<PAGE>
Investing
for the [PHOTO OF BRICK WALL APPEARS HERE]
21st
Century EDUCATION
Semiannual Report March 31, 1998
[PHOTO OF HIGHWAY AT
NIGHT APPEARS HERE] California
EATON VANCE Florida
MUNICIPALS Massachusetts
TRUST Mississippi
New York
Global Management-Global Distribution Ohio
Rhode Island
West Virginia
[PHOTO OF EXTENSION BRIDGE APPEARS HERE]
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
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LETTER TO SHAREHOLDERS
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[PHOTO OF THOMAS J. FETTER APPEARS HERE]
Thomas J. Fetter,
President
The past six months have been favorable for the municipal bond market. Low
inflation and declining interest rates produced strong returns for the
tax-exempt sector. As a measure of overall municipal bond market performance,
the Lehman Brothers Municipal Bond Index* -- a widely recognized, unmanaged
index of municipal bonds -- had a total return of 3.9% for the six months ended
March 31, 1998.
Amid volatile global markets, more investors were drawn to municipal bonds...
Against a backdrop of moderate-to-strong economic growth and low inflation,
investors in 1997 again focused on the unique advantages of municipals, which
remain among the best tax-advantaged vehicles. In addition, the municipal market
attracted an increasing number of crossover investors from other markets. Many
investors bought municipals in a flight to quality as the domestic equity market
reached overvalued levels and emerging markets were caught up in the turmoil of
the Asian currency crisis.
A sound economy has resulted in improving municipal credits...
The upbeat economic climate of recent years has provided strong support for the
municipal market. Steady job growth has generated increased tax revenues for
states and local issuers. As a result, many areas hard-hit in the recessions of
the 1970s and 1980s have since recovered, a fact reflected in the value of their
bonds. We expect to see many more such stories emerge in the coming year.
*It is not possible to invest directly in an index.
Municipal bonds yield 88% of Treasury yields
[BAR GRAPH APPEARS HERE]
30-Year AAA rated General Obligation (GO) Bonds* 5.24%
Taxable equivalent yield in 36% tax bracket 8.19%
30-Year Treasury bond 5.93%
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
March 31, 1998.
Past performance is no guarantee of future results.
Source: Bloomberg L.P.
The current economic climate should bring more opportunities for municipal
investors...
At present, there is little sign of inflation on the horizon, and, with the
Asian turmoil of recent months, it's possible that the economy may slow somewhat
during 1998. Meanwhile, the federal budget situation has improved dramatically
in the past several years.
Naturally, those conditions are subject to change over time. The market could be
vulnerable if the economy strengthens or the budget situation unexpectedly
worsens. We will, of course, continue to closely monitor economic progress.
As for the tax-exempt market, municipal bonds currently represent unusual value
relative to their taxable counterparts. We believe that municipals will continue
to serve their traditional function of financing vital public works, while
offering good opportunities for tax-conscious investors.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter,
President
May 4, 1998
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Effective November 24, 1997, Thomas J. Fetter became Portfolio Manager of the
New York Municipals Portfolio and Robert MacIntosh became Portfolio Manager of
the Rhode Island Municipals Portfolio. Mr. Fetter and Mr. MacIntosh are both
Vice Presidents of Eaton Vance Management and Boston Management and Research,
and both manage other Eaton Vance municipal portfolios.
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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>
California Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[PHOTO OF CYNTHIA J. CLEMSON APPEARS HERE]
Cynthia J. Clemson,
Portfolio Manager
The Economy
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. California finished 1997 with strong economic performance. The labor force
increased 309,800 during the year to over 16 million, a 2.9% annual growth
rate which exceeded the national employment growth rate of 2.5%. Unemployment
declined to 5.8% in February, 1998 from 6.7% a year earlier.
. California's economic growth in the past year has been supported by a broad
base of industry sectors. The construction sector grew 10.8%, aided by
declining mortgage rates. Manufacturing grew 4.4%, led by textiles and
apparels with 11.3% and 4.2% growth rates, respectively. Services showed solid
growth, with particular strength in transportation, communications, financial
services, and business services.
. California continues to lead the nation in the computer software and motion
pictures industries. In computer software, the state is the nation's leading
employer, with 20% of the estimated 600,000 jobs nationwide. In motion
pictures, nearly 75% of all feature films are produced in California. It is
estimated that this industry is responsible for up to 600,000 jobs statewide,
with an annual payroll of $22 billion.
Management Update
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. During the period, we continued to focus on the Fund's structure, which
consists of the coupon, maturity and length to call of its holdings. In so
doing, we replaced several current coupon bonds with some zero coupon bonds
and some 5% issues that had excellent call protection.
. The California municipal market continues to provide us with opportunities
for finding bonds that are not only high-yielding, but which also have solid
credit fundamentals. The strong economy is largely responsible for this, and
we have been particularly fortunate in the housing and health care sectors.
The Fund
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. During the six months ended March 31, 1998, the Fund's Class A shares had a
total return of 4.4%. This return resulted from an increase in net asset value
(NAV) per share to $11.08 on March 31, 1998 from $10.90 on September 30, 1997
and the reinvestment of $0.292 per share in tax-free dividend income./1/
. The Fund's Class B shares had a total return of 4.0% during the period, the
result of an increase in NAV to $10.18 from $10.01 and the reinvestment of
$0.224 per share in tax-free dividend income./1/
. Based on the Fund's most recent dividends and NAVs per share of $11.08 for
Class A and $10.18 for Class B, the distribution rates were 5.28% and 4.42%,
respectively./2/ The SEC 30-day yields at March 31 were 4.45% and 3.75%,
respectively./3/
Your Investment at Work
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San Diego County Water Authority [ARTWORK APPEARS HERE]
Water Revenue Refunding Certificates
of Participation -- Series 1993A
. This bond issue financed significant improvements to the pipeline system that
provides water to the San Diego metropolitan area. Conceived from an extensive
study in 1987, the improvements are designed to increase capacity to meet
present and future demands -- especially during peak usage -- eliminate
bottlenecks, increase reliability and flexibility, and provide for an
extension of a proposed new major pipeline.
. The bonds are triple-A-rated by both Moody's and Standard & Poor's and are
insured by the Financial Guaranty Insurance Company (FGIC).+
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Fund Information
as of March 31, 1998
Performance/4/ Class A Class B
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Average Annual Total Returns (at net asset value)
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One Year 12.9% 11.9%
Five Years N.A. 5.8
Ten Years N.A. 6.8
Life of Fund* 8.8 6.7
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
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One Year 7.5% 6.9%
Five Years N.A. 5.5
Ten Years N.A. 6.8
Life of Fund* 7.4 6.7
* Inception Dates -- Class A: 5/27/94; Class B: 12/19/85
[BAR GRAPH APPEARS HERE]
5 Largest Sectors/5/
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By total investments
Escrowed 23.2%
Lease Revenue/ Certificates of Participation 17.5%
Insured Water & Sewer+ 9.9%
Special Tax Revenue 8.4%
Cogeneration 7.7%
Portfolio Overview/5/
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Number of Issues 74
Average Maturity 21.6 Yrs.
Effective Maturity 13.2 Yrs.
Average Rating A+
Average Call 10.4 Yrs.
Average Dollar Price $100.99
+Private insurance does not remove the interest rate risks that are associated
with these investments.
/1/These returns do not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for the
Fund's Class B shares; a portion of the Fund's income may be subject to federal
and state income taxes and/or federal alternative minimum tax. /2/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. /3/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. /4/Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. SEC returns for Class A reflect maximum sales charge
as noted, and, for Class B, reflect applicable CDSC based on the following
schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year;
1% - 6th year. /5/Subject to change due to active management.
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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3
<PAGE>
Florida Municipals Fund as of March 31, 1998
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INVESTMENT UPDATE
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[PHOTO OF THOMAS J. FETTER APPEARS HERE]
Thomas J. Fetter,
Portfolio Manager
The Economy
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. Florida's economy continues to enjoy great strength, driven by a diverse base
that includes a booming service sector. The service sector accounts for over
35% of total non-farm employment and is dominated by tourism.
. Florida's tourism industry includes amusement and recreation services, which
added over 49,000 jobs last year and led to increased employment in the hotel
industry. According to the Travel Industry Association, Florida has surpassed
California and Hawaii as the number one tourist destination in the U.S.
. Other important sectors in the Florida economy include construction -- which
slowed somewhat in 1997 from the rapid growth of the mid-1990's -- and
manufacturing, which accounts for almost 8% of total employment. Within
manufacturing, the aerospace, telecommunications equipment, and defense
industries should continue to show strength in 1998.
Management Update
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. To maintain the Portfolio's upside potential in a declining interest rate
environment, we have, in the past six months, sold some of the higher coupon
holdings and have added some discounts. Our goal is to keep a diverse group of
bonds in which high- and low-coupon issues are balanced around the
ever-changing market interest rates.
. During the period, we increased our holdings of high-quality, insured
issues. These tended to perform well in a declining interest rate environment.
. We have added to the Portfolio's holdings of general obligations (GO) bonds,
reflecting the healthy economic conditions in Florida, and have also increased
the Portfolio's insured hospital holdings. The Portfolio's non-rated
holdings -- which our analysts are highly selective in choosing -- have
increased during the period. Non-rated bonds, when chosen carefully, can add
yield without significantly affecting the Portfolio's credit quality.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended March 31, 1998, the Fund's Class A shares had a
total return of 5.4%. This return resulted from an increase in net asset value
(NAV) per share to $10.93 on March 31, 1998 from $10.64 on September 30, 1997
and the reinvestment of $0.280 per share in tax-free dividend income./1/
. The Fund's Class B shares had a total return of 5.0% during the period, the
result of an increase in NAV to $11.20 from $10.90 and the reinvestment of
$0.241 per share in tax-free dividend income./1/
. Based on the Fund's most recent dividends and NAVs per share of $10.93 for
Class A and $11.20 for Class B, the distribution rates were 4.94% and 4.22%,
respectively./2/ The SEC 30-day yields at March 31 were 4.50% and 3.90%,
respectively./3/
Your Investment at Work [ARTWORK APPEARS HERE]
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Volusia County Educational Facilities Authority Revenue Bonds -- Embry-Riddle
Aeronautical University Project
. This bond issue financed a major construction and renovation project at Embry-
Riddle Aeronautical University, an aviation training college with campuses in
Daytona Beach, Florida and Prescott, Arizona.
. The projects for the Florida campus included purchasing real estate for
expansion of the University; developing infrastructure -- such as roads, water
and electricity -- on the new land; constructing a new field house on the
campus; constructing a new Engineering Center; and purchasing and installing
new administrative and academic computer systems.
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Fund Information
as of March 31, 1998
Performance/4/ Class A Class B
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Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 11.0% 10.3%
Five Years N.A. 5.4
Life of Fund* 8.1 7.5
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
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One Year 5.7% 5.3%
Five Years N.A. 5.0
Life of Fund* 6.8 7.5
*Inception Dates -- Class A: 4/5/94; Class B: 8/28/90
5 Largest Sectors/5/
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By total investments
[BAR GRAPH APPEARS HERE]
General Obligations 18.2%
Housing 10.2%
Insured Hospitals+ 8.0%
Electric Utilities 7.8%
Escrowed 7.3%
Portfolio Overview/5/
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Number of Issues 111
Average Maturity 22.9 Yrs.
Effective Maturity 13.6 Yrs.
Average Rating AA-
Average Call 8.2 Yrs.
Average Dollar Price $101.41
+Private insurance does not remove the interest rate risks that are associated
with these investments.
/1/These returns do not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for the
Fund's Class B shares; a portion of the Fund's income may be subject to federal
income and state intangibles taxes and/or federal alternative minimum tax.
/2/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. /3/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. /4/Returns
are calculated by determining the percentage change in net asset value (NAV)
with all distributions reinvested. SEC returns for Class A reflect maximum sales
charge as noted, and, for Class B, reflect applicable CDSC based on the
following schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% -
5th year; 1% - 6th year. /5/Subject to change due to active management.
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.
4
<PAGE>
Massachusetts Municipals Fund as of March 31, 1998
INVESTMENT UPDATE
[PHOTO OF ROBERT B. MACINTOSH APPEARS HERE]
Robert B. MacIntosh,
Portfolio Manager
The Economy
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. Massachusetts' economy benefits from diverse sources of strength -- most
notably the high-technology and financial services industries -- which have
produced solid growth, high personal incomes, and very low unemployment. The
unemployment rate reached a 9-year low of 3.3% in February, 1998. Employment
increased 3.1% in the 12 months ending February, 1998, reaching an all-time
high of 3.19 million.
. Massachusetts is one of the nation's leaders in high-technology -- which
includes computers and biotechnology -- as well as financial services,
especially mutual funds. High-tech employment in the state grew 6.1% over the
past year -- twice as fast as the national average. In the mutual funds
industry, Boston is second only to New York, employing 45,000.
. Despite the booming economy, however, Massachusetts has one of the highest
per capita debt levels in the nation. Major projects, such as a new convention
center and the Central Artery/Third Harbor Tunnel Project, could create
financial pressures in the years to come.
Management Discussion
- --------------------------------------------------------------------------------
. The strong economy in Massachusetts has produced large budget surpluses
which, in turn, has led to continued upgrades for the state's general
obligation debt. These upgrades have had a positive ripple effect on the
state's municipal bonds generally.
. We continued to add zero coupon bonds, which improve the Fund's structure
and can add performance upside. One of our recent additions is Massachusetts
Biomedical Research, a subsidiary of Partners Healthcare.
. Several of the Fund's holdings, particularly in the healthcare sector, have
been prerefunded. This not only increased their credit quality, but also
boosted their market value.
The Fund
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. During the six months ended March 31, 1998, the Fund's Class A shares had a
total return of 4.7%. This return resulted from an increase in net asset value
(NAV) per share to $9.80 on March 31, 1998 from $9.62 on September 30, 1997
and the reinvestment of $0.265 per share in tax-free dividend income./1/
. The Fund's Class B shares had a total return of 4.2% during the period, the
result of an increase in NAV to $10.89 from $10.69 and the reinvestment of
$0.242 per share in tax-free dividend income./1/
. The Fund's Class I shares had a total return of 4.7% during the period, the
result of an increase in NAV to $10.09 from $9.89 and the reinvestment of
$0.264 per share in tax-free dividend income./1/
. Based on the Fund's most recent dividends and NAVs per share of $9.80 for
Class A, $10.89 for Class B, and $10.09 for Class I, the distribution rates
were 5.42%, 4.45%, and 5.25%, respectively./2/ The SEC 30-day yields at March
31 were 4.52%, 3.84%, and 4.78%, respectively./3/
Your Investment at Work [ARTWORK APPEARS HERE]
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Massachusetts Port Authority Revenue Bonds -- Series 1990-A
. This bond issue has been used primarily to finance improvements to Boston's
Logan International Airport and the Maurice J. Tobin Memorial Bridge.
. Improvements to the bridge included replacing the toll plaza, repairing the
bridge deck, and constructing a pier protection system. Improvements at the
airport included runway repairs, a new fire station, new security systems,
electrical and water upgrades, an elevated walkway to Terminal E, and new
cargo facilities.
- --------------------------------------------------------------------------------
Fund Information
as of March 31, 1998
Performance/4/ Class A Class B Class I
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 12.3% 11.3% 12.3%
Five Years N.A. 5.4 N.A.
Life of Fund* 5.1 7.0 5.9%
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
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One Year 7.0% 6.3% N.A.
Five Years N.A. 5.1 N.A.
Life of Fund* 3.9 7.0 N.A.
*Inception Dates -- Class A:12/7/93; Class B:4/18/91; Class I: 6/17/93
[BAR GRAPH APPEARS HERE]
5 Largest Sectors/5/
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By total investments
Hospitals 23.6%
Transportation 11.7%
Insured Hospitals+ 9.5%
Water & Sewer 8.7%
Housing 8.6%
+Private insurance does not remove the interest rate risks that are associated
with these investments.
Portfolio Overview/5/
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Number of Issues 82
Average Maturity 21.9 Yrs.
Effective Maturity 10.5 Yrs.
Average Rating A
Average Call 7.1 Yrs.
Average Dollar Price $100.54
/1/These returns do not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for the
Fund's Class B shares; a portion of the Fund's income may be subject to federal
and state income taxes and/or federal alternative minimum tax. There is no sales
charge for the Fund's Class I shares. /2/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. /3/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. /4/Returns are calculated by determining the percentage change in net
asset value (NAV) with all distributions reinvested. SEC returns for Class A
reflect maximum sales charge as noted, and, for Class B, reflect applicable CDSC
based on the following schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th
year; 2% - 5th year; 1% - 6th year. SEC returns do not apply to Class I shares
because there is no sales charge. /5/Subject to change due to active management.
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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5
<PAGE>
Mississippi Municipals Fund as of March 31, 1998
[PHOTO OF CYNTHIA J. CLEMSON APPEARS HERE]
Cynthia J. Clemson,
Portfolio Manager
The Economy
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. In 1997, Mississippi continued to become increasingly reliant on services and
less so on its traditional manufacturing base. Employment in the services
sector, led by hotel and lodging, increased 1.8% between the third quarter of
1996 and the third quarter of 1997. Healthcare, an important service industry,
grew 1.6% in the same 12-month period.
. Tourism continues to be a big part of Mississippi's changing economy, driven
by the state's booming casino business. Nine casinos along the coast have
announced plans to expand hotel space, increasing the total to approximately
4,500 rooms. This growth has contributed to a decline in the state's
unemployment rate to 5.4% in February, 1998 from 6.0% a year earlier.
. Significant investments in the manufacturing sector should help it rebound
from a sluggish 1997. Commitments from such companies as Chevron, Caterpillar,
and Irvan Automotive are expected to bring jobs and growth. Meanwhile, the
state's trade sector is growing rapidly, led by exports of electronic
equipment, food, machinery, computers, and paper.
Management Update
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. During the six-month period, we have focused on maintaining the "barbell"
structure of the Portfolio, wherein lower-coupon, performance-oriented bonds
are combined with higher-coupon bonds. As interest rates have declined, some
realignment of the Portfolio was necessary to maintain this structure. Of
course, we have sought the maximum call protection possible in each new bond
that we acquired.
. To maintain as high a dividend as is appropriate, we have sought some lower
quality, yield-oriented bonds. In recent months, we found excellent value in
the industrial development and hospital sectors, where we acquired solid
credits with good fundamentals, high coupons and long call dates.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended March 31, 1998, the Fund's Class A shares had a
total return of 4.0%. This return resulted from an increase in net asset value
(NAV) per share to $9.88 on March 31, 1998 from $9.74 on September 30, 1997
and the reinvestment of $0.242 per share in tax-free dividend income./1/
. The Fund's Class B shares had a total return of 3.7% during the period, the
result of an increase in NAV to $10.12 from $9.97 and the reinvestment of
$0.212 per share in tax-free dividend income./1/
. Based on the Fund's most recent dividends and NAVs per share of $9.88 for
Class A and $10.12 for Class B, the distribution rates were 4.91% and 4.21%,
respectively./2/ The SEC 30-day yields at March 31 were 4.04% and 3.40%,
respectively./3/
[ART APPEARS HERE]
Your Investment at Work
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Hinds County, Mississippi Urban Renewal Revenue Refunding Bonds, Series 1993
-- Woodbridge Apartments Project
. The proceeds from this bond issue refinanced a previous issue. The original
issue provided funding for mortgage loans, insured by the Federal Housing
Administration (FHA), to construct the 192-unit, multi-family Woodbridge
housing project in Jackson, Mississippi. The housing complex was designed for
people of low or moderate income.
. The bonds carry an attractive 6.25% coupon and have good call protection. In
addition, payment of interest and principal is secured, in part, by the FHA.
- --------------------------------------------------------------------------------
/1/These returns do not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for the
Fund's Class B shares; a portion of the Fund's income may be subject to federal
and state income taxes and/or federal alternative minimum tax. /2/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. /3/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. /4/Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. SEC returns for Class A reflect maximum sales charge
as noted, and, for Class B, reflect applicable CDSC based on the following
schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year;
1% - 6th year. /5/Subject to change due to active management.
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 March 31, 1998
Performance/4/ Class A Class B
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 10.2% 9.8%
Five Years N.A. N.A.
Life of Fund* 4.9 5.1
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 4.9% 4.8%
Five Years N.A. N.A.
Life of Fund* 3.7 4.8
*Inception Dates - Class A:12/7/93; Class B:6/11/93
5 Largest Sectors/5/
- --------------------------------------------------------------------------------
By total investments
[BAR GRAPH APPEARS HERE]
Industrial Development/Pollution Control 16.8%
Insured Hospitals 14.7%
Housing 14.5%
Lease/Certificates of Participation 10.3%
Electric Utilities 9.8%
Portfolio Overview/5/
- --------------------------------------------------------------------------------
Number of Issues 31
Average Maturity 20.0 Yrs.
Effective Maturity 9.6 Yrs.
Average Rating AA-
Average Call 9.2 Yrs.
Average Dollar Price $106.07
+Private insurance does not remove the interest rate risks that are associated
with these investments.
6
<PAGE>
New York Municipals Fund as of March 31, 1998
[PHOTO OF THOMAS J. FETTER APPEARS HERE]
Thomas J. Fetter,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. The strength of the national economy is finally starting to have an impact on
New York. The state added 96,000 jobs in 1997, an increase of 1.2%. However,
New York's growth continued to lag that of the nation, where employment rose
2.3%. The gap is expected to narrow slightly in 1998, led by strength in the
service and finance sectors.
. Wall Street activity was again a major boost to New York's economy, as the
sharp rise in corporate underwriting and merger-and-acquisition activity
contributed to robust profit growth. Bonuses earned in the state's financial
sectors added $4.2 billion to state personal income growth in 1997.
. With downsizing among large New York companies exacting a heavy toll, small
business growth has become central to the state's job creation. It's estimated
that small business has added more than 500,000 jobs since 1992, while large
companies have reduced their workforce by nearly 250,000.
Management Update
- --------------------------------------------------------------------------------
. The success of New York City's securities industry and the accompanying
increase in sales and income tax revenues has spilled over to the rest of the
state, giving the overall economy a boost and upgrading the state's GO rating.
As a result, state appropriation bonds have risen in value -- a very positive
development due to their significant weighting in the Fund.
. When rates were in the 7% range in early 1997, we extended the maturities of
the Fund's non-callable holdings, picking up additional yield in the process.
This improved the Fund's overall call protection and its price appreciation in
the subsequent rally.
. New York City water bonds have become very prevalent in the municipal market.
Varying coupon structures have provided liquid trading vehicles for making
several relative value trades that benefited the Fund.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended March 31, 1998, the Fund's Class A shares had a
total return of 4.5%. This return resulted from an increase in net asset value
(NAV) per share to $10.69 on March 31, 1998 from $10.51 on September 30, 1997
and the reinvestment of $0.287 per share in tax-free dividend income./1/
. The Fund's Class B shares had a total return of 4.0% during the period, the
result of an increase in NAV to $11.50 from $11.30 and the reinvestment of
$0.253 per share in tax-free dividend income./1/
. Based on the Fund's most recent dividends and NAVs per share of $10.69 for
Class A and $11.50 for Class B, the distribution rates were 5.38% and 4.41%,
respectively./2/ The SEC 30-day yields at March 31 were 4.27% and 3.84%,
respectively./3/
[ART APPEARS HERE]
Your Investment at Work
- --------------------------------------------------------------------------------
Albany County, New York General Obligation Bonds -- Bethlehem Central School
District Serial Bonds, 1990.
. The proceeds from this bond issue were used to help fund several capital
projects in this school district. Projects included reconstructing and making
additions to several elementary and middle schools.
. The Bethlehem Central School District is located in the Capital District of
Albany County, serving a population of over 23,000 who live and work primarily
in the City of Albany.
. The bonds, which carry triple-A ratings from both Moody's and Standard
& Poor's, are insured through AMBAC Indemnity Corp./1/
- --------------------------------------------------------------------------------
/1/These returns do not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for the
Fund's Class B shares; a portion of the Fund's income may be subject to federal
and state income taxes and/or federal alternative minimum tax. /2/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. /3/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. /4/Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. SEC returns for Class A reflect maximum sales charge
as noted, and, for Class B, reflect applicable CDSC based on the following
schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year;
1% - 6th year. /5/Subject to change due to active management.
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 March 31, 1998
Performance/4/ Class A Class B
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 11.7% 10.7%
Five Years N.A. 5.7
Life of Fund* 7.9 8.0
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 6.4% 5.7%
Five Years N.A. 5.4
Life of Fund* 6.6 8.0
*Inception Dates - Class A:4/15/94; Class B:8/30/90
[BAR GRAPH APPEARS HERE]
5 Largest Sectors/5/
- --------------------------------------------------------------------------------
By total investments
Education 15.5%
Loans/ Certificates of Participation 14.8%
Hospitals 8.4%
Special Tax 6.6%
Housing 5.7%
+Private insurance does not remove the interest rate risks that are associated
with these investments.
Portfolio Overview/5/
- --------------------------------------------------------------------------------
Number of Issues 115
Average Maturity 20.0 Yrs.
Effective Maturity 14.5 Yrs.
Average Rating A
Average Call 12.0 Yrs.
Average Dollar Price $103.77
7
<PAGE>
Ohio Municipals Fund as of March 31, 1998
[PHOTO OF THOMAS J. FETTER APPEARS HERE]
Thomas J. Fetter,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. Ohio's labor market has remained strong in recent months. According to the
Ohio Bureau of Employment Services, the state saw an increase of 14,000 jobs
in January, with most growth occurring in the business and health services
areas. Over the one-year period, the number of employed Ohioans has increased
by 169,000.
. The Asian crisis, which rocked the financial markets in late 1997, has
moderated somewhat in recent months. Nonetheless, weakness in the Asian
economies is likely to persist through 1998 and into 1999, and this could
modestly dampen export demand for Ohio's manufactured goods.
. Ohio tax revenues have exceeded estimates by 2.1% in the current fiscal
year. Continued low employment and strong consumer buying power have resulted
in strong year-to-date income and sales tax receipts.
Management Update
- --------------------------------------------------------------------------------
. The bond market has been favorable over the past six months, with declining
interest rates translating into solid total returns for investors. In this
environment, we have focused on increasing performance without sacrificing
yield. Where possible, we have sold some of our premium, or higher-coupon,
issues and replaced them with lower coupon bonds which perform better in a
rally.
. Our research staff continued to focus on locating non-rated, higher-yielding
bonds which can boost the Portfolio's income without adding unnecessary risks.
. With a combination of yield, or high-coupon bonds on one hand, and high-
quality, discounted "performance" bonds on the other, the Portfolio has a
"barbell" structure which provides both income and total return. This
portfolio mix performed well in a generally declining interest rate
environment. Duration was kept in a targeted range to help reduce volatility.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended March 31, 1998, the Fund's Class A shares had a
total return of 4.2%. This return resulted from an increase in net asset value
(NAV) per share to $9.83 on March 31, 1998 from $9.68 on September 30, 1997
and the reinvestment of $0.256 per share in tax-free dividend income./1/
. The Fund's Class B shares had a total return of 3.8% during the period, the
result of an increase in NAV to $11.09 from $10.93 and the reinvestment of
$0.247 per share in tax-free dividend income./1/
. Based on the Fund's most recent dividends and NAVs per share of $9.83 for
Class A and $11.09 for Class B, the distribution rates were 5.22% and 4.46%,
respectively./2/ The SEC 30-day yields at March 31 were 4.53% and 3.93%,
respectively./3/
[ART APPEARS HERE]
Your Investment at Work
- --------------------------------------------------------------------------------
City of Kent, Ohio Multifamily Housing Revenue Bonds, Series 1995 - Silver
Meadows Apartments Project
. This bond issue funded mortgage loans used to acquire and renovate a 444-unit
multifamily housing project in Kent, Ohio. Named Silver Meadows Apartments,
the complex provides one-, two-, and three-bedroom units and has parking and a
swimming pool.
. Payments are secured by mortgage-backed pass-through securities (GNMA's),
that are, in turn, guaranteed by the Government National Mortgage Association
(GNMA). The mortgage loans are insured by the Federal Housing Administration.
- --------------------------------------------------------------------------------
Fund Information
as of March 31, 1998
Performance/4/ Class A Class B
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 11.0% 9.9%
Five Years N.A. 5.7
Life of Fund* 5.0 7.1
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 5.6% 4.9%
Five Years N.A. 5.4
Life of Fund* 3.8 7.1
*Inception Dates - Class A:12/7/93; Class B:4/18/91
[BAR GRAPH APPEARS HERE]
5 Largest Sectors/5/
- --------------------------------------------------------------------------------
By total investments
Hospitals 18.7%
Housing 14.1%
Industrial Development/Pollution Control 12.4%
Insured Hospitals+ 9.4%
General Obligation 7.0%
+Private insurance does not remove the interest rate risks that are associated
with these investments.
Portfolio Overview/5/
- --------------------------------------------------------------------------------
Number of Issues 97
Average Maturity 19.7 Yrs.
Effective Maturity 9.5 Yrs.
Average Rating A+
Average Call 6.1 Yrs.
Average Dollar Price $106.96
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
/1/These returns do not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for the
Fund's Class B shares; a portion of the Fund's income may be subject to federal
and state income taxes and/or federal alternative minimum tax. /2/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. /3/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. /4/Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. SEC returns for Class A reflect maximum sales charge
as noted, and, for Class B, reflect applicable CDSC based on the following
schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year;
1% - 6th year. /5/Subject to change due to active management.
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.
- --------------------------------------------------------------------------------
8
<PAGE>
Rhode Island Municipals Fund as of March 31, 1998
[PHOTO OF ROBERT B. MACINTOSH APPEARS HERE]
Robert B. MacIntosh,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. Rhode Island's economy enjoyed solid growth in 1997. Total employment
increased by 10,200 jobs, or 2.4%, during the 12-month period ending January,
1998. Unemployment (seasonally adjusted) declined to 4.7% in January from 5.3%
a year earlier. Total employment stood at over 484,000 in January, the highest
it has been since June, 1990.
. Most industries in the state participated in the growth last year, with
manufacturing the exception. Factory payrolls declined by 800, primarily in
the jewelry, printing and plastics industries. Services and government
employment increased by 3,900 and 2,400, respectively, while construction
added 1,800 jobs and retail trade added 1,700 jobs.
. Many Rhode Islanders have high-paying jobs in neighboring Connecticut and
Massachusetts. This has helped existing home sales, which had a record year in
1997, as well as retail sales. In October, November, and December of 1997,
retail sales increased at rates of 10.1%, 8.3%, and 5.4%, respectively.
Management Update
- --------------------------------------------------------------------------------
. We continued to maintain diversification across sectors and credit quality as
we sought to combine high-quality insured holdings, which provided upside
performance, with higher-yielding issues, which provided income and stability.
. We added some zero coupon bonds to the Fund, which are typically hard to
find. We have also replaced several older bonds having shorter call features
with newer, longer-call bonds. Both of these measures improved the Fund's
structure and added performance upside.
. Issuance in Rhode Island has been somewhat light during the period. As a
result, we have added some Puerto Rico bonds with very long call dates to the
Fund. This greatly improved the Fund's overall call protection.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended March 31, 1998, the Fund's Class A shares had a
total return of 4.0%. This return resulted from an increase in net asset value
(NAV) per share to $9.76 on March 31, 1998 from $9.61 on September 30, 1997
and the reinvestment of $0.234 per share in tax-free dividend income./1/
. The Fund's Class B shares had a total return of 3.7% during the period, the
result of an increase in NAV to $9.99 from $9.84 and the reinvestment of
$0.213 per share in tax-free dividend income./1/
. Based on the Fund's most recent dividends and NAVs per share of $9.76 for
Class A and $9.99 for Class B, the distribution rates were 4.81% and 4.27%,
respectively./2/ The SEC 30-day yields at March 31 were 4.39% and 3.80%,
respectively./3/
Your Investment at Work
- --------------------------------------------------------------------------------
Rhode Island Clean Water Finance Agency Safe Drinking Water Revenue Bonds,
Series 1994 A - Providence Water Supply
. This bond issue is part of a revolving loan fund designed to finance all
aspects of acquiring and maintaining the water supply for the state of Rhode
Island. This includes design, planning, construction, enlargement, and repair.
These particular bonds have been used for the City of Providence's water
supply.
. These bonds carry an attractive 6.7% coupon and have excellent call
protection. In addition, they are triple-A-rated by both Moody's and Standard
& Poor's and are insured by AMBAC Indemnity Corp.+
- --------------------------------------------------------------------------------
Fund Information
as of March 31, 1998
Performance/4/ Class A Class B
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 11.0% 10.5%
Five Years N.A. N.A.
Life of Fund* 4.5 5.0
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 5.7% 5.5%
Five Years N.A. N.A.
Life of Fund* 3.3 4.6
*Inception Dates - Class A: 12/7/93; Class B: 6/11/93
5 Largest Sectors/5/
- --------------------------------------------------------------------------------
By total investments
[BAR GRAPH APPEARS HERE]
Housing 16.4%
Insured Hospitals+ 15.3%
Insured Special Tax+ 13.1%
Insured General Obligation+ 12.5%
Hospitals 9.2%
+ Private insurance does not remove the interest rate risks that are associated
with these investments.
Portfolio Overview/5/
- --------------------------------------------------------------------------------
Number of Issues 40
Average Maturity 22.7 Yrs.
Effective Maturity 15.2 Yrs.
Average Rating AA
Average Call 10.5 Yrs.
Average Dollar Price $103.17
/1/These returns do not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for the
Fund's Class B shares; aportion of the Fund's income may be subject to federal
and state income taxes and/or federal alternative minimum tax. /2/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. 3The 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. /4/Returns are calculated by determining the
percentage change in net asset value (NAV) with all distributions reinvested.
SEC returns for Class A reflect maximum sales charge as noted, and, for Class B,
reflect applicable CDSC based on the following schedule: 5% - 1st and 2nd years;
4% - 3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th year. /5/Subject to change
due to active management.
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.
9
<PAGE>
West Virginia Municipals Fund as of March 31, 1998
[PHOTO OF TIMOTHY T. BROWSE APPEARS HERE]
Timothy T. Browse,
Portfolio Manager
The Economy
- --------------------------------------------------------------------------------
. West Virginia's economy showed solid growth in 1997, with total non-farm
payroll employment increasing by 10,100, or 10.1% during the calendar year.
The unemployment rate declined to 6.5% in December from 7.5% a year earlier.
. Much of the state's growth in 1997 was in service-producing industries, where
employment increased 8.5%. Within this category, business services,
healthcare, and government stood out as leading providers of new jobs.
. The goods-producing sectors grew slightly during the year, with employment
increasing 1.6%. Durable goods industries - notably, primary metals
industries, fabricated metal products, and industrial machinery and equipment
- had the highest gains (2.3% overall), while mining and apparels had job
losses. Despite the weakness last year, manufacturing remains a substantial
and important sector in the state, with leading employers such as Weirton
Steel, Kroger Co., DuPont, and Union Carbide.
Management Update
- --------------------------------------------------------------------------------
. We seek to maintain a balanced portfolio of high-coupon, defensive bonds and
lower-coupon, performance bonds. With interest rates continually moving, we
make minor adjustments on an ongoing basis to maintain the right mix. The goal
of this strategy is to provide the optimum performance in any given market
condition. As interest rates have fallen in the last year, we have added to
our low-coupon, or discount, holdings to maintain the right balance in the
Portfolio.
. The municipal bond market in West Virginia has seen a great deal of supply
in the past six months, which has had the effect of driving down prices. As a
result, we have found very good values in two sectors - healthcare and
colleges & universities - which we feel have potential for appreciation when
supply begins to decrease again.
The Fund
- --------------------------------------------------------------------------------
. During the six months ended March 31, 1998, the Fund's Class A shares had a
total return of 4.4%. This return resulted from an increase in net asset value
(NAV) per share to $9.97 on March 31, 1998 from $9.79 on September 30, 1997
and the reinvestment of $0.249 per share in tax-free dividend income./1/
. The Fund's Class B shares had a total return of 4.0% during the period, the
result of an increase in NAV to $10.16 from $9.97 and the reinvestment of
$0.207 per share in tax-free dividend income./1/
. Based on the Fund's most recent dividends and NAVs per share of $9.97 for
Class A and $10.16 for Class B, the distribution rates were 5.02% and 4.09%,
respectively./2/ The SEC 30-day yields at March 31 were 4.17% and 3.56%,
respectively./3/
Your Investment at Work
- --------------------------------------------------------------------------------
West Virginia Hospital Finance Authority Hospital Revenue Bonds - Charleston
Area Medical Center, Inc., 1993 Series A
. This bond issue helped fund a $41 million capital project at the Charleston
Area Medical Center. Included in the project were a new surgical suite; a new
18-bed Cardiovascular Intensive Care Unit and Coronary Care Unit; three new
patient elevators; and expansion of the outpatient treatment area.
. The Charleston Area Medical Center (CAMC) is a 962-bed medical center that
resulted from five mergers between 1965 and 1986. CAMC serves as a major
teaching hospital for West Virginia University and provides a full range of
healthcare services.
- --------------------------------------------------------------------------------
Fund Information
as of March 31, 1998
Performance/4/ Class A Class B
- --------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
One Year 11.6% 10.7%
Five Years N.A. N.A.
Life of Fund* 5.1 5.2
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- --------------------------------------------------------------------------------
One Year 6.3% 5.7%
Five Years N.A. N.A.
Life of Fund* 4.0 4.8
*Inception Dates - Class A: 12/13/93; Class B: 6/11/93
5 Largest Sectors/5/
- --------------------------------------------------------------------------------
By total investments
[BAR GRAPH APPEARS HERE]
Insured Water & Sewer+ 16.3%
Insured Hospitals 12.3%
Electric Utilities 11.5%
Hospitals 10.1%
Insured Colleges & Universities+ 9.8%
+Private insurance does not remove the interest rate risks that are associated
with these investments.
Portfolio Overview/5/
- --------------------------------------------------------------------------------
Number of Issues 37
Average Maturity 22.1 Yrs.
Effective Maturity 9.8 Yrs.
Average Rating AA-
Average Call 7.5 Yrs.
Average Dollar Price $101.53
- --------------------------------------------------------------------------------
/1/These returns do not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for the
Fund's Class B shares; a portion of the Fund's income may be subject to federal
and state income taxes and/or federal alternative minimum tax. /2/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. /3/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. /4/Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. SEC returns for Class A reflect maximum sales charge
as noted, and, for Class B, reflect applicable CDSC based on the following
schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year;
1% - 6th year. /5/Subject to change due to active management.
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.
10
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited)
Statements of Assets and Liabilities
As of March 31, 1998
<TABLE>
<CAPTION>
California Fund Florida Fund Massachusetts Fund Mississippi Fund
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Investment in Municipals Portfolio --
Identified cost $275,211,802 $ 448,381,221 $ 223,822,300 $ 18,683,093
Unrealized appreciation 36,612,414 38,116,067 23,837,777 1,879,731
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment in Portfolio, at value (Note 1A) $311,824,216 $ 486,497,288 $ 247,660,077 $ 20,562,824
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 273,258 $ 275,150 $ 237,343 $ 400
Deferred organization expenses (Note 1D) 2,206 -- 338 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $312,099,680 $ 486,772,438 $ 247,897,758 $ 20,563,224
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends payable $ 584,138 $ 842,202 $ 456,756 $ 36,784
Payable for Fund shares redeemed 434,520 918,727 326,938 36,708
Payable to affiliate for Trustees' fees (Note 4) 947 951 948 54
Accrued expenses 260,239 309,179 152,261 16,544
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 1,279,844 $ 2,071,059 $ 936,903 $ 90,090
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $310,819,836 $ 484,701,379 $ 246,960,855 $ 20,473,134
- ------------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $297,261,270 $ 455,986,029 $ 236,425,071 $ 20,299,661
Accumulated net realized loss from Portfolio
(computed on the basis of identified cost) (22,245,916) (7,979,974) (12,767,922) (1,766,056)
Accumulated undistributed (distributions in
excess of) net investment income (807,932) (1,420,743) (534,071) 59,798
Net unrealized appreciation of investments from
Portfolio (computed on the basis of
identified cost) 36,612,414 38,116,067 23,837,777 1,879,731
- ------------------------------------------------------------------------------------------------------------------------------------
Total $310,819,836 $ 484,701,379 $ 246,960,855 $ 20,473,134
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 6,466,978 $ 10,416,493 $ 6,223,256 $ 1,367,745
Shares Outstanding 583,531 952,954 635,290 138,394
Net Asset Value and Redemption Price Per Share
(Net assets/shares of beneficial interest
outstanding) $ 11.08 $ 10.93 $ 9.80 $ 9.88
Offering Price Per Share
(100/95.25 of net assets value per share) $ 11.63 $ 11.48 $ 10.29 $ 10.37
- ------------------------------------------------------------------------------------------------------------------------------------
Class B Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $304,352,858 $ 474,284,886 $ 231,324,254 $ 19,105,389
Shares Outstanding 29,895,116 42,356,048 21,239,292 1,888,088
Net Asset Value, Offering Price and Redemption
Price Per Share (Note 6)
(Net assets/shares of beneficial interest
outstanding) $ 10.18 $ 11.20 $ 10.89 $ 10.12
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
11
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited)
Statements of Assets and Liabilities
As of March 31, 1998
<TABLE>
<CAPTION>
California Fund Florida Fund Massachusetts Fund Mississippi Fund
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $ -- $ -- $ 9,413,345 $ --
Shares Outstanding -- -- 933,078 --
Net Asset Value, Offering Price and Redemption
Price
Per Share
(Net assets/shares of beneficial interest
outstanding) $ -- $ -- $ 10.09 $ --
- ------------------------------------------------------------------------------------------------------------------------------------
On sales of $25,000 or more, the offering price of Class A shares is reduced.
</TABLE>
See notes to financial statements
12
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Assets and Liabilities
As of March 31, 1998
<TABLE>
<CAPTION>
New York Fund Ohio Fund Rhode Island Fund West Virginia Fund
- ----------------------------------------------------------------------------------------------------------------------------------
Assets
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment in Municipals Portfolio --
Identified cost $467,888,553 $247,325,707 $ 38,565,969 $ 30,078,088
Unrealized appreciation 36,973,468 17,951,709 2,488,602 2,200,494
- ----------------------------------------------------------------------------------------------------------------------------------
Total investment in Portfolio, at value (Note 1A) $504,862,021 $265,277,416 $ 41,054,571 $ 32,278,582
- ----------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 123,907 $ 109,260 $ 300,456 $ 39
Deferred organization expenses (Note 1D) 3,866 1,414 108 --
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets $504,989,794 $265,388,090 $ 41,355,135 $ 32,278,621
- ----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends payable $ 918,159 $ 500,799 $ 75,799 $ 53,810
Payable for Fund shares redeemed 528,509 316,277 8,815 71,696
Payable to affiliate for Trustees' fees (Note 4) 947 919 54 33
Accrued expenses 310,449 172,630 32,757 31,621
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 1,758,064 $ 990,625 $ 117,425 $ 157,160
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets $503,231,730 $264,397,465 $ 41,237,710 $ 32,121,461
- ----------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $462,150,851 $245,515,461 $ 40,723,325 $ 31,381,438
Accumulated net realized gain (loss) from
Portfolio (computed on the basis
of identified cost) 5,465,799 513,177 (1,907,771) (1,379,559)
Accumulated undistributed (distributions in excess
of) net investment income (1,358,388) 417,118 (66,446) (80,912)
Net unrealized appreciation of investments from
Portfolio (computed on the basis
of identified cost) 36,973,468 17,951,709 2,488,602 2,200,494
- ----------------------------------------------------------------------------------------------------------------------------------
Total $503,231,730 $264,397,465 $ 41,237,710 $ 32,121,461
- ----------------------------------------------------------------------------------------------------------------------------------
Class A Shares
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 9,752,741 $ 5,872,169 $ 1,765,038 $ 1,851,029
Shares Outstanding 912,619 597,605 180,912 185,645
Net Asset Value and Redemption Price Per Share
(Net assets / shares of beneficial interest
outstanding) $ 10.69 $ 9.83 $ 9.76 $ 9.97
Offering Price Per Share
(100 / 95.25 of net assets value per share) $ 11.22 $ 10.32 $ 10.25 $ 10.47
- ----------------------------------------------------------------------------------------------------------------------------------
Class B Shares
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets $493,478,989 $258,525,296 $ 39,472,672 $ 30,270,432
Shares Outstanding 42,904,821 23,309,617 3,951,813 2,978,616
Net Asset Value, Offering Price and Redemption
Price Per Share (Note 6)
(Net assets / shares of beneficial interest
outstanding) $ 11.50 $ 11.09 $ 9.99 $ 10.16
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
See notes to financial statements
13
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
For the Six Months Ended March 31, 1998
<TABLE>
<CAPTION>
California Fund Florida Fund Massachusetts Fund Mississippi Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest income allocated from Portfolio $ 9,545,348 $14,172,532 $ 7,497,629 $ 614,893
Expenses allocated from Portfolio (881,217) (1,216,323) (682,949) (45,531)
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $ 8,664,131 $12,956,209 $ 6,814,680 $ 569,362
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Compensation of Trustees not members of the
Administrator's organization (Note 4) $ 1,740 $ 900 $ 855 $ 96
Custodian fee 15,964 -- 9,098 2,448
Distribution and service fees (Note 5)
Class A 4,688 6,746 2,619 993
Class B 1,568,584 2,327,550 1,113,636 93,998
Transfer and dividend disbursing agent fees 143,940 163,516 109,492 7,567
Printing and postage 7,122 10,087 6,830 2,572
Legal and accounting services 4,051 397 2,295 3,388
Registration fees 5,413 4,978 4,070 531
Amortization of organization expenses (Note 1D) 965 -- 1,997 2,677
Miscellaneous 4,275 26,375 13,253 2,087
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 1,756,742 $ 2,540,549 $ 1,264,145 $ 116,357
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 6,907,389 $10,415,660 $ 5,550,535 $ 453,005
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 6,527,142 $ 7,732,196 $ 4,609,924 $ 485,008
Financial futures contracts (849,857) 312,242 (622,028) (64,447)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment transactions $ 5,677,285 $ 8,044,438 $ 3,987,896 $ 420,561
- ------------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $ (500,559) $ 6,132,706 $ 540,203 $ (135,495)
Financial futures contracts 405,034 4,126 242,046 27,562
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $ (95,525) $ 6,136,832 $ 782,249 $ (107,933)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 5,581,760 $14,181,270 $ 4,770,145 $ 312,628
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $12,489,149 $24,596,930 $10,320,680 $ 765,633
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
14
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
For the Six Months Ended March 31, 1998
<TABLE>
<CAPTION>
New York Fund Ohio Fund Rhode Island Fund West Virginia Fund
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Income (Note 1B)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Interest income allocated from Portfolio $ 15,046,116 $8,192,345 $1,159,398 $ 909,827
Expenses allocated from Portfolio (1,345,296) (746,602) (82,435) (66,589 )
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income from Portfolio $ 13,700,820 $7,445,743 $1,076,963 $ 843,238
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------------------------------------------
Compensation of Trustees not members of the
Administrator's organization (Note 4) $ 897 $ 910 $ 54 $ 32
Distribution and service fees (Note 5)
Class A 6,558 2,726 1,655 1,459
Class B 2,385,870 1,249,753 179,418 150,250
Custodian fee 13,844 11,838 3,931 847
Transfer and dividend disbursing agent fees 167,260 97,507 18,392 18,153
Printing and postage 12,764 3,720 4,144 1,368
Legal and accounting services 4,176 5,300 951 --
Registration fees 8,751 1,635 763 --
Amortization of organization expenses (Note 1D) 1,513 1,037 2,314 2,743
Miscellaneous 25,694 10,186 3,589 8,183
- ----------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 2,627,327 $1,384,612 $ 215,211 $ 183,035
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 11,073,493 $6,061,131 $ 861,752 $ 660,203
- ----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 17,189,424 $2,660,820 $ 314,273 $ 499,983
Financial futures contracts (2,106,461) 105,303 (219,400) (98,036 )
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment transactions $ 15,082,963 $2,766,123 $ 94,873 $ 401,947
- ----------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $ (6,459,710) $1,024,370 $ 408,713 $ 224,750
Financial futures contracts 981,800 -- 90,281 36,006
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments $ (5,477,910) $1,024,370 $ 498,994 $ 260,756
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 9,605,053 $3,790,493 $ 593,867 $ 662,703
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 20,678,546 $9,851,624 $1,455,619 $1,322,906
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
15
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended March 31, 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 $ 6,907,389 $ 10,415,660 $ 5,550,535 $ 453,005
Net realized gain on investment transactions 5,677,285 8,044,438 3,987,896 420,561
Net change in unrealized appreciation
(depreciation) of investments (95,525) 6,136,832 782,249 (107,933)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 12,489,149 $ 24,596,930 $ 10,320,680 $ 765,633
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net investment income
Class A $ (143,263) $ (248,523) $ (131,912) $ (30,404)
Class B (6,766,295) (10,167,137) (5,183,965) (425,653)
Class I -- -- (231,775) --
In excess of net investment income
Class A (2,384) (11,556) (5,323) --
Class B (210,450) (476,780) (88,542) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $ (7,122,392) $ (10,903,996) $ (5,641,517) $ (456,057)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares
Class A $ 1,689,131 $ 6,718,550 $ 2,056,941 $ 354,008
Class B 6,051,221 8,834,641 4,076,523 255,829
Class I -- -- 1,251,400 --
Net asset value of shares issued to shareholders
in payment of distributions declared
Class A 60,060 87,040 72,411 21,256
Class B 2,849,219 3,657,352 2,550,840 190,257
Class I -- -- 49,635 --
Cost of shares redeemed
Class A (192,037) (4,799,624) (709,801) (47,137)
Class B (30,989,643) (55,715,192) (19,579,297) (2,555,758)
Class I -- -- (216,252) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from Fund share transactions $(20,532,049) $ (41,217,233) $ (10,447,600) $ (1,781,545)
- ------------------------------------------------------------------------------------------------------------------------------------
Contribution from EV Traditional Municipals Funds $ 4,827,782 $ 8,168,505 $ 4,721,026 $ 1,021,041
Contribution from Massachusetts Municipal Bond Portfolio -- -- 8,170,080 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Contributions $ 4,827,782 $ 8,168,505 $ 12,891,106 $ 1,021,041
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $(10,337,510) $ (19,355,794) $ 7,122,669 $ (450,928)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of period $321,157,346 $ 504,057,173 $ 239,838,186 $ 20,924,062
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $310,819,836 $ 484,701,379 $ 246,960,855 $ 20,473,134
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $ (807,932) $ (1,420,743) $ (534,071) $ 59,798
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
16
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended March 31, 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 $ 11,073,493 $ 6,061,131 $ 861,752 $ 660,203
Net realized gain on investment transactions 15,082,963 2,766,123 94,873 401,947
Net change in unrealized appreciation (depreciation)
of investments (5,477,910) 1,024,370 498,994 260,756
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 20,678,546 $ 9,851,624 $ 1,455,619 $ 1,322,906
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Note 2) --
From net investment income
Class A $ (226,011) $ (117,889) $ (41,189) $ (41,527)
Class B (10,847,482) (5,897,544) (820,563) (618,676)
In excess of net investment income
Class A (14,307) -- (783) (2,381)
Class B (359,546) -- (1,046) (22,685)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders $(11,447,346) $ (6,015,433) $ (863,581) $ (685,269)
- ------------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares
Class A $ 1,521,610 $ 2,744,425 $ 80,232 $ 154,036
Class B 8,517,795 3,460,052 2,890,539 741,593
Net asset value of shares issued to shareholders
in payment of distributions declared
Class A 112,528 54,292 21,774 30,244
Class B 6,186,167 3,092,867 455,935 326,582
Cost of shares redeemed
Class A (683,027) (144,614) (100,031) (140,184)
Class B (47,698,863) (18,810,065) (2,674,950) (2,929,783)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund
share transactions $(32,043,790) $ (9,603,043) $ 673,499 $ (1,817,512)
- ------------------------------------------------------------------------------------------------------------------------------------
Contribution from EV Traditional Municipals Funds $ 8,651,176 $ 3,163,408 $ 1,738,315 $ 1,777,064
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $(14,161,414) $ (2,603,444) $ 3,003,852 $ 597,189
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of period $517,393,144 $267,000,909 $ 38,233,858 $ 31,524,272
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $503,231,730 $264,397,465 $ 41,237,710 $ 32,121,461
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $ (1,358,388) $ 417,118 $ (66,446) $ (80,912)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
17
<PAGE>
Eaton Vance Municipals Funds as of March 31, 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 on investment transactions 5,255,764 7,707,320 2,100,741 164,539
Net change in unrealized appreciation (depreciation)
of investments 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) (Note 2) --
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)
(Note 3) --
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
18
<PAGE>
Eaton Vance Municipals Funds as of March 31, 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) on investment transactions 9,726,733 3,893,563 138,859 (21,740)
Net change in unrealized appreciation (depreciation)
of investments 8,452,408 4,595,564 1,153,611 1,248,927
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 43,369,461 $ 21,403,383 $ 2,988,396 $ 2,748,675
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders (Class B) (Note 2) --
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)
(Note 3) --
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
19
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
California Fund
---------------------------------------------------------------------------------------
Year Ended
-----------------------------------------------------------------
Six Months Ended September 30, March 31,
March 31, 1998 ------------------------------------------- --------------------
(Unaudited) 1997 1996 1995 1994* 1994 1993
-------------------- ------------------------------------------- --------------------
Class A Class B Class B Class B Class B Class B Class B Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value-- Beginning of period $ 10.900 $ 10.010 $ 9.540 $ 9.410 $ 9.290 $ 9.560 $ 10.200 $ 9.850
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.283 $ 0.217 $ 0.451 $ 0.464 $ 0.475 $ 0.240 $ 0.480 $ 0.509
Net realized and unrealized gain (loss) on
investments 0.189 0.177 0.477 0.135 0.253 (0.234) (0.395) 0.524
- ------------------------------------------------------------------------------------------------------------------------------------
Total income from operations $ 0.472 $ 0.394 $ 0.928 $ 0.599 $ 0.728 $ 0.006 $ 0.085 $ 1.033
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.287) $ (0.217) $ (0.451) $ (0.465) $ (0.475) $ (0.240) $ (0.480) $ (0.509)
In excess of net investment income (0.005) (0.007) (0.007) (0.004) (0.016) (0.036) (0.092) (0.115)
From net realized gain on investments -- -- -- -- -- -- (0.153) (0.059)
In excess of net realized gain on investments -- -- -- -- (0.117) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.292) $ (0.224) $ (0.458) $ (0.469) $ (0.608) $ (0.276) $ (0.725) $ (0.683)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value-- End of period $ 11.080 $ 10.180 $ 10.010 $ 9.540 $ 9.410 $ 9.290 $ 9.560 $ 10.200
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 4.37% 3.97% 9.98% 6.49% 8.30% 0.06% 0.55% 10.82%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
- -
Net assets, end of period (000's omitted) $ 6,467 $304,353 $321,157 $ 361,255 $ 401,742 $439,591 $463,414 $438,938
Ratio of net expenses to average daily net
assets /(2)(3)/ 0.88%+ 1.72%+ 1.69% 1.66% 1.65% 1.63%+ 1.67% 1.84%
Ratio of net expenses to average daily net
assets after custodian fee reduction /(2)/ 0.83%+ 1.67%+ 1.68% 1.65% 1.64% -- -- --
Ratio of net investment income to average
daily net assets 5.09%+ 4.31%+ 4.66% 4.87% 5.19% 5.06%+ 4.64% 5.05%
Portfolio Turnover /(4)/ -- -- -- -- -- -- 5% 139%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* 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. (1)
Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the 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.
/(4)/ Portfolio Turnover represents the rate of portfolio activity for the
period while the Fund was making investments directly in securities. The
portfolio turnover rate for the period since the Fund transferred
substantially all of its investable assets to the Portfolio is shown in
the Portfolio's financial statements which are included elsewhere in this
report.
See notes to financial statements
20
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Florida Fund
-------------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 --------------------------------------------------------------
(Unaudited) 1997 1996 1995 1995 1993
-------------------- --------------------------------------------------------------
Class A Class B Class B Class B Class B Class B Class B
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 10.640 $ 10.900 $ 10.780 $ 10.720 $ 10.270 $ 11.700 $ 10.940
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.267 $ 0.229 $ 0.488 $ 0.505 $ 0.514 $ 0.514 $ 0.516
Net realized and unrealized gain (loss) on
investments 0.302 0.311 0.136 0.067 0.469 (1.228) 1.040
- -----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.569 $ 0.540 $ 0.624 $ 0.572 $ 0.983 $ (0.714) $ 1.556
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.267) $ (0.229) $ (0.488) $ (0.506) $ (0.514) $ (0.514) $ (0.516)
In excess of net investment income (0.012) (0.011) (0.016) (0.006) (0.019) (0.082) (0.121)
From net realized gain on investments -- -- -- -- -- -- (0.159)
In excess of net realized gain on investments -- -- -- -- -- (0.120) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.279) $ (0.240) $ (0.504) $ (0.512) $ (0.533) $ (0.716) $ (0.796)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value-- End of period $ 10.930 $ 11.200 $ 10.900 $ 10.780 $ 10.720 $ 10.270 $ 11.700
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 5.40% 5.00% 5.89% 5.43% 9.90% (6.34)% 14.85%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 10,416 $474,285 $504,057 $612,438 $ 701,565 $ 760,867 $776,856
Ratio of net expenses to average daily net
assets /(2)(3)/ 0.75%+ 1.57%+ 1.57% 1.55% 1.54% 1.44% 1.53%
Ratio of net expenses to average daily net
assets after custodian fee reduction /(2)/ 0.70%+ 1.52%+ 1.53% 1.52% 1.51% -- --
Ratio of net investment income to average
daily net assets 4.93%+ 4.15%+ 4.50% 4.67% 4.97% 4.70% 4.54%
Portfolio Turnover /(4)/ -- -- -- -- -- -- 9%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
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.
/(4)/ Portfolio Turnover represents the rate of portfolio activity for the
period while the Fund was making investments directly in securities. The
portfolio turnover rate for the period since the Fund transferred
substantially all of its investable assets to the Portfolio is shown in
the Portfolio's financial statements which are included elsewhere in this
report.
See notes to financial statements
21
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Massachusetts Fund
-----------------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 ------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
-------------------------------- ------------------------------------------------------
Class A Class B Class I Class B Class B Class B Class B Class B
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.620 $ 10.690 $ 9.890 $ 10.330 $ 10.270 $ 9.990 $ 11.250 $ 10.640
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.255 $ 0.238 $ 0.269 $ 0.487 $ 0.491 $ 0.499 $ 0.505 $ 0.514
Net realized and unrealized gain (loss)
on investments 0.190 0.204 0.195 0.360 0.066 0.307 (1.108) 0.784
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.445 $ 0.442 $ 0.464 $ 0.847 $ 0.557 $ 0.806 $ (0.603) $ 1.298
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.255) $ (0.238) $ (0.264) $ (0.487) $ (0.492) $ (0.499) $ (0.505) $ (0.514)
In excess of net investment income (0.010) (0.004) -- -- (0.005) (0.027) (0.087) (0.116)
From net realized gain on investments -- -- -- -- -- -- -- (0.058)
In excess of net realized gain on
investments -- -- -- -- -- -- (0.065) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.265) $ (0.242) $ (0.264) $ (0.487) $ (0.497) $ (0.526) $ (0.657) $ (0.688)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 9.800 $ 10.890 $ 10.090 $ 10.690 $ 10.330 $ 10.270 $ 9.990 $ 11.250
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return (1) 4.66% 4.16% 4.74% 8.41% 5.53% 8.38% (5.57)% 12.67%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted)$ 6,223 $231,324 $ 9,413 $ 239,838 $ 267,398 $ 291,114 $ 295,011 $286,801
Ratio of net expenses to average daily
net assets /(2)(3)/ 0.77%+ 1.61%+ 0.67%+ 1.61% 1.59% 1.58% 1.50% 1.58%
Ratio of net expenses to average daily
net assets after
custodian fee reduction /(2)/ 0.77%+ 1.61%+ 0.67%+ 1.59% 1.58% 1.56% -- --
Ratio of net investment income to average
daily net assets 5.21%+ 4.41%+ 5.35%+ 4.70% 4.75% 5.00% 4.75% 4.69%
Portfolio Turnover /(4)/ -- -- -- -- -- -- -- 27%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
(1) Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be 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.
(4) Portfolio Turnover represents the rate of portfolio activity for the period
while the Fund was making investments directly in securities. The portfolio
turnover rate for the period since the Fund transferred substantially all of
its investable assets to the Portfolio is shown in the Portfolio's financial
statements which are included elsewhere in this report.
See notes to financial statements
22
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Mississippi Fund
--------------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 -------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
---------------------- -------------------------------------------------------------
Class A Class B Class B Class B Class B Class B Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 9.740 $ 9.970 $ 9.610 $ 9.480 $ 9.110 $ 10.260 $ 10.000
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.242 $ 0.214 $ 0.433 $ 0.451 $ 0.449 $ 0.453 $ 0.106
Net realized and unrealized gain (loss) on
investments 0.140 0.148 0.362 0.122 0.379 (1.072) 0.300
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.382 $ 0.362 $ 0.795 $ 0.573 $ 0.828 $ (0.619) $ 0.406
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.242) $ (0.212) $ (0.435) $ (0.443) $ (0.449) $ (0.453) $ (0.106)
In excess of net investment income -- -- -- -- (0.009) (0.071) (0.040)
In excess of net realized gain on investments -- -- -- -- -- (0.007) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.242) $ (0.212) $ (0.435) $ (0.443) $ (0.458) $ (0.531) $ (0.146)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 9.880 $ 10.120 $ 9.970 $ 9.610 $ 9.480 $ 9.110 $ 10.260
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 3.95% 3.66% 8.45% 6.17% 9.40% (6.20)% 3.85%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 1,368 $ 19,105 $ 20,924 $ 23,862 $ 26,756 $ 26,771 $ 11,810
Ratio of net expenses to average daily net
assets /(2)(3)/ 0.81%+ 1.58%+ 1.60% 1.44% 1.36% 0.99% 0.75%+
Ratio of net expenses to average daily net
assets after custodian fee reduction /(2)/ 0.79%+ 1.56%+ 1.59% 1.41% 1.33% -- --
Ratio of net investment income to average
daily net assets 4.93%+ 4.20%+ 4.39% 4.64% 4.89% 4.63% 3.50%+
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ The operating expenses of the Fund and the Portfolio may reflect a reduction
of the Investment Adviser fee, an allocation of expenses to the Investment
Adviser or the Administrator, or both. Had such actions not been taken, the
ratios and net investment income per share would have been as follows:
<TABLE>
<S> <C> <C> <C> <C>
Ratios (As a percentage of average daily net assets):
Expenses /(2)(3)/ 1.55% 1.49% 1.45% 1.44%+
Expenses after custodian fee reduction /(2)/ 1.52% 1.46% -- --
Net investment income 4.53% 4.76% 4.17% 2.81%+
Net investment income per share $ 0.440 $ 0.437 $ 0.407 $ 0.085
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, June 11, 1993, to September
30, 1993.
/(1)/ Total return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day
of each period reported. Dividends and distributions, if any, are assumed
to be reinvested at the net asset value on the 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
23
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
New York Fund
-------------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 -----------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
--------------------- -----------------------------------------------------------
Class A Class B Class B Class B Class B Class B Class B
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 10.510 $ 11.300 $ 10.930 $ 10.830 $ 10.450 $ 11.880 $ 11.070
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.274 $ 0.243 $ 0.506 $ 0.506 $ 0.523 $ 0.528 $ 0.535
Net realized and unrealized gain (loss) on 0.193 0.210 0.375 0.116 0.406 (1.165) 1.014
investments
- -----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.467 $ 0.453 $ 0.881 $ 0.622 $ 0.929 $ (0.637) $ 1.549
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.270) $ (0.245) $ (0.506) $ (0.508) $ (0.523) $ (0.528) $ (0.535)
In excess of net investment income (0.017) (0.008) (0.005) (0.014) (0.026) (0.089) (0.120)
From net realized gain on investments -- -- -- -- -- -- (0.084)
In excess of net realized gain on investments -- -- -- -- -- (0.176) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.287) $ (0.253) $ (0.511) $ (0.522) $ (0.549) $ (0.793) $ (0.739)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 10.690 $ 11.500 $ 11.300 $ 10.930 $ 10.830 $ 10.450 $ 11.880
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 4.48% 4.04% 8.23% 5.87% 9.23% (5.62)% 14.53%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 9,753 $493,479 $517,393 $590,397 $640,605 $648,325 $650,361
Ratio of expenses to average daily net assets 0.78%+ 1.58%+ 1.63% 1.54% 1.55% 1.46% 1.55%
/(2)(3)/
Ratio of expenses to average daily net assets
after custodian fee reduction/(2)/ 0.76%+ 1.56%+ 1.63% 1.51% 1.51% -- --
Ratio of net investment income to average 5.08%+ 4.30%+ 4.56% 4.64% 4.99% 4.72% 4.68%
daily net assets
Portfolio Turnover/(4)/ -- -- -- -- -- -- 11%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
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 for the period the fund was investing in the Portfolio.
/(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.
/(4)/ Portfolio Turnover represents the rate of portfolio activity for the
period while the Fund was making investments directly in securities. The
portfolio turnover rate for the period since the Fund transferred
substantially all of its investable assets to the Portfolio is shown in
the Portfolio's financial statements which are included elsewhere in this
report.
See notes to financial statements
24
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Ohio Fund
------------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 -------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
-------------------- -------------------------------------------------------------
Class A Class B Class B Class B Class B Class B Class B
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 9.680 $ 10.930 $ 10.590 $ 10.510 $ 10.070 $ 11.300 $ 10.550
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.258 $ 0.249 $ 0.499 $ 0.494 $ 0.487 $ 0.494 $ 0.499
Net realized and unrealized gain (loss) on
investments 0.148 0.158 0.328 0.071 0.461 (1.081) 0.901
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.406 $ 0.407 $ 0.827 $ 0.565 $ 0.948 $ (0.587) $ 1.400
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.256) $ (0.247) $ (0.487) $ (0.485) $ (0.487) $ (0.494) $ (0.499)
In excess of net investment income -- -- -- -- (0.021) (0.084) (0.118)
From net realized gain on investments -- -- -- -- -- -- (0.033)
In excess of net realized gain on investments -- -- -- -- -- (0.065) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.256) $ (0.247) $ (0.487) $ (0.485) $ (0.508) $ (0.643) $ (0.650)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 9.830 $ 11.090 $ 10.930 $ 10.590 $ 10.510 $ 10.070 $ 11.300
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 4.23% 3.75% 7.98% 5.48% 9.74% (5.39)% 13.74%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 5,872 $258,525 $267,001 $289,829 $ 315,891 $ 321,578 $299,331
Ratio of expenses to average daily net assets 0.78%+ 1.62%+ 1.63% 1.63% 1.59% 1.50% 1.58%
/(2)(3)/
Ratio of expenses to average daily net assets
after custodian fee reduction /(2)/ 0.77%+ 1.61%+ 1.62% 1.61% 1.57% -- --
Ratio of net investment income to average 5.31%+ 4.52%+ 4.65% 4.66% 4.80% 4.62% 4.57%
daily net assets
Portfolio Turnover /(4)/ -- -- -- -- -- -- 12%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
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 for the period the fund was investing in the Portfolio.
/(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.
/(4)/ Portfolio Turnover represents the rate of portfolio activity for the
period while the Fund was making investments directly in securities. The
portfolio turnover rate for the period since the Fund transferred all of
its investable assets to the Portfolio is shown in the Portfolio's
financial statements which are included elsewhere in this report.
See notes to financial statements
25
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Rhode Island Fund
---------------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 ---------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
--------------------- ---------------------------------------------------------------
Class A Class B Class B Class B Class B Class B Class B
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 9.610 $ 9.840 $ 9.510 $ 9.400 $ 9.090 $ 10.330 $ 10.000
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.230 $ 0.213 $ 0.427 $ 0.440 $ 0.452 $ 0.454 $ 0.113
Net realized and unrealized gain (loss) on
investments 0.154 0.150 0.334 0.125 0.332 (1.146) 0.361
- -----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.384 $ 0.363 $ 0.761 $ 0.565 $ 0.784 $ (0.692) $ 0.474
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.230) $ (0.213) $ (0.427) $ (0.444) $ (0.452) $ (0.454) $ (0.113)
In excess of net investment income (0.004) -- (0.004) (0.011) (0.022) (0.078) (0.008)
From net realized gain on investments -- -- -- -- -- -- (0.023)
In excess of net realized gain on
investments -- -- -- -- -- (0.016) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.234) $ (0.213) $ (0.431) $ (0.455) $ (0.474) $ (0.548) $ (0.144)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 9.760 $ 9.990 $ 9.840 $ 9.510 $ 9.400 $ 9.090 $ 10.330
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 4.03% 3.72% 8.19% 6.14% 8.94% (6.91)% 4.53%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 1,765 $ 39,473 $ 38,234 $ 39,488 $ 39,864 $ 34,261 $ 17,680
Ratio of net expenses to average daily net
assets /(2)(3)/ 0.78%+ 1.55%+ 1.40% 1.35% 1.33% 1.02% 0.75%+
Ratio of net expenses to average daily net
assets after custodian fee
reduction /(2)/ 0.75%+ 1.52%+ 1.35% 1.32% 1.29% -- --
Ratio of net investment income to average
daily net assets 4.73%+ 4.28%+ 4.43% 4.63% 4.92% 4.65% 3.70%+
- -----------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the Investment Advisor fee, an allocation of
expenses to the Investment Advisor or Administrator, or both. Had such actions 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% 1.30%+
Expenses after custodian fee reduction/(2)/ 1.47% 1.44% 1.42% -- --
Net investment income 4.31% 4.51% 4.79% 4.29% 3.15%+
Net investment income per share $ 0.415 $ 0.429 $ 0.440 $ 0.418 $ 0.096
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, June 11, 1993, to September 30,
1993.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the 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 March 31, 1998
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
West Virginia Fund
-------------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 ------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
---------------------- ------------------------------------------------------------
Class A Class B Class B Class B Class B Class B Class B
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- Beginning of period $ 9.790 $ 9.970 $ 9.620 $ 9.500 $ 9.130 $ 10.220 $ 10.000
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.237 $ 0.199 $ 0.419 $ 0.420 $ 0.436 $ 0.450 $ 0.103
Net realized and unrealized gain (loss) on 0.192 0.198 0.351 0.147 0.393 (1.011) 0.262
investments
- -----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.429 $ 0.397 $ 0.770 $ 0.567 $ 0.829 $ (0.561) $ 0.365
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.236) $ (0.200) $ (0.419) $ (0.427) $ (0.436) $ (0.450) $ (0.103)
In excess of net investment income (0.013) (0.007) (0.001) (0.020) (0.023) (0.069) (0.042)
In excess of net realized gain on investments -- -- -- -- -- (0.010) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.249) $ (0.207) $ (0.420) $ (0.447) $ (0.459) $ (0.529) $ (0.145)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value -- End of period $ 9.970 $ 10.160 $ 9.970 $ 9.620 $ 9.500 $ 9.130 $ 10.220
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return /(1)/ 4.42% 4.01% 8.18% 6.02% 9.39% (5.66)% 3.47%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $ 1,851 $ 30,270 $ 31,524 $ 37,708 $ 39,569 $ 38,476 $ 25,717
Ratio of net expenses to average daily net
assets /(2)(3)/ 0.80%+ 1.59%+ 1.53% 1.55% 1.40% 0.95% 0.75%+
Ratio of net expenses to average daily net
assets after custodian fee reduction /(2)/ 0.77%+ 1.56%+ 1.51% 1.51% 1.38% -- --
Ratio of net investment income to average
daily net assets 4.76%+ 3.98%+ 4.31% 4.30% 4.74% 4.62% 3.40%+
- -----------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the Investment Adviser fee, an allocation of
expenses to the Investment Adviser or Administrator, or both. Had such actions not been taken, the ratios and net investment
income per share would have been as follows:
Ratios (As a percentage of average daily net
assets):
Expenses /(2)(3)/ 1.48% 1.32% 1.19%+
Expenses after custodian fee reduction /(2)/ 1.46% -- --
Net investment income 4.66% 4.25% 2.96%+
Net investment income per share $ 0.429 $ 0.414 $ 0.090
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, June 11, 1993, to September 30,
1993.
/(1)/ Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the 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
27
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
----------------------------------------------------------------------------
Eaton Vance Municipals Trust (the Trust) is an entity of the type commonly
known as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. The Trust presently consists of twenty-nine Funds, eight
of the non-diversified funds are included in these financial statements.
They include Eaton Vance 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 (100% at March
31, 1998 for each Fund except Mississippi, Rhode Island and West Virginia
which were 99.4%, 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, 1997, the Funds, for federal income tax purposes, had capital
loss carryovers which will reduce taxable income arising from future net
realized gain on investments, if any, to the extent permitted by the
Internal Revenue Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Funds of
any liability for federal income or excise tax. A portion of such capital
loss carryovers were acquired through the Fund Reorganization (see Note 8)
and may be subject to certain limitations. The amounts and expiration dates
of the capital loss carryovers are as follows:
Fund Amount Expires
---------------------------------------------------------------------
California Fund $18,822,061 September 30, 2004
1,123,064 September 30, 2003
6,075,665 September 30, 2002
Florida Fund 15,713,972 September 30, 2004
28
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CON'T
Fund Amount Expires
---------------------------------------------------------------------
Massachusetts Fund $ 2,135 September 30, 2005
11,784,647 September 30, 2004
4,861,649 September 30, 2003
85,630 September 30, 2002
Mississippi Fund 1,574,492 September 30, 2004
595,367 September 30, 2003
47,035 September 30, 2002
New York Fund 9,988,977 September 30, 2004
Ohio Fund 2,029,384 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
485,900 September 30, 2003
85,223 September 30, 2002
West Virginia Fund 170,463 September 30, 2005
1,133,263 September 30, 2004
490,344 September 30, 2003
20,474 September 30, 2002
Additionally, at September 30, 1997, net capital losses of $20,884 and $463
for the Rhode Island Fund and West Virginia Fund, respectively, attributable
to security transactions incurred after October 31, 1996, are treated as
arising on the first day of each Fund's current taxable year.
Dividends paid by each Fund from net interest on tax-exempt municipal bonds
allocated from its corresponding Portfolio are not includable by
shareholders as gross income for federal income tax purposes because each
Fund and Portfolio intend to meet certain requirements of the Internal
Revenue Code applicable to regulated investment companies which will enable
the Funds to pay exempt-interest dividends. The portion of such interest, if
any, earned on private activity bonds issued after August 7, 1986 may be
considered a tax preference item to shareholders.
D Deferred Organization Expenses -- Costs incurred by each Fund in
connection with its organization, including registration costs, are being
amortized on the straight-line basis over five years.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Funds and the Portfolios. Pursuant to the respective
custodian agreements, IBT receives a fee reduced by 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 Statement of Operations.
F Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
G Other -- Investment transactions are accounted for on a trade-date basis.
H Interim Financial Information -- The interim financial statements relating
to March 31, 1998 and for the six month period then ended have not been
audited by independent certified public accountants, but in the opinion of
the Fund's management, reflect all adjustments, consisting only of normal
recurring adjustments necessary for the fair presentation of the financial
statements.
2 Distributions to Shareholders
----------------------------------------------------------------------------
The net income of each Fund is determined daily and subtantially 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.
29
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
3 Shares of Beneficial Interest
----------------------------------------------------------------------------
The Funds' Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Such shares may be issued in a number of different classes.
Transactions in Fund shares were as follows:
California Fund
------------------------------------------
Six Months Ended
March 31, 1998 Year Ended
(Unaudited) Sept. 30, 1997
---------------------- --------------
Class A Class B Class B
- --------------------------------------------------------------------------------
Sales 152,567 596,441 1,432,515
Issued to shareholders electing
to receive payments of
distributions in Fund shares 5,435 280,807 661,973
Redemptions (17,333) (3,056,232) (7,897,702)
Issued to EV Traditional
Municipals Fund shareholders 442,862 - -
- --------------------------------------------------------------------------------
Net increase (decrease) 583,531 (2,178,984) (5,803,214)
- --------------------------------------------------------------------------------
Florida Fund
------------------------------------------
Six Months Ended
March 31, 1998 Year Ended
(Unaudited) Sept. 30, 1997
---------------------- --------------
Class A Class B Class B
- --------------------------------------------------------------------------------
Sales 617,824 793,776 2,104,483
Issued to shareholders
electing to receive payments of
distributions in Fund shares 8,003 329,003 806,134
Redemptions (440,518) (5,017,263) (13,472,545)
Issued to EV Traditional
Municipals Fund shareholders 767,645 - -
- --------------------------------------------------------------------------------
Net increase (decrease) 952,954 (3,984,484) (10,561,928)
- --------------------------------------------------------------------------------
Massachusetts Fund
------------------------------------------
Six Months Ended
March 31, 1998 Year Ended
(Unaudited) Sept. 30, 1997
---------------------- --------------
Class A Class B Class B
- --------------------------------------------------------------------------------
Sales 210,005 375,179 747,491
Issued to shareholders
electing to receive payments of
distributions in Fund shares 7,417 235,190 546,499
Redemptions (72,960) (1,809,544) (4,753,239)
Issued to EV Traditional
Municipals Fund shareholders 490,828 - -
- --------------------------------------------------------------------------------
Net increase (decrease) 635,290 (1,199,175) (3,459,249)
- --------------------------------------------------------------------------------
Massachusetts
Fund
----------------
Six Months Ended
March 31, 1998
Class I (Unaudited)
- --------------------------------------------------------------------------------
Sales 124,046
Issued to shareholders electing to receive payment of
distribution in Fund shares 4,942
Redemptions (21,693)
Issued to Massachusetts Municipal Bond
Portfolio shareholders 825,783
- --------------------------------------------------------------------------------
Net increase 933,078
- --------------------------------------------------------------------------------
Mississippi Fund
------------------------------------------
Six Months Ended
March 31, 1998 Year Ended
(Unaudited) Sept. 30, 1997
---------------------- --------------
Class A Class B Class B
- --------------------------------------------------------------------------------
Sales 36,135 25,276 93,560
Issued to shareholders electing
to receive payments of
distributions in Fund shares 2,158 18,863 47,277
Redemptions (4,739) (253,724) (526,804)
Issued to EV Traditional
Municipals Fund shareholders 104,840 - -
- --------------------------------------------------------------------------------
Net increase (decrease) 138,394 (209,585) (385,967)
- --------------------------------------------------------------------------------
30
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
New York Fund
------------------------------------------
Six Months Ended
March 31, 1998 Year Ended
(Unaudited) Sept. 30, 1997
---------------------- --------------
Class A Class B Class B
- --------------------------------------------------------------------------------
Sales 143,078 745,255 1,854,790
Issued to shareholders electing
to receive payments of
distributions in Fund shares 10,574 540,026 1,243,630
Redemptions
(64,448) (4,175,738) (11,329,986)
Issued to EV Traditional
Municipal Fund shareholders 823,415 - -
- --------------------------------------------------------------------------------
Net increase (decrease) 912,619 (2,890,457) (8,231,566)
- --------------------------------------------------------------------------------
Ohio Fund
------------------------------------------
Six Months Ended
March 31, 1998 Year Ended
(Unaudited) Sept. 30, 1997
---------------------- --------------
Class A Class B Class B
- --------------------------------------------------------------------------------
Sales 280,022 312,699 795,756
Issued to shareholders electing
to receive payments of
distributions in Fund shares 5,540 279,626 612,550
Redemptions (14,713) (1,702,231) (4,355,129)
Issued to EV Traditional
Municipal Fund shareholders 326,756 - -
- --------------------------------------------------------------------------------
Net increase (decrease) 597,605 (1,109,906) (2,946,823)
- --------------------------------------------------------------------------------
Rhode Island Fund
------------------------------------------
Six Months Ended
March 31, 1998 Year Ended
(Unaudited) Sept. 30, 1997
---------------------- --------------
Class A Class B Class B
- --------------------------------------------------------------------------------
Sales 8,193 290,003 405,304
Issued to shareholders electing
to receive payments of
distributions in Fund shares 2,241 45,778 99,538
Redemptions (10,328) (269,648) (770,050)
Issued to EV Traditional
Municipal Fund shareholders 180,806 - -
- --------------------------------------------------------------------------------
Net increase (decrease) 180,912 66,133 (265,208)
- --------------------------------------------------------------------------------
West Virginia Fund
------------------------------------------
Six Months Ended
March 31, 1998 Year Ended
(Unaudited) Sept. 30, 1997
---------------------- --------------
Class A Class B Class B
- --------------------------------------------------------------------------------
Sales 15,391 73,698 115,286
Issued to shareholders electing
to receive payments of
distributions in Fund shares 3,044 32,283 77,703
Redemptions (14,393) (289,934) (949,690)
Issued to EV Traditional
Municipal Fund shareholders 181,603 - -
- --------------------------------------------------------------------------------
Net increase (decrease) 185,645 (183,953) (756,701)
- --------------------------------------------------------------------------------
4 Transactions with Affiliates
----------------------------------------------------------------------------
Eaton Vance Management (EVM) serves as the Administrator of each Fund, but
receives no compensation. Each of the Portfolios have engaged Boston
Management and Research (BMR), a subsidiary of EVM, to render investment
advisory services. See Note 2 of the Portfolios' Notes to Financial
Statements which are included elsewhere in this report. Certain of the
officers and Trustees of the Funds and the Portfolios are officers and
directors/trustees of the above organizations. Except as to Trustees of the
Funds and Portfolios who are not members of EVM's or BMR's organization,
officers and Trustees receive remuneration for their services to each fund
out of the investment adviser fee earned by BMR. Eaton Vance Distributors,
Inc. (EVD), a subsidiary of EVM and the Funds' principal underwriter,
received $2,309, $6,093, $2,780, $958, $3,267, $1,182, $160 and $381 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 six
months ended March 31, 1998.
5 Distribution Plan
----------------------------------------------------------------------------
Each Fund has adopted a distribution plan (the Plans) pursuant to Rule 12b-1
under the Investment Company Act of 1940 for each Fund's Class B shares. The
Plans require the Class B shares to pay the principal underwriter, Eaton
Vance Distributors, Inc. (EVD), amounts equal to 1/365 of 0.75% of each
Fund's Class B daily net assets, for providing
31
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CON'D
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 Fund's Class B shares and, accordingly,
reduces each Fund's Class B net assets. For the six months ended March 31,
1998, California Fund, Florida Fund, Massachusetts Fund, Mississippi Fund,
New York Fund, Ohio Fund, Rhode Island Fund and West Virginia Fund, paid
$1,176,562, $1,837,553, $882,305, $75,398, $1,893,588, $986,649, $143,664
and $116,734, respectively, to EVD, representing 0.75% of each Fund's Class
B average daily net assets. At March 31, 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 $894,000, $10,818,000, $5,605,000, $728,000, $9,554,000,
$6,107,000, $1,367,000 and $1,035,000, respectively.
In addition, the Plans authorize the Funds to make payments of service fees
to the Principal Underwriter, Authorized Firms and other persons in amounts
not exceeding 0.25% of each Fund's average daily net assets for any fiscal
year. The Trustees have initially implemented the Plans by authorizing the
Funds to make quarterly service fee payments to the Principal Underwriter
and Authorized Firms in amounts not expected to exceed 0.20% per annum
(0.25% per annum for the California Fund) of each Fund's average daily net
assets attributable to both Class A and Class B shares based on the value of
Fund shares sold by such persons and remaining outstanding for at least one
year. For the six months ended March 31, 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 $4,688, $6,746, $2,619, $993, $6,558,
$2,726, $1,655 and $1,459, respectively, for Class A shares and $392,022,
$489,997, $231,331, $18,600, $492,282, $263,104, $35,754 and $33,516,
respectively, for Class B shares. Service fee payments are made for personal
services and/or maintenance of shareholder accounts. Service fees paid to
EVD and Authorized Firms are separate and distinct from the sales
commissions and distribution fees payable by each Fund to EVD, and as such
are not subject to automatic discontinuance when there are no outstanding
Uncovered Distribution Charges of EVD.
Certain officers and Trustees of the Funds are officers or directors of EVD.
6 Contingent Deferred Sales Charge
----------------------------------------------------------------------------
A contingent deferred sales charge (CDSC) is imposed on any redemption of
Class B shares made within six years of purchase. Generally, the CDSC is
based upon the lower of the net asset value at date of redemption or date of
purchase. No charge is levied on Class B shares acquired by reinvestment of
dividends or capital gains distributions. The CDSC is imposed at declining
rates that begin at 5% in the case of redemptions in the first and second
year after purchase, declining one percentage point each subsequent year. No
CDSC is levied on Class B shares which have been sold to EVD or its
affiliates or to their respective employees or clients. CDSC charges are
paid to EVD to reduce the amount of Uncovered Distribution Charges
calculated under each Fund's Class B Distribution Plan (See Note 5). CDSC
charges received when no Uncovered Distribution Charges exist will be
credited to the Fund. EVD received approximately $229,000, $540,000,
$185,000, $39,000, $548,000, $220,000, $62,000 and $47,000 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 six months ended March 31, 1998.
7 Investment Transactions
----------------------------------------------------------------------------
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the six months ended March 31, 1998 were as follows:
California Fund
----------------------------------------------------------------------
Increases $ 7,904,301
Decreases 37,329,970
Florida Fund
----------------------------------------------------------------------
Increases $15,423,197
Decreases 70,264,782
32
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
Massachusetts Fund
----------------------------------------------------------------------
Increases $ 7,444,277
Decreases 25,043,767
Mississippi Fund
----------------------------------------------------------------------
Increases $ 684,332
Decreases 3,001,884
New York Fund
----------------------------------------------------------------------
Increases $10,833,885
Decreases 56,881,228
Ohio Fund
----------------------------------------------------------------------
Increases $ 6,765,535
Decreases 23,992,917
Rhode Island Fund
----------------------------------------------------------------------
Increases $ 2,822,460
Decreases 3,528,899
West Virginia Fund
----------------------------------------------------------------------
Increases $ 973,926
Decreases 3,576,455
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:
Aggregate Net asset
Class A shares value of value per
Fund issued shares issued share
------------------------------------------------------------------------
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
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:
Fund Acquired Net Assets Unrealized appreciation
------------------------------------------------------------------------
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
The net assets acquired from the Massachusetts Municipal Bond Portfolio were
$8,170,080 and the unrealized appreciation was $375,818.
33
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
Directly after the merger, the combined net assets of the Funds and the net
asset value of Class A shares and Class B shares were as follows:
Class A net Class B net
asset value asset value
Fund Combined Net Assets per share per share
--------------------------------------------------------------------------
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
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.
34
<PAGE>
California Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------
Cogeneration -- 7.7%
- ---------------------------------------------------------------------------
NR BBB- $ 4,985 Central Valley
Financing Authority,
(Carson Ice),
6.20%, 7/1/20 $ 5,282,405
NR BBB- 10,900 Sacramento Cogeneration
Authority, (Procter
& Gamble), 6.50%,
7/1/21 11,909,775
NR BBB- 6,000 Sacramento Power
Authority, Cogeneration
Project, 6.00%, 7/1/22 6,362,400
- ---------------------------------------------------------------------------
$ 23,554,580
- ---------------------------------------------------------------------------
Electric Utilities -- 1.5%
- ---------------------------------------------------------------------------
A2 A $ 4,100 California Pollution
Control Financing
Authority, (San
Diego Gas & Electric),
5.90%, 6/1/14 $ 4,539,274
- ---------------------------------------------------------------------------
$ 4,539,274
- ---------------------------------------------------------------------------
Escrowed/Prerefunded -- 23.2%
- ---------------------------------------------------------------------------
NR BBB $ 3,910 Fontana Public
Financing Authority,
7.00%, 9/1/21 $ 4,221,236
Aaa AAA 6,400 Port Oakland, CA,
0.00%, 11/1/05 3,949,440
Aaa AAA 8,000 Sacramento County,
Single Family,
(AMT) (GNMA),
8.125%, 7/1/16/(1)/ 10,831,520
Aaa AAA 6,000 Sacramento County,
Single Family,
(AMT) (GNMA),
8.25%, 1/1/21 8,444,280
Aaa NR 14,285 Sacramento County,
Single Family,
(AMT) (GNMA),
8.50%, 11/1/16 20,017,855
Aaa AAA 3,000 San Francisco City
and County Sewer,
(AMBAC) Variable
Rate, 10/1/21/(2)/ 3,345,000
Aaa AAA 12,000 San Joaquin Hills
Transportation
Corridor Agency,
Toll Road Bonds,
0.00%, 1/1/14 5,525,640
Aaa AAA 35,975 San Joaquin Hills
Transportation
Corridor Agency,
Toll Road Bonds,
0.00%, 1/1/27 8,392,968
Aaa AAA 4,430 San Joaquin Hills
Transportation
Corridor Agency,
Toll Road Bonds,
7.00%, 1/1/30 5,042,802
Aaa AAA 5,765 San Joaquin Hills,
CA, Transportation
Corridor Agency,
Toll Road Bonds,
0.00%, 1/1/26 1,415,596
- ---------------------------------------------------------------------------
$ 71,186,337
- ---------------------------------------------------------------------------
Hospitals -- 2.2%
- ---------------------------------------------------------------------------
NR NR $ 1,000 Eastern Plumas, CA,
Health Care,
(District Hospital),
7.50%, 8/1/07 $ 1,025,450
Ba2 NR 1,000 San Bernadino, CA,
San Bernadino
Community Hospital,
7.875%, 12/1/08 1,053,930
Ba2 NR 3,000 San Bernadino, CA,
San Bernadino
Community Hospital,
7.875%, 12/1/19 3,156,870
NR BBB- 1,500 Woodland, (Woodland
Memorial Hospital),
8.20%, 8/1/15 1,546,380
- ---------------------------------------------------------------------------
$ 6,782,630
- ---------------------------------------------------------------------------
Housing -- 6.8%
- ---------------------------------------------------------------------------
Aa AA- $ 2,730 California Housing
Finance Agency,
7.375%, 8/1/11 $ 2,833,249
Aa AA- 2,475 California Housing
Finance Agency,
7.40%, 8/1/26 2,690,078
Aa AA- 3,595 California Housing
Finance Agency,
7.50%, 8/1/25 3,930,665
Aa AA- 5,630 California Housing
Finance Agency,
7.65%, 8/1/23 5,851,428
Aa2 AA- 1,180 California Housing
Finance Agency,
8.60%, 8/1/19 1,212,957
See notes to financial statements
35
<PAGE>
California Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------
Housing (continued)
- ---------------------------------------------------------------------------
NR NR $ 2,000 Los Angeles County
Housing Authority,
CA, Multifamily
Housing, (Corporate
Fund for Housing),
10.50%, 12/1/29 $ 1,851,940
A1 NR 770 Los Angeles County,
Single Family,
7.875%, 8/1/16 830,129
NR A+ 1,560 Oakland, Housing
Finance Agency,
7.10%, 1/1/10 1,649,216
- ---------------------------------------------------------------------------
$ 20,849,662
- ---------------------------------------------------------------------------
Industrial Development Revenue/Pollution
Control Revenue -- 3.9%
- ---------------------------------------------------------------------------
A3 A- $ 5,000 California Pollution
Control Financing
Authority, (Browning
Ferris Industries,
Inc.), 5.80%, 12/1/16 $ 5,247,000
NR NR 3,000 California Pollution
Control Financing
Authority, (Laidlaw
Environmental),
(AMT), 6.70%, 7/1/07 3,161,640
Baa3 BB+ 3,600 California Statewide
Community Development
Authority, (United
Airlines), (AMT),
5.70%, 10/1/33 3,674,628
- ---------------------------------------------------------------------------
$ 12,083,268
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 7.0%
- ---------------------------------------------------------------------------
Aaa AAA $ 8,000 Northern California
Power Agency (MBIA)
Variable Rate,
8/1/25/(2)/ $ 9,600,000
Aaa AAA 2,000 Southern California
Public Power
Authority, (FGIC)
Variable Rate,
7/1/12/(2)/ 2,112,500
Aaa AAA 7,070 Southern California
Public Power
Authority, (MBIA),
0.00%, 7/1/15 2,940,979
Aaa AAA 6,915 Southern California
Public Power
Authority, (MBIA),
5.00%, 1/1/20 6,735,556
- ---------------------------------------------------------------------------
$ 21,389,035
- ---------------------------------------------------------------------------
Insured-Hospitals -- 1.2%
- ---------------------------------------------------------------------------
Aaa AAA $ 4,000 California Health
Facilities Financing
Authority, Stanford
Health Care, (AMBAC),
5.00%, 11/15/28 $ 3,854,160
- ---------------------------------------------------------------------------
$ 3,854,160
- ---------------------------------------------------------------------------
Insured-Lease Revenue/Certificates of
Participation -- 3.0%
- ---------------------------------------------------------------------------
Aaa AAA $ 4,350 Stockton, Wastewater
Treatment Plant,
(FGIC), 6.80%, 9/1/24 $ 5,055,135
Aaa AAA 13,985 Visalia Unified
School District,
(MBIA), 0.00%, 12/1/17 4,054,112
- ---------------------------------------------------------------------------
$ 9,109,247
- ---------------------------------------------------------------------------
Insured-Solid Waste -- 0.5%
- ---------------------------------------------------------------------------
Aaa AAA $ 1,500 Inland Empire Solid
Waste Finance
Authority, (FSA),
6.25%, 8/1/11 $ 1,691,700
- ---------------------------------------------------------------------------
$ 1,691,700
- ---------------------------------------------------------------------------
Insured-Transportation -- 3.6%
- ---------------------------------------------------------------------------
Aaa AAA $ 3,125 Port Oakland, CA,
(MBIA), 5.375%,
11/1/25 $ 3,136,875
Aaa AAA 2,000 San Francisco
Airport, (MBIA),
6.75%, 5/1/13 2,237,160
Aaa AAA 7,800 San Joaquin Hills,
CA, Transportation
Corridor Agency,
Toll Road Bonds,
(MBIA), 0.00%, 1/15/24 2,038,374
Aaa AAA 15,000 San Joaquin Hills,
CA, Transportation
Corridor Agency,
Toll Road Bonds,
(MBIA), 0.00%, 1/15/25 3,717,300
- ---------------------------------------------------------------------------
$ 11,129,709
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 9.9%
- ---------------------------------------------------------------------------
Aaa AAA $ 5,000 California Water
Resources, Central
Valley Project,
(FGIC), 5.25%, 12/1/28 $ 5,006,850
See notes to financial statements
36
<PAGE>
California Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------
Insured-Water and Sewer (continued)
- ---------------------------------------------------------------------------
Aaa AAA $ 5,000 Contra Costa County,
Water District, (MBIA),
5.00%, 10/1/24 $ 4,857,050
Aaa AAA 5,000 East Bay, Municipal
Utilities District,
Wastewater Treatment
System, (FGIC), 5.00%,
6/1/26 4,859,850
Aaa AAA 5,000 East Bay, Municipal
Utilities District,
Water System,
(MBIA) Variable
Rate, 6/1/08/(2)/ 5,375,000
Aaa AAA 2,000 Metropolitan Water
District, Southern
California Waterworks,
(MBIA), 5.00%, 7/1/27 1,942,980
Aaa AAA 5,000 Metropolitan Water
District, Southern
California Waterworks,
(MBIA), 5.00%, 7/1/30 4,844,000
Aaa AAA 3,000 San Diego County
Water Authority,
(FGIC) Variable
Rate, 4/22/09/(2)/ 3,566,250
- ---------------------------------------------------------------------------
$ 30,451,980
- ---------------------------------------------------------------------------
Lease Revenue/
Certificates of Participation -- 17.5%
- ---------------------------------------------------------------------------
Aa3 A+ $ 6,500 California Public
Works, (University
of California),
5.00%, 6/1/23 $ 6,265,220
Aa3 A+ 5,000 California Public
Works, (University
of California),
5.25%, 6/1/20 5,132,100
Aa3 A+ 8,000 California Public
Works, (University
of California),
5.50%, 6/1/14 8,531,120
Baa3 BBB- 2,750 Inglewood, CA,
7.00%, 8/1/19 2,966,865
NR NR 7,000 Los Angeles County,
(Marina Del Ray),
6.50%, 7/1/08 7,593,740
Baa1 BBB 5,115 Los Angeles County,
Disney Parking
Project, 0.00%, 3/1/16 1,914,800
Baa1 BBB 1,925 Los Angeles County,
Disney Parking
Project, 0.00%, 3/1/17 675,906
Baa1 BBB 5,000 Los Angeles County,
Disney Parking
Project, 0.00%, 9/1/17 1,707,700
Baa1 BBB 5,370 Los Angeles County,
Disney Parking
Project, 0.00%, 3/1/18 1,784,075
Baa1 BBB 3,100 Los Angeles County,
Disney Parking
Project, 0.00%, 3/1/20 922,002
Baa1 BBB 6,925 Los Angeles County,
Disney Parking
Project, 0.00%, 9/1/20 2,003,472
Baa1 BBB 1,000 Los Angeles County,
Disney Parking
Project, 6.50%, 3/1/23 1,071,250
A1 A+ 8,000 Pasadena Parking
Facility Project,
6.25%, 1/1/18 9,017,840
A1 A+ 4,000 Sacramento City
Financing Authority,
5.40%, 11/1/20 4,176,120
- ---------------------------------------------------------------------------
$ 53,762,210
- ---------------------------------------------------------------------------
Nursing Homes -- 1.0%
- ---------------------------------------------------------------------------
NR NR $ 3,000 Banning, CA,
9.50%, 12/1/11 $ 3,078,390
- ---------------------------------------------------------------------------
$ 3,078,390
- ---------------------------------------------------------------------------
Special Tax Revenue -- 8.4%
- ---------------------------------------------------------------------------
NR NR $ 2,845 Commerce, Joint
Power Financing
Authority,
8.00%, 3/1/22 $ 3,071,434
NR BBB 5,000 Contra Costa County,
Public Financing
Authority, 7.10%,
8/1/22 5,482,750
NR NR 1,955 Fairfield, North
Cordelia District,
7.375%, 9/2/18 2,025,595
NR NR 755 Fairfield, North
Cordelia District,
8.00%, 9/2/11 784,445
NR BBB+ 5,720 Fontana Redevelopment
Agency, Jurupa
Hills, 7.00%, 10/1/14 6,479,273
NR BBB 600 Rancho Mirage,
Joint Power Financing
Authority, 7.50%, 4/1/17 654,294
See notes to financial statements
37
<PAGE>
California Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------
Special Tax Revenue (continued)
- ---------------------------------------------------------------------------
NR NR $ 3,000 Riverside County
Community Facilities
District, 7.55%,
9/1/17 $ 3,180,000
NR BBB 2,500 Riverside County
Redevelopment Agency,
7.50%, 10/1/26 2,820,100
NR NR 1,400 Simi Valley
Community Development,
Sycamore Plaza II,
8.20%, 9/1/12 1,413,692
- ---------------------------------------------------------------------------
$ 25,911,583
- ---------------------------------------------------------------------------
Transportation -- 1.8%
- ---------------------------------------------------------------------------
NR BBB $ 3,050 Guam Airport
Authority, (AMT),
6.70%, 10/1/23 $ 3,344,691
Aa3 AA- 2,000 Long Beach (AMT),
7.25%, 5/15/19 2,048,680
- ---------------------------------------------------------------------------
$ 5,393,371
- ---------------------------------------------------------------------------
Water and Sewer -- 0.8%
- ---------------------------------------------------------------------------
Aa2 AA $ 2,500 Metropolitan Water
District, Southern
California Waterworks,
5.00%, 7/1/26 $ 2,433,425
- ---------------------------------------------------------------------------
$ 2,433,425
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $270,444,922) $307,200,561
- ---------------------------------------------------------------------------
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 March 31, 1998, 39.1% 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 1.3% to 17.0% 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
38
<PAGE>
Florida Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Cogeneration -- 2.6%
- --------------------------------------------------------------------------
NR NR $ 4,600 Palm Beach County, FL,
Okeelanta Power Project,
(AMT), 6.85%, 2/15/21 $ 3,680,000
NR NR 11,000 Palm Beach County, FL,
Osceola Power Project,
(AMT), 6.95%, 1/1/22 8,690,000
- --------------------------------------------------------------------------
$ 12,370,000
- --------------------------------------------------------------------------
Education -- 1.3%
- --------------------------------------------------------------------------
NR AAA $ 5,500 Volusia County
Educational Facilities,
(Embry-Riddle
Aeronautical University)
(CLEE), 6.625%, 10/15/22 $ 6,045,655
- --------------------------------------------------------------------------
$ 6,045,655
- --------------------------------------------------------------------------
Electric Utilities -- 7.8%
- --------------------------------------------------------------------------
Aa2 AA $14,000 Jacksonville Electric
Authority, Bulk Power
Supply System Scherer 4,
5.25%, 10/1/21/(1)/ $ 13,981,240
Aa1 AA 2,850 Orlando Utilities
Commission Water and
Electric, 5.125%, 10/1/19 2,818,878
Aa2 AA- 10,000 Orlando Utilities
Commission Water and
Electric, 5.60%, 10/6/17 10,314,500
Baa1 BBB+ 5,000 Puerto Rico Electric
Power Authority, 6.25%,
7/1/17 5,486,350
Baa1 BBB+ 185 Puerto Rico Electric
Power Authority, 7.125%,
7/1/14 194,651
Aa3 AA- 2,515 St. Lucie County Solid
Waste Disposal, (Florida
Power & Light Co.) (AMT),
6.70%, 5/1/27 2,729,152
NR NR 1,925 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 2,104,314
- --------------------------------------------------------------------------
$ 37,629,085
- --------------------------------------------------------------------------
Escrowed / Prerefunded -- 7.3%
- --------------------------------------------------------------------------
Aaa AAA $ 9,225 Dade County, (Baptist
Hospital of Miami),
5.75%, 5/1/21 $ 9,915,584
Aaa AAA 5,000 Florida Municipal Power
Agency Stanton II (AMBAC)
Variable
Rate, 10/1/20/(2)/ 6,112,500
NR NR $ 1,675 Florida State (Mid-Bay
Bridge Authority),
6.875%, 10/1/22 $ 2,068,876
A3 A 7,255 Hillsborough County
Capital Improvement -
Museum of Science, 6.45%,
1/1/22 7,701,981
Aaa AAA 2,000 Orlando and Orange
County, Expressway
Authority (FGIC), 8.25%,
7/1/14 2,750,800
Aaa AAA 5,600 St. Lucie Utility System,
6.00%, 10/1/20 6,247,360
- --------------------------------------------------------------------------
$ 34,797,101
- --------------------------------------------------------------------------
General Obligations -- 18.2%
- --------------------------------------------------------------------------
Aa2 AA+ $32,000 Florida Board of
Education,
4.75%, 6/1/22 $ 30,197,439
Aa2 AA+ 10,910 Florida Board of
Education,
5.00%, 6/1/20 10,666,162
Aa2 AA+ 8,000 Florida Board of General
Services, 6.60%, 7/1/17 8,824,640
Aa AA+ 9,585 Florida State,
(Jacksonville
Transportation), 5.00%,
7/1/22 9,347,580
NR BBB 5,700 Guam, 5.40%, 11/15/18 5,731,464
A3 BBB+ 15,000 New York City, NY,
5.00%, 8/1/22/(3)/ 14,387,550
A3 BBB+ 5,000 New York City, NY,
5.125%, 8/1/25/(3)/ 4,839,000
Baa1 A 2,100 Puerto Rico Commonwealth,
0.00%, 7/1/16 840,651
Baa1 A 2,500 Puerto Rico Public
Building Authority,
6.00%, 7/1/12 2,557,725
- --------------------------------------------------------------------------
$ 87,392,211
- --------------------------------------------------------------------------
Hospitals -- 1.9%
- --------------------------------------------------------------------------
NR BBB+ $ 3,600 Escambia County, Health
Facilities Authority
(Baptist Hospital, Inc.
and The Baptist Manor,
Inc.), 6.75%, 10/1/14 $ 3,917,520
NR AA+ 4,750 Jacksonville Health
Facilities Finance
Authority, St. Luke's
Hospital Association,
6.75%, 11/15/13 5,195,788
- --------------------------------------------------------------------------------
$ 9,113,308
- --------------------------------------------------------------------------------
See notes to financial statements
39
<PAGE>
Florida Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Housing -- 10.2%
- --------------------------------------------------------------------------
Aaa NR $ 2,000 Broward County, Housing
Finance Authority, SFMR,
(AMT), (GNMA/FNMA),
6.10%, 10/1/19 $ 2,111,580
NR AAA 585 Broward County, Housing
Finance Authority, Single
Family, (GNMA) (AMT),
7.35%, 3/1/23 619,521
NR AAA 1,300 Clay County, Housing
Finance Authority,
Multifamily (GNMA),
7.40%, 12/1/25 1,374,867
Aaa NR 2,005 Clay County, Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.55%, 3/1/28 2,134,262
Aaa NR 930 Dade County, Housing
Finance Authority, Single
Family (AMT), 7.75%,
9/1/22 979,364
NR AAA 5,850 Dade County, Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.70%, 10/1/28 6,230,777
Aaa NR 1,130 Dade County, Housing
Finance Authority, Single
Family (GNMA), (AMT),
7.25%, 9/1/19 1,192,127
Aaa AAA 1,480 Escambia County, Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.90%, 10/1/21 1,595,973
Aaa AAA 1,725 Escambia County, Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.95%, 10/1/27 1,861,965
Aaa NR 2,540 Escambia County, Housing
Finance Authority, Single
Family (GNMA), (AMT),
7.40%, 10/1/23 2,681,732
NR AAA 1,125 Florida Housing Finance
Authority, 6.35%, 6/1/14 1,192,511
Aa3 AA 2,500 Florida Housing Finance
Authority (AMT), 6.35%,
7/1/28 2,666,300
Aaa NR 740 Hillsborough County,
Housing Finance
Authority, Single Family
(GNMA), (AMT),
7.875%, 5/1/23 783,083
NR NR 3,365 North Miami, Health Care
Facilities (The Imperial
Club), 9.25%, 1/1/13 3,851,815
NR AAA 6,205 Orange County, Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.60%, 4/1/28 6,607,456
NR AAA 7,230 Orange County, Housing
Finance Authority, Single
Family (GNMA), (AMT),
6.85%, 10/1/27/(1)/ 7,776,733
NR AAA $ 1,695 Orange County, Housing
Finance Authority, Single
Family (GNMA), (AMT),
7.375%, 9/1/24 1,801,073
Aaa NR 1,455 Polk County, Housing
Finance Authority, Single
Family (GNMA), 7.15%,
9/1/23 1,533,555
Aaa AAA 605 Puerto Rico Housing
Financial Corp. Single
Family (GNMA),
7.65%, 10/15/22 644,422
Baa BBB 1,400 Puerto Rico Urban Renewal
and Housing Corp.,
7.875%, 10/1/04 1,488,718
- --------------------------------------------------------------------------
$ 49,127,834
- --------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control Revenue -- 1.0%
- --------------------------------------------------------------------------
Baa3 BBB- $ 4,500 Puerto Rico Port
Authority, (American
Airlines), (AMT), 6.25%,
6/1/26 $ 4,893,525
- --------------------------------------------------------------------------
$ 4,893,525
- --------------------------------------------------------------------------
Insured-Electric Utilities -- 3.3%
- --------------------------------------------------------------------------
Aaa AAA $ 1,540 Manatee County, Public
Utility (FGIC), 0.00%,
10/1/12 $ 756,802
Aaa AAA 2,200 Puerto Rico Electric
Power Authority,
"STRIPES", (FSA),
Variable Rate, 7/1/02/(2)/ 2,455,750
Aaa AAA 2,200 Puerto Rico Electric
Power Authority,
"STRIPES", (FSA),
Variable Rate, 7/1/03/(2)/ 2,508,000
Aaa AAA 3,000 Sunrise, Utilities
Systems, (AMBAC), 5.00%,
10/1/28/(3)/ 2,926,680
Aaa AAA 7,000 Sunrise, Utilities
Systems, (AMBAC), 5.20%,
10/1/22 7,026,320
- --------------------------------------------------------------------------
$ 15,673,552
- --------------------------------------------------------------------------
Insured-Hospitals -- 8.0%
- --------------------------------------------------------------------------
Aaa AAA $ 8,000 Charlotte County, Health
Care, (Bon-Secours Health
System) (FSA) Variable
Rate, 8/26/27/(2)/ $ 9,130,000
See notes to financial statements
40
<PAGE>
Florida Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Insured-Hospitals (continued)
- --------------------------------------------------------------------------
Aaa AAA $23,355 Jacksonville Health
Authority, (Daughters of
Charity) (MBIA), 5.00%,
11/15/15 $ 23,191,515
Aaa AAA 2,000 Lee County, (Memorial
Hospital) (MBIA) Variable
Rate, 4/1/20/(2)/ 2,362,500
Aaa AAA 3,000 Orange County Health
Facilities Authority
(Orlando Regional Medical
Center) (MBIA) Variable
Rate, 10/29/21/(2)/ 3,581,250
- --------------------------------------------------------------------------
$ 38,265,265
- --------------------------------------------------------------------------
Insured-Housing -- 3.0%
- --------------------------------------------------------------------------
Aaa AAA $ 880 Brevard County, Housing
Finance Authority, Single
Family (FSA), 7.00%,
3/1/13 $ 931,700
Aaa AAA 3,000 Florida Health Facilities
Authority, (Brittany of
Rosemont) (AMBAC) (AMT),
6.875%, 8/1/26 3,266,280
Aaa AAA 6,530 Florida Health Facilities
Authority, (Maitland Club
Apartments), (AMBAC), (AMT),
6.875%, 8/1/26 7,109,603
Aaa AAA 2,675 Lee County Housing
Finance, SCA Multifamily
(FSA) (AMT),
7.05%, 1/1/30 2,904,462
- --------------------------------------------------------------------------
$ 14,212,045
- --------------------------------------------------------------------------
Insured-Life Care -- 0.1%
- --------------------------------------------------------------------------
Aaa AAA $ 500 Alachua County Health
Facility, (Mental Health
Services) (CGIC), 7.75%,
7/1/10 $ 546,220
- --------------------------------------------------------------------------
$ 546,220
- --------------------------------------------------------------------------
Insured-Miscellaneous -- 0.9%
- --------------------------------------------------------------------------
Aaa AAA $ 1,500 Dade County, Seaport,
(MBIA), 5.125%, 10/1/21 $ 1,482,840
Aaa AAA 2,000 Escambia County (MBIA),
7.20%, 1/1/15 2,087,300
Aaa AAA 799 Osceola County,
Industrial Development
Authority, Community
Provider Pooled Loan
Program (CGIC), 7.75%,
7/1/10 858,086
- --------------------------------------------------------------------------
$ 4,428,226
- --------------------------------------------------------------------------
Insured-Solid Waste -- 0.3%
- --------------------------------------------------------------------------
Aaa AAA $ 1,500 St. John's County Solid
Waste Disposal (FGIC),
7.25%, 11/1/10 $ 1,630,050
- --------------------------------------------------------------------------
$ 1,630,050
- --------------------------------------------------------------------------
Insured-Special Tax Revenue -- 7.3%
- --------------------------------------------------------------------------
Aaa AAA $ 1,160 Dade County, Professional
Sports Franchise, (MBIA),
0.00%, 10/1/19 $ 387,127
Aaa AAA 3,835 Dade County, Professional
Sports Franchise, (MBIA),
0.00%, 10/1/23 1,036,754
Aaa AAA 1,000 Jacksonville Excise Tax,
(FGIC) (AMT), 0.00%,
10/1/10 545,340
Aaa AAA 1,000 Jacksonville Excise Tax,
(FGIC) (AMT), 0.00%,
10/1/11 512,720
Aaa AAA 2,000 Jacksonville Excise Tax,
(FGIC) (AMT), 0.00%,
10/1/12 962,240
Aaa AAA 1,185 Opa-Locka Sales Tax,
(FGIC), 7.00%, 1/1/14 1,349,916
Aaa AAA 3,160 St. Petersburg Excise
Tax, (FGIC), 5.00%,
10/1/16 3,126,188
Aaa AAA 2,000 Sunrise Public
Facilities, (MBIA),
0.00%, 10/1/10 1,110,840
Aaa AAA 1,760 Sunrise Public
Facilities, (MBIA),
0.00%, 10/1/12 864,917
Aaa AAA 2,840 Sunrise Public
Facilities, (MBIA),
0.00%, 10/1/14 1,245,198
Aaa AAA 4,000 Sunrise Public
Facilities, (MBIA),
0.00%, 10/1/15 1,654,120
Aaa AAA 4,140 Sunrise Public
Facilities, (MBIA),
0.00%, 10/1/16 1,621,928
Aaa AAA 2,525 Sunrise Public
Facilities, (MBIA),
0.00%, 10/1/17 935,008
Aaa AAA 2,270 Tampa Sports Authority,
(MBIA), 5.25%, 1/1/17 2,295,855
Aaa AAA 11,500 Tampa Sports Authority,
(MBIA), 5.25%, 1/1/17 11,630,985
Aaa AAA 6,800 Tampa Utility Tax,
(AMBAC), 0.00%, 4/1/19 2,328,048
Aaa AAA 5,000 Tampa Utility Tax,
(AMBAC), 0.00%, 10/1/19 1,668,650
Aaa AAA 2,000 Tampa Utility Tax,
(AMBAC), 0.00%, 10/1/20 703,820
Aaa AAA 4,000 Tampa Utility Tax,
(AMBAC), 0.00%, 10/1/20 1,268,480
- --------------------------------------------------------------------------
$ 35,248,134
- --------------------------------------------------------------------------
See notes to financial statements
41
<PAGE>
Florida Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Insured-Transportation -- 6.4%
- --------------------------------------------------------------------------
Aaa AAA $ 3,475 Dade County Aviation
Facilities (MBIA) (AMT),
6.00%, 10/1/24 $ 3,716,269
Aaa AAA 4,000 Dade County Aviation
Facilities (MBIA) (AMT),
6.55%, 10/1/13 4,384,160
Aaa AAA 4,150 Dade County Aviation
Facilities (MBIA) (AMT),
6.60%, 10/1/22 4,555,123
Aaa AAA 8,850 Dade County Aviation
Facilities, (Miami
International Airport),
(FSA), (AMT),
5.125%, 10/1/22 8,603,439
Aaa AAA 8,650 Greater Orlando Aviation
Authority, (FGIC) (AMT),
6.375%, 10/1/21 9,416,131
- --------------------------------------------------------------------------
$ 30,675,122
- --------------------------------------------------------------------------
Insured-Water and Sewer -- 2.9%
- --------------------------------------------------------------------------
Aaa AAA $14,000 Dade County, Water And
Sewer System, (FGIC),
5.25%, 10/1/26 $ 14,048,020
- --------------------------------------------------------------------------
$ 14,048,020
- --------------------------------------------------------------------------
Life Care -- 1.6%
- --------------------------------------------------------------------------
NR NR $ 6,895 Atlantic Beach, Fixed
Rate Improvement, FL,
(Fleet Landing Project),
8.00%, 6/1/24 $ 7,737,293
- --------------------------------------------------------------------------
$ 7,737,293
- --------------------------------------------------------------------------
Miscellaneous -- 1.1%
- --------------------------------------------------------------------------
NR NR $ 5,000 Osceola County, IDA,
Community Pooled Loan-93,
7.75%, 7/1/17 $ 5,435,750
- --------------------------------------------------------------------------
$ 5,435,750
- --------------------------------------------------------------------------
Nursing Homes -- 5.2%
- --------------------------------------------------------------------------
NR NR $ 300 Broward County,
Industrial Development
Authority (Beverly
Enterprises), 9.80%,
11/1/10 $ 335,952
NR NR 430 Charlotte County,
Industrial Development
Authority (Beverly
Enterprises), 10.00%,
6/1/11 490,578
NR NR 5,415 Citrus County, Industrial
Development Authority
(Beverly Enterprises),
7.25%, 4/1/03/(1)/ 5,528,119
NR AAA 4,285 Dade County, Industrial
Development Authority
(Club Care Center)
(GNMA), 6.60%, 1/20/18 4,627,971
NR AAA 5,075 Dade County, Industrial
Development Authority
(Gramercy Park Nursing
Care) (FHA), 6.60%, 8/1/23 5,525,863
NR NR 1,955 Highlands County,
Industrial Development
Authority, (Beverly
Enterprises), 9.25%,
7/1/07 2,192,806
Baa1 NR 3,750 Jacksonville Health
(Cypress Village), 7.00%,
12/1/22 4,123,725
NR NR 360 Okaloosa County, (Beverly
Enterprises), 10.75%,
10/1/03 372,139
NR NR 655 Orange County, Industrial
Development Authority,
(Beverly Enterprises),
9.25%, 8/1/10 736,724
NR NR 1,000 Winter Garden, (Beverly
Enterprises), 8.75%,
7/1/12 1,129,240
- --------------------------------------------------------------------------
$ 25,063,117
- --------------------------------------------------------------------------
Solid Waste -- 0.8%
- --------------------------------------------------------------------------
A A- $ 3,450 Broward County (Waste
Energy Co., L.P. North),
7.95%, 12/1/08 $ 3,743,457
- --------------------------------------------------------------------------
$ 3,743,457
- --------------------------------------------------------------------------
Special Tax Revenue -- 2.7%
- --------------------------------------------------------------------------
A1 AA- $ 3,000 Orlando, 6.00%, 10/1/22 $ 3,175,530
Baa1 A 9,250 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/36 8,988,318
Baa1 A 700 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/36 732,942
- --------------------------------------------------------------------------
$ 12,896,790
- --------------------------------------------------------------------------
Transportation -- 5.5%
- --------------------------------------------------------------------------
NR NR $10,140 Florida State (Mid-Bay
Bridge Authority), 6.05%,
10/1/22 $ 10,836,314
See notes to financial statements
42
<PAGE>
Florida Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Transportation (continued)
- --------------------------------------------------------------------------
Aa2 AA+ $10,800 Florida State,
(Jacksonville
Transportation), 5.25%,
7/1/22 $ 10,824,516
Baa1 A 5,000 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 4,629,650
- --------------------------------------------------------------------------
$ 26,290,480
- --------------------------------------------------------------------------
Water and Sewer -- 0.6%
- --------------------------------------------------------------------------
Baa1 BBB+ $ 2,500 Hillsborough County
Utility, 6.625%, 8/1/11 $ 2,691,125
- --------------------------------------------------------------------------
$ 2,691,125
- --------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $441,861,344) $479,953,365
- --------------------------------------------------------------------------
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 March 31, 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 1.3% to 16.7% of total investments.
(1) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(2) Security has been issued as an inverse floater bond.
(3) When-issued security.
See notes to financial statements
43
<PAGE>
Massachusetts Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Assisted Living -- 0.7%
- --------------------------------------------------------------------------------
NR AAA $ 1,500 Massachusetts IFA
(Briscoe House) (FHA),
7.125%, 2/1/36 $ 1,736,850
- --------------------------------------------------------------------------------
$ 1,736,850
- --------------------------------------------------------------------------------
Education -- 3.9%
- --------------------------------------------------------------------------------
NR AAA $ 3,400 Massachusetts HEFA
(Merrimack College),
7.125%, 7/1/12 $ 3,849,344
A1 AA- 250 Massachusetts HEFA (Tufts
University), 7.75%, 8/1/13 258,325
Aa1 AA+ 1,625 Massachusetts HEFA,
(Amherst College), 6.80%,
11/1/21 1,780,155
Baa3 BBB- 1,250 Massachusetts IFA, (Dana
Hall), 5.90%, 7/1/27 1,313,588
A1 NR 2,000 New England Educational
Loan Marketing Corp.,
(AMT), 6.90%, 11/1/09 2,268,680
- --------------------------------------------------------------------------------
$ 9,470,092
- --------------------------------------------------------------------------------
Electric Utilities -- 6.9%
- --------------------------------------------------------------------------------
NR BBB $ 1,545 Guam Power Authority,
5.25%, 10/1/23 $ 1,532,130
Baa2 BBB+ 5,060 Massachusetts Municipal
Wholesale Electric Co.,
6.625%, 7/1/18 5,454,882
Baa2 BBB+ 3,500 Massachusetts Municipal
Wholesale Electric Co.,
6.75%, 7/1/11 3,788,295
Baa1 BBB+ 3,000 Puerto Rico Electric
Power Authority, 0.00%,
7/1/17 1,135,740
Baa1 BBB+ 13,055 Puerto Rico Electric
Power Authority, 0.00%,
7/1/17 4,942,362
- --------------------------------------------------------------------------------
$ 16,853,409
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 4.9%
- --------------------------------------------------------------------------------
NR NR $ 2,400 Massachusetts HEFA
(Fairview Care
Facilities), 10.25%,
1/1/21 $ 2,840,784
Aaa AAA 1,380 Massachusetts Port
Authority, (FGIC), 7.50%,
7/1/20 1,508,230
Aaa AAA 29,870 Massachusetts Turnpike
Authority, 0.00%, 1/1/28 6,465,063
NR AAA 1,000 Puerto Rico Commonwealth,
"RIBS", (AMBAC), Variable
Rate, 7/1/15/(1)/ 1,165,000
- --------------------------------------------------------------------------------
$ 11,979,077
- --------------------------------------------------------------------------------
General Obligations -- 2.1%
- --------------------------------------------------------------------------------
NR BBB $ 440 Guam, 5.375%, 11/15/13 $ 444,215
NR BBB 2,395 Guam, 5.40%, 11/15/18 2,408,220
Aaa NR 1,700 Nantucket, 6.80%, 12/1/11 1,883,957
A1 A+ 250 University of
Massachusetts Building
Authority, 7.20%, 5/1/04 284,570
- --------------------------------------------------------------------------------
$ 5,020,962
- --------------------------------------------------------------------------------
Hospitals -- 23.6%
- --------------------------------------------------------------------------------
A1 A $ 3,000 Massachusetts HEFA
(Charlton Memorial
Hospital),
7.25%, 7/1/13 $ 3,335,670
Aa2 AA+ 2,000 Massachusetts HEFA
(Daughters of Charity
Health System),
6.10%, 7/1/14 2,156,120
NR A- 1,020 Massachusetts HEFA
(Jordan Hospital),
6.875%, 10/1/15 1,113,422
NR A- 3,055 Massachusetts HEFA
(Jordan Hospital),
6.875%, 10/1/22 3,339,970
Baa3 NR 5,500 Massachusetts HEFA
(Milford-Whitinsville
Hospital),
7.75%, 7/15/17 6,344,690
Baa1 AAA 2,000 Massachusetts HEFA (New
England Baptist
Hospital), 7.35%, 7/1/17 2,226,560
NR BBB- 2,600 Massachusetts HEFA (North
Adams Hospital), 6.625%,
7/1/18 2,823,054
Baa2 BBB 5,255 Massachusetts HEFA
(Sisters of Providence
Health System), 6.50%,
11/15/08 5,890,697
Baa2 BBB 2,085 Massachusetts HEFA
(Sisters of Providence
Health System), 6.625%,
11/15/22 2,352,068
A1 AA- 530 Massachusetts HEFA
(Spaulding Rehabilitation
Hospital),
7.625%, 7/1/21 545,153
NR AA 1,465 Massachusetts HEFA,
(FHA), (Deutsches
Altenheim),
7.70%, 11/1/31 1,577,820
Aaa AAA 1,070 Massachusetts HEFA,
(Hallmark Health), (FSA),
5.00%, 7/1/21 1,032,839
Aaa AAA 8,695 Massachusetts HEFA,
(Hallmark Health), (FSA),
5.00%, 7/1/27 8,358,590
See notes to financial statements
44
<PAGE>
Massachusetts Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Hospitals (continued)
- --------------------------------------------------------------------------------
Baa2 BBB- $ 500 Massachusetts HEFA,
(Milford-Whitinsville
Hospital),
5.25%, 7/15/18 $ 491,080
Ba1 NR 2,875 Massachusetts HEFA, (New
England Health Systems),
6.125%, 8/1/13 3,011,994
NR NR 8,000 Massachusetts IFA
(Biomedical Research
Corp.), 0.00%, 8/1/08 4,790,400
NR NR 9,000 Massachusetts IFA
(Biomedical Research
Corp.), 0.00%, 8/1/09 5,071,860
NR NR 6,000 Massachusetts IFA
(Biomedical Research
Corp.), 0.00%, 8/1/10 3,175,980
- --------------------------------------------------------------------------------
$ 57,637,967
- --------------------------------------------------------------------------------
Housing -- 8.6%
- --------------------------------------------------------------------------------
NR AAA $ 2,750 Framingham Housing
Authority, (GNMA), 6.65%,
2/20/32 $ 2,892,918
Aa A+ 7,055 Massachusetts HFA, (AMT),
6.60%, 12/1/26 7,503,627
Aa A+ 6,315 Massachusetts HFA, (AMT),
6.60%, 12/1/26 6,716,571
Aa A+ 2,195 Massachusetts HFA, (AMT),
8.10%, 6/1/20 2,244,585
Aa A+ 1,500 Massachusetts HFA, (AMT),
8.10%, 12/1/21 1,549,845
- --------------------------------------------------------------------------------
$ 20,907,546
- --------------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control Revenue -- 4.0%
- --------------------------------------------------------------------------------
NR NR $ 2,075 Massachusetts IFA
(Hingham Water Co.),
(AMT), 6.60%, 12/1/15 $ 2,262,497
NR NR 3,000 Massachusetts IFA
(Hingham Water Co.),
(AMT), 6.90%, 12/1/29 3,315,630
Baa3 BBB- 3,750 Puerto Rico Port
Authority, (American
Airlines), (AMT), 6.25%,
6/1/26 4,077,938
- --------------------------------------------------------------------------------
$ 9,656,065
- --------------------------------------------------------------------------------
Insured-Colleges and Universities -- 1.5%
- --------------------------------------------------------------------------------
Aaa AAA $ 400 Massachusetts HEFA
(Boston University)
"RIBS", (MBIA),
Variable Rate, 10/1/31/(1)/ $ 471,000
Aaa AAA 250 Massachusetts HEFA
(Northeastern
University), (AMBAC),
7.50%, 10/1/08 259,510
Aaa AAA 2,000 Massachusetts HEFA,
(Berklee College of
Music), (MBIA),
5.10%, 10/1/27 1,955,240
Aaa AAA 1,000 Massachusetts IFA,
(Merrimack College),
(MBIA), 5.00%, 7/1/27 968,570
- --------------------------------------------------------------------------------
$ 3,654,320
- --------------------------------------------------------------------------------
Insured-Education -- 1.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,825 Massachusetts Educational
Finance Authority,
(AMBAC), (AMT), 7.30%,
1/1/12 $ 1,979,687
Aaa AAA 280 Massachusetts Educational
Finance Authority,
(MBIA), (AMT),
7.25%, 1/1/09 299,810
Aaa AAA 1,000 Massachusetts IFA,
(WGBH), (AMBAC), 5.00%,
3/1/28 950,870
- --------------------------------------------------------------------------------
$ 3,230,367
- --------------------------------------------------------------------------------
Insured-General Obligations -- 1.0%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,960 Massachusetts Bay
Transportation Authority,
(FGIC), 5.00%, 3/1/23 $ 1,902,846
Aaa AAA 600 Tyngsborough, (AMBAC),
6.90%, 5/15/08 665,508
- --------------------------------------------------------------------------------
$ 2,568,354
- --------------------------------------------------------------------------------
Insured-Hospitals -- 9.5%
- --------------------------------------------------------------------------------
Aaa AAA $ 300 Massachusetts HEFA
(Berkshire Health
Systems), (MBIA),
7.60%, 10/1/14 $ 311,796
Aaa AAA 3,750 Massachusetts HEFA (Beth
Israel Hospital),
(AMBAC), (AMT), Variable
Rate, 7/1/25/(1)/ 4,303,125
See notes to financial statements
45
<PAGE>
Massachusetts Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Insured-Hospitals (continued)
- --------------------------------------------------------------------------------
Aaa AAA $ 1,040 Massachusetts HEFA
(Beverly Hospital),
(MBIA), 7.30%, 7/1/13 $ 1,098,770
Aaa AAA 1,500 Massachusetts HEFA
(Capital Assist Program),
(MBIA), 7.20%, 7/1/09 1,586,385
Aaa AAA 1,885 Massachusetts HEFA
(Fallon Healthcare
System), (FSA), 6.75%,
6/1/20/(2)/ 2,066,186
Aaa AAA 2,000 Massachusetts HEFA (St.
Elizabeth Hospital Issue)
"LEVRRS", (FSA), Variable
Rate, 8/12/21/(1)/ 2,350,000
Aaa AAA 2,600 Massachusetts HEFA (St.
Luke's Hospital) "Yield
Curve Notes", (MBIA),
Variable Rate, 8/15/13/(1)/ 2,886,000
Aaa AAA 2,600 Massachusetts HEFA (St.
Luke's Hospital) "Yield
Curve Notes", Variable
Rate, (MBIA), 8/15/23/(1)/ 2,879,500
Aaa AAA 3,000 Massachusetts HEFA (The
Medical Center of Central
Massachusetts) (AMBAC),
"CARS", Variable
Rate, 6/23/22/(1)/ 3,851,250
Aaa AAA 700 Massachusetts HEFA
(University Hospital),
(MBIA), 7.25%, 7/1/19 755,237
Aaa AAA 1,000 Massachusetts HEFA,
(Partners Healthcare),
(MBIA), 5.375%, 7/1/24 1,010,430
- --------------------------------------------------------------------------------
$ 23,098,679
- --------------------------------------------------------------------------------
Insured-Transportation -- 2.7%
- --------------------------------------------------------------------------------
Aaa AAA $ 4,480 Massachusetts Port
Authority, (FGIC), 7.50%,
7/1/20 $ 4,853,229
Aaa AAA 2,000 Massachusetts Turnpike
Authority, (MBIA), 0.00%,
1/1/19 693,500
Aaa AAA 1,000 Massachusetts Turnpike
Authority, Metropolitan
District Highway System,
(MBIA), 5.00%, 1/1/27 965,910
- --------------------------------------------------------------------------------
$ 6,512,639
- --------------------------------------------------------------------------------
Insured-Water and Sewer -- 0.6%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,500 Massachusetts Water
Resources Authority,
(MBIA), 4.75%, 12/1/21 $ 1,408,605
- --------------------------------------------------------------------------------
$ 1,408,605
- --------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 3.6%
- --------------------------------------------------------------------------------
NR AA- $ 7,800 Plymouth County, MA
(Plymouth County
Correctional Facility),
7.00%, 4/1/22 $ 8,737,872
- --------------------------------------------------------------------------------
$ 8,737,872
- --------------------------------------------------------------------------------
Life Care -- 0.9%
- --------------------------------------------------------------------------------
NR AAA $ 2,000 Boston, IDA, (Alzheimers
Center), (FHA), 6.00%,
2/1/37 $ 2,095,600
- --------------------------------------------------------------------------------
$ 2,095,600
- --------------------------------------------------------------------------------
Nursing Homes -- 1.5%
- --------------------------------------------------------------------------------
NR NR $ 3,225 Massachusetts IFA, (Age
Institute of
Massachusetts),
8.05%, 11/1/25 $ 3,626,674
- --------------------------------------------------------------------------------
$ 3,626,674
- --------------------------------------------------------------------------------
Solid Waste -- 0.4%
- --------------------------------------------------------------------------------
NR NR $ 1,035 Pittsfield, Solid Waste
Disposal, Vicon Recovery
Associates,
7.95%, 11/1/04 $ 1,078,191
- --------------------------------------------------------------------------------
$ 1,078,191
- --------------------------------------------------------------------------------
Special Tax Revenue -- 1.9%
- --------------------------------------------------------------------------------
Baa1 A $ 2,000 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/36 $ 1,943,420
NR NR 2,350 Virgin Islands Public
Finance Authority, 7.25%,
10/1/18 2,632,729
- --------------------------------------------------------------------------------
$ 4,576,149
- --------------------------------------------------------------------------------
Transportation -- 11.7%
- --------------------------------------------------------------------------------
NR BBB $ 5,950 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 $ 6,524,889
See notes to financial statements
46
<PAGE>
Massachusetts Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Transportation (continued)
- --------------------------------------------------------------------------------
Aaa NR $20,860 Massachusetts Turnpike
Authority, 5.00%, 1/1/20 $ 20,795,750
Baa1 A 1,250 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 1,157,413
- --------------------------------------------------------------------------------
$ 28,478,052
- --------------------------------------------------------------------------------
Water and Sewer -- 8.7%
- --------------------------------------------------------------------------------
Baa1 BBB $12,185 Boston, IDA, (Harbor
Electric Energy Co.),
(AMT),
7.375%, 5/15/15 $ 13,273,485
A2 A 1,500 Massachusetts Water
Resources Authority,
5.25%, 3/1/13 1,511,175
A2 A 4,165 Massachusetts Water
Resources Authority,
5.25%, 12/1/15 4,295,823
NR NR 2,000 Virgin Islands Water and
Power Authority, 7.60%,
1/1/12 2,242,180
- --------------------------------------------------------------------------------
$ 21,322,663
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $219,818,375) $243,650,133
- --------------------------------------------------------------------------------
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 March 31, 1998, 18.4% 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 institutions ranged from 2.7% to 9.8% 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.
47
<PAGE>
Mississippi Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Education -- 2.5%
- --------------------------------------------------------------------------
NR A $ 470 University of Mississippi
Educational Building Corp.
Athletic Facility,
6.20%, 6/1/16 $ 512,352
- --------------------------------------------------------------------------
$ 512,352
- --------------------------------------------------------------------------
Electric Utilities -- 9.8%
- --------------------------------------------------------------------------
NR BBB $ 810 Guam Power Authority,
6.625%, 10/1/14 $ 898,808
Baa3 NR 1,000 Warren County (Mississippi
Power & Light Co.), 7.00%,
4/1/22 1,114,850
- --------------------------------------------------------------------------
$ 2,013,658
- --------------------------------------------------------------------------
Escrowed/Prerefunded -- 7.8%
- --------------------------------------------------------------------------
Aaa NR $2,500 Mississippi Housing Finance
Corp., Single Family,
(AMT), 0.00%, 6/1/15 $ 1,041,725
Aa3 AA 500 Mississippi State, 6.75%,
12/1/14 570,470
- --------------------------------------------------------------------------
$ 1,612,195
- --------------------------------------------------------------------------
General Obligations -- 1.0%
- --------------------------------------------------------------------------
Aa3 AA $ 200 Mississippi State, 5.10%,
11/15/12 $ 206,880
- --------------------------------------------------------------------------
$ 206,880
- --------------------------------------------------------------------------
Hospitals -- 4.7%
- --------------------------------------------------------------------------
NR BBB+ $ 500 Jones County, (South
Central Regional Medical
Center), 5.50%, 12/1/17 $ 500,555
Baa3 BBB 450 Mississippi Hospital
Equipment and Facilities
Authority, (Rush Medical
Foundation Project), 6.00%,
1/1/22 470,637
- --------------------------------------------------------------------------
$ 971,192
- --------------------------------------------------------------------------
Housing -- 14.5%
- --------------------------------------------------------------------------
Aa NR $ 500 Hinds County, Woodridge
Apartments, (FHA), 6.25%,
11/1/27 $ 527,330
Aaa NR 500 Mississippi Home Corp.,
Single Family, (AMT),
(GNMA), 6.625%, 4/1/27 534,390
Aaa NR 385 Mississippi Home Corp.,
Single Family, Access
Program, (AMT), (GNMA),
8.10%, 12/1/24 431,223
Aaa NR $ 825 Mississippi Home Corp.,
Single Family, Access
Program, (AMT), (GNMA),
8.125%, 12/1/24 $ 921,632
Aaa NR 500 Mississippi Home Corp.,
Single Family, Access
Program, (GNMA), (AMT),
7.55%, 12/1/27 568,250
- --------------------------------------------------------------------------
$ 2,982,825
- --------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control Revenue -- 16.8%
- --------------------------------------------------------------------------
Baa2 NR $ 500 Grenada County,
(Georgia-Pacific Corp.),
5.45%, 9/1/14 $ 501,150
A3 A- 400 Jones County,
(International Paper Co.),
5.80%, 10/1/21 411,848
A2 A 1,000 Lowndes County
(Weyerhaeuser Co.), 6.80%,
4/1/22 1,222,980
NR AA- 500 Mississippi Business
Finance Corp., (AMT),
7.15%, 5/1/16/(1)/ 547,525
Baa3 BBB- 250 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.25%, 6/1/26 271,863
A3 A- 450 Warren County
(International Paper Co.),
(AMT), 6.60%, 3/1/19 495,810
- --------------------------------------------------------------------------
$ 3,451,176
- --------------------------------------------------------------------------
Insured-Education -- 5.5%
- --------------------------------------------------------------------------
Aaa AAA $1,000 Mississippi Educational
Facilities Authority,
(Milsaps College), (MBIA),
6.50%, 11/1/19 $ 1,125,910
- --------------------------------------------------------------------------
$ 1,125,910
- --------------------------------------------------------------------------
Insured-Electric Utilities -- 1.7%
- --------------------------------------------------------------------------
Aaa AAA $ 300 Puerto Rico Electric Power
Authority, "STRIPES",
(FSA), Variable Rate,
7/1/03/(2)/ $ 342,000
- --------------------------------------------------------------------------
$ 342,000
- --------------------------------------------------------------------------
Insured-General Obligations -- 4.2%
- --------------------------------------------------------------------------
Aaa AAA $ 300 Desoto County School
District, (MBIA), 4.75%,
2/1/13 $ 292,497
Aaa AAA 500 Hinds County, (MBIA),
6.25%, 3/1/11 574,640
- --------------------------------------------------------------------------
$ 867,137
- --------------------------------------------------------------------------
See notes to financial statements
48
<PAGE>
Mississippi Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------
Insured-Hospitals -- 14.7%
- --------------------------------------------------------------------------
Aaa AAA $1,000 Gulfport, (Gulfport
Memorial Hospital), (MBIA),
6.20%, 7/1/18 $ 1,098,150
Aaa AAA 1,275 Hinds County (Mississippi
Methodist Hospital),
(AMBAC), 5.60%, 5/1/12 1,381,207
Aaa AAA 500 Mississippi Hospital
Equipment and Facilities
Authority (Mississippi
Baptist Medical Center),
(MBIA), 6.00%, 5/1/13 539,030
- --------------------------------------------------------------------------
$ 3,018,387
- --------------------------------------------------------------------------
Insured-Lease Revenue/Certificates of Participation -- 3.9%
- --------------------------------------------------------------------------
Aaa AAA $ 750 Medical Center Building
Corp., (University of
Mississippi Medical
Center), (MBIA), 5.80%,
12/1/14 $ 791,723
- --------------------------------------------------------------------------
$ 791,723
- --------------------------------------------------------------------------
Lease Revenue/
Certificates of Participation -- 10.3%
- --------------------------------------------------------------------------
NR A $1,000 Mississippi Development
Bank, Golden Triangle Solid
Waste, 6.00%, 7/1/15 $ 1,053,270
A2 NR 1,000 Mississippi University
Educational Building Corp.,
Facilities Renovation,
6.15%, 6/15/15 1,072,520
- --------------------------------------------------------------------------
$ 2,125,790
- --------------------------------------------------------------------------
Life Care -- 1.0%
- --------------------------------------------------------------------------
NR NR $ 200 Ridgeland, MS, Urban
Renewal, (The Orchard
Project), 7.75%, 12/1/15 $ 218,490
- --------------------------------------------------------------------------
$ 218,490
- --------------------------------------------------------------------------
Nursing Homes -- 1.6%
- --------------------------------------------------------------------------
NR NR $ 300 Mississippi Business
Finance Corp. (Magnolia
Healthcare), 7.99%, 7/1/25 $ 324,840
- --------------------------------------------------------------------------
$ 324,840
- --------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $18,673,351) $20,564,555
- --------------------------------------------------------------------------
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 March 31, 1998, 29.9% 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 institutions ranged from 0.1% to 0.9% 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 March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Airlines -- 0.6%
- --------------------------------------------------------------------------------
Baa3 BBB- $ 2,800 Port Authority of New
York and New Jersey,
(Delta Airlines), 6.95%,
6/1/08 $ 3,073,952
- --------------------------------------------------------------------------------
$ 3,073,952
- --------------------------------------------------------------------------------
Assisted Living -- 3.5%
- --------------------------------------------------------------------------------
NR NR $ 4,000 Glen Cove, NY, IDA,
(Regency at Glen Cove),
9.50%, 7/1/12 $ 4,000,000
NR A-1+ 5,000 New York City Municipals
Assistance Corp., 3.50%,
7/1/08 5,000,000
Aa2 AA 5,000 New York City Municipals
Assistance Corp.,
5.50%, 7/1/07/(1)/ 5,386,300
NR NR 2,970 North Syracuse Village,
Housing Authority (AJM
Senior Housing, Inc.,
Janus Park),
8.00%, 6/1/24 3,092,631
- --------------------------------------------------------------------------------
$ 17,478,931
- --------------------------------------------------------------------------------
Cogeneration -- 1.2%
- --------------------------------------------------------------------------------
Baa3 BBB- $ 6,000 New York City, IDA,
(Brooklyn Navy Yard
Cogeneration),
5.65%, 10/1/28 $ 6,115,920
- --------------------------------------------------------------------------------
$ 6,115,920
- --------------------------------------------------------------------------------
Colleges and Universities -- 5.3%
- --------------------------------------------------------------------------------
Baa1 BBB+ $10,000 New York State Dormitory
Authority, (City
University),
5.25%, 7/1/25/(1)/ $ 9,856,600
Baa1 BBB+ 1,030 New York State Dormitory
Authority, (City
University),
5.50%, 7/1/04/(1)/ 1,082,067
Baa1 BBB+ 105 New York State Dormitory
Authority, (City
University), 6.375%,
7/1/08 113,927
A3 A- 16,000 New York State Dormitory
Authority, (State
University), 5.125%,
5/15/21 15,691,039
- --------------------------------------------------------------------------------
$ 26,743,633
- --------------------------------------------------------------------------------
Education -- 15.5%
- --------------------------------------------------------------------------------
A NR $ 1,000 Dutchess County IDA,
(Bard College), 7.00%,
11/1/17 $ 1,116,860
A1 NR 5,890 Monroe County IDA,
(Wilmur Assc.), 7.25%,
12/1/16 6,283,982
Baa2 NR 1,660 New Rochelle IDA Civic
Facilities, (College of
New Rochelle),
6.75%, 7/1/22 1,788,783
NR AA 1,300 New York State Dormitory
Authority, (New York
Medical College) (Asset
Guaranty), 6.875%, 7/1/21 1,430,052
A3 A- 9,985 New York State Dormitory
Authority, (State
University Educational
Facilities),
5.25%, 5/15/15 10,223,042
A3 A- 28,775 New York State Dormitory
Authority, (State
University Educational
Facilities),
5.25%, 5/15/19/(2)/ 29,553,363
A3 A- 14,680 New York State Dormitory
Authority, (State
University Educational
Facilities),
5.25%, 5/15/21 15,076,946
A3 A- 2,000 New York State Dormitory
Authority, (State
University Educational
Facilities),
5.50%, 5/15/19 2,110,580
A3 A- 1,300 New York State Dormitory
Authority, (State
University Educational
Facilities),
7.50%, 5/15/11 1,598,545
A3 A- 9,000 New York State Dormitory
Authority, Educational
Facilities, 5.125%,
5/15/27 8,767,080
- --------------------------------------------------------------------------------
$ 77,949,233
- --------------------------------------------------------------------------------
Electric Utilities -- 3.9%
- --------------------------------------------------------------------------------
A1 A+ $ 2,365 New York State Energy
Research and Development
Authority, (Consolidated
Edison) (AMT), 7.50%,
7/1/25 $ 2,478,922
A1 A 2,500 New York State Energy
Research and Development
Authority, (Brooklyn
Union Gas), (RIBS),
(AMT), Variable Rate,
7/1/26/(3)/ 3,262,500
- --------------------------------------------------------------------------------
See notes to financial statements
50
<PAGE>
New York Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Electric Utilities (continued)
- --------------------------------------------------------------------------------
A1 A+ $ 1,000 New York State Energy
Research and Development
Authority, (Consolidated
Edison) (AMT), 7.50%,
1/1/26 $ 1,058,570
NR NR 3,000 New York State Energy
Research and Development
Authority, (LILCO)
"RITES" (AMT), Variable
Rate, 8/1/22/(3)/ 3,528,750
NR NR 2,450 New York State Energy
Research and Development
Authority, (LILCO),
"RITES" (AMT),
8.998%, 8/1/22/(3)/ 2,881,813
Ba1 BB+ 3,110 New York State Energy
Research and Development
Authority, (LILCO),
(AMT), 6.90%, 8/1/22 3,402,807
NR NR 2,885 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 3,153,738
- --------------------------------------------------------------------------------
$ 19,767,100
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 1.6%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,650 New York City, NY,
(AMBAC), 7.00%, 8/1/17 $ 1,858,494
Baa1 BBB+ 145 New York State Dormitory
Authority, (City
University), 6.375%,
7/1/08 159,726
Baa BBB+ 5,540 New York State MCFFA,
Secured Hospital, 7.35%,
8/15/11 6,189,565
- --------------------------------------------------------------------------------
$ 8,207,785
- --------------------------------------------------------------------------------
General Obligations -- 5.5%
- --------------------------------------------------------------------------------
A3 BBB+ $ 2,500 New York City, NY,
0.00%, 8/1/08 $ 1,520,725
A3 BBB+ 12,375 New York City, NY,
5.00%, 8/1/23 11,859,829
A3 BBB+ 5,000 New York City, NY,
5.25%, 8/1/16 4,976,350
A3 BBB+ 5,000 New York City, NY,
5.25%, 8/1/17 4,975,600
Aa2 AA 1,700 Onondaga County,
5.875%, 2/15/11 1,890,298
Aa2 AA 1,600 Onondaga County,
5.875%, 2/15/12 1,777,808
Baa1 A 1,700 Puerto Rico Commonwealth,
0.00%, 7/1/18 611,915
- --------------------------------------------------------------------------------
$ 27,612,525
- --------------------------------------------------------------------------------
Healthcare -- 1.1%
- --------------------------------------------------------------------------------
NR NR $ 5,000 New York State Housing
Finance Agency, "RITES",
Variable
Rate, 5/1/06/(3)/ $ 5,700,000
- --------------------------------------------------------------------------------
$ 5,700,000
- --------------------------------------------------------------------------------
Hospitals -- 8.4%
- --------------------------------------------------------------------------------
Baa1 BBB+ $ 5,000 New York State Dormitory
Authority, (Jamaica
Hospital), 5.20%, 2/15/15 $ 4,941,050
Aa2 AAA 1,500 New York State Dormitory
Authority, (Long Island
Jewish Medical Center)
(FHA), 7.75%, 8/15/27 1,533,870
NR AAA 1,000 New York State Dormitory
Authority, (St. Francis
Hospital) (FHA), 7.65%,
8/1/30 1,100,420
A3 A- 7,300 New York State Dormitory
Authority, Mental Health
Facilities, 5.375%,
2/15/26 7,302,263
Aa2 AAA 980 New York State MCFFA,
Hospital and Nursing
Insured Mortgage (FHA),
6.55%, 8/15/12 1,063,996
NR AA 9,000 New York State MCFFA,
Hospital and Nursing
Insured Mortgage (FHA),
6.70%, 8/15/23 9,779,310
Aa2 AA 1,050 New York State MCFFA,
Hospital and Nursing
Insured Mortgage (FHA),
6.75%, 2/15/12 1,139,744
Aa2 AA 1,500 New York State MCFFA,
Hospital and Nursing
Insured Mortgage (FHA),
6.95%, 2/15/32 1,640,925
Aa2 AA 2,190 New York State MCFFA,
Hospital and Nursing
Insured Mortgage (FHA),
7.00%, 8/15/32 2,415,242
Aa2 AA 6,600 New York State MCFFA,
Hospital and Nursing
Insured Mortgage (FHA),
7.25%, 2/15/31 7,284,420
Aa2 AA 730 New York State MCFFA,
Hospital and Nursing
Insured Mortgage (FHA),
7.35%, 2/15/29 774,698
Aa2 AA 950 New York State MCFFA,
Insured Mortgage (FHA),
7.45%, 8/15/31 1,044,269
See notes to financial statements
51
<PAGE>
New York Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Hospitals (continued)
- --------------------------------------------------------------------------------
Baa1 BBB+ $ 1,800 Syracuse Industrial Development
Agency (IDA), (St. Joseph's
Hospital Health Center), 7.50%,
6/1/18 $ 2,009,880
- --------------------------------------------------------------------------------
$ 42,030,087
- --------------------------------------------------------------------------------
Hotels -- 0.2%
- --------------------------------------------------------------------------------
NR NR $ 3,000 Niagara County, NY, Industrial
Development Authority (Winter-
garden Inn Associates), 9.75%,
6/1/11/(4)/ $ 1,200,000
- --------------------------------------------------------------------------------
$ 1,200,000
- --------------------------------------------------------------------------------
Housing -- 5.7%
- --------------------------------------------------------------------------------
NR NR $ 4,528 New York City HDC, Allerville,
6.50%, 11/15/18 $ 4,566,636
NR NR 1,985 New York City HDC,
Dayton, 6.50%, 11/15/18 2,084,875
NR AAA 2,550 New York City HDC, Multi-Unit
Management, 7.35%, 6/1/19 2,727,302
Aa2 AAA 235 New York State Housing Finance
Agency, Baytown, 7.10%, 8/15/35 249,502
Aaa NR 30,855 New York State Mortgage Agency,
0.00%, 10/1/14 6,491,892
Aa2 NR 500 New York State Mortgage Agency,
6.65%, 4/1/22 528,945
Aa2 NR 8,750 New York State Mortgage Agency,
6.90%, 4/1/15 9,449,913
Aa2 NR 1,000 New York State Mortgage Agency,
7.50%, 4/1/15 1,076,800
Aa2 NR 1,600 New York State Mortgage Agency
(AMT), 7.95%, 10/1/21 1,724,256
- --------------------------------------------------------------------------------
$ 28,900,121
- --------------------------------------------------------------------------------
Insured-Colleges and Universities -- 1.4%
- --------------------------------------------------------------------------------
Aaa AAA $ 5,000 New York State Dormitory
Authority, (City University),
(MBIA), 5.125%, 7/1/27 $ 4,921,400
Aaa AAA 2,000 New York State Dormitory
Authority, (Ithaca College),
(AMBAC), 5.25%, 7/1/26 2,004,880
- --------------------------------------------------------------------------------
$ 6,926,280
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 1.1%
- --------------------------------------------------------------------------------
Aaa AAA $ 5,000 Puerto Rico Telephone Authority
(MBIA) Variable Rate,
1/25/07/(3)/ $ 5,481,250
- --------------------------------------------------------------------------------
$ 5,481,250
- --------------------------------------------------------------------------------
Insured-General Obligations -- 2.6%
- --------------------------------------------------------------------------------
Aaa AAA $ 700 Bethlehem Central School
District (AMBAC), 7.10%,
11/1/08 $ 850,885
Aaa AAA 700 Bethlehem Central School
District (AMBAC), 7.10%,
11/1/09 855,400
Aaa AAA 770 Chautauqua County Unlimited
Tax (FGIC), 6.40%, 9/15/09 893,446
Aaa AAA 1,035 Erie County Water Authority
(AMBAC), 0.00%, 12/1/17 253,482
Aaa AAA 700 Jamestown, (Secondary AMBAC),
7.10%, 3/15/09 848,925
Aaa AAA 700 Jamestown, (Secondary AMBAC),
7.10%, 3/15/10 855,554
Aaa AAA 700 Jamestown, (Secondary AMBAC),
7.10%, 3/15/11 861,231
Aaa AAA 675 Jamestown, (Secondary AMBAC),
7.10%, 3/15/12 833,132
Aaa AAA 675 Jamestown, (Secondary AMBAC),
7.10%, 3/15/13 836,831
Aaa AAA 515 Jamestown, (Secondary AMBAC),
7.10%, 3/15/14 640,712
Aaa AAA 280 New York, NY (AMBAC), 7.00%,
8/1/17 311,542
Aaa AAA 4,500 Puerto Rico, (FSA), Variable
Rate, 7/1/22/(3)/ 5,118,750
- --------------------------------------------------------------------------------
$ 13,159,890
- --------------------------------------------------------------------------------
Insured-Hospitals -- 2.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 3,985 New York State Dormitory
Authority, (Southside
Hospital), (MBIA), 5.00%,
2/15/18 $ 3,872,344
Aaa AAA 1,300 New York State MCFFA, New
York Hospital (FHA)
(AMBAC),
6.60%, 2/15/11 1,388,049
Aaa AAA 5,400 New York State MCFFA, New
York Hospital (FHA)
(AMBAC),
6.75%, 8/15/14 6,251,472
- --------------------------------------------------------------------------------
$ 11,511,865
- --------------------------------------------------------------------------------
See notes to financial statements
52
<PAGE>
New York Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Insured-Housing -- 0.1%
- --------------------------------------------------------------------------------
Aaa AAA $ 500 New York City HDC, Charter Oaks
(MBIA), 7.375%, 4/1/17 $ 508,350
- --------------------------------------------------------------------------------
$ 508,350
- --------------------------------------------------------------------------------
Insured-Life Care -- 0.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,500 New York State MCFFA, Long Term
Health Care (FSA), 6.80%,
11/1/14 $ 1,650,555
- --------------------------------------------------------------------------------
$ 1,650,555
- --------------------------------------------------------------------------------
Insured-Miscellaneous -- 0.5%
- --------------------------------------------------------------------------------
Aaa AAA $ 500 New York City IDA, (USTA
National Tennis Center Inc.)
(FSA), 6.375%, 11/15/14 $ 556,535
Aaa AAA 1,600 New York City Trust Cultural
Resources, (American Museum of
Natural History), (MBIA),
5.65%, 4/1/22 1,674,240
- --------------------------------------------------------------------------------
$ 2,230,775
- --------------------------------------------------------------------------------
Insured-Solid Waste -- 1.9%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,650 Dutchess County Resource
Recovery Solid Waste (FGIC),
7.50%, 1/1/09 $ 1,771,770
Aaa AAA 6,795 Islip Resource Recovery
Agency (MBIA), 6.50%, 7/1/09 7,761,996
- --------------------------------------------------------------------------------
$ 9,533,766
- --------------------------------------------------------------------------------
Insured-Transportation -- 5.5%
- --------------------------------------------------------------------------------
Aaa AAA $ 6,000 Metropolitan Transportation
Authority of New York, (MBIA),
5.00%, 7/1/20 $ 5,865,600
Aaa AAA 5,000 Metropolitan Transportation
Authority of New York, (MBIA),
5.25%, 4/1/26 5,012,450
Aaa AAA 2,500 New York State Thruway Authority,
Highway and Trust Fund, (FGIC),
5.00%, 4/1/15 2,471,800
Aaa AAA 3,000 Triborough Bridge and Tunnel
Authority of New York, "RITES",
(AMBAC), Variable Rate,
1/1/12/(3)/ 3,446,250
NR AAA 3,000 Triborough Bridge and Tunnel
Authority, NY, (MBIA), Variable
Rate, 1/1/19/(3)/ 3,243,750
NR NR 7,000 VRDC-IVRC Trust, (NY MTA),
Variable Rate, (MBIA),
6/26/02/(3)/ 7,665,000
- --------------------------------------------------------------------------------
$ 27,704,850
- --------------------------------------------------------------------------------
Lease Revenue /
Certificates of Participation -- 14.8%
- --------------------------------------------------------------------------------
Baa1 BBB+ $ 8,000 New York State Dormitory
Authority, (City University),
5.625%, 7/1/16 $ 8,474,720
Baa1 BBB+ 8,500 New York State Dormitory
Authority, (City University),
6.00%, 7/1/20 9,425,480
Baa1 BBB+ 5,100 New York State Dormitory
Authority, (City University),
7.00%, 7/1/09 5,921,253
Baa1 BBB+ 4,325 New York State Dormitory
Authority, (City University),
7.50%, 7/1/10 5,274,857
Baa1 BBB+ 3,380 New York State HFA Health
Facilities, 6.00%, 5/1/06 3,646,581
NR BBB 5,865 New York State Thruway
Authority, 0.00%, 1/1/01 5,197,798
NR BBB 2,350 New York State Thruway
Authority, 0.00%, 1/1/03 1,890,787
Baa1 BBB+ 27,940 New York State UDC, 5.70%,
4/1/20 29,758,055
Baa1 BBB+ 3,200 New York State Urban
Development Corp., (Youth
Facilities), 5.00%, 4/1/13 3,114,432
A A 1,825 Syracuse-Hancock International
Airport, 6.625%, 1/1/12 1,952,166
- --------------------------------------------------------------------------------
$ 74,656,129
- --------------------------------------------------------------------------------
Life Care -- 0.6%
- --------------------------------------------------------------------------------
A3 AA- $ 3,000 New York State Dormitory
Authority, (Mental Health
Services), 5.00%, 2/15/18 $ 2,893,620
- --------------------------------------------------------------------------------
$ 2,893,620
- --------------------------------------------------------------------------------
See notes to financial statements
53
<PAGE>
New York Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Solid Waste -- 2.0%
- --------------------------------------------------------------------------------
Baa1 NR $ 9,530 New York State EFC Resource
Recovery, Huntington, 7.50%,
10/1/12 $ 10,146,972
- --------------------------------------------------------------------------------
$ 10,146,972
- --------------------------------------------------------------------------------
Special Tax Revenue -- 6.6%
- --------------------------------------------------------------------------------
A3 A+ $14,530 New York State LGAC, 5.00%,
4/1/21 $ 14,373,366
A3 A+ 11,900 New York State LGAC, 5.375%,
4/1/19 12,062,792
NR BBB+ 2,630 New York State Municipal Bond
Bank Agency, 6.875%, 3/15/06 2,854,339
Baa1 BBB+ 3,335 Triborough Bridge and Tunnel
Authority, Convention Center,
6.00%, 1/1/11 3,682,841
- --------------------------------------------------------------------------------
$ 32,973,338
- --------------------------------------------------------------------------------
Transportation -- 4.8%
- --------------------------------------------------------------------------------
Baa1 BBB+ $ 2,535 Metropolitan Transportation
Authority of New York, 5.50%,
7/1/14/(1)/ $ 2,589,198
A1 AA- 1,500 Port Authority of New York and
New Jersey (AMT), Variable Rate,
1/15/27/(3)/ 1,683,750
Baa1 A 4,000 Puerto Rico Highway and
Transportation Authority, 4.75%,
7/1/38 3,703,720
Aa3 A+ 12,080 Triborough Bridge and Tunnel
Authority, 5.50%, 1/1/17 12,884,648
Aa3 A+ 3,000 Triborough Bridge and Tunnel
Authority, 6.125%, 1/1/21 3,445,860
- --------------------------------------------------------------------------------
$ 24,307,176
- --------------------------------------------------------------------------------
Water and Sewer -- 3.0%
- --------------------------------------------------------------------------------
A2 A- $ 7,000 New York City Municipal, Water
Finance Authority, 5.25%,
6/15/29 $ 6,956,880
A2 A- 3,500 New York City Municipal, Water
Finance Authority, 4.75%,
6/15/25 3,243,030
Aa2 A+ 4,545 New York State EFC, State Water
Pollution Control, 7.20%,
3/15/11 4,888,329
- --------------------------------------------------------------------------------
$ 15,088,239
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $466,422,435) $503,552,342
- --------------------------------------------------------------------------------
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 March 31, 1998, 16.0% 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 0.3% to 6.5% of total investments.
/(1)/ When-issued security.
/(2)/ Security (or a portion thereof) has been segregated to cover when-issued
securities.
/(3)/ Security has been issued as an inverse floater bond.
/(4)/ Non-income producing security.
See notes to financial statements
54
<PAGE>
Ohio Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Standard Amount
& (000's
Moody's Poor's omitted) Security Value
- ---------------------------------------------------------------------------
Colleges and Universities -- 0.3%
- ---------------------------------------------------------------------------
Aa AA $ 550 Ohio State Higher
Educational Facilities,
(Case Western
University), 6.50%, 10/1/20 $ 660,688
- ---------------------------------------------------------------------------
$ 660,688
- ---------------------------------------------------------------------------
Education -- 4.4%
- ---------------------------------------------------------------------------
A1 NR $ 6,000 Ohio State Student Loan
Funding Corp (AMT),
6.10%, 8/1/07 $ 6,293,700
A1 NR 5,000 Ohio State Student Loan
Funding Corp (AMT),
6.10%, 8/1/08 5,232,850
- ---------------------------------------------------------------------------
$ 11,526,550
- ---------------------------------------------------------------------------
Electric Utilities -- 3.6%
- ---------------------------------------------------------------------------
A1 A+ $ 1,185 Ohio State Air Quality
Development Authority,
6.10%, 9/1/30 $ 1,271,766
Ba1 BB+ 7,000 Ohio State Water
Development Authority,
Pollution Control
Facilities, (Cleveland
Electric), (AMT), 6.10%,
8/1/20 7,332,079
NR NR 960 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 1,049,424
- ---------------------------------------------------------------------------
$ 9,653,269
- ---------------------------------------------------------------------------
Escrowed/Prerefunded -- 2.3%
- ---------------------------------------------------------------------------
NR NR $ 2,905 Greene County, IDA,
(Fairview Extended Care),
10.125%, 1/1/11 $ 3,428,626
NR AAA 1,700 Puerto Rico Commonwealth,
"RIBS", (AMBAC), Variable
Rate, 7/1/15/(1)/ 1,980,500
Aa2 NR 600 Warren County, (Otterbein
Homes), 7.20%, 7/1/11 655,554
- ---------------------------------------------------------------------------
$ 6,064,680
- ---------------------------------------------------------------------------
General Obligations -- 7.0%
- ---------------------------------------------------------------------------
NR NR $ 3,035 Belmont County,
7.30%, 12/1/12 $ 3,302,596
NR NR 2,450 Cleveland City School
District, 7.25%, 6/15/98 2,458,747
NR NR 800 Mahoning Valley,
Sanitation District,
7.80%, 12/15/08 871,632
NR NR 950 Mahoning Valley,
Sanitation District,
7.80%, 12/15/09 1,034,398
Baa1 A 1,075 Puerto Rico Commonwealth,
0.00%, 7/1/16 430,333
Aa2 NR 1,250 Rocky River Ohio City,
School District, 5.375%,
12/1/17 1,306,563
NR NR 1,000 Tuscarawas Public Library
Improvement, 6.90%,
12/1/11 1,059,470
NR NR 6,855 Youngstown, 7.35%, 7/1/05 7,915,673
- ---------------------------------------------------------------------------
$ 18,379,412
- ---------------------------------------------------------------------------
Hospitals -- 18.7%
- ---------------------------------------------------------------------------
NR AAA $ 1,000 Allen County, LIMA
Convalescent Home
Foundation (GNMA), 6.40%,
1/1/21 $ 1,065,730
Baa3 BBB- 1,000 Butler County
(Hamilton-Hughe
Hospital), 7.50%, 1/1/10 1,087,220
A1 A 2,100 Cuyahoga County,
(Fairview General
Hospital), 6.25%, 8/15/10 2,252,691
Aa AA 4,450 Cuyahoga County,
(University Hospitals
Health System), 6.00%,
1/15/22 4,713,351
Aa AA 750 Cuyahoga County,
(University Hospitals
Health System), 6.50%,
1/15/19 809,138
NR BBB+ 3,280 Defiance, (Defiance
Hospital), 7.625%, 11/1/03 3,337,498
Baa2 BBB+ 1,000 East Liverpool, (City
Hospital), 8.00%, 10/1/21 1,096,530
A A 4,000 Erie County, (Fireland
Community Hospital),
6.75%, 1/1/08 4,360,200
Aa NR 3,000 Franklin County
(Children's Hospital),
6.60%, 5/1/13 3,305,760
A A 1,015 Garfield Heights
(Marymount Hospital),
6.65%, 11/15/11 1,102,513
A A 1,000 Garfield Heights
(Marymount Hospital),
6.70%, 11/15/15 1,087,400
A2 A 5,115 Hamilton County (Bethesda
Hospital, Inc.), 6.25%,
1/1/12 5,521,489
Aa2 NR 1,000 Hamilton County, (Wesley
Hall), 6.50%, 3/1/15 1,107,790
See notes to financial statements
55
<PAGE>
Ohio Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Standard Amount
& (000's
Moody's Poor's omitted) Security Value
- ---------------------------------------------------------------------------
Hospitals (continued)
- ---------------------------------------------------------------------------
A1 NR $ 1,095 Lorain County (Humility
of Mary Health Care
Corp.),
7.125%, 12/15/06 $ 1,234,799
A1 NR 1,000 Lorain County (Humility
of Mary Health Care
Corp.),
7.20%, 12/15/11 1,192,130
A1 NR 1,750 Lorain, (Lakeland County
Hospital), 6.50%, 11/15/12 1,984,903
Baa2 BBB 3,800 Miami, (Upper Valley
Medical Center), 6.375%,
5/15/26 4,075,006
NR NR 9,670 Mt. Vernon, (Knox
Community Hospital),
7.875%, 6/1/12 9,935,150
- ---------------------------------------------------------------------------
$ 49,269,298
- ---------------------------------------------------------------------------
Housing -- 14.1%
- ---------------------------------------------------------------------------
Aa NR $ 1,300 Clermont County, (SEM
Laurels), (FHA), 6.00%,
9/1/20 $ 1,351,142
NR NR 3,000 Cuyahoga County, (Rolling
Hills Apts.), (AMT),
8.00%, 1/1/28 3,006,210
Aa NR 2,500 Franklin County MFMR -
Tuttle Park (FHA), (AMT),
6.50%, 3/1/26 2,695,225
Aa NR 5,985 Franklin County MFMR -
Tuttle Park (FHA), (AMT),
6.60%, 3/1/36 6,479,361
Aa NR 3,645 Franklin County,
(Hamilton Creek
Apartments) (FHA), (AMT),
5.55%, 7/1/24 3,634,648
Aa NR 1,000 Franklin County,
(Hamilton Creek
Apartments) (FHA), (AMT),
5.80%, 7/1/14 1,024,580
Aaa NR 2,500 Kent MFMR, (Silver
Meadows), (GNMA), (AMT),
7.30%, 12/20/36 2,799,050
NR NR 2,975 Lucas County, (County
Creek Project), (AMT),
8.00%, 7/1/26 2,948,106
Aaa AAA 835 Ohio HFA SFMR, (GNMA)
(AMT) Variable Rate,
3/31/31/(1)/ 938,331
Aa A 1,000 Ohio HFA, (Aristocrat),
(FHA), (AMT), 7.30%,
8/1/31 1,058,890
NR AAA 3,310 Ohio HFA, Residential,
(GNMA), (AMT), 6.375%,
3/1/25 3,518,894
NR AAA 4,595 Ohio HFA, Residential,
(GNMA), (AMT), 6.70%,
3/1/25 4,936,271
Baa BBB 2,925 Puerto Rico Commonwealth
Urban Renewal and Housing
Corp., 0.00%, 10/1/99 2,754,677
- ---------------------------------------------------------------------------
$ 37,145,385
- ---------------------------------------------------------------------------
Industrial Development Revenue/Pollution
Control Revenue -- 12.4%
- ---------------------------------------------------------------------------
Aa NR $ 2,000 Cuyahoga, IDR, (Chippewa
Place), 6.60%, 8/1/15 $ 2,143,100
Baa1 NR 3,750 Ohio Air Quality
Development Authority,
(Ashland Oil Inc.),
6.85%, 4/1/10 3,986,625
NR A- 545 Ohio Economic Development
Commission, (Burrows
Paper Corp.) (AMT),
7.625%, 6/1/11 598,214
NR A- 240 Ohio Economic Development
Commission, (Cheryl &
Co.) (AMT), 5.50%, 12/1/04 256,022
NR A- 530 Ohio Economic Development
Commission, (Cheryl &
Co.), (AMT), 5.90%,
12/1/09 571,086
NR A- 1,610 Ohio Economic Development
Commission, (Consolidated
Biscuit), (AMT),
7.00%, 12/1/09 1,804,891
NR A- 3,210 Ohio Economic Development
Commission, (J J & W LP)
(AMT), 6.70%, 12/1/14 3,563,967
NR BB 1,020 Ohio Economic Development
Commission, (Kmart
Corp.), 6.75%, 5/15/07 1,096,449
NR A- 750 Ohio Economic Development
Commission, (Luigino's
Inc.) (AMT), 6.85%, 6/1/01 753,630
NR A- 1,525 Ohio Economic Development
Commission, (Progress
Plastic Products) (AMT),
7.80%, 12/1/09 1,790,152
NR A- 650 Ohio Economic Development
Commission, (Progress
Plastics Products),
(AMT), 6.80%, 12/1/01 693,966
NR A- 1,000 Ohio Economic Development
Commission, (Royal
Appliance Manufacturing
Co.) (AMT), 7.625%, 12/1/11 1,105,140
NR A- 680 Ohio Economic Development
Commission, (Royal
Appliance Manufacturing
Co.) (AMT), 7.625%, 12/1/11 751,495
See notes to financial statements
56
<PAGE>
Ohio Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Standard Amount
& (000's
Moody's Poor's omitted) Security Value
- ---------------------------------------------------------------------------
Industrial Development Revenue/
Pollution Control Revenue (continued)
- ---------------------------------------------------------------------------
NR A- $ 880 Ohio Economic Development
Commission, (VSM Corp.)
(AMT), 7.375%, 12/1/11 $ 965,228
Aa3 AA 1,000 Ohio Pollution Control,
(Standard Oil Co.),
6.75%, 12/1/15 1,187,030
NR NR 3,000 Ohio Solid Waste Revenue,
(Republic Engineered
Steels Inc.), (AMT),
9.00%, 6/1/21 3,234,660
Baa2 BBB 3,805 Ohio Water Development
Authority, (Union Carbide
Corp.), 5.50%, 1/15/07 3,807,702
Baa3 BBB- 4,000 Puerto Rico Port
Authority, (American
Airlines), (AMT), 6.25%,
6/1/26 4,349,800
- ---------------------------------------------------------------------------
$ 32,659,157
- ---------------------------------------------------------------------------
Insured-Colleges and Universities -- 0.4%
- ---------------------------------------------------------------------------
Aaa AAA $ 1,000 Ohio Higher Education
Facilities (University of
Dayton) (FGIC), 5.80%,
12/1/14 $ 1,067,370
- ---------------------------------------------------------------------------
$ 1,067,370
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 6.2%
- ---------------------------------------------------------------------------
Aaa AAA $ 1,650 Cleveland Public Power
System, (MBIA), 7.00%,
11/15/17 $ 1,818,515
Aaa AAA 10,000 Cleveland, Public Power
System, (MBIA), 5.00%,
11/15/20 9,787,299
Aaa AAA 2,000 Cuyahoga County Utility
Systems, (Medical Center
Company), (MBIA), (AMT),
6.10%, 8/15/15 2,149,720
Aaa AAA 2,300 Puerto Rico Electric
Power Authority,
"STRIPES", (FSA),
Variable Rate, 7/1/02/(1)/ 2,567,375
- ---------------------------------------------------------------------------
$ 16,322,909
- ---------------------------------------------------------------------------
Insured-General Obligations -- 2.0%
- ---------------------------------------------------------------------------
Aaa AAA $ 2,000 North Olmsted, (AMBAC),
5.00%, 12/1/16 $ 1,980,720
Aaa AAA 3,000 Puerto Rico, (FSA),
Variable Rate, 7/1/22/(1)/ 3,412,500
- ---------------------------------------------------------------------------
$ 5,393,220
- ---------------------------------------------------------------------------
Insured-Hospitals -- 9.4%
- ---------------------------------------------------------------------------
Aaa AAA $ 1,000 Clermont County, (Mercy
Health System), (AMBAC),
Variable Rate, 10/5/21/(1)/ $ 1,203,750
Aaa AAA 1,000 East Liverpool, (City
Hospital), (FSA), 5.00%,
10/1/21 971,730
Aaa AAA 6,500 Mahoning County, Hospital
Facilities Revenue,
(Forum Health), (MBIA),
5.00%, 11/15/17 6,333,145
Aaa AAA 2,750 Mansfield, (Mansfield
General Hospital),
(AMBAC),
6.70%, 12/1/09 3,006,740
Aaa AAA 5,000 Middleburg Heights,
(Southwestern General),
(FSA), 5.75%, 8/15/21 5,318,800
Aaa AAA 1,000 Montgomery County, (Miami
Valley Hospital) (AMBAC),
6.25%, 11/15/16 1,088,520
Aaa AAA 6,565 Portage County, (Robinson
Memorial Hospital),
(MBIA), 5.80%, 11/15/15 7,014,637
- ---------------------------------------------------------------------------
$ 24,937,322
- ---------------------------------------------------------------------------
Insured-Housing -- 2.7%
- ---------------------------------------------------------------------------
Aaa AAA $ 1,100 Ohio Capital Corp.,
(Horizon Apts.), (FHA),
(MBIA), 6.50%, 1/1/23 $ 1,156,793
Aaa AAA 6,000 Ohio Capital Corp.,
(Section 8), (FHA), 6,001,500
(MBIA), 5.30%, 1/1/24
- ---------------------------------------------------------------------------
$ 7,158,293
- ---------------------------------------------------------------------------
Insured-Lease Revenue/Certificates of
Participation -- 0.9%
- ---------------------------------------------------------------------------
Aaa AAA $ 2,500 University of Cincinnati,
(MBIA), 5.125%, 6/1/24 $ 2,462,625
- ---------------------------------------------------------------------------
$ 2,462,625
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.5%
- ---------------------------------------------------------------------------
Aaa AAA $ 2,110 Hudson Local School
District, (FGIC), 0.00%, $ 1,227,746
12/15/09
- ---------------------------------------------------------------------------
$ 1,227,746
- ---------------------------------------------------------------------------
See notes to financial statements
57
<PAGE>
Ohio Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------
Insured-Transportation -- 3.3%
- ---------------------------------------------------------------------------
Aaa AAA $ 7,000 Columbus Municipal
Airport Authority,
(AMBAC), 5.00%, 1/1/28 $ 6,788,670
Aaa AAA 2,000 Ohio State Airline
Quality Development
Authority, (JMG Funding),
(AMBAC), 5.625%, 10/1/22 2,072,220
- ---------------------------------------------------------------------------
$ 8,860,890
- ---------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 0.4%
- ---------------------------------------------------------------------------
A2 A+ $ 1,000 University of Cincinnati,
6.50%, 12/1/11 $ 1,096,120
- ---------------------------------------------------------------------------
$ 1,096,120
- ---------------------------------------------------------------------------
Life Care -- 1.9%
- ---------------------------------------------------------------------------
Aa NR $ 1,990 Franklin County,
(Kensington Place),
6.75%, 1/1/34 $ 2,100,943
Aa2 NR 1,000 Hamilton County,
(Hospital - Episcopal
Retirement Home), 6.80%,
1/1/08 1,081,890
NR BBB- 1,800 Marion, Health Care,
(United Church Home),
6.30%, 11/15/15 1,905,750
- ---------------------------------------------------------------------------
$ 5,088,583
- ---------------------------------------------------------------------------
Nursing Homes -- 4.5%
- ---------------------------------------------------------------------------
Aaa NR $ 1,305 Cuyahoga County, (Maple
Care Center) (GNMA),
(AMT), 8.00%, 8/20/16 $ 1,582,443
NR AAA 1,205 North Canton, Health Care
Facilities, (St. Luke
Lutheran), (GNMA), 6.10%,
9/20/16 1,327,187
NR AAA 6,455 North Canton, Health Care
Facilities, (St. Luke
Lutheran), (GNMA), 9.55%,
3/20/32 8,870,654
- ---------------------------------------------------------------------------
$ 11,780,284
- ---------------------------------------------------------------------------
Special Tax Revenue -- 1.2%
- ---------------------------------------------------------------------------
Baa1 A $ 3,000 Puerto Rico, Highway and
Transportation Authority,
6.625%, 7/1/12 $ 3,297,000
- ---------------------------------------------------------------------------
$ 3,297,000
- ---------------------------------------------------------------------------
Transportation -- 3.4%
- ---------------------------------------------------------------------------
NR BBB $ 5,630 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 $ 6,173,971
Baa1 A 3,000 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 2,777,790
- ---------------------------------------------------------------------------
$ 8,951,761
- ---------------------------------------------------------------------------
Water and Sewer -- 0.4%
- ---------------------------------------------------------------------------
NR NR $ 1,000 Vermilion Water,
7.25%, 8/15/15 $ 1,063,080
- ---------------------------------------------------------------------------
$ 1,063,080
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $246,107,305) $264,065,642
- ---------------------------------------------------------------------------
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 March 31, 1998, 26.3% 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 institution ranged from 0.8% to 14.1% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
See notes to financial statements
58
<PAGE>
Rhode Island Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Education -- 1.9%
- --------------------------------------------------------------------------------
A NR $ 750 Rhode Island Student Loan
Authority, (AMT), 5.60%,
12/1/12 $ 782,025
- --------------------------------------------------------------------------------
$ 782,025
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 0.7%
- --------------------------------------------------------------------------------
NR AAA $ 250 Puerto Rico Commonwealth,
"RIBS", (AMBAC), Variable
Rate, 7/1/15/(1)/ $ 291,250
- --------------------------------------------------------------------------------
$ 291,250
- --------------------------------------------------------------------------------
General Obligations -- 3.0%
- --------------------------------------------------------------------------------
Baa1 A $ 225 Puerto Rico Commonwealth,
0.00%, 7/1/16 $ 90,070
Baa1 A 1,000 Puerto Rico Public
Buildings Authority, 5.25%,
7/1/21 998,580
Baa2 NR 105 West Warwick, 6.80%,
7/15/98/(2)/ 105,738
- --------------------------------------------------------------------------------
$ 1,194,388
- --------------------------------------------------------------------------------
Hospitals -- 9.2%
- --------------------------------------------------------------------------------
NR AA $1,500 Rhode Island Health and
Educational Building Corp.,
(Landmark Medical Center),
5.875%, 10/1/19 $ 1,561,275
A3 A- 1,250 Rhode Island Health and
Educational Building Corp.,
(South County Hospital),
5.75%, 11/15/26 1,285,138
Baa3 BBB 830 Rhode Island Health and
Educational Building Corp.,
(Westerly Hospital), 6.00%,
7/1/14 868,072
- --------------------------------------------------------------------------------
$ 3,714,485
- --------------------------------------------------------------------------------
Housing -- 16.4%
- --------------------------------------------------------------------------------
Aa2 AA+ $ 220 Rhode Island Housing and
Mortgage Finance Corp.,
6.50%, 4/1/27 $ 232,379
Aa2 AA+ 85 Rhode Island Housing and
Mortgage Finance Corp.,
6.85%, 4/1/27 91,416
Aa AA+ 200 Rhode Island Housing and
Mortgage Finance Corp.,
7.875%, 10/1/22 209,348
Aa2 AA+ 1,750 Rhode Island Housing and
Mortgage Finance Corp.,
(AMT), 6.60%, 10/1/25 1,860,968
Aa2 AA+ 100 Rhode Island Housing and
Mortgage Finance Corp.,
(AMT), 6.70%, 10/1/12 106,737
Aa2 AA+ 875 Rhode Island Housing and
Mortgage Finance Corp.,
(AMT), 6.80%, 10/1/25/(3)/ 929,941
Aa2 AA+ 1,000 Rhode Island Housing and
Mortgage Finance Corp.,
(AMT), 7.10%, 10/1/23 1,049,880
Aa2 AA+ 2,000 Rhode Island Housing and
Mortgage Finance Corp.,
(AMT), 7.55%, 10/1/22 2,129,620
Aa AA+ 35 Rhode Island Housing and
Mortgage Finance Corp.,
(AMT), 7.875%, 10/1/22 36,636
- --------------------------------------------------------------------------------
$ 6,646,925
- --------------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control Revenue -- 1.3%
- --------------------------------------------------------------------------------
Baa3 BBB- $ 500 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.30%, 6/1/23 $ 534,500
- --------------------------------------------------------------------------------
$ 534,500
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 1.7%
- --------------------------------------------------------------------------------
Aaa AAA $1,750 Puerto Rico Electric Power
Authority, (MBIA), 0.00%,
7/1/17 $ 675,080
- --------------------------------------------------------------------------------
$ 675,080
- --------------------------------------------------------------------------------
Insured-General Obligations -- 12.5%
- --------------------------------------------------------------------------------
Aaa AAA $1,500 Kent County Water
Authority, (MBIA), 6.35%,
7/15/14 $ 1,665,315
Aaa AAA 750 Puerto Rico Public Building
Authority, (AMBAC), 5.00%,
7/1/27 729,720
Aaa AAA 500 Rhode Island Depositors
Economic Protection Corp.,
(MBIA), 5.80%, 8/1/09 556,005
Aaa AAA 1,000 Rhode Island Depositors
Economic Protection Corp.,
(MBIA), 5.80%, 8/1/12 1,107,640
Aaa AAA 1,000 Warwick, RI, Series A,
(FGIC), 5.00%, 3/1/17 989,110
- --------------------------------------------------------------------------------
$ 5,047,790
- --------------------------------------------------------------------------------
See notes to financial statements
59
<PAGE>
Rhode Island Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Insured-Hospitals -- 15.3%
- --------------------------------------------------------------------------------
Aaa AAA $3,350 Rhode Island Health And
Educational Building Corp.,
(Lifespan) (MBIA), 5.75%,
5/15/23/(4)/ $ 3,515,456
Aaa AAA 2,700 Rhode Island Health and
Educational Building Corp.,
Lifespan Obligation Group,
(MBIA), 5.25%, 5/15/26 2,684,124
- --------------------------------------------------------------------------------
$ 6,199,580
- --------------------------------------------------------------------------------
Insured-Housing -- 5.5%
- --------------------------------------------------------------------------------
Aa2 AA+ $ 500 Rhode Island Housing and
Mortgage Finance Corp.,
(MBIA), 6.20%, 10/1/06 $ 531,040
Aaa AAA 1,075 Villa Excelsior Housing
Development Corp. Mortgage,
(MBIA), 6.75%, 1/1/19 1,156,904
Aaa AAA 500 Villa Excelsior Housing
Development Corp. Mortgage,
(MBIA), 6.85%, 1/1/24 539,325
- --------------------------------------------------------------------------------
$ 2,227,269
- --------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 13.1%
- --------------------------------------------------------------------------------
Aaa AAA $3,000 Convention Center Authority
of Rhode Island, (MBIA),
5.00%, 5/15/20 $ 2,910,000
Aaa AAA 2,300 Convention Center Authority
of Rhode Island, (MBIA),
5.25%, 5/15/15 2,378,913
- --------------------------------------------------------------------------------
$ 5,288,913
- --------------------------------------------------------------------------------
Insured-Water and Sewer -- 4.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 750 Rhode Island Clean Water,
Safe Drinking Water,
(AMBAC), 6.70%, 1/1/15 $ 850,065
Aaa AAA 350 Rhode Island Clean Water,
Water Pollution Control,
(MBIA), 5.40%, 10/1/15 367,038
Aaa AAA 500 Rhode Island Clean Water,
Water Pollution Control,
(MBIA), 5.85%, 10/1/09 544,335
- --------------------------------------------------------------------------------
$ 1,761,438
- --------------------------------------------------------------------------------
Life Care -- 2.6%
- --------------------------------------------------------------------------------
NR NR $1,000 Rhode Island Health and
Educational Building Corp.,
(Tockwotton Home), 6.25%,
8/15/22 $ 1,065,940
- --------------------------------------------------------------------------------
$ 1,065,940
- --------------------------------------------------------------------------------
Miscellaneous -- 0.6%
- --------------------------------------------------------------------------------
Baa1 A- $ 230 Rhode Island Depositors
Economic Protection Corp.,
5.75%, 8/1/21 $ 251,305
- --------------------------------------------------------------------------------
$ 251,305
- --------------------------------------------------------------------------------
Nursing Homes -- 1.8%
- --------------------------------------------------------------------------------
NR NR $ 725 Rhode Island Health And
Educational Building Corp.,
(Steere House), 5.80%,
7/1/20 $ 739,638
- --------------------------------------------------------------------------------
$ 739,638
- --------------------------------------------------------------------------------
Special Tax Revenue -- 4.2%
- --------------------------------------------------------------------------------
Baa3 BBB- $1,500 City of Providence Special
Obligation Tax Increment
Bonds, 7.65%, 6/1/16 $ 1,708,110
- --------------------------------------------------------------------------------
$ 1,708,110
- --------------------------------------------------------------------------------
Transportation -- 5.9%
- --------------------------------------------------------------------------------
NR BBB $ 500 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 $ 548,310
Baa1 A 2,000 Puerto Rico, Highway and
Transportation Authority,
4.75%, 7/1/38 1,851,860
- --------------------------------------------------------------------------------
$ 2,400,170
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $38,034,509) $40,528,806
- --------------------------------------------------------------------------------
AMT - Interest earned from these securities may be considered a tax
preference item for purposes of the Federal Alternative
Minimum Tax.
See notes to financial statements
60
<PAGE>
Rhode Island Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
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 March 31, 1998, 53.0% 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 0.2% to 3.8% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ When-issued security.
/(3)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
/(4)/ Security has been segregated to cover when-issued securities.
See notes to financial statements
61
<PAGE>
West Virginia Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Electric Utilities -- 11.5%
- --------------------------------------------------------------------------------
A2 A $2,000 Harrison, WV PCR
(Monongahela Power Co.
Harrison Station), (AMT),
6.75%, 8/1/24 $ 2,227,259
Baa1 BBB+ 1,000 Mason, WV PCR (Appalacian
Power Co.), 6.85%, 6/1/22 1,098,610
Baa1 BBB+ 855 Puerto Rico Electric Power
Authority, 0.00%, 7/1/17 323,686
- --------------------------------------------------------------------------------
$ 3,649,555
- --------------------------------------------------------------------------------
Escrowed/Prerefunded -- 3.0%
- --------------------------------------------------------------------------------
Aaa AAA $2,500 Kanawha-Putnam, WV Single
Family Mortgage (AMBAC),
0.00%, 12/1/16 $ 963,275
- --------------------------------------------------------------------------------
$ 963,275
- --------------------------------------------------------------------------------
General Obligations -- 2.5%
- --------------------------------------------------------------------------------
NR BBB $ 400 Guam, 5.375%, 11/15/13 $ 403,832
Baa1 A 500 Puerto Rico Commonwealth,
0.00%, 7/1/16 200,155
Baa1 A 500 Puerto Rico Commonwealth,
0.00%, 7/1/18 179,975
- --------------------------------------------------------------------------------
$ 783,962
- --------------------------------------------------------------------------------
Hospitals -- 10.1%
- --------------------------------------------------------------------------------
NR BBB+ $1,250 Berkeley, WV Building
Commission (City Hospital),
6.50%, 11/1/22 $ 1,347,163
Baa1 BBB+ 250 Princeton, WV (Community
Hospital), 6.00%, 5/1/18 259,910
A1 NR 500 West Virginia HFA
(Charleston Area Medical
Center), 6.50%, 9/1/16 536,145
A1 NR 1,000 West Virginia HFA
(Charleston Area Medical
Center), 6.50%, 9/1/23 1,070,100
- --------------------------------------------------------------------------------
$ 3,213,318
- --------------------------------------------------------------------------------
Housing -- 1.6%
- --------------------------------------------------------------------------------
Aa2 AA+ $ 500 West Virginia State Housing
Development Fund, (AMT),
5.70%, 11/1/17 $ 515,810
- --------------------------------------------------------------------------------
$ 515,810
- --------------------------------------------------------------------------------
Industrial Development Revenue/Pollution Control Revenue -- 9.2%
- --------------------------------------------------------------------------------
NR A- $1,375 Jefferson, WV (Royal
Venders, Inc.) (AMT),
5.90%, 8/1/04 $ 1,473,161
Baa2 NR 300 Kanawha, WV (Union Carbide
Chemicals and Plastics Co.)
(AMT), 8.00%, 8/1/20 325,134
NR NR 1,000 Upshur, WV Solid Waste
(TJI) (AMT), 7.00%, 7/15/25 1,122,020
- --------------------------------------------------------------------------------
$ 2,920,315
- --------------------------------------------------------------------------------
Insured-Colleges and Universities -- 9.8%
- --------------------------------------------------------------------------------
Aaa AAA $ 550 West Virginia State
University System, (AMBAC),
6.00%, 4/1/12 $ 596,151
Aaa AAA 1,000 West Virginia State
University System,
(Marshall Library),(AMBAC),
5.75%, 4/1/16 1,060,520
Aaa AAA 500 West Virginia University,
(AMBAC), 5.00%, 5/1/22 488,345
Aaa AAA 1,000 West Virginia University,
(AMBAC), 5.00%, 5/1/27 973,060
- --------------------------------------------------------------------------------
$ 3,118,076
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 3.2%
- --------------------------------------------------------------------------------
Aaa AAA $ 700 Marshall, WV PCR (Ohio
Power Kammer Plant) (MBIA),
5.45%, 7/1/14 $ 723,247
Aaa AAA 250 Puerto Rico Electric Power
Authority, "STRIPES", (FSA),
Variable Rate, 7/1/03/(1)/ 285,000
- --------------------------------------------------------------------------------
$ 1,008,247
- --------------------------------------------------------------------------------
Insured-General Obligations -- 3.8%
- --------------------------------------------------------------------------------
Aaa AAA $ 150 West Virginia (FGIC),
5.25%, 11/1/26 $ 149,772
Aaa AAA 1,000 West Virginia (FGIC),
5.75%, 11/1/21 1,056,800
- --------------------------------------------------------------------------------
$ 1,206,572
- --------------------------------------------------------------------------------
Insured-Hospitals -- 12.3%
- --------------------------------------------------------------------------------
Aaa AAA $1,300 West Virginia HFA (Cabell
Huntington Hospital)
(AMBAC), 6.25%, 1/1/19 $ 1,423,734
See notes to financial statements
62
<PAGE>
West Virginia Municipals Portfolio as of March 31, 1998
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Insured-Hospitals (continued)
- --------------------------------------------------------------------------------
Aaa AAA $ 850 West Virginia HFA
(Charleston Area Medical
Center) (MBIA),
5.75%, 9/1/13 $ 909,237
Aaa AAA 1,200 West Virginia HFA (Linked
Bulls & Bears) (MBIA),
6.10%, 1/1/18 1,284,816
Aaa AAA 300 West Virginia HFA
(University Hospital)
(MBIA), 5.00%, 6/1/16 292,638
- --------------------------------------------------------------------------------
$ 3,910,425
- --------------------------------------------------------------------------------
Insured-Lease Revenue/Certificates of Participation -- 1.6%
- --------------------------------------------------------------------------------
Aaa AAA $ 500 West Virginia School
Building Authority,
(AMBAC), 5.60%, 7/1/17 $ 525,620
- --------------------------------------------------------------------------------
$ 525,620
- --------------------------------------------------------------------------------
Insured-Life Care -- 3.8%
- --------------------------------------------------------------------------------
Aaa NR $1,250 Harrison County, WV
Building Commission,
(AMBAC), 5.25%, 4/1/28 $ 1,227,763
- --------------------------------------------------------------------------------
$ 1,227,763
- --------------------------------------------------------------------------------
Insured-Transportation -- 2.4%
- --------------------------------------------------------------------------------
Aaa AAA $1,000 West Virginia Parkways
Economic Development and
Tourism Authority (FGIC),
0.00%, 5/15/04 $ 764,710
- --------------------------------------------------------------------------------
$ 764,710
- --------------------------------------------------------------------------------
Insured-Water and Sewer -- 16.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 250 Berkeley, WV Public Service
District Sewer (MBIA),
5.75%, 10/1/25 $ 264,128
Aaa AAA 500 Crab Orchard, WV Public
Service District, (AMBAC),
5.50%, 10/1/25 516,515
Aaa AAA 1,500 Parkersburg, WV Waterworks
and Sewer (FSA), 5.80%,
9/1/19 1,590,195
Aaa AAA 2,000 West Virginia Water
Development (Loan Program
II) (FSA), 5.25%, 11/1/35 2,001,399
Aaa AAA 750 West Virginia Water
Development (Loan Program
II) (FSA), 6.00%, 11/1/14 819,248
- --------------------------------------------------------------------------------
$ 5,191,485
- --------------------------------------------------------------------------------
Nursing Homes -- 2.3%
- --------------------------------------------------------------------------------
NR NR $ 705 Kanawha, WV (Beverly
Enterprises), 7.25%, 11/1/04 $ 730,747
- --------------------------------------------------------------------------------
$ 730,747
- --------------------------------------------------------------------------------
Solid Waste -- 6.6%
- --------------------------------------------------------------------------------
A2 A $2,000 Braxton County, WV,
(Weyerhaeuser Co.), (AMT),
5.80%, 6/1/27/(2)/ $ 2,092,599
- --------------------------------------------------------------------------------
$ 2,092,599
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $29,616,591) $31,822,479
- --------------------------------------------------------------------------------
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 March 31, 1998, 56.3% 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 institution ranged from 0.4% to 1.6% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
63
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited)
Statements of Assets and Liabilities
As of March 31, 1998
<TABLE>
<CAPTION>
California Florida Massachusetts Mississippi
Portfolio Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------------------------------
Assets
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments --
Identified cost $270,444,922 $ 441,861,344 $ 219,818,375 $ 18,673,351
Unrealized appreciation 36,755,639 38,092,021 23,831,758 1,891,204
- -------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Note 1A) $307,200,561 $ 479,953,365 $ 243,650,133 $ 20,564,555
- -------------------------------------------------------------------------------------------------------------------------------
Cash $ -- $ 15,823,751 $ 93,258 $ 296
Receivable for investments sold 3,390,410 3,975,854 -- 5,135
Interest receivable 4,461,718 8,592,471 3,996,829 399,561
Deferred organization expenses (Note 1D) 480 -- -- 145
- -------------------------------------------------------------------------------------------------------------------------------
Total assets $315,053,169 $ 508,345,441 $ 247,740,220 $ 20,969,692
- -------------------------------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------------------------------
Payable for when-issued securities (Note 1G) $ -- $ 21,836,683 $ -- $ --
Demand note payable (Note 5) 3,140,000 -- -- 264,000
Payable for daily variation margin on open
financial futures contracts (Note 1E and 6) 56,719 -- 46,875 3,281
Payable to affiliate for Trustees' fees (Note 2) 4,617 6,107 4,404 54
Accrued expenses 27,596 5,342 28,841 5,818
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 3,228,932 $ 21,848,132 $ 80,120 $ 273,153
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in
Portfolio $311,824,237 $ 486,497,309 $ 247,660,100 $ 20,696,539
- -------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and $275,067,857 $ 448,405,288 $ 223,819,473 $ 18,805,093
withdrawals
Net unrealized appreciation of investments
(computed on the basis of identified cost) 36,756,380 38,092,021 23,840,627 1,891,446
- -------------------------------------------------------------------------------------------------------------------------------
Total $311,824,237 $ 486,497,309 $ 247,660,100 $ 20,696,539
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
64
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Assets and Liabilities
As of March 31, 1998
<TABLE>
<CAPTION>
New York Ohio Rhode Island West Virginia
Portfolio Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------------------------------
Assets
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments --
Identified cost $466,422,435 $246,107,305 $ 38,034,509 $ 29,616,591
Unrealized appreciation 37,129,907 17,958,337 2,494,297 2,205,888
- -------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Note 1A) $503,552,342 $264,065,642 $ 40,528,806 $ 31,822,479
- -------------------------------------------------------------------------------------------------------------------------------
Cash $ 440,159 $ 7 $ 862,457 $ 137,238
Receivable for investments sold 11,643,257 -- 5,000 --
Interest receivable 8,181,989 4,119,293 789,170 462,768
Deferred organization expenses (Note 1D) -- -- 153 158
- -------------------------------------------------------------------------------------------------------------------------------
Total assets $523,817,747 $268,184,942 $ 42,185,586 $ 32,422,643
- -------------------------------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------------------------------
Payable for when-issued securities (Note 1G) $ 18,909,720 $ -- $ 983,925 $ --
Demand note payable (Note 5) -- 2,879,000 -- --
Payable for daily variation margin on open
financial futures contracts (Notes 1E and 6) -- -- 8,437 5,625
Payable to affiliate for Trustees' fees (Note 2) 6,104 4,404 471 463
Accrued expenses 39,879 24,099 5,281 4,196
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 18,955,703 $ 2,907,503 $ 998,114 $ 10,284
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in
Portfolio $504,862,044 $265,277,439 $ 41,187,472 $ 32,412,359
- -------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and $467,732,137 $247,319,102 $ 38,691,579 $ 30,204,546
withdrawals
Net unrealized appreciation of investments
(computed on the basis of identified cost) 37,129,907 17,958,337 2,495,893 2,207,813
- -------------------------------------------------------------------------------------------------------------------------------
Total $504,862,044 $265,277,439 $ 41,187,472 $ 32,412,359
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
65
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
For the Six Months Ended March 31, 1998
<TABLE>
<CAPTION>
California Florida Massachusetts Mississippi
Portfolio Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- -------------------------------------------------------------------------------------------------------------------------------
Interest income $ 9,545,348 $14,172,532 $ 7,497,632 $ 618,655
- -------------------------------------------------------------------------------------------------------------------------------
Total investment income $ 9,545,348 $14,172,532 $ 7,497,632 $ 618,655
- -------------------------------------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 769,856 $ 1,133,368 $ 553,925 $ 18,304
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 8,827 12,160 8,956 96
Custodian fee (Note 1J) 115,669 105,249 62,860 13,194
Legal and accounting services 36,340 41,900 31,300 14,900
Amortization of organization expenses (Note 1D) 2,819 3,413 2,001 311
Miscellaneous 21,044 25,482 23,907 1,736
- -------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 954,555 $ 1,321,572 $ 682,949 $ 48,541
- -------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1J) $ 73,338 $ 105,249 $ -- $ 2,726
- -------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 73,338 $ 105,249 $ -- $ 2,726
- -------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 881,217 $ 1,216,323 $ 682,949 $ 45,815
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 8,664,131 $12,956,209 $ 6,814,683 $ 572,840
- -------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 6,521,324 $ 7,731,796 $ 4,609,924 $ 487,959
Financial futures contracts (849,857) 312,242 (622,028) (64,830)
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment transactions $ 5,671,467 $ 8,044,038 $ 3,987,896 $ 423,129
- -------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ (480,100) $ 6,137,232 $ 540,204 $ (136,480)
Financial futures contracts 390,393 -- 242,046 27,855
- -------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments $ (89,707) $ 6,137,232 $ 782,250 $ (108,625)
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 5,581,760 $14,181,270 $ 4,770,146 $ 314,504
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $14,245,891 $27,137,479 $11,584,829 $ 887,344
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
66
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
For the Six Months Ended March 31, 1998
<TABLE>
<CAPTION>
New York Ohio Rhode Island West Virginia
Portfolio Portfolio Portfolio Portfolio
- --------------------------------------------------------------------------------------------------------------------------------
Investment Income (Note 1B)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income $15,046,116 $ 8,192,345 $1,163,158 $ 913,441
- --------------------------------------------------------------------------------------------------------------------------------
Total investment income $15,046,116 $ 8,192,345 $1,163,158 $ 913,441
- --------------------------------------------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 1,175,235 $ 602,729 $ 48,325 $ 36,038
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 12,157 8,955 930 922
Custodian fee (Note 1J) 114,861 65,697 17,413 10,836
Legal and accounting services 40,000 34,939 17,650 20,400
Amortization of organization expenses (Note 1D) 2,330 1,385 319 315
Interest expense (Note 5) -- 38,859 -- --
Miscellaneous 42,458 10,701 3,666 3,179
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 1,387,041 $ 763,265 $ 88,303 $ 71,690
- --------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1J) $ 41,745 $ 16,663 $ 5,600 $ 4,836
- --------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 41,745 $ 16,663 $ 5,600 $ 4,836
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 1,345,296 $ 746,602 $ 82,703 $ 66,854
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $13,700,820 $ 7,445,743 $1,080,455 $ 846,587
- --------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $17,189,424 $ 2,660,820 $ 315,299 $ 501,976
Financial futures contracts (2,106,461) 105,303 (220,109) (98,416)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment transactions $15,082,963 $ 2,766,123 $ 95,190 $ 403,560
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $(6,459,710) $ 1,024,370 $ 410,046 $ 225,516
Financial futures contracts 981,800 -- 90,571 36,230
- --------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments $(5,477,910) $ 1,024,370 $ 500,617 $ 261,746
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 9,605,053 $ 3,790,493 $ 595,807 $ 665,306
- --------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $23,305,873 $11,236,236 $1,676,262 $1,511,893
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
67
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended March 31, 1998
<TABLE>
<CAPTION>
California Florida Massachusetts Mississippi
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 8,664,131 $ 12,956,209 $ 6,814,683 $ 572,840
Net realized gain on investment transactions 5,671,467 8,044,038 3,987,896 423,129
Net change in unrealized appreciation
(depreciation) of investments (89,707) 6,137,232 782,250 (108,625)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 14,245,891 $ 27,137,479 $ 11,584,829 $ 887,344
- ----------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 7,904,301 $ 15,423,197 $ 7,444,277 $ 684,332
Withdrawals (37,329,970) (70,264,782) (25,043,767) (3,001,884)
- ----------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $(29,425,669) $ (54,841,585) $ (17,599,490) $ (2,317,552)
- ----------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(15,179,778) $ (27,704,106) $ (6,014,661) $ (1,430,208)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
At beginning of period $327,004,015 $ 514,201,415 $ 253,674,761 $ 22,126,747
- ----------------------------------------------------------------------------------------------------------------------------------
At end of period $311,824,237 $ 486,497,309 $ 247,660,100 $ 20,696,539
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
68
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended March 31, 1998
<TABLE>
<CAPTION>
New York Ohio Rhode Island West Virginia
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 13,700,820 $ 7,445,743 $ 1,080,455 $ 846,587
Net realized gain on investment transactions 15,082,963 2,766,123 95,190 403,560
Net change in unrealized appreciation
(depreciation) of investments (5,477,910) 1,024,370 500,617 261,746
- ----------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 23,305,873 $ 11,236,236 $ 1,676,262 $ 1,511,893
- ----------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 10,833,885 $ 6,765,535 $ 2,822,460 $ 973,926
Withdrawals (56,881,228) (23,992,917) (3,528,899) (3,576,455)
- ----------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $(46,047,343) $(17,227,382) $ (706,439) $ (2,602,529)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $(22,741,470) $ (5,991,146) $ 969,823 $ (1,090,636)
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
At beginning of period $527,603,514 $271,268,585 $ 40,217,649 $ 33,502,995
- ----------------------------------------------------------------------------------------------------------------------------
At end of period $504,862,044 $265,277,439 $ 41,187,472 $ 32,412,359
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
69
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
California Florida Massachusetts Mississippi
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio 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 on investment transactions 5,306,120 7,793,553 2,120,143 183,405
Net change in unrealized appreciation
(depreciation) of investments 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
transactions $(80,011,948) $(147,962,225) $ (51,699,864) $ (5,391,503)
- ---------------------------------------------------------------------------------------------------------------------------------
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
70
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
New York Ohio Rhode Island West Virginia
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio 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) on investment
transactions 9,867,274 3,902,013 84,287 (31,612)
Net change in unrealized appreciation
(depreciation) of investments 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
71
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
California Portfolio
------------------------------------------------------------------------
Year Ended
Six Months ---------------------------------------------------------
Ended September 30, March 31,
March 31, 1998 ---------------------------------------------------------
(Unaudited) 1997 1996 1995 1994** 1994*
- --------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net expenses/(1)/ 0.60%+ 0.57% 0.57% 0.59% 0.57%+ 0.55%+
Net expenses, after custodian fee reduction 0.55%+ 0.56% 0.56% 0.58% -- --
Net investment income 5.41%+ 5.76% 5.93% 6.22% 6.09%+ 5.72%+
Portfolio Turnover 9% 12% 14% 58% 40% 91%
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $311,824 $327,004 $370,590 $410,763 $445,131 $467,259
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, May 3, 1993, to March 31, 1994.
** For the six months ended September 30, 1994. The Portfolio changed its
fiscal year from March 31 to September 30, effective September 30, 1994.
/(1)/ 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 Portfolio to
increase its expense ratio by the effect of any expense offset
arrangements with its service providers. The expense ratios for the prior
periods have not been adjusted to reflect this change.
See notes to financial statements
72
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Florida Portfolio
---------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 ---------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net expenses/(1)/ 0.53%+ 0.52% 0.52% 0.55% 0.48% 0.47%+
Net expenses, after custodian fee reduction 0.48%+ 0.48% 0.49% 0.52% -- --
Net investment income 5.16%+ 5.53% 5.67% 5.94% 5.65% 5.53%+
Portfolio Turnover 19% 54% 51% 61% 57% 55%
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $486,497 $514,201 $624,374 $712,203 $772,123 $772,422
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ 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 Portfolio to
increase its expense ratio by the effect of any expense offset
arrangements with its service providers. The expense ratios for the prior
periods have not been adjusted to reflect this change.
See notes to financial statements
73
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Massachusetts Portfolio
--------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 ---------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net expenses/(1)/ 0.55%+ 0.53% 0.55% 0.56% 0.51% 0.49%+
Net expenses, after custodian fee reduction 0.55%+ 0.52% 0.54% 0.53% -- --
Net investment income 5.45%+ 5.75% 5.77% 6.00% 5.74% 5.72%+
Portfolio Turnover 11% 35% 51% 87% 53% 38%
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $247,660 $253,675 $281,129 $302,170 $308,540 $290,613
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ 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 Portfolio to
increase its expense ratio by the effect of any expense offset
arrangements with its service providers. The expense ratios for the prior
periods have not been adjusted to reflect this change.
See notes to financial statements
74
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Mississippi Portfolio
----------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 ------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net expenses /(1)/ 0.45%+ 0.38% 0.29% 0.27% 0.05% 0.00%+
Net expenses after custodian fee reduction 0.43%+ 0.37% 0.26% 0.23% -- --
Net investment income 5.32%+ 5.59% 5.77% 5.97% 5.67% 4.49%+
Portfolio Turnover 9% 6% 12% 52% 38% 11%
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $20,697 $22,127 $25,280 $28,993 $29,477 $11,233
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ The operating expenses of the Portfolio reflect a reduction of the Investment
Adviser fee, an allocation of expenses to the Investment Adviser, or both.
Had such actions not been taken, the ratios would have been as follows:
<TABLE>
<S> <C> <C> <C> <C>
Expenses/(1)/ 0.40% 0.39% 0.32% 0.25%+
Expenses after custodian fee reduction 0.37% 0.35% -- --
Net investment income 5.66% 5.85% 5.40% 4.24%+
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, June 11, 1993, to September 30,
1993.
/(1)/ 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 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>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
New York Portfolio
---------------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 --------------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Expenses/(1)/ 0.54%+ 0.57% 0.52% 0.54% 0.48% 0.48%+
Expenses after custodian fee reduction 0.52%+ 0.57% 0.49% 0.51% -- --
Net investment income 5.32%+ 5.60% 5.64% 5.97% 5.70% 5.64%+
Portfolio Turnover 35% 44% 47% 55% 47% 37%
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $504,862 $527,604 $604,530 $652,736 $655,647 $648,807
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, June 11, 1993, to September 30,
1993.
/(1)/ 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 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>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Ohio Portfolio
----------------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 ----------------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Expenses/(1)/ 0.57%+ 0.56% 0.57% 0.57% 0.51% 0.49%+
Expenses after custodian fee reduction 0.56%+ 0.55% 0.56% 0.55% -- --
Net investment income 5.55%+ 5.70% 5.69% 5.80% 5.61% 5.61%+
Portfolio Turnover 11% 30% 35% 51% 31% 24%
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $265,277 $271,269 $292,671 $319,017 $324,412 $298,092
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ 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 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>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Rhode Island Portfolio
--------------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 --------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net expenses/(1)/ 0.44%+ 0.27% 0.27% 0.29% 0.12% 0.00%+
Net expenses after custodian fee reduction 0.41%+ 0.23% 0.24% 0.25% -- --
Net investment income 5.36%+ 5.54% 5.69% 5.96% 5.64% 4.86%+
Portfolio Turnover 15% 39% 25% 42% 42% 23%
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $41,187 $40,218 $42,167 $42,906 $38,120 $16,981
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ The operating expenses of the Portfolio may reflect a reduction of the
Investment Adviser fee, an allocation of expenses to the Investment Adviser,
or both. Had such actions not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
Expenses/(1)/ 0.39% 0.40% 0.41% 0.33% 0.26%+
Expenses after custodian fee reduction 0.35% 0.37% 0.37% -- --
Net investment income 5.42% 5.56% 5.84% 5.43% 4.60%+
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, June 11, 1993, to September 30,
1993.
/(1)/ 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 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
78
<PAGE>
EV Municipals Portfolios as of March 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
West Virginia Portfolio
-----------------------------------------------------------------------------
Six Months Ended Year Ended September 30,
March 31, 1998 ---------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993*
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net expenses/(1)/ 0.43%+ 0.38% 0.42% 0.31% 0.10% 0.00%+
Net expenses after custodian fee reduction 0.40%+ 0.36% 0.38% 0.29% -- --
Net investment income 5.12%+ 5.44% 5.41% 5.81% 5.52% 4.50%+
Portfolio Turnover 12% 24% 43% 19% 39% 19%
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $32,412 $33,503 $39,501 $40,835 $40,473 $24,760
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ The operating expenses of the Portfolio may reflect a reduction of the
Investment Adviser fee, an allocation of expenses to the Investment Adviser,
or both. Had such actions not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C> <C> <C>
Expenses/(1)/ 0.39% 0.33% 0.21%+
Expenses after custodian fee reduction 0.37% -- --
Net investment income 5.73% 5.29% 4.30%+
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ 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 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
79
<PAGE>
EV Municipals Portfolios as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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.
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
80
<PAGE>
EV Municipals Portfolios as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
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 Other -- Investment transactions are accounted for on a trade date basis.
I 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.
J 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.
K Interim Financial Information -- The interim financial statements relating
to March 31, 1998 and the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the
Portfolios' management reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
--------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research
(BMR), a wholly-owned subsidiary of Eaton Vance Management (EVM), as
compensation for management and investment advisory services rendered to
each Portfolio. The fee is based upon a percentage of average daily net
assets plus a percentage of gross income (i.e., income other than gains from
the sale of securities). For the six months ended March 31, 1998, each
Portfolio paid advisory fees as follows:
Portfolio Amount Effective Rate*
-------------------------------------------------------------------------
California $ 769,856 0.48%
Florida 1,133,368 0.45%
Massachusetts 553,925 0.44%
Mississippi 18,304 0.17%
New York 1,175,235 0.46%
Ohio 602,729 0.45%
Rhode Island 48,325 0.24%
West Virginia 36,038 0.22%
* Advisory fees paid as a percentage of average daily net assets
(annualized).
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 six months ended
March 31, 1998, no significant amounts have been deferred.
81
<PAGE>
EV Municipals Portfolios as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
3 Investments
----------------------------------------------------------------------------
Purchases and sales of investments, other than U.S. Government securities,
purchased option transactions and short-term obligations, for the six months
ended March 31, 1998 were as follows:
California Portfolio
----------------------------------------------------------------------------
Purchases $ 29,995,528
Sales 55,356,339
Florida Portfolio
----------------------------------------------------------------------------
Purchases $ 93,233,640
Sales 121,935,965
Massachusetts Portfolio
----------------------------------------------------------------------------
Purchases $ 28,498,811
Sales 58,564,964
Mississippi Portfolio
----------------------------------------------------------------------------
Purchases $ 1,807,833
Sales 3,390,892
New York Portfolio
----------------------------------------------------------------------------
Purchases $ 182,414,663
Sales 214,976,590
Ohio Portfolio
----------------------------------------------------------------------------
Purchases $ 29,709,570
Sales 38,511,256
Rhode Island Portfolio
----------------------------------------------------------------------------
Purchases $ 5,823,678
Sales 6,270,737
West Virginia Portfolio
----------------------------------------------------------------------------
Purchases $ 4,036,919
Sales 6,113,578
4 Federal Income Tax Basis of Investments
----------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at March 31, 1998, as computed on a
federal income tax basis, are as follows:
California Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 270,444,922
----------------------------------------------------------------------------
Gross unrealized appreciation $ 37,298,355
Gross unrealized depreciation (542,716)
----------------------------------------------------------------------------
Net unrealized appreciation $ 36,755,639
----------------------------------------------------------------------------
Florida Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 441,861,344
----------------------------------------------------------------------------
Gross unrealized appreciation $ 40,339,012
Gross unrealized depreciation (2,246,991)
----------------------------------------------------------------------------
Net unrealized appreciation $ 38,092,021
----------------------------------------------------------------------------
Massachusetts Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 219,818,375
----------------------------------------------------------------------------
Gross unrealized appreciation $ 23,898,796
Gross unrealized depreciation (67,038)
----------------------------------------------------------------------------
Net unrealized appreciation $ 23,831,758
----------------------------------------------------------------------------
Mississippi Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 18,673,351
----------------------------------------------------------------------------
Gross unrealized appreciation $ 1,891,204
Gross unrealized depreciation --
----------------------------------------------------------------------------
Net unrealized appreciation $ 1,891,204
----------------------------------------------------------------------------
New York Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 466,422,435
----------------------------------------------------------------------------
Gross unrealized appreciation $ 37,929,737
Gross unrealized depreciation (799,830)
----------------------------------------------------------------------------
Net unrealized appreciation $ 37,129,907
----------------------------------------------------------------------------
82
<PAGE>
EV Municipals Portfolios as of March 31, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
Ohio Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 246,107,305
----------------------------------------------------------------------------
Gross unrealized appreciation $ 17,985,996
Gross unrealized depreciation (27,659)
----------------------------------------------------------------------------
Net unrealized appreciation $ 17,958,337
----------------------------------------------------------------------------
Rhode Island Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 38,034,509
----------------------------------------------------------------------------
Gross unrealized appreciation $ 2,517,950
Gross unrealized depreciation (23,653)
----------------------------------------------------------------------------
Net unrealized appreciation $ 2,494,297
----------------------------------------------------------------------------
West Virginia Portfolio
----------------------------------------------------------------------------
Aggregate Cost $ 29,616,591
----------------------------------------------------------------------------
Gross unrealized appreciation $ 2,217,059
Gross unrealized depreciation (11,171)
----------------------------------------------------------------------------
Net unrealized appreciation $ 2,205,888
----------------------------------------------------------------------------
5 Line of Credit
----------------------------------------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR
and EVM and its affiliates in a $100 million 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 March 31, 1998, the
California Portfolio, Mississippi Portfolio and Ohio Portfolio had a balance
outstanding pursuant to this line of credit of $3,140,000, $264,000 and
$2,879,000, respectively. The Portfolios did not have any significant
borrowings or allocated fees during the six months ended March 31, 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 March 31,
1998, is as follows:
Futures Net
Contracts Unrealized
Expiration Appreciation
Portfolio Date Contracts Position (Depreciation)
----------------------------------------------------------------------------
California 6/98 121 US Treasury Bonds Short $741
----------------------------------------------------------------------------
Massachusetts 6/98 100 US Treasury Bonds Short 8,869
----------------------------------------------------------------------------
Mississippi 6/98 7 US Treasury Bonds Short 242
----------------------------------------------------------------------------
Rhode Island 6/98 18 US Treasury Bonds Short 1,596
----------------------------------------------------------------------------
West Virginia 6/98 12 US Treasury Bonds Short 1,925
----------------------------------------------------------------------------
At March 31, 1998 each Portfolio had sufficient cash and/or securities to
cover margin requirements on open futures contracts.
83
<PAGE>
Eaton Vance Municipals Funds as of March 31, 1998
INVESTMENT MANAGEMENT
Eaton Vance Municipals Funds
Officers Independent Trustees
Thomas J. Fetter Donald R. Dwight
President President, Dwight Partners, Inc.
James B. Hawkes Samuel L. Hayes, III
Vice President and Trustee Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
Robert B. MacIntosh Business Administration
Vice President
Norton H. Reamer
James L. O'Connor President and Director, United Asset
Treasurer Management Corporation
Alan R. Dynner John L. Thorndike
Secretary Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
Municipals Portfolios
Officers Independent Trustees
Thomas J. Fetter Donald R. Dwight
President and Portfolio President, Dwight Partners, Inc.
Manager of Florida,
New York and Ohio Samuel L. Hayes, III
Municipals Portfolios Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
James B. Hawkes Business Administration
Vice President and Trustee
Norton H. Reamer
Robert B. MacIntosh President and Director, United Asset
Vice President and Portfolio Management Corporation
Manager of Massachusetts
and Rhode Island John L. Thorndike
Municipals Portfolio Formerly Director, Fiduciary Company Incorporated
Timothy T. Browse Jack L. Treynor
Vice President and Portfolio Investment Adviser and Consultant
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
84
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Portfolio Investment Adviser
Boston Management and Research
24 Federal Street
Boston, MA 02110
Fund Administrator
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
Transfer Agent
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
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-5/98
