<PAGE>
[EV LOGO] MUTUAL FUNDS
FOR PEOPLE [PHOTO OF BRICK WALL WITH EDUCATION PLAQUE]
WHO PAY
TAXES
Semiannual Report July 31, 1999
[PHOTO OF HIGHWAY AT NIGHT] EATON VANCE
MUNICIPALS Florida Insured
TRUST II
Hawaii
Global Management-Global Distribution
Kansas
[PHOTO OF SUSPENSION BRIDGE]
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
- -------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
- -------------------------------------------------------------------------------
[PHOTO] The first six months of 1999 proved to be increasingly
challenging for the municipal market. At the outset,
continued low inflation provided a fairly positive
Thomas J. Fetter environment for the tax-exempt sector. The U.S. economy grew
President 4.6% in the first quarter, before posting a more moderate
2.3% growth rate in the second quarter. Inflation appeared
to remain fairly well in check, although rising energy prices and labor cost
pressures caught the eye of the Federal Reserve. In late June, the Fed raised
its Federal funds rate -- a key short-term interest rate barometer -- by 25
basis points (.25%), and repeated the move in August.
Municipal bonds gained ground on Treasuries in the first quarter of 1999, as
supply pressures, which weighed so heavily on the municipal market in 1998,
eased somewhat early in the year. In June and July, however, the municipal
market encountered some turmoil amid uncertainty about possible Federal
Reserve actions as well as confusion over tax proposals pending in the
Congress. For the six month period ended July 31, 1999, the Lehman Brothers
Municipal Bond Index* -- a widely recognized, unmanaged index of municipal
bonds -- posted a return of 1.83%.
MUNICIPAL BONDS REMAIN AN
UNDERVALUED ASSET CLASS...
Municipal bonds remained significantly undervalued relative to Treasury
bonds. The numbers are most compelling. At July 31, the ratio of municipal
yields to Treasury yields was 91% - very high by historical standards. Market
anomalies such as this often create unusual opportunities. Indeed,
considering their tax-exempt status, municipal bonds appear to be an
excellent bargain for income-oriented investors.
*It is not possible to invest directly in an Index.
- -------------------------------------------------------------------------------
Municipal bonds yield 91% of Treasury yields
-------------------------------------------------------
|
5.55% | 8.67%
|
---------------------------------------------------------
30-Year AAA-rated Taxable equivalent yield
General Obligation (GO) Bonds* in 36% tax bracket
-------------------------------------
6.10%
-------------------------------------
30-Year Treasury Bond
Principal and interest payments of Treasury securities are guaranteed by the
U.S. Government.
*GO yields are a compilation of a representative variety of general
obligations and are not necessarily representative of a Fund's yield.
Statistics as of July 31, 1999.
Past performance is no guarantee of future results.
Source: Bloomberg, L.P.
- -------------------------------------------------------------------------------
WITH THE 2000 ELECTIONS NEARING,
TAX REFORM HAS ONCE AGAIN BECOME
A POLITICAL FOOTBALL...
Once again, the prospects of lower taxes are threatened by a political
stalemate in Washington. The administration has threatened to veto recent tax
cuts passed by Congress. Meanwhile, taxpayers continue to bear the burden of
high taxes while facing the challenge of paying for college tuition, caring
for elderly parents, or trying to plan for retirement.
At Eaton Vance, we believe that, amid rising surpluses and modest inflation
pressures, the outlook for municipal bonds is quite favorable. And, at their
recent levels, municipal bonds remain an especially attractive fixed-income
alternative. In this uncertain climate, municipals represent a prudent way to
diversify one's investment portfolio while lowering one's tax burden. We
believe that municipals merit strong consideration from today's tax-conscious
investors.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter
President
September 9, 1999
- -------------------------------------------------------------------------------
MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED.
YIELDS WILL CHANGE.
- -------------------------------------------------------------------------------
2
<PAGE>
EATON VANCE FLORIDA INSURED MUNICIPALS FUND AS OF JULY 31, 1999
- -------------------------------------------------------------------------------
INVESTMENT UPDATE
- -------------------------------------------------------------------------------
[PHOTO] The Economy
------------------------------------
- The Florida economy expanded further in the first half of
1999, with the fast-growing service sector leading the
Cynthia J. Clemson way. Propelled by tourism and retirement services, Florida
Portfolio Manager has added 300,000 employees to its service sector payrolls
in the past three years alone. The July jobless rate was
just 3.8%, down from 4.2% a year earlier.
- - Tourism continued to rebound following last year's devastating wildfires.
Theme park and convention business posted strong gains, as Central Florida
opened new parks, accompanied by the construction of new hotels, restaurants,
retirement communities and entertainment facilities.
- - Florida's manufacturing sector has weakened in 1999 in response to slower
foreign demand. Exports, which slowed to a 5% growth rate in 1998, have
suffered from continued weak demand from Asia, with citrus fruits and chemical
exports especially hard-hit.
The Fund
- ------------------------------------
- - During the six months ended July 31, 1999, the Fund's Class A and Class B
shares had total returns of -3.2% and -3.6%, respectively.(1) For Class A,
this return resulted from a decline in net asset value (NAV) per share to
$10.91 on July 31, 1999 from $11.54 on January 31, 1999, and the reinvestment
of $0.268 per share in tax-free income.(2) For Class B, this return resulted
from a decline in NAV to $10.78 from $11.40, and the reinvestment of $0.221
per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999 of $10.91
per share for Class A and $10.78 per share for Class B, the distribution rates
were 4.95% and 4.13%, respectively.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 4.58% and
4.00%, respectively.(4)
Management Update
- ------------------------------------
- - Insured* water and sewer issues represented one of the Portfolio's largest
sector weightings at July 31. As local communities struggle to accommodate
their sharply rising populations, Florida has seen an ample supply of
water-related projects come to market.
- - The Portfolio found some excellent opportunities in special assessment
district bonds. Used as an alternative to general obligations, special
assessment district bonds are typically issued to finance infrastructural
improvements in fast-growing communities.
- - The Portfolio was again characterized by the extremely high quality of its
investments, with 98.7% of the Portfolio rated AAA at July 31. That is an
important consideration for conservative, quality-conscious investors.
Portfolio Statistics(5)
- ------------------------------------
- - Number of Issues: 46
- - Average Maturity: 24.5 years
- - Average Rating: AAA
- - Average Call: 7.8 years
- - Average Dollar Price: $95.68
Rating Distribution(5)
- ------------------------------------
[PIE CHART]
AAA 98.7%
Non-Rated 1.3%
- -------------------------------------------------------------------------------
FUND INFORMATION
AS OF JULY 31, 1999
PERFORMANCE(6) Class A Class B
- -------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 0.9% 0.2%
Five Years 5.7 5.1
Life of Fund+ 6.9 6.0
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year -3.9% -4.6%
Five Years 4.7 4.8
Life of Fund+ 6.0 5.9
+Inception date: Class A: 3/3/94; Class B: 3/2/94
Five Largest Sectors(5)
- -------------------------------------------------------------------------------
By total investments
[BAR GRAPH]
INSURED -- SPECIAL TAX REVENUE* 18.0%
INSURED -- WATER AND SEWER* 17.3%
HOUSING 13.2%
INSURED -- TRANSPORTATION* 11.7%
INSURED -- HOUSING* 9.4%
(1) These returns do not include the 4.75% maximum sales charge for the
Fund's Class A shares or the applicable contingent deferred sales charges
(CDSC) for Class B shares. (2) Aportion of the Fund's income could be subject
to federal income tax and/or alternative minimum tax. Income may be subject
to state intangibles tax. (3) The Fund's distribution rate represents actual
distributions paid to shareholders and is calculated by dividing the last
distribution per share (annualized) by the net asset value. (4) The Fund's
SEC yield is calculated by dividing the net investment income per share for
the 30-day period by the offering price at the end of the period and
annualizing the result. (5) Portfolio Statistics, Rating Distribution, and
Five Largest Sectors may not be representative of the Portfolio's future
investments. Five Largest Sectors represent 69.6% of the Portfolio's
investments. In the opinion of management, the non-rated portion of the Fund
represents bonds that, if rated, would warrant an investment-grade rating.
(6) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns for
Class A reflect the maximum 4.75% sales charge. SEC returns for Class B
reflect applicable CDSC based on the following schedule: 5% - 1st and 2nd
years; 4% -3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th year.
* Private insurance does not decrease the risk of loss of principal
associated with this investment.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
3
<PAGE>
EATON VANCE HAWAII MUNICIPALS FUND AS OF JULY 31, 1999
- -------------------------------------------------------------------------------
INVESTMENT UPDATE
- -------------------------------------------------------------------------------
[PHOTO] The Economy
------------------------------------
- Following years of decline, the Hawaiian economy has
finally shown signs of a turnaround, with unemployment
Robert B. MacIntosh falling to 5.4% in July from 6.3% a year earlier. While
Portfolio Manager job growth in past years has been dominated by government
programs, recent growth has been tied to private industry,
including retail trade, air transportation, and hotels.
- - Hawaii's tourism industry is mounting a comeback, with total visitor counts
rising 1% in the first quarter of the year. While the weak economy in Japan
has discouraged eastbound arrivals, the state has enjoyed a 7% surge in
mainland and other westbound traffic.
- - The construction sector has shown signs of life. While the weak yen continues
to hamper resort real estate sales, low interest rates and bargain prices are
stirring home re-sales. On the commercial front, new retailers are taking
advantage of low prices to establish a beachhead in the valuable Hawaii
market.
The Fund
- ------------------------------------
- - During the six months ended July 31, 1999, the Fund's Class A and Class B
shares had total returns of -2.9% and -3.4%, respectively.(1) For Class A,
this return resulted from a decrease in net asset value (NAV) per share to
$9.52 on July 31, 1999 from $10.05 on January 31, 1999, and the reinvestment
of $0.242 per share in tax-free income.(2) For Class B, this return resulted
from a decrease in NAV to $9.65 from $10.20, and the reinvestment of $0.211
per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999 of $9.52
per share for Class A and $9.65 per share for Class B, the distribution rates
were 5.13% and 4.40%, respectively.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 4.76% and
4.28%, respectively.(4)
Management Update
- ------------------------------------
- - As new issuance of Hawaii bonds remained sparse, the Portfolio's trading
activities were limited. Honolulu issues remained core holdings. The Portfolio
maintained positions in Honolulu general obligations as well as in bonds for
the city's wastewater treatment system.
- - The Portfolio remained very selective with respect to the Hawaii hospital bond
market. The upheaval that has characterized the hospital industry in the
mainland U.S. has recently been felt in Hawaii, with changing reimbursement
policies and shorter patient stays exerting cost pressures on the crowded
Hawaii market.
- - With the municipal market marked by continued calls of higher-coupon bonds,
the Portfolio again emphasized call protection, trading short-call bonds for
those with longer call dates.
Portfolio Statistics(5)
- ------------------------------------
- - Number of Issues: 44
- - Average Maturity: 22.4 years
- - Average Rating: AA
- - Average Call: 8.9 years
- - Average Dollar Price: $95.60
Rating Distribution(5)
- ------------------------------------
[PIE CHART]
AAA 52.2%
AA 21.7%
A 11.1%
BBB 8.2%
BB 5.8%
Non-Rated 1.0%
- -------------------------------------------------------------------------------
FUND INFORMATION
AS OF JULY 31, 1999
Performance(6) Class A Class B
- -------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 1.8% 0.7%
Five Years 5.4 5.0
Life of Fund+ 4.3 4.2
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year -3.1% -4.2%
Five Years 4.4 4.7
Life of Fund+ 3.3 4.1
+Inception date: Class A: 3/14/94; Class B: 3/2/94
FIVE LARGEST SECTORS(5)
- -------------------------------------------------------------------------------
BY TOTAL INVESTMENTS
[BAR GRAPH]
HOSPITALS 16.0%
INSURED -- GENERAL OBLIGATIONS* 15.7%
TRANSPORTATION 9.9%
INSURED -- ELECTRIC UTILITIES* 8.7%
INSURED -- TRANSPORTATION* 8.5%
(1) These returns do not include the 4.75% maximum sales charge for the
Fund's Class A shares or the applicable contingent deferred sales charges
(CDSC) for Class B shares. (2) A portion of the Fund's income could be
subject to federal income tax and/or alternative minimum tax. Income may be
subject to state tax. (3) The Fund's distribution rate represents actual
distributions paid to shareholders and is calculated by dividing the last
distribution per share (annualized) by the net asset value. (4) The Fund's
SEC yield is calculated by dividing the net investment income per share for
the 30-day period by the offering price at the end of the period and
annualizing the result. (5) Portfolio Statistics, Rating Distribution, and
Five Largest Sectors may not be representative of the Portfolio's future
investments. Five Largest Sectors represent 58.8% of the Portfolio's
investments. (6) Returns are historical and are calculated by determining the
percentage change in net asset value with all distributions reinvested. SEC
returns for Class A reflect the maximum 4.75% sales charge. SEC returns for
Class B reflect applicable CDSC based on the following schedule: 5% - 1st and
2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th year.
* Private insurance does not decrease the risk of loss of principal
associated with this investment.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
4
<PAGE>
EATON VANCE KANSAS MUNICIPALS FUND AS OF JULY 31, 1999
- -------------------------------------------------------------------------------
INVESTMENT UPDATE
- -------------------------------------------------------------------------------
[PHOTO] The Economy
------------------------------------
- The Kansas economy registered brisk job growth in the
first half of 1999, with personal income growth only
Timothy T. Browse slightly lower than in 1998. New businesses continue
Portfolio Manager to generate new jobs. Dun & Bradstreet reported that
Kansas ranked fifth among states in new business
formation, growing 11% in 1999.
- - Durable goods manufacturing remained strong in Kansas, especially in the
transportation sectors. Raytheon Aircraft was awarded additional Defense
Department contracts, while Boeing, Inc. enjoyed a large order backlog for its
Next Generation 737 aircraft, parts of which are manufactured in Witchita.
- - Western Kansas' energy producers have suffered significantly from the
recession in Asia and Latin America, as weak foreign economies have resulted
in lower energy demand. Meanwhile, the Kansas farm sector has struggled with
the worst drought conditions in decades.
The Fund
- ------------------------------------
- - During the six months ended July 31, 1999, the Fund's Class A and Class B
shares had total returns of -2.4% and -2.7%, respectively.(1) For Class A,
this return resulted from a decrease in net asset value (NAV) per share to
$9.97 on July 31, 1999 from $10.47 on January 31, 1999, and the reinvestment
of $0.256 per share in tax-free income.(2) For Class B, this return resulted
from a decrease in NAV to $9.88 from $10.37, and the reinvestment of $0.214
per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on July 31, 1999 of $9.97
per share for Class A and $9.88 per share for Class B, the distribution rates
were 5.15% and 4.33%, respectively.(3)
- - The SEC 30-day yields for Class A and B shares at July 31 were 4.46% and
3.90%, respectively.(4)
Management Update
- ------------------------------------
- - Management continued its barbell approach in the thinly-trade Kansas market.
Where possible, the Portfolio improved call protection through the purchase of
non-callable bonds. Separately, the Portfolio added zero coupon issues to add
capital appreciation potential.
- - Housing bonds were the Portfolio's largest sector weighting. Single and
multi-family projects have tended to provide attractive yields while also
affording excellent liquidity.
- - Hospital bonds were also a significant investment. In a fast-changing health
care environment, the Portfolio focused on institutions with competitive
strengths, including a reputation for health care specialties, favorable
demographics, and a history of containing costs.
Portfolio Statistics(5)
- ------------------------------------
- - Number of Issues: 50
- - Average Maturity: 20.3 years
- - Average Rating: AA+
- - Average Call: 7.6 years
- - Average Dollar Price: $96.91
Rating Distribution(5)
- ------------------------------------
[PIE CHART]
AAA 66.7%
AA 14.3%
A 6.4%
BBB 9.7%
Non-Rated 2.9%
- -------------------------------------------------------------------------------
FUND INFORMATION
AS OF JULY 31, 1999
Performance(6) Class A Class B
- -------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- -------------------------------------------------------------------------------
One Year 1.4% 0.7%
Five Years 5.4 5.0
Life of Fund+ 5.2 4.9
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -------------------------------------------------------------------------------
One Year -3.4% -4.1%
Five Years 4.4 4.7
Life of Fund+ 4.2 4.7
+Inception date: Class A: 3/3/94 Class B: 3/2/94
FIVE LARGEST SECTORS(5)
- -------------------------------------------------------------------------------
BY TOTAL INVESTMENTS(5)
[BAR GRAPH]
HOUSING 20.1%
GENERAL OBLIGATIONS 12.5%
INSURED -- HOSPITAL* 11.7%
INSURED -- GENERAL OBLIGATIONS* 11.1%
INSURED -- ELECTRIC UTILITIES* 6.8%
(1) These returns do not include the 4.75% maximum sales charge for the
Fund's Class A shares or the applicable contingent deferred sales charges
(CDSC) for Class B shares. (2) Aportion of the Fund's income could be subject
to federal income tax and/or alternative minimum tax. Income may be subject
to state tax. (3) The Fund's distribution rate represents actual
distributions paid to shareholders and is calculated by dividing the last
distribution per share (annualized) by the net asset value. (4) The Fund's
SEC yield is calculated by dividing the net investment income per share for
the 30-day period by the offering price at the end of the period and
annualizing the result. (5) Portfolio Statistics, Rating Distribution, and
Five Largest Sectors may not be representative of the Portfolio's future
investments. Five Largest Sectors represent 62.2% of the Portfolio's
investments. (6) Returns are historical and are calculated by determining the
percentage change in net asset value with all distributions reinvested. SEC
returns for Class A reflect the maximum 4.75% sales charge. SEC returns for
Class B reflect applicable CDSC based on the following schedule: 5% - 1st and
2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th year.
* Private insurance does not decrease the risk of loss of principal
associated with this investment.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
5
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED
FUND HAWAII FUND KANSAS FUND
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Assets
- ----------------------------------------------------------------------------------------------------------------------
Investment in Portfolio --
Identified cost $28,586,887 $ 19,043,514 $ 12,880,777
Unrealized appreciation 367,673 311,188 56,311
- ----------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN PORTFOLIO, AT VALUE $28,954,560 $ 19,354,702 $ 12,937,088
- ----------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 100,171 49 2,879
- ----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $29,054,731 $ 19,354,751 $ 12,939,967
- ----------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------
Dividends payable $ 54,354 $ 34,751 $ 21,215
Payable for Fund shares redeemed 42,942 -- 14,695
Payable to affiliate for Trustees' fees 134 134 132
Other accrued expenses 9,251 8,286 5,914
- ----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 106,681 $ 43,171 $ 41,956
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS $28,948,050 $ 19,311,580 $ 12,898,011
- ----------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Paid-in capital $28,422,466 $ 19,222,285 $ 12,870,928
Accumulated net realized gain (loss) from Portfolio
(computed on the basis of identified cost) 127,409 (192,580) (1,395)
Accumulated undistributed (distributions in excess of)
net investment income 30,502 (29,313) (27,833)
Net unrealized appreciation from Portfolio
(computed on the basis of identified cost) 367,673 311,188 56,311
- ----------------------------------------------------------------------------------------------------------------------
TOTAL $28,948,050 $ 19,311,580 $ 12,898,011
- ----------------------------------------------------------------------------------------------------------------------
Class A Shares
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 6,113,512 $ 304,553 $ 2,189,794
SHARES OUTSTANDING 560,388 32,000 219,632
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial interest outstanding) $ 10.91 $ 9.52 $ 9.97
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of net asset value per share) $ 11.45 $ 9.99 $ 10.47
- ----------------------------------------------------------------------------------------------------------------------
Class B Shares
- ----------------------------------------------------------------------------------------------------------------------
NET ASSETS $22,834,538 $ 19,007,027 $ 10,708,217
SHARES OUTSTANDING 2,119,121 1,968,920 1,084,370
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial interest outstanding) $ 10.78 $ 9.65 $ 9.88
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED
FUND HAWAII FUND KANSAS FUND
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Investment Income
- ----------------------------------------------------------------------------------------------------------------------
Interest allocated from Portfolios $ 788,365 $ 541,234 $ 351,178
Expenses allocated from Portfolios (47,613) -- --
- ----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIOS $ 740,752 $ 541,234 $ 351,178
- ----------------------------------------------------------------------------------------------------------------------
Expenses
- ----------------------------------------------------------------------------------------------------------------------
Trustees fees and expenses $ 194 $ 194 $ 194
Distribution and service fees
Class A 3,596 258 1,426
Class B 103,028 86,605 50,420
Transfer and dividend disbursing agent fees 12,886 10,744 6,429
Legal and accounting services 7,294 6,701 6,701
Printing and postage 5,400 5,400 5,400
Custodian fee 1,973 1,973 1,973
Amortization of organization expenses 500 895 616
Registration fees 180 900 180
Miscellaneous 1,463 1,026 687
- ----------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 136,514 $ 114,696 $ 74,026
- ----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 604,238 $ 426,538 $ 277,152
- ----------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolios
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 78,195 $ 35,221 $ (64,951)
Financial futures contracts 18,161 47,434 11,892
- ----------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ 96,356 $ 82,655 $ (53,059)
- ----------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments $(1,740,259) $ (1,169,410) $(581,712)
Financial futures contracts -- -- 732
- ----------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $(1,740,259) $ (1,169,410) $(580,980)
- ----------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(1,643,903) $ (1,086,755) $(634,039)
- ----------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $(1,039,665) $ (660,217) $(356,887)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JULY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED
Increase (Decrease) in Net Assets FUND HAWAII FUND KANSAS FUND
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 604,238 $ 426,538 $ 277,152
Net realized gain (loss) 96,356 82,655 (53,059)
Net change in unrealized appreciation (depreciation) (1,740,259) (1,169,410) (580,980)
- ----------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $(1,039,665) $ (660,217) $ (356,887)
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (144,490) $ (7,110) $ (50,142)
Class B (452,622) (411,004) (227,010)
In excess of net investment income
Class A -- -- (648)
Class B -- -- (3,486)
- ----------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (597,112) $ (418,114) $ (281,286)
- ----------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 872,693 $ 62,386 $ 729,560
Class B 2,417,781 1,118,547 492,415
Net asset value of shares issued
to shareholders in payment of
distributions declared
Class A 57,012 5,632 37,005
Class B 174,215 182,189 130,462
Cost of shares redeemed
Class A (374,800) (6,804) (36,536)
Class B (1,368,504) (1,079,175) (600,896)
- ----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS $ 1,778,397 $ 282,775 $ 752,010
- ----------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ 141,620 $ (795,556) $ 113,837
- ----------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------
At beginning of period $28,806,430 $ 20,107,136 $ 12,784,174
- ----------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $28,948,050 $ 19,311,580 $ 12,898,011
- ----------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of)
net investment income
included in net assets
- ----------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $ 30,502 $ (29,313) $ (27,833)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JANUARY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED
Increase (Decrease) in Net Assets FUND HAWAII FUND KANSAS FUND
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,093,636 $ 841,995 $ 500,972
Net realized gain 86,945 265,220 73,451
Net change in unrealized appreciation (depreciation) 432,527 (88,908) 20,907
- ----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,613,108 $ 1,018,307 $ 595,330
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (176,713) $ (16,646) $ (64,105)
Class B (912,251) (824,101) (436,867)
In excess of net investment income
Class A -- -- (1,487)
Class B -- (38,387) (21,739)
From net realized gain
Class A -- -- (8,732)
Class B -- -- (62,972)
- ----------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $(1,088,964) $ (879,134) $ (595,902)
- ----------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 3,726,286 $ 68,224 $ 519,968
Class B 3,463,956 2,096,709 1,638,898
Issued in reorganization of EV Traditional
Municipals Funds
Class A 2,748,790 300,865 1,223,080
Net asset value of shares issued
to shareholders in payment of
distributions declared
Class A 56,951 14,016 51,968
Class B 358,409 370,407 293,314
Cost of shares redeemed
Class A (832,835) (127,811) (234,770)
Class B (3,212,340) (2,155,033) (757,439)
- ----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS $ 6,309,217 $ 567,377 $ 2,735,019
- ----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 6,833,361 $ 706,550 $ 2,734,447
- ----------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------
At beginning of year $21,973,069 $ 19,400,586 $ 10,049,727
- ----------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $28,806,430 $ 20,107,136 $ 12,784,174
- ----------------------------------------------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of)
net investment income
included in net assets
- ----------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 23,376 $ (37,737) $ (23,699)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FLORIDA INSURED FUND
--------------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
SIX MONTHS ENDED --------------------------------------------------------------------
JULY 31, 1999
(UNAUDITED) 1999 1998 1997 1996 1995(1)
-------------------------- -------------------- -------- -------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $11.540 $11.400 $11.370 $11.230 $10.710 $11.090 $10.260 $10.000
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.269 $ 0.223 $ 0.569 $ 0.467 $ 0.488 $ 0.499 $ 0.512 $ 0.456
Net realized and unrealized
gain (loss) (0.631) (0.622) 0.153 0.170 0.511 (0.385) 0.832 0.304
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.362) $(0.399) $ 0.722 $ 0.637 $ 0.999 $ 0.114 $ 1.344 $ 0.760
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.268) $(0.221) $(0.552) $(0.467) $(0.479) $(0.494) $(0.512) $(0.456)
In excess of net investment
income -- -- -- -- -- -- (0.002) (0.044)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.268) $(0.221) $(0.552) $(0.467) $(0.479) $(0.494) $(0.514) $(0.500)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $10.910 $10.780 $11.540 $11.400 $11.230 $10.710 $11.090 $10.260
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) (3.18)% (3.55)% 6.52% 5.82% 9.57% 1.14% 13.39% 7.10%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 6,114 $22,835 $ 5,905 $22,901 $21,973 $21,717 $18,391 $11,596
Ratios (As a percentage of
average daily net
assets):
Net expenses(3)(4) 0.70%(5) 1.48%(5) 0.46% 1.25% 1.23% 1.21% 1.10% 0.75%(5)
Net expenses after
custodian fee
reduction(3) 0.66%(5) 1.44%(5) 0.39% 1.18% 1.16% 1.12% 1.00% --
Net investment income 4.81%(5) 4.03%(5) 4.86% 4.15% 4.50% 4.67% 4.76% 4.79%(5)
- ---------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the investment adviser fee, an allocation of
expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios and net investment income per share
would have been as follows:
Ratios (As a percentage of
average daily net
assets):
Expenses(3)(4) 0.58% 1.37% 1.65% 1.51% 1.49% 1.62%(5)
Expenses after custodian
fee reduction(3) 0.51% 1.30% 1.58% 1.42% 1.39% --
Net investment income 4.74% 4.03% 4.08% 4.37% 4.37% 3.92%(5)
Net investment income per
share $ 0.555 $ 0.453 $ 0.443 $ 0.467 $ 0.470 $ 0.374
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, March 2, 1994, to January 31,
1995.
(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
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(3) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(4) The expense ratios for the year ended January 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratios by the effect of
any expense offset arrangements with its service providers. The expense
ratios for the period ended January 31, 1995 have not been adjusted to
reflect this change.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
HAWAII FUND
--------------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
SIX MONTHS ENDED --------------------------------------------------------------------
JULY 31, 1999
(UNAUDITED)(1) 1999 1998 1997 1996 1995(2)
-------------------------- -------------------- -------- -------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $10.050 $10.200 $ 9.930 $10.130 $ 9.730 $ 9.980 $ 9.150 $10.000
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.242 $ 0.214 $ 0.534 $ 0.431 $ 0.441 $ 0.466 $ 0.484 $ 0.434
Net realized and unrealized
gain (loss) (0.530) (0.553) 0.078 0.090 0.418 (0.241) 0.835 (0.805)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.288) $(0.339) $ 0.612 $ 0.521 $ 0.859 $ 0.225 $ 1.319 $(0.371)
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.242) $(0.211) $(0.492) $(0.431) $(0.441) $(0.466) $(0.484) $(0.434)
In excess of net investment
income -- -- -- (0.020) (0.018) (0.009) (0.005) (0.045)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.242) $(0.211) $(0.492) $(0.451) $(0.459) $(0.475) $(0.489) $(0.479)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.520 $ 9.650 $10.050 $10.200 $10.130 $ 9.730 $ 9.980 $ 9.150
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (2.90)% (3.36)% 6.34% 5.29% 9.08% 2.40% 14.74% (4.01)%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 305 $19,007 $ 259 $19,848 $19,401 $15,552 $15,126 $12,601
Ratios (As a percentage of
average daily net
assets):
Net expenses(4)(5) 0.48%(6) 1.20%(6) 0.45% 1.18% 1.27% 1.20% 1.05% 0.87%(6)
Net expenses after
custodian fee
reduction(4) 0.46%(6) 1.18%(6) 0.41% 1.14% 1.24% 1.15% 0.98% --
Net investment income 4.99%(6) 4.33%(6) 5.35% 4.27% 4.47% 4.81% 5.03% 5.03%(6)
- ---------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the investment adviser fee, an allocation of
expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios and net investment income per share
would have been as follows:
Ratios (As a percentage of
average daily net
assets):
Expenses(4)(5) 0.88%(6) 1.60%(6) 0.69% 1.42% 1.70% 1.61% 1.53% 1.41%(6)
Expenses after custodian
fee reduction(4) 0.86%(6) 1.58%(6) 0.65% 1.38% 1.67% 1.56% 1.46% --
Net investment income 4.59%(6) 3.93%(6) 5.11% 4.03% 4.04% 4.40% 4.51% 4.49%(6)
Net investment income per
share $ 0.222 $ 0.194 $ 0.510 $ 0.407 $ 0.399 $ 0.426 $ 0.434 $ 0.387
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the start of business, March 2, 1994, to January 31,
1995.
(3) 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
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) The expense ratios for the year ended January 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratios by the effect of
any expense offset arrangements with its service providers. The expense
ratios for the period ended January 31, 1995 have not been adjusted to
reflect this change.
(6) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KANSAS FUND
--------------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
SIX MONTHS ENDED --------------------------------------------------------------------
JULY 31, 1999
(UNAUDITED)(1) 1999(1) 1998 1997 1996 1995(2)
-------------------------- -------------------- -------- -------- -------- --------
CLASS A CLASS B CLASS A CLASS B CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $10.470 $10.370 $10.460 $10.380 $10.080 $10.320 $ 9.560 $10.000
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.252 $ 0.210 $ 0.505 $ 0.429 $ 0.458 $ 0.479 $ 0.481 $ 0.435
Net realized and unrealized
gain (loss) (0.496) (0.487) 0.082 0.071 0.414 (0.238) 0.761 (0.393)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.244) $(0.277) $ 0.587 $ 0.500 $ 0.872 $ 0.241 $ 1.242 $ 0.042
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.252) $(0.210) $(0.505) $(0.429) $(0.462) $(0.473) $(0.481) $(0.435)
In excess of net investment
income (0.004) (0.003) (0.012) (0.021) --(3) -- (0.001) (0.047)
From net realized gain -- -- (0.060) (0.060) (0.110) (0.008) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.256) $(0.213) $(0.577) $(0.510) $(0.572) $(0.481) $(0.482) $(0.482)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.970 $ 9.880 $10.470 $10.370 $10.380 $10.080 $10.320 $ 9.560
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) (2.36)% (2.70)% 5.77% 4.96% 8.87% 2.46% 13.26% 0.16%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 2,190 $10,708 $ 1,561 $11,223 $10,050 $10,492 $10,782 $ 7,753
Ratios (As a percentage of
average daily net
assets):
Net expenses(5)(6) 0.54%(7) 1.33%(7) 0.49% 1.28% 1.38% 1.25% 1.20% 0.75%(7)
Net expenses after
custodian fee
reduction(5) 0.48%(7) 1.27%(7) 0.43% 1.22% 1.33% 1.15% 1.08% --
Net investment income 4.93%(7) 4.17%(7) 4.83% 4.14% 4.48% 4.77% 4.79% 4.81%(7)
- ---------------------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Fund and the Portfolio may reflect a reduction of the investment adviser fee, an allocation of
expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios and net investment income per share
would have been as follows:
Ratios (As a percentage of
average daily net
assets):
Expenses(5)(6) 1.02%(7) 1.81%(7) 0.79% 1.58% 1.90% 1.68% 1.59% 1.60%(7)
Expenses after custodian
fee reduction(5) 0.96%(7) 1.75%(7) 0.73% 1.52% 1.85% 1.58% 1.47% --
Net investment income 4.45%(7) 3.69%(7) 4.53% 3.84% 3.96% 4.34% 4.40% 3.96%(7)
Net investment income per
share $ 0.227 $ 0.186 $ 0.474 $ 0.398 $ 0.405 $ 0.436 $ 0.442 $ 0.397
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the start of business, March 2, 1994, to January 31,
1995.
(3) Distributions in excess of net investment income are less than $0.001 per
share.
(4) 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
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(5) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(6) The expense ratios for the year ended January 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratios by the effect of
any expense offset arrangements with its service providers. The expense
ratios for the period ended January 31, 1995 have not been adjusted to
reflect this change.
(7) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
Eaton Vance Municipals Trust II (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 Trust presently consists of four Funds, three of
which are included in these financial statements. They include Eaton Vance
Florida Insured Municipals Fund ("Florida Insured Fund"), Eaton Vance Hawaii
Municipals Fund ("Hawaii Fund") and Eaton Vance Kansas Municipals Fund
("Kansas Fund"). The Funds offer two classes of shares. Class A shares are
generally sold subject to a sales charge imposed at time of purchase. Class B
shares are sold at net asset value and are subject to a declining contingent
deferred sales charge (see Note 6). Each class represents a pro rata interest
in the Fund, but votes separately on class-specific matters and (as noted
below) is subject to different expenses. Realized and unrealized gains and
losses are allocated daily to each class of shares based on the relative net
assets of each class to the total net assets of the Fund. Net investment
income, other than class specific expenses, is allocated daily to each class
of shares based upon the ratio of the value of each class' paid shares to the
total value of all paid shares. Each class of shares differs in its
distribution plan and certain other class specific expenses. Each Fund
invests all of its investable assets in interests in a separate corresponding
open-end management investment company (a "Portfolio"), a New York trust,
having the same investment objective as its corresponding Fund. The Florida
Insured Fund invests its assets in the Florida Insured Municipals Portfolio,
the Hawaii Fund invests its assets in the Hawaii Municipals Portfolio and the
Kansas Fund invests its assets in the Kansas Municipals Portfolio. The value
of each Fund's investment in its corresponding Portfolio reflects the Fund's
proportionate interest in the net assets of that Portfolio (99.5%, 99.3% and
99.0% at July 31, 1999 for Florida Insured Fund, Hawaii Fund and Kansas
Fund). The performance of each Fund is directly affected by the performance
of its corresponding Portfolio. The financial statements of each Portfolio,
including the portfolio of investments, are included elsewhere in this report
and should be read in conjunction with each 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 Portfolios is
discussed in Note 1A of the Portfolios' Notes to Financial Statements which
are included elsewhere in this report.
B Income -- Each Fund's net investment income consists of each Fund's pro rata
share of the net investment income of its corresponding Portfolio, less all
actual and accrued expenses of each Fund determined in accordance with
generally accepted accounting principles.
C Federal Taxes -- Each 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, 1999,
the Hawaii Fund, for federal income tax purposes, had capital loss carryovers
which will reduce taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Internal Revenue Code,
and thus will reduce the amount of distributions to shareholders which would
otherwise be necessary to relieve the Funds of any liability for federal
income or excise tax. The amounts and expiration dates of the capital loss
carryovers are as follows:
<TABLE>
<CAPTION>
FUND AMOUNT EXPIRES
<S> <C> <C>
- -----------------------------------------------------------------------
Hawaii Fund $ 26,381 January 31, 2005
249,200 January 31, 2004
</TABLE>
Dividends paid by each Fund from net interest on tax-exempt municipal bonds
allocated from its corresponding Portfolio are not includable by shareholders
as gross income for federal income tax purposes because each Fund and
Portfolio intends to meet certain requirements of the Internal Revenue Code
applicable to regulated investment companies which will enable the Funds 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 each Fund in connection
with its organization, including registration costs, are being amortized on a
straight-line basis over five years.
E Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
13
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
F Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to the Funds and the Portfolios. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by credits which are determined based
on the average cash balances the Funds and Portfolios maintain with IBT. All
significant credit balances used to reduce each Fund's custodian fees are
reported as a reduction of operating expenses on the statements of
operations.
G Other -- Investment transactions are accounted for on a trade date basis.
H Interim Financial Statements -- The interim financial statements relating to
July 31, 1999 and for the six-months then ended have not been audited by
independent certified public accountants, but in the opinion of the Funds'
management, reflect all adjustments necessary for the fair presentation of
the financial statements.
2 Distributions to Shareholders
- -------------------------------------------
The net income of each 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 Funds distinguish 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
statement 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.
3 Shares of Beneficial Interest
- -------------------------------------------
The Funds' Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Such shares may be issued in a number of different series (such as
the Funds) and classes. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
FLORIDA INSURED FUND
-----------------------------------
SIX MONTHS ENDED
JULY 31, 1999 YEAR ENDED
CLASS A (UNAUDITED) JANUARY 31, 1999
<S> <C> <C>
- -----------------------------------------------------------------------------
Sales 77,045 326,221
Issued to shareholders electing to
receive payments of distributions in
Fund shares 5,081 4,977
Redemptions (33,327) (61,434)
Issued to EV Traditional Florida
Insured Fund Shareholders -- 241,825
- -----------------------------------------------------------------------------
NET INCREASE 48,799 511,589
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FLORIDA INSURED FUND
-----------------------------------
SIX MONTHS ENDED
JULY 31, 1999 YEAR ENDED
CLASS B (UNAUDITED) JANUARY 31, 1999
<S> <C> <C>
- -----------------------------------------------------------------------------
Sales 216,720 307,055
Issued to shareholders electing to
receive payments of distributions in
Fund shares 15,674 31,837
Redemptions (122,816) (285,458)
- -----------------------------------------------------------------------------
NET INCREASE 109,578 53,434
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
HAWAII FUND
-----------------------------------
SIX MONTHS ENDED
JULY 31, 1999 YEAR ENDED
CLASS A (UNAUDITED) JANUARY 31, 1999
<S> <C> <C>
- -----------------------------------------------------------------------------
Sales 6,316 6,921
Issued to shareholders electing to
receive payments of distributions in
Fund shares 577 1,413
Redemptions (687) (12,832)
Issued to EV Traditional Hawaii Fund
Shareholders -- 30,292
- -----------------------------------------------------------------------------
NET INCREASE 6,206 25,794
- -----------------------------------------------------------------------------
</TABLE>
14
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
HAWAII FUND
-----------------------------------
SIX MONTHS ENDED
JULY 31, 1999 YEAR ENDED
CLASS B (UNAUDITED) JANUARY 31, 1999
<S> <C> <C>
- -----------------------------------------------------------------------------
Sales 113,188 208,238
Issued to shareholders electing to
receive payments of distributions in
Fund shares 18,324 36,709
Redemptions (109,207) (214,065)
- -----------------------------------------------------------------------------
NET INCREASE 22,305 30,882
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
KANSAS FUND
-----------------------------------
SIX MONTHS ENDED
JULY 31, 1999 YEAR ENDED
CLASS A (UNAUDITED) JANUARY 31, 1999
<S> <C> <C>
- -----------------------------------------------------------------------------
Sales 70,478 49,650
Issued to shareholders electing to
receive payments of distributions in
Fund shares 3,631 4,982
Redemptions (3,537) (22,527)
Issued to EV Traditional Kansas Fund
Shareholders -- 116,955
- -----------------------------------------------------------------------------
NET INCREASE 70,572 149,060
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
KANSAS FUND
-----------------------------------
SIX MONTHS ENDED
JULY 31, 1999 YEAR ENDED
CLASS B (UNAUDITED) JANUARY 31, 1999
<S> <C> <C>
- -----------------------------------------------------------------------------
Sales 48,696 158,523
Issued to shareholders electing to
receive payments of distributions in
Fund shares 12,860 28,367
Redemptions (59,251) (73,215)
- -----------------------------------------------------------------------------
NET INCREASE 2,305 113,675
- -----------------------------------------------------------------------------
</TABLE>
4 Transactions with Affiliates
- -------------------------------------------
Eaton Vance Management (EVM) serves as the Administrator of each Fund, but
receives no compensation. Each of the Portfolios has engaged Boston
Management and Research (BMR), a subsidiary of EVM, to render investment
advisory services. See Note 2 of the Portfolios' Notes to Financial
Statements which are included elsewhere in this report. Except as to Trustees
of the Funds and Portfolios who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services
to each Fund out of the investment adviser fee earned by BMR. Eaton Vance
Distributors, Inc. (EVD), a subsidiary of EVM and the Fund's principal
underwriter, received $6,187, $162 and $488 as its portion of the sales
charge on sales of Class A shares from Florida Insured Fund, Hawaii Fund and
Kansas Fund, respectively, for the six months ended July 31, 1999.
Certain officers and Trustees of the Funds and of the Portfolios are officers
of the above organizations.
5 Distribution and Service Plans
- -------------------------------------------
Each Fund has adopted a distribution plan (Class B Plan) pursuant to Rule
12b-1 under the Investment Company Act of 1940, and a service plan (Class A
Plan, collectively, the Plans). The Plans require the Class B shares to pay
EVD amounts equal to 0.75% (annualized) of each Fund's Class B average daily
net assets for providing ongoing distribution services and facilities to the
respective Fund. A Fund's Class B shares will automatically discontinue
payments to EVD during any period in which there are no outstanding Uncovered
Distribution Charges, which are equivalent to the sum of (i) 5% of the
aggregate amount received by the Fund for Class B shares sold plus (ii)
interest calculated by applying the rate of 1% over the prevailing prime rate
to the outstanding balance of Uncovered Distribution Charges of EVD reduced
by the aggregate amount of contingent deferred sales charges (see Note 6) and
amounts theretofore paid to EVD. The amount payable to EVD with respect to
each day is accrued on such day as a liability of each Class B and,
accordingly, reduces the Class B's net assets. For the six months ended July
31, 1999, Florida Insured Fund, Hawaii Fund and Kansas Fund paid $84,914,
$72,170 and $41,103, respectively, to EVD, representing 0.75% (annualized) of
each Fund's Class B average daily net assets. At July 31, 1999, the amount of
Uncovered Distribution Charges of EVD calculated under the Class B Plans for
Florida Insured Fund, Hawaii Fund and Kansas Fund were approximately
$721,000, $670,000 and $355,000, respectively.
Each Plan authorizes each class to make payments of service fees to EVD,
investment dealers and other persons in amounts not exceeding 0.25% of each
Fund's average daily net assets attributable to Class A and Class B shares
for any fiscal year. The Trustees have initially implemented the Plans by
authorizing each class to make quarterly payments of service fees to EVD and
investment dealers in amounts not expected to exceed 0.20% per annum of each
Fund's average daily net assets attributable to both Class A and Class B
shares based on the value of Fund shares sold by such persons and remaining
outstanding for at least one year. For the six months ended July 31, 1999,
Florida Insured Fund, Hawaii Fund and Kansas Fund paid or accrued service
fees to or payable to EVD in the amount of
15
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
$3,596, $258 and $1,426, respectively, for Class A shares, and $18,114,
$14,435 and $9,317, respectively, for Class B shares. Service fee payments
are made for personal services and/or the maintenance of shareholder
accounts. Service fees paid to EVD and investment dealers are separate and
distinct from the sales commissions and distribution fees payable by each
Fund to EVD, and as such are not subject to automatic discontinuance when
there are no outstanding Uncovered Distribution Charges of EVD.
Certain officers and Trustees of the Funds are officers or directors of EVD.
6 Contingent Deferred Sales Charge
- -------------------------------------------
A contingent deferred sales charge (CDSC) generally is imposed on redemptions
of Class B shares made within six years of purchase. Generally, the CDSC is
based upon the lower of the net asset value at date of redemption or date of
purchase. No charge is levied on Class B shares acquired by reinvestment of
dividends or capital gains distributions. The CDSC is imposed at declining
rates that begin at 5% in the case of redemptions in the first and second
year after purchase, declining one percentage point each subsequent year. No
CDSC is levied on Class B shares which have been sold to EVM or its
affiliates or to their respective employees or clients and may be waived
under certain other limited circumstances. CDSC charges are paid to EVD to
reduce the amount of Uncovered Distribution Charges calculated under each
Fund's Class B Distribution Plan. CDSC charges received when no Uncovered
Distribution Charges exist will be credited to the Fund. EVD received
approximately $30,000, $15,000 and $7,000 of CDSC paid by Class B
shareholders of Florida Insured Fund, Hawaii Fund and Kansas Fund,
respectively, for the six months ended July 31, 1999.
7 Investment Transactions
- -------------------------------------------
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the six months ended July 31, 1999 were as follows:
<TABLE>
<CAPTION>
FLORIDA INSURED FUND
<S> <C>
- -----------------------------------------------------
Increases $ 4,190,309
Decreases 2,321,983
<CAPTION>
HAWAII FUND
<S> <C>
- -----------------------------------------------------
Increases $ 1,187,885
Decreases 1,541,784
<CAPTION>
KANSAS FUND
<S> <C>
- -----------------------------------------------------
Increases $ 1,321,097
Decreases 841,798
</TABLE>
8 Transfer of Net Assets
- -------------------------------------------
On February 1, 1998, EV Marathon Florida Insured Fund, EV Marathon Hawaii
Fund and EV Marathon Kansas Fund acquired the net assets of the EV
Traditional Florida Insured Fund, EV Traditional Hawaii Fund and EV
Traditional Kansas Fund, respectively, pursuant to an Agreement and Plan of
Reorganization dated June 23, 1997. In accordance with the agreement, the
Funds, at the closing, issued Class A shares as follows:
<TABLE>
<CAPTION>
CLASS A SHARES AGGREGATE VALUE NET ASSET VALUE
FUND ISSUED OF SHARES ISSUED PER SHARE
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Florida Insured Fund 241,825 $2,748,790 $11.37
Hawaii Fund 30,292 300,865 9.93
Kansas Fund 116,955 1,223,080 10.46
</TABLE>
The transaction was structured for tax purposes to qualify as a tax free
reorganization under the Internal Revenue Code. The net assets acquired,
including unrealized appreciation at the date of the transaction were as
follows:
<TABLE>
<CAPTION>
FUND ACQUIRED NET ASSETS UNREALIZED APPRECIATION
<S> <C> <C>
- -----------------------------------------------------------------------------------------
Florida Insured Fund $2,748,790 $160,660
Hawaii Fund 300,865 27,372
Kansas Fund 1,223,080 49,919
</TABLE>
Directly after the merger, the combined net assets of the Funds and the net
asset value of Class A shares and Class B shares were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B
NET ASSET VALUE NET ASSET VALUE
FUND COMBINED NET ASSETS PER SHARE PER SHARE
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Florida Insured Fund $24,721,859 $11.37 $11.23
Hawaii Fund 19,701,451 9.93 10.13
Kansas Fund 11,272,807 10.46 10.38
</TABLE>
16
<PAGE>
FLORIDA INSURED MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 5.7%
- ---------------------------------------------------------------------------
$1,160 Dade County, Professional Sports $ 383,020
Franchise, (MBIA), Escrowed to Maturity,
0.00%, 10/1/19
500 North Port, Utility Revenue, (FGIC), 540,095
Prerefunded to 10/1/02, 6.25%, 10/1/22
250 Orange, Tourist Development Tax, (MBIA), 272,960
Prerefunded to 10/1/04, 6.00%, 10/1/24
400 Titusville, (MBIA), Prerefunded to 436,736
10/1/04, 6.00%, 10/1/24
- ---------------------------------------------------------------------------
$ 1,632,811
- ---------------------------------------------------------------------------
Housing -- 13.2%
- ---------------------------------------------------------------------------
$ 320 Duval County HFA, SFMR, (GNMA), (AMT), $ 338,198
6.70%, 10/1/26
750 Escambia County HFA, SFMR, (GNMA), 812,820
(AMT), 7.00%, 4/1/28
660 Manatee County, HFA, SFMR, (GNMA), 727,564
(AMT), 6.875%, 11/1/26
995 Pinellas County HFA, SFMR, (AMT), 5.80%, 1,010,283
3/1/29
795 Pinellas County HFA, SFMR, (GNMA), 840,999
(AMT), 6.70%, 2/1/28
- ---------------------------------------------------------------------------
$ 3,729,864
- ---------------------------------------------------------------------------
Insured-Cogeneration -- 1.6%
- ---------------------------------------------------------------------------
$ 500 Tampa, Solid Waste System, (McKay Bay $ 466,040
Refuse to Energy), (AMBAC), (AMT),
5.00%, 10/1/21
- ---------------------------------------------------------------------------
$ 466,040
- ---------------------------------------------------------------------------
Insured-Education -- 1.8%
- ---------------------------------------------------------------------------
$ 500 Florida A&M University, (Student $ 504,420
Apartment Facilties), (MBIA), 5.625%,
7/1/25
- ---------------------------------------------------------------------------
$ 504,420
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 7.9%
- ---------------------------------------------------------------------------
$ 445 Citrus County, PCR, (MBIA), 6.35%, $ 474,828
2/1/22
895 Florida State Municipal Power Agency, 757,904
(Stanton), (AMBAC), 4.50%, 10/1/27
1,000 Puerto Rico Electric Power Authority, 1,004,710
(MBIA), 5.50%, 7/1/25
- ---------------------------------------------------------------------------
$ 2,237,442
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Insured-General Obligations -- 7.9%
- ---------------------------------------------------------------------------
$1,000 Florida Board of Education, (FGIC), $ 861,460
4.50%, 6/1/23
1,000 Florida Board Of Education, (MBIA), 853,930
4.50%, 6/1/24
500 Miami-Dade County, School District, 511,340
(FSA), 5.375%, 8/1/15
- ---------------------------------------------------------------------------
$ 2,226,730
- ---------------------------------------------------------------------------
Insured-Hospital -- 2.4%
- ---------------------------------------------------------------------------
$ 200 Dade, Public Facilities Revenue, $ 186,582
(Jackson Memorial Hospital), (MBIA),
4.875%, 6/1/15
500 Sarasota County, Public Hospital Board, 488,095
(Sarasota Memorial Hospital), (MBIA),
5.25%, 7/1/24
- ---------------------------------------------------------------------------
$ 674,677
- ---------------------------------------------------------------------------
Insured-Housing -- 9.4%
- ---------------------------------------------------------------------------
$ 500 Florida HFA, (Homeowner Mortgage), $ 515,880
(MBIA), (AMT), 5.90%, 7/1/29
500 Florida HFA, (Maitland Club Apartments), 540,920
(AMBAC), (AMT), 6.875%, 8/1/26
1,000 Florida HFA, (Mariner Club Apartments), 1,061,861
(AMBAC), (AMT), 6.375%, 9/1/36
500 Florida HFA, (Spinnaker Cove 534,850
Apartments), (AMBAC), (AMT), 6.50%,
7/1/36
- ---------------------------------------------------------------------------
$ 2,653,511
- ---------------------------------------------------------------------------
Insured-Industrial Development Revenue -- 1.8%
- ---------------------------------------------------------------------------
$ 500 Dade County Resources Recovery $ 504,800
Facilities, (AMBAC), (AMT), 5.50%,
10/1/13
- ---------------------------------------------------------------------------
$ 504,800
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 18.0%
- ---------------------------------------------------------------------------
$ 605 Celebration Community Development $ 581,780
District, (MBIA), 5.125%, 5/1/20
625 Dade County, Special Obligation, 526,325
(AMBAC), Variable Rate, 10/1/35(1)
500 Jacksonville, Capital Improvement 447,310
Revenue, (Stadium), (AMBAC), 4.75%,
10/1/25
1,000 Jacksonville, Excise Taxes Revenue, 564,230
(FGIC), (AMT), 0.00%, 10/1/10
1,000 Jacksonville, Excise Taxes Revenue, 1,034,940
(FGIC), (AMT), 5.70%, 10/1/09
250 Puerto Rico Public Finance Corp., 222,810
(AMBAC), Variable Rate, 6/1/26(1)(2)
505 St. Petersburg Excise Tax, (FGIC), 487,744
5.00%, 10/1/16
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
FLORIDA INSURED MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Special Tax Revenue (continued)
- ---------------------------------------------------------------------------
$ 340 Sunrise Public Facilities, (MBIA), $ 142,973
0.00%, 10/1/15
500 Tampa, Occupational License Tax Revenue, 500,135
(FGIC), 5.50%, 10/1/27
2,000 Tampa, Utility Tax Revenue, (AMBAC), 569,320
0.00%, 4/1/22
- ---------------------------------------------------------------------------
$ 5,077,567
- ---------------------------------------------------------------------------
Insured-Transportation -- 11.7%
- ---------------------------------------------------------------------------
$1,000 Dade County Aviation Facilities, (Miami $ 946,750
International Airport), (FSA), (AMT),
5.125%, 10/1/22
1,000 Dade County, Seaport Revenue, (MBIA), 980,800
5.125%, 10/1/16
750 Florida Ports Financing Commission, 733,005
(State Transportation Trust Fund),
(MBIA), (AMT), 5.375%, 6/1/27
750 Florida Turnpike Authority, (Department 644,063
of Transportation), (FGIC), 4.50%,
7/1/27
- ---------------------------------------------------------------------------
$ 3,304,618
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 17.3%
- ---------------------------------------------------------------------------
$ 325 Dade County, Water and Sewer System, $ 326,745
(FGIC), 5.375%, 10/1/16
735 Enterprise Community Development 779,343
District, Water and Sewer, (MBIA),
6.125%, 5/1/24
1,000 Jacksonville, Water and Sewer, (AMBAC), 1,056,090
(AMT), 6.35%, 8/1/25
1,000 Lee County IDA, (Bonita Springs), 1,035,660
(MBIA), (AMT), 6.05%, 11/1/20
500 Miami-Dade County, Water and Sewer, 465,085
(FGIC), 5.00%, 10/1/29
375 Tampa Bay, Water Utility System, (FGIC), 289,485
Variable Rate, 10/1/27(1)(2)
1,000 Vero Beach, Water and Sewer, (FGIC), 940,360
5.00%, 12/1/21
- ---------------------------------------------------------------------------
$ 4,892,768
- ---------------------------------------------------------------------------
Transportation -- 1.3%
- ---------------------------------------------------------------------------
$ 400 Greater Orlando, Aviation Authority, $ 363,952
(Florida Airport), 8.328%, 10/1/18
- ---------------------------------------------------------------------------
$ 363,952
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $27,896,035) $ 28,269,200
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio primarily invests in debt securities issued by 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 July 31, 1999, 85.5% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. At July 31, 1999, the Portfolio's insured
securities by financial institution are as follows:
<TABLE>
<CAPTION>
% OF
MARKET VALUE MARKET VALUE
<S> <C> <C>
- ----------------------------------------------------------------------
American Municipal Bond Assurance Corp. $ 6,688,230 23.7%
(AMBAC)
Financial Guaranty Insurance Corp. 6,654,342 23.5
(FGIC)
Financial Security Assurance (FSA) 1,458,090 5.2
Municipal Bond Insurance Assoc. (MBIA) 9,374,722 33.1
- ----------------------------------------------------------------------
TOTAL $ 24,175,384 85.5%
- ----------------------------------------------------------------------
</TABLE>
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
HAWAII MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Electric Utilities -- 3.0%
- ---------------------------------------------------------------------------
$1,500 Puerto Rico Electric Power Authority, $ 566,355
0.00%, 7/1/17
- ---------------------------------------------------------------------------
$ 566,355
- ---------------------------------------------------------------------------
General Obligations -- 4.3%
- ---------------------------------------------------------------------------
$ 750 Honolulu, 4.75%, 9/1/17 $ 700,283
285 Puerto Rico, Public Improvement, 0.00%, 121,649
7/1/15
- ---------------------------------------------------------------------------
$ 821,932
- ---------------------------------------------------------------------------
Hospital -- 16.0%
- ---------------------------------------------------------------------------
$ 200 Hawaii State Department of Budget and $ 188,866
Finance, (Kaiser Permanente), 5.15%,
3/1/15
635 Hawaii State Department of Budget and 652,596
Finance, (Kapiolani Health System),
6.00%, 7/1/19
870 Hawaii State Department of Budget and 876,290
Finance, (Queens Health System), 5.75%,
7/1/26
710 Hawaii State Department of Budget and 750,917
Finance, (Wahiawa General Hospital),
7.50%, 7/1/12
300 Hawaii State Department of Budget and 278,103
Finance, (Wilcox Memorial Hospital),
5.35%, 7/1/18
300 Hawaii State Department of Budget and 277,575
Finance, (Wilcox Memorial Hospital),
5.50%, 7/1/28
- ---------------------------------------------------------------------------
$ 3,024,347
- ---------------------------------------------------------------------------
Housing -- 7.3%
- ---------------------------------------------------------------------------
$ 200 Guam Housing Corp., Single Family, $ 202,342
5.75%, 9/1/31
1,000 Hawaii State Housing Finance and 1,022,709
Development, Single Family, 5.90%,
7/1/27
145 Hawaii State Housing Finance and 148,699
Development, Single Family, (AMT),
6.00%, 7/1/26
- ---------------------------------------------------------------------------
$ 1,373,750
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 2.8%
- ---------------------------------------------------------------------------
$ 370 Hawaii State Department of $ 351,903
Transportation, (Continental Airlines,
Inc.), (AMT), 5.625%, 11/15/27
180 Puerto Rico Port Authority, (American 187,362
Airlines), (AMT), 6.30%, 6/1/23
- ---------------------------------------------------------------------------
$ 539,265
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Insured-Education -- 5.4%
- ---------------------------------------------------------------------------
$ 500 Hawaii State Housing Development Corp., $ 510,015
(University of Hawaii), (AMBAC), 5.65%,
10/1/16
500 University of Hawaii Board of Regents, 510,385
University System, (AMBAC), 5.65%,
10/1/12
- ---------------------------------------------------------------------------
$ 1,020,400
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 8.7%
- ---------------------------------------------------------------------------
$1,000 Hawaii State Department of Budget and $ 1,000,400
Finance, (Hawaiian Electric Co.),
(MBIA), (AMT), 5.65%, 10/1/27
500 Hawaii State Department of Budget and 539,765
Finance, (Hawaiian Electric Co., Inc.),
(MBIA), (AMT), 6.60%, 1/1/25
100 Puerto Rico Electric Power Authority, 109,750
STRIPES, (FSA), Variable Rate, 7/1/03(1)
- ---------------------------------------------------------------------------
$ 1,649,915
- ---------------------------------------------------------------------------
Insured-General Obligations -- 15.7%
- ---------------------------------------------------------------------------
$ 350 Hawaii County, (FGIC), 5.55%, 5/1/10 $ 364,798
400 Hawaii State, (FGIC), 5.00%, 10/1/17 382,708
150 Honolulu, City and County, (FGIC), 139,988
5.00%, 7/1/23
250 Honolulu, City and County, (FGIC), 233,055
5.00%, 4/1/24
305 Kauai County, (MBIA), 5.90%, 2/1/14 317,078
910 Maui County, (FGIC), 5.00%, 9/1/17 870,797
250 Maui County, (FGIC), 5.25%, 3/1/18 246,055
420 Maui County, (FGIC), 5.30%, 9/1/14 421,054
- ---------------------------------------------------------------------------
$ 2,975,533
- ---------------------------------------------------------------------------
Insured-Hospital -- 3.0%
- ---------------------------------------------------------------------------
$ 500 Hawaii State Department of Budget and $ 455,590
Finance, (Queens Health System), (MBIA),
5.00%, 7/1/28
100 Hawaii State Department of Budget and 106,698
Finance, (St. Francis Medical Center),
(FSA), 6.50%, 7/1/22
- ---------------------------------------------------------------------------
$ 562,288
- ---------------------------------------------------------------------------
Insured-Housing -- 2.7%
- ---------------------------------------------------------------------------
$ 480 Honolulu, Mortgage Revenue Bonds, (Smith $ 506,525
Beretania), (FHA Insured) (MBIA), 7.80%,
7/1/24
- ---------------------------------------------------------------------------
$ 506,525
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
HAWAII MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-Lease Revenue/ Certificates of Participation -- 1.2%
- ---------------------------------------------------------------------------
$ 250 Hawaii State, (Kapolei State Office $ 233,388
Building), (AMBAC), 5.00%, 5/1/18
- ---------------------------------------------------------------------------
$ 233,388
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.9%
- ---------------------------------------------------------------------------
$ 210 Puerto Rico Infrastructure Financing $ 174,626
Authority, (AMBAC), Variable Rate,
7/1/28(1)
- ---------------------------------------------------------------------------
$ 174,626
- ---------------------------------------------------------------------------
Insured-Transportation -- 8.5%
- ---------------------------------------------------------------------------
$ 500 Hawaii State Airports System, (FGIC), $ 524,250
(AMT), 7.50%, 7/1/20
100 Hawaii State Airports System, (MBIA), 114,208
(AMT), 6.90%, 7/1/12
245 Hawaii State Airports System, (MBIA), 260,420
(AMT), 7.00%, 7/1/18
650 Hawaii State Harbor Revenue, (FGIC), 697,093
(AMT), 6.375%, 7/1/24
- ---------------------------------------------------------------------------
$ 1,595,971
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 5.1%
- ---------------------------------------------------------------------------
$1,000 Honolulu, City and County Waste Water $ 348,500
Systems, (FGIC), 0.00%, 7/1/18
730 Honolulu, City and County Waterworks 614,237
System Revenue, (FGIC), 4.50%, 7/1/28
- ---------------------------------------------------------------------------
$ 962,737
- ---------------------------------------------------------------------------
Special Tax Revenue -- 2.2%
- ---------------------------------------------------------------------------
$ 200 Puerto Rico Infrastructure Financing $ 177,540
Authority, Variable Rate, 7/1/28(1)(2)
250 Virgin Islands Public Facilities 244,948
Authority, 5.625%, 10/1/25
- ---------------------------------------------------------------------------
$ 422,488
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Transportation -- 9.9%
- ---------------------------------------------------------------------------
$ 500 Hawaii State Highway Revenue, 5.00%, $ 485,845
7/1/12
250 Hawaii State Highway Revenue, 5.50%, 254,268
7/1/18
1,300 Puerto Rico Highway and Transportation 1,132,039
Authority, 4.75%, 7/1/38
- ---------------------------------------------------------------------------
$ 1,872,152
- ---------------------------------------------------------------------------
Water and Sewer -- 3.3%
- ---------------------------------------------------------------------------
$ 600 Honolulu, Water Supply System, 5.80%, $ 623,988
7/1/16
- ---------------------------------------------------------------------------
$ 623,988
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $18,612,858) $ 18,925,660
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The portfolio invests primarily in debt securities issued by Hawaii
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1999, 51.2% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institutions ranged from 1.1% to 25.6% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
KANSAS MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Electric Utilities -- 4.6%
- ---------------------------------------------------------------------------
$ 150 Guam Power Authority, 6.625%, 10/1/14 $ 168,149
450 Puerto Rico Electric Power Authority, 414,846
5.00%, 7/1/28
- ---------------------------------------------------------------------------
$ 582,995
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 5.3%
- ---------------------------------------------------------------------------
$ 65 Kansas City, Utility System, (FGIC), $ 71,974
Prerefunded to 09/01/04, 6.375%, 9/1/23
415 Labette County, SFMR, Escrowed to 182,206
Maturity, 0.00%, 12/1/14
1,000 Saline County, SFMR, Escrowed to 412,810
Maturity, 0.00%, 12/1/15
- ---------------------------------------------------------------------------
$ 666,990
- ---------------------------------------------------------------------------
General Obligations -- 12.5%
- ---------------------------------------------------------------------------
$ 400 Douglas County, Unified School District $ 421,235
#497, 6.00%, 9/1/15
890 Johnson County, Unified School District 864,474
#229, 5.00%, 10/1/16
500 Puerto Rico, 0.00%, 7/1/18 178,140
110 Topeka, 5.00%, 8/15/12 108,701
- ---------------------------------------------------------------------------
$ 1,572,550
- ---------------------------------------------------------------------------
Hospital -- 6.0%
- ---------------------------------------------------------------------------
$ 225 Atchison, (Atchison Hospital Assn.), $ 217,823
5.70%, 11/15/18
250 Lawrence, (Lawrence Memorial Hospital), 256,953
6.20%, 7/1/19
300 Newton, (Newton Healthcare Corp.), 286,521
5.75%, 11/15/24
- ---------------------------------------------------------------------------
$ 761,297
- ---------------------------------------------------------------------------
Housing -- 20.1%
- ---------------------------------------------------------------------------
$ 60 Kansas City, Mortgage Revenue, (GNMA), $ 61,013
(AMT), 5.30%, 5/1/07
65 Kansas City, Mortgage Revenue, (GNMA), 66,155
(AMT), 5.30%, 11/1/07
145 Kansas City, Mortgage Revenue, (GNMA), 149,073
(AMT), 5.90%, 11/1/27
300 Kansas City, Mortgage Revenue, (GNMA), 313,986
(AMT), 7.00%, 12/1/11
220 Kansas City, Multifamily, (FHA), 6.70%, 225,135
7/1/23
100 Kansas Development Authority, SFMR, 103,818
(FHA), (Martin Creek), 6.60%, 8/1/34
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Housing (continued)
- ---------------------------------------------------------------------------
$ 85 Olathe and Labette County, SFMR, (GNMA), $ 94,113
(AMT), 8.10%, 8/1/23
140 Olathe, Mortgage Revenue, (GNMA), (AMT), 145,830
7.60%, 3/1/07
250 Olathe, Multifamily, (FNMA), 6.45%, 263,213
6/1/19
210 Puerto Rico Housing Finance Corp., 218,182
7.50%, 4/1/22
160 Sedgwick and Shawnee County, SFMR, 178,051
(GNMA), 7.75%, 11/1/24
290 Sedgwick County, SFMR, (GNMA), 8.00%, 322,141
5/1/25
35 Sedgwick County, SFMR, (GNMA), 8.20%, 38,721
5/1/14
350 Wichita, Multifamily, (Broadmoor Chelsea 357,140
Apartments), (FNMA), (AMT), 5.65%,
7/1/16
- ---------------------------------------------------------------------------
$ 2,536,571
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 4.1%
- ---------------------------------------------------------------------------
$ 350 Puerto Rico Port Authority, (American $ 364,315
Airlines), (AMT), 6.30%, 6/1/23
160 Topeka IDA, (Resers Fine Foods, Inc.), 156,584
(AMT), 5.40%, 4/1/05
- ---------------------------------------------------------------------------
$ 520,899
- ---------------------------------------------------------------------------
Insured-Education -- 1.9%
- ---------------------------------------------------------------------------
$ 250 Johnson County Community College, $ 238,873
(Student Commons and Parking Systems),
(MBIA), 5.05%, 11/15/21
- ---------------------------------------------------------------------------
$ 238,873
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 6.8%
- ---------------------------------------------------------------------------
$ 345 Burlington PCR, (Kansas Gas & Electric $ 366,770
Co.), (MBIA), 7.00%, 6/1/31
100 Puerto Rico Electric Power Authority, 107,375
STRIPES, (FSA), Variable Rate, 7/1/02(1)
400 Wellington Electric Waterworks and 387,508
Authority Revenue, (AMBAC), 5.20%,
5/1/23
- ---------------------------------------------------------------------------
$ 861,653
- ---------------------------------------------------------------------------
Insured-General Obligations -- 11.1%
- ---------------------------------------------------------------------------
$ 200 Harvey County, Unified School District $ 184,084
#373, (FSA), 4.80%, 9/1/18
200 Johnson County, Unified School District 217,412
#231, (FGIC), 6.00%, 10/1/16
500 Sedgwick County, Unified School District 473,449
#267, (AMBAC), 5.00%, 11/1/19
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
KANSAS MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-General Obligations (continued)
- ---------------------------------------------------------------------------
$ 250 Sedgwick County, Unified School District $ 273,455
#267, (AMBAC), 6.15%, 11/1/09
230 Sedgwick County, Unified School District 251,579
#267, (AMBAC), 6.15%, 11/1/10
- ---------------------------------------------------------------------------
$ 1,399,979
- ---------------------------------------------------------------------------
Insured-Hospital -- 11.7%
- ---------------------------------------------------------------------------
$ 250 Kansas DFA, (Medical Center, Inc.), $ 248,515
(MBIA), 5.50%, 11/15/22
500 Kansas DFA, (St. Luke's), (MBIA), 487,384
5.375%, 11/15/26
500 Kansas DFA, (Stormont-Vail) (MBIA), 525,954
5.80%, 11/15/11
200 Olathe, Health Facilities, (Evangelical 207,440
Lutheran Good Samaritan Society),
(AMBAC), 6.00%, 5/1/19
- ---------------------------------------------------------------------------
$ 1,469,293
- ---------------------------------------------------------------------------
Insured-Housing -- 2.6%
- ---------------------------------------------------------------------------
$ 100 Puerto Rico Housing Finance Corp., $ 101,635
(AMBAC), 7.50%, 10/1/11
145 Sedgwick County, Mortgage Loan Revenue, 149,366
(MBIA), (GNMA), (AMT), 7.50%, 12/1/09
75 Sedgwick County, Mortgage Loan Revenue, 77,342
(MBIA), (GNMA), (AMT), 7.50%, 12/1/10
- ---------------------------------------------------------------------------
$ 328,343
- ---------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 3.7%
- ---------------------------------------------------------------------------
$ 500 Kansas DFA, (Sisters Of Charity $ 464,414
Leavenworth), (MBIA), 5.00%, 12/1/25
- ---------------------------------------------------------------------------
$ 464,414
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.2%
- ---------------------------------------------------------------------------
$ 175 Puerto Rico Infrastructure Financing $ 145,521
Authority, (AMBAC), Variable Rate,
7/1/28(1)
- ---------------------------------------------------------------------------
$ 145,521
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Insured-Transportation -- 1.5%
- ---------------------------------------------------------------------------
$ 200 Puerto Rico Highway and Transportation $ 188,488
Authority, (AMBAC), 5.00%, 7/1/28
- ---------------------------------------------------------------------------
$ 188,488
- ---------------------------------------------------------------------------
Insured-Utilities -- 1.2%
- ---------------------------------------------------------------------------
$ 135 Kansas City, Utility System, (FGIC), $ 145,642
6.375%, 9/1/23
- ---------------------------------------------------------------------------
$ 145,642
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 2.7%
- ---------------------------------------------------------------------------
$ 400 Wyandotte County & Kansas City, (MBIA), $ 338,940
4.50%, 9/1/28
- ---------------------------------------------------------------------------
$ 338,940
- ---------------------------------------------------------------------------
Transportation -- 3.0%
- ---------------------------------------------------------------------------
$ 400 Puerto Rico Highway and Transportation $ 372,872
Authority, 5.00%, 7/1/22
- ---------------------------------------------------------------------------
$ 372,872
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $12,538,681) $ 12,595,320
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Kansas
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1999, 44.9% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 2.3% to 23.0% of total investments.
(1) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED HAWAII KANSAS
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
Assets
- ----------------------------------------------------------------------------------------
Investments --
Identified cost $27,896,035 $ 18,612,858 $ 12,538,681
Unrealized appreciation 373,165 312,802 56,639
- ----------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $28,269,200 $ 18,925,660 $ 12,595,320
- ----------------------------------------------------------------------------------------
Cash $ 351,832 $ 347,835 $ 271,880
Receivable for investments sold 25,429 -- 10,197
Interest receivable 448,550 185,951 173,263
Receivable from the Investment Adviser -- 24,254 21,308
Other assets 8,548 8,419 7,989
- ----------------------------------------------------------------------------------------
TOTAL ASSETS $29,103,559 $ 19,492,119 $ 13,079,957
- ----------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------
Payable to affiliate for Trustees' fees $ 135 $ 135 $ 135
Other accrued expenses 4,460 5,543 5,684
- ----------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 4,595 $ 5,678 $ 5,819
- ----------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $29,098,964 $ 19,486,441 $ 13,074,138
- ----------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $28,725,799 $ 19,173,639 $ 13,017,499
Net unrealized appreciation (computed on
the basis of identified cost) 373,165 312,802 56,639
- ----------------------------------------------------------------------------------------
TOTAL $29,098,964 $ 19,486,441 $ 13,074,138
- ----------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED HAWAII KANSAS
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
Investment Income
- --------------------------------------------------------------------------------------
Interest $ 792,391 $ 544,884 $ 354,916
- --------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 792,391 $ 544,884 $ 354,916
- --------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------
Investment adviser fee $ 28,063 $ 15,340 $ 10,028
Trustees fees and expenses 194 194 194
Custodian fee 12,322 13,252 13,295
Legal and accounting services 8,840 8,840 8,593
Amortization of organization expenses 201 331 184
Miscellaneous 6,024 3,276 3,180
- --------------------------------------------------------------------------------------
TOTAL EXPENSES $ 55,644 $ 41,233 $ 35,474
- --------------------------------------------------------------------------------------
Deduct --
Preliminary reduction of investment
adviser fee $ -- $ 15,340 $ 10,028
Preliminary allocation of expenses to
the Investment Adviser -- 24,254 21,308
Reduction of custodian fee 6,560 1,639 4,138
- --------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 6,560 $ 41,233 $ 35,474
- --------------------------------------------------------------------------------------
NET EXPENSES $ 49,084 $ -- $ --
- --------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 743,307 $ 544,884 $ 354,916
- --------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- --------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 78,601 $ 35,456 $ (65,642)
Financial futures contracts 18,253 47,758 12,019
- --------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ 96,854 $ 83,214 $ (53,623)
- --------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $(1,749,139) $ (1,177,306) $ (588,519)
Financial futures contracts -- -- 787
- --------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $(1,749,139) $ (1,177,306) $ (587,732)
- --------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(1,652,285) $ (1,094,092) $ (641,355)
- --------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (908,978) $ (549,208) $ (286,439)
- --------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JULY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED HAWAII KANSAS
Increase (Decrease) in Net Assets PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
From operations --
Net investment income $ 743,307 $ 544,884 $ 354,916
Net realized gain (loss) 96,854 83,214 (53,623)
Net change in unrealized appreciation
(depreciation) (1,749,139) (1,177,306) (587,732)
- ----------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (908,978) $ (549,208) $ (286,439)
- ----------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 4,190,309 $ 1,187,885 $ 1,321,097
Withdrawals (2,321,983) (1,541,784) (841,798)
- ----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL TRANSACTIONS $ 1,868,326 $ (353,899) $ 479,299
- ----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ 959,348 $ (903,107) $ 192,860
- ----------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------
At beginning of period $28,139,616 $ 20,389,548 $ 12,881,278
- ----------------------------------------------------------------------------------------
AT END OF PERIOD $29,098,964 $ 19,486,441 $ 13,074,138
- ----------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JANUARY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED HAWAII KANSAS
Increase (Decrease) in Net Assets PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,347,962 $ 1,069,839 $ 641,820
Net realized gain 87,420 267,003 73,744
Net change in unrealized appreciation
(depreciation) 301,762 (89,480) 21,642
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,737,144 $ 1,247,362 $ 737,206
- ----------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 6,379,597 $ 2,231,345 $ 2,114,772
Withdrawals (4,827,198) (2,953,293) (1,389,324)
- ----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL TRANSACTIONS $ 1,552,399 $ (721,948) $ 725,448
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 3,289,543 $ 525,414 $ 1,462,654
- ----------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------
At beginning of year $24,850,073 $ 19,864,134 $ 11,418,624
- ----------------------------------------------------------------------------------------
AT END OF YEAR $28,139,616 $ 20,389,548 $ 12,881,278
- ----------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
FLORIDA INSURED PORTFOLIO
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JANUARY 31,
JULY 31, 1999 --------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995(1)
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ---------------------------------------------------------------------------------------------------------------------
Net expenses(2) 0.38%(3) 0.18% 0.07% 0.09% 0.07% 0.01%(3)
Net expenses after custodian fee
reduction 0.34%(3) 0.11% 0.00% 0.02% 0.00% --
Net investment income 5.13%(3) 5.21% 5.63% 5.76% 5.82% 5.73%(3)
Portfolio Turnover 21% 9% 34% 36% 32% 33%
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $29,099 $28,140 $24,850 $24,204 $21,416 $14,400
- ---------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the investment adviser fee, an allocation of
expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios would have been as
follows:
Expenses 0.30% 0.48% 0.39% 0.39% 0.41%(3)
Expenses after custodian fee reduction 0.23% 0.41% 0.32% 0.32% --
Net investment income 5.09% 5.22% 5.46% 5.50% 5.33%(3)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, March 2, 1994, to January 31,
1995.
(2) The expense ratios for the year ended January 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for the prior period have
not been adjusted to reflect this change.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
HAWAII PORTFOLIO
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JANUARY 31,
JULY 31, 1999 --------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995(1)
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ---------------------------------------------------------------------------------------------------------------------
Net expenses(2) 0.02%(3) 0.04% 0.03% 0.04% 0.06% 0.06%(3)
Net expenses after custodian fee
reduction 0.00%(3) 0.00% 0.00% 0.00% 0.00% --
Net investment income 5.50%(3) 5.39% 5.70% 5.96% 6.01% 6.03%(3)
Portfolio Turnover 9% 29% 27% 21% 19% 66%
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $19,486 $20,390 $19,864 $16,014 $15,578 $12,865
- ---------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the investment adviser fee, an allocation of
expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios would have been as
follows:
Expenses(2) 0.42%(3) 0.28% 0.46% 0.43% 0.41% 0.38%(3)
Expenses after custodian fee reduction 0.40%(3) 0.24% 0.43% 0.39% 0.35% --
Net investment income 5.10%(3) 5.15% 5.27% 5.57% 5.66% 5.70%(3)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, March 2, 1994, to January 31,
1995.
(2) The expense ratios for the year ended January 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for the prior period have
not been adjusted to reflect this change.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
28
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
KANSAS PORTFOLIO
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JANUARY 31,
JULY 31, 1999 --------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995(1)
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ---------------------------------------------------------------------------------------------------------------------
Net expenses(2) 0.06%(3) 0.06% 0.05% 0.08% 0.09% 0.01%(3)
Net expenses after custodian fee
reduction 0.00%(3) 0.00% 0.00% 0.00% 0.00% --
Net investment income 5.42%(3) 5.34% 5.79% 5.91% 5.93% 5.68%(3)
Portfolio Turnover 9% 33% 17% 49% 21% 12%
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $13,074 $12,881 $11,419 $11,736 $11,609 $ 8,306
- ---------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the investment adviser fee, an allocation of
expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios would have been as
follows:
Expenses(2) 0.54%(3) 0.36% 0.57% 0.48% 0.50% 0.43%(3)
Expenses after custodian fee reduction 0.48%(3) 0.30% 0.52% 0.40% 0.41% --
Net investment income 4.94%(3) 5.04% 5.27% 5.51% 5.52% 5.26%(3)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, March 2, 1994, to January 31,
1995.
(2) The expense ratios for the year ended January 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for the prior period have
not been adjusted to reflect this change.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
Florida Insured Municipals Portfolio ("Florida Insured Portfolio"), Hawaii
Municipals Portfolio ("Hawaii Portfolio") and Kansas Municipals Portfolio
("Kansas Portfolio"), collectively the Portfolios, are registered under the
Investment Company Act of 1940, as amended, as non-diversified open-end
management investment companies. The Portfolios were organized as trusts
under the laws of the State of New York on May 1, 1992 for the Hawaii
Portfolio and October 25, 1993 for the Florida Insured Portfolio and the
Kansas Portfolio. The Declarations of Trust permit the Trustees to issue
interests in the Portfolios. The following is a summary of significant
accounting policies consistently followed by the Portfolios in the
preparation of their financial statements. The policies are in conformity
with generally accepted accounting principles.
A Investment Valuations -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts and options on
financial futures contracts listed on commodity exchanges are valued at
closing settlement prices. Over-the-counter options on financial futures
contracts are normally valued at the mean between the latest bid and asked
prices. Short-term obligations, maturing in sixty days or less, are valued at
amortized cost, which approximates value. Investments for which valuations or
market quotations are unavailable are valued at fair value using methods
determined in good faith by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C Income Taxes -- The Portfolios are treated as partnerships for Federal tax
purposes. No provision is made by the Portfolios for federal or state taxes
on any taxable income of the Portfolios because each investor in the
Portfolios is ultimately responsible for the payment of any taxes. Since some
of the Portfolios' investors are regulated investment companies that invest
all or substantially all of their assets in the Portfolios, the Portfolios
normally must satisfy the applicable source of income and diversification
requirements (under the Internal Revenue Code) in order for their respective
investors to satisfy them. The Portfolios will allocate at least annually
among their respective investors each investor's distributive share of the
Portfolios' net taxable (if any) and tax-exempt investment income, net
realized capital gains, and any other items of income, gain, loss, deduction
or credit. Interest income received by the Portfolios on investments in
municipal bonds, which is excludable from gross income under the Internal
Revenue Code, will retain its status as income exempt from federal income tax
when allocated to each Portfolio's investors. The portion of such interest,
if any, earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item for investors.
D Deferred Organization Expenses -- Costs incurred by a Portfolio in connection
with its organization are being amortized on the straight-line basis over
five years.
E Financial Futures Contracts -- Upon the entering of a financial futures
contract, a Portfolio is required to deposit ("initial margin") either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by a Portfolio ("margin maintenance") each day, dependent on
the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by a Portfolio. A
Portfolio's investment in financial futures contracts is designed only to
hedge against anticipated future changes in interest rates. Should interest
rates move unexpectedly, a Portfolio may not achieve the anticipated benefits
of the financial futures contracts and may realize a loss.
F Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by a Portfolio, the premium paid is recorded
as an investment, the value of which is marked-to-market daily. When a
purchased option expires, the Portfolio will realize a loss in the amount of
cost of the option. When a Portfolio enters into a closing sales transaction,
the Portfolio will realize a gain or loss depending on whether the sales
proceeds from the closing sale transaction are greater or less than the cost
of the option. When a Portfolio exercises a put option, settlement is made in
cash. The risk associated with purchasing options is limited to the premium
originally paid.
G When-issued and Delayed Delivery Transactions -- The Portfolios may engage in
when-issued or delayed delivery transactions. The Portfolios record
when-issued securities on trade date and maintain security positions such
that sufficient liquid assets will be available to make payments for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked-to-market daily and begin accruing interest on
settlement date.
30
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
H Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolios. Pursuant to the respective custodian agreements, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balances each Portfolio maintains with IBT. All significant credit
balances used to reduce the Portfolios' custodian fees are reflected as a
reduction of expenses on the Statement of Operations.
I Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
J Other -- Investment transactions are accounted for on a trade date basis.
K Interim Financial Statements -- The interim financial statements relating to
July 31, 1999 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the
Portfolios' management, reflect all adjustments necessary for the fair
presentation of the financial statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
- -------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to each Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e., income other than gains from the sale of
securities). For the six months ended July 31, 1999, each Portfolio incurred
advisory fees as follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT EFFECTIVE RATE*
<S> <C> <C>
- --------------------------------------------------------------------
Florida Insured $ 28,063 0.19%
Hawaii 15,340 0.15%
Kansas 10,028 0.15%
</TABLE>
* As a percentage of average daily net assets.
To enhance the net income of the Hawaii Portfolio and Kansas Portfolio, BMR
made a reduction of its fee in the amount of $15,340 and $10,028,
respectively, and $24,254 and $21,308, respectively, of expenses related to
the operation of the Portfolios were 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 Portfolios out of
such investment adviser fee.
Certain officers and Trustees of the Portfolios are officers of the above
organizations.
Trustees of the Portfolios that are not affiliated with the Investment
Adviser may elect to defer receipt of all or a percentage of their annual
fees in accordance with the terms of the Trustees Deferred Compensation Plan.
For the six months ended July 31, 1999, no significant amounts have been
deferred.
3 Investments
- -------------------------------------------
Purchases and sales of investments, other than U.S. Government securities,
put option transactions and short-term obligations, for the six months ended
July 31, 1999, were as follows:
<TABLE>
<CAPTION>
FLORIDA INSURED PORTFOLIO
<S> <C>
- -----------------------------------------------------
Purchases $ 7,510,686
Sales 6,075,534
<CAPTION>
HAWAII PORTFOLIO
<S> <C>
- -----------------------------------------------------
Purchases $ 1,662,624
Sales 1,834,011
<CAPTION>
KANSAS PORTFOLIO
<S> <C>
- -----------------------------------------------------
Purchases $ 1,713,140
Sales 1,124,945
</TABLE>
4 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at July 31, 1999, as computed on a
federal income tax basis, are as follows:
<TABLE>
<CAPTION>
FLORIDA INSURED PORTFOLIO
<S> <C>
- ------------------------------------------------------
AGGREGATE COST $ 27,896,035
- ------------------------------------------------------
Gross unrealized appreciation $ 1,136,192
Gross unrealized depreciation (763,027)
- ------------------------------------------------------
NET UNREALIZED APPRECIATION $ 373,165
- ------------------------------------------------------
</TABLE>
31
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
HAWAII PORTFOLIO
- ------------------------------------------------------
<S> <C>
AGGREGATE COST $ 18,612,858
- ------------------------------------------------------
Gross unrealized appreciation $ 691,685
Gross unrealized depreciation (378,883)
- ------------------------------------------------------
NET UNREALIZED APPRECIATION $ 312,802
- ------------------------------------------------------
<CAPTION>
KANSAS PORTFOLIO
<S> <C>
- ------------------------------------------------------
AGGREGATE COST $ 12,538,681
- ------------------------------------------------------
Gross unrealized appreciation $ 297,030
Gross unrealized depreciation (240,391)
- ------------------------------------------------------
NET UNREALIZED APPRECIATION $ 56,639
- ------------------------------------------------------
</TABLE>
5 Line of Credit
- -------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and its affiliates in a $130 million unsecured line of credit agreement
with a group of banks. The Portfolios 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 either the Eurodollar rate or federal funds rate. In addition, a
fee computed at an annual rate of 0.10% on the daily unused portion of the
line of credit is allocated among the participating portfolios and funds at
the end of each quarter. The Portfolios did not have any significant
borrowings or allocated fees during the six months ended July 31, 1999.
6 Financial Instruments
- -------------------------------------------
The Portfolios regularly trade in financial instruments with off-balance
sheet risk in the normal course of their investing activities to assist in
managing exposure to various market risks. These financial instruments
include futures contracts and may involve, to a varying degree, elements of
risk in excess of the amounts recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment a Portfolio has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
At July 31, 1999, there were no outstanding obligations under these financial
instruments.
32
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 1999
MANAGEMENT
EATON VANCE MUNICIPALS FUNDS
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
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
MUNICIPALS PORTFOLIOS
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Cynthia J. Clemson
Vice President and Portfolio
Manager of Florida Insured
Municipals Portfolio
Robert B. MacIntosh
Vice President and Portfolio
Manager of Hawaii Municipals
Portfolio
Timothy T. Browse
Vice President and Portfolio
Manager of Kansas
Municipals Portfolio
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
33
<PAGE>
PORTFOLIO INVESTMENT ADVISER
BOSTON MANAGEMENT AND RESEARCH
The Eaton Vance Building
255 State Street
Boston, MA 02109
FUND ADMINISTRATOR
EATON VANCE MANAGEMENT
The Eaton Vance Building
255 State Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
EATON VANCE DISTRIBUTORS, INC.
The Eaton Vance Building
255 State Street
Boston, MA 02109
(617) 482-8260
CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
FIRST DATA INVESTOR SERVICES GROUP
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
EATON VANCE MUNICIPALS TRUST II
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
- -------------------------------------------------------------------------------
THIS REPORT MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS WHICH
CONTAINS MORE COMPLETE INFORMATION ON THE FUND, INCLUDING ITS SALES
CHARGES AND EXPENSES. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
- -------------------------------------------------------------------------------
3-4388 3CSRC-9/99
