<PAGE>
ALABAMA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Education -- 1.7%
---------------------------------------------------------------------------------------
A3 NR $ 1,500 Birmingham-Southern College, 5.35%,
12/1/19 $ 1,537,365
---------------------------------------------------------------------------------------
$ 1,537,365
---------------------------------------------------------------------------------------
Electric Utilities -- 0.5%
---------------------------------------------------------------------------------------
Baa1 BBB+ $ 500 Puerto Rico Electric Power Authority,
5.00%, 7/1/28 $ 490,535
---------------------------------------------------------------------------------------
$ 490,535
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 12.6%
---------------------------------------------------------------------------------------
Aaa AAA $ 250 Fairfield City, (AMBAC), Prerefunded to
6/1/02, 6.30%, 6/1/22 $ 275,248
NR BBB 2,000 Gadsen East Medical Clinic Board,
(Baptist Hospital), Prerefunded to
11/1/01, 7.80%, 11/1/21 2,252,040
Aaa AAA 2,000 Huntsville, Health Care Facilities,
(MBIA), Prerefunded to 6/1/04, 6.50%,
6/1/13 2,282,420
Aaa AAA 5,000 Scottsboro, Water, Sewer and Gas,
(AMBAC), Prerefunded to 6/1/04, 6.50%,
12/1/14(1) 5,716,349
Aaa AAA 1,000 West Morgan-East Lawrence, Water
Authority, (FSA), Prerefunded to
8/15/04, 6.85%, 8/15/25 1,164,800
---------------------------------------------------------------------------------------
$ 11,690,857
---------------------------------------------------------------------------------------
General Obligations -- 0.3%
---------------------------------------------------------------------------------------
Baa1 A $ 650 Puerto Rico, Public Improvement, 0.00%,
7/1/15 $ 292,728
---------------------------------------------------------------------------------------
$ 292,728
---------------------------------------------------------------------------------------
Hospital -- 12.9%
---------------------------------------------------------------------------------------
NR BBB $ 3,000 Alexander City, Special Care, (Russell
Hospital), 6.00%, 12/1/22 $ 3,079,830
Baa3 BBB- 1,000 Baldwin County, (Thomas Hospital),
6.75%, 4/1/21 1,083,710
Baa2 NR 1,000 Cullman Medical Clinic Board, (Cullman
Regional Medical Center), 6.50%, 2/15/23 1,059,790
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Hospital (continued)
---------------------------------------------------------------------------------------
A3 NR $ 3,550 Jasper Medical Clinic Board, (Walker
Regional Medical Center), 6.375%, 7/1/18 $ 3,735,558
Baa3 BBB 2,000 Marshall County Healthcare Authority,
(Boaz-Albertville Medical Center),
7.00%, 1/1/20 2,195,140
A A- 745 Montgomery, Medical Clinic Board,
(Jackson Hospital), 7.00%, 3/1/15 782,891
---------------------------------------------------------------------------------------
$ 11,936,919
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 11.4%
---------------------------------------------------------------------------------------
Baa1 BBB $ 1,200 Courtland, (Champion International
Corp.), 7.20%, 12/1/13 $ 1,312,092
Baa1 BBB 2,000 Courtland, (Champion International
Corp.), (AMT), 6.50%, 9/1/25 2,138,700
Baa1 BBB 550 Courtland, (Champion International
Corp.), (AMT), 7.00%, 6/1/22 591,707
Baa3 BBB- 3,020 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 3,264,469
A3 BBB+ 1,000 Selma, Solid Waste Disposal,
(International Paper), (AMT), 6.00%,
12/1/17 1,036,850
A2 A+ 2,000 Tallahassee, (United Tech), 6.10%,
8/1/14 2,220,140
---------------------------------------------------------------------------------------
$ 10,563,958
---------------------------------------------------------------------------------------
Insured-Education -- 11.0%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Alabama Agricultural and Mechanical
University, (MBIA), 5.00%, 11/1/25 $ 1,975,180
Aaa AAA 750 Alabama State Board of Education
Revenue, (Southern Union State Community
College), (MBIA), 5.00%, 7/1/18 745,815
Aaa AAA 1,330 Alabama State Board of Education,
(AMBAC), 5.25%, 9/1/17 1,352,025
Aaa AAA 1,500 University of Alabama, Student Housing,
(MBIA), 5.00%, 6/1/16 1,505,775
Aaa AAA 7,500 University of South Alabama, (AMBAC),
0.00%, 11/15/16(2) 3,062,025
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
47
<PAGE>
ALABAMA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Education (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 University of South Alabama, (AMBAC),
5.00%, 11/15/15 $ 1,517,010
---------------------------------------------------------------------------------------
$ 10,157,830
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 2.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Columbia, (Alabama Power), (AMBAC),
6.50%, 9/1/23 $ 2,071,740
Aaa AAA 250 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 7/1/03(3) 289,375
---------------------------------------------------------------------------------------
$ 2,361,115
---------------------------------------------------------------------------------------
Insured-General Obligations -- 10.2%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Daphne, (AMBAC), 5.125%, 4/1/17 $ 507,140
Aaa AAA 1,000 Greenville, (AMBAC), 5.25%, 12/1/21 1,011,730
Aaa AAA 2,000 Madison, Warrants (MBIA), 5.00%, 9/1/27 1,974,540
Aaa AAA 3,250 Madison, Warrants, (MBIA), 6.00%, 2/1/24 3,620,273
Aaa AAA 4,000 Mobile, (MBIA), 0.00%, 8/15/20 1,282,880
Aaa AAA 500 North Port, (AMBAC), 5.70%, 3/1/21 532,875
Aaa AAA 500 Troy City, (CAPG), 6.60%, 6/1/12 554,595
---------------------------------------------------------------------------------------
$ 9,484,033
---------------------------------------------------------------------------------------
Insured-Hospital -- 4.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Anniston Regional Medical Center Board,
(AMBAC), 5.125%, 6/1/28 $ 1,976,520
Aaa AAA 1,810 Bessemer, Medical Clinic Board, (MBIA),
6.00%, 5/15/19 1,968,484
---------------------------------------------------------------------------------------
$ 3,945,004
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Miscellaneous -- 6.1%
---------------------------------------------------------------------------------------
Aaa AAA $ 4,500 Alabama State Docks Department, (MBIA),
(AMT), 6.30%, 10/1/21 $ 4,992,569
Aaa AAA 1,825 Birmingham Jefferson, Civic Center
Authority, (MBIA), 0.00%, 9/1/18 675,323
---------------------------------------------------------------------------------------
$ 5,667,892
---------------------------------------------------------------------------------------
Insured-Pooled Loans -- 1.0%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Alabama Water Pollution Control
Authority, (AMBAC), 4.75%, 8/15/18 $ 963,670
---------------------------------------------------------------------------------------
$ 963,670
---------------------------------------------------------------------------------------
Insured-Solid Waste -- 4.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 250 Huntsville, Solid Waste Disposal,
(FGIC), (AMT), 7.00%, 10/1/08 $ 267,365
Aaa AAA 4,000 Huntsville, Solid Waste Disposal,
(FGIC), (AMT), 7.00%, 10/1/14 4,274,399
---------------------------------------------------------------------------------------
$ 4,541,764
---------------------------------------------------------------------------------------
Insured-Transportation -- 2.0%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Huntsville-Madison County Airport,
(AMT), (MBIA), 5.40%, 7/1/19 $ 1,018,970
Aaa AAA 2,000 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/16 868,020
---------------------------------------------------------------------------------------
$ 1,886,990
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 7.1%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,050 Bessemer, Water, (AMBAC), 5.75%, 7/1/26 $ 2,196,268
Aaa AAA 1,000 Limestone County Water and Sewer
Authority, (AMBAC), 5.00%, 12/1/24 987,790
Aaa AAA 3,075 Prichard Water and Sewer, (AMBAC),
6.125%, 11/15/14 3,433,945
---------------------------------------------------------------------------------------
$ 6,618,003
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
48
<PAGE>
ALABAMA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lease Revenue / Certificates of Participation -- 0.6%
---------------------------------------------------------------------------------------
NR BBB $ 500 Puerto Rico, (Guaynabo Municipal
Government Center Lease), 5.625%, 7/1/22 $ 515,350
---------------------------------------------------------------------------------------
$ 515,350
---------------------------------------------------------------------------------------
Miscellaneous -- 0.1%
---------------------------------------------------------------------------------------
A A $ 100 Tennessee Valley, Exhibit Commission,
6.70%, 6/1/10 $ 109,653
---------------------------------------------------------------------------------------
$ 109,653
---------------------------------------------------------------------------------------
Nursing Home -- 1.1%
---------------------------------------------------------------------------------------
NR NR $ 325 Fairhope Midtown Medical Clinic Board,
(Beverly Enterprises), 6.375%, 6/1/09 $ 326,034
NR NR 670 Mobile, Midtown Medical Clinic Board,
(Beverly Enterprises), 7.00%, 4/1/07 677,705
---------------------------------------------------------------------------------------
$ 1,003,739
---------------------------------------------------------------------------------------
Transportation -- 4.0%
---------------------------------------------------------------------------------------
Baa1 A $ 1,000 Puerto Rico Highway and Transportation
Authority, 4.75%, 7/1/38 $ 949,700
Baa1 A- 800 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/22 786,424
Baa1 A 2,000 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/38 1,951,140
---------------------------------------------------------------------------------------
$ 3,687,264
---------------------------------------------------------------------------------------
Water and Sewer -- 5.7%
---------------------------------------------------------------------------------------
Aa3 AA- $ 4,000 Birmingham, Water and Sewer Revenue,
4.75%, 1/1/29 $ 3,748,479
NR NR 1,500 Moulton City, Water, 6.30%, 1/1/18 1,555,770
---------------------------------------------------------------------------------------
$ 5,304,249
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $85,855,302) $ 92,758,918
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Alabama
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 59.4% of securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.6% to 28.5% of total investments.
(1) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(2) When-issued security.
(3) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
49
<PAGE>
ARKANSAS MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Education -- 6.5%
---------------------------------------------------------------------------------------
NR A+ $ 2,750 Conway, Public Facilities Board,
(Hendrix College), 6.00%, 10/1/26 $ 2,929,959
A1 NR 500 University of Arkansas, 5.00%, 9/1/17 504,310
A1 NR 250 University of Arkansas, 5.00%, 12/1/18 247,965
---------------------------------------------------------------------------------------
$ 3,682,234
---------------------------------------------------------------------------------------
Electric Utilities -- 2.7%
---------------------------------------------------------------------------------------
Baa2 BBB+ $ 550 Jefferson, Pollution Control, (Arkansas
Power and Light), 6.30%, 6/1/18 $ 586,938
Baa2 BBB+ 500 Pope County, Pollution Control,
(Arkansas Power and Light), 6.30%,
12/1/16 534,660
Baa1 BBB+ 1,000 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 401,940
---------------------------------------------------------------------------------------
$ 1,523,538
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 1.1%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Harrison, Residential Housing Facility
Board, Single Family Mortgage, (FGIC),
Escrowed to Maturity, 7.40%, 9/1/11 $ 635,650
---------------------------------------------------------------------------------------
$ 635,650
---------------------------------------------------------------------------------------
General Obligations -- 3.1%
---------------------------------------------------------------------------------------
Aa3 AA $ 2,750 Arkansas State College Savings, 0.00%,
6/1/14 $ 1,319,368
Baa1 A 500 Puerto Rico, 0.00%, 7/1/16 213,725
Baa1 A 500 Puerto Rico, 0.00%, 7/1/18 190,150
---------------------------------------------------------------------------------------
$ 1,723,243
---------------------------------------------------------------------------------------
Hospital -- 13.1%
---------------------------------------------------------------------------------------
Baa1 NR $ 700 Baxter, Hospital Improvement, 7.25%,
9/1/07 $ 760,053
Baa1 NR 750 Baxter, Hospital Improvement, 7.50%,
9/1/21 818,153
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Hospital (continued)
---------------------------------------------------------------------------------------
NR A+ $ 550 Little Rock, Health Facilities Board,
(Baptist Medical Center), 5.50%, 9/1/15 $ 572,171
NR A+ 1,125 Little Rock, Health Facilities Board,
(Baptist Medical Center), 6.80%, 11/1/05 1,302,199
NR BBB 1,500 Paragould, Hospital, 6.375%, 10/1/17 1,597,335
NR A- 2,250 Pulaski County, (Children's Hospital),
6.20%, 3/1/22 2,366,798
---------------------------------------------------------------------------------------
$ 7,416,709
---------------------------------------------------------------------------------------
Housing -- 13.3%
---------------------------------------------------------------------------------------
A NR $ 3,000 Arkansas Development Finance Authority,
0.00%, 12/1/11 $ 1,209,600
NR NR 500 Arkansas Development Finance Authority,
MFMR, (Park Apartments), (AMT), 5.95%,
12/1/28 497,185
NR AAA 1,135 Arkansas Development Finance Authority,
Single Family Mortgage, (GNMA), (AMT),
5.80%, 6/1/25 1,166,156
NR AAA 990 Arkansas Development Finance Authority,
Single Family Mortgage, (GNMA), (AMT),
7.45%, 1/1/27 1,097,633
NR AAA 3,270 Arkansas Development Finance Authority,
Single Family Mortgage, (GNMA/FNMA),
(AMT), 6.70%, 7/1/27 3,529,375
---------------------------------------------------------------------------------------
$ 7,499,949
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 15.8%
---------------------------------------------------------------------------------------
NR A- $ 750 Arkansas Development Finance Authority,
Economic Development, (AMT), 6.00%,
10/1/11 $ 790,560
Baa2 A 2,350 Baxter, (Aeroquip Corp.), 5.80%,
10/1/13(1) 2,558,304
A1 AA- 2,500 Blytheville, Solid Waste Recycling and
Sewer Treatment, (Nucor Corp.), (AMT),
6.90%, 12/1/21(1) 2,683,925
A1 A+ 1,000 Jonesboro, (Anheuser-Busch), 6.50%,
11/15/12 1,094,590
Baa2 NR 1,000 Little River County, (Georgia-Pacific
Corp.), (AMT), 5.60%, 10/1/26 995,070
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
50
<PAGE>
ARKANSAS MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Development Revenue (continued)
---------------------------------------------------------------------------------------
A3 BBB+ $ 775 Pine Bluff, Solid Waste Disposal,
(International Paper), (AMT), 5.55%,
10/1/17 $ 784,548
---------------------------------------------------------------------------------------
$ 8,906,997
---------------------------------------------------------------------------------------
Insured-Education -- 3.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,625 Arkansas State University Revenue
Housing System, (AMBAC), 5.05%,
3/1/24(2) $ 1,621,555
Aaa AAA 500 University of Central Arkansas, (AMBAC),
6.125%, 4/1/26 553,745
---------------------------------------------------------------------------------------
$ 2,175,300
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 6.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 250 North Little Rock, Electric System,
(MBIA), 6.50%, 7/1/10 $ 297,100
Aaa AAA 2,390 North Little Rock, Electric System,
(MBIA), 6.50%, 7/1/15 2,860,064
Aaa AAA 450 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 7/1/03(3) 520,875
---------------------------------------------------------------------------------------
$ 3,678,039
---------------------------------------------------------------------------------------
Insured-General Obligations -- 0.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Arkansas State College Savings, (FGIC),
0.00%, 6/1/17 $ 200,370
---------------------------------------------------------------------------------------
$ 200,370
---------------------------------------------------------------------------------------
Insured-Hospital -- 6.7%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,610 Jonesboro, Residential Housing and
Health Care Facilities Board Hospital,
(Saint Bernard Regional Medical Center),
(AMBAC), 5.90%, 7/1/16 $ 2,819,765
Aaa AAA 400 Saline County, Retirement Housing and
Healthcare Facilities Board, (Evan
Lutheran Good Samaritan), (AMBAC),
5.80%, 5/1/11 434,200
Aaa AAA 500 Saline County, Retirement Housing and
Healthcare Facilities Board, (Evan
Lutheran Good Samaritan), (AMBAC),
6.00%, 6/1/18 543,855
---------------------------------------------------------------------------------------
$ 3,797,820
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 5.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,250 Arkansas Development Finance Authority,
Wastewater System, (MBIA), 5.00%, 6/1/15 $ 1,262,413
Aaa AAA 1,250 Arkansas Development Finance Authority,
Wastewater System, (MBIA), 5.40%,
12/1/15 1,291,700
Aaa NR 500 Texarkana, Water and Sewer, (FGIC),
5.40%, 9/1/15 521,505
---------------------------------------------------------------------------------------
$ 3,075,618
---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 0.5%
---------------------------------------------------------------------------------------
NR BBB $ 250 Puerto Rico, (Guaynabo Municipal
Government Center Lease), 5.625%, 7/1/22 $ 257,675
---------------------------------------------------------------------------------------
$ 257,675
---------------------------------------------------------------------------------------
Nursing Home -- 1.9%
---------------------------------------------------------------------------------------
NR A $ 1,000 Little Rock, Health Facilities Board,
(Baptist Medical Center-Parkway
Village), 7.00%, 10/1/17 $ 1,082,990
---------------------------------------------------------------------------------------
$ 1,082,990
---------------------------------------------------------------------------------------
Pooled Loans -- 4.9%
---------------------------------------------------------------------------------------
A2 NR $ 1,000 Arkansas State Student Loan Authority,
(AMT), 5.60%, 6/1/14 $ 1,016,570
A NR 1,000 Arkansas State Student Loan Authority,
(AMT), 6.25%, 6/1/10 1,044,010
A NR 610 Arkansas State Student Loan Authority,
(AMT), 7.25%, 6/1/09 711,974
---------------------------------------------------------------------------------------
$ 2,772,554
---------------------------------------------------------------------------------------
Special Tax Revenue -- 4.9%
---------------------------------------------------------------------------------------
A NR $ 2,000 Little Rock, Hotel and Restaurant Gross
Receipts Tax, 7.375%, 8/1/15 $ 2,511,040
NR AAA 250 Puerto Rico, Infrastructure Financing
Authority, Variable Rate, 7/1/28(3)(4) 248,438
---------------------------------------------------------------------------------------
$ 2,759,478
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
51
<PAGE>
ARKANSAS MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Transportation -- 2.0%
---------------------------------------------------------------------------------------
NR NR $ 750 Northwest Arkansas Regional Airport
Authority, (AMT), 7.625%, 2/1/27 $ 865,050
Baa1 A 250 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 247,685
---------------------------------------------------------------------------------------
$ 1,112,735
---------------------------------------------------------------------------------------
Water and Sewer -- 7.2%
---------------------------------------------------------------------------------------
NR AA $ 1,000 Arkansas Development Finance Authority,
(Waste Water System Revenue), 5.00%,
6/1/22 $ 998,010
A1 NR 1,500 Little Rock, Sewer, 5.50%, 8/1/14 1,535,145
NR NR 1,500 South Sebastian County, Water Users
Association, 6.15%, 6/1/23 1,543,860
---------------------------------------------------------------------------------------
$ 4,077,015
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $52,365,476) $ 56,377,914
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Arkansas
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 24.1% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.9% to 10.6% of total investments.
(1) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(2) When-issued security.
(3) Security has been issued as an inverse floater bond.
(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. At February 28,
1999, the value of these securities amounted to $248,438 or 0.5% of the
Portfolio's net assets.
SEE NOTES TO FINANCIAL STATEMENTS
52
<PAGE>
GEORGIA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Electric Utilities -- 12.4%
---------------------------------------------------------------------------------------
A1 A $ 2,000 Burke County Development Authority
Pollution Control (Georgia Power),
6.375%, 8/1/24 $ 2,050,820
A3 A 1,000 Georgia Municipal Electric Power
Authority, 0.00%, 1/1/12 507,350
A3 A 2,000 Georgia Municipal Electric Power
Authority, 8.25%, 1/1/11 2,651,080
A1 AA- 1,000 Monroe County, Development Authority
Pollution Control, (Gulf Power Scherer),
6.30%, 9/1/24 1,026,850
A3 A 2,000 Monroe County, Development Authority
Pollution Control, (Ogelthorpe Power),
6.55%, 1/1/06 2,258,640
A3 A 1,000 Monroe County, Development Authority
Pollution Control, (Ogelthorpe Power),
6.80%, 1/1/12 1,200,840
Baa1 BBB+ 665 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 267,290
---------------------------------------------------------------------------------------
$ 9,962,870
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 7.6%
---------------------------------------------------------------------------------------
Baa1 NR $ 2,000 Fulco County, Georgia Baptist Health,
Prerefunded to 9/1/02, 6.375%, 9/1/22 $ 2,210,980
NR AAA 500 Puerto Rico, RIBS, (AMBAC), Prerefunded
to 7/1/02, Variable Rate, 7/1/15(1)(2) 585,535
A3 NR 3,000 Savannah, (Saint Josephs Hospital),
Prerefunded to 7/1/03, 6.20%, 7/1/23 3,331,020
---------------------------------------------------------------------------------------
$ 6,127,535
---------------------------------------------------------------------------------------
General Obligations -- 3.3%
---------------------------------------------------------------------------------------
Aa2 AA $ 300 Alpharetta, 6.50%, 5/1/10 $ 355,728
Aaa AAA 500 Georgia State, 6.30%, 3/1/08 580,680
A2 A 450 Paulding County School District, 6.625%,
2/1/08 530,366
Baa1 A 1,000 Puerto Rico Aqueduct and Sewer
Authority, 6.25%, 7/1/12 1,163,690
---------------------------------------------------------------------------------------
$ 2,630,464
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Hospital -- 4.6%
---------------------------------------------------------------------------------------
NR BBB $ 1,000 Baldwin County Hospital Authority,
(Oconee Regional Medical Center),
5.375%, 12/1/28 $ 960,500
NR NR 800 Forsyth County, Hospital Authority
Revenue, (Georgia Baptist Health Care
System), 6.375%, 10/1/28 780,712
NR BBB 1,785 Toombs County Hospital Authority, (Dr.
John M. Meadows Memorial), 7.00%,
12/1/17 1,921,196
---------------------------------------------------------------------------------------
$ 3,662,408
---------------------------------------------------------------------------------------
Housing -- 5.6%
---------------------------------------------------------------------------------------
NR NR $ 875 Atlanta Urban Residential Finance
Authority, (New Community John Hope),
7.25%, 6/1/07 $ 882,420
Aa2 AAA 2,000 Georgia Housing and Finance Authority,
(AMT), 5.85%, 12/1/28 2,089,260
Aa NR 1,450 Georgia Housing and Finance Authority,
(AMT), 6.875%, 12/1/20 1,536,986
---------------------------------------------------------------------------------------
$ 4,508,666
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 14.9%
---------------------------------------------------------------------------------------
Baa2 NR $ 1,000 Brunswick and Glynn County Development
Authority, (Georgia-Pacific Corp.),
5.55%, 3/1/26 $ 998,600
Baa2 BBB 500 Camden County, Joint Development
Authority, PCR, (Carbide Corp.), 5.00%,
1/1/12 499,545
A1 A+ 1,000 Cartersville Development Authority,
(Anheuser-Busch), (AMT), 6.125%, 5/1/27 1,084,450
A1 A+ 1,000 Cartersville Development Authority,
(Anheuser-Busch), (AMT), 7.375%, 5/1/09 1,226,680
Baa2 BBB- 1,500 Effingham County, Solid Waste Disposal,
(Fort James), (AMT), 5.625%, 7/1/18 1,506,240
Baa3 BBB- 1,750 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,891,663
NR A+ 500 Savannah Economic Development Authority,
(Hershey Foods), 6.60%, 6/1/12 539,750
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
53
<PAGE>
GEORGIA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Development Revenue (continued)
---------------------------------------------------------------------------------------
A1 A- $ 750 Savannah Economic Development Authority,
(Union Camp Corp.), 6.80%, 2/1/12 $ 807,420
NR NR 1,190 Savannah EDA, (Intercat-Savannah, Inc.),
(AMT), 9.00%, 1/1/15 1,304,764
NR AA- 2,000 Vienna Water and Sewer, (Cargill),
(AMT), 6.00%, 9/1/14 2,127,960
---------------------------------------------------------------------------------------
$ 11,987,072
---------------------------------------------------------------------------------------
Insured-Education -- 1.2%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Fulton County, Development Authority,
(Georgia Technology Research Corp.),
(MBIA), 5.00%, 9/1/27 $ 991,730
---------------------------------------------------------------------------------------
$ 991,730
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 7.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Georgia Municipal Electric Power
Authority, (FGIC), 5.50%, 1/1/12 $ 1,088,030
Aaa AAA 750 Georgia Municipal Electric Power
Authority, (MBIA), 0.00%, 1/1/07 537,533
Aaa AAA 3,100 Georgia Municipal Electric Power
Authority, (MBIA), 5.50%, 1/1/20 3,321,185
Aaa AAA 900 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 7/1/03(2) 1,041,750
---------------------------------------------------------------------------------------
$ 5,988,498
---------------------------------------------------------------------------------------
Insured-Hospital -- 11.0%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Clarke County, Hospital Authority,
(MBIA), 5.00%, 1/1/27 $ 977,150
Aaa AAA 1,500 Cobb County, Hospital Authority Revenue,
(AMBAC), 4.75%, 4/1/26(3) 1,426,455
Aaa AAA 2,225 Gainsville and Hall County, (North East
Healthcare), (MBIA), 6.00%, 10/1/25 2,431,369
Aaa AAA 2,000 Medical Center Hospital Authority,
Columbus Regional Healthcare, (MBIA),
6.40%, 8/1/06 2,198,140
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Hospital (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Medical Center, Hospital Authority
Floats, (MBIA), Variable Rate, 8/1/10(2) $ 1,768,125
---------------------------------------------------------------------------------------
$ 8,801,239
---------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 1.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 East Point Building Authority, (FGIC),
6.00%, 2/1/10 $ 1,098,490
---------------------------------------------------------------------------------------
$ 1,098,490
---------------------------------------------------------------------------------------
Insured-Pooled Loans -- 1.2%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 George L. Smith, (Georgia World Congress
Center-Domed Stadium), (MBIA), (AMT),
5.50%, 7/1/20(3) $ 1,000,000
---------------------------------------------------------------------------------------
$ 1,000,000
---------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 4.2%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Metropolitan Atlanta Rapid Transit
Authority, (AMBAC), 6.25%, 7/1/11 $ 1,172,110
Aaa AAA 1,000 Metropolitan Atlanta Rapid Transit
Authority, (AMBAC), 6.25%, 7/1/20 1,173,730
NR AAA 1,000 Puerto Rico Public Finance Corp.,
(AMBAC-TCRS), Variable Rate,
6/1/26(1)(2) 1,009,400
---------------------------------------------------------------------------------------
$ 3,355,240
---------------------------------------------------------------------------------------
Insured-Transportation -- 0.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 750 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/18 $ 291,210
---------------------------------------------------------------------------------------
$ 291,210
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 13.0%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Cherokee County, Water and Sewer
Authority, (FGIC), 4.75%, 8/1/28 $ 953,510
Aaa AAA 1,975 Cherokee County, Water and Sewer
Authority, (MBIA), 6.875%, 8/1/13 2,155,061
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
54
<PAGE>
GEORGIA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Water and Sewer (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 3,500 Fulton County, Water and Sewer, (FGIC),
4.75%, 1/1/28 $ 3,343,759
Aaa AAA 4,000 Henry County, Water and Sewer Authority,
(AMBAC), 5.00%, 2/1/26(4) 3,967,679
---------------------------------------------------------------------------------------
$ 10,420,009
---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 1.8%
---------------------------------------------------------------------------------------
Aa3 AA $ 2,300 Fulton County, Building Authority,
Judicial Center, 0.00%, 1/1/10 $ 1,414,845
---------------------------------------------------------------------------------------
$ 1,414,845
---------------------------------------------------------------------------------------
Miscellaneous -- 1.4%
---------------------------------------------------------------------------------------
NR NR $ 1,000 Atlanta, Downtown Development Authority,
Childcare Facilities, (Central Atlanta
Hospitality Childcare Inc.), 8.00%,
1/1/26 $ 1,109,900
---------------------------------------------------------------------------------------
$ 1,109,900
---------------------------------------------------------------------------------------
Senior Living / Life Care -- 1.4%
---------------------------------------------------------------------------------------
NR NR $ 1,485 De Kalb County, Private Hospital
Authority, (Atlanta, Inc.), 8.50%,
3/1/25(4) $ 1,113,750
---------------------------------------------------------------------------------------
$ 1,113,750
---------------------------------------------------------------------------------------
Solid Waste -- 1.3%
---------------------------------------------------------------------------------------
A1 A+ $ 1,000 Savannah Resource Recovery, (Savannah
Energy Systems Co.), 6.30%, 12/1/06 $ 1,069,320
---------------------------------------------------------------------------------------
$ 1,069,320
---------------------------------------------------------------------------------------
Special Tax Revenue -- 1.2%
---------------------------------------------------------------------------------------
NR AAA $ 1,000 Puerto Rico, Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) $ 993,750
---------------------------------------------------------------------------------------
$ 993,750
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Transportation -- 4.6%
---------------------------------------------------------------------------------------
Baa1 A $ 3,750 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 $ 3,715,274
---------------------------------------------------------------------------------------
$ 3,715,274
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $74,051,935) $ 80,242,270
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Georgia
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 40.5% of securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 1.3% to 19.2% of total investments.
(1) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At February 28,
1999, the value of these securities amounted to $2,588,685 or 3.2% of the
Portfolio's net assets.
(2) Security has been issued as an inverse floater bond.
(3) When-issued security.
(4) Security (or a portion thereof) has been segregated to cover when-issued
securities.
SEE NOTES TO FINANCIAL STATEMENTS
55
<PAGE>
KENTUCKY MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Assisted Living -- 3.2%
---------------------------------------------------------------------------------------
Aa NR $ 3,000 Kenton County, (Highland Terrace), FHA,
6.95%, 12/1/26 $ 3,407,520
---------------------------------------------------------------------------------------
$ 3,407,520
---------------------------------------------------------------------------------------
Electric Utilities -- 2.8%
---------------------------------------------------------------------------------------
Aa2 AA- $ 1,000 Muhlenburg County, (Kentucky Utilities
Co.), 6.25%, 2/1/18 $ 1,071,490
Baa1 BBB+ 3,500 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 1,406,790
Baa1 BBB+ 500 Puerto Rico Electric Power Authority,
5.50%, 7/1/25 514,100
---------------------------------------------------------------------------------------
$ 2,992,380
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 7.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 3,000 Kentucky Development Finance Authority
(Saint Luke's Hospital), (MBIA),
Prerefunded to 10/1/01, 7.00%, 10/1/21 $ 3,322,350
Aaa AAA 2,000 Louisville and Jefferson County,
Metropolitan Sewer District, (AMBAC),
Prerefunded to 11/15/04, 6.75%, 5/15/25 2,332,280
Baa1 BBB+ 1,250 Puerto Rico Electric Power Authority,
Prerefunded to 7/1/04, 6.375%, 7/1/24 1,425,775
Aaa AAA 545 Russell, Health Systems, Prerefunded to
7/1/06, 8.10%, 7/1/15 690,897
---------------------------------------------------------------------------------------
$ 7,771,302
---------------------------------------------------------------------------------------
General Obligations -- 1.4%
---------------------------------------------------------------------------------------
Aa3 AA- $ 1,100 Louisville, 4.50%, 12/1/18 $ 1,030,711
Baa1 A 1,125 Puerto Rico, 0.00%, 7/1/17 452,183
---------------------------------------------------------------------------------------
$ 1,482,894
---------------------------------------------------------------------------------------
Hospital -- 0.5%
---------------------------------------------------------------------------------------
Baa1 AAA $ 430 Russell, Health Systems, 8.10%, 7/1/15 $ 516,916
---------------------------------------------------------------------------------------
$ 516,916
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Housing -- 7.3%
---------------------------------------------------------------------------------------
NR AAA $ 1,420 Boone County, Multifamily Housing
Mortgage, (Walnut Creek Apartments),
FHA, 7.00%, 1/1/27 $ 1,499,634
NR NR 1,200 Florence, Housing Facilities, (Blue
Grass Housing), 7.625%, 5/1/27 1,480,500
Aaa AAA 2,000 Kentucky Housing Corp., MFMR, 6.30%,
1/1/28 2,133,000
Aaa AAA 2,000 Kentucky Housing Corp., SFMR, 6.25%,
7/1/28 2,143,820
Aaa AAA 475 Kentucky Housing Corp., SFMR, FHA,
(AMT), 7.45%, 1/1/23 502,802
---------------------------------------------------------------------------------------
$ 7,759,756
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 24.1%
---------------------------------------------------------------------------------------
Baa1 NR $ 2,425 Ashland, Solid Waste Disposal, (Ashland
Oil), (AMT), 7.125%, 2/1/22 $ 2,736,613
Baa1 BBB 2,355 Ashland, Solid Waste Disposal, (Ashland
Oil), (AMT), 7.20%, 10/1/20 2,526,986
NR NR 1,000 Elsmmere, (Courtaulds Pkg, Inc.), 6.75%,
4/1/10 1,069,920
NR NR 3,075 Fulton County, Industrial Building,
(Chic Jeans), (AMT), 7.50%, 2/1/10 3,115,898
NR NR 1,500 Hancock County, (Southwire Co.), (AMT),
7.75%, 7/1/26 1,610,925
NR A- 2,370 Hancock County, Solid Waste Disposal,
(Williamette Corp.), (AMT), 6.60%,
5/1/26 2,619,608
Baa2 BBB- 3,000 Henderson County, Solid Waste Disposal,
(MacMillan Bloedel), (AMT), 7.00%,
3/1/25 3,218,040
Aa3 AA- 1,000 Jefferson County, Pollution Control,
(E.I. du Pont de Nemours), 6.30%, 7/1/12 1,102,350
NR BB 985 Owensboro County, (KMart Corp.), 6.80%,
12/1/07 1,053,201
NR NR 1,500 Perry County, Solid Waste Disposal, (TJI
International), 6.80%, 5/1/26 1,636,995
NR BB 915 Powderly, (KMart Corp.), 6.90%, 3/1/07 978,062
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
56
<PAGE>
KENTUCKY MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Development Revenue (continued)
---------------------------------------------------------------------------------------
Baa3 BBB- $ 500 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.30%, 6/1/23 $ 531,150
A1 A 2,820 Wickliffe, Solid Waste Disposal,
(Westvaco Corp.), (AMT), 6.375%, 4/1/26 3,064,973
Baa3 NR 500 Winchester County, (Kroger Corp.),
6.90%, 7/1/01 504,405
---------------------------------------------------------------------------------------
$ 25,769,126
---------------------------------------------------------------------------------------
Insured-Education -- 0.7%
---------------------------------------------------------------------------------------
Aaa AAA $ 700 Northern Kentucky University Educational
Buildings, (AMBAC), 6.25%, 5/1/12 $ 761,642
---------------------------------------------------------------------------------------
$ 761,642
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 1.6%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,600 Puerto Rico Telephone Authority, (MBIA),
Variable Rate, 1/16/15(1) $ 1,728,000
---------------------------------------------------------------------------------------
$ 1,728,000
---------------------------------------------------------------------------------------
Insured-General Obligations -- 1.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Puerto Rico Public Building Authority,
(AMBAC), 5.00%, 7/1/27 $ 1,498,770
---------------------------------------------------------------------------------------
$ 1,498,770
---------------------------------------------------------------------------------------
Insured-Hospital -- 10.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,500 Daviess County, (ODCH, Inc.), (MBIA),
6.25%, 8/1/22 $ 2,724,325
Aaa AAA 500 Jefferson County, Health Facilities
Authority, (University Medical Center),
(MBIA), 5.25%, 7/1/22 503,340
Aaa AAA 2,500 Jefferson County, Health Facilities,
(Jewish Hospital), (AMBAC), 6.50%,
5/1/15 2,722,925
Aaa AAA 750 Jefferson County, Health Facilities,
(Jewish Hospital), (AMBAC), 6.55%,
5/1/22 817,988
Aaa AAA 2,500 Jefferson County, Health Facilities,
(MBIA), 5.125%, 10/1/27 2,481,325
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Hospital (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Kentucky EDA, (Ashland Hospital Corp.),
(FSA), 5.00%, 2/1/28 $ 982,690
Aaa AAA 1,000 Warren County, Hospital Facilities,
(Bowling Green-Warren County Hospital),
(FSA), 5.00%, 4/1/17 988,810
---------------------------------------------------------------------------------------
$ 11,221,403
---------------------------------------------------------------------------------------
Insured-Transportation -- 10.8%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Kenton County Airport, (FSA), (AMT),
6.30%, 3/1/15 $ 1,072,530
Aaa AAA 3,550 Kenton County Airport, (MBIA), 6.30%,
3/1/15 3,991,051
Aaa AAA 1,195 Kenton County Airport, (MBIA), (AMT),
6.45%, 3/1/15 1,369,135
Aaa AAA 1,000 Kentucky EDA, (State Turnpike
Revitalization), (FGIC), 0.00%, 7/1/10 616,450
Aaa AAA 1,300 Louisville and Jefferson County,
Regional Airport Authority, (MBIA),
(AMT), 5.00%, 7/1/25 1,261,936
Aaa AAA 3,000 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/16 1,302,030
Aaa AAA 5,000 Puerto Rico Highway and Transportation
Authority, (AMBAC), 0.00%, 7/1/18 1,941,400
---------------------------------------------------------------------------------------
$ 11,554,532
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 7.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Kenton County, Water District
Waterworks, (FGIC), 6.00%, 2/1/17 $ 2,176,980
Aaa AAA 500 Lexington-Fayette County, Government
Sewer System, (MBIA), 6.375%, 7/1/12 547,650
Aaa AAA 2,000 Louisville and Jefferson County,
Metropolitan Sewer District and Drainage
System Revenue, (FGIC), 4.75%, 5/15/28 1,901,380
Aaa AAA 3,415 Louisville and Jefferson County,
Metropolitan Sewer District, (MBIA),
6.25%, 5/15/26 3,823,979
---------------------------------------------------------------------------------------
$ 8,449,989
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
57
<PAGE>
KENTUCKY MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lease Revenue / Certificates of Participation -- 11.4%
---------------------------------------------------------------------------------------
A1 A+ $ 4,990 Jefferson County, (Capital Projects
Corp.), 0.00%, 8/15/15 $ 2,156,279
A1 NR 1,000 Kenton County, (Public Properties
Corp.), 5.00%, 3/1/29 971,990
NR A+ 1,030 Kentucky, League of Cities Funding
Trust, Floating Indebtedness
Certificates of Participation, 6.15%,
8/1/13 1,124,863
Aa NR 2,000 Mount Sterling, Lease, 6.15%, 3/1/13 2,132,460
Aa NR 3,500 Mount Sterling, Lease, 6.20%, 3/1/18 3,706,465
A NR 2,000 Owensboro County, Airport Lease, 5.875%,
6/1/15 2,115,020
---------------------------------------------------------------------------------------
$ 12,207,077
---------------------------------------------------------------------------------------
Nursing Home -- 0.8%
---------------------------------------------------------------------------------------
NR NR $ 765 Jefferson County, Health Facilities,
(Beverly Enterprises), 9.75%, 8/1/07 $ 799,838
---------------------------------------------------------------------------------------
$ 799,838
---------------------------------------------------------------------------------------
Solid Waste -- 1.2%
---------------------------------------------------------------------------------------
NR NR $ 1,200 Morgantown, Solid Waste Revenue, 7.45%,
5/1/22 $ 1,266,936
---------------------------------------------------------------------------------------
$ 1,266,936
---------------------------------------------------------------------------------------
Transportation -- 6.4%
---------------------------------------------------------------------------------------
Baa3 BBB- $ 3,400 Kenton County Airport, (Delta Airlines),
(AMT), 6.125%, 2/1/22 $ 3,473,202
Baa3 BBB- 1,500 Kenton County Airport, (Delta Airlines),
(AMT), 7.125%, 2/1/21 1,613,700
Baa3 BBB- 250 Kenton County Airport, (Delta Airlines),
(AMT), 7.50%, 2/1/12 273,055
Baa3 BBB- 500 Kenton County Airport, (Delta Airlines),
(AMT), 7.50%, 2/1/20 546,110
Baa1 A 1,000 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/38 975,570
---------------------------------------------------------------------------------------
$ 6,881,637
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Water and Sewer -- 0.7%
---------------------------------------------------------------------------------------
A NR $ 650 Harden County, Water District, 6.50%,
9/1/12 $ 713,642
---------------------------------------------------------------------------------------
$ 713,642
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $98,349,521) $ 106,783,360
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Kentucky
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 38.3% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 2.9% to 20.4% of total investments.
(1) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
58
<PAGE>
LOUISIANA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Electric Utilities -- 2.9%
---------------------------------------------------------------------------------------
Baa1 BBB+ $ 2,500 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 $ 1,004,850
---------------------------------------------------------------------------------------
$ 1,004,850
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 4.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,475 Jefferson Parish, Home Mortgage
Authority, Single Family, (FGIC),
Escrowed to Maturity, 0.00%, 5/1/17 $ 1,003,068
NR AAA 250 Puerto Rico, "RIBS", (AMBAC),
Prerefunded to 7/1/02, Variable Rate,
7/1/15(1)(2) 292,768
NR AAA 300 Saint Tammany, Public Finance,
(Christwood), Prerefunded to 5/15/05,
9.00%, 11/15/25 393,753
---------------------------------------------------------------------------------------
$ 1,689,589
---------------------------------------------------------------------------------------
Hospital -- 6.0%
---------------------------------------------------------------------------------------
A3 NR $ 1,000 Lafourche Parish, Hospital Service
District, 6.00%, 10/1/23 $ 1,025,900
NR BBB 730 Louisiana Public Facilities Authority,
(General Health Systems), 6.80%, 11/1/16 802,453
NR NR 250 Saint Tammany Parish, Hospital Service
District, 6.50%, 7/1/22 275,380
---------------------------------------------------------------------------------------
$ 2,103,733
---------------------------------------------------------------------------------------
Housing -- 18.5%
---------------------------------------------------------------------------------------
NR AAA $ 300 Guam Housing Corp., Single Family,
5.75%, 9/1/31 $ 323,763
Aaa NR 480 Louisiana HFA, Single Family, 6.375%,
12/1/27 515,102
Aaa NR 575 Louisiana HFA, Single Family, (GNMA),
(AMT), 6.30%, 12/1/27 612,709
Aaa NR 1,000 Louisiana HFA, Single Family, (GNMA),
(AMT), 8.00%, 3/1/25 1,146,410
Aaa NR 2,000 Louisiana HFA, Single Family,
(GNMA/FNMA), 0.00%, 6/1/27 432,400
Aaa NR 580 Louisiana HFA, Single Family,
(GNMA/FNMA), (AMT), 6.55%, 12/1/26 621,377
NR D 1,000 Louisiana Public Facilities Authority,
Multifamily, (Windsor Housing), 6.25%,
1/1/26 750,000
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Housing (continued)
---------------------------------------------------------------------------------------
Aaa NR $ 1,890 New Orleans Home Mortgage Authority,
Single Family, (GNMA/ FNMA), (AMT),
6.30%, 6/1/28 $ 2,038,761
---------------------------------------------------------------------------------------
$ 6,440,522
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 14.9%
---------------------------------------------------------------------------------------
A3 BBB+ $ 1,000 Bastrop, (International Paper Co.),
(AMT), 6.60%, 3/1/19 $ 1,092,700
Baa2 NR 1,000 East Baton Rouge Parish, (Georgia-
Pacific Corp.), (AMT), 5.35%, 9/1/11 985,660
A3 A 1,500 Louisiana Offshore Terminal Authority,
Deepwater Port Revenue, (Loop, LLC),
5.20%, 10/1/18 1,499,010
Aa2 AA 1,000 Saint Bernard Parish, (Mobil Oil),
5.90%, 11/1/26 1,082,100
Aa3 NR 500 South Louisiana Port Commission,
(Cargill, Inc.), 5.85%, 4/1/17 535,230
---------------------------------------------------------------------------------------
$ 5,194,700
---------------------------------------------------------------------------------------
Insured-Economic Development Revenue -- 1.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Louisiana Government Environmental
Facilities and Community Development
Authority Revenue, (Capital and
Equipment Acquisition), (AMBAC), 4.50%,
12/1/18 $ 467,315
---------------------------------------------------------------------------------------
$ 467,315
---------------------------------------------------------------------------------------
Insured-Education -- 5.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 450 Louisiana Public Facilities Authority,
(Dillard University), (AMBAC), 5.00%,
2/1/28 $ 441,545
Aaa AAA 250 Louisiana Public Facilities Authority,
(Tulane University), (MBIA), 5.00%,
11/15/27 244,573
Aaa AAA 1,100 Louisiana State University, (FGIC),
5.75%, 7/1/14 1,193,203
---------------------------------------------------------------------------------------
$ 1,879,321
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 2.1%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,750 Puerto Rico Electric Power Authority,
(MBIA), (IBC), 0.00%, 7/1/17 $ 717,378
---------------------------------------------------------------------------------------
$ 717,378
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
59
<PAGE>
LOUISIANA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-General Obligations -- 10.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 3,000 New Orleans, (AMBAC), 0.00%, 9/1/15 $ 1,322,940
Aaa AAA 4,000 New Orleans, (AMBAC), 0.00%, 9/1/16 1,664,320
Aaa AAA 1,500 New Orleans, (AMBAC), 0.00%, 9/1/17 588,300
---------------------------------------------------------------------------------------
$ 3,575,560
---------------------------------------------------------------------------------------
Insured-Hospital -- 6.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 100 Louisiana Public Facilities Authority,
(MBIA), Variable Rate, 12/1/14(2) $ 115,250
Aaa AAA 1,500 Ouachita Parish, Glenwood Medical
Center, (FSA), 5.75%, 5/15/21 1,596,240
Aaa AAA 500 Terrebonne Parish, Hospital Service
District No. 1, (Terrebonne General
Medical Center), (AMBAC), 5.375%, 4/1/28 506,650
---------------------------------------------------------------------------------------
$ 2,218,140
---------------------------------------------------------------------------------------
Insured-Housing -- 0.1%
---------------------------------------------------------------------------------------
Aaa AAA $ 270 East Baton Rouge Mortgage Finance
Authority, Single Family, (MBIA),
(GNMA/FNMA), 0.00%, 10/1/15 $ 47,007
---------------------------------------------------------------------------------------
$ 47,007
---------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 2.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 345 Baton Rouge, Public Improvement, (FGIC),
4.75%, 8/1/17 $ 334,074
Aaa AAA 500 Lafayette Parish, School District,
(FGIC), 4.60%, 4/1/18 473,845
---------------------------------------------------------------------------------------
$ 807,919
---------------------------------------------------------------------------------------
Senior Living / Life Care -- 13.1%
---------------------------------------------------------------------------------------
NR NR $ 500 Louisiana HFA, (HCC Assisted Living
Group 1), (AMT), 9.00%, 3/1/25 $ 559,100
NR AAA 500 Louisiana HFA, (Saint Dominic Assisted
Care Facility), (GNMA), 6.85%, 9/1/25 549,795
NR AAA 1,995 Louisiana HFA, (Saint Joseph's Manor
Retirement Center), (GNMA), 7.80%,
12/1/35 2,230,748
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Senior Living / Life Care (continued)
---------------------------------------------------------------------------------------
NR BBB $ 1,150 Louisiana Public Facilities Authority,
(Glen Retirement System), 6.70%, 12/1/25 $ 1,240,850
---------------------------------------------------------------------------------------
$ 4,580,493
---------------------------------------------------------------------------------------
Special Tax Revenue -- 1.4%
---------------------------------------------------------------------------------------
NR AAA $ 500 Puerto Rico, Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) $ 496,875
---------------------------------------------------------------------------------------
$ 496,875
---------------------------------------------------------------------------------------
Transportation -- 10.4%
---------------------------------------------------------------------------------------
A A- $ 500 Mississippi River Bridge Authority,
Bridge Revenue, 6.75%, 11/1/12 $ 553,325
Baa1 A 1,700 Puerto Rico Highway and Transportation
Authority, 4.75%, 7/1/38 1,614,490
Baa1 A 1,500 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/38 1,463,355
---------------------------------------------------------------------------------------
$ 3,631,170
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $32,923,087) $ 34,854,572
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Louisiana
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 31.6% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 3.2% to 15.2% of total investments.
(1) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At February 28,
1999, the value of these securities amounted to $789,643 or 2.2% of the
Portfolio's net assets.
(2) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
60
<PAGE>
MARYLAND MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Cogeneration -- 1.3%
---------------------------------------------------------------------------------------
NR NR $ 1,250 Maryland Energy Cogeneration, (AES
Warrior Run), (AMT), 7.40%, 9/1/19 $ 1,325,175
---------------------------------------------------------------------------------------
$ 1,325,175
---------------------------------------------------------------------------------------
Education -- 2.3%
---------------------------------------------------------------------------------------
NR BBB+ $ 1,500 Annapolis, EDA, (Saint Johns College),
5.50%, 10/1/23 $ 1,517,190
NR BBB 500 Montgomery County, EDA, (Bullis School),
5.60%, 11/1/18 513,300
NR BBB 350 Montgomery County, EDA, (Bullis School),
5.60%, 11/1/22 358,775
---------------------------------------------------------------------------------------
$ 2,389,265
---------------------------------------------------------------------------------------
Electric Utilities -- 8.9%
---------------------------------------------------------------------------------------
A2 A $ 1,500 Calvert, Pollution Control Revenue,
(Baltimore Gas and Electric Co.), 5.55%,
7/15/14 $ 1,587,825
NR BBB 2,000 Guam Power Authority, 5.25%, 10/1/13 2,023,780
NR BBB 750 Guam Power Authority, 6.625%, 10/1/14 839,933
A1 A 2,225 Prince George's County, Pollution
Control Revenue, (Potomac Electric),
6.375%, 1/15/23 2,432,504
Baa1 BBB+ 2,250 Puerto Rico Electric Power Authority,
5.00%, 7/1/28 2,207,408
---------------------------------------------------------------------------------------
$ 9,091,450
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 8.0%
---------------------------------------------------------------------------------------
Aaa NR $ 1,125 Baltimore, SFMR, (Inner Harbor),
Escrowed to Maturity, 8.00%, 12/1/10 $ 1,488,759
Aaa BBB- 1,250 Maryland HEFA, (Howard County General
Hospital), Escrowed to Maturity, 5.50%,
7/1/25 1,316,388
A3 NR 2,500 Maryland HEFA, (Union Hospital of
Cecil), Prerefunded to 7/1/02, 6.70%,
7/1/22 2,780,250
Aaa AAA 500 Maryland HEFA, (University of Maryland),
(FGIC), Prerefunded to 7/1/01, 6.50%,
7/1/21 534,830
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Escrowed / Prerefunded (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 1,365 Maryland HEFA, (Washington Community
Hospital), (AMBAC), Prerefunded to
7/1/02, 6.375%, 7/1/22 $ 1,507,820
Aa1 AA 500 Washington, Suburban Sanitary District,
Prerefunded to 6/1/02, 6.20%, 6/1/11 547,995
---------------------------------------------------------------------------------------
$ 8,176,042
---------------------------------------------------------------------------------------
General Obligations -- 2.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 350 Howard County, 4.75%, 2/15/27 $ 335,115
Baa1 A 600 Puerto Rico, 0.00%, 7/1/16 256,470
Baa1 A 500 Puerto Rico, 0.00%, 7/1/18 190,150
Baa1 A 1,000 Puerto Rico, 4.50%, 7/1/23 920,080
Aa1 AA 500 Washington, Suburban Sanitary District,
5.625%, 6/1/21 525,790
Aa NR 190 Worcester, Sanitary District, 6.55%,
8/15/17 209,348
---------------------------------------------------------------------------------------
$ 2,436,953
---------------------------------------------------------------------------------------
Hospital -- 10.0%
---------------------------------------------------------------------------------------
NR NR $ 475 Berlin, (Atlantic General Hospital),
8.375%, 6/1/22 $ 511,661
A2 NR 1,200 Maryland HEFA, (Calvert Memorial
Hospital), 5.00%, 7/1/28 1,164,000
A1 NR 1,175 Maryland HEFA, (Good Samaritan
Hospital), 5.75%, 7/1/19 1,270,727
Baa2 NR 1,000 Maryland HEFA, (Kennedy Krieger Issue),
5.125%, 7/1/22 956,020
A NR 3,000 Prince George's County, (Dimensions
Health), 5.30%, 7/1/24 2,908,290
NR NR 1,355 Prince George's County, (Greater
SouthEast Healthcare System), 6.375%,
1/1/13 907,850
NR NR 3,800 Prince George's County, (Greater
SouthEast Healthcare System), 6.375%,
1/1/23 2,546,000
---------------------------------------------------------------------------------------
$ 10,264,548
---------------------------------------------------------------------------------------
Housing -- 12.6%
---------------------------------------------------------------------------------------
NR AAA $ 600 Harford County, Multifamily, (Perkins
Place), (FNMA), 5.00%, 9/1/28 $ 605,802
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
61
<PAGE>
MARYLAND MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing (continued)
---------------------------------------------------------------------------------------
Aa2 NR $ 1,000 Maryland Community Development
Administration Multifamily, FHA, (AMT),
6.70%, 5/15/36 $ 1,088,250
Aa NR 3,000 Maryland Community Development
Administration Single Family, (AMT),
6.75%, 4/1/26 3,221,130
Aa2 NR 855 Maryland Community Development
Administration Single Family, (AMT),
6.80%, 4/1/22 913,140
Aa2 NR 745 Maryland Community Development
Administration Single Family, (AMT),
6.80%, 4/1/24 795,660
Aa2 NR 1,000 Montgomery County, Housing Opportunities
Commission, SFMR, 0.00%, 7/1/28 206,220
Aa2 NR 3,525 Montgomery County, Housing Opportunities
Commission, SFMR, (AMT), 6.05%, 7/1/27 3,741,857
NR AAA 2,160 Prince George's County, Housing
Authority, (Langely Gardens), (AMT),
5.875%, 2/20/39 2,269,598
---------------------------------------------------------------------------------------
$ 12,841,657
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 7.3%
---------------------------------------------------------------------------------------
A1 A $ 1,350 Allegany, Pollution Control Revenue,
(Westvaco Corp.), 6.20%, 1/1/08 $ 1,501,025
Aa3 AA- 2,000 Baltimore, Port Facilities,
(Consolidated Coal Sales Co. - E.I. du
Pont de Nemours), 6.50%, 12/1/10 2,206,280
Aa3 AA- 2,000 Baltimore, Port Facilities,
(Consolidated Coal Sales Co. - E.I. du
Pont de Nemours), 6.50%, 10/1/11(1) 2,193,560
NR AA- 1,425 Frederick, EDA, (Cargill, Inc.), 6.30%,
11/1/09 1,570,079
---------------------------------------------------------------------------------------
$ 7,470,944
---------------------------------------------------------------------------------------
Insured-Education -- 6.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 460 Maryland HEFA, (College Of Notre Dame),
(MBIA), 5.30%, 10/1/18 $ 487,471
Aaa AAA 4,600 Maryland HEFA, (Loyola College), (MBIA),
5.375%, 10/1/26(1) 4,745,911
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Education (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 1,200 Morgan State University, Maryland
Academic and Facilities, (MBIA), 6.10%,
7/1/20 $ 1,391,844
---------------------------------------------------------------------------------------
$ 6,625,226
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 2.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,700 Montgomery County, Pollution Control
Revenue, (Potomac Electric Power Co.),
(MBIA), 5.375%, 2/15/24 $ 1,740,613
Aaa AAA 250 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 7/1/03(2) 289,375
Aaa AAA 1,000 Puerto Rico Electric Power Authority,
(FSA), 4.75%, 7/1/21 969,790
---------------------------------------------------------------------------------------
$ 2,999,778
---------------------------------------------------------------------------------------
Insured-Hospital -- 10.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 350 Calvert County, EDA, (Asbury - Solomons
Facility), (MBIA), 5.00%, 1/1/27 $ 348,152
Aaa AAA 3,000 Maryland HEFA, (Helix Health Issue),
(AMBAC), 5.00%, 7/1/27 3,006,240
Aaa AAA 3,740 Maryland HEFA, (Johns Hopkins
Medicine-Howard County General Hospital
Acquisition), (MBIA), 5.00%, 7/1/29 3,719,505
Aaa AAA 3,150 Puerto Rico ITEM & EC, (Auxilio Mutuo
Obligated Group), (MBIA), 6.25%, 7/1/24 3,526,551
---------------------------------------------------------------------------------------
$ 10,600,448
---------------------------------------------------------------------------------------
Insured-Housing -- 0.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Prince George's County, (Keystone
Apartments), FHA, (MBIA), 6.80%, 7/1/25 $ 532,255
---------------------------------------------------------------------------------------
$ 532,255
---------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 3.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Baltimore, COPS, (AMBAC), 4.75%, 10/1/18 $ 975,660
Aaa AAA 1,000 Maryland Stadium Authority, (AMBAC),
5.60%, 3/1/14 1,068,250
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
62
<PAGE>
MARYLAND MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Lease Revenue / Certificates of Participation (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 1,300 Maryland Stadium Authority, (AMBAC),
5.80%, 3/1/26 $ 1,395,186
---------------------------------------------------------------------------------------
$ 3,439,096
---------------------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 1.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Maryland HEFA, (Medlantic/Helix Issue),
(AMBAC), 4.75%, 8/15/28 $ 965,390
Aaa AAA 500 Maryland HEFA, (Medlantic/Helix Issue),
(AMBAC), 5.25%, 8/15/38 522,230
---------------------------------------------------------------------------------------
$ 1,487,620
---------------------------------------------------------------------------------------
Insured-Solid Waste -- 5.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 5,000 NE Maryland Solid Waste Disposal,
(MBIA), (AMT), 6.30%, 7/1/16 $ 5,489,049
---------------------------------------------------------------------------------------
$ 5,489,049
---------------------------------------------------------------------------------------
Insured-Transportation -- 3.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Baltimore, International Airport,
(FGIC), (AMT), 6.25%, 7/1/14 $ 2,202,620
Aaa AAA 1,750 Washington, D.C., Metro Area
Transportation, (FGIC), 5.25%, 7/1/14 1,810,340
---------------------------------------------------------------------------------------
$ 4,012,960
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 6.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Baltimore, Wastewater, (FGIC), 5.00%,
7/1/22 $ 1,015,850
Aaa AAA 1,000 Baltimore, Wastewater, (FGIC), 5.50%,
7/1/26 1,045,790
Aaa AAA 2,000 Baltimore, Wastewater, (MBIA), 5.65%,
7/1/20 2,199,760
Aaa AAA 2,100 Baltimore, Water, (FGIC), 5.50%, 7/1/26 2,196,159
---------------------------------------------------------------------------------------
$ 6,457,559
---------------------------------------------------------------------------------------
Solid Waste -- 1.9%
---------------------------------------------------------------------------------------
NR BBB+ $ 2,000 Northeast Waste Disposal Authority,
Resources Recovery Revenue, (Baltimore
Resco Retrofit), (AMT), 4.75%, 1/1/12 $ 1,932,300
---------------------------------------------------------------------------------------
$ 1,932,300
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Special Tax Revenue -- 1.0%
---------------------------------------------------------------------------------------
NR NR $ 1,000 Frederick County, Urbana Community
Development Authority, 6.625%, 7/1/25 $ 1,020,520
---------------------------------------------------------------------------------------
$ 1,020,520
---------------------------------------------------------------------------------------
Transportation -- 2.4%
---------------------------------------------------------------------------------------
Baa1 A $ 500 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 $ 495,370
Baa1 A 2,000 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/38 1,951,140
---------------------------------------------------------------------------------------
$ 2,446,510
---------------------------------------------------------------------------------------
Water and Sewer -- 1.1%
---------------------------------------------------------------------------------------
Aa2 AA $ 1,000 Maryland Water Quality Financing
Administration Revolving Loan Fund,
6.55%, 9/1/14 $ 1,097,550
---------------------------------------------------------------------------------------
$ 1,097,550
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $97,548,848) $ 102,136,905
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for the purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Maryland
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 42.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 1.2% to 23.7% of total investments.
(1) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(2) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
63
<PAGE>
MISSOURI MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Electric Utilities -- 1.5%
---------------------------------------------------------------------------------------
NR BBB $ 1,010 Guam Power Authority, 6.30%, 10/1/22 $ 1,089,901
---------------------------------------------------------------------------------------
$ 1,089,901
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 9.6%
---------------------------------------------------------------------------------------
NR AAA $ 875 Kansas City IDA, (Kingswood United
Methodist Manor), Prerefunded to
11/15/03, 9.00%, 11/15/13(1) $ 1,074,824
Aaa NR 1,000 Lake of The Ozarks, (Community Bridge
Corp.), Prerefunded to 12/1/06, 6.40%,
12/1/25(1) 1,173,090
NR BBB+ 1,005 Missouri HEFA, (Lake of the Ozarks
General Hospital), Prerefunded to
2/15/06, 6.50%, 2/15/21 1,162,082
Aaa AAA 575 Missouri HEFA, (Saint Louis Children's),
(MBIA), Escrowed to Maturity, 0.00%,
5/15/08 385,647
Baa1 BBB+ 750 Puerto Rico Electric Power Authority,
Prerefunded to 7/1/04, 6.375%, 7/1/24 855,465
NR AAA 500 Puerto Rico, RIBS, (AMBAC), Prerefunded
to 7/1/02, Variable Rate, 7/1/15(2)(3) 585,535
NR AAA 1,000 Saint Louis County, Mortgage Revenue,
(GNMA), (AMT), Escrowed to Maturity,
5.40%, 1/1/16 1,042,210
Aaa AAA 750 Saint Louis Water, (FGIC), Prerefunded
to 7/1/04, 6.00%, 7/1/14 841,193
---------------------------------------------------------------------------------------
$ 7,120,046
---------------------------------------------------------------------------------------
Hospital -- 17.5%
---------------------------------------------------------------------------------------
Aa2 AA $ 3,250 Missouri HEFA, (Barnes Jewish
Christian), 5.25%, 5/15/14 $ 3,401,027
NR A+ 1,500 Missouri HEFA, (Childrens Mercy
Hospital), 5.30%, 5/15/28 1,496,550
NR BBB+ 1,000 Missouri HEFA, (Freeman Health Systems),
5.25%, 2/15/18 982,310
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Hospital (continued)
---------------------------------------------------------------------------------------
Baa NR $ 2,000 Missouri HEFA, (Jefferson Memorial
Hospital), 6.00%, 8/15/23 $ 2,068,060
Baa NR 1,900 Missouri HEFA, (Jefferson Memorial
Hospital), 6.80%, 5/15/25 2,067,599
NR BBB+ 495 Missouri HEFA, (Lake of the Ozarks
General Hospital), 6.50%, 2/15/21 529,304
NR BBB+ 1,250 Taney County IDA, (The Skaggs Community
Hospital Association), 5.30%, 5/15/18 1,227,725
NR BBB- 1,250 West Plains IDA, (Ozarks Medical
Center), 5.65%, 11/15/22 1,243,413
---------------------------------------------------------------------------------------
$ 13,015,988
---------------------------------------------------------------------------------------
Housing -- 3.2%
---------------------------------------------------------------------------------------
NR AAA $ 810 Missouri Housing Development Authority,
SFMR, (GNMA), 6.45%, 9/1/27 $ 868,263
NR AAA 510 Missouri Housing Development Authority,
SFMR, (GNMA), (AMT), 6.75%, 6/1/24 539,657
NR AAA 860 Missouri Housing Development Authority,
SFMR, (GNMA), (AMT), 7.25%, 9/1/26 969,856
---------------------------------------------------------------------------------------
$ 2,377,776
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 12.6%
---------------------------------------------------------------------------------------
NR BB $ 1,035 Jefferson County, (Kmart Corp.), 6.40%,
8/1/08(1) $ 1,089,120
NR NR 1,255 Kansas City IDA, (Airline Cargo
Facilities), 8.50%, 1/1/17 1,409,202
A3 NR 1,200 Missouri Environmental Improvement and
Energy Resources Authority, (American
Cyanamid Company), 5.80%, 9/1/09 1,318,968
Baa3 BBB- 1,500 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,621,425
A1 A+ 3,750 Saint Louis IDA, (Anheuser-Busch),
(AMT), 5.875%, 11/1/26 3,942,074
---------------------------------------------------------------------------------------
$ 9,380,789
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
64
<PAGE>
MISSOURI MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Education -- 2.3%
---------------------------------------------------------------------------------------
Aaa NR $ 1,750 Missouri HEFA, (St. Louis University
High School), (AMBAC), 4.75%, 10/1/24(4) $ 1,678,600
---------------------------------------------------------------------------------------
$ 1,678,600
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 8.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 4,400 Missouri Environmental Improvement and
Energy Resources Authority, (Union
Electric), (AMBAC), (AMT), 5.45%,
10/1/28 $ 4,485,051
Aaa AAA 700 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 7/1/03(3) 810,250
Aaa AAA 1,000 Sikeston, Electric System, (MBIA),
5.00%, 6/1/22 993,800
---------------------------------------------------------------------------------------
$ 6,289,101
---------------------------------------------------------------------------------------
Insured-General Obligations -- 1.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Puerto Rico, Variable Rate, (FSA),
7/1/22(2)(3) $ 572,500
Aaa AAA 2,000 Saint Charles County, (Francis Howell
School District), (FGIC), 0.00%, 3/1/16 856,080
---------------------------------------------------------------------------------------
$ 1,428,580
---------------------------------------------------------------------------------------
Insured-Hospital -- 11.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Jackson County, (Saint Joseph's Health
System), (MBIA), 6.50%, 7/1/12 $ 1,090,920
Aaa AAA 800 Jackson County, (Saint Joseph's Health
System), (MBIA), 6.50%, 7/1/19 874,056
Aaa AAA 1,500 Missouri HEFA, (Heartland Health),
(AMBAC), 6.35%, 11/15/17 1,647,855
Aaa AAA 9,500 Missouri HEFA, (Lester Cox Medical
Center), (MBIA), 0.00%, 9/1/20 3,168,155
Aaa AAA 1,500 Missouri HEFA, (Lester Cox Medical
Center), (MBIA), 5.35%, 6/1/10 1,613,655
---------------------------------------------------------------------------------------
$ 8,394,641
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Housing -- 2.2%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 SCA, MFMR Receipts, Springfield, (FSA),
7.10%, 1/1/30 $ 1,663,380
---------------------------------------------------------------------------------------
$ 1,663,380
---------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 0.7%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Saint Charles County, PFA, (FGIC),
6.375%, 3/15/07 $ 545,285
---------------------------------------------------------------------------------------
$ 545,285
---------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.4%
---------------------------------------------------------------------------------------
NR AAA $ 1,000 Puerto Rico Public Finance Corp.,
(AMBAC-TCRS), Variable Rate,
6/1/26(2)(3) $ 1,009,400
---------------------------------------------------------------------------------------
$ 1,009,400
---------------------------------------------------------------------------------------
Insured-Transportation -- 1.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 910 Saint Louis, Airport Revenue, (Lambert
International Airport), (FGIC), 6.00%,
7/1/14 $ 1,027,044
---------------------------------------------------------------------------------------
$ 1,027,044
---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 8.4%
---------------------------------------------------------------------------------------
A1 A+ $ 2,000 Missouri Regional Convention and Sports
Complex Authority, 5.50%, 8/15/21 $ 2,070,860
A A+ 3,000 Saint Louis County, Regional Convention
and Sports Complex Authority, 5.50%,
8/15/13 3,136,740
A A+ 1,000 Saint Louis County, Regional Convention
and Sports Complex Authority, 5.75%,
8/15/21 1,044,650
---------------------------------------------------------------------------------------
$ 6,252,250
---------------------------------------------------------------------------------------
Nursing Home -- 3.7%
---------------------------------------------------------------------------------------
NR NR $ 1,000 Kansas City IDA, (Beverly Enterprises),
8.00%, 12/1/02 $ 1,068,430
NR NR 500 Missouri HEFA, (Bethesda Health Group of
Saint Louis, Inc.), 6.625%, 8/15/05 538,880
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
65
<PAGE>
MISSOURI MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nursing Home (continued)
---------------------------------------------------------------------------------------
NR NR $ 1,000 Missouri HEFA, (Bethesda Health Group of
Saint Louis, Inc.), 7.50%, 8/15/12 $ 1,121,320
---------------------------------------------------------------------------------------
$ 2,728,630
---------------------------------------------------------------------------------------
Pooled Loans -- 3.8%
---------------------------------------------------------------------------------------
A NR $ 2,750 Missouri Higher Education Loan
Authority, Student Loan, (AMT), 5.45%,
2/15/09 $ 2,840,640
---------------------------------------------------------------------------------------
$ 2,840,640
---------------------------------------------------------------------------------------
Senior Living / Life Care -- 4.6%
---------------------------------------------------------------------------------------
Baa1 NR $ 300 Cass County, (Fox Springs Living
Center), 7.375%, 10/1/22 $ 326,691
NR NR 1,000 Kansas City IDR, (Kingswood Manor),
5.80%, 11/15/17 969,390
NR NR 2,000 Missouri HEFA, (Lutheran Senior
Services), 6.375%, 2/1/27 2,106,380
---------------------------------------------------------------------------------------
$ 3,402,461
---------------------------------------------------------------------------------------
Special Tax Revenue -- 1.3%
---------------------------------------------------------------------------------------
NR AAA $ 1,000 Puerto Rico, Infrastructure Financing
Authority, Variable Rate, 7/1/28(2)(3) $ 993,750
---------------------------------------------------------------------------------------
$ 993,750
---------------------------------------------------------------------------------------
Transportation -- 1.5%
---------------------------------------------------------------------------------------
Baa1 A $ 1,000 Puerto Rico Highway and Transportation
Authority, 6.625%, 7/1/12 $ 1,088,130
---------------------------------------------------------------------------------------
$ 1,088,130
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Water and Sewer -- 2.6%
---------------------------------------------------------------------------------------
Aa1 NR $ 1,000 Missouri Environmental Improvement and
Energy Resources Authority, 0.00%,
1/1/14 $ 482,450
Aa1 NR 1,250 Missouri Environmental Improvement and
Energy Resources Authority, 7.20%,
7/1/16(1) 1,429,388
---------------------------------------------------------------------------------------
$ 1,911,838
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $67,193,631) $ 74,238,230
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Missouri
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 32.1% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 4.1% to 12.7% of total investments.
(1) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At February 28,
1999, the value of these securities amounted to $3,161,185 or 4.2% of the
Portfolio's net assets.
(3) Security has been issued as an inverse floater bond.
(4) When-issued security.
SEE NOTES TO FINANCIAL STATEMENTS
66
<PAGE>
NORTH CAROLINA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Education -- 3.7%
---------------------------------------------------------------------------------------
Aa1 AA+ $ 1,000 North Carolina Educational Facilities
Finance Agency, (Duke University),
6.75%, 10/1/21 $ 1,090,790
Aa2 AA 8,410 University of North Carolina at Chapel
Hill, 0.00%, 8/1/17 3,372,410
Aa2 AA 2,500 University of North Carolina at Chapel
Hill, 0.00%, 8/1/19 897,075
---------------------------------------------------------------------------------------
$ 5,360,275
---------------------------------------------------------------------------------------
Electric Utilities -- 5.2%
---------------------------------------------------------------------------------------
Baa1 BBB $ 5,000 North Carolina Municipal Power
Authority, (Eastern Power), 6.125%,
1/1/09 $ 5,479,700
Baa1 BBB+ 2,000 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 803,880
Baa1 BBB+ 2,000 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 803,880
Baa1 BBB+ 365 Puerto Rico Electric Power Authority,
7.125%, 7/1/14 375,559
---------------------------------------------------------------------------------------
$ 7,463,019
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 5.6%
---------------------------------------------------------------------------------------
Aa3 NR $ 985 Durham County, Prerefunded to 12/1/01,
6.75%, 12/1/11 $ 1,088,809
NR AA 825 Durham County, Prerefunded to 7/15/02,
6.10%, 7/15/07 903,812
Aaa NR 2,500 Pitt County Memorial Hospital, Escrowed
to Maturity, 5.25%, 12/1/21 2,585,875
Baa1 AAA 635 Puerto Rico Electric Power Authority,
Prerefunded to 7/1/99, 7.125%, 7/1/14 653,631
Aaa AAA 150 Puerto Rico General Obligations,
Prerefunded to 7/1/00, 7.30%, 7/1/20 161,027
NR AAA 1,000 Puerto Rico, RIBS, (AMBAC), Prerefunded
to 7/1/02, Variable Rate, 7/1/15(1)(2) 1,171,070
NR NR 1,000 Virgin Islands Public Finance Authority,
Prerefunded to 10/1/02, 7.25%, 10/1/18 1,139,850
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Escrowed / Prerefunded (continued)
---------------------------------------------------------------------------------------
NR NR $ 230 Virgin Islands Water and Power
Authority, Prerefunded to 7/1/01, 7.40%,
7/1/11 $ 251,852
---------------------------------------------------------------------------------------
$ 7,955,926
---------------------------------------------------------------------------------------
General Obligations -- 3.5%
---------------------------------------------------------------------------------------
A A- $ 175 Eden, Water and Sewer Bonds, (AMT),
6.75%, 6/1/08 $ 193,076
Aaa AAA 3,550 North Carolina Capital Improvements,
4.75%, 2/1/12 3,651,992
Baa1 A 500 Puerto Rico, 0.00%, 7/1/17 200,970
Baa1 A 1,000 Puerto Rico Public Buildings Authority,
5.25%, 7/1/21 1,005,080
---------------------------------------------------------------------------------------
$ 5,051,118
---------------------------------------------------------------------------------------
Hospital -- 15.2%
---------------------------------------------------------------------------------------
Aa3 AA $ 2,090 Charlotte-Mecklenberg Hospital, 0.00%,
1/1/06 $ 1,572,328
Aa3 AA 3,000 Charlotte-Mecklenberg Hospital, 5.125%,
1/15/22 2,960,040
Aa3 AA 2,000 Charlotte-Mecklenberg Hospital, 5.875%,
1/15/26 2,157,840
Baa3 NR 1,500 North Carolina Medical Care Commission,
(Annie Penn Memorial Hospital), 5.375%,
1/1/22 1,458,555
Aa3 AA 3,400 North Carolina Medical Care Commission,
(Duke University Hospital), 0.00%,
6/1/09 2,129,318
Aa3 AA 1,000 North Carolina Medical Care Commission,
(Duke University Hospital), 5.25%,
6/1/21 1,005,010
A1 A+ 1,000 North Carolina Medical Care Commission,
(Gaston Health Care), 5.00%, 2/15/29 953,020
Baa1 A 500 North Carolina Medical Care Commission,
(Halifax Regional Medical Center),
5.00%, 8/15/24 469,530
Aa3 AA 2,000 North Carolina Medical Care Commission,
(North Carolina Baptist Hospital),
6.00%, 6/1/22 2,121,720
Aa3 AA- 2,750 North Carolina Medical Care Commission,
(Pitt County Memorial Hospital), 4.75%,
12/1/28 2,545,840
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
67
<PAGE>
NORTH CAROLINA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hospital (continued)
---------------------------------------------------------------------------------------
Aa3 AA $ 1,700 North Carolina Medical Care Commission,
(Presbyterian Health Services), 6.00%,
10/1/24 $ 1,861,806
Aaa NR 2,500 North Carolina Medical Care Commission,
(Roanoke-Chowan Hospital), 7.75%,
10/1/19 2,619,400
---------------------------------------------------------------------------------------
$ 21,854,407
---------------------------------------------------------------------------------------
Housing -- 12.3%
---------------------------------------------------------------------------------------
NR AAA $ 1,900 Charlotte Housing Authority, Double
Oaks, FHA, (FNMA), 7.35%, 5/15/26 $ 2,115,593
NR AAA 1,000 Guam Housing Corp., Single Family,
5.75%, 9/1/31 1,079,210
Aa2 AA 2,250 North Carolina HFA, MFMR, 6.70%, 1/1/26 2,441,993
Aa2 AA 1,920 North Carolina HFA, MFMR, (AMT), 6.45%,
9/1/27 2,059,526
Aa AA 1,235 North Carolina HFA, SFMR, (AMT), 6.20%,
9/1/27 1,301,851
Aa2 AA 1,500 North Carolina HFA, SFMR, (AMT), 6.30%,
3/1/26 1,597,530
Aa AA 2,080 North Carolina HFA, SFMR, (AMT), 6.60%,
9/1/26 2,223,520
Aa2 AA 3,880 North Carolina HFA, SFMR, (AMT), 6.70%,
9/1/26 4,149,505
Aa AA 705 North Carolina HFA, SFMR, (AMT), 7.05%,
9/1/20 747,744
---------------------------------------------------------------------------------------
$ 17,716,472
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 14.6%
---------------------------------------------------------------------------------------
A2 A $ 1,015 Chatham County Industrial Facilities and
Pollution, (Carolina Power and Light),
6.30%, 6/15/14 $ 1,096,017
Baa1 BBB 2,750 Haywood County IDA, (Champion
International Corp.), (AMT), 5.50%,
10/1/18 2,741,668
Baa1 BBB 1,500 Haywood County IDA, (Champion
International Corp.), (AMT), 5.75%,
12/1/25 1,512,690
A2 A 3,750 Martin County IDA, (Weyerhaeuser Co.),
(AMT), 6.80%, 5/1/24 4,104,338
Baa3 BBB 2,500 New Hanover County, (Occidental
Petroleum Corp.), 6.70%, 7/1/19 2,668,475
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Industrial Development Revenue (continued)
---------------------------------------------------------------------------------------
Baa3 BBB- $ 6,155 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 $ 6,653,246
Baa3 BBB- 1,150 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.30%, 6/1/23 1,221,645
NR AA- 850 Robeson County, Industrial Facilities
and Pollution Control Financing
Authority, (Campbell Soup Co.), 6.40%,
12/1/06 976,072
---------------------------------------------------------------------------------------
$ 20,974,151
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 6.7%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 North Carolina Eastern Municipal Power
Authority, (FSA), Variable Rate,
1/1/19(1)(2) $ 1,615,440
Aaa AAA 2,000 North Carolina Eastern Municipal Power
Authority, (MBIA), 5.375%, 1/1/24 2,059,540
Aaa AAA 4,000 North Carolina Municipal Power
Authority, (Catawba Electric), (MBIA),
Variable Rate, 1/1/12(2) 4,410,000
Aaa AAA 1,400 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 7/1/02(2) 1,573,250
---------------------------------------------------------------------------------------
$ 9,658,230
---------------------------------------------------------------------------------------
Insured-General Obligations -- 2.8%
---------------------------------------------------------------------------------------
Aaa AAA $ 3,500 Puerto Rico, Variable Rate, (FSA),
7/1/22(1)(2) $ 4,007,500
---------------------------------------------------------------------------------------
$ 4,007,500
---------------------------------------------------------------------------------------
Insured-Hospital -- 8.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Cumberland County Hospital, (MBIA),
0.00%, 10/1/09 $ 314,605
Aaa AAA 935 North Carolina Medical Care Commission,
(Memorial Mission Hospital), (FSA),
0.00%, 10/1/06 682,840
Aaa AAA 5,000 North Carolina Medical Care Commission,
(Saint Joseph's Medical Center),
(AMBAC), 5.10%, 10/1/14 5,123,100
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
68
<PAGE>
NORTH CAROLINA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Hospital (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 5,000 North Carolina Medical Care Commission,
(Wake County Hospital), (MBIA), 5.375%,
10/1/26 $ 5,109,200
Aaa AAA 1,500 North Carolina Medical Care Commission,
(Wilson Memorial Hospital), (AMBAC),
0.00%, 11/1/15 662,460
---------------------------------------------------------------------------------------
$ 11,892,205
---------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 3.6%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,150 Charlotte, Convention Facility, (AMBAC),
5.25%, 12/1/13 $ 2,248,728
Aaa AAA 1,575 Franklin, County Jail, (FGIC), 6.625%,
6/1/14 1,772,899
Aaa AAA 1,000 Mooresville School District, (AMBAC),
6.35%, 10/1/14 1,097,360
---------------------------------------------------------------------------------------
$ 5,118,987
---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 7.9%
---------------------------------------------------------------------------------------
Aa3 A+ $ 2,065 Buncombe County, 6.625%, 12/1/10 $ 2,316,290
A3 BBB+ 6,000 Columbus County, Industrial Facility and
Pollution Control Financing,
(International Paper Co.), (AMT), 6.15%,
4/1/21 6,430,859
A1 AA 2,400 Greensboro, Greensboro Coliseum Arena,
6.75%, 12/1/09 2,629,176
---------------------------------------------------------------------------------------
$ 11,376,325
---------------------------------------------------------------------------------------
Transportation -- 9.2%
---------------------------------------------------------------------------------------
Baa1 A $ 4,450 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 $ 4,408,793
Baa1 A 4,000 Puerto Rico Highway and Transportation
Authority, 5.25%, 7/1/20 4,022,200
Baa1 A 1,490 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/15 1,608,008
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Transportation (continued)
---------------------------------------------------------------------------------------
Baa1 A $ 2,925 Puerto Rico Highway and Transportation
Authority, 5.50%, 7/1/36 $ 3,091,345
---------------------------------------------------------------------------------------
$ 13,130,346
---------------------------------------------------------------------------------------
Water and Sewer -- 1.4%
---------------------------------------------------------------------------------------
Aa2 AA $ 2,000 Orange County, Water and Sewer, 5.20%,
7/1/16 $ 2,032,800
---------------------------------------------------------------------------------------
$ 2,032,800
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $129,769,473) $ 143,591,761
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by North Carolina
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 22.2% 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 1.2% to 8.3% of total investments.
(1) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At February 28,
1999, the value of these securities amounted to $6,794,010 or 4.7% of the
Portfolio's net assets.
(2) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
69
<PAGE>
OREGON MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Cogeneration -- 2.2%
---------------------------------------------------------------------------------------
NR NR $ 2,000 Western Generation Agency, (Wauna
Cogeneration), (AMT), 7.40%, 1/1/16 $ 2,175,140
---------------------------------------------------------------------------------------
$ 2,175,140
---------------------------------------------------------------------------------------
Education -- 1.1%
---------------------------------------------------------------------------------------
A2 NR $ 1,000 Salem EFA, (Willamette University),
6.10%, 4/1/14 $ 1,082,210
---------------------------------------------------------------------------------------
$ 1,082,210
---------------------------------------------------------------------------------------
Electric Utilities -- 8.4%
---------------------------------------------------------------------------------------
Aa1 AA- $ 4,000 Eugene, Trojan Nuclear Power, 5.90%,
9/1/09 $ 4,120,000
Aa1 AA- 1,000 Northern Wasco County, (Bonneville Power
Administration), 5.20%, 12/1/24 1,007,000
Baa1 BBB+ 2,750 Puerto Rico Electric Power Authority,
4.75%, 7/1/24 2,611,895
A A+ 500 Puerto Rico Telephone Authority,
Variable Rate, 1/1/20(1) 555,880
---------------------------------------------------------------------------------------
$ 8,294,775
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 6.1%
---------------------------------------------------------------------------------------
A1 AAA $ 2,000 Medford, Rogue Valley Memorial Hospital,
Escrowed to Maturity, 6.25%, 12/1/07 $ 2,215,500
NR A+ 1,250 Oregon State, Health, Housing,
Educational and Cultural Facilities
Authority, (Reed College), Prerefunded
to 7/1/02, 6.75%, 7/1/21 1,365,388
Aaa AAA 55 Port of Portland, (Portland
International Airport), (AMBAC),
Prerefunded to 07/01/01, (AMT), 6.25%,
7/1/18 59,462
NR AAA 2,000 Puerto Rico, RIBS, (AMBAC), Prerefunded
to 7/1/02, Variable Rate, 7/1/15(1)(2) 2,342,140
---------------------------------------------------------------------------------------
$ 5,982,490
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
General Obligations -- 16.6%
---------------------------------------------------------------------------------------
Aa NR $ 1,000 Lane County, Eugene School District,
5.375%, 7/1/13 $ 1,052,480
Aa2 AA 1,000 Oregon State, Board of Higher Education,
6.00%, 10/15/18 1,065,780
Aa2 AA 1,250 Oregon State, Elderly and Disabled
Housing, 6.375%, 8/1/24 1,360,800
Aa2 AA 4,610 Oregon State, Elderly and Disabled
Housing, (AMT), 5.65%, 8/1/26 4,868,759
Aa2 AA 1,120 Oregon State, Veterans Welfare, 5.85%,
10/1/15 1,176,224
Aa2 AA 1,500 Oregon State, Veterans Welfare, 5.90%,
10/1/17 1,593,705
Baa1 A 4,850 Puerto Rico, 0.00%, 7/1/17 1,949,409
Baa1 A 3,500 Puerto Rico Public Improvement, 4.75%,
7/1/23 3,327,730
---------------------------------------------------------------------------------------
$ 16,394,887
---------------------------------------------------------------------------------------
Hospital -- 1.1%
---------------------------------------------------------------------------------------
A3 A $ 1,000 Clackamas County, (Kaiser Permanente),
6.25%, 4/1/21 $ 1,053,740
---------------------------------------------------------------------------------------
$ 1,053,740
---------------------------------------------------------------------------------------
Housing -- 25.5%
---------------------------------------------------------------------------------------
NR NR $ 2,105 Hood River County, Health Facility
Authority, Elderly Housing Revenue,
(Down Manor Project), 6.50%, 1/1/17 $ 2,191,031
Aa2 NR 2,000 Oregon State, Housing and Community
Services Department, MFMR, (AMT), 5.70%,
7/1/29 2,079,100
Aa2 NR 1,500 Oregon State, Housing and Community
Services Department, MFMR, (AMT), 6.20%,
7/1/28 1,604,085
Aa2 NR 1,975 Oregon State, Housing and Community
Services Department, SFMR, (AMT), 6.20%,
7/1/27 2,103,039
Aa2 NR 1,970 Oregon State, Housing and Community
Services Department, SFMR, (AMT), 6.40%,
7/1/26 2,115,819
Aa2 NR 2,500 Oregon State, Housing and Community
Services Department, SFMR, (AMT), 6.45%,
7/1/26 2,686,100
NR A 1,000 Portland Housing Authority, 6.00%,
1/1/27 1,034,650
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
70
<PAGE>
OREGON MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing (continued)
---------------------------------------------------------------------------------------
Aa3 NR $ 4,810 Portland Housing Authority, MFMR, (Berry
Ridge), (AMT), 6.30%, 5/1/29 $ 5,105,814
Aa1 NR 2,875 Portland Housing Authority, MFMR,
(Cherry Blossom), (AMT), 6.20%, 12/20/36 3,088,124
Aa3 NR 1,000 Washington County Housing Authority,
MFMR, (Bethany Meadows), (AMT), 5.75%,
9/1/17 1,040,000
Aa3 NR 2,000 Washington County Housing Authority,
MFMR, (Bethany Meadows), (AMT), 5.85%,
9/1/27 2,079,600
---------------------------------------------------------------------------------------
$ 25,127,362
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 9.4%
---------------------------------------------------------------------------------------
Baa2 BBB- $ 3,500 Oregon EDA, (Georgia Pacific), (AMT),
6.35%, 8/1/25 $ 3,704,015
NR BBB- 3,500 Port of Astoria, Pollution Control
Revenue, (James River Corp.), 6.55%,
2/1/15 3,728,480
NR NR 750 Port of Portland, (Ash Grove Cement
Co.), 7.25%, 10/1/09 802,058
NR NR 1,000 Port of Portland, (North Portland Crown
Zellerbach Corp.), 6.125%, 5/15/08 1,002,880
---------------------------------------------------------------------------------------
$ 9,237,433
---------------------------------------------------------------------------------------
Insured-Certificates of Participation -- 1.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Oregon State Department, Administrative
Services, (AMBAC), 5.00%, 5/1/24 $ 1,486,110
---------------------------------------------------------------------------------------
$ 1,486,110
---------------------------------------------------------------------------------------
Insured-Education -- 4.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 4,850 Oregon Health Science University,
Capital Appreciation (MBIA), 0.00%,
7/1/21 $ 1,552,437
Aaa AAA 1,000 Oregon State, Health, Housing,
Educational and Cultural Facilities
Authority, (Lewis and Clark College),
(MBIA), 6.00%, 10/1/13 1,108,730
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Education (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Oregon State, Health, Housing,
Educational and Cultural Facilities
Authority, (Lewis and Clark College),
(MBIA), 6.125%, 10/1/24 $ 1,666,005
---------------------------------------------------------------------------------------
$ 4,327,172
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 5.6%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Emerald People's Utility District,
Electric System, (AMBAC), 5.75%, 11/1/16 $ 1,052,760
Aaa AAA 500 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 7/1/03(1) 578,750
Aaa AAA 5,300 Puerto Rico Electric Power Authority,
(MBIA), 0.00%, 7/1/17 2,172,629
Aaa AAA 1,600 Puerto Rico Telephone Authority, (MBIA),
Variable Rate, 1/16/15(1) 1,728,000
---------------------------------------------------------------------------------------
$ 5,532,139
---------------------------------------------------------------------------------------
Insured-General Obligations -- 0.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Columbia, School District North 502,
(FGIC), 0.00%, 6/1/17 $ 400,030
---------------------------------------------------------------------------------------
$ 400,030
---------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 1.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,250 Oregon State, Department of General
Services, Real Property Financing
Program, (AMBAC), 6.25%, 9/1/15 $ 1,353,288
---------------------------------------------------------------------------------------
$ 1,353,288
---------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Portland, Arena Natural Gas Tax Revenue
(AMBAC), 0.00%, 6/1/17 $ 353,470
---------------------------------------------------------------------------------------
$ 353,470
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
71
<PAGE>
OREGON MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Transportation -- 6.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Oregon Department of Transportation,
(Westside Light Rail), (MBIA), 6.25%,
6/1/09 $ 1,680,735
Aaa AAA 945 Port of Portland, (Portland
International Airport), (AMBAC), (AMT),
6.25%, 7/1/18 1,008,816
Aaa AAA 750 Port of Portland, (Portland
International Airport), (FGIC), (AMT),
5.00%, 7/1/28 733,350
Aaa AAA 2,750 Port of Portland, Portland International
Airport, (FGIC), (AMT), 6.00%, 7/1/23 2,919,758
---------------------------------------------------------------------------------------
$ 6,342,659
---------------------------------------------------------------------------------------
Special Tax Revenue -- 5.2%
---------------------------------------------------------------------------------------
A NR $ 1,000 Portland, Urban Renewal and
Redevelopment Bonds, (Downtown
Waterfront), 6.40%, 6/1/08 $ 1,070,240
NR AAA 2,000 Puerto Rico, Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) 1,987,500
A1 AA+ 2,000 Tri-County Metropolitan Transportation
District, Limited Tax Pledge, 5.70%,
8/1/13 2,133,660
---------------------------------------------------------------------------------------
$ 5,191,400
---------------------------------------------------------------------------------------
Transportation -- 2.1%
---------------------------------------------------------------------------------------
Baa3 BBB- $ 1,500 Port of Portland, Special Obligation
Revenue Bonds, (Delta Airlines, Inc.),
(AMT), 6.20%, 9/1/22 $ 1,555,110
Baa1 A 500 Puerto Rico Highway and Transportation
Authority, 6.375%, 7/1/08 542,575
---------------------------------------------------------------------------------------
$ 2,097,685
---------------------------------------------------------------------------------------
Water and Sewer -- 2.3%
---------------------------------------------------------------------------------------
NR A+ $ 2,000 Clackamas County, Water Revenue, 6.375%,
10/1/14 $ 2,239,620
---------------------------------------------------------------------------------------
$ 2,239,620
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $92,026,997) $ 98,671,610
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Oregon
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 22.5% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.6% to 10.0% 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. At February 28,
1999, the value of these securities amounted to $4,329,640 or 4.3% of the
Portfolio's net assets.
SEE NOTES TO FINANCIAL STATEMENTS
72
<PAGE>
SOUTH CAROLINA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Electric Utilities -- 8.3%
---------------------------------------------------------------------------------------
A2 A $ 1,650 Berkeley County, (South Carolina
Electric and Gas Co.), 6.50%, 10/1/14 $ 1,813,647
Baa2 BBB- 500 Piedmont Municipal Power Agency,
Electric Revenue, 5.25%, 1/1/21 478,975
Baa1 BBB+ 1,000 Puerto Rico Electric Power Authority,
4.75%, 7/1/24 949,780
Aa2 AA- 1,000 South Carolina Public Service Authority,
5.125%, 1/1/32 973,590
---------------------------------------------------------------------------------------
$ 4,215,992
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 7.6%
---------------------------------------------------------------------------------------
A3 NR $ 1,750 Myrtle Beach Convention Center,
Prerefunded to 7/1/02, 6.875%, 7/1/17 $ 1,956,325
Aaa AAA 300 Piedmont Municipal Power Agency, (MBIA),
Escrowed to Maturity, 6.25%, 1/1/09 349,557
Baa1 BBB+ 1,400 Puerto Rico Electric Power Authority,
Prerefunded to 7/1/02, 6.25%, 7/1/17 1,536,192
---------------------------------------------------------------------------------------
$ 3,842,074
---------------------------------------------------------------------------------------
General Obligations -- 1.3%
---------------------------------------------------------------------------------------
Baa1 A $ 500 Puerto Rico, 0.00%, 7/1/18 $ 190,150
Baa1 A 500 Puerto Rico Public Improvement, 4.75%,
7/1/23 475,390
---------------------------------------------------------------------------------------
$ 665,540
---------------------------------------------------------------------------------------
Hospital -- 3.1%
---------------------------------------------------------------------------------------
A3 NR $ 1,440 Horry County, (Conway Hospital), 6.75%,
7/1/12 $ 1,556,150
---------------------------------------------------------------------------------------
$ 1,556,150
---------------------------------------------------------------------------------------
Housing -- 10.0%
---------------------------------------------------------------------------------------
NR AA- $ 1,780 South Carolina Housing Finance
Authority, MFMR, (Runaway Bay
Apartments), 6.20%, 12/1/20 $ 1,860,509
Aa AA 1,500 South Carolina Housing Finance
Authority, SFMR, 6.375%, 7/1/16 1,602,585
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Housing (continued)
---------------------------------------------------------------------------------------
Aa2 NR $ 1,500 South Carolina Housing Finance
Authority, SFMR, 6.45%, 7/1/17 $ 1,604,130
---------------------------------------------------------------------------------------
$ 5,067,224
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 26.9%
---------------------------------------------------------------------------------------
Baa2 BB $ 1,890 Aiken County, (Beloit Corp.), 6.00%,
12/1/11 $ 1,831,864
NR BBB+ 1,500 Chester County, (Spring Industries),
7.35%, 2/1/14 1,612,470
A2 A-1+ 1,150 Darlington County, (Carolina Power and
Light Co.), 6.60%, 11/1/10 1,276,086
A1 AA- 1,500 Darlington County, (Nucor Corp.), (AMT),
5.75%, 8/1/23 1,555,740
A2 A 2,500 Darlington County, (Sonoco Products),
6.00%, 4/1/26 2,662,949
A2 A 500 Darlington County, (Sonoco Products),
(AMT), 6.125%, 6/1/25 530,875
NR NR 465 Florence County, (Stone Container Co.),
7.375%, 2/1/07 494,402
A3 BBB+ 1,000 Georgetown County, (International Paper
Co.), 5.70%, 10/1/21 1,019,060
A1 A- 1,000 Richland County, (Union Camp Corp.),
(AMT), 6.75%, 5/1/22 1,091,840
A2 A+ 1,500 York County, (Hoechst Celanese Corp.),
(AMT), 5.70%, 1/1/24 1,532,235
---------------------------------------------------------------------------------------
$ 13,607,521
---------------------------------------------------------------------------------------
Insured-Education -- 1.0%
---------------------------------------------------------------------------------------
Aaa NR $ 500 South Carolina Educational Facilities
Authority, (Furman University), (AMBAC),
5.00%, 10/1/29 $ 491,890
---------------------------------------------------------------------------------------
$ 491,890
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 8.1%
---------------------------------------------------------------------------------------
Aaa NR $ 500 Edgefield County, Water and Sewer
Authority, (FGIC), 5.00%, 1/1/28 $ 490,605
Aaa AAA 195 Piedmont Municipal Power Agency,
Electric Revenue, (MBIA), 6.30%, 1/1/14 213,266
Aaa AAA 2,500 Puerto Rico Electric Power Authority,
(MBIA), (IBC), 0.00%, 7/1/17 1,024,825
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
73
<PAGE>
SOUTH CAROLINA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Electric Utilities (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 1,250 South Carolina Public Service Authority,
(AMBAC), 6.375%, 7/1/21 $ 1,367,063
Aaa AAA 1,000 South Carolina State Public Service
Authority, (MBIA), 5.00%, 1/1/29 980,930
---------------------------------------------------------------------------------------
$ 4,076,689
---------------------------------------------------------------------------------------
Insured-Hospital -- 12.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,500 Greenwood County, (Self Memorial
Hospital), (FGIC), 5.875%, 10/1/17 $ 1,587,150
Aaa AAA 1,500 South Carolina Jobs Economic Development
Authority, (Anderson Area Medical
Center), (MBIA), 5.25%, 2/1/26 1,504,710
Aaa AAA 1,000 South Carolina Jobs Economic Development
Authority, (Baptist Hospital), (AMBAC),
5.45%, 8/1/15 1,035,460
Aaa AAA 1,000 South Carolina Jobs Economic Development
Authority, (Baptist Hospital), (AMBAC),
Variable Rate, 8/1/15(1) 1,070,000
NR AAA 1,000 South Carolina Jobs Economic Development
Authority, (Oconee Memorial Hospital),
(CLEE), 6.15%, 3/1/25 1,101,670
---------------------------------------------------------------------------------------
$ 6,298,990
---------------------------------------------------------------------------------------
Insured-Housing -- 2.1%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 South Carolina Housing Finance and
Development Authority, SFMR, (AMBAC),
(AMT), 5.95%, 7/1/29 $ 1,053,770
---------------------------------------------------------------------------------------
$ 1,053,770
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 3.2%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Charleston County, (Charleston PFC),
(MBIA), 6.10%, 6/1/11 $ 553,195
Aaa AAA 1,000 Florence County, (Law Enforcement
Center), (AMBAC), 6.00%, 3/1/14 1,089,570
---------------------------------------------------------------------------------------
$ 1,642,765
---------------------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 1.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Florence County, (McLeod Regional
Medical Center), (MBIA), 5.00%, 11/1/20 $ 976,010
---------------------------------------------------------------------------------------
$ 976,010
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 1.8%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Charleston, Waterworks and Sewer
Revenue, (FGIC), 4.50%, 1/1/24 $ 924,570
---------------------------------------------------------------------------------------
$ 924,570
---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 1.7%
---------------------------------------------------------------------------------------
Baa2 NR $ 750 Lexington County School District, 6.90%,
7/1/08 $ 847,118
---------------------------------------------------------------------------------------
$ 847,118
---------------------------------------------------------------------------------------
Pooled Loans -- 3.1%
---------------------------------------------------------------------------------------
NR A $ 1,500 South Carolina Education Authority,
Student Loan, (AMT), 6.30%, 9/1/08 $ 1,592,835
---------------------------------------------------------------------------------------
$ 1,592,835
---------------------------------------------------------------------------------------
Solid Waste -- 3.4%
---------------------------------------------------------------------------------------
NR NR $ 1,500 Spartanburg County, Solid Waste,
(Bavarian Motor Works Corp.), (AMT),
7.55%, 11/1/24 $ 1,706,115
---------------------------------------------------------------------------------------
$ 1,706,115
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
74
<PAGE>
SOUTH CAROLINA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Special Tax Revenue -- 0.7%
---------------------------------------------------------------------------------------
NR AAA $ 375 Puerto Rico, Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) $ 372,656
---------------------------------------------------------------------------------------
$ 372,656
---------------------------------------------------------------------------------------
Transportation -- 3.3%
---------------------------------------------------------------------------------------
NR BBB- $ 1,000 Connector 2000 Association Inc., Bridge
& Toll Road Revenue, (Southern
Connector), 5.25%, 1/1/23 $ 937,310
Baa1 A 750 Puerto Rico Highway and Transportation
Authority, 4.75%, 7/1/38 712,275
---------------------------------------------------------------------------------------
$ 1,649,585
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $46,719,996) $ 50,587,494
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by South Carolina
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 31.3% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance The aggregate percentage by financial institution
ranged from 2.2% to 12.1% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At February 28,
1999, the value of these securities amounted to $372,656 or 0.7% of the
Portfolio's net assets.
SEE NOTES TO FINANCIAL STATEMENTS
75
<PAGE>
TENNESSEE MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Education -- 4.8%
---------------------------------------------------------------------------------------
Baa2 NR $ 1,000 Metropolitan Government of Nashville and
Davidson County, (Belmont University),
6.40%, 12/1/19 $ 1,070,520
Aa3 AA 1,500 Metropolitan Government of Nashville and
Davidson County, (Vanderbilt
University), 5.00%, 10/1/28 1,471,515
---------------------------------------------------------------------------------------
$ 2,542,035
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 8.0%
---------------------------------------------------------------------------------------
Baa1 NR $ 500 Clarksville, (Clarksville Memorial),
Prerefunded to 7/1/03, 6.25%, 7/1/08 $ 556,165
Baa1 NR 500 Clarksville, (Clarksville Memorial),
Prerefunded to 7/1/03, 6.375%, 7/1/18 558,640
Aaa AAA 1,000 Johnson, School District Sales Tax,
(AMBAC), Prerefunded to 5/1/06, 6.70%,
5/1/21 1,167,340
NR AAA 300 Puerto Rico, "RIBS", (AMBAC),
Prerefunded to 7/1/02, Variable Rate,
7/1/15(1)(2) 351,321
Aaa AAA 1,500 Shelby County, (Lebonheur Children's
Hospital), (MBIA), Escrowed to Maturity,
5.50%, 8/15/12 1,623,825
---------------------------------------------------------------------------------------
$ 4,257,291
---------------------------------------------------------------------------------------
General Obligations -- 4.0%
---------------------------------------------------------------------------------------
Aa2 AA $ 1,000 Metropolitan Government of Nashville and
Davidson County, 5.875%, 5/15/21 $ 1,085,660
Aa3 AA+ 1,000 Shelby County, 5.125%, 3/1/16 1,035,200
---------------------------------------------------------------------------------------
$ 2,120,860
---------------------------------------------------------------------------------------
Hospital -- 6.3%
---------------------------------------------------------------------------------------
Baa1 BBB+ $ 250 Knox County, (East Tennessee
Children's), 6.50%, 10/1/12 $ 264,383
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Hospital (continued)
---------------------------------------------------------------------------------------
Aa2 AA+ 1,000 Metropolitan Government of Nashville and
Davidson County, (Charity Obligated
Group), 5.125%, 11/1/27 $ 977,870
Baa2 BBB $ 1,000 Montgomery County, (Clarksville Regional
Health System), 5.375%, 1/1/28 961,000
NR A- 1,000 Sumner County, (Sumner Regional Health
Systems), 7.50%, 11/1/14 1,141,320
---------------------------------------------------------------------------------------
$ 3,344,573
---------------------------------------------------------------------------------------
Housing -- 15.1%
---------------------------------------------------------------------------------------
NR A $ 750 Knoxville Community Development Corp.,
(Clinton Towers), 6.65%, 10/15/10 $ 791,595
NR AAA 500 Knoxville Community Development Corp.,
(Morningside Gardens), (GNMA), 6.10%,
7/20/20 520,055
NR A 1,500 Metropolitan Government of Nashville and
Davidson County, (The Park at
Hermitage), 5.90%, 2/1/19 1,533,255
Aa2 A-1+ 1,000 Tennessee Housing Development Agency,
5.375%, 7/1/23 1,010,510
A1 A+ 1,000 Tennessee Housing Development Agency,
5.85%, 7/1/13 1,041,260
A1 A+ 2,000 Tennessee Housing Development Agency,
5.95%, 7/1/28 2,076,779
Aa AA 1,000 Tennessee Housing Development Agency,
(AMT), 5.75%, 7/1/24 1,024,990
---------------------------------------------------------------------------------------
$ 7,998,444
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 26.6%
---------------------------------------------------------------------------------------
Aa3 AA- $ 1,000 Chattanooga, (E.I. du Pont de Nemours
and Co.), 6.35%, 7/1/22 $ 1,098,010
NR NR 500 Hardeman County, (Correctional
Facilities Corp.), 7.75%, 8/1/17 562,925
Aa3 AA- 1,000 Humphreys County, (E.I. du Pont de
Nemours and Co.), (AMT), 6.70%, 5/1/24 1,115,230
Aa2 AA 2,000 Loudon County, (Kimberly-Clark Corp.),
(AMT), 6.20%, 2/1/23 2,152,859
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
76
<PAGE>
TENNESSEE MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Development Revenue (continued)
---------------------------------------------------------------------------------------
A3 A $ 2,250 Maury County, (Saturn Corp.), 6.50%,
9/1/24 $ 2,437,222
Baa1 BBB 1,500 McMinn County, (Calhoun Newsprint Co. -
Bowater Inc.), (AMT), 7.40%, 12/1/22 1,662,720
Baa2 BBB 1,000 Memphis-Shelby County Airport Authority,
(Federal Express Corp.), 6.75%, 9/1/12 1,092,550
Baa2 BBB 1,000 Memphis-Shelby County Airport Authority,
(Federal Express Corp.), (AMT), 6.20%,
7/1/14 1,042,970
NR NR 500 Metropolitan Government of Nashville and
Davidson County, (Osco Treatment
Systems), (AMT), 6.00%, 5/1/03 519,815
Baa3 BBB- 1,250 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,351,188
A3 NR 1,000 South Fulton County, (Tyson Foods Co.),
(AMT), 6.40%, 10/1/20 1,080,370
---------------------------------------------------------------------------------------
$ 14,115,859
---------------------------------------------------------------------------------------
Insured-Education -- 4.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,230 Metropolitan Government of Nashville and
Davidson County, HEFA, (Meharry Medical
College), (AMBAC), 6.00%, 12/1/19 $ 1,404,082
Aaa AAA 1,000 Metropolitan Government of Nashville and
Davidson County, HEFA, (Meharry Medical
College), (AMBAC),5.00%, 12/1/24 982,150
---------------------------------------------------------------------------------------
$ 2,386,232
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 6.4%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Lawrenceburg, Electric Revenues, (MBIA),
6.625%, 7/1/18 $ 1,221,800
Aaa AAA 1,750 Madison County Suburban Utility
District, (MBIA), 5.00%, 2/1/19 1,740,113
Aaa AAA 400 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 8.17%,
7/1/03(2) 463,000
---------------------------------------------------------------------------------------
$ 3,424,913
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Insured-Hospital -- 4.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 500 Bristol, (Bristol Memorial Hospital),
(FGIC), 6.75%, 9/1/10 $ 606,515
Aaa AAA 250 Chattanooga, (Memorial Hospital),
(MBIA), 6.625%, 9/1/09 299,570
Aaa AAA 1,500 Chattanooga-Hamilton County, (Erlanger
Medical Center), (MBIA), 5.00%, 10/1/28 1,471,515
Aaa AAA 250 Jackson, Hospital Revenue,
(Jackson-Madison County General
Hospital), (AMBAC), 5.00%, 4/1/28 245,288
---------------------------------------------------------------------------------------
$ 2,622,888
---------------------------------------------------------------------------------------
Insured-Housing -- 2.1%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Knox County, SCA Realty, MFMR, (FSA),
7.125%, 1/1/30 $ 1,110,190
---------------------------------------------------------------------------------------
$ 1,110,190
---------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.9%
---------------------------------------------------------------------------------------
NR AAA $ 500 Puerto Rico Public Finance Corp.,
(AMBAC-TCRS), Variable Rate,
6/1/26(1)(2) $ 504,700
---------------------------------------------------------------------------------------
$ 504,700
---------------------------------------------------------------------------------------
Insured-Transportation -- 2.2%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Memphis-Shelby County Airport Authority,
(MBIA), (AMT), 6.50%, 2/15/08 $ 1,163,160
---------------------------------------------------------------------------------------
$ 1,163,160
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 2.8%
---------------------------------------------------------------------------------------
Aaa AAA $ 350 Metropolitan Government of Nashville and
Davidson County, Water System, (AMBAC),
Variable Rate, 1/1/22(2) $ 403,375
Aaa AAA 1,000 Metropolitan Government of Nashville and
Davidson County, Water System, (FGIC),
5.20%, 1/1/13 1,060,360
---------------------------------------------------------------------------------------
$ 1,463,735
---------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
77
<PAGE>
TENNESSEE MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nursing Home -- 2.1%
---------------------------------------------------------------------------------------
NR AA $ 1,000 Tennessee State Veterans' Homes Board,
(Humboldt), 6.65%, 2/1/14 $ 1,117,610
---------------------------------------------------------------------------------------
$ 1,117,610
---------------------------------------------------------------------------------------
Pooled Loans -- 3.4%
---------------------------------------------------------------------------------------
NR A $ 1,200 Tennessee Local Development Authority,
Community Provider, 6.55%, 10/1/23 $ 1,308,888
A2 AA 500 Tennessee Local Development Authority,
State Loan Program, 5.00%, 3/1/15 499,995
---------------------------------------------------------------------------------------
$ 1,808,883
---------------------------------------------------------------------------------------
Special Tax Revenue -- 1.2%
---------------------------------------------------------------------------------------
NR AAA $ 625 Puerto Rico, Infrastructure Financing
Authority, Variable Rate, 7/1/28(1)(2) $ 621,094
---------------------------------------------------------------------------------------
$ 621,094
---------------------------------------------------------------------------------------
Transportation -- 4.7%
---------------------------------------------------------------------------------------
NR NR $ 900 Memphis-Shelby County Airport Authority,
6.12%, 12/1/16 $ 916,515
Baa1 A 1,575 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 1,560,416
---------------------------------------------------------------------------------------
$ 2,476,931
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $49,054,272) $ 53,079,398
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Tennessee
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 29.8% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 3.0% to 14.2% of total investments.
(1) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At February 28,
1999, the value of these securities amounted to $1,477,115 or 2.7% of the
Portfolio's net assets.
(2) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
78
<PAGE>
VIRGINIA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Education -- 4.6%
---------------------------------------------------------------------------------------
NR A- $ 2,000 Lynchburgh, (Randolph-Macon Woman's
College), 5.875%, 9/1/23 $ 2,093,440
NR A- 2,000 Medical College of Hampton Roads,
6.875%, 11/15/11 2,148,900
Baa3 NR 1,000 Rockingham County IDA, (Bridgewater
College), 5.95%, 10/1/13 1,038,270
NR A+ 1,000 Virginia College Building Authority,
(Hampton University), 5.75%, 4/1/14 1,055,330
NR A+ 400 Virginia College Building Authority,
(Hampton University), 6.50%, 4/1/08 439,800
---------------------------------------------------------------------------------------
$ 6,775,740
---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 15.9%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,665 Arlington County IDA, (AMBAC),
Prerefunded to 9/1/03, 5.00%, 9/1/21 $ 1,650,548
Aaa NR 1,000 Arlington County IDA, (Arlington
Hospital), Prerefunded to 9/1/01,
7.125%, 9/1/21 1,106,630
A NR 500 Augusta County IDA, (Augusta Hospital),
Prerefunded to 9/1/01, 7.00%, 9/1/21 550,605
Aaa AAA 2,000 Loudoun County IDA, (Falcons Landing),
Prerefunded to 11/1/04, 8.75%, 11/1/24 2,537,740
A2 NR 1,250 Martinsville, (Memorial Hospital of
Martinsville and Henry County),
Prerefunded to 1/1/01, 7.00%, 1/1/06 1,327,175
Aaa NR 2,400 Prince William County IDA, (Potomac
Hospital), Prerefunded to 10/1/05,
6.85%, 10/1/25 2,844,648
Aaa AAA 1,000 Richmond Metropolitan Authority
Expressway, (FGIC), Prerefunded to
7/15/02, 6.375%, 7/15/16 1,105,230
A NR 3,000 Rockingham and Harrisonburg Counties,
Harrisonburg Redevelopment and Housing
Authority, Prerefunded to 9/1/01, 6.50%,
9/1/14 3,217,380
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Escrowed / Prerefunded (continued)
---------------------------------------------------------------------------------------
NR NR $ 2,000 Virgin Islands Public Finance Authority,
Prerefunded to 10/1/02, 7.25%, 10/1/18 $ 2,279,700
NR NR 925 Virgin Islands Water and Power
Authority, Prerefunded to 7/1/01, 7.40%,
7/1/11 1,012,884
NR A+ 1,700 Virginia Beach, Water and Sewer System,
Prerefunded to 2/1/02, 6.625%, 2/1/17 1,868,487
NR AAA 1,570 Virginia College Building Authority,
(Hampden-Sydney College), Prerefunded to
9/1/01, 6.60%, 9/1/16 1,719,119
A2 NR 1,060 Washington County IDA, (Johnston
Memorial Hospital), Prerefunded to
7/1/02, 7.00%, 7/1/22 1,188,398
A2 NR 1,000 Washington County IDA, (Johnston
Memorial Hospital), Prerefunded to
7/1/05, 6.00%, 7/1/14 1,123,930
---------------------------------------------------------------------------------------
$ 23,532,474
---------------------------------------------------------------------------------------
General Obligations -- 2.0%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Fairfax County, 5.625%, 6/1/14 $ 1,070,110
Baa1 A 350 Puerto Rico, 0.00%, 7/1/04 283,350
Baa1 A 1,700 Puerto Rico, 4.50%, 7/1/23 1,564,136
---------------------------------------------------------------------------------------
$ 2,917,596
---------------------------------------------------------------------------------------
Hospital -- 11.7%
---------------------------------------------------------------------------------------
A2 NR $ 3,800 Albermarle County IDA, (Martha Jefferson
Hospital), 5.50%, 10/1/20 $ 3,855,366
A2 NR 170 Chesapeake Hospital Authority,
(Chesapeake General Hospital), 7.60%,
7/1/00 175,794
Aa2 AA 2,910 Fairfax County IDA, (Inova Health System
Hospitals), 5.00%, 8/15/14 2,958,655
Aa2 AA 2,000 Fairfax County IDA, (Inova Health System
Hospitals), 5.00%, 8/15/15 2,025,780
Aa2 AA 1,000 Fairfax County IDA, (Inova Health System
Hospitals), 6.00%, 8/15/26 1,086,290
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
79
<PAGE>
VIRGINIA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hospital (continued)
---------------------------------------------------------------------------------------
Aa2 AA- $ 3,500 Peninsula Ports Authority of Virginia,
(Riverside Health System), 6.625%,
7/1/10 $ 3,882,970
Aa2 AA 3,000 Virginia Beach Development Authority,
(Sentara Bayside Hospital), 6.60%,
11/1/09 3,293,310
---------------------------------------------------------------------------------------
$ 17,278,165
---------------------------------------------------------------------------------------
Housing -- 9.2%
---------------------------------------------------------------------------------------
NR BBB $ 1,000 Alexandria, Redevelopment and Housing
Authority, Multi-family Housing Revenue,
(Buckingham Village Apartments), (AMT),
5.45%, 7/1/18 $ 992,840
NR AAA 1,250 Fairfax County Redevelopment and Housing
Authority MFMR, FHA, 7.00%, 5/1/26 1,331,350
NR AAA 960 Hampton Redevelopment and Housing
Authority, Senior Living, (GNMA), 6.00%,
1/20/26 1,021,843
NR AAA 1,000 Newport News Redevelopment and Housing
Authority, MFMR, 5.85%, 8/20/30 1,058,140
NR AAA 1,800 Suffolk Redevelopment and Housing
Authority, (Prince Williams Commons),
(FNMA), 6.45%, 6/1/19 1,969,848
Aa AA+ 5,000 Virginia Housing Development Authority,
MFMR, (AMT), 6.75%, 7/1/21 5,250,550
Aa NR 1,900 Virginia Housing Development Authority,
SFMR, Variable Rate, 7/1/04(1) 2,025,875
---------------------------------------------------------------------------------------
$ 13,650,446
---------------------------------------------------------------------------------------
Industrial Development Revenue -- 19.5%
---------------------------------------------------------------------------------------
Baa2 NR $ 4,500 Bedford County, (Nekoosa Packaging),
(AMT), 5.60%, 12/1/25 $ 4,565,970
Aa3 AA- 2,190 Chesapeake, (Cargill, Inc.), 5.875%,
3/1/13 2,338,767
A2 A+ 1,500 Giles, (Hoechst Celanese Corp.), (AMT),
5.95%, 12/1/25 1,552,095
A2 A+ 2,000 Giles, (Hoechst Celanese Corp.), (AMT),
6.45%, 5/1/26 2,180,740
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Industrial Development Revenue (continued)
---------------------------------------------------------------------------------------
A2 A+ $ 500 Giles, (Hoechst Celanese Corp.), (AMT),
6.625%, 12/1/22 $ 535,105
A3 A- 2,000 Henrico County, (Browning Ferris, Inc.),
(AMT), 5.45%, 1/1/14 2,094,460
A1 A- 4,000 Isle of Wright County IDA, (Union Camp
Corp.), (AMT), 6.55%, 4/1/24(2) 4,339,800
A1 A+ 2,000 James City County IDA, (Anheuser Busch),
(AMT), 6.00%, 4/1/32 2,140,880
Baa3 BBB- 1,000 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 1,080,950
Baa3 BBB- 1,000 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.30%, 6/1/23 1,062,300
Baa3 BBB 980 West Point, (Chesapeake Corp.), 6.25%,
3/1/19 1,035,703
Baa3 BBB 5,520 West Point, (Chesapeake Corp.), (AMT),
6.375%, 3/1/19 5,820,839
---------------------------------------------------------------------------------------
$ 28,747,609
---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 0.7%
---------------------------------------------------------------------------------------
Aaa AAA $ 900 Puerto Rico Telephone Authority, (MBIA),
Variable Rate, 1/16/15(1) $ 972,000
---------------------------------------------------------------------------------------
$ 972,000
---------------------------------------------------------------------------------------
Insured-General Obligations -- 3.5%
---------------------------------------------------------------------------------------
Aaa AAA $ 5,250 Richmond, (FGIC), 5.00%, 1/15/21(2) $ 5,198,025
---------------------------------------------------------------------------------------
$ 5,198,025
---------------------------------------------------------------------------------------
Insured-Hospital -- 8.8%
---------------------------------------------------------------------------------------
Aaa AAA $ 3,585 Fredericksburg IDA, (Medicorp Health),
(AMBAC), 5.25%, 6/15/23 $ 3,608,840
Aaa AAA 1,500 Henrico County, (Bon Secour Health
Systems), (MBIA), 6.25%, 8/15/20 1,754,925
Aaa AAA 5,000 Virginia Beach, (Virginia Beach Memorial
Hospital), (AMBAC), 5.125%, 2/15/18 5,097,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
80
<PAGE>
VIRGINIA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Hospital (continued)
---------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Winchester IDA, (Winchester Medical
Center), (AMBAC), Variable Rate,
1/21/14(1) $ 2,540,000
---------------------------------------------------------------------------------------
$ 13,001,265
---------------------------------------------------------------------------------------
Insured-Miscellaneous -- 1.3%
---------------------------------------------------------------------------------------
Aaa AAA $ 2,000 Norfolk, Parking System Revenue, (MBIA),
5.00%, 2/1/29(3) $ 1,980,000
---------------------------------------------------------------------------------------
$ 1,980,000
---------------------------------------------------------------------------------------
Insured-Transportation -- 0.8%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,105 Metropolitan Washington Airports
Authority, (MBIA), (AMT), 5.75%, 10/1/20 $ 1,156,438
---------------------------------------------------------------------------------------
$ 1,156,438
---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 8.8%
---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Loudoun County, Sanitation Authority,
Water and Sewer Revenue, (MBIA), 4.75%,
1/1/21 $ 961,150
Aaa AAA 1,000 Prince William County Service Authority,
(FGIC), 4.75%, 7/1/29 951,380
Aaa AAA 4,000 Richmond, Public Utility Revenue,
(MBIA), 5.125%, 1/15/28 4,016,360
Aaa AAA 3,000 Upper Occoquan Sewage Authority, (MBIA),
5.00%, 7/1/25 2,967,300
Aaa AAA 1,000 Upper Occoquan Sewage Authority, (MBIA),
5.15%, 7/1/20 1,033,470
Aaa AAA 3,150 Upper Occoquan Sewer Authority, (MBIA),
4.75%, 7/1/29 2,996,847
---------------------------------------------------------------------------------------
$ 12,926,507
---------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 4.3%
---------------------------------------------------------------------------------------
Aa2 AA $ 2,000 Henrico County IDA, Lease, 7.00%, 8/1/13 $ 2,340,160
Aa2 AA 2,250 Henrico County IDA, Lease, 7.125%,
8/1/21 2,641,410
NR NR 1,250 King George County IDA, Lease, 7.00%,
12/15/12 1,321,475
---------------------------------------------------------------------------------------
$ 6,303,045
---------------------------------------------------------------------------------------
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Nursing Home -- 0.2%
---------------------------------------------------------------------------------------
NR NR $ 215 Covington-Allegheny County IDA, (Beverly
Enterprises), 9.375%, 9/1/01 $ 226,799
---------------------------------------------------------------------------------------
$ 226,799
---------------------------------------------------------------------------------------
Solid Waste -- 1.6%
---------------------------------------------------------------------------------------
Baa1 A- $ 2,250 Southeastern Public Service Authority,
Solid Waste Systems, (AMT), 6.00%,
7/1/13 $ 2,347,920
---------------------------------------------------------------------------------------
$ 2,347,920
---------------------------------------------------------------------------------------
Special Tax Revenue -- 1.8%
---------------------------------------------------------------------------------------
NR NR $ 1,500 Dulles Community Development Authority,
(Dulles Town Center), 6.25%, 3/1/26 $ 1,526,265
Aa AA 1,000 Virginia State Transportation Board
Revenue, Route 28, Variable Rate,
4/1/18(1) 1,181,210
---------------------------------------------------------------------------------------
$ 2,707,475
---------------------------------------------------------------------------------------
Transportation -- 2.2%
---------------------------------------------------------------------------------------
NR BBB $ 400 Charlottesville-Albermarle, Airport
Authority, (AMT), 6.125%, 12/1/13 $ 419,496
Baa1 A 1,500 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/36 1,486,110
Aa2 AA 1,250 Virginia Port Authority, (AMT), 5.90%,
7/1/16 1,336,213
---------------------------------------------------------------------------------------
$ 3,241,819
---------------------------------------------------------------------------------------
Water and Sewer -- 3.1%
---------------------------------------------------------------------------------------
Aa2 AA $ 1,500 Fairfax County Water Authority, 5.00%,
4/1/21 $ 1,519,020
Aa2 AA 805 Fairfax County Water Authority, 6.00%,
4/1/22 887,826
Aa2 AA- 1,000 Fairfax County Water Authority, Variable
Rate, 4/1/29(1)(4) 1,093,250
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
81
<PAGE>
VIRGINIA MUNICIPALS PORTFOLIO AS OF FEBRUARY 28, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
RATINGS
----------- PRINCIPAL
AMOUNT
STANDARD (000'S
MOODY'S & POOR'S OMITTED) SECURITY VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Water and Sewer (continued)
---------------------------------------------------------------------------------------
NR AA $ 1,000 Virginia Resource Authority, (Hopewell
Waste Water), (AMT), 6.00%, 1/1/25 $ 1,080,270
---------------------------------------------------------------------------------------
$ 4,580,366
---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $134,784,173) $ 147,543,689
---------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Virginia
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at February 28, 1999, 25.7% 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 4.9% to 12.1% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security (or a portion thereof) has been segregated to cover 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. At February 28,
1999, the value of these securities amounted to $1,093,250 or 0.7% of the
Portfolio's net assets.
SEE NOTES TO FINANCIAL STATEMENTS
82
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 1999
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Assets
- -------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $85,855,302 $52,365,476 $74,051,935 $ 98,349,521
Unrealized appreciation 6,903,616 4,012,438 6,190,335 8,433,839
- -------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $92,758,918 $56,377,914 $80,242,270 $106,783,360
- -------------------------------------------------------------------------------------------------------------------------
Cash $ 698 $ 919 $ 2,825,969 $ 298,743
Interest receivable 1,331,949 802,520 1,005,707 1,602,179
- -------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $94,091,565 $57,181,353 $84,073,946 $108,684,282
- -------------------------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------------------------
Payable for when-issued securities $ 3,055,650 $ 1,625,456 $ 2,402,543 $ --
Demand note payable 25,000 511,000 -- --
Payable to affiliate for Trustees'
fees 92 79 60 80
Other accrued expenses 6,531 3,177 2,750 5,404
- -------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 3,087,273 $ 2,139,712 $ 2,405,353 $ 5,484
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $91,004,292 $55,041,641 $81,668,593 $108,678,798
- -------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital
contributions and withdrawals $84,100,676 $51,029,203 $75,478,258 $100,244,959
Net unrealized appreciation
(computed on the basis of
identified cost) 6,903,616 4,012,438 6,190,335 8,433,839
- -------------------------------------------------------------------------------------------------------------------------
TOTAL $91,004,292 $55,041,641 $81,668,593 $108,678,798
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
83
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 1999
<TABLE>
<CAPTION>
LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $32,923,087 $ 97,548,848 $67,193,631 $129,769,473
Unrealized appreciation 1,931,485 4,588,057 7,044,599 13,822,288
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $34,854,572 $102,136,905 $74,238,230 $143,591,761
- ----------------------------------------------------------------------------------------------------------------------------------
Cash $ 715,028 $ 43,188 $ 785,567 $ 123,094
Receivable for investments sold 165,000 -- 601,265 --
Receivable for when-issued
securities sold -- 3,546,846 -- --
Interest receivable 604,251 1,352,487 852,280 2,077,203
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $36,338,851 $107,079,426 $76,477,342 $145,792,058
- ----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased $ 432,400 $ -- $ -- $ --
Payable for when-issued securities -- 3,289,180 1,680,000 --
Payable to affiliate for Trustees'
fees 230 -- 196 156
Other accrued expenses 6,343 7,179 8,965 9,766
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 438,973 $ 3,296,359 $ 1,689,161 $ 9,922
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $35,899,878 $103,783,067 $74,788,181 $145,782,136
- ----------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital
contributions and withdrawals $33,968,393 $ 99,195,010 $67,743,582 $131,959,848
Net unrealized appreciation
(computed on the basis of
identified cost) 1,931,485 4,588,057 7,044,599 13,822,288
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL $35,899,878 $103,783,067 $74,788,181 $145,782,136
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
84
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 1999
<TABLE>
<CAPTION>
OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Assets
- --------------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $ 92,026,997 $46,719,996 $49,054,272 $134,784,173
Unrealized appreciation 6,644,613 3,867,498 4,025,126 12,759,516
- --------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $ 98,671,610 $50,587,494 $53,079,398 $147,543,689
- --------------------------------------------------------------------------------------------------------------------------------
Cash $ 1,280,760 $ 487,709 $ 298,099 $ 874,055
Interest receivable 1,275,127 661,041 724,709 2,205,204
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $101,227,497 $51,736,244 $54,102,206 $150,622,948
- --------------------------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased $ 1,495,748 $ 493,412 $ -- $ --
Payable for when-issued securities -- -- -- 1,985,682
Payable to affiliate for Trustees'
fees 1,176 75 194 --
Other accrued expenses 12,640 3,259 7,410 3,641
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 1,509,564 $ 496,876 $ 7,604 $ 1,989,323
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $ 99,717,933 $51,229,368 $54,094,602 $148,633,625
- --------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital
contributions and withdrawals $ 93,073,320 $47,371,870 $50,069,476 $135,874,109
Net unrealized appreciation
(computed on the basis of
identified cost) 6,644,613 3,867,498 4,025,126 12,759,516
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 99,717,933 $51,239,368 $54,094,602 $148,633,625
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
85
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Investment Income
- -------------------------------------------------------------------------------------------------------------------------
Interest $ 2,556,931 $1,535,898 $ 2,356,614 $ 3,176,456
- -------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 2,556,931 $1,535,898 $ 2,356,614 $ 3,176,456
- -------------------------------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 168,550 $ 82,019 $ 149,732 $ 214,510
Trustees fees and expenses 4,195 4,120 4,255 5,669
Custodian fee 25,777 15,860 20,072 29,744
Legal and accounting services 18,360 18,251 18,223 20,291
Amortization of organization
expenses -- 747 -- --
Miscellaneous 4,771 5,800 4,820 6,017
- -------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 221,653 $ 126,797 $ 197,102 $ 276,231
- -------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 5,986 $ -- $ 13,689 $ 10,597
- -------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 5,986 $ -- $ 13,689 $ 10,597
- -------------------------------------------------------------------------------------------------------------------------
NET EXPENSES $ 215,667 $ 126,797 $ 183,413 $ 265,634
- -------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 2,341,264 $1,409,101 $ 2,173,201 $ 2,910,822
- -------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 865,253 $ 191,960 $ 794,712 $ 459,994
Financial futures contracts (93,298) (30,828) (122,496) (168,515)
- -------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 771,955 $ 161,132 $ 672,216 $ 291,479
- -------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost
basis) $(1,293,126) $ (551,990) $(1,143,990) $(1,097,952)
Financial futures contracts 43,140 45,369 136,956 171,430
- -------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $(1,249,986) $ (506,621) $(1,007,034) $ (926,522)
- -------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $ (478,031) $ (345,489) $ (334,818) $ (635,043)
- -------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,863,233 $1,063,612 $ 1,838,383 $ 2,275,779
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
86
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999
<TABLE>
<CAPTION>
LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Income
- ----------------------------------------------------------------------------------------------------------------------------------
Interest $ 979,314 $ 2,897,640 $2,071,239 $ 4,235,328
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 979,314 $ 2,897,640 $2,071,239 $ 4,235,328
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 40,501 $ 196,501 $ 127,050 $ 304,198
Trustees fees and expenses 1,572 5,977 5,011 7,642
Custodian fee 14,266 33,062 22,451 40,502
Legal and accounting services 15,279 19,934 18,899 20,434
Amortization of organization
expenses 701 -- -- --
Miscellaneous 2,472 8,422 4,701 5,900
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 74,791 $ 263,896 $ 178,112 $ 378,676
- ----------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 5,246 $ 16,374 $ 8,963 $ 8,218
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 5,246 $ 16,374 $ 8,963 $ 8,218
- ----------------------------------------------------------------------------------------------------------------------------------
NET EXPENSES $ 69,545 $ 247,522 $ 169,149 $ 370,458
- ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 909,769 $ 2,650,118 $1,902,090 $ 3,864,870
- ----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 192,989 $ 911,144 $ 170,839 $ 381,873
Financial futures contracts (24,918) (57,252) (102,445) 67,748
- ----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 168,071 $ 853,892 $ 68,394 $ 449,621
- ----------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost
basis) $(466,411) $(2,576,445) $ (600,928) $(1,510,247)
Financial futures contracts 33,128 84,256 114,183 --
- ----------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $(433,283) $(2,492,189) $ (486,745) $(1,510,247)
- ----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(265,212) $(1,638,297) $ (418,351) $(1,060,626)
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 644,557 $ 1,011,821 $1,483,739 $ 2,804,244
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
87
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999
<TABLE>
<CAPTION>
OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Investment Income
- --------------------------------------------------------------------------------------------------------------------------------
Interest $ 2,892,752 $1,425,331 $1,482,183 $ 4,265,359
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 2,892,752 $1,425,331 $1,482,183 $ 4,265,359
- --------------------------------------------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 191,617 $ 72,129 $ 78,076 $ 304,704
Trustees fees and expenses 7,602 1,767 5,010 7,486
Custodian fee 35,915 17,264 19,202 36,475
Legal and accounting services 21,118 17,347 19,034 19,934
Amortization of organization
expenses -- 703 -- --
Miscellaneous 8,736 2,818 2,866 6,048
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 264,988 $ 112,028 $ 124,188 $ 374,647
- --------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 7,628 $ 4,351 $ 3,866 $ 15,269
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 7,628 $ 4,351 $ 3,866 $ 15,269
- --------------------------------------------------------------------------------------------------------------------------------
NET EXPENSES $ 257,360 $ 107,677 $ 120,322 $ 359,378
- --------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 2,635,392 $1,317,654 $1,361,861 $ 3,905,981
- --------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 990,785 $ 291,283 $ 59,062 $ 756,856
Financial futures contracts 86,092 (29,550) (71,805) (88,080)
- --------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ 1,076,877 $ 261,733 $ (12,743) $ 668,776
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost
basis) $(1,231,204) $ (744,664) $ (230,423) $(1,504,010)
Financial futures contracts -- -- 80,022 129,625
- --------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $(1,231,204) $ (744,664) $ (150,401) $(1,374,385)
- --------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $ (154,327) $ (482,931) $ (163,144) $ (705,609)
- --------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 2,481,065 $ 834,723 $1,198,717 $ 3,200,372
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
88
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 2,341,264 $ 1,409,101 $ 2,173,201 $ 2,910,822
Net realized gain 771,955 161,132 672,216 291,479
Net change in unrealized
appreciation (depreciation) (1,249,986) (506,621) (1,007,034) (926,522)
- -------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,863,233 $ 1,063,612 $ 1,838,383 $ 2,275,779
- -------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 2,564,046 $ 2,452,359 $ 3,175,113 $ 3,232,703
Withdrawals (8,199,690) (4,729,374) (10,596,177) (9,464,964)
- -------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $(5,635,644) $(2,277,015) $ (7,421,064) $ (6,232,261)
- -------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $(3,772,411) $(1,213,403) $ (5,582,681) $ (3,956,482)
- -------------------------------------------------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------------------------------------------------
At beginning of period $94,776,703 $56,255,044 $ 87,251,274 $112,635,280
- -------------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $91,004,292 $55,041,641 $ 81,668,593 $108,678,798
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
89
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 909,769 $ 2,650,118 $ 1,902,090 $ 3,864,870
Net realized gain 168,071 853,892 68,394 449,621
Net change in unrealized
appreciation (depreciation) (433,283) (2,492,189) (486,745) (1,510,247)
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 644,557 $ 1,011,821 $ 1,483,739 $ 2,804,244
- ----------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 2,392,060 $ 5,458,731 $ 4,337,049 $ 3,586,291
Withdrawals (3,646,512) (7,839,738) (5,430,604) (13,538,523)
- ----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $(1,254,452) $ (2,381,007) $(1,093,555) $ (9,952,232)
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS $ (609,895) $ (1,369,186) $ 390,184 $ (7,147,988)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
At beginning of period $36,509,773 $105,152,253 $74,397,997 $152,930,124
- ----------------------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $35,899,878 $103,783,067 $74,788,181 $145,782,136
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
90
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 2,635,392 $ 1,317,654 $ 1,361,861 $ 3,905,981
Net realized gain (loss) 1,076,877 261,733 (12,743) 668,776
Net change in unrealized
appreciation (depreciation) (1,231,204) (744,664) (150,401) (1,374,385)
- --------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 2,481,065 $ 834,723 $ 1,198,717 $ 3,200,372
- --------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 3,317,758 $ 4,412,997 $ 2,752,865 $ 6,532,402
Withdrawals (9,835,987) (4,125,425) (3,565,687) (12,356,619)
- --------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL TRANSACTIONS $ (6,518,229) $ 287,572 $ (812,822) $ (5,824,217)
- --------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS $ (4,037,164) $ 1,122,295 $ 385,895 $ (2,623,845)
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
At beginning of period $103,755,097 $50,117,073 $53,708,707 $151,257,470
- --------------------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $ 99,717,933 $51,239,368 $54,094,602 $148,633,625
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
91
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 5,095,243 $ 3,100,264 $ 4,801,322 $ 6,375,114
Net realized gain 286,744 521,968 1,210,267 1,448,862
Net change in unrealized
appreciation (depreciation) 1,494,649 1,138,587 1,131,581 1,384,902
- -------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 6,876,636 $ 4,760,819 $ 7,143,170 $ 9,208,878
- -------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 5,971,850 $ 3,190,175 $ 5,270,754 $ 5,929,474
Withdrawals (20,427,780) (14,381,768) (20,324,717) (25,613,276)
- -------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $(14,455,930) $(11,191,593) $(15,053,963) $(19,683,802)
- -------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (7,579,294) $ (6,430,774) $ (7,910,793) $(10,474,924)
- -------------------------------------------------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------------------------------------------------
At beginning of year $102,355,997 $ 62,685,818 $ 95,162,067 $123,110,204
- -------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 94,776,703 $ 56,255,044 $ 87,251,274 $112,635,280
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
92
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,831,943 $ 5,400,842 $ 4,136,832 $ 8,388,082
Net realized gain 354,545 824,903 956,161 1,791,750
Net change in unrealized
appreciation (depreciation) 679,062 1,975,688 1,572,339 2,930,375
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 2,865,550 $ 8,201,433 $ 6,665,332 $ 13,110,207
- ----------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 5,706,360 $ 8,581,280 $ 4,493,837 $ 9,214,460
Withdrawals (6,494,266) (19,031,547) (16,642,888) (36,965,507)
- ----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (787,906) $(10,450,267) $(12,149,051) $(27,751,047)
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS $ 2,077,644 $ (2,248,834) $ (5,483,719) $(14,640,840)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
At beginning of year $34,432,129 $107,401,087 $ 79,881,716 $167,570,964
- ----------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $36,509,773 $105,152,253 $ 74,397,997 $152,930,124
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
93
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 5,723,164 $ 2,819,111 $ 2,821,503 $ 8,239,066
Net realized gain 1,571,010 1,175,496 463,355 2,037,263
Net change in unrealized
appreciation (depreciation) 1,436,080 554,107 897,702 2,473,102
- --------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 8,730,254 $ 4,548,714 $ 4,182,560 $ 12,749,431
- --------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 3,763,506 $ 2,733,381 $ 5,452,717 $ 7,893,877
Withdrawals (22,431,429) (11,134,947) (10,088,250) (31,043,370)
- --------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $(18,667,923) $ (8,401,566) $ (4,635,533) $(23,149,493)
- --------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (9,937,669) $ (3,852,852) $ (452,973) $(10,400,062)
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
At beginning of year $113,692,766 $ 53,969,925 $ 54,161,680 $161,657,532
- --------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $103,755,097 $ 50,117,073 $ 53,708,707 $151,257,470
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
94
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO
--------------------------------------------------------------------------------------------
YEAR ENDED
----------------------------------------------------------------------
SIX MONTHS ENDED AUGUST 31, SEPT. 30,
FEBRUARY 28, 1999 -------------------------------------------------------- ----------
(UNAUDITED) 1998 1997 1996 1995 1994(1) 1993(2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ------------------------------------------------------------------------------------------------------------------------------
Net expenses(3) 0.48%(4) 0.49% 0.50% 0.49% 0.47% 0.44%(4) 0.25%(4)
Net expenses after custodian fee
reduction 0.47%(4) 0.47% 0.49% 0.45% -- -- --
Net investment income 5.10%(4) 5.21% 5.47% 5.50% 5.77% 5.37%(4) 5.52%(4)
Portfolio Turnover 12% 23% 23% 52% 51% 26% 10%
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $ 91,004 $94,777 $102,356 $108,544 $118,486 $117,163 $ 83,628
- ------------------------------------------------------------------------------------------------------------------------------
+ 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(3) 0.35%(4)
Net investment income 5.42%(4)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the eleven month period ended August 31, 1994.
(2) For the period from the start of business, February 1, 1993, to September
30, 1993.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
95
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
ARKANSAS PORTFOLIO
------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------
SIX MONTHS ENDED AUGUST 31,
FEBRUARY 28, 1999 --------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994(1)
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ----------------------------------------------------------------------------------------------------------------
Net expenses(2) 0.46%(3) 0.44% 0.49% 0.48% 0.46% 0.24%(3)
Net expenses after custodian fee
reduction 0.46%(3) 0.43% 0.48% 0.46% -- --
Net investment income 5.15%(3) 5.22% 5.40% 5.40% 5.69% 5.60%(3)
Portfolio Turnover 9% 13% 17% 11% 23% 16%
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $ 55,042 $56,255 $62,686 $74,103 $81,535 $82,917
- ----------------------------------------------------------------------------------------------------------------
+ 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(2) 0.43%(3)
Net investment income 5.41%(3)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, February 1, 1994, to August 31,
1994.
(2) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
96
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
GEORGIA PORTFOLIO
--------------------------------------------------------------------------------------------
YEAR ENDED
----------------------------------------------------------------------
SIX MONTHS ENDED AUGUST 31, SEPT. 30,
FEBRUARY 28, 1999 -------------------------------------------------------- ----------
(UNAUDITED) 1998 1997 1996 1995 1994(1) 1993(2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------
Expenses(3) 0.47%(4) 0.48% 0.49% 0.50% 0.46% 0.44%(4) 0.40%(4)
Expenses after custodian fee
reduction 0.44%(4) 0.47% 0.47% 0.45% -- -- --
Net investment income 5.21%(4) 5.29% 5.55% 5.59% 5.73% 5.37%(4) 5.37%(4)
Portfolio Turnover 18% 19% 13% 21% 48% 45% 35%
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $ 81,669 $87,251 $95,162 $108,974 $122,949 $137,724 $ 119,311
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the eleven month period ended August 31, 1994.
(2) For the period from the start of business, February 1, 1993, to September
30, 1993.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
97
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
KENTUCKY PORTFOLIO
--------------------------------------------------------------------------------------------
YEAR ENDED
----------------------------------------------------------------------
SIX MONTHS ENDED AUGUST 31, SEPT. 30,
FEBRUARY 28, 1999 -------------------------------------------------------- ----------
(UNAUDITED) 1998 1997 1996 1995 1994(1) 1993(2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------
Expenses(3) 0.50%(4) 0.49% 0.51% 0.53% 0.49% 0.46%(4) 0.40%(4)
Expenses after custodian fee
reduction 0.48%(4) 0.48% 0.48% 0.50% -- -- --
Net investment income 5.28%(4) 5.38% 5.56% 5.49% 5.75% 5.39%(4) 5.40%(4)
Portfolio Turnover 4% 15% 28% 28% 30% 21% 11%
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $108,679 $112,635 $123,110 $133,017 $145,269 $145,210 $ 117,936
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the eleven month period ended August 31, 1994.
(2) For the period from the start of business, February 1, 1993, to September
30, 1993.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
98
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
LOUISIANA PORTFOLIO
--------------------------------------------------------------------------------
YEAR ENDED
----------------------------------------------------------
SIX MONTHS ENDED AUGUST 31,
FEBRUARY 28, 1999 ----------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994(1)
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ------------------------------------------------------------------------------------------------------------------
Net Expenses(2) 0.42%(3) 0.39% 0.40% 0.30% 0.22% 0.14%(3)
Net expenses after custodian fee
reduction 0.39%(3) 0.34% 0.38% 0.23% -- --
Net investment income 5.04%(3) 5.25% 5.85% 5.90% 6.06% 5.86%(3)
Portfolio Turnover 11% 43% 27% 99% 46% 21%
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $35,900 $36,510 $34,432 $35,049 $34,309 $ 31,423
- ------------------------------------------------------------------------------------------------------------------
+ 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(2) 0.41% 0.33% 0.33%(3)
Expenses after custodian fee
reduction 0.41% -- --
Net investment income 5.79% 5.95% 5.67%(3)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, February 1, 1994, to August 31,
1994.
(2) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
99
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
MARYLAND PORTFOLIO
--------------------------------------------------------------------------------------------
YEAR ENDED
----------------------------------------------------------------------
SIX MONTHS ENDED AUGUST 31, SEPT. 30,
FEBRUARY 28, 1999 -------------------------------------------------------- ----------
(UNAUDITED) 1998 1997 1996 1995 1994(1) 1993(2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ------------------------------------------------------------------------------------------------------------------------------
Net expenses(3) 0.51%(4) 0.48% 0.48% 0.51% 0.47% 0.44%(4) 0.36%(4)
Net expenses after custodian fee
reduction 0.48%(4) 0.44% 0.45% 0.48% -- -- --
Net investment income 5.09%(4) 5.11% 5.38% 5.50% 5.79% 5.44%(4) 5.41%(4)
Portfolio Turnover 11% 30% 30% 33% 30% 41% 34%
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $103,783 $105,152 $107,401 $110,588 $115,004 $117,856 $ 94,213
- ------------------------------------------------------------------------------------------------------------------------------
+ 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(3) 0.38%(4)
Net investment income 5.39%(4)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the eleven month period ended August 31, 1994.
(2) For the period from the start of business, February 1, 1993, to September
30, 1993.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
100
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
MISSOURI PORTFOLIO
--------------------------------------------------------------------------------------------
YEAR ENDED
----------------------------------------------------------------------
SIX MONTHS ENDED AUGUST 31, SEPT. 30,
FEBRUARY 28, 1999 -------------------------------------------------------- ----------
(UNAUDITED) 1998 1997 1996 1995 1994(1) 1993(2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------
Expenses(3) 0.48%(4) 0.47% 0.47% 0.49% 0.48% 0.45%(4) 0.40%(4)
Expenses after custodian fee
reduction 0.46%(4) 0.45% 0.46% 0.47% -- -- --
Net investment income 5.14%(4) 5.31% 5.52% 5.52% 5.76% 5.36%(4) 5.36%(4)
Portfolio Turnover 11% 11% 5% 36% 24% 28% 6%
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $74,788 $74,398 $79,882 $85,162 $93,162 $95,167 $ 75,273
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the eleven month period ended August 31, 1994.
(2) For the period from the start of business, February 1, 1993, to September
30, 1993.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
101
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
NORTH CAROLINA PORTFOLIO
--------------------------------------------------------------------------------------------
YEAR ENDED
----------------------------------------------------------------------
SIX MONTHS ENDED AUGUST 31, SEPT. 30,
FEBRUARY 28, 1999 -------------------------------------------------------- ----------
(UNAUDITED) 1998 1997 1996 1995 1994(1) 1993(2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------
Expenses(3) 0.51%(4) 0.51% 0.52% 0.52% 0.48% 0.46%(4) 0.43%(4)
Expenses after custodian fee
reduction 0.50%(4) 0.48% 0.50% 0.48% -- -- --
Net investment income 5.18%(4) 5.31% 5.53% 5.51% 5.78% 5.40%(4) 5.43%(4)
Portfolio Turnover 2% 26% 42% 54% 33% 37% 21%
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $145,782 $152,930 $167,571 $187,044 $195,179 $199,772 $ 172,534
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the eleven month period ended August 31, 1994.
(2) For the period from the start of business, February 1, 1993, to September
30, 1993.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
102
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
OREGON PORTFOLIO
--------------------------------------------------------------------------------------------
YEAR ENDED
----------------------------------------------------------------------
SIX MONTHS ENDED AUGUST 31, SEPT. 30,
FEBRUARY 28, 1999 -------------------------------------------------------- ----------
(UNAUDITED) 1998 1997 1996 1995 1994(1) 1993(2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------
Expenses(3) 0.53%(4) 0.48% 0.56% 0.50% 0.50% 0.46%(4) 0.43%(4)
Expenses after custodian fee
reduction 0.51%(4) 0.48% 0.55% 0.47% -- -- --
Net investment income 5.21%(4) 5.28% 5.46% 5.37% 5.60% 5.26%(4) 5.30%(4)
Portfolio Turnover 17% 9% 22% 28% 22% 15% 32%
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $ 99,718 $103,755 $113,693 $129,759 $146,391 $153,119 $ 127,497
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the eleven month period ended August 31, 1994.
(2) For the period from the start of business, February 1, 1993, to September
30, 1993.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
103
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
SOUTH CAROLINA PORTFOLIO
------------------------------------------------------------------------------
YEAR ENDED
--------------------------------------------------------
SIX MONTHS ENDED AUGUST 31,
FEBRUARY 28, 1999 --------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994(1)
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------------------------------
Expenses(2) 0.45%(3) 0.44% 0.51% 0.53% 0.44% 0.37%(3)
Expenses after custodian fee
reduction 0.43%(3) 0.43% 0.50% 0.51% -- --
Net investment income 5.22%(3) 5.37% 5.59% 5.65% 5.81% 5.47%(3)
Portfolio Turnover 8% 21% 8% 36% 75% 23%
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $ 51,239 $50,117 $53,970 $58,318 $61,412 $62,265
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, February 1, 1994, to August 31,
1994.
(2) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
104
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
TENNESSEE PORTFOLIO
--------------------------------------------------------------------------------------------
YEAR ENDED
----------------------------------------------------------------------
SIX MONTHS ENDED AUGUST 31, SEPT. 30,
FEBRUARY 28, 1999 -------------------------------------------------------- ----------
(UNAUDITED) 1998 1997 1996 1995 1994(1) 1993(2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ------------------------------------------------------------------------------------------------------------------------------
Net Expenses(3) 0.46%(4) 0.44% 0.43% 0.45% 0.41% 0.36%(4) 0.08%(4)
Net Expenses after custodian fee
reduction 0.45%(4) 0.42% 0.42% 0.43% -- -- --
Net investment income 5.11%(4) 5.20% 5.48% 5.52% 5.81% 5.49%(4) 5.60%(4)
Portfolio Turnover 9% 21% 3% 39% 20% 10% 69%
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $ 54,095 $53,709 $54,162 $56,065 $58,673 $56,496 $ 39,266
- ------------------------------------------------------------------------------------------------------------------------------
+ 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(3) 0.31%(4)
Net investment income 5.37%(4)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the eleven month period ended August 31, 1994.
(2) For the period from the start of business, February 1, 1993, to September
30, 1993.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
105
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
VIRGINIA PORTFOLIO
--------------------------------------------------------------------------------------------
YEAR ENDED
----------------------------------------------------------------------
SIX MONTHS ENDED AUGUST 31, SEPT. 30,
FEBRUARY 28, 1999 -------------------------------------------------------- ----------
(UNAUDITED) 1998 1997 1996 1995 1994(1) 1993(2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------------
Expenses(3) 0.50%(4) 0.52% 0.52% 0.51% 0.48% 0.46%(4) 0.43%(4)
Expenses after custodian fee
reduction 0.48%(4) 0.50% 0.49% 0.48% -- -- --
Net investment income 5.23%(4) 5.27% 5.53% 5.55% 5.81% 5.49%(4) 5.49%(4)
Portfolio Turnover 7% 8% 25% 30% 38% 48% 29%
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $148,634 $151,257 $161,658 $177,644 $191,748 $194,519 $ 174,260
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the eleven month period ended August 31, 1994.
(2) For the period from the start of business, February 1, 1993, to September
30, 1993.
(3) The expense ratios for the year ended August 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for each of the prior
periods have not been adjusted to reflect this change.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
106
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
Alabama Municipals Portfolio (Alabama Portfolio), Arkansas Municipals
Portfolio (Arkansas Portfolio), Georgia Municipals Portfolio (Georgia
Portfolio), Kentucky Municipals Portfolio (Kentucky Portfolio), Louisiana
Municipals Portfolio (Louisiana Portfolio), Maryland Municipals Portfolio
(Maryland Portfolio), Missouri Municipals Portfolio (Missouri Portfolio),
North Carolina Municipals Portfolio (North Carolina Portfolio), Oregon
Municipals Portfolio (Oregon Portfolio), South Carolina Municipals Portfolio
(South Carolina Portfolio), Tennessee Municipals Portfolio (Tennessee
Portfolio) and Virginia Municipals Portfolio (Virginia Portfolio),
collectively the Portfolios, are registered under the Investment Company Act
of 1940, as amended, as non-diversified open-end management investment
companies which were organized as trusts under the laws of the State of New
York on May 1, 1992. The Declarations of Trust permit the Trustees to issue
interests in the Portfolios. The following is a summary of significant
accounting policies of the Portfolios. The policies are in conformity with
generally accepted accounting principles.
A Investment Valuations -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Financial futures contracts and
options on financial futures contracts listed on commodity exchanges are
valued at closing settlement prices. Over-the-counter options on financial
futures contracts are normally valued at the mean between the latest bid and
asked prices. Short-term obligations, maturing in sixty days or less, are
valued at amortized cost, which approximates value. Investments for which
valuations or market quotations are unavailable are valued at fair value
using methods determined in good faith by or at the direction of the
Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for Federal
income tax purposes.
C Federal Taxes -- The Portfolios are treated as partnerships for Federal tax
purposes. No provision is made by the Portfolios for federal or state taxes
on any taxable income of the Portfolios because each investor in the
Portfolios is ultimately responsible for the payment of any taxes. Since some
of the Portfolios' investors are regulated investment companies that invest
all or substantially all of their assets in the Portfolios, the Portfolios
normally must satisfy the applicable source of income and diversification
requirements (under the Internal Revenue Code) in order for their respective
investors to satisfy them. The Portfolios will allocate at least annually
among their respective investors each investor's distributive share of the
Portfolios' net taxable (if any) and tax-exempt investment income, net
realized capital gains, and any other items of income, gain, loss, deduction
or credit. Interest income received by the Portfolios on investments in
municipal bonds, which is excludable from gross income under the Internal
Revenue Code, will retain its status as income exempt from federal income tax
when allocated to each Portfolio's investors. The portion of such interest,
if any, earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item for investors.
D Deferred Organization Expenses -- Costs incurred by a Portfolio in connection
with its organization are being amortized on the straight-line basis over
five years.
E Financial Futures Contracts -- Upon the entering of a financial futures
contract, a Portfolio is required to deposit ("initial margin") either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by a Portfolio ("margin maintenance") each day, dependent on
the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by a Portfolio. A
Portfolio's investment in financial futures contracts is designed for both
hedging against anticipated future changes in interest rates and investment
purposes. Should interest rates move unexpectedly, a Portfolio may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss.
F Options on Financial Futures Contracts -- Upon purchase of a put option on a
financial futures contract by a Portfolio, the premium paid is recorded as an
investment, the value of which is marked-to-market daily. When a purchased
option expires, a Portfolio will realize a loss in the amount of the cost of
the option. When a Portfolio enters into a closing sale transaction, the
Portfolio will realize a gain or loss depending on whether the sales proceeds
from the closing sale transaction are greater or less than the cost of the
option. When a Portfolio exercises a put option, settlement is made in cash.
The risk associated with purchasing options is limited to the premium
originally paid.
107
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
G When-issued and Delayed Delivery Transactions -- The Portfolios may engage in
when-issued and delayed delivery transactions. The Portfolios record
when-issued securities on trade date and maintain security positions such
that sufficient liquid assets will be available to make payments for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked-to-market daily and begin earning interest on
settlement date.
H Other -- Investment transactions are accounted for on a trade date basis.
I Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolios. Pursuant to the custodian agreements, IBT receives a fee
reduced by credits which are determined based on the average daily cash
balances each Portfolio maintains with IBT. All significant credit balances
used to reduce each Portfolio's custodian fees are reported as a reduction of
expenses in the Statement of Operations.
J Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
K Interim Financial Statements -- The interim financial statements relating to
February 28, 1999 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the
Portfolio's management, reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
- -------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to each Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e., income other than gains from the sale of
securities). For the six months ended February 28, 1999, the Portfolios paid
advisory fees as follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT EFFECTIVE RATE*
<S> <C> <C>
- ---------------------------------------------------------------------
Alabama $ 168,550 0.37%
Arkansas 82,019 0.30%
Georgia 149,732 0.36%
Kentucky 214,510 0.39%
Louisiana 40,501 0.23%
Maryland 196,501 0.38%
Missouri 127,050 0.34%
North Carolina 304,198 0.41%
Oregon 191,617 0.38%
South Carolina 72,129 0.29%
Tennessee 78,076 0.29%
Virginia 304,704 0.41%
</TABLE>
* Advisory fees paid as a percentage of average daily net assets
(annualized).
Except as to Trustees of the Portfolios who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services
to the Portfolios out of such investment adviser fee.
Trustees of the Portfolios that are not affiliated with the Investment
Adviser may elect to defer receipt of all or a percentage of their annual
fees in accordance with the terms of the Trustees Deferred Compensation Plan.
For the six months ended February 28, 1999, no significant amounts have been
deferred.
Certain of the officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations.
108
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
3 Investments
- -------------------------------------------
Purchases and sales of investments, other than U.S. Government securities,
purchased options and short-term obligations, for the six months ended
February 28, 1999, were as follows:
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 10,918,050
Sales 11,216,838
<CAPTION>
ARKANSAS PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 5,809,450
Sales 4,773,320
<CAPTION>
GEORGIA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 15,274,834
Sales 20,979,850
<CAPTION>
KENTUCKY PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 4,237,935
Sales 6,754,844
<CAPTION>
LOUISIANA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 3,788,142
Sales 4,522,393
<CAPTION>
MARYLAND PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 11,749,219
Sales 13,729,005
<CAPTION>
MISSOURI PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 10,194,030
Sales 8,199,953
<CAPTION>
NORTH CAROLINA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 3,081,194
Sales 11,314,421
<CAPTION>
OREGON PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 17,067,035
Sales 20,996,909
<CAPTION>
SOUTH CAROLINA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 5,364,330
Sales 4,156,283
<CAPTION>
TENNESSEE PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 5,455,964
Sales 4,735,438
<CAPTION>
VIRGINIA PORTFOLIO
<S> <C>
- ------------------------------------------------------
Purchases $ 10,982,898
Sales 11,015,444
</TABLE>
4 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at February 28, 1999, as computed on a
federal income tax basis, are as follows:
<TABLE>
<CAPTION>
ALABAMA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 85,855,302
- -------------------------------------------------------
Gross unrealized appreciation $ 6,988,086
Gross unrealized depreciation (84,470)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 6,903,616
- -------------------------------------------------------
<CAPTION>
ARKANSAS PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 52,365,476
- -------------------------------------------------------
Gross unrealized appreciation $ 4,047,295
Gross unrealized depreciation (34,857)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 4,012,438
- -------------------------------------------------------
<CAPTION>
GEORGIA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 74,051,935
- -------------------------------------------------------
Gross unrealized appreciation $ 6,541,609
Gross unrealized depreciation (351,274)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 6,190,335
- -------------------------------------------------------
</TABLE>
109
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
KENTUCKY PORTFOLIO
- -------------------------------------------------------
<S> <C>
AGGREGATE COST $ 98,349,521
- -------------------------------------------------------
Gross unrealized appreciation $ 8,463,567
Gross unrealized depreciation (29,728)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 8,433,839
- -------------------------------------------------------
<CAPTION>
LOUISIANA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 32,923,087
- -------------------------------------------------------
Gross unrealized appreciation $ 2,253,260
Gross unrealized depreciation (321,775)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 1,931,485
- -------------------------------------------------------
<CAPTION>
MARYLAND PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 97,548,848
- -------------------------------------------------------
Gross unrealized appreciation $ 6,353,624
Gross unrealized depreciation (1,765,567)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 4,588,057
- -------------------------------------------------------
<CAPTION>
MISSOURI PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 67,193,631
- -------------------------------------------------------
Gross unrealized appreciation $ 7,085,729
Gross unrealized depreciation (41,130)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 7,044,599
- -------------------------------------------------------
<CAPTION>
NORTH CAROLINA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 129,769,473
- -------------------------------------------------------
Gross unrealized appreciation $ 13,860,966
Gross unrealized depreciation (38,678)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 13,822,288
- -------------------------------------------------------
<CAPTION>
OREGON PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 92,026,997
- -------------------------------------------------------
Gross unrealized appreciation $ 6,716,738
Gross unrealized depreciation (72,125)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 6,644,613
- -------------------------------------------------------
<CAPTION>
SOUTH CAROLINA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 46,719,996
- -------------------------------------------------------
Gross unrealized appreciation $ 3,915,789
Gross unrealized depreciation (48,291)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 3,867,498
- -------------------------------------------------------
<CAPTION>
TENNESSEE PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 49,054,272
- -------------------------------------------------------
Gross unrealized appreciation $ 4,041,248
Gross unrealized depreciation (16,122)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 4,025,126
- -------------------------------------------------------
<CAPTION>
VIRGINIA PORTFOLIO
<S> <C>
- -------------------------------------------------------
AGGREGATE COST $ 134,784,173
- -------------------------------------------------------
Gross unrealized appreciation $ 12,811,681
Gross unrealized depreciation (52,165)
- -------------------------------------------------------
NET UNREALIZED APPRECIATION $ 12,759,516
- -------------------------------------------------------
</TABLE>
5 Line of Credit
- -------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and its affiliates in a $130 million unsecured line of credit agreement
with a group of banks. Borrowings will be made by the portfolios or funds
solely to facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Interest is charged to each portfolio or fund based on its
borrowings at an amount above either the Eurodollar rate or Federal Funds
effective rate. In addition, a fee computed at an annual rate of 0.10% on the
daily unused portion of the facility is allocated among the participating
portfolios and funds at the end of each quarter. At February 28, 1999, the
Alabama Portfolio and Arkansas Portfolio had balances outstanding pursuant to
this line of credit of $25,000 and $511,000, respectively. The Portfolios did
not have any significant borrowings or allocated fees during the six months
ended February 28, 1999.
110
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF FEBRUARY 28, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
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 February 28, 1999, there were no outstanding obligations under these
financial instruments.
111
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF FEBRUARY 28, 1999
MUNICIPALS PORTFOLIOS
Officers
Thomas J. Fetter
President of the Portfolios and Portfolio
Manager of South Carolina
Municipals Portfolio
James B. Hawkes
Vice President and Trustee
William H. Ahern, Jr.
Vice President and Portfolio Manager
of Alabama and Kentucky Municipals Portfolios
Robert B. MacIntosh
Vice President of the Portfolios and Portfolio Manager
of Louisiana and North Carolina
Municipals Portfolios
Timothy T. Browse
Vice President and Portfolio Manager
of Arkansas, Maryland and
Virginia Municipals Portfolios
Cynthia J. Clemson
Vice President and Portfolio Manager
of Georgia, Missouri, and Tennessee
Municipals Portfolios
Thomas M. Metzold
Vice President and Portfolio Manager
of Oregon Municipals Portfolio
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent 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
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
112