Thruway
Authority, 0.00%, 1/1/01 5,363,191
NR BBB 2,350 New York State Thruway
Authority, 0.00%, 1/1/03 1,970,052
Baa1 BBB+ 27,940 New York State UDC,
5.70%, 4/1/20 30,989,929
Baa1 BBB- 1,825 Syracuse-Hancock
International Airport,
6.625%, 1/1/12 1,961,893
- -------------------------------------------------------------------------------
$ 64,267,890
- -------------------------------------------------------------------------------
Solid Waste -- 2.1%
- -------------------------------------------------------------------------------
Baa1 NR $ 9,530 New York State EFC,
Resource Recovery,
(Huntington),
7.50%, 10/1/12 $ 10,003,069
- -------------------------------------------------------------------------------
$ 10,003,069
- -------------------------------------------------------------------------------
Special Tax Revenue -- 7.1%
- -------------------------------------------------------------------------------
A3 A+ $14,830 New York State LGAC,
5.00%, 4/1/21 $ 15,245,685
A3 A+ 11,900 New York State LGAC,
5.375%, 4/1/19 12,394,445
NR BBB+ 2,630 New York State Municipal
Bond Bank Agency, 6.875%,
3/15/06 2,883,401
Baa1 BBB+ 3,335 Triborough Bridge and
Tunnel Authority,
Convention Center, 6.00%,
1/1/11 3,790,161
- -------------------------------------------------------------------------------
$ 34,313,692
- -------------------------------------------------------------------------------
Transportation -- 6.3%
- -------------------------------------------------------------------------------
Baa1 BBB+ $ 2,535 Metropolitan
Transportation Authority
of New York, 5.50%, 7/1/14 $ 2,707,101
A1 AA- 1,500 Port Authority of New
York and New Jersey,
(AMT), Variable Rate,
1/15/27/(1)//(2)/ 1,708,635
Baa1 A $ 4,000 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 $ 3,926,040
Aa3 A+ 5,000 Triborough Bridge and
Tunnel Authority, 5.20%,
1/1/22 5,125,450
Aa3 A+ 12,080 Triborough Bridge and
Tunnel Authority, 5.50%,
1/1/17 13,372,439
Aa3 A+ 3,000 Triborough Bridge and
Tunnel Authority, 6.125%,
1/1/21 3,583,470
- -------------------------------------------------------------------------------
$ 30,423,135
- -------------------------------------------------------------------------------
Water and Sewer -- 2.5%
- --------------------------------------------------------------------------------
A1 A- $ 7,000 New York City Municipal
Water Finance Authority,
5.25%, 6/15/29 $ 7,124,670
Aa2 A+ 4,545 New York State EFC, State
Water Pollution Control,
7.20%, 3/15/11 4,851,833
- --------------------------------------------------------------------------------
$ 11,976,503
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $434,692,716) $481,924,378
- --------------------------------------------------------------------------------
</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 New York
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 September 30, 1998, 13.1% 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 0.6% to 7.8%
of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30,
1998, the value of these securities amounted to $33,228,110 or 6.8% of the
Portfolio's net assets.
/(3)/ Non-income producing security.
/(4)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
53
<PAGE>
Ohio Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS
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 -- 0.3%
- ------------------------------------------------------------------------------------------------------------
Aa AA $ 550 Ohio State Higher Educational
Facilities, (Case Western University),
6.50%, 10/1/20 $ 674,905
- ------------------------------------------------------------------------------------------------------------
$ 674,905
- ------------------------------------------------------------------------------------------------------------
Electric Utilities -- 3.9%
- ------------------------------------------------------------------------------------------------------------
A1 A+ $1,185 Ohio State Air Quality Development
Authority, 6.10%, 9/1/30 $ 1,290,335
Ba1 BB+ 7,000 Ohio State Water Development
Authority, Pollution Control Facilities,
(Cleveland Electric), (AMT),
6.10%, 8/1/20 7,356,300
NR NR 915 Virgin Islands Water and Power
Authority, 7.40%, 7/1/11 1,007,937
- ------------------------------------------------------------------------------------------------------------
$ 9,654,572
- ------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 3.7%
- ------------------------------------------------------------------------------------------------------------
Aaa AAA $1,000 Clermont County, (Mercy Health
System), (AMBAC), Prerefunded to
9/25/01, Variable
Rate, 10/5/21/(1)/ $ 1,200,000
Aaa NR 2,905 Greene County, IDA, (Fairview
Extended Care), Prerefunded to
1/1/01, 10.125%, 1/1/11 3,346,821
A1 NR 1,750 Lorain, (Lakeland County Hospital),
Escrowed to Maturity,
6.50%, 11/15/12 2,021,303
NR AAA 1,700 Puerto Rico, "RIBS", (AMBAC),
Variable Rate, Prerefunded to
7/1/02, 7.933%, 7/1/15/(1)(2)/ 1,998,554
Aa2 NR 600 Warren County, (Otterbein Homes),
Prerefunded to 7/1/01,
7.20%, 7/1/11 665,736
- ------------------------------------------------------------------------------------------------------------
$ 9,232,414
- ------------------------------------------------------------------------------------------------------------
General Obligations -- 6.4%
- ------------------------------------------------------------------------------------------------------------
NR NR $3,035 Belmont County, 7.30%, 12/1/12 $ 3,325,783
NR NR 800 Mahoning Valley, Sanitation District,
7.80%, 12/15/08 870,096
NR NR 950 Mahoning Valley, Sanitation District,
7.80%, 12/15/09 1,032,650
Baa1 A 1,075 Puerto Rico, 0.00%, 7/1/16 463,938
Aa2 NR $1,250 Rocky River City School District,
5.375%, 12/1/17 $ 1,354,925
NR NR 1,000 Tuscarawas Public Library
Improvement, 6.90%, 12/1/11 1,075,330
NR NR 6,855 Youngstown, 7.35%, 7/1/05 7,843,011
- ------------------------------------------------------------------------------------------------------------
$ 15,965,733
- ------------------------------------------------------------------------------------------------------------
Hospital -- 18.7%
- ------------------------------------------------------------------------------------------------------------
NR AAA $1,000 Allen County, LIMA Convalescent
Home Foundation (GNMA),
6.40%, 1/1/21 $ 1,069,540
Baa3 BBB- 1,000 Butler County, (Hamilton-Hughe
Hospital), 7.50%, 1/1/10 1,087,020
A1 A 2,100 Cuyahoga County, (Fairview General
Hospital), 6.25%, 8/15/10 2,305,758
Aa AA 4,450 Cuyahoga County, (University
Hospitals Health System),
6.00%, 1/15/22 4,763,325
Aa AA 750 Cuyahoga County, (University
Hospitals Health System),
6.50%, 1/15/19 817,118
NR A 3,280 Defiance, (Defiance Hospital),
7.625%, 11/1/03 3,338,220
Baa2 BBB+ 1,000 East Liverpool, (City Hospital),
8.00%, 10/1/21 1,093,950
A A 4,000 Erie County, (Firelands Community
Hospital), 6.75%, 1/1/08 4,381,800
Aa NR 3,000 Franklin County, (Children's
Hospital), 6.60%, 5/1/13 3,315,270
A A 1,015 Garfield Heights,
(Marymount Hospital),
6.65%, 11/15/11 1,118,205
A A 1,000 Garfield Heights,
(Marymount Hospital),
6.70%, 11/15/15 1,103,150
A2 A 5,115 Hamilton County, (Bethesda
Hospital, Inc.), 6.25%,
1/1/12 5,599,595
Aa2 NR 1,000 Hamilton County, (Wesley
Hall), 6.50%, 3/1/15 1,123,930
Baa2 BBB 3,800 Miami, (Upper Valley
Medical Center), 6.375%,
5/15/26 4,116,692
NR NR 9,305 Mt. Vernon, (Knox
Community Hospital),
7.875%, 6/1/12 9,515,850
NR A- 1,000 Parma Hospital Improvement
Revenue, (Parma Community
General Hospital
Association), 5.35%,
11/1/18 1,020,940
</TABLE>
See notes to financial statements
54
<PAGE>
Ohio Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS (CONT'D)
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hospital (continued)
- -------------------------------------------------------------------------------
NR A- $1,000 Parma Hospital Improvement
Revenue, (Parma Community
General Hospital
Association), 5.375%,
11/1/29 $ 1,024,540
- -------------------------------------------------------------------------------
$ 46,794,903
- -------------------------------------------------------------------------------
Housing -- 15.1%
- -------------------------------------------------------------------------------
Aa NR $1,300 Clermont County, (SEM
Laurels), (FHA), 6.00%,
9/1/20 $ 1,373,112
NR NR 2,990 Cuyahoga County, (Rolling
Hills Apts.), (AMT),
8.00%, 1/1/28 3,049,381
Aa NR 2,500 Franklin County MFMR,
(Tuttle Park), (FHA),
(AMT),
6.50%, 3/1/26 2,762,525
Aa NR 5,985 Franklin County MFMR,
(Tuttle Park), (FHA),
(AMT),
6.60%, 3/1/36 6,609,714
Aa NR 3,645 Franklin County, (Hamilton
Creek Apartments) (FHA),
(AMT),
5.55%, 7/1/24 3,699,967
Aa NR 1,000 Franklin County, (Hamilton
Creek Apartments) (FHA),
(AMT),
5.80%, 7/1/14 1,041,300
Aaa NR 2,500 Kent MFMR, (Silver
Meadows), (GNMA), (AMT),
7.30%, 12/20/36 2,867,125
NR NR 2,965 Lucas County, (Country
Creek), (AMT), 8.00%,
7/1/26 2,998,475
Aaa AAA 835 Ohio HFA SFMR, (GNMA),
(AMT), Variable Rate,
3/31/31/(1)/ 939,375
Aa A 1,000 Ohio HFA, (Aristocrat),
(FHA), (AMT), 7.30%, 8/1/31 1,061,400
NR AAA 3,310 Ohio HFA, Residential,
(GNMA), (AMT), 6.375%,
3/1/25 3,556,430
NR AAA 4,595 Ohio HFA, Residential,
(GNMA), (AMT), 6.70%,
3/1/25 4,978,039
Baa3 BBB 2,925 Puerto Rico Urban Renewal
and Housing Corp., 0.00%,
10/1/99 2,825,258
- --------------------------------------------------------------------------------
$ 37,762,101
- --------------------------------------------------------------------------------
Industrial Development Revenue -- 13.1%
- --------------------------------------------------------------------------------
Aa NR $2,000 Cuyahoga, IDR, (Chippewa
Place), 6.60%, 8/1/15 $ 2,161,020
- --------------------------------------------------------------------------------
Industrial Development Revenue (continued)
- --------------------------------------------------------------------------------
Baa1 NR $3,750 Ohio Air Quality
Development Authority,
(Ashland Oil, Inc.),
6.85%, 4/1/10 $ 4,014,263
NR A- 535 Ohio Economic Development
Commission, (Burrows Paper
Corp.) (AMT), 7.625%,
6/1/11 586,702
NR A- 230 Ohio Economic Development
Commission, (Cheryl &
Co.), (AMT), 5.50%, 12/1/04 249,534
NR A- 530 Ohio Economic Development
Commission, (Cheryl &
Co.), (AMT), 5.90%, 12/1/09 581,855
NR A- 1,565 Ohio Economic Development
Commission, (Consolidated
Biscuit), (AMT), 7.00%,
12/1/09 1,776,040
NR A- 3,160 Ohio Economic Development
Commission, (J J & W LP),
(AMT), 6.70%, 12/1/14 3,551,935
NR BB 1,020 Ohio Economic Development
Commission, (Kmart Corp.),
6.75%, 5/15/07 1,103,099
NR A- 750 Ohio Economic Development
Commission, (Luigino's,
Inc.), (AMT), 6.85%, 6/1/01 751,950
NR A- 1,525 Ohio Economic Development
Commission, (Progress
Plastic Products), (AMT),
7.80%, 12/1/09 1,806,973
NR A- 575 Ohio Economic Development
Commission, (Progress
Plastics Products), (AMT),
6.80%, 12/1/01 603,049
NR A- 1,000 Ohio Economic Development
Commission, (Royal
Appliance Manufacturing
Co.), (AMT),
7.625%, 12/1/11 1,103,460
NR A- 680 Ohio Economic Development
Commission, (Royal
Appliance Manufacturing
Co.), (AMT),
7.625%, 12/1/11 750,353
NR A- 880 Ohio Economic Development
Commission, (VSM Corp.),
(AMT), 7.375%, 12/1/11 964,638
Aa3 AA 1,000 Ohio Pollution Control,
(Standard Oil Co.), 6.75%,
12/1/15 1,240,310
</TABLE>
See notes to financial statements
55
<PAGE>
Ohio Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ----------------------------------------------------------------------------------------
Industrial Development Revenue (continued)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR NR $ 3,000 Ohio Solid Waste Revenue, (Republic
Engineered Steels, Inc.), (AMT),
9.00%, 6/1/21 $ 3,261,270
Baa2 BBB 3,805 Ohio Water Development Authority,
(Union Carbide Corp.), 5.50%, 1/15/07 3,808,463
Baa3 BBB- 4,000 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 4,365,680
- ----------------------------------------------------------------------------------------
$ 32,680,594
- ----------------------------------------------------------------------------------------
Insured-Education -- 0.4%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Ohio Higher Education Facilities,
(University of Dayton), (FGIC),
5.80%, 12/1/14 $ 1,090,890
- ----------------------------------------------------------------------------------------
$ 1,090,890
- ----------------------------------------------------------------------------------------
Insured-Electric Utilities -- 5.6%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 1,650 Cleveland Public Power System, (MBIA),
7.00%, 11/15/17 $ 1,823,366
Aaa AAA 7,250 Cleveland, Public Power System, (MBIA),
5.00%, 11/15/20 7,298,285
Aaa AAA 2,000 Cuyahoga County Utility Systems,
(Medical Center Co.), (MBIA), (AMT),
6.10%, 8/15/15 2,189,960
Aaa AAA 2,300 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable
Rate, 7/1/02/(1)/ 2,596,125
- ----------------------------------------------------------------------------------------
$ 13,907,736
- ----------------------------------------------------------------------------------------
Insured-General Obligations -- 1.4%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 3,000 Puerto Rico, (FSA), Variable
Rate, 7/1/22/(1)(2)/ $ 3,468,750
- ----------------------------------------------------------------------------------------
$ 3,468,750
- ----------------------------------------------------------------------------------------
Insured-Hospital -- 7.6%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 1,000 East Liverpool, (City Hospital),
(FSA), 5.00%, 10/1/21 $ 1,002,020
Aaa AAA 1,250 Mahoning County Hospital Facilities
Revenue, (Forum Health), (MBIA),
5.00%, 11/15/17 1,258,950
Ratings (Unaudited) Principal
- ------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Hospital (continued)
Aaa AAA $ 2,750 Mansfield, (Mansfield General
Hospital), (AMBAC), 6.70%, 12/1/09 $ 3,015,568
Aaa AAA 5,000 Middleburg Heights, (Southwestern
General), (FSA), 5.75%, 8/15/21 5,484,300
Aaa AAA 1,000 Montgomery County, (Miami Valley
Hospital), (AMBAC), 6.25%, 11/15/16 1,097,890
Aaa AAA 6,565 Portage County, (Robinson Memorial
Hospital), (MBIA), 5.80%, 11/15/15 7,192,023
- ----------------------------------------------------------------------------------------
$ 19,050,751
- ----------------------------------------------------------------------------------------
Insured-Housing -- 2.9%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 1,100 Ohio Capital Corp., (Horizon Apts.),
(FHA), (MBIA), 6.50%, 1/1/23 $ 1,159,312
Aaa AAA 6,000 Ohio Capital Corp., (Section 8),
(FHA), (MBIA), 5.30%, 1/1/24 6,036,840
- ----------------------------------------------------------------------------------------
$ 7,196,152
- ----------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 1.0%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 2,500 University of Cincinnati, (MBIA),
5.125%, 6/1/24 $ 2,527,725
- ----------------------------------------------------------------------------------------
$ 2,527,725
- ----------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.5%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 2,110 Hudson Local School District, (FGIC),
0.00%, 12/15/09 $ 1,309,761
- ----------------------------------------------------------------------------------------
$ 1,309,761
- ----------------------------------------------------------------------------------------
Insured-Transportation -- 3.7%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 7,000 Columbus Municipal Airport Authority,
(AMBAC), 5.00%, 1/1/28 $ 7,014,420
Aaa AAA 2,000 Ohio State Airline Quality Development
Authority, (JMG Funding), (AMBAC),
5.625%, 10/1/22 2,128,920
- ----------------------------------------------------------------------------------------
$ 9,143,340
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
56
<PAGE>
Ohio Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Water and Sewer -- 1.0%
- ----------------------------------------------------------------------------------------
Aaa NR $ 2,500 Alliance Water Works Revenue, (MBIA),
5.00%, 11/15/20 $ 2,517,900
- ----------------------------------------------------------------------------------------
$ 2,517,900
- ----------------------------------------------------------------------------------------
Lease Revenue /
Certificates of Participation -- 0.4%
- ----------------------------------------------------------------------------------------
A2 A+ $ 1,000 University of Cincinnati, 6.50%,
12/1/11 $ 1,101,640
- ----------------------------------------------------------------------------------------
$ 1,101,640
- ----------------------------------------------------------------------------------------
Nursing Home -- 6.8%
- ----------------------------------------------------------------------------------------
NR NR $ 2,000 Cuyahoga County Health Care
Facilities, (Benjamin Rose Institute),
5.50%, 12/1/17 $ 2,017,280
NR NR 2,855 Cuyahoga County Health Care
Facilities, (Benjamin Rose Institute),
5.50%,12/1/28 2,860,681
Aaa NR 1,305 Cuyahoga County, (Maple Care Center),
(GNMA), (AMT), 8.00%, 8/20/16 1,611,518
NR AAA 1,205 North Canton Health Care Facilities,
(St. Luke Lutheran), (GNMA), 6.10%,
9/20/16 1,371,338
NR AAA 6,455 North Canton Health Care Facilities,
(St. Luke Lutheran), (GNMA), 9.55%,
3/20/32 9,084,185
- ----------------------------------------------------------------------------------------
$ 16,945,002
- ----------------------------------------------------------------------------------------
Senior Living / Life Care -- 2.1%
- ----------------------------------------------------------------------------------------
Aa NR $ 1,990 Franklin County, (Kensington Place),
6.75%, 1/1/34/(3)/ $ 2,119,151
Aa2 NR 1,000 Hamilton County, (Hospital - Episcopal
Retirement Home), 6.80%, 1/1/08 1,085,500
NR BBB- 1,800 Marion, Health Care,(United Church
Home), 6.30%, 11/15/15 1,918,548
- ----------------------------------------------------------------------------------------
$ 5,123,199
- ----------------------------------------------------------------------------------------
Solid Waste -- 1.6%
- ----------------------------------------------------------------------------------------
P-1 BBB $ 4,000 Ohio State Solid Waste Disposal
Revenue, (USG Corp.), (AMT), 5.60%,
8/1/32 $ 4,073,080
- ----------------------------------------------------------------------------------------
$ 4,073,080
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Transportation -- 3.4%
- --------------------------------------------------------------------------------------------
Baa1 A $ 3,000 Puerto Rico Highway and Transportation
Authority, 4.75%, 7/1/38 $ 2,944,530
Baa1 A 250 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 256,665
Baa1 A 2,000 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/38 1,987,860
Baa1 A 3,000 Puerto Rico Highway and Transportation
Authority, 6.625%, 7/1/12 3,304,380
- --------------------------------------------------------------------------------------------
$ 8,493,435
- --------------------------------------------------------------------------------------------
Water and Sewer -- 0.4%
- --------------------------------------------------------------------------------------------
NR NR $ 1,000 Vermilion Water, 7.25%, 8/15/15 $ 1,064,490
- --------------------------------------------------------------------------------------------
$ 1,064,490
- --------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $230,144,643) $ 249,779,073
- --------------------------------------------------------------------------------------------
</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 Ohio
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 the risk associated with such economic
developments, at September 30, 1998, 25.4% 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 1.0% to 12.8% of total investments.
/1/ Security has been issued as an inverse floater bond.
/2/ Security exempt from registration under Rule 144A of the Securities Act of
1993. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30,
1998, the value of these securities amounted to $5,467,304 or 2.1% of the
Portfolio's net assets.
/3/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
57
<PAGE>
Rhode Island Municipals Portfolio as of September 30, 1998
PORTFOLIO OF INVESTMENTS
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 -- 2.0%
- ---------------------------------------------------------------------------------------------------------------------------------
A NR $ 750 Rhode Island Student Loan
Authority, (AMT), 5.60%, 12/1/12 $ 810,713
- ---------------------------------------------------------------------------------------------------------------------------------
$ 810,713
- ---------------------------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 0.7%
- ---------------------------------------------------------------------------------------------------------------------------------
NR AAA $ 250 Puerto Rico, "RIBS", (AMBAC),
Variable Rate, Prerefunded to
7/1/02, 7.933%, 7/1/15/(1)//(2)/ $ 293,905
- ---------------------------------------------------------------------------------------------------------------------------------
$ 293,905
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -- 3.3%
- ---------------------------------------------------------------------------------------------------------------------------------
Baa1 A $ 225 Puerto Rico, 0.00%, 7/1/16 $ 97,103
Baa1 A 1,000 Puerto Rico Public Buildings Authority,
5.25%, 7/1/21 1,028,480
Baa1 A- 230 Rhode Island Depositors Economic
Protection Corp., 5.75%, 8/1/21 259,509
- ---------------------------------------------------------------------------------------------------------------------------------
$ 1,385,092
- ---------------------------------------------------------------------------------------------------------------------------------
Hospital -- 9.2%
- ---------------------------------------------------------------------------------------------------------------------------------
NR AA $1,500 Rhode Island HEFA, (Landmark
Medical Center), 5.875%, 10/1/19 $ 1,594,275
A3 A- 1,250 Rhode Island HEFA, (South County
Hospital), 5.75%, 11/15/26 1,338,550
Baa3 BBB 830 Rhode Island HEFA, (Westerly
Hospital), 6.00%, 7/1/14 871,425
- ---------------------------------------------------------------------------------------------------------------------------------
$ 3,804,250
- ---------------------------------------------------------------------------------------------------------------------------------
Housing -- 16.1%
- ---------------------------------------------------------------------------------------------------------------------------------
NR AAA $ 500 Guam Housing Corp., Single Family,
5.75%, 9/1/31 $ 547,305
Aa2 AA+ 1,740 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
6.60%, 10/1/25 1,872,866
Aa2 AA+ 100 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
6.70%, 10/1/12 107,267
Aa2 AA+ 875 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
6.80%, 10/1/25 934,903
Aa2 AA+ $1,000 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
7.10%, 10/1/23 $ 1,051,920
Aa2 AA+ 2,000 Rhode Island Housing and Mortgage
Finance Corp., (AMT),
7.55%, 10/1/22 2,128,900
- ---------------------------------------------------------------------------------------------------------------------------------
$ 6,643,161
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Development Revenue -- 1.3%
- ---------------------------------------------------------------------------------------------------------------------------------
Baa3 BBB- $ 500 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.30%, 6/1/23 $ 538,140
- ---------------------------------------------------------------------------------------------------------------------------------
$ 538,140
- ---------------------------------------------------------------------------------------------------------------------------------
Insured-Education -- 1.0%
- ---------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $ 400 Rhode Island HEFA, (Roger Williams),
(AMBAC), 5.00%, 11/15/28 $ 397,816
- ---------------------------------------------------------------------------------------------------------------------------------
$ 397,816
- ---------------------------------------------------------------------------------------------------------------------------------
Insured-Electric Utilities -- 1.8%
- ---------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $1,750 Puerto Rico Electric Power Authority,
(MBIA), (IBC), 0.00%, 7/1/17 $ 733,635
- ---------------------------------------------------------------------------------------------------------------------------------
$ 733,635
- ---------------------------------------------------------------------------------------------------------------------------------
Insured-General Obligations -- 15.2%
- ---------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $1,500 Kent County Water Authority,
(MBIA), 6.35%, 7/15/14 $ 1,688,160
Aaa AAA 500 Providence, Public Building Authority,
(School and Public Facilities Projects),
(FSA), 5.00%, 12/15/18 502,460
Aaa AAA 500 Rhode Island Depositors Economic
Protection Corp., (MBIA),
5.80%, 8/1/09 572,560
Aaa AAA 1,000 Rhode Island Depositors Economic
Protection Corp., (MBIA),
5.80%, 8/1/12 1,143,310
Aaa AAA 375 Rhode Island State Consolidated
Capital Development, (FGIC),
4.75%, 9/1/17 374,291
Aaa AAA 1,000 Rhode Island State Economic
Development Corp., (FSA),
5.00%, 7/1/23 999,220
</TABLE>
See notes to financial statements
58
<PAGE>
RHODE ISLAND MUNICIPALS PORTFOLIO as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-General Obligations (continued)
- ---------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $1,000 Rhode Island State Economic
Development Corp., (FSA),
5.00%, 7/1/28 $ 997,620
- ---------------------------------------------------------------------------------------------------------------------------------
$ 6,277,621
- ---------------------------------------------------------------------------------------------------------------------------------
Insured-Hospital -- 15.5%
- ---------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $2,700 Rhode Island HEFA, (Lifespan),
(MBIA), 5.25%, 5/15/26 $ 2,751,597
Aaa AAA 3,350 Rhode Island HEFA, (Lifespan),
(MBIA), 5.75%, 5/15/23 3,628,218
- ---------------------------------------------------------------------------------------------------------------------------------
$ 6,379,815
- ---------------------------------------------------------------------------------------------------------------------------------
Insured-Housing -- 4.1%
- ---------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $1,075 Villa Excelsior Housing Development
Corp. Mortgage, (MBIA),
6.75%, 1/1/19 $ 1,171,137
Aaa AAA 500 Villa Excelsior Housing Development
Corp. Mortgage, (MBIA),
6.85%, 1/1/24 544,565
- ---------------------------------------------------------------------------------------------------------------------------------
$ 1,715,702
- ---------------------------------------------------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 13.2%
- ---------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $3,000 Convention Center Authority of Rhode
Island, (MBIA), 5.00%, 5/15/20 $ 3,004,110
Aaa AAA 2,300 Convention Center Authority of Rhode
Island, (MBIA), 5.25%, 5/15/15 2,457,067
- ---------------------------------------------------------------------------------------------------------------------------------
$ 5,461,177
- ---------------------------------------------------------------------------------------------------------------------------------
Insured-Water and Sewer -- 4.4%
- ---------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $ 750 Rhode Island Clean Water, Safe
Drinking Water,
(AMBAC), 6.70%, 1/1/15 $ 866,145
Aaa AAA 350 Rhode Island Clean Water, Water
Pollution Control, (MBIA),
5.40%, 10/1/15 379,540
Aaa AAA 500 Rhode Island Clean Water, Water
Pollution Control, (MBIA),
5.85%, 10/1/09 553,700
- ---------------------------------------------------------------------------------------------------------------------------------
$ 1,799,385
- ---------------------------------------------------------------------------------------------------------------------------------
Nursing Home -- 1.8%
- ---------------------------------------------------------------------------------------------------------------------------------
NR NR $ 725 Rhode Island HEFA, (Steere House),
5.80%, 7/1/20 $ 750,150
- ---------------------------------------------------------------------------------------------------------------------------------
$ 750,150
- ---------------------------------------------------------------------------------------------------------------------------------
Senior Living / Life Care -- 2.6%
- ----------------------------------------------------------------------------------------------------------------------------------
NR NR $1,000 Rhode Island HEFA, (Tockwotton
Home), 6.25%, 8/15/22 $ 1,070,250
- ---------------------------------------------------------------------------------------------------------------------------------
$ 1,070,250
- ---------------------------------------------------------------------------------------------------------------------------------
Special Tax Revenue -- 4.2%
- ---------------------------------------------------------------------------------------------------------------------------------
Baa3 BBB- $1,500 Providence Special Obligation Tax
Increment Bonds, 7.65%, 6/1/16 $ 1,727,415
- ---------------------------------------------------------------------------------------------------------------------------------
$ 1,727,415
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation -- 3.6%
- ---------------------------------------------------------------------------------------------------------------------------------
Baa1 A $1,500 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 $ 1,472,265
- --------------------------------------------------------------------------------------------------------------------------------
$ 1,472,265
- --------------------------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $37,839,301) $41,260,492
- ---------------------------------------------------------------------------------------------------------------------------------
</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 Rhode Island
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 September 30, 1998, 55.9% 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 0.9% to 45.1% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security exempt from registration under Rule 144A of the Securities Act of
1993. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30,
1998, the value of these securities amounted to $293,905 or 0.7% of the
Portfolio's net assets.
See notes to financial statements
59
<PAGE>
WEST VIRGINIA MUNICIPALS PORTFOLIO as of September 30, 1998
PORTFOLIO OF INVESTMENTS
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>
Electric Utilities -- 11.7%
- ---------------------------------------------------------------------------------------------------------------------------------
A2 A $2,000 Harrison PCR, (Monongahela Power
Co. Harrison Station), (AMT),
6.75%, 8/1/24 $ 2,245,999
Baa1 BBB+ 1,000 Mason PCR, (Appalacian Power Co.),
6.85%, 6/1/22 1,098,190
Baa1 BBB+ 855 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 351,927
- --------------------------------------------------------------------------------------------------------------------------------
$ 3,696,116
- --------------------------------------------------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 3.3%
- --------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $2,500 Kanawha-Putnam Single Family
Mortgage, (AMBAC), Escrowed to
Maturity, 0.00%, 12/1/16 $ 1,037,400
- --------------------------------------------------------------------------------------------------------------------------------
$ 1,037,400
- --------------------------------------------------------------------------------------------------------------------------------
General Obligations -- 1.3%
- --------------------------------------------------------------------------------------------------------------------------------
Baa1 A $ 500 Puerto Rico, 0.00%, 7/1/16 $ 215,785
Baa1 A 500 Puerto Rico, 0.00%, 7/1/18 194,410
- --------------------------------------------------------------------------------------------------------------------------------
$ 410,195
- --------------------------------------------------------------------------------------------------------------------------------
Hospital -- 10.3%
- ---------------------------------------------------------------------------------------------------------------------------------
NR BBB+ $1,250 Berkeley Building Commission, (City
Hospital), 6.50%, 11/1/22 $ 1,349,013
Baa1 BBB+ 250 Princeton, (Community Hospital),
6.00%, 5/1/18 260,385
A1 NR 500 West Virginia HFA, (Charleston Area
Medical Center), 6.50%, 9/1/16 544,210
A1 NR 1,000 West Virginia HFA, (Charleston Area
Medical Center), 6.50%, 9/1/23 1,086,390
- --------------------------------------------------------------------------------------------------------------------------------
$ 3,239,998
- --------------------------------------------------------------------------------------------------------------------------------
Housing -- 1.6%
- -------------------------------------------------------------------------------------------------------------------------------
Aa1 AA+ $ 500 West Virginia State Housing
Development Fund, (AMT),
5.70%, 11/1/17 $ 521,265
- -------------------------------------------------------------------------------------------------------------------------------
$ 521,265
- -------------------------------------------------------------------------------------------------------------------------------
Industrial Development Revenue -- 9.2%
- ------------------------------------------------------------------------------------------------------------------------------
NR A- $1,375 Jefferson, (Royal Venders, Inc.),
(AMT), 5.90%, 8/1/04 $ 1,464,760
Baa2 NR 300 Kanawha, (Union Carbide Chemicals
and Plastics Co.), (AMT),
8.00%, 8/1/20 322,497
NR NR 1,000 Upshur Solid Waste, (TJI), (AMT),
7.00%, 7/15/25 1,128,800
- -------------------------------------------------------------------------------------------------------------------------------
$ 2,916,057
- -------------------------------------------------------------------------------------------------------------------------------
Insured-Education -- 10.1%
- -------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $1,000 West Virginia State University System,
(AMBAC), 5.75%, 4/1/16 $ 1,088,340
Aaa AAA 550 West Virginia State University System,
(AMBAC), 6.00%, 4/1/12 603,284
Aaa AAA 500 West Virginia University, (AMBAC),
5.00%, 5/1/22 501,035
Aaa AAA 1,000 West Virginia University, (AMBAC),
5.00%, 5/1/27 1,002,140
- --------------------------------------------------------------------------------------------------------------------------------
$ 3,194,799
- --------------------------------------------------------------------------------------------------------------------------------
Insured-Electric Utilities -- 3.3%
- ---------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $ 700 Marshall PCR, (Ohio Power Kammer
Plant), (MBIA), 5.45%, 7/1/14 $ 742,448
Aaa AAA 250 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable
Rate, 7/1/03/(1)/ 290,313
- ---------------------------------------------------------------------------------------------------------------------------------
$ 1,032,761
- ---------------------------------------------------------------------------------------------------------------------------------
Insured-General Obligations -- 7.0%
- --------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $1,000 West Virginia State Roads, (FGIC),
4.50%, 6/1/23 $ 953,360
Aaa AAA 150 West Virginia, (FGIC),
5.25%, 11/1/26 154,554
Aaa AAA 1,000 West Virginia, (FGIC),
5.75%, 11/1/21 1,098,360
- --------------------------------------------------------------------------------------------------------------------------------
$ 2,206,274
- --------------------------------------------------------------------------------------------------------------------------------
Insured-Hospital -- 11.6%
- --------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $1,300 West Virginia HFA, (Cabell Huntington
Hospital), (AMBAC),
6.25%, 1/1/19 $ 1,442,324
</TABLE>
See notes to financial statements
60
<PAGE>
WEST VIRGINIA MUNICIPALS PORTFOLIO as of September 30, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Hospital (continued)
- -----------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $ 850 West Virginia HFA, (Charleston Area
Medical Center), (MBIA),
5.75%, 9/1/13 $ 933,309
Aaa AAA 1,200 West Virginia HFA, (Linked Bulls &
Bears), (MBIA), 6.10%, 1/1/18 1,293,528
- ----------------------------------------------------------------------------------------------------------------------------------
$ 3,669,161
- ----------------------------------------------------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 1.7%
- ----------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $ 500 West Virginia School Building
Authority, (AMBAC), 5.60%, 7/1/17 $ 544,680
- ----------------------------------------------------------------------------------------------------------------------------------
$ 544,680
- ----------------------------------------------------------------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 3.6%
- ----------------------------------------------------------------------------------------------------------------------------------
Aaa NR $1,100 Harrison County Building Commission,
(Maplewood Retirement), (AMBAC),
5.25%, 4/1/28 $ 1,124,321
- ---------------------------------------------------------------------------------------------------------------------------------
$ 1,124,321
- ---------------------------------------------------------------------------------------------------------------------------------
Insured-Transportation -- 2.5%
- ----------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $1,000 West Virginia Parkways Economic
Development and Tourism Authority
(FGIC), 0.00%, 5/15/04 $ 800,730
- ---------------------------------------------------------------------------------------------------------------------------------
$ 800,730
- ---------------------------------------------------------------------------------------------------------------------------------
Insured-Water and Sewer -- 13.7%
- ---------------------------------------------------------------------------------------------------------------------------------
Aaa AAA $ 250 Berkeley Public Service District Sewer,
(MBIA), 5.75%, 10/1/25 $ 274,610
Aaa AAA 500 Crab Orchard Public Service District,
(AMBAC), 5.50%, 10/1/25 532,660
Aaa AAA 1,500 Parkersburg Waterworks and Sewer,
(FSA), 5.80%, 9/1/19 1,652,595
Aaa AAA 1,000 West Virginia Water Development,
(Loan Program II), (FSA),
5.25%, 11/1/35 1,022,060
Aaa AAA 750 West Virginia Water Development,
(Loan Program II), (FSA),
6.00%, 11/1/14 837,968
- --------------------------------------------------------------------------------------------------------------------------------
$ 4,319,893
- --------------------------------------------------------------------------------------------------------------------------------
Nursing Home -- 2.3%
- ---------------------------------------------------------------------------------------------------------------------------------
NR NR $ 705 Kanawha, (Beverly Enterprises),
7.25%, 11/1/04 $ 726,904
- ---------------------------------------------------------------------------------------------------------------------------------
$ 726,904
- ---------------------------------------------------------------------------------------------------------------------------------
Solid Waste -- 6.8%
- ---------------------------------------------------------------------------------------------------------------------------------
A2 A $2,000 Braxton County, (Weyerhaeuser Co.),
(AMT), 5.80%, 6/1/27/(2)/ $ 2,136,579
- ---------------------------------------------------------------------------------------------------------------------------------
$ 2,136,579
- ---------------------------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $28,916,100) $31,577,133
- ---------------------------------------------------------------------------------------------------------------------------------
</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 West Virginia
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 September 30, 1998, 56.8% 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 9.5% to 24.9% 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
61
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
As of September 30, 1998
<TABLE>
<CAPTION>
California Florida Massachusetts Mississippi
Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $ 263,561,693 $ 399,089,975 $ 219,810,305 $ 18,269,091
Unrealized appreciation 44,689,578 45,231,952 26,476,507 2,137,293
- ----------------------------------------------------------------------------------------------------------------------
Investments, at value $ 308,251,271 $ 444,321,927 $ 246,286,812 $ 20,406,384
- ----------------------------------------------------------------------------------------------------------------------
Cash $ 3,597,638 $ 70,159 $ 1,266,847 $ 26
Receivable for investments sold -- 4,119,173 556,000 10,271
Interest receivable 4,249,052 7,805,147 3,649,087 365,437
- ----------------------------------------------------------------------------------------------------------------------
Total assets $ 316,097,961 $ 456,316,406 $ 251,758,746 $ 20,782,118
- ----------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------
Payable for investments purchased $ -- -- $ 1,011,806 $ --
Payable for when-issued securities 3,936,240 -- -- --
Demand note payable -- -- -- 29,000
Payable for daily variation margin
on open financial futures contracts 137,896 290,460 -- 8,231
Payable to affiliate for Trustees' fees 97 1,920 86 --
Other accrued expenses 15,045 4,206 20,402 5,223
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities $ 4,089,278 $ 296,586 $ 1,032,294 $ 42,454
- ----------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors'
interest in Portfolio $ 312,008,683 $ 456,019,820 $ 250,726,452 $ 20,739,664
- ----------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Net proceeds from capital
contributions and withdrawals $ 267,695,304 $ 411,186,748 $ 224,249,945 $ 18,625,312
Net unrealized appreciation
(computed on the basis of
identified cost) 44,313,379 44,833,072 26,476,507 2,114,352
- ----------------------------------------------------------------------------------------------------------------------
Total $ 312,008,683 $ 456,019,820 $ 250,726,452 $ 20,739,664
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
62
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Assets and Liabilities
As of September 30, 1998
<TABLE>
<CAPTION>
New York Ohio Rhode Island West Virginia
Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
- ----------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $434,692,716 $230,144,643 $37,839,301 $28,916,100
Unrealized appreciation 47,231,662 19,634,430 3,421,191 2,661,033
- ----------------------------------------------------------------------------------------------------------------------
Investments, at value $481,924,378 $249,779,073 $41,260,492 $31,577,133
- ----------------------------------------------------------------------------------------------------------------------
Cash $1,335,777 $1,528,368 $ 24,289 $ 111
Receivable for investments sold 510,000 -- 10,000 --
Interest receivable 7,765,085 3,834,005 781,844 469,491
- ----------------------------------------------------------------------------------------------------------------------
Total assets $491,535,240 $255,141,446 $42,076,625 $32,046,735
- ----------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------
Payable for investments purchased $4,980,594 $ -- $ -- $ --
Demand note payable -- -- -- 106,000
Payable for daily variation margin on
open financial futures contracts 461,105 94,400 -- 20,024
Payable to affiliate for Trustees' 119 1,316 9 150
fees
Other accrued expenses 29,406 15,280 5,244 1,017
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities $ 5,471,224 $ 110,996 $ 5,253 $ 127,191
- ----------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' $486,064,016 $255,030,450 $42,071,372 $31,919,544
interest in Portfolio
- ----------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Net proceeds from capital $439,465,576 $235,525,656 $38,650,181 $29,303,969
contributions and withdrawals
Net unrealized appreciation (computed 46,598,440 19,504,794 3,421,191 2,615,575
on the basis of identified cost)
- ----------------------------------------------------------------------------------------------------------------------
Total $486,064,016 $255,030,450 $42,071,372 $31,919,544
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
63
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
California Florida Massachusetts Mississippi
Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income
- ----------------------------------------------------------------------------------------------------------------------
Interest $18,430,349 $26,699,762 $14,559,835 $1,169,948
- ----------------------------------------------------------------------------------------------------------------------
Total investment income $18,430,349 $26,699,762 $14,559,835 $1,169,948
- ----------------------------------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 1,499,946 $ 2,175,772 $ 1,089,133 $ 34,333
Trustees fees and expenses 18,621 24,564 16,105 185
Custodian fee 158,480 205,461 151,350 23,563
Legal and accounting services 37,298 40,621 32,249 15,849
Amortization of organization expenses 3,299 3,413 2,001 456
Miscellaneous 24,034 43,984 28,642 5,126
- ----------------------------------------------------------------------------------------------------------------------
Total expenses $ 1,741,678 $ 2,493,815 $ 1,319,480 $ 79,512
- ----------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 61,317 $ 205,461 $ 38,788 $ 4,977
- ----------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 61,317 $ 205,461 $ 38,788 $ 4,977
- ----------------------------------------------------------------------------------------------------------------------
Net expenses $ 1,680,361 $ 2,288,354 $ 1,280,692 $ 74,535
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $16,749,988 $24,411,408 $13,279,143 $1,095,413
- ----------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 7,546,724 $10,550,685 $ 6,941,642 $ 714,580
Financial futures contracts (2,057,580) 371,270 (1,360,303) (141,254)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain $ 5,489,144 $10,921,955 $ 5,581,339 $ 573,326
- ----------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 7,453,839 $13,277,163 $ 3,184,953 $ 109,609
Financial futures contracts 13,453 (398,880) 233,177 4,672
- ----------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) $ 7,467,292 $12,878,283 $ 3,418,130 $ 114,281
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain $12,956,436 $23,800,238 $ 8,999,469 $ 687,607
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
operations $29,706,424 $48,211,646 $22,278,612 $1,783,020
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
64
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
New York Portfolio Ohio Portfolio Rhode Island Portfolio West Virginia Portfolio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income
- ---------------------------------------------------------------------------------------------------------------------------------
Interest $29,156,949 $15,942,764 $2,309,745 $1,845,096
- ---------------------------------------------------------------------------------------------------------------------------------
Total investment income $29,156,949 $15,942,764 $2,309,745 $1,845,096
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 2,284,029 $ 1,174,214 $ 98,372 $ 69,657
Trustees fees and expenses 23,903 18,476 1,891 2,032
Custodian fee 225,502 143,393 32,315 23,399
Legal and accounting services 40,951 33,635 18,589 17,847
Amortization of organization expenses 2,330 1,385 472 473
Interest -- 80,106 -- --
Miscellaneous 82,623 17,407 6,880 7,170
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 2,659,338 $ 1,468,616 $ 158,519 $ 120,578
- ---------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 80,282 $ 36,995 $ 12,929 $ 9,161
- ---------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 80,282 $ 36,995 $ 12,929 $ 9,161
- ---------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 2,579,056 $ 1,431,621 $ 145,590 $ 111,417
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $26,577,893 $14,511,143 $2,164,155 $1,733,679
- ---------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $18,847,137 $ 3,815,867 $ 388,348 $ 626,849
Financial futures contracts (2,012,754) 124,487 (449,618) (215,886)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) $16,834,383 $ 3,940,354 $ (61,270) $ 410,963
- ---------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 3,642,045 $ 2,700,463 $1,336,940 $ 680,661
Financial futures contracts 348,578 (129,636) 88,975 (11,153)
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) $ 3,990,623 $ 2,570,827 $1,425,915 $ 669,508
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain $20,825,006 $ 6,511,181 $1,364,645 $1,080,471
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from $47,402,899 $21,022,324 $3,528,800 $2,814,150
operations
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
65
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets California Florida Massachusetts Mississippi
Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 16,749,988 $ 24,411,408 $ 13,279,143 $ 1,095,413
Net realized gain 5,489,144 10,921,955 5,581,339 573,326
Net change in unrealized
appreciation (depreciation) 7,467,292 12,878,283 3,418,130 114,281
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 29,706,424 $ 48,211,646 $ 22,278,612 $ 1,783,020
- ----------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 22,739,308 $ 23,116,173 $ 23,126,655 $ 1,791,601
Withdrawals (67,441,064) (129,509,414) (48,353,576) (4,961,704)
- ----------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $(44,701,756) $(106,393,241) $(25,226,921) $(3,170,103)
- ----------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(14,995,332) $ (58,181,595) $ (2,948,309) $(1,387,083)
- ----------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------
At beginning of year $327,004,015 $ 514,201,415 $253,674,761 $22,126,747
- ----------------------------------------------------------------------------------------------------------------------
At end of year $312,008,683 $ 456,019,820 $250,726,452 $20,739,664
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
66
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended September 30, 1998
<TABLE>
<CAPTION>
RHODE ISLAND WEST VIRGINIA
Increase (Decrease) in Net Assets NEW YORK PORTFOLIO OHIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 26,577,893 $ 14,511,143 $ 2,164,155 $ 1,733,679
Net realized gain (loss) 16,834,383 3,940,354 (61,270) 410,963
Net change in unrealized
appreciation (depreciation) 3,990,623 2,570,827 1,425,915 669,508
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
operations $ 47,402,899 $ 21,022,324 $ 3,528,800 $ 2,814,150
- -----------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 21,974,717 $ 12,482,905 $ 5,483,365 $ 1,913,546
Withdrawals (110,917,114) (49,743,364) (7,158,442) (6,311,147)
- -----------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $ (88,942,397) $(37,260,459) $(1,675,077) $(4,397,601)
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ (41,539,498) $(16,238,135) $ 1,853,723 $(1,583,451)
- -----------------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------
At beginning of year $ 527,603,514 $271,268,585 $40,217,649 $33,502,995
- -----------------------------------------------------------------------------------------------------------------------
At end of year $ 486,064,016 $255,030,450 $42,071,372 $31,919,544
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
67
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets California Portfolio Florida Portfolio Massachusetts Portfolio Mississippi Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $19,859,806 $31,305,979 $15,319,434 $1,336,230
Net realized gain 5,306,120 7,793,553 2,120,143 183,405
Net change in unrealized appreciation
(depreciation) 11,259,842 (1,309,893) 6,805,812 719,054
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $36,425,768 $37,789,639 $24,245,389 $2,238,689
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $16,666,266 $35,743,906 $12,526,247 $1,197,391
Withdrawals (96,678,214) (183,706,131) (64,226,111) (6,588,894)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital $(80,011,948) $(147,962,225) $(51,699,864) $(5,391,503)
transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(43,586,180) $(110,172,586) $(27,454,475) $(3,152,814)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $370,590,195 $624,374,001 $281,129,236 $25,279,561
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $327,004,015 $514,201,415 $253,674,761 $22,126,747
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
68
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets New York Portfolio Ohio Portfolio Rhode Island Portfolio West Virginia Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 31,517,527 $ 16,012,542 $ 2,229,154 $ 2,023,743
Net realized gain (loss) 9,867,274 3,902,013 84,287 (31,612)
Net change in unrealized
appreciation (depreciation) 8,663,813 4,660,390 1,271,712 1,322,252
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
operations $ 50,048,614 $ 24,574,945 $ 3,585,153 $ 3,314,383
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 25,819,897 $ 10,983,777 $ 4,387,108 $ 1,406,737
Withdrawals (152,794,517) (56,960,953) (9,921,791) (10,718,916)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $(126,974,620) $(45,977,176) $(5,534,683) $ (9,312,179)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (76,926,006) $(21,402,231) $(1,949,530) $ (5,997,796)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 604,529,520 $292,670,816 $42,167,179 $ 39,500,791
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 527,603,514 $271,268,585 $40,217,649 $ 33,502,995
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
69
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
California Portfolio
---------------------------------------------------------------------------
Year Ended
---------------------------------------------------------------------------
September 30, March 31,
---------------------------------------------------------------------------
1998 1997 1996 1995 1994/(1)/ 1994/(2)/
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Expenses /(3)/ 0.55% 0.57% 0.57% 0.59% 0.57%/(4)/ 0.55%/(4)/
Expenses after custodian fee reduction 0.53% 0.56% 0.56% 0.58% -- --
Net investment income 5.33% 5.76% 5.93% 6.22% 6.09%/(4)/ 5.72%/(4)/
Portfolio Turnover 16% 12% 14% 58% 40% 91%
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $312,009 $327,004 $370,590 $410,763 $445,131 $467,259
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ For the six months ended September 30, 1994. The Portfolio changed its
fiscal year from March 31 to September 30, effective September 30, 1994.
/(2)/ For the period from the start of business, May 3, 1993, to March 31,
1994.
/(3)/ The expense ratios for the year ended September 30, 1995 and periods
thereafter have been adjusted to reflect a change in reporting
guidelines. The new reporting guidelines require the 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)/ Annualized.
See notes to financial statements
70
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Florida Portfolio
---------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------
1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------------------------------------
Expenses /(1)/ 0.51% 0.52% 0.52% 0.55% 0.48%
Expenses after custodian fee reduction 0.47% 0.48% 0.49% 0.52% --
Net investment income 5.03% 5.53% 5.67% 5.94% 5.65%
Portfolio Turnover 25% 54% 51% 61% 57%
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $456,020 $514,201 $624,374 $712,203 $772,123
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ The expense ratios for the year ended September 30, 1995 and periods
thereafter have been adjusted to reflect a change in reporting
guidelines. The new reporting guidelines require the 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.
See notes to financial statements
71
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Massachusetts Portfolio
--------------------------------------------------------
Year Ended September 30,
--------------------------------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- ---------------------------------------------------------------------------------------------------------------------
Expenses /(1)/ 0.54% 0.53% 0.55% 0.56% 0.51%
Expenses after custodian fee reduction 0.52% 0.52% 0.54% 0.53% --
Net investment income 5.36% 5.75% 5.77% 6.00% 5.74%
Portfolio Turnover 28% 35% 51% 87% 53%
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $250,726 $253,675 $281,129 $302,170 $308,540
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ The expense ratios for the year ended September 30, 1995 and periods
thereafter have been adjusted to reflect a change in reporting
guidelines. The new reporting guidelines require the 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.
See notes to financial statements
72
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Mississippi Portfolio
-----------------------------------------------------
Year Ended September 30,
-----------------------------------------------------
1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets +
- ----------------------------------------------------------------------------------------------------------------------
Net expenses /(1)/ 0.37% 0.38% 0.29% 0.27% 0.05%
Net expenses after custodian fee reduction 0.35% 0.37% 0.26% 0.23% --
Net investment income 5.21% 5.59% 5.77% 5.97% 5.67%
Portfolio Turnover 17% 6% 12% 52% 38%
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $20,740 $22,127 $25,280 $28,993 $29,477
- ----------------------------------------------------------------------------------------------------------------------
+ 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:
Expenses /(1)/ 0.40% 0.39% 0.32%
Expenses after custodian fee reduction 0.37% 0.35% --
Net investment income 5.66% 5.85% 5.40%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ The expense ratios for the year ended September 30, 1995 and periods
thereafter have been adjusted to reflect a change in reporting guidelines.
The new reporting guidelines require the 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.
See notes to financial statements
73
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
New York Portfolio
-----------------------------------------------------
Year Ended September 30,
-----------------------------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- ---------------------------------------------------------------------------------------------------------------------
Expenses /1/ 0.53% 0.57% 0.52% 0.54% 0.48%
Expenses after custodian fee reduction 0.51% 0.57% 0.49% 0.51% --
Net investment income 5.28% 5.60% 5.64% 5.97% 5.70%
Portfolio Turnover 55% 44% 47% 55% 47%
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $486,064 $527,604 $604,530 $652,736 $655,647
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ The expense ratios for the year ended September 30, 1995 and periods
thereafter have been adjusted to reflect a change in reporting guidelines.
The new reporting guidelines require the 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.
See notes to financial statements
74
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Ohio Portfolio
-------------------------------------------------------
Year Ended September 30,
-------------------------------------------------------
1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------------------------------------
Expenses /(1)/ 0.56% 0.56% 0.57% 0.57% 0.51%
Expenses after custodian fee reduction 0.54% 0.55% 0.56% 0.55% --
Net investment income 5.50% 5.70% 5.69% 5.80% 5.61%
Portfolio Turnover 17% 30% 35% 51% 31%
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $255,030 $271,269 $292,671 $319,017 $324,412
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ The expense ratios for the year ended September 30, 1995 and periods
thereafter have been adjusted to reflect a change in reporting guidelines.
The new reporting guidelines require the 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.
See notes to financial statements
75
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Rhode Island Portfolio
-------------------------------------------------------
Year Ended September 30,
-------------------------------------------------------
1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets +
- -----------------------------------------------------------------------------------------------------------------------
Net expenses /(1)/ 0.39% 0.27% 0.27% 0.29% 0.12%
Net expenses after custodian fee reduction 0.36% 0.23% 0.24% 0.25% --
Net investment income 5.28% 5.54% 5.69% 5.96% 5.64%
Portfolio Turnover 24% 39% 25% 42% 42%
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $42,071 $40,218 $42,167 $42,906 $38,120
- -----------------------------------------------------------------------------------------------------------------------
+ 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:
Expenses /(1)/ 0.39% 0.40% 0.41% 0.33%
Expenses after custodian fee reduction 0.35% 0.37% 0.37% --
Net investment income 5.42% 5.56% 5.84% 5.43%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ The expense ratios for the year ended September 30, 1995 and periods
thereafter have been adjusted to reflect a change in reporting guidelines.
The new reporting guidelines require the 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.
See notes to financial statements
76
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS as of September 30, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
West Virginia Portfolio
---------------------------------------------------------------
Year Ended September 30,
---------------------------------------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets +
- ---------------------------------------------------------------------------------------------------------------------------------
Net expenses /1/ 0.37% 0.38% 0.42% 0.31% 0.10%
Net expenses after custodian fee reduction 0.34% 0.36% 0.38% 0.29% --
Net investment income 5.34% 5.44% 5.41% 5.81% 5.52%
Portfolio Turnover 16% 24% 43% 19% 39%
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $31,920 $33,503 $39,501 $40,835 $40,473
- ----------------------------------------------------------------------------------------------------------------------------------
+ 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:
Expenses /1/ 0.39% 0.33%
Expenses after custodian fee reduction 0.37% --
Net investment income 5.73% 5.29%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ The expense ratios for the year ended September 30, 1995 and periods
thereafter have been adjusted to reflect a change in reporting guidelines.
The new reporting guidelines require the 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.
See notes to financial statements
77
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
- --------------------------------------------------------------------------------
California Municipals Portfolio (California Portfolio), Florida Municipals
Portfolio (Florida Portfolio), Massachusetts Municipals Portfolio
(Massachusetts Portfolio), Mississippi Municipals Portfolio (Mississippi
Portfolio), New York Municipals Portfolio (New York Portfolio), Ohio
Municipals Portfolio (Ohio Portfolio), Rhode Island Municipals Portfolio
(Rhode Island Portfolio) and West Virginia Municipals Portfolio (West
Virginia Portfolio), collectively the Portfolios, are registered under the
Investment Company Act of 1940, as amended, as non-diversified, open-end
management investment companies. The Portfolios 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 consistently
followed by the Portfolios in the preparation of their financial statements.
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 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
sales 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 put options
is limited to the premium originally paid.
78
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS
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.
H Legal Fees -- Legal fees and other related expenses incurred as part of
negotiations of the terms and requirements of capital infusions, or that are
expected to result in the restructuring of or a plan of reorganization for
an investment are recorded as realized losses. Ongoing expenditures to
protect or enhance an investment are treated as operating expenses.
I Other -- Investment transactions are accounted for on a trade date basis.
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 Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolios. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by credits which are determined based
on the average daily cash balance each Portfolio maintains with IBT. All
significant credit balances used to reduce the Portfolios' custodian fees
are reflected as a reduction of operating expenses in the Statements of
Operations.
2 Investment Adviser Fee and Other Transactions with Affiliates
----------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research
(BMR), a wholly-owned subsidiary of Eaton Vance Management (EVM), as
compensation for management and investment advisory services rendered to
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 year ended September 30, 1998, each
Portfolio paid advisory fees as follows:
<TABLE>
<CAPTION>
Portfolio Amount Effective Rate*
----------------------------------------------------------------------------
<S> <C> <C>
California $1,499,946 0.48%
Florida 2,175,772 0.45%
Massachusetts 1,089,133 0.44%
Mississippi 34,333 0.16%
New York 2,284,029 0.45%
Ohio 1,174,214 0.45%
Rhode Island 98,372 0.24%
West Virginia 69,657 0.21%
</TABLE>
* 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.
Certain of the officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations. 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 year ended
September 30, 1998, no significant amounts have been deferred.
3 Investments
----------------------------------------------------------------------------
Purchases and sales of investments, other than U.S. Government securities,
purchased option transactions and short-term obligations, for the year ended
September 30, 1998 were as follows:
<TABLE>
<CAPTION>
California Portfolio
----------------------------------------------------------------------------
<S> <C>
Purchases $ 48,255,219
Sales 82,464,411
Florida Portfolio
--------------------------------------------------------------------------
Purchases $117,685,882
Sales 192,327,102
Massachusetts Portfolio
--------------------------------------------------------------------------
Purchases $ 67,637,378
Sales 94,535,228
</TABLE>
79
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
Mississippi Portfolio
----------------------------------------------------------------------------
<S> <C>
Purchases $ 3,439,676
Sales 5,650,818
New York Portfolio
----------------------------------------------------------------------------
Purchases $ 272,779,799
Sales 339,391,309
Ohio Portfolio
----------------------------------------------------------------------------
Purchases $ 45,050,590
Sales 71,033,728
Rhode Island Portfolio
----------------------------------------------------------------------------
Purchases $ 9,611,432
Sales 10,341,612
West Virginia Portfolio
----------------------------------------------------------------------------
Purchases $ 5,133,011
Sales 8,152,600
</TABLE>
4 Federal Income Tax Basis of Investments
----------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at September 30, 1998, as computed on a
federal income tax basis, are as follows:
<TABLE>
<CAPTION>
California Portfolio
----------------------------------------------------------------------------
<S> <C>
Aggregate Cost $ 263,561,693
----------------------------------------------------------------------------
Gross unrealized appreciation $ 44,837,570
Gross unrealized depreciation (147,992)
----------------------------------------------------------------------------
Net unrealized appreciation $ 44,689,578
----------------------------------------------------------------------------
Florida Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 399,215,789
----------------------------------------------------------------------------
Gross unrealized appreciation $ 47,359,537
Gross unrealized depreciation (2,253,399)
----------------------------------------------------------------------------
Net unrealized appreciation $ 45,106,138
----------------------------------------------------------------------------
Massachusetts Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 219,810,305
----------------------------------------------------------------------------
Gross unrealized appreciation $ 26,476,507
Gross unrealized depreciation --
----------------------------------------------------------------------------
Net unrealized appreciation $ 26,476,507
----------------------------------------------------------------------------
Mississippi Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 18,269,091
----------------------------------------------------------------------------
Gross unrealized appreciation $ 2,137,293
Gross unrealized depreciation --
----------------------------------------------------------------------------
Net unrealized appreciation $ 2,137,293
----------------------------------------------------------------------------
New York Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 434,700,464
----------------------------------------------------------------------------
Gross unrealized appreciation $ 47,413,384
Gross unrealized depreciation (189,470)
----------------------------------------------------------------------------
Net unrealized appreciation $ 47,223,914
----------------------------------------------------------------------------
Ohio Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 230,144,643
----------------------------------------------------------------------------
Gross unrealized appreciation $ 19,656,204
Gross unrealized depreciation (21,774)
----------------------------------------------------------------------------
Net unrealized appreciation $ 19,634,430
----------------------------------------------------------------------------
Rhode Island Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 37,839,301
----------------------------------------------------------------------------
Gross unrealized appreciation $ 3,421,191
Gross unrealized depreciation --
----------------------------------------------------------------------------
Net unrealized appreciation $ 3,421,191
----------------------------------------------------------------------------
West Virginia Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 28,916,100
----------------------------------------------------------------------------
Gross unrealized appreciation $ 2,661,033
Gross unrealized depreciation --
----------------------------------------------------------------------------
Net unrealized appreciation $ 2,661,033
----------------------------------------------------------------------------
</TABLE>
80
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
5 Line of Credit
---------------------------------------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR
and EVM and its affiliates in a $100 million ($80 million effective October
13, 1998) unsecured line of credit agreement with a group of banks. The
Portfolios may temporarily borrow from the line of credit to satisfy
redemption requests or settle investment transactions. Interest is charged
to each portfolio or fund based on its borrowings at an amount above either
the Eurodollar rate or federal funds rate. In addition, a fee computed at an
annual rate of 0.10% on the daily unused portion of the line of credit is
allocated among the participating portfolios and funds at the end of each
quarter. At September 30, 1998, the Mississippi Portfolio and West Virginia
Portfolio had a balance outstanding pursuant to this line of credit of
$29,000 and $106,000, respectively. The Portfolios did not have any
significant borrowings or allocated fees during the year ended September 30,
1998.
6 Financial Instruments
----------------------------------------------------------------------------
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 September 30,
1998, is as follows:
<TABLE>
<CAPTION>
Futures
Contracts Net Unrealized
Expiration Appreciation
Portfolio Date Contracts Position (Depreciation)
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California 12/98 121 US Treasury Bonds Short $(376,199)
----------------------------------------------------------------------------
Florida 12/98 240 US Treasury Bonds Short (398,880)
----------------------------------------------------------------------------
Mississippi 12/98 7 US Treasury Bonds Short (22,941)
----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Futures
Contracts Net Unrealized
Expiration Appreciation
Portfolio Date Contracts Position (Depreciation)
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York 12/98 381 US Treasury Bonds Short (633,222)
----------------------------------------------------------------------------
Ohio 12/98 78 US Treasury Bonds Short (129,636)
----------------------------------------------------------------------------
West Virginia 12/98 16 US Treasury Bonds Short (45,458)
----------------------------------------------------------------------------
</TABLE>
At September 30, 1998 each Portfolio had sufficient cash and/or securities
to cover margin requirements on open futures contracts.
81
<PAGE>
Eaton Vance Municipals Portfolios as of September 30, 1998
INDEPENDENT AUDITORS' REPORT
To the Trustees and Investors of the California Municipals Portfolio, Florida
Municipals Portfolio, Massachusetts Municipals Portfolio, Mississippi Municipals
Portfolio, New York Municipals Portfolio, Ohio Municipals Portfolio, Rhode
Island Municipals Portfolio, and West Virginia Municipals Portfolio
- -------------------------------------------------------------------------------
We have audited the accompanying statements of assets and liabilities, including
the portfolio of investments, of the California Municipals Portfolio, Florida
Municipals Portfolio, Massachusetts Municipals Portfolio, Mississippi Municipals
Portfolio, New York Municipals Portfolio, Ohio Municipals Portfolio, Rhode
Island Municipals Portfolio, and West Virginia Municipals Portfolio (the
Portfolios) as of September 30, 1998, the related statements of operations for
the year then ended, the statements of changes in net assets for the years ended
September 30, 1998 and 1997 and the supplementary data for each of years in the
five-year period ended September 30, 1998. (For the California Municipals
Portfolio, the supplementary data is for each of the years in the five-year
period ended September 30, 1998 and the period from the start of business, May
3, 1993, to March 31, 1994). These financial statements and supplementary data
are the responsibility of the Portfolio's management. Our responsibility is to
express an opinion on these financial statements and supplementary data based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities held as of
September 30, 1998 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other audit procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial position of the aforementioned
Portfolios at September 30, 1998, the results of their operations, the changes
in their net assets and their supplementary data for the respective stated
periods in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
October 30, 1998
82
<PAGE>
Eaton Vance Municipals Funds as of September 30, 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
Chairman and Chief Executive Officer,
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 and Portfolio
Manager of Florida,
New York and Ohio
Municipals Portfolios
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President and Portfolio
Manager of Massachusetts
and Rhode Island
Municipals Portfolio
Timothy T. Browse
Vice President and Portfolio
Manager of West Virginia
Municipals Portfolio
Cynthia J. Clemson
Vice President and Portfolio
Manager of California and
Mississippi Municipals Portfolio
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School
of Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
83
<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
Independent Auditors
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
Eaton Vance Municipals Trust
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------
MUNISRC-11/98
