<PAGE>
UTILITIES PORTFOLIO AS OF DECEMBER 31, 1999
PORTFOLIO OF INVESTMENTS
<TABLE>
<S> <C> <C>
COMMON STOCKS -- 86.4%
SECURITY SHARES VALUE
<S> <C> <C>
- -----------------------------------------------------------------------
Broadcasting and Cable -- 1.2%
- -----------------------------------------------------------------------
Ovation, Inc.(1)(2) 285,787 $ 2,857,870
Young Broadcasting, Inc., Class A(2) 80,000 4,080,000
- -----------------------------------------------------------------------
$ 6,937,870
- -----------------------------------------------------------------------
Communications Equipment -- 2.3%
- -----------------------------------------------------------------------
Alcatel ADR 75,000 $ 3,375,000
LM Ericsson Telephone Co., ADR 85,000 5,583,437
Nokia Corp. ADR 10,000 1,900,000
TranSwitch Corp.(2) 35,000 2,539,687
- -----------------------------------------------------------------------
$ 13,398,124
- -----------------------------------------------------------------------
Computer Software -- 3.7%
- -----------------------------------------------------------------------
BCE, Inc. 105,000 $ 9,469,687
Netcom Systems, AB(3) 100,000 6,999,860
SilverStream Software, Inc.(2) 20,000 2,380,000
SonicWALL, Inc.(2) 20,000 805,000
Wind River Systems, Inc.(2) 50,000 1,831,250
- -----------------------------------------------------------------------
$ 21,485,797
- -----------------------------------------------------------------------
Electric Utilities -- 16.3%
- -----------------------------------------------------------------------
Calpine Corp.(2) 70,500 $ 4,512,000
Cleco Corp. 300,000 9,618,750
DPL, Inc. 600,000 10,387,500
DQE, Inc. 450,000 15,581,250
Edison International 50,000 1,309,375
Illinova Corp. 315,000 10,946,250
Kansas City Power and Light Co. 115,000 2,537,187
LG & E Energy Corp. 120,000 2,092,500
National Grid Group plc(3) 800,000 6,072,880
Niagra Mohawk Holdings, Inc.(2) 120,000 1,672,500
Nisource, Inc. 600,000 10,725,000
Pinnacle West Capital Corp. 400,000 12,225,000
PowerGen plc(3) 57,530 412,611
ScottishPower plc ADR 140,500 3,934,000
Sierra Pacific Resources 144,000 2,493,000
- -----------------------------------------------------------------------
$ 94,519,803
- -----------------------------------------------------------------------
Gas Utilities -- 5.2%
- -----------------------------------------------------------------------
Columbia Energy Group 75,000 $ 4,743,750
El Paso Energy Corp. 75,000 2,910,938
MCN Energy Group, Inc. 100,000 2,375,000
Mitchell Energy & Development Corp.,
Class B 67,400 1,453,313
SECURITY SHARES VALUE
<S> <C> <C>
- -----------------------------------------------------------------------
Gas Utilities (continued)
- -----------------------------------------------------------------------
National Fuel Gas Co. 100,000 $ 4,650,000
NICOR, Inc. 155,000 5,037,500
Peoples Energy Corp. 110,000 3,685,000
San Juan Basin Royalty Trust 500,000 5,187,500
- -----------------------------------------------------------------------
$ 30,043,001
- -----------------------------------------------------------------------
Machinery and Engineering -- 1.3%
- -----------------------------------------------------------------------
Mannesmann AG(3) 30,000 $ 7,276,704
- -----------------------------------------------------------------------
$ 7,276,704
- -----------------------------------------------------------------------
REITS -- 0.5%
- -----------------------------------------------------------------------
Annaly Mortgage, Inc. 144A(2)(4) 350,000 $ 3,062,500
- -----------------------------------------------------------------------
$ 3,062,500
- -----------------------------------------------------------------------
Telecommunications Services -- 7.7%
- -----------------------------------------------------------------------
Adelphia Business Solutions, Inc.(2) 115,000 $ 5,520,000
BEA Systems, Inc.(2) 30,000 2,098,125
Broadwing, Inc. 100,000 3,687,500
Digex, Inc.(2) 65,000 4,468,750
Equant NV(2) 40,000 4,480,000
GRIC Communications, Inc.(2) 15,000 380,625
Infonet Services Corp. ADR(2) 80,000 2,100,000
ITC DeltaCom, Inc.(2) 50,000 1,381,250
Jazztel plc ADR(2) 5,000 325,625
NBC Internet, Inc.(2) 10,000 772,500
PSINet, Inc.(2) 25,000 1,543,750
Sonera Corp. ADR(2) 85,000 5,886,250
Thus plc(3) 350,000 2,205,595
Verio, Inc.(2) 25,000 1,154,688
Versatel Telecom International NV ADR(2) 250,000 8,734,375
- -----------------------------------------------------------------------
$ 44,739,033
- -----------------------------------------------------------------------
Telephone Utilities -- 44.9%
- -----------------------------------------------------------------------
Airgate PCS, Inc.(2) 20,000 $ 1,055,000
Alltel Corp. 110,000 9,095,625
Bell Atlantic Corp. 275,000 16,929,688
BellSouth Corp. 85,000 3,979,063
Call-Net Enterprises Inc.-B 160,000 535,008
CenturyTel, Inc. 80,000 3,790,000
Clearnet Communications, Inc.(2) 40,000 1,375,000
Energis(2)(3) 816,259 39,124,926
Esat Telecom Group plc ADR(2) 40,000 3,660,000
GTE Corp. 350,000 24,696,875
Helsingin Puhelin Oyj(3) 73,850 6,121,449
MCI Worldcom, Inc.(2) 52,500 2,785,781
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
UTILITIES PORTFOLIO AS OF DECEMBER 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
SECURITY SHARES VALUE
<S> <C> <C>
- -----------------------------------------------------------------------
Telephone Utilities (continued)
- -----------------------------------------------------------------------
Microcell Telecommunications, Inc.(2) 120,000 $ 3,945,000
Nippon Telegraph and Telephone Corp. 70,000 6,028,750
Omnipoint Corp.(2) 95,000 11,459,375
Portugal Telecom SA(3) 100,000 1,091,510
Primus Telecommunications Group, Inc.(2) 105,000 4,016,250
RSL Communications, Ltd.(2) 92,500 1,584,063
SBC Communications, Inc. 1,107,960 54,013,050
Sprint Corp. 550,000 37,021,875
Tele Danmark(3) 15,350 1,135,071
Telecom Italia SpA(3) 900,000 10,003,950
US West, Inc. 140,000 10,080,000
Vodafone AirTouch plc ADR 50,000 2,475,000
Western Wireless Corp., Class A(2) 45,000 3,003,750
Z-Tel Technologies, Inc.(2) 15,625 630,859
- -----------------------------------------------------------------------
$259,636,918
- -----------------------------------------------------------------------
Utilities - Electrical and Gas -- 3.3%
- -----------------------------------------------------------------------
Constellation Energy Group 90,000 $ 2,610,000
MDU Resources Group, Inc. 100,000 2,000,000
Montana Power Co. 100,000 3,606,250
NSTAR 75,000 3,037,500
PG&E Corp. 50,000 1,025,000
SCANA Corp. 260,000 6,987,500
- -----------------------------------------------------------------------
$ 19,266,250
- -----------------------------------------------------------------------
Total Common Stocks
(identified cost $347,633,607) $500,366,000
- -----------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS -- 8.8%
SECURITY SHARES VALUE
<S> <C> <C>
- -----------------------------------------------------------------------
Gas Utilities -- 2.6%
- -----------------------------------------------------------------------
El Paso Energy Capital Trust 300,000 $ 15,112,500
- -----------------------------------------------------------------------
$ 15,112,500
- -----------------------------------------------------------------------
Telephone Utilities -- 6.2%
- -----------------------------------------------------------------------
Omnipoint Corp.(4) 180,000 $ 35,550,000
- -----------------------------------------------------------------------
$ 35,550,000
- -----------------------------------------------------------------------
Total Convertible Preferred Stocks
(identified cost $23,725,147) $ 50,662,500
- -----------------------------------------------------------------------
WARRANTS -- 0.0%
SECURITY SHARES VALUE
<S> <C> <C>
- -----------------------------------------------------------------------
REITS -- 0.0%
- -----------------------------------------------------------------------
Walden Residential(2) 340,000 $ 1,700
- -----------------------------------------------------------------------
$ 1,700
- -----------------------------------------------------------------------
Total Warrants
(identified cost $0) $ 1,700
- -----------------------------------------------------------------------
CONVERTIBLE BONDS -- 3.3%
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C>
- -----------------------------------------------------------------------
Bell Atlantic Financial, 4.25%,
9/15/05(4) $ 5,500 $ 6,765,000
NTL, Inc., 7.00%, 12/15/08(4) 3,500 9,152,500
Ovation, Inc. (PIK), 9.75%, 2/23/01(1) 3,117 3,116,808
- -----------------------------------------------------------------------
Total Convertible Bonds
(identified cost, $12,893,058) $ 19,034,308
- -----------------------------------------------------------------------
COMMERCIAL PAPER -- 1.6%
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
<S> <C> <C>
- -----------------------------------------------------------------------
SBC Communications, Inc., 4.70%, 1/3/00 $ 9,476 $ 9,473,526
- -----------------------------------------------------------------------
Total Commercial Paper
(at amortized cost, $9,473,526) $ 9,473,526
- -----------------------------------------------------------------------
Total Investments -- 100.1%
(identified cost $393,725,338) $579,538,034
- -----------------------------------------------------------------------
Other Assets, Less Liabilities -- (0.1)% $ (447,665)
- -----------------------------------------------------------------------
Net Assets -- 100.0% $579,090,369
- -----------------------------------------------------------------------
</TABLE>
ADR - American Depositary Receipt
(PIK) - Payment in kind.
(1) Security valued at fair value using methods determined in good faith by or
at the direction of the Trustees.
(2) Non-income producing security.
(3) Foreign security.
(4) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
UTILITIES PORTFOLIO AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
<S> <C>
Assets
- ------------------------------------------------------
Investments, at value (identified cost,
$393,725,338) $579,538,034
Cash 4,672
Receivable for investments sold 1,127,766
Dividends and interest receivable 1,250,660
Miscellaneous receivable 15,211
Tax reclaim receivable 7,099
- ------------------------------------------------------
TOTAL ASSETS $581,943,442
- ------------------------------------------------------
Liabilities
- ------------------------------------------------------
Payable for investments purchased $ 2,813,238
Payable to affiliate for Trustee's fees 6,362
Accrued expenses 33,473
- ------------------------------------------------------
TOTAL LIABILITIES $ 2,853,073
- ------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $579,090,369
- ------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $393,281,944
Net unrealized appreciation (computed on
the basis of identified cost) 185,808,425
- ------------------------------------------------------
TOTAL $579,090,369
- ------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1999
<S> <C>
Investment Income
- ------------------------------------------------------
Dividends (net of foreign taxes,
$44,938) $ 10,759,912
Interest 1,189,780
Miscellaneous 52,643
- ------------------------------------------------------
TOTAL INVESTMENT INCOME $ 12,002,335
- ------------------------------------------------------
Expenses
- ------------------------------------------------------
Investment adviser fee $ 3,236,300
Trustees' fees and expenses 29,845
Custodian fee 254,760
Legal and accounting services 47,629
Interest expense 26,348
Miscellaneous 4,102
- ------------------------------------------------------
TOTAL EXPENSES $ 3,598,984
- ------------------------------------------------------
NET INVESTMENT INCOME $ 8,403,351
- ------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $125,097,015
Foreign currency transactions (17,451)
- ------------------------------------------------------
NET REALIZED GAIN $125,079,564
- ------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 43,688,318
Foreign currency (5,793)
- ------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ 43,682,525
- ------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $168,762,089
- ------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $177,165,440
- ------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
UTILITIES PORTFOLIO AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INCREASE (DECREASE) YEAR ENDED YEAR ENDED
IN NET ASSETS DECEMBER 31, 1999 DECEMBER 31, 1998
<S> <C> <C>
- ------------------------------------------------------------------------------
From operations --
Net investment income $ 8,403,351 $ 13,457,660
Net realized gain 125,079,564 5,496,806
Net change in unrealized appreciation
(depreciation) 43,682,525 75,228,993
- ------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 177,165,440 $ 94,183,459
- ------------------------------------------------------------------------------
Capital transactions --
Contributions $ 20,219,337 $ 17,840,966
Withdrawals (77,910,493) (65,817,239)
- ------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (57,691,156) $ (47,976,273)
- ------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 119,474,284 $ 46,207,186
- ------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------
At beginning of year $ 459,616,085 $ 413,408,899
- ------------------------------------------------------------------------------
AT END OF YEAR $ 579,090,369 $ 459,616,085
- ------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
UTILITIES PORTFOLIO AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ------------------------------------------------------------------------------------------
Operating expenses 0.72% 0.72% 0.74% 0.82% 0.81%
Interest expense --(1) 0.16% 0.01% 0.03(1) 0.03(1)
Net investment income 1.68% 3.13% 4.42% 5.94% 4.83%
Portfolio Turnover 93% 78% 169% 166% 103%
- ------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $579,090 $459,616 $413,409 $455,067 $521,670
- ------------------------------------------------------------------------------------------
</TABLE>
Certain prior year ratios have been restated to conform to the current year
presentation.
(1) Less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
UTILITIES PORTFOLIO AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
- -------------------------------------------
Utilities Portfolio (the Portfolio), is registered under the Investment
Company Act of 1940 as a diversified open-end management investment company
which was organized as a trust under the laws of the State of New York on May
1, 1992. Under normal circumstances the Portfolio invests at least 65% of its
total assets in common stocks of utilities companies. The Declaration of
Trust permits the Trustees to issue beneficial interests in the Portfolio.
The following is a summary of significant accounting policies of the
Portfolio. The policies are in conformity with generally accepted accounting
principles.
A Investment Valuation -- Securities listed on securities exchanges or in the
NASDAQ National Market are valued at closing sales prices or, if there has
been no sale, at the mean between the closing bid and asked prices. Unlisted
securities are valued at the mean between the latest available bid and asked
prices. Options and financial futures contracts are valued at the last sale
price, as quoted on the principal exchange or board of trade on which such
options or contracts are traded or, in the absence of a sale, the mean
between the last bid and asked prices. Short-term obligations, maturing in 60
days or less, are valued at amortized cost, which approximates value. Other
fixed income and debt securities, including listed securities and securities
for which price quotations are available, will normally be valued on the
basis of valuations furnished by a pricing service. Securities for which
market quotations are unavailable are appraised at their fair value as
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. Dividend income is recorded on the ex-dividend date for
dividends received in cash and/or securities. However, if the ex-dividend
date has passed, certain dividends from foreign securities are recorded as
the Portfolio is informed of the ex-dividend date. Dividend income may
include dividends that represent returns of capital for federal income tax
purposes.
C 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 one of the
Portfolio's investors is a regulated investment company that invests all or
substantially all of its assets in the Portfolio, the Portfolio normally must
satisfy the applicable source of income and diversification requirements
(under the Internal Revenue Code) in order for its investors to satisfy them.
The Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net investment income, net
realized capital gains, and any other items of income, gain, loss, deduction
or credit. Withholding taxes on foreign dividends and capital gains have been
provided for in accordance with the Portfolio's understanding of the
applicable countries' tax rules and rates.
D Foreign Currency Translation -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing on
the respective dates of such transactions. Recognized gains or losses on
investment transactions attributable to changes in foreign currency exchange
rates are recorded for financial statement purposes as net realized gains and
losses on investments. That portion of unrealized gains and losses on
investments that results from fluctuations in foreign currency exchange rates
is not separately disclosed.
E Option Accounting Principles -- Upon the writing of a covered call 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 market
value of the option written in accordance with the Portfolio's policies on
investment valuations discussed above. Premiums received from writing call
options which expire are treated as realized gains. Premiums received from
writing call 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. The Portfolio, as writer of a call option, may have no
control over whether the underlying securities may be sold and, as a result,
bears the market risk for an unfavorable change in the price of the
securities underlying the written option.
F Financial Futures Contracts -- Upon the entering of 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 security, and are
recorded for book purposes as unrealized
20
<PAGE>
UTILITIES PORTFOLIO AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
gains or losses by the Portfolio. The Portfolio's investment in financial
futures contracts is designed only to hedge against anticipated future
changes in interest rates, security prices, commodity prices or currency
exchange rates. Should interest rates, security prices, commodity prices or
currency exchange rates move unexpectedly, the Portfolio may not achieve the
anticipated benefits of the financial futures contracts and may realize a
loss. 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.
G Delayed Delivery Transactions -- The Portfolio may purchase or sell
securities on a when-issued or forward commitment basis. Payment and delivery
may take place at a period in time after the date of the transaction. At the
time the transaction is negotiated, the price of the security that will be
delivered and paid for is fixed. Losses may arise due to changes in the
market value of the underlying securities if the counterparty does not
perform under the contract.
H Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to the Portfolio. Pursuant to the respective custodian agreements, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balances the Portfolio maintains with IBT. All significant credit
balances used to reduce the Portfolio's custodian fees are reported as a
reduction of expenses on the Statement of Operations. For the year ended
December 31, 1999, $3,021 credit balances were used to reduce the Portfolio's
custodian fee.
I Other -- Investment transactions are accounted for on a trade date basis.
Realized gains and losses are computed based on the specific identification
of the securities sold.
J Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income 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 the Portfolio.
The fee is at the annual rate of 0.75% of the Portfolio's average daily net
assets up to $500 million and at reduced rates as daily net assets exceed
that level. In addition, the Trustees voted to accept a waiver of BMR's
compensation so that advisory fees paid will not exceed 0.65% on an annual
basis on assets up to $500 million and at reduced rates thereafter. For the
year ended December 31, 1999, the fee was equivalent to 0.65% of the
Portfolio's average daily net assets for such period and amounted to
$3,236,300. 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 services to the Portfolio out of such investment adviser fee. Certain
officers and Trustees of the Portfolio are officers of the above
organizations. 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, 1999, no significant
amounts have been deferred.
3 Investment Transactions
- -------------------------------------------
Purchases and sales of investments, other than short-term obligations,
aggregated $444,761,865 and
$481,690,394, respectively.
4 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at December 31, 1999, as computed on a federal income tax
basis, were as follows:
<TABLE>
<S> <C>
AGGREGATE COST $ 394,393,450
-------------------------------------------------------
Gross unrealized appreciation $ 190,151,085
Gross unrealized depreciation (5,006,501)
-------------------------------------------------------
NET UNREALIZED APPRECIATION $ 185,144,584
-------------------------------------------------------
</TABLE>
5 Line of Credit
- -------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $150 million unsecured line of credit agreement
with a group of banks. The Portfolio may temporarily borrow from the line of
credit to satisfy redemption requests or settle investment transactions.
Interest is charged to each portfolio or fund based on its borrowings at an
amount above 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
21
<PAGE>
UTILITIES PORTFOLIO AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
the line of credit is allocated among the participating portfolios and funds
at the end of each quarter. The average daily loan balance for the year ended
December 31, 1999 was $476,088 and the average interest rate was 5.53%. At
December 31, 1999, the Portfolio did not have a loan outstanding under this
agreement.
6 Financial Instruments
- -------------------------------------------
The Portfolio may trade 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
Portfolio has in particular classes of financial instruments and does not
necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered. At December 31,
1999 there were no outstanding obligations under these financial instruments.
22
<PAGE>
UTILITIES PORTFOLIO AS OF DECEMBER 31, 1999
INDEPENDENT ACCOUNTANTS' REPORT
TO THE TRUSTEES AND INVESTORS
OF UTILITIES PORTFOLIO
- ---------------------------------------------
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and supplementary data present fairly, in all material
respects, the financial position of Utilities Portfolio (the "Portfolio") at
December 31, 1999, and the results of its operations, the changes in its net
assets and the supplementary data for the periods indicated, in conformity with
accounting principles generally accepted in the United States. These financial
statements and supplementary data (hereafter referred to as "financial
statements") are the responsibility of the Portfolio's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at December 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 9, 2000
23
<PAGE>
EATON VANCE UTILITIES FUND AS OF DECEMBER 31, 1999
INVESTMENT MANAGEMENT
UTILITIES PORTFOLIO
Officers
James B. Hawkes
President and Trustee
Judith A. Saryan
Vice President and
Portfolio Manager
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking Emeritus, Harvard University
Graduate School of Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
24
