<PAGE> 1
EATON VANCE MUNICIPALS TRUST II
FOR THE FUND:
* EV Traditional Florida Insured Tax Free Fund
- -------------------------------------------------------------------------------
[GRAPHIC]
- -------------------------------------------------------------------------------
ANNUAL SHAREHOLDER REPORT
JANUARY 31, 1995
<PAGE> 2
To Shareholders:
In the 11 months that ended January 31, 1995, EV Traditional Florida Insured
Tax Free Fund paid to its shareholders monthly income dividends of $0.475 per
share.
Based on the most recent dividend paid and the Fund's net asset value of $10.43
per share on January 31, 1995, the Fund's annualized distribution rate was 5.61
percent. To equal that rate in a taxable investment, a couple in the combined
36 percent tax bracket would have to receive 8.77 percent.
As a result of recent Federal tax legislation, certain tax-exempt obligations
acquired by the Portfolio at market discounts have generated a small amount --
1.54 percent -- of ordinary taxable income. The remainder -- 98.46 percent --
remains tax-exempt.
To say that 1994 was a difficult time for fixed-income markets would be an
understatement. According to several reports, 1994 was the worst single year
for bond markets since at least 1927.
Put simply, the troubles experienced by fixed-income markets were the result of
an economy that remained stronger than most observers had anticipated at the
start of the year. In response to this persistent economic strength and in an
attempt to keep inflation in check, the Federal Reserve raised short-term
interest rates a total of six times during the year, thereby depressing bond
prices.
Since the end of 1994, the Fed already has raised interest rates once
again. It's expected that economists and market observers alike will continue to
watch closely both the Fed's actions and the economic indicators, to ensure
that inflation is in check.
The market slide was not the only investment news during 1994. Many
shareholders also may have heard about the problems affecting the investments
of Orange County, CA, and may have wondered whether those problems have in any
way affected non-California Funds. While Orange County bonds were affected, the
market realized that this was an isolated situation and other bonds have not
been affected.
Despite the difficulties that beset the market in 1994, we feel optimistic
about prospects for 1995. The market now appears convinced that the Federal
Reserve is, in fact, keeping a tight watch on inflation. Core inflation was 2.7
percent for 1994.
Also, the changes in Washington that resulted from the November elections could
be positive for financial markets. While it is impossible to predict the
outcomes of government initiatives, it appears that proposals already put
forth to cut spending and taxes could have a positive effect if they are
enacted.
No matter what the economic environment, the goal of your Fund remains the
same: to continue to hold a portfolio of high-quality bonds that provides
shareholders a competitive distribution of tax-exempt income.
For this most recent report, please note that we have made some changes in the
way we describe the individual Funds and their Portfolios. On the following
pages, the fund will be described using a Portfolio Overview, which is a brief
description of the Portfolio's contents, as well as some observations from the
portfolio manager. Of course, we continue to provide a detailed description of
the contents of the Portfolio in the back of this report.
For the first time, we also are including a profile of a specific bond held in
the Portfolio. This information will help you understand the kinds of
investments that we make with your money.
Municipal bonds provide a way for government to raise money for a diverse range
of projects. Shareholders should realize that their Fund's portfolio provides
funding for projects that governments believe will benefit the public, from
road and bridge repairs to industrial development projects.
I hope that you find this additional information useful.
[PHOTO] Sincerely,
THOMAS J. FETTER [Signature]
---------------------
Thomas J. Fetter
President
March 20, 1995
2
<PAGE> 3
EV Traditional Florida Insured Tax Free Fund
[GRAPHIC]
PORTFOLIO OVERVIEW
Based on market value as of Jan. 31, 1995
<TABLE>
<S> <C>
Number of issues .................... 41
Average quality...................... Aaa
Investment grade..................... 100.0%
Effective maturity (years)........... 23.09
Largest sectors:
Insured water and sewer............ 23.6%*
Insured special tax revenue........ 18.6*
Housing............................ 12.2
Insured industrial development..... 8.0*
Insured health care................ 7.0*
</TABLE>
* Private insurance does not remove the market risks associated with this
investment.
FLORIDA IN 1994
The Florida economy turned in generally positive results during the year, with
an improving labor market, as demonstrated by a lower unemployment rate and an
improving housing market.
The state's important tourism industry, while experiencing a slight decrease in
visitors in 1994, was more stable than in recent years because of the improved
national economy.
Analysts expect population growth to continue to be healthy in coming years,
with Florida maintaining its position as the fourth-largest state in terms of
population.
- -------------------------------------------------------------------------------
FROM THE PORTFOLIO MANAGER
"With the Florida economy improving overall during 1994, the state's economic
outlook appears to be positive. We're pleased to be able to provide investors
with high-quality tax exempt investments that contribute to the economic
success of the state of Florida.*"
* A portion of the Fund's income may be subject to Federal alternative minimum
tax
Bond profile: Your money at work [GRAPHIC]
FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION
These bonds are a significant holding in the Portfolio. The state uses the
money to acquire land that is in danger of development and that will help
protect Florida's groundwater.
Some recent projects that have used this money include Silver Springs, a large
wooded reserve near Ocala that had been privately held. Now it is a state
forest protected from development. Other money is being used to restructure the
Kissimmee River to increase water flow into the Everglades.
- -------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EV TRADITIONAL FLORIDA INSURED TAX FREE FUND (INCLUDING SALES CHARGE)
AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
From March 31, 1994, through January 31, 1995
<TABLE>
<S> <C>
CUMULATIVE LIFE OF
TOTAL RETURN FUND*
With maximum 4.75% sales charge 4.0%
Without maximum sales charge 9.2%
</TABLE>
<TABLE>
<CAPTION>
LABEL A C D
- -------------------------------------------------------------------------------
TRADITIONAL TRADITIONAL
FLORIDA FLORIDA
INSURED INSURED
LABEL DATE AT OFFERING LEHMAN BROS AT NAV
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 3/94 9524 10000 10000
- -------------------------------------------------------------------------------
2 4/94 9967 10085 10465
- -------------------------------------------------------------------------------
3 5/94 10099 10172 10604
- -------------------------------------------------------------------------------
4 6/94 10154 10113 10661
- -------------------------------------------------------------------------------
5 7/94 10375 10295 10894
- -------------------------------------------------------------------------------
6 8/94 10365 10331 10883
- -------------------------------------------------------------------------------
7 9/94 10178 10180 10687
- -------------------------------------------------------------------------------
8 10/94 9914 9999 10410
- -------------------------------------------------------------------------------
9 11/94 9686 9818 10170
- -------------------------------------------------------------------------------
10 12/94 10021 10034 10523
- -------------------------------------------------------------------------------
11 1/95 10398 10321 10918
- -------------------------------------------------------------------------------
</TABLE>
Past performance is not indicative of future results. Investment returns and
principal will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. Source: Towers Data Systems,
Bethesda, MD.
*Investment operations commenced 3/3/94. **Index information is available only
at month-end; therefore, the line comparison begins at the next month-end
following the commencement of the Fund's investment operations.
To the left is a performance chart comparing your Fund's total return with that
of a broad-based securities market index. The lines on the chart represent the
total returns of $10,000 hypothetical investments in the Fund and the unmanaged
Lehman Brothers Municipal Bond Index.
The solid line on the chart represents the Fund's performance. The Fund's total
return figure reflects Fund expenses and portfolio transaction costs, and
assumes the reinvestment of income dividends and capital gain distributions.
The dashed line represents the Fund's performance adjusted for maximum sales
charge. It reflects Fund expenses and transaction costs, assumes the
reinvestment of all dividends and capital gain distributions, and includes the
current maximum 4.75% sales charge.
The dotted line represents the performance of the Lehman Brothers Municipal
Bond Index, a broad-based, widely recognized unmanaged index of municipal
bonds. Whereas the Fund's portfolio principally comprises Florida bonds, the
Index is composed of bonds from all 50 states and many jurisdictions. The
Index's total return does not reflect any commissions or expenses that would be
incurred if an investor individually purchased or sold the securities
represented in the Index.
3
<PAGE> 4
EV Traditional Florida Insured Tax Free Fund
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
January 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in Portfolio-
Identified cost $ 1,190,543
Unrealized appreciation 8,509
------------
Total investment in Portfolio, at value (Note 1A) $ 1,199,052
Receivable from other Affiliates 3,574
Receivable from the Administrator (Note 4) 16,043
Deferred organization expenses (Note 1D) 10,505
------------
Total assets $ 1,229,174
------------
LIABILITIES:
Dividends payable $ 5,207
Payables to Affiliate-
Custodian fee 84
Accrued expenses 10,486
------------
Total liabilities $ 15,777
------------
NET ASSETS $ 1,213,397
============
SOURCES OF NET ASSETS:
Paid-in capital $ 1,212,747
Accumulated net realized loss on investment and financial futures
transactions (computed on the basis of identified cost) (7,553)
Accumulated distributions in excess of net investment income (306)
Unrealized appreciation of investments and financial futures contracts
from Portfolio (computed on the basis of identified cost) 8,509
------------
Total $ 1,213,397
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING 116,372
============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets divided by shares of beneficial interest outstanding) $ 10.43
============
COMPUTATION OF OFFERING PRICE
Offering Price per Share (100/95.25 of $10.43) $ 10.95
============
</TABLE>
On sales of $100,000 or more, the offering price is reduced.
See notes to financial statements
4
<PAGE> 5
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
For the Period from the Start of Business, March 3, 1994, to January 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME (NOTE 1B):
Interest income allocated from Portfolio $ 32,115
Expenses allocated from Portfolio (33)
------------
Net investment income from Portfolio $ 32,082
------------
Expenses-
Custodian fees (Note 4) $ 417
Transfer and dividend disbursing agent fees 288
Printing and postage 11,914
Amortization of organization expenses (Note 1D) 2,407
Registration costs 402
Legal and accounting fees 332
Miscellaneous 283
------------
Total expenses $ 16,043
Deduct allocation of expenses to the Administrator (Note 4) 16,043
------------
Net expenses $ -
------------
Net investment income $ 32,082
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from Portfolio --
Investment transactions (identified cost basis) $ (7,035)
Financial futures contracts (518)
------------
Net realized loss on investments $ (7,553)
Unrealized appreciation of investments 8,509
------------
Net realized and unrealized gain on investments $ 956
------------
Net increase in net assets from operations $ 33,038
============
</TABLE>
See notes to financial statements
5
<PAGE> 6
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
For the Period from the Start of Business, March 3, 1994, to January 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 32,082
Net realized loss on investments (7,553)
Change in unrealized appreciation of investments 8,509
------------
Net increase in net assets from operations $ 33,038
------------
Distributions to shareholders (Note 2) -
From net investment income $ (32,082)
In excess of net investment income (306)
------------
Total distributions to shareholders $ (32,388)
------------
Transactions in shares of beneficial interest (Note 3) -
Proceeds from sales of shares $ 1,247,667
Net asset value of shares issued to shareholders in payment of distributions declared 5,083
Cost of shares redeemed (40,013)
------------
Increase in net assets from Fund share transactions $ 1,212,737
------------
Net increase in net assets $ 1,213,387
------------
NET ASSETS:
At beginning of period 10
------------
At end of period $ 1,213,397
============
ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET
INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD $ (306)
============
</TABLE>
See notes to financial statements
6
<PAGE> 7
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
For the Period from the Start of Business, March 3, 1994, to January 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
NET ASSET VALUE, beginning of period $ 10.000
------------
INCOME FROM OPERATIONS:
Net investment income $ 0.509
Net realized and unrealized gain on investments 0.435
------------
Total income from operations $ 0.944
------------
LESS DISTRIBUTIONS:
From net investment income $ (0.509)
In excess of net investment income (0.005)
------------
Total distributions $ (0.514)
------------
NET ASSET VALUE, end of period $ 10.430
============
TOTAL RETURN (2) 9.18%
RATIOS/SUPPLEMENTAL DATA*:
Net assets, end of period (000 omitted) $ 1,213
Ratio of net expenses to average daily net assets (1) 0.01%+
Ratio of net investment income to average daily net assets 5.37%+
</TABLE>
* For the period from the start of business, March 3, 1994, to January 31,
1995, the operating expenses of the Fund and the Portfolio reflect a reduction
of expenses by the Administrator or Investment Adviser. Had such actions not
been taken, net investment income per share and the ratios would have been as
follows:
<TABLE>
<S> <C>
Net investment income per share $ 0.226
============
RATIOS (As a percentage of average daily net assets):
Expenses (1) 3.00%+
Net investment income 2.38%+
</TABLE>
+ Computed on an annualized basis.
(1) Includes the Fund's share of its Portfolio's allocated expenses.
(2) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the payable date, computed on a
non-annualized basis.
See notes to financial statements
7
<PAGE> 8
Notes to Financial Statements
(1) SIGNIFICANT ACCOUNTING POLICIES
EV Traditional Florida Insured Tax Free Fund (the Fund) is a non-diversified
series of Eaton Vance Municipal Trust II (the Trust). The Trust is an entity of
the type commonly known as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund invests all of its investable assets in interests
in the Florida Insured Tax Free Portfolio (the Portfolio), a New York Trust,
having the same investment objective as the Fund. The value of the Fund's
investment in the Portfolio reflects the Fund's proportionate interest in the
net assets of the Portfolio (8.3% at January 31, 1995). The performance of the
Fund is directly affected by the performance of the Portfolio. The financial
statements of the Portfolio, including the portfolio of investments, are
included elsewhere in this report and should be read in conjunction with the
Fund's financial statements. The following is a summary of significant
accounting policies consistently followed by the Trust in the preparation of
its financial statements. The policies are in conformity with generally
accepted accounting principles.
A. INVESTMENT VALUATIONS -- Valuation of securities by the Portfolio is
discussed in Note 1 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.
B. INCOME -- The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund determined in accordance with generally accepted
accounting principles.
C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable and tax-exempt income,
including any net realized gain on investments. Accordingly, no provision for
federal income or excise tax is necessary. At January 31, 1995, the Fund, for
federal income tax purposes had a capital loss carryover of $518, which will
reduce the taxable income arising from future net realized gains on
investments, if any, to the extent permitted by the Internal Revenue Code, and
thus will reduce the amount of the distributions to shareholders which would
otherwise be necessary to relieve the Fund of any liability for federal income
or excise tax. Such capital loss carryover will expire on January 31, 2003. In
addition, at January 31, 1995, net capital losses of $6,759 attributable to
security transactions incurred after October 31, 1994 are treated as arising on
the first day of the Fund's next taxable year. Dividends paid by the Fund from
net interest on tax-exempt municipal bonds allocated from the Portfolio are not
includable by shareholders as gross income for federal income tax purposes
because the Fund and Portfolio intend to meet certain requirements of the
Internal Revenue Code applicable to regulated investment companies which will
enable the Fund to pay exempt-interest dividends. The portion of such interest,
if any, earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item to shareholders.
D. DEFERRED ORGANIZATION EXPENSES -- Costs incurred by the Fund in connection
with its organization, including registration costs, are being amortized on the
straight-line basis over five years, beginning on the date the Fund commenced
operations.
E. OTHER -- Investment transactions are accounted for on a trade date basis.
- -------------------------------------------------------------------------------
(2) DISTRIBUTIONS TO SHAREHOLDERS
The net income of the Fund is determined daily and substantially all of the net
income so determined is declared as a dividend to shareholders of record at the
time of declaration. Distributions are paid monthly. Distributions of allocated
realized capital gains, if any, are made at least annually. Shareholders may
reinvest capital gain distributions in additional shares of the Fund at the net
asset value as of the ex-dividend date. Distributions are paid in the form of
additional shares or, at the election of the shareholder, in cash. The Fund
distinguishes between distributions on a tax basis and a financial reporting
basis. Generally accepted accounting principles require that only distributions
in excess of tax basis earnings and profits be reported in the financial
statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax earnings and
profits which result in temporary over distributions for financial statements
purposes are classified as distributions in excess of net investment income or
accumulated net realized gains. Permanent differences between book and tax
accounting relating to distributions are reclassified to paid-in capital.
8
<PAGE> 9
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares for the period from the start of business, March 3,
1994, to January 31, 1995, were as follows:
<TABLE>
<S> <C>
Sales 119,622
Issued to shareholders electing to receive
payments of distributions in Fund Shares 496
Redemptions (3,747)
-------
Net increase 116,371
=======
</TABLE>
- -------------------------------------------------------------------------------
(4) TRANSACTIONS WITH AFFILIATES
Eaton Vance Management (EVM) serves as the administrator of the Fund, but
receives no compensation. The Portfolio has engaged Boston Management and
Research (BMR), a subsidiary of EVM, to render investment advisory services.
See Note 2 of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report. To enhance the net income of the Fund, $16,043 of
expenses related to the operation of the Fund were allocated to EVM. Except as
to Trustees of the Fund and the Portfolio who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services to
the Fund out of such investment adviser fee. Investors Bank & Trust Company
(IB&T), an affiliate of EVM, serves as custodian to the Fund and the Portfolio.
Pursuant to the respective custodian agreements, IB&T receives a fee reduced by
credits which are determined based on the average cash balances the Fund or the
Portfolio maintains with IB&T. Certain of the officers and Trustees of the Fund
and of the Portfolio are officers and directors/trustees of the above
organizations (Note 5).
- -------------------------------------------------------------------------------
(5) SERVICE PLAN
The Fund adopted a Service Plan on February 25, 1994 designed to meet the
requirements of Rule 12b-1 under the Investment Company Act of 1940 and the
service fee requirements of the revised sales charge rule of The National
Association of Securities Dealers, Inc. The Service Plan provides that the Fund
may make service fee payments to the Principal Underwriter, Eaton Vance
Distributors, Inc., a subsidiary of Eaton Vance Management, Authorized Firms or
other persons in amounts not exceeding 0.25% of the Fund's average daily net
assets for any fiscal year. The Trustees have initially implemented the Plan by
authorizing the Fund to make quarterly service fee payments to the Principal
Underwriter and Authorized Firms in amounts not exceeding 0.20% of the Fund's
average daily net assets for any fiscal year which is attributable to shares of
the Fund sold by such persons and remaining outstanding for at least one year.
Service fee payments are made for personal services and/or the maintenance of
shareholder accounts. No provision for service fee payments was made for the
period from the start of business, March 3, 1994, to January 31, 1995.
Certain of the officers and Trustees of the Funds are officers or
directors of EVD.
- -------------------------------------------------------------------------------
(6) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio for the
period from the start of business March 3, 1994, to January 31, 1995 aggregated
$1,249,765 and $83,762, respectively.
9
<PAGE> 10
INDEPENDENT AUDITORS' REPORT
To the Trustees and Investors of
Eaton Vance Municipals Trust II:
We have audited the accompanying statement of assets and liabilities of EV
Traditional Florida Insured Tax Free Fund (one of the series constituting Eaton
Vance Municipals Trust II) as of January 31, 1995, and the related statement of
operations, the statement of changes in net assets and the financial highlights
for the period from the start of business, March 3, 1994, to January 31, 1995.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based upon our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Fund at January
31, 1995, the results of its operations, the changes in its net assets and its
financial highlights for the period from the start of business, March 3, 1994,
to January 31, 1995, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE, LLP
Boston, Massachusetts
March 2, 1995
10
<PAGE> 11
Florida Insured Tax Free Portfolio
Portfolio of Investments - January 31, 1995
- -------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS- 100%
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED) PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ESCROWED -- 4.2%
Aaa AAA $500 Gainesville Florida Utility
System, 8.125%, 10/1/14 $595,615
-----------
HOUSING -- 12.2%
Aaa NR $500 Broward County HFA
(FNMA Backed), 6.55%,
8/1/19 (AMT) $489,260
Aaa NR 750 Escambia HFA SFMR
(GNMA Backed), 7.00%,
4/1/28 (2) 756,007
Aaa AAA 500 Duval County HFA SFMR
(GNMA Backed), 6.70%,
10/1/26 (AMT) 487,765
-----------
$1,733,032
-----------
INSURED EDUCATION -- 2.5%
Aaa AAA $400 University of Florida
(MBIA), 5.50%, 7/1/23 $355,976
-----------
INSURED GENERAL OBLIGATIONS -- 4.3%
Aaa AAA $750 Puerto Rico (MBIA),
5.00%, 7/1/21 $616,163
-----------
INSURED HEALTHCARE -- 7.0%
Aaa AAA $1,200 Tampa Allegany Health
System -- St. Joseph's
(MBIA), 5.125%,
12/1/23 (3) $994,296
-----------
INSURED HOSPITALS -- 5.5%
Aaa AAA $450 Dade Florida Public Facilities,
Jackson Memorial Hospital,
(MBIA), 5.625%, 6/1/18 $405,994
Aaa AAA 200 Dade Florida Public Facilities,
Jackson Memorial Hospital,
(MBIA), 4.875%, 6/1/15 162,838
Aaa AAA 50 Hillsborough County Hospital
Authority, Tampa General
Hospital (FSA), 6.375%,
10/1/13 50,227
Aaa AAA 75 Lakeland Hospital System
Regional Medical Center
(FGIC), 5.75%, 11/15/15 69,676
Aaa AAA 75 Palm Beach Florida Health
Facilities Authority, JFK
Medical Center, (FSA)
5.80%, 12/1/18 69,357
-----------
$758,092
-----------
INSURED HOUSING -- 6.2%
Aaa AAA $410 Dade County Florida
Housing Finance Authority,
Lincoln Fields Apartments
(MBIA), 6.25%, 7/1/24 $384,404
Aaa Aaa 500 Florida HFA Maitland
Club Apartments Project
(AMBAC), 6.875%, 8/1/26 (2) 502,210
-----------
$886,614
-----------
INSURED INDUSTRIAL DEVELOPMENT REVENUE -- 8.0%
Aaa AAA $445 Citrus County PCR- FL
Power & Light (MBIA),
6.35%, 2/1/22 $447,189
Aaa AAA 750 Escambia County PCR-
Gulf Power (MBIA), 5.80%,
6/1/23 689,588
-----------
$1,136,777
-----------
INSURED SOLID WASTE -- 0.7%
Aaa AAA $100 Broward County Solid
Waste System (MBIA),
6.00%, 7/1/13 (AMT) $95,495
-----------
INSURED SPECIAL TAX REVENUES -- 18.6%
Aaa AAA $450 Escambia County
(FGIC), 5.80%, 1/1/15 $420,300
Aaa AAA 150 Florida State Department
of Natural Resources
(FSA), 5.80%, 7/1/13 141,264
</TABLE>
11
<PAGE> 12
FLORIDA INSURED TAX FREE PORTFOLIO (CONTINUED)
- -------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED) PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaa AAA 1,225 Florida State Department
of Environmental Preservation
(MBIA), 4.75%, 7/1/09 1,058,400
Aaa AAA 250 Orange County Florida
Tourist Development
(MBIA), 6.00%, 10/1/24 239,962
Aaa AAA 795 St. Petersburg Excise Tax
(FGIC), 5.00%, 10/1/16 670,408
Aaa AAA 340 Sunrise Florida Public
Facilities (MBIA), 0%, 10/1/15 92,208
-----------
$2,622,542
-----------
INSURED TRANSPORTATION -- 4.7%
Aaa AAA $700 Florida State Turnpike
Authority (FGIC), 5.00%,
7/1/19 $576,765
Aaa AAA 50 Greater Orlando Aviation
Authority (FGIC),
6.375%, 10/1/21 (AMT) 49,395
Aaa AAA 50 Orlando & Orange
County Expressway
Authority Junior Lien
(FGIC), 5.125%, 7/1/20 41,937
-----------
$668,097
-----------
INSURED UTILITIES -- 2.5%
Aaa AAA $305 New Smyrna Beach Florida
Utility System (FGIC),
5.00%, 10/1/19 $251,723
Aaa AAA 50 Key West Florida Utility
(AMBAC), 6.75%, 10/1/13 51,746
Aaa AAA 50 Puerto Rico Electric
Power Authority Revenue
Bonds-Stripes, (FSA),
Variable, 7/1/02 (1) 50,619
-----------
$354,088
-----------
INSURED WATER & SEWER -- 23.6%
Aaa AAA $50 Broward County Water and
Sewer Utility (AMBAC),
5.00%, 10/1/18 $41,576
Aaa AAA 75 City of Cocoa Water and
Sewer System (AMBAC),
5.00%, 10/1/23 60,951
Aaa AAA 500 Englewood Water District
Utility System (FSA),
6.00%, 10/1/19 477,095
Aaa AAA 735 Enterprise Community
Water & Sewer (MBIA),
6.125%, 5/1/24 (3) 715,912
Aaa AAA 75 City of Key West Sewer
(FGIC), 5.70%, 10/1/26 67,534
Aaa AAA 70 City of North Port Utility
System (FGIC), 6.25%,
10/1/17 69,992
Aaa AAA 500 City of North Port Utility
System (FGIC), 6.25%,
10/1/22 (3) 496,690
Aaa AAA 65 City of Palm Bay Utility
System (MBIA), 5.00%,
10/1/19 53,646
Aaa AAA 50 Reedy Creek Florida
Utility (MBIA), 5.00%,
10/1/19 41,426
Aaa AAA 155 Sanford Florida Water &
Sewer (AMBAC), 4.50%,
10/1/21 116,918
Aaa AAA 400 Titusville Florida Water
& Sewer (MBIA), 6.00%,
10/1/24 385,496
Aaa AAA 1,000 Vero Beach Water & Sewer
(FGIC), 5.00%, 12/1/21 822,640
-----------
$3,349,876
-----------
TOTAL TAX-EXEMPT INVESTMENTS -----------
(IDENTIFIED COST, $13,938,422) $14,166,663
===========
</TABLE>
12
<PAGE> 13
FLORIDA INSURED TAX FREE PORTFOLIO (CONTINUED)
- -------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (CONTINUED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS (UNAUDITED) PRINCIPAL
AMOUNT
STANDARD (000
MOODY'S & POOR'S OMITTED) SECURITY VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
(1) The above designated securities have been issued as inverse floater
bonds.
(2) When-issued security
(3) At January 31, 1995, the market value of securities segregated to
cover when-issued securities amounted to $2,206,898
The Portfolio invests primarily in debt securities issued by Florida
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 January 31, 1995, 83.7% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentages, based on
total investments, by financial institution were as follows at January 31,
1995:
<TABLE>
<S> <C>
AMBAC, Inc. (AMBAC) 5.5%
Financial Guaranty Insurance Corp. (FGIC) 25.0%
Financial Security Assurance Inc. (FSA) 5.6%
Municipal Bond Investors Assurance Corp. (MBIA) 47.6%
-----
83.7%
-----
</TABLE>
See notes to financial statements.
13
<PAGE> 14
Florida Insured Tax Free Portfolio
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
January 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments-
Identified cost $ 13,938,422
Unrealized appreciation 228,241
------------
Total investments, at value (Note 1A) $ 14,166,663
Cash 1,284,005
Receivable from the Investment Adviser (Note 2) 13,139
Interest receivable 194,758
Deferred organization expenses (Note 1D) 9,902
------------
Total assets $ 15,668,467
------------
LIABILITIES:
Payable for investments purchased $ 1,265,667
Payable to Affiliates-
Trustees fees 13
Custodian fee 250
Accrued Expenses 2,586
------------
Total liabilities $ 1,268,516
------------
NET ASSETS applicable to investors' interest in Portfolio $ 14,399,951
============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and withdrawals $ 14,171,710
Unrealized appreciation of investments
(computed on the basis of identified cost) 228,241
------------
Total $ 14,399,951
============
</TABLE>
See notes to financial statements
14
<PAGE> 15
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
For the Period from the Start of Business, March 2, 1994, to January 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income $ 308,363
---------
Expenses -
Investment adviser fee (Note 2) $ 8,420
Compensation of Trustees not members of the Investment Adviser's organization 53
Custodian fee (Note 2) 3,818
Bond pricing 2,986
Printing 2,592
Amortization of organization expenses (Note 1D) 2,227
Legal and accounting services 1,126
Miscellaneous 729
---------
Total expenses $ 21,951
---------
Deduct -
Reduction of investment adviser fee (Note 2) $ 8,420
Allocation of expenses to the Investment Adviser (Note 2) 13,139
---------
Total $ 21,559
---------
Net expenses $ 392
---------
Net investment income $ 307,971
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) -
Investment transactions (identified cost basis) $ (54,985)
Financial futures contracts (2,527)
---------
Net realized loss on investments $ (57,512)
Unrealized appreciation of investments 228,241
---------
Net realized and unrealized gain on investments $ 170,729
---------
Net increase in net assets from operations $ 478,700
=========
</TABLE>
See notes to financial statements
15
<PAGE> 16
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
For the Period from the Start of Business, March 2, 1994, to January 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 307,971
Net realized loss on investment transactions (57,512)
Unrealized appreciation of investments 228,241
------------
Net increase in net assets from operations $ 478,700
------------
Capital transactions -
Contributions $ 16,016,246
Withdrawals (2,195,015)
------------
Increase in net assets resulting from capital transactions $ 13,821,231
------------
Total increase in net assets $ 14,299,931
NET ASSETS:
At beginning of period 100,020
------------
At end of period $ 14,399,951
============
</TABLE>
See notes to financial statements
16
<PAGE> 17
SUPPLEMENTARY DATA
- -------------------------------------------------------------------------------
For the Period from the Start of Business, March 2, 1994, to January 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
RATIOS (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)**:
Net expenses 0.01%+
Net investment income 5.73%+
PORTFOLIO TURNOVER 33%
</TABLE>
** The operating expenses of the Portfolio reflect a reduction of the
investment adviser fee and allocation of expenses to the Investment Adviser.
Had such actions not been taken, the ratios would have been as follows:
<TABLE>
<S> <C>
RATIOS (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS):
Expenses 0.41%+
Net investment income 5.33%+
</TABLE>
+ Annualized.
See notes to financial statements
17
<PAGE> 18
Notes to Financial Statements
(1) SIGNIFICANT ACCOUNTING POLICIES
Florida Insured Tax Free Portfolio ("Florida Insured Portfolio") is registered
under the Investment Company Act of 1940 as a non-diversified open-end
management investment company which was organized as a trust under the laws of
the State of New York on October 25, 1993. The Declaration of Trust permits the
Trustees to issue 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 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 listed on commodity
exchanges are valued at closing settlement 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 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 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 taxable (if any) and tax-exempt
investment income, net realized capital gains, and any other items of income,
gain, loss, deductions or credit. Interest income received by the Portfolio 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 the 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 the 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, the 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 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 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. Should interest rates
move unexpectedly, the Portfolio may not achieve the anticipated benefits of
the financial futures contracts and may realize a loss.
F. WHEN-ISSUED AND DELAYED TRANSACTIONS -- The Portfolio may engage in
when-issued or delayed delivery transactions. The Portfolio records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis are
marked to market daily and begin accruing interest on the settlement date.
G. OTHER -- Investment transactions are accounted for on a trade date basis.
18
<PAGE> 19
(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 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 period ended January 31, 1995, the fee was equivalent to 0.16% (annualized)
of the Portfolio's average net assets for such period and amounted to $8,420.
To enhance the net income of the Portfolio, BMR made a reduction of its fee in
the amount of $8,420 and $13,139 of expenses related to the operation of the
Portfolio was allocated to BMR. 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. Investors Bank & Trust Company (IB&T), an affiliate of EVM and BMR, serves
as custodian of the Portfolio. Pursuant to the custodian agreement, IB&T
receives a fee reduced by credits which are determined based on the average
daily cash balances the Portfolio maintains with IB&T. Certain of the officers
and Trustees of the Portfolio are officers and directors/trustees 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 portion of their
annual fees in accordance with the terms of the Trustees Deferred Compensation
Plan. For the period from the start of business, March 2, 1994, to January 31,
1995, no significant amounts have been deferred.
- -------------------------------------------------------------------------------
(3) INVESTMENTS
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $15,828,032 and $1,844,032, respectively.
- -------------------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investments
owned by the Portfolio at January 31, 1995, as computed on a federal income tax
basis, are as follows:
<TABLE>
<S> <C>
Aggregate Cost $ 13,938,422
============
Gross unrealized appreciation $ 330,938
Gross unrealized depreciation 102,697
------------
Net unrealized appreciation $ 228,241
============
</TABLE>
- -------------------------------------------------------------------------------
(5) 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 a $100 million
discretionary facility. Borrowings will be made by the Portfolio 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 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 funds and
portfolios at the end of each quarter. The Portfolio did not have any
significant borrowings or allocated fees during the period.
- -------------------------------------------------------------------------------
(6) FINANCIAL INSTRUMENTS
The Portfolio regularly trades in financial instruments with off-balance sheet
risk in the normal course of their investing activities to assist in managing
exposure to various market risks. These financial instruments include written
options and 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.
The Portfolio had no such obligations open at January 31, 1995.
19
<PAGE> 20
INDEPENDENT AUDITORS' REPORT
To the Trustees and Investors of
Florida Insured Tax Free Portfolio:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Florida Insured Tax Free Portfolio as of
January 31, 1995, and the related statement of operations, the statement of
changes in net assets and supplementary data for the period from the start of
business, March 2, 1994, to January 31, 1995. These financial statements and
supplementary data are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
supplementary data based upon our audit.
We conducted our audit 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 January
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 audit provides 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 Florida Insured Tax
Free Portfolio at January 31, 1995, the results of its operations, the changes
in its net assets and its supplementary data for the period from the start of
business, March 2, 1994, to January 31, 1995, in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
March 2, 1995
20
<PAGE> 21
Investment Management
- --------------------------------------------------------------------------------
EV TRADITIONAL FLORIDA INSURED TAX FREE FUND
24 Federal Street
Boston, MA 02110
OFFICERS
THOMAS J. FETTER
President
JAMES B. HAWKES
Vice President, Trustee
ROBERT MACINTOSH
Vice President
JAMES L. O'CONNOR
Treasurer
DOUGLAS C. MILLER
Assistant Treasurer
THOMAS OTIS
Secretary
JANET E. SANDERS
Assistant Treasurer and
Assistant Secretary
INDEPENDENT TRUSTEES
DONALD R. DWIGHT
President, Dwight Partners, Inc.
Chairman, Newspaper of New England, Inc.
SAMUEL L. HAYES, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate
School of Business Administration
NORTON H. REAMER
President and Director, United Asset
Management Corporation
JOHN L. THORNDIKE
Director, Fiduciary Trust Company
JACK L. TREYNOR
Investment Adviser and Consultant
- -------------------------------------------------------------------------------
FLORIDA INSURED TAX FREE PORTFOLIO
24 Federal Street
Boston, MA 02110
OFFICERS
THOMAS J. FETTER
President and Portfolio Manager of Florida
Insured Tax Free Portfolio
JAMES B. HAWKES
Vice President, Trustee
ROBERT MACINTOSH
Vice President
JAMES L. O'CONNOR
Treasurer
DOUGLAS C. MILLER
Assistant Treasurer
THOMAS OTIS
Secretary
JANET E. SANDERS
Assistant Treasurer and
Assistant Secretary
INDEPENDENT TRUSTEES
DONALD R. DWIGHT
President, Dwight Partners, Inc.
Chairman, Newspaper of New England, Inc.
SAMUEL L. HAYES, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate
School of Business Administration
NORTON H. REAMER
President and Director, United Asset
Management Corporation
JOHN L. THORNDIKE
Director, Fiduciary Trust Company
JACK L. TREYNOR
Investment Adviser and Consultant
21
<PAGE> 22
PORTFOLIO INVESTMENT ADVISER
Boston Management and Research
24 Federal Street
Boston, MA 02110
FUND ADMINISTRATOR
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
22
<PAGE> 23
(THIS SPACE INTENTIONALLY LEFT BLANK)
23
<PAGE> 24
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Funds, including
distribution plan, sales charges and expenses. Please read the prospectus
carefully before you invest or send money.
EV TRADITIONAL FLORIDA INSURED TAX FREE FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-FLISRC
