<PAGE>
Arizona Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ----------------------------------------------------------------------------------------------
Assisted Living -- 1.8%
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR NR $1,800 Arizona HFA, (Care Institute, Inc.-
Mesa), 7.625%, 1/1/26 $ 1,877,868
- ----------------------------------------------------------------------------------------------
$ 1,877,868
- ----------------------------------------------------------------------------------------------
Education -- 3.4%
- ----------------------------------------------------------------------------------------------
NR NR $2,000 Arizona Educational Loan Marketing
Corp., (AMT), 6.30%, 12/1/08 $ 2,141,740
A1 AA 1,250 University of Arizona,
6.25%, 6/1/11 1,354,138
- ----------------------------------------------------------------------------------------------
$ 3,495,878
- ----------------------------------------------------------------------------------------------
Electric Utilities -- 13.2%
- ----------------------------------------------------------------------------------------------
Ba2 BB+ $3,500 Maricopa County, Pollution Control,
6.375%, 8/15/23 $ 3,697,539
Baa1 A- 4,300 Navajo County, Pollution Control,
5.875%, 8/15/28 4,413,132
B2 B 1,000 Pima County, IDA, (Tucson Electric
Power Co.), 6.00%, 9/1/29 1,011,090
Baa1 BBB+ 370 Puerto Rico Electric Power Authority,
7.125%, 7/1/14 385,880
A A+ 1,000 Puerto Rico Telephone Authority,
Variable Rate, 1/1/20/(1)/ 1,105,850
Aa2 AA 2,000 Salt River Project Agricultural
Improvement and Power District,
5.00%, 1/1/20 1,970,200
Aa2 AA 820 Salt River Project Agricultural
Improvement and Power District,
6.25%, 1/1/27 879,434
- -----------------------------------------------------------------------------------------------
$13,463,125
- -----------------------------------------------------------------------------------------------
Escrowed/Prerefunded -- 19.4%
- -----------------------------------------------------------------------------------------------
NR AAA $1,000 Glendale, IDA, Prerefunded to
7/1/05, 7.125%, 7/1/20 $ 1,175,530
Baa1 BBB- 1,000 Maricopa County, (Sun Health
Corp.), Prerefunded to 4/1/02,
8.125%, 4/1/12 1,150,850
NR NR 2,250 Maricopa County, IDA, (Greenery
Apartments), Escrowed to Maturity,
6.625%, 7/1/26 2,607,143
NR NR 3,000 Maricopa County, IDA, (Place Five
and The Greenery), Escrowed to
Maturity, 6.625%, 1/1/27 3,485,910
NR NR 1,250 Maricopa County, IDA, (Place Five
and The Greenery), Escrowed to
Maturity, 8.625%, 1/1/11 1,642,850
Aaa AAA 7,500 Maricopa County, Single Family
Mortgage, Escrowed to Maturity,
0.00%, 2/1/16 3,096,225
Aaa AAA 1,750 Phoenix, Civic Improvement Excise
Tax, (MBIA), Prerefunded to
7/1/04, 6.60%, 7/1/08 1,983,468
Aaa AAA 6,500 Phoenix, IDA, Single Family,
Escrowed to Maturity,
0.00%, 12/1/14 2,892,110
NR AAA 1,500 Puerto Rico, "RIBS", (AMBAC),
Variable Rate, Prerefunded to
7/1/02, 7/1/15/(1)//(2)/ 1,731,615
- -----------------------------------------------------------------------------------------------
$19,765,701
- -----------------------------------------------------------------------------------------------
General Obligations -- 3.6%
- -----------------------------------------------------------------------------------------------
Baa1 A $1,125 Puerto Rico, 0.00%, 7/1/17 $ 428,366
NR A 2,000 Tatum Ranch, 6.875%, 7/1/16 2,234,120
Aa3 AA 1,000 Tucson, 5.375%, 7/1/21 1,048,670
- -----------------------------------------------------------------------------------------------
$ 3,711,156
- -----------------------------------------------------------------------------------------------
Hospitals -- 3.5%
- -----------------------------------------------------------------------------------------------
NR BBB $1,130 Arizona HFA, (Phoenix Memorial
Hospital), 8.125%, 6/1/12 $ 1,218,558
NR BBB 1,250 Arizona HFA, (Phoenix Memorial
Hospital), 8.20%, 6/1/21/(3)/ 1,350,400
NR NR 895 Winslow, IDA, (Winslow Memorial
Hospital), 9.50%, 6/1/22 1,026,628
- -----------------------------------------------------------------------------------------------
$ 3,595,586
- -----------------------------------------------------------------------------------------------
Housing -- 5.2%
- -----------------------------------------------------------------------------------------------
NR A $2,000 Maricopa County, IDA, (Laguna Point
Apartments), 6.75%, 7/1/19 $ 2,168,920
NR NR 1,000 Maricopa County, IDA, (National
Health Facilities II),
6.375%, 1/1/19 1,000,330
NR AA 1,000 Phoenix, (Woodstone and Silver
Springs Apartments), (Asset
Guaranty), 6.25%, 4/1/23 1,042,430
NR AAA 1,000 Tempe, IDA, (Quadrangle Village
Apartments), 6.25%, 6/1/26 1,043,880
- -----------------------------------------------------------------------------------------------
$ 5,255,560
- -----------------------------------------------------------------------------------------------
Industrial Development Revenue/Pollution
Control Revenue -- 11.7%
- -----------------------------------------------------------------------------------------------
A1 NR $1,000 Casa Grande, Pollution Control, (Frito
Lay, Inc.), 6.60%, 12/1/10 $ 1,093,810
- -----------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
34
<PAGE>
Arizona Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ----------------------------------------------------------------------------------------------
Industrial Development Revenue/
Pollution Control Revenue (continued)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR BBB- $2,000 Coconino County, Pollution Control,
(Nevada Power Co.), (AMT),
5.80%, 11/1/32 $ 2,039,540
Baa2 BBB 2,000 Gila County, IDA, (Asarco, Inc.),
5.55%, 1/1/27 2,020,120
A2 A 1,000 Greenlee County, Pollution Control,
(Phelps Dodge Corp.),
5.45%, 6/1/09 1,031,740
Ba1 BB+ 500 Maricopa County, Pollution Control,
(Public Service Co.),
5.75%, 11/1/22 509,290
Baa3 BBB- 2,950 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.25%, 6/1/26 3,189,393
NR AA- 2,000 Yavapai County, IDA, (Citizens
Utilities Co.), (AMT), 5.45%, 6/1/33 1,998,280
- -----------------------------------------------------------------------------------------------
$11,882,173
- -----------------------------------------------------------------------------------------------
Insured-Electric Utilities -- 3.0%
- -----------------------------------------------------------------------------------------------
Aaa AAA $2,715 Pima County, (Irvington Power),
(FGIC), 7.25%, 7/15/10 $ 3,020,030
- -----------------------------------------------------------------------------------------------
$ 3,020,030
- -----------------------------------------------------------------------------------------------
Insured-General Obligations -- 2.2%
- -----------------------------------------------------------------------------------------------
Aaa AAA $1,000 Puerto Rico, (FSA), Variable
Rate, 7/1/22/(1)//(2)/ $ 1,136,250
Aaa AAA 1,000 Puerto Rico, Variable Rate,
(FSA), 7/1/20/(1)/ 1,121,250
- -----------------------------------------------------------------------------------------------
$ 2,257,500
- -----------------------------------------------------------------------------------------------
Insured-Hospitals -- 11.9%
- -----------------------------------------------------------------------------------------------
Aaa AAA $2,000 Maricopa County, (Samaritan
Health), (MBIA), 7.00%, 12/1/16 $ 2,487,360
Aaa AAA 2,000 Maricopa County, Hospital District
No. 1, (FGIC), 6.125%, 6/1/15 2,144,760
Aaa AAA 2,000 Mohave County, (Kingman Regional
Medical Center), (FGIC),
6.50%, 6/1/15 2,159,780
Aaa AAA 1,000 Pima County, (Carondelet Health
Care Corp.), (MBIA),
5.25%, 7/1/12 1,049,410
Aaa AAA 1,000 Pima County, (Carondolet Health
Care Corp.), (MBIA),
5.25%, 7/1/11 1,054,250
Aaa AAA 1,500 Pima County, (Tucson Medical
Center), (MBIA), 6.375%, 4/1/12 1,618,140
Aaa AAA 1,500 Scottsdale, IDA, (Scottsdale
Memorial Hospital), (AMBAC),
6.125%, 9/1/17 1,634,730
- -----------------------------------------------------------------------------------------------
$12,148,430
- -----------------------------------------------------------------------------------------------
Insured-Housing -- 2.6%
- -----------------------------------------------------------------------------------------------
Aaa AAA $2,500 Maricopa County, IDA, Multifamily,
(National Health Facilities II), (FSA),
5.50%, 1/1/24 $ 2,638,075
- -----------------------------------------------------------------------------------------------
$ 2,638,075
- -----------------------------------------------------------------------------------------------
Insured-Water and Sewer -- 1.1%
- -----------------------------------------------------------------------------------------------
Aaa AAA $1,000 Chandler, Water and Sewer, (FGIC),
6.25%, 7/1/13 $ 1,084,600
- -----------------------------------------------------------------------------------------------
$ 1,084,600
- -----------------------------------------------------------------------------------------------
Miscellaneous Health Care -- 1.0%
- -----------------------------------------------------------------------------------------------
NR NR $1,000 Coconino County, IDA, Health Care
Insurance, (Guidance Center, Inc.),
5.80%, 6/1/11 $ 1,001,840
- -----------------------------------------------------------------------------------------------
$ 1,001,840
- -----------------------------------------------------------------------------------------------
Pooled Loans -- 3.8%
- -----------------------------------------------------------------------------------------------
Aa2 NR $2,000 Arizona Educational Loan Marketing
Corp., (AMT), 6.25%, 6/1/06 $ 2,191,440
A NR 1,500 Arizona Student Loan Acquisition
Authority, (AMT),
7.625%, 5/1/10 1,659,075
- -----------------------------------------------------------------------------------------------
$ 3,850,515
- -----------------------------------------------------------------------------------------------
Special Tax Revenue -- 0.8%
- -----------------------------------------------------------------------------------------------
NR NR $ 750 Virgin Islands Public Finance
Authority, 7.25%, 10/1/18 $ 853,028
- -----------------------------------------------------------------------------------------------
$ 853,028
- -----------------------------------------------------------------------------------------------
Transportation -- 6.1%
- -----------------------------------------------------------------------------------------------
NR BBB $3,000 Guam Airport Authority, (AMT),
6.70%, 10/1/23 $ 3,280,950
Baa1 A 3,000 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/38 2,877,480
- -----------------------------------------------------------------------------------------------
$ 6,158,430
- -----------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
35
<PAGE>
Arizona Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Water and Sewer -- 5.7%
- -----------------------------------------------------------------------------------------------
Aa1 AA+ $2,000 Arizona Wastewater Management
Authority, 6.80%, 7/1/11 $ 2,208,420
A1 AA- 1,000 Central Arizona Water Conservation
District, 5.50%, 11/1/09 1,083,310
Aa3 A 1,500 Phoenix, (Civic Improvement Corp.),
4.75%, 7/1/23 1,411,245
A1 A+ 1,000 Tuscon, Water Systems,
6.50%, 7/1/16 1,074,890
- -----------------------------------------------------------------------------------------------
$ 5,777,865
- -----------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $92,678,595) $101,837,360
- -----------------------------------------------------------------------------------------------
</TABLE>
AMT-Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio primarily invests in debt securities issued by Arizona
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1998, 24.4% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 3.3% to 8.3% 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 July 31,
1998, the value of these securities amounted to $2,867,865 or 2.8% of
the Portfolio's net assets.
/(3)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
36
<PAGE>
Colorado Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Electric Utilities -- 1.4%
- --------------------------------------------------------------------------------
NR BBB $ 500 Guam Power Authority,
6.625%, 10/1/14 $ 553,510
- --------------------------------------------------------------------------------
$ 553,510
- --------------------------------------------------------------------------------
Escrowed/Prerefunded -- 6.9%
- --------------------------------------------------------------------------------
Aaa NR $4,500 Dawson Ridge, Metropolitan
District #1, Escrowed to
Maturity, 0.00%, 10/1/22 $ 1,165,185
Aaa BBB 160 Denver, City and County
Airport Revenue, Pre-
refunded to 11/15/01,
(AMT), 7.00%, 11/15/25 174,462
Aaa BBB 1,185 Denver, City and County
Airport Revenue, Pre-
refunded to 11/15/02,
(AMT), 6.75%, 11/15/22 1,290,181
Aaa BBB 85 Denver, City and County
Airport Revenue, Pre-
refunded to 11/15/04,
(AMT), 7.50%, 11/15/23 101,116
- --------------------------------------------------------------------------------
$ 2,730,944
- --------------------------------------------------------------------------------
Hospitals -- 23.4%
- --------------------------------------------------------------------------------
NR NR $ 900 Colorado HFA, (Cleo Wallace
Center), 7.00%, 8/1/15 $ 942,867
NR BBB- 650 Colorado HFA, (National
Jewish Center For Immunology),
6.875%, 2/15/12 717,717
Baa1 NR 2,000 Colorado HFA, (Parkview
Memorial Hospital),
6.125%, 9/1/25 2,117,640
Baa BBB 2,050 Colorado HFA, (Rocky
Mountain Adventist
Healthcare), 6.625%, 2/1/13 2,202,704
NR NR 600 Colorado HFA, (Steamboat
Springs Health), 5.00%,
9/15/03 606,036
NR NR 500 Colorado HFA, (Steamboat
Springs Health), 5.30%,
9/15/09 504,195
NR BBB 2,000 Colorado HFA, (Vail Valley
Medical Center), 6.60%,
1/15/20 2,153,660
- --------------------------------------------------------------------------------
$ 9,244,819
- --------------------------------------------------------------------------------
Housing -- 19.3%
- --------------------------------------------------------------------------------
A3 A $1,000 Colorado HFA, 5.35%, 11/1/16 $ 1,003,890
Aa AA 500 Colorado HFA, MFMR,
(AMT), 6.40%, 10/1/27 534,120
Aa2 NR 1,130 Colorado HFA, Single
Family Access Program,
7.90%, 12/1/24 1,264,979
Aa2 NR 570 Colorado HFA, Single
Family Access Program,
8.00%, 12/1/24 643,262
Aa2 NR 1,000 Colorado HFA, Single
Family Housing, (AMT),
7.55%, 11/1/27 1,134,670
Aa2 NR 490 Colorado HFA, Single
Family Housing, (AMT),
7.65%, 12/1/25 550,902
NR AAA 1,000 Denver, Multifamily Housing,
(Lofts), (AMT), 6.15%, 12/1/16 1,052,830
NR NR 340 Lake Creek, Affordable
Housing Corp., 8.00%,
12/1/23 358,948
NR AAA 1,000 Lakewood, Multifamily
Housing, FHA Insured
Mortgage Loan, (AMT),
6.65%, 10/1/25 1,075,870
- --------------------------------------------------------------------------------
$ 7,619,471
- --------------------------------------------------------------------------------
Industrial Development Revenue/Pollution
Control Revenue -- 6.6%
- --------------------------------------------------------------------------------
A2 NR $1,250 Puerto Rico Industrial,
Medical and Environmental
Pollution Control Facility
Finance Authority, (American
Home Products), 5.10%,
12/1/18 $ 1,225,875
Baa3 BBB- 1,250 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.25%, 6/1/26 1,351,438
- --------------------------------------------------------------------------------
$ 2,577,313
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 2.2%
- --------------------------------------------------------------------------------
Aaa AAA $ 300 Puerto Rico Electric Power
Authority, "STRIPES", (FSA),
Variable Rate, 7/1/03/(1)/ $ 339,375
Aaa AAA 500 Puerto Rico Telephone
Authority, (MBIA), Variable
Rate, 1/16/15/(1)/ 531,875
- --------------------------------------------------------------------------------
$ 871,250
- --------------------------------------------------------------------------------
Insured-General Obligations -- 8.4%
- --------------------------------------------------------------------------------
Aaa AAA $1,750 Eagle, Garfield and Routt
Counties, School District
No. RE 50J, (FGIC), 6.30%,
12/1/12 $ 1,948,188
Aaa AAA 1,160 Highlands Ranch Metropolitan
District No. 2, (FSA), 6.50%,
6/15/10/(2)/ 1,358,082
- --------------------------------------------------------------------------------
$ 3,306,270
- --------------------------------------------------------------------------------
Insured-Housing -- 2.8%
- --------------------------------------------------------------------------------
Aaa AAA $1,000 Thornton, SCA Realty MFMR,
(FSA), 7.10%, 1/1/30 $ 1,094,500
- --------------------------------------------------------------------------------
$ 1,094,500
- --------------------------------------------------------------------------------
See notes to financial statements
37
<PAGE>
Colorado Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 2.7%
Aaa AAA $1,000 Broomfield Sales and Use Tax,
(AMBAC), 6.30%, 12/1/14 $ 1,076,600
- --------------------------------------------------------------------------------
$ 1,076,600
- --------------------------------------------------------------------------------
Insured-Transportation -- 7.4%
- --------------------------------------------------------------------------------
Aaa AAA $ 750 Denver, (Denver International
Airport), (AMT), (MBIA),
5.75%, 11/15/15 $ 790,125
Aaa AAA 3,095 Puerto Rico Highway and
Transportation Authority,
(AMBAC), 0.00%, 7/1/18 1,150,690
Aaa AAA 1,000 Puerto Rico Highway and
Transportation Authority,
(MBIA), (IBC), 5.00%, 7/1/38 970,540
- --------------------------------------------------------------------------------
$ 2,911,355
- --------------------------------------------------------------------------------
Transportation -- 16.2%
- --------------------------------------------------------------------------------
Baa3 BB+ $2,000 Denver, (United Airlines),
(AMT), 6.875%, 10/1/32 $ 2,166,339
Aaa BBB 315 Denver, City and County
Airport Revenue, (AMT),
6.75%, 11/15/22 352,198
Baa1 BBB 590 Denver, City and County
Airport Revenue, (AMT),
7.00%, 11/15/25 629,831
Baa1 BBB 415 Denver, City and County
Airport Revenue, (AMT),
7.50%, 11/15/23 479,972
NR NR 500 Eagle County, (Eagle County
Airport Terminal), (AMT),
7.50%, 5/1/21 546,115
NR BBB 750 Guam Airport Authority,
(AMT), 6.60%, 10/1/10 819,735
NR BBB 100 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 109,365
Baa1 A 250 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/36 246,433
Baa1 A 1,000 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/36 1,053,200
- --------------------------------------------------------------------------------
$ 6,403,188
- --------------------------------------------------------------------------------
Water and Sewer -- 2.7%
- --------------------------------------------------------------------------------
NR NR $1,000 Cottonwood Water and
Sanitation District, 7.75%,
12/1/20 $ 1,075,940
- --------------------------------------------------------------------------------
$ 1,075,940
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $36,166,584) $39,465,160
- --------------------------------------------------------------------------------
AMT- Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Colorado
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1998, 23.5% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institutions ranged from 4.9% to 7.1% of total investments.
/(1)/ Security has been issued as an inverse floater bond.
/(2)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
38
<PAGE>
Connecticut Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cogeneration -- 4.9%
- -----------------------------------------------------------------------------------------
NR BBB $ 8,000 Eastern Connecticut Resource
Recovery Authority,
(Wheelabrator Lisbon), (AMT),
5.50%, 1/1/20 $ 7,920,160
- -----------------------------------------------------------------------------------------
$ 7,920,160
- -----------------------------------------------------------------------------------------
Education -- 9.6%
- -----------------------------------------------------------------------------------------
NR BBB- $ 4,775 Connecticut HEFA, (Quinnipiac
College), 6.00%, 7/1/23 $ 4,878,904
Baa3 BBB- 1,000 Connecticut HEFA, (Sacred Heart
University), 5.80%, 7/1/23 1,005,310
Ba2 BBB- 5,500 Connecticut HEFA, (University
of Hartford), 6.80%, 7/1/22 5,824,500
Aaa AAA 3,400 Connecticut HEFA, (Yale
University), Variable Rate,
6/10/30(1) 3,846,250
- -----------------------------------------------------------------------------------------
$ 15,554,964
- -----------------------------------------------------------------------------------------
Electric Utilities -- 5.3%
- -----------------------------------------------------------------------------------------
NR BBB $ 3,625 Guam Power Authority,
6.30%, 10/1/22 $ 3,849,823
NR BBB 1,100 Guam Power Authority,
6.625%, 10/1/14 1,217,722
NR NR 3,220 Virgin Islands Water and Power
Authority, 7.40%, 7/1/11 3,538,072
- -----------------------------------------------------------------------------------------
$ 8,605,617
- -----------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 1.5%
- -----------------------------------------------------------------------------------------
NR A $ 1,000 Connecticut HEFA, (Sacred Heart
University), 6.80%, 7/1/12 $ 1,112,830
A1 AAA 645 Connecticut State, (STOB),
(Transportation Infrastructure
Purposes), 6.50%, 7/1/09 674,270
NR AA- 650 Connecticut State, General
Obligations Bonds,
6.875%, 7/15/10 698,900
- -----------------------------------------------------------------------------------------
$ 2,486,000
- -----------------------------------------------------------------------------------------
General Obligations -- 2.0%
- -----------------------------------------------------------------------------------------
Aa3 AA- $ 1,750 Connecticut State, Capital
Appreciation Bonds,
0.00%, 11/1/09 $ 1,049,143
Aa2 AA 1,270 Danbury, 4.50%, 2/1/14 1,230,033
NR BBB 500 Guam, 5.40%, 11/15/18 501,600
Baa1 A $ 1,065 Puerto Rico, Public
Improvement, 0.00%, 7/1/15 $ 451,326
- -----------------------------------------------------------------------------------------
$ 3,232,102
- -----------------------------------------------------------------------------------------
Hospitals -- 9.5%
- -----------------------------------------------------------------------------------------
Baa2 NR $ 5,400 Connecticut HEFA, (Griffin
Hospital), 5.75%, 7/1/23 $ 5,424,894
Baa2 BBB 500 Connecticut HEFA, (Hospital for
Special Care), 5.375%, 7/1/17 498,095
NR NR 2,000 Connecticut HEFA, (New Britain
Memorial Hospital),
7.75%, 7/1/22 2,286,680
NR A+ 1,100 Connecticut HEFA, (William W.
Backus Hospital), 6.00%, 7/1/12 1,164,229
NR A+ 5,780 Connecticut HEFA, (William W.
Backus Hospital),
6.375%, 7/1/22 6,125,817
- -----------------------------------------------------------------------------------------
$ 15,499,715
- -----------------------------------------------------------------------------------------
Housing -- 11.0%
- -----------------------------------------------------------------------------------------
Aa AA $ 3,000 Connecticut HFA, MRB,
6.20%, 5/15/14 $ 3,176,520
Aa2 AA 1,620 Connecticut HFA, MRB,
6.35%, 5/15/17 1,730,128
Aa2 AA 210 Connecticut HFA, MRB,
6.55%, 11/15/13 224,459
Aa2 AA 2,515 Connecticut HFA, MRB,
6.60%, 11/15/23 2,697,966
Aa2 AA 2,925 Connecticut HFA, MRB,
6.70%, 11/15/12 3,161,867
Aa2 AA 1,705 Connecticut HFA, MRB,
6.75%, 11/15/23 1,847,009
Aa2 AA 200 Connecticut HFA, MRB,
7.00%, 11/15/09 213,422
Aa AA 15 Connecticut HFA, MRB,
7.625%, 11/15/17 15,271
Aa2 AA 4,545 Connecticut HFA, MRB, (AMT),
6.20%, 11/15/22 4,825,290
- -----------------------------------------------------------------------------------------
$ 17,891,932
- -----------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 3.4%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Connecticut Development
Authority PCR, (Pfizer, Inc.),
6.55%, 2/15/13 $ 1,094,060
</TABLE>
See notes to financial statements
39
<PAGE>
Connecticut Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
Industrial Development Revenue /
Pollution Control Revenue (continued)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR NR $ 3,065 Connecticut Development
Authority, Airport Facility,
(Signature Flight), (AMT),
6.625%, 12/1/14 $ 3,284,209
A3 BBB+ 1,100 Sprague, Environmental
Improvement, (International
Paper Co.), (AMT), 5.70%,
10/1/21 1,134,298
- -----------------------------------------------------------------------------------------
$ 5,512,567
- -----------------------------------------------------------------------------------------
Insured-Education -- 4.3%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 3,250 Connecticut HEFA, (Choate
Rosemary College), (MBIA),
5.00%, 7/1/27 $ 3,174,568
Aaa AAA 1,555 Connecticut HEFA, (Choate
Rosemary College), (MBIA),
6.80%, 7/1/15(2) 1,773,882
Aaa AAA 2,000 Connecticut HEFA, (Trinity
College), (MBIA), 5.50%, 7/1/21 2,126,920
- -----------------------------------------------------------------------------------------
$ 7,075,370
- -----------------------------------------------------------------------------------------
Insured-General Obligations -- 1.3%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 1,000 New Britain, (MBIA),
6.00%, 3/1/12 $ 1,125,090
Aaa AAA 1,000 Puerto Rico, (MBIA),
5.375%, 7/1/25 1,023,420
- -----------------------------------------------------------------------------------------
$ 2,148,510
- -----------------------------------------------------------------------------------------
Insured-Hospitals -- 7.0%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Connecticut HEFA, (Bridgeport
Hospital), (MBIA),
6.625%, 7/1/18 $ 1,090,400
Aaa AAA 1,000 Connecticut HEFA, (Danbury
Hospital), (AMBAC),
5.375%, 7/1/17 1,018,440
Aaa AAA 1,000 Connecticut HEFA, (Hospital of
St. Raphael), (AMBAC),
6.50%, 7/1/11 1,176,480
Aaa AAA 1,500 Connecticut HEFA, (Hospital of
St. Raphael), (AMBAC),
6.625%, 7/1/14 1,612,920
Aaa AAA 2,350 Connecticut HEFA, (Lawrence and
Memorial Hospital), (MBIA),
5.00%, 7/1/22 2,271,933
Aaa AAA 2,000 Connecticut HEFA, (Veterans
Memorial Medical Center),
(MBIA), 5.375%, 7/1/15 2,061,940
Aaa AAA $ 2,000 Connecticut HEFA, (Yale-New
Haven Hospital), (MBIA), 6.50%, $ 2,168,160
7/1/12
- -----------------------------------------------------------------------------------------
$ 11,400,273
- -----------------------------------------------------------------------------------------
Insured-Housing -- 0.2%
- -----------------------------------------------------------------------------------------
NR AA $ 305 Puerto Rico Housing Finance
Corp., (AMBAC), 7.50%, 10/1/11 $ 315,144
- -----------------------------------------------------------------------------------------
$ 315,144
- -----------------------------------------------------------------------------------------
Insured-Transportation -- 5.9%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 8,200 Connecticut State, Airport
Revenue, (Bradley
International), (FGIC), 7.65%,
10/1/12 $ 9,576,779
- -----------------------------------------------------------------------------------------
$ 9,576,779
- -----------------------------------------------------------------------------------------
Nursing Homes -- 15.1%
- -----------------------------------------------------------------------------------------
NR NR $ 1,240 Connecticut Development
Authority, (Baptist Homes),
9.00%, 9/1/22 $ 1,397,046
A2 NR 9,000 Connecticut Development
Authority, Health Care Bonds,
(Duncaster), 6.75%, 9/1/15 9,737,549
A1 AA- 720 Connecticut HEFA, (NHP),
(Highland View), (AMT), 7.00%,
11/1/07 832,442
A1 AA- 1,305 Connecticut HEFA, (NHP),
(Sharon Healthcare), 6.25%,
11/1/14 1,445,235
A1 AA- 655 Connecticut HEFA, (NHP), (St.
Camillus), 6.25%, 11/1/18 716,747
A1 AA- 3,250 Connecticut HEFA, (NHP), (St.
Joseph's Manor),
6.25%, 11/1/16 3,599,245
A1 AA- 335 Connecticut HEFA, (NHP),
(Wadsworth Glen), (AMT),
7.00%, 11/1/07 387,317
A1 AA- 2,000 Connecticut HEFA, (NHP),
(Wadsworth Glen), (AMT),
7.50%, 11/1/16 2,355,620
A1 AA- 3,000 Connecticut HEFA, (NHP),
(Windsor), 7.125%, 11/1/14 3,444,330
A1 AA- 500 Connecticut HEFA, (NHP),
(Windsor), 7.125%, 11/1/24 573,760
- -----------------------------------------------------------------------------------------
$ 24,489,291
- -----------------------------------------------------------------------------------------
Solid Waste -- 5.4%
- -----------------------------------------------------------------------------------------
A NR $ 2,500 Bristol Resource Recovery
Facility, (Ogden Martin
Systems), $ 2,762,950
6.50%, 7/1/14
</TABLE>
See notes to financial statements
40
<PAGE>
Connecticut Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Solid Waste (continued)
- -----------------------------------------------------------------------------------------
Baa1 A- $ 4,250 Connecticut Resources Recovery
Authority, (American REF-FUEL
Co.), (AMT), 6.45%, 11/15/22 $ 4,560,973
A2 NR 450 Connecticut Resources Recovery
Authority, (American REF-FUEL
Co.), (AMT), 8.00%, 11/15/15 467,181
A2 A- 1,000 Connecticut Resources Recovery
Authority, (American REF-FUEL
Co.), (AMT), 8.10%, 11/15/15 1,040,600
- -----------------------------------------------------------------------------------------
$ 8,831,704
- -----------------------------------------------------------------------------------------
Special Tax Revenue -- 4.4%
- -----------------------------------------------------------------------------------------
A1 AA- $ 3,180 Connecticut State, (STOB),
6.125%, 9/1/12 $ 3,614,579
A1 AA- 2,000 Connecticut State, (STOB),
6.50%, 10/1/12 2,345,280
NR NR 1,000 Virgin Islands Public Finance
Authority, 7.25%, 10/1/18 1,137,370
- -----------------------------------------------------------------------------------------
$ 7,097,229
- -----------------------------------------------------------------------------------------
Student Loans -- 2.5%
- -----------------------------------------------------------------------------------------
A1 NR $ 1,180 Connecticut Higher Education
Supplemental Loan Authority
Revenue Bonds, (AMT),
6.20%, 11/15/09 $ 1,250,788
A1 NR 390 Connecticut Higher Education
Supplemental Loan Authority
Revenue Bonds, (AMT),
7.375%, 11/15/05 400,187
A1 NR 2,435 Connecticut Higher Education
Supplemental Loan Authority
Revenue Bonds, (AMT),
7.50%, 11/15/10 2,500,185
- -----------------------------------------------------------------------------------------
$ 4,151,160
- -----------------------------------------------------------------------------------------
Transportation -- 5.8%
- -----------------------------------------------------------------------------------------
NR BBB $ 2,000 Guam Airport Authority, (AMT),
6.70%, 10/1/23 $ 2,187,300
Baa1 A 1,020 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 956,862
Baa1 A 1,000 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/38 959,160
Baa1 A 4,965 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/15 5,251,778
- -----------------------------------------------------------------------------------------
$ 9,355,100
- -----------------------------------------------------------------------------------------
Water and Sewer -- 0.9%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 1,250 Connecticut State, Clean Water
Fund, 6.00%, 10/1/12 $ 1,415,225
- -----------------------------------------------------------------------------------------
$ 1,415,225
- -----------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $151,783,349) $ 162,558,842
- -----------------------------------------------------------------------------------------
</TABLE>
AMT -- Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Connecticut
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1998, 18.8% 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 2.5% to 10.3% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
41
<PAGE>
Michigan Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Electric Utilities -- 1.6%
- ---------------------------------------------------------------------------------------
NR BBB $ 1,000 Guam Power Authority,
6.625%, 10/1/14 $ 1,107,020
Baa1 BBB+ 500 Michigan South Central Power
Agency Supply System,
6.75%, 11/1/10 536,835
Baa1 BBB+ 365 Puerto Rico Electric Power
Authority, 7.125%, 7/1/14 380,666
- ---------------------------------------------------------------------------------------
$ 2,024,521
- ---------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 2.4%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,000 Lake Orion School District,
Prerefunded to 5/1/05,
(AMBAC), 7.00%, 5/1/20 $ 1,165,750
NR NR 1,770 Michigan Strategic
Environmental Research
Institute, Prerefunded to
8/15/02, 6.375%, 8/15/12 1,922,114
- ---------------------------------------------------------------------------------------
$ 3,087,864
- ---------------------------------------------------------------------------------------
General Obligations -- 6.3%
- ---------------------------------------------------------------------------------------
Aa2 AA+ $ 500 Avondale School District,
School Building and Site,
6.75%, 5/1/14 $ 536,195
Baa2 BBB+ 5,115 Detroit, 6.35%, 4/1/14 5,550,286
Aaa BBB+ 500 Detroit, 6.70%, 4/1/10 571,235
Aa2 AA+ 1,000 Mattawan Consolidated Schools,
6.40%, 5/1/09 1,093,550
Baa1 A 500 Puerto Rico, 0.00%, 7/1/16 200,355
Baa1 A 700 Puerto Rico, 0.00%, 7/1/18 252,784
- ---------------------------------------------------------------------------------------
$ 8,204,405
- ---------------------------------------------------------------------------------------
Hospitals -- 13.6%
- ---------------------------------------------------------------------------------------
NR BBB $ 2,000 Michigan HFA, (Central
Michigan Community Hospital),
6.25%, 10/1/27 $ 2,111,460
A2 A 2,975 Michigan HFA, (Detroit Medical
Center Obligated Group),
5.50%, 8/15/23 3,006,684
A2 A 4,000 Michigan HFA, (Detroit Medical
Center Obligated Group),
6.25%, 8/15/13 4,330,080
Aa AA 250 Michigan HFA, (Henry Ford
Continuing Care Corp.),
6.75%, 7/1/11 270,703
A1 NR $ 9,000 Michigan HFA, (McLaren
Obligated Group), 4.50%,
10/15/21 8,094,329
- ---------------------------------------------------------------------------------------
$ 17,813,256
- ---------------------------------------------------------------------------------------
Housing -- 1.4%
- ---------------------------------------------------------------------------------------
NR AA- $ 740 Michigan HDA, Rental Housing,
(AMT), 7.15%, 4/1/10 $ 796,773
NR AA+ 1,000 Michigan HDA, SFMR, (AMT),
6.20%, 12/1/27 1,063,290
- ---------------------------------------------------------------------------------------
$ 1,860,063
- ---------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control
Revenue -- 13.1%
- ---------------------------------------------------------------------------------------
Baa1 BBB $ 2,000 Dickinson, PCR, (Champion
International), 5.85%, 10/1/18 $ 2,085,980
NR BB- 1,000 Michigan Strategic Fund,
(Crown Paper), (AMT), 6.50%,
8/1/21 1,024,070
A3 A 5,970 Michigan Strategic Fund,
(General Motors Corp.),
6.20%, 9/1/20 6,458,166
NR BB- 110 Michigan Strategic Fund,
(KMart Corp.), 6.80%, 12/15/07 117,033
NR NR 3,000 Michigan Strategic Fund, (S.D.
Warren Co.), (AMT),
7.375%, 1/15/22 3,332,940
Baa3 BBB- 2,750 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.25%, 6/1/26 2,973,163
Baa3 BBB- 490 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.30%, 6/1/23 520,057
NR BB- 530 Richmond EDC, (KMart Corp.),
6.625%, 1/1/07 570,911
- ---------------------------------------------------------------------------------------
$ 17,082,320
- ---------------------------------------------------------------------------------------
Insured-Colleges and Universities -- 5.6%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 2,870 Eastern Michigan University,
(FGIC), 5.50%, 6/1/27 $ 2,971,598
Aaa AAA 2,750 Ferris State University,
(MBIA), 5.25%, 10/1/20 2,754,318
Aaa AAA 1,000 Michigan State
University-Grand Valley,
(MBIA), 5.25%, 10/1/17 1,008,950
Aaa AAA 500 Western Michigan University,
(AMBAC), 6.50%, 7/15/21 539,900
- ---------------------------------------------------------------------------------------
$ 7,274,766
- ---------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
42
<PAGE>
Michigan Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- -------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
Insured-Electric Utilities -- 4.1%
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA $ 300 Michigan Strategic Fund,
(Detroit Edison Co.), (FGIC),
6.95%, 5/1/11 $ 363,741
Aaa AAA 4,000 Michigan Strategic Fund,
(Detroit Edison Co.), (FGIC),
6.95%, 9/1/21 4,349,960
Aaa AAA 550 Monroe County, PCR, (Detroit
Edison Co.), (FGIC), (AMT),
7.65%, 9/1/20 595,287
- ---------------------------------------------------------------------------------------
$ 5,308,988
- ---------------------------------------------------------------------------------------
Insured-General Obligations -- 14.6%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 500 Detroit, (FGIC), 5.50%, 4/1/16 $ 514,885
Aaa AAA 1,000 Grand Ledge School District,
(MBIA), 5.375%, 5/1/24 1,018,070
Aaa AAA 1,900 Holland School District,
(AMBAC), 0.00%, 5/1/17 729,638
Aaa AAA 2,000 Kalamazoo, (MBIA),
5.40%, 5/1/14 2,117,740
Aaa AAA 1,000 Lake Shore Public Schools,
Macomb County, (FSA),
5.50%, 5/1/17 1,033,210
Aaa AAA 2,000 Lincoln Park School District,
(FGIC), 5.00%, 5/1/20 1,954,460
Aaa AAA 1,500 Lincoln Park School District,
(FGIC), 5.90%, 5/1/26 1,664,820
Aaa AAA 2,410 Okemos Public Schools, (MBIA),
0.00%, 5/1/16 973,953
Aaa AAA 13,700 Parchment School District,
(MBIA), 5.00%, 5/1/25(2) 1,347,395
Aaa AAA 4,740 South Redford School District,
(FGIC), 5.50%, 5/1/22 4,887,271
Aaa AAA 2,750 Ypsilanti School District,
(FGIC), 5.375%, 5/1/26 2,799,693
- ---------------------------------------------------------------------------------------
$ 19,041,135
- ---------------------------------------------------------------------------------------
Insured-Hospitals -- 6.1%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 1,300 Jackson HFA, (W.A. Foote
Memorial), (FGIC),
4.75%, 6/1/15 $ 1,241,136
Aaa NR 900 Kalamazoo HFA, (Bronson
Methodist Hospital), (MBIA),
5.50%, 5/15/28 924,696
Aaa AAA 3,500 Kent HFA, (Butterworth Health
System), (MBIA),
6.125%, 1/15/16 3,941,490
Aaa NR $ 1,000 Michigan State HFA, (Botsford
Hospital Obligation), (MBIA),
5.00%, 2/15/22 963,150
Aaa AAA 1,000 Petoskey, HFA, (Northern
Michigan Hospital Obligation),
(MBIA), 5.00%, 11/15/27 959,130
- ---------------------------------------------------------------------------------------
$ 8,029,602
- ---------------------------------------------------------------------------------------
Insured-Housing -- 2.1%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 500 Michigan HDA, (Parkway
Meadows), (FSA),
6.85%, 10/15/18 $ 536,140
Aaa AAA 2,075 Michigan HDA, SFMR, (AMBAC),
(AMT), 6.05%, 12/1/27 2,182,610
- ---------------------------------------------------------------------------------------
$ 2,718,750
- ---------------------------------------------------------------------------------------
Insured-Life Care -- 4.7%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 2,200 Hancock HFA, (Portage Health),
(MBIA), 5.45%, 8/1/47 $ 2,222,814
Aaa AAA 1,000 Michigan State HFA,
(Midmichigan Obligation
Group), (FSA), 5.375%, 6/1/27 1,013,490
Aaa AAA 3,000 Michigan State HFA, (Oakwood
Obligation Group), (FSA),
5.00%, 8/15/26 2,880,000
- ---------------------------------------------------------------------------------------
$ 6,116,304
- ---------------------------------------------------------------------------------------
Insured-Transportation -- 2.9%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 4,000 Wayne Charter County, Airport
Revenue, Detroit Metropolitan
Wayne County Airport, (MBIA),
(AMT), 5.00%, 12/1/28 $ 3,816,720
- ---------------------------------------------------------------------------------------
$ 3,816,720
- ---------------------------------------------------------------------------------------
Insured-Water and Sewer -- 5.6%
- ---------------------------------------------------------------------------------------
Aaa AAA $ 7,680 Detroit, City Water Supply
System, (FGIC), 4.75%,
7/1/19(3) $ 7,284,402
- ---------------------------------------------------------------------------------------
$ 7,284,402
- ---------------------------------------------------------------------------------------
Life Care -- 2.0%
- ---------------------------------------------------------------------------------------
NR BBB $ 1,500 Kalamazoo EDC, (Friendship
Village), 6.25%, 5/15/27 $ 1,587,345
NR NR 1,000 Michigan HFA, (Presbyterian
Village), 6.50%, 1/1/25 1,072,680
- ---------------------------------------------------------------------------------------
$ 2,660,025
- ---------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
43
<PAGE>
Michigan Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- -------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Miscellaneous -- 1.2%
- ---------------------------------------------------------------------------------------
NR NR $ 1,500 Pittsfield Township EDC,
(Arbor Hospice), 7.875%,
8/15/27 $ 1,585,605
- ---------------------------------------------------------------------------------------
$ 1,585,605
- ---------------------------------------------------------------------------------------
Pooled Loans -- 4.8%
- ---------------------------------------------------------------------------------------
NR A $ 1,825 Michigan Municipal Bond
Authority Local Government
Loan, $ 2,016,406
6.75%, 5/1/12
NR A 590 Michigan Municipal Bond
Authority Local Government
Loan, 645,442
6.90%, 5/1/21
Aa2 AA+ 2,550 Michigan Municipal Bond
Authority Local Government
Loan-Qualified School, 6.50%, 2,826,548
5/1/07
Aa2 AA+ 760 Michigan Municipal Parking
Bond Authority, 6.50%, 11/1/08 840,849
- ---------------------------------------------------------------------------------------
$ 6,329,245
- ---------------------------------------------------------------------------------------
Special Tax Revenue -- 7.2%
- ---------------------------------------------------------------------------------------
NR BBB+ $ 250 Battle Creek, Downtown
Development Authority Tax
Increment, 7.60%, 5/1/16 $ 294,893
NR BBB+ 1,315 Battle Creek, Downtown
Development Authority Tax
Increment, 7.65%, 5/1/22 1,554,448
NR A 4,300 Detroit, (Convention Facility
Cobo Hall Expansion),
5.25%, 9/30/12/(1)//(3)/ 4,336,722
NR A- 3,050 Detroit, Downtown Tax
Increment, 0.00%, 7/1/16 1,157,811
NR A- 2,000 Detroit, Downtown Tax
Increment, 0.00%, 7/1/20 598,660
A3 A 1,500 Detroit, Local Development
Finance Authority, 5.375%,
5/1/21 1,515,735
- ---------------------------------------------------------------------------------------
$ 9,458,269
- ---------------------------------------------------------------------------------------
Water and Sewer -- 0.7%
- ---------------------------------------------------------------------------------------
Aa1 AA+ $ 1,000 Michigan Municipal Bond
Authority, (Clean Water
Revolving Fund), 4.75%,
10/1/18/(2)/ $ 948,320
- ---------------------------------------------------------------------------------------
$ 948,320
- ---------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $119,726,431) $ 130,644,560
- ---------------------------------------------------------------------------------------
</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 Michigan
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1998, 46.5% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 3.5% to 21.9%.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(2) When-issued security.
(3) Security (or a portion thereof) has been segregated to cover when-issued
securities.
See notes to financial statements
44
<PAGE>
Minnesota Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------ Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ----------------------------------------------------------------------------------------
Assisted Living -- 1.7%
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR NR $ 1,000 St. Paul, Housing and
Redevelopment, (Care Institute,
Inc. -Highland), 8.75%, 11/1/24 $ 1,157,940
- ----------------------------------------------------------------------------------------
$ 1,157,940
- ----------------------------------------------------------------------------------------
Education -- 7.1%
- ----------------------------------------------------------------------------------------
A2 NR $ 1,000 Hopkins, (Blake School),
5.50%, 9/1/24 $ 1,018,910
A3 NR 500 Minnesota Higher Education
Facilities Authority, (St.
John's University), 5.40%,
10/1/22 509,555
Baa2 NR 500 Minnesota Higher Education
Facilities Authority, (St.
Mary's College), 6.15%, 10/1/23 521,035
A2 NR 1,100 Minnesota Higher Education
Facilities Authority,
(University of St. Thomas),
5.40%, 4/1/22 1,120,097
A2 NR 1,510 Minnesota Higher Education
Facilities Authority,
(University of St. Thomas),
5.40%, 4/1/23 1,532,318
- ----------------------------------------------------------------------------------------
$ 4,701,915
- ----------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 3.0%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 1,700 Minnesota State, Prerefunded
to 8/1/02, Variable
Rate, 8/1/11(1) $ 1,965,166
- ----------------------------------------------------------------------------------------
$ 1,965,166
- ----------------------------------------------------------------------------------------
General Obligations -- 2.8%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 200 Minneapolis and St. Paul,
Airports Commission, (AMT),
6.60%, 1/1/09 $ 213,808
Aaa AAA 300 Minneapolis and St. Paul,
Airports Commission, (AMT),
6.60%, 1/1/10 320,220
Aaa AAA 1,000 Minnesota State, (Duluth
Airport), (AMT), 6.25%, 8/1/14 1,098,110
A1 AA- 200 St. Cloud, Variable
Rate, 8/1/13(1) 222,750
- ----------------------------------------------------------------------------------------
$ 1,854,888
- ----------------------------------------------------------------------------------------
Hospitals -- 17.1%
- ----------------------------------------------------------------------------------------
Baa1 A- $ 1,250 Minneapolis and St. Paul,
Housing and Redevelopment
Authority, (Group Health Plan,
Inc.), 6.75%, 12/1/13 $ 1,352,575
Baa1 A- 250 Minneapolis and St. Paul,
Housing and Redevelopment
Authority, (Group Health Plan,
Inc.), 6.90%, 10/15/22 272,570
NR BBB+ 2,120 Red Wing Health Care Facilities,
(River Region Obligation Group),
6.50%, 9/1/22 2,279,191
NR AA+ 1,000 Rochester Health Care
Facilities, (Mayo Clinic),
5.50%, 11/15/27 1,031,900
NR AA+ 2,200 Rochester Health Care
Facilities, (Mayo Clinic),
(AMT), Variable
Rate, 11/15/15(1) 2,535,500
Baa3 BBB 1,000 St. Paul, Housing and
Redevelopment Authority,
(Healtheast), 6.625%, 11/1/17 1,075,120
Baa3 BBB 2,500 St. Paul, Housing and
Redevelopment Authority,
(Healtheast), 6.625%, 11/1/17 2,687,799
- ----------------------------------------------------------------------------------------
$ 11,234,655
- ----------------------------------------------------------------------------------------
Housing -- 23.4%
- ----------------------------------------------------------------------------------------
NR AAA $ 300 Coon Rapids, Multifamily
Housing, (Browns Meadow), (FHA),
(AMT), 6.85%, 8/1/33 $ 316,716
NR AAA 1,395 Dakota County, Housing and
Redevelopment Authority, (GNMA),
7.375%, 12/1/29(2) 1,532,463
Aaa NR 500 Little Canada, Facilities
Revenue, (Cedars Lakeside)
(GNMA),
5.90%, 8/1/20 523,510
Aaa NR 500 Little Canada, Facilities
Revenue, (Cedars Lakeside)
(GNMA), 5.95%, 2/1/32 521,415
Aa NR 1,200 Maplewood, Multifamily Housing,
(Beaver Creek), (FHA),
6.50%, 9/1/24 1,276,584
NR AAA 80 Minneapolis and St. Paul,
Housing Finance Board, SFM,
(GNMA), (AMT), 7.30%, 8/1/31 84,360
Aa2 AA 400 Minnesota HFA, SFMR,
6.95%, 7/1/16 428,084
Aa2 AA+ 3,975 Minnesota HFA, SFMR, (AMT),
6.50%, 1/1/26(3) 4,193,823
Aa2 AA+ 1,000 Minnesota HFA, SFMR, (AMT),
6.75%, 7/1/12 1,057,080
</TABLE>
See notes to financial statements
45
<PAGE>
Minnesota Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ----------------------------------------------------------------------------------------
Housing (continued)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aa2 AA $ 650 Minnesota HFA, SFMR, (AMT),
6.75%, 1/1/26 $ 688,513
Aa2 AA+ 1,235 Minnesota HFA, SFMR, (AMT),
6.85%, 1/1/24 1,309,779
Aa2 AA 380 Minnesota HFA, SFMR, (AMT),
7.05%, 7/1/22 397,951
Aa NR 1,250 St. Louis Park, (Knollwood
Apartments), (FHA),
6.25%, 12/1/28 1,326,988
Aaa NR 1,685 St. Paul, Housing and
Redevelopment Authority, (Cliffe
Apartments), (GNMA),
6.00%, 1/1/31 1,749,957
- ----------------------------------------------------------------------------------------
$ 15,407,223
- ----------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 8.1%
- ----------------------------------------------------------------------------------------
NR A- $ 1,000 Cloquet PCR, (Potlach Corp.),
5.90%, 10/1/26 $ 1,054,250
NR A- 750 Minneapolis, Community
Development Agency,
6.00%, 6/1/11 779,580
NR A- 100 Minneapolis, Community
Development Agency,
7.35%, 12/1/09 106,687
NR A- 1,250 Minneapolis, Community
Development Agency,
7.40%, 12/1/21 1,333,488
NR A- 1,605 Minneapolis, Community
Development Agency, (AMT),
6.80%, 12/1/24 1,739,932
NR A- 300 Minneapolis, Community
Development Agency, (Firemans
Ins.), 6.40%, 12/1/04 307,863
- ----------------------------------------------------------------------------------------
$ 5,321,800
- ----------------------------------------------------------------------------------------
Insured-Electric Utilities -- 14.8%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 1,050 Northern Minnesota Municipal
Power Agency, (AMBAC),
5.30%, 1/1/21 $ 1,065,687
Aaa AAA 700 Northern Minnesota Municipal
Power Agency, (FSA), 5.40%,
1/1/16(4) 717,094
Aaa AAA 3,000 Southern Minnesota Municipal
Power Agency, (MBIA),
0.00%, 10/1/21 959,610
Aaa AAA 10,000 Southern Minnesota Municipal
Power Agency, (MBIA),
0.00%, 1/1/25 2,593,900
Aaa AAA $ 9,880 Southern Minnesota Municipal
Power Agency, (MBIA),
0.00%, 1/1/26 $ 2,431,270
Aaa AAA 4,800 Southern Minnesota Municipal
Power Agency, (MBIA),
0.00%, 1/1/27 1,122,288
Aaa AAA 300 Southern Minnesota Municipal
Power Agency, (MBIA), (AMT),
Variable Rate, 1/1/18(1)(5) 324,000
Aaa AAA 510 Western Minnesota Municipal
Power Agency, (MBIA), 5.50%,
1/1/15 510,184
- ----------------------------------------------------------------------------------------
$ 9,724,033
- ----------------------------------------------------------------------------------------
Insured-General Obligations -- 2.3%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 1,330 St. Francis, Independent School
District No. 15, (FGIC),
6.35%, 2/1/12 $ 1,495,066
- ----------------------------------------------------------------------------------------
$ 1,495,066
- ----------------------------------------------------------------------------------------
Insured-Hospitals -- 3.6%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 100 Minneapolis and St. Paul,
Housing and Redevelopment
Authority, (Health One), (MBIA),
7.40%, 8/15/11 $ 108,003
Aaa AAA 250 Minneapolis, Hospital Revenue,
(Fairview Hospital), (MBIA),
6.50%, 1/1/11 269,955
Aaa AAA 450 Minnesota Agricultural and
Economic Development, (Fairview
Hospital), (MBIA), 5.75%,
11/15/26 478,607
Aaa AAA 450 Plymouth, Health Facilities,
(Westhealth), (CGIC),
6.25%, 6/1/16 493,268
Aaa AAA 1,000 St. Louis Park, Health Care
Facilities, (AMBAC), Variable
Rate, 7/1/13(1) 1,013,750
- ----------------------------------------------------------------------------------------
$ 2,363,583
- ----------------------------------------------------------------------------------------
Insured-Housing -- 2.5%
- ----------------------------------------------------------------------------------------
Aaa AAA $ 1,500 SCA MFMR Receipts, Burnsville,
(FSA), 7.10%, 1/1/30 $ 1,641,750
- ----------------------------------------------------------------------------------------
$ 1,641,750
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
46
<PAGE>
Minnesota Municipals Portfolio as of July 31, 1998
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS CONT'D
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- ----------------------------------------------------------------------------------------
Insured-Special Tax Revenue -- 4.8%
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA $ 3,000 St. Paul, Housing and
Redevelopment Authority, (Civic
Center), (MBIA), 5.45%, 11/1/13 $ 3,134,399
- ----------------------------------------------------------------------------------------
$ 3,134,399
- ----------------------------------------------------------------------------------------
Lease Revenue / Certificates of
Participation -- 3.5%
- ----------------------------------------------------------------------------------------
Baa1 NR $ 350 Cambridge EDA, 6.25%, 2/1/14 $ 362,471
NR AA 1,770 Hennepin County,
6.80%, 5/1/17(2) 1,920,893
- ----------------------------------------------------------------------------------------
$ 2,283,364
- ----------------------------------------------------------------------------------------
Miscellaneous -- 1.5%
- ----------------------------------------------------------------------------------------
NR NR $ 1,000 Red Lake Band of Chippewa
Indians, 6.25%, 8/1/13 $ 1,000,480
- ----------------------------------------------------------------------------------------
$ 1,000,480
- ----------------------------------------------------------------------------------------
Nursing Homes -- 1.5%
- ----------------------------------------------------------------------------------------
NR NR $ 1,000 Columbia Heights, Multifamily,
(Crest View), 6.00%, 3/1/33 $ 1,005,730
- ----------------------------------------------------------------------------------------
$ 1,005,730
- ----------------------------------------------------------------------------------------
Solid Waste -- 0.7%
- ----------------------------------------------------------------------------------------
Aa3 AA- $ 450 Anoka County, Solid Waste
Disposal, National Rural
Utility, (AMT), 6.95%, 12/1/08 $ 479,264
- ----------------------------------------------------------------------------------------
$ 479,264
- ----------------------------------------------------------------------------------------
Transportation -- 1.6%
- ----------------------------------------------------------------------------------------
Baa1 A $ 500 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 $ 469,050
Baa1 A 600 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/36 591,438
- ----------------------------------------------------------------------------------------
$ 1,060,488
- ----------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $59,988,550) $ 65,831,744
- ----------------------------------------------------------------------------------------
</TABLE>
AMT -- Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Minnesota
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1998, 27.9% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 0.7% to 18.1% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(3) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(4) When-issued security.
(5) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. It is the
Portfolio's intention to hold the security until maturity.
See notes to financial statements
47
<PAGE>
New Jersey Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
Airlines -- 1.7%
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Baa3 BBB- $ 5,100 Port Authority of New York and
New Jersey, (Delta Airlines),
6.95%, 6/1/08 $ 5,557,776
- -----------------------------------------------------------------------------------------
$ 5,557,776
- -----------------------------------------------------------------------------------------
Assisted Living -- 2.6%
- -----------------------------------------------------------------------------------------
NR NR $ 3,750 New Jersey EDA, (Chelsea at
East Brunswick), (AMT),
8.25%, 10/1/20 $ 4,170,600
NR NR 3,630 New Jersey EDA, (Forsgate),
(AMT), 8.625%, 6/1/25 4,212,143
- -----------------------------------------------------------------------------------------
$ 8,382,743
- -----------------------------------------------------------------------------------------
Cogeneration -- 4.9%
- -----------------------------------------------------------------------------------------
NR BBB- $ 1,725 New Jersey EDA, (Trigen
Trenton), (AMT), 6.20%, 12/1/07 $ 1,831,398
NR BB+ 12,750 New Jersey EDA, (Vineland
Cogeneration), (AMT),
7.875%, 6/1/19 13,987,132
- -----------------------------------------------------------------------------------------
$ 15,818,530
- -----------------------------------------------------------------------------------------
Education -- 3.0%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 1,000 New Jersey Educational
Facilities Authority,
(Princeton Theological),
5.00%, 7/1/22 $ 986,910
Baa1 A- 2,480 New Jersey Educational
Facilities Authority, (Seton
Hall Univ.), 7.00%, 7/1/21 2,666,050
NR NR 8,800 New Jersey Higher Educational
Student Loan Bonds, (AMT),
0.00%, 7/1/10 3,521,584
A1 AAA 2,500 Rutgers, The State University
of New Jersey, 6.85%, 5/1/21 2,730,150
- -----------------------------------------------------------------------------------------
$ 9,904,694
- -----------------------------------------------------------------------------------------
Electric Utilities -- 3.6%
- -----------------------------------------------------------------------------------------
NR BBB $ 3,000 Guam Power Authority,
6.75%, 10/1/24 $ 3,340,800
Baa1 BBB+ 6,500 Puerto Rico Electric Power
Authority, 0.00%, 7/1/17 2,497,950
Baa1 BBB+ 2,000 Puerto Rico Electric Power
Authority, 0.00%, 7/1/17 768,600
NR NR $ 4,695 Virgin Islands Water and Power
Authority, 7.40%, 7/1/11 $ 5,158,772
- -----------------------------------------------------------------------------------------
$ 11,766,122
- -----------------------------------------------------------------------------------------
Escrowed / Prerefunded -- 3.2%
- -----------------------------------------------------------------------------------------
NR NR $ 615 New Jersey EDA, (Cadbury
Corp.), Prerefunded to 7/1/01,
7.50%, 7/1/21 $ 687,656
NR NR 2,000 New Jersey EDA, (Cadbury
Corp.), Prerefunded to 7/1/01,
8.00%, 7/1/15 2,263,480
NR NR 300 New Jersey EDA, (Cadbury
Corp.), Prerefunded to 7/1/01,
8.70%, 7/1/07 342,573
Aaa AAA 4,000 New Jersey EDA, (Keswick
Pines), Prerefunded to 1/1/04,
8.75%, 1/1/24 4,904,480
Aaa A+ 1,000 New Jersey EDA, (Performing
Arts Center), Prerefunded to
6/15/01, 6.75%, 6/15/12 1,092,420
NR NR 1,000 Passaic County, Prerefunded to
9/1/99, 6.70%, 9/1/13 1,050,760
- -----------------------------------------------------------------------------------------
$ 10,341,369
- -----------------------------------------------------------------------------------------
General Obligations -- 4.2%
- -----------------------------------------------------------------------------------------
NR BBB $ 9,745 Guam, 5.40%, 11/15/18 $ 9,776,183
NR A+ 1,500 Hudson County Improvement
Authority, 6.625%, 8/1/25 1,628,805
Aa2 NR 3,000 Mercer County Improvement
Authority, 0.00%, 4/1/10 1,717,170
Baa1 A 1,600 Puerto Rico, 0.00%, 7/1/18 577,792
- -----------------------------------------------------------------------------------------
$ 13,699,950
- -----------------------------------------------------------------------------------------
Hospitals -- 13.4%
- -----------------------------------------------------------------------------------------
Baa2 NR $ 5,250 Camden County, Improvement
Authority Revenue, (Cooper
Health System), 6.00%, 2/15/27 $ 5,472,653
A3 A- 2,300 New Jersey Health Care
Facilities Financing
Authority, (Atlantic City
Medical Center), 6.80%, 7/1/11 2,530,483
Baa2 NR 5,875 New Jersey Health Care
Facilities Financing
Authority, (Deborah Heart and
Lung Center),
6.30%, 7/1/23 6,221,625
Baa1 NR 4,000 New Jersey Health Care
Facilities Financing
Authority, (Southern Ocean
County Hospital),
6.25%, 7/1/23 4,241,160
</TABLE>
See notes to financial statements
48
<PAGE>
New Jersey Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- --------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
Hospitals (continued)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aa2 AAA $ 9,585 New Jersey Health Care
Facilities Financing
Authority, (St. Elizabeth's
Hospital),
6.80%, 8/1/19 $ 10,261,700
Baa1 A- 3,500 New Jersey Health Care
Facilities, (Capital Health
System),
5.25%, 7/1/17 3,489,430
Baa1 A- 1,250 New Jersey Health Care
Facilities, (Capital Health
Systems), 5.125%, 7/1/12 1,236,475
Baa2 BBB 5,400 New Jersey Health Care
Facilities, (Capital Health
Systems),
6.00%, 7/1/27 5,652,990
Baa1 A- 1,750 New Jersey Health Care
Facilities, (Capital Health
System),
5.25%, 7/1/27 1,723,803
NR BBB+ 2,720 New Jersey Health Care
Facilities, (Holy Name
Hospital),
6.00%, 7/1/25 2,847,432
- -----------------------------------------------------------------------------------------
$ 43,677,751
- -----------------------------------------------------------------------------------------
Housing -- 3.0%
- -----------------------------------------------------------------------------------------
NR AAA $ 1,000 Guam Housing Corp., Single
Family, 5.75%, 9/1/31 $ 1,063,300
NR A+ 1,250 New Jersey HFA,
7.25%, 11/1/22 1,315,688
NR AAA 2,000 New Jersey HFA, (Presidential
Plaza), (FHA), 6.95%, 5/1/13 2,163,960
NR AAA 3,700 New Jersey HFA, (Presidential
Plaza), (FHA), 7.00%, 5/1/30 4,002,993
NR A+ 1,000 New Jersey HFA, Rental
Housing, (AMT), 7.10%, 5/1/22 1,064,840
- -----------------------------------------------------------------------------------------
$ 9,610,781
- -----------------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 10.4%
- -----------------------------------------------------------------------------------------
NR NR $ 4,000 Middlesex County Pollution
Control Financing Authority,
(Amerada Hess Corp.), 6.875%,
12/1/22 $ 4,367,440
NR NR 2,000 Middlesex County Pollution
Control Financing Authority,
(Amerada Hess Corp.), 7.875%,
6/1/22 2,306,620
Aa1 NR 3,000 New Jersey EDA, (Garden State
Paper Co.), 7.125%, 4/1/22 3,287,430
Baa1 BBB+ 2,135 New Jersey EDA, (GATX
Terminals Corp.), 7.30%, 9/1/19 2,432,341
NR NR 1,500 New Jersey EDA, (Holt
Hauling), 7.90%, 3/1/27 1,711,080
NR NR 5,640 New Jersey EDA, (Holt
Hauling), 8.95%, 12/15/18 6,306,874
NR NR 1,160 New Jersey EDA, (National
Association of Accountants),
7.65%, 7/1/09 1,240,284
NR NR 2,000 New Jersey EDA, (The Seeing
Eye, Inc.), 7.30%, 4/1/11 2,125,080
Baa3 BBB- 2,250 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.25%, 6/1/26 2,432,588
Baa3 BBB- 5,550 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.30%, 6/1/23 5,890,437
NR BBB 1,520 South Jersey Transportation
Authority, (Raytheon
Aircraft), 6.15%, 1/1/22 1,623,208
- -----------------------------------------------------------------------------------------
$ 33,723,382
- -----------------------------------------------------------------------------------------
Insured-Education -- 0.3%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 845 New Jersey Educational
Facilities Authority, (Seton
Hall University), (BIGI),
6.85%, 7/1/19 $ 883,270
- -----------------------------------------------------------------------------------------
$ 883,270
- -----------------------------------------------------------------------------------------
Insured-Electric Utilities -- 0.4%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 1,150 New Jersey EDA, (New Jersey
American Water Co.), (AMT)
(FGIC), 6.875%, 11/1/34 $ 1,294,521
- -----------------------------------------------------------------------------------------
$ 1,294,521
- -----------------------------------------------------------------------------------------
Insured-General Obligations -- 1.2%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 3,815 Middletown Township, Board of
Education, (MBIA),
5.80%, 8/1/23 $ 4,019,064
- -----------------------------------------------------------------------------------------
$ 4,019,064
- -----------------------------------------------------------------------------------------
Insured-Hospitals -- 4.2%
- -----------------------------------------------------------------------------------------
Aaa NR $ 4,250 New Jersey EDA, (Hillcrest
Health Services), (AMBAC),
0.00%, 1/1/19 $ 1,526,090
Aaa NR 3,000 New Jersey EDA, (Hillcrest
Health Services), (AMBAC),
0.00%, 1/1/21 970,140
Aaa NR 10,620 New Jersey EDA, (St.
Barnabas), (MBIA), 0.00%,
7/1/26 2,582,253
</TABLE>
See notes to financial statements
49
<PAGE>
New Jersey Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- --------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
Insured-Hospitals (continued)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA $ 1,570 New Jersey Health Care
Facilities Financing
Authority, (Cathedral Health
Services) (MBIA),
7.25%, 2/15/21 $ 1,720,987
Aaa AAA 2,415 New Jersey Health Care
Facilities Financing
Authority, (Cathedral Health
Services), (MBIA),
5.20%, 8/1/15 2,434,779
Aaa AAA 2,000 New Jersey Health Care
Facilities Financing
Authority, (Hackensack Medical
Center) (FGIC),
6.25%, 7/1/21 2,122,360
Aaa AAA 2,000 New Jersey Health Care
Facilities Financing
Authority, (Hackensack Medical
Center), (MBIA),
5.00%, 1/1/28 1,941,440
Aaa AAA 500 New Jersey Health Care
Facilities Financing
Authority, (Medical Center at
Princeton), (AMBAC), 5.00%,
7/1/28 486,735
- -----------------------------------------------------------------------------------------
$ 13,784,784
- -----------------------------------------------------------------------------------------
Insured-Housing -- 0.8%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 1,040 New Jersey HFA, (AMT), (MBIA),
7.70%, 10/1/29 $ 1,082,515
Aaa AAA 1,550 Pennsauken Township, Housing
Finance Corp., (MBIA),
8.00%, 4/1/11 1,609,133
- -----------------------------------------------------------------------------------------
$ 2,691,648
- -----------------------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of
Participation -- 4.1%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 3,900 Atlantic County, Public
Facilities Lease Agreement,
(FGIC),
6.00%, 3/1/13 $ 4,382,235
Aaa AAA 2,500 Hudson County Improvement
Authority, Secondary Yield
Curve Notes, (FGIC) Variable
Rate, 12/1/25(1)(2) 2,901,150
Aaa AAA 1,750 Hudson County, Correctional
Facility, (MBIA),
6.50%, 12/1/11 1,894,620
Aaa AAA 1,800 Middlesex County, Certificates
of Participation, (MBIA),
6.125%, 2/15/19 1,950,966
Aaa AAA 2,020 University of Medicine and
Dentistry, Certificates of
Participation, (MBIA),
6.75%, 12/1/09 2,130,494
- -----------------------------------------------------------------------------------------
$ 13,259,465
- -----------------------------------------------------------------------------------------
Insured-Transportation -- 5.1%
- -----------------------------------------------------------------------------------------
NR AAA $ 5,000 New Jersey Turnpike Authority,
"RITES" (MBIA), Variable
Rate, 1/1/16(1) $ 6,729,350
Aaa AAA 7,450 New Jersey Turnpike Authority,
(MBIA), 6.50%, 1/1/16 8,782,134
Aaa AAA 1,000 New Jersey Turnpike Authority,
(MBIA), 6.50%, 1/1/16 1,178,810
- -----------------------------------------------------------------------------------------
$ 16,690,294
- -----------------------------------------------------------------------------------------
Insured-Water and Sewer -- 0.9%
- -----------------------------------------------------------------------------------------
Aaa AAA $ 2,500 Middlesex County, Utilities
Authority, (MBIA), Variable
Rate, 8/15/10 $ 2,884,275
- -----------------------------------------------------------------------------------------
$ 2,884,275
- -----------------------------------------------------------------------------------------
Lease Revenue / Certificates of Participation -- 4.1%
- -----------------------------------------------------------------------------------------
Baa1 A- $ 720 Atlantic County, Public
Facilities Lease Agreement,
8.875%, 1/15/14 $ 991,685
Baa1 A- 785 Atlantic County, Public
Facilities Lease Agreement,
8.875%, 1/15/15 1,091,221
A1 NR 1,000 Bedminster Township, Board of
Education, 7.125%, 9/1/10 1,092,690
Aa AA- 2,000 Mercer County Improvement
Authority, (Richard J. Hughes
Justice), 6.05%, 1/1/15 2,002,880
Aa AA- 1,500 Mercer County Improvement
Authority, (Richard J. Hughes
Justice), 6.05%, 1/1/16 1,502,160
Aa AA- 1,500 Mercer County Improvement
Authority, (Richard J. Hughes
Justice), 6.05%, 1/1/17 1,502,115
Aa2 AA- 2,591 New Jersey Building Authority,
(Garden State Savings Bonds),
0.00%, 6/15/10 1,468,553
A1 A+ 5,500 New Jersey EDA, Economic
Recovery Fund, 0.00%, 3/15/13 2,622,400
A1 A+ 1,650 New Jersey EDA, State
Contract, 0.00%, 9/15/09 970,398
- -----------------------------------------------------------------------------------------
$ 13,244,102
- -----------------------------------------------------------------------------------------
Life Care -- 0.5%
- -----------------------------------------------------------------------------------------
NR NR $ 1,480 New Jersey EDA, (Hudson County
Occupational Center),
6.50%, 7/1/18 $ 1,497,642
- -----------------------------------------------------------------------------------------
$ 1,497,642
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
50
<PAGE>
<TABLE>
<CAPTION>
New Jersey Municipals Portfolio as of July 31, 1998
- -----------------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS CONT'D
Ratings (Unaudited)
- --------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
Nursing Homes -- 1.3%
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR NR $ 1,400 New Jersey EDA, (Claremont
Health System, Inc.),
9.10%, 9/1/22 $ 1,588,818
NR NR 2,500 New Jersey EDA, (Victoria
Health Corp.), 7.65%, 1/1/14 2,751,200
- -----------------------------------------------------------------------------------------
$ 4,340,018
- -----------------------------------------------------------------------------------------
Solid Waste -- 0.7%
- -----------------------------------------------------------------------------------------
NR NR $ 2,350 Union County, Utilities
Authority, (AMT), 7.20%,
6/15/14 $ 2,355,852
- -----------------------------------------------------------------------------------------
$ 2,355,852
- -----------------------------------------------------------------------------------------
Special Tax Revenue -- 5.8%
- -----------------------------------------------------------------------------------------
NR NR $ 7,600 New Jersey Sports and
Exposition Authority,
(Monmouth Park), 8.00%,
1/1/25(3) $ 8,660,352
NR NR 8,850 Virgin Islands Public Finance
Authority, 7.25%, 10/1/18 10,065,724
- -----------------------------------------------------------------------------------------
$ 18,726,076
- -----------------------------------------------------------------------------------------
Transportation -- 19.1%
- -----------------------------------------------------------------------------------------
NR BBB $ 1,400 Guam Airport Authority,
6.50%, 10/1/23 $ 1,523,844
NR BBB 2,000 Guam Airport Authority, (AMT),
6.70%, 10/1/23 2,187,300
Aa3 A+ 3,500 New Jersey Turnpike Authority,
5.00%, 6/15/17 3,455,620
A1 AA- 5,000 Port Authority of New York and
New Jersey, 5.375%, 3/1/28 5,271,800
A1 AA- 19,000 Port Authority of New York and
New Jersey, 6.125%, 6/1/24 21,942,909
A1 AA- 4,750 Port Authority of New York and
New Jersey, (AMT),
6.25%, 1/15/27 5,045,260
NR NR 5,000 Port Authority of New York and
New Jersey, (KIAC),
6.75%, 10/1/19 5,507,000
Baa1 A 2,500 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 2,345,250
Baa1 A 6,625 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/36 6,530,461
Baa1 A 7,825 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/36 8,241,290
- -----------------------------------------------------------------------------------------
$ 62,050,734
- -----------------------------------------------------------------------------------------
Water and Sewer -- 1.5%
- -----------------------------------------------------------------------------------------
A3 A $ 4,500 New Jersey EDA, Elizabethtown
Water Revenue, (AMT),
6.70%, 8/1/21 $ 4,826,745
Aa2 AA 80 New Jersey Wastewater
Treatment Trust, 6.875%,
6/15/09 85,673
Aa2 AA 20 New Jersey Wastewater
Treatment Trust, 7.00%, 6/15/10 21,444
- -----------------------------------------------------------------------------------------
$ 4,933,862
- -----------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $292,277,246) $ 325,138,705
- -----------------------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by New Jersey
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1998, 17.1% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 0.3% to 12.6% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. It is the
Portfolio's intention to hold the security until maturity.
(3) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
51
<PAGE>
Pennsylvania Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
Ratings
(Unaudited) Principal
- ------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Assisted Living -- 4.1%
- --------------------------------------------------------------------------------
NR NR $ 5,000 Chester IDA, (Senior Life
Choice of Kimberton),
(AMT),
8.50%, 9/1/25 $ 5,729,450
NR NR 2,680 Chester IDA, (Senior Life
Choice of Paoli, L.P.),
8.05%, 1/1/24 2,998,277
NR NR 5,000 Delaware IDA, (Glen
Riddle), (AMT), 8.625%,
9/1/25 5,764,750
- --------------------------------------------------------------------------------
$ 14,492,477
- --------------------------------------------------------------------------------
Cogeneration -- 2.7%
- --------------------------------------------------------------------------------
NR BBB- $ 9,000 Pennsylvania EDA,
(Northampton Generating),
(AMT),
6.50%, 1/1/13 $ 9,572,489
- --------------------------------------------------------------------------------
$ 9,572,489
- --------------------------------------------------------------------------------
Colleges and Universities -- 3.7%
- --------------------------------------------------------------------------------
NR AAA $ 2,000 Lehigh County General
Purpose Authority,
(Allentown College of St.
Francis), 6.75%,
12/15/12/(1)/ $ 2,155,200
NR BBB- 1,100 Lehigh County General
Purpose Authority, (Cedar
Crest College), 6.70%,
4/1/26 1,194,996
NR BBB- 3,000 Pennsylvania Higher
Educational Facilities
Authority, (Gwynedd-Mercy
College), 5.60%, 11/1/22 3,014,820
NR BBB+ 2,000 Pennsylvania Higher
Educational Facilities
Authority, (Ursinns
College), 5.90%, 1/1/27 2,086,060
NR A- 4,225 Scranton-Lackawanna,
(University of Scranton),
6.40%, 3/1/07 4,532,834
- --------------------------------------------------------------------------------
$ 12,983,910
- --------------------------------------------------------------------------------
Electric Utilities -- 2.8%
- --------------------------------------------------------------------------------
Baa3 BB- $ 500 Beaver IDA, (Ohio Edison
Co.), 7.75%, 9/1/24 $ 525,105
Baa1 BBB+ 3,250 Delaware IDA,
(Philadelphia Electric
Co.), 7.375%, 4/1/21 3,513,250
Baa2 BBB+ 4,070 Montgomery IDA,
(Philadelphia Electric
Co.), (AMT),
7.60%, 4/1/21 4,405,816
NR NR 1,385 Virgin Islands Water and
Power Authority, 7.40%,
7/1/11 1,521,810
- --------------------------------------------------------------------------------
$ 9,965,981
- --------------------------------------------------------------------------------
Escrowed / Prerefunded -- 6.6%
- --------------------------------------------------------------------------------
NR NR $ 4,315 Hazelton Luzerne, (Saint
Joseph Medical Center),
Prerefunded to 7/1/03,
8.375%, 7/1/12 $ 5,085,788
Aaa AAA 5,000 Philadelphia Hospital and
Higher Education
Authority, (FGIC),
Prerefunded to 2/15/04,
Variable Rate, 3/6/12/(2)/ 5,225,000
Baa2 NR 4,115 Somerset, (Community
Hospital), Prerefunded to
3/1/02,
6.75%, 3/1/11 4,466,956
Aaa AAA 4,845 Westmoreland Municipal
Authority, (FGIC),
Escrowed to Maturity,
0.00%, 8/15/19 1,611,883
Aaa AAA 5,400 Westmoreland Municipal
Authority, (FGIC),
Escrowed to Maturity,
0.00%, 8/15/20 1,753,218
Aaa AAA 5,780 Westmoreland Municipal
Authority, (FGIC),
Escrowed to Maturity,
0.00%, 8/15/20 1,817,116
NR NR 2,750 Wilkins Area IDA,
(Fairview Extended Care),
Prerefunded to 1/1/01,
10.25%, 1/1/21 3,212,083
- --------------------------------------------------------------------------------
$ 23,172,044
- --------------------------------------------------------------------------------
General Obligations -- 3.7%
- --------------------------------------------------------------------------------
Aaa AAA $ 5,600 Berks, (FGIC), Variable
Rate, 11/10/20/(7)/ $ 6,741,000
NR A 3,000 Dauphin, 6.90%, 6/1/26 3,207,390
A1 A+ 2,050 Lower Providence Township
Sewer Authority, 6.75%,
5/1/22 2,232,573
Baa1 A 1,000 Puerto Rico, 4.50%, 7/1/23 904,750
- --------------------------------------------------------------------------------
$ 13,085,713
- --------------------------------------------------------------------------------
Hospitals -- 14.6%
- --------------------------------------------------------------------------------
A3 NR $ 5,330 Allegheny County HDA,(St.
Francis Medical Center),
5.75%, 5/15/27 $ 5,495,923
NR AAA 2,300 Allegheny IDA,
(Presbyterian Medical
Center), 6.75%, 2/1/26 2,525,147
Baa BBB 2,000 Dauphin County Hospital
Authority, (Community
General Osteopathic
Hospital), 7.375%, 6/1/16 2,183,540
NR BBB 1,150 Horizon Hospital Systems
Authority, (Horizon
Hospital Systems, Inc.),
6.35%, 5/15/26 1,229,856
A NR 2,670 Indiana County Hospital
Authority, (Indiana
Hospital), 7.125%, 7/1/23 2,933,956
See notes to financial statements
52
<PAGE>
Pennsylvania Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
Ratings
(Unaudited) Principal
- ------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Hospitals (continued)
- --------------------------------------------------------------------------------
A3 A $ 3,250 Lehigh County Hospital
Authority, (Muhlenberg
Hospital),
6.60%, 7/15/22 $ 3,591,023
NR BBB- 3,500 McKean County Hospital
Authority, (Bradford
Hospital),
6.00%, 10/1/13 3,592,750
A3 A- 2,550 Monroeville Hospital
Authority, (Forbes Health
System),
6.25%, 10/1/15 2,378,640
Baa2 NR 1,375 Montgomery Hospital
Authority, (Montgomery
Hospital Medical Center),
6.60%, 7/1/10 1,482,264
NR BBB+ 2,615 Montgomery Hospital
Authority, (Pottstown
Medical Center), 6.875%,
11/15/20 2,888,974
A BBB+ 8,500 Pennsylvania HEFA,
(Albert
Einstein Medical Center),
7.625%, 4/1/11 8,887,855
A3 A 500 Pennsylvania HEFA,
(Allegheny General
Hospital),
7.25%, 9/1/17 446,295
B2 BB 5,625 Philadelphia HEFA,
6.625%, 7/1/21 2,818,913
B2 BB 7,115 Philadelphia HEFA,
7.25%, 7/1/18 3,564,900
A3 NR 7,000 Washington County
Hospital Authority,
(Monongahela Valley
Hospital), 6.75%, 12/1/08 7,623,000
- --------------------------------------------------------------------------------
$ 51,643,036
- --------------------------------------------------------------------------------
Housing -- 6.1%
- --------------------------------------------------------------------------------
NR AAA $ 2,870 Allegheny, SFMR, (Ladies
Grand Army), (FHA),
6.35%, 10/1/36 $ 3,098,050
Aa2 AA 1,000 Pennsylvania HFA, (AMT),
Variable Rate, 10/3/23/(2)/ 1,135,000
Aa2 AA+ 2,000 Pennsylvania HFA, SFMR,
(AMT), 6.15%, 10/1/27 2,105,320
Aa AA+ 8,350 Pennsylvania HFA, SFMR,
(AMT), 7.50%, 10/1/25 9,102,669
A1 AAA 1,000 Pittsburgh Urban
Redevelopment Authority,
7.125%, 4/1/15 1,049,360
Aa2 AAA 265 Pittsburgh Urban
Redevelopment Authority,
7.45%, 4/1/10 279,776
Aa2 AAA 3,385 Pittsburgh Urban
Redevelopment Authority,
(AMT),
7.10%, 4/1/24 3,684,674
A1 AAA 1,055 Pittsburgh Urban
Redevelopment Authority,
(AMT),
7.40%, 4/1/24 1,111,200
- --------------------------------------------------------------------------------
$ 21,566,049
- --------------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 19.5%
- --------------------------------------------------------------------------------
A3 BBB+ $ 6,450 Butler County IDA, (Witco
Corp.), 5.85%, 12/1/23 $ 6,732,317
NR BB- 1,005 Clearfield County IDA,
(Kmart Corp.), 6.80%,
5/15/07 1,078,053
NR A 4,000 Franklin County IDA,
(Corning, Inc.), 6.25%,
8/1/05 4,450,600
A2 A 12,000 New Morgan IDA, (New
Morgan Landfill), (AMT),
6.50%, 4/1/19 13,062,239
NR BBB- 9,000 Pennsylvania EDA,
(Colver), (AMT), 7.125%,
12/1/15 10,033,199
NR BBB- 5,000 Pennsylvania EDA,
(Colver), (AMT), 7.15%,
12/1/18 5,589,300
Baa2 BBB- 5,000 Pennsylvania IDA,
(MacMillan Bloedel),
(AMT),
7.60%, 12/1/20 5,562,900
Baa3 BBB 4,450 Pennsylvania IDA, (Sun
Company), (AMT), 7.60%,
12/1/24 5,198,357
NR NR 6,500 Philadelphia IDA,
(Refrigerated
Enterprises), (AMT),
9.05%, 12/1/19 7,371,260
Baa3 BBB- 5,000 Puerto Rico Port
Authority, (American
Airlines), (AMT), 6.25%,
6/1/26 5,405,750
Baa3 BBB- 2,800 Puerto Rico Port
Authority, (American
Airlines), (AMT), 6.30%,
6/1/23 2,971,752
NR BB- 1,105 Shamokin IDA, (Kmart
Corp.), 6.70%, 7/1/07 1,189,201
- --------------------------------------------------------------------------------
$ 68,644,928
- --------------------------------------------------------------------------------
Insured-Education -- 2.8%
- --------------------------------------------------------------------------------
Aaa NR $ 3,000 Delaware County,
(Villanova University),
(MBIA),
5.00%, 12/1/28 $ 2,910,930
Aaa AAA 2,500 Pennsylvania Higher
Education Student Loan,
(AMBAC), (AMT), 7.15%,
9/1/21 2,700,975
Aaa AAA 1,500 Pennsylvania Higher
Education Student Loan,
(AMBAC), (AMT), Variable
Rate, 3/1/22/(2)/ 1,685,625
Aaa AAA 700 Pennsylvania Higher
Education Student Loan,
(AMBAC), (AMT), Variable
Rate, 9/1/26/(2)/ 809,375
Aaa AAA 1,750 University of Pittsburgh,
(FGIC), 5.125%, 6/1/22 1,728,528
- -------------------------------------------------------------------------------
$ 9,835,433
- -------------------------------------------------------------------------------
See notes to financial statements
53
<PAGE>
Pennsylvania Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 5.7%
- --------------------------------------------------------------------------------
Aaa AAA $ 4,000 Beaver IDA, (Ohio Edison
Co.), (FGIC), 7.00%,
6/1/21 $ 4,334,560
Aaa AAA 10,000 Beaver IDA, (Ohio Edison
Co.), (FGIC), 7.05%,
10/1/20 11,485,699
Aaa AAA 3,800 Puerto Rico Electric
Power Authority,
"STRIPES", (FSA),
Variable Rate, 7/1/02(2) 4,189,500
- --------------------------------------------------------------------------------
$ 20,009,759
- --------------------------------------------------------------------------------
Insured-General Obligations -- 6.9%
- --------------------------------------------------------------------------------
Aaa AAA $ 2,170 Elizabeth Forward School
District, (MBIA), 0.00%,
9/1/20 $ 680,621
Aaa AAA 2,170 Elizabeth Forward School
District, (MBIA), 0.00%,
9/1/21 645,228
Aaa AAA 2,170 Elizabeth Forward School
District, (MBIA), 0.00%,
9/1/22 611,332
Aaa AAA 2,170 Elizabeth Forward School
District, (MBIA), 0.00%,
9/1/23 579,151
Aaa AAA 2,500 Erie School District,
(MBIA), 0.00%, 5/1/19 866,875
Aaa AAA 2,625 Erie School District,
(MBIA), 0.00%, 5/1/20 864,938
Aaa AAA 2,625 Erie School District,
(MBIA), 0.00%, 5/1/21 821,704
Aaa AAA 3,625 Erie School District,
(MBIA), 0.00%, 5/1/22 1,077,278
Aaa AAA 5,000 Hampton Township School
District, (FGIC), 5.00%,
9/1/27 4,854,350
Aaa NR 2,365 Harrisburg, (AMBAC),
0.00%, 3/15/17 894,467
Aaa AAA 5,175 Hazelton School District,
(FGIC), 0.00%, 3/1/21 1,580,756
Aaa NR 1,000 Hopewell School District,
(FSA), 0.00%, 9/1/22 284,380
Aaa AAA 7,500 Keystone Oaks School
District, (AMBAC),
Variable Rate, 9/1/16(2) 8,681,250
Aaa AAA 1,430 Mars Area School
District, (MBIA), 0.00%,
3/1/14 641,584
Aaa AAA 655 Rochester Area School
District, (AMBAC), 0.00%,
5/1/10 368,320
Aaa AAA 1,000 Venango County, (AMBAC),
6.30%, 12/1/19 1,076,600
- --------------------------------------------------------------------------------
$ 24,528,834
- --------------------------------------------------------------------------------
Insured-Hospitals -- 5.2%
- --------------------------------------------------------------------------------
Aaa AAA $ 4,550 Allegheny County HDA,
(MBIA), 5.625%, 4/1/27 $ 4,738,598
Aaa AAA 3,750 Allegheny County Hospital
Authority, (Magee-Womens
Hospital), (FGIC),
0.00%, 10/1/15 1,537,950
Aaa AAA 1,170 Allegheny County,
(Children's Hospital of
Pittsburgh), (MBIA),
6.75%, 7/1/08 1,228,968
Aaa AAA 2,500 Armstrong County Hospital
Authority, (Saint Francis
Health Care), (AMBAC),
6.00%, 8/15/08 2,676,350
Aaa AAA 1,400 Armstrong County Hospital
Authority, (Saint Francis
Health Care), (AMBAC),
6.25%, 6/1/13 1,508,892
Aaa AAA 775 Carbon County Hospital
Authority, (Gnaden
Memorial Hospital),
(AMBAC), 7.00%, 11/15/14 834,605
Aaa AAA 750 Erie County Hospital
Authority, (Hamot Health
System), (AMBAC), 7.10%,
2/15/10 818,790
Aaa NR 4,000 Lehigh County Hospital
Authority, (Lehigh Valley
Health Network), (MBIA),
5.00%, 7/1/28 3,841,040
Aaa AAA 1,000 Montgomery County HEFA,
(Abington Memorial
Hospital) (AMBAC),
Variable Rate, 7/5/11(2) 1,172,500
- --------------------------------------------------------------------------------
$ 18,357,693
- --------------------------------------------------------------------------------
Insured-Industrial Development Revenue -- 0.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 1,000 Delaware County,
(Philadelphia Water),
(AMT), (FGIC),
6.35%, 8/15/25 $ 1,095,570
- --------------------------------------------------------------------------------
$ 1,095,570
- --------------------------------------------------------------------------------
Insured-Transportation -- 1.7%
- --------------------------------------------------------------------------------
Aaa AAA $ 2,000 Allegheny County Port
Authority, (Pittsburgh
International Airport),
(MBIA), 5.00%, 1/1/19 $ 1,956,100
Aaa AAA 2,000 Allegheny County Port
Authority, (Pittsburgh
International Airport),
(MBIA), (AMT), 5.25%,
1/1/16 2,007,080
See notes to financial statements
54
<PAGE>
Pennsylvania Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Insured-Transportation (continued)
- --------------------------------------------------------------------------------
Aaa AAA $ 2,000 Philadelphia Authority
For Industrial
Development,
(Philadelphia Airport
System), (FGIC), (AMT),
5.00%, 7/1/16 $ 1,954,800
- --------------------------------------------------------------------------------
$ 5,917,980
- --------------------------------------------------------------------------------
Insured-Water and Sewer -- 2.6%
- --------------------------------------------------------------------------------
Aaa AAA $ 2,500 Philadelphia Water and
Wastewater, (CGIC),
Variable Rate, 6/15/12(2) $ 2,712,500
Aaa AAA 3,490 Pittsburgh Water and
Sewer Authority, (FGIC),
4.75%, 9/1/16 3,336,754
Aaa AAA 3,000 Pittsburgh Water and
Sewer Authority, (FSA),
5.00%, 9/1/19 2,951,880
- --------------------------------------------------------------------------------
$ 9,001,134
- --------------------------------------------------------------------------------
Life Care -- 3.2%
- --------------------------------------------------------------------------------
NR NR $ 4,050 Delaware County, (White
Horse Village), 7.50%,
7/1/18 $ 4,438,476
NR BBB+ 3,620 Delaware HFA,
5.75%, 12/15/22 3,970,126
Baa2 BBB+ 3,060 Hazleton HFA, (Hazelton
General Hospital), 5.50%,
7/1/27 3,042,283
- --------------------------------------------------------------------------------
$ 11,450,885
- --------------------------------------------------------------------------------
Nursing Homes -- 2.2%
- --------------------------------------------------------------------------------
NR NR $ 1,230 Chartiers Valley IDA,
(Beverly Enterprises,
Inc.),
5.375%, 6/1/07 $ 1,236,937
NR NR 3,500 Montgomery IDA,
(Advancement of Geriatric
Health Care Institute),
8.375%, 7/1/23 3,786,300
NR NR 1,100 Philadelphia HEFA, (The
Philadelphia Protestant
Home), 6.50%, 7/1/27 1,146,728
NR NR 1,445 Westmoreland County IDA,
(Highland Health Systems,
Inc.), 9.25%, 6/1/22 1,645,277
- --------------------------------------------------------------------------------
$ 7,815,242
- --------------------------------------------------------------------------------
Pooled Loans -- 5.6%
- --------------------------------------------------------------------------------
NR AA- $16,950 Pennsylvania Finance
Authority, Beaver County,
6.60%, 11/1/09 $ 18,763,988
NR AA+ 870 Pennsylvania
Infrastructure Investment
Authority, (Pennvest),
6.80%, 9/1/10 957,661
- --------------------------------------------------------------------------------
$ 19,721,649
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $327,484,420) $352,860,806
- --------------------------------------------------------------------------------
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Pennsylvania
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1998, 30% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 0.8% to 13.9%.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(2) Security has been issued as an inverse floater bond.
See notes to financial statements
55
<PAGE>
Texas Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Assisted Living -- 3.3%
- --------------------------------------------------------------------------------
NR NR $500 Bell County, Health
Facilities, (Care Institute,
Inc., Texas), 9.00%, 11/1/24 $ 573,925
- --------------------------------------------------------------------------------
$ 573,925
- --------------------------------------------------------------------------------
Education -- 1.4%
- --------------------------------------------------------------------------------
A NR $240 Brazos, Higher Education
Authority, (AMT), 6.50%, 6/1/04 $ 254,206
- --------------------------------------------------------------------------------
$ 254,206
- --------------------------------------------------------------------------------
Escrowed/Prerefunded -- 4.3%
- --------------------------------------------------------------------------------
NR NR $200 Bexar County, Health Facilities,
(St. Luke's Lutheran), Escrowed
to Maturity, 7.00%, 5/1/21 $ 251,234
Aaa NR 100 Ector County, Hospital
District, Prerefunded to
6/1/02, 7.30%, 4/15/12 112,503
Baa1 BBB 185 Gulf Coast Waste Disposal
Authority, (Champion
International), (AMT),
Prerefunded to 04/01/02,
7.25%, 4/1/17 206,917
Aaa AAA 150 Texas National Research
Lab Super Collider, Escrowed
to Maturity, 6.95%, 12/1/12 177,335
- --------------------------------------------------------------------------------
$ 747,989
- --------------------------------------------------------------------------------
General Obligations -- 15.2%
- --------------------------------------------------------------------------------
Aaa AAA $1,000 Bastrop, Independent School
District, (PSF), 0.00%, 2/15/13 $ 480,170
NR NR 500 Leander, 6.75%, 8/15/16 578,240
Aaa NR 1,000 New Braunfel Independent School
District, (PSF), 0.00%, 2/1/13 481,120
Aa2 AA 690 Texas Veterans' Housing
Assistance U.T., (AMT),
6.70%, 12/1/24 738,328
Aa2 AA 345 Texas Veterans' Housing
Assistance U.T., (AMT),
6.80%, 12/1/23 371,286
- --------------------------------------------------------------------------------
$2,649,144
- --------------------------------------------------------------------------------
Hospitals -- 6.9%
- --------------------------------------------------------------------------------
NR BBB+ $500 Denison Hospital Authority,
(Texoma Medical Center),
7.10%, 8/15/24 $ 558,780
A3 NR 100 Harris County, Hospital
District, (Memorial),
7.125%, 6/1/15 112,157
A2 NR $500 Tarrant County,
(Methodist Health System),
6.00%, 9/1/24 $ 542,485
- --------------------------------------------------------------------------------
$1,213,422
- --------------------------------------------------------------------------------
Housing -- 24.8%
- --------------------------------------------------------------------------------
NR AAA $ 80 Bexar County, HFC,
8.10%, 3/1/24 $ 84,744
NR AAA 500 Dallas, HFC, (GNMA),
7.95%, 12/1/23 528,740
NR AAA 150 North Central County,
HFC, (GNMA), 7.875%,
10/1/22 158,099
NR AAA 1,000 Texas Department of
Housing and Community Affairs,
(Meadow Ridge Apartments),
(AMT), 5.55%, 8/1/30 1,016,659
NR A 500 Texas Department of
Housing and Community Affairs,
(NHP Foundation-Asmara),
6.40%, 1/1/27 536,895
NR AAA 500 Texas Department of Housing and
Community Affairs, (Pebble Brook
Apartments), (AMT), 5.50%, 12/1/18 503,075
NR A 750 Travis County HFC, (Travis
Station Apartments),
6.75%, 4/1/19 795,420
NR AAA 665 Travis County, HFC, (GNMA)
(FNMA), 7.05%, 12/1/25 710,267
- --------------------------------------------------------------------------------
$4,333,899
- --------------------------------------------------------------------------------
Industrial Development Revenue/Pollution
Control Revenue -- 15.5%
- --------------------------------------------------------------------------------
Baa2 BBB $505 Alliance Airport Authority,
(American Airlines), (AMT),
7.50%, 12/1/29 $ 544,451
Baa2 BBB- 225 Dallas-Fort Worth Airport,
(American Airlines), (AMT),
7.50%, 11/1/25 242,233
Baa1 BBB 265 Gulf Coast Waste Disposal
Authority, (Champion
International), (AMT),
7.25%, 4/1/17 290,551
A2 A+ 1,000 Port Corpus Christi,
(Hoechst Celanese Corp.),
(AMT), 6.875%, 4/1/17 1,089,259
NR A 500 Trinity River Authority, (PCR),
(AMT), 6.20%, 3/1/20 535,580
- --------------------------------------------------------------------------------
$2,702,074
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 8.3%
- --------------------------------------------------------------------------------
Aaa AAA $1,000 Austin, Combined Utility,
(AMBAC), 6.75%, 11/15/12 $1,201,029
Aaa AAA 500 Lower Colorado River
Authority Junior Lien, (FGIC),
0.00%, 1/1/12 255,740
- --------------------------------------------------------------------------------
$1,456,769
- --------------------------------------------------------------------------------
See notes to financial statements
56
<PAGE>
Texas Municipals Portfolio as of July 31, 1998
PORTFOLIO OF INVESTMENTS CONT'D
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Insured-Hospitals -- 6.3%
- --------------------------------------------------------------------------------
Aaa AAA $ 500 Harris County, HFC, (Hermann
Hospital), (MBIA), 6.375%,
10/1/24 $ 560,495
Aaa AAA 500 Tyler County, HFC, (Mother
Frances Hospital), (FGIC),
6.50%, 7/1/22 543,920
- --------------------------------------------------------------------------------
$ 1,104,415
- --------------------------------------------------------------------------------
Lease Revenue/Certificates of
Participation -- 1.6%
- --------------------------------------------------------------------------------
NR BBB- $ 250 Rio Grande, Independent School
District Lease, 6.75%, 7/15/10 $ 273,945
- --------------------------------------------------------------------------------
$ 273,945
- --------------------------------------------------------------------------------
Nursing Homes -- 6.0%
- --------------------------------------------------------------------------------
Aa NR $ 975 Port Arthur, Health Facilities,
(FHA), 6.50%, 8/1/24 $ 1,048,534
- --------------------------------------------------------------------------------
$ 1,048,534
- --------------------------------------------------------------------------------
Transportation -- 6.4%
- --------------------------------------------------------------------------------
NR NR $ 250 Abia Dev. Corp., (Austin
Cargoport), 9.25%, 10/1/21 $ 286,710
NR BBB 755 Guam Airport Authority, (AMT),
6.70%, 10/1/23 825,706
- --------------------------------------------------------------------------------
$ 1,112,416
- --------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100.0%
(identified cost $15,998,639) $17,470,738
- --------------------------------------------------------------------------------
AMT- Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
HFC - Housing Finance Corporation
The Portfolio invests primarily in debt securities issued by Texas
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1998, 14.7% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institution ranged from 3.2% to 6.9% of total investments.
See notes to financial statements
57
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
As of July 31, 1998
Arizona Colorado Connecticut Michigan
Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments --
Identified cost $ 92,678,595 $ 36,166,584 $151,783,349 $119,726,431
Unrealized appreciation 9,158,765 3,298,576 10,775,493 10,918,129
- ------------------------------------------------------------------------------------------------------------------------------------
Investments, at value $101,837,360 $ 39,465,160 $162,558,842 $130,644,560
- ------------------------------------------------------------------------------------------------------------------------------------
Cash $ 720,410 $ 3,074 $ 234,826 $ 499
Receivable for investments sold 495,917 86,125 253,673 --
Interest receivable 1,007,738 524,704 1,927,464 1,919,186
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $104,061,425 $ 40,079,063 $164,974,805 $132,564,245
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased $ 959,723 $ -- $ -- $ --
Payable for when-issued securities -- -- -- 2,294,354
Demand note payable -- 273,000 -- 21,000
Payable for daily variation margin on open
financial futures contracts 812 312 1,313 1,062
Payable to affiliate for Trustees' fees 949 14 96 949
Other accrued expenses 7,835 4,537 18,508 10,412
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 969,319 $ 277,863 $ 19,917 $ 2,327,777
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in
Portfolio $103,092,106 $ 39,801,200 $164,954,888 $130,236,468
- ------------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and
withdrawals $ 93,964,184 $ 36,504,559 $154,187,522 $119,353,075
Net unrealized appreciation (computed on the
basis of identified cost) 9,127,922 3,296,641 10,767,366 10,883,393
- ------------------------------------------------------------------------------------------------------------------------------------
Total $103,092,106 $ 39,801,200 $164,954,888 $130,236,468
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
58
<PAGE>
<TABLE>
<CAPTION>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Assets and Liabilities
As of July 31, 1998
Minnesota New Jersey Pennsylvania Texas
Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments --
Identified cost $59,988,550 $292,277,246 $327,484,420 $15,998,639
Unrealized appreciation 5,843,194 32,861,459 25,376,386 1,472,099
- ------------------------------------------------------------------------------------------------------------------------------------
Investments, at value $65,831,744 $325,138,705 $352,860,806 $17,470,738
- ------------------------------------------------------------------------------------------------------------------------------------
Cash $ 727 $ 281 $ 1,961,280 $ 21,554
Receivable for investments sold 1,351,090 1,078,009 30,000 1,102,056
Interest receivable 821,427 3,949,296 4,685,769 291,451
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $68,004,988 $330,166,291 $359,537,855 $18,885,799
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased $ -- $ -- $ -- $ 1,046,570
Payable for when-issued securities 688,793 -- -- --
Demand note payable 325,000 1,510,000 -- --
Payable for daily variation margin on open
financial futures contracts 375 1,875 3,000 --
Payable to affiliate for Trustees' fees 57 146 1,742 --
Other accrued expenses 7,086 25,132 1,238 1,742
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 1,021,311 $ 1,537,153 $ 5,980 $ 1,048,312
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in
Portfolio $66,983,677 $328,629,138 $359,531,875 $17,837,487
- ------------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and
withdrawals $61,152,363 $295,827,079 $334,253,565 $16,365,388
Net unrealized appreciation (computed on the basis
of identified cost) 5,831,314 32,802,059 25,278,310 1,472,099
- ------------------------------------------------------------------------------------------------------------------------------------
Total $66,983,677 $328,629,138 $359,531,875 $17,837,487
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
59
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended July 31, 1998
<TABLE>
<CAPTION>
Arizona Colorado Connecticut Michigan
Portfolio Portfolio Portfolio Portfolio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income
- ---------------------------------------------------------------------------------------------------------------------------------
Interest $ 6,121,201 $ 2,377,732 $ 9,650,563 $ 7,913,736
- ---------------------------------------------------------------------------------------------------------------------------------
Total investment income $ 6,121,201 $ 2,377,732 $ 9,650,563 $ 7,913,736
Expenses
- ---------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 413,386 $ 97,947 $ 703,463 $ 562,200
Trustees fees and expenses 13,877 2,173 15,168 11,996
Custodian fee 71,087 36,312 102,421 78,882
Legal and accounting services 22,495 17,118 22,318 22,162
Amortization of organization expenses 887 229 1,574 1,508
Miscellaneous 6,831 8,452 19,101 21,863
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 528,563 $ 162,231 $ 864,045 $ 698,611
- ---------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 18,275 $ 10,652 $ 23,586 $ 22,172
- ---------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 18,275 $ 10,652 $ 23,586 $ 22,172
- ---------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 510,288 $ 151,579 $ 840,459 $ 676,439
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 5,610,913 $ 2,226,153 $ 8,810,104 $ 7,237,297
- ---------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 3,159,656 $ 886,357 $ 583,817 $ 3,849,645
Financial futures contracts (949,855) (418,124) (1,055,823) (1,463,448)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) $ 2,209,801 $ 468,233 $ (472,006) $ 2,386,197
- ---------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $(1,542,650) $ (611,689) $ 1,205,087 $(2,128,854)
Financial futures contracts 597,430 221,001 552,590 968,229
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ (945,220) $ (390,688) $ 1,757,677 $(1,160,625)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain $ 1,264,581 $ 77,545 $ 1,285,671 $ 1,225,572
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 6,875,494 $ 2,303,698 $10,095,775 $ 8,462,869
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
60
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Operations
For the Year Ended July 31, 1998
<TABLE>
<CAPTION>
Minnesota New Jersey Pennsylvania Texas
Portfolio Portfolio Portfolio Portfolio
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income
- --------------------------------------------------------------------------------------------------------------------------------
Interest $ 3,919,663 $ 20,492,162 $ 23,535,425 $ 1,168,398
- --------------------------------------------------------------------------------------------------------------------------------
Total investment income $ 3,919,663 $ 20,492,162 $ 23,535,425 $ 1,168,398
- --------------------------------------------------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee $ 228,670 $ 1,535,921 $ 1,758,264 $ 31,780
Trustees fees and expenses 8,363 22,424 23,320 679
Custodian fee 45,883 184,415 149,630 19,962
Legal and accounting services 20,218 34,518 34,362 15,161
Amortization of organization expenses 309 2,330 2,988 209
Miscellaneous 15,759 36,037 83,951 7,446
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 319,202 $ 1,815,645 $ 2,052,515 $ 75,237
- --------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee $ 11,817 $ 55,680 $ 149,630 $ 6,280
- --------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 11,817 $ 55,680 $ 149,630 $ 6,280
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 307,385 $ 1,759,965 $ 1,902,885 $ 68,957
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 3,612,278 $ 18,732,197 $ 21,632,540 $ 1,099,441
- --------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 1,573,786 $ 4,091,888 $ 5,872,852 $ 568,115
Financial futures contracts (872,751) (2,384,863) (3,792,095) (91,792)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain $ 701,035 $ 1,707,025 $ 2,080,757 $ 476,323
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ (694,189) $ (4,734) $ (9,695,269) $ (357,281)
Financial futures contracts 457,776 988,190 2,480,978 81,068
- --------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ (236,413) $ 983,456 $ (7,214,291) $ (276,213)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) $ 464,622 $ 2,690,481 $ (5,133,534) $ 200,110
- --------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 4,076,900 $ 21,422,678 $ 16,499,006 $ 1,299,551
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
61
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended July 31, 1998
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets Arizona Portfolio Colorado Portfolio Connecticut Portfolio Michigan Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 5,610,913 $ 2,226,153 $ 8,810,104 $ 7,237,297
Net realized gain (loss) 2,209,801 468,233 (472,006) 2,386,197
Net change in unrealized appreciation
(depreciation) (945,220) (390,688) 1,757,677 (1,160,625)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 6,875,494 $ 2,303,698 $ 10,095,775 $ 8,462,869
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 8,495,182 $ 4,707,220 $ 9,761,887 $ 5,251,473
Withdrawals (24,750,363) (9,834,162) (29,880,364) (33,701,520)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $ (16,255,181) $ (5,126,942) $(20,118,477) $ (28,450,047)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (9,379,687) $ (2,823,244) $(10,022,702) $ (19,987,178)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 112,471,793 $ 42,624,444 $174,977,590 $ 150,223,646
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 103,092,106 $ 39,801,200 $164,954,888 $ 130,236,468
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
62
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended July 31, 1998
<TABLE>
<CAPTION>
Minnesota New Jersey Pennsylvania Texas
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 3,612,278 $ 18,732,197 $ 21,632,540 $ 1,099,441
Net realized gain 701,035 1,707,025 2,080,757 476,323
Net change in unrealized appreciation (depreciation) (236,413) 983,456 (7,214,291) (276,213)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 4,076,900 $ 21,422,678 $ 16,499,006 $ 1,299,551
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 4,912,748 $ 28,452,460 $ 23,151,071 $ 710,511
Withdrawals (12,679,645) (74,018,070) (82,338,942) (5,848,716)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital transactions $ (7,766,897) $(45,565,610) $(59,187,871) $ (5,138,205)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (3,689,997) $(24,142,932) $(42,688,865) $ (3,838,654)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 70,673,674 $352,772,070 $402,220,740 $ 21,676,141
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 66,983,677 $328,629,138 $359,531,875 $ 17,837,487
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
63
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended July 31, 1997
<TABLE>
<CAPTION>
Arizona Colorado Connecticut Michigan
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 6,682,773 $ 2,539,687 $ 9,925,507 $ 8,798,336
Net realized gain 799,157 446,628 472,294 36,033
Net change in unrealized appreciation (depreciation) 4,938,530 2,095,673 7,068,431 6,476,859
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 12,420,460 $ 5,081,988 $ 17,466,232 $ 15,311,228
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 7,001,783 $ 4,009,912 $ 9,762,822 $ 3,699,109
Withdrawals (36,811,997) (11,883,030) (39,868,349) (42,251,299)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital transactions $(29,810,214) $ (7,873,118) $(30,105,527) $(38,552,190)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $(17,389,754) $ (2,791,130) $(12,639,295) $(23,240,962)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $129,861,547 $ 45,415,574 $187,616,885 $173,464,608
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $112,471,793 $ 42,624,444 $174,977,590 $150,223,646
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
64
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended July 31, 1997
<TABLE>
<CAPTION>
Minnesota New Jersey Pennsylvania Texas
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 4,112,897 $ 21,484,047 $ 25,120,444 $ 1,316,730
Net realized gain (loss) 28,621 1,984,468 (1,113,620) (11,999)
Net change in unrealized appreciation (depreciation) 2,786,157 14,203,930 18,755,709 1,114,403
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 6,927,675 $ 37,672,445 $ 42,762,533 $ 2,419,134
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 4,877,845 $ 20,443,481 $ 19,109,521 $ 1,759,693
Withdrawals (17,221,919) (91,588,197) (107,833,175) (6,869,522)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital transactions $ (12,344,074) $ (71,144,716) $ (88,723,654) $ (5,109,829)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (5,416,399) $ (33,472,271) $ (45,961,121) $ (2,690,695)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 76,090,073 $ 386,244,341 $ 448,181,861 $ 24,366,836
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 70,673,674 $ 352,772,070 $ 402,220,740 $ 21,676,141
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
65
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Arizona Portfolio
-----------------------------------------------------------------------
Year Ended
-----------------------------------------------------------------------
July 31, Sept. 30,
---------------------------------------------------------- -----------
1998 1997 1996 1995 1994* 1993**
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.50% 0.50% 0.51% 0.52% 0.46%+ 0.42%+
Expenses after custodian fee reduction 0.48% 0.49% 0.50% -- -- --
Net investment income 5.27% 5.56% 5.53% 5.81% 5.43%+ 5.46%+
Portfolio Turnover 23% 10% 18% 22% 23% 107%
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $103,092 $112,472 $129,862 $144,521 $154,068 $133,539
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten-month period ended July 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the prior periods have not been adjusted to
reflect this change.
See notes to financial statements
66
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Colorado Portfolio
-----------------------------------------------------------------
Year Ended
------------------------------------------------------------------
July 31, Sept. 30,
------------------------------------------------------ ---------
1998 1997 1996 1995 1994* 1993**
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets+
- -----------------------------------------------------------------------------------------------------------------------
Net expenses/(1)/ 0.40% 0.40% 0.40% 0.25% 0.02%+ 0.06%+
Net expenses after custodian fee reduction 0.37% 0.36% 0.36% -- -- --
Net investment income 5.49% 5.86% 5.75% 6.05% 5.73%+ 5.60%+
Portfolio Turnover 18% 14% 53% 52% 23% 10%
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $39,801 $42,624 $45,416 $46,077 $44,399 $24,346
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ The operating expenses of the Colorado 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:
<TABLE>
<S> <C> <C> <C> <C>
Expenses/(1)/ 0.42% 0.40% 0.35%+ 0.35%+
Expenses after custodian fee reduction 0.38% -- -- --
Net investment income 5.73% 5.90% 5.40%+ 5.31%+
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten-month period ended July 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the prior periods have not been adjusted to
reflect this change.
See notes to financial statements
67
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Connecticut Portfolio
-----------------------------------------------------------------------
Year Ended
-----------------------------------------------------------------------
July 31, Sept. 30,
---------------------------------------------------------- ----------
1998 1997 1996 1995 1994* 1993**
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.51% 0.53% 0.52% 0.53% 0.47%+ 0.46%+
Expenses after custodian fee reduction 0.50% 0.53% 0.50% -- -- --
Net investment income 5.20% 5.50% 5.49% 5.77% 5.40%+ 5.45%+
Portfolio Turnover 7% 11% 23% 29% 10% 10%
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $164,955 $174,978 $187,617 $195,276 $192,038 $159,848
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten-month period ended July 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the prior periods have not been adjusted to
reflect this change.
See notes to financial statements
68
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Michigan Portfolio
-----------------------------------------------------------------------
Year Ended
-----------------------------------------------------------------------
July 31, Sept. 30,
----------------------------------------------------------- ----------
1998 1997 1996 1995 1994* 1993**
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.50% 0.52% 0.54% 0.48% 0.47%+ 0.44%+
Expenses after custodian fee reduction 0.48% 0.50% 0.52% -- -- --
Net investment income 5.19% 5.45% 5.50% 5.85% 5.48%+ 5.46%+
Portfolio Turnover 26% 16% 49% 54% 45% 20%
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $130,236 $150,224 $173,465 $191,263 $204,032 $187,665
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten-month period ended July 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio by
the effect of any expense offset arrangements with its service providers.
The expense ratios for each of the prior periods have not been adjusted to
reflect this change.
See notes to financial statements
69
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Minnesota Portfolio
------------------------------------------------------------------
Year Ended
------------------------------------------------------------------
July 31, Sept. 30,
----------------------------------------------------- ------------
1998 1997 1996 1995 1994* 1993**
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.47% 0.47% 0.48% 0.47% 0.45%+ 0.40%+
Expenses after custodian fee reduction 0.45% 0.44% 0.46% -- -- --
Net investment income 5.28% 5.71% 5.69% 5.83% 5.50%+ 5.58%+
Portfolio Turnover 23% 22% 45% 76% 20% 10%
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $66,984 $70,674 $76,090 $82,968 $84,005 $67,019
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten-month period ended July 31, 1994.
** For the period from the start of business, February 1, 1993, to
September 30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the prior periods have not been
adjusted to reflect this change.
See notes to financial statements
70
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
New Jersey Portfolio
----------------------------------------------------------------------
Year Ended
----------------------------------------------------------------------
July 31, Sept. 30,
--------------------------------------------------------- -----------
1998 1997 1996 1995 1994* 1993**
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------------------------------------
Expenses (1) 0.54% 0.54% 0.53% 0.52% 0.50%+ 0.50%+
Expenses after custodian fee reduction 0.52% 0.52% 0.52% -- -- --
Net investment income 5.52% 5.84% 5.82% 5.96% 5.62%+ 5.67%+
Portfolio Turnover 14% 24% 39% 54% 25% 12%
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $328,629 $352,772 $386,244 $411,038 $423,854 $393,677
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten-month period ended July 31, 1994.
** For the period from the start of business, February 1, 1993, to
September 30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the prior periods have not been
adjusted to reflect this change.
See notes to financial statements
71
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Pennsylvania Portfolio
------------------------------------------------------------------------
Year Ended
------------------------------------------------------------------------
July 31, Sept. 30,
-------------------------------------------------------- --------------
1998 1997 1996 1995 1994* 1993**
- -------------------------------------------------------------------------------------------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.54% 0.55% 0.54% 0.49% 0.48%+ 0.50%+
Expenses after custodian fee reduction 0.50% 0.51% 0.50% -- -- --
Net investment income 5.66% 5.96% 5.90% 6.02% 5.66%+ 5.71%+
Portfolio Turnover 13% 17% 30% 44% 21% 17%
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $359,532 $402,221 $448,182 $502,250 $536,786 $497,001
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten-month period ended July 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the prior periods have not been
adjusted to reflect this change .
See notes to financial statements
72
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Texas Portfolio
--------------------------------------------------------------------
Year Ended
--------------------------------------------------------------------
July 31, Sept. 30,
------------------------------------------------------ ------------
1998 1997 1996 1995 1994* 1993**
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net expenses/(1)/ 0.38% 0.37% 0.32% 0.08% 0%+ 0.03%+
Net expenses after custodian fee reduction 0.35% 0.35% 0.27% -- -- --
Net investment income 5.58% 5.79% 5.81% 6.20% 5.69%+ 5.82%+
Portfolio Turnover 17% 17% 39% 49% 27% 8%
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $17,837 $21,676 $24,367 $28,227 $27,589 $16,029
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ The operating expenses of the Portfolio may reflect a reduction of the
Investment Adviser fee, an allocation of expenses to the Investment Adviser,
or both. Had such action not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C> <C> <C> <C>
Expenses/(1)/ 0.42% 0.35% 0.37%+ 0.42%
Expenses after custodian fee reduction 0.37% -- -- --
Net investment income 5.71% 5.93% 5.32%+ 5.43%+
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the ten-month period ended July 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ The expense ratios for the year ended July 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Portfolio to increase its expense ratio
by the effect of any expense offset arrangements with its service
providers. The expense ratios for each of the prior periods have not been
adjusted to reflect this change.
See notes to financial statements
73
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
1 Significant Accounting Policies
------------------------------------------------------------------------------
Arizona Municipals Portfolio (Arizona Portfolio), Colorado Municipals
Portfolio (Colorado Portfolio), Connecticut Municipals Portfolio (Connecticut
Portfolio), Michigan Municipals Portfolio (Michigan Portfolio), Minnesota
Municipals Portfolio (Minnesota Portfolio), New Jersey Municipals Portfolio
(New Jersey Portfolio), Pennsylvania Municipals Portfolio (Pennsylvania
Portfolio) and Texas Municipals Portfolio (Texas Portfolio), collectively the
Portfolios, are registered under the Investment Company Act of 1940 as
non-diversified open-end management investment companies which were organized
as trusts under the laws of the State of New York on May 1, 1992. The
Declarations of Trust permit the Trustees to issue interests in the
Portfolios. The following is a summary of significant accounting policies of
the Portfolios. The policies are in conformity with generally accepted
accounting principles.
A Investment Valuations -- Municipal bonds are normally valued on the basis
of valuations furnished by a pricing service. Taxable obligations, if any,
for which price quotations are readily available are normally valued at the
mean between the latest bid and asked prices. Futures contracts and options
on futures contracts listed on commodity exchanges are valued at closing
settlement prices. Over-the-counter options on financial futures contracts
are normally valued at the mean between the latest bid and asked prices.
Short-term obligations, maturing in sixty days or less, are valued at
amortized cost, which approximates value. Investments for which valuations or
market quotations are unavailable are valued at fair value using methods
determined in good faith by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C Income Taxes -- The Portfolios are treated as partnerships for federal tax
purposes. No provision is made by the Portfolios for federal or state taxes
on any taxable income of the Portfolios because each investor in the
Portfolios is ultimately responsible for the payment of any taxes. Since some
of the Portfolios' investors are regulated investment companies that invest
all or substantially all of their assets in the Portfolios, the Portfolios
normally must satisfy the applicable source of income and diversification
requirements (under the Internal Revenue Code) in order for their respective
investors to satisfy them. The Portfolios will allocate at least annually
among their respective investors each investor's distributive share of the
Portfolios' net taxable (if any) and tax-exempt investment income, net
realized capital gains, and any other items of income, gain, loss, deduction
or credit. Interest income received by the Portfolios on investments in
municipal bonds, which is excludable from gross income under the Internal
Revenue Code, will retain its status as income exempt from federal income tax
when allocated to each Portfolio's investors. The portion of such interest,
if any, earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item for investors.
D Deferred Organization Expenses -- Costs incurred by a Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E Financial Futures Contracts -- Upon the entering of a financial futures
contract, a Portfolio is required to deposit ("initial margin") either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by a Portfolio ("margin maintenance") each day, dependent on
the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by a Portfolio. A
Portfolio's investment in financial futures contracts is designed only to
hedge against anticipated future changes in interest rates. Should interest
rates move unexpectedly, a Portfolio may not achieve the anticipated benefits
of the financial futures contracts and may realize a loss.
F Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by a Portfolio, the premium paid is recorded
as an investment, the value of which is marked-to-market daily. When a
purchased option expires, a Portfolio will realize a loss in the amount of
the cost of the option. When a Portfolio enters into a closing sale
transaction, the Portfolio will realize a gain or loss depending on whether
the sales proceeds from the closing sale transaction are greater or less than
the cost of the option. When a Portfolio exercises a put option, settlement
is made in cash. The risk associated with purchasing options is limited to
the premium originally paid.
G When-issued and Delayed Delivery Transactions -- The Portfolios may engage
in when-issued or delayed delivery transactions. The Portfolios record
when-issued securities on trade date and maintain security positions such
that sufficient liquid assets will be available to make payments for the
securities purchased. Securities purchased on a when-issued or delayed
delivery
74
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
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 financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
2 Investment Adviser Fee and Other Transactions with Affiliates
------------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to each Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e., income other than gains from the sale of
securities). For the year ended July 31, 1998, each Portfolio paid advisory
fees as follows:
Portfolio Amount Effective Rate*
------------------------------------------------------------------------------
Arizona $ 413,386 0.39%
Colorado 97,947 0.24%
Connecticut 703,463 0.42%
Michigan 562,200 0.40%
Minnesota 228,670 0.33%
New Jersey 1,535,921 0.45%
Pennsylvania 1,758,264 0.46%
Texas 31,780 0.16%
* Advisory fees paid as a percentage of average daily net assets.
Except as to Trustees of the Portfolios who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services
to the Portfolios out of such investment adviser fee.
Trustees of the Portfolios that are not affiliated with the Investment
Adviser may elect to defer receipt of all or a percentage of their annual
fees in accordance with the terms of the Trustees Deferred Compensation Plan.
For the year ended July 31, 1998, no significant amounts have been deferred.
Certain of the officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations.
3 Investments
------------------------------------------------------------------------------
Purchases and sales of investments, other than U.S. Government securities,
purchased options and short-term obligations, for the year ended July 31,
1998 were as follows:
Arizona Portfolio
------------------------------------------------------------------------------
Purchases $24,145,210
Sales 35,138,378
Colorado Portfolio
------------------------------------------------------------------------------
Purchases $ 7,134,562
Sales 10,160,716
Connecticut Portfolio
------------------------------------------------------------------------------
Purchases $11,752,567
Sales 22,274,789
Michigan Portfolio
------------------------------------------------------------------------------
Purchases $35,222,997
Sales 52,977,352
Minnesota Portfolio
------------------------------------------------------------------------------
Purchases $15,681,830
Sales 20,575,048
New Jersey Portfolio
------------------------------------------------------------------------------
Purchases $46,163,464
Sales 75,032,585
Pennsylvania Portfolio
------------------------------------------------------------------------------
Purchases $48,254,274
Sales 87,111,676
Texas Portfolio
------------------------------------------------------------------------------
Purchases $ 3,480,795
Sales 8,284,640
75
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
4 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at July 31, 1998, as computed on a
federal income tax basis, are as follows:
Arizona Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 92,678,595
------------------------------------------------------------------------------
Gross unrealized appreciation $ 9,196,716
Gross unrealized depreciation (37,951)
------------------------------------------------------------------------------
Net unrealized appreciation $ 9,158,765
------------------------------------------------------------------------------
Colorado Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 36,166,584
------------------------------------------------------------------------------
Gross unrealized appreciation $ 3,298,576
Gross unrealized depreciation --
------------------------------------------------------------------------------
Net unrealized appreciation $ 3,298,576
------------------------------------------------------------------------------
Connecticut Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 151,783,349
------------------------------------------------------------------------------
Gross unrealized appreciation $ 10,802,275
Gross unrealized depreciation (26,782)
------------------------------------------------------------------------------
Net unrealized appreciation $ 10,775,493
------------------------------------------------------------------------------
Michigan Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 119,726,431
------------------------------------------------------------------------------
Gross unrealized appreciation $ 10,959,239
Gross unrealized depreciation (41,110)
------------------------------------------------------------------------------
Net unrealized appreciation $ 10,918,129
------------------------------------------------------------------------------
Minnesota Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 59,988,550
------------------------------------------------------------------------------
Gross unrealized appreciation $ 5,843,194
Gross unrealized depreciation --
------------------------------------------------------------------------------
Net unrealized appreciation $ 5,843,194
------------------------------------------------------------------------------
New Jersey Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 292,277,246
------------------------------------------------------------------------------
Gross unrealized appreciation $ 32,961,776
Gross unrealized depreciation (100,317)
------------------------------------------------------------------------------
Net unrealized appreciation $ 32,861,459
------------------------------------------------------------------------------
Pennsylvania Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 327,484,420
------------------------------------------------------------------------------
Gross unrealized appreciation $ 31,636,291
Gross unrealized depreciation (6,259,905)
------------------------------------------------------------------------------
Net unrealized appreciation $ 25,376,386
------------------------------------------------------------------------------
Texas Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 15,998,639
------------------------------------------------------------------------------
Gross unrealized appreciation $ 1,472,099
Gross unrealized depreciation --
------------------------------------------------------------------------------
Net unrealized appreciation $ 1,472,099
------------------------------------------------------------------------------
5 Line of Credit
------------------------------------------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and their affiliates in a committed $100 million unsecured line of credit
agreement with a group of banks. Borrowings will be made by the portfolios or
funds solely to facilitate the handling of unusual and/or unanticipated
short-term cash requirements. Interest is charged to each portfolio or fund
based on its borrowings at an amount above either the Eurodollar rate or
Federal Funds rate. In addition, a fee computed at an annual rate of 0.10% on
the daily unused portion of the facility is allocated among the participating
portfolios and funds at the end of each quarter. At July 31, 1998, the
Colorado Portfolio, Michigan Portfolio, Minnesota Portfolio and New Jersey
Portfolio had balances outstanding pursuant to this line of credit of
$273,000, $21,000, $325,000 and $1,510,000 respectively. The Portfolios did
not have any significant borrowings or allocated fees during the year ended
July 31, 1998.
6 Financial Instruments
------------------------------------------------------------------------------
The Portfolios regularly trade in financial instruments with off-balance
sheet risk in the normal course of their investing activities to assist in
managing exposure to
76
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
NOTES TO FINANCIAL STATEMENTS CONT'D
various market risks. These financial instruments include futures contracts
and may involve, to a varying degree, elements of risk in excess of the
amounts recognized for financial statement purposes. The notional or
contractual amounts of these instruments represent the investment a Portfolio
has in particular classes of financial instruments and does not necessarily
represent the amounts potentially subject to risk. The measurement of the
risks associated with these instruments is meaningful only when all related
and offsetting transactions are considered.
A summary of obligations under these financial instruments at July 31, 1998,
is as follows:
Futures
Contracts
Expiration Net Unrealized
Portfolio Date Contracts Position Depreciation
------------------------------------------------------------------------------
Arizona 9/98 26 U.S. Treasury Bonds Short $30,843
------------------------------------------------------------------------------
Colorado 9/98 10 U.S. Treasury Bonds Short 1,935
------------------------------------------------------------------------------
Connecticut 9/98 42 U.S. Treasury Bonds Short 8,127
------------------------------------------------------------------------------
Michigan 9/98 34 U.S. Treasury Bonds Short 34,736
------------------------------------------------------------------------------
Minnesota 9/98 12 U.S. Treasury Bonds Short 11,880
------------------------------------------------------------------------------
New Jersey 9/98 60 U.S. Treasury Bonds Short 59,400
------------------------------------------------------------------------------
Pennsylvania 9/98 96 U.S. Treasury Bonds Short 98,076
------------------------------------------------------------------------------
At July 31, 1998, the Portfolios had sufficient cash and/or securities to
cover margin requirements on open futures contracts.
77
<PAGE>
Eaton Vance Municipals Portfolios as of July 31, 1998
INDEPENDENT AUDITORS' REPORT
To the Trustees and Investors of Arizona Municipals Portfolio, Colorado
Municipals Portfolio, Connecticut Municipals Portfolio, Michigan Municipals
Portfolio, Minnesota Municipals Portfolio, New Jersey Municipals Portfolio,
Pennsylvania Municipals Portfolio and Texas Municipals Portfolio:
- --------------------------------------------------------------------------------
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Arizona Municipals Portfolio, Colorado
Municipals Portfolio, Connecticut Municipals Portfolio, Michigan Municipals
Portfolio, Minnesota Municipals Portfolio, New Jersey Municipals Portfolio,
Pennsylvania Municipals Portfolio and Texas Municipals Portfolio as of July 31,
1998, the related statements of operations for the year then ended, the
statements of changes in net assets for the years ended July 31, 1998 and 1997
and supplementary data for each of the years in the four year period ended July
31, 1998, the ten months ended July 31, 1994, and the period from the start of
business, February 1, 1993 to September 30, 1993. These financial statements and
supplementary data are the responsibility of the Trusts' management. Our
responsibility is to express an opinion on the financial statements and
supplementary data based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at July 31,
1998, by correspondence with the custodian and brokers; where replies were not
received from brokers, we performed other audit procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial position of Arizona Municipals
Portfolio, Colorado Municipals Portfolio, Connecticut Municipals Portfolio,
Michigan Municipals Portfolio, Minnesota Municipals Portfolio, New Jersey
Municipals Portfolio, Pennsylvania Municipals Portfolio and Texas Municipals
Portfolio at July 31, 1998, the results of their operations, the changes in
their net assets and their supplementary data for the respective stated periods
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 4, 1998
78
<PAGE>
Eaton Vance Municipals Portfolio as of July 31, 1998
INVESTMENT MANAGEMENT
Municipals Portfolios
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President and Portfolio
Manager of Minnesota and
New Jersey Municipals Portfolios
Cynthia J. Clemson
Vice President and Portfolio
Manager of Arizona
Municipals Portfolio
William H. Ahern, Jr.
Vice President and Portfolio
Manager of Colorado and
Connecticut Municipals Portfolios
Thomas M. Metzold
Vice President and Portfolio
Manager of Texas
Municipals Portfolio
Timothy T. Browse
Vice President and Portfolio
Manager of Michigan
and Pennsylvania
Municipals Portfolios
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
79
