<PAGE>
The Eaton Vance Mutual Funds Trust
For the Government Obligations Portfolio
[logo]
Annual Shareholder Report
December 31, 1995
Investment Adviser of Growth Portfolio
Boston Management and Research
24 Federal Street
Boston, MA 02110
Fund Administrator
Eaton Vance Management
24 Federal Street
Boston, MA 02110
(617) 482-8260
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
Transfer Agent
First Data Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
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GOVERNMENT OBLIGATIONS PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
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MORTGAGE PASS-THROUGHS - 95.5%
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PRINCIPAL AMOUNT VALUE
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FEDERAL HOME LOAN MORTGAGE CORP.
PARTICIPATION CERTIFICATES:
4.5s, with maturity at 2000 $ 129,430 $ 128,579
4.75s, with various maturities to 2002 81,124 79,883
5s, with various maturities to 2003 857,801 845,310
5.25s, with various maturities to 2005 415,840 410,222
5.5s, with various maturities to 2011 1,897,020 1,888,058
5.75s, with maturity at 1998 69,456 69,415
6s, with various maturities to 2022 4,411,251 4,409,402
6.25s, with various maturities to 2013 1,046,597 1,049,650
6.5s, with various maturities to 2022 19,620,356 19,876,684
6.75s, with various maturities to 2011 10,777,956 10,976,283
7s, with various maturities to 2019 17,028,452 17,428,229
7.25s, with maturity at 2003 1,957,267 2,014,982
7.5s, with various maturities to 2019 20,894,342 21,625,530
7.75s, with various maturities to 2018 4,532,111 4,733,182
8s, with various maturities to 2022 22,245,627 23,320,290
8.25s, with various maturities to 2011 15,716,675 16,579,860
8.5s, with various maturities to 2018 24,723,871 26,257,090
8.75s, with various maturities to 2014 3,815,701 4,073,223
9s, with various maturities to 2020 9,632,137 10,426,534
9.25s, with various maturities to 2010 1,612,994 1,741,676
9.5s, with various maturities to 2016 1,339,383 1,460,372
10s, with various maturities to 2017 263,414 283,192
11s, with various maturities to 2019 2,796,971 3,093,287
12s, with various maturities to 2019 2,213,182 2,505,911
12.25s, with various maturities to 2019 4,620,216 5,278,881
12.5, with various maturities to 2019 13,962,910 16,012,292
12.75s, with various maturities to 2015 1,869,392 2,146,825
13s, with various maturities to 2019 5,209,133 6,022,538
13.25s, with various maturities to 2019 792,182 925,190
13.5s, with various maturities to 2015 6,435,272 7,429,600
13.75s, with various maturities to 2014 131,761 153,778
14s, with various maturities to 2016 3,438,451 4,050,818
14.5s, with various maturities to 2014 277,362 330,278
14.75s, with maturity at 2010 1,092,452 1,296,500
15s, with various maturities to 2013 1,347,133 1,640,250
15.25s, with maturity at 2012 201,726 248,167
15.5s, with various maturities to 2012 337,724 412,581
16s, with maturity at 2012 242,047 300,093
16.25s, with various maturities to 2012 297,431 371,165
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$221,895,800
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FEDERAL NATIONAL MORTGAGE ASSOCIATION
MORTGAGE BACKED SECURITIES:
0.25s, with maturity at 2014 $ 285,166 $ 234,972
3.5s, with maturity at 2007 163,955 153,501
4.5s, with maturity at 1999 13,387 13,175
5s, with various maturities to 2017 1,274,114 1,241,278
5.25s, with various maturities to 2006 400,000 391,857
5.5s, with various maturities to 2006 1,231,238 1,226,343
5.75s, with maturity at 2003 216,880 216,448
6s, with various maturities to 2010 23,700,765 23,721,659
6.25s, with various maturities to 2007 2,696,318 2,706,547
6.5s, with various maturities to 2017 6,786,513 6,848,122
6.75s, with various maturities to 2007 1,387,457 1,411,418
7s, with various maturities to 2018 8,700,095 8,888,954
7.25s, with various maturities to 2017 2,302,634 2,364,202
7.5s, with various maturities to 2020 10,000,288 10,355,825
7.75s, with various maturities to 2008 1,846,112 1,922,666
8s, with various maturities to 2017 22,672,040 23,751,155
8.25s, with various maturities to 2020 15,155,881 16,001,478
8.5s, with various maturities to 2017 24,012,814 25,565,270
8.75s, with various maturities to 2017 1,623,305 1,734,909
9s, with various maturities to 2020 10,133,784 10,929,360
9.25s, with maturity to 2010 2,745,777 2,977,963
9.5s, with maturity at 2009 381,894 416,580
9.75s, with maturity at 2019 481,943 536,059
11s, with maturity at 2010 38,689 42,735
11.75s, with various maturities to 2015 2,705,061 3,064,528
12s, with various maturities to 2020 7,265,070 8,464,810
12.25s, with maturity at 2011 1,159,922 1,321,091
12.5s, with various maturities to 2021 6,756,798 7,752,664
12.75s, with various maturities to 2014 1,991,759 2,301,910
13s, with various maturities to 2019 8,782,166 10,131,322
13.25s, with various maturities to 2015 2,726,445 3,192,115
13.5s, with various maturities to 2015 4,528,641 5,289,523
13.75s, with various maturities to 2014 223,438 264,302
14s, with various maturities to 2014 944,870 1,123,496
14.25s, with maturity at 2014 370,014 443,543
14.5s, with various maturities to 2014 346,140 416,227
14.75s, with maturity at 2012 5,141,517 6,164,483
15s, with various maturities to 2013 4,162,338 5,038,755
15.5s, with maturity at 2012 1,277,134 1,577,795
15.75s, with maturity at 2011 39,197 48,251
16s, with maturity at 2012 462,224 578,033
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$200,825,324
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GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MORTGAGE BACKED SECURITIES:
5.5s, with maturity at 1999 $ 75,678 $ 75,635
6.5s, with maturity at 2002 656,816 667,642
7.25s, with various maturities to 2022 4,697,140 4,884,698
7.5s, with maturity at 2017 1,143,783 1,196,887
8s, with various maturities to 2017 18,587,122 19,643,099
8.25s, with maturity at 2008 660,206 698,287
8.5s, with various maturities to 2018 1,337,987 1,441,542
9s, with various maturities to 2016 6,562,394 7,131,012
9.5s, with maturity at 2018 763,645 822,475
12s, with various maturities to 2015 4,647,054 5,303,055
12.5s, with various maturities to 2015 2,552,580 2,954,632
13s, with various maturities to 2014 1,483,428 1,738,372
13.5s, with various maturities to 2013 448,337 527,823
14s, with maturity at 2015 279,437 331,605
14.5s, with various maturities to 2014 518,507 623,258
15s, with various maturities to 2013 1,011,818 1,231,087
16s, with various maturities to 2012 443,939 554,454
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$ 49,825,563
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COLLATERALIZED MORTGAGE OBLIGATIONS:
Federal Home Loan Mtg. Corp.
Series 1327-F, 7.5%, due 2003,
Collateral 100% FHLMC PC $ 5,027,000 $ 5,305,059
Federal Home Loan Mtg. Corp.
Series 1058-F, 8.0%, due 2004,
Collateral 100% FHLMC PC 3,906,688 3,931,106
Federal Home Loan Mtg. Corp.
Series 1188-GC, 7.5%, due 2019,
Collateral 100% FHLMC PC 10,000,000 10,525,000
Federal National Mtg. Association Series 93-73E,
6.35%, due 2019 Collateral 100% FNMA MBS 3,000,000 2,940,000
Guaranteed Mtg. Corp. III Series H2, 9% due 2015,
Collateral 100% FNMA MBS 919,486 945,635
Salomon Brothers Mortgage Securities II, Inc.
Series III, Class Z, 11.50%, due 2015
Collateral 100%
GNMA/FNMA MBS 2,007,213 2,253,728
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$ 25,900,528
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TOTAL MORTGAGE PASS-THROUGHS
(identified cost, $487,675,564) $498,447,215
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UNITED STATES TREASURY BONDS - 16.1%
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PRINCIPAL AMOUNT VALUE
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U.S. Treasury Bond, 12s, 8/15/13++ $50,000,000 $ 77,214,050
U.S. Treasury Bond, 7.125s, 2/15/23+ 6,000,000 6,853,896
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TOTAL UNITED STATES TREASURY BONDS
(identified cost, $67,368,569) $ 84,067,946
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TOTAL INVESTMENTS - 111.6%
(identified cost, $555,044,133) $582,515,161
OTHER ASSETS, LESS LIABILITIES - (11.6%) (60,726,256)
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NET ASSETS - 100% $521,788,905
============
+ Collateral for financial futures contracts held at December 31, 1995
(See Note 7).
++ A portion of this security is on loan at December 31, 1995 (See Note 5).
The accompanying notes are an integral part
of the financial statements
<PAGE>
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FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
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December 31, 1995
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ASSETS:
Investments, at value (Note 1A)
(identified cost, $555,044,133) $582,515,161
Cash 230
Receivable for investments sold 935,637
Interest receivable 6,446,980
Deferred organization expenses (Note 1H) 10,773
------------
Total assets $589,908,781
LIABILITIES:
Demand note payable (Note 4) $ 3,835,000
Payable for daily variation margin on open
financial futures contracts (Note 1G) 86,328
Liability for collateral received for securities
loaned (Note 5) 64,094,800
Payable to affiliate --
Trustees' fees 4,980
Accrued expenses 98,768
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Total liabilities 68,119,876
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NET ASSETS applicable to investors' interest in Portfolio $521,788,905
============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and
withdrawals $494,891,945
Unrealized appreciation of investments and
financial futures contracts
(computed on the basis of identified cost) 26,896,960
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Total net assets $521,788,905
============
The accompanying notes are an integral part of the financial statements
<PAGE>
STATEMENT OF OPERATIONS
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For the Year Ended December 31, 1995
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INVESTMENT INCOME:
Interest income -- $ 49,156,066
Expenses --
Investment adviser fee (Note 3) $ 3,928,237
Compensation of Trustees not members of the
Administrator's organization (Note 3) 32,456
Custodian fee (Note 3) 236,803
Interest (Note 5) 3,738,252
Printing and postage 877
Legal and accounting services 58,636
Amortization of organization expenses
(Note 1H) 3,810
Miscellaneous 42,567
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Total expenses 8,041,638
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Net investment income $ 41,114,428
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REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss (identified cost basis) --
Investment transactions $(7,705,021)
Financial futures contracts (7,999,647)
-----------
Net realized loss on investments $(15,704,668)
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $45,644,289
Financial futures contracts (776,490)
-----------
Net unrealized appreciation of investments $ 44,867,799
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Net realized and unrealized gain on
investments $ 29,163,131
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Net increase in net assets from operations $ 70,277,559
============
The accompanying notes are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
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YEAR ENDED DECEMBER 31,
---------------------------------------
1995 1994
---- ----
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 41,114,428 $ 45,968,015
Net realized loss on investments (15,704,668) (4,216,708)
Change in unrealized appreciation (depreciation) of investments 44,867,799 (50,227,104)
------------ -------------
Net increase (decrease) in net assets from operations $ 70,277,559 $ (8,475,797)
------------ -------------
Capital transactions --
Contributions $ 95,964,004 $ 272,129,376
Withdrawals (160,122,171) (285,281,160)
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Decrease in net assets resulting from capital transactions $(64,158,167) $ (13,151,784)
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Total increase (decrease) in net assets $ 6,119,392 $ (21,627,581)
NET ASSETS:
At beginning of year 515,669,513 537,297,094
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At end of year $521,788,905 $ 515,669,513
============ =============
<CAPTION>
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SUPPLEMENTARY DATA
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YEAR ENDED DECEMBER 31,
------------------------------------------------
1995 1994 1993*
------ ------ ------
<S> <C> <C> <C>
RATIOS (As a percentage of net assets):
Interest expense 0.71% 0.56% 0.63%+
Other expenses 0.82% 0.80% 0.86%+
Net investment income 7.82% 8.03% 8.46%+
PORTFOLIO TURNOVER 19% 35% 42%
LEVERAGE ANALYSIS:
Amount of debt outstanding at end of period
(000 omitted) $3,835 $3,924 --
Average daily balance of debt outstanding during period
(000 omitted) $1,067 $ 982 $1,660
<FN>
* For the period from the start of business, October 28, 1993, to December 31, 1993.
+ Computed on an annualized basis.
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE>
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NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
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(1) SIGNIFICANT ACCOUNTING POLICIES
Government Obligations Portfolio (the Portfolio) is registered under the
Investment Company Act of 1940 as a diversified open-end investment company
which was organized as a trust under the laws of the State of New York in 1992.
The Declaration of Trust permits the Trustees to issue beneficial interests in
the Portfolio. Investment operations began on October 28, 1993, with the
acquisition of net assets of $564,244,545 in exchange for an interest in the
Portfolio by one of the Portfolio's investors. The following is a summary of
significant accounting policies of the Portfolio. The policies are in conformity
with generally accepted accounting principles.
A. INVESTMENT VALUATIONS -- Mortgage backed, "pass-through" securities are
valued using a matrix pricing system which takes into account closing bond
valuations, yield differentials, anticipated prepayments, and interest rates.
Debt securities (other than mortgage backed, "pass-through" securities) are
normally valued at the mean between the latest available bid and asked prices
for securities for which the over-the-counter market is the primary market. Debt
securities may also be valued on the basis of valuations furnished by a pricing
service. Options are valued at last sale price on an exchange or board of trade
or, in the absence of a sale, at the mean between the last bid and asked price.
Financial futures contracts listed on commodity exchanges are valued at closing
settlement prices. Securities for which there is no such quotation or valuation
are valued at fair value using methods determined in good faith by or at the
direction of the Trustees. Short-term obligations having remaining maturities of
less than 60 days are valued at amortized cost, which approximates fair or
market value.
B. INCOME -- Interest income is determined on the basis of interest accrued and
discount earned, adjusted for amortization of discount when required for federal
income tax purposes.
C. GAINS AND LOSSES FROM SECURITY TRANSACTIONS -- For book purposes, gains or
losses are not recognized until disposition. For federal tax purposes, the
Portfolio has elected, under Section 1092 of the Internal Revenue Code, to
utilize mixed straddle accounting for certain designated classes of activities
involving options and financial futures contracts in determining recognized
gains or losses. Under this method, Section 1256 positions (financial futures
contracts and options on investments or financial futures contracts) and
non-Section 1256 positions (bonds, etc.) are marked-to-market on a daily basis
resulting in the recognition of taxable gains or losses on a daily basis. Such
gains or losses are categorized as short-term or long-term based on aggregation
rules provided in the Code.
D. INCOME TAXES -- The Portfolio is treated as a partnership for federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes. Since some of the
Portfolio's investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolio, the Portfolio normally must
satisfy the applicable source of income and diversification requirements (under
the Code) in order for its investors to satisfy them. The Portfolio will
allocate at least annually among its investors each investors' distributive
share of the Portfolio's net investment income, net realized capital gains, and
any other items of income, gain, loss, deduction or credit.
E. WRITTEN OPTIONS -- Upon the writing of a call or a put option, an amount
equal to the premium received by the Portfolio is included in the Statement of
Assets and Liabilities as a liability. The amount of the liability is
subsequently marked-to-market to reflect the current value of the option written
in accordance with the Portfolio's policies on investment valuations discussed
above. Premiums received from writing options which expire are treated as
realized gains. Premiums received from writing options which are exercised or
are closed are added to or offset against the proceeds or amount paid on the
transaction to determine the realized gain or loss. If a put option is
exercised, the premium reduces the cost basis of the securities purchased by the
Portfolio. The Portfolio, as writer of an option, may have no control over
whether the underlying securities may be sold (call) or purchased (put) and, as
a result, bears the market risk of an unfavorable change in the price of the
securities underlying the written option.
F. PURCHASED OPTIONS -- Upon the purchase of a call or put option, the premium
paid by the Portfolio is included in the Statement of Assets and Liabilities as
an investment. The amount of the investment is subsequently marked-to-market to
reflect the current market value of the option purchased, in accordance with the
Portfolio's policies on investment valuations discussed above. If an option
which the Portfolio has purchased expires on the stipulated expiration date, the
Portfolio will realize a loss in the amount of the cost of the option. If the
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. If the Portfolio
exercises a put option, it will realize a gain or loss from the sale of the
underlying security, and the proceeds from such sale will be decreased by the
premium originally paid. If the Portfolio exercises a call option, the cost of
the security which the Portfolio purchases upon exercise will be increased by
the premium originally paid. For tax purposes, the Portfolio's options are
generally subject to the mixed straddle rules described in Note 1C, and
unrealized gains or losses are recognized on a daily basis.
G. FINANCIAL FUTURES CONTRACTS -- Upon entering into a financial futures
contract, the Portfolio is required to deposit an amount ("initial margin")
either in cash or securities equal to a certain percentage of the purchase price
indicated in the financial futures contract. Subsequent payments are made or
received by the Portfolio ("margin maintenance") each day, dependent on the
daily fluctuations in the value of the underlying securities, and are recorded
for book purposes as unrealized gains or losses by the Portfolio.
If the Portfolio enters into a closing transaction, the Portfolio will
realize, for book purposes, a gain or loss equal to the difference between the
value of the financial futures contract to sell and the financial futures
contract to buy. The Portfolio's investment in financial futures contracts is
designed only to hedge against anticipated futures changes in interest or
currency exchange rates. Should interest or currency exchange rates move
unexpectedly, the Portfolio may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss. For tax purposes, such
futures contracts are generally subject to the mixed straddle rules described in
Note 1C, and unrealized gains or losses are recognized on a daily basis.
H. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
I. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold.
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(2) PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term obligations,
aggregated $109,818,095 and $148,287,474, respectively.
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(3) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES The investment
adviser fee, computed at the monthly rate of 0.0625% (0.75% per annum) of the
Portfolio's average daily net assets up to $500 million and at reduced rates as
daily net assets exceed that level, 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 the
Portfolio. For the year ended December 31, 1995, the fee was equivalent to 0.75%
(annualized) of the Portfolio's average net assets for such period and amounted
to $3,928,237. Except as to Trustees of the Portfolio who are not members of
EVM's or BMR's organization, officers and Trustees receive remuneration for
their service to the Portfolio out of such investment adviser fee. Trustees of
the Portfolio 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 December
31, 1995, no significant amounts have been deferred. The custodian fee was paid
to Investors Bank & Trust Company (IBT) for its services as custodian of the
Fund. Prior to November 10, 1995, IBT was an affiliate of EVM. Pursuant to the
custodian agreement, IBT receives a fee reduced by credits which are determined
based on the average daily cash balances the Portfolio maintains with IBT.
Certain of the officers and Trustees of the Portfolio are officers and
directors/trustees of the above organizations.
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(4) LINE OF CREDIT
The Portfolio participates with other portfolios and funds managed by BMR and
EVM in a $120 million unsecured line of credit agreement with a bank. The line
of credit consists of a $20 million committed facility and an $100 million
discretionary facility. Interest is charged to each portfolio or fund based on
its borrowings at an amount above either the bank's adjusted certificate of
deposit rate, a variable adjusted certificate of deposit rate, or a federal
funds effective rate. In addition, a fee computed at an annual rate of 1/4 of 1%
on the $20 million committed facility and on the daily unused portion of the
$100 million discretionary facility is allocated among the participating
portfolios and funds at the end of each quarter. At December 31, 1995, the
Portfolio had a balance outstanding pursuant to this line of credit amounting to
$3,835,000. The average daily loan balance for the year ended December 31, 1995,
was $1,067,197 and the average interest rate was 7.41%. The maximum borrowing
outstanding at any month end during the year ended December 31, 1995 was
$9,661,000.
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(5) SECURITIES LENDING AGREEMENT
The Portfolio has established a securities lending agreement with a broker in
which the Portfolio lends portfolio securities to the broker in exchange for
collateral consisting of either cash or U.S. government securities. Under the
agreement, the Portfolio continues to earn interest on the securities loaned. If
the collateral received is U.S. government securities, the Portfolio will also
receive from the broker an additional loan premium fee computed as a varying
percentage of the market value of the securities loaned. If the collateral
received is cash, the Portfolio may invest the cash and receive any interest on
the amount invested but it must also pay the broker a loan rebate fee computed
as a varying percentage of the collateral received. The Portfolio did not
receive any loan premium fee during the year ended December 31, 1995, but did
incur $3,656,000 of loan rebate fees which have been included in interest
expense. The maximum liability for cash collateral received for securities
loaned at any month end during the year ended December 31, 1995, was
$64,094,800.
<PAGE>
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(6) FEDERAL INCOME TAX BASIS OF INVESTMENT
The cost and unrealized appreciation/depreciation in the value of investment
securities owned at December 31, 1995, as computed on a United States federal
income tax basis, were as follows:
Aggregate cost $573,306,263
============
Gross unrealized appreciation $ 10,445,033
Gross unrealized depreciation 1,236,135
------------
Net unrealized appreciation $ 9,208,898
============
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(7) FINANCIAL INSTRUMENTS
The Portfolio regularly trades in financial instruments with off-balance sheet
risk in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include written
options, forward foreign currency exchange contracts, and financial 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 the Fund 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/or offsetting transactions are considered.
A summary of obligations under these financial instruments at December 31,
1995 is as follows:
<TABLE>
<CAPTION>
FUTURES CONTRACT NET UNREALIZED
EXPIRATION DATE CONTRACTS POSITION DEPRECIATION
--------------- --------- -------- ------------
<S> <C> <C> <C> <C>
3/96 425 U.S. Treasury Five Year Note Futures Short $(574,068)
=========
At December 31, 1995, the Fund had sufficient cash and/or securities to cover margin requirements on any open futures contracts.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
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TO THE TRUSTEES AND INVESTORS OF
GOVERNMENT OBLIGATIONS PORTFOLIO:
We have audited the accompanying statement of assets and liabilities of
Government Obligations Portfolio, including the portfolio of investments, as of
December 31, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for the two years then ended, and
the supplementary data for the two years then ended December 31, 1995, and 1994
and for the period from October 28, 1993 (start of business), to December 31,
1993. These financial statements and supplementary data are the responsibility
of the Portfolio's management. Our responsibility is to express an opinion on
these 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 as of
December 31, 1995 by correspondence with the custodian and brokers. 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, the financial statements and supplementary data referred to
above present fairly, in all material respects, the financial position of
Government Obligations Portfolio as of December 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for the two
years then ended, and the supplementary data for the two years then ended and
for the period from October 28, 1993 (start of business) to December 31, 1993,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 2, 1996
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INVESTMENT MANAGEMENT FOR GOVERNMENT OBLIGATIONS PORTFOLIO
OFFICERS INDEPENDENT TRUSTEES
JAMES B. HAWKES DONALD R. DWIGHT
President, Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
LANDON T. CLAY
Vice President, Trustee SAMUEL L. HAYES, III
Jacob H. Schiff Professor of
M. DOZIER GARDNER Investment Banking,
Vice President Harvard University Graduate School
of Business Administration
PETER F. KIELY
Vice President and NORTON H. REAMER
Portfolio Manager President and Director,
United Asset Management Corporation
JAMES L. O'CONNNOR JOHN L. THORNDIKE
Treasurer Vice President and Director,
Fiduciary Company Incorporated
THOMAS OTIS
Secretary JACK L. TREYNOR
Investment Adviser and Consultant
