<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
AS OF AUGUST 31, 1999
<TABLE>
<CAPTION>
ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Assets
- ---------------------------------------------------------------------------------------------------------
Investment in Municipals Portfolio --
Identified cost $81,159,199 $49,731,294 $71,127,206 $94,711,935
Unrealized appreciation 982,047 759,457 93,197 3,049,952
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN PORTFOLIO, AT VALUE $82,141,246 $50,490,751 $71,220,403 $97,761,887
- ---------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 16,485 $ 39,147 $ 57,395 $ 34,859
- ---------------------------------------------------------------------------------------------------------
TOTAL ASSETS $82,157,731 $50,529,898 $71,277,798 $97,796,746
- ---------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------
Dividends payable $ 153,030 $ 96,693 $ 134,945 $ 183,193
Payable for Fund shares redeemed 278,119 156,427 100,065 172,470
Accrued expenses 52,996 32,911 56,375 49,464
- ---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 484,145 $ 286,031 $ 291,385 $ 405,127
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $81,673,586 $50,243,867 $70,986,413 $97,391,619
- ---------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ---------------------------------------------------------------------------------------------------------
Paid-in capital $82,205,853 $51,184,880 $76,415,653 $96,446,706
Accumulated net realized loss from
Portfolio (computed on the basis of
identified cost) (1,400,147) (1,603,777) (5,387,492) (1,921,846)
Accumulated distributions in excess of
net investment income (114,167) (96,693) (134,945) (183,193)
Net unrealized appreciation from
Portfolio (computed on the basis of
identified cost) 982,047 759,457 93,197 3,049,952
- ---------------------------------------------------------------------------------------------------------
TOTAL $81,673,586 $50,243,867 $70,986,413 $97,391,619
- ---------------------------------------------------------------------------------------------------------
Class A Shares
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $ 6,198,475 $ 4,166,717 $ 2,554,252 $ 1,386,505
SHARES OUTSTANDING 657,344 437,953 284,175 147,396
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.43 $ 9.51 $ 8.99 $ 9.41
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of net asset
value per share) $ 9.90 $ 9.98 $ 9.44 $ 9.88
- ---------------------------------------------------------------------------------------------------------
Class B Shares
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $75,475,111 $46,077,150 $68,432,161 $96,005,114
SHARES OUTSTANDING 7,280,339 4,519,778 7,131,192 9,487,190
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 10.37 $ 10.19 $ 9.60 $ 10.12
- ---------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF ASSETS AND LIABILITIES
AS OF AUGUST 31, 1999
<TABLE>
<CAPTION>
LOUISIANA FUND MARYLAND FUND MISSOURI FUND NORTH CAROLINA FUND
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Assets
- ------------------------------------------------------------------------------------------------------------------
Investment in Municipals Portfolio --
Identified cost $32,836,929 $97,548,650 $66,023,270 $123,999,108
Unrealized appreciation
(depreciation) (169,449) (2,325,448) 2,240,996 5,331,001
- ------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN PORTFOLIO, AT VALUE $32,667,480 $95,223,202 $68,264,266 $129,330,109
- ------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 50,000 $ 47,360 $ 58,234 $ 47,515
- ------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $32,717,480 $95,270,562 $68,322,500 $129,377,624
- ------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------
Dividends payable $ 62,407 $ 176,261 $ 120,641 $ 254,136
Payable for Fund shares redeemed -- 141,651 5,708 231,850
Accrued expenses 11,077 58,430 34,406 85,049
- ------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 73,484 $ 376,342 $ 160,755 $ 571,035
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS $32,643,996 $94,894,220 $68,161,745 $128,806,589
- ------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------
Paid-in capital $34,939,560 $97,590,455 $66,697,570 $132,319,519
Accumulated net realized loss from
Portfolio (computed on the basis of
identified cost) (2,063,708) (194,526) (881,589) (8,589,795)
Accumulated undistributed (distributions
in excess of) net investment income (62,407) (176,261) 104,768 (254,136)
Net unrealized appreciation
(depreciation) from Portfolio
(computed on the basis of identified
cost) (169,449) (2,325,448) 2,240,996 5,331,001
- ------------------------------------------------------------------------------------------------------------------
TOTAL $32,643,996 $94,894,220 $68,161,745 $128,806,589
- ------------------------------------------------------------------------------------------------------------------
Class A Shares
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 4,101,754 $ 3,573,548 $ 4,691,647 $ 12,696,635
SHARES OUTSTANDING 444,096 386,984 487,172 1,371,822
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.24 $ 9.23 $ 9.63 $ 9.26
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of net asset
value per share) $ 9.70 $ 9.69 $ 10.11 $ 9.72
- ------------------------------------------------------------------------------------------------------------------
Class B Shares
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS $28,542,242 $91,320,672 $63,470,098 $116,109,954
SHARES OUTSTANDING 2,923,060 9,055,158 5,957,355 11,662,122
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.76 $ 10.08 $ 10.65 $ 9.96
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF ASSETS AND LIABILITIES
AS OF AUGUST 31, 1999
<TABLE>
<CAPTION>
OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Assets
- ----------------------------------------------------------------------------------------------------------------
Investment in Municipals Portfolio --
Identified cost $92,470,537 $43,885,598 $48,108,798 $133,436,118
Unrealized appreciation 1,846,892 947,405 1,298,648 4,188,114
- ----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT, AT VALUE $94,317,429 $44,833,003 $49,407,446 $137,624,232
- ----------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 42,757 $ 14,630 $ 13,176 $ 20,516
- ----------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $94,360,186 $44,847,633 $49,420,622 $137,644,748
- ----------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------
Distributions payable $ 172,076 $ 85,235 $ 85,732 $ 256,049
Payable for Fund shares redeemed 190,565 379,055 52,335 240,283
Accrued expenses 44,445 26,306 23,135 97,781
- ----------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 407,086 $ 490,596 $ 161,202 $ 594,113
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS $93,953,100 $44,357,037 $49,259,420 $137,050,635
- ----------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------------------------------
Paid-in capital $95,242,888 $46,872,214 $49,602,991 $137,812,337
Accumulated net realized loss from
Portfolio (computed on the basis of
identified cost) (3,100,601) (3,506,377) (1,591,643) (4,693,767)
Accumulated undistributed (distributions
in excess of) net investment income (36,079) 43,795 (50,576) (256,049)
Net unrealized appreciation from
Portfolio (computed on the basis of
identified cost) 1,846,892 947,405 1,298,648 4,188,114
- ----------------------------------------------------------------------------------------------------------------
TOTAL $93,953,100 $44,357,037 $49,259,420 $137,050,635
- ----------------------------------------------------------------------------------------------------------------
Class A Shares
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,658,336 $ 1,756,692 $ 2,870,204 $ 3,528,268
SHARES OUTSTANDING 283,480 188,430 303,366 379,426
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.38 $ 9.32 $ 9.46 $ 9.30
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of net asset
value per share) $ 9.85 $ 9.78 $ 9.93 $ 9.76
- ----------------------------------------------------------------------------------------------------------------
Class B Shares
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS $91,294,764 $42,600,345 $46,389,216 $133,522,367
SHARES OUTSTANDING 8,901,774 4,304,391 4,511,323 12,978,474
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 10.26 $ 9.90 $ 10.28 $ 10.29
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Investment Income
- ---------------------------------------------------------------------------------------------------------
Interest allocated from Portfolio $ 5,046,143 $ 3,081,097 $ 4,626,998 $ 6,295,605
Expenses allocated from Portfolio (400,538) (235,776) (338,935) (508,184)
- ---------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $ 4,645,605 $ 2,845,321 $ 4,288,063 $ 5,787,421
- ---------------------------------------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------------------------------------
Trustees fees and expenses $ 2,431 $ 2,431 $ 1,764 $ 4,852
Distribution and service fees
Class A 9,518 2,862 4,847 2,662
Class B 789,708 484,062 741,736 989,191
Transfer and dividend disbursing agent
fees 81,978 46,725 69,063 93,882
Legal and accounting services 15,289 15,767 15,291 15,676
Custodian fee 12,624 7,633 9,002 14,446
Printing and postage 9,722 6,927 10,250 13,496
Registration fees 1,010 510 459 2,494
Miscellaneous 6,350 5,088 8,757 6,792
- ---------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 928,630 $ 572,005 $ 861,169 $ 1,143,491
- ---------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 3,716,975 $ 2,273,316 $ 3,426,894 $ 4,643,930
- ---------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ---------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 1,799,870 $ 723,381 $ 1,231,093 $ 1,033,885
Financial futures contracts 22,763 42,385 (78,110) (46,738)
- ---------------------------------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENT
TRANSACTIONS $ 1,822,633 $ 765,766 $ 1,152,983 $ 987,147
- ---------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments $(7,214,692) $(3,804,990) $(7,241,126) $(6,481,838)
Financial futures contracts 43,140 45,369 136,956 171,430
- ---------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $(7,171,552) $(3,759,621) $(7,104,170) $(6,310,408)
- ---------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(5,348,919) $(2,993,855) $(5,951,187) $(5,323,261)
- ---------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $(1,631,944) $ (720,539) $(2,524,293) $ (679,331)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
LOUISIANA FUND MARYLAND FUND MISSOURI FUND NORTH CAROLINA FUND
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Investment Income
- ------------------------------------------------------------------------------------------------------------------
Interest allocated from Portfolio $ 1,963,315 $ 5,671,231 $ 4,205,494 $ 8,290,889
Expenses allocated from Portfolio (121,220) (473,460) (322,973) (704,946)
- ------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $ 1,842,095 $ 5,197,771 $ 3,882,521 $ 7,585,943
- ------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------
Trustees fees and expenses $ 257 $ 4,805 $ 1,914 $ 4,852
Distribution and service fees
Class A 4,027 4,686 3,873 21,983
Class B 289,546 943,077 659,524 1,243,749
Transfer and dividend disbursing agent
fees 30,064 90,384 57,096 119,102
Legal and accounting services 15,014 16,674 16,539 15,724
Printing and postage 4,406 13,034 13,173 15,744
Custodian fee 5,888 11,326 12,824 16,216
Registration fees 1,251 1,983 2,129 1,325
Miscellaneous 2,418 9,600 6,686 9,292
- ------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 352,871 $ 1,095,569 $ 773,758 $ 1,447,987
- ------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 1,489,224 $ 4,102,202 $ 3,108,763 $ 6,137,956
- ------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ (192,585) $ 978,479 $ 588,948 $ 634,522
Financial futures contracts 60,502 78,716 (57,847) 417,752
- ------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ (132,083) $ 1,057,195 $ 531,101 $ 1,052,274
- ------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments $(2,567,348) $(9,489,950) $(5,404,530) $(10,001,534)
Financial futures contracts 33,128 84,256 114,183 --
- ------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $(2,534,220) $(9,405,694) $(5,290,347) $(10,001,534)
- ------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(2,666,303) $(8,348,499) $(4,759,246) $ (8,949,260)
- ------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $(1,177,079) $(4,246,297) $(1,650,483) $ (2,811,304)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Investment Income
- ----------------------------------------------------------------------------------------------------------------
Interest allocated from Portfolio $ 5,736,356 $ 2,857,240 $ 2,998,086 $ 8,447,011
Expenses allocated from Portfolio (470,066) (198,344) (219,143) (704,521)
- ----------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $ 5,266,290 $ 2,658,896 $ 2,778,943 $ 7,742,490
- ----------------------------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------------------------
Trustees fees and expenses $ 3,922 $ 2,264 $ 2,582 $ 4,852
Distribution and service fees
Class A 1,922 3,577 4,820 2,905
Class B 935,295 445,692 462,289 1,369,107
Transfer and dividend disbursing agent
fees 75,442 40,454 39,388 127,059
Custodian fee 15,609 6,670 9,079 17,386
Printing and postage 14,635 7,067 7,532 17,277
Legal and accounting services 15,846 15,735 15,796 15,215
Amortization of organization expenses 534 -- -- --
Registration fees 770 484 1,600 1,215
Miscellaneous 8,621 4,563 4,255 10,229
- ----------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 1,072,596 $ 526,506 $ 547,341 $ 1,565,245
- ----------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 4,193,694 $ 2,132,390 $ 2,231,602 $ 6,177,245
- ----------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ----------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 957,713 $ (163,160) $ 152,219 $ 1,358,363
Financial futures contracts 86,092 (12,386) (40,480) 121,101
- ----------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ 1,043,805 $ (175,546) $ 111,739 $ 1,479,464
- ----------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments $(6,028,924) $(3,664,757) $(2,956,900) $(10,075,411)
Financial futures contracts -- -- 80,022 129,625
- ----------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $(6,028,924) $(3,664,757) $(2,876,878) $ (9,945,786)
- ----------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(4,985,119) $(3,840,303) $(2,765,139) $ (8,466,322)
- ----------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (791,425) $(1,707,913) $ (533,537) $ (2,289,077)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 3,716,975 $ 2,273,316 $ 3,426,894 $ 4,643,930
Net realized gain 1,822,633 765,766 1,152,983 987,147
Net change in unrealized appreciation
(depreciation) (7,171,552) (3,759,621) (7,104,170) (6,310,408)
- ---------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (1,631,944) $ (720,539) $ (2,524,293) $ (679,331)
- ---------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (273,893) $ (134,735) $ (120,402) $ (66,923)
Class B (3,448,983) (2,138,581) (3,306,492) (4,577,007)
In excess of net investment income
Class A -- (1,553) (2,744) (1,279)
Class B (103,265) (24,429) (69,736) (73,211)
- ---------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (3,826,141) $(2,299,298) $ (3,499,374) $ (4,718,420)
- ---------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 1,728,724 $ 3,455,084 $ 1,076,371 $ 303,922
Class B 5,603,743 2,226,973 4,887,411 5,902,302
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 138,087 38,595 65,272 52,077
Class B 1,798,421 1,107,738 1,475,296 2,414,303
Cost of shares redeemed
Class A (433,969) (391,394) (425,348) (201,869)
Class B (16,164,402) (9,115,134) (16,942,132) (17,998,919)
- ---------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ (7,329,396) $(2,678,138) $ (9,863,130) $ (9,528,184)
- ---------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $(12,787,481) $(5,697,975) $(15,886,797) $(14,925,935)
- ---------------------------------------------------------------------------------------------------------
Net Assets
- ---------------------------------------------------------------------------------------------------------
At beginning of year $ 94,461,067 $55,941,842 $ 86,873,210 $112,317,554
- ---------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 81,673,586 $50,243,867 $ 70,986,413 $ 97,391,619
- ---------------------------------------------------------------------------------------------------------
Accumulated distributions
in excess of net investment income
included in net assets
- ---------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (114,167) $ (96,693) $ (134,945) $ (183,193)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets LOUISIANA FUND MARYLAND FUND MISSOURI FUND NORTH CAROLINA FUND
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,489,224 $ 4,102,202 $ 3,108,763 $ 6,137,956
Net realized gain (loss) (132,083) 1,057,195 531,101 1,052,274
Net change in unrealized appreciation
(depreciation) (2,534,220) (9,405,694) (5,290,347) (10,001,534)
- ------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $(1,177,079) $ (4,246,297) $(1,650,483) $ (2,811,304)
- ------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (226,135) $ (109,175) $ (188,860) $ (659,797)
Class B (1,263,089) (3,993,027) (2,883,597) (5,478,159)
In excess of net investment income
Class A (6,814) (6,852) -- (5,970)
Class B (59,171) (236,051) -- (100,614)
- ------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $(1,555,209) $ (4,345,105) $(3,072,457) $ (6,244,540)
- ------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 1,106,212 $ 3,289,092 $ 3,030,569 $ 1,198,422
Class B 3,037,552 8,242,955 4,126,558 5,852,796
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 80,885 60,937 120,445 196,774
Class B 592,446 2,104,432 1,442,178 2,704,594
Cost of shares redeemed
Class A (1,633,134) (1,146,216) (847,082) (798,040)
Class B (4,229,343) (13,997,652) (9,239,481) (23,584,395)
- ------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $(1,045,382) $ (1,446,452) $(1,366,813) $(14,429,849)
- ------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $(3,777,670) $(10,037,854) $(6,089,753) $(23,485,693)
- ------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------
At beginning of year $36,421,666 $104,932,074 $74,251,498 $152,292,282
- ------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $32,643,996 $ 94,894,220 $68,161,745 $128,806,589
- ------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of)
net investment income
included in net assets
- ------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (62,407) $ (176,261) $ 104,768 $ (254,136)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 4,193,694 $ 2,132,390 $ 2,231,602 $ 6,177,245
Net realized gain (loss) 1,043,805 (175,546) 111,739 1,479,464
Net change in unrealized appreciation
(depreciation) (6,028,924) (3,664,757) (2,876,878) (9,945,786)
- -----------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (791,425) $(1,707,913) $ (533,537) $ (2,289,077)
- -----------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (75,205) $ (88,628) $ (188,489) $ (135,278)
Class B (4,117,449) (2,043,137) (2,025,466) (6,041,967)
In excess of net investment income
Class A -- -- -- (521)
Class B (28,994) -- -- (130,541)
- -----------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (4,221,648) $(2,131,765) $(2,213,955) $ (6,308,307)
- -----------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 2,074,921 $ 1,093,370 $ 870,700 $ 2,275,635
Class B 8,483,806 5,463,697 4,407,750 9,796,312
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 47,100 48,765 129,366 76,553
Class B 2,313,890 877,041 1,019,918 3,097,056
Cost of shares redeemed
Class A (273,367) (554,261) (1,325,138) (753,738)
Class B (17,165,026) (8,609,880) (6,597,919) (19,862,551)
- -----------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ (4,518,676) $(1,681,268) $(1,495,323) $ (5,370,733)
- -----------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (9,531,749) $(5,520,946) $(4,242,815) $(13,968,117)
- -----------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------
At beginning of year $103,484,849 $49,877,983 $53,502,235 $151,018,752
- -----------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 93,953,100 $44,357,037 $49,259,420 $137,050,635
- -----------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of)
net investment income
included in net assets
- -----------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (36,079) $ 43,795 $ (50,576) $ (256,049)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 4,079,834 $ 2,462,062 $ 3,836,631 $ 5,112,509
Net realized gain 286,744 521,967 1,210,267 1,448,862
Net change in unrealized appreciation
(depreciation) 1,494,646 1,138,588 1,131,579 1,384,900
- ---------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 5,861,224 $ 4,122,617 $ 6,178,477 $ 7,946,271
- ---------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (256,747) $ (60,637) $ (92,887) $ (62,581)
Class B (3,900,023) (2,401,425) (3,767,746) (5,049,928)
In excess of net investment income
Class A -- (1,495) (1,254) (643)
Class B (11,357) (43,885) (152,617) (40,542)
- ---------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (4,168,127) $ (2,507,442) $ (4,014,504) $ (5,153,694)
- ---------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 965,736 $ 180,715 $ 400,263 $ 549,886
Class B 4,317,818 2,540,276 4,434,797 5,050,902
Issued in reorganization of EV
Traditional Municipals Funds
Class A 5,824,841 1,180,015 1,767,367 1,387,318
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 120,247 27,552 47,911 51,125
Class B 2,020,391 1,217,405 1,719,213 2,661,634
Cost of shares redeemed
Class A (1,866,128) (135,293) (216,783) (716,037)
Class B (14,769,375) (12,006,489) (16,571,299) (20,836,124)
- ---------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ (3,386,470) $ (6,995,819) $ (8,418,531) $(11,851,296)
- ---------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (1,693,373) $ (5,380,644) $ (6,254,558) $ (9,058,719)
- ---------------------------------------------------------------------------------------------------------
Net Assets
- ---------------------------------------------------------------------------------------------------------
At beginning of year $ 96,154,440 $ 61,322,486 $ 93,127,768 $121,376,273
- ---------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 94,461,067 $ 55,941,842 $ 86,873,210 $112,317,554
- ---------------------------------------------------------------------------------------------------------
Accumulated distributions
in excess of net investment income
included in net assets
- ---------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (5,001) $ (79,869) $ (150,807) $ (157,492)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets LOUISIANA FUND MARYLAND FUND MISSOURI FUND NORTH CAROLINA FUND
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,472,762 $ 4,277,923 $ 3,316,346 $ 6,802,904
Net realized gain 354,545 824,903 956,161 1,791,750
Net change in unrealized appreciation
(depreciation) 679,059 1,975,687 1,572,338 2,930,374
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 2,506,366 $ 7,078,513 $ 5,844,845 $ 11,525,028
- ------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (148,596) $ (62,710) $ (120,579) $ (642,314)
Class B (1,363,672) (4,275,271) (3,157,438) (6,160,590)
In excess of net investment income
Class A (5,372) (2,889) -- (16,355)
Class B (110,293) (140,512) -- (179,601)
- ------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $(1,627,933) $ (4,481,382) $(3,278,017) $ (6,998,860)
- ------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 3,105,905 $ 528,321 $ 691,095 $ 3,292,983
Class B 1,949,759 7,687,378 3,543,773 5,635,754
Issued in reorganization of EV
Traditional Municipals Funds
Class A 2,360,799 1,300,861 2,197,879 15,424,165
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 86,786 43,075 68,901 204,670
Class B 705,051 2,273,990 1,567,422 3,140,609
Cost of shares redeemed
Class A (745,401) (279,302) (374,022) (6,393,149)
Class B (3,915,577) (14,890,026) (13,489,505) (25,103,039)
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS $ 3,547,322 $ (3,335,703) $(5,794,457) $ (3,798,007)
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ 4,425,755 $ (738,572) $(3,227,629) $ 728,161
- ------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------
At beginning of year $31,995,911 $105,670,646 $77,479,127 $151,564,121
- ------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $36,421,666 $104,932,074 $74,251,498 $152,292,282
- ------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of)
net investment income
included in net assets
- ------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (77,244) $ (143,563) $ 68,462 $ (266,312)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 4,569,755 $ 2,260,969 $ 2,258,516 $ 6,573,608
Net realized gain 1,571,010 1,175,496 463,355 2,037,263
Net change in unrealized appreciation
(depreciation) 1,436,079 554,108 897,701 2,473,102
- -----------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 7,576,844 $ 3,990,573 $ 3,619,572 $ 11,083,973
- -----------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (40,919) $ (57,957) $ (127,482) $ (87,472)
Class B (4,544,926) (2,265,770) (2,131,034) (6,486,136)
In excess of net investment income
Class A (439) -- (4,443) (4,904)
Class B (7,523) -- (29,049) (169,210)
- -----------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (4,593,807) $(2,323,727) $(2,292,008) $ (6,747,722)
- -----------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class A $ 240,287 $ 236,369 $ 1,476,876 $ 683,695
Class B 3,335,606 2,255,119 3,766,007 6,983,975
Issued in reorganization of EV
Traditional Municipals Funds
Class A 724,248 1,063,786 2,445,040 1,446,129
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 28,491 34,909 92,311 42,011
Class B 2,549,727 984,003 1,091,081 3,353,218
Cost of shares redeemed
Class A (100,479) (57,302) (670,289) (96,379)
Class B (18,862,201) (8,991,445) (7,738,430) (25,333,066)
- -----------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS $(12,084,321) $(4,474,561) $ 462,596 $(12,920,417)
- -----------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ (9,101,284) $(2,807,715) $ 1,790,160 $ (8,584,166)
- -----------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------
At beginning of year $112,586,133 $52,685,698 $51,712,075 $159,602,918
- -----------------------------------------------------------------------------------------------------------------
AT END OF YEAR $103,484,849 $49,877,983 $53,502,235 $151,018,752
- -----------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of)
net investment income
included in net assets
- -----------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (8,125) $ 43,152 $ (68,223) $ (252,567)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ALABAMA FUND
----------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
------------------- ------------------- -------- --------- ---------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $10.040 $11.040 $ 9.860 $10.850 $10.460 $ 10.440 $ 10.210
- ------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------
Net investment income $ 0.481 $ 0.447 $ 0.493 $ 0.455 $ 0.469 $ 0.470 $ 0.479
Net realized and unrealized
gain (loss) (0.599) (0.657) 0.181 0.200 0.386 0.030 0.244
- ------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.118) $(0.210) $ 0.674 $ 0.655 $ 0.855 $ 0.500 $ 0.723
- ------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------
From net investment income $(0.492) $(0.447) $(0.494) $(0.464) $(0.465) $ (0.480) $ (0.479)
In excess of net investment
income -- (0.013) -- (0.001) -- -- (0.014)
- ------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.492) $(0.460) $(0.494) $(0.465) $(0.465) $ (0.480) $ (0.493)
- ------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.430 $10.370 $10.040 $11.040 $10.850 $ 10.460 $ 10.440
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) (1.29)% (2.02)% 6.98% 6.17% 8.33% 4.85% 7.38%
- ------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $ 6,198 $75,475 $ 5,140 $89,321 $96,154 $101,692 $108,642
Ratios (As a percentage of
average daily net assets):
Expenses(3)(4) 0.77% 1.54% 0.78% 1.57% 1.60% 1.57% 1.51%
Expenses after custodian
fee reduction(3) 0.76% 1.53% 0.76% 1.55% 1.59% 1.52% --
Net investment income 4.87% 4.11% 4.93% 4.15% 4.39% 4.44% 4.74%
Portfolio Turnover of the
Portfolio 23% 23% 23% 23% 23% 52% 51%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(4) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ARKANSAS FUND
---------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
---------------------------------------------------------------------------
1999(1) 1998(1) 1997 1996 1995
------------------- ------------------- -------- --------- --------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $10.070 $10.800 $ 9.810 $10.510 $10.190 $ 10.250 $10.140
- -----------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------
Net investment income $ 0.497 $ 0.443 $ 0.492 $ 0.442 $ 0.445 $ 0.450 $ 0.460
Net realized and unrealized
gain (loss) (0.555) (0.605) 0.272 0.298 0.324 (0.038) 0.132
- -----------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.058) $(0.162) $ 0.764 $ 0.740 $ 0.769 $ 0.412 $ 0.592
- -----------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------
From net investment income $(0.497) $(0.443) $(0.492) $(0.442) $(0.445) $ (0.471) $(0.460)
In excess of net investment
income (0.005) (0.005) (0.012) (0.008) (0.004) (0.001) (0.022)
- -----------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.502) $(0.448) $(0.504) $(0.450) $(0.449) $ (0.472) $(0.482)
- -----------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.510 $10.190 $10.070 $10.800 $10.510 $ 10.190 $10.250
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) (0.67)% (1.60)% 7.95% 7.19% 7.70% 4.05% 6.15%
- -----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $ 4,167 $46,077 $ 1,286 $54,655 $61,322 $ 72,868 $80,823
Ratios (As a percentage of
average daily net assets):
Expenses(3)(4) 0.71% 1.56% 0.73% 1.53% 1.60% 1.56% 1.50%
Expenses after custodian
fee reduction(3) 0.69% 1.54% 0.72% 1.52% 1.59% 1.54% --
Net investment income 4.94% 4.17% 4.93% 4.14% 4.31% 4.34% 4.67%
Portfolio Turnover of the
Portfolio 24% 24% 13% 13% 17% 11% 23%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(4) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
28
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GEORGIA FUND
----------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
------------------- ------------------- -------- --------- ---------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $ 9.730 $10.380 $ 9.500 $10.140 $ 9.810 $ 9.790 $ 9.800
- ------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ------------------------------------------------------------------------------------------------------------
Net investment income $ 0.476 $ 0.433 $ 0.476 $ 0.434 $ 0.449 $ 0.451 $ 0.450
Net realized and unrealized
gain (loss) (0.730) (0.771) 0.245 0.261 0.336 0.024 0.007(2)
- ------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.254) $(0.338) $ 0.721 $ 0.695 $ 0.785 $ 0.475 $ 0.457
- ------------------------------------------------------------------------------------------------------------
Less distributions
- ------------------------------------------------------------------------------------------------------------
From net investment income $(0.476) $(0.433) $(0.484) $(0.437) $(0.455) $ (0.455) $ (0.450)
In excess of net investment
income (0.010) (0.009) (0.007) (0.018) -- -- (0.017)
- ------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.486) $(0.442) $(0.491) $(0.455) $(0.455) $ (0.455) $ (0.467)
- ------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 8.990 $ 9.600 $ 9.730 $10.380 $10.140 $ 9.810 $ 9.790
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (2.78)% (3.44)% 7.75% 7.00% 8.16% 4.91% 4.90%
- ------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $ 2,554 $68,432 $ 2,043 $84,830 $93,128 $106,992 $120,143
Ratios (As a percentage of
average daily net assets):
Expenses(4)(5) 0.80% 1.55% 0.83% 1.56% 1.59% 1.58% 1.49%
Expenses after custodian
fee reduction(4) 0.76% 1.51% 0.82% 1.55% 1.57% 1.52% --
Net investment income 4.97% 4.24% 4.92% 4.22% 4.48% 4.55% 4.72%
Portfolio Turnover of the
Portfolio 38% 38% 19% 19% 13% 21% 48%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The per share amounts are not in accord with the net realized and
unrealized gain for the period because of the timing of sales of Fund
shares and the amount of the per share realized and unrealized gains and
losses at such time.
(3) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KENTUCKY FUND
------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------
1999(1) 1998(1) 1997 1996 1995
------------------- -------------------- --------- --------- ---------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $ 9.910 $10.660 $ 9.680 $ 10.410 $ 9.970 $ 9.990 $ 9.850
- --------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- --------------------------------------------------------------------------------------------------------------
Net investment income $ 0.493 $ 0.453 $ 0.497 $ 0.456 $ 0.456 $ 0.450 $ 0.458
Net realized and unrealized
gain (loss) (0.491) (0.533) 0.235 0.254 0.435 (0.009)(2) 0.163
- --------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.002 $(0.080) $ 0.732 $ 0.710 $ 0.891 $ 0.441 $ 0.621
- --------------------------------------------------------------------------------------------------------------
Less distributions
- --------------------------------------------------------------------------------------------------------------
From net investment income $(0.493) $(0.453) $(0.497) $ (0.456) $ (0.451) $ (0.450) $ (0.458)
In excess of net investment
income (0.009) (0.007) (0.005) (0.004) -- (0.011) (0.023)
- --------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.502) $(0.460) $(0.502) $ (0.460) $ (0.451) $ (0.461) $ (0.481)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.410 $10.120 $ 9.910 $ 10.660 $ 10.410 $ 9.970 $ 9.990
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (0.05)% (0.84)% 7.72% 6.97% 9.12% 4.45% 6.61%
- --------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $ 1,387 $96,005 $ 1,303 $111,015 $121,376 $131,357 $143,106
Ratios (As a percentage of
average daily net assets):
Expenses(4)(5) 0.83% 1.56% 0.83% 1.57% 1.60% 1.57% 1.52%
Expenses after custodian
fee reduction(4) 0.81% 1.54% 0.82% 1.56% 1.57% 1.54% --
Net investment income 5.03% 4.30% 5.05% 4.32% 4.50% 4.45% 4.74%
Portfolio Turnover of the
Portfolio 11% 11% 15% 15% 28% 28% 30%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The per share amounts are not in accord with the net realized and
unrealized gain (loss) for the period because of the timing of sales of
Fund shares and the amount of the per share realized and unrealized gains
and losses at such time.
(3) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
30
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA FUND
--------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------------- ------------------- -------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $ 9.990 $10.570 $ 9.750 $10.310 $ 9.960 $ 9.980 $10.010
- ----------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------------
Net investment income $ 0.486 $ 0.429 $ 0.480 $ 0.436 $ 0.482 $ 0.486 $ 0.487
Net realized and unrealized
gain (loss) (0.735) (0.790) 0.294 0.306 0.350 (0.016) (0.006)(1)
- ----------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.249) $(0.361) $ 0.774 $ 0.742 $ 0.832 $ 0.470 $ 0.481
- ----------------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------------
From net investment income $(0.486) $(0.429) $(0.515) $(0.446) $(0.482) $(0.490) $(0.487)
In excess of net investment
income (0.015) (0.020) (0.019) (0.036) -- -- (0.024)
- ----------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.501) $(0.449) $(0.534) $(0.482) $(0.482) $(0.490) $(0.511)
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.240 $ 9.760 $ 9.990 $10.570 $10.310 $ 9.960 $ 9.980
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) (2.73)% (3.63)% 8.13% 7.37% 8.52% 4.77% 5.08%
- ----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- ----------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $ 4,102 $28,542 $ 4,886 $31,536 $31,996 $32,994 $31,836
Ratios (As a percentage of
average daily net assets):
Net expenses(3)(4) 0.63% 1.47% 0.71% 1.49% 1.54% 1.41% 1.31%
Net expenses after
custodian fee
reduction(3) 0.60% 1.44% 0.66% 1.44% 1.52% 1.34% --
Net investment income 4.93% 4.08% 4.79% 4.18% 4.74% 4.82% 4.97%
Portfolio Turnover of the
Portfolio 20% 20% 43% 43% 27% 99% 46%
- ----------------------------------------------------------------------------------------------------------
+ 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(3)(4) 1.53% 1.42%
Expenses after custodian
fee reduction(3) 1.45% --
Net investment income 4.70% 4.86%
Net investment income per
share $ 0.474 $ 0.470
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) The per share amounts are not in accord with the net realized and
unrealized gain (loss) for the period because of the timing of sales of
Fund shares and the amount of the per share realized and unrealized gains
and losses at such time.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(4) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require each 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 the year ended August 31, 1995 have not been adjusted to reflect
this change.
SEE NOTES TO FINANCIAL STATEMENTS
31
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MARYLAND FUND
------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------
1999(1) 1998(1) 1997 1996 1995
------------------- -------------------- --------- --------- ---------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $10.050 $10.980 $ 9.810 $ 10.710 $ 10.300 $ 10.230 $ 10.070
- --------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- --------------------------------------------------------------------------------------------------------------
Net investment income $ 0.451 $ 0.425 $ 0.476 $ 0.441 $ 0.453 $ 0.464 $ 0.476
Net realized and unrealized
gain (loss) (0.785) (0.874) 0.262 0.291 0.419 0.086 0.169
- --------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.334) $(0.449) $ 0.738 $ 0.732 $ 0.872 $ 0.550 $ 0.645
- --------------------------------------------------------------------------------------------------------------
Less distributions
- --------------------------------------------------------------------------------------------------------------
From net investment income $(0.457) $(0.425) $(0.476) $ (0.447) $ (0.462) $ (0.480) $ (0.476)
In excess of net investment
income (0.029) (0.026) (0.022) (0.015) -- -- (0.009)
- --------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.486) $(0.451) $(0.498) $ (0.462) $ (0.462) $ (0.480) $ (0.485)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.230 $10.080 $10.050 $ 10.980 $ 10.710 $ 10.300 $ 10.230
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) (3.47)% (4.25)% 7.68% 6.98% 8.64% 5.44% 6.71%
- --------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $ 3,574 $91,321 $ 1,625 $103,307 $105,671 $109,243 $113,826
Ratios (As a percentage of
average daily net assets):
Expenses(3)(4) 0.81% 1.58% 0.82% 1.56% 1.57% 1.57% 1.50%
Expenses after custodian
fee reduction(3) 0.78% 1.55% 0.78% 1.52% 1.54% 1.55% --
Net investment income 4.65% 3.98% 4.76% 4.05% 4.30% 4.46% 4.82%
Portfolio Turnover of the
Portfolio 31% 31% 30% 30% 30% 33% 30%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(4) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
32
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MISSOURI FUND
--------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------------- ------------------- -------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $10.270 $11.380 $ 9.930 $11.010 $10.510 $10.510 $10.240
- ----------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------------
Net investment income $ 0.495 $ 0.471 $ 0.503 $ 0.477 $ 0.478 $ 0.476 $ 0.477
Net realized and unrealized
gain (loss) (0.638) (0.736) 0.334 0.364 0.493 0.003 0.289
- ----------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.143) $(0.265) $ 0.837 $ 0.841 $ 0.971 $ 0.479 $ 0.766
- ----------------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------------
From net investment income $(0.497) $(0.465) $(0.497) $(0.471) $(0.471) $(0.476) $(0.477)
In excess of net investment
income -- -- -- -- -- (0.003) (0.019)
- ----------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.497) $(0.465) $(0.497) $(0.471) $(0.471) $(0.479) $(0.496)
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.630 $10.650 $10.270 $11.380 $11.010 $10.510 $10.510
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN(1) (1.52)% (2.46)% 8.61% 7.81% 9.42% 4.60% 7.82%
- ----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $ 4,692 $63,470 $ 2,665 $71,586 $77,479 $82,385 $89,811
Ratios (As a percentage of
average daily net assets):
Expenses(2)(3) 0.72% 1.56% 0.79% 1.56% 1.57% 1.56% 1.53%
Expenses after custodian
fee reduction(2) 0.70% 1.54% 0.77% 1.54% 1.56% 1.54% --
Net investment income 5.10% 4.19% 5.00% 4.25% 4.44% 4.47% 4.72%
Portfolio Turnover of the
Portfolio 21% 21% 11% 11% 5% 36% 24%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
33
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NORTH CAROLINA FUND
-------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------------------
1999(1) 1998(1) 1997 1996 1995
-------------------- -------------------- --------- --------- ---------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $ 9.880 $ 10.630 $ 9.610 $ 10.340 $ 9.970 $ 9.960 $ 9.970
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 0.483 $ 0.438 $ 0.490 $ 0.447 $ 0.452 $ 0.452 $ 0.466
Net realized and unrealized
gain (loss) (0.616) (0.662) 0.282 0.303 0.378 0.026 0.011(2)
- ---------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.133) $ (0.224) $ 0.772 $ 0.750 $ 0.830 $ 0.478 $ 0.477
- ---------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------
From net investment income $(0.483) $ (0.438) $(0.490) $ (0.447) $ (0.455) $ (0.455) $ (0.466)
In excess of net investment
income (0.004) (0.008) (0.012) (0.013) (0.005) (0.013) (0.021)
- ---------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.487) $ (0.446) $(0.502) $ (0.460) $ (0.460) $ (0.468) $ (0.487)
- ---------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.260 $ 9.960 $ 9.880 $ 10.630 $ 10.340 $ 9.970 $ 9.960
- ---------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (1.46)% (2.24)% 8.22% 7.42% 8.50% 4.83% 5.03%
- ---------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $12,697 $116,110 $12,967 $139,325 $151,564 $169,889 $188,450
Ratios (As a percentage of
average daily net assets):
Expenses(4)(5) 0.79% 1.58% 0.83% 1.58% 1.60% 1.59% 1.51%
Expenses after custodian
fee reduction(4) 0.78% 1.57% 0.80% 1.55% 1.58% 1.54% --
Net investment income 4.97% 4.19% 5.03% 4.26% 4.48% 4.47% 4.78%
Portfolio Turnover of the
Portfolio 3% 3% 26% 26% 42% 54% 33%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The per share amounts are not in accord with the net realized and
unrealized gain (loss) for the period because of the timing of sales of
Fund shares and the amount of the per share realized and unrealized gains
and losses at such time.
(3) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
34
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OREGON FUND
------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------
1999(1) 1998(1) 1997 1996 1995
------------------- -------------------- --------- --------- ---------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $ 9.870 $10.800 $ 9.600 $ 10.510 $ 10.240 $ 10.310 $ 10.090
- --------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- --------------------------------------------------------------------------------------------------------------
Net investment income $ 0.489 $ 0.449 $ 0.483 $ 0.450 $ 0.456 $ 0.450 $ 0.455
Net realized and unrealized
gain (loss) (0.491) (0.537) 0.275 0.292 0.266 (0.061) 0.241
- --------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.002) $(0.088) $ 0.758 $ 0.742 $ 0.722 $ 0.389 $ 0.696
- --------------------------------------------------------------------------------------------------------------
Less distributions
- --------------------------------------------------------------------------------------------------------------
From net investment income $(0.488) $(0.449) $(0.483) $ (0.451) $ (0.452) $ (0.457) $ (0.455)
In excess of net investment
income -- (0.003) (0.005) (0.001) -- (0.002) (0.021)
- --------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.488) $(0.452) $(0.488) $ (0.452) $ (0.452) $ (0.459) $ (0.476)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.380 $10.260 $ 9.870 $ 10.800 $ 10.510 $ 10.240 $ 10.310
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) (0.11)% (0.92)% 8.08% 7.22% 7.20% 3.80% 7.22%
- --------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $ 2,658 $91,295 $ 914 $102,571 $112,586 $128,580 $145,056
Ratios (As a percentage of
average daily net assets):
Expenses(3)(4) 0.71% 1.57% 0.78% 1.56% 1.63% 1.56% 1.53%
Expenses after custodian
fee reduction(3) 0.70% 1.56% 0.78% 1.56% 1.63% 1.53% --
Net investment income 5.02% 4.19% 4.95% 4.22% 4.41% 4.33% 4.59%
Portfolio Turnover of the
Portfolio 35% 35% 9% 9% 22% 28% 22%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(4) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
35
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SOUTH CAROLINA FUND
--------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------------- ------------------- -------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $10.090 $10.720 $ 9.760 $10.380 $10.020 $10.000 $ 9.940
- ----------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------------
Net investment income $ 0.490 $ 0.448 $ 0.495 $ 0.455 $ 0.463 $ 0.467 $ 0.460
Net realized and unrealized
gain (loss) (0.767) (0.820) 0.328 0.352 0.364 0.021 0.071
- ----------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.277) $(0.372) $ 0.823 $ 0.807 $ 0.827 $ 0.488 $ 0.531
- ----------------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------------
From net investment income $(0.493) $(0.448) $(0.493) $(0.467) $(0.467) $(0.468) $(0.460)
In excess of net investment
income -- -- -- -- -- -- (0.011)
- ----------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.493) $(0.448) $(0.493) $(0.467) $(0.467) $(0.468) $(0.471)
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.320 $ 9.900 $10.090 $10.720 $10.380 $10.020 $10.000
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN(1) (2.91%) (3.63%) 8.62% 7.96% 8.41% 4.92% 5.64%
- ----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $ 1,757 $42,600 $ 1,316 $48,562 $52,686 $57,217 $59,955
Ratio (As a percentage of
average daily net assets):
Expenses(2)(3) 0.78% 1.51% 0.77% 1.52% 1.63% 1.60% 1.49%
Expenses after custodian
fee reduction(2) 0.75% 1.48% 0.76% 1.51% 1.62% 1.58% --
Net investment income 4.98% 4.26% 5.03% 4.30% 4.50% 4.60% 4.77%
Portfolio Turnover of the
Portfolio 26% 26% 21% 21% 8% 36% 75%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(2) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
36
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TENNESSEE FUND
--------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------------------------
1999 1998(1) 1997 1996 1995
------------------- ------------------- -------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $ 9.980 $10.840 $ 9.740 $10.580 $10.150 $10.110 $10.020
- ----------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------------
Net investment income $ 0.489 $ 0.446 $ 0.491 $ 0.444 $ 0.453 $ 0.457 $ 0.468
Net realized and unrealized
gain (loss) (0.519) (0.564) 0.257 0.266 0.436 0.059 0.115
- ----------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.030) $(0.118) $ 0.748 $ 0.710 $ 0.889 $ 0.516 $ 0.583
- ----------------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------------
From net investment income $(0.490) $(0.442) $(0.491) $(0.444) $(0.453) $(0.475) $(0.468)
In excess of net investment
income -- -- (0.017) (0.006) (0.006) (0.001) (0.025)
- ----------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.490) $(0.442) $(0.508) $(0.450) $(0.459) $(0.476) $(0.493)
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.460 $10.280 $ 9.980 $10.840 $10.580 $10.150 $10.110
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) (0.39)% (1.19)% 7.85% 6.86% 8.95% 5.16% 6.12%
- ----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $ 2,870 $46,389 $ 3,413 $50,090 $51,712 $54,533 $57,484
Ratios (As a percentage of
average daily net assets):
Expenses(3)(4) 0.70% 1.51% 0.67% 1.52% 1.54% 1.53% 1.47%
Expenses after custodian
fee reduction(3) 0.69% 1.50% 0.65% 1.50% 1.53% 1.51% --
Net investment income 4.96% 4.15% 4.94% 4.14% 4.39% 4.45% 4.77%
Portfolio Turnover of the
Portfolio 13% 13% 21% 21% 3% 39% 20%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses for the period the Fund was investing in the Portfolio.
(4) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
37
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
VIRGINIA FUND
-------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------------------
1999 1998(1) 1997 1996 1995
-------------------- -------------------- --------- --------- ---------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $ 9.870 $ 10.930 $ 9.620 $ 10.630 $ 10.260 $ 10.260 $ 10.120
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 0.503 $ 0.450 $ 0.483 $ 0.454 $ 0.467 $ 0.471 $ 0.479
Net realized and unrealized
gain (loss) (0.582) (0.629) 0.277 0.312 0.369 0.006 0.161
- ---------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.079) $ (0.179) $ 0.760 $ 0.766 $ 0.836 $ 0.477 $ 0.640
- ---------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------
From net investment income $(0.489) $ (0.451) $(0.483) $ (0.454) $ (0.466) $ (0.471) $ (0.479)
In excess of net investment
income (0.002) (0.010) (0.027) (0.012) -- (0.006) (0.021)
- ---------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.491) $ (0.461) $(0.510) $ (0.466) $ (0.466) $ (0.477) $ (0.500)
- ---------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.300 $ 10.290 $ 9.870 $ 10.930 $ 10.630 $ 10.260 $ 10.260
- ---------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) (0.90)% (1.75)% 8.08% 7.37% 8.31% 4.67% 6.62%
- ---------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $ 3,528 $133,522 $ 2,117 $148,902 $159,603 $175,918 $189,535
Ratios (As a percentage of
average daily net assets):
Expenses(3)(4) 0.73% 1.58% 0.85% 1.59% 1.60% 1.56% 1.50%
Expenses after custodian
fee reduction(3) 0.71% 1.56% 0.83% 1.57% 1.57% 1.53% --
Net investment income 5.00% 4.19% 4.92% 4.21% 4.47% 4.52% 4.81%
Portfolio Turnover of the
Portfolio 17% 17% 8% 8% 25% 30% 38%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(4) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the year ended August 31, 1995 has not been adjusted to reflect this
change.
SEE NOTES TO FINANCIAL STATEMENTS
38
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
- -------------------------------------------
Eaton Vance Municipals Trust (the "Trust") is an entity of the type commonly
known as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. The Trust presently consists of twenty-nine Funds, twelve
of which, each non-diversified, are included in these financial statements.
They include Eaton Vance Alabama Municipals Fund ("Alabama Fund"), Eaton
Vance Arkansas Municipals Fund ("Arkansas Fund"), Eaton Vance Georgia
Municipals Fund ("Georgia Fund"), Eaton Vance Kentucky Municipals Fund
("Kentucky Fund"), Eaton Vance Louisiana Municipals Fund ("Louisiana Fund"),
Eaton Vance Maryland Municipals Fund ("Maryland Fund"), Eaton Vance Missouri
Municipals Fund ("Missouri Fund"), Eaton Vance North Carolina Municipals Fund
("North Carolina Fund"), Eaton Vance Oregon Municipals Fund ("Oregon Fund"),
Eaton Vance South Carolina Municipals Fund ("South Carolina Fund"), Eaton
Vance Tennessee Municipals Fund ("Tennessee Fund") and Eaton Vance Virginia
Municipals Fund ("Virginia Fund"). The Funds offer two classes of shares.
Class A shares are generally sold subject to a sales charge imposed at 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). Each class
represents a pro rata interest in the Fund, but votes separately on class-
specific matters and (as noted below) is subject to different expenses.
Realized and unrealized gains and losses 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. Net investment income, other than class specific expenses, is
allocated daily to each class of shares based upon the ratio of the value of
each class' paid shares to the total value of all paid shares. 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 Alabama Fund invests its assets in the Alabama
Municipals Portfolio, the Arkansas Fund invests its assets in the Arkansas
Municipals Portfolio, the Georgia Fund invests its assets in the Georgia
Municipals Portfolio, the Kentucky Fund invests its assets in the Kentucky
Municipals Portfolio, the Louisiana Fund invests its assets in the Louisiana
Municipals Portfolio, the Maryland Fund invests its assets in the Maryland
Municipals Portfolio, the Missouri Fund invests its assets in the Missouri
Municipals Portfolio, the North Carolina Fund invests its assets in the North
Carolina Municipals Portfolio, the Oregon Fund invests its assets in the
Oregon Municipals Portfolio, the South Carolina Fund invests its assets in
the South Carolina Municipals Portfolio, the Tennessee Fund invests its
assets in the Tennessee Municipals Portfolio and the Virginia Fund invests
its assets in the Virginia Municipals Portfolio. The value of each Fund's
investment in its corresponding Portfolio reflects the Fund's proportionate
interest in the net assets of that Portfolio (approximately 99.9% at
August 31, 1999 for each Fund). The performance of each Fund is directly
affected by the performance of its corresponding Portfolio. The financial
statements of each Portfolio, including the portfolio of investments, are
included elsewhere in this report and should be read in conjunction with each
Fund's financial statements.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A Investment Valuation -- Valuation of securities by the Portfolios is
discussed in Note 1A of the Portfolios' Notes to Financial Statements which
are included elsewhere in this report.
B Income -- Each Fund's net investment income consists of the Fund's pro rata
share of the net investment income of its corresponding Portfolio, less all
actual and accrued expenses of each Fund determined in accordance with
generally accepted accounting principles.
C Federal Taxes -- Each Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable and tax-exempt
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary. At August 31, 1999,
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
39
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
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:
<TABLE>
<CAPTION>
FUND AMOUNT EXPIRES
<S> <C> <C>
- ------------------------------------------------------------------------
Alabama Fund $ 94,556 August 31, 2005
988,165 August 31, 2004
317,426 August 31, 2003
Arkansas Fund 251,575 August 31, 2005
1,352,201 August 31, 2004
Georgia Fund 5,373,040 August 31, 2004
Kentucky Fund 233,391 August 31, 2005
1,632,812 August 31, 2004
Louisiana Fund 250,837 August 31, 2005
1,598,606 August 31, 2004
Maryland Fund 35 August 31, 2005
186,705 August 31, 2004
Missouri Fund 113,141 August 31, 2005
768,446 August 31, 2004
North Carolina Fund 73,745 August 31, 2005
8,426,582 August 31, 2004
Oregon Fund 924,680 August 31, 2005
2,175,920 August 31, 2004
South Carolina Fund 25,336 August 31, 2005
183,416 August 31, 2004
2,881,146 August 31, 2003
266,269 August 31, 2002
Tennessee Fund 246,996 August 31, 2005
1,344,648 August 31, 2004
Virginia Fund 4,643,723 August 31, 2004
</TABLE>
Dividends paid by each Fund from net interest on tax-exempt municipal bonds
allocated from its corresponding Portfolio are not includable by shareholders
as gross income for federal income tax purposes because each Fund and
Portfolio intend to meet certain requirements of the Internal Revenue Code
applicable to regulated investment companies which will enable the Funds to
pay tax-exempt interest dividends. The portion of such interest, if any,
earned on private activity bonds issued after August 7, 1986 may be
considered a tax preference item to shareholders.
D Deferred Organization Expenses -- Costs incurred by each Fund in connection
with its organization, including registration costs, are being amortized on
the straight-line basis over five years.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to the Funds and the Portfolios. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by credits which are determined based
on the average daily cash balances the Funds or the Portfolios maintain with
IBT. All significant credit balances used to reduce each Fund's custodian
fees are reported as a reduction of expenses in the Statements of Operations.
F Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
G Other -- Investment transactions are accounted for on a trade date basis.
2 Distributions to Shareholders
- -------------------------------------------
The net income of each Fund is determined daily, and substantially all of the
net income so determined is declared as a dividend to shareholders of record
at the time of declaration. Distributions are paid monthly. Distributions are
paid in the form of additional shares or, at the election of the shareholder,
in cash. Distributions of allocated realized capital gains, if any, are made
at least annually. Shareholders may reinvest income and 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.
40
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
3 Shares of Beneficial Interest
- -------------------------------------------
The Funds' Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Such shares may be issued in a number of different series (such as
the Funds) and classes. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
ALABAMA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 175,161 96,942
Issued to shareholders electing to
receive payment of distribution in Fund
shares 13,976 12,052
Redemptions (43,692) (187,576)
Issued to EV Traditional Municipals
shareholders -- 590,481
- ---------------------------------------------------------------------------
NET INCREASE 145,445 511,899
- ---------------------------------------------------------------------------
<CAPTION>
ALABAMA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 515,878 392,145
Issued to shareholders electing to
receive payment of distribution in Fund
shares 165,189 183,966
Redemptions (1,489,503) (1,345,698)
- ---------------------------------------------------------------------------
NET DECREASE (808,436) (769,587)
- ---------------------------------------------------------------------------
<CAPTION>
ARKANSAS FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 346,734 18,182
Issued to shareholders electing to
receive payment of distribution in Fund
shares 3,908 2,761
Redemptions (40,372) (13,548)
Issued to EV Traditional Municipals
shareholders -- 120,288
- ---------------------------------------------------------------------------
NET INCREASE 310,270 127,683
- ---------------------------------------------------------------------------
<CAPTION>
ARKANSAS FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 209,730 236,560
Issued to shareholders electing to
receive payment of distribution in Fund
shares 104,018 113,885
Redemptions (855,918) (1,124,754)
- ---------------------------------------------------------------------------
NET DECREASE (542,170) (774,309)
- ---------------------------------------------------------------------------
<CAPTION>
GEORGIA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 112,219 41,385
Issued to shareholders electing to
receive payment of distribution in Fund
shares 6,847 4,967
Redemptions (44,970) (22,370)
Issued to EV Traditional Municipals
shareholders -- 186,097
- ---------------------------------------------------------------------------
NET INCREASE 74,096 210,079
- ---------------------------------------------------------------------------
<CAPTION>
GEORGIA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 477,417 430,422
Issued to shareholders electing to
receive payment of distribution in Fund
shares 144,503 166,705
Redemptions (1,662,425) (1,608,037)
- ---------------------------------------------------------------------------
NET DECREASE (1,040,505) (1,010,910)
- ---------------------------------------------------------------------------
</TABLE>
41
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
KENTUCKY FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales 31,154 55,826
Issued to shareholders electing to
receive payment of distribution in Fund
shares 5,316 5,205
Redemptions (20,537) (72,837)
Issued to EV Traditional Municipals
shareholders -- 143,269
- ---------------------------------------------------------------------------
NET INCREASE 15,933 131,463
- ---------------------------------------------------------------------------
<CAPTION>
KENTUCKY FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 559,194 477,522
Issued to shareholders electing to
receive payment of distribution in Fund
shares 229,481 251,649
Redemptions (1,716,108) (1,970,750)
- ---------------------------------------------------------------------------
NET DECREASE (927,433) (1,241,579)
- ---------------------------------------------------------------------------
<CAPTION>
LOUISIANA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 113,438 313,546
Issued to shareholders electing to
receive payment of distribution in Fund
shares 8,254 8,780
Redemptions (166,545) (75,541)
Issued to EV Traditional Municipals
shareholders -- 242,164
- ---------------------------------------------------------------------------
NET INCREASE (DECREASE) (44,853) 488,949
- ---------------------------------------------------------------------------
<CAPTION>
LOUISIANA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 291,845 186,443
Issued to shareholders electing to
receive payment of distribution in Fund
shares 57,003 67,357
Redemptions (410,172) (373,866)
- ---------------------------------------------------------------------------
NET DECREASE (61,324) (120,066)
- ---------------------------------------------------------------------------
<CAPTION>
MARYLAND FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 335,934 52,926
Issued to shareholders electing to
receive payment of distribution in Fund
shares 6,272 4,317
Redemptions (116,835) (28,207)
Issued to EV Traditional Municipals
shareholders -- 132,577
- ---------------------------------------------------------------------------
NET INCREASE 225,371 161,613
- ---------------------------------------------------------------------------
<CAPTION>
MARYLAND FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 766,092 705,126
Issued to shareholders electing to
receive payment of distribution in Fund
shares 196,870 208,732
Redemptions (1,317,904) (1,369,032)
- ---------------------------------------------------------------------------
NET DECREASE (354,942) (455,174)
- ---------------------------------------------------------------------------
<CAPTION>
MISSOURI FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 299,009 68,428
Issued to shareholders electing to
receive payment of distribution in Fund
shares 11,942 6,805
Redemptions (83,257) (37,078)
Issued to EV Traditional Municipals
shareholders -- 221,323
- ---------------------------------------------------------------------------
NET INCREASE 227,694 259,478
- ---------------------------------------------------------------------------
<CAPTION>
MISSOURI FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 366,959 315,672
Issued to shareholders electing to
receive payment of distribution in Fund
shares 128,713 139,565
Redemptions (829,815) (1,202,462)
- ---------------------------------------------------------------------------
NET DECREASE (334,143) (747,225)
- ---------------------------------------------------------------------------
</TABLE>
42
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
NORTH CAROLINA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales 121,902 336,246
Issued to shareholders electing to
receive payment of distribution in Fund
shares 20,265 20,900
Redemptions (82,674) (650,119)
Issued to EV Traditional Municipals
shareholders -- 1,605,302
- ---------------------------------------------------------------------------
NET INCREASE 59,493 1,312,329
- ---------------------------------------------------------------------------
<CAPTION>
NORTH CAROLINA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 557,238 535,860
Issued to shareholders electing to
receive payment of distribution in Fund
shares 258,442 299,045
Redemptions (2,257,535) (2,392,924)
- ---------------------------------------------------------------------------
NET DECREASE (1,441,855) (1,558,019)
- ---------------------------------------------------------------------------
<CAPTION>
OREGON FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 214,279 24,544
Issued to shareholders electing to
receive payment of distribution in Fund
shares 4,836 2,921
Redemptions (28,242) (10,284)
Issued to EV Traditional Municipals
shareholders -- 75,426
- ---------------------------------------------------------------------------
NET INCREASE 190,873 92,607
- ---------------------------------------------------------------------------
<CAPTION>
OREGON FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 793,504 312,672
Issued to shareholders electing to
receive payment of distribution in Fund
shares 216,216 239,123
Redemptions (1,605,973) (1,770,810)
- ---------------------------------------------------------------------------
NET DECREASE (596,253) (1,219,015)
- ---------------------------------------------------------------------------
<CAPTION>
SOUTH CAROLINA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 109,081 23,792
Issued to shareholders electing to
receive payment of distribution in Fund
shares 4,912 3,412
Redemptions (56,016) (5,801)
Issued to EV Traditional Municipals
shareholders -- 109,050
- ---------------------------------------------------------------------------
NET INCREASE 57,977 130,453
- ---------------------------------------------------------------------------
<CAPTION>
SOUTH CAROLINA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 518,929 213,365
Issued to shareholders electing to
receive payment of distribution in Fund
shares 83,516 93,082
Redemptions (830,090) (850,327)
- ---------------------------------------------------------------------------
NET DECREASE (227,645) (543,880)
- ---------------------------------------------------------------------------
<CAPTION>
TENNESSEE FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 87,643 149,164
Issued to shareholders electing to
receive payment of distribution in Fund
shares 13,115 9,340
Redemptions (139,499) (67,357)
Issued to EV Traditional Municipals
shareholders -- 250,960
- ---------------------------------------------------------------------------
NET INCREASE (DECREASE) (38,741) 342,107
- ---------------------------------------------------------------------------
<CAPTION>
TENNESSEE FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 410,305 350,938
Issued to shareholders electing to
receive payment of distribution in Fund
shares 95,146 101,626
Redemptions (615,845) (720,704)
- ---------------------------------------------------------------------------
NET DECREASE (110,394) (268,140)
- ---------------------------------------------------------------------------
</TABLE>
43
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
VIRGINIA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS A AUGUST 31, 1999 AUGUST 31, 1998
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales 234,327 69,689
Issued to shareholders electing to
receive payment of distribution in Fund
shares 7,909 4,299
Redemptions (77,321) (9,849)
Issued to EV Traditional Municipals
shareholders -- 150,372
- ---------------------------------------------------------------------------
NET INCREASE 164,915 214,511
- ---------------------------------------------------------------------------
<CAPTION>
VIRGINIA FUND
---------------------------------
YEAR ENDED YEAR ENDED
CLASS B AUGUST 31, 1999 AUGUST 31, 1998
<S> <C> <C>
- ---------------------------------------------------------------------------
Sales 907,245 645,327
Issued to shareholders electing to
receive payment of distribution in Fund
shares 287,613 310,137
Redemptions (1,845,422) (2,343,911)
- ---------------------------------------------------------------------------
NET DECREASE (650,564) (1,388,447)
- ---------------------------------------------------------------------------
</TABLE>
4 Transactions with Affiliates
- -------------------------------------------
Eaton Vance Management (EVM) serves as the Administrator of each Fund, but
receives no compensation. Each of the Portfolios have engaged Boston
Management and Research (BMR), a subsidiary of EVM, to render investment
advisory services. See Note 2 of the Portfolios' Notes to Financial
Statements which are included elsewhere in this report. Certain of the
officers and Trustees of the Funds and Portfolios are officers of the above
organizations. Except for 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. The Funds were informed that Eaton Vance Distributors,
Inc. (EVD), a subsidiary of EVM and the Funds' principal underwriter,
received $1,545, $2,117, $1,880, $750, $1,134, $1,888, $2,317, $2,642,
$1,155, $982, $1,757 and $3,219 from the Alabama Fund, Arkansas Fund, Georgia
Fund, Kentucky Fund, Louisiana Fund, Maryland Fund, Missouri Fund, North
Carolina Fund, Oregon Fund, South Carolina Fund, Tennessee Fund and Virginia
Fund, respectively, as its portion of the sales charge on sales of Class A
shares for the year August 31, 1999.
5 Distribution and Service Plans
- -------------------------------------------
Each Fund has adopted a distribution plan (Class B Plans) pursuant to Rule
12b-1 under the Investment Company Act of 1940 and a service plan (Class A
Plans, the Plans). The Plans require the Class B shares to pay the principal
underwriter, Eaton Vance Distributors, Inc. (EVD), amounts equal to 1/365 of
0.75% of each Fund's Class B daily net assets, for providing ongoing
distribution services and facilities to the respective Fund. A Fund's
Class B shares will automatically discontinue payments to EVD during any
period in which there are no outstanding Uncovered Distribution Charges,
which are equivalent to the sum of (i) 5% of the aggregate amount received by
the Fund for Class B shares sold plus (ii) interest 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 year ended August 31, 1999, the
Class B shares of the Alabama Fund, Arkansas Fund, Georgia Fund, Kentucky
Fund, Louisiana Fund, Maryland Fund, Missouri Fund, North Carolina Fund,
Oregon Fund, South Carolina Fund, Tennessee Fund and Virginia Fund paid
$629,616, $385,185, $585,581, $797,736, $232,543, $752,454, $521,023,
$981,907, $736,475, $359,429, $369,011 and $1,080,873, respectively, to EVD,
representing 0.75% of each Fund's Class B average daily net assets. At
August 31, 1999, the amount of Uncovered Distribution Charges of EVD
calculated under the Class B Plans for Alabama Fund, Arkansas Fund, Georgia
Fund, Kentucky Fund, Louisiana Fund, Maryland Fund, Missouri Fund, North
Carolina Fund, Oregon Fund, South Carolina Fund, Tennessee Fund and Virginia
Fund were approximately $2,196,000, $1,577,000, $2,277,000, $2,620,000,
$1,024,000, $2,723,000, $1,649,000, $3,367,000, $2,822,000, $1,506,000,
$1,416,000 and $3,509,000, respectively.
In addition, the Plans authorize the Funds to make payments of service fees
to EVD, investment dealers 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 EVD and investment dealers in amounts not
exceeding 0.20% per annum of each Fund's average daily net assets
attributable to both Class A and Class B shares based on the value of Fund
shares sold by such persons and remaining outstanding for at least one year.
For the year ended August 31, 1999, Alabama Fund, Arkansas Fund, Georgia
Fund, Kentucky Fund, Louisiana Fund, Maryland Fund, Missouri Fund, North
Carolina Fund, Oregon Fund, South Carolina Fund, Tennessee Fund and Virginia
Fund paid or accrued service fees to or payable to EVD in the amount of
$9,518, $2,862, $4,847, $2,662, $4,027, $4,686, $3,873, $21,983, $1,922,
$3,577, $4,820 and $2,905, respectively, for Class A shares, and $160,092,
44
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
$98,877, $156,155, $191,455, $57,003, $190,623, $138,501, $261,842, $198,820,
$86,263, $93,278 and $288,234, 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 investment dealers 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) generally is imposed on redemptions
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 shares which have been sold to EVM or its affiliates or to
their respective employees or clients and may be waived under certain other
limited conditions. CDSC charges are paid to EVD to reduce the amount of
Uncovered Distribution Charges calculated under each Fund's Class B Plan (see
Note 5). CDSC charges received when no Uncovered Distribution Charges exist
will be credited to the Fund. EVD received approximately $150,000, $80,000,
$104,000, $123,000, $49,000, $112,000, $68,000, $134,000, $120,000, $77,000,
$60,000 and $146,000 of CDSC paid by Class B shareholders of Alabama Fund,
Arkansas Fund, Georgia Fund, Kentucky Fund, Louisiana Fund, Maryland Fund,
Missouri Fund, North Carolina Fund, Oregon Fund, South Carolina Fund,
Tennessee Fund and Virginia Fund, respectively, for the year ended
August 31, 1999.
7 Investment Transactions
- -------------------------------------------
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the year ended August 31, 1999 were as follows:
<TABLE>
<CAPTION>
ALABAMA FUND
<S> <C>
- ------------------------------------------------------
Increases $ 7,798,450
Decreases 19,730,570
<CAPTION>
ARKANSAS FUND
<S> <C>
- ------------------------------------------------------
Increases $ 5,682,021
Decreases 11,297,759
<CAPTION>
GEORGIA FUND
<S> <C>
- ------------------------------------------------------
Increases $ 5,916,906
Decreases 20,284,630
<CAPTION>
KENTUCKY FUND
<S> <C>
- ------------------------------------------------------
Increases $ 6,215,330
Decreases 21,552,860
<CAPTION>
LOUISIANA FUND
<S> <C>
- ------------------------------------------------------
Increases $ 4,126,276
Decreases 7,144,339
<CAPTION>
MARYLAND FUND
<S> <C>
- ------------------------------------------------------
Increases $11,497,954
Decreases 18,276,256
<CAPTION>
MISSOURI FUND
<S> <C>
- ------------------------------------------------------
Increases $ 7,132,282
Decreases 12,389,264
<CAPTION>
NORTH CAROLINA FUND
<S> <C>
- ------------------------------------------------------
Increases $ 7,046,445
Decreases 29,283,120
<CAPTION>
OREGON FUND
<S> <C>
- ------------------------------------------------------
Increases $10,547,640
Decreases 20,266,456
<CAPTION>
SOUTH CAROLINA FUND
<S> <C>
- ------------------------------------------------------
Increases $ 6,573,386
Decreases 10,676,028
<CAPTION>
TENNESSEE FUND
<S> <C>
- ------------------------------------------------------
Increases $ 5,309,074
Decreases 9,624,115
<CAPTION>
VIRGINIA FUND
<S> <C>
- ------------------------------------------------------
Increases $12,279,948
Decreases 25,189,332
</TABLE>
45
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
8 Transfer of Assets
- -------------------------------------------
On September 1, 1997, Eaton Vance Alabama Municipal Fund, Eaton Vance
Arkansas Municipal Fund, Eaton Vance Georgia Municipal Fund, Eaton Vance
Kentucky Municipal Fund, Eaton Vance Louisiana Municipal Fund, Eaton Vance
Maryland Municipal Fund, Eaton Vance Missouri Municipal Fund, Eaton Vance
North Carolina Municipal Fund, Eaton Vance Oregon Municipal Fund, Eaton Vance
South Carolina Municipal Fund, Eaton Vance Tennessee Municipal Fund and Eaton
Vance Virginia Municipal Fund acquired the net assets of EV Traditional
Alabama Municipals Fund, EV Traditional Arkansas Municipals Fund, EV
Traditional Georgia Municipals Fund, EV Traditional Kentucky Municipals Fund,
EV Traditional Louisiana Municipals Fund, EV Traditional Maryland Municipals
Fund, EV Traditional Missouri Municipals Fund, EV Traditional North Carolina
Municipals Fund, EV Traditional Oregon Municipals Fund, EV Traditional South
Carolina Municipals Fund, EV Traditional Tennessee Municipals Fund and EV
Traditional Virginia Municipals Fund, respectively, pursuant to an Agreement
and Plan of Reorganization dated June 23, 1997. In accordance with the
agreement, the Funds, at the closing, issued Class A shares as follows:
<TABLE>
<CAPTION>
AGGREGATE NET ASSET
CLASS A SHARES VALUE OF VALUE PER
FUND ISSUED SHARES ISSUED SHARE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
Alabama Fund 590,481 $ 5,824,841 $9.86
Arkansas Fund 120,288 1,180,015 9.81
Georgia Fund 186,097 1,767,367 9.50
Kentucky Fund 143,269 1,387,318 9.68
Louisiana Fund 242,164 2,360,799 9.75
Maryland Fund 132,577 1,300,861 9.81
Missouri Fund 221,323 2,197,879 9.93
North Carolina Fund 1,605,302 15,424,165 9.61
Oregon Fund 75,426 724,248 9.60
South Carolina Fund 109,050 1,063,786 9.76
Tennessee Fund 250,960 2,445,040 9.74
Virginia Fund 150,372 1,446,129 9.62
</TABLE>
The transaction was structured for tax purposes to qualify as a tax free
reorganization under the Internal Revenue Code. The net assets acquired,
including unrealized appreciation at the date of the transaction were as
follows:
<TABLE>
<CAPTION>
UNREALIZED
ACQUIRED APPRECIATION
FUND NET ASSETS (DEPRECIATION)
<S> <C> <C>
- ------------------------------------------------------------------------
Alabama Fund $ 5,824,841 $341,598
Arkansas Fund 1,180,015 36,550
Georgia Fund 1,767,367 36,495
Kentucky Fund 1,387,318 (3,075)
Louisiana Fund 2,360,799 105,625
Maryland Fund 1,300,861 20,996
Missouri Fund 2,197,879 106,055
North Carolina Fund 15,424,165 648,298
Oregon Fund 724,248 (11,883)
South Carolina Fund 1,063,786 61,451
Tennessee Fund 2,445,040 84,917
Virginia Fund 1,446,129 81,920
</TABLE>
Directly after the merger, the combined net assets of the Funds and the net
asset value of Class A shares and Class B shares were as follows:
<TABLE>
<CAPTION>
CLASS A NET CLASS B NET
COMBINED ASSET VALUE ASSET VALUE
FUND NET ASSETS PER SHARE PER SHARE
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------
Alabama Fund $101,979,281 $9.86 $10.85
Arkansas Fund 62,502,501 9.81 10.51
Georgia Fund 94,895,135 9.50 10.14
Kentucky Fund 122,763,591 9.68 10.41
Louisiana Fund 34,356,710 9.75 10.31
Maryland Fund 106,971,507 9.81 10.71
Missouri Fund 79,677,006 9.93 11.01
North Carolina Fund 166,988,286 9.61 10.34
Oregon Fund 113,310,381 9.60 10.51
South Carolina Fund 53,749,484 9.76 10.38
Tennessee Fund 54,157,115 9.74 10.58
Virginia Fund 161,049,047 9.62 10.63
</TABLE>
46
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND SHAREHOLDERS
OF EATON VANCE MUNICIPALS TRUST:
- ---------------------------------------------
We have audited the accompanying statements of assets and liabilities of Eaton
Vance Alabama Municipals Fund, Eaton Vance Arkansas Municipals Fund, Eaton Vance
Georgia Municipals Fund, Eaton Vance Kentucky Municipals Fund, Eaton Vance
Louisiana Municipals Fund, Eaton Vance Maryland Municipals Fund, Eaton Vance
Missouri Municipals Fund, Eaton Vance North Carolina Municipals Fund, Eaton
Vance Oregon Municipals Fund, Eaton Vance South Carolina Municipals Fund, Eaton
Vance Tennessee Municipals Fund and Eaton Vance Virginia Municipals Fund (the
Funds) (certain of the series of Eaton Vance Municipals Trust) as of August 31,
1999, the related statements of operations for the year then ended, and the
statements of changes in net assets for the years ended August 31, 1999 and 1998
and financial highlights for each of the years in the five year period ended
August 31, 1999. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on the financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the aforementioned
Funds of Eaton Vance Municipals Trust at August 31, 1999, the results of their
operations, the changes in their net assets and their financial highlights for
the respective stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
October 1, 1999
47
<PAGE>
ALABAMA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Education -- 1.8%
- ---------------------------------------------------------------------------
$1,500 Birmingham-Southern College,
5.35%, 12/1/19 $ 1,419,180
- ---------------------------------------------------------------------------
$ 1,419,180
- ---------------------------------------------------------------------------
Electric Utilities -- 2.3%
- ---------------------------------------------------------------------------
$1,500 Puerto Rico Electric Power Authority,
4.75%, 7/1/24 $ 1,301,955
500 Puerto Rico Electric Power Authority,
5.00%, 7/1/28 449,725
100 Tennessee Valley, Exhibit Commission,
6.70%, 6/1/10 106,773
- ---------------------------------------------------------------------------
$ 1,858,453
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 12.3%
- ---------------------------------------------------------------------------
$1,000 Gadsen East Medical Clinic Board,
(Baptist Hospital), Prerefunded to
11/1/01, 7.80%, 11/1/21 $ 1,091,590
2,000 Huntsville, Health Care Facilities,
(MBIA), Prerefunded to 6/1/04,
6.50%, 6/1/13 2,201,100
5,000 Scottsboro, Water, Sewer and Gas,
(AMBAC), Prerefunded to 6/1/04,
6.50%, 12/1/14 5,511,799
1,000 West Morgan-East Lawrence, Water
Authority, (FSA), Prerefunded to
8/15/04, 6.85%, 8/15/25 1,121,020
- ---------------------------------------------------------------------------
$ 9,925,509
- ---------------------------------------------------------------------------
General Obligations -- 0.3%
- ---------------------------------------------------------------------------
$ 650 Puerto Rico, Public Improvement,
0.00%, 7/1/15 $ 271,518
- ---------------------------------------------------------------------------
$ 271,518
- ---------------------------------------------------------------------------
Hospital -- 9.7%
- ---------------------------------------------------------------------------
$3,000 Alexander City, Special Care, (Russell
Hospital), 6.00%, 12/1/22 $ 2,879,970
1,000 Baldwin County, (Thomas Hospital),
6.75%, 4/1/21 1,032,090
1,000 Cullman Medical Clinic Board, (Cullman
Regional Medical Center),
6.50%, 2/15/23 1,017,040
2,000 Marshall County Healthcare Authority,
(Boaz-Albertville Medical Center),
7.00%, 1/1/20 2,109,760
745 Montgomery, Medical Clinic Board,
(Jackson Hospital), 7.00%, 3/1/15 765,137
- ---------------------------------------------------------------------------
$ 7,803,997
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 11.9%
- ---------------------------------------------------------------------------
$1,200 Courtland, (Champion International
Corp.), 7.20%, 12/1/13 $ 1,288,464
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Industrial Development Revenue (continued)
- ---------------------------------------------------------------------------
$2,000 Courtland, (Champion International
Corp.), (AMT), 6.50%, 9/1/25 $ 2,046,240
3,020 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 3,095,047
1,000 Selma, Solid Waste Disposal,
(International Paper), (AMT),
6.00%, 12/1/17 1,005,310
2,000 Tallahassee, (United Tech),
6.10%, 8/1/14 2,182,060
- ---------------------------------------------------------------------------
$ 9,617,121
- ---------------------------------------------------------------------------
Insured-Education -- 6.7%
- ---------------------------------------------------------------------------
$2,900 Alabama Agricultural and Mechanical
University, (MBIA), 5.00%, 11/1/25 $ 2,598,313
7,500 University of South Alabama, (AMBAC),
0.00%, 11/15/16 2,813,775
- ---------------------------------------------------------------------------
$ 5,412,088
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 0.3%
- ---------------------------------------------------------------------------
$ 250 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable Rate,
7/1/03(1) $ 270,938
- ---------------------------------------------------------------------------
$ 270,938
- ---------------------------------------------------------------------------
Insured-General Obligations -- 9.3%
- ---------------------------------------------------------------------------
$2,000 Madison, Warrants (MBIA), 5.00%, 9/1/27 $ 1,786,120
3,250 Madison, Warrants, (MBIA),
6.00%, 2/1/24 3,501,323
4,000 Mobile, (MBIA), 0.00%, 8/15/20 1,194,800
500 North Port, (AMBAC), 5.70%, 3/1/21 497,855
500 Troy City, (CAPG), 6.60%, 6/1/12 537,595
- ---------------------------------------------------------------------------
$ 7,517,693
- ---------------------------------------------------------------------------
Insured-Hospital -- 4.5%
- ---------------------------------------------------------------------------
$2,000 Anniston Regional Medical Center Board,
(AMBAC), 5.125%, 6/1/28 $ 1,805,600
1,810 Bessemer, Medical Clinic Board, (MBIA),
6.00%, 5/15/19 1,842,327
- ---------------------------------------------------------------------------
$ 3,647,927
- ---------------------------------------------------------------------------
Insured-Pooled Loans -- 1.1%
- ---------------------------------------------------------------------------
$1,000 Alabama Water Pollution Control
Authority, (AMBAC), 4.75%, 8/15/18 $ 890,210
- ---------------------------------------------------------------------------
$ 890,210
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
48
<PAGE>
ALABAMA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Solid Waste -- 5.5%
- ---------------------------------------------------------------------------
$ 250 Huntsville, Solid Waste Disposal,
(FGIC), (AMT), 7.00%, 10/1/08 $ 262,008
4,000 Huntsville, Solid Waste Disposal,
(FGIC), (AMT), 7.00%, 10/1/14 4,184,720
- ---------------------------------------------------------------------------
$ 4,446,728
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.8%
- ---------------------------------------------------------------------------
$1,825 Birmingham Jefferson, Civic Center
Authority, (MBIA), 0.00%, 9/1/18 $ 614,715
- ---------------------------------------------------------------------------
$ 614,715
- ---------------------------------------------------------------------------
Insured-Transportation -- 9.1%
- ---------------------------------------------------------------------------
$4,500 Alabama State Docks Department, (MBIA),
(AMT), 6.30%, 10/1/21 $ 4,655,249
1,000 Huntsville-Madison County Airport,
(AMT), (MBIA), 5.40%, 7/1/19 954,160
2,000 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/16 806,320
1,000 Puerto Rico Highway and Transportation
Authority, (AMBAC), 5.00%, 7/1/28 915,240
- ---------------------------------------------------------------------------
$ 7,330,969
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 12.9%
- ---------------------------------------------------------------------------
$2,050 Bessemer, Water, (AMBAC), 5.75%, 7/1/26 $ 2,042,866
3,500 Jefferson County, Sewer, (FGIC),
5.00%, 2/1/33 3,076,885
1,000 Limestone County Water and Sewer
Authority, (AMBAC), 5.00%, 12/1/24 900,030
3,075 Prichard Water and Sewer, (AMBAC),
6.125%, 11/15/14 3,263,744
1,195 Warrior River, Water Authority, (FSA),
5.25%, 8/1/23 1,124,459
- ---------------------------------------------------------------------------
$10,407,984
- ---------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 0.6%
- ---------------------------------------------------------------------------
$ 500 Puerto Rico, (Guaynabo Municipal
Government Center Lease),
5.625%, 7/1/22 $ 484,960
- ---------------------------------------------------------------------------
$ 484,960
- ---------------------------------------------------------------------------
Nursing Home -- 1.2%
- ---------------------------------------------------------------------------
$ 325 Fairhope Midtown Medical Clinic Board,
(Beverly Enterprises), 6.375%, 6/1/09 $ 319,075
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Nursing Home (continued)
- ---------------------------------------------------------------------------
$ 670 Mobile, Midtown Medical Clinic Board,
(Beverly Enterprises), 7.00%, 4/1/07 $ 672,117
- ---------------------------------------------------------------------------
$ 991,192
- ---------------------------------------------------------------------------
Special Tax Revenue -- 0.3%
- ---------------------------------------------------------------------------
$ 250 Puerto Rico Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) $ 208,290
- ---------------------------------------------------------------------------
$ 208,290
- ---------------------------------------------------------------------------
Transportation -- 2.5%
- ---------------------------------------------------------------------------
$1,000 Puerto Rico Highway and Transportation
Authority, 4.75%, 7/1/38 $ 845,930
800 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/22 729,392
500 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/38 442,310
- ---------------------------------------------------------------------------
$ 2,017,632
- ---------------------------------------------------------------------------
Water and Sewer -- 6.9%
- ---------------------------------------------------------------------------
$ 750 Birmingham, Water and Sewer,
4.75%, 1/1/21 $ 654,675
4,000 Birmingham, Water and Sewer,
4.75%, 1/1/29 3,393,560
1,500 Moulton City, Water, 6.30%, 1/1/18 1,518,150
- ---------------------------------------------------------------------------
$ 5,566,385
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $79,721,443) $80,703,489
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Alabama
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 August 31, 1999, 61.2% of securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.7% to 24.1% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
49
<PAGE>
ARKANSAS MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Education -- 5.5%
- ---------------------------------------------------------------------------
$2,250 Conway, Public Facilities Board,
(Hendrix College), 6.00%, 10/1/26 $ 2,295,968
500 University of Arkansas, 5.00%, 9/1/17 463,310
- ---------------------------------------------------------------------------
$ 2,759,278
- ---------------------------------------------------------------------------
Electric Utilities -- 4.8%
- ---------------------------------------------------------------------------
$ 550 Jefferson, Pollution Control, (Arkansas
Power and Light), 6.30%, 6/1/18 $ 561,737
500 Pope County, Pollution Control,
(Arkansas Power and Light),
6.30%, 12/1/16 509,140
1,000 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 368,950
1,050 Puerto Rico Electric Power Authority,
5.00%, 7/1/28 944,423
- ---------------------------------------------------------------------------
$ 2,384,250
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 1.2%
- ---------------------------------------------------------------------------
$ 500 Harrison, Residential Housing Facility
Board, Single Family Mortgage, (FGIC),
Escrowed to Maturity, 7.40%, 9/1/11 $ 594,080
- ---------------------------------------------------------------------------
$ 594,080
- ---------------------------------------------------------------------------
General Obligations -- 3.5%
- ---------------------------------------------------------------------------
$2,750 Arkansas State College Savings,
0.00%, 6/1/14 $ 1,224,685
500 Puerto Rico, 0.00%, 7/1/16 196,045
1,000 Puerto Rico, 0.00%, 7/1/18 347,620
- ---------------------------------------------------------------------------
$ 1,768,350
- ---------------------------------------------------------------------------
Hospital -- 14.5%
- ---------------------------------------------------------------------------
$1,000 Arkansas Development Finance Authority,
(White River Medical Center),
5.60%, 6/1/24 $ 922,100
1,500 Baxter County, Community Hospital
District, 5.625%, 9/1/28 1,360,350
1,125 Little Rock, Health Facilities Board,
(Baptist Medical Center),
6.80%, 11/1/05 1,238,051
1,500 Paragould, Hospital, 6.375%, 10/1/17 1,519,995
2,250 Pulaski County, (Children's Hospital),
6.20%, 3/1/22 2,256,750
- ---------------------------------------------------------------------------
$ 7,297,246
- ---------------------------------------------------------------------------
Housing -- 14.9%
- ---------------------------------------------------------------------------
$3,000 Arkansas Development Finance Authority,
0.00%, 12/1/11 $ 1,156,560
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Housing (continued)
- ---------------------------------------------------------------------------
$ 500 Arkansas Development Finance Authority,
MFMR, (Park Apartments), (AMT),
5.95%, 12/1/28 $ 472,875
1,100 Arkansas Development Finance Authority,
Single Family Mortgage, (GNMA), (AMT),
5.80%, 6/1/25 1,079,705
760 Arkansas Development Finance Authority,
Single Family Mortgage, (GNMA), (AMT),
7.45%, 1/1/27 821,575
3,270 Arkansas Development Finance Authority,
Single Family Mortgage, (GNMA/FNMA),
(AMT), 6.70%, 7/1/27 3,421,433
540 North Little Rock, Residential Housing
Facilities, (Parkstone Place),
6.50%, 8/1/21 529,465
- ---------------------------------------------------------------------------
$ 7,481,613
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 15.8%
- ---------------------------------------------------------------------------
$ 750 Arkansas Development Finance Authority,
(Intelectron, Inc.), (AMT),
6.00%, 10/1/11 $ 757,485
2,350 Baxter, (Aeroquip Corp.),
5.80%, 10/1/13(1) 2,373,547
2,500 Blytheville, Solid Waste Recycling and
Sewer Treatment, (Nucor Corp.), (AMT),
6.90%, 12/1/21(1) 2,633,275
500 Camden, (International Paper Co.),
5.70%, 9/1/12(2) 502,510
1,000 Little River County, (Georgia-Pacific
Corp.), (AMT), 5.60%, 10/1/26 913,520
775 Pine Bluff, Solid Waste Disposal,
(International Paper), (AMT),
5.55%, 10/1/17 744,217
- ---------------------------------------------------------------------------
$ 7,924,554
- ---------------------------------------------------------------------------
Insured-Education -- 2.9%
- ---------------------------------------------------------------------------
$1,000 Arkansas State University, (Consolidated
Building System), (AMBAC),
5.10%, 4/1/24 $ 939,340
500 University of Central Arkansas, (AMBAC),
6.125%, 4/1/26 518,530
- ---------------------------------------------------------------------------
$ 1,457,870
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 6.8%
- ---------------------------------------------------------------------------
$ 250 North Little Rock, Electric System,
(MBIA), 6.50%, 7/1/10 $ 278,945
2,390 North Little Rock, Electric System,
(MBIA), 6.50%, 7/1/15 2,671,278
450 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable Rate,
7/1/03(3) 487,688
- ---------------------------------------------------------------------------
$ 3,437,911
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
50
<PAGE>
ARKANSAS MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-General Obligations -- 0.4%
- ---------------------------------------------------------------------------
$ 500 Arkansas State College Savings, (FGIC),
0.00%, 6/1/17 $ 183,745
- ---------------------------------------------------------------------------
$ 183,745
- ---------------------------------------------------------------------------
Insured-Hospital -- 7.1%
- ---------------------------------------------------------------------------
$2,610 Jonesboro, Residential Housing and
Health Care Facilities Board Hospital,
(Saint Bernard Regional Medical Center),
(AMBAC), 5.90%, 7/1/16 $ 2,659,928
400 Saline County, Retirement Housing and
Healthcare Facilities Board, (Evan
Lutheran Good Samaritan), (AMBAC),
5.80%, 5/1/11 413,436
500 Saline County, Retirement Housing and
Healthcare Facilities Board, (Evan
Lutheran Good Samaritan), (AMBAC),
6.00%, 6/1/18 508,315
- ---------------------------------------------------------------------------
$ 3,581,679
- ---------------------------------------------------------------------------
Insured-Transportation -- 0.6%
- ---------------------------------------------------------------------------
$ 300 Little Rock, Airport, (FSA),
5.25%, 11/1/19(2) $ 285,816
- ---------------------------------------------------------------------------
$ 285,816
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 3.5%
- ---------------------------------------------------------------------------
$1,250 Arkansas Development Finance Authority,
Wastewater System, (MBIA),
5.40%, 12/1/15 $ 1,248,688
500 Texarkana, Water and Sewer, (FGIC),
5.40%, 9/1/15 496,350
- ---------------------------------------------------------------------------
$ 1,745,038
- ---------------------------------------------------------------------------
Nursing Home -- 2.1%
- ---------------------------------------------------------------------------
$1,000 Little Rock, Health Facilities Board,
(Baptist Medical Center-Parkway
Village), 7.00%, 10/1/17 $ 1,055,340
- ---------------------------------------------------------------------------
$ 1,055,340
- ---------------------------------------------------------------------------
Pooled Loans -- 2.7%
- ---------------------------------------------------------------------------
$ 700 Arkansas State Student Loan Authority,
(AMT), 6.25%, 6/1/10 $ 712,040
610 Arkansas State Student Loan Authority,
(AMT), 7.25%, 6/1/09 672,940
- ---------------------------------------------------------------------------
$ 1,384,980
- ---------------------------------------------------------------------------
Special Tax Revenue -- 4.7%
- ---------------------------------------------------------------------------
$2,000 Little Rock, Hotel and Restaurant Gross
Receipts Tax, 7.375%, 8/1/15 $ 2,353,120
- ---------------------------------------------------------------------------
$ 2,353,120
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Transportation -- 1.7%
- ---------------------------------------------------------------------------
$ 750 Northwest Arkansas Regional Airport
Authority, (AMT), 7.625%, 2/1/27 $ 833,153
- ---------------------------------------------------------------------------
$ 833,153
- ---------------------------------------------------------------------------
Water and Sewer -- 7.3%
- ---------------------------------------------------------------------------
$1,000 Arkansas Development Finance Authority,
(Waste Water System Revenue),
5.00%, 6/1/22 $ 910,700
1,250 Little Rock, Sewer, 5.50%, 8/1/14 1,250,900
1,500 South Sebastian County, Water Users
Association, 6.15%, 6/1/23 1,506,735
- ---------------------------------------------------------------------------
$ 3,668,335
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $49,436,920) $50,196,358
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Arkansas
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 August 31, 1999, 22.5% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 1.5% to 10.0% of total investments.
(1) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(2) When-issued security.
(3) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
51
<PAGE>
GEORGIA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Electric Utilities -- 12.1%
- ---------------------------------------------------------------------------
$1,250 Burke County, Development Authority,
(Georgia Power Co.), (AMT),
5.45%, 5/1/34(1) $ 1,142,463
1,000 Georgia Municipal Electric Power
Authority, 0.00%, 1/1/12 482,100
2,000 Georgia Municipal Electric Power
Authority, 8.25%, 1/1/11 2,469,600
1,000 Monroe County, Development Authority
Pollution Control, (Gulf Power Scherer),
6.30%, 9/1/24 1,016,000
2,000 Monroe County, Development Authority
Pollution Control, (Ogelthorpe Power),
6.55%, 1/1/06 2,162,180
1,000 Monroe County, Development Authority
Pollution Control, (Ogelthorpe Power),
6.80%, 1/1/12 1,117,400
665 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 245,352
- ---------------------------------------------------------------------------
$ 8,635,095
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 4.5%
- ---------------------------------------------------------------------------
$ 500 Puerto Rico, "RIBS", (AMBAC),
Prerefunded to 7/1/02, Variable Rate,
7/1/15(2)(3) $ 560,090
2,500 Savannah, (Saint Josephs Hospital),
Prerefunded to 7/1/03, 6.20%, 7/1/23 2,693,300
- ---------------------------------------------------------------------------
$ 3,253,390
- ---------------------------------------------------------------------------
General Obligations -- 3.5%
- ---------------------------------------------------------------------------
$ 300 Alpharetta, 6.50%, 5/1/10 $ 332,661
500 Georgia State, 6.30%, 3/1/08 551,515
450 Paulding County School District,
6.625%, 2/1/08 503,321
1,000 Puerto Rico Aqueduct and Sewer
Authority, 6.25%, 7/1/12 1,090,970
- ---------------------------------------------------------------------------
$ 2,478,467
- ---------------------------------------------------------------------------
Hospital -- 4.9%
- ---------------------------------------------------------------------------
$1,000 Baldwin County Hospital Authority,
(Oconee Regional Medical Center),
5.375%, 12/1/28 $ 871,020
800 Forsyth County, Hospital Authority
Revenue, (Georgia Baptist Health Care
System), 6.375%, 10/1/28 740,960
1,785 Toombs County Hospital Authority, (Dr.
John M. Meadows Memorial),
7.00%, 12/1/17 1,875,696
- ---------------------------------------------------------------------------
$ 3,487,676
- ---------------------------------------------------------------------------
Housing -- 5.9%
- ---------------------------------------------------------------------------
$ 735 Atlanta Urban Residential Finance
Authority, (New Community John Hope),
7.25%, 6/1/07 $ 724,644
1,990 Georgia Housing and Finance Authority,
(AMT), 5.85%, 12/1/28 1,973,264
1,450 Georgia Housing and Finance Authority,
(AMT), 6.875%, 12/1/20 1,506,434
- ---------------------------------------------------------------------------
$ 4,204,342
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 18.0%
- ---------------------------------------------------------------------------
$2,500 Albany Dougherty, Payroll Development
Authority, Solid Waste Disposal,
(Proctor and Gamble), (AMT),
5.20%, 5/15/28 $ 2,286,375
1,000 Brunswick and Glynn County Development
Authority, (Georgia-Pacific Corp.),
5.55%, 3/1/26 920,930
500 Camden County, Joint Development
Authority, PCR, (Carbide Corp.),
5.00%, 1/1/12 473,115
1,000 Cartersville Development Authority,
(Anheuser-Busch), (AMT), 6.125%, 5/1/27 1,011,950
1,000 Cartersville Development Authority,
(Anheuser-Busch), (AMT),
7.375%, 5/1/09(1) 1,153,810
1,500 Effingham County, Solid Waste Disposal,
(Fort James), (AMT), 5.625%, 7/1/18 1,419,120
1,250 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,281,063
500 Savannah Economic Development Authority,
(Hershey Foods), 6.60%, 6/1/12 525,630
750 Savannah Economic Development Authority,
(Union Camp Corp.), 6.80%, 2/1/12 790,658
1,190 Savannah EDA, (Intercat-Savannah, Inc.),
(AMT), 9.00%, 1/1/15 920,179
2,000 Vienna Water and Sewer, (Cargill),
(AMT), 6.00%, 9/1/14 2,037,440
- ---------------------------------------------------------------------------
$12,820,270
- ---------------------------------------------------------------------------
Insured-Education -- 1.3%
- ---------------------------------------------------------------------------
$1,000 Fulton County, Development Authority,
(Georgia Technology Research Corp.),
(MBIA), 5.00%, 9/1/27 $ 903,290
- ---------------------------------------------------------------------------
$ 903,290
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 7.9%
- ---------------------------------------------------------------------------
$1,000 Georgia Municipal Electric Power
Authority, (FGIC), 5.50%, 1/1/12 $ 1,018,310
750 Georgia Municipal Electric Power
Authority, (MBIA), 0.00%, 1/1/07 522,878
3,100 Georgia Municipal Electric Power
Authority, (MBIA), 5.50%, 1/1/20 3,115,251
900 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable Rate,
7/1/03(2) 975,375
- ---------------------------------------------------------------------------
$ 5,631,814
- ---------------------------------------------------------------------------
Insured-Hospital -- 10.3%
- ---------------------------------------------------------------------------
$1,500 Cobb County, Hospital Authority,
(AMBAC), 4.75%, 4/1/26 $ 1,268,985
2,225 Gainsville and Hall County, (North East
Healthcare), (MBIA), 6.00%, 10/1/25 2,264,027
2,000 Medical Center Hospital Authority,
(Columbus Regional Healthcare), (MBIA),
6.40%, 8/1/06 2,138,960
1,500 Medical Center, Hospital Authority
Floats, (MBIA), Variable Rate, 8/1/10(2) 1,676,250
- ---------------------------------------------------------------------------
$ 7,348,222
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
52
<PAGE>
GEORGIA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Housing -- 1.5%
- ---------------------------------------------------------------------------
$1,145 Macon, Multifamily Housing Authority,
(Riverside Gardens), (MBIA),
5.40%, 1/1/24 $ 1,099,269
- ---------------------------------------------------------------------------
$ 1,099,269
- ---------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 1.5%
- ---------------------------------------------------------------------------
$1,000 East Point Building Authority, (FGIC),
6.00%, 2/1/10 $ 1,058,080
- ---------------------------------------------------------------------------
$ 1,058,080
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 6.3%
- ---------------------------------------------------------------------------
$1,000 George L. Smith, (Georgia World Congress
Center-Domed Stadium), (MBIA), (AMT),
5.50%, 7/1/20(4) $ 935,530
1,000 Metropolitan Atlanta Rapid Transit
Authority, (AMBAC), 6.25%, 7/1/11 1,095,090
1,000 Metropolitan Atlanta Rapid Transit
Authority, (AMBAC), 6.25%, 7/1/20 1,086,360
700 Puerto Rico Infrastructure Financing
Authority, (AMBAC), Variable Rate,
7/1/28(2) 524,818
1,000 Puerto Rico Public Finance Corp.,
(AMBAC), Variable Rate, 6/1/26(2)(3) 838,340
- ---------------------------------------------------------------------------
$ 4,480,138
- ---------------------------------------------------------------------------
Insured-Transportation -- 2.2%
- ---------------------------------------------------------------------------
$1,500 Atlanta, Metropolitan Rapid
Transportation Authority, (MBIA),
Variable Rate, 7/1/20(2)(3) $ 1,299,225
750 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/18 267,975
- ---------------------------------------------------------------------------
$ 1,567,200
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 8.3%
- ---------------------------------------------------------------------------
$1,000 Cherokee County, Water and Sewer
Authority, (FGIC), 4.75%, 8/1/28 $ 848,020
1,975 Cherokee County, Water and Sewer
Authority, (MBIA), 6.875%, 8/1/13(1) 2,097,746
3,500 Fulton County, Water and Sewer, (FGIC),
4.75%, 1/1/28 2,989,349
- ---------------------------------------------------------------------------
$ 5,935,115
- ---------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 1.9%
- ---------------------------------------------------------------------------
$2,300 Fulton County, Building Authority,
Judicial Center, 0.00%, 1/1/10 $ 1,339,612
- ---------------------------------------------------------------------------
$ 1,339,612
- ---------------------------------------------------------------------------
Miscellaneous -- 1.5%
- ---------------------------------------------------------------------------
$1,000 Atlanta, Downtown Development Authority,
Childcare Facilities, (Central Atlanta
Hospitality Childcare Inc.),
8.00%, 1/1/26 $ 1,077,190
- ---------------------------------------------------------------------------
$ 1,077,190
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Senior Living / Life Care -- 1.0%
- ---------------------------------------------------------------------------
$1,485 De Kalb County, Private Hospital
Authority, (Atlanta, Inc.),
8.50%, 3/1/25(1) $ 742,500
- ---------------------------------------------------------------------------
$ 742,500
- ---------------------------------------------------------------------------
Solid Waste -- 1.4%
- ---------------------------------------------------------------------------
$1,000 Savannah Resource Recovery, (Savannah
Energy Systems Co.), 6.30%, 12/1/06 $ 1,042,490
- ---------------------------------------------------------------------------
$ 1,042,490
- ---------------------------------------------------------------------------
Transportation -- 4.7%
- ---------------------------------------------------------------------------
$3,750 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 $ 3,334,199
- ---------------------------------------------------------------------------
$ 3,334,199
- ---------------------------------------------------------------------------
Water and Sewer -- 1.3%
- ---------------------------------------------------------------------------
$1,000 De Kalb County, Water and Sewer,
5.00%, 10/1/28 $ 899,140
- ---------------------------------------------------------------------------
$ 899,140
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $71,244,303) $71,337,499
- ---------------------------------------------------------------------------
</TABLE>
AMT -- Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Georgia
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 August 31, 1999, 40.1% 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 1.4% to 22.5% 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) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(4) When-issued security.
SEE NOTES TO FINANCIAL STATEMENTS
53
<PAGE>
KENTUCKY MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Assisted Living -- 3.4%
- ---------------------------------------------------------------------------
$3,000 Kenton County, (Highland Terrace),
(AMT), FHA, 6.95%, 12/1/26 $ 3,263,730
- ---------------------------------------------------------------------------
$ 3,263,730
- ---------------------------------------------------------------------------
Electric Utilities -- 1.9%
- ---------------------------------------------------------------------------
$3,500 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 $ 1,291,325
500 Puerto Rico Electric Power Authority,
5.50%, 7/1/25 484,225
- ---------------------------------------------------------------------------
$ 1,775,550
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 8.9%
- ---------------------------------------------------------------------------
$1,000 Elsmmere, (Courtaulds Pkg, Inc.),
Prerefunded to 4/1/05, 6.75%, 4/1/10 $ 1,109,550
1,200 Florence, Housing Facilities, (Blue
Grass Housing), Prerefunded to 7/1/07,
7.625%, 5/1/27 1,412,772
2,000 Louisville and Jefferson County,
Metropolitan Sewer District, (AMBAC),
Prerefunded to 11/15/04, 6.75%, 5/15/25 2,242,800
1,250 Puerto Rico Electric Power Authority,
Prerefunded to 7/1/04, 6.375%, 7/1/24 1,378,625
1,600 Puerto Rico Telephone Authority, (MBIA),
Prerefunded to 1/1/03, Variable Rate,
1/16/15(1) 1,724,000
545 Russell, Health Systems, Prerefunded to
7/1/06, 8.10%, 7/1/15 649,253
- ---------------------------------------------------------------------------
$ 8,517,000
- ---------------------------------------------------------------------------
General Obligations -- 2.3%
- ---------------------------------------------------------------------------
$1,000 Lexington-Fayette Urban County, (County
Detention Center), 4.75%, 5/1/20 $ 883,770
1,100 Louisville, 4.50%, 12/1/18 935,946
1,125 Puerto Rico, 0.00%, 7/1/17 415,069
- ---------------------------------------------------------------------------
$ 2,234,785
- ---------------------------------------------------------------------------
Hospital -- 0.5%
- ---------------------------------------------------------------------------
$ 430 Russell, Health Systems, 8.10%, 7/1/15 $ 496,057
- ---------------------------------------------------------------------------
$ 496,057
- ---------------------------------------------------------------------------
Housing -- 6.3%
- ---------------------------------------------------------------------------
$1,405 Boone County, Multifamily Housing
Mortgage, (Walnut Creek Apartments),
FHA, 7.00%, 1/1/27 $ 1,465,738
2,000 Kentucky Housing Corp., MFMR, (AMT),
6.30%, 1/1/28 2,075,160
2,000 Kentucky Housing Corp., SFMR, (AMT),
6.25%, 7/1/28 2,060,080
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Housing (continued)
- ---------------------------------------------------------------------------
$ 365 Kentucky Housing Corp., SFMR, FHA,
(AMT), 7.45%, 1/1/23 $ 380,308
- ---------------------------------------------------------------------------
$ 5,981,286
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 24.5%
- ---------------------------------------------------------------------------
$2,425 Ashland, Solid Waste Disposal, (Ashland
Oil), (AMT), 7.125%, 2/1/22 $ 2,575,059
2,355 Ashland, Solid Waste Disposal, (Ashland
Oil), (AMT), 7.20%, 10/1/20 2,480,192
3,075 Fulton County, Industrial Building,
(Chic Jeans), (AMT), 7.50%, 2/1/10 3,069,650
1,500 Hancock County, (Southwire Co.), (AMT),
7.75%, 7/1/26 1,563,855
2,370 Hancock County, Solid Waste Disposal,
(Williamette Corp.), (AMT),
6.60%, 5/1/26 2,528,221
3,000 Henderson County, Solid Waste Disposal,
(MacMillan Bloedel), (AMT),
7.00%, 3/1/25 3,156,540
1,000 Jefferson County, Pollution Control,
(E.I. du Pont de Nemours),
6.30%, 7/1/12 1,061,440
985 Owensboro County, (KMart Corp.),
6.80%, 12/1/07 1,020,519
1,500 Perry County, Solid Waste Disposal, (TJI
International), (AMT), 6.80%, 5/1/26 1,591,140
915 Powderly, (KMart Corp.), 6.90%, 3/1/07 955,050
500 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.30%, 6/1/23 510,185
2,820 Wickliffe, Solid Waste Disposal,
(Westvaco Corp.), (AMT), 6.375%, 4/1/26 2,950,538
- ---------------------------------------------------------------------------
$23,462,389
- ---------------------------------------------------------------------------
Insured-Education -- 0.8%
- ---------------------------------------------------------------------------
$ 700 Northern Kentucky University Educational
Buildings, (AMBAC), 6.25%, 5/1/12 $ 748,055
- ---------------------------------------------------------------------------
$ 748,055
- ---------------------------------------------------------------------------
Insured-General Obligations -- 1.3%
- ---------------------------------------------------------------------------
$1,500 Puerto Rico Commonwealth, Public
Improvement, (AMBAC), 4.50%, 7/1/23 $ 1,262,535
- ---------------------------------------------------------------------------
$ 1,262,535
- ---------------------------------------------------------------------------
Insured-Hospital -- 9.2%
- ---------------------------------------------------------------------------
$2,500 Daviess County, (ODCH, Inc.), (MBIA),
6.25%, 8/1/22 $ 2,595,475
2,500 Jefferson County, Health Facilities
Authority, (Jewish Hospital), (AMBAC),
6.50%, 5/1/15 2,648,725
750 Jefferson County, Health Facilities
Authority, (Jewish Hospital), (AMBAC),
6.55%, 5/1/22 795,548
2,500 Jefferson County, Health Facilities
Authority, (MBIA), (Alliant Health
System), 5.125%, 10/1/27 2,249,825
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
54
<PAGE>
KENTUCKY MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Hospital (continued)
- ---------------------------------------------------------------------------
$ 500 Jefferson County, Health Facilities
Authority, (University Medical Center),
(MBIA), 5.25%, 7/1/22 $ 465,095
- ---------------------------------------------------------------------------
$ 8,754,668
- ---------------------------------------------------------------------------
Insured-Transportation -- 13.5%
- ---------------------------------------------------------------------------
$1,000 Kenton County Airport, (FSA), (AMT),
6.30%, 3/1/15 $ 1,042,990
3,000 Kenton County Airport, (MBIA), (AMT),
6.30%, 3/1/15 3,154,230
1,195 Kenton County Airport, (MBIA), (AMT),
6.45%, 3/1/15 1,275,304
1,000 Kentucky EDA, (State Turnpike
Revitalization), (FGIC), 0.00%, 7/1/10 584,200
1,300 Louisville and Jefferson County,
Regional Airport Authority, (MBIA),
(AMT), 5.00%, 7/1/25 1,148,095
3,000 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/16 1,209,480
5,000 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/18 1,786,500
3,000 Puerto Rico Highway and Transportation
Authority, (AMBAC), 5.00%, 7/1/28 2,745,720
- ---------------------------------------------------------------------------
$12,946,519
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 8.6%
- ---------------------------------------------------------------------------
$2,000 Kenton County, Water District
Waterworks, (FGIC), 6.00%, 2/1/17 $ 2,078,000
2,000 Louisville and Jefferson County,
Metropolitan Sewer District and Drainage
System Revenue, (FGIC), 4.75%, 5/15/28 1,696,840
1,000 Louisville and Jefferson County,
Metropolitan Sewer District, (MBIA),
5.20%, 5/15/25 929,700
3,415 Louisville and Jefferson County,
Metropolitan Sewer District, (MBIA),
6.25%, 5/15/26 3,566,727
- ---------------------------------------------------------------------------
$ 8,271,267
- ---------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 10.6%
- ---------------------------------------------------------------------------
$4,990 Jefferson County, (Capital Projects
Corp.), 0.00%, 8/15/15 $ 2,000,940
1,000 Kenton County, (Public Properties
Corp.), 5.00%, 3/1/29 893,410
1,030 Kentucky, League of Cities Funding
Trust, Floating Indebtedness
Certificates of Participation,
6.15%, 8/1/13 1,084,940
1,000 Mount Sterling, Lease, 6.15%, 3/1/13 1,034,560
3,000 Mount Sterling, Lease, 6.20%, 3/1/18 3,079,200
2,000 Owensboro County, Airport Lease,
5.875%, 6/1/15 2,009,660
- ---------------------------------------------------------------------------
$10,102,710
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Solid Waste -- 1.3%
- ---------------------------------------------------------------------------
$1,200 Morgantown, Solid Waste Revenue, (AMT),
7.45%, 5/1/22 $ 1,228,596
- ---------------------------------------------------------------------------
$ 1,228,596
- ---------------------------------------------------------------------------
Special Tax Revenue -- 0.2%
- ---------------------------------------------------------------------------
$ 250 Puerto Rico Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) $ 208,290
- ---------------------------------------------------------------------------
$ 208,290
- ---------------------------------------------------------------------------
Transportation -- 6.0%
- ---------------------------------------------------------------------------
$3,400 Kenton County Airport, (Delta Airlines),
(AMT), 6.125%, 2/1/22 $ 3,328,837
1,500 Kenton County Airport, (Delta Airlines),
(AMT), 7.125%, 2/1/21 1,584,690
250 Kenton County Airport, (Delta Airlines),
(AMT), 7.50%, 2/1/12 265,365
500 Kenton County Airport, (Delta Airlines),
(AMT), 7.50%, 2/1/20 530,730
- ---------------------------------------------------------------------------
$ 5,709,622
- ---------------------------------------------------------------------------
Water and Sewer -- 0.7%
- ---------------------------------------------------------------------------
$ 650 Harden County, Water District,
6.50%, 9/1/12 $ 695,533
- ---------------------------------------------------------------------------
$ 695,533
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $92,608,640) $95,658,592
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Kentucky
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 August 31, 1999, 37.6% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 1.1% to 17.9% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
55
<PAGE>
LOUISIANA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Electric Utilities -- 2.9%
- ---------------------------------------------------------------------------
$2,500 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 $ 922,375
- ---------------------------------------------------------------------------
$ 922,375
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 4.0%
- ---------------------------------------------------------------------------
$2,475 Jefferson Parish, Home Mortgage
Authority, Single Family, (FGIC),
Escrowed to Maturity, 0.00%, 5/1/17 $ 906,023
100 Louisiana Public Facilities Authority,
(Our Lady of the Lake Medical Center),
(MBIA), Prerefunded to 5/31/02, Variable
Rate, 12/1/14(1) 109,875
250 Puerto Rico, "RIBS", (AMBAC),
Prerefunded to 7/1/02, Variable Rate,
7/1/15(1)(2) 280,045
- ---------------------------------------------------------------------------
$ 1,295,943
- ---------------------------------------------------------------------------
Hospital -- 7.7%
- ---------------------------------------------------------------------------
$1,000 Lafourche Parish, Hospital Service
District, 6.00%, 10/1/23 $ 979,990
730 Louisiana Public Facilities Authority,
(General Health Systems),
6.80%, 11/1/16 770,902
500 Louisiana Public Facilities Authority,
(Tuoro Infirmary), 5.625%, 8/15/29 457,895
250 Saint Tammany Parish, Hospital Service
District, 6.50%, 7/1/22 268,140
- ---------------------------------------------------------------------------
$ 2,476,927
- ---------------------------------------------------------------------------
Housing -- 17.5%
- ---------------------------------------------------------------------------
$ 300 Guam Housing Corp., Single Family,
5.75%, 9/1/31 $ 292,716
475 Louisiana HFA, Single Family,
6.375%, 12/1/27 491,540
560 Louisiana HFA, Single Family, (GNMA),
(AMT), 6.30%, 12/1/27 576,234
915 Louisiana HFA, Single Family, (GNMA),
(AMT), 8.00%, 3/1/25 1,017,700
2,000 Louisiana HFA, Single Family,
(GNMA/FNMA), 0.00%, 6/1/27 404,840
500 Louisiana HFA, Single Family,
(GNMA/FNMA), (AMT), 6.55%, 12/1/26 518,665
400 Louisiana Public Facilities Authority,
(Eden Point), 6.25%, 3/1/34 376,920
1,890 New Orleans Home Mortgage Authority,
Single Family, (GNMA/FNMA), (AMT),
6.30%, 6/1/28 1,975,673
- ---------------------------------------------------------------------------
$ 5,654,288
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 13.7%
- ---------------------------------------------------------------------------
$1,000 Bastrop, (International Paper Co.),
(AMT), 6.60%, 3/1/19 $ 1,046,860
1,000 East Baton Rouge Parish,
(Georgia-Pacific Corp.), (AMT),
5.35%, 9/1/11 941,210
1,000 Louisiana Offshore Terminal Authority,
Deepwater Port Revenue, (Loop, LLC),
5.20%, 10/1/18 926,350
1,000 Saint Bernard Parish, (Mobil Oil),
5.90%, 11/1/26 1,017,960
500 South Louisiana Port Commission,
(Cargill, Inc.), 5.85%, 4/1/17 502,335
- ---------------------------------------------------------------------------
$ 4,434,715
- ---------------------------------------------------------------------------
Insured-Economic Development Revenue -- 1.3%
- ---------------------------------------------------------------------------
$ 500 Louisiana Government Environmental
Facilities and Community Development
Authority Revenue, (Capital and
Equipment Acquisition), (AMBAC),
4.50%, 12/1/18 $ 428,025
- ---------------------------------------------------------------------------
$ 428,025
- ---------------------------------------------------------------------------
Insured-Education -- 6.2%
- ---------------------------------------------------------------------------
$ 750 Louisiana Public Facilities Authority,
(Dillard University), (AMBAC),
5.00%, 2/1/28 $ 669,278
250 Louisiana Public Facilities Authority,
(Tulane University), (MBIA),
5.00%, 11/15/27 223,100
1,100 Louisiana State University, (FGIC),
5.75%, 7/1/14 1,113,838
- ---------------------------------------------------------------------------
$ 2,006,216
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 2.1%
- ---------------------------------------------------------------------------
$1,750 Puerto Rico Electric Power Authority,
(MBIA), 0.00%, 7/1/17 $ 663,845
- ---------------------------------------------------------------------------
$ 663,845
- ---------------------------------------------------------------------------
Insured-General Obligations -- 10.3%
- ---------------------------------------------------------------------------
$3,000 New Orleans, (AMBAC), 0.00%, 9/1/15 $ 1,230,150
4,000 New Orleans, (AMBAC), 0.00%, 9/1/16 1,538,560
1,500 New Orleans, (AMBAC), 0.00%, 9/1/17 541,620
- ---------------------------------------------------------------------------
$ 3,310,330
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
56
<PAGE>
LOUISIANA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Hospital -- 4.5%
- ---------------------------------------------------------------------------
$1,000 Ouachita Parish, (Glenwood Medical
Center), (FSA), 5.75%, 5/15/21 $ 990,730
500 Terrebonne Parish, Hospital Service
District No. 1, (Terrebonne General
Medical Center), (AMBAC),
5.375%, 4/1/28 468,170
- ---------------------------------------------------------------------------
$ 1,458,900
- ---------------------------------------------------------------------------
Insured-Housing -- 0.1%
- ---------------------------------------------------------------------------
$ 195 East Baton Rouge Mortgage Finance
Authority, Single Family, (MBIA),
(GNMA/FNMA), 0.00%, 10/1/15 $ 33,717
- ---------------------------------------------------------------------------
$ 33,717
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 4.5%
- ---------------------------------------------------------------------------
$ 345 Baton Rouge, Public Improvement, (FGIC),
4.75%, 8/1/17 $ 307,247
500 Lafayette Parish, School District,
(FGIC), 4.60%, 4/1/18 434,075
500 Louisiana Stadium and Exposition,
(FGIC), 5.00%, 7/1/26 447,425
350 Puerto Rico Infrastructure Financing
Authority, (AMBAC), Variable Rate,
7/1/28(1) 262,409
- ---------------------------------------------------------------------------
$ 1,451,156
- ---------------------------------------------------------------------------
Senior Living / Life Care -- 13.8%
- ---------------------------------------------------------------------------
$ 500 Louisiana HFA, (HCC Assisted Living
Group 1), (AMT), 9.00%, 3/1/25 $ 543,775
500 Louisiana HFA, (Saint Dominic Assisted
Care Facility), (GNMA), 6.85%, 9/1/25 532,230
1,995 Louisiana HFA, (Saint Joseph's Manor
Retirement Center), (GNMA),
7.80%, 12/1/35 2,185,861
1,150 Louisiana PFA, (Glen Retirement System),
6.70%, 12/1/25 1,188,353
- ---------------------------------------------------------------------------
$ 4,450,219
- ---------------------------------------------------------------------------
Special Tax Revenue -- 1.2%
- ---------------------------------------------------------------------------
$ 450 Puerto Rico Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) $ 374,922
- ---------------------------------------------------------------------------
$ 374,922
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Transportation -- 10.2%
- ---------------------------------------------------------------------------
$ 500 Mississippi River Bridge Authority,
Bridge Revenue, 6.75%, 11/1/12 $ 538,655
1,700 Puerto Rico Highway and Transportation
Authority, 4.75%, 7/1/38 1,438,081
1,500 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/38 1,326,930
- ---------------------------------------------------------------------------
$ 3,303,666
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $32,434,698) $32,265,244
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Louisiana
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 August 31, 1999, 33.0% 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 by financial
institution ranged from 3.1% to 16.8% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
57
<PAGE>
MARYLAND MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Cogeneration -- 1.4%
- ---------------------------------------------------------------------------
$1,250 Maryland Energy Cogeneration, (AES
Warrior Run), (AMT), 7.40%, 9/1/19 $ 1,326,913
- ---------------------------------------------------------------------------
$ 1,326,913
- ---------------------------------------------------------------------------
Education -- 4.2%
- ---------------------------------------------------------------------------
$1,500 Annapolis, EDA, (Saint Johns College),
5.50%, 10/1/23 $ 1,409,550
1,000 Maryland EDA, (Collegiate Housing -
Courtyard), 5.75%, 6/1/24 953,030
750 Maryland EDA, (Collegiate Housing -
Salisbury), 6.00%, 6/1/30 727,418
500 Montgomery County, EDA, (Bullis School),
5.60%, 11/1/18 483,150
350 Montgomery County, EDA, (Bullis School),
5.60%, 11/1/22 336,585
- ---------------------------------------------------------------------------
$ 3,909,733
- ---------------------------------------------------------------------------
Electric Utilities -- 7.0%
- ---------------------------------------------------------------------------
$1,500 Calvert, Pollution Control Revenue,
(Baltimore Gas and Electric Co.),
5.55%, 7/15/14 $ 1,504,215
2,000 Guam Power Authority, 5.25%, 10/1/13 1,912,620
750 Guam Power Authority, 6.625%, 10/1/14 836,715
2,225 Prince George's County, Pollution
Control Revenue, (Potomac Electric),
6.375%, 1/15/23 2,317,249
- ---------------------------------------------------------------------------
$ 6,570,799
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 7.2%
- ---------------------------------------------------------------------------
$1,125 Baltimore, SFMR, (Inner Harbor),
Escrowed to Maturity, 8.00%, 12/1/10 $ 1,393,807
1,250 Maryland HEFA, (Howard County General
Hospital), Escrowed to Maturity,
5.50%, 7/1/25 1,246,888
2,500 Maryland HEFA, (Union Hospital of
Cecil), Prerefunded to 7/1/02,
6.70%, 7/1/22 2,703,625
1,365 Maryland HEFA, (Washington Community
Hospital), (AMBAC), Prerefunded to
7/1/02, 6.375%, 7/1/22 1,467,129
- ---------------------------------------------------------------------------
$ 6,811,449
- ---------------------------------------------------------------------------
General Obligations -- 2.2%
- ---------------------------------------------------------------------------
$1,000 Baltimore County, 4.75%, 7/1/13 $ 947,900
600 Puerto Rico, 0.00%, 7/1/16 235,254
500 Puerto Rico, 0.00%, 7/1/18 173,810
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
General Obligations (continued)
- ---------------------------------------------------------------------------
$ 500 Washington, Suburban Sanitary District,
5.625%, 6/1/21 $ 498,085
190 Worcester, Sanitary District,
6.55%, 8/15/17 203,146
- ---------------------------------------------------------------------------
$ 2,058,195
- ---------------------------------------------------------------------------
Hospital -- 9.6%
- ---------------------------------------------------------------------------
$ 470 Berlin, (Atlantic General Hospital),
8.375%, 6/1/22 $ 496,156
900 Maryland HEFA, (Calvert Memorial
Hospital), 5.00%, 7/1/28 804,852
1,000 Maryland HEFA, (Doctors Community
Hospital), 5.50%, 7/1/24 893,250
1,175 Maryland HEFA, (Good Samaritan
Hospital), 5.75%, 7/1/19 1,204,669
3,000 Maryland HEFA, (Johns Hopkins Hospital),
4.50%, 5/15/35 2,447,250
1,000 Maryland HEFA, (Kennedy Krieger Issue),
5.125%, 7/1/22 855,430
1,355 Prince George's County, (Greater
SouthEast Healthcare System),
6.375%, 1/1/13 609,750
3,800 Prince George's County, (Greater
SouthEast Healthcare System),
6.375%, 1/1/23 1,710,000
- ---------------------------------------------------------------------------
$ 9,021,357
- ---------------------------------------------------------------------------
Housing -- 11.2%
- ---------------------------------------------------------------------------
$1,000 Maryland Community Development
Administration Multifamily, FHA, (AMT),
6.70%, 5/15/36 $ 1,060,270
2,985 Maryland Community Development
Administration Single Family, (AMT),
6.75%, 4/1/26 3,087,087
780 Maryland Community Development
Administration Single Family, (AMT),
6.80%, 4/1/22 813,680
740 Maryland Community Development
Administration Single Family, (AMT),
6.80%, 4/1/24 771,953
1,000 Montgomery County, Housing Opportunities
Commission, SFMR, 0.00%, 7/1/28 200,030
2,390 Montgomery County, Housing Opportunities
Commission, SFMR, (AMT), 6.05%, 7/1/27 2,434,072
2,160 Prince George's County, Housing
Authority, (Langely Gardens), (AMT),
5.875%, 2/20/39 2,151,727
- ---------------------------------------------------------------------------
$10,518,819
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
58
<PAGE>
MARYLAND MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Industrial Development Revenue -- 8.8%
- ---------------------------------------------------------------------------
$1,350 Allegany, Pollution Control Revenue,
(Westvaco Corp.), 6.20%, 1/1/08 $ 1,445,729
2,000 Baltimore, Port Facilities,
(Consolidated Coal Sales Co. - E.I. du
Pont de Nemours), 6.50%, 12/1/10 2,146,100
2,000 Baltimore, Port Facilities,
(Consolidated Coal Sales Co. - E.I. du
Pont de Nemours), 6.50%, 10/1/11 2,141,260
1,425 Frederick, EDA, (Cargill, Inc.),
6.30%, 11/1/09 1,526,275
1,000 Maryland EDA, (AFCO Cargo),
6.50%, 7/1/24 1,001,700
- ---------------------------------------------------------------------------
$ 8,261,064
- ---------------------------------------------------------------------------
Insured-Education -- 6.6%
- ---------------------------------------------------------------------------
$ 460 Maryland HEFA, (College Of Notre Dame),
(MBIA), 5.30%, 10/1/18 $ 451,692
4,600 Maryland HEFA, (Loyola College), (MBIA),
5.375%, 10/1/26 4,471,981
1,200 Morgan State University, Academic and
Facilities, (MBIA), 6.10%, 7/1/20 1,286,196
- ---------------------------------------------------------------------------
$ 6,209,869
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 1.2%
- ---------------------------------------------------------------------------
$ 250 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable Rate,
7/1/03(1) $ 270,938
1,000 Puerto Rico Electric Power Authority,
(FSA), 4.75%, 7/1/21 889,550
- ---------------------------------------------------------------------------
$ 1,160,488
- ---------------------------------------------------------------------------
Insured-General Obligations -- 4.0%
- ---------------------------------------------------------------------------
$3,950 Baltimore County, (FSA),
5.25%, 10/15/20 $ 3,786,825
- ---------------------------------------------------------------------------
$ 3,786,825
- ---------------------------------------------------------------------------
Insured-Hospital -- 7.8%
- ---------------------------------------------------------------------------
$ 350 Calvert County, EDA, (Asbury - Solomons
Facility), (MBIA), 5.00%, 1/1/27 $ 318,262
3,000 Maryland HEFA, (Helix Health Issue),
(AMBAC), 5.00%, 7/1/27 2,772,840
990 Maryland HEFA, (Johns Hopkins
Medicine-Howard County General Hospital
Acquisition), (MBIA), 5.00%, 7/1/29 902,276
3,150 Puerto Rico ITEM & EC, (Auxilio Mutuo
Obligated Group), (MBIA), 6.25%, 7/1/24 3,332,542
- ---------------------------------------------------------------------------
$ 7,325,920
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Insured-Housing -- 0.6%
- ---------------------------------------------------------------------------
$ 500 Prince George's County, (Keystone
Apartments), FHA, (MBIA), 6.80%, 7/1/25 $ 523,935
- ---------------------------------------------------------------------------
$ 523,935
- ---------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 2.5%
- ---------------------------------------------------------------------------
$1,000 Maryland Stadium Authority, (AMBAC),
5.60%, 3/1/14 $ 1,014,970
1,300 Maryland Stadium Authority, (AMBAC),
5.80%, 3/1/26 1,320,917
- ---------------------------------------------------------------------------
$ 2,335,887
- ---------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 3.8%
- ---------------------------------------------------------------------------
$3,850 Maryland HEFA, (Medlantic/Helix Issue),
(AMBAC), 5.25%, 8/15/38 $ 3,541,884
- ---------------------------------------------------------------------------
$ 3,541,884
- ---------------------------------------------------------------------------
Insured-Solid Waste -- 5.6%
- ---------------------------------------------------------------------------
$5,000 NE Maryland Solid Waste Disposal,
(MBIA), (AMT), 6.30%, 7/1/16 $ 5,264,299
- ---------------------------------------------------------------------------
$ 5,264,299
- ---------------------------------------------------------------------------
Insured-Transportation -- 4.5%
- ---------------------------------------------------------------------------
$2,000 Baltimore, International Airport,
(FGIC), (AMT), 6.25%, 7/1/14 $ 2,092,980
1,000 Puerto Rico Highway and Transportation
Authority, (AMBAC), 5.00%, 7/1/28 915,240
1,250 Washington, D.C., Metro Area
Transportation, (FGIC), 5.25%, 7/1/14 1,234,075
- ---------------------------------------------------------------------------
$ 4,242,295
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 6.4%
- ---------------------------------------------------------------------------
$1,000 Baltimore, Wastewater, (FGIC),
5.00%, 7/1/22 $ 926,170
1,000 Baltimore, Wastewater, (FGIC),
5.50%, 7/1/26 995,050
2,000 Baltimore, Wastewater, (MBIA),
5.65%, 7/1/20 2,036,760
2,100 Baltimore, Water, (FGIC), 5.50%, 7/1/26 2,089,605
- ---------------------------------------------------------------------------
$ 6,047,585
- ---------------------------------------------------------------------------
Solid Waste -- 1.9%
- ---------------------------------------------------------------------------
$2,000 Northeast Waste Disposal Authority,
Resources Recovery Revenue, (Baltimore
Resco Retrofit), (AMT), 4.75%, 1/1/12 $ 1,746,100
- ---------------------------------------------------------------------------
$ 1,746,100
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
59
<PAGE>
MARYLAND MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Special Tax Revenue -- 1.9%
- ---------------------------------------------------------------------------
$1,000 Frederick County, Urbana Community
Development Authority, 6.625%, 7/1/25 $ 973,380
1,000 Puerto Rico Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) 833,160
- ---------------------------------------------------------------------------
$ 1,806,540
- ---------------------------------------------------------------------------
Transportation -- 0.5%
- ---------------------------------------------------------------------------
$ 500 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 $ 444,560
- ---------------------------------------------------------------------------
$ 444,560
- ---------------------------------------------------------------------------
Water and Sewer -- 1.1%
- ---------------------------------------------------------------------------
$1,000 Maryland Water Quality Financing
Administration Revolving Loan Fund,
6.55%, 9/1/14 $ 1,061,780
- ---------------------------------------------------------------------------
$ 1,061,780
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $96,301,744) $93,976,296
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for the purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Maryland
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 August 31, 1999, 44.6% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 5.3% to 19.8% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
60
<PAGE>
MISSOURI MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 7.7%
- ---------------------------------------------------------------------------
$ 875 Kansas City IDA, (Kingswood United
Methodist Manor), Prerefunded to
11/15/03, 9.00%, 11/15/13 $ 1,032,439
1,000 Lake of The Ozarks, (Community Bridge
Corp.), Prerefunded to 12/1/06,
6.40%, 12/1/25 1,119,260
1,005 Missouri HEFA, (Lake of the Ozarks
General Hospital), Prerefunded to
2/15/06, 6.50%, 2/15/21 1,114,535
575 Missouri HEFA, (Saint Louis Children's),
(MBIA), Escrowed to Maturity,
0.00%, 5/15/08 370,277
500 Puerto Rico, "RIBS", (AMBAC),
Prerefunded to 7/1/02, Variable Rate,
7/1/15(1)(2) 560,090
1,000 Saint Louis County, Mortgage Revenue,
(GNMA), (AMT), Escrowed to Maturity,
5.40%, 1/1/16 982,360
- ---------------------------------------------------------------------------
$ 5,178,961
- ---------------------------------------------------------------------------
Hospital -- 16.2%
- ---------------------------------------------------------------------------
$3,250 Missouri HEFA, (Barnes Jewish
Christian), 5.25%, 5/15/14 $ 3,184,544
1,500 Missouri HEFA, (Childrens Mercy
Hospital), 5.30%, 5/15/28 1,335,420
1,000 Missouri HEFA, (Freeman Health Systems),
5.25%, 2/15/18 910,720
750 Missouri HEFA, (Jefferson Memorial
Hospital), 6.00%, 8/15/23 719,663
1,900 Missouri HEFA, (Jefferson Memorial
Hospital), 6.80%, 5/15/25 1,994,259
495 Missouri HEFA, (Lake of the Ozarks
General Hospital), 6.50%, 2/15/21 507,781
1,250 Taney County IDA, (The Skaggs Community
Hospital Association), 5.30%, 5/15/18 1,144,438
1,250 West Plains IDA, (Ozarks Medical
Center), 5.65%, 11/15/22 1,113,875
- ---------------------------------------------------------------------------
$10,910,700
- ---------------------------------------------------------------------------
Housing -- 3.2%
- ---------------------------------------------------------------------------
$ 795 Missouri Housing Development Authority,
SFMR, (GNMA), 6.45%, 9/1/27 $ 820,718
485 Missouri Housing Development Authority,
SFMR, (GNMA), (AMT), 6.75%, 6/1/24 503,226
770 Missouri Housing Development Authority,
SFMR, (GNMA), (AMT), 7.25%, 9/1/26 842,896
- ---------------------------------------------------------------------------
$ 2,166,840
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 16.0%
- ---------------------------------------------------------------------------
$1,035 Jefferson County, (Kmart Corp.),
6.40%, 8/1/08 $ 1,052,471
1,255 Kansas City IDA, (Airline Cargo
Facilities), 8.50%, 1/1/17 1,371,175
2,500 Missouri Development Finance Authority,
Solid Waste Disposal, (Proctor and
Gamble Paper Products), (AMT),
5.20%, 3/15/29 2,303,950
1,200 Missouri Environmental Improvement and
Energy Resources Authority, (American
Cyanamid Company), 5.80%, 9/1/09 1,260,372
1,000 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,024,850
3,750 Saint Louis IDA, (Anheuser-Busch),
(AMT), 5.875%, 11/1/26 3,729,487
- ---------------------------------------------------------------------------
$10,742,305
- ---------------------------------------------------------------------------
Insured-Education -- 2.2%
- ---------------------------------------------------------------------------
$1,750 Missouri HEFA, (St. Louis University
High School), (AMBAC), 4.75%, 10/1/24 $ 1,505,508
- ---------------------------------------------------------------------------
$ 1,505,508
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 7.3%
- ---------------------------------------------------------------------------
$4,400 Missouri Environmental Improvement and
Energy Resources Authority, (Union
Electric), (AMBAC), (AMT),
5.45%, 10/1/28 $ 4,163,939
700 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable Rate,
7/1/03(1) 758,625
- ---------------------------------------------------------------------------
$ 4,922,564
- ---------------------------------------------------------------------------
Insured-General Obligations -- 2.0%
- ---------------------------------------------------------------------------
$ 500 Puerto Rico, (FSA), Variable Rate,
7/1/22(1)(2) $ 527,500
2,000 Saint Charles County, (Francis Howell
School District), (FGIC), 0.00%, 3/1/16 801,420
- ---------------------------------------------------------------------------
$ 1,328,920
- ---------------------------------------------------------------------------
Insured-Hospital -- 11.6%
- ---------------------------------------------------------------------------
$ 955 Jackson County, (Saint Joseph's Health
System), (MBIA), 6.50%, 7/1/12 $ 1,012,711
800 Jackson County, (Saint Joseph's Health
System), (MBIA), 6.50%, 7/1/19 849,440
1,500 Missouri HEFA, (Heartland Health),
(AMBAC), 6.35%, 11/15/17 1,587,840
9,500 Missouri HEFA, (Lester Cox Medical
Center), (MBIA), 0.00%, 9/1/20 2,853,610
1,500 Missouri HEFA, (Lester Cox Medical
Center), (MBIA), 5.35%, 6/1/10 1,523,790
- ---------------------------------------------------------------------------
$ 7,827,391
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
61
<PAGE>
MISSOURI MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Housing -- 2.4%
- ---------------------------------------------------------------------------
$1,500 SCA, MFMR Receipts, Springfield, (FSA),
7.10%, 1/1/30 $ 1,625,145
- ---------------------------------------------------------------------------
$ 1,625,145
- ---------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 0.8%
- ---------------------------------------------------------------------------
$ 500 Saint Charles County, PFA, (FGIC),
6.375%, 3/15/07 $ 531,675
- ---------------------------------------------------------------------------
$ 531,675
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 2.0%
- ---------------------------------------------------------------------------
$ 700 Puerto Rico Infrastructure Financing
Authority, (AMBAC), Variable Rate,
7/1/28(1) $ 524,818
1,000 Puerto Rico Public Finance Corp.,
(AMBAC), Variable Rate, 6/1/26(1)(2) 838,340
- ---------------------------------------------------------------------------
$ 1,363,158
- ---------------------------------------------------------------------------
Insured-Transportation -- 1.4%
- ---------------------------------------------------------------------------
$ 910 Saint Louis, Airport Revenue, (Lambert
International Airport), (FGIC),
6.00%, 7/1/14 $ 957,074
- ---------------------------------------------------------------------------
$ 957,074
- ---------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 8.1%
- ---------------------------------------------------------------------------
$2,000 Missouri Regional Convention and Sports
Complex Authority, 5.50%, 8/15/21 $ 1,961,240
3,000 Saint Louis County, Regional Convention
and Sports Complex Authority,
5.50%, 8/15/13 3,012,750
500 Saint Louis County, Regional Convention
and Sports Complex Authority,
5.75%, 8/15/21 501,855
- ---------------------------------------------------------------------------
$ 5,475,845
- ---------------------------------------------------------------------------
Nursing Home -- 5.9%
- ---------------------------------------------------------------------------
$1,000 Kansas City IDA, (Beverly Enterprises),
8.00%, 12/1/02 $ 1,044,050
500 Missouri HEFA, (Bethesda Health Group of
Saint Louis, Inc.), 6.625%, 8/15/05 517,205
1,000 Missouri HEFA, (Bethesda Health Group of
Saint Louis, Inc.), 7.50%, 8/15/12 1,089,600
1,500 Saint Louis County IDA, (Nazareth
Living), 5.625%, 8/15/29 1,344,990
- ---------------------------------------------------------------------------
$ 3,995,845
- ---------------------------------------------------------------------------
Pooled Loans -- 4.0%
- ---------------------------------------------------------------------------
$2,750 Missouri Higher Education Loan
Authority, Student Loan, (AMT),
5.45%, 2/15/09 $ 2,710,043
- ---------------------------------------------------------------------------
$ 2,710,043
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Senior Living / Life Care -- 4.9%
- ---------------------------------------------------------------------------
$ 300 Cass County, (Fox Springs Living
Center), 7.375%, 10/1/22 $ 316,782
1,000 Kansas City IDR, (Kingswood Manor),
5.80%, 11/15/17 920,800
2,000 Missouri HEFA, (Lutheran Senior
Services), 6.375%, 2/1/27 2,033,160
- ---------------------------------------------------------------------------
$ 3,270,742
- ---------------------------------------------------------------------------
Transportation -- 1.6%
- ---------------------------------------------------------------------------
$1,000 Puerto Rico Highway and Transportation
Authority, 6.625%, 7/1/12 $ 1,064,260
- ---------------------------------------------------------------------------
$ 1,064,260
- ---------------------------------------------------------------------------
Water and Sewer -- 2.7%
- ---------------------------------------------------------------------------
$1,000 Missouri Environmental Improvement and
Energy Resources Authority,
0.00%, 1/1/14 $ 449,960
1,250 Missouri Environmental Improvement and
Energy Resources Authority,
7.20%, 7/1/16 1,375,863
- ---------------------------------------------------------------------------
$ 1,825,823
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $65,161,804) $67,402,799
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Missouri
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 August 31, 1999, 31.1% 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 by financial
institution ranged from 3.4% to 13.6% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
62
<PAGE>
NORTH CAROLINA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ----------------------------------------------------------------------------
Education -- 3.9%
- ----------------------------------------------------------------------------
$1,000 North Carolina Educational Facilities
Finance Agency, (Duke University),
6.75%, 10/1/21 $ 1,062,860
8,410 University of North Carolina at Chapel
Hill, 0.00%, 8/1/17 3,088,488
2,500 University of North Carolina at Chapel
Hill, 0.00%, 8/1/19 814,625
- ----------------------------------------------------------------------------
$ 4,965,973
- ----------------------------------------------------------------------------
Electric Utilities -- 6.0%
- ----------------------------------------------------------------------------
$1,015 Chatham County Industrial Facilities and
Pollution, (Carolina Power and Light),
6.30%, 6/15/14 $ 1,066,055
5,000 North Carolina Municipal Power
Authority, (Eastern Power),
6.125%, 1/1/09 5,079,349
2,000 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 737,900
2,000 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 737,900
- ----------------------------------------------------------------------------
$ 7,621,204
- ----------------------------------------------------------------------------
Escrowed / Prerefunded -- 2.8%
- ----------------------------------------------------------------------------
$1,000 Pitt County Memorial Hospital, Escrowed
to Maturity, 5.25%, 12/1/21 $ 950,580
150 Puerto Rico General Obligations,
Prerefunded to 7/1/00, 7.30%, 7/1/20 157,412
1,000 Puerto Rico, "RIBS", (AMBAC),
Prerefunded to 7/1/02, Variable Rate,
7/1/15(1)(2) 1,120,180
1,000 Virgin Islands Public Finance Authority,
Prerefunded to 10/1/02, 7.25%, 10/1/18 1,104,590
220 Virgin Islands Water and Power
Authority, Prerefunded to 7/1/01,
7.40%, 7/1/11 234,366
- ----------------------------------------------------------------------------
$ 3,567,128
- ----------------------------------------------------------------------------
General Obligations -- 3.7%
- ----------------------------------------------------------------------------
$ 175 Eden, Water and Sewer Bonds, (AMT),
6.75%, 6/1/08 $ 187,593
3,550 North Carolina Capital Improvements,
4.75%, 2/1/12 3,403,492
500 Puerto Rico, 0.00%, 7/1/17 184,475
1,000 Puerto Rico Public Buildings Authority,
5.25%, 7/1/21 941,140
- ----------------------------------------------------------------------------
$ 4,716,700
- ----------------------------------------------------------------------------
Hospital -- 14.9%
- ----------------------------------------------------------------------------
$2,090 Charlotte-Mecklenberg Hospital,
0.00%, 1/1/06 $ 1,536,234
2,000 Charlotte-Mecklenberg Hospital,
5.125%, 1/15/22 1,844,800
2,000 Charlotte-Mecklenberg Hospital,
5.875%, 1/15/26 1,989,220
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ----------------------------------------------------------------------------
Hospital (continued)
- ----------------------------------------------------------------------------
$1,500 North Carolina Medical Care Commission,
(Annie Penn Memorial Hospital),
5.375%, 1/1/22 $ 1,324,935
3,400 North Carolina Medical Care Commission,
(Duke University Hospital),
0.00%, 6/1/09 2,045,100
1,000 North Carolina Medical Care Commission,
(Duke University Hospital),
5.25%, 6/1/21 928,350
1,000 North Carolina Medical Care Commission,
(Gaston Health Care), 5.00%, 2/15/29 866,840
500 North Carolina Medical Care Commission,
(Halifax Regional Medical Center),
5.00%, 8/15/24 435,130
2,000 North Carolina Medical Care Commission,
(North Carolina Baptist Hospital),
6.00%, 6/1/22 2,024,040
1,750 North Carolina Medical Care Commission,
(Pitt County Memorial Hospital),
4.75%, 12/1/28 1,459,378
1,700 North Carolina Medical Care Commission,
(Presbyterian Health Services),
6.00%, 10/1/24 1,812,880
2,500 North Carolina Medical Care Commission,
(Roanoke-Chowan Hospital),
7.75%, 10/1/19 2,558,250
- ----------------------------------------------------------------------------
$ 18,825,157
- ----------------------------------------------------------------------------
Housing -- 12.1%
- ----------------------------------------------------------------------------
$1,900 Charlotte Housing Authority, Double
Oaks, FHA, (FNMA), 7.35%, 5/15/26 $ 2,056,389
1,000 Guam Housing Corp., Single Family,
5.75%, 9/1/31 975,720
1,840 North Carolina HFA, MFMR, (AMT),
6.45%, 9/1/27 1,903,167
1,215 North Carolina HFA, SFMR, (AMT),
6.20%, 9/1/27 1,239,045
1,500 North Carolina HFA, SFMR, (AMT),
6.30%, 3/1/26 1,540,665
2,080 North Carolina HFA, SFMR, (AMT),
6.60%, 9/1/26 2,155,296
3,605 North Carolina HFA, SFMR, (AMT),
6.70%, 9/1/26 3,747,037
620 North Carolina HFA, SFMR, (AMT),
7.05%, 9/1/20 646,046
1,000 Raleigh Housing Authority, Multifamily,
(Cedar Point), 7.00%, 11/1/30 962,570
- ----------------------------------------------------------------------------
$ 15,225,935
- ----------------------------------------------------------------------------
Industrial Development Revenue -- 19.8%
- ----------------------------------------------------------------------------
$6,000 Columbus County, Industrial Facility and
Pollution Control Financing,
(International Paper Co.), (AMT),
6.15%, 4/1/21 $ 6,099,479
2,750 Haywood County IDA, (Champion
International Corp.), (AMT),
5.50%, 10/1/18 2,514,655
1,500 Haywood County IDA, (Champion
International Corp.), (AMT),
5.75%, 12/1/25 1,399,125
3,750 Martin County IDA, (Weyerhaeuser Co.),
(AMT), 6.80%, 5/1/24 3,990,938
2,500 New Hanover County, (Occidental
Petroleum Corp.), 6.70%, 7/1/19 2,618,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
63
<PAGE>
NORTH CAROLINA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------
<C> <S> <C>
Industrial Development Revenue (continued)
- ----------------------------------------------------------------------------
$6,155 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 $ 6,307,951
1,150 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.30%, 6/1/23 1,173,426
850 Robeson County, Industrial Facilities
and Pollution Control Financing
Authority, (Campbell Soup Co.),
6.40%, 12/1/06 933,402
- ----------------------------------------------------------------------------
$ 25,036,976
- ----------------------------------------------------------------------------
Insured-Electric Utilities -- 6.3%
- ----------------------------------------------------------------------------
$1,500 North Carolina Eastern Municipal Power
Authority, (FSA), Variable Rate,
1/1/19(1)(2) $ 1,509,420
1,000 North Carolina Eastern Municipal Power
Authority, (MBIA), 5.375%, 1/1/24 943,000
4,000 North Carolina Municipal Power
Authority, (Catawba Electric), (MBIA),
Variable Rate, 1/1/12(1) 4,040,000
1,400 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable Rate,
7/1/02(1) 1,489,250
- ----------------------------------------------------------------------------
$ 7,981,670
- ----------------------------------------------------------------------------
Insured-General Obligations -- 2.9%
- ----------------------------------------------------------------------------
$3,500 Puerto Rico, (FSA), Variable Rate,
7/1/22(1)(2) $ 3,692,500
- ----------------------------------------------------------------------------
$ 3,692,500
- ----------------------------------------------------------------------------
Insured-Hospital -- 8.8%
- ----------------------------------------------------------------------------
$ 500 Cumberland County Hospital, (MBIA),
0.00%, 10/1/09 $ 298,550
935 North Carolina Medical Care Commission,
(Memorial Mission Hospital), (FSA),
0.00%, 10/1/06 662,204
5,000 North Carolina Medical Care Commission,
(Saint Joseph's Medical Center),
(AMBAC), 5.10%, 10/1/14 4,843,850
5,000 North Carolina Medical Care Commission,
(Wake County Hospital), (MBIA),
5.375%, 10/1/26 4,708,000
1,500 North Carolina Medical Care Commission,
(Wilson Memorial Hospital), (AMBAC),
0.00%, 11/1/15 610,350
- ----------------------------------------------------------------------------
$ 11,122,954
- ----------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 3.9%
- ----------------------------------------------------------------------------
$2,150 Charlotte, Convention Facility, (AMBAC),
5.25%, 12/1/13 $ 2,135,982
1,575 Franklin, County Jail, (FGIC),
6.625%, 6/1/14 1,743,131
1,000 Mooresville School District, (AMBAC),
6.35%, 10/1/14 1,064,700
- ----------------------------------------------------------------------------
$ 4,943,813
- ----------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ----------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 3.8%
- ----------------------------------------------------------------------------
$2,065 Buncombe County, 6.625%, 12/1/10 $ 2,247,401
2,400 Greensboro, Greensboro Coliseum Arena,
6.75%, 12/1/09 2,557,008
- ----------------------------------------------------------------------------
$ 4,804,409
- ----------------------------------------------------------------------------
Transportation -- 9.6%
- ----------------------------------------------------------------------------
$4,450 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 $ 3,956,584
4,000 Puerto Rico Highway and Transportation
Authority, 5.25%, 7/1/20 3,774,840
1,490 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/15 1,490,656
2,925 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/36 2,832,892
- ----------------------------------------------------------------------------
$ 12,054,972
- ----------------------------------------------------------------------------
Water and Sewer -- 1.5%
- ----------------------------------------------------------------------------
$2,000 Orange County, Water and Sewer,
5.20%, 7/1/16 $ 1,918,620
- ----------------------------------------------------------------------------
$ 1,918,620
- ----------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $121,147,010) $126,478,011
- ----------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by North Carolina
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 August 31, 1999, 22.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 1.4% to 7.9% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
64
<PAGE>
OREGON MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Cogeneration -- 2.3%
- ---------------------------------------------------------------------------
$2,000 Western Generation Agency, (Wauna
Cogeneration), (AMT), 7.40%, 1/1/16 $ 2,127,320
- ---------------------------------------------------------------------------
$ 2,127,320
- ---------------------------------------------------------------------------
Education -- 1.1%
- ---------------------------------------------------------------------------
$1,000 Salem EFA, (Willamette University),
6.10%, 4/1/14 $ 1,043,100
- ---------------------------------------------------------------------------
$ 1,043,100
- ---------------------------------------------------------------------------
Electric Utilities -- 9.6%
- ---------------------------------------------------------------------------
$4,000 Eugene, Trojan Nuclear Power,
5.90%, 9/1/09 $ 4,074,999
1,000 Northern Wasco County, (Bonneville Power
Administration), 5.20%, 12/1/24 932,780
4,350 Puerto Rico Electric Power Authority,
4.75%, 7/1/24 3,775,670
- ---------------------------------------------------------------------------
$ 8,783,449
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 6.7%
- ---------------------------------------------------------------------------
$2,000 Medford, Rogue Valley Memorial Hospital,
Escrowed to Maturity, 6.25%, 12/1/07 $ 2,152,420
1,600 Puerto Rico Telephone Authority, (MBIA),
Prerefunded to 1/1/03, Variable Rate,
1/16/15(1) 1,724,000
2,000 Puerto Rico, "RIBS", (AMBAC),
Prerefunded to 7/1/02, Variable Rate,
7/1/15(1)(2) 2,240,360
- ---------------------------------------------------------------------------
$ 6,116,780
- ---------------------------------------------------------------------------
General Obligations -- 15.6%
- ---------------------------------------------------------------------------
$1,000 Lane County, Eugene School District,
5.375%, 7/1/13 $ 1,001,630
1,000 Oregon State, Board of Higher Education,
6.00%, 10/15/18 1,028,360
1,250 Oregon State, Elderly and Disabled
Housing, 6.375%, 8/1/24 1,324,525
4,610 Oregon State, Elderly and Disabled
Housing, (AMT), 5.65%, 8/1/26 4,735,529
1,025 Oregon State, Veterans Welfare,
5.85%, 10/1/15 1,044,086
1,445 Oregon State, Veterans Welfare,
5.90%, 10/1/17 1,475,663
4,850 Puerto Rico, 0.00%, 7/1/17 1,789,408
2,250 Puerto Rico, 4.75%, 7/1/23 1,950,683
- ---------------------------------------------------------------------------
$14,349,884
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Hospital -- 0.5%
- ---------------------------------------------------------------------------
$ 465 Clackamas County HFA, (Williamette Falls
Hospital), 6.00%, 4/1/19 $ 458,653
- ---------------------------------------------------------------------------
$ 458,653
- ---------------------------------------------------------------------------
Housing -- 25.7%
- ---------------------------------------------------------------------------
$2,105 Hood River County, Health Facility
Authority, Elderly Housing Revenue,
(Down Manor Project), 6.50%, 1/1/17 $ 2,111,904
1,000 Oregon Health Authority, (Trillium
Affordable Housing), 6.75%, 8/15/29 956,870
2,000 Oregon State, Housing and Community
Services Department, MFMR, (AMT),
5.70%, 7/1/29 1,971,600
1,500 Oregon State, Housing and Community
Services Department, MFMR, (AMT),
6.20%, 7/1/28 1,545,045
1,975 Oregon State, Housing and Community
Services Department, SFMR, (AMT),
6.20%, 7/1/27 2,030,182
1,680 Oregon State, Housing and Community
Services Department, SFMR, (AMT),
6.40%, 7/1/26 1,743,638
2,310 Oregon State, Housing and Community
Services Department, SFMR, (AMT),
6.45%, 7/1/26 2,398,796
1,000 Portland Housing Authority,
6.00%, 1/1/27 1,010,530
3,810 Portland Housing Authority, MFMR, (Berry
Ridge), (AMT), 6.30%, 5/1/29 3,928,566
2,875 Portland Housing Authority, MFMR,
(Cherry Blossom), (AMT),
6.20%, 12/20/36 2,971,974
1,000 Washington County Housing Authority,
MFMR, (Bethany Meadows), (AMT),
5.75%, 9/1/17 1,009,840
2,000 Washington County Housing Authority,
MFMR, (Bethany Meadows), (AMT),
5.85%, 9/1/27 2,000,000
- ---------------------------------------------------------------------------
$23,678,945
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 9.8%
- ---------------------------------------------------------------------------
$3,500 Oregon EDA, (Georgia Pacific), (AMT),
6.35%, 8/1/25 $ 3,567,585
3,500 Port of Astoria, Pollution Control
Revenue, (James River Corp.),
6.55%, 2/1/15 3,614,905
750 Port of Portland, (Ash Grove Cement
Co.), 7.25%, 10/1/09 790,140
1,000 Port of Portland, (North Portland Crown
Zellerbach Corp.), 6.125%, 5/15/08 1,001,160
- ---------------------------------------------------------------------------
$ 8,973,790
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
65
<PAGE>
OREGON MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Education -- 4.4%
- ---------------------------------------------------------------------------
$4,850 Oregon Health Science University,
(MBIA), 0.00%, 7/1/21 $ 1,445,155
1,000 Oregon State, Health, Housing,
Educational and Cultural Facilities
Authority, (Lewis and Clark College),
(MBIA), 6.00%, 10/1/13 1,047,750
1,500 Oregon State, Health, Housing,
Educational and Cultural Facilities
Authority, (Lewis and Clark College),
(MBIA), 6.125%, 10/1/24 1,543,230
- ---------------------------------------------------------------------------
$ 4,036,135
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 3.9%
- ---------------------------------------------------------------------------
$1,000 Emerald People's Utility District,
Electric System, (AMBAC),
5.75%, 11/1/16 $ 1,013,940
500 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable Rate,
7/1/03(1) 541,875
5,300 Puerto Rico Electric Power Authority,
(MBIA), 0.00%, 7/1/17 2,010,502
- ---------------------------------------------------------------------------
$ 3,566,317
- ---------------------------------------------------------------------------
Insured-General Obligations -- 3.4%
- ---------------------------------------------------------------------------
$1,000 Columbia, School District North 502,
(FGIC), 0.00%, 6/1/17 $ 379,750
1,000 Salem-Keizer, School District, (FGIC),
5.00%, 6/1/17 943,170
2,000 Umatilla County, School District,
(MBIA), Variable Rate, 6/15/14(1)(2) 1,806,060
- ---------------------------------------------------------------------------
$ 3,128,980
- ---------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 1.4%
- ---------------------------------------------------------------------------
$1,250 Oregon State, Department of General
Services, Real Property Financing
Program, (AMBAC), 6.25%, 9/1/15 $ 1,307,188
- ---------------------------------------------------------------------------
$ 1,307,188
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.5%
- ---------------------------------------------------------------------------
$1,000 Portland, Arena Natural Gas Tax Revenue
(AMBAC), 0.00%, 6/1/17 $ 348,870
1,400 Puerto Rico Infrastructure Financing
Authority, (AMBAC), Variable Rate,
7/1/28(1) 1,049,636
- ---------------------------------------------------------------------------
$ 1,398,506
- ---------------------------------------------------------------------------
Insured-Transportation -- 5.5%
- ---------------------------------------------------------------------------
$1,500 Oregon Department of Transportation,
(Westside Light Rail), (MBIA),
6.25%, 6/1/09 $ 1,621,875
750 Port of Portland, (Portland
International Airport), (FGIC), (AMT),
5.00%, 7/1/28 667,823
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Insured-Transportation (continued)
- ---------------------------------------------------------------------------
$2,750 Port of Portland, (Portland
International Airport), (FGIC), (AMT),
6.00%, 7/1/23 $ 2,776,373
- ---------------------------------------------------------------------------
$ 5,066,071
- ---------------------------------------------------------------------------
Special Tax Revenue -- 2.2%
- ---------------------------------------------------------------------------
$2,000 Tri-County Metropolitan Transportation
District, Limited Tax Pledge,
5.70%, 8/1/13 $ 2,030,760
- ---------------------------------------------------------------------------
$ 2,030,760
- ---------------------------------------------------------------------------
Transportation -- 3.5%
- ---------------------------------------------------------------------------
$1,500 Port of Portland, Special Obligation
Revenue Bonds, (Delta Airlines, Inc.),
(AMT), 6.20%, 9/1/22 $ 1,488,210
2,000 Tri-County Metropolitan Transportation
District, Variable Rate, 8/1/19(1)(2) 1,729,800
- ---------------------------------------------------------------------------
$ 3,218,010
- ---------------------------------------------------------------------------
Utilities -- 0.6%
- ---------------------------------------------------------------------------
$ 500 Puerto Rico Telephone Authority,
Variable Rate, 1/1/20(1) $ 554,230
- ---------------------------------------------------------------------------
$ 554,230
- ---------------------------------------------------------------------------
Water and Sewer -- 2.3%
- ---------------------------------------------------------------------------
$2,000 Clackamas County, Water Revenue,
6.375%, 10/1/14 $ 2,135,820
- ---------------------------------------------------------------------------
$ 2,135,820
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $90,127,046) $91,973,938
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Oregon
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 August 31, 1999, 24.4% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.6% to 12.2% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
66
<PAGE>
SOUTH CAROLINA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Electric Utilities -- 9.6%
- ---------------------------------------------------------------------------
$1,650 Berkeley County, (South Carolina
Electric and Gas Co.), 6.50%, 10/1/14 $ 1,760,616
1,150 Darlington County, (Carolina Power and
Light Co.), 6.60%, 11/1/10 1,241,149
500 Piedmont Municipal Power Agency,
Electric Revenue, 5.25%, 1/1/21 441,480
1,000 Puerto Rico Electric Power Authority,
4.75%, 7/1/24 867,970
- ---------------------------------------------------------------------------
$ 4,311,215
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 7.3%
- ---------------------------------------------------------------------------
$1,750 Myrtle Beach Convention Center,
Prerefunded to 7/1/02, 6.875%, 7/1/17 $ 1,900,132
300 Piedmont Municipal Power Agency, (MBIA),
Escrowed to Maturity, 6.25%, 1/1/09 328,962
1,000 Puerto Rico Electric Power Authority,
Prerefunded to 7/1/02, 6.25%, 7/1/17 1,069,570
- ---------------------------------------------------------------------------
$ 3,298,664
- ---------------------------------------------------------------------------
General Obligations -- 1.3%
- ---------------------------------------------------------------------------
$ 500 Puerto Rico, 0.00%, 7/1/18 $ 173,810
500 Puerto Rico, 4.75%, 7/1/23 433,485
- ---------------------------------------------------------------------------
$ 607,295
- ---------------------------------------------------------------------------
Hospital -- 8.5%
- ---------------------------------------------------------------------------
$1,375 Horry County, (Conway Hospital),
6.75%, 7/1/12(1) $ 1,457,679
1,500 Loris, Community Hospital District,
5.625%, 1/1/29 1,352,295
1,000 Medical University, Hospital Facilities,
6.00%, 7/1/19 984,530
- ---------------------------------------------------------------------------
$ 3,794,504
- ---------------------------------------------------------------------------
Housing -- 11.0%
- ---------------------------------------------------------------------------
$1,780 South Carolina Housing Finance
Authority, MFMR, (Runaway Bay
Apartments), 6.20%, 12/1/20 $ 1,811,968
1,500 South Carolina Housing Finance
Authority, SFMR, 6.375%, 7/1/16 1,554,780
1,500 South Carolina Housing Finance
Authority, SFMR, 6.45%, 7/1/17 1,556,775
- ---------------------------------------------------------------------------
$ 4,923,523
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 18.3%
- ---------------------------------------------------------------------------
$ 500 Charleston County IDA, (Zeigler Coal),
6.95%, 8/10/28 $ 491,955
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Industrial Development Revenue (continued)
- ---------------------------------------------------------------------------
$1,500 Darlington County, (Nucor Corp.), (AMT),
5.75%, 8/1/23(1) $ 1,493,160
1,000 Darlington County, (Sonoco Products),
6.00%, 4/1/26 1,005,600
500 Darlington County, (Sonoco Products),
(AMT), 6.125%, 6/1/25 507,950
465 Florence County, (Stone Container Co.),
7.375%, 2/1/07 485,962
1,000 Georgetown County, (International Paper
Co.), 5.70%, 10/1/21 960,540
750 Georgetown County, (International Paper
Co.), 6.25%, 9/1/23(2) 750,315
1,000 Richland County, (Union Camp Corp.),
(AMT), 6.75%, 5/1/22 1,061,790
1,500 York County, (Hoechst Celanese Corp.),
(AMT), 5.70%, 1/1/24 1,439,880
- ---------------------------------------------------------------------------
$ 8,197,152
- ---------------------------------------------------------------------------
Insured-Education -- 1.0%
- ---------------------------------------------------------------------------
$ 500 South Carolina Educational Facilities
Authority, (Furman University), (AMBAC),
5.00%, 10/1/29 $ 444,980
- ---------------------------------------------------------------------------
$ 444,980
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 9.6%
- ---------------------------------------------------------------------------
$ 500 Edgefield County, Water and Sewer
Authority, (FGIC), 5.00%, 1/1/28 $ 446,230
1,000 Piedmont Municipal Power Agency,
Electric Revenue, (MBIA), 4.00%, 1/1/23 745,930
195 Piedmont Municipal Power Agency,
Electric Revenue, (MBIA), 6.30%, 1/1/14 206,265
2,500 Puerto Rico Electric Power Authority,
(MBIA), 0.00%, 7/1/17 948,350
1,250 South Carolina Public Service Authority,
(AMBAC), 6.375%, 7/1/21 1,320,013
750 South Carolina Public Service Authority,
(MBIA), 5.00%, 1/1/29 657,728
- ---------------------------------------------------------------------------
$ 4,324,516
- ---------------------------------------------------------------------------
Insured-General Obligations -- 1.4%
- ---------------------------------------------------------------------------
$ 645 Orangeburg County, School District
North, (FSA), 5.25%, 2/1/23 $ 607,229
- ---------------------------------------------------------------------------
$ 607,229
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
67
<PAGE>
SOUTH CAROLINA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Hospital -- 10.0%
- ---------------------------------------------------------------------------
$1,500 Greenwood County, (Self Memorial
Hospital), (FGIC), 5.875%, 10/1/17 $ 1,513,635
1,000 South Carolina Jobs Economic Development
Authority, (Baptist Hospital), (AMBAC),
5.45%, 8/1/15 978,110
1,000 South Carolina Jobs Economic Development
Authority, (Baptist Hospital), (AMBAC),
Variable Rate, 8/1/15(3) 955,000
1,000 South Carolina Jobs Economic Development
Authority, (Oconee Memorial Hospital),
(CLEE), 6.15%, 3/1/25 1,025,620
- ---------------------------------------------------------------------------
$ 4,472,365
- ---------------------------------------------------------------------------
Insured-Housing -- 2.3%
- ---------------------------------------------------------------------------
$1,000 South Carolina Housing Finance and
Development Authority, SFMR, (AMBAC),
(AMT), 5.95%, 7/1/29 $ 1,019,040
- ---------------------------------------------------------------------------
$ 1,019,040
- ---------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 3.5%
- ---------------------------------------------------------------------------
$ 500 Charleston County, (Charleston PFC),
(MBIA), 6.10%, 6/1/11 $ 535,210
1,000 Florence County, (Law Enforcement
Center), (AMBAC), 6.00%, 3/1/14 1,042,450
- ---------------------------------------------------------------------------
$ 1,577,660
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.4%
- ---------------------------------------------------------------------------
$ 260 Puerto Rico Infrastructure Financing
Authority, (AMBAC), Variable Rate,
7/1/28(3) $ 194,932
- ---------------------------------------------------------------------------
$ 194,932
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 4.7%
- ---------------------------------------------------------------------------
$2,000 Charleston, Waterworks and Sewer
Revenue, (FGIC), 4.50%, 1/1/24 $ 1,643,920
500 Spartanburg, San Sewer District, (MBIA),
5.00%, 3/1/28 450,455
- ---------------------------------------------------------------------------
$ 2,094,375
- ---------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 1.8%
- ---------------------------------------------------------------------------
$ 750 Lexington County School District,
6.90%, 7/1/08 $ 814,733
- ---------------------------------------------------------------------------
$ 814,733
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Pooled Loans -- 2.3%
- ---------------------------------------------------------------------------
$1,000 South Carolina Education Authority,
Student Loan, (AMT), 6.30%, 9/1/08 $ 1,024,270
- ---------------------------------------------------------------------------
$ 1,024,270
- ---------------------------------------------------------------------------
Solid Waste -- 3.7%
- ---------------------------------------------------------------------------
$1,500 Spartanburg County, Solid Waste,
(Bavarian Motor Works Corp.), (AMT),
7.55%, 11/1/24 $ 1,655,610
- ---------------------------------------------------------------------------
$ 1,655,610
- ---------------------------------------------------------------------------
Transportation -- 3.3%
- ---------------------------------------------------------------------------
$1,000 Connector 2000 Association Inc., Bridge
& Toll Road Revenue, (Southern
Connector), 5.25%, 1/1/23 $ 868,060
750 Puerto Rico Highway and Transportation
Authority, 4.75%, 7/1/38 634,448
- ---------------------------------------------------------------------------
$ 1,502,508
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $43,917,167) $44,864,571
- ---------------------------------------------------------------------------
</TABLE>
AMT -- Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by South Carolina
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 August 31, 1999, 33.6% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance. The aggregate percentage by financial institution
ranged from 1.4% to 13.3% of total investments.
(1) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(2) When-issued security.
(3) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
68
<PAGE>
TENNESSEE MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Education -- 4.9%
- ---------------------------------------------------------------------------
$1,000 Metropolitan Government of Nashville and
Davidson County, (Belmont University),
6.40%, 12/1/19 $ 1,022,830
1,500 Metropolitan Government of Nashville and
Davidson County, (Vanderbilt
University), 5.00%, 10/1/28 1,340,925
- ---------------------------------------------------------------------------
$ 2,363,755
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 6.1%
- ---------------------------------------------------------------------------
$1,000 Johnson, School District Sales Tax,
(AMBAC), Prerefunded to 5/1/06,
6.70%, 5/1/21 $ 1,115,970
300 Puerto Rico, "RIBS", (AMBAC),
Prerefunded to 7/1/02, Variable Rate,
7/1/15(1)(2) 336,054
1,500 Shelby County, (Lebonheur Children's
Hospital), (MBIA), Escrowed to Maturity,
5.50%, 8/15/12 1,522,290
- ---------------------------------------------------------------------------
$ 2,974,314
- ---------------------------------------------------------------------------
General Obligations -- 4.2%
- ---------------------------------------------------------------------------
$1,000 Metropolitan Government of Nashville and
Davidson County, 5.875%, 5/15/21 $ 1,015,550
1,000 Shelby County, 5.125%, 3/1/16 1,023,850
- ---------------------------------------------------------------------------
$ 2,039,400
- ---------------------------------------------------------------------------
Hospital -- 5.9%
- ---------------------------------------------------------------------------
$ 250 Knox County, (East Tennessee
Children's), 6.50%, 10/1/12 $ 258,093
750 Metropolitan Government of Nashville and
Davidson County, TN, (Charity Obligated
Group), 5.125%, 11/1/27 673,883
1,000 Montgomery County, (Clarksville Regional
Health System), 5.375%, 1/1/28 871,310
1,000 Sumner County, (Sumner Regional Health
Systems), 7.50%, 11/1/14 1,091,840
- ---------------------------------------------------------------------------
$ 2,895,126
- ---------------------------------------------------------------------------
Housing -- 15.8%
- ---------------------------------------------------------------------------
$ 750 Knoxville Community Development Corp.,
(Clinton Towers), 6.65%, 10/15/10 $ 776,835
500 Knoxville Community Development Corp.,
(Morningside Gardens), (GNMA),
6.10%, 7/20/20 511,095
1,500 Metropolitan Government of Nashville and
Davidson County, (The Park at
Hermitage), 5.90%, 2/1/19 1,493,055
1,000 Tennessee Housing Development Agency,
5.375%, 7/1/23 935,610
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Housing (continued)
- ---------------------------------------------------------------------------
$ 985 Tennessee Housing Development Agency,
5.85%, 7/1/13 $ 999,470
1,970 Tennessee Housing Development Agency,
5.95%, 7/1/28 1,986,193
1,000 Tennessee Housing Development Agency,
(AMT), 5.75%, 7/1/24 981,760
- ---------------------------------------------------------------------------
$ 7,684,018
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 26.3%
- ---------------------------------------------------------------------------
$1,000 Chattanooga, (E.I. du Pont de Nemours
and Co.), 6.35%, 7/1/22 $ 1,046,720
500 Hardeman County, (Correctional
Facilities Corp.), 7.75%, 8/1/17 538,680
1,000 Humphreys County, (E.I. du Pont de
Nemours and Co.), (AMT), 6.70%, 5/1/24 1,070,000
2,000 Loudon County, (Kimberly-Clark Corp.),
(AMT), 6.20%, 2/1/23 2,032,540
2,250 Maury County, (Saturn Corp.),
6.50%, 9/1/24 2,367,269
1,500 McMinn County, (Calhoun Newsprint Co. -
Bowater, Inc.), (AMT), 7.40%, 12/1/22 1,611,750
1,000 Memphis-Shelby County Airport Authority,
(Federal Express Corp.), 6.75%, 9/1/12 1,062,270
1,000 Memphis-Shelby County Airport Authority,
(Federal Express Corp.), (AMT),
6.20%, 7/1/14 1,018,220
500 Metropolitan Government of Nashville and
Davidson County, (Osco Treatment
Systems), (AMT), 6.00%, 5/1/03 507,540
500 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 512,425
1,000 South Fulton County, (Tyson Foods Co.),
(AMT), 6.40%, 10/1/20 1,041,360
- ---------------------------------------------------------------------------
$12,808,774
- ---------------------------------------------------------------------------
Insured-Education -- 4.5%
- ---------------------------------------------------------------------------
$1,230 Metropolitan Government of Nashville and
Davidson County, HEFA, (Meharry Medical
College), (AMBAC), 6.00%, 12/1/19 $ 1,292,841
1,000 Metropolitan Government of Nashville and
Davidson County, HEFA, (Meharry Medical
College), (AMBAC), 5.00%, 12/1/24 893,930
- ---------------------------------------------------------------------------
$ 2,186,771
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 6.5%
- ---------------------------------------------------------------------------
$1,000 Lawrenceburg, Electric Revenues, (MBIA),
6.625%, 7/1/18 $ 1,135,270
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
69
<PAGE>
TENNESSEE MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Electric Utilities (continued)
- ---------------------------------------------------------------------------
$1,750 Madison County Suburban Utility
District, (MBIA), 5.00%, 2/1/19 $ 1,617,805
400 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable Rate,
7/1/03(2) 433,500
- ---------------------------------------------------------------------------
$ 3,186,575
- ---------------------------------------------------------------------------
Insured-General Obligations -- 2.5%
- ---------------------------------------------------------------------------
$1,425 Franklin, Special School District,
(FSA), 0.00%, 6/1/19 $ 460,688
2,500 Franklin, Special School District,
(FSA), 0.00%, 6/1/20 758,700
- ---------------------------------------------------------------------------
$ 1,219,388
- ---------------------------------------------------------------------------
Insured-Hospital -- 4.5%
- ---------------------------------------------------------------------------
$ 500 Bristol, (Bristol Memorial Hospital),
(FGIC), 6.75%, 9/1/10 $ 568,580
250 Chattanooga, (Memorial Hospital),
(MBIA), 6.625%, 9/1/09 281,560
1,500 Chattanooga-Hamilton County, (Erlanger
Medical Center), (MBIA), 5.00%, 10/1/28 1,323,675
- ---------------------------------------------------------------------------
$ 2,173,815
- ---------------------------------------------------------------------------
Insured-Housing -- 2.2%
- ---------------------------------------------------------------------------
$1,000 Knox County, SCA Realty, MFMR, (FSA),
7.125%, 1/1/30 $ 1,084,590
- ---------------------------------------------------------------------------
$ 1,084,590
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.9%
- ---------------------------------------------------------------------------
$ 500 Puerto Rico Public Finance Corp.,
(AMBAC), Variable Rate, 6/1/26(1)(2) $ 419,170
- ---------------------------------------------------------------------------
$ 419,170
- ---------------------------------------------------------------------------
Insured-Transportation -- 2.3%
- ---------------------------------------------------------------------------
$1,000 Memphis-Shelby County Airport Authority,
(MBIA), (AMT), 6.50%, 2/15/08 $ 1,099,630
- ---------------------------------------------------------------------------
$ 1,099,630
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 2.8%
- ---------------------------------------------------------------------------
$ 350 Metropolitan Government of Nashville and
Davidson County, Water System, (AMBAC),
Variable Rate, 1/1/22(2) $ 388,063
1,000 Metropolitan Government of Nashville and
Davidson County, Water System, (FGIC),
5.20%, 1/1/13 989,980
- ---------------------------------------------------------------------------
$ 1,378,043
- ---------------------------------------------------------------------------
Nursing Home -- 2.2%
- ---------------------------------------------------------------------------
$1,000 Tennessee State Veterans' Homes Board,
(Humboldt), 6.65%, 2/1/14 $ 1,073,000
- ---------------------------------------------------------------------------
$ 1,073,000
- ---------------------------------------------------------------------------
Pooled Loans -- 3.7%
- ---------------------------------------------------------------------------
$1,200 Tennessee Local Development Authority,
Community Provider, 6.55%, 10/1/23 $ 1,328,892
500 Tennessee Local Development Authority,
State Loan Program, 5.00%, 3/1/15 468,940
- ---------------------------------------------------------------------------
$ 1,797,832
- ---------------------------------------------------------------------------
Transportation -- 4.7%
- ---------------------------------------------------------------------------
$ 900 Memphis-Shelby County Airport Authority,
6.12%, 12/1/16 $ 882,540
1,575 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 1,400,364
- ---------------------------------------------------------------------------
$ 2,282,904
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $47,368,457) $48,667,105
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Tennessee
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 August 31, 1999, 32.3% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 3.2% to 14.3% of total investments.
(1) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(2) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
70
<PAGE>
VIRGINIA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ----------------------------------------------------------------------------
Education -- 4.1%
- ----------------------------------------------------------------------------
$2,000 Lynchburgh, (Randolph-Macon Woman's
College), 5.875%, 9/1/23 $ 2,009,020
2,000 Medical College of Hampton Roads,
6.875%, 11/15/11 2,100,400
1,000 Virginia College Building Authority,
(Hampton University), 5.75%, 4/1/14 1,015,900
400 Virginia College Building Authority,
(Hampton University), 6.50%, 4/1/08 428,500
- ----------------------------------------------------------------------------
$ 5,553,820
- ----------------------------------------------------------------------------
Electric Utilities -- 0.7%
- ----------------------------------------------------------------------------
$1,000 Puerto Rico Electric Power Authority,
5.00%, 7/1/28 $ 899,450
- ----------------------------------------------------------------------------
$ 899,450
- ----------------------------------------------------------------------------
Escrowed / Prerefunded -- 20.5%
- ----------------------------------------------------------------------------
$1,665 Arlington County IDA, (AMBAC),
Prerefunded to 9/1/03, 5.00%, 9/1/21 $ 1,528,703
1,000 Arlington County IDA, (Arlington
Hospital), Prerefunded to 9/1/01,
7.125%, 9/1/21 1,075,260
500 Augusta County IDA, (Augusta Hospital),
Prerefunded to 9/1/01, 7.00%, 9/1/21 535,740
1,000 Fairfax County, Prerefunded to 6/1/02,
5.625%, 6/1/14 1,053,740
2,000 Loudoun County IDA, (Falcons Landing),
Prerefunded to 11/1/04, 8.75%, 11/1/24 2,431,500
3,500 Peninsula Ports Authority of Virginia,
(Riverside Health System), Prerefunded
to 7/1/02, 6.625%, 7/1/10 3,777,165
2,400 Prince William County IDA, (Potomac
Hospital), Prerefunded to 10/1/05,
6.85%, 10/1/25 2,726,160
900 Puerto Rico Telephone Authority, (MBIA),
Prerefunded to 1/1/03, Variable Rate,
1/16/15(1) 969,750
1,000 Richmond Metropolitan Authority
Expressway, (FGIC), Prerefunded to
7/15/02, 6.375%, 7/15/16 1,075,230
3,000 Rockingham and Harrisonburg Counties,
Harrisonburg Redevelopment and Housing
Authority, Prerefunded to 9/1/01,
6.50%, 9/1/14 3,133,110
2,000 Virgin Islands Public Finance Authority,
Prerefunded to 10/1/02, 7.25%, 10/1/18 2,209,180
3,000 Virginia Beach Development Authority,
(Sentara Bayside Hospital), Prerefunded
to 11/1/01, 6.60%, 11/1/09 3,204,510
1,700 Virginia Beach, Water and Sewer System,
Prerefunded to 2/1/02, 6.625%, 2/1/17 1,820,887
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ----------------------------------------------------------------------------
Escrowed / Prerefunded (continued)
- ----------------------------------------------------------------------------
$1,060 Washington County IDA, (Johnston
Memorial Hospital), Prerefunded to
7/1/02, 7.00%, 7/1/22 $ 1,154,435
1,000 Washington County IDA, (Johnston
Memorial Hospital), Prerefunded to
7/1/05, 6.00%, 7/1/14 1,082,700
- ----------------------------------------------------------------------------
$ 27,778,070
- ----------------------------------------------------------------------------
General Obligations -- 0.2%
- ----------------------------------------------------------------------------
$ 350 Puerto Rico, 0.00%, 7/1/04 $ 280,140
- ----------------------------------------------------------------------------
$ 280,140
- ----------------------------------------------------------------------------
Hospital -- 6.7%
- ----------------------------------------------------------------------------
$3,550 Albermarle County IDA, (Martha Jefferson
Hospital), 5.50%, 10/1/20 $ 3,337,000
90 Chesapeake Hospital Authority,
(Chesapeake General Hospital),
7.60%, 7/1/00 92,502
2,910 Fairfax County IDA, (Inova Health System
Hospitals), 5.00%, 8/15/14 2,781,465
2,000 Fairfax County IDA, (Inova Health System
Hospitals), 5.00%, 8/15/15 1,897,680
1,000 Fairfax County IDA, (Inova Health System
Hospitals), 6.00%, 8/15/26 1,016,930
- ----------------------------------------------------------------------------
$ 9,125,577
- ----------------------------------------------------------------------------
Housing -- 7.1%
- ----------------------------------------------------------------------------
$1,000 Alexandria, Redevelopment and Housing
Authority, Multi-family Housing Revenue,
(Buckingham Village Apartments), (AMT),
5.45%, 7/1/18 $ 949,150
1,250 Fairfax County Redevelopment and Housing
Authority MFMR, FHA, 7.00%, 5/1/26 1,312,863
960 Hampton Redevelopment and Housing
Authority, Senior Living, (GNMA),
6.00%, 1/20/26 991,920
1,000 Newport News Redevelopment and Housing
Authority, MFMR, 5.85%, 12/20/30 1,011,430
1,500 Prince William County, Industrial
Development Authority, (Melrose
Apartments), 5.40%, 1/1/29 1,421,820
1,800 Suffolk Redevelopment and Housing
Authority, (Prince Williams Commons),
(FNMA), 6.45%, 6/1/19 1,915,776
1,900 Virginia Housing Development Authority,
SFMR, Variable Rate, 7/1/04(1) 1,942,750
- ----------------------------------------------------------------------------
$ 9,545,709
- ----------------------------------------------------------------------------
Industrial Development Revenue -- 21.7%
- ----------------------------------------------------------------------------
$4,500 Bedford County, (Nekoosa Packaging),
(AMT), 5.60%, 12/1/25 $ 4,168,125
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
71
<PAGE>
VIRGINIA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------
<C> <S> <C>
Industrial Development Revenue (continued)
- ----------------------------------------------------------------------------
$2,190 Chesapeake, (Cargill, Inc.),
5.875%, 3/1/13 $ 2,250,050
1,500 Giles, (Hoechst Celanese Corp.), (AMT),
5.95%, 12/1/25 1,490,970
2,000 Giles, (Hoechst Celanese Corp.), (AMT),
6.45%, 5/1/26 2,108,960
500 Giles, (Hoechst Celanese Corp.), (AMT),
6.625%, 12/1/22 523,210
2,000 Henrico County, (Browning Ferris, Inc.),
(AMT), 5.45%, 1/1/14 1,807,620
4,000 Isle of Wright County IDA, (Union Camp
Corp.), (AMT), 6.55%, 4/1/24 4,220,080
2,000 James City County IDA, (Anheuser Busch),
(AMT), 6.00%, 4/1/32 2,016,540
1,400 Peninsula Ports Authority, (Zeigler
Coal), 6.90%, 5/2/22 1,383,704
1,750 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,793,488
1,000 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.30%, 6/1/23 1,020,370
980 West Point, (Chesapeake Corp.),
6.25%, 3/1/19 993,553
5,520 West Point, (Chesapeake Corp.), (AMT),
6.375%, 3/1/19 5,619,690
- ----------------------------------------------------------------------------
$ 29,396,360
- ----------------------------------------------------------------------------
Insured-General Obligations -- 2.7%
- ----------------------------------------------------------------------------
$4,000 Richmond, (FGIC), 5.00%, 1/15/21 $ 3,672,480
- ----------------------------------------------------------------------------
$ 3,672,480
- ----------------------------------------------------------------------------
Insured-Hospital -- 7.1%
- ----------------------------------------------------------------------------
$1,085 Fredericksburg IDA, (Medicorp Health),
(AMBAC), 5.25%, 6/15/23 $ 1,014,377
1,500 Henrico County, (Bon Secour Health
Systems), (MBIA), 6.25%, 8/15/20 1,618,365
5,000 Virginia Beach, (Virginia Beach Memorial
Hospital), (AMBAC), 5.125%, 2/15/18 4,704,150
2,000 Winchester IDA, (Winchester Medical
Center), (AMBAC), Variable Rate,
1/21/14(1) 2,315,000
- ----------------------------------------------------------------------------
$ 9,651,892
- ----------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ----------------------------------------------------------------------------
Insured-Transportation -- 3.3%
- ----------------------------------------------------------------------------
$1,000 Metro Washington D.C., Airport
Authority, (FGIC), (AMT),
5.00%, 10/1/27 $ 889,080
1,000 Metro Washington D.C., Airport
Authority, (MBIA), (AMT),
6.25%, 10/1/21 1,026,350
1,105 Metropolitan Washington Airports
Authority, (MBIA), (AMT),
5.75%, 10/1/20 1,098,934
1,650 Norfolk, Parking System Revenue, (MBIA),
5.00%, 2/1/29 1,487,162
- ----------------------------------------------------------------------------
$ 4,501,526
- ----------------------------------------------------------------------------
Insured-Water and Sewer -- 11.0%
- ----------------------------------------------------------------------------
$1,000 Loudoun County, Sanitation Authority,
Water and Sewer Revenue, (MBIA),
4.75%, 1/1/21 $ 874,010
2,500 Loudoun County, Sanitation Authority,
Water and Sewer Revenue, (MBIA),
4.75%, 1/1/30 2,113,050
1,000 Prince William County Service Authority,
(FGIC), 4.75%, 7/1/29 854,910
4,000 Richmond, Public Utility Revenue,
(MBIA), 5.125%, 1/15/28 3,691,280
1,250 Upper Occoquan Sewage Authority, (MBIA),
5.00%, 7/1/25 1,129,988
1,000 Upper Occoquan Sewage Authority, (MBIA),
5.15%, 7/1/20 948,170
6,150 Upper Occoquan Sewer Authority, (MBIA),
4.75%, 7/1/29 5,281,005
- ----------------------------------------------------------------------------
$ 14,892,413
- ----------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 4.5%
- ----------------------------------------------------------------------------
$2,000 Henrico County IDA, Lease,
7.00%, 8/1/13 $ 2,231,900
2,250 Henrico County IDA, Lease,
7.125%, 8/1/21 2,525,130
1,250 King George County IDA, Lease,
7.00%, 12/15/12 1,294,525
- ----------------------------------------------------------------------------
$ 6,051,555
- ----------------------------------------------------------------------------
Nursing Home -- 0.1%
- ----------------------------------------------------------------------------
$ 145 Covington-Allegheny County IDA, (Beverly
Enterprises), 9.375%, 9/1/01 $ 149,998
- ----------------------------------------------------------------------------
$ 149,998
- ----------------------------------------------------------------------------
Solid Waste -- 1.7%
- ----------------------------------------------------------------------------
$2,250 Southeastern Public Service Authority,
Solid Waste Systems, (AMT),
6.00%, 7/1/13 $ 2,263,500
- ----------------------------------------------------------------------------
$ 2,263,500
- ----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
72
<PAGE>
VIRGINIA MUNICIPALS PORTFOLIO AS OF AUGUST 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------
<C> <S> <C>
Special Tax Revenue -- 1.9%
- ----------------------------------------------------------------------------
$1,500 Dulles Community Development Authority,
(Dulles Town Center), 6.25%, 3/1/26 $ 1,475,220
1,000 Virginia State Transportation Board
Revenue, Route 28, Variable Rate,
4/1/18(1) 1,120,830
- ----------------------------------------------------------------------------
$ 2,596,050
- ----------------------------------------------------------------------------
Transportation -- 2.2%
- ----------------------------------------------------------------------------
$ 400 Charlottesville-Albermarle, Airport
Authority, (AMT), 6.125%, 12/1/13 $ 402,404
1,500 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 1,333,680
1,250 Virginia Port Authority, (AMT),
5.90%, 7/1/16 1,268,350
- ----------------------------------------------------------------------------
$ 3,004,434
- ----------------------------------------------------------------------------
Water and Sewer -- 4.5%
- ----------------------------------------------------------------------------
$3,500 Fairfax County Water Authority,
5.00%, 4/1/21 $ 3,240,755
805 Fairfax County Water Authority,
6.00%, 4/1/22 830,696
1,000 Fairfax County Water Authority, Variable
Rate, 4/1/29(1)(2) 1,036,240
1,000 Virginia Resource Authority, (Hopewell
Waste Water), (AMT), 6.00%, 10/1/25 1,019,480
- ----------------------------------------------------------------------------
$ 6,127,171
- ----------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $131,302,031) $135,490,145
- ----------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by 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 August 31, 1999, 26.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 4.8% to 14.9% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
73
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
AS OF AUGUST 31, 1999
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Assets
- -------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $79,721,443 $49,436,920 $71,244,303 $92,608,640
Unrealized appreciation 982,046 759,438 93,196 3,049,952
- -------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $80,703,489 $50,196,358 $71,337,499 $95,658,592
- -------------------------------------------------------------------------------------------------------------------
Cash $ 293,797 $ -- $ -- $ 591,999
Receivable for investments
sold -- 582,625 235,992 25,310
Interest receivable 1,148,763 768,475 980,769 1,491,196
- -------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $82,146,049 $51,547,458 $72,554,260 $97,767,097
- -------------------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------------------
Payable for when-issued
securities $ -- $ 795,957 $ 958,690 $ --
Due to bank -- 56,160 73,346 --
Demand note payable -- 200,000 300,000 --
Accrued expenses 4,781 4,570 1,799 5,187
- -------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 4,781 $ 1,056,687 $ 1,333,835 $ 5,187
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
INVESTORS' INTEREST IN
PORTFOLIO $82,141,268 $50,490,771 $71,220,425 $97,761,910
- -------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------------------------------------------
Net proceeds from capital
contributions and
withdrawals $81,159,222 $49,731,333 $71,127,229 $94,711,958
Net unrealized appreciation
(computed on the basis of
identified cost) 982,046 759,438 93,196 3,049,952
- -------------------------------------------------------------------------------------------------------------------
TOTAL $82,141,268 $50,490,771 $71,220,425 $97,761,910
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
74
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF ASSETS AND LIABILITIES
AS OF AUGUST 31, 1999
<TABLE>
<CAPTION>
LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Assets
- ----------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $32,434,698 $96,301,744 $65,161,804 $121,147,010
Unrealized appreciation
(depreciation) (169,454) (2,325,448) 2,240,995 5,331,001
- ----------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $32,265,244 $93,976,296 $67,402,799 $126,478,011
- ----------------------------------------------------------------------------------------------------------------------------
Cash $ -- $ -- $ -- $ 813,177
Receivable for investments
sold 85,000 -- 30,000 80,000
Receivable for when-issued
securities sold -- 3,546,846 -- --
Interest receivable 489,036 1,429,789 889,304 1,970,105
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $32,839,280 $98,952,931 $68,322,103 $129,341,293
- ----------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Payable for when-issued
securities $ -- $ 3,289,180 $ -- $ --
Due to bank 66,294 35,400 50,078 --
Demand note payable 100,000 400,000 -- --
Payable to affiliate for
Trustees' fees -- -- -- 35
Accrued expenses 5,486 5,127 7,738 11,128
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 171,780 $ 3,729,707 $ 57,816 $ 11,163
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
INVESTORS' INTEREST IN
PORTFOLIO $32,667,500 $95,223,224 $68,264,287 $129,330,130
- ----------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital
contributions and
withdrawals $32,836,954 $97,548,672 $66,023,292 $123,999,129
Net unrealized appreciation
(depreciation) (computed on
the basis of identified
cost) (169,454) (2,325,448) 2,240,995 5,331,001
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL $32,667,500 $95,223,224 $68,264,287 $129,330,130
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
75
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF ASSETS AND LIABILITIES
AS OF AUGUST 31, 1999
<TABLE>
<CAPTION>
OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $90,127,046 $43,917,167 $47,368,457 $131,302,031
Unrealized appreciation 1,846,892 947,404 1,298,648 4,188,114
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $91,973,938 $44,864,571 $48,667,105 $135,490,145
- --------------------------------------------------------------------------------------------------------------------------
Cash $ 57,923 $ -- $ -- $ --
Receivable for investments
sold 1,544,125 241,009 45,444 70,000
Interest receivable 1,211,140 625,354 710,246 2,189,324
- --------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $94,787,126 $45,730,934 $49,422,795 $137,749,469
- --------------------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------------------
Payable for investments
purchased $ 460,406 $ -- $ -- $ --
Payable for when-issued
securities -- 751,823 -- --
Demand note payable -- 100,000 -- 100,000
Due to bank -- 42,606 8,159 17,312
Accrued expenses 9,268 3,482 7,167 7,903
- --------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 469,674 $ 897,911 $ 15,326 $ 125,215
- --------------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
INVESTORS' INTEREST IN
PORTFOLIO $94,317,452 $44,833,023 $49,407,469 $137,624,254
- --------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital
contributions and
withdrawals $92,470,560 $43,885,619 $48,108,821 $133,436,140
Net unrealized appreciation
(computed on the basis of
identified cost) 1,846,892 947,404 1,298,648 4,188,114
- --------------------------------------------------------------------------------------------------------------------------
TOTAL $94,317,452 $44,833,023 $49,407,469 $137,624,254
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
76
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Investment Income
- -------------------------------------------------------------------------------------------------------------------
Interest $ 5,046,144 $ 3,081,097 $ 4,626,999 $ 6,295,606
- -------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 5,046,144 $ 3,081,097 $ 4,626,999 $ 6,295,606
- -------------------------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 326,867 $ 161,041 $ 287,404 $ 418,048
Trustees fees and expenses 8,577 8,492 9,334 11,091
Custodian fee 52,018 41,357 42,708 61,323
Legal and accounting services 19,020 19,016 19,006 20,944
Amortization of organization
expenses -- 747 -- --
Miscellaneous 10,639 13,770 12,326 14,432
- -------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 417,121 $ 244,423 $ 370,778 $ 525,838
- -------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 16,583 $ 8,647 $ 31,843 $ 17,654
- -------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 16,583 $ 8,647 $ 31,843 $ 17,654
- -------------------------------------------------------------------------------------------------------------------
NET EXPENSES $ 400,538 $ 235,776 $ 338,935 $ 508,184
- -------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 4,645,606 $ 2,845,321 $ 4,288,064 $ 5,787,422
- -------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- -------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 1,799,872 $ 723,380 $ 1,231,094 $ 1,033,885
Financial futures contracts 22,763 42,385 (78,110) (46,738)
- -------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 1,822,635 $ 765,765 $ 1,152,984 $ 987,147
- -------------------------------------------------------------------------------------------------------------------
Change in unrealized
appreciation (depreciation)
--
Investments (identified
cost basis) $(7,214,696) $(3,804,990) $(7,241,129) $(6,481,839)
Financial futures contracts 43,140 45,369 136,956 171,430
- -------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $(7,171,556) $(3,759,621) $(7,104,173) $(6,310,409)
- -------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
LOSS $(5,348,921) $(2,993,856) $(5,951,189) $(5,323,262)
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ (703,315) $ (148,535) $(1,663,125) $ 464,160
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
77
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Investment Income
- ----------------------------------------------------------------------------------------------------------------------------
Interest $ 1,963,315 $ 5,671,231 $ 4,205,494 $ 8,290,889
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 1,963,315 $ 5,671,231 $ 4,205,494 $ 8,290,889
- ----------------------------------------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 79,665 $ 386,101 $ 252,365 $ 588,407
Trustees fees and expenses 2,748 11,916 9,935 13,460
Custodian fee 28,263 68,270 44,238 85,475
Legal and accounting services 15,864 20,943 19,582 21,573
Amortization of organization
expenses 701 -- -- --
Miscellaneous 6,288 17,490 10,054 15,200
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 133,529 $ 504,720 $ 336,174 $ 724,115
- ----------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 12,309 $ 31,260 $ 13,201 $ 19,169
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 12,309 $ 31,260 $ 13,201 $ 19,169
- ----------------------------------------------------------------------------------------------------------------------------
NET EXPENSES $ 121,220 $ 473,460 $ 322,973 $ 704,946
- ----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 1,842,095 $ 5,197,771 $ 3,882,521 $ 7,585,943
- ----------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ (192,585) $ 978,480 $ 588,947 $ 634,520
Financial futures contracts 60,502 78,716 (57,847) 417,752
- ----------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ (132,083) $ 1,057,196 $ 531,100 $ 1,052,272
- ----------------------------------------------------------------------------------------------------------------------------
Change in unrealized
appreciation (depreciation)
--
Investments (identified
cost basis) $(2,567,350) $(9,489,950) $(5,404,532) $(10,001,534)
Financial futures contracts 33,128 84,256 114,183 --
- ----------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $(2,534,222) $(9,405,694) $(5,290,349) $(10,001,534)
- ----------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
LOSS $(2,666,305) $(8,348,498) $(4,759,249) $ (8,949,262)
- ----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM OPERATIONS $ (824,210) $(3,150,727) $ (876,728) $ (1,363,319)
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
78
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Investment Income
- --------------------------------------------------------------------------------------------------------------------------
Interest $ 5,736,356 $ 2,857,240 $ 2,998,086 $ 8,447,011
- --------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 5,736,356 $ 2,857,240 $ 2,998,086 $ 8,447,011
- --------------------------------------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 377,530 $ 140,934 $ 153,950 $ 600,595
Trustees fees and expenses 10,877 6,143 9,267 13,425
Custodian fee 57,670 36,222 35,451 80,765
Legal and accounting services 21,625 18,122 19,579 20,948
Amortization of organization
expenses -- 703 -- --
Miscellaneous 15,075 8,806 8,632 18,407
- --------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 482,777 $ 210,930 $ 226,879 $ 734,140
- --------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 12,712 $ 12,586 $ 7,736 $ 29,620
- --------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 12,712 $ 12,586 $ 7,736 $ 29,620
- --------------------------------------------------------------------------------------------------------------------------
NET EXPENSES $ 470,065 $ 198,344 $ 219,143 $ 704,520
- --------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 5,266,291 $ 2,658,896 $ 2,778,943 $ 7,742,491
- --------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- --------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 957,713 $ (163,160) $ 152,219 $ 1,358,363
Financial futures contracts 86,092 (12,386) (40,480) 121,101
- --------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ 1,043,805 $ (175,546) $ 111,739 $ 1,479,464
- --------------------------------------------------------------------------------------------------------------------------
Change in unrealized
appreciation (depreciation)
--
Investments (identified
cost basis) $(6,028,925) $(3,664,758) $(2,956,901) $(10,075,412)
Financial futures contracts -- -- 80,022 129,625
- --------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $(6,028,925) $(3,664,758) $(2,876,879) $ (9,945,787)
- --------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
LOSS $(4,985,120) $(3,840,304) $(2,765,140) $ (8,466,323)
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 281,171 $(1,181,408) $ 13,803 $ (723,832)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
79
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net
Assets ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 4,645,606 $ 2,845,321 $ 4,288,064 $ 5,787,422
Net realized gain 1,822,635 765,765 1,152,984 987,147
Net change in unrealized
appreciation
(depreciation) (7,171,556) (3,759,621) (7,104,173) (6,310,409)
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ (703,315) $ (148,535) $ (1,663,125) $ 464,160
- -------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 7,798,450 $ 5,682,021 $ 5,916,906 $ 6,215,330
Withdrawals (19,730,570) (11,297,759) (20,284,630) (21,552,860)
- -------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM CAPITAL TRANSACTIONS $(11,932,120) $ (5,615,738) $(14,367,724) $(15,337,530)
- -------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $(12,635,435) $ (5,764,273) $(16,030,849) $(14,873,370)
- -------------------------------------------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------------------------------------------
At beginning of year $ 94,776,703 $ 56,255,044 $ 87,251,274 $112,635,280
- -------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 82,141,268 $ 50,490,771 $ 71,220,425 $ 97,761,910
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
80
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net
Assets LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,842,095 $ 5,197,771 $ 3,882,521 $ 7,585,943
Net realized gain (loss) (132,083) 1,057,196 531,100 1,052,272
Net change in unrealized
appreciation
(depreciation) (2,534,222) (9,405,694) (5,290,349) (10,001,534)
- ----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM OPERATIONS $ (824,210) $ (3,150,727) $ (876,728) $ (1,363,319)
- ----------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 4,126,276 $ 11,497,954 $ 7,132,282 $ 7,046,445
Withdrawals (7,144,339) (18,276,256) (12,389,264) (29,283,120)
- ----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM CAPITAL TRANSACTIONS $(3,018,063) $ (6,778,302) $ (5,256,982) $(22,236,675)
- ----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $(3,842,273) $ (9,929,029) $ (6,133,710) $(23,599,994)
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
At beginning of year $36,509,773 $105,152,253 $ 74,397,997 $152,930,124
- ----------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $32,667,500 $ 95,223,224 $ 68,264,287 $129,330,130
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
81
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net
Assets OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 5,266,291 $ 2,658,896 $ 2,778,943 $ 7,742,491
Net realized gain (loss) 1,043,805 (175,546) 111,739 1,479,464
Net change in unrealized
appreciation
(depreciation) (6,028,925) (3,664,758) (2,876,879) (9,945,787)
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 281,171 $ (1,181,408) $ 13,803 $ (723,832)
- --------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 10,547,640 $ 6,573,386 $ 5,309,074 $ 12,279,948
Withdrawals (20,266,456) (10,676,028) (9,624,115) (25,189,332)
- --------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM CAPITAL TRANSACTIONS $ (9,718,816) $ (4,102,642) $(4,315,041) $(12,909,384)
- --------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (9,437,645) $ (5,284,050) $(4,301,238) $(13,633,216)
- --------------------------------------------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------------------------------
At beginning of year $103,755,097 $ 50,117,073 $53,708,707 $151,257,470
- --------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 94,317,452 $ 44,833,023 $49,407,469 $137,624,254
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
82
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net
Assets ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 5,095,243 $ 3,100,264 $ 4,801,322 $ 6,375,114
Net realized gain 286,744 521,968 1,210,267 1,448,862
Net change in unrealized
appreciation
(depreciation) 1,494,649 1,138,587 1,131,581 1,384,902
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 6,876,636 $ 4,760,819 $ 7,143,170 $ 9,208,878
- -------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 5,971,850 $ 3,190,175 $ 5,270,754 $ 5,929,474
Withdrawals (20,427,780) (14,381,768) (20,324,717) (25,613,276)
- -------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM CAPITAL TRANSACTIONS $(14,455,930) $(11,191,593) $(15,053,963) $(19,683,802)
- -------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (7,579,294) $ (6,430,774) $ (7,910,793) $(10,474,924)
- -------------------------------------------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------------------------------------------
At beginning of year $102,355,997 $ 62,685,818 $ 95,162,067 $123,110,204
- -------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 94,776,703 $ 56,255,044 $ 87,251,274 $112,635,280
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
83
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net
Assets LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,831,943 $ 5,400,842 $ 4,136,832 $ 8,388,082
Net realized gain 354,545 824,903 956,161 1,791,750
Net change in unrealized
appreciation
(depreciation) 679,062 1,975,688 1,572,339 2,930,375
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 2,865,550 $ 8,201,433 $ 6,665,332 $ 13,110,207
- ----------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 5,706,360 $ 8,581,280 $ 4,493,837 $ 9,214,460
Withdrawals (6,494,266) (19,031,547) (16,642,888) (36,965,507)
- ----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM CAPITAL TRANSACTIONS $ (787,906) $(10,450,267) $(12,149,051) $(27,751,047)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS $ 2,077,644 $ (2,248,834) $ (5,483,719) $(14,640,840)
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
At beginning of year $34,432,129 $107,401,087 $ 79,881,716 $167,570,964
- ----------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $36,509,773 $105,152,253 $ 74,397,997 $152,930,124
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
84
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net
Assets OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 5,723,164 $ 2,819,111 $ 2,821,503 $ 8,239,066
Net realized gain 1,571,010 1,175,496 463,355 2,037,263
Net change in unrealized
appreciation
(depreciation) 1,436,080 554,107 897,702 2,473,102
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 8,730,254 $ 4,548,714 $ 4,182,560 $ 12,749,431
- --------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 3,763,506 $ 2,733,381 $ 5,452,717 $ 7,893,877
Withdrawals (22,431,429) (11,134,947) (10,088,250) (31,043,370)
- --------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM CAPITAL TRANSACTIONS $(18,667,923) $ (8,401,566) $ (4,635,533) $(23,149,493)
- --------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (9,937,669) $ (3,852,852) $ (452,973) $(10,400,062)
- --------------------------------------------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------------------------------
At beginning of year $113,692,766 $ 53,969,925 $ 54,161,680 $161,657,532
- --------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $103,755,097 $ 50,117,073 $ 53,708,707 $151,257,470
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
85
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO
-------------------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Ratios to average daily net assets
- ---------------------------------------------------------------------------------------
Expenses(1) 0.46% 0.49% 0.50% 0.49% 0.47%
Expenses after custodian fee
reduction 0.45% 0.47% 0.49% 0.45% --
Net investment income 5.18% 5.21% 5.47% 5.50% 5.77%
Portfolio Turnover 23% 23% 23% 52% 51%
- ---------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $82,141 $94,777 $102,356 $108,544 $118,486
- ---------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended
August 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
86
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
ARKANSAS PORTFOLIO
----------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------
Expenses(1) 0.45% 0.44% 0.49% 0.48% 0.46%
Expenses after custodian fee
reduction 0.43% 0.43% 0.48% 0.46% --
Net investment income 5.25% 5.22% 5.40% 5.40% 5.69%
Portfolio Turnover 24% 13% 17% 11% 23%
- ------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $50,491 $56,255 $62,686 $74,103 $81,535
- ------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended
August 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
87
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
GEORGIA PORTFOLIO
------------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
Ratios to average daily net assets
- --------------------------------------------------------------------------------------
Expenses(1) 0.46% 0.48% 0.49% 0.50% 0.46%
Expenses after custodian fee
reduction 0.42% 0.47% 0.47% 0.45% --
Net investment income 5.31% 5.29% 5.55% 5.59% 5.73%
Portfolio Turnover 38% 19% 13% 21% 48%
- --------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $71,220 $87,251 $95,162 $108,974 $122,949
- --------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended
August 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
88
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
KENTUCKY PORTFOLIO
--------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------
Expenses(1) 0.49% 0.49% 0.51% 0.53% 0.49%
Expenses after custodian fee
reduction 0.47% 0.48% 0.48% 0.50% --
Net investment income 5.36% 5.38% 5.56% 5.49% 5.75%
Portfolio Turnover 11% 15% 28% 28% 30%
- ----------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR
(000'S OMITTED) $97,762 $112,635 $123,110 $133,017 $145,269
- ----------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended
August 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
89
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
LOUISIANA PORTFOLIO
----------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ------------------------------------------------------------------------------------
Net expenses(1) 0.37% 0.39% 0.40% 0.30% 0.22%
Net expenses after custodian
fee reduction 0.34% 0.34% 0.38% 0.23% --
Net investment income 5.16% 5.25% 5.85% 5.90% 6.06%
Portfolio Turnover 20% 43% 27% 99% 46%
- ------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $32,668 $36,510 $34,432 $35,049 $34,309
- ------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the investment
adviser fee, an allocation of expenses to the Investment Adviser, or both. Had
such action not been taken, the ratios would have been as follows:
Expenses(1) 0.41% 0.33%
Expenses after custodian fee
reduction 0.35% --
Net investment income 5.79% 5.95%
- ------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended August 31,
1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
90
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
MARYLAND PORTFOLIO
--------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------
Expenses(1) 0.49% 0.48% 0.48% 0.51% 0.47%
Expenses after custodian fee
reduction 0.46% 0.44% 0.45% 0.48% --
Net investment income 5.05% 5.11% 5.38% 5.50% 5.79%
Portfolio Turnover 31% 30% 30% 33% 30%
- ----------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $95,223 $105,152 $107,401 $110,588 $115,004
- ----------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended August 31,
1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
91
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
MISSOURI PORTFOLIO
----------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------
Expenses(1) 0.46% 0.47% 0.47% 0.49% 0.48%
Expenses after custodian fee
reduction 0.44% 0.45% 0.46% 0.47% --
Net investment income 5.28% 5.31% 5.52% 5.52% 5.76%
Portfolio Turnover 21% 11% 5% 36% 24%
- ------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $68,264 $74,398 $79,882 $85,162 $93,162
- ------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended August 31,
1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
92
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
NORTH CAROLINA PORTFOLIO
---------------------------------------------------------
YEAR ENDED AUGUST 31,
---------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------
Expenses(1) 0.50% 0.51% 0.52% 0.52% 0.48%
Expenses after custodian fee
reduction 0.49% 0.48% 0.50% 0.48% --
Net investment income 5.24% 5.31% 5.53% 5.51% 5.78%
Portfolio Turnover 3% 26% 42% 54% 33%
- -----------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $129,330 $152,930 $167,571 $187,044 $195,179
- -----------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended August 31,
1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
93
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
OREGON PORTFOLIO
--------------------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------
Expenses(1) 0.48% 0.48% 0.56% 0.50% 0.50%
Expenses after custodian fee
reduction 0.47% 0.48% 0.55% 0.47% --
Net investment income 5.27% 5.28% 5.46% 5.37% 5.60%
Portfolio Turnover 35% 9% 22% 28% 22%
- ----------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $94,317 $103,755 $113,693 $129,759 $146,391
- ----------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended August 31,
1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
94
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
SOUTH CAROLINA PORTFOLIO
----------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------
Expenses(1) 0.43% 0.44% 0.51% 0.53% 0.44%
Expenses after custodian fee
reduction 0.40% 0.43% 0.50% 0.51% --
Net investment income 5.33% 5.37% 5.59% 5.65% 5.81%
Portfolio Turnover 26% 21% 8% 36% 75%
- ------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $44,833 $50,117 $53,970 $58,318 $61,412
- ------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended August 31,
1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
95
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
TENNESSEE PORTFOLIO
----------------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------
Expenses(1) 0.42% 0.44% 0.43% 0.45% 0.41%
Expenses after custodian fee
reduction 0.41% 0.42% 0.42% 0.43% --
Net investment income 5.23% 5.20% 5.48% 5.52% 5.81%
Portfolio Turnover 13% 21% 3% 39% 20%
- ------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $49,407 $53,709 $54,162 $56,065 $58,673
- ------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended August 31,
1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
96
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
VIRGINIA PORTFOLIO
---------------------------------------------------------
YEAR ENDED AUGUST 31,
---------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------
Expenses(1) 0.50% 0.52% 0.52% 0.51% 0.48%
Expenses after custodian fee
reduction 0.48% 0.50% 0.49% 0.48% --
Net investment income 5.26% 5.27% 5.53% 5.55% 5.81%
Portfolio Turnover 17% 8% 25% 30% 38%
- -----------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S
OMITTED) $137,624 $151,257 $161,658 $177,644 $191,748
- -----------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended August 31, 1996 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 ratio for the year ended August 31,
1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
97
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
- -------------------------------------------
Alabama Municipals Portfolio (Alabama Portfolio), Arkansas Municipals
Portfolio (Arkansas Portfolio), Georgia Municipals Portfolio (Georgia
Portfolio), Kentucky Municipals Portfolio (Kentucky Portfolio), Louisiana
Municipals Portfolio (Louisiana Portfolio), Maryland Municipals Portfolio
(Maryland Portfolio), Missouri Municipals Portfolio (Missouri Portfolio),
North Carolina Municipals Portfolio (North Carolina Portfolio), Oregon
Municipals Portfolio (Oregon Portfolio), South Carolina Municipals Portfolio
(South Carolina Portfolio), Tennessee Municipals Portfolio (Tennessee
Portfolio) and Virginia Municipals Portfolio (Virginia Portfolio),
collectively the Portfolios, are registered under the Investment Company Act
of 1940, as amended, as non-diversified open-end management investment
companies which were organized as trusts under the laws of the State of New
York on May 1, 1992. The Declarations of Trust permit the Trustees to issue
interests in the Portfolios. The following is a summary of significant
accounting policies of the Portfolios. The policies are in conformity with
generally accepted accounting principles.
A Investment Valuations -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Financial futures contracts and
options on financial futures contracts listed on commodity exchanges are
valued at closing settlement prices. Over-the-counter options on financial
futures contracts are normally valued at the mean between the latest bid and
asked prices. Short-term obligations, maturing in sixty days or less, are
valued at amortized cost, which approximates value. Investments for which
valuations or market quotations are unavailable are valued at fair value
using methods determined in good faith by or at the direction of the
Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for Federal
income tax purposes.
C Federal 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 for both
hedging against anticipated future changes in interest rates and investment
purposes. 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 purchase of a put option on a
financial futures contract by a Portfolio, the premium paid is recorded as an
investment, the value of which is marked-to-market daily. When a purchased
option expires, a Portfolio will realize a loss in the amount of the cost of
the option. When a Portfolio enters into a closing sale transaction, the
Portfolio will realize a gain or loss depending on whether the sales proceeds
from the closing sale transaction are greater or less than the cost of the
option. When a Portfolio exercises a put option, settlement is made in cash.
The risk associated with purchasing options is limited to the premium
originally paid.
G When-issued and Delayed Delivery Transactions -- The Portfolios may engage in
when-issued and delayed delivery transactions. The Portfolios record
when-issued securities on trade date and maintain security positions such
that sufficient liquid assets will be available to make payments for the
securities purchased.
98
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
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 Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolios. Pursuant to the custodian agreements, IBT receives a fee
reduced by credits which are determined based on the average daily cash
balances each Portfolio maintains with IBT. All significant credit balances
used to reduce each Portfolio's custodian fees are reported as a reduction of
expenses in the Statement of Operations.
J Use of Estimates -- The preparation of the 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.
2 Investment Adviser Fee and Other Transactions with Affiliates
- -------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to each Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e., income other than gains from the sale of
securities). For the year ended August 31, 1999, the Portfolios paid advisory
fees as follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT EFFECTIVE RATE*
<S> <C> <C>
- ---------------------------------------------------------------------
Alabama $326,867 0.36%
Arkansas 161,041 0.30%
Georgia 287,404 0.36%
Kentucky 418,048 0.39%
Louisiana 79,665 0.22%
Maryland 386,101 0.38%
Missouri 252,365 0.34%
North Carolina 588,407 0.41%
Oregon 377,530 0.38%
South Carolina 140,934 0.28%
Tennessee 153,950 0.29%
Virginia 600,595 0.41%
</TABLE>
* Advisory fees paid as a percentage of average daily net assets.
Except as to Trustees of the Portfolios who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services
to the Portfolios out of such investment adviser fee.
Trustees of the Portfolios that are not affiliated with the Investment
Adviser may elect to defer receipt of all or a percentage of their annual
fees in accordance with the terms of the Trustees Deferred Compensation Plan.
For the year ended August 31, 1999, no significant amounts have been
deferred.
Certain officers and Trustees of the Portfolios are officers of the above
organizations.
3 Investments
- -------------------------------------------
Purchases and sales of investments, other than U.S. Government securities,
purchased options and short-term obligations, for the year ended August 31,
1999, were as follows:
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $19,986,217
Sales 27,403,123
<CAPTION>
ARKANSAS PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $12,787,646
Sales 15,299,979
<CAPTION>
GEORGIA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $30,287,404
Sales 39,306,062
<CAPTION>
KENTUCKY PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $11,210,125
Sales 20,097,121
<CAPTION>
LOUISIANA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 7,113,612
Sales 8,118,675
<CAPTION>
MARYLAND PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $31,302,727
Sales 34,659,531
<CAPTION>
MISSOURI PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $14,824,775
Sales 15,422,381
</TABLE>
99
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
NORTH CAROLINA PORTFOLIO
- ------------------------------------------------------
<S> <C>
Purchases $ 4,065,484
Sales 21,525,341
<CAPTION>
OREGON PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $34,355,553
Sales 40,320,456
<CAPTION>
SOUTH CAROLINA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $12,649,548
Sales 13,830,493
<CAPTION>
TENNESSEE PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 6,668,843
Sales 7,736,713
<CAPTION>
VIRGINIA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $24,443,761
Sales 28,596,240
</TABLE>
4 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at August 31, 1999, as computed on a
federal income tax basis, are as follows:
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 79,721,443
- -------------------------------------------------------
Gross unrealized appreciation $ 3,243,384
Gross unrealized depreciation (2,261,338)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 982,046
- -------------------------------------------------------
<CAPTION>
ARKANSAS PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 49,436,920
- -------------------------------------------------------
Gross unrealized appreciation $ 1,482,250
Gross unrealized depreciation (722,812)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 759,438
- -------------------------------------------------------
<CAPTION>
GEORGIA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 71,244,303
- -------------------------------------------------------
Gross unrealized appreciation $ 2,888,455
Gross unrealized depreciation (2,795,259)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 93,196
- -------------------------------------------------------
<CAPTION>
KENTUCKY PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 92,608,640
- -------------------------------------------------------
Gross unrealized appreciation $ 4,445,032
Gross unrealized depreciation (1,395,080)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 3,049,952
- -------------------------------------------------------
<CAPTION>
LOUISIANA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 32,434,698
- -------------------------------------------------------
Gross unrealized appreciation $ 875,382
Gross unrealized depreciation (1,044,836)
- -------------------------------------------------------
NET UNREALIZED DEPRECIATION $ (169,454)
- -------------------------------------------------------
<CAPTION>
MARYLAND PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 96,301,744
- -------------------------------------------------------
Gross unrealized appreciation $ 2,498,264
Gross unrealized depreciation (4,823,712)
- -------------------------------------------------------
NET UNREALIZED DEPRECIATION $ (2,325,448)
- -------------------------------------------------------
<CAPTION>
MISSOURI PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 65,161,804
- -------------------------------------------------------
Gross unrealized appreciation $ 3,572,292
Gross unrealized depreciation (1,331,297)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 2,240,995
- -------------------------------------------------------
<CAPTION>
NORTH CAROLINA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $121,147,873
- -------------------------------------------------------
Gross unrealized appreciation $ 6,612,733
Gross unrealized depreciation (1,282,595)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 5,330,138
- -------------------------------------------------------
</TABLE>
100
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
OREGON PORTFOLIO
- -------------------------------------------------------
<S> <C>
AGGREGATE COST $ 90,127,046
- -------------------------------------------------------
Gross unrealized appreciation $ 3,493,586
Gross unrealized depreciation (1,646,694)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 1,846,892
- -------------------------------------------------------
<CAPTION>
SOUTH CAROLINA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 43,917,167
- -------------------------------------------------------
Gross unrealized appreciation $ 1,981,997
Gross unrealized depreciation (1,034,593)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 947,404
- -------------------------------------------------------
<CAPTION>
TENNESSEE PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 47,368,457
- -------------------------------------------------------
Gross unrealized appreciation $ 1,912,802
Gross unrealized depreciation (614,154)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 1,298,648
- -------------------------------------------------------
<CAPTION>
VIRGINIA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $131,329,574
- -------------------------------------------------------
Gross unrealized appreciation $ 6,370,254
Gross unrealized depreciation (2,209,683)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 4,160,571
- -------------------------------------------------------
</TABLE>
5 Line of Credit
- -------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and its affiliates in a $130 million unsecured line of credit agreement
with a group of banks. Borrowings will be made by the portfolios or funds
solely to facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Interest is charged to each portfolio or fund based on its
borrowings at an amount above either the Eurodollar rate or Federal Funds
effective rate. In addition, a fee computed at an annual rate of 0.10% on the
daily unused portion of the facility is allocated among the participating
portfolios and funds at the end of each quarter. At August 31, 1999, the
Arkansas Portfolio, Georgia Porfolio, Louisiana Portfolio, Maryland
Portfolio, South Carolina Portfolio and Virginia Portfolio had balances
outstanding pursuant to this line of credit of $200,000, $300,000, $100,000,
$400,000, $100,000 and $100,000, respectively. The Portfolios did not have
any significant borrowings or allocated fees during the year ended
August 31, 1999.
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.
At August 31, 1999, there were no outstanding obligations under these
financial instruments.
101
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF AUGUST 31, 1999
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND INVESTORS OF ALABAMA MUNICIPALS
PORTFOLIO, ARKANSAS MUNICIPALS PORTFOLIO, GEORGIA
MUNICIPALS PORTFOLIO, KENTUCKY MUNICIPALS PORTFOLIO,
LOUISIANA MUNICIPALS PORTFOLIO, MARYLAND MUNICIPALS
PORTFOLIO, MISSOURI MUNICIPALS PORTFOLIO, NORTH
CAROLINA MUNICIPALS PORTFOLIO, OREGON MUNICIPALS
PORTFOLIO, SOUTH CAROLINA MUNICIPALS PORTFOLIO,
TENNESSEE MUNICIPALS PORTFOLIO AND VIRGINIA
MUNICIPALS PORTFOLIO:
- --------------------------------------------------
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Alabama Municipals Portfolio, Arkansas
Municipals Portfolio, Georgia Municipals Portfolio, Kentucky Municipals
Portfolio, Louisiana Municipals Portfolio, Maryland Municipals Portfolio,
Missouri Municipals Portfolio, North Carolina Municipals Portfolio, Oregon
Municipals Portfolio, South Carolina Municipals Portfolio, Tennessee Municipals
Portfolio and Virginia Municipals Portfolio (the Portfolios) as of August 31,
1999, the related statements of operations for the year then ended, the
statements of changes in net assets for the years ended August 31, 1999 and 1998
and supplementary data for each of the years in the five year period ended
August 31, 1999. These financial statements and supplementary data are the
responsibility of the Trusts' management. Our responsibility is to express an
opinion on the financial statements and supplementary data based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at
August 31, 1999, by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial position of the aforementioned
Portfolios at August 31, 1999, the results of their operations, the changes in
their net assets and their supplementary data for the respective stated periods
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
October 1, 1999
102
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF AUGUST 31, 1999
INVESTMENT MANAGEMENT
EATON VANCE MUNICIPALS FUNDS
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
Thomas M. Metzold
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking Emeritus, Harvard University Graduate
School of Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
MUNICIPALS PORTFOLIOS
Officers
Thomas J. Fetter
President and Portfolio
Manager of South Carolina
Municipals Portfolio
James B. Hawkes
Vice President and Trustee
William H. Ahern, Jr.
Vice President and Portfolio Manager
of Alabama and Kentucky Municipals Portfolios
Robert B. MacIntosh
Vice President and Portfolio Manager
of Louisiana, Maryland, Missouri and
North Carolina Municipals Portfolios
Timothy T. Browse
Vice President and Portfolio Manager
of Arkansas, Maryland and
Virginia Municipals Portfolios
Cynthia J. Clemson
Vice President and Portfolio Manager
of Georgia, Missouri, and Tennessee
Municipals Portfolios
Thomas M. Metzold
Vice President and Portfolio Manager of
Oregon Municipals Portfolio
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking Emeritus, Harvard University Graduate
School of Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
103
