<PAGE>
[LOGO]
[PHOTO]
Annual Report July 31, 1999
EATON VANCE
Arizona
[PHOTO] MUNICIPALS
Colorado
TRUST
Connecticut
Global Management-Global Distribution
Michigan
Minnesota
New Jersey
Pennsylvania
[PHOTO] Texas
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
LETTER TO SHAREHOLDERS
[PHOTO]
Thomas J. Fetter
President
The first six months of 1999 proved to be increasingly challenging for the
municipal market. At the outset, continued low inflation provided a fairly
positive environment for the tax-exempt sector. The U.S. economy grew 4.6% in
the first quarter before posting a more moderate 2.3% growth rate in the second
quarter. Inflation appeared to remain fairly well in check, although rising
energy prices and labor cost pressures caught the eye of the Federal Reserve. In
late June, the Fed raised its Federal Funds rate - a key short-term interest
rate barometer - by 25 basis points (.25%), the first such increase since
February 1995. Then in late August, the Fed raised the rate another .25%,
bringing the Fed funds rate to 5.25%.
Municipal bonds gained ground on Treasuries in the first quarter of 1999, as
supply pressures, which weighed so heavily on the municipal market in 1998,
eased somewhat early in the year. In June and July, however, the municipal
market encountered some turmoil amid uncertainty about possible Federal Reserve
actions as well as confusion over tax proposals pending in Congress. For the six
months ended July 31, 1999, the Lehman Brothers Municipal Bond Index - a widely
recognized, unmanaged index of municipal bonds - posted a return of 1.83%.*
Municipal bonds remain an undervalued asset class...
Municipal bonds remained significantly undervalued relative to Treasury bonds.
The numbers are most compelling. At July 31, the ratio of municipal yields to
Treasury yields was 91% - very high by historical standards. Market anomalies
such as this often create unusual opportunities. Indeed, considering their
tax-exempt status, municipal bonds appear to be an excellent bargain for
income-oriented investors.
- --------------------------------------------------------
Municipal bonds yield 91% of Treasury yields
<TABLE>
<S> <C>
30-Year AAA-rated General
Obligation (G0) Bonds* 5.55%
Taxable equity yield
in 36% tax bracket 8.67%
30-Year Treasury bond 6.10%
</TABLE>
Principal and interest payments of Treasury securities are guaranteed by the
U.S. Government.
*GO yields are a compilation of a representative variety of general
obligations and are not necessarily representative of the Funds' yield.
Statistics as of July 31, 1999.
Past performance is no guarantee of future results.
Source: Bloomberg, L.P.
- --------------------------------------------------------
With the 2000 elections nearing, tax reform has become a political football...
Once again, the prospects of lower taxes are threatened by a political stalemate
in Washington. The administration has threatened to veto recent tax cuts passed
by Congress. Meanwhile, taxpayers continue to bear the burden of high taxes
while facing the challenge of paying for college tuition, caring for elderly
parents, or trying to plan for retirement.
At Eaton Vance, we believe that, amid rising surpluses and modest inflation
pressures, the outlook for municipal bonds is quite favorable. And, at their
recent levels, municipal bonds remain an especially attractive fixed-income
alternative. In this uncertain climate, municipals represent a prudent way to
diversify one's investment portfolio while lowering one's tax burden. We believe
that municipals merit strong consideration from today's tax-conscious investors.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter,
President
September 9, 1999
*It is not possible to invest directly in the Index.
- --------------------------------------------------------------------------------
MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED. YIELDS WILL
CHANGE.
- --------------------------------------------------------------------------------
2
<PAGE>
EATON VANCE ARIZONA MUNICIPALS FUND AS OF JULY 31, 1999
INVESTMENT UPDATE
[PHOTO]
Cynthia J. Clemson
Portfolio Manager
The Economy
- --------------------------
- - With strong consumer spending and a housing boom fueling the economy, Arizona
continued to experience robust growth, according to data available through the
first quarter 1999. Total housing permits, which have hit new highs each
month, increased by 21% from first quarter 1998.
- - Consumer spending remained vigorous, made possible by a combination of
factors, including increasing real wages and low interest rates. Retail sales
have been rising at a 7-8% annual rate, with apparel and accessories stores
showing the largest gains. Consumer confidence levels are at record highs,
although forecasters predict a drop-off in the coming year.
- - Exports improved significantly over last year's performance, thanks to a
strong fourth quarter of 1998, in which total exports rose 27.5%. While
exports to Latin American markets remained weak, the Mexican market appeared
to be reinvigorated, as pressures eased on the peso and gross domestic product
picked up momentum.
Management Update
- --------------------------
- - With muni yields dramatically higher in the first half of 1999, management
focused on identifying bonds or specific lots of bonds that could be sold at a
loss and using the proceeds to purchase more desirable bonds. This investment
strategy allowed management to realize a capital loss the Fund can use in the
future to offset gains it might have, thereby lowering tax liability.
- - Emphasis on call protection has remained an important component of
management's strategy. Management continually strives to improve the call
characteristics of in the Portfolio whenever possible.
- - Credit quality spreads remained narrow in the first half of 1999. Management
used this opportunity to look for ways to increase the Portfolio's overall
credit quality.
The Fund
- --------------------------
- - During the year ended July 31, 1999, the Fund's Class A and Class B shares had
total returns of 1.5% and 0.7%, respectively.(1) For Class A, this return
resulted from a decline in net asset value (NAV) per share to $9.85 on July
31, 1999 from $10.20 on July 31, 1998, and the reinvestment of $0.506 per
share in tax-free income.2 For Class B, this return resulted from a decline in
NAV to $10.95 from $11.34, and the reinvestment of $0.482 per share in
tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999, the
distribution rates were 5.13% for Class A and 4.38% for Class B.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 5.14% and
4.62%, respectively.(4)
Rating Distribution+
- --------------------------
<TABLE>
<S> <C>
A 11.4%
AA 20.0%
AAA 42.1%
B 0.8%
BB 7.0%
BBB 5.2%
Non-Rated 13.5%
</TABLE>
+May not represent the Portfolio's current or future investments.
(1) These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charge (CDSC) for
Class B shares. (2)A portion of the Fund's income may be subject to
federal income and/or alternative minimum tax and state income tax.
(3)The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution
per share (annualized)by the net asset value (NAV). (4)The Fund's SEC
yield is calculated by dividing the net investment income per share for
the 30-day period by the offering price at the end of the period and
annualizing the result. (5)Returns are calculated by determining the
percentage change in NAV with all distributions reinvested. SEC average
annual returns for Class A reflect a sales charge of 4.75% and for Class
B reflect applicable CDSC based on the following schedule: 5% - 1st and
2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th year.
Past performance is no guarantee of future results. Investment return and
principal value may fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of July 31, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B
- ----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year 1.5% 0.7%
Five Years 6.2 5.8
Life of Fund+ 4.9 6.7
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year -3.4% -4.1%
Five Years 5.2 5.4
Life of Fund+ 4.0 6.7
</TABLE>
+Inception date: Class A: 12/13/93; Class B: 7/25/91
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EATON VANCE ARIZONA MUNICIPALS FUND, CLASS B VS.LEHMAN
BROTHERS MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
Date Fund/NAV LBMBI
---- -------- -----
<S> <C> <C>
7/31/91 $10,000 $10,000
8/31/91 $10,079 $10,132
9/30/91 $10,310 $10,264
10/31/91 $10,411 $10,356
11/30/91 $10,396 $10,385
12/31/91 $10,736 $10,608
1/31/92 $10,698 $10,632
2/28/92 $10,719 $10,636
3/31/92 $10,635 $10,639
4/30/92 $10,720 $10,734
5/31/92 $10,931 $10,861
6/30/92 $11,146 $11,043
7/31/92 $11,621 $11,374
8/31/92 $11,343 $11,263
9/30/92 $11,386 $11,337
10/31/92 $11,046 $11,225
11/30/92 $11,437 $11,426
12/31/92 $11,598 $11,543
1/31/93 $11,625 $11,677
2/28/93 $12,300 $12,100
3/31/93 $12,153 $11,972
4/30/93 $12,278 $12,092
5/31/93 $12,349 $12,160
6/30/93 $12,638 $12,364
7/31/93 $12,616 $12,379
8/31/93 $12,970 $12,637
9/30/93 $13,127 $12,781
10/31/93 $13,170 $12,806
11/30/93 $12,988 $12,693
12/31/93 $13,337 $12,961
1/31/94 $13,493 $13,109
2/28/94 $13,062 $12,770
3/31/94 $12,295 $12,249
4/30/94 $12,352 $12,353
5/31/94 $12,470 $12,460
6/30/94 $12,331 $12,388
7/31/94 $12,581 $12,611
8/31/94 $12,615 $12,655
9/30/94 $12,369 $12,469
10/31/94 $12,012 $12,248
11/30/94 $11,674 $12,026
12/31/94 $12,045 $12,291
1/31/95 $12,534 $12,642
2/28/95 $13,008 $13,010
3/31/95 $13,143 $13,160
4/30/95 $13,136 $13,175
5/31/95 $13,574 $13,596
6/30/95 $13,349 $13,477
7/31/95 $13,416 $13,604
8/31/95 $13,582 $13,777
9/30/95 $13,648 $13,864
10/31/95 $13,894 $14,065
11/30/95 $14,218 $14,299
12/31/95 $14,401 $14,436
1/31/96 $14,482 $14,545
2/28/96 $14,314 $14,447
3/31/96 $14,052 $14,263
4/30/96 $13,989 $14,222
5/31/96 $13,963 $14,217
6/30/96 $14,114 $14,372
7/31/96 $14,244 $14,502
8/31/96 $14,245 $14,499
9/30/96 $14,462 $14,701
10/31/96 $14,581 $14,867
11/30/96 $14,812 $15,140
12/31/96 $14,746 $15,076
1/31/97 $14,760 $15,104
2/28/97 $14,930 $15,243
3/31/97 $14,732 $15,040
4/30/97 $14,882 $15,166
5/31/97 $15,089 $15,394
6/30/97 $15,230 $15,558
7/31/97 $15,646 $15,989
8/31/97 $15,509 $15,839
9/30/97 $15,679 $16,027
10/31/97 $15,764 $16,130
11/30/97 $15,841 $16,225
12/31/97 $16,064 $16,462
1/31/98 $16,351 $16,631
2/28/98 $16,371 $16,636
3/31/98 $16,380 $16,651
4/30/98 $16,251 $16,576
5/31/98 $16,482 $16,838
6/30/98 $16,498 $16,905
7/31/98 $16,513 $16,947
8/31/98 $16,738 $17,209
9/30/98 $16,883 $17,423
10/31/98 $16,838 $17,423
11/30/98 $16,900 $17,484
12/31/98 $16,912 $17,528
1/31/99 $17,091 $17,736
2/28/99 $16,990 $17,659
3/31/99 $16,983 $17,684
4/30/99 $17,044 $17,727
5/31/99 $16,942 $17,625
6/30/99 $16,622 $17,371
7/31/99 $16,636 $17,435
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
7/25/91. Index information is available only at month end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 12/31/93 at net asset value would have grown to $13,042 on
7/31/99; $12,422, including the 4.75% maximum sales charge. The Index's total
return does not reflect commissions or expenses that would have been incurred
if an investor individually purchased or sold the securities represented in
the Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.52% of the total dividends paid by the Fund from net investment
income during the year ended July 31, 1999 was designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
3
<PAGE>
EATON VANCE COLORADO MUNICIPALS FUND AS OF JULY 31, 1999
INVESTMENT UPDATE
[PHOTO]
William H. Ahern
Portfolio Manager
The Economy
- --------------------------
- - In July 1999,Colorado posted a low 3.0% seasonally adjusted unemployment rate,
compared to the national 4.3% level. This figure represents a 1.0% decline
from July 1998. The services sector led the way in job gains; Colorado's vital
tourist business provided jobs in the hotel, recreation, and hotel industries.
- - The Consumer Price Index for the Denver-Boulder area rose 2.6% in May 1999;
the CPI for the U.S. rose 2.1%. Analysts anticipate that the index, considered
a leading indicator of inflation, will remain at moderate levels over the next
five years.
- - Population growth in Colorado, while expected to decline somewhat into the
next decade, remains above national levels. As a result, the state is quite
sensitive to swings in the construction and real estate cycles and has
benefited from a construction boom that has lasted throughout the 1990s.
Management Update
- --------------------------
- - Emphasis on call protection has remained an important component of
management's strategy. Management continually strives to improve the call
characteristics of issues in the Portfolio whenever possible.
- - With muni yields dramatically higher in the first half of 1999, management
focused on identifying bonds or specific lots of bonds that could be sold at a
loss and using the proceeds to purchase more desirable bonds. This investment
strategy allowed management to realize a capital loss the Fund can use in the
future to offset gains it might have, thereby lowering tax liability.
- - Credit quality spreads remained narrow in the first half of 1999. Management
used this opportunity to look for ways to increase the Portfolio's overall
credit quality.
The Fund
- --------------------------
- - During the year ended July 31, 1999, the Fund's Class A and Class B shares had
total returns of 1.3% and 0.5%, respectively.(1) For Class A, this return
resulted from a decline in net asset value (NAV) per share to $9.57 on July
31, 1999 from $9.95 on July 31, 1998, and the reinvestment of $0.513 per share
in tax-free income.2 For Class B, this return resulted from a decline in NAV
to $10.41 from $10.82, and the reinvestment of $0.476 per share in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999, the
distribution rates were 5.33% for Class A and 4.50% for Class B.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 5.80% and
4.96%, respectively.(4)
Rating Distribution+
- --------------------------
<TABLE>
<S> <C>
A 10.9%
AA 11.1%
AAA 40.4%
BBB 20.7%
Non-Rated 16.9%
</TABLE>
+May not represent the Portfolio's current or future investments.
(1) These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charge(CDSC)for Class
B shares. (2)A portion of the Fund's income may be subject to federal
income and/or alternative minimum tax and state income tax. (3)The Fund's
distribution rate represents actual distributions paid to shareholders
and is calculated daily by dividing the last distribution per share
(annualized)by the net asset value (NAV). (4)The Fund's SEC yield is
calculated by dividing the net investment income per share for the 30-day
period by the offering price at the end of the period and annualizing the
result. (5)Returns are calculated by determining the percentage change in
NAV with all distributions reinvested. SEC average annual returns for
Class A reflect a sales charge of 4.75% and for Class B reflect
applicable CDSC based on the following schedule:5% - 1st and 2nd years;
4% - 3rd year; 3% -4th year; 2% - 5th year; 1% - 6th year.
Past performance is no guarantee of future results. Investment return and
principal value may fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of July 31, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B
- ----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year 1.3% 0.5%
Five Years 6.2 5.7
Life of Fund+ 4.5 5.6
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year -3.6% -4.3%
Five Years 5.2 5.3
Life of Fund+ 3.6 5.6
</TABLE>
+Inception date: Class A: 12/10/93; Class B: 8/25/92
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EATON VANCE COLORADO MUNICIPALS FUND, CLASS B VS.
LEHMAN BROTHERS MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
Date Fund/NAV LBMBI
---- -------- -----
<S> <C> <C>
8/31/92 $10,000 $10,000
9/30/92 $10,020 $10,065
10/31/92 $9,762 $9,966
11/30/92 $10,205 $10,145
12/31/92 $10,353 $10,249
1/31/93 $10,465 $10,368
2/28/93 $10,896 $10,743
3/31/93 $10,746 $10,629
4/30/93 $10,900 $10,736
5/31/93 $10,964 $10,797
6/30/93 $11,147 $10,977
7/31/93 $11,166 $10,991
8/31/93 $11,430 $11,220
9/30/93 $11,575 $11,348
10/31/93 $11,604 $11,370
11/30/93 $11,475 $11,270
12/31/93 $11,707 $11,508
1/31/94 $11,847 $11,639
2/28/94 $11,443 $11,338
3/31/94 $10,776 $10,876
4/30/94 $10,838 $10,968
5/31/94 $10,957 $11,063
6/30/94 $10,809 $10,999
7/31/94 $11,058 $11,197
8/31/94 $11,068 $11,236
9/30/94 $10,854 $11,071
10/31/94 $10,573 $10,874
11/30/94 $10,309 $10,678
12/31/94 $10,592 $10,913
1/31/95 $11,005 $11,225
2/28/95 $11,427 $11,551
3/31/95 $11,505 $11,684
4/30/95 $11,475 $11,698
5/31/95 $11,819 $12,071
6/30/95 $11,613 $11,965
7/31/95 $11,675 $12,079
8/31/95 $11,827 $12,232
9/30/95 $11,875 $12,309
10/31/95 $12,148 $12,488
11/30/95 $12,420 $12,696
12/31/95 $12,563 $12,817
1/31/96 $12,614 $12,914
2/28/96 $12,471 $12,827
3/31/96 $12,255 $12,663
4/30/96 $12,233 $12,627
5/31/96 $12,234 $12,622
6/30/96 $12,348 $12,760
7/31/96 $12,430 $12,876
8/31/96 $12,405 $12,873
9/30/96 $12,592 $13,053
10/31/96 $12,701 $13,200
11/30/96 $12,913 $13,442
12/31/96 $12,877 $13,385
1/31/97 $12,914 $13,410
2/28/97 $13,045 $13,534
3/31/97 $12,901 $13,353
4/30/97 $13,001 $13,465
5/31/97 $13,178 $13,668
6/30/97 $13,422 $13,813
7/31/97 $13,829 $14,196
8/31/97 $13,728 $14,063
9/30/97 $13,832 $14,229
10/31/97 $13,974 $14,321
11/30/97 $14,044 $14,405
12/31/97 $14,235 $14,616
1/31/98 $14,354 $14,766
2/28/98 $14,371 $14,771
3/31/98 $14,379 $14,784
4/30/98 $14,286 $14,717
5/31/98 $14,431 $14,950
6/30/98 $14,472 $15,009
7/31/98 $14,485 $15,046
8/31/98 $14,691 $15,279
9/30/98 $14,837 $15,469
10/31/98 $14,769 $15,469
11/30/98 $14,826 $15,523
12/31/98 $14,824 $15,562
1/31/99 $14,948 $15,747
2/28/99 $14,827 $15,679
3/31/99 $14,833 $15,701
4/30/99 $14,916 $15,739
5/31/99 $14,834 $15,648
6/30/99 $14,566 $15,423
7/31/99 $14,564 $15,479
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
8/25/92. Index information is available only at month end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 12/31/93 at net asset value would have grown to $12,772 on
7/31/99; $12,166, including the 4.75% maximum sales charge. The Index's total
return does not reflect commissions or expenses that would have been incurred
if an investor individually purchased or sold the securities represented in
the Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.74% of the total dividends paid by the Fund from net investment
income during the year ended July 31, 1999 was designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
4
<PAGE>
EATON VANCE CONNECTICUT MUNICIPALS FUND AS OF JULY 31, 1999
INVESTMENT UPDATE
[PHOTO]
William H. Ahern
Portfolio Manager
The Economy
- --------------------------
- - Unemployment remained very low in July, at 2.6%, down 0.4% from the previous
year. The Connecticut Department of Labor projects that personal income will
increase by 5.2% in the fourth quarter of 1999 from a year earlier. The
state's employment indexes have been stable throughout the year, with no
dramatic trends apparent.
- - Manufacturing activity in Connecticut increased by 1.3% from June 1998 to June
1999, as measured by the Connecticut Manufacturing Production Index. Although
manhours were down somewhat, average weekly earnings in the manufacturing
industry increased by 2.9% over the same time period.
- - The housing market in Connecticut remained robust. The state authorized 1,230
new housing permits in June 1999, a 2.2% increase over June 1998. Year-to-date
figures suggest that 1999 could be the strongest year of the decade for the
housing market.
Management Update
- --------------------------
- - Credit quality spreads remained narrow in the first half of 1999. Management
used this opportunity to look for ways to increase the Portfolio's overall
credit quality.
- - As muni yields moved higher in the first half of 1999, management took
advantage of the opportunity to establish capital losses. The Fund can use
these losses in the future to offset gains it might have, thereby lowering tax
liability.
- - Emphasis on call protection has remained an important component of
management's strategy. Management continually strive to improve the call
characteristics of issues in the Portfolio whenever possible.
The Fund
- --------------------------
- - During the year ended July 31, 1999, the Fund's Class A and Class B shares had
total returns of 2.6% and 1.8%, respectively.(1) For Class A, this return
resulted from a decline in net asset value (NAV) per share to $10.46 on July
31, 1999 from $10.71 on July 31, 1998, and the reinvestment of $0.531 per
share in tax-free income.(2) For Class B, this return resulted from a decline
in NAV to $10.40 from $10.64, and the reinvestment of $0.438 per share in
tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999, the
distribution rates were 4.97% for Class A and 4.12% for Class B.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 4.41% and
3.97%, respectively.(4)
Rating Distribution+
- --------------------------
<TABLE>
<S> <C>
A 18.6%
AA 17.4%
AAA 26.9%
BB 1.9%
BBB 22.5%
Non-Rated 12.7%
</TABLE>
+May not represent the Portfolio's current or future investments.
(1) These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charge(CDSC)for Class
B shares. (2)A portion of the Fund's income may be subject to federal
income and/or alternative minimum tax and state income tax. (3)The Fund's
distribution rate represents actual distributions paid to shareholders
and is calculated daily by dividing the last distribution per share
(annualized)by the net asset value (NAV). (4)The Fund's SEC yield is
calculated by dividing the net investment income per share for the 30-day
period by the offering price at the end of the period and annualizing the
result. (5)Returns are calculated by determining the percentage change in
NAV with all distributions reinvested. SEC average annual returns for
Class A reflect a sales charge of 4.75% and for Class B reflect
applicable CDSC based on the following schedule: 5% - 1st and 2nd years;
4% - 3rd year; 3% -4th year; 2% - 5th year; 1% - 6th year.
Past performance is no guarantee of future results. Investment return and
principal value may fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of July 31, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B
- ----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year 2.6% 1.8%
Five Years 6.3 5.3
Life of Fund+ 6.4 5.5
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year -2.2% -3.1%
Five Years 5.2 5.0
Life of Fund+ 5.5 5.5
</TABLE>
+Inception date: Class A: 4/19/94; Class B: 5/1/92
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EATON VANCE CONNECTICUT MUNICIPALS FUND, CLASS B VS.
LEHMAN BROTHERS MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
Date Fund/NAV LBMBI
---- -------- -----
<S> <C> <C>
5/31/92 $10,000 $10,000
6/30/92 $10,215 $10,168
7/31/92 $10,616 $10,473
8/31/92 $10,409 $10,370
9/30/92 $10,416 $10,438
10/31/92 $10,131 $10,336
11/30/92 $10,491 $10,521
12/31/92 $10,617 $10,628
1/31/93 $10,741 $10,752
2/28/93 $11,179 $11,141
3/31/93 $11,048 $11,023
4/30/93 $11,173 $11,134
5/31/93 $11,237 $11,197
6/30/93 $11,455 $11,384
7/31/93 $11,442 $11,398
8/31/93 $11,710 $11,636
9/30/93 $11,835 $11,769
10/31/93 $11,821 $11,791
11/30/93 $11,679 $11,687
12/31/93 $11,933 $11,934
1/31/94 $12,043 $12,070
2/28/94 $11,686 $11,758
3/31/94 $11,084 $11,279
4/30/94 $11,102 $11,374
5/31/94 $11,200 $11,473
6/30/94 $11,071 $11,406
7/31/94 $11,290 $11,612
8/31/94 $11,298 $11,652
9/30/94 $11,057 $11,481
10/31/94 $10,736 $11,277
11/30/94 $10,353 $11,073
12/31/94 $10,697 $11,317
1/31/95 $11,104 $11,641
2/28/95 $11,486 $11,979
3/31/95 $11,576 $12,117
4/30/95 $11,568 $12,131
5/31/95 $11,881 $12,518
6/30/95 $11,706 $12,409
7/31/95 $11,803 $12,526
8/31/95 $11,980 $12,685
9/30/95 $12,075 $12,765
10/31/95 $12,254 $12,951
11/30/95 $12,481 $13,166
12/31/95 $12,601 $13,292
1/31/96 $12,662 $13,393
2/28/96 $12,527 $13,302
3/31/96 $12,318 $13,132
4/30/96 $12,318 $13,095
5/31/96 $12,329 $13,090
6/30/96 $12,442 $13,233
7/31/96 $12,547 $13,353
8/31/96 $12,533 $13,350
9/30/96 $12,707 $13,536
10/31/96 $12,815 $13,689
11/30/96 $13,002 $13,940
12/31/96 $12,950 $13,881
1/31/97 $12,947 $13,907
2/28/97 $13,077 $14,035
3/31/97 $12,941 $13,848
4/30/97 $13,038 $13,964
5/31/97 $13,187 $14,174
6/30/97 $13,328 $14,325
7/31/97 $13,697 $14,722
8/31/97 $13,591 $14,584
9/30/97 $13,732 $14,757
10/31/97 $13,806 $14,852
11/30/97 $13,872 $14,939
12/31/97 $14,049 $15,157
1/31/98 $14,178 $15,313
2/28/98 $14,205 $15,318
3/31/98 $14,223 $15,332
4/30/98 $14,152 $15,262
5/31/98 $14,321 $15,504
6/30/98 $14,359 $15,565
7/31/98 $14,381 $15,604
8/31/98 $14,585 $15,845
9/30/98 $14,715 $16,043
10/31/98 $14,669 $16,042
11/30/98 $14,723 $16,098
12/31/98 $14,743 $16,139
1/31/99 $14,905 $16,331
2/28/99 $14,848 $16,260
3/31/99 $14,850 $16,282
4/30/99 $14,901 $16,323
5/31/99 $14,829 $16,228
6/30/99 $14,624 $15,995
7/31/99 $14,645 $16,053
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
5/1/92. Index information is available only at month end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 4/30/94 at net asset value would have grown to $13,888 on 7/31/99;
$13,227, including the 4.75% maximum sales charge. The Index's total return
does not reflect commissions or expenses that would have been incurred if an
investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.77% of the total dividends paid by the Fund from net investment
income during the year ended July 31, 1999 was designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
5
<PAGE>
EATON VANCE MICHIGAN MUNICIPALS FUND AS OF JULY 31, 1999
INVESTMENT UPDATE
[PHOTO]
Timothy T. Browse
Portfolio Manager
The Economy
- --------------------------
- - Michigan's unemployment rate has been below U.S. levels since 1995. That trend
continued this year, with the seasonally adjusted rate for July coming in at
3.4%, well below the 4.3% national level. Many of the job gains, in areas such
as construction and retail, are attributable to seasonal factors.
- - Automotive sales remain a crucial segment of the Michigan economy. U.S. sales
of cars and light trucks in the first half of 1999 were 7.0% higher than in
the first half of 1998. On the production side, U.S. car production is up 4.5%
this year, while U.S. truck production has grown by 16.0% in 1999.
- - Personal income growth in Michigan grew by 1.0% in the first quarter 1999 from
fourth quarter 1998, and by 3.4% over the year-ago period. Real disposable
income, a leading indicator of future expenditures in durable goods such as
light vehicles, grew by 3.5% in the U.S. in the first quarter and 2.4% in the
second quarter of 1999.
Management Update
- --------------------------
- - With muni yields dramatically higher in the first half of 1999, management
focused on identifying bonds or specific lots of bonds that could be sold at a
loss and using the proceeds to purchase more desirable bonds. This investment
strategy allowed management to realize a capital loss the Fund can use in the
future to offset gains it might have, thereby lowering tax liability.
- - Emphasis on call protection has remained an important component of
management's strategy. Management continually strives to improve the call
characteristics of the Portfolio whenever possible.
- - Credit quality spreads remained narrow in the first half of 1999. Management
used this opportunity to look for ways to increase the Portfolio's overall
credit quality.
The Fund
- --------------------------
- - During the year ended July 31, 1999, the Fund's Class A and Class B shares had
total returns of 0.8% and 0.1%, respectively. (1)For Class A, this return
resulted from a decline in net asset value (NAV) per share to $9.43 on July
31, 1999 from $9.82 on July 31, 1998, and the reinvestment of $0.476 per share
in tax-free income.(2) For Class B, this return resulted from a decline in NAV
to $10.52 from $10.95, and the reinvestment of $0.450 per share in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999, the
distribution rates were 4.99% for Class A and 4.23% for Class B.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 5.19% and
4.54%, respectively.(4)
Rating Distribution+
- --------------------------
<TABLE>
<S> <C>
A 22.0%
AA 4.0%
AAA 50.6%
B 0.8%
BB 0.6%
BBB 13.6%
Non-Rated 8.4%
</TABLE>
+May not represent the Portfolio's current or future investments.
(1) These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charge(CDSC)for Class
B shares. (2)A portion of the Fund's income may be subject to federal
income and/or alternative minimum tax and state and local income tax.
(3)The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution
per share (annualized)by the net asset value (NAV). (4)The Fund's SEC
yield is calculated by dividing the net investment income per share for
the 30-day period by the offering price at the end of the period and
annualizing the result. (5)Returns are calculated by determining the
percentage change in NAV with all distributions reinvested. SEC average
annual returns for Class A reflect a sales charge of 4.75% and for Class
B reflect applicable CDSC based on the following schedule: 5% - 1st and
2nd years; 4% - 3rd year; 3% -4th year; 2% - 5th year; 1% - 6th year.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B
- ----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year 0.8% 0.1%
Five Years 5.6 5.2
Life of Fund+ 4.0 5.9
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year -4.0% -4.7%
Five Years 4.6 4.9
Life of Fund+ 3.1 5.9
</TABLE>
+Inception date: Class A: 12/7/93; Class B: 4/19/91
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EATON VANCE MICHIGAN MUNICIPALS FUND, CLASS B VS.
LEHMAN BROTHERS MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
Date Fund/NAV LBMBI
---- -------- -----
<S> <C> <C>
4/30/91 $10,000 $10,000
5/31/91 $10,030 $10,089
6/30/91 $9,968 $10,079
7/31/91 $10,180 $10,202
8/31/91 $10,338 $10,336
9/30/91 $10,488 $10,471
10/31/91 $10,592 $10,565
11/30/91 $10,576 $10,594
12/31/91 $10,887 $10,822
1/31/92 $10,911 $10,846
2/28/92 $10,901 $10,850
3/31/92 $10,846 $10,854
4/30/92 $10,955 $10,951
5/31/92 $11,118 $11,080
6/30/92 $11,327 $11,265
7/31/92 $11,761 $11,603
8/31/92 $11,518 $11,490
9/30/92 $11,550 $11,565
10/31/92 $11,189 $11,451
11/30/92 $11,579 $11,657
12/31/92 $11,713 $11,776
1/31/93 $11,851 $11,913
2/28/93 $12,329 $12,343
3/31/93 $12,166 $12,213
4/30/93 $12,292 $12,336
5/31/93 $12,375 $12,405
6/30/93 $12,589 $12,613
7/31/93 $12,551 $12,629
8/31/93 $12,818 $12,892
9/30/93 $12,943 $13,039
10/31/93 $12,962 $13,064
11/30/93 $12,831 $12,949
12/31/93 $13,126 $13,222
1/31/94 $13,281 $13,373
2/28/94 $12,868 $13,027
3/31/94 $12,164 $12,496
4/30/94 $12,243 $12,602
5/31/94 $12,348 $12,711
6/30/94 $12,219 $12,637
7/31/94 $12,468 $12,866
8/31/94 $12,501 $12,910
9/30/94 $12,287 $12,721
10/31/94 $11,975 $12,495
11/30/94 $11,669 $12,269
12/31/94 $12,005 $12,539
1/31/95 $12,434 $12,897
2/28/95 $12,836 $13,272
3/31/95 $12,958 $13,425
4/30/95 $12,937 $13,441
5/31/95 $13,302 $13,870
6/30/95 $13,087 $13,748
7/31/95 $13,168 $13,878
8/31/95 $13,322 $14,055
9/30/95 $13,415 $14,143
10/31/95 $13,676 $14,349
11/30/95 $13,977 $14,587
12/31/95 $14,161 $14,727
1/31/96 $14,243 $14,839
2/28/96 $14,073 $14,738
3/31/96 $13,835 $14,550
4/30/96 $13,772 $14,509
5/31/96 $13,759 $14,503
6/30/96 $13,909 $14,661
7/31/96 $14,024 $14,794
8/31/96 $13,996 $14,791
9/30/96 $14,199 $14,997
10/31/96 $14,317 $15,167
11/30/96 $14,562 $15,445
12/31/96 $14,493 $15,380
1/31/97 $14,436 $15,409
2/28/97 $14,591 $15,550
3/31/97 $14,390 $15,343
4/30/97 $14,524 $15,471
5/31/97 $14,745 $15,704
6/30/97 $14,885 $15,871
7/31/97 $15,288 $16,311
8/31/97 $15,132 $16,158
9/30/97 $15,259 $16,350
10/31/97 $15,356 $16,455
11/30/97 $15,473 $16,552
12/31/97 $15,709 $16,793
1/31/98 $15,851 $16,966
2/28/98 $15,868 $16,972
3/31/98 $15,889 $16,987
4/30/98 $15,756 $16,910
5/31/98 $16,029 $17,178
6/30/98 $16,043 $17,245
7/31/98 $16,070 $17,289
8/31/98 $16,308 $17,556
9/30/98 $16,451 $17,775
10/31/98 $16,372 $17,774
11/30/98 $16,446 $17,836
12/31/98 $16,410 $17,881
1/31/99 $16,557 $18,094
2/28/99 $16,465 $18,015
3/31/99 $16,455 $18,040
4/30/99 $16,496 $18,085
5/31/99 $16,374 $17,980
6/30/99 $16,093 $17,721
7/31/99 $16,088 $17,786
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
4/19/91. Index information is available only at month end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 12/31/93 at net asset value would have grown to $12,454 on
7/31/99; $11,862, including the 4.75% maximum sales charge. The Index's total
return does not reflect commissions or expenses that would have been incurred
if an investor individually purchased or sold the securities represented in
the Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.24% of the total dividends paid by the Fund from net investment
income during the year ended July 31, 1999 was designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
6
<PAGE>
EATON VANCE MINNESOTA MUNICIPALS FUND AS OF JULY 31, 1999
INVESTMENT UPDATE
[PHOTO]
Robert B. MacIntosh
Portfolio Manager
The Economy
- --------------------------
- - With one of the strongest and most diverse economies in the country,
Minnesota's growth paralleled the nation's over the past six months,
especially in the areas of high-technology research, healthcare, and medical
devices. Unemployment at the end of July was a low 2.9%, up 0.4% from July
1999, but well below the national rate of 4.3%.
- - Manufacturing exports totalled $2.1 billion in the first quarter of 1999. This
decline of 4.3% from the previous year reflects the national trend, as total
U.S. exports in this sector were down 3.5%.
- - Although most of Minnesota's largest export markets showed a decline, export
figures for China and the Philippines were better than the nation's. Exports
to China and Hong Kong increased by 39.3% in the first quarter, while U.S.
exports to this region dropped off by 9.6% during this period.
Management Update
- --------------------------
- - With muni yields dramatically higher in the first half of 1999, management
focused on identifying bonds or specific lots of bonds that could be sold at a
loss and using the proceeds to purchase more desirable bonds. This investment
strategy allowed management to realize a capital loss the Fund can use in the
future to offset gains it might have, thereby lowering tax liability.
- - Supply of new bond issues in Minnesota was low over the six-month period.
Management was able to acquire some AAA-rated, GNMA-backed housing bonds,
which helped to improve the Portfolio's yield.
- - Emphasis on call protection has remained an important component of
management's strategy. Management continually strives to improve the call
characteristics of issues in the Portfolio whenever possible.
The Fund
- --------------------------
- - During the year ended July 31, 1999, the Fund's Class A and Class B shares had
total returns of 1.3% and 0.7%, respectively.(1) For Class A, this return
resulted from a decline in net asset value (NAV) per share to $9.46 on July
31, 1999 from $9.82 on July 31, 1998, and the reinvestment of $0.499 per share
in tax-free income.(2) For Class B, this return resulted from a decline in NAV
to $10.17 from $10.54, and the reinvestment of $0.447 per share in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999, the
distribution rates were 5.13% for Class A and 4.25% for Class B.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 4.73% and
4.46%, respectively.(4)
Rating Distribution+
- --------------------------
<TABLE>
<S> <C>
A 16.3%
AA 15.4%
AAA 45.5%
BBB 12.5%
Non-Rated/
Investment Guide 3.7%
Non-Rated/Below
Investment Guide 6.6%
</TABLE>
+May not represent the Portfolio's current or future investments.
(1) These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charge(CDSC)for Class
B shares. (2)A portion of the Fund's income may be subject to federal
income and/or alternative minimum tax and state income tax. (3)The Fund's
distribution rate represents actual distributions paid to shareholders
and is calculated daily by dividing the last distribution per share
(annualized)by the net asset value (NAV). (4)The Fund's SEC yield is
calculated by dividing the net investment income per share for the 30-day
period by the offering price at the end of the period and annualizing the
result. (5)Returns are calculated by determining the percentage change in
NAV with all distributions reinvested. SEC average annual returns for
Class A reflect a sales charge of 4.75% and for Class B reflect
applicable CDSC based on the following schedule: 5% - 1st and 2nd years;
4% - 3rd year; 3% -4th year; 2% - 5th year; 1% - 6th year.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of July 31, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B
- ----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year 1.3% 0.7%
Five Years 5.5 5.0
Life of Fund+ 4.3 5.4
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year -3.5% -4.2%
Five Years 4.5 4.7
Life of Fund+ 3.4 5.4
</TABLE>
+Inception date: Class A: 12/9/93; Class B: 7/29/91
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EATON VANCE MINNESOTA MUNICIPALS FUND, CLASS B VS.
LEHMAN BROTHERS MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
Date Fund/NAV LBMBI
---- -------- -----
<S> <C> <C>
7/31/91 $10,000 $10,000
8/31/91 $10,050 $10,132
9/30/91 $10,196 $10,264
10/31/91 $10,299 $10,356
11/30/91 $10,303 $10,385
12/31/91 $10,502 $10,608
1/31/92 $10,556 $10,632
2/28/92 $10,555 $10,636
3/31/92 $10,521 $10,639
4/30/92 $10,617 $10,734
5/31/92 $10,746 $10,861
6/30/92 $10,919 $11,043
7/31/92 $11,273 $11,374
8/31/92 $11,087 $11,263
9/30/92 $11,096 $11,337
10/31/92 $10,805 $11,225
11/30/92 $11,156 $11,426
12/31/92 $11,288 $11,543
1/31/93 $11,411 $11,677
2/28/93 $11,812 $12,100
3/31/93 $11,696 $11,972
4/30/93 $11,819 $12,092
5/31/93 $11,889 $12,160
6/30/93 $12,076 $12,364
7/31/93 $12,063 $12,379
8/31/93 $12,303 $12,637
9/30/93 $12,459 $12,781
10/31/93 $12,466 $12,806
11/30/93 $12,349 $12,693
12/31/93 $12,598 $12,961
1/31/94 $12,703 $13,109
2/28/94 $12,370 $12,770
3/31/94 $11,718 $12,249
4/30/94 $11,749 $12,353
5/31/94 $11,876 $12,460
6/30/94 $11,775 $12,388
7/31/94 $11,984 $12,611
8/31/94 $12,017 $12,655
9/30/94 $11,797 $12,469
10/31/94 $11,468 $12,248
11/30/94 $11,110 $12,026
12/31/94 $11,463 $12,291
1/31/95 $11,834 $12,642
2/28/95 $12,227 $13,010
3/31/95 $12,372 $13,160
4/30/95 $12,339 $13,175
5/31/95 $12,671 $13,596
6/30/95 $12,448 $13,477
7/31/95 $12,513 $13,604
8/31/95 $12,676 $13,777
9/30/95 $12,739 $13,864
10/31/95 $12,967 $14,065
11/30/95 $13,221 $14,299
12/31/95 $13,398 $14,436
1/31/96 $13,437 $14,545
2/28/96 $13,308 $14,447
3/31/96 $13,021 $14,263
4/30/96 $13,047 $14,222
5/31/96 $13,058 $14,217
6/30/96 $13,165 $14,372
7/31/96 $13,264 $14,502
8/31/96 $13,196 $14,499
9/30/96 $13,382 $14,701
10/31/96 $13,484 $14,867
11/30/96 $13,697 $15,140
12/31/96 $13,615 $15,076
1/31/97 $13,640 $15,104
2/28/97 $13,778 $15,243
3/31/97 $13,580 $15,040
4/30/97 $13,712 $15,166
5/31/97 $13,887 $15,394
6/30/97 $14,024 $15,558
7/31/97 $14,459 $15,989
8/31/97 $14,265 $15,839
9/30/97 $14,389 $16,027
10/31/97 $14,498 $16,130
11/30/97 $14,612 $16,225
12/31/97 $14,816 $16,462
1/31/98 $14,969 $16,631
2/28/98 $14,985 $16,636
3/31/98 $14,991 $16,651
4/30/98 $14,874 $16,576
5/31/98 $15,113 $16,838
6/30/98 $15,169 $16,905
7/31/98 $15,181 $16,947
8/31/98 $15,457 $17,209
9/30/98 $15,641 $17,423
10/31/98 $15,579 $17,423
11/30/98 $15,622 $17,484
12/31/98 $15,616 $17,528
1/31/99 $15,760 $17,736
2/28/99 $15,685 $17,659
3/31/99 $15,660 $17,684
4/30/99 $15,686 $17,727
5/31/99 $15,579 $17,625
6/30/99 $15,302 $17,371
7/31/99 $15,279 $17,435
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
7/29/91. Index information is available only at month end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 12/31/93 at net asset value would have grown to $12,585 on
7/31/99; $11,989, including the 4.75% maximum sales charge. The Index's total
return does not reflect commissions or expenses that would have been incurred
if an investor individually purchased or sold the securities represented in
the Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.55% of the total dividends paid by the Fund from net investment
income during the year ended July 31, 1999 was designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
7
<PAGE>
EATON VANCE NEW JERSEY MUNICIPALS FUND AS OF JULY 31, 1999
INVESTMENT UPDATE
[PHOTO]
Robert B. MacIntosh
Portfolio Manager
The Economy
- --------------------------
- - The seasonally adjusted unemployment rate in New Jersey as of July 1999 was
4.8%, an increase of 0.4% from the year-ago period but a 0.1% improvement over
June 1999. Most of the job gains this year have been in the areas of services
and trade, particularly retail trade, offsetting losses in manufacturing
employment.
- - Reflecting national trends, the regional inflation rate remained low, gaining
0.5% according to the New York-Northern New Jersey consumer price index and
0.6% in the Philadelphia-New Jersey CPI.
- - The New Jersey housing market continued to gain momentum. Figures available
for May 1999 indicate that although the number of building permits for
residential units decreased 6% from the previous month, they have increased
22% since May 1998.
Management Update
- --------------------------
- - As a result of reimbursement restructuring and other factors, the healthcare
market in New Jersey has become as competitive as any in the country. In light
of the increasing rating pressure, management has taken steps to reduce the
Portfolio's exposure to this sector.
- - As muni yields moved higher in the first half of 1999, management focused on
identifying bonds or specific lots of bonds that could be sold at a loss and
using the proceeds to purchase more desirable bonds. This investment strategy
allowed management to realize a capital loss the Fund can use in the future to
offset gains it might have, thereby lowering tax liability.
- - Emphasis on call protection has remained an important component of
management's strategy. Management continually strives to improve the call
characteristics of issues in the Portfolio whenever possible.
The Fund
- --------------------------
- - During the year ended July 31, 1999, the Fund's Class A and Class B shares had
total returns of 1.4% and 0.6%, respectively.(1) For Class A, this return
resulted from a decline in net asset value (NAV) per share to $10.19 on July
31, 1999 from $10.59 on July 31, 1998, and the reinvestment of $0.553 per
share in tax-free income.(2) For Class B, this return resulted from a decline
in NAV to $10.61 from $11.02, and the reinvestment of $0.483 per share in
tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999, the
distribution rates were 5.35% for Class A and 4.48% for Class B.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 5.01% and
4.45%, respectively.(4)
Rating Distribution+
- --------------------------
<TABLE>
<S> <C>
A 13.7%
AA 15.3%
AAA 30.7%
B 0.9%
BB 4.9%
BBB 15.5%
Non-Rated/
Investment Grade 7.6%
Non-Rated/Below
Investment Grade 11.4%
</TABLE>
+May not represent the Portfolio's current or future investments.
(1) These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charge(CDSC)for Class
B shares. (2)A portion of the Fund's income may be subject to federal
income and/or alternative minimum tax and state income tax. (3)The Fund's
distribution rate represents actual distributions paid to shareholders
and is calculated daily by dividing the last distribution per share
(annualized)by the net asset value (NAV). (4)The Fund's SEC yield is
calculated by dividing the net investment income per share for the 30-day
period by the offering price at the end of the period and annualizing the
result. (5)Returns are calculated by determining the percentage change in
NAV with all distributions reinvested. SEC average annual returns for
Class A reflect a sales charge of 4.75% and for Class B reflect
applicable CDSC based on the following schedule: 5% - 1st and 2nd years;
4% - 3rd year; 3% -4th year; 2% - 5th year; 1% - 6th year.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of July 31, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B
- ----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year 1.4% 0.6%
Five Years 6.3 5.3
Life of Fund+ 6.2 6.2
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year -3.4% -4.2%
Five Years 5.3 5.0
Life of Fund+ 5.2 6.2
</TABLE>
+Inception date: Class A: 4/13/94; Class B: 1/8/91
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EATON VANCE NEW JERSEY MUNICIPALS FUND, CLASS B VS.
LEHMAN BROTHERS MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
Date Fund/NAV LBMBI
---- -------- -----
<S> <C> <C>
1/31/91 $10,000 $10,000
2/28/91 $10,097 $10,087
3/31/91 $10,089 $10,090
4/30/91 $10,236 $10,225
5/31/91 $10,353 $10,316
6/30/91 $10,243 $10,306
7/31/91 $10,448 $10,431
8/31/91 $10,618 $10,569
9/30/91 $10,739 $10,706
10/31/91 $10,834 $10,803
11/30/91 $10,818 $10,833
12/31/91 $11,095 $11,065
1/31/92 $11,077 $11,091
2/28/92 $11,078 $11,094
3/31/92 $11,054 $11,098
4/30/92 $11,122 $11,197
5/31/92 $11,317 $11,329
6/30/92 $11,494 $11,519
7/31/92 $11,932 $11,865
8/31/92 $11,731 $11,749
9/30/92 $11,775 $11,826
10/31/92 $11,477 $11,709
11/30/92 $11,805 $11,919
12/31/92 $11,959 $12,041
1/31/93 $12,121 $12,181
2/28/93 $12,660 $12,622
3/31/93 $12,486 $12,488
4/30/93 $12,649 $12,614
5/31/93 $12,734 $12,685
6/30/93 $12,954 $12,897
7/31/93 $12,943 $12,913
8/31/93 $13,181 $13,183
9/30/93 $13,323 $13,333
10/31/93 $13,323 $13,358
11/30/93 $13,196 $13,241
12/31/93 $13,467 $13,520
1/31/94 $13,615 $13,675
2/28/94 $13,275 $13,320
3/31/94 $12,617 $12,778
4/30/94 $12,666 $12,886
5/31/94 $12,752 $12,998
6/30/94 $12,626 $12,922
7/31/94 $12,821 $13,155
8/31/94 $12,870 $13,201
9/30/94 $12,659 $13,007
10/31/94 $12,349 $12,776
11/30/94 $12,008 $12,545
12/31/94 $12,363 $12,821
1/31/95 $12,762 $13,188
2/28/95 $13,108 $13,571
3/31/95 $13,217 $13,727
4/30/95 $13,237 $13,744
5/31/95 $13,597 $14,182
6/30/95 $13,409 $14,058
7/31/95 $13,467 $14,191
8/31/95 $13,613 $14,371
9/30/95 $13,708 $14,462
10/31/95 $13,935 $14,672
11/30/95 $14,188 $14,916
12/31/95 $14,323 $15,059
1/31/96 $14,408 $15,173
2/28/96 $14,225 $15,070
3/31/96 $14,066 $14,878
4/30/96 $14,043 $14,836
5/31/96 $14,032 $14,830
6/30/96 $14,161 $14,992
7/31/96 $14,241 $15,127
8/31/96 $14,257 $15,124
9/30/96 $14,454 $15,335
10/31/96 $14,563 $15,509
11/30/96 $14,788 $15,793
12/31/96 $14,722 $15,726
1/31/97 $14,724 $15,756
2/28/97 $14,844 $15,900
3/31/97 $14,713 $15,688
4/30/97 $14,854 $15,820
5/31/97 $15,040 $16,058
6/30/97 $15,158 $16,229
7/31/97 $15,643 $16,678
8/31/97 $15,475 $16,522
9/30/97 $15,651 $16,718
10/31/97 $15,754 $16,826
11/30/97 $15,848 $16,925
12/31/97 $16,107 $17,172
1/31/98 $16,242 $17,349
2/28/98 $16,264 $17,354
3/31/98 $16,303 $17,369
4/30/98 $16,186 $17,291
5/31/98 $16,425 $17,565
6/30/98 $16,473 $17,634
7/31/98 $16,490 $17,678
8/31/98 $16,737 $17,951
9/30/98 $16,933 $18,175
10/31/98 $16,842 $18,175
11/30/98 $16,861 $18,238
12/31/98 $16,889 $18,284
1/31/99 $17,043 $18,502
2/28/99 $16,924 $18,421
3/31/99 $16,916 $18,447
4/30/99 $16,947 $18,492
5/31/99 $16,842 $18,385
6/30/99 $16,590 $18,121
7/31/99 $16,588 $18,187
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
1/8/91. Index information is available only at month end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 4/30/94 at net asset value would have grown to $13,837 on 7/31/99;
$13,174, including the 4.75% maximum sales charge. The Index's total return
does not reflect commissions or expenses that would have been incurred if an
investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.72% of the total dividends paid by the Fund from net investment
income during the year ended July 31, 1999 was designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
8
<PAGE>
EATON VANCE PENNSYLVANIA MUNICIPALS FUND AS OF JULY 31, 1999
INVESTMENT UPDATE
[PHOTO]
Timothy T. Browse
Portfolio Manager
The Economy
- --------------------------
- - Pennsylvania's seasonally adjusted unemployment rate remained a low 4.3% in
July, an improvement of 0.3% from a year earlier. The Commonwealth also saw an
increase in per capita personal income, which rose 4.4% in the fourth quarter
of 1998, in line with the national rate.
- - The latest export data available show that in 1998, 18% of Pennsylvania's
exports consisted of industrial machinery and computer equipment. Electronics
and electrical equipment accounted for 14%, and chemicals and allied products
were the third largest export, at 13%. Canada remained the largest export
market, taking in 35% of Pennsylvania's exports.
- - The Commonwealth was the recipient of more than $78 billion in federal funds
in fiscal year 1998. About 33% of this funding was used for retirement and
disability payments. Other "direct payments," including Medicare and
unemployment received 23%, with grant awards accounting for 16% of the
funding.
Management Update
- --------------------------
- - Credit quality spreads remained narrow in the first half of 1999. Management
used this opportunity to look for ways to increase the Portfolio's overall
credit quality.
- - With muni yields dramatically higher in the first half of 1999, management
focused on identifying bonds or specific lots of bonds that could be sold at a
loss and using the proceeds to purchase more desirable bonds. This investment
strategy allowed management to realize a capital loss the Fund can use in the
future to offset gains it might have, thereby lowering tax liability.
- - Emphasis on call protection has remained an important component of
management's strategy. Management continually strives to improve the call
characteristics of issues in the Portfolio whenever possible.
The Fund
- --------------------------
- - During the year ended July 31, 1999, the Fund's Class A and Class B shares had
total returns of 1.4% and 0.6%, respectively.(1) For Class A, this return
resulted from a decline in net asset value (NAV) per share to $9.99 on July
31, 1999 from $10.40 on July 31, 1998, and the reinvestment of $0.563 per
share in tax-free income.(2) For Class B, this return resulted from a decline
in NAV to $10.31 from $10.73, and the reinvestment of $0.494 per share in
tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999, the
distribution rates were 5.56% for Class A and 4.66% for Class B.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 4.99% and
4.38%, respectively.(4)
Rating Distribution+
- --------------------------
<TABLE>
<S> <C>
A 13.6%
AA 3.6%
AAA 42.7%
BB 0.7%
BBB 19.3%
Non-Rated 20.1%
</TABLE>
+May not represent the Portfolio's current or future investments.
(1) These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charge(CDSC)for Class
B shares. (2)A portion of the Fund's income may be subject to federal
income and/or alternative minimum tax and state and local income tax.
(3)The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated daily by dividing the last distribution
per share (annualized)by the net asset value (NAV). (4)The Fund's SEC
yield is calculated by dividing the net investment income per share for
the 30-day period by the offering price at the end of the period and
annualizing the result. (5)Returns are calculated by determining the
percentage change in NAV with all distributions reinvested. SEC average
annual returns for Class A reflect a sales charge of 4.75% and for Class
B reflect applicable CDSC based on the following schedule: 5% - 1st and
2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th year.
Past performance is no guarantee of future results. Investment return and
return and principal value will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of July 31, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B
- ----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year 1.4% 0.6%
Five Years 5.7 4.9
Life of Fund+ 5.8 5.9
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- ----------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
One Year -3.4% -4.2%
Five Years 4.7 4.6
Life of Fund+ 4.8 5.9
</TABLE>
+Inception date: Class A: 6/1/94; Class B: 1/8/91
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EATON VANCE PENNSYLVANIA MUNICIPALS FUND, CLASS B VS.
LEHMAN BROTHERS MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
Date Fund/NAV LBMBI
---- -------- -----
<S> <C> <C>
1/31/91 $10,000 $10,000
2/28/91 $10,096 $10,087
3/31/91 $10,109 $10,090
4/30/91 $10,268 $10,225
5/31/91 $10,366 $10,316
6/30/91 $10,298 $10,306
7/31/91 $10,465 $10,431
8/31/91 $10,617 $10,569
9/30/91 $10,772 $10,706
10/31/91 $10,901 $10,803
11/30/91 $10,887 $10,833
12/31/91 $11,169 $11,065
1/31/92 $11,131 $11,091
2/28/92 $11,134 $11,094
3/31/92 $11,101 $11,098
4/30/92 $11,214 $11,197
5/31/92 $11,380 $11,329
6/30/92 $11,594 $11,519
7/31/92 $12,014 $11,865
8/31/92 $11,780 $11,749
9/30/92 $11,803 $11,826
10/31/92 $11,471 $11,709
11/30/92 $11,890 $11,919
12/31/92 $12,024 $12,041
1/31/93 $12,165 $12,181
2/28/93 $12,649 $12,622
3/31/93 $12,486 $12,488
4/30/93 $12,628 $12,614
5/31/93 $12,680 $12,685
6/30/93 $12,866 $12,897
7/31/93 $12,856 $12,913
8/31/93 $13,143 $13,183
9/30/93 $13,308 $13,333
10/31/93 $13,319 $13,358
11/30/93 $13,202 $13,241
12/31/93 $13,523 $13,520
1/31/94 $13,672 $13,675
2/28/94 $13,270 $13,320
3/31/94 $12,548 $12,778
4/30/94 $12,595 $12,886
5/31/94 $12,693 $12,998
6/30/94 $12,590 $12,922
7/31/94 $12,797 $13,155
8/31/94 $12,821 $13,201
9/30/94 $12,621 $13,007
10/31/94 $12,320 $12,776
11/30/94 $11,901 $12,545
12/31/94 $12,219 $12,821
1/31/95 $12,618 $13,188
2/28/95 $13,016 $13,571
3/31/95 $13,168 $13,727
4/30/95 $13,150 $13,744
5/31/95 $13,562 $14,182
6/30/95 $13,384 $14,058
7/31/95 $13,468 $14,191
8/31/95 $13,587 $14,371
9/30/95 $13,696 $14,462
10/31/95 $13,923 $14,672
11/30/95 $14,178 $14,916
12/31/95 $14,326 $15,059
1/31/96 $14,425 $15,173
2/28/96 $14,308 $15,070
3/31/96 $14,094 $14,878
4/30/96 $14,071 $14,836
5/31/96 $14,060 $14,830
6/30/96 $14,150 $14,992
7/31/96 $14,286 $15,127
8/31/96 $14,303 $15,124
9/30/96 $14,502 $15,335
10/31/96 $14,599 $15,509
11/30/96 $14,812 $15,793
12/31/96 $14,803 $15,726
1/31/97 $14,820 $15,756
2/28/97 $14,956 $15,900
3/31/97 $14,784 $15,688
4/30/97 $14,912 $15,820
5/31/97 $15,128 $16,058
6/30/97 $15,291 $16,229
7/31/97 $15,665 $16,678
8/31/97 $15,556 $16,522
9/30/97 $15,721 $16,718
10/31/97 $15,798 $16,826
11/30/97 $15,881 $16,925
12/31/97 $16,115 $17,172
1/31/98 $16,238 $17,349
2/28/98 $16,277 $17,354
3/31/98 $16,319 $17,369
4/30/98 $16,219 $17,291
5/31/98 $16,432 $17,565
6/30/98 $16,453 $17,634
7/31/98 $16,171 $17,678
8/31/98 $16,378 $17,951
9/30/98 $16,471 $18,175
10/31/98 $16,412 $18,175
11/30/98 $16,448 $18,238
12/31/98 $16,463 $18,284
1/31/99 $16,605 $18,502
2/28/99 $16,548 $18,421
3/31/99 $16,556 $18,447
4/30/99 $16,604 $18,492
5/31/99 $16,529 $18,385
6/30/99 $16,291 $18,121
7/31/99 $16,274 $18,187
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
1/8/91. Index information is available only at month end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 6/30/94 at net asset value would have grown to $13,451 on 7/31/99;
$12,817, including the 4.75% maximum sales charge. The Index's total return
does not reflect commissions or expenses that would have been incurred if an
investor individually purchased or sold the securities represented in the
Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.82% of the total dividends paid by the Fund from net investment
income during the year ended July 31, 1999 was designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
9
<PAGE>
EATON VANCE TEXAS MUNICIPALS FUND AS OF JULY 31, 1999
INVESTMENT UPDATE
[PHOTO]
Thomas M. Metzold
Portfolio Manager
The Economy
- --------------------------
- - In the 1990s, Texas has led all U.S. states in net job creation. The state
continued moderate job growth during the past year, adding over a quarter of a
million jobs from June 1998 to June 1999. Leading the way were the services,
wholesale and retail trade, and construction sectors.
- - In the 1990s, the Texas economy has paralleled the U.S. economic boom, in a
marked change from the 1970s and 80s when Texas ran counter-cyclical to
national trends. This phenomenon has been attributed to a lessened dependence
on fossil fuel production as well as rising income levels in Texas.
- - Gross State Product (GSP) for Texas is currently projected at $690 billion for
1999, according to the state's Comptroller of Public Accounts. In a steadily
diversifying economy, Texas has produced the strongest growth in the service
and manufacturing areas, offset by losses in the mining industry (primarily
oil and gas exploration).
Management Update
- --------------------------
- - Credit quality spreads remained narrow in the first half of 1999. Management
used this opportunity to look for ways to increase the Portfolio's overall
credit quality.
- - Management took advantage of the rise in interest rates by establishing tax
losses. This investment strategy allowed management to realize capital losses
the Fund can use in the future to offset gains it might have, thereby lowering
tax liability.
- - Emphasis on call protection has remained an important component of
management's strategy. Management continually strives to improve the call
characteristics of issues in the Portfolio whenever possible.
The Fund
- --------------------------
- - During the year ended July 31, 1999, the Fund's Class A and Class B shares had
total returns of 1.7% and 1.0%, respectively.(1) For Class A, this return
resulted from a decline in net asset value (NAV) per share to $9.56 on July
31, 1999 from $9.89 on July 31, 1998, and the reinvestment of $0.505 per share
in tax-free income.(2) For Class B, this return resulted from a decline in NAV
to $10.71 from $11.08, and the reinvestment of $0.488 per share in tax-free
income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999, the
distribution rates were 5.28% for Class A and 4.54% for Class B.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 4.49% and
3.95%, respectively.(4)
Rating Distribution+
- --------------------------
<TABLE>
<S> <C>
A 7.5%
AA 9.6%
AAA 55.8%
BBB 11.9%
Non-Rated 15.2%
</TABLE>
+May not represent the Portfolio's current or future investments.
(1) These returns do not include the 4.75% maximum sales charge for Class A
shares or the applicable contingent deferred sales charge(CDSC)for Class
B shares. (2)A portion of the Fund's income may be subject to federal
income and/or alternative minimum tax. (3)The Fund's distribution rate
represents actual distributions paid to shareholders and is calculated
daily by dividing the last distribution per share (annualized)by the net
asset value (NAV). (4)The Fund's SEC yield is calculated by dividing the
net investment income per share for the 30-day period by the offering
price at the end of the period and annualizing the result. (5)Returns are
calculated by determining the percentage change in NAV with all
distributions reinvested. SEC average annual returns for Class A reflect
a sales charge of 4.75% and for Class B reflect applicable CDSC based on
the following schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th
year; 2% - 5th year; 1% - 6th year.
Past performance is no guarantee of future results. Investment return and
return and principal value will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of July 31, 1999
<TABLE>
<CAPTION>
Performance(5) Class A Class B
- ----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year 1.7% 1.0%
Five Years 6.1 5.9
Life of Fund+ 4.6 6.2
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year -3.1% -3.8%
Five Years 5.1 5.6
Life of Fund+ 3.7 6.2
</TABLE>
+Inception date: Class A: 12/8/93; Class B: 3/24/92
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EATON VANCE TEXAS MUNICIPALS FUND, CLASS B VS.
LEHMAN BROTHERS MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
Date Fund/NAV LBMBI
---- -------- -----
<S> <C> <C>
3/31/92 $10,000 $10,000
4/30/92 $10,080 $10,089
5/31/92 $10,286 $10,208
6/30/92 $10,501 $10,379
7/31/92 $10,970 $10,690
8/31/92 $10,710 $10,586
9/30/92 $10,751 $10,656
10/31/92 $10,421 $10,551
11/30/92 $10,788 $10,740
12/31/92 $10,914 $10,849
1/31/93 $10,979 $10,976
2/28/93 $11,532 $11,373
3/31/93 $11,337 $11,252
4/30/93 $11,445 $11,366
5/31/93 $11,524 $11,430
6/30/93 $11,694 $11,621
7/31/93 $11,685 $11,636
8/31/93 $11,972 $11,878
9/30/93 $12,137 $12,013
10/31/93 $12,116 $12,037
11/30/93 $11,987 $11,930
12/31/93 $12,287 $12,182
1/31/94 $12,459 $12,321
2/28/94 $12,055 $12,002
3/31/94 $11,344 $11,513
4/30/94 $11,412 $11,611
5/31/94 $11,538 $11,712
6/30/94 $11,432 $11,643
7/31/94 $11,694 $11,854
8/31/94 $11,729 $11,895
9/30/94 $11,499 $11,720
10/31/94 $11,187 $11,512
11/30/94 $10,929 $11,304
12/31/94 $11,295 $11,552
1/31/95 $11,726 $11,883
2/28/95 $12,155 $12,228
3/31/95 $12,262 $12,369
4/30/95 $12,222 $12,383
5/31/95 $12,594 $12,779
6/30/95 $12,383 $12,667
7/31/95 $12,437 $12,787
8/31/95 $12,586 $12,949
9/30/95 $12,650 $13,031
10/31/95 $12,886 $13,220
11/30/95 $13,171 $13,440
12/31/95 $13,309 $13,569
1/31/96 $13,363 $13,671
2/28/96 $13,218 $13,579
3/31/96 $13,020 $13,406
4/30/96 $12,999 $13,368
5/31/96 $13,039 $13,363
6/30/96 $13,146 $13,508
7/31/96 $13,258 $13,630
8/31/96 $13,272 $13,627
9/30/96 $13,442 $13,818
10/31/96 $13,531 $13,974
11/30/96 $13,714 $14,230
12/31/96 $13,704 $14,170
1/31/97 $13,744 $14,197
2/28/97 $13,895 $14,327
3/31/97 $13,747 $14,136
4/30/97 $13,864 $14,254
5/31/97 $14,049 $14,469
6/30/97 $14,212 $14,623
7/31/97 $14,583 $15,028
8/31/97 $14,479 $14,887
9/30/97 $14,629 $15,064
10/31/97 $14,751 $15,161
11/30/97 $14,812 $15,250
12/31/97 $14,985 $15,472
1/31/98 $15,137 $15,632
2/28/98 $15,157 $15,637
3/31/98 $15,180 $15,651
4/30/98 $15,125 $15,580
5/31/98 $15,333 $15,826
6/30/98 $15,391 $15,889
7/31/98 $15,420 $15,929
8/31/98 $15,608 $16,175
9/30/98 $15,775 $16,376
10/31/98 $15,733 $16,376
11/30/98 $15,821 $16,433
12/31/98 $15,819 $16,475
1/31/99 $15,963 $16,671
2/28/99 $15,881 $16,598
3/31/99 $15,875 $16,621
4/30/99 $15,934 $16,662
5/31/99 $15,809 $16,566
6/30/99 $15,561 $16,328
7/31/99 $15,575 $16,387
</TABLE>
* Source: Towers Data Systems, Bethesda, MD. Investment operations commenced on
3/24/92. Index information is available only at month end; therefore, the line
comparison begins at the next month following the commencement of the Fund's
investment operations.The chart compares the total return of the Fund's Class
B with that of the Lehman Brothers Municipal Bond Index, a broad-based,
unmanaged market index. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent total returns of $10,000 hypothetical investments in
the Fund and the Lehman Brothers Municipal Bond Index. An investment in Class
A shares on 12/31/93 at net asset value would have grown to $12,857 on
7/31/99; $12,245, including the 4.75% maximum sales charge. The Index's total
return does not reflect commissions or expenses that would have been incurred
if an investor individually purchased or sold the securities represented in
the Index. It is not possible to invest directly in an Index.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.82% of the total dividends paid by the Fund from net investment
income during the year ended July 31, 1999 was designated as an exempt-interest
dividend.
- --------------------------------------------------------------------------------
10
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
ARIZONA FUND COLORADO FUND CONNECTICUT FUND MICHIGAN FUND
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Assets
- -----------------------------------------------------------------------------------------------------------------------------
Investment in Municipals Portfolio --
Identified cost $ 90,166,341 $36,866,570 $152,304,154 $ 105,266,267
Unrealized appreciation 4,166,924 1,007,477 5,589,410 4,197,067
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT, AT VALUE $ 94,333,265 $37,874,047 $157,893,564 $ 109,463,334
- -----------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 123,789 $ -- $ 777,380 $ 10,662
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 94,457,054 $37,874,047 $158,670,944 $ 109,473,996
- -----------------------------------------------------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------
Distributions payable $ 167,858 $ 70,082 $ 264,839 $ 203,651
Payable for Fund shares redeemed 154,199 63,980 87,046 100,615
Payable to affiliate for Trustees' fees 1,324 35 46 --
Other accrued expenses 42,295 16,666 72,838 76,068
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 365,676 $ 150,763 $ 424,769 $ 380,334
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 94,091,378 $37,723,284 $158,246,175 $ 109,093,662
- -----------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -----------------------------------------------------------------------------------------------------------------------------
Paid-in capital $ 90,548,772 $37,470,372 $156,769,286 $ 104,784,987
Accumulated net realized gain (loss) from Portfolio
(computed on the basis of identified cost) (456,461) (776,354) (3,847,682) 315,260
Accumulated undistributed (distributions in excess of)
net investment income (167,857) 21,789 (264,839) (203,652)
Net unrealized appreciation from Portfolio
(computed on the basis of identified cost) 4,166,924 1,007,477 5,589,410 4,197,067
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL $ 94,091,378 $37,723,284 $158,246,175 $ 109,093,662
- -----------------------------------------------------------------------------------------------------------------------------
Class A Shares
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 5,409,405 $ 2,020,760 $ 9,222,397 $ 1,736,586
SHARES OUTSTANDING 549,152 211,128 881,854 184,201
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial interest
outstanding) $ 9.85 $ 9.57 $ 10.46 $ 9.43
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of net asset value per share) $ 10.34 $ 10.05 $ 10.98 $ 9.90
- -----------------------------------------------------------------------------------------------------------------------------
Class B Shares
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 88,681,973 $35,702,524 $149,023,778 $ 107,357,076
SHARES OUTSTANDING 8,096,110 3,428,866 14,333,458 10,208,042
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of beneficial interest
outstanding) $ 10.95 $ 10.41 $ 10.40 $ 10.52
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF ASSETS AND LIABILITIES
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
MINNESOTA FUND NEW JERSEY FUND PENNSYLVANIA FUND TEXAS FUND
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------------------------------------------------------
Investment in Municipals Portfolio --
Identified cost $57,663,972 $295,580,890 $307,916,871 $ 15,155,472
Unrealized appreciation 2,728,875 13,752,494 6,956,398 609,657
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT, AT VALUE $60,392,847 $309,333,384 $314,873,269 $ 15,765,129
- --------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold $ 134,365 $ 215,359 $ 106,767 $ 497
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $60,527,212 $309,548,743 $314,980,036 $ 15,765,626
- --------------------------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------------------------
Distributions payable $ 115,400 $ 576,957 $ 640,279 $ 29,774
Payable for Fund shares redeemed 194,793 705,072 414,788 52,798
Payable to affiliate for Trustees' fees 16 31 -- --
Other accrued expenses 39,742 151,097 123,179 6,451
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 349,951 $ 1,433,157 $ 1,178,246 $ 89,023
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $60,177,261 $308,115,586 $313,801,790 $ 15,676,603
- --------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $60,733,225 $301,061,487 $316,710,109 $ 15,186,921
Accumulated net realized loss from Portfolio
(computed on the basis of identified cost) (3,136,720) (6,186,267) (9,537,128) (130,961)
Accumulated undistributed (distributions in excess of)
net investment income (148,119) (512,128) (327,589) 10,986
Net unrealized appreciation from Portfolio
(computed on the basis of identified cost) 2,728,875 13,752,494 6,956,398 609,657
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL $60,177,261 $308,115,586 $313,801,790 $ 15,676,603
- --------------------------------------------------------------------------------------------------------------------------------
Class A Shares
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 4,822,098 $ 18,896,860 $ 10,652,148 $ 457,931
SHARES OUTSTANDING 509,656 1,853,891 1,066,050 47,884
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial interest
outstanding) $ 9.46 $ 10.19 $ 9.99 $ 9.56
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of net asset value per share) $ 9.93 $ 10.70 $ 10.49 $ 10.04
- --------------------------------------------------------------------------------------------------------------------------------
Class B Shares
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $55,355,163 $289,218,726 $303,149,642 $ 15,218,672
SHARES OUTSTANDING 5,444,497 27,253,267 29,397,955 1,420,612
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of beneficial interest
outstanding) $ 10.17 $ 10.61 $ 10.31 $ 10.71
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
ARIZONA FUND COLORADO FUND CONNECTICUT FUND MICHIGAN FUND
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------
Interest allocated from Portfolio $ 5,809,056 $ 2,288,094 $ 9,315,501 $ 6,820,667
Expenses allocated from Portfolio (490,295) (141,143) (789,272) (590,715)
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $ 5,318,761 $ 2,146,951 $ 8,526,229 $ 6,229,952
- -----------------------------------------------------------------------------------------------------------------------------
Expenses
- -----------------------------------------------------------------------------------------------------------------------------
Trustees fees and expenses $ 6,133 $ 417 $ 5,180 $ 4,809
Distribution and service fees
Class A 9,215 2,422 10,077 3,123
Class B 890,533 350,129 1,474,115 1,141,536
Transfer and dividend disbursing agent fees 77,941 31,870 134,010 100,640
Custodian fee 14,557 5,780 19,072 14,764
Legal and accounting services 17,670 5,605 18,706 16,045
Printing and postage 8,483 5,372 12,740 14,486
Registration fees 5,264 449 889 3,800
Amortization of organization expenses -- -- -- 775
Miscellaneous 6,642 3,982 9,458 9,785
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 1,036,438 $ 406,026 $ 1,684,247 $ 1,309,763
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 4,282,323 $ 1,740,925 $ 6,841,982 $ 4,920,189
- -----------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 1,691,720 $ 766,484 $ 1,248,465 $ 2,187,074
Financial futures contracts (69,065) 4,864 (12,636) 30,318
Options -- 39,791 199,446 --
- -----------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 1,622,655 $ 811,139 $ 1,435,275 $ 2,217,392
- -----------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $(4,991,841) $(2,291,099) $(5,205,374) $(6,721,062)
Financial futures contracts 30,843 1,935 8,127 34,736
- -----------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $(4,960,998) $(2,289,164) $(5,197,247) $(6,686,326)
- -----------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(3,338,343) $(1,478,025) $(3,761,972) $(4,468,934)
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 943,980 $ 262,900 $ 3,080,010 $ 451,255
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
MINNESOTA FUND NEW JERSEY FUND PENNSYLVANIA FUND TEXAS FUND
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Investment Income
- -------------------------------------------------------------------------------------------------------------------------------
Interest allocated from Portfolio $ 3,776,714 $ 19,527,918 $ 20,690,241 $ 987,079
Expenses allocated from Portfolio (291,838) (1,713,255) (1,738,362) (60,010)
- -------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $ 3,484,876 $ 17,814,663 $ 18,951,879 $ 927,069
- -------------------------------------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------------------------------------
Trustees fees and expenses $ 2,590 $ 5,166 $ 3,474 $ 241
Distribution and service fees
Class A 6,068 16,101 10,599 715
Class B 568,921 2,914,153 3,104,008 152,232
Transfer and dividend disbursing agent fees 52,677 263,033 271,602 12,796
Custodian fee 9,931 27,485 6,907 5,211
Legal and accounting services 23,816 18,289 18,492 14,062
Printing and postage 6,650 24,020 30,360 2,243
Registration fees 35 2,193 3,700 20
Amortization of organization expenses 923 1,202 -- 252
Miscellaneous 5,444 25,880 25,878 2,179
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 677,055 $ 3,297,522 $ 3,475,020 $ 189,951
- -------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 2,807,821 $ 14,517,141 $ 15,476,859 $ 737,118
- -------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 753,339 $ 6,342,302 $ 5,782,186 $ 329,438
Financial futures contracts 95,090 740,360 85,296 --
- -------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 848,429 $ 7,082,662 $ 5,867,482 $ 329,438
- -------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $(3,114,318) $(19,108,964) $(18,419,988) $(862,442)
Financial futures contracts 11,880 59,400 98,076 --
- -------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $(3,102,438) $(19,049,564) $(18,321,912) $(862,442)
- -------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(2,254,009) $(11,966,902) $(12,454,430) $(533,004)
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 553,812 $ 2,550,239 $ 3,022,429 $ 204,114
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets ARIZONA FUND COLORADO FUND CONNECTICUT FUND MICHIGAN FUND
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 4,282,323 $ 1,740,925 $ 6,841,982 $ 4,920,189
Net realized gain 1,622,655 811,139 1,435,275 2,217,392
Net change in unrealized appreciation (depreciation) (4,960,998) (2,289,164) (5,197,247) (6,686,326)
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 943,980 $ 262,900 $ 3,080,010 $ 451,255
- -----------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders--
From net investment income
Class A $ (301,613) $ (113,038) $ (367,948) $ (77,207)
Class B (3,980,710) (1,659,567) (6,438,328) (4,801,254)
In excess of net investment income
Class A (1,295) -- -- --
Class B (75,917) -- -- --
From net realized gain
Class A -- -- -- (2,684)
Class B -- -- -- (148,743)
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (4,359,535) $(1,772,605) $ (6,806,276) $ (5,029,888)
- -----------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 5,695,521 $ 410,035 $ 5,614,029 $ 476,350
Class B 7,317,398 3,574,611 10,368,849 4,918,939
Net asset value of shares issued to shareholders in
payment of distributions declared
Class A 145,259 58,140 213,503 50,026
Class B 1,488,338 842,774 3,425,924 2,605,627
Cost of shares redeemed
Class A (3,679,906) (536,119) (1,587,114) (244,401)
Class B (16,250,220) (4,822,974) (20,380,835) (23,876,690)
- -----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS $ (5,283,610) $ (473,533) $ (2,345,644) $ (16,070,149)
- -----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (8,699,165) $(1,983,238) $ (6,071,910) $ (20,648,782)
- -----------------------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 102,790,543 $39,706,522 $164,318,085 $ 129,742,444
- -----------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 94,091,378 $37,723,284 $158,246,175 $ 109,093,662
- -----------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions in excess of)
net investment income included in
net assets
- -----------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (167,857) $ 21,789 $ (264,839) $ (203,652)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets MINNESOTA FUND NEW JERSEY FUND PENNSYLVANIA FUND TEXAS FUND
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 2,807,821 $ 14,517,141 $ 15,476,859 $ 737,118
Net realized gain 848,429 7,082,662 5,867,482 329,438
Net change in unrealized appreciation (depreciation) (3,102,438) (19,049,564) (18,321,912) (862,442)
- --------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 553,812 $ 2,550,239 $ 3,022,429 $ 204,114
- --------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (225,700) $ (830,624) $ (567,134) $ (21,492)
Class B (2,582,121) (13,686,517) (15,120,969) (719,293)
In excess of net investment income
Class A (3,995) (8,497) (11,869) --
Class B (5,888) (19,571) (316,467) --
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $(2,817,704) $(14,545,209) $(16,016,439) $ (740,785)
- --------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 1,586,280 $ 10,874,081 $ 9,157,522 $ 263,076
Class B 4,513,386 26,459,043 16,392,325 717,516
Net asset value of shares issued to shareholders in
payment of distributions declared
Class A 117,088 407,915 372,064 11,491
Class B 1,383,773 7,147,875 7,015,145 274,459
Cost of shares redeemed
Class A (681,021) (3,283,634) (6,986,416) (173,118)
Class B (11,372,093) (49,220,137) (57,299,191) (2,240,673)
- --------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS $(4,452,587) $ (7,614,857) $(31,348,551) $ (1,147,249)
- --------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $(6,716,479) $(19,609,827) $(44,342,561) $ (1,683,920)
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
At beginning of year $66,893,740 $327,725,413 $358,144,351 $ 17,360,523
- --------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $60,177,261 $308,115,586 $313,801,790 $ 15,676,603
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions in excess of)
net investment income included in
net assets
- --------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (148,119) $ (512,128) $ (327,589) $ 10,986
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JULY 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets ARIZONA FUND COLORADO FUND CONNECTICUT FUND MICHIGAN FUND
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 4,496,719 $ 1,794,973 $ 7,013,947 $ 5,734,072
Net realized gain (loss) 2,209,800 468,233 (472,006) 2,386,197
Net change in unrealized appreciation (depreciation) (945,220) (390,688) 1,891,754 (1,160,625)
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 5,761,299 $ 1,872,518 $ 8,433,695 $ 6,959,644
- -----------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders--
From net investment income
Class A $ (131,150) $ (95,887) $ (172,439) $ (54,041)
Class B (4,365,569) (1,722,316) (6,841,508) (5,682,246)
In excess of net investment income
Class A (4,180) -- (6,696) --
Class B (126,748) -- (150,607) (212,249)
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (4,627,647) $(1,818,203) $ (7,171,250) $ (5,948,536)
- -----------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 1,739,465 $ 834,848 $ 2,967,667 $ 725,660
Class B 6,442,510 3,825,870 6,225,238 3,792,047
Issued in reorganization of EV Traditional Municipals
Funds
Class A 1,873,786 1,672,995 2,746,315 1,141,339
Net asset value of shares issued to shareholders in
payment of distributions declared
Class A 69,652 44,261 53,614 36,731
Class B 1,670,753 875,227 3,767,532 3,061,914
Cost of shares redeemed
Class A (209,594) (382,226) (592,798) (381,773)
Class B (19,308,751) (8,004,934) (23,745,878) (28,186,086)
- -----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS $ (7,722,179) $(1,133,959) $ (8,578,310) $ (19,810,168)
- -----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (6,588,527) $(1,079,644) $ (7,315,865) $ (18,799,060)
- -----------------------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 109,379,070 $40,786,166 $171,633,950 $ 148,541,504
- -----------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 102,790,543 $39,706,522 $164,318,085 $ 129,742,444
- -----------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions in excess of)
net investment income included in
net assets
- -----------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (180,526) $ 53,469 $ (315,853) $ (245,380)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JULY 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets MINNESOTA FUND NEW JERSEY FUND PENNSYLVANIA FUND TEXAS FUND
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 2,884,264 $ 15,204,158 $ 17,670,830 $ 885,593
Net realized gain 701,035 1,707,025 2,080,757 476,323
Net change in unrealized appreciation (depreciation) (236,414) 1,067,439 (7,216,085) (276,214)
- --------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 3,348,885 $ 17,978,622 $ 12,535,502 $ 1,085,702
- --------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (163,184) $ (457,368) $ (348,278) $ (18,647)
Class B (2,727,564) (14,746,790) (17,849,608) (870,033)
In excess of net investment income
Class A -- (17,868) (3,747) --
Class B (143,063) (270,007) -- --
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $(3,033,811) $(15,492,033) $(18,201,633) $ (888,680)
- --------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 1,538,325 $ 7,108,162 $ 4,213,104 $ 41,067
Class B 3,343,605 20,260,815 17,769,330 582,852
Issued in reorganization of EV Traditional Municipals
Funds
Class A 2,536,172 5,945,100 5,104,277 352,637
Net asset value of shares issued to shareholders in
payment of distributions declared
Class A 85,836 211,396 197,696 11,174
Class B 1,484,893 7,689,826 8,191,410 355,409
Cost of shares redeemed
Class A (180,691) (1,750,303) (808,053) (36,588)
Class B (10,010,256) (59,305,679) (66,831,364) (5,425,673)
- --------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS $(1,202,116) $(19,840,683) $(32,163,600) $ (4,119,122)
- --------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (887,042) $(17,354,094) $(37,829,731) $ (3,922,100)
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
At beginning of year $67,780,782 $345,079,507 $395,974,082 $ 21,282,623
- --------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $66,893,740 $327,725,413 $358,144,351 $ 17,360,523
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions in excess of)
net investment income included in
net assets
- --------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ (138,236) $ (484,060) $ 211,991 $ 14,653
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ARIZONA FUND
--------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------------------------------
JULY 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 $10.200 $11.340 $10.090 $11.220 $10.680 $10.530 $10.390
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------
Net investment income $ 0.504 $ 0.472 $ 0.499 $ 0.476 $ 0.486 $ 0.482 $ 0.492
Net realized and unrealized
gain (loss) (0.348) (0.381) 0.126 0.134 0.539 0.161 0.164
- -----------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.156 $ 0.091 $ 0.625 $ 0.610 $ 1.025 $ 0.643 $ 0.656
- -----------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------
From net investment income $(0.504) $(0.472) $(0.499) $(0.476) $(0.485) $(0.488) $(0.492)
In excess of net investment
income (0.002) (0.009) (0.016) (0.014) -- (0.005) (0.024)
- -----------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.506) $(0.481) $(0.515) $(0.490) $(0.485) $(0.493) $(0.516)
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.850 $10.950 $10.200 $11.340 $11.220 $10.680 $10.530
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 1.48% 0.74% 6.34% 5.54% 9.85% 6.17% 6.64%
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $ 5,409 $88,682 $ 3,498 $99,293 $109,379 $127,681 $141,859
Ratios (As a percentage of
average daily net assets):
Expenses(3)(4) 0.77% 1.56% 0.78% 1.57% 1.58% 1.56% 1.53%
Expenses after custodian
fee reduction(3) 0.76% 1.55% 0.76% 1.55% 1.57% 1.55% --
Net investment income 4.90% 4.16% 4.88% 4.22% 4.50% 4.49% 4.81%
- -----------------------------------------------------------------------------------------------------------------
</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 July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratio for the
year ended July 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
COLORADO FUND
--------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------------------------------
JULY 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 $ 9.950 $10.820 $ 9.920 $10.800 $10.170 $10.020 $10.010
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------
Net investment income $ 0.507 $ 0.467 $ 0.507 $ 0.478 $ 0.491 $ 0.480 $ 0.494
Net realized and unrealized
gain (loss) (0.374) (0.401) 0.038 0.025 0.621 0.162 0.033
- -----------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.133 $ 0.066 $ 0.545 $ 0.503 $ 1.112 $ 0.642 $ 0.527
- -----------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------
From net investment income $(0.513) $(0.476) $(0.515) $(0.483) $(0.482) $(0.492) $(0.494)
In excess of net investment
income -- -- -- -- -- -- (0.023)
- -----------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.513) $(0.476) $(0.515) $(0.483) $(0.482) $(0.492) $(0.517)
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.570 $10.410 $ 9.950 $10.820 $10.800 $10.170 $10.020
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN(1) 1.27% 0.54% 5.62% 4.74% 11.26% 6.46% 5.58%
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $ 2,021 $35,703 $ 2,172 $37,535 $40,786 $42,972 $43,900
Ratios (As a percentage of
average daily net assets):
Net expenses(2)(3) 0.63% 1.46% 0.74% 1.51% 1.53% 1.49% 1.28%
Net expenses after
custodian fee
reduction(2) 0.59% 1.42% 0.71% 1.48% 1.49% 1.45% --
Net investment income 5.09% 4.32% 5.14% 4.40% 4.75% 4.69% 5.03%
- -----------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the investment adviser fee, an
allocation of expenses to the Investment Adviser or Administrator, or both. Had such actions not been taken,
the ratios and net investment income per share would have been as follows:
Ratios (As a percentage of
average daily net assets):
Expenses(2)(3) 1.51% 1.43%
Expenses after custodian
fee reduction(2) 1.46% --
Net investment income 4.67% 4.88%
Net investment income per
share $ 0.478 $ 0.479
- -----------------------------------------------------------------------------------------------------------------
</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 July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratio for the
year ended July 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CONNECTICUT FUND
--------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------------------------------
JULY 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 $10.710 $10.640 $10.640 $10.570 $10.120 $ 9.970 $10.050
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------
Net investment income $ 0.539 $ 0.440 $ 0.529 $ 0.438 $ 0.453 $ 0.452 $ 0.465
Net realized and unrealized
gain (loss) (0.258) (0.243) 0.091 0.080 0.450 0.169 (0.037)
- -----------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.281 $ 0.197 $ 0.620 $ 0.518 $ 0.903 $ 0.621 $ 0.428
- -----------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------
From net investment income $(0.531) $(0.437) $(0.529) $(0.438) $(0.453) $(0.452) $(0.465)
In excess of net investment
income -- -- (0.021) (0.010) -- (0.019) (0.043)
- -----------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.531) $(0.437) $(0.550) $(0.448) $(0.453) $(0.471) $(0.508)
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $10.460 $10.400 $10.710 $10.640 $10.570 $10.120 $ 9.970
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 2.60% 1.84% 5.97% 4.99% 9.17% 6.30% 4.55%
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $ 9,222 $149,024 $ 5,193 $159,125 $171,634 $181,608 $188,900
Ratios (As a percentage of
average daily net assets):
Expenses(3)(4) 0.75% 1.56% 0.76% 1.59% 1.60% 1.58% 1.55%
Expenses after custodian
fee reduction(3) 0.73% 1.54% 0.75% 1.58% 1.60% 1.57% --
Net investment income 4.89% 4.11% 4.93% 4.14% 4.45% 4.45% 4.77%
- -----------------------------------------------------------------------------------------------------------------
</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 July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratio for the
year ended July 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MICHIGAN FUND
--------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------------------------------
JULY 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 $ 9.820 $10.950 $ 9.750 $10.870 $10.420 $10.250 $10.210
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------
Net investment income $ 0.471 $ 0.440 $ 0.474 $ 0.448 $ 0.460 $ 0.464 $ 0.486
Net realized and unrealized
gain (loss) (0.385) (0.420) 0.092 0.097 0.454 0.195 0.059
- -----------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.086 $ 0.020 $ 0.566 $ 0.545 $ 0.914 $ 0.659 $ 0.545
- -----------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------
From net investment income $(0.461) $(0.435) $(0.496) $(0.448) $(0.462) $(0.481) $(0.486)
In excess of net investment
income -- -- -- (0.017) (0.002) (0.008) (0.019)
From net realized gain (0.015) (0.015) -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.476) $(0.450) $(0.496) $(0.465) $(0.464) $(0.489) $(0.505)
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.430 $10.520 $ 9.820 $10.950 $10.870 $10.420 $10.250
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 0.81% 0.11% 5.95% 5.11% 9.01% 6.50% 5.61%
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $ 1,737 $107,357 $ 1,526 $128,216 $148,542 $171,067 $186,363
Ratios (As a percentage of
average daily net assets):
Expenses(3)(4) 0.80% 1.58% 0.83% 1.59% 1.60% 1.61% 1.51%
Expenses after custodian
fee reduction(3) 0.79% 1.57% 0.81% 1.57% 1.58% 1.60% --
Net investment income 4.81% 4.03% 4.85% 4.12% 4.40% 4.44% 4.84%
- -----------------------------------------------------------------------------------------------------------------
</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 July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratio for the
year ended July 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MINNESOTA FUND
--------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------------------------------
JULY 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 $ 9.820 $10.540 $ 9.770 $10.490 $10.070 $ 9.950 $10.040
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------
Net investment income $ 0.490 $ 0.446 $ 0.492 $ 0.439 $ 0.466 $ 0.468 $ 0.470
Net realized and unrealized
gain (loss) (0.351) (0.369) 0.073 0.073 0.415 0.123 (0.053)
- -----------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.139 $ 0.077 $ 0.565 $ 0.512 $ 0.881 $ 0.591 $ 0.417
- -----------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------
From net investment income $(0.490) $(0.446) $(0.515) $(0.439) $(0.461) $(0.468) $(0.470)
In excess of net investment
income (0.009) (0.001) -- (0.023) -- (0.003) (0.037)
- -----------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.499) $(0.447) $(0.515) $(0.462) $(0.461) $(0.471) $(0.507)
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.460 $10.170 $ 9.820 $10.540 $10.490 $10.070 $ 9.950
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 1.34% 0.65% 5.94% 4.99% 9.01% 6.00% 4.41%
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $ 4,822 $55,355 $ 3,995 $62,899 $67,781 $74,374 $78,970
Ratios (As a percentage of
average daily net assets):
Net expenses(3)(4) 0.73% 1.55% 0.73% 1.58% 1.58% 1.56% 1.52%
Net expenses after
custodian fee
reduction(3) 0.71% 1.53% 0.71% 1.56% 1.55% 1.54% --
Net investment income 4.97% 4.21% 5.03% 4.19% 4.62% 4.63% 4.80%
- -----------------------------------------------------------------------------------------------------------------
</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 July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratio for the
year ended July 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NEW JERSEY FUND
--------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------------------------------
JULY 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 $10.590 $11.020 $10.530 $10.940 $10.440 $10.360 $10.410
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------
Net investment income $ 0.548 $ 0.481 $ 0.558 $ 0.491 $ 0.506 $ 0.505 $ 0.505
Net realized and unrealized
gain (loss) (0.394) (0.409) 0.082 0.089 0.493 0.084 (0.009)
- -----------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.154 $ 0.072 $ 0.640 $ 0.580 $ 0.999 $ 0.589 $ 0.496
- -----------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------
From net investment income $(0.548) $(0.481) $(0.558) $(0.491) $(0.499) $(0.505) $(0.505)
In excess of net investment
income (0.006) (0.001) (0.022) (0.009) -- (0.004) (0.035)
In excess of net realized gain -- -- -- -- -- -- (0.006)
- -----------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.554) $(0.482) $(0.580) $(0.500) $(0.499) $(0.509) $(0.546)
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $10.190 $10.610 $10.590 $11.020 $10.940 $10.440 $10.360
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 1.39% 0.59% 6.24% 5.41% 9.85% 5.74% 5.04%
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $18,897 $289,219 $11,570 $316,155 $345,080 $378,649 $404,861
Ratios (As a percentage of
average daily net assets):
Expenses(3)(4) 0.73% 1.57% 0.77% 1.61% 1.59% 1.57% 1.53%
Expenses after custodian
fee reduction(3) 0.72% 1.56% 0.75% 1.59% 1.57% 1.56% --
Net investment income 5.14% 4.37% 5.25% 4.48% 4.82% 4.80% 4.97%
- -----------------------------------------------------------------------------------------------------------------
</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 July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratio for the
year ended July 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PENNSYLVANIA FUND
--------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------------------------------
JULY 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 $10.400 $10.730 $10.550 $10.900 $10.430 $10.320 $10.340
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------
Net investment income $ 0.546 $ 0.477 $ 0.578 $ 0.506 $ 0.522 $ 0.512 $ 0.507
Net realized and unrealized
gain (loss) (0.393) (0.404) (0.143) (0.156) 0.458 0.108 0.004(2)
- -----------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.153 $ 0.073 $ 0.435 $ 0.350 $ 0.980 $ 0.620 $ 0.511
- -----------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------
From net investment income $(0.546) $(0.483) $(0.578) $(0.520) $(0.510) $(0.510) $(0.507)
In excess of net investment
income (0.017) (0.010) (0.007) -- -- -- (0.024)
- -----------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.563) $(0.493) $(0.585) $(0.520) $(0.510) $(0.510) $(0.531)
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.990 $10.310 $10.400 $10.730 $10.900 $10.430 $10.320
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 1.42% 0.64% 4.17% 3.23% 9.66% 6.08% 5.24%
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $10,652 $303,150 $ 8,552 $349,593 $395,974 $441,104 $495,856
Ratios (As a percentage of
average daily net assets):
Expenses(4)(5) 0.75% 1.58% 0.74% 1.59% 1.61% 1.58% 1.51%
Expenses after custodian
fee reduction(4) 0.71% 1.54% 0.70% 1.55% 1.56% 1.54% --
Net investment income 5.29% 4.47% 5.40% 4.63% 4.93% 4.89% 5.04%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The per share amount is not in accord with the net realized and unrealized
gain (loss) on investments for the period because of the timing of sales of
Fund shares and the amount of the per share realized and unrealized gains
and losses at such time.
(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 July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratio for the
year ended July 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TEXAS FUND
--------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------------------------------
JULY 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 $ 9.890 $11.080 $ 9.770 $10.960 $10.440 $10.280 $10.210
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------------------------
Net investment income $ 0.511 $ 0.485 $ 0.515 $ 0.496 $ 0.489 $ 0.492 $ 0.532
Net realized and unrealized
gain (loss) (0.336) (0.368) 0.110 0.120 0.526 0.177 0.084
- -----------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.175 $ 0.117 $ 0.625 $ 0.616 $ 1.015 $ 0.669 $ 0.616
- -----------------------------------------------------------------------------------------------------------------
Less distributions
- -----------------------------------------------------------------------------------------------------------------
From net investment income $(0.505) $(0.487) $(0.505) $(0.496) $(0.495) $(0.509) $(0.532)
In excess of net investment
income -- -- -- -- -- -- (0.014)
- -----------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.505) $(0.487) $(0.505) $(0.496) $(0.495) $(0.509) $(0.546)
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.560 $10.710 $ 9.890 $11.080 $10.960 $10.440 $10.280
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN(1) 1.72% 1.01% 6.55% 5.74% 10.00% 6.60% 6.36%
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $ 458 $15,219 $ 373 $16,988 $21,283 $23,996 $27,762
Ratios (As a percentage of
average daily net assets):
Net expenses(2)(3) 0.75% 1.54% 0.72% 1.49% 1.57% 1.43% 0.99%
Net expenses after
custodian fee
reduction(2) 0.72% 1.51% 0.69% 1.46% 1.55% 1.39% --
Net investment income 5.11% 4.37% 5.22% 4.50% 4.61% 4.70% 5.29%
- -----------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the investment adviser fee, an
allocation of expenses to the Investment Adviser or Administrator, or both. Had such actions not been taken,
the ratios and net investment income per share would have been as follows:
Ratios (As a percentage of
average daily net assets):
Expenses(2)(3) 1.53% 1.44%
Expenses after custodian
fee reduction(2) 1.49% --
Net investment income 4.60% 4.84%
Net investment income per
share $ 0.482 $ 0.487
- -----------------------------------------------------------------------------------------------------------------
</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 July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratio for the
year ended July 31, 1995 has not been adjusted to reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 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, eight
of which, each non-diversified, are included in these financial statements.
They include Eaton Vance Arizona Municipals Fund ("Arizona Fund"), Eaton
Vance Colorado Municipals Fund ("Colorado Fund"), Eaton Vance Connecticut
Municipals Fund ("Connecticut Fund"), Eaton Vance Michigan Municipals Fund
("Michigan Fund"), Eaton Vance Minnesota Municipals Fund ("Minnesota Fund"),
Eaton Vance New Jersey Municipals Fund ("New Jersey Fund"), Eaton Vance
Pennsylvania Municipals Fund ("Pennsylvania Fund") and Eaton Vance Texas
Municipals Fund ("Texas Fund"). The Funds offer two classes of shares. Class
A shares are 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 Arizona Fund invests its assets in the Arizona
Municipals Portfolio, the Colorado Fund invests its assets in the Colorado
Municipals Portfolio, the Connecticut Fund invests its assets in the
Connecticut Municipals Portfolio, the Michigan Fund invests its assets in the
Michigan Municipals Portfolio, the Minnesota Fund invests its assets in the
Minnesota Municipals Portfolio, the New Jersey Fund invests its assets in the
New Jersey Municipals Portfolio, the Pennsylvania Fund invests its assets in
the Pennsylvania Municipals Portfolio and the Texas Fund invests its assets
in the Texas Municipals Portfolio. The value of each Fund's investment in its
corresponding Portfolio reflects the Fund's proportionate interest in the net
assets of that Portfolio (approximately 99.9% at July 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 July 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 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>
- ---------------------------------------------------------------------
Arizona Fund $ 431,585 July 31, 2004
Colorado Fund 776,352 July 31, 2004
Connecticut Fund 91,011 July 31, 2005
3,755,736 July 31, 2004
Minnesota Fund 329,867 July 31, 2005
2,802,385 July 31, 2004
New Jersey Fund 23,676 July 31, 2005
6,131,408 July 31, 2004
Pennsylvania Fund $ 1,809,455 July 31, 2005
7,652,773 July 31, 2004
Texas Fund 84,793 July 31, 2005
46,167 July 31, 2004
</TABLE>
27
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
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.
Pursuant to Section 852 of the Internal Revenue Code, the Michigan Fund
designates $151,427 of distributions from tax-exempt income as a long-term
capital gain distribution for its taxable year ended July 31, 1999.
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 on the Statement Of Operations.
F Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
G Other -- Investment transactions are accounted for on a trade date basis.
2 Distributions to Shareholders
- -------------------------------------------
The net income of each Fund is determined daily and substantially all of the
net income so determined is declared as a dividend to shareholders of record
at the time of declaration. Distributions are paid monthly. Distributions are
paid in the form of additional shares or, at the election of the shareholder,
in cash. Distributions of allocated realized capital gains, if any, are made
at least annually. Shareholders may reinvest capital gain distributions in
additional shares of the Fund at the net asset value as of the ex-dividend
date.
The Funds distinguish between distributions on a tax basis and a financial
reporting basis. Generally accepted accounting principles require that only
distributions in excess of tax basis earnings and profits be reported in the
financial statements as a return of capital. Differences in the recognition
or classification of income between the financial statements and tax earnings
and profits which result in temporary over distributions for financial
statement purposes are classified as distributions in excess of net
investment income or accumulated net realized gains. Permanent differences
between book and tax accounting relating to distributions are reclassified to
paid-in capital.
The tax treatment of distributions for the calendar year will be reported to
shareholders prior to February 1, 2000, and will be based on tax accounting
methods which may differ from amounts determined for financial statement
purposes.
3 Shares of Beneficial Interest
- -------------------------------------------
The Trust's 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>
ARIZONA FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS A JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 556,423 170,891
Issued to shareholders electing to
receive payments of distributions in
Fund shares 14,297 6,850
Redemptions (364,504) (20,568)
Issued to EV Traditional Municipals
Fund shareholders -- 185,763
- -----------------------------------------------------------------------
NET INCREASE 206,216 342,936
- -----------------------------------------------------------------------
</TABLE>
28
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
ARIZONA FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS B JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 644,520 569,460
Issued to shareholders electing to
receive payments of distributions in
Fund shares 131,278 147,910
Redemptions (1,431,988) (1,710,682)
- -----------------------------------------------------------------------
NET DECREASE (656,190) (993,312)
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
COLORADO FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS A JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 41,160 83,490
Issued to shareholders electing to
receive payments of distributions in
Fund shares 5,870 4,447
Redemptions (54,245) (38,178)
Issued to EV Traditional Municipals
Fund shareholders -- 168,584
- -----------------------------------------------------------------------
NET INCREASE (DECREASE) (7,215) 218,343
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
COLORADO FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS B JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 329,508 352,856
Issued to shareholders electing to
receive payments of distributions in
Fund shares 78,095 80,757
Redemptions (447,093) (740,698)
- -----------------------------------------------------------------------
NET DECREASE (39,490) (307,085)
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CONNECTICUT FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS A JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 524,295 277,244
Issued to shareholders electing to
receive payments of distributions in
Fund shares 19,896 5,014
Redemptions (147,351) (55,247)
Issued to EV Traditional Municipals
Fund shareholders -- 258,003
- -----------------------------------------------------------------------
NET INCREASE 396,840 485,014
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CONNECTICUT FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS B JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 967,806 585,923
Issued to shareholders electing to
receive payments of distributions in
Fund shares 320,758 355,118
Redemptions (1,912,012) (2,227,088)
- -----------------------------------------------------------------------
NET DECREASE (623,448) (1,286,047)
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MICHIGAN FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS A JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 48,762 73,709
Issued to shareholders electing to
receive payments of distributions in
Fund shares 5,120 3,759
Redemptions (25,127) (39,094)
Issued to EV Traditional Municipals
Fund shareholders -- 117,072
- -----------------------------------------------------------------------
NET INCREASE 28,755 155,446
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MICHIGAN FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS B JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 449,210 348,116
Issued to shareholders electing to
receive payments of distributions in
Fund shares 238,514 280,699
Redemptions (2,185,130) (2,585,944)
- -----------------------------------------------------------------------
NET DECREASE (1,497,406) (1,957,129)
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS A JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 159,290 157,027
Issued to shareholders electing to
receive payments of distributions in
Fund shares 12,797 8,777
Redemptions (69,272) (18,523)
Issued to EV Traditional Municipals
Fund shareholders -- 259,560
- -----------------------------------------------------------------------
NET INCREASE 102,815 406,841
- -----------------------------------------------------------------------
</TABLE>
29
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
MINNESOTA FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS B JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 425,368 318,574
Issued to shareholders electing to
receive payments of distributions in
Fund shares 130,884 141,435
Redemptions (1,078,648) (954,723)
- -----------------------------------------------------------------------
NET DECREASE (522,396) (494,714)
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NEW JERSEY FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS A JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 1,033,440 672,700
Issued to shareholders electing to
receive payments of distributions in
Fund shares 38,666 19,995
Redemptions (310,720) (165,010)
Issued to EV Traditional Municipals
Fund shareholders -- 564,820
- -----------------------------------------------------------------------
NET INCREASE 761,386 1,092,505
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NEW JERSEY FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS B JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 2,398,545 1,840,820
Issued to shareholders electing to
receive payments of distributions in
Fund shares 649,772 700,002
Redemptions (4,488,554) (5,394,350)
- -----------------------------------------------------------------------
NET DECREASE (1,440,237) (2,853,528)
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PENNSYLVANIA FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS A JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 881,964 396,676
Issued to shareholders electing to
receive payments of distributions in
Fund shares 36,031 18,652
Redemptions (674,530) (76,420)
Issued to EV Traditional Municipals
Fund shareholders -- 483,677
- -----------------------------------------------------------------------
NET INCREASE 243,465 822,585
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PENNSYLVANIA FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS B JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 1,533,768 1,626,734
Issued to shareholders electing to
receive payments of distributions in
Fund shares 657,662 749,510
Redemptions (5,385,455) (6,125,607)
- -----------------------------------------------------------------------
NET DECREASE (3,194,025) (3,749,363)
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TEXAS FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS A JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 26,766 4,222
Issued to shareholders electing to
receive payments of distributions in
Fund shares 1,162 1,137
Redemptions (17,726) (3,768)
Issued to EV Traditional Municipals
Fund shareholders -- 36,091
- -----------------------------------------------------------------------
NET INCREASE 10,202 37,682
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TEXAS FUND
-----------------------------
YEAR ENDED YEAR ENDED
CLASS B JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
- -----------------------------------------------------------------------
Sales 64,343 52,970
Issued to shareholders electing to
receive payments of distributions in
Fund shares 24,770 32,250
Redemptions (202,053) (493,571)
- -----------------------------------------------------------------------
NET DECREASE (112,940) (408,351)
- -----------------------------------------------------------------------
</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 officers and
Trustees of the Funds and of the Portfolios are officers of the above
organizations. Except as to Trustees of the Funds and Portfolios who are not
members of EVM's or BMR's organization, officers and Trustees receive
remuneration for their services to each fund out of the investment adviser
fee earned by BMR. Eaton Vance Distributors, Inc. (EVD), a subsidiary of EVM
and the Funds' principal
30
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
underwriter, received $6,023, $994, $5,959, $603, $3,090, $14,381, $5,427 and
$303 from the Arizona Fund, Colorado Fund, Connecticut Fund, Michigan Fund,
Minnesota Fund, New Jersey Fund, Pennsylvania Fund and Texas Fund,
respectively, as its portion of the sales charge on sales of Class A shares
for the year ended July 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)(collectively, the Plans). The Plans require the Class B shares to pay
the principal underwriter, EVD, amounts equal to 1/365 of 0.75% of each
Fund's Class B daily net assets, for providing ongoing distribution services
and facilities to the respective Fund. A Fund's Class B shares will
automatically discontinue payments to EVD during any period in which there
are no outstanding Uncovered Distribution Charges, which are equivalent to
the sum of (i) 5% of the aggregate amount received by the Fund for Class B
shares sold plus (ii) 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 (see Note 6) and amounts theretofore paid to EVD. The amount payable
to EVD with respect to each day is accrued on such day as a liability of each
Class B and, accordingly, reduces the Class B's net assets. For the year
ended July 31, 1999, the Class B shares of the Arizona Fund, Colorado Fund,
Connecticut Fund, Michigan Fund, Minnesota Fund, New Jersey Fund,
Pennsylvania Fund and Texas Fund paid $718,447, $283,125, $1,181,348,
$901,213, $459,775, $2,351,311, $2,502,923 and $122,830, respectively, to
EVD, representing 0.75% (annualized) of each Fund's Class B average daily net
assets. At July 31, 1999, the amount of Uncovered Distribution Charges of EVD
calculated under the Class B Plans for Arizona Fund, Colorado Fund,
Connecticut Fund, Michigan Fund, Minnesota Fund, New Jersey Fund,
Pennsylvania Fund and Texas Fund were approximately $2,412,000, $1,330,000,
$3,960,000, $2,244,000, $1,520,000, $6,289,000, $7,100,000 and $327,000,
respectively.
In addition, the Plans also authorize each class 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 attributable to Class A and
Class B shares for any fiscal year. The Trustees have initially implemented
the Plans by authorizing each class to make quarterly payments of service
fees to EVD and investment dealers in amounts not expected to exceed 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 July 31,
1999, Arizona Fund, Colorado Fund, Connecticut Fund, Michigan Fund, Minnesota
Fund, New Jersey Fund, Pennsylvania Fund and Texas Fund paid or accrued
service fees to or payable to EVD in the amount of $9,215, $2,422, $10,077,
$3,123, $6,068, $16,101, $10,599 and $715, respectively, for Class A shares,
and $172,086, $67,004, $292,767, $240,323, $109,146, $562,842, $601,085 and
$29,402, respectively, for Class B shares. Service fee payments will be made
for personal services and/or the maintenance of shareholder accounts. Service
fees are separate and distinct from the sales commissions and distribution
fees payable by each Fund to EVD, and as such are not subject to automatic
discontinuance when there are no outstanding Uncovered Distribution Charges
of EVD.
Certain officers and Trustees of the Funds are officers or directors of EVD.
6 Contingent Deferred Sales Charge
- -------------------------------------------
A contingent deferred sales charge (CDSC) 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 Class B shares which have been sold to EVD 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 Distribution Plan (see Note 5). CDSC charges received when no
Uncovered Distribution Charges exist will be credited to the Fund. EVD
received approximately $90,000, $42,000, $149,000, $146,000, $87,000,
$279,000, $284,000 and $24,000 of CDSC paid by Class B shareholders of
Arizona Fund, Colorado Fund, Connecticut Fund, Michigan Fund, Minnesota Fund,
New Jersey Fund, Pennsylvania Fund and Texas Fund, respectively, for the year
ended July 31, 1999.
31
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
7 Investment Transactions
- -------------------------------------------
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the year ended July 31, 1999 were as follows:
<TABLE>
<CAPTION>
ARIZONA FUND
<S> <C>
- ------------------------------------------------------
Increases $ 13,039,976
Decreases 23,779,211
<CAPTION>
COLORADO FUND
<S> <C>
- ------------------------------------------------------
Increases $ 3,990,873
Decreases 6,586,932
<CAPTION>
CONNECTICUT FUND
<S> <C>
- ------------------------------------------------------
Increases $ 15,311,591
Decreases 27,156,440
<CAPTION>
MICHIGAN FUND
<S> <C>
- ------------------------------------------------------
Increases $ 5,494,726
Decreases 28,028,857
<CAPTION>
MINNESOTA FUND
<S> <C>
- ------------------------------------------------------
Increases $ 6,142,642
Decreases 13,964,317
<CAPTION>
NEW JERSEY FUND
<S> <C>
- ------------------------------------------------------
Increases $ 37,233,317
Decreases 62,376,808
<CAPTION>
PENNSYLVANIA FUND
<S> <C>
- ------------------------------------------------------
Increases $ 25,746,805
Decreases 76,902,838
<CAPTION>
TEXAS FUND
<S> <C>
- ------------------------------------------------------
Increases $ 980,095
Decreases 3,446,497
</TABLE>
8 Transfer of Assets
- -------------------------------------------
On August 1, 1997, Arizona Municipals Fund, Colorado Municipals Fund,
Connecticut Municipals Fund, Michigan Municipals Fund, Minnesota Municipals
Fund, New Jersey Municipals Fund, Pennsylvania Municipals Fund and Texas
Municipals Fund acquired the net assets of EV Traditional Arizona Municipals
Fund, EV Traditional Colorado Municipals Fund, EV Traditional Connecticut
Municipals Fund, EV Traditional Michigan Municipals Fund, EV Traditional
Minnesota Municipals Fund, EV Traditional New Jersey Municipals Fund, EV
Traditional Pennsylvania Municipals Fund and EV Traditional Texas Municipals
Fund, respectively, pursuant to an Agreement and Plan of Reorganization dated
June 23, 1997. In accordance with the agreement, the Funds, at the closing,
issued Class A shares as follows:
<TABLE>
<CAPTION>
CLASS A SHARES AGGREGATE VALUE NET ASSET VALUE
FUND ISSUED OF SHARES ISSUED PER SHARE
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Arizona Fund 185,763 $1,873,786 $10.09
Colorado Fund 168,584 1,672,995 9.92
Connecticut Fund 258,003 2,746,315 10.64
Michigan Fund 117,072 1,141,339 9.75
Minnesota Fund 259,560 2,536,172 9.77
New Jersey Fund 564,820 5,945,100 10.53
Pennsylvania Fund 483,677 5,104,277 10.55
Texas Fund 36,091 352,637 9.77
</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>
FUND ACQUIRED NET ASSETS UNREALIZED APPRECIATION
<S> <C> <C>
- -----------------------------------------------------------------------------------------
Arizona Fund $1,873,786 $105,967
Colorado Fund 1,672,995 154,386
Connecticut Fund 2,746,315 148,370
Michigan Fund 1,141,339 105,076
Minnesota Fund 2,536,172 208,144
New Jersey Fund 5,945,100 282,362
Pennsylvania Fund 5,104,277 214,513
Texas Fund 352,637 12,509
</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 CLASS B
NET ASSET VALUE NET ASSET VALUE
FUND COMBINED NET ASSETS PER SHARE PER SHARE
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Arizona Fund $111,252,856 $10.09 $11.22
Colorado Fund 42,459,161 9.92 10.80
Connecticut Fund 174,380,265 10.64 10.57
Michigan Fund 149,682,843 9.75 10.87
Minnesota Fund 70,316,954 9.77 10.49
New Jersey Fund 351,024,607 10.53 10.94
Pennsylvania Fund 401,078,359 10.55 10.90
Texas Fund 21,635,260 9.77 10.96
</TABLE>
32
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 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 Arizona Municipals Fund, Eaton Vance Colorado Municipals Fund, Eaton Vance
Connecticut Municipals Fund, Eaton Vance Michigan Municipals Fund, Eaton Vance
Minnesota Municipals Fund, Eaton Vance New Jersey Municipals Fund, Eaton Vance
Pennsylvania Municipals Fund and Eaton Vance Texas Municipals Fund (the Funds)
(certain of the series of Eaton Vance Municipals Trust) as of July 31, 1999, the
related statements of operations for the year then ended, the statements of
changes in net assets for the years ended July 31, 1999 and 1998 and financial
highlights for each of the years in the five year period ended July 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 referred to
above present fairly, in all material respects, the financial position of the
aforementioned Funds of Eaton Vance Municipals Trust at July 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
September 3, 1999
33
<PAGE>
ARIZONA MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -------------------------------------------------------------------------------
Assisted Living -- 2.0%
- -------------------------------------------------------------------------------
$1,800 Arizona HFA, (Care Institute,
Inc.-Mesa), 7.625%, 1/1/26 $ 1,829,268
- -------------------------------------------------------------------------------
$ 1,829,268
- -------------------------------------------------------------------------------
Education -- 3.7%
- -------------------------------------------------------------------------------
$2,000 Arizona Educational Loan Marketing
Corp., (AMT), 6.30%, 12/1/08 $ 2,098,380
1,250 University of Arizona, 6.25%, 6/1/11 1,332,000
- -------------------------------------------------------------------------------
$ 3,430,380
- -------------------------------------------------------------------------------
Electric Utilities -- 10.7%
- -------------------------------------------------------------------------------
$3,500 Maricopa County, Pollution Control,
(Public Service Co. of Colorado),
6.375%, 8/15/23 $ 3,576,229
4,300 Navajo County, Pollution Control,
(Arizona Public Service), 5.875%,
8/15/28 4,338,957
1,000 Pima County, IDA, (Tucson Electric Power
Co.), 6.00%, 9/1/29 970,170
1,000 Puerto Rico Telephone Authority,
Variable Rate, 1/1/20(1) 1,116,380
- -------------------------------------------------------------------------------
$ 10,001,736
- -------------------------------------------------------------------------------
Escrowed / Prerefunded -- 14.6%
- -------------------------------------------------------------------------------
$1,000 Glendale, IDA, Prerefunded to 7/1/05,
7.125%, 7/1/20 $ 1,142,440
2,850 Maricopa County, IDA, (Place Five and
The Greenery), Escrowed to Maturity,
6.625%, 1/1/27 3,272,228
1,250 Maricopa County, IDA, (Place Five and
The Greenery), Escrowed to Maturity,
8.625%, 1/1/27 1,603,338
7,500 Maricopa County, Single Family Mortgage,
Escrowed to Maturity, 0.00%, 2/1/16 3,058,425
6,500 Phoenix, IDA, Single Family, Escrowed to
Maturity, 0.00%, 12/1/14 2,862,340
1,500 Puerto Rico, "RIBS", (AMBAC),
Prerefunded to 7/1/02, Variable Rate,
7/1/15(1)(2) 1,692,750
- -------------------------------------------------------------------------------
$ 13,631,521
- -------------------------------------------------------------------------------
General Obligations -- 5.1%
- -------------------------------------------------------------------------------
$1,500 Phoenix, 4.75%, 7/1/23 $ 1,357,725
1,125 Puerto Rico, 0.00%, 7/1/17 424,766
2,275 Tucson, 4.50%, 7/1/19 2,005,390
1,000 Tucson, 5.375%, 7/1/21 1,005,090
- -------------------------------------------------------------------------------
$ 4,792,971
- -------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -------------------------------------------------------------------------------
Hospital -- 5.9%
- -------------------------------------------------------------------------------
$1,130 Arizona HFA, (Phoenix Memorial
Hospital), 8.125%, 6/1/12 $ 1,165,584
1,250 Arizona HFA, (Phoenix Memorial
Hospital), 8.20%, 6/1/21 1,292,413
1,250 Maricopa County, IDA, (Mayo Foundation),
Residual Certificates, Variable Rate,
11/15/37(1)(2) 1,140,800
1,000 Winslow, IDA, (Winslow Memorial
Hospital), 5.50%, 6/1/22 936,060
885 Winslow, IDA, (Winslow Memorial
Hospital), 9.50%, 6/1/22 1,032,034
- -------------------------------------------------------------------------------
$ 5,566,891
- -------------------------------------------------------------------------------
Housing -- 5.5%
- -------------------------------------------------------------------------------
$2,000 Maricopa County, IDA, (Laguna Point
Apartments), 6.75%, 7/1/19 $ 2,139,140
965 Maricopa County, IDA, (National Health
Facilities II), 6.375%, 1/1/19 952,783
1,000 Phoenix, IDA, (Woodstone and Silver
Springs Apartments), (Asset Guaranty),
6.25%, 4/1/23 1,031,110
1,000 Tempe, IDA, (Quadrangle Village
Apartments), 6.25%, 6/1/26 1,045,540
- -------------------------------------------------------------------------------
$ 5,168,573
- -------------------------------------------------------------------------------
Industrial Development Revenue -- 9.8%
- -------------------------------------------------------------------------------
$1,000 Casa Grande, Pollution Control, (Frito
Lay, Inc.), 6.60%, 12/1/10 $ 1,070,600
2,000 Coconino County, Pollution Control,
(Nevada Power Co.), (AMT), 5.80%,
11/1/32 1,967,640
1,750 Gila County, IDA, (Asarco, Inc.), 5.55%,
1/1/27 1,634,605
500 Maricopa County, Pollution Control,
(Public Service Co.), 5.75%, 11/1/22 480,450
750 Phoenix Airport Authority, (America West
Airlines, Inc.), (AMT), 6.25%, 6/1/19 735,150
1,250 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,313,013
2,000 Yavapai County, IDA, (Citizens Utilities
Co.), (AMT), 5.45%, 6/1/33 1,997,940
- -------------------------------------------------------------------------------
$ 9,199,398
- -------------------------------------------------------------------------------
Insured-Education -- 1.1%
- -------------------------------------------------------------------------------
$1,000 Glendale, Development Authority,
(Midwestern University), (MBIA), 5.375%,
5/15/28 $ 982,660
- -------------------------------------------------------------------------------
$ 982,660
- -------------------------------------------------------------------------------
Insured-Electric Utilities -- 2.9%
- -------------------------------------------------------------------------------
$2,505 Pima County, (Irvington Power), (FGIC),
7.25%, 7/15/10 $ 2,722,935
- -------------------------------------------------------------------------------
$ 2,722,935
- -------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
34
<PAGE>
ARIZONA MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- -------------------------------------------------------------------------------
<C> <S> <C>
Insured-General Obligations -- 2.3%
- -------------------------------------------------------------------------------
$1,000 Puerto Rico, (FSA), Variable Rate,
7/1/22(1)(2) $ 1,095,000
1,000 Puerto Rico, Variable Rate, (FSA),
7/1/20(1) 1,072,500
- -------------------------------------------------------------------------------
$ 2,167,500
- -------------------------------------------------------------------------------
Insured-Hospital -- 12.6%
- -------------------------------------------------------------------------------
$2,000 Maricopa County, (Samaritan Health),
(MBIA), 7.00%, 12/1/16 $ 2,401,380
2,000 Maricopa County, Hospital District No.
1, (FGIC), 6.125%, 6/1/15 2,113,400
2,000 Mohave County, (Kingman Regional Medical
Center), (FGIC), 6.50%, 6/1/15 2,119,300
1,000 Pima County, (Carondelet Health Care
Corp.), (MBIA), 5.25%, 7/1/12 1,015,440
1,000 Pima County, (Carondolet Health Care
Corp.), (MBIA), 5.25%, 7/1/11 1,017,260
1,500 Pima County, (Tucson Medical Center),
(MBIA), 6.375%, 4/1/12 1,591,065
1,500 Scottsdale, IDA, (Scottsdale Memorial
Hospital), (AMBAC), 6.125%, 9/1/17 1,584,240
- -------------------------------------------------------------------------------
$ 11,842,085
- -------------------------------------------------------------------------------
Insured-Housing -- 2.7%
- -------------------------------------------------------------------------------
$2,500 Maricopa County, IDA, Multifamily,
(National Health Facilities II), (FSA),
5.50%, 1/1/24 $ 2,549,350
- -------------------------------------------------------------------------------
$ 2,549,350
- -------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 2.2%
- -------------------------------------------------------------------------------
$1,400 Puerto Rico Infrastructure Financing
Authority, (AMBAC), Variable Rate,
7/1/28(1) $ 1,164,170
1,000 Puerto Rico Public Finance Corp.,
(AMBAC), Variable Rate, 6/1/26(1)(2) 891,240
- -------------------------------------------------------------------------------
$ 2,055,410
- -------------------------------------------------------------------------------
Insured-Transportation -- 1.1%
- -------------------------------------------------------------------------------
$2,500 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/16 $ 1,030,025
- -------------------------------------------------------------------------------
$ 1,030,025
- -------------------------------------------------------------------------------
Insured-Water and Sewer -- 1.1%
- -------------------------------------------------------------------------------
$1,000 Chandler, Water and Sewer, (FGIC),
6.25%, 7/1/13 $ 1,064,470
- -------------------------------------------------------------------------------
$ 1,064,470
- -------------------------------------------------------------------------------
Miscellaneous Health Care -- 1.0%
- -------------------------------------------------------------------------------
$1,000 Coconino County, IDA, Health Care
Insurance, (Guidance Center, Inc.),
5.80%, 6/1/11 $ 972,090
- -------------------------------------------------------------------------------
$ 972,090
- -------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -------------------------------------------------------------------------------
Pooled Loans -- 4.0%
- -------------------------------------------------------------------------------
$2,000 Arizona Educational Loan Marketing
Corp., (AMT), 6.25%, 6/1/06 $ 2,122,900
1,500 Arizona Student Loan Acquisition
Authority, (AMT), 7.625%, 5/1/10 1,610,025
- -------------------------------------------------------------------------------
$ 3,732,925
- -------------------------------------------------------------------------------
Special Tax Revenue -- 4.4%
- -------------------------------------------------------------------------------
$4,750 Scottsdale, Preservation Authority,
(FGIC), 4.50%, 7/1/24 $ 4,124,092
- -------------------------------------------------------------------------------
$ 4,124,092
- -------------------------------------------------------------------------------
Water and Sewer -- 7.3%
- -------------------------------------------------------------------------------
$2,000 Arizona Wastewater Management Authority,
6.80%, 7/1/11 $ 2,166,440
1,000 Central Arizona Water Conservation
District, 5.50%, 11/1/09 1,049,880
1,500 Phoenix Civic Improvement Corp.
Wastewater, 4.75%, 7/1/23 1,359,585
2,500 Scottsdale, Water and Sewer Revenue,
4.50%, 7/1/20 2,209,900
- -------------------------------------------------------------------------------
$ 6,785,805
- -------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $89,483,162) $ 93,650,085
- -------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio primarily invests in debt securities issued by Arizona
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at July 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 insured by
financial institution ranged from 5.0% to 13.0% 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
35
<PAGE>
COLORADO MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Education -- 5.1%
- ---------------------------------------------------------------------------
$1,000 Colorado Educational and Cultural
Facilities, (Alexander Dawson School),
5.30%, 2/15/29 $ 942,460
1,000 Colorado Springs, (Colorado College),
5.25%, 6/1/24 961,700
- ---------------------------------------------------------------------------
$ 1,904,160
- ---------------------------------------------------------------------------
Electric Utilities -- 1.5%
- ---------------------------------------------------------------------------
$ 500 Guam Power Authority, 6.625%, 10/1/14 $ 560,495
- ---------------------------------------------------------------------------
$ 560,495
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 2.7%
- ---------------------------------------------------------------------------
$1,500 Dawson Ridge, Metropolitan District #1,
Escrowed to Maturity, 0.00%, 10/1/22 $ 331,335
3,000 Dawson Ridge, Metropolitan District #1,
Escrowed to Maturity, 0.00%, 10/1/22 662,670
- ---------------------------------------------------------------------------
$ 994,005
- ---------------------------------------------------------------------------
General Obligations -- 1.0%
- ---------------------------------------------------------------------------
$ 400 Bell Mountain Ranch, (Metropolitan
District), 6.625%, 11/15/25 $ 386,964
- ---------------------------------------------------------------------------
$ 386,964
- ---------------------------------------------------------------------------
Hospital -- 20.9%
- ---------------------------------------------------------------------------
$ 900 Colorado HFA, (Cleo Wallace Center),
7.00%, 8/1/15 $ 924,381
400 Colorado HFA, (National Jewish Center
For Immunology), 6.875%, 2/15/12 431,620
2,000 Colorado HFA, (Parkview Memorial
Hospital), 6.125%, 9/1/25 2,056,939
600 Colorado HFA, (Steamboat Springs
Health), 5.00%, 9/15/03 595,362
2,000 Colorado HFA, (Vail Valley Medical
Center), 6.60%, 1/15/20 2,098,079
1,000 Denver, Health and Hospital Authority,
(Denver Health Medical Center), 5.375%,
12/1/28 914,130
400 La Junta, (Valley Regional Medical
Center), 6.10%, 4/1/24 394,488
420 Lake County, (State Vincent General
Hospital), 6.00%, 12/1/19 406,321
- ---------------------------------------------------------------------------
$ 7,821,320
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Housing -- 15.5%
- ---------------------------------------------------------------------------
$1,000 Colorado HFA, 5.35%, 11/1/16 $ 965,940
500 Colorado HFA, MFMR, (AMT), 6.40%,
10/1/27 527,830
295 Colorado HFA, Single Family Access
Program, 8.00%, 12/1/24 313,836
1,000 Colorado HFA, Single Family Housing,
(AMT), 7.55%, 11/1/27 1,116,920
355 Colorado HFA, Single Family Housing,
(AMT), 7.65%, 12/1/25 387,969
1,000 Denver, Multifamily Housing, (Lofts),
(FHA), (AMT), 6.15%, 12/1/16 1,044,950
400 Lake Creek, (Affordable Housing Corp.),
Multifamily, 6.25%, 12/1/23 393,576
1,000 Lakewood, Multifamily Housing, FHA
Insured Mortgage Loan, (AMT), 6.65%,
10/1/25 1,066,640
- ---------------------------------------------------------------------------
$ 5,817,661
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 8.2%
- ---------------------------------------------------------------------------
$1,000 Denver Airport Special Facilities,
(United Airlines), (AMT), 6.875%,
10/1/32 $ 1,059,530
1,000 Puerto Rico Industrial, Medical and
Environmental Pollution Control Facility
Finance Authority, (American Home
Products), 5.10%, 12/1/18 945,270
1,000 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,050,410
- ---------------------------------------------------------------------------
$ 3,055,210
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 2.3%
- ---------------------------------------------------------------------------
$ 300 Puerto Rico Electric Power Authority,
"STRIPES", (FSA), Variable Rate,
7/1/03(1) $ 329,250
500 Puerto Rico Telephone Authority, (MBIA),
Variable Rate, 1/16/15(1) 545,000
- ---------------------------------------------------------------------------
$ 874,250
- ---------------------------------------------------------------------------
Insured-General Obligations -- 8.7%
- ---------------------------------------------------------------------------
$1,750 Eagle, Garfield and Routt Counties,
School District No. RE 50J, (FGIC),
6.30%, 12/1/12 $ 1,937,320
1,160 Highlands Ranch Metropolitan District
No.2, (FSA), 6.50%, 6/15/10 1,308,155
- ---------------------------------------------------------------------------
$ 3,245,475
- ---------------------------------------------------------------------------
Insured-Housing -- 2.9%
- ---------------------------------------------------------------------------
$1,000 Thornton, SCA Realty MFMR, (FSA), 7.10%,
1/1/30 $ 1,091,290
- ---------------------------------------------------------------------------
$ 1,091,290
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
36
<PAGE>
COLORADO MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Transportation -- 15.6%
- ---------------------------------------------------------------------------
$3,500 Colorado Public Highway Authority
Revenue, (MBIA), 0.00%, 9/1/16 $ 1,378,125
1,830 Colorado Public Highway Authority
Revenue, (MBIA), 4.75%, 9/1/23 1,635,581
750 Denver, Airport Revenue, (AMT), (MBIA),
5.75%, 11/15/15 763,703
1,000 Denver, Airport Revenue, (FSA), (AMT),
5.00%, 11/15/25 918,500
3,095 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/18 1,133,575
- ---------------------------------------------------------------------------
$ 5,829,484
- ---------------------------------------------------------------------------
Senior Living / Life Care -- 2.1%
- ---------------------------------------------------------------------------
$ 400 Colorado HFA, Revenue Refunding and
Improvement, (Volunteers of America),
5.875%, 7/1/28 $ 377,228
430 Logan County, Industrial Development
Revenue, (TLC Care Choices, Inc.),
6.875%, 12/1/23 418,571
- ---------------------------------------------------------------------------
$ 795,799
- ---------------------------------------------------------------------------
Special Tax Revenue -- 1.1%
- ---------------------------------------------------------------------------
$ 400 Black Hawk Business Improvement
District, 6.50%, 12/1/11 $ 394,232
- ---------------------------------------------------------------------------
$ 394,232
- ---------------------------------------------------------------------------
Transportation -- 4.7%
- ---------------------------------------------------------------------------
$ 500 Eagle County, (Eagle County Airport
Terminal), (AMT), 7.50%, 5/1/21 $ 531,755
250 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 231,995
1,000 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/36 1,004,880
- ---------------------------------------------------------------------------
$ 1,768,630
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Utilities -- 2.3%
- ---------------------------------------------------------------------------
$1,000 Colorado Springs, Utility Revenue
System, 4.75%, 11/15/26 $ 876,070
- ---------------------------------------------------------------------------
$ 876,070
- ---------------------------------------------------------------------------
Water and Sewer -- 5.4%
- ---------------------------------------------------------------------------
$1,000 Colorado Water Resources, Power
Development Authority, 5.25%, 9/1/19 $ 981,100
1,000 Cottonwood Water and Sanitation
District, 7.75%, 12/1/20 1,054,700
- ---------------------------------------------------------------------------
$ 2,035,800
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $36,443,369) $ 37,450,845
- ---------------------------------------------------------------------------
</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 Colorado
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1999, 29.5% 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 insured by
financial institutions ranged from 3.0% to 11.5% of total investments.
(1) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
37
<PAGE>
CONNECTICUT MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Cogeneration -- 4.9%
- --------------------------------------------------------------------------------
$8,000 Eastern Connecticut Resource Recovery
Authority, (Wheelabrator Lisbon), (AMT),
5.50%, 1/1/20 $ 7,626,320
- --------------------------------------------------------------------------------
$ 7,626,320
- --------------------------------------------------------------------------------
Education -- 7.8%
- --------------------------------------------------------------------------------
$1,675 Connecticut HEFA, (Quinnipiac College),
6.00%, 7/1/23 $ 1,691,063
1,000 Connecticut HEFA, (Sacred Heart
University), 5.80%, 7/1/23 1,068,400
5,500 Connecticut HEFA, (University of
Hartford), 6.80%, 7/1/22 5,709,550
3,400 Connecticut HEFA, (Yale University),
Variable Rate, 6/10/30(1) 3,676,250
- --------------------------------------------------------------------------------
$ 12,145,263
- --------------------------------------------------------------------------------
Electric Utilities -- 7.6%
- --------------------------------------------------------------------------------
$1,600 Connecticut State Development Authority,
(Western Massachusetts Electric Co.),
5.85%, 9/1/28 $ 1,537,760
1,500 Connecticut State Development Authority,
Pollution Control Revenue, (Connecticut
Light and Power), (AMT), 5.95%, 9/1/28 1,432,785
1,625 Guam Power Authority, 6.30%, 10/1/22 1,755,683
1,100 Guam Power Authority, 6.625%, 10/1/14 1,233,089
4,000 Puerto Rico Electric Power Authority,
4.75%, 7/1/24 3,568,160
2,500 Puerto Rico Electric Power Authority,
5.00%, 7/1/28 2,304,700
- --------------------------------------------------------------------------------
$ 11,832,177
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 5.0%
- --------------------------------------------------------------------------------
$3,100 Connecticut HEFA, (Quinnipiac College),
Prerefunded to 07/01/03, 6.00%, 7/1/23 $ 3,334,174
1,000 Connecticut HEFA, (Sacred Heart
University), Prerefunded to 7/01/02,
6.80%, 7/1/12 1,087,690
3,060 Virgin Islands Water and Power
Authority, Prerefunded to 7/1/01, 7.40%,
7/1/11 3,274,169
- --------------------------------------------------------------------------------
$ 7,696,033
- --------------------------------------------------------------------------------
General Obligations -- 3.3%
- --------------------------------------------------------------------------------
$1,750 Connecticut State, 0.00%, 11/1/09 $ 1,053,675
1,270 Danbury, 4.50%, 2/1/14 1,194,422
500 Guam, 5.40%, 11/15/18 485,095
1,065 Puerto Rico, Public Improvement, 0.00%,
7/1/15 454,585
2,000 Puerto Rico, Public Improvement, 5.00%,
7/1/27 1,851,360
- --------------------------------------------------------------------------------
$ 5,039,137
- --------------------------------------------------------------------------------
Hospital -- 9.2%
- --------------------------------------------------------------------------------
$5,400 Connecticut HEFA, (Griffin Hospital),
5.75%, 7/1/23 $ 5,262,840
500 Connecticut HEFA, (Hospital for Special
Care), 5.375%, 7/1/17 471,175
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Hospital (continued)
- --------------------------------------------------------------------------------
$2,000 Connecticut HEFA, (New Britain Memorial
Hospital), 7.75%, 7/1/22 $ 2,232,320
5,780 Connecticut HEFA, (William W. Backus
Hospital), 6.375%, 7/1/22 6,210,090
- --------------------------------------------------------------------------------
$ 14,176,425
- --------------------------------------------------------------------------------
Housing -- 3.6%
- --------------------------------------------------------------------------------
$ 210 Connecticut HFA, MRB, 6.55%, 11/15/13 $ 222,986
1,000 Connecticut HFA, MRB, 6.60%, 11/15/23 1,060,210
4,055 Connecticut HFA, MRB, (AMT), 6.20%,
11/15/22 4,241,733
- --------------------------------------------------------------------------------
$ 5,524,929
- --------------------------------------------------------------------------------
Industrial Development Revenue -- 3.8%
- --------------------------------------------------------------------------------
$1,000 Connecticut Development Authority PCR,
(Pfizer, Inc.), 6.55%, 2/15/13 $ 1,073,850
3,065 Connecticut Development Authority,
Airport Facility, (Signature Flight),
(AMT), 6.625%, 12/1/14 3,192,780
400 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 420,164
1,200 Sprague, Environmental Improvement,
(International Paper Co.), (AMT), 5.70%,
10/1/21 1,189,452
- --------------------------------------------------------------------------------
$ 5,876,246
- --------------------------------------------------------------------------------
Insured-Education -- 5.1%
- --------------------------------------------------------------------------------
$3,000 Connecticut HEFA, (Choate Rosemary
College), (MBIA), 5.00%, 7/1/27 $ 2,801,250
1,555 Connecticut HEFA, (Choate Rosemary
College), (MBIA), 6.80%, 7/1/15 1,732,783
2,000 Connecticut HEFA, (Trinity College),
(MBIA), 5.50%, 7/1/21 2,042,260
1,440 Connecticut HEFA, (Westminster School),
(MBIA), 5.00%, 7/1/29 1,341,821
- --------------------------------------------------------------------------------
$ 7,918,114
- --------------------------------------------------------------------------------
Insured-General Obligations -- 1.4%
- --------------------------------------------------------------------------------
$1,000 New Britain, (MBIA), 6.00%, 3/1/12 $ 1,088,130
1,000 Puerto Rico, (MBIA), 5.375%, 7/1/25 991,660
- --------------------------------------------------------------------------------
$ 2,079,790
- --------------------------------------------------------------------------------
Insured-Hospital -- 7.8%
- --------------------------------------------------------------------------------
$1,000 Connecticut HEFA, (Bridgeport Hospital),
(MBIA), 6.625%, 7/1/18 $ 1,070,350
1,000 Connecticut HEFA, (Danbury Hospital),
(AMBAC), 5.375%, 7/1/17 990,880
1,000 Connecticut HEFA, (Hospital of St.
Raphael), (AMBAC), 6.50%, 7/1/11 1,131,980
1,500 Connecticut HEFA, (Hospital of St.
Raphael), (AMBAC), 6.625%, 7/1/14 1,587,180
2,350 Connecticut HEFA, (Lawrence and Memorial
Hospital), (MBIA), 5.00%, 7/1/22 2,187,733
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
38
<PAGE>
CONNECTICUT MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
Insured-Hospital (continued)
- --------------------------------------------------------------------------------
$1,000 Connecticut HEFA, (Stamford Hospital),
(MBIA), 5.00%, 7/1/24 $ 928,090
2,000 Connecticut HEFA, (Veterans Memorial
Medical Center), (MBIA), 5.375%, 7/1/15 2,018,240
2,000 Connecticut HEFA, (Yale-New Haven
Hospital), (MBIA), 6.50%, 7/1/12 2,131,120
- --------------------------------------------------------------------------------
$ 12,045,573
- --------------------------------------------------------------------------------
Insured-Housing -- 0.2%
- --------------------------------------------------------------------------------
$ 305 Puerto Rico Housing Finance Corp.,
(AMBAC), 7.50%, 10/1/11 $ 309,987
- --------------------------------------------------------------------------------
$ 309,987
- --------------------------------------------------------------------------------
Insured-Transportation -- 7.2%
- --------------------------------------------------------------------------------
$8,200 Connecticut State, Airport Revenue,
(Bradley International), (FGIC), 7.65%,
10/1/12 $ 9,291,993
2,035 Puerto Rico Highway and Transportation
Authority, (AMBAC), 5.00%, 7/1/28 1,917,865
- --------------------------------------------------------------------------------
$ 11,209,858
- --------------------------------------------------------------------------------
Nursing Home -- 14.2%
- --------------------------------------------------------------------------------
$1,240 Connecticut Development Authority,
(Baptist Homes), 9.00%, 9/1/22 $ 1,354,688
7,000 Connecticut Development Authority,
Health Care Bonds, (Duncaster), 6.75%,
9/1/15 7,623,980
720 Connecticut HEFA, (NHP), (Highland
View), (AMT), 7.00%, 11/1/07 808,574
1,305 Connecticut HEFA, (NHP), (Sharon
Healthcare), 6.25%, 11/1/14 1,404,898
655 Connecticut HEFA, (NHP), (St. Camillus),
6.25%, 11/1/18 700,732
3,250 Connecticut HEFA, (NHP), (St. Joseph's
Manor), 6.25%, 11/1/16 3,498,788
335 Connecticut HEFA, (NHP), (Wadsworth
Glen), (AMT), 7.00%, 11/1/07 376,212
2,000 Connecticut HEFA, (NHP), (Wadsworth
Glen), (AMT), 7.50%, 11/1/16 2,277,560
3,000 Connecticut HEFA, (NHP), (Windsor),
7.125%, 11/1/14 3,423,360
500 Connecticut HEFA, (NHP), (Windsor),
7.125%, 11/1/24 570,560
- --------------------------------------------------------------------------------
$ 22,039,352
- --------------------------------------------------------------------------------
Solid Waste -- 4.5%
- --------------------------------------------------------------------------------
$2,500 Bristol Resource Recovery Facility,
(Ogden Martin Systems), 6.50%, 7/1/14 $ 2,682,650
4,250 Connecticut Resources Recovery
Authority, (American REF-FUEL Co.),
(AMT), 6.45%, 11/15/22 4,278,900
- --------------------------------------------------------------------------------
$ 6,961,550
- --------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Special Tax Revenue -- 3.9%
- --------------------------------------------------------------------------------
$3,180 Connecticut State, (STOB), 6.125%,
9/1/12 $ 3,486,711
2,000 Connecticut State, (STOB), 6.50%,
10/1/12 2,277,360
375 Puerto Rico Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) 332,888
- --------------------------------------------------------------------------------
$ 6,096,959
- --------------------------------------------------------------------------------
Student Loans -- 2.2%
- --------------------------------------------------------------------------------
$1,095 Connecticut Higher Education
Supplemental Loan Authority Revenue
Bonds, (AMT), 6.20%, 11/15/09 $ 1,158,192
2,245 Connecticut Higher Education
Supplemental Loan Authority Revenue
Bonds, (AMT), 7.50%, 11/15/10 2,294,704
- --------------------------------------------------------------------------------
$ 3,452,896
- --------------------------------------------------------------------------------
Transportation -- 7.4%
- --------------------------------------------------------------------------------
$1,020 Puerto Rico Highway and Transportation
Authority, 4.75%, 7/1/38 $ 888,216
2,350 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/22 2,190,623
3,680 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/38 3,350,346
500 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/15 511,995
4,465 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/15 4,572,115
- --------------------------------------------------------------------------------
$ 11,513,295
- --------------------------------------------------------------------------------
Water and Sewer -- 0.9%
- --------------------------------------------------------------------------------
$1,250 Connecticut State, Clean Water Fund,
6.00%, 10/1/12 $ 1,366,275
- --------------------------------------------------------------------------------
$ 1,366,275
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $149,320,769) $ 154,910,179
- --------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Connecticut
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1999, 21.7% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 3.8% to 11.8% 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
39
<PAGE>
MICHIGAN MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ----------------------------------------------------------------------------
Electric Utilities -- 3.2%
- ----------------------------------------------------------------------------
$1,000 Guam Power Authority, 6.625%, 10/1/14 $ 1,120,990
500 Michigan South Central Power Agency
Supply System, 6.75%, 11/1/10 526,605
2,000 Puerto Rico Electric Power Authority,
4.75%, 7/1/24 1,784,080
- ----------------------------------------------------------------------------
$ 3,431,675
- ----------------------------------------------------------------------------
Escrowed / Prerefunded -- 4.2%
- ----------------------------------------------------------------------------
$1,000 Lake Orion School District, Prerefunded
to 5/1/05, (AMBAC), 7.00%, 5/1/20 $ 1,134,480
1,770 Michigan Strategic Environmental
Research Institute, Prerefunded to
8/15/02, 6.375%, 8/15/12 1,884,130
1,470 South Redford School District,
Prerefunded to 5/10/07, (FGIC), 5.50%,
5/1/22 1,548,968
- ----------------------------------------------------------------------------
$ 4,567,578
- ----------------------------------------------------------------------------
General Obligations -- 7.3%
- ----------------------------------------------------------------------------
$ 500 Avondale School District, 6.75%, 5/1/14 $ 525,285
4,920 Detroit, 6.35%, 4/1/14 5,226,121
500 Detroit, 6.70%, 4/1/10 559,015
1,000 Mattawan Consolidated Schools, 6.40%,
5/1/09 1,071,410
500 Puerto Rico, 0.00%, 7/1/16 200,315
700 Puerto Rico, 0.00%, 7/1/18 249,396
- ----------------------------------------------------------------------------
$ 7,831,542
- ----------------------------------------------------------------------------
Hospital -- 9.4%
- ----------------------------------------------------------------------------
$1,000 Dickinson County Health System, 5.80%,
11/1/24 $ 969,000
1,000 John Tolfree Health System Corp., 6.00%,
9/15/23 972,610
1,000 Mecosta County, (Michigan General
Hospital), 5.75%, 5/15/09 966,380
2,000 Michigan HFA, (Central Michigan
Community Hospital), 6.25%, 10/1/27 2,055,240
250 Michigan HFA, (Henry Ford Continuing
Care Corp.), 6.75%, 7/1/11 265,003
6,000 Michigan HFA, (McLaren Obligated Group),
4.50%, 10/15/21 4,951,019
- ----------------------------------------------------------------------------
$ 10,179,252
- ----------------------------------------------------------------------------
Housing -- 1.3%
- ----------------------------------------------------------------------------
$ 495 Michigan HDA, Rental Housing, (AMT),
7.15%, 4/1/10 $ 526,442
885 Michigan HDA, SFMR, (AMT), 6.20%,
12/1/27 926,922
- ----------------------------------------------------------------------------
$ 1,453,364
- ----------------------------------------------------------------------------
Industrial Development Revenue -- 11.4%
- ----------------------------------------------------------------------------
$2,000 Dickinson, PCR, (Champion
International), 5.85%, 10/1/18 $ 2,004,320
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ----------------------------------------------------------------------------
Industrial Development Revenue (continued)
- ----------------------------------------------------------------------------
$1,000 Michigan Strategic Fund, (Crown Paper),
(AMT), 6.50%, 8/1/21 $ 861,670
2,970 Michigan Strategic Fund, (General Motors
Corp.), 6.20%, 9/1/20 3,132,786
110 Michigan Strategic Fund, (KMart Corp.),
6.80%, 12/15/07 114,007
2,500 Michigan Strategic Fund, (S.D. Warren
Co.), (AMT), 7.375%, 1/15/22 2,703,925
2,750 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 2,888,628
530 Richmond EDC, (KMart Corp.), 6.625%,
1/1/07 552,912
- ----------------------------------------------------------------------------
$ 12,258,248
- ----------------------------------------------------------------------------
Insured-Education -- 8.3%
- ----------------------------------------------------------------------------
$2,870 Eastern Michigan University, (FGIC),
5.50%, 6/1/27 $ 2,839,521
2,750 Ferris State University, (MBIA), 5.25%,
10/1/20 2,652,760
1,000 Michigan State University-Grand Valley,
(MBIA), 5.25%, 10/1/17 987,820
2,000 Wayne State University, (FGIC), 5.25%,
11/15/19 1,959,500
500 Western Michigan University, (AMBAC),
6.50%, 7/15/21 529,940
- ----------------------------------------------------------------------------
$ 8,969,541
- ----------------------------------------------------------------------------
Insured-Electric Utilities -- 1.3%
- ----------------------------------------------------------------------------
$ 300 Michigan Strategic Fund, (Detroit Edison
Co.), (FGIC), 6.95%, 5/1/11 $ 349,941
550 Monroe County, PCR, (Detroit Edison
Co.), (FGIC), (AMT), 7.65%, 9/1/20 580,036
500 Puerto Rico Electric Power Authority,
(FSA), 4.75%, 7/1/21 455,815
- ----------------------------------------------------------------------------
$ 1,385,792
- ----------------------------------------------------------------------------
Insured-General Obligations -- 21.1%
- ----------------------------------------------------------------------------
$ 750 Anchor Bay School District, (FGIC),
4.75%, 5/1/26 $ 660,660
2,500 Chippewa Hills School District, (FGIC),
5.30%, 5/1/19 2,462,775
2,900 Detroit School District, (FGIC), 4.75%,
5/1/28 2,551,391
500 Detroit, (FGIC), 5.50%, 4/1/16 504,590
1,000 Grand Ledge School District, (MBIA),
5.375%, 5/1/24 977,170
1,900 Holland School District, (AMBAC), 0.00%,
5/1/17 718,922
2,000 Kalamazoo, (MBIA), 5.40%, 5/1/14 2,056,280
2,000 Lincoln Park School District, (FGIC),
5.00%, 5/1/20 1,875,800
1,500 Lincoln Park School District, (FGIC),
5.90%, 5/1/26 1,626,180
1,000 Lincon, Consolidated School District,
(FSA), 5.00%, 5/1/28 926,070
1,000 Muskegon Heights School District,
(MBIA), 5.00%, 5/1/29 923,670
2,410 Okemos Public Schools, (MBIA), 0.00%,
5/1/16 969,519
1,370 Parchment School District, (MBIA),
5.00%, 5/1/25 1,296,869
1,000 Port Huron, (MBIA), 5.25%, 10/1/19 979,820
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
40
<PAGE>
MICHIGAN MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------
<C> <S> <C>
Insured-General Obligations (continued)
- ----------------------------------------------------------------------------
$3,270 South Redford School District, (FGIC),
5.50%, 5/1/22 $ 3,246,620
1,000 Ypsilanti School District, (FGIC),
5.375%, 5/1/26 976,350
- ----------------------------------------------------------------------------
$ 22,752,686
- ----------------------------------------------------------------------------
Insured-Hospital -- 3.6%
- ----------------------------------------------------------------------------
$3,500 Kent HFA, (Butterworth Health System),
(MBIA), 6.125%, 1/15/16 $ 3,846,360
- ----------------------------------------------------------------------------
$ 3,846,360
- ----------------------------------------------------------------------------
Insured-Housing -- 2.5%
- ----------------------------------------------------------------------------
$ 500 Michigan HDA, (Parkway Meadows), (FSA),
6.85%, 10/15/18 $ 533,070
2,075 Michigan HDA, SFMR, (AMBAC), (AMT),
6.05%, 12/1/27 2,152,647
- ----------------------------------------------------------------------------
$ 2,685,717
- ----------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 2.7%
- ----------------------------------------------------------------------------
$2,200 Hancock HFA, (Portage Health), (MBIA),
5.45%, 8/1/47 $ 2,202,310
750 Michigan State HFA, (Midmichigan
Obligation Group), (FSA), 5.375%, 6/1/27 719,655
- ----------------------------------------------------------------------------
$ 2,921,965
- ----------------------------------------------------------------------------
Insured-Transportation -- 0.9%
- ----------------------------------------------------------------------------
$1,000 Bishop International Airport Authority,
(AMBAC), 5.00%, 12/1/23 $ 932,660
- ----------------------------------------------------------------------------
$ 932,660
- ----------------------------------------------------------------------------
Insured-Water and Sewer -- 4.6%
- ----------------------------------------------------------------------------
$5,000 Detroit, City Water Supply System,
(FGIC), 4.75%, 7/1/19 $ 4,529,650
500 Grand Rapids, Sanitary Sewer System,
(FGIC), 4.75%, 1/1/28 442,790
- ----------------------------------------------------------------------------
$ 4,972,440
- ----------------------------------------------------------------------------
Miscellaneous -- 1.4%
- ----------------------------------------------------------------------------
$1,500 Pittsfield Township EDC, (Arbor
Hospice), 7.875%, 8/15/27 $ 1,541,505
- ----------------------------------------------------------------------------
$ 1,541,505
- ----------------------------------------------------------------------------
Pooled Loans -- 2.4%
- ----------------------------------------------------------------------------
$1,825 Michigan Municipal Bond Authority Local
Government Loan, 6.75%, 5/1/12 $ 1,966,985
590 Michigan Municipal Bond Authority Local
Government Loan, 6.90%, 5/1/21 627,943
- ----------------------------------------------------------------------------
$ 2,594,928
- ----------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ----------------------------------------------------------------------------
Senior Living / Life Care -- 2.4%
- ----------------------------------------------------------------------------
$1,500 Kalamazoo EDC, (Friendship Village),
6.25%, 5/15/27 $ 1,535,100
1,000 Michigan HFA, (Presbyterian Village),
6.50%, 1/1/25 1,042,670
- ----------------------------------------------------------------------------
$ 2,577,770
- ----------------------------------------------------------------------------
Special Tax Revenue -- 8.5%
- ----------------------------------------------------------------------------
$ 250 Battle Creek, Downtown Development
Authority Tax Increment, 7.60%, 5/1/16 $ 286,563
1,315 Battle Creek, Downtown Development
Authority Tax Increment, 7.65%, 5/1/22 1,510,093
4,300 Detroit, (Convention Facility Cobo Hall
Expansion), 5.25%, 9/30/12 4,225,524
3,050 Detroit, Downtown Tax Increment, 0.00%,
7/1/16 1,159,244
2,000 Detroit, Downtown Tax Increment, 0.00%,
7/1/20 592,600
1,500 Detroit, Local Development Finance
Authority, 5.375%, 5/1/21 1,458,645
- ----------------------------------------------------------------------------
$ 9,232,669
- ----------------------------------------------------------------------------
Transportation -- 2.7%
- ----------------------------------------------------------------------------
$1,500 Kent County Airport Facility, Variable
Rate, 1/1/25(1)(2) $ 1,293,870
2,000 Wayne Charter County Airport, Variable
Rate, 12/1/28(1)(2) 1,621,360
- ----------------------------------------------------------------------------
$ 2,915,230
- ----------------------------------------------------------------------------
Water and Sewer -- 0.8%
- ----------------------------------------------------------------------------
$1,000 Michigan Municipal Bond Authority,
(Clean Water Revolving Fund), 4.75%,
10/1/18 $ 913,420
- ----------------------------------------------------------------------------
$ 913,420
- ----------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $103,767,276) $ 107,964,342
- ----------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Michigan
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1999, 47.4% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 2.4% to 24.2%.
(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
41
<PAGE>
MINNESOTA MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -------------------------------------------------------------------------------
Assisted Living -- 1.9%
- -------------------------------------------------------------------------------
$ 1,000 St. Paul, Housing and Redevelopment,
(Care Institute, Inc.-Highland), 8.75%,
11/1/24 $ 1,126,920
- -------------------------------------------------------------------------------
$ 1,126,920
- -------------------------------------------------------------------------------
Education -- 7.6%
- -------------------------------------------------------------------------------
$ 1,000 Hopkins, (Blake School), 5.50%, 9/1/24 $ 987,220
500 Minnesota Higher Education Facilities
Authority, (St. John's University),
5.40%, 10/1/22 483,605
500 Minnesota Higher Education Facilities
Authority, (St. Mary's College), 6.15%,
10/1/23 509,565
1,100 Minnesota Higher Education Facilities
Authority, (University of St. Thomas),
5.40%, 4/1/22 1,089,275
1,510 Minnesota Higher Education Facilities
Authority, (University of St. Thomas),
5.40%, 4/1/23 1,479,256
- -------------------------------------------------------------------------------
$ 4,548,921
- -------------------------------------------------------------------------------
Escrowed / Prerefunded -- 8.3%
- -------------------------------------------------------------------------------
$ 1,700 Minnesota State, Prerefunded to 8/1/02,
Variable Rate, 8/1/11(1) $ 1,898,730
3,000 St. Paul, Housing and Redevelopment
Authority, (Civic Center), (MBIA),
Escrowed to Maturity, 5.45%, 11/1/13 3,072,509
- -------------------------------------------------------------------------------
$ 4,971,239
- -------------------------------------------------------------------------------
General Obligations -- 3.0%
- -------------------------------------------------------------------------------
$ 200 Minneapolis and St. Paul, Airports
Commission, (AMT), 6.60%, 1/1/09 $ 209,798
300 Minneapolis and St. Paul, Airports
Commission, (AMT), 6.60%, 1/1/10 314,697
1,000 Minnesota State, (Duluth Airport),
(AMT), 6.25%, 8/1/14 1,060,680
200 St. Cloud, Water and Sewer, Variable
Rate, 8/1/13(1) 212,750
- -------------------------------------------------------------------------------
$ 1,797,925
- -------------------------------------------------------------------------------
Hospital -- 15.4%
- -------------------------------------------------------------------------------
$ 1,250 Minneapolis and St. Paul, Housing and
Redevelopment Authority, (Group Health
Plan, Inc.), 6.75%, 12/1/13 $ 1,322,875
250 Minneapolis and St. Paul, Housing and
Redevelopment Authority, (Group Health
Plan, Inc.), 6.90%, 10/15/22 264,605
2,120 Red Wing Health Care Facilities, (River
Region Obligation Group), 6.50%, 9/1/22 2,228,268
1,000 Rochester Health Care Facilities, (Mayo
Clinic), 5.50%, 11/15/27 992,110
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -------------------------------------------------------------------------------
Hospital (continued)
- -------------------------------------------------------------------------------
$ 2,200 Rochester Health Care Facilities, (Mayo
Clinic), (AMT), Variable Rate,
11/15/15(1) $ 2,381,499
2,000 St. Paul, Housing and Redevelopment
Authority, (Healtheast), 6.625%, 11/1/17 2,033,940
- -------------------------------------------------------------------------------
$ 9,223,297
- -------------------------------------------------------------------------------
Housing -- 19.3%
- -------------------------------------------------------------------------------
$ 300 Coon Rapids, Multifamily Housing,
(Browns Meadow), (FHA), (AMT), 6.85%,
8/1/33 $ 314,157
500 Little Canada, Facilities Revenue,
(Cedars Lakeside) (GNMA), 5.90%, 8/1/20 518,770
500 Little Canada, Facilities Revenue,
(Cedars Lakeside) (GNMA), 5.95%, 2/1/32 516,855
50 Minneapolis and St. Paul, Housing
Finance Board, SFM, (GNMA), (AMT),
7.30%, 8/1/31 52,069
3,835 Minnesota HFA, SFMR, (AMT), 6.50%,
1/1/26(2) 3,990,585
1,650 Minnetonka, Multifamily Housing, (Archer
Heights Apartments), 6.00%, 1/20/27 1,615,202
1,250 St. Louis Park, (Knollwood Apartments),
(FHA), 6.25%, 12/1/28 1,311,050
1,685 St. Paul, Housing and Redevelopment
Authority, (Cliffe Apartments), (GNMA),
6.00%, 1/1/31 1,742,223
1,500 Washington County, Housing and
Redevelopment Authority, (Briar Pond),
(GNMA), 5.60%, 8/20/34(3) 1,497,660
- -------------------------------------------------------------------------------
$ 11,558,571
- -------------------------------------------------------------------------------
Industrial Development Revenue -- 9.1%
- -------------------------------------------------------------------------------
$ 1,205 Cloquet PCR, (Potlach Corp.), 5.90%,
10/1/26 $ 1,212,254
750 Minneapolis, Community Development
Agency, 6.00%, 6/1/11 764,010
100 Minneapolis, Community Development
Agency, 7.35%, 12/1/09 106,962
1,250 Minneapolis, Community Development
Agency, 7.40%, 12/1/21 1,351,288
1,605 Minneapolis, Community Development
Agency, (AMT), 6.80%, 12/1/24 1,694,575
300 Minneapolis, Community Development
Agency, (Firemans Ins.), 6.40%, 12/1/04 304,749
- -------------------------------------------------------------------------------
$ 5,433,838
- -------------------------------------------------------------------------------
Insured-Electric Utilities -- 15.6%
- -------------------------------------------------------------------------------
$ 1,000 Northern Minnesota Municipal Power
Agency, (AMBAC), 4.75%, 1/1/20 $ 913,780
1,050 Northern Minnesota Municipal Power
Agency, (AMBAC), 5.30%, 1/1/21 1,030,838
3,000 Southern Minnesota Municipal Power
Agency, (MBIA), 0.00%, 10/1/21 911,430
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
42
<PAGE>
MINNESOTA MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- -------------------------------------------------------------------------------
<C> <S> <C>
Insured-Electric Utilities (continued)
- -------------------------------------------------------------------------------
$10,000 Southern Minnesota Municipal Power
Agency, (MBIA), 0.00%, 1/1/25 $ 2,408,199
9,880 Southern Minnesota Municipal Power
Agency, (MBIA), 0.00%, 1/1/26 2,238,215
4,800 Southern Minnesota Municipal Power
Agency, (MBIA), 0.00%, 1/1/27 1,027,392
300 Southern Minnesota Municipal Power
Agency, (MBIA), (AMT), Variable Rate,
1/1/18(1)(4) 315,000
510 Western Minnesota Municipal Power
Agency, (MBIA), 5.50%, 1/1/15 510,689
- -------------------------------------------------------------------------------
$ 9,355,543
- -------------------------------------------------------------------------------
Insured-General Obligations -- 2.4%
- -------------------------------------------------------------------------------
$ 1,330 St. Francis, Independent School District
No. 15, (FGIC), 6.35%, 2/1/12 $ 1,454,847
- -------------------------------------------------------------------------------
$ 1,454,847
- -------------------------------------------------------------------------------
Insured-Hospital -- 3.6%
- -------------------------------------------------------------------------------
$ 250 Minneapolis, (Fairview Hospital),
(MBIA), 6.50%, 1/1/11 $ 265,583
450 Minnesota Agricultural and Economic
Development, (Fairview Hospital),
(MBIA), 5.75%, 11/15/26 458,888
450 Plymouth, (Westhealth), (FSA), 6.25%,
6/1/16 475,925
1,000 St. Louis Park, (Care Institute),
(AMBAC), Variable Rate, 7/1/13(1) 951,250
- -------------------------------------------------------------------------------
$ 2,151,646
- -------------------------------------------------------------------------------
Insured-Housing -- 2.7%
- -------------------------------------------------------------------------------
$ 1,500 SCA MFMR Receipts, Burnsville, (FSA),
7.10%, 1/1/30 $ 1,636,935
- -------------------------------------------------------------------------------
$ 1,636,935
- -------------------------------------------------------------------------------
Insured-Transportation -- 0.7%
- -------------------------------------------------------------------------------
$ 1,000 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/16 $ 412,010
- -------------------------------------------------------------------------------
$ 412,010
- -------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 0.6%
- -------------------------------------------------------------------------------
$ 350 Cambridge EDA, Public Lease, 6.25%,
2/1/14 $ 366,979
- -------------------------------------------------------------------------------
$ 366,979
- -------------------------------------------------------------------------------
Miscellaneous -- 1.6%
- -------------------------------------------------------------------------------
$ 1,000 Red Lake Band of Chippewa Indians,
6.25%, 8/1/13 $ 979,040
- -------------------------------------------------------------------------------
$ 979,040
- -------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -------------------------------------------------------------------------------
Nursing Home -- 3.0%
- -------------------------------------------------------------------------------
$ 1,000 Columbia Heights, Multifamily, (Crest
View), 6.00%, 3/1/33 $ 985,720
800 Minneapolis, (Walker Methodist Senior
Services), 6.00%, 11/15/28 782,968
- -------------------------------------------------------------------------------
$ 1,768,688
- -------------------------------------------------------------------------------
Solid Waste -- 0.8%
- -------------------------------------------------------------------------------
$ 450 Anoka County, Solid Waste Disposal,
National Rural Utility, (AMT), 6.95%,
12/1/08 $ 469,616
- -------------------------------------------------------------------------------
$ 469,616
- -------------------------------------------------------------------------------
Transportation -- 4.4%
- -------------------------------------------------------------------------------
$ 1,500 Minneapolis and St. Paul, Metropolitan
Airport Commission, (AMT), 4.50%, 1/1/15 $ 1,362,060
1,000 Puerto Rico Highway and Transportation
Authority, 4.75%, 7/1/38 870,800
400 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 371,192
- -------------------------------------------------------------------------------
$ 2,604,052
- -------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $57,131,192) $ 59,860,067
- -------------------------------------------------------------------------------
</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 Minnesota
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1999, 30.2% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 2.4% to 18.7% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(3) When-issued security.
(4) 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
43
<PAGE>
NEW JERSEY MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Assisted Living -- 2.6%
- --------------------------------------------------------------------------------
$ 3,750 New Jersey EDA, (Chelsea at East
Brunswick), (AMT), 8.25%, 10/1/20 $ 4,061,475
3,525 New Jersey EDA, (Forsgate), (AMT),
8.625%, 6/1/25 3,971,018
- --------------------------------------------------------------------------------
$ 8,032,493
- --------------------------------------------------------------------------------
Cogeneration -- 4.3%
- --------------------------------------------------------------------------------
$ 1,725 New Jersey EDA, (Trigen Trenton), (AMT),
6.20%, 12/1/07 $ 1,773,214
10,750 New Jersey EDA, (Vineland Cogeneration),
(AMT), 7.875%, 6/1/19 11,435,957
- --------------------------------------------------------------------------------
$ 13,209,171
- --------------------------------------------------------------------------------
Education -- 2.2%
- --------------------------------------------------------------------------------
$ 1,500 New Jersey Educational Facilities
Authority, (Institute of Advanced
Studies), 5.00%, 7/1/21 $ 1,435,440
1,565 New Jersey Educational Facilities
Authority, (Seton Hall Univ.), 7.00%,
7/1/21 1,650,433
8,800 New Jersey Higher Educational Student
Loan Bonds, (AMT), 0.00%, 7/1/10 3,804,064
- --------------------------------------------------------------------------------
$ 6,889,937
- --------------------------------------------------------------------------------
Electric Utilities -- 1.1%
- --------------------------------------------------------------------------------
$ 6,500 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 $ 2,454,205
2,000 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 755,140
- --------------------------------------------------------------------------------
$ 3,209,345
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 3.2%
- --------------------------------------------------------------------------------
$ 915 New Jersey Educational Facilities
Authority, (Seton Hall Univ.),
Prerefunded to 7/1/01 @ 102, 7.00%,
7/1/21 $ 981,356
7,600 New Jersey Sports and Exposition
Authority, (Monmouth Park), Prerefunded
to 1/1/05, 8.00%, 1/1/25 8,947,403
- --------------------------------------------------------------------------------
$ 9,928,759
- --------------------------------------------------------------------------------
General Obligations -- 3.8%
- --------------------------------------------------------------------------------
$ 8,000 Guam, 5.40%, 11/15/18 $ 7,761,520
1,500 Hudson County Improvement Authority,
6.625%, 8/1/25 1,605,435
3,000 Mercer County Improvement Authority,
0.00%, 4/1/10 1,743,840
1,600 Puerto Rico, 0.00%, 7/1/18 570,048
- --------------------------------------------------------------------------------
$ 11,680,843
- --------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Hospital -- 14.0%
- --------------------------------------------------------------------------------
$ 3,750 Camden County, Improvement Authority,
(Cooper Health System), 6.00%, 2/15/27 $ 2,909,213
2,300 New Jersey Health Care Facilities
Financing Authority, (Atlantic City
Medical Center), 6.80%, 7/1/11 2,461,253
5,875 New Jersey Health Care Facilities
Financing Authority, (Deborah Heart and
Lung Center), 6.30%, 7/1/23 6,055,598
4,000 New Jersey Health Care Facilities
Financing Authority, (Southern Ocean
County Hospital), 6.25%, 7/1/23 4,133,320
2,890 New Jersey Health Care Facilities
Financing Authority, (St. Barnabas
Health), Variable Rate, 7/1/28(1)(2) 2,284,892
9,585 New Jersey Health Care Facilities
Financing Authority, (St. Elizabeth's
Hospital), 6.80%, 8/1/19 10,157,319
850 New Jersey Health Care Facilities
Financing Authority, (St. Elizabeth's
Hospital)), 6.00%, 7/1/20 853,103
1,250 New Jersey Health Care Facilities,
(Capital Health System), 5.125%, 7/1/12 1,163,213
3,500 New Jersey Health Care Facilities,
(Capital Health System), 5.25%, 7/1/17 3,196,060
1,750 New Jersey Health Care Facilities,
(Capital Health System), 5.25%, 7/1/27 1,551,603
5,400 New Jersey Health Care Facilities,
(Capital Health System), 6.00%, 7/1/27 5,419,710
2,720 New Jersey Health Care Facilities, (Holy
Name Hospital), 6.00%, 7/1/25 2,769,694
- --------------------------------------------------------------------------------
$ 42,954,978
- --------------------------------------------------------------------------------
Housing -- 1.1%
- --------------------------------------------------------------------------------
$ 1,000 Guam Housing Corp., Single Family,
5.75%, 9/1/31 $ 1,011,710
1,000 New Jersey HFA, Rental Housing, (AMT),
7.10%, 5/1/22 1,050,380
1,250 New Jersey HFA, Rental Housing, (AMT),
7.25%, 11/1/22 1,305,663
- --------------------------------------------------------------------------------
$ 3,367,753
- --------------------------------------------------------------------------------
Industrial Development Revenue -- 12.5%
- --------------------------------------------------------------------------------
$ 4,000 Middlesex County Pollution Control
Financing Authority, (Amerada Hess
Corp.), 6.875%, 12/1/22 $ 4,287,000
2,000 Middlesex County Pollution Control
Financing Authority, (Amerada Hess
Corp.), 7.875%, 6/1/22 2,246,200
3,900 New Jersey EDA, (Continental Airlines),
(AMT), 5.50%, 4/1/28 3,669,783
3,000 New Jersey EDA, (Garden State Paper
Co.), 7.125%, 4/1/22 3,220,320
2,135 New Jersey EDA, (GATX Terminals Corp.),
7.30%, 9/1/19 2,346,066
3,500 New Jersey EDA, (Glimcher Properties
REIT), (AMT), 6.00%, 11/1/28 3,463,915
5,640 New Jersey EDA, (Holt Hauling), 8.95%,
12/15/18 6,116,467
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
44
<PAGE>
NEW JERSEY MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
Industrial Development Revenue (continued)
- --------------------------------------------------------------------------------
$ 1,500 New Jersey EDA, (Holt Hauling), (AMT),
7.90%, 3/1/27 $ 1,652,445
750 New Jersey EDA, (Kapkowsi Mall), 6.375%,
4/1/31 762,098
1,160 New Jersey EDA, (National Association of
Accountants), 7.65%, 7/1/09 1,214,149
2,000 New Jersey EDA, (The Seeing Eye, Inc.),
7.30%, 4/1/11 2,083,080
5,550 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.30%, 6/1/23 5,776,995
1,520 South Jersey Transportation Authority,
(Raytheon Aircraft), 6.15%, 1/1/22 1,554,458
- --------------------------------------------------------------------------------
$ 38,392,976
- --------------------------------------------------------------------------------
Insured-Education -- 0.4%
- --------------------------------------------------------------------------------
$ 1,525 New Brunswick, Housing Authority,
(Rutgers University), (FGIC), 4.625%,
7/1/24 $ 1,351,699
- --------------------------------------------------------------------------------
$ 1,351,699
- --------------------------------------------------------------------------------
Insured-General Obligations -- 1.3%
- --------------------------------------------------------------------------------
$ 3,815 Middletown Township, Board of Education,
(MBIA), 5.80%, 8/1/23 $ 3,937,347
- --------------------------------------------------------------------------------
$ 3,937,347
- --------------------------------------------------------------------------------
Insured-Hospital -- 7.2%
- --------------------------------------------------------------------------------
$ 4,250 New Jersey EDA, (Hillcrest Health
Services), (AMBAC), 0.00%, 1/1/19 $ 1,473,433
3,000 New Jersey EDA, (Hillcrest Health
Services), (AMBAC), 0.00%, 1/1/21 922,920
10,620 New Jersey EDA, (St. Barnabas), (MBIA),
0.00%, 7/1/26 2,381,747
1,570 New Jersey Health Care Facilities
Financing Authority, (Cathedral Health
Services) (MBIA), 7.25%, 2/15/21 1,676,525
2,395 New Jersey Health Care Facilities
Financing Authority, (Cathedral Health
Services), (MBIA), 5.20%, 8/1/15 2,355,435
2,000 New Jersey Health Care Facilities
Financing Authority, (Hackensack Medical
Center) (FGIC), 6.25%, 7/1/21 2,082,080
6,000 New Jersey Health Care Facilities
Financing Authority, (St. Barnabas
Health), (MBIA), 0.00%, 7/1/23 1,571,580
4,720 New Jersey Health Care Facilities
Financing Authority, (St. Barnabas
Health), (MBIA), 4.75%, 7/1/28 4,225,863
3,500 New Jersey Health Care Facilities
Financing Authority, (St. Barnabas
Health), (MBIA), 5.25%, 7/1/13 3,509,590
2,150 New Jersey Health Care Facilities,
(Virtua Health), (FSA), 4.50%, 7/1/28 1,825,307
- --------------------------------------------------------------------------------
$ 22,024,480
- --------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Insured-Housing -- 0.5%
- --------------------------------------------------------------------------------
$ 1,475 Pennsauken Township, Housing Finance
Corp., (MBIA), 8.00%, 4/1/11 $ 1,524,014
- --------------------------------------------------------------------------------
$ 1,524,014
- --------------------------------------------------------------------------------
Insured-Industrial Development Revenue -- 0.9%
- --------------------------------------------------------------------------------
$ 1,600 New Jersey EDA, (Educational Testing
Service), (MBIA), 4.75%, 5/15/25 $ 1,452,912
1,150 New Jersey EDA, (New Jersey American
Water Co.), (AMT) (FGIC), 6.875%,
11/1/34 1,268,128
- --------------------------------------------------------------------------------
$ 2,721,040
- --------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 3.6%
- --------------------------------------------------------------------------------
$ 3,900 Atlantic County, Public Facilities Lease
Agreement, (FGIC), 6.00%, 3/1/13 $ 4,254,822
2,500 Hudson County Improvement Authority,
Secondary Yield Curve Notes, (FGIC)
Variable Rate, 12/1/25(1)(2) 2,879,950
1,750 Hudson County, Correctional Facility,
(MBIA), 6.50%, 12/1/11 1,863,768
1,800 Middlesex County, (MBIA), 6.125%,
2/15/19 1,946,304
- --------------------------------------------------------------------------------
$ 10,944,844
- --------------------------------------------------------------------------------
Insured-Miscellaneous -- 2.4%
- --------------------------------------------------------------------------------
$ 3,555 New Jersey Sports and Exposition
Authority, (MBIA), 4.50%, 9/1/20 $ 3,128,507
4,850 New Jersey Sports and Exposition
Authority, (MBIA), 4.50%, 3/1/24 4,220,907
- --------------------------------------------------------------------------------
$ 7,349,414
- --------------------------------------------------------------------------------
Insured-Transportation -- 9.4%
- --------------------------------------------------------------------------------
$ 4,940 Delaware River Port Authority, (MBIA),
5.00%, 1/1/26 $ 4,700,064
3,500 New Jersey State Transportation
Authority, (FSA), 4.50%, 6/15/19 3,112,900
5,000 New Jersey Turnpike Authority, RITES
(MBIA), Variable Rate, 1/1/16(1) 6,482,650
9,285 New Jersey Turnpike Authority, (MBIA),
6.50%, 1/1/16 10,571,064
1,000 New Jersey Turnpike Authority, (MBIA),
6.50%, 1/1/16 1,138,510
1,750 Port Authority of New York and New
Jersey, (MBIA), 4.75%, 8/1/33 1,540,578
1,300 Puerto Rico Highway and Transportation
Authority, (AMBAC), 5.00%, 7/1/28 1,225,172
- --------------------------------------------------------------------------------
$ 28,770,938
- --------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
45
<PAGE>
NEW JERSEY MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
Insured-Water and Sewer -- 0.9%
- --------------------------------------------------------------------------------
$ 2,500 Middlesex County, Utilities Authority,
(MBIA), 6.25%, 8/15/10 $ 2,746,575
- --------------------------------------------------------------------------------
$ 2,746,575
- --------------------------------------------------------------------------------
Lease Revenue/Certificates of Participation -- 4.3%
- --------------------------------------------------------------------------------
$ 720 Atlantic County, Public Facilities Lease
Agreement, 8.875%, 1/15/14 $ 948,830
785 Atlantic County, Public Facilities Lease
Agreement, 8.875%, 1/15/15 1,042,409
1,000 Bedminster Township, Board of Education,
7.125%, 9/1/10 1,065,850
2,000 Mercer County Improvement Authority,
(Richard J. Hughes Justice), 6.05%,
1/1/15 2,003,660
1,500 Mercer County Improvement Authority,
(Richard J. Hughes Justice), 6.05%,
1/1/16 1,502,685
1,500 Mercer County Improvement Authority,
(Richard J. Hughes Justice), 6.05%,
1/1/17 1,502,610
2,591 New Jersey Building Authority, (Garden
State Savings Bonds), 0.00%, 6/15/10 1,490,447
1,650 New Jersey EDA, (Economic Recovery),
0.00%, 9/15/09 991,898
5,500 New Jersey EDA, (Economic Recovery),
0.00%, 3/15/13 2,671,735
- --------------------------------------------------------------------------------
$ 13,220,124
- --------------------------------------------------------------------------------
Nursing Home -- 1.4%
- --------------------------------------------------------------------------------
$ 1,385 New Jersey EDA, (Claremont Health
System, Inc.), 9.10%, 9/1/22 $ 1,524,968
2,500 New Jersey EDA, (Victoria Health Corp.),
7.65%, 1/1/14 2,687,275
- --------------------------------------------------------------------------------
$ 4,212,243
- --------------------------------------------------------------------------------
Senior Living / Life Care -- 0.5%
- --------------------------------------------------------------------------------
$ 1,465 New Jersey EDA, (Hudson County
Occupational Center), 6.50%, 7/1/18 $ 1,434,499
- --------------------------------------------------------------------------------
$ 1,434,499
- --------------------------------------------------------------------------------
Special Tax Revenue -- 0.8%
- --------------------------------------------------------------------------------
$ 2,650 Puerto Rico Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) $ 2,352,405
- --------------------------------------------------------------------------------
$ 2,352,405
- --------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Transportation -- 18.2%
- --------------------------------------------------------------------------------
$ 3,500 New Jersey Transportation Authority,
Variable Rate, 6/15/17(1)(2) $ 3,278,590
7,600 Port Authority of New York and New
Jersey, 5.375%, 3/1/28 7,588,600
19,000 Port Authority of New York and New
Jersey, 6.125%, 6/1/24 20,911,589
5,000 Port Authority of New York and New
Jersey, (KIAC), 6.75%, 10/1/19 5,441,850
5,000 Puerto Rico Highway and Transportation
Authority, 4.75%, 7/1/38 4,354,000
6,825 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 6,333,464
7,825 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/36 7,863,186
- --------------------------------------------------------------------------------
$ 55,771,279
- --------------------------------------------------------------------------------
Water and Sewer -- 3.4%
- --------------------------------------------------------------------------------
$ 6,000 New Jersey EDA, (Atlantic City Sewer),
(AMT), 5.45%, 4/1/28 $ 5,715,720
4,500 New Jersey EDA, Elizabethtown Water
Revenue, (AMT), 6.70%, 8/1/21 4,730,445
80 New Jersey Wastewater Treatment Trust,
6.875%, 6/15/09 83,710
20 New Jersey Wastewater Treatment Trust,
7.00%, 6/15/10 20,939
- --------------------------------------------------------------------------------
$ 10,550,814
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $292,825,477) $ 306,577,970
- --------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by New Jersey
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1999, 26.5% 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 insured by
financial institution ranged from 1.2% to 19.9% 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
46
<PAGE>
PENNSYLVANIA MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Assisted Living -- 4.5%
- --------------------------------------------------------------------------------
$ 5,000 Chester IDA, (Senior Life Choice of
Kimberton), (AMT), 8.50%, 9/1/25 $ 5,567,750
2,680 Chester IDA, (Senior Life Choice of
Paoli, L.P.), (AMT), 8.05%, 1/1/24 2,921,816
5,000 Delaware IDA, (Glen Riddle), (AMT),
8.625%, 9/1/25 5,598,650
- --------------------------------------------------------------------------------
$ 14,088,216
- --------------------------------------------------------------------------------
Certificates of Participation -- 0.6%
- --------------------------------------------------------------------------------
$ 2,000 Cliff House Trust, (AMT), 6.625%, 6/1/27 $ 2,000,000
- --------------------------------------------------------------------------------
$ 2,000,000
- --------------------------------------------------------------------------------
Cogeneration -- 3.0%
- --------------------------------------------------------------------------------
$ 9,000 Pennsylvania EDA, (Northampton
Generating), (AMT), 6.50%, 1/1/13 $ 9,391,859
- --------------------------------------------------------------------------------
$ 9,391,859
- --------------------------------------------------------------------------------
Education -- 5.8%
- --------------------------------------------------------------------------------
$ 2,000 Lehigh County General Purpose Authority,
(Allentown College of St. Francis),
6.75%, 12/15/12 $ 2,139,720
1,100 Lehigh County General Purpose Authority,
(Cedar Crest College), 6.70%, 4/1/26 1,162,370
3,000 Pennsylvania HEFA, (Delaware Valley
College of Science and Agriculture),
5.35%, 4/15/28 2,707,410
3,000 Pennsylvania HEFA, (Gwynedd-Mercy
College), 5.60%, 11/1/22 2,877,480
3,000 Pennsylvania HEFA, (University of
Pennsylvania), 4.625%, 7/15/30 2,550,720
2,000 Pennsylvania HEFA, (Ursinns College),
5.90%, 1/1/27 2,025,100
4,225 Scranton-Lackawanna, (University of
Scranton), 6.40%, 3/1/07 4,482,303
- --------------------------------------------------------------------------------
$ 17,945,103
- --------------------------------------------------------------------------------
Electric Utilities -- 2.7%
- --------------------------------------------------------------------------------
$ 500 Beaver IDA, (Ohio Edison Co.), 7.75%,
9/1/24 $ 511,725
3,250 Delaware IDA, (Philadelphia Electric
Co.), 7.375%, 4/1/21 3,422,315
4,070 Montgomery IDA, (Philadelphia Electric
Co.), (AMT), 7.60%, 4/1/21 4,310,008
- --------------------------------------------------------------------------------
$ 8,244,048
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 11.0%
- --------------------------------------------------------------------------------
$ 5,600 Berks County, (FGIC), Variable Rate,
Partially Prerefunded to 12/01/02,
11/10/20(1) $ 6,545,000
4,145 Hazelton Luzerne, (Saint Joseph Medical
Center), Prerefunded to 7/1/03, 8.375%,
7/1/12 4,720,326
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Escrowed / Prerefunded (continued)
- --------------------------------------------------------------------------------
$ 7,500 Keystone Oaks School District, (AMBAC),
Variable Rate, Prerefunded to 9/1/02,
9/1/16(1) $ 8,409,375
5,000 Philadelphia Hospital and Higher
Education Authority, (FGIC), Prerefunded
to 2/15/04, Variable Rate, 3/6/12(1) 4,981,250
4,115 Somerset, (Community Hospital),
Prerefunded to 3/1/02, 6.75%, 3/1/11 4,367,126
4,845 Westmoreland Municipal Authority,
(FGIC), Escrowed to Maturity, 0.00%,
8/15/19 1,601,660
5,400 Westmoreland Municipal Authority,
(FGIC), Escrowed to Maturity, 0.00%,
8/15/20 1,682,316
5,780 Westmoreland Municipal Authority,
(FGIC), Escrowed to Maturity, 0.00%,
8/15/20 1,800,701
- --------------------------------------------------------------------------------
$ 34,107,754
- --------------------------------------------------------------------------------
General Obligations -- 1.8%
- --------------------------------------------------------------------------------
$ 3,000 Dauphin County, 6.90%, 6/1/26 $ 3,168,090
2,500 Montgomery County, 5.00%, 7/15/24 2,336,150
- --------------------------------------------------------------------------------
$ 5,504,240
- --------------------------------------------------------------------------------
Hospital -- 10.4%
- --------------------------------------------------------------------------------
$ 5,330 Allegheny County HDA, (St. Francis
Medical Center), 5.75%, 5/15/27 $ 5,049,855
2,000 Allegheny County HDA, (Villa St.
Joseph), 6.00%, 8/15/28 1,882,480
2,240 Allegheny County, IDA, (Presbyterian
Medical Center), 6.75%, 2/1/26 2,410,083
2,000 Dauphin County Hospital Authority,
(Community General Osteopathic
Hospital), 7.375%, 6/1/16 2,195,880
1,150 Horizon Hospital Systems Authority,
(Horizon Hospital Systems, Inc.), 6.35%,
5/15/26 1,196,575
2,670 Indiana County Hospital Authority,
(Indiana Hospital), 7.125%, 7/1/23 2,859,757
2,550 Monroeville Hospital Authority, (Forbes
Health System), 6.25%, 10/1/15 2,524,500
1,375 Montgomery Hospital Authority,
(Montgomery Hospital Medical Center),
6.60%, 7/1/10 1,441,413
500 Pennsylvania HEFA, (Allegheny General
Hospital), 7.25%, 9/1/17 500,000
5,625 Philadelphia HEFA, (Graduate Health
System), 6.625%, 7/1/21 2,137,500
7,115 Philadelphia HEFA, (Graduate Health
System), 7.25%, 7/1/18 2,703,700
7,000 Washington County Hospital Authority,
(Monongahela Valley Hospital), 6.75%,
12/1/08 7,519,330
- --------------------------------------------------------------------------------
$ 32,421,073
- --------------------------------------------------------------------------------
Housing -- 5.4%
- --------------------------------------------------------------------------------
$ 2,815 Allegheny, SFMR, (Ladies Grand Army),
(FHA), 6.35%, 10/1/36 $ 2,996,708
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
47
<PAGE>
PENNSYLVANIA MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
Housing (continued)
- --------------------------------------------------------------------------------
$ 1,000 Pennsylvania HFA, (AMT), Variable Rate,
10/3/23(1) $ 1,103,750
2,000 Pennsylvania HFA, SFMR, (AMT), 6.15%,
10/1/27 2,075,040
2,250 Pennsylvania HFA, Single Family, (AMT),
5.50%, 4/1/29 2,214,225
2,300 Pennsylvania HFA, Single Family, (AMT),
5.85%, 10/1/27 2,347,449
1,000 Pittsburgh Urban Redevelopment
Authority, 7.125%, 4/1/15 1,036,760
265 Pittsburgh Urban Redevelopment
Authority, 7.45%, 4/1/10 275,831
3,295 Pittsburgh Urban Redevelopment
Authority, (AMT), 7.10%, 4/1/24 3,554,646
1,055 Pittsburgh Urban Redevelopment
Authority, (AMT), 7.40%, 4/1/24 1,096,272
- --------------------------------------------------------------------------------
$ 16,700,681
- --------------------------------------------------------------------------------
Industrial Development Revenue -- 18.3%
- --------------------------------------------------------------------------------
$ 6,450 Butler County IDA, (Witco Corp.), 5.85%,
12/1/23 $ 6,553,329
1,005 Clearfield County IDA, (Kmart Corp.),
6.80%, 5/15/07 1,050,969
4,000 Franklin County IDA, (Corning, Inc.),
6.25%, 8/1/05 4,354,800
11,000 New Morgan IDA, (New Morgan Landfill),
(AMT), 6.50%, 4/1/19 11,152,899
9,000 Pennsylvania EDA, (Colver), (AMT),
7.125%, 12/1/15 9,874,619
5,000 Pennsylvania EDA, (Colver), (AMT),
7.15%, 12/1/18 5,491,650
4,450 Pennsylvania IDA, (Sun Company), (AMT),
7.60%, 12/1/24 4,938,877
6,500 Philadelphia IDA, (Refrigerated
Enterprises), (AMT), 9.05%, 12/1/19 7,127,380
5,000 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 5,252,050
$ 1,105 Shamokin IDA, (Kmart Corp.), 6.70%,
7/1/07 $ 1,151,697
- --------------------------------------------------------------------------------
$ 56,948,270
- --------------------------------------------------------------------------------
Insured-Education -- 2.4%
- --------------------------------------------------------------------------------
$ 3,000 Delaware County, (Villanova University),
(MBIA), 5.00%, 12/1/28 $ 2,776,410
1,805 Northeastern, HEFA, (Wyoming Seminary),
(MBIA), 4.75%, 10/1/28 1,591,469
625 Pennsylvania HEFA, (Bryn Mawr College),
(AMBAC), 5.125%, 12/1/29 587,494
1,590 Pennsylvania Manor, School District,
(FGIC), 5.20%, 6/1/16 1,561,030
1,000 State Public School Building Authority,
(Westmoreland Community College),
(MBIA), 5.25%, 10/15/15 995,060
- --------------------------------------------------------------------------------
$ 7,511,463
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 6.3%
- --------------------------------------------------------------------------------
$ 4,000 Beaver IDA, (Ohio Edison Co.), (FGIC),
7.00%, 6/1/21 $ 4,248,760
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Insured-Electric Utilities (continued)
- --------------------------------------------------------------------------------
$10,000 Beaver IDA, (Ohio Edison Co.), (FGIC),
7.05%, 10/1/20 $ 11,221,599
3,800 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 7/1/02(1) 4,080,250
- --------------------------------------------------------------------------------
19,550,609
- --------------------------------------------------------------------------------
Insured-General Obligations -- 6.2%
- --------------------------------------------------------------------------------
$ 2,500 Butler School District, (FGIC), 4.75%,
10/1/22 $ 2,242,325
2,170 Elizabeth Forward School District,
(MBIA), 0.00%, 9/1/20 668,859
2,170 Elizabeth Forward School District,
(MBIA), 0.00%, 9/1/21 629,170
2,170 Elizabeth Forward School District,
(MBIA), 0.00%, 9/1/22 593,799
2,170 Elizabeth Forward School District,
(MBIA), 0.00%, 9/1/23 560,337
2,500 Erie School District, (MBIA), 0.00%,
5/1/19 839,750
2,625 Erie School District, (MBIA), 0.00%,
5/1/20 830,996
2,625 Erie School District, (MBIA), 0.00%,
5/1/21 782,355
3,625 Erie School District, (MBIA), 0.00%,
5/1/22 1,020,111
2,365 Harrisburg, (AMBAC), 0.00%, 3/15/17 896,524
5,175 Hazelton School District, (FGIC), 0.00%,
3/1/21 1,544,375
1,000 Hopewell School District, (FSA), 0.00%,
9/1/22 273,640
2,000 Hopewell School District, (FSA), 0.00%,
9/1/26 432,740
1,430 Mars Area School District, (MBIA),
0.00%, 3/1/14 653,639
2,000 McGuffey School District, (AMBAC),
4.75%, 8/1/28 1,753,720
3,650 Philadelphia School District, (MBIA),
4.75%, 4/1/27 3,208,934
1,000 Ridley School District, (FGIC), 5.00%,
11/15/29 924,510
655 Rochester Area School District, (AMBAC),
0.00%, 5/1/10 381,321
1,000 Venango County, (AMBAC), 6.30%, 12/1/19 1,054,630
- --------------------------------------------------------------------------------
$ 19,291,735
- --------------------------------------------------------------------------------
Insured-Hospital -- 6.8%
- --------------------------------------------------------------------------------
$ 4,550 Allegheny County HDA, (University of
Pittsburg Hospital), (MBIA), 5.625%,
4/1/27 $ 4,549,591
3,750 Allegheny County Hospital Authority,
(Magee-Womens Hospital), (FGIC), 0.00%,
10/1/15 1,562,063
1,170 Allegheny County, (Children's Hospital
of Pittsburgh), (MBIA), 6.75%, 7/1/08 1,201,379
2,500 Armstrong County Hospital Authority,
(Saint Francis Health Care), (AMBAC),
6.00%, 8/15/08 2,632,025
1,400 Armstrong County Hospital Authority,
(Saint Francis Health Care), (AMBAC),
6.25%, 6/1/13 1,484,700
775 Carbon County Hospital Authority,
(Gnaden Memorial Hospital), (AMBAC),
7.00%, 11/15/14 816,928
1,700 Dauphin County Hospital Authority,
(Pinnacle Health System), (MBIA), 5.00%,
8/15/27 1,550,927
3,000 Delaware County Hospital Authority,
(Riddle Memorial Hospital), (FSA),
5.00%, 1/1/28 2,735,430
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
48
<PAGE>
PENNSYLVANIA MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- --------------------------------------------------------------------------------
<C> <S> <C>
Insured-Hospital (continued)
- --------------------------------------------------------------------------------
$ 1,000 Montgomery County HEFA, (Abington
Memorial Hospital) (AMBAC), Variable
Rate, 7/5/11(1) $ 1,122,500
4,000 Montgomery County HEFA, (Abington
Memorial Hospital), (AMBAC), 5.00%,
6/1/28 3,645,000
- --------------------------------------------------------------------------------
$ 21,300,543
- --------------------------------------------------------------------------------
Insured-Industrial Development Revenue -- 0.3%
- --------------------------------------------------------------------------------
$ 1,000 Delaware County, (Philadelphia Water),
(AMT), (FGIC), 6.35%, 8/15/25 $ 1,067,660
- --------------------------------------------------------------------------------
$ 1,067,660
- --------------------------------------------------------------------------------
Insured-Solid Waste -- 1.3%
- --------------------------------------------------------------------------------
$ 4,205 Lancaster County, Solid Waste Management
Authority Resources Recovery System,
(AMBAC), 5.375%, 12/15/15 $ 4,168,585
- --------------------------------------------------------------------------------
$ 4,168,585
- --------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.6%
- --------------------------------------------------------------------------------
$ 2,500 Pennsylvania Turnpike Commission Oil
Franchise, (AMBAC), Variable Rate,
12/1/27(1)(2) $ 1,928,500
- --------------------------------------------------------------------------------
$ 1,928,500
- --------------------------------------------------------------------------------
Insured-Transportation -- 1.1%
- --------------------------------------------------------------------------------
$ 2,000 Allegheny County Port Authority,
(Pittsburgh International Airport),
(MBIA), (AMT), 5.25%, 1/1/16 $ 1,947,340
2,000 Southeastern Pennsylvania Transit
Authority, (FGIC), Variable Rate,
3/1/29(1)(2) 1,503,360
- --------------------------------------------------------------------------------
$ 3,450,700
- --------------------------------------------------------------------------------
Insured-Water and Sewer -- 2.6%
- --------------------------------------------------------------------------------
$ 2,500 Philadelphia Water and Wastewater,
(FGIC), Variable Rate, 6/15/12(1) $ 2,621,875
2,490 Pittsburgh Water and Sewer Authority,
(FGIC), 4.75%, 9/1/16 2,288,584
3,575 West Mifflin Water and Sewer Authority,
(MBIA), 5.00%, 8/1/28 3,310,057
- --------------------------------------------------------------------------------
$ 8,220,516
- --------------------------------------------------------------------------------
Nursing Home -- 3.6%
- --------------------------------------------------------------------------------
$ 1,230 Chartiers Valley IDA, (Beverly
Enterprises, Inc.), 5.375%, 6/1/07 $ 1,208,340
250 Clarion County IDA, (Beverly Enterprises
Inc.), 5.50%, 5/1/03 246,053
1,510 Green County, IDA, (Beverly Enterprises,
Inc.), 5.75%, 3/1/13 1,450,793
2,000 Grove City, Area Hospital Health
Facilities Authority, (Grove Manor),
6.625%, 8/15/29 1,920,820
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- --------------------------------------------------------------------------------
Nursing Home (continued)
- --------------------------------------------------------------------------------
$ 3,465 Montgomery IDA, (Advancement of
Geriatric Health Care Institute),
8.375%, 7/1/23 $ 3,672,900
1,100 Philadelphia HEFA, (The Philadelphia
Protestant Home), 6.50%, 7/1/27 1,132,109
1,425 Westmoreland County IDA, (Highland
Health Systems, Inc.), 9.25%, 6/1/22 1,571,604
- --------------------------------------------------------------------------------
$ 11,202,619
- --------------------------------------------------------------------------------
Pooled Loans -- 1.5%
- --------------------------------------------------------------------------------
$ 3,400 Pennsylvania Finance Authority, Beaver
County, 6.60%, 11/1/09 $ 3,675,842
870 Pennsylvania Infrastructure Investment
Authority, (Pennvest), 6.80%, 9/1/10 $ 939,296
- --------------------------------------------------------------------------------
4,615,138
- --------------------------------------------------------------------------------
Senior Living / Life Care -- 3.5%
- --------------------------------------------------------------------------------
$ 4,050 Delaware County, (White Horse Village),
7.50%, 7/1/18 $ 4,320,581
3,620 Delaware County, HFA, (Mercy Health
Corp.), 5.75%, 12/15/22 3,710,355
3,060 Hazleton HFA, (Hazelton General
Hospital), 5.50%, 7/1/27 2,853,787
- --------------------------------------------------------------------------------
$ 10,884,723
- --------------------------------------------------------------------------------
Transportation -- 0.3%
- --------------------------------------------------------------------------------
$ 1,000 Erie County Airport Revenue, (AMT),
5.875%, 7/1/16 $ 981,570
- --------------------------------------------------------------------------------
$ 981,570
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $304,569,208) $ 311,525,605
- --------------------------------------------------------------------------------
</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 Pennsylvania
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1999, 35.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 2.4% to 15.2%.
(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>
TEXAS MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -------------------------------------------------------------------------------
Assisted Living -- 3.6%
- -------------------------------------------------------------------------------
$ 500 Bell County, Health Facilities, (Care
Institute, Inc., Texas), 9.00%, 11/1/24 $ 557,695
- -------------------------------------------------------------------------------
$ 557,695
- -------------------------------------------------------------------------------
Education -- 2.3%M
- -------------------------------------------------------------------------------
$ 375 Houston Higher Education Finance,
DRIVERS, (Rice University), Variable
Rate, 5/15/23(1)(2) $ 354,720
- -------------------------------------------------------------------------------
$ 354,720
- -------------------------------------------------------------------------------
Electric Utilities -- 4.3%
- -------------------------------------------------------------------------------
$ 750 Puerto Rico Electric Power Authority,
4.75%, 7/1/24 $ 669,029
- -------------------------------------------------------------------------------
$ 669,029
- -------------------------------------------------------------------------------
Escrowed / Prerefunded -- 3.4%
- -------------------------------------------------------------------------------
$ 200 Bexar County, Health Facilities, (St.
Luke's Lutheran), Escrowed to Maturity,
7.00%, 5/1/21 $ 241,572
100 Harris County, Hospital District,
(Memorial), Prerefunded to 6/1/02,
7.125%, 6/1/15 109,688
150 Texas National Research Lab Super
Collider, Escrowed to Maturity, 6.95%,
12/1/12 171,948
- -------------------------------------------------------------------------------
$ 523,208
- -------------------------------------------------------------------------------
General Obligations -- 22.7%
- -------------------------------------------------------------------------------
$1,000 Bastrop, Independent School District,
(PSF), 0.00%, 2/15/13 $ 486,640
1,500 Grapevine-Colleyville Independent School
District, 0.00%, 8/15/25 345,600
200 Katy Independent School District, 4.75%,
2/15/27 176,398
500 Leander, 6.75%, 8/15/16 564,015
1,000 New Braunfels Independent School
District, (PSF), 0.00%, 2/1/13 487,650
500 North East Independent School District,
4.50%, 10/1/28 422,940
690 Texas Veterans' Housing Assistance U.T.,
(AMT), 6.70%, 12/1/24 727,749
275 Texas Veterans' Housing Assistance U.T.,
(AMT), 6.80%, 12/1/23 291,742
- -------------------------------------------------------------------------------
$ 3,502,734
- -------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- -------------------------------------------------------------------------------
Hospital -- 8.6%
- -------------------------------------------------------------------------------
$ 190 Bell County, (Heritage Oaks Healthcare),
6.70%, 6/1/29 $ 185,197
330 Denison Hospital Authority, (Texoma
Medical Center), 7.10%, 8/15/04 357,225
500 Tarrant County, (Methodist Health
System), 6.00%, 9/1/24 538,295
250 Tomball Hospital Authority, (Tomball
Regional Hospital), 6.00%, 7/1/29 246,565
- -------------------------------------------------------------------------------
$ 1,327,282
- -------------------------------------------------------------------------------
Housing -- 22.4%
- -------------------------------------------------------------------------------
$ 75 Bexar County, HFC, 8.10%, 3/1/24 $ 78,331
200 Bexar County, HFC, (North Knoll
Apartments), 5.90%, 4/1/37 194,680
490 Dallas, HFC, (GNMA), 7.95%, 12/1/23 510,502
10 North Central County, HFC, (GNMA),
7.875%, 10/1/22 10,375
500 Texas Department of Housing and
Community Affairs, (AMT), 5.50%, 1/1/21 503,770
500 Texas Department of Housing and
Community Affairs, (Meadow Ridge
Apartments), (AMT), 5.55%, 8/1/30 504,095
500 Texas Department of Housing and
Community Affairs, (NHP
Foundation-Asmara), 6.40%, 1/1/27 528,570
500 Texas Department of Housing and
Community Affairs, (Pebble Brook
Apartments), (AMT), 5.50%, 12/1/18 507,125
585 Travis County, HFC, (GNMA) (FNMA),
7.05%, 12/1/25 616,847
- -------------------------------------------------------------------------------
$ 3,454,295
- -------------------------------------------------------------------------------
Industrial Development Revenue -- 7.0%
- -------------------------------------------------------------------------------
$ 250 Abia Dev. Corp., (Austin Cargoport),
9.25%, 10/1/21 $ 277,843
265 Gulf Coast Waste Disposal Authority,
(Champion International), (AMT), 7.25%,
4/1/17 282,835
500 Trinity River Authority, (Texas
Instruments), (AMT), 6.20%, 3/1/20 524,190
- -------------------------------------------------------------------------------
$ 1,084,868
- -------------------------------------------------------------------------------
Insured-Electric Utilities -- 4.8%
- -------------------------------------------------------------------------------
$ 500 Brazos River Authority, TX, (Houston
Lighting and Power Co.), (AMBAC), (AMT),
5.05%, 11/1/18 $ 474,865
500 Lower Colorado River Authority Junior
Lien, (FGIC), 0.00%, 1/1/12 259,850
- -------------------------------------------------------------------------------
$ 734,715
- -------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
50
<PAGE>
TEXAS MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- -------------------------------------------------------------------------------
<C> <S> <C>
Insured-Hospital -- 7.0%
- -------------------------------------------------------------------------------
$ 500 Harris County, HFC, (Hermann Hospital),
(MBIA), 6.375%, 10/1/24 $ 548,805
500 Tyler County, HFC, (Mother Frances
Hospital), (FGIC), 6.50%, 7/1/22 534,195
- -------------------------------------------------------------------------------
$ 1,083,000
- -------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.9%
- -------------------------------------------------------------------------------
$ 350 Puerto Rico Infrastructure Financing
Authority, (AMBAC), Variable Rate,
7/1/28(1) $ 291,043
- -------------------------------------------------------------------------------
$ 291,043
- -------------------------------------------------------------------------------
Insured-Utilities -- 7.5%
- -------------------------------------------------------------------------------
$1,000 Austin, Combined Utility, (AMBAC),
6.75%, 11/15/12 $ 1,159,349
- -------------------------------------------------------------------------------
$ 1,159,349
- -------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 1.7%
- -------------------------------------------------------------------------------
$ 250 Rio Grande, Independent School District
Lease, 6.75%, 7/15/10 $ 267,000
- -------------------------------------------------------------------------------
$ 267,000
- -------------------------------------------------------------------------------
Utilities - Electrical and Gas -- 2.8%
- -------------------------------------------------------------------------------
$ 500 San Antonio, Electric and Natural Gas
Revenue, 4.50%, 2/1/21 $ 431,455
- -------------------------------------------------------------------------------
$ 431,455
- -------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $14,830,737) $ 15,440,393
- -------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
HFC - Housing Finance Corporation
The Portfolio invests primarily in debt securities issued by Texas
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1999, 21.2% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 3.6% to 12.5% 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
51
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO COLORADO PORTFOLIO CONNECTICUT PORTFOLIO MICHIGAN PORTFOLIO
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Assets
- ------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $ 89,483,162 $ 36,443,369 $ 149,320,769 $ 103,767,276
Unrealized appreciation 4,166,923 1,007,476 5,589,410 4,197,066
- ------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $ 93,650,085 $ 37,450,845 $ 154,910,179 $ 107,964,342
- ------------------------------------------------------------------------------------------------------------------
Cash $ -- $ -- $ 1,258,243 $ 48,382
Receivable for investments sold -- 35,461 -- --
Interest receivable 915,084 446,783 1,741,604 1,460,547
- ------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 94,565,169 $ 37,933,089 $ 157,910,026 $ 109,473,271
- ------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------
Due to bank $ 25,115 $ 51,656 $ -- $ --
Demand note payable 200,000 -- -- --
Payable to affiliate for
Trustees' fees -- 6 190 --
Other accrued expenses 6,766 7,360 16,248 9,919
- ------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 231,881 $ 59,022 $ 16,438 $ 9,919
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
INVESTORS' INTEREST IN
PORTFOLIO $ 94,333,288 $ 37,874,067 $ 157,893,588 $ 109,463,352
- ------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------
Net proceeds from capital
contributions and withdrawals $ 90,166,365 $ 36,866,591 $ 152,304,178 $ 105,266,286
Net unrealized appreciation
(computed on the basis of
identified cost) 4,166,923 1,007,476 5,589,410 4,197,066
- ------------------------------------------------------------------------------------------------------------------
TOTAL $ 94,333,288 $ 37,874,067 $ 157,893,588 $ 109,463,352
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
52
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF ASSETS AND LIABILITIES
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO NEW JERSEY PORTFOLIO PENNSYLVANIA PORTFOLIO TEXAS PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $ 57,131,192 $ 292,825,477 $ 304,569,208 $ 14,830,737
Unrealized appreciation 2,728,875 13,752,493 6,956,397 609,656
- --------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $ 59,860,067 $ 306,577,970 $ 311,525,605 $ 15,440,393
- --------------------------------------------------------------------------------------------------------------------
Cash $ 1,296,947 $ -- $ -- $ 113,835
Receivable for investments sold 20,000 -- 30,000 --
Interest receivable 725,659 3,741,489 4,292,411 212,154
- --------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 61,902,673 $ 310,319,459 $ 315,848,016 $ 15,766,382
- --------------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------------
Payable for when-issued
securities $ 1,500,933 $ -- $ -- $ --
Demand note payable -- 900,000 900,000 --
Due to bank -- 57,990 63,017 --
Payable to affiliate for
Trustees' fees 495 198 -- --
Other accrued expenses 8,377 27,864 11,708 1,230
- --------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 1,509,805 $ 986,052 $ 974,725 $ 1,230
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
INVESTORS' INTEREST IN
PORTFOLIO $ 60,392,868 $ 309,333,407 $ 314,873,291 $ 15,765,152
- --------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------------------------------------------
Net proceeds from capital
contributions and withdrawals $ 57,663,993 $ 295,580,914 $ 307,916,894 $ 15,155,496
Net unrealized appreciation
(computed on the basis of
identified cost) 2,728,875 13,752,493 6,956,397 609,656
- --------------------------------------------------------------------------------------------------------------------
TOTAL $ 60,392,868 $ 309,333,407 $ 314,873,291 $ 15,765,152
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
53
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO COLORADO PORTFOLIO CONNECTICUT PORTFOLIO MICHIGAN PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Investment Income
- -------------------------------------------------------------------------------------------------------------------------
Interest $ 5,809,056 $ 2,288,094 $ 9,315,502 $ 6,820,667
- -------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 5,809,056 $ 2,288,094 $ 9,315,502 $ 6,820,667
- -------------------------------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 386,713 $ 94,915 $ 681,988 $ 477,860
Trustees fees and expenses 11,416 2,252 16,589 11,416
Custodian fee 56,035 31,070 82,024 68,143
Legal and accounting services 25,516 19,943 26,242 26,017
Miscellaneous 20,925 8,701 9,320 22,608
- -------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 500,605 $ 156,881 $ 816,163 $ 606,044
- -------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 10,309 $ 15,739 $ 26,891 $ 15,327
- -------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 10,309 $ 15,739 $ 26,891 $ 15,327
- -------------------------------------------------------------------------------------------------------------------------
NET EXPENSES $ 490,296 $ 141,142 $ 789,272 $ 590,717
- -------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 5,318,760 $ 2,146,952 $ 8,526,230 $ 6,229,950
- -------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 1,691,721 $ 766,484 $ 1,248,465 $ 2,187,074
Financial futures contracts (69,065) 4,864 (12,636) 30,318
Options -- 39,791 199,446 --
- -------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 1,622,656 $ 811,139 $ 1,435,275 $ 2,217,392
- -------------------------------------------------------------------------------------------------------------------------
Change in unrealized
appreciation (depreciation)
--
Investments (identified cost
basis) $ (4,991,842) $ (2,291,100) $ (5,186,083) $ (6,721,063)
Financial futures contracts 30,843 1,935 8,127 34,736
- -------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $ (4,960,999) $ (2,289,165) $ (5,177,956) $ (6,686,327)
- -------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $ (3,338,343) $ (1,478,026) $ (3,742,681) $ (4,468,935)
- -------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,980,417 $ 668,926 $ 4,783,549 $ 1,761,015
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
54
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO NEW JERSEY PORTFOLIO PENNSYLVANIA PORTFOLIO TEXAS PORTFOLIO
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
Investment Income
- ---------------------------------------------------------------------------------------------------------------------------
Interest $ 3,776,714 $ 19,527,919 $ 20,690,242 $ 987,080
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 3,776,714 $ 19,527,919 $ 20,690,242 $ 987,080
- ---------------------------------------------------------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 217,205 $ 1,481,949 $ 1,558,973 $ 26,732
Trustees fees and expenses 9,395 25,838 25,379 452
Custodian fee 39,611 157,661 186,114 14,986
Legal and accounting services 23,746 38,343 38,117 17,817
Miscellaneous 13,942 44,230 49,633 5,478
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 303,899 $ 1,748,021 $ 1,858,216 $ 65,465
- ---------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 12,061 $ 34,765 $ 119,854 $ 5,457
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 12,061 $ 34,765 $ 119,854 $ 5,457
- ---------------------------------------------------------------------------------------------------------------------------
NET EXPENSES $ 291,838 $ 1,713,256 $ 1,738,362 $ 60,008
- ---------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 3,484,876 $ 17,814,663 $ 18,951,880 $ 927,072
- ---------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 753,339 $ 6,342,302 $ 5,782,186 $ 329,438
Financial futures contracts 95,090 740,361 85,296 --
- ---------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 848,429 $ 7,082,663 $ 5,867,482 $ 329,438
- ---------------------------------------------------------------------------------------------------------------------------
Change in unrealized
appreciation (depreciation)
--
Investments (identified cost
basis) $ (3,114,319) $ (19,108,966) $ (18,419,989) $ (862,443)
Financial futures contracts 11,880 59,400 98,076 --
- ---------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $ (3,102,439) $ (19,049,566) $ (18,321,913) $ (862,443)
- ---------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $ (2,254,010) $ (11,966,903) $ (12,454,431) $ (533,005)
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,230,866 $ 5,847,760 $ 6,497,449 $ 394,067
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
55
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net
Assets ARIZONA PORTFOLIO COLORADO PORTFOLIO CONNECTICUT PORTFOLIO MICHIGAN PORTFOLIO
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 5,318,760 $ 2,146,952 $ 8,526,230 $ 6,229,950
Net realized gain 1,622,656 811,139 1,435,275 2,217,392
Net change in unrealized
appreciation
(depreciation) (4,960,999) (2,289,165) (5,177,956) (6,686,327)
- -----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 1,980,417 $ 668,926 $ 4,783,549 $ 1,761,015
- -----------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 13,039,976 $ 3,990,873 $ 15,311,591 $ 5,494,726
Withdrawals (23,779,211) (6,586,932) (27,156,440) (28,028,857)
- -----------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM CAPITAL TRANSACTIONS $(10,739,235) $(2,596,059) $(11,844,849) $(22,534,131)
- -----------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (8,758,818) $(1,927,133) $ (7,061,300) $(20,773,116)
- -----------------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------
At beginning of year $103,092,106 $39,801,200 $164,954,888 $130,236,468
- -----------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 94,333,288 $37,874,067 $157,893,588 $109,463,352
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
56
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net
Assets MINNESOTA PORTFOLIO NEW JERSEY PORTFOLIO PENNSYLVANIA PORTFOLIO TEXAS PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 3,484,876 $ 17,814,663 $ 18,951,880 $ 927,072
Net realized gain 848,429 7,082,663 5,867,482 329,438
Net change in unrealized
appreciation
(depreciation) (3,102,439) (19,049,566) (18,321,913) (862,443)
- -------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 1,230,866 $ 5,847,760 $ 6,497,449 $ 394,067
- -------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 6,142,642 $ 37,233,317 $ 25,746,805 $ 980,095
Withdrawals (13,964,317) (62,376,808) (76,902,838) (3,446,497)
- -------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM CAPITAL TRANSACTIONS $ (7,821,675) $(25,143,491) $(51,156,033) $(2,466,402)
- -------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (6,590,809) $(19,295,731) $(44,658,584) $(2,072,335)
- -------------------------------------------------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 66,983,677 $328,629,138 $359,531,875 $17,837,487
- -------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 60,392,868 $309,333,407 $314,873,291 $15,765,152
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
57
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JULY 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets ARIZONA PORTFOLIO COLORADO PORTFOLIO CONNECTICUT PORTFOLIO MICHIGAN PORTFOLIO
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 5,610,913 $ 2,226,153 $ 8,810,104 $ 7,237,297
Net realized gain (loss) 2,209,801 468,233 (472,006) 2,386,197
Net change in unrealized appreciation
(depreciation) (945,220) (390,688) 1,757,677 (1,160,625)
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 6,875,494 $ 2,303,698 $ 10,095,775 $ 8,462,869
- ---------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 8,495,182 $ 4,707,220 $ 9,761,887 $ 5,251,473
Withdrawals (24,750,363) (9,834,162) (29,880,364) (33,701,520)
- ---------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CAPITAL
TRANSACTIONS $(16,255,181) $(5,126,942) $(20,118,477) $(28,450,047)
- ---------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (9,379,687) $(2,823,244) $(10,022,702) $(19,987,178)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ---------------------------------------------------------------------------------------------------------------------------------
At beginning of year $112,471,793 $42,624,444 $174,977,590 $150,223,646
- ---------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $103,092,106 $39,801,200 $164,954,888 $130,236,468
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
58
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JULY 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets MINNESOTA PORTFOLIO NEW JERSEY PORTFOLIO PENNSYLVANIA PORTFOLIO TEXAS PORTFOLIO
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 3,612,278 $ 18,732,197 $ 21,632,540 $ 1,099,441
Net realized gain 701,035 1,707,025 2,080,757 476,323
Net change in unrealized appreciation
(depreciation) (236,413) 983,456 (7,214,291) (276,213)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 4,076,900 $ 21,422,678 $ 16,499,006 $ 1,299,551
- -----------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 4,912,748 $ 28,452,460 $ 23,151,071 $ 710,511
Withdrawals (12,679,645) (74,018,070) (82,338,942) (5,848,716)
- -----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CAPITAL
TRANSACTIONS $ (7,766,897) $(45,565,610) $(59,187,871) $(5,138,205)
- -----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (3,689,997) $(24,142,932) $(42,688,865) $(3,838,654)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 70,673,674 $352,772,070 $402,220,740 $21,676,141
- -----------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 66,983,677 $328,629,138 $359,531,875 $17,837,487
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
59
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO
-----------------------------------------------------------------
YEAR ENDED JULY 31,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------
Expenses(1) 0.49% 0.50% 0.50% 0.51% 0.52%
Expenses after custodian fee reduction 0.48% 0.48% 0.49% 0.50% --
Net investment income 5.21% 5.27% 5.56% 5.53% 5.81%
Portfolio Turnover 38% 23% 10% 18% 22%
- ------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $ 94,333 $ 103,092 $ 112,472 $ 129,862 $ 144,521
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the 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 July 31, 1995 has not been adjusted to
reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
60
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
COLORADO PORTFOLIO
-------------------------------------------------------------
YEAR ENDED JULY 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- --------------------------------------------------------------------------------------------------------
Net expenses(1) 0.39% 0.40% 0.40% 0.40% 0.25%
Net expenses after custodian fee
reduction 0.35% 0.37% 0.36% 0.36% --
Net investment income 5.36% 5.49% 5.86% 5.75% 6.05%
Portfolio Turnover 33% 18% 14% 53% 52%
- --------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $ 37,874 $ 39,801 $ 42,624 $ 45,416 $ 46,077
- --------------------------------------------------------------------------------------------------------
+ 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) 0.42% 0.40%
Expenses after custodian fee reduction 0.38% --
Net investment income 5.73% 5.90%
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the 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 July 31, 1995 has not been adjusted to
reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
61
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
CONNECTICUT PORTFOLIO
------------------------------------------------------------------
YEAR ENDED JULY 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- -------------------------------------------------------------------------------------------------------------
Expenses(1) 0.50% 0.51% 0.53% 0.52% 0.53%
Expenses after custodian fee reduction 0.48% 0.50% 0.53% 0.50% --
Net investment income 5.15% 5.20% 5.50% 5.49% 5.77%
Portfolio Turnover 18% 7% 11% 23% 29%
- -------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $ 157,894 $ 164,955 $ 174,978 $ 187,617 $ 195,276
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the 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 July 31, 1995 has not been adjusted to
reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
62
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
MICHIGAN PORTFOLIO
------------------------------------------------------------------
YEAR ENDED JULY 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- -------------------------------------------------------------------------------------------------------------
Expenses(1) 0.49% 0.50% 0.52% 0.54% 0.48%
Expenses after custodian fee reduction 0.48% 0.48% 0.50% 0.52% --
Net investment income 5.10% 5.19% 5.45% 5.50% 5.85%
Portfolio Turnover 31% 26% 16% 49% 54%
- -------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $ 109,463 $ 130,236 $ 150,224 $ 173,465 $ 191,263
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the 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 July 31, 1995 has not been adjusted to
reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
63
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO
-------------------------------------------------------------
YEAR ENDED JULY 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% 0.48% 0.47%
Expenses after custodian fee reduction 0.44% 0.45% 0.44% 0.46% --
Net investment income 5.28% 5.28% 5.71% 5.69% 5.83%
Portfolio Turnover 19% 23% 22% 45% 76%
- --------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $ 60,393 $ 66,984 $ 70,674 $ 76,090 $ 82,968
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the 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 July 31, 1995 has not been adjusted to
reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
64
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
NEW JERSEY PORTFOLIO
------------------------------------------------------------------
YEAR ENDED JULY 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- -------------------------------------------------------------------------------------------------------------
Expenses(1) 0.53% 0.54% 0.54% 0.53% 0.52%
Expenses after custodian fee reduction 0.52% 0.52% 0.52% 0.52% --
Net investment income 5.39% 5.52% 5.84% 5.82% 5.96%
Portfolio Turnover 32% 14% 24% 39% 54%
- -------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $ 309,333 $ 328,629 $ 352,772 $ 386,244 $ 411,038
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the 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 July 31, 1995 has not been adjusted to
reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
65
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
PENNSYLVANIA PORTFOLIO
------------------------------------------------------------------
YEAR ENDED JULY 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- -------------------------------------------------------------------------------------------------------------
Expenses(1) 0.54% 0.54% 0.55% 0.54% 0.49%
Expenses after custodian fee reduction 0.50% 0.50% 0.51% 0.50% --
Net investment income 5.49% 5.66% 5.96% 5.90% 6.02%
Portfolio Turnover 27% 13% 17% 30% 44%
- -------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $ 314,873 $ 359,532 $ 402,221 $ 448,182 $ 502,250
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the 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 July 31, 1995 has not been adjusted to
reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
66
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
TEXAS PORTFOLIO
-------------------------------------------------------------
YEAR ENDED JULY 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- --------------------------------------------------------------------------------------------------------
Net expenses(1) 0.39% 0.38% 0.37% 0.32% 0.08%
Net expenses after custodian fee
reduction 0.36% 0.35% 0.35% 0.27% --
Net investment income 5.50% 5.58% 5.79% 5.81% 6.20%
Portfolio Turnover 55% 17% 17% 39% 49%
- --------------------------------------------------------------------------------------------------------
NET ASSETS, END OF YEAR (000'S OMITTED) $ 15,765 $ 17,837 $ 21,676 $ 24,367 $ 28,227
- --------------------------------------------------------------------------------------------------------
+ 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) 0.42% 0.35%
Expenses after custodian fee reduction 0.37% --
Net investment income 5.71% 5.93%
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the 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 July 31, 1995 has not been adjusted to
reflect this change.
SEE NOTES TO FINANCIAL STATEMENTS
67
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
- -------------------------------------------
Arizona Municipals Portfolio (Arizona Portfolio), Colorado Municipals
Portfolio (Colorado Portfolio), Connecticut Municipals Portfolio (Connecticut
Portfolio), Michigan Municipals Portfolio (Michigan Portfolio), Minnesota
Municipals Portfolio (Minnesota Portfolio), New Jersey Municipals Portfolio
(New Jersey Portfolio), Pennsylvania Municipals Portfolio (Pennsylvania
Portfolio) and Texas Municipals Portfolio (Texas Portfolio), collectively the
Portfolios, are registered under the Investment Company Act of 1940 as
non-diversified open-end management investment companies which were organized
as trusts under the laws of the State of New York on May 1, 1992. The
Declarations of Trust permit the Trustees to issue interests in the
Portfolios. The following is a summary of significant accounting policies of
the Portfolios. The policies are in conformity with generally accepted
accounting principles.
A Investment Valuations -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts and options on
futures contracts listed on commodity exchanges are valued at closing
settlement prices. Over-the-counter options on financial futures contracts
are normally valued at the mean between the latest bid and asked prices.
Short-term obligations, maturing in sixty days or less, are valued at
amortized cost, which approximates value. Investments for which valuations or
market quotations are unavailable are valued at fair value using methods
determined in good faith by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C Federal Income Taxes -- The Portfolios are treated as partnerships for
federal tax purposes. No provision is made by the Portfolios for federal or
state taxes on any taxable income of the Portfolios because each investor in
the Portfolios is ultimately responsible for the payment of any taxes. Since
some of the Portfolios' investors are regulated investment companies that
invest all or substantially all of their assets in the Portfolios, the
Portfolios normally must satisfy the applicable source of income and
diversification requirements (under the Internal Revenue Code) in order for
their respective investors to satisfy them. The Portfolios will allocate at
least annually among their respective investors each investor's distributive
share of the Portfolios' net taxable (if any) and tax-exempt investment
income, net realized capital gains, and any other items of income, gain,
loss, deduction or credit. Interest income received by the Portfolios on
investments in municipal bonds, which is excludable from gross income under
the Internal Revenue Code, will retain its status as income exempt from
federal income tax when allocated to each Portfolio's investors. The portion
of such interest, if any, earned on private activity bonds issued after
August 7, 1986, may be considered a tax preference item for investors.
D Financial Futures Contracts -- Upon the entering of a financial futures
contract, a Portfolio is required to deposit ("initial margin") either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by a Portfolio ("margin maintenance") each day, dependent on
the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by a Portfolio. A
Portfolio's investment in financial futures contracts is designed only to
hedge against anticipated future changes in interest rates. Should interest
rates move unexpectedly, a Portfolio may not achieve the anticipated benefits
of the financial futures contracts and may realize a loss.
E Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by a Portfolio, the premium paid is recorded
as an investment, the value of which is marked-to-market daily. When a
purchased option expires, a Portfolio will realize a loss in the amount of
the cost of the option. When a Portfolio enters into a closing sale
transaction, the Portfolio will realize a gain or loss depending on whether
the sales proceeds from the closing sale transaction are greater or less than
the cost of the option. When a Portfolio exercises a put option, settlement
is made in cash. The risk associated with purchasing options is limited to
the premium originally paid.
F When-issued and Delayed Delivery
Transactions -- The Portfolios may engage in when-issued or delayed delivery
transactions. The Portfolios record when-issued securities on trade date and
maintain security positions such that sufficient liquid assets will be
available to make payments for the securities purchased. Securities purchased
on a when-issued or delayed delivery basis are marked-to-market daily and
begin earning interest on settlement date.
G Other -- Investment transactions are accounted for on a trade date basis.
H 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
68
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
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.
I Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
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 July 31, 1999, each Portfolio paid advisory
fees as follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT EFFECTIVE RATE*
<S> <C> <C>
- -----------------------------------------------------------------------
Arizona $ 386,713 0.38%
Colorado 94,915 0.24%
Connecticut 681,988 0.41%
Michigan 477,860 0.39%
Minnesota 217,205 0.33%
New Jersey 1,481,949 0.45%
Pennsylvania 1,558,973 0.45%
Texas 26,732 0.16%
</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 July 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 July 31,
1999 were as follows:
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO
<S> <C>
- -------------------------------------------------------
Purchases $ 37,865,471
Sales 43,011,588
<CAPTION>
COLORADO PORTFOLIO
<S> <C>
- -------------------------------------------------------
Purchases $ 12,878,234
Sales 13,562,553
<CAPTION>
CONNECTICUT PORTFOLIO
<S> <C>
- -------------------------------------------------------
Purchases $ 29,185,192
Sales 32,911,750
<CAPTION>
MICHIGAN PORTFOLIO
<S> <C>
- -------------------------------------------------------
Purchases $ 37,953,141
Sales 56,397,404
<CAPTION>
MINNESOTA PORTFOLIO
<S> <C>
- -------------------------------------------------------
Purchases $ 12,489,907
Sales 16,434,221
<CAPTION>
NEW JERSEY PORTFOLIO
<S> <C>
- -------------------------------------------------------
Purchases $ 103,679,221
Sales 110,582,448
<CAPTION>
PENNSYLVANIA PORTFOLIO
<S> <C>
- -------------------------------------------------------
Purchases $ 91,876,726
Sales 121,543,776
<CAPTION>
TEXAS PORTFOLIO
<S> <C>
- -------------------------------------------------------
Purchases $ 9,184,002
Sales 10,745,861
</TABLE>
4 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at July 31, 1999, as computed on a
federal income tax basis, are as follows:
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 89,483,162
- -------------------------------------------------------
Gross unrealized appreciation $ 5,523,875
Gross unrealized depreciation $ (1,356,952)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 4,166,923
- -------------------------------------------------------
</TABLE>
69
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
<TABLE>
<CAPTION>
COLORADO PORTFOLIO
- -------------------------------------------------------
<S> <C>
AGGREGATE COST $ 36,443,369
- -------------------------------------------------------
Gross unrealized appreciation $ 1,654,028
Gross unrealized depreciation (646,552)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 1,007,476
- -------------------------------------------------------
<CAPTION>
CONNECTICUT PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 149,320,769
- -------------------------------------------------------
Gross unrealized appreciation $ 7,043,939
Gross unrealized depreciation (1,454,529)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 5,589,410
- -------------------------------------------------------
<CAPTION>
MICHIGAN PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 103,767,276
- -------------------------------------------------------
Gross unrealized appreciation $ 5,729,431
Gross unrealized depreciation (1,532,365)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 4,197,066
- -------------------------------------------------------
<CAPTION>
MINNESOTA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 57,131,192
- -------------------------------------------------------
Gross unrealized appreciation $ 3,121,710
Gross unrealized depreciation (392,835)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 2,728,875
- -------------------------------------------------------
<CAPTION>
NEW JERSEY PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 292,856,660
- -------------------------------------------------------
Gross unrealized appreciation $ 18,735,537
Gross unrealized depreciation (5,014,227)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 13,721,310
- -------------------------------------------------------
<CAPTION>
PENNSYLVANIA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 304,569,208
- -------------------------------------------------------
Gross unrealized appreciation $ 17,886,078
Gross unrealized depreciation (10,929,681)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 6,956,397
- -------------------------------------------------------
<CAPTION>
TEXAS PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 14,830,737
- -------------------------------------------------------
Gross unrealized appreciation $ 824,688
Gross unrealized depreciation (215,032)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 609,656
- -------------------------------------------------------
</TABLE>
5 Line of Credit
- -------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and their affiliates in a committed $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 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 July 31, 1999, the
Arizona Portfolio, New Jersey Portfolio, and Pennsylvania Portfolio had
balances outstanding pursuant to this line of credit of $200,000, $900,000
and $900,000 respectively. The Portfolios did not have any significant
borrowings or allocated fees during the year ended July 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 July 31, 1999, there were no outstanding obligations under these financial
instruments.
70
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND INVESTORS OF ARIZONA MUNICIPALS PORTFOLIO, COLORADO
MUNICIPALS PORTFOLIO, CONNECTICUT MUNICIPALS PORTFOLIO, MICHIGAN MUNICIPALS
PORTFOLIO, MINNESOTA MUNICIPALS PORTFOLIO, NEW JERSEY MUNICIPALS PORTFOLIO,
PENNSYLVANIA MUNICIPALS PORTFOLIO AND TEXAS MUNICIPALS PORTFOLIO:
- ---------------------------------------------
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Arizona Municipals Portfolio, Colorado
Municipals Portfolio, Connecticut Municipals Portfolio, Michigan Municipals
Portfolio, Minnesota Municipals Portfolio, New Jersey Municipals Portfolio,
Pennsylvania Municipals Portfolio and Texas Municipals Portfolio as of July 31,
1999, the related statements of operations for the year then ended, the
statements of changes in net assets for the years ended July 31, 1999 and 1998
and supplementary data for each of the years in the five year period ended July
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 July 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 Arizona Municipals
Portfolio, Colorado Municipals Portfolio, Connecticut Municipals Portfolio,
Michigan Municipals Portfolio, Minnesota Municipals Portfolio, New Jersey
Municipals Portfolio, Pennsylvania Municipals Portfolio and Texas Municipals
Portfolio at July 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
September 3, 1999
71
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
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
James B. Hawkes
Vice President and Trustee
William H. Ahern, Jr.
Vice President and Portfolio
Manager of Colorado and
Connecticut Municipals Portfolios
Timothy T. Browse
Vice President and Portfolio
Manager of Michigan
and Pennsylvania
Municipals Portfolios
Cynthia J. Clemson
Vice President and Portfolio
Manager of Arizona
Municipals Portfolio
Robert B. MacIntosh
Vice President and Portfolio
Manager of Minnesota and New
Jersey Municipals Portfolios
Thomas M. Metzold
Vice President and Portfolio
Manager of Texas
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
72
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<PAGE>
INVESTMENT ADVISER OF
THE PORTFOLIOS
Boston Management and Research
The Eaton Vance Building
255 State Street
Boston, MA 02109
ADMINISTRATOR OF THE FUNDS
Eaton Vance Management
The Eaton Vance Building
255 State Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
INDEPENDENT AUDITORS
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116-5022
EATON VANCE MUNICIPALS TRUST
The Eaton Vance Building
255 State Street
Boston, MA 02109
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution plan,
sales charges and expenses. Please read the prospectus carefully before you
invest or send money.
- --------------------------------------------------------------------------------
2-2253-9/99 8CSRC-9/99
