<PAGE>
[GRAPHIC]
EDUCATION
Semiannual Report July 31, 2000
EATON VANCE
MUNICIPALS Florida Insured
TRUST II
Hawaii
[GRAPHIC]
Kansas
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
LETTER TO SHAREHOLDERS
[PHOTO]
Thomas J. Fetter
President
While municipal bond investors have faced the challenge of rising interest rates
for much of the past year, the market has mounted a recovery in recent months.
In its fight against inflation, the Federal Reserve has aggressively hiked
interest rates, voicing concerns over higher labor costs, despite improvements
in productivity. Now, after raising its key Federal Funds rate on six occasions
since June 1999 for a total of 175 basis points (1.75%), there are at last some
signs that the economy may have moderated from its blistering pace of the last
year.
The bond market began the six-month period with a modest rally in February and
March, as investors sought some refuge from the increasingly volatile equity
markets. The rally stalled in April and May in anticipation of another Fed rate
hike. However, by the end of the period, the Fed was hinting that it may be near
the end of its interest-rate hike cycle, which cheered bond investors. For the
six-month period ended July 31, 2000, the Lehman Brothers Municipal Bond Index*
- a widely recognized, unmanaged index of municipal bonds - posted a return of
6.40%.
Municipal bonds remain an
undervalued asset class...
Municipal bonds remain significantly undervalued relative to Treasury bonds. The
numbers are most compelling. At July 31, the ratio of municipal yields to
Treasury yields was 99% - exceptionally 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.
---------------------------------------------------
MUNICIPAL BONDS YIELD 99% OF TREASURY YIELDS
5.77% 9.55%
30-Year AAA-rated Taxable equivalent yield
General Obligation (60) Bonds+ in 39.6% tax bracket
5.78%
30-Year Treasury bond
Principal and interest payments of Treasury Securities are guaranteed by the
U.S. government.
* 60 yields are a compilation of a representative variety of general obligations
and are not necessarily representative of a fund's yield. Statistics of July 31,
2000.
Past performance is no guarantee of future results.
Source: Bloomberg, L.P.
---------------------------------------------------
The outlook for municipal bonds
appears to be improving...
While municipal bond investors have endured difficulties over the past year, we
believe the outlook has improved. First, municipal issuance has declined
dramatically. Second, a surge in Federal tax receipts has resulted in rising
estimates for the Federal budget surplus, sharply reducing the Treasury's
borrowing needs. Third, the Treasury Department has announced that it will buy
back at least $30 billion of 10-to-30-year bonds this fiscal year. That may,
over time, contribute to lower long-term interest rates.
Finally, we are encouraged that, in the midst of an election year, Congress and
the Administration have continued to exercise a high degree of fiscal
discipline. While we will closely monitor the economic proposals of the major
party nominees for president, we are confident that the progress of recent years
can be maintained. That could result in a much improved outlook for all
fixed-income areas, including the municipal bond market.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter
President
September 12, 2000
*It is not possible to invest directly in an Index.
--------------------------------------------------------------------------------
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, 2000
INVESTMENT UPDATE
[PHOTO]
Cynthia J. Clemson
Portfolio Manager
THE ECONOMY
--------------------------------------------------------------------------------
- The Florida economy continued to benefit in 2000 from impressive job growth
in its service and tourism sectors. The construction industry, however, has
been uneven, with single-family construction slowing somewhat from a year ago.
The July jobless rate was 3.8%, up slightly from 3.7% a year earlier.
- In South Florida, Miami posted the nation's highest hotel occupancy rates in
the first quarter of 2000. Reflecting that strength, plans call for the
construction of 7,900 new hotel rooms in coming years, according to the
Greater Miami Convention and Visitors Bureau.
- Brazil remains Florida's top export market, as Latin America emerges from an
economic slump. Estimates suggest that Florida's exports to Brazil could
exceed $6 billion in 2000, led by pharmaceuticals, technology, medical
supplies and sports equipment.
THE FUND
--------------------------------------------------------------------------------
- During the six months ended July 31, 2000, the Fund's Class A and Class B
shares had total returns of 8.83% and 8.45%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$10.68 on July 31, 2000 from $10.07 on January 31, 2000, and the reinvestment
of $0.270 per share in tax-free income.(2) For Class B, this return resulted
from an increase in NAV to $10.56 from $9.95, and the reinvestment of $0.223
per share in tax-free income.(2)
- Based on the Fund's most recent dividends and NAVs on July 31, 2000 of $10.68
per share for Class A and $10.56 per share for Class B, the distribution rates
were 4.82% and 4.26%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 7.98% and 7.05%, respectively.(4)
- The SEC 30-day yields for Class A and B shares at July 31 were 4.58% and
4.03%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 7.58% and 6.67%, respectively.(4)
MANAGEMENT UPDATE
--------------------------------------------------------------------------------
- Special tax revenue bonds were among the Portfolio's largest sector
weightings. Faced with a continuing population surge of retirees and emigres
from other states, Florida communities have relied on special tax revenue
bonds as their primary method of financing upgrades to water, utility and
transportation facilities.
- Management maintained a significant exposure to housing bonds at July 31,
2000. The Portfolio's investments were well-diversified geographically
throughout the state and included both single-family and multi-family housing
projects.
- High quality remained a hallmark of the Portfolio's investments. At July 31,
2000, 98.7% of the Portfolio was rated AAA. Call protection was again an
important strategic consideration to improve the Portfolio's performance
characteristics.
<TABLE>
<CAPTION>
PORTFOLIO STATISTICS(6)
--------------------------------------------------------------------------------
<S> <C>
- Number of Issues: 42
- Average Maturity: 23.1 years
- Average Rating: AAA
- Average Call: 7.3 years
- Average Dollar Price: $91.94
</TABLE>
RATING DISTRIBUTION(6)
--------------------------------------------------------------------------------
[CHART]
<TABLE>
<S> <C>
AAA 98.7%
Non-Rated 1.3%
</TABLE>
--------------------------------------------------------------------------------
FUND INFORMATION
AS OF JULY 31, 2000
<TABLE>
<CAPTION>
PERFORMANCE(7) Class A Class B
-----------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (AT NET ASSET VALUE)
-----------------------------------------------------------------------------
<S> <C> <C>
One Year 3.13% 2.36%
Five Years 5.23 4.54
Life of Fund + 6.33 5.45
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
-----------------------------------------------------------------------------
<S> <C> <C>
One Year -1.73% -2.54%
Five Years 4.21 4.21
Life of Fund + 5.52 5.45
</TABLE>
+ Inception date: Class A: 3/3/94; Class B: 3/2/94
FIVE LARGEST SECTORS(6)
---------------------------------------------
BY TOTAL NET ASSETS
<TABLE>
<S> <C>
Insured - Special Tax Revenue* 23.8
Insured - Water and Sewer* 17.3
Housing 13.7
Insured - Transportation* 11.0
Insured - Housing* 8.0
</TABLE>
(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 may 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)
Taxable-equivalent rates assume maximum 39.60% combined federal and state
income tax rate. A lower rate would result in lower tax-equivalent figures.
(5) 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. (6) Portfolio Statistics, Rating
Distribution, and Five Largest Sectors may not be representative of the
Portfolio's future investments. Five Largest Sectors represent 73.8% of the
Portfolio's total net assets. In the opinion of management, the non-rated
portion of the Fund represents bonds that, if rated, would warrant an
investment-grade rating. (7) 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, 2000
INVESTMENT UPDATE
[PHOTO]
Robert B. MacIntosh
Portfolio Manager
THE ECONOMY
--------------------------------------------------------------------------------
- Hawaii's economy has showed further signs of recovery in 2000, although
improvement remains gradual. Some of Hawaii's leading indicators, such as
personal income and visitor arrivals, have revived in recent months.
Meanwhile, the jobless rate fell to 4.0% in July, 2000 from 5.5% a year
ago.
- Hawaii's tourism industry, which has suffered from a stagnant Japanese
economy, continues to register modest growth in 2000. The troubled Japanese
economy had depressed eastbound traffic, although visits from the mainland
have remained fairly strong.
- The state's construction industry has reflected increased activity in the
Hawaii housing market. Single-family and condominium sales have risen
sharply, while statewide building permits have surged over the same period
a year earlier.
THE FUND
--------------------------------------------------------------------------------
- During the six months ended July 31, 2000, the Fund's Class A and Class B
shares had total returns of 8.02% and 7.53%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$9.15 on July 31, 2000 from $8.69 on January 31, 2000, and the reinvestment
of $0.230 per share in tax-free income.(2) For Class B, this return
resulted from an increase in NAV to $9.28 from $8.82, and the reinvestment
of $0.198 per share in tax-free income.(2)
- Based on the Fund's most recent dividends and NAVs on July 31, 2000 of
$9.15 per share for Class A and $9.28 per share for Class B, the
distribution rates were 4.77% and 4.26%, respectively.(3) The distribution
rates of Class A and Class B are equivalent to taxable rates of 8.66% and
7.73%, respectively.(4)
- The SEC 30-day yields for Class A and B shares at July 31 were 4.51% and
4.00%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 8.18% and 7.26%, respectively.(4)
MANAGEMENT UPDATE
--------------------------------------------------------------------------------
- In a market characterized by relatively little new issuance, the Portfolio
featured limited trading activity. Management focused its largest
weightings in the hospital and general obligation sectors. The emphasis was
on highly liquid issuers, including City and County of Honolulu and Hawaii
Airports System.
- While hospital bonds maintained an important role in the Portfolio's
investments, management monitored the local hospital market carefully. The
Portfolio focused on quality institutions and issuers, including Kapiolani
Hospital and Queens Health System.
- Management continued to upgrade call protection, including a trade from an
older Continental Airlines bond into a newer Continental issue. The newer
bond brought a more attractive coupon together with longer call protection.
<TABLE>
<CAPTION>
PORTFOLIO STATISTICS(6)
--------------------------------------------------------------------------------
<S> <C>
- Number of Issues: 41
- Average Maturity: 21.0 years
- Average Rating: AA
- Average Call: 8.2 years
- Average Dollar Price: $92.08
--------------------------------------------------------------------------------
</TABLE>
RATING DISTRIBUTION(6)
--------------------------------------------------------------------------------
[CHART]
<TABLE>
<CAPTION>
<S> <C>
AAA 63.2%
AA 10.7%
A 10.3%
BBB 8.8%
BB 2.4%
B 3.6%
Non-Rated 1.0%
</TABLE>
--------------------------------------------------------------------------------
FUND INFORMATION
AS OF JULY 31, 2000
<TABLE>
<CAPTION>
PERFORMANCE(7) CLASS A CLASS B
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (AT NET ASSET VALUE)
--------------------------------------------------------------------------------
<S> <C> <C>
One Year 1.29% 0.62%
Five Years 4.67 4.19
Life of Fund + 3.80 3.66
<CAPTION>
SEC AVERAGE ANNUAL TOTAL RETURNS (INCLUDING SALES CHARGE OR APPLICABLE CDSC)
--------------------------------------------------------------------------------
<S> <C> <C>
One Year -3.47% -4.19%
Five Years 3.65 3.86
Life of Fund + 3.01 3.66
</TABLE>
+ Inception date: Class A: 3/14/94; Class B: 3/2/94
<TABLE>
<CAPTION>
FIVE LARGEST SECTORS(6)
--------------------------------------------------------------------------------
BY TOTAL NET ASSETS
<S> <C>
Hospital 15.1%
Insured - General Obligations* 14.1%
Insured - Transportation* 12.2%
Insured - Electric Utilities* 9.2%
Housing 7.5%
</TABLE>
(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 may 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) Taxable-equivalent rates
assume maximum 44.89% combined federal and state income tax rate. A lower
rate would result in lower tax-equivalent figures. (5) 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. (6) Portfolio Statistics, Rating Distribution, and
Five Largest Sectors may not be representative of the Portfolio's future
investments. Five Largest Sectors represent 58.1% of the Portfolio's total
net assets. In the opinion of management, the non-rated portion of the Fund
represents bonds that, if rated, would warrant an investment-grade rating.
(7) 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, 2000
INVESTMENT UPDATE
[PHOTO]
Thomas M. Metzold
Portfolio Manager
THE ECONOMY
--------------------------------------------------------------------------------
- The Kansas economy continued to add jobs in the first half of 2000,
although at a slower rate than in recent years. State personal income
growth, which averaged 6% annually from 1996-1998, declined to the 4.5%
level in the past year. The state's jobless rate was 3.3% in July, up from
2.8% a year ago.
- Kansas' manufacturing sector has posted slower job growth in 2000 than in
the previous three years. The slowdown has been especially keen in two
major areas that have been economic mainstays: transportation equipment and
machinery.
- Following on the heels of low crop prices in 1999, Kansas' land values have
remained fairly stagnant, as farmers are encountering a mixed export
picture. The Russian government has reported a large wheat harvest,
indicating no need to import wheat from the U.S.
THE FUND
--------------------------------------------------------------------------------
- During the six months ended July 31, 2000, the Fund's Class A and Class B
shares had total returns of 8.18% and 7.89%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$9.73 on July 31, 2000 from $9.23 on January 31, 2000, and the reinvestment
of $0.247 per share in tax-free income.(2) For Class B, this return
resulted from an increase in NAV to $9.65 from $9.14, and the reinvestment
of $0.204 per share in tax-free income.(2)
- Based on the Fund's most recent dividends and NAVs on July 31, 2000 of
$9.73 per share for Class A and $9.65 per share for Class B, the
distribution rates were 4.82% and 4.23%, respectively.(3) The distribution
rates of Class A and Class B are equivalent to taxable rates of 8.81% and
7.73%, respectively.(4)
- The SEC 30-day yields for Class A and B shares at July 31 were 4.65% and
4.07%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 8.50% and 7.44%, respectively.(4)
MANAGEMENT UPDATE
--------------------------------------------------------------------------------
- Management has continued to pursue a "barbell" strategy, balancing higher
quality, performance-oriented issues with higher coupon bonds. In a market
characterized by little new Kansas issuance, the Portfolio featured
relatively little trading activity.
- Housing bonds again constituted the Portfolio's largest sector weighting.
In a rising interest rate environment, the Portfolio's higher coupon
housing bonds displayed some defensive characteristics. The Portfolio's
single and multi-family housing bonds provided especially attractive yields
and a measure of protection against higher rates.
- Insured hospital bonds played an important role in the Portfolio.
Management emphasized financially sound, well-managed institutions.
Investments included the consumer choice award-winning St. Luke's Shawnee
Mission Health System, which operates 8 facilities in the metropolitan
Kansas City area.
<TABLE>
<CAPTION>
PORTFOLIO STATISTICS(6)
--------------------------------------------------------------------------------
<S> <C>
- Number of Issues: 45
- Average Maturity: 20.3 years
- Average Rating: AA+
- Average Call: 7.5 years
- Average Dollar Price: $92.81
</TABLE>
<TABLE>
<CAPTION>
RATING DISTRIBUTION(6)
--------------------------------------------------------------------------------
<S> <C>
AAA 69.0%
AA 10.1%
A 13.0%
BBB 4.9%
Non-Rated 3.0%
</TABLE>
--------------------------------------------------------------------------------
FUND INFORMATION
AS OF JULY 31, 2000
<TABLE>
<CAPTION>
Performance(7) Class A Class B
--------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
--------------------------------------------------------------------------------
<S> <C> <C>
One Year 2.91% 2.15%
Five Years 5.04 4.48
Life of Fund + 4.83 4.42
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
--------------------------------------------------------------------------------
<S> <C> <C>
One Year -2.01% -2.73%
Five Years 4.03 4.15
Life of Fund + 4.03 4.42
+ Inception date: Class A: 3/3/94 Class B: 3/2/94
<CAPTION>
FIVE LARGEST SECTORS(6)
--------------------------------------------------------------------------------
BY TOTAL NET ASSETS
<CAPTION>
<S> <C>
Housing 15.4%
Insured - General Obligations* 13.9%
Insured - Hospital* 10.6%
Hospital 10.1%
General Obligations 7.2%
</TABLE>
(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 may 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) Taxable-equivalent rates
assume maximum 45.31% combined federal and state income tax rate. A lower
rate would result in lower tax-equivalent figures. (5) 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. (6) Portfolio Statistics, Rating Distribution, and
Five Largest Sectors may not be representative of the Portfolio's future
investments. Five Largest Sectors represent 57.2% of the Portfolio's total
net assets. In the opinion of management, the non-rated portion of the Fund
represents bonds that, if rated, would warrant an investment-grade rating.
(7) 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, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
AS OF JULY 31, 2000
<TABLE>
<CAPTION>
FLORIDA INSURED FUND HAWAII FUND KANSAS FUND
<S> <C> <C> <C>
------------------------------------------------------------------------------
Assets
------------------------------------------------------------------------------
Investment in Portfolio --
Identified cost $25,560,190 $17,767,639 $11,754,995
Unrealized
appreciation (depreciation) 149,143 (155,014) (242,915)
------------------------------------------------------------------------------
TOTAL INVESTMENT IN PORTFOLIO,
AT VALUE $25,709,333 $17,612,625 $11,512,080
------------------------------------------------------------------------------
Receivable for Fund shares
sold $ 6,998 $ 5,822 $ 191
------------------------------------------------------------------------------
TOTAL ASSETS $25,716,331 $17,618,447 $11,512,271
------------------------------------------------------------------------------
Liabilities
------------------------------------------------------------------------------
Payable for Fund shares
redeemed $ 70,811 $ -- $ 9,054
Dividends payable 48,508 28,433 17,255
Payable to affiliate for
Trustees' fees 88 88 88
Accrued expenses 8,901 9,226 6,958
------------------------------------------------------------------------------
TOTAL LIABILITIES $ 128,308 $ 37,747 $ 33,355
------------------------------------------------------------------------------
NET ASSETS $25,588,023 $17,580,700 $11,478,916
------------------------------------------------------------------------------
Sources of Net Assets
------------------------------------------------------------------------------
Paid-in capital $25,760,564 $18,259,290 $11,827,466
Accumulated net realized loss
from Portfolio (computed on
the basis of
identified cost) (376,019) (502,700) (77,589)
Accumulated undistributed
(distributions in excess
of) net investment income 54,335 (20,876) (28,046)
Net unrealized appreciation
(depreciation) from
Portfolio (computed on the
basis of identified cost) 149,143 (155,014) (242,915)
------------------------------------------------------------------------------
TOTAL $25,588,023 $17,580,700 $11,478,916
------------------------------------------------------------------------------
Class A Shares
------------------------------------------------------------------------------
NET ASSETS $ 5,129,469 $ 390,175 $ 2,667,896
SHARES OUTSTANDING 480,205 42,645 274,103
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE
(net
assets DIVIDED BY shares
of beneficial interest
outstanding) $ 10.68 $ 9.15 $ 9.73
MAXIMUM OFFERING PRICE PER
SHARE
(100 DIVIDED BY 95.25 of
net asset value per
share) $ 11.21 $ 9.61 $ 10.22
------------------------------------------------------------------------------
Class B Shares
------------------------------------------------------------------------------
NET ASSETS $20,458,554 $17,190,525 $ 8,811,020
SHARES OUTSTANDING 1,937,691 1,852,380 913,369
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION PRICE
PER SHARE
(net
assets DIVIDED BY shares
of beneficial interest
outstanding) $ 10.56 $ 9.28 $ 9.65
------------------------------------------------------------------------------
</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, 2000
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 2000
<TABLE>
<CAPTION>
FLORIDA INSURED FUND HAWAII FUND KANSAS FUND
<S> <C> <C> <C>
------------------------------------------------------------------------------
Investment Income
------------------------------------------------------------------------------
Interest allocated from
Portfolio $ 749,126 $ 514,193 $348,154
Expenses allocated from
Portfolio (54,101) (27,242) (19,393)
------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM
PORTFOLIO $ 695,025 $ 486,951 $328,761
------------------------------------------------------------------------------
Expenses
------------------------------------------------------------------------------
Trustees fees and expenses $ 197 $ 197 $ 197
Distribution and service fees
Class A 3,388 89 2,045
Class B 92,078 75,932 42,098
Legal and accounting services 13,992 12,603 12,292
Printing and postage 5,460 5,460 5,460
Custodian fee 3,076 3,076 3,076
Transfer and dividend
disbursing agent fees 11,351 9,411 5,833
Registration fees 182 910 182
Miscellaneous 1,262 1,710 566
------------------------------------------------------------------------------
TOTAL EXPENSES $ 130,986 $ 109,388 $ 71,749
------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 564,039 $ 377,563 $257,012
------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ (191,249) $ (139,080) $(28,321)
------------------------------------------------------------------------------
NET REALIZED LOSS $ (191,249) $ (139,080) $(28,321)
------------------------------------------------------------------------------
Change in unrealized
appreciation
(depreciation) --
Investments $1,704,018 $1,052,252 $664,354
Financial futures contracts (691) (30,512) --
------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $1,703,327 $1,021,740 $664,354
------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN $1,512,078 $ 882,660 $636,033
------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $2,076,117 $1,260,223 $893,045
------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JULY 31, 2000
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS FLORIDA INSURED FUND HAWAII FUND KANSAS FUND
<S> <C> <C> <C>
---------------------------------------------------------------------------------
From operations --
Net investment income $ 564,039 $ 377,563 $ 257,012
Net realized loss (191,249) (139,080) (28,321)
Net change in unrealized
appreciation (depreciation) 1,703,327 1,021,740 664,354
---------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 2,076,117 $ 1,260,223 $ 893,045
---------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (135,826) $ (7,242) $ (63,311)
Class B (439,556) (370,240) (193,701)
In excess of net investment
income
Class A -- -- (3,002)
Class B -- (1,043) (6,473)
---------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS $ (575,382) $ (378,525) $ (266,487)
---------------------------------------------------------------------------------
Transactions in shares of
beneficial interest --
Proceeds from sale of shares
Class A $ 258,134 $ 150,631 $ 58,108
Class B 1,420,948 216,292 266,394
Net asset value of shares
issued to shareholders in
payment of distributions
declared
Class A 47,431 5,169 50,138
Class B 154,208 163,657 114,036
Cost of shares redeemed
Class A (1,102,991) (37,520) (30,697)
Class B (2,233,834) (726,668) (1,628,118)
---------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS $(1,456,104) $ (228,439) $(1,170,139)
---------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS $ 44,631 $ 653,259 $ (543,581)
---------------------------------------------------------------------------------
Net Assets
---------------------------------------------------------------------------------
At beginning of period $25,543,392 $16,927,441 $12,022,497
---------------------------------------------------------------------------------
AT END OF PERIOD $25,588,023 $17,580,700 $11,478,916
---------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
---------------------------------------------------------------------------------
AT END OF PERIOD $ 54,335 $ (20,876) $ (28,046)
---------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JANUARY 31, 2000
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS FLORIDA INSURED FUND HAWAII FUND KANSAS FUND
<S> <C> <C> <C>
---------------------------------------------------------------------------------
From operations --
Net investment income $ 1,235,496 $ 853,625 $ 567,158
Net realized loss (184,770) (88,025) (50,040)
Net change in unrealized
appreciation (depreciation) (3,662,116) (2,657,352) (1,544,560)
---------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
FROM OPERATIONS $(2,611,390) $(1,891,752) $(1,027,442)
---------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (300,696) $ (14,670) $ (110,747)
Class B (922,489) (821,132) (456,136)
In excess of net investment
income
Class A -- -- (798)
From net realized gain
Class A -- -- (847)
Class B -- -- (6,040)
---------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS $(1,223,185) $ (835,802) $ (574,568)
---------------------------------------------------------------------------------
Transactions in shares of
beneficial interest --
Proceeds from sale of shares
Class A $ 1,414,481 $ 80,537 $ 1,237,633
Class B 3,990,518 1,554,149 1,144,398
Net asset value of shares
issued to shareholders in
payment of
distributions declared
Class A 113,679 10,916 85,355
Class B 350,904 362,455 261,592
Cost of shares redeemed
Class A (985,040) (51,218) (151,189)
Class B (4,313,005) (2,408,980) (1,737,456)
---------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM FUND
SHARE TRANSACTIONS $ 571,537 $ (452,141) $ 840,333
---------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $(3,263,038) $(3,179,695) $ (761,677)
---------------------------------------------------------------------------------
Net Assets
---------------------------------------------------------------------------------
At beginning of year $28,806,430 $20,107,136 $12,784,174
---------------------------------------------------------------------------------
AT END OF YEAR $25,543,392 $16,927,441 $12,022,497
---------------------------------------------------------------------------------
Accumulated undistributed
(distributions in excess of) net
investment income included in net assets
---------------------------------------------------------------------------------
AT END OF YEAR $ 65,678 $ (19,914) $ (18,571)
---------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FLORIDA INSURED FUND -- CLASS A
------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 ----------------------
(UNAUDITED) 2000 1999
<S> <C> <C> <C>
----------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 10.070 $ 11.540 $ 11.370
----------------------------------------------------------------------------
Income (loss) from operations
----------------------------------------------------------------------------
Net investment income $ 0.266 $ 0.541 $ 0.569
Net realized and unrealized
gain (loss) 0.614 (1.470) 0.153
----------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.880 $ (0.929) $ 0.722
----------------------------------------------------------------------------
Less distributions
----------------------------------------------------------------------------
From net investment income $ (0.270) $ (0.541) $ (0.552)
----------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 10.680 $ 10.070 $ 11.540
----------------------------------------------------------------------------
TOTAL RETURN(1) 8.83% (8.24)% 6.52%
----------------------------------------------------------------------------
Ratios/Supplemental Data+
----------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 5,129 $ 5,629 $ 5,905
Ratios (As a percentage of
average daily net assets):
Net expenses(2) 0.86%(3) 0.69% 0.46%
Net expenses after
custodian fee
reduction(2) 0.84%(3) 0.65% 0.39%
Net investment income 5.10%(3) 5.02% 4.86%
Portfolio Turnover of the
Portfolio 7% 34% 9%
----------------------------------------------------------------------------
+ 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(2) 0.58%
Expenses after custodian
fee reduction(2) 0.51%
Net investment income 4.74%
Net investment income per
share $ 0.555
----------------------------------------------------------------------------
</TABLE>
(1) 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.
(2) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FLORIDA INSURED FUND -- CLASS B
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 --------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 9.950 $11.400 $11.230 $10.710 $11.090 $10.260
--------------------------------------------------------------------------------------------------------------
Income (loss) from operations
--------------------------------------------------------------------------------------------------------------
Net investment income $ 0.220 $ 0.452 $ 0.467 $ 0.488 $ 0.499 $ 0.512
Net realized and unrealized
gain (loss) 0.614 (1.456) 0.170 0.511 (0.385) 0.832
--------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.834 $(1.004) $ 0.637 $ 0.999 $ 0.114 $ 1.344
--------------------------------------------------------------------------------------------------------------
Less distributions
--------------------------------------------------------------------------------------------------------------
From net investment income $(0.224) $(0.446) $(0.467) $(0.479) $(0.494) $(0.512)
In excess of net investment
income -- -- -- -- -- (0.002)
--------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.224) $(0.446) $(0.467) $(0.479) $(0.494) $(0.514)
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $10.560 $ 9.950 $11.400 $11.230 $10.710 $11.090
--------------------------------------------------------------------------------------------------------------
TOTAL RETURN(1) 8.45% (8.97)% 5.82% 9.57% 1.14% 13.39%
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $20,459 $19,914 $22,901 $21,973 $21,717 $18,391
Ratios (As a percentage of
average daily net assets):
Net expenses(2) 1.65%(3) 1.50% 1.25% 1.23% 1.21% 1.10%
Net expenses after
custodian fee
reduction(2) 1.63%(3) 1.46% 1.18% 1.16% 1.12% 1.00%
Net investment income 4.31%(3) 4.22% 4.15% 4.50% 4.67% 4.76%
Portfolio Turnover of the
Portfolio 7% 34% 9% 34% 36% 32%
--------------------------------------------------------------------------------------------------------------
+ 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(2) 1.37% 1.65% 1.51% 1.49%
Expenses after custodian
fee reduction(2) 1.30% 1.58% 1.42% 1.39%
Net investment income 4.03% 4.08% 4.37% 4.37%
Net investment income per
share $ 0.453 $ 0.443 $ 0.467 $ 0.470
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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.
(2) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
HAWAII FUND -- CLASS A
------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 ----------------------
(UNAUDITED)(1) 2000 1999
<S> <C> <C> <C>
----------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 8.690 $10.050 $ 9.930
----------------------------------------------------------------------------
Income (loss) from operations
----------------------------------------------------------------------------
Net investment income $ 0.233 $ 0.487 $ 0.534
Net realized and unrealized
gain (loss) 0.457 (1.362) 0.078
----------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.690 $(0.875) $ 0.612
----------------------------------------------------------------------------
Less distributions
----------------------------------------------------------------------------
From net investment income $(0.230) $(0.485) $(0.492)
----------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.150 $ 8.690 $10.050
----------------------------------------------------------------------------
TOTAL RETURN(2) 8.02% (8.95)% 6.34%
----------------------------------------------------------------------------
Ratios/Supplemental Data+
----------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 390 $ 258 $ 259
Ratios (As a percentage of
average daily net assets):
Net expenses(3) 0.78%(4) 0.48% 0.45%
Net expenses after
custodian fee
reduction(3) 0.76%(4) 0.46% 0.41%
Net investment income 5.24%(4) 5.20% 5.35%
Portfolio Turnover of the
Portfolio 4% 20% 29%
----------------------------------------------------------------------------
+ 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) 0.90%(4) 0.84% 0.69%
Expenses after custodian
fee reduction(3) 0.88%(4) 0.82% 0.65%
Net investment income 5.12%(4) 4.84% 5.11%
Net investment income per
share $ 0.228 $ 0.453 $ 0.510
----------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(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) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
HAWAII FUND -- CLASS B
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 --------------------------------------------------------
(UNAUDITED)(1) 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 8.820 $10.200 $10.130 $ 9.730 $ 9.980 $ 9.150
--------------------------------------------------------------------------------------------------------------
Income (loss) from operations
--------------------------------------------------------------------------------------------------------------
Net investment income $ 0.200 $ 0.430 $ 0.431 $ 0.441 $ 0.466 $ 0.484
Net realized and unrealized
gain (loss) 0.461 (1.388) 0.090 0.418 (0.241) 0.835
--------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.661 $(0.958) $ 0.521 $ 0.859 $ 0.225 $ 1.319
--------------------------------------------------------------------------------------------------------------
Less distributions
--------------------------------------------------------------------------------------------------------------
From net investment income $(0.200) $(0.422) $(0.431) $(0.441) $(0.466) $(0.484)
In excess of net investment
income (0.001) -- (0.020) (0.018) (0.009) (0.005)
--------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.201) $(0.422) $(0.451) $(0.459) $(0.475) $(0.489)
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.280 $ 8.820 $10.200 $10.130 $ 9.730 $ 9.980
--------------------------------------------------------------------------------------------------------------
TOTAL RETURN(2) 7.53% (9.58)% 5.29% 9.08% 2.40% 14.74%
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $17,191 $16,669 $19,848 $19,401 $15,552 $15,126
Ratios (As a percentage of
average daily net assets):
Net expenses(3) 1.63%(4) 1.20% 1.18% 1.27% 1.20% 1.05%
Net expenses after
custodian fee
reduction(3) 1.61%(4) 1.18% 1.14% 1.24% 1.15% 0.98%
Net investment income 4.40%(4) 4.51% 4.27% 4.47% 4.81% 5.03%
Portfolio Turnover of the
Portfolio 4% 20% 29% 27% 21% 19%
--------------------------------------------------------------------------------------------------------------
+ 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) 1.75%(4) 1.56% 1.42% 1.70% 1.61% 1.53%
Expenses after custodian
fee reduction(3) 1.73%(4) 1.54% 1.38% 1.67% 1.56% 1.46%
Net investment income 4.28%(4) 4.15% 4.03% 4.04% 4.40% 4.51%
Net investment income per
share $ 0.195 $ 0.396 $ 0.407 $ 0.399 $ 0.426 $ 0.434
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(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) Anualized.
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KANSAS FUND -- CLASS A
------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 ----------------------
(UNAUDITED)(1) 2000(1) 1999(1)
<S> <C> <C> <C>
----------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 9.230 $ 10.470 $ 10.460
----------------------------------------------------------------------------
Income (loss) from operations
----------------------------------------------------------------------------
Net investment income $ 0.236 $ 0.505 $ 0.505
Net realized and unrealized
gain (loss) 0.511 (1.231) 0.082
----------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.747 $ (0.726) $ 0.587
----------------------------------------------------------------------------
Less distributions
----------------------------------------------------------------------------
From net investment income $ (0.236) $ (0.505) $ (0.505)
In excess of net investment
income (0.011) (0.004) (0.012)
From net realized gain -- -- (0.060)
In excess of net realized gain -- (0.005) --
----------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.247) $ (0.514) $ (0.577)
----------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.730 $ 9.230 $ 10.470
----------------------------------------------------------------------------
TOTAL RETURN(2) 8.18% (7.12)% 5.77%
----------------------------------------------------------------------------
Ratios/Supplemental Data+
----------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 2,668 $ 2,455 $ 1,561
Ratios (As a percentage of
average daily net assets):
Net expenses(3) 0.96%(4) 0.53% 0.49%
Net expenses after
custodian fee
reduction(3) 0.96%(4) 0.48% 0.43%
Net investment income 4.99%(4) 5.12% 4.83%
Portfolio Turnover of the
Portfolio 1% 24% 33%
----------------------------------------------------------------------------
+ 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) 1.19%(4) 0.97% 0.79%
Expenses after custodian
fee reduction(3) 1.19%(4) 0.92% 0.73%
Net investment income 4.76%(4) 4.68% 4.53%
Net investment income per
share $ 0.233 $ 0.462 $ 0.474
----------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(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) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KANSAS FUND -- CLASS B
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 --------------------------------------------------------
(UNAUDITED)(1) 2000(1) 1999(1) 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 9.140 $10.370 $10.380 $10.080 $10.320 $ 9.560
--------------------------------------------------------------------------------------------------------------
Income (loss) from operations
--------------------------------------------------------------------------------------------------------------
Net investment income $ 0.198 $ 0.424 $ 0.429 $ 0.458 $ 0.479 $ 0.481
Net realized and unrealized
gain (loss) 0.517 (1.225) 0.071 0.414 (0.238) 0.761
--------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.715 $(0.801) $ 0.500 $ 0.872 $ 0.241 $ 1.242
--------------------------------------------------------------------------------------------------------------
Less distributions
--------------------------------------------------------------------------------------------------------------
From net investment income $(0.198) $(0.424) $(0.429) $(0.462) $(0.473) $(0.481)
In excess of net investment
income (0.007) -- (0.021) --(2) -- (0.001)
From net realized gain -- -- (0.060) (0.110) (0.008) --
In excess of net realized gain -- (0.005) -- -- -- --
--------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.205) $(0.429) $(0.510) $(0.572) $(0.481) $(0.482)
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.650 $ 9.140 $10.370 $10.380 $10.080 $10.320
--------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 7.89% (7.87)% 4.96% 8.87% 2.46% 13.26%
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 8,811 $ 9,568 $11,223 $10,050 $10,492 $10,782
Ratios (As a percentage of
average daily net assets):
Net expenses(4) 1.73%(5) 1.33% 1.28% 1.38% 1.25% 1.20%
Net expenses after
custodian fee
reduction(4) 1.73%(5) 1.28% 1.22% 1.33% 1.15% 1.08%
Net investment income 4.24%(5) 4.32% 4.14% 4.48% 4.77% 4.79%
Portfolio Turnover of the
Portfolio 1% 24% 33% 17% 49% 21%
--------------------------------------------------------------------------------------------------------------
+ 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) 1.96%(5) 1.77% 1.58% 1.90% 1.68% 1.59%
Expenses after custodian
fee reduction(4) 1.96%(5) 1.72% 1.52% 1.85% 1.58% 1.47%
Net investment income 4.01%(5) 3.88% 3.84% 3.96% 4.34% 4.40%
Net investment income per
share $ 0.195 $ 0.381 $ 0.398 $ 0.405 $ 0.436 $ 0.442
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) Distributions in excess of net investment income are less than $0.001
per share.
(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) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
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, each
diversified, 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 (99.4%, 99.2% and 98.8% at July 31, 2000 for Florida
Insured Fund, Hawaii Fund and Kansas Fund respectively). 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, 2000,
the Funds, 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 for each Fund are as follows:
<TABLE>
<CAPTION>
FUND AMOUNT EXPIRES
<S> <C> <C>
--------------------------------------------------------------------
Florida Insured Fund $120,174 January 31, 2008
Hawaii Fund 75,392 January 31, 2008
26,381 January 31, 2005
249,200 January 31, 2004
Kansas Fund 37,245 January 31, 2008
</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 intend 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.
Additionally, at January 31, 2000, Florida Insured Fund, Hawaii Fund and
Kansas Fund had net capital losses of $64,596, $12,647 and $12,023,
respectively, attributable to security transactions incurred after October
31, 1999. These net capital losses are treated as arising on the first day of
each Fund's next taxable year.
D Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
16
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
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 income and expense during the reporting period. Actual results could
differ from those estimates.
E 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 daily cash balances the Funds and Portfolios maintain with
IBT. All significant credit balances used to reduce the Funds' custodian fees
are reported as a reduction of operating expenses in the statements of
operations.
F Other -- Investment transactions are accounted for on a trade-date basis.
G Interim Financial Statements -- The interim financial statements relating to
July 31, 2000 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, consisting only of normal recurring
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, 2000 YEAR ENDED
CLASS A (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
--------------------------------------------------------------------------------
Sales 24,739 129,363
Issued to shareholders electing to
receive payments of distributions in
Fund shares 4,553 10,555
Redemptions (108,155) (92,439)
--------------------------------------------------------------------------------
NET INCREASE (DECREASE) (78,863) 47,479
--------------------------------------------------------------------------------
<CAPTION>
FLORIDA INSURED FUND
--------------------------------------
SIX MONTHS ENDED
JULY 31, 2000 YEAR ENDED
CLASS B (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
--------------------------------------------------------------------------------
Sales 140,097 370,014
Issued to shareholders electing to
receive payments of distributions in
Fund shares 15,026 32,898
Redemptions (218,680) (411,207)
--------------------------------------------------------------------------------
NET DECREASE (63,557) (8,295)
--------------------------------------------------------------------------------
<CAPTION>
HAWAII FUND
--------------------------------------
SIX MONTHS ENDED
JULY 31, 2000 YEAR ENDED
CLASS A (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
--------------------------------------------------------------------------------
Sales 16,657 8,367
Issued to shareholders electing to
receive payments of distributions in
Fund shares 576 1,163
Redemptions (4,286) (5,626)
--------------------------------------------------------------------------------
NET INCREASE 12,947 3,904
--------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
HAWAII FUND
--------------------------------------
SIX MONTHS ENDED
JULY 31, 2000 YEAR ENDED
CLASS B (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
--------------------------------------------------------------------------------
Sales 23,729 161,038
Issued to shareholders electing to
receive payments of distributions in
Fund shares 18,038 38,002
Redemptions (80,177) (254,865)
--------------------------------------------------------------------------------
NET DECREASE (38,410) (55,825)
--------------------------------------------------------------------------------
<CAPTION>
KANSAS FUND
--------------------------------------
SIX MONTHS ENDED
JULY 31, 2000 YEAR ENDED
CLASS A (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
--------------------------------------------------------------------------------
Sales 6,152 123,868
Issued to shareholders electing to
receive payments of distributions in
Fund shares 5,263 8,729
Redemptions (3,290) (15,679)
--------------------------------------------------------------------------------
NET INCREASE 8,125 116,918
--------------------------------------------------------------------------------
<CAPTION>
KANSAS FUND
--------------------------------------
SIX MONTHS ENDED
JULY 31, 2000 YEAR ENDED
CLASS B (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
--------------------------------------------------------------------------------
Sales 28,446 117,585
Issued to shareholders electing to
receive payments of distributions in
Fund shares 12,137 26,745
Redemptions (173,633) (179,976)
--------------------------------------------------------------------------------
NET DECREASE (133,050) (35,646)
--------------------------------------------------------------------------------
</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. The Funds were
informed that Eaton Vance Distributors, Inc. (EVD), a subsidiary of EVM and
the Funds' principal underwriter, received $255, $56 and $123 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, 2000.
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 in effect a distribution plan for Class B (Class B Plan)
pursuant to Rule 12b-1 under the Investment Company Act of 1940, and a
service plan for Class A (Class A Plan), (collectively, the Plans). The Class
B Plan requires each Fund to pay EVD amounts equal to 0.75% of each Fund's
average daily net assets attributable to Class B shares, for providing
ongoing distribution services and facilities to the respective Fund. Each
Fund 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 net assets. For the six
months ended July 31, 2000, the Class B shares of the Florida Insured Fund,
Hawaii Fund and Kansas Fund paid $75,113, $63,121 and $34,241, respectively,
to EVD, representing 0.75% (annualized) of each Fund's Class B average daily
net assets. At July 31, 2000, 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 $653,000, $600,000 and $310,000,
respectively.
The Plans authorize each Fund 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 each fiscal year. The Trustees initially implemented the Plans by
authorizing each Fund to make quarterly payments of service fees to EVD and
investment dealers equal to 0.20% per annum of each Fund's
18
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
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. On October 4, 1999, the Trustees approved
service fee payments equal to 0.20% per annum of each Fund's average daily
net assets attributable to Class A and Class B shares for any fiscal year on
shares of the Fund sold on or after October 12, 1999. Service fee payments
will be 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. Service fee
payments for the six months ended July 31, 2000 for the Florida Insured Fund,
Hawaii Fund and Kansas Fund amounted to $3,388, $89 and $2,045, respectively
for Class A shares, and $16,965, $12,811 and $7,857, respectively, for
Class B shares.
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 conditions. 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 $35,000, $9,000 and $15,000 of CDSC paid by Class B
shareholders of Florida Insured Fund, Hawaii Fund and Kansas Fund,
respectively, for the six months ended July 31, 2000.
7 Investment Transactions
-------------------------------------------
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the six months ended July 31, 2000 were as follows:
<TABLE>
<CAPTION>
FLORIDA INSURED FUND
<S> <C>
----------------------------------------------------
Increases $1,672,087
Decreases 3,791,837
<CAPTION>
HAWAII FUND
<S> <C>
----------------------------------------------------
Increases $ 369,253
Decreases 1,095,786
<CAPTION>
KANSAS FUND
<S> <C>
----------------------------------------------------
Increases $ 329,311
Decreases 1,851,232
</TABLE>
19
<PAGE>
FLORIDA INSURED MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 97.4%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Escrowed / Prerefunded -- 6.3%
------------------------------------------------------------------------
$1,160 Dade County, Professional Sports
Franchise, (MBIA), Escrowed to Maturity,
0.00%, 10/1/19 $ 396,128
500 North Port, Utility Revenue, (FGIC),
Prerefunded to 10/1/02, 6.25%, 10/1/22 528,250
250 Orange, Tourist Development Tax, (MBIA),
Prerefunded to 10/1/04, 6.00%, 10/1/24 267,992
400 Titusville Water & Sewer, (MBIA),
Prerefunded to 10/1/04, 6.00%, 10/1/24 428,788
------------------------------------------------------------------------
$ 1,621,158
------------------------------------------------------------------------
Housing -- 13.7%
------------------------------------------------------------------------
$ 270 Duval County, HFA, SFMR, (GNMA), (AMT),
6.70%, 10/1/26 $ 278,753
750 Escambia County, HFA, SFMR, (GNMA),
(AMT), 7.00%, 4/1/28 792,735
650 Manatee County, HFA, SFMR, (GNMA),
(AMT), 6.875%, 11/1/26 695,032
990 Pinellas County, HFA, SFMR, (GNMA),
(AMT), 5.80%, 3/1/29 961,716
795 Pinellas County, HFA, SFMR, (GNMA),
(AMT), 6.70%, 2/1/28 826,752
------------------------------------------------------------------------
$ 3,554,988
------------------------------------------------------------------------
Insured-Cogeneration -- 3.5%
------------------------------------------------------------------------
$1,000 Tampa, Solid Waste System, (McKay Bay
Refuse to Energy), (AMBAC), (AMT),
5.00%, 10/1/21 $ 915,060
------------------------------------------------------------------------
$ 915,060
------------------------------------------------------------------------
Insured-Education -- 3.3%
------------------------------------------------------------------------
$1,000 Florida State University, System
Improvement Revenue, (AMBAC),
4.50%, 7/1/23 $ 844,670
------------------------------------------------------------------------
$ 844,670
------------------------------------------------------------------------
Insured-Electric Utilities -- 1.8%
------------------------------------------------------------------------
$ 445 Citrus County, PCR, (Florida Power
Corp.), (MBIA), 6.35%, 2/1/22 $ 461,078
------------------------------------------------------------------------
$ 461,078
------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Insured-General Obligations -- 3.3%
------------------------------------------------------------------------
$1,000 Florida Board Of Education, (MBIA),
4.50%, 6/1/24 $ 842,830
------------------------------------------------------------------------
$ 842,830
------------------------------------------------------------------------
Insured-Hospital -- 2.6%
------------------------------------------------------------------------
$ 200 Dade, Public Facilities Revenue,
(Jackson Memorial Hospital), (MBIA),
4.875%, 6/1/15 $ 186,364
500 Sarasota County, Public Hospital Board,
(Sarasota Memorial Hospital), (MBIA),
5.25%, 7/1/24 478,015
------------------------------------------------------------------------
$ 664,379
------------------------------------------------------------------------
Insured-Housing -- 8.0%
------------------------------------------------------------------------
$ 500 Florida HFA, (Maitland Club Apartments),
(AMBAC), (AMT), 6.875%, 8/1/26 $ 528,210
1,000 Florida HFA, (Mariner Club Apartments),
(AMBAC), (AMT), 6.375%, 9/1/36(1) 1,021,750
500 Florida HFA, (Spinnaker Cove
Apartments), (AMBAC), (AMT),
6.50%, 7/1/36 514,590
------------------------------------------------------------------------
$ 2,064,550
------------------------------------------------------------------------
Insured-Resource Recovery -- 1.9%
------------------------------------------------------------------------
$ 500 Dade County Resources Recovery
Facilities, (AMBAC), (AMT),
5.50%, 10/1/13 $ 504,045
------------------------------------------------------------------------
$ 504,045
------------------------------------------------------------------------
Insured-Special Tax Revenue -- 23.8%
------------------------------------------------------------------------
$ 480 Celebration Community Development
District, (MBIA), 5.125%, 5/1/20 $ 454,843
750 Crossings at Fleming Island Community
Development District, (MBIA),
5.80%, 5/1/16 775,703
625 Dade County, Special Obligation,
(AMBAC), Variable Rate, 10/1/35(2) 507,525
500 Jacksonville, Capital Improvement
Revenue, (Stadium), (AMBAC),
4.75%, 10/1/25 439,610
1,000 Jacksonville, Excise Taxes Revenue,
(FGIC), (AMT), 0.00%, 10/1/10 588,990
1,000 Jacksonville, Excise Taxes Revenue,
(FGIC), (AMT), 5.70%, 10/1/09 1,017,260
500 Miami-Dade County, Special Obligations,
(MBIA), 5.00%, 10/1/37 449,335
250 Puerto Rico Public Finance Corp.,
(AMBAC), Variable Rate, 6/1/26(2)(3) 214,078
505 St. Petersburg Excise Tax, (FGIC),
5.00%, 10/1/16 480,487
340 Sunrise Public Facilities, (MBIA),
0.00%, 10/1/15 147,669
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
FLORIDA INSURED MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Insured-Special Tax Revenue (continued)
------------------------------------------------------------------------
$1,625 Tampa, Utility Tax Revenue, (AMBAC),
0.00%, 4/1/21 $ 499,021
1,950 Tampa, Utility Tax Revenue, (AMBAC),
0.00%, 10/1/21 581,958
------------------------------------------------------------------------
$ 6,156,479
------------------------------------------------------------------------
Insured-Transportation -- 11.0%
------------------------------------------------------------------------
$1,000 Dade County Aviation Facilities, (Miami
International Airport), (FSA), (AMT),
5.125%, 10/1/22 $ 928,660
1,000 Dade County, Seaport Revenue, (MBIA),
5.125%, 10/1/16 971,040
750 Florida Turnpike Authority, (FGIC),
4.50%, 7/1/27 627,128
400 Greater Orlando, Aviation Authority,
(FGIC), Variable Rate, 10/1/18 330,880
------------------------------------------------------------------------
$ 2,857,708
------------------------------------------------------------------------
Insured-Utilities -- 0.9%
------------------------------------------------------------------------
$ 250 Florida Government Utility Authority,
Utility Revenue, (Barefoot Bay),
(AMBAC), 5.00%, 10/1/29 $ 227,713
------------------------------------------------------------------------
$ 227,713
------------------------------------------------------------------------
Insured-Water and Sewer -- 17.3%
------------------------------------------------------------------------
$ 500 Cocoa, Water and Sewer, (FGIC),
4.50%, 10/1/22 $ 423,595
735 Enterprise Community Development
District, Water and Sewer, (MBIA),
6.125%, 5/1/24 758,079
1,000 Jacksonville, Water and Sewer, (AMBAC),
(AMT), 6.35%, 8/1/25 1,054,350
1,000 Lee County, IDA, (Bonita Springs
Utilities), (MBIA), (AMT),
6.05%, 11/1/20 1,034,410
375 Tampa Bay, Water Utility System, (FGIC),
Variable Rate, 10/1/27(2)(3) 279,990
1,000 Vero Beach, Water and Sewer, (FGIC),
5.00%, 12/1/21 926,350
------------------------------------------------------------------------
$ 4,476,774
------------------------------------------------------------------------
Total Tax-Exempt Investments -- 97.4%
(identified cost $25,036,713) $25,191,432
------------------------------------------------------------------------
Other Assets, Less Liabilities -- 2.6% $ 668,704
------------------------------------------------------------------------
Net Assets -- 100.0% $25,860,136
------------------------------------------------------------------------
</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 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, 2000, 85.9% 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, 2000, the Portfolio's insured securities by financial institution
are as follows:
<TABLE>
<CAPTION>
MARKET % OF
VALUE MARKET VALUE
--------------------------------------------------------------
<S> <C> <C>
American Municipal Bond Assurance
Corp. (AMBAC) $ 7,852,580 31.2%
Financial Guaranty Insurance Corp.
(FGIC) 5,202,930 20.6%
Financial Security Assurance (FSA) 928,660 3.7%
Municipal Bond Insurance
Association (MBIA) 7,652,274 30.4%
--------------------------------------------------------------
$21,636,444 85.9%
</TABLE>
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(2) Security has been issued as an inverse floater bond.
(3) 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
21
<PAGE>
HAWAII MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 94.3%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Electric Utilities -- 3.3%
------------------------------------------------------------------------
$1,500 Puerto Rico Electric Power Authority,
0.00%, 7/1/17 $ 583,500
------------------------------------------------------------------------
$ 583,500
------------------------------------------------------------------------
General Obligations -- 4.5%
------------------------------------------------------------------------
$ 750 Honolulu, 4.75%, 9/1/17 $ 679,290
285 Puerto Rico, Public Improvement,
0.00%, 7/1/15 126,318
------------------------------------------------------------------------
$ 805,608
------------------------------------------------------------------------
Hospital -- 15.1%
------------------------------------------------------------------------
$ 200 Hawaii Department of Budget and Finance,
(Kaiser Permanente), 5.15%, 3/1/15 $ 177,470
635 Hawaii Department of Budget and Finance,
(Kapiolani Health System),
6.00%, 7/1/19 614,413
870 Hawaii Department of Budget and Finance,
(Queens Health System), 5.75%, 7/1/26 808,691
665 Hawaii Department of Budget and Finance,
(Wahiawa General Hospital),
7.50%, 7/1/12 602,570
300 Hawaii Department of Budget and Finance,
(Wilcox Memorial Hospital),
5.35%, 7/1/18 244,602
300 Hawaii Department of Budget and Finance,
(Wilcox Memorial Hospital),
5.50%, 7/1/28 235,119
------------------------------------------------------------------------
$ 2,682,865
------------------------------------------------------------------------
Housing -- 7.5%
------------------------------------------------------------------------
$ 200 Guam Housing Corp., Single Family,
(AMT), 5.75%, 9/1/31 $ 197,960
1,000 Hawaii Housing Finance and Development,
Single Family, 5.90%, 7/1/27(1) 991,940
145 Hawaii Housing Finance and Development,
Single Family, (AMT), 6.00%, 7/1/26 143,301
------------------------------------------------------------------------
$ 1,333,201
------------------------------------------------------------------------
Industrial Development Revenue -- 3.2%
------------------------------------------------------------------------
$ 400 Hawaii Department of Transportation
Special Facilities, (Continental
Airlines), 7.00%, 6/1/20 $ 394,468
180 Puerto Rico Port Authority, (American
Airlines), (AMT), 6.30%, 6/1/23 179,548
------------------------------------------------------------------------
$ 574,016
------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Insured-Education -- 5.7%
------------------------------------------------------------------------
$ 500 Hawaii State Housing Development Corp.,
(University of Hawaii), (AMBAC),
5.65%, 10/1/16 $ 504,615
500 University of Hawaii Board of Regents,
University System, (AMBAC),
5.65%, 10/1/12 508,835
------------------------------------------------------------------------
$ 1,013,450
------------------------------------------------------------------------
Insured-Electric Utilities -- 9.2%
------------------------------------------------------------------------
$1,000 Hawaii Department of Budget and Finance,
(Hawaiian Electric Co.), (AMBAC), (AMT),
5.75%, 12/1/18 $ 993,750
500 Hawaii Department of Budget and Finance,
(Hawaiian Electric Co.), (MBIA), (AMT),
6.60%, 1/1/25 531,165
100 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 7/1/03(2) 105,500
------------------------------------------------------------------------
$ 1,630,415
------------------------------------------------------------------------
Insured-General Obligations -- 14.1%
------------------------------------------------------------------------
$ 350 Hawaii County, (FGIC), 5.55%, 5/1/10 $ 365,368
400 Hawaii State, (FGIC), 5.00%, 10/1/17 375,188
150 Honolulu, City and County, (FGIC),
5.00%, 7/1/23 136,207
305 Kauai County, (MBIA), 5.90%, 2/1/14 312,131
910 Maui County, (FGIC), 5.00%, 9/1/17 849,931
250 Maui County, (FGIC), 5.25%, 3/1/18 240,145
250 Puerto Rico, (FSA), 5.00%, 7/1/28 230,920
------------------------------------------------------------------------
$ 2,509,890
------------------------------------------------------------------------
Insured-Hospital -- 0.6%
------------------------------------------------------------------------
$ 100 Hawaii Department of Budget and Finance,
(St. Francis Medical Center), (FSA),
6.50%, 7/1/22 $ 102,996
------------------------------------------------------------------------
$ 102,996
------------------------------------------------------------------------
Insured-Housing -- 2.8%
------------------------------------------------------------------------
$ 475 Honolulu, Mortgage Revenue Bonds, (Smith
Beretania), (FHA Insured) (MBIA),
7.80%, 7/1/24 $ 490,908
------------------------------------------------------------------------
$ 490,908
------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 1.3%
------------------------------------------------------------------------
$ 250 Hawaii, (Kapolei State Office Building),
(AMBAC), 5.00%, 5/1/18 $ 226,065
------------------------------------------------------------------------
$ 226,065
------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
HAWAII MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Insured-Special Tax Revenue -- 0.9%
------------------------------------------------------------------------
$ 210 Puerto Rico Infrastructure Financing
Authority, (AMBAC), Variable Rate,
7/1/28(3) $ 161,918
------------------------------------------------------------------------
$ 161,918
------------------------------------------------------------------------
Insured-Transportation -- 12.2%
------------------------------------------------------------------------
$ 100 Hawaii Airports System, (MBIA), (AMT),
6.90%, 7/1/12 $ 113,570
245 Hawaii Airports System, (MBIA), (AMT),
7.00%, 7/1/18 254,455
650 Hawaii Harbor Revenue, (FGIC), (AMT),
6.375%, 7/1/24 669,272
1,300 Puerto Rico Highway and Transportation
Authority, (FSA), 4.75%, 7/1/38 1,126,021
------------------------------------------------------------------------
$ 2,163,318
------------------------------------------------------------------------
Insured-Water and Sewer -- 5.4%
------------------------------------------------------------------------
$1,000 Honolulu, City and County Waste Water
Systems, (FGIC), 0.00%, 7/1/18 $ 355,910
730 Honolulu, City and County Waterworks
System Revenue, (FGIC), 4.50%, 7/1/28 596,738
------------------------------------------------------------------------
$ 952,648
------------------------------------------------------------------------
Special Tax Revenue -- 2.3%
------------------------------------------------------------------------
$ 200 Puerto Rico Infrastructure Financing
Authority, Variable Rate, 7/1/28(2)(4) $ 169,472
250 Virgin Islands Public Facilities
Authority, 5.625%, 10/1/25 233,130
------------------------------------------------------------------------
$ 402,602
------------------------------------------------------------------------
Transportation -- 2.8%
------------------------------------------------------------------------
$ 250 Hawaii Highway Revenue, 5.00%, 7/1/12 $ 243,533
250 Hawaii Highway Revenue, 5.50%, 7/1/18 250,128
------------------------------------------------------------------------
$ 493,661
------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Water and Sewer -- 3.4%
------------------------------------------------------------------------
$ 600 Honolulu, Water Supply System,
5.80%, 7/1/16 $ 612,360
------------------------------------------------------------------------
$ 612,360
------------------------------------------------------------------------
Total Tax-Exempt Investments -- 94.3%
(identified cost $16,864,862) $16,739,421
------------------------------------------------------------------------
Other Assets, Less Liabilities -- 5.7% $ 1,007,304
------------------------------------------------------------------------
Net Assets -- 100.0% $17,746,725
------------------------------------------------------------------------
</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 economic developments in a specific
industry or municipality. In order to reduce the risk associated with such
economic developments, at July 31, 2000, 55.3% 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 9.4% to 21.4% of
total investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(2) Security has been issued as an inverse floater bond.
(3) Security has been issued as a leveraged inverse floater bond.
(4) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
KANSAS MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 98.5%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Electric Utilities -- 2.7%
------------------------------------------------------------------------
$ 350 Puerto Rico Electric Power Authority,
5.00%, 7/1/28 $ 318,216
------------------------------------------------------------------------
$ 318,216
------------------------------------------------------------------------
Escrowed / Prerefunded -- 5.9%
------------------------------------------------------------------------
$ 65 Kansas City, Utility System, (FGIC),
Prerefunded to 9/01/04, 6.375%, 9/1/23 $ 70,416
415 Labette County, SFMR, Escrowed to
Maturity, 0.00%, 12/1/14 188,825
1,000 Saline County, SFMR, Escrowed to
Maturity, 0.00%, 12/1/15 426,840
------------------------------------------------------------------------
$ 686,081
------------------------------------------------------------------------
General Obligations -- 7.2%
------------------------------------------------------------------------
$ 500 Johnson County, Unified School District
#229, 5.00%, 10/1/16 $ 476,245
1,000 Puerto Rico, 0.00%, 7/1/18 365,330
------------------------------------------------------------------------
$ 841,575
------------------------------------------------------------------------
Hospital -- 10.1%
------------------------------------------------------------------------
$ 225 Atchison, (Atchison Hospital Assn.),
5.70%, 11/15/18 $ 185,794
250 Lawrence, (Lawrence Memorial Hospital),
6.20%, 7/1/19 249,185
300 Newton, (Newton Healthcare Corp.),
5.75%, 11/15/24 238,866
500 Wichita, (Christi Health Systems, Inc.),
6.25%, 11/15/24 504,985
------------------------------------------------------------------------
$ 1,178,830
------------------------------------------------------------------------
Housing -- 15.4%
------------------------------------------------------------------------
$ 55 Kansas City, Mortgage Revenue, (GNMA),
(AMT), 5.30%, 5/1/07 $ 54,632
65 Kansas City, Mortgage Revenue, (GNMA),
(AMT), 5.30%, 11/1/07 64,539
260 Kansas City, Mortgage Revenue, (GNMA),
(AMT), 7.00%, 12/1/11 265,463
215 Kansas City, Multifamily, (FHA),
6.70%, 7/1/23 216,726
100 Kansas Development Finance Authority,
(FHA), (Martin Creek), 6.60%, 8/1/34 101,707
65 Olathe and Labette County, SFMR, (GNMA),
(AMT), 8.10%, 8/1/23 70,182
95 Olathe, Mortgage Revenue, (GNMA), (AMT),
7.60%, 3/1/07 97,344
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Housing (continued)
------------------------------------------------------------------------
$ 250 Olathe, Multifamily, (FNMA),
6.45%, 6/1/19 $ 256,802
200 Puerto Rico Housing Finance Corp.,
7.50%, 4/1/22 204,394
135 Sedgwick and Shawnee Counties, SFMR,
(GNMA), 7.75%, 11/1/24 144,635
255 Sedgwick County, SFMR, (GNMA),
8.00%, 5/1/25 276,749
35 Sedgwick County, SFMR, (GNMA),
8.20%, 5/1/14 37,742
------------------------------------------------------------------------
$ 1,790,915
------------------------------------------------------------------------
Industrial Development Revenue -- 1.3%
------------------------------------------------------------------------
$ 160 Topeka, IDA, (Resers Fine Foods, Inc.)
(AMT), 5.40%, 4/1/05 $ 155,136
------------------------------------------------------------------------
$ 155,136
------------------------------------------------------------------------
Insured-Education -- 6.4%
------------------------------------------------------------------------
$ 250 Johnson County Community College,
(Student Commons and Parking Systems),
(MBIA), 5.05%, 11/15/21 $ 228,905
500 Washburn University, Topeka, (Living
Learning Center), (AMBAC),
6.125%, 7/1/29 518,020
------------------------------------------------------------------------
$ 746,925
------------------------------------------------------------------------
Insured-Electric Utilities -- 4.0%
------------------------------------------------------------------------
$ 345 Burlington, PCR, (Kansas Gas & Electric
Co.), (MBIA), 7.00%, 6/1/31 $ 358,051
100 Puerto Rico Electric Power Authority,
STRIPES, (FSA), Variable Rate, 7/1/02(1) 103,750
------------------------------------------------------------------------
$ 461,801
------------------------------------------------------------------------
Insured-General Obligations -- 13.9%
------------------------------------------------------------------------
$ 250 Butler and Sedgwick County, Unified
School District #385, (FSA),
5.40%, 9/1/18 $ 246,722
200 Harvey County, Unified School District
#373, (FSA), 4.80%, 9/1/18 179,236
200 Johnson County, Unified School District
#231, (FGIC), 6.00%, 10/1/16 214,494
500 Sedgwick County, Unified School District
#267, (AMBAC), 5.00%, 11/1/19 464,610
250 Sedgwick County, Unified School District
#267, (AMBAC), 6.15%, 11/1/09 268,173
230 Sedgwick County, Unified School District
#267, (AMBAC), 6.15%, 11/1/10 246,719
------------------------------------------------------------------------
$ 1,619,954
------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
KANSAS MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Insured-Hospital -- 10.6%
------------------------------------------------------------------------
$ 250 Kansas Development Finance Authority,
(Hays Medical Center, Inc.), (MBIA),
5.50%, 11/15/22 $ 244,173
500 Kansas Development Finance Authority,
(St. Luke's/ Shawnee Mission), (MBIA),
5.375%, 11/15/26 476,315
500 Kansas Development Finance Authority,
(Stormont-Vail Healthcare) (MBIA),
5.80%, 11/15/11 517,905
------------------------------------------------------------------------
$ 1,238,393
------------------------------------------------------------------------
Insured-Housing -- 0.9%
------------------------------------------------------------------------
$ 100 Puerto Rico Housing Finance Corp.,
(AMBAC), 7.50%, 10/1/11 $ 100,164
------------------------------------------------------------------------
$ 100,164
------------------------------------------------------------------------
Insured-Lease Revenue -- 2.2%
------------------------------------------------------------------------
$ 250 Kansas Development Finance Authority,
(7th and Harrison Project), (AMBAC),
5.75%, 12/1/27 $ 251,520
------------------------------------------------------------------------
$ 251,520
------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 3.8%
------------------------------------------------------------------------
$ 500 Kansas Development Finance Authority,
(Sisters Of Charity - Leavenworth),
(MBIA), 5.00%, 12/1/25 $ 448,725
------------------------------------------------------------------------
$ 448,725
------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.2%
------------------------------------------------------------------------
$ 175 Puerto Rico Infrastructure Financing
Authority, (AMBAC), Variable Rate,
7/1/28(2) $ 134,932
------------------------------------------------------------------------
$ 134,932
------------------------------------------------------------------------
Insured-Utilities -- 4.4%
------------------------------------------------------------------------
$ 135 Kansas City, Utility System, (FGIC),
6.375%, 9/1/23 $ 141,456
400 Wellington Electric Waterworks and
Authority Revenue, (AMBAC),
5.20%, 5/1/23 376,928
------------------------------------------------------------------------
$ 518,384
------------------------------------------------------------------------
Insured-Water and Sewer -- 2.8%
------------------------------------------------------------------------
$ 400 Wyandotte County & Kansas City, Utility
System, (MBIA), 4.50%, 9/1/28 $ 327,280
------------------------------------------------------------------------
$ 327,280
------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Transportation -- 5.7%
------------------------------------------------------------------------
$ 300 Kansas Highway Transportation
Department, 5.25%, 9/1/19 $ 289,302
400 Puerto Rico Highway and Transportation
Authority, 5.00%, 7/1/22 369,660
------------------------------------------------------------------------
$ 658,962
------------------------------------------------------------------------
Total Tax-Exempt Investments -- 98.5%
(identified cost $11,722,985) $11,477,793
------------------------------------------------------------------------
Other Assets, Less Liabilities -- 1.5% $ 176,126
------------------------------------------------------------------------
Net Assets -- 100.0% $11,653,919
------------------------------------------------------------------------
</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, 2000, 51.6% 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 3.7% to 22.7% of
total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security has been issued as a leveraged inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
AS OF JULY 31, 2000
<TABLE>
<CAPTION>
FLORIDA INSURED PORTFOLIO HAWAII PORTFOLIO KANSAS PORTFOLIO
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------
Assets
---------------------------------------------------------------------------------------------
Investments --
Identified cost $25,036,713 $16,864,862 $11,722,985
Unrealized appreciation
(depreciation) 154,719 (125,441) (245,192)
---------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $25,191,432 $16,739,421 $11,477,793
---------------------------------------------------------------------------------------------
Cash $ 255,151 $ 850,963 $ 29,307
Interest receivable 417,593 157,436 146,024
Receivable from the Investment
Adviser -- 2,328 4,379
Receivable for daily variation
margin on open financial
futures contracts 875 -- --
---------------------------------------------------------------------------------------------
TOTAL ASSETS $25,865,051 $17,750,148 $11,657,503
---------------------------------------------------------------------------------------------
Liabilities
---------------------------------------------------------------------------------------------
Payable for daily variation
margin on open financial
futures contracts $ -- $ 281 $ --
Accrued expenses 4,915 3,142 3,584
---------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 4,915 $ 3,423 $ 3,584
---------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
INVESTORS' INTEREST
IN PORTFOLIO $25,860,136 $17,746,725 $11,653,919
---------------------------------------------------------------------------------------------
Sources of Net Assets
---------------------------------------------------------------------------------------------
Net proceeds from capital
contributions
and withdrawals $25,706,112 $17,902,909 $11,899,111
Net unrealized appreciation
(depreciation) (computed on
the basis of
identified cost) 154,024 (156,184) (245,192)
---------------------------------------------------------------------------------------------
TOTAL $25,860,136 $17,746,725 $11,653,919
---------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 2000
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 2000
<TABLE>
<CAPTION>
FLORIDA INSURED PORTFOLIO HAWAII PORTFOLIO KANSAS PORTFOLIO
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------
Investment Income
---------------------------------------------------------------------------------------------
Interest $ 753,381 $ 518,043 $352,182
---------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 753,381 $ 518,043 $352,182
---------------------------------------------------------------------------------------------
Expenses
---------------------------------------------------------------------------------------------
Investment adviser fee $ 24,766 $ 14,510 $ 10,117
Trustees fees and expenses 1,236 197 197
Legal and accounting services 19,010 16,810 16,810
Custodian fee 8,351 5,520 2,369
Miscellaneous 4,307 2,682 3,607
---------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 57,670 $ 39,719 $ 33,100
---------------------------------------------------------------------------------------------
Deduct --
Preliminary reduction of
investment adviser fee $ -- $ 7,897 $ 9,102
Preliminary allocation of
expenses to the
Investment Adviser -- 2,328 4,379
Reduction of custodian fee 3,262 2,062 --
---------------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 3,262 $ 12,287 $ 13,481
---------------------------------------------------------------------------------------------
NET EXPENSES $ 54,408 $ 27,432 $ 19,619
---------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 698,973 $ 490,611 $332,563
---------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
---------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ (192,356) $ (140,135) $(28,654)
---------------------------------------------------------------------------------------------
NET REALIZED LOSS $ (192,356) $ (140,135) $(28,654)
---------------------------------------------------------------------------------------------
Change in unrealized
appreciation
(depreciation) --
Investments (identified
cost basis) $1,713,739 $1,060,115 $672,043
Financial futures contracts (695) (30,743) --
---------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $1,713,044 $1,029,372 $672,043
---------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN $1,520,688 $ 889,237 $643,389
---------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $2,219,661 $1,379,848 $975,952
---------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 2000
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JULY 31, 2000
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS FLORIDA INSURED PORTFOLIO HAWAII PORTFOLIO KANSAS PORTFOLIO
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 698,973 $ 490,611 $ 332,563
Net realized loss (192,356) (140,135) (28,654)
Net change in unrealized
appreciation (depreciation) 1,713,044 1,029,372 672,043
------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 2,219,661 $ 1,379,848 $ 975,952
------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 1,672,088 $ 369,253 $ 329,311
Withdrawals (3,791,837) (1,095,786) (1,851,232)
------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $(2,119,749) $ (726,533) $(1,521,921)
------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS $ 99,912 $ 653,315 $ (545,969)
------------------------------------------------------------------------------------------------
Net Assets
------------------------------------------------------------------------------------------------
At beginning of period $25,760,224 $17,093,410 $12,199,888
------------------------------------------------------------------------------------------------
AT END OF PERIOD $25,860,136 $17,746,725 $11,653,919
------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
28
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JANUARY 31, 2000
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS FLORIDA INSURED PORTFOLIO HAWAII PORTFOLIO KANSAS PORTFOLIO
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,508,327 $ 1,082,364 $ 719,905
Net realized loss (185,258) (88,647) (50,545)
Net change in unrealized
appreciation (depreciation) (3,681,324) (2,675,664) (1,561,606)
------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $(2,358,255) $(1,681,947) $ (892,246)
------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 6,405,002 $ 1,633,534 $ 2,479,031
Withdrawals (6,426,139) (3,247,725) (2,268,175)
------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL
TRANSACTIONS $ (21,137) $(1,614,191) $ 210,856
------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $(2,379,392) $(3,296,138) $ (681,390)
------------------------------------------------------------------------------------------------
Net Assets
------------------------------------------------------------------------------------------------
At beginning of year $28,139,616 $20,389,548 $12,881,278
------------------------------------------------------------------------------------------------
AT END OF YEAR $25,760,224 $17,093,410 $12,199,888
------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
FLORIDA INSURED PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 --------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Ratios (As a percentage of
average daily net assets):
Net expenses 0.45%(1) 0.38% 0.18% 0.07% 0.09% 0.07%
Net expenses after
custodian fee reduction 0.43%(1) 0.34% 0.11% 0.00% 0.02% 0.00%
Net investment income 5.49%(1) 5.32% 5.21% 5.63% 5.76% 5.82%
Portfolio Turnover 7% 34% 9% 34% 36% 32%
--------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(000'S OMITTED) $25,860 $25,760 $28,140 $24,850 $24,204 $21,416
--------------------------------------------------------------------------------------------------------------
+ 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:
Ratios (As a percentage of
average daily net assets):
Expenses 0.30% 0.48% 0.39% 0.39%
Expenses after custodian
fee reduction 0.23% 0.41% 0.32% 0.32%
Net investment income 5.09% 5.22% 5.46% 5.50%
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
30
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
HAWAII PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 --------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Ratios (As a percentage of
average daily net assets):
Net expenses 0.34%(1) 0.02% 0.04% 0.03% 0.04% 0.06%
Net expenses after
custodian fee reduction 0.32%(1) 0.00% 0.00% 0.00% 0.00% 0.00%
Net investment income 5.67%(1) 5.67% 5.39% 5.70% 5.96% 6.01%
Portfolio Turnover 4% 20% 29% 27% 21% 19%
--------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(000'S OMITTED) $17,747 $17,093 $20,390 $19,864 $16,014 $15,578
--------------------------------------------------------------------------------------------------------------
+ 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:
Ratios (As a percentage of
average daily net assets):
Expenses 0.46%(1) 0.38% 0.28% 0.46% 0.43% 0.41%
Expenses after custodian
fee reduction 0.44%(1) 0.36% 0.24% 0.43% 0.39% 0.35%
Net investment income 5.55%(1) 5.31% 5.15% 5.27% 5.57% 5.66%
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
31
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
KANSAS PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 --------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Ratios (As a percentage of
average daily net assets):
Net expenses 0.33%(1) 0.05% 0.06% 0.05% 0.08% 0.09%
Net expenses after
custodian fee reduction 0.33%(1) 0.00% 0.00% 0.00% 0.00% 0.00%
Net investment income 5.62%(1) 5.59% 5.34% 5.79% 5.91% 5.93%
Portfolio Turnover 1% 24% 33% 17% 49% 21%
--------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(000'S OMITTED) $11,654 $12,200 $12,881 $11,419 $11,736 $11,609
--------------------------------------------------------------------------------------------------------------
+ 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:
Ratios (As a percentage of
average daily net assets):
Expenses 0.56%(1) 0.49% 0.36% 0.57% 0.48% 0.50%
Expenses after custodian
fee reduction 0.56%(1) 0.44% 0.30% 0.52% 0.40% 0.41%
Net investment income 5.39%(1) 5.15% 5.04% 5.27% 5.51% 5.52%
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
32
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 2000
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 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 Portfolios seek to achieve current income exempt from
regular federal income tax and particular state or local income or other
taxes by investing primarily in investment grade municipal obligations. 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 accretion of 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 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.
E Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by a Portfolio, the premium paid is recorded
as an investment, the value of which is marked-to-market daily. When a
purchased option expires, a Portfolio will realize a loss in the amount of
the cost of the option. When a Portfolio enters into a closing sale
transaction, a 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 put options is limited to
the premium originally paid.
F When-issued and Delayed Delivery Transactions -- The Portfolios may engage in
when-issued and 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 earning interest on
settlement date.
33
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
G 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 reported as a
reduction of total expenses in the Statement of Operations.
H Use of Estimates -- The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of income and expense during the reporting period. Actual results could
differ from those estimates.
I Other -- Investment transactions are accounted for on a trade date basis.
Realized gains and losses are computed based on the specific identification
of the securities sold.
J Interim Financial Statements -- The interim financial statements relating to
July 31, 2000 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, consisting only of normal
recurring 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, 2000, each Portfolio incurred
advisory fees as follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT EFFECTIVE RATE*
<S> <C> <C>
------------------------------------------------------------------
Florida Insured $24,766 0.19%
Hawaii 14,510 0.17%
Kansas 10,117 0.17%
</TABLE>
* As a percentage of average daily net assets (annualized).
To enhance the net income of the Hawaii Portfolio and Kansas Portfolio, BMR
made a reduction of its fee in the amount of $7,897 and $9,102, respectively,
and $2,328 and $4,379 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, 2000, 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, 2000, were as follows:
<TABLE>
<CAPTION>
FLORIDA INSURED PORTFOLIO
<S> <C>
----------------------------------------------------
Purchases $1,828,431
Sales 3,380,739
<CAPTION>
HAWAII PORTFOLIO
<S> <C>
----------------------------------------------------
Purchases $ 617,229
Sales 1,506,768
<CAPTION>
KANSAS PORTFOLIO
<S> <C>
----------------------------------------------------
Purchases $ 163,450
Sales 1,153,212
</TABLE>
34
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
4 Federal Income Tax Basis of Investments
-------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at July 31, 2000, as computed on a
federal income tax basis, are as follows:
<TABLE>
<CAPTION>
FLORIDA INSURED PORTFOLIO
<S> <C>
-----------------------------------------------------
AGGREGATE COST $25,036,713
-----------------------------------------------------
Gross unrealized appreciation $ 833,614
Gross unrealized depreciation (678,895)
-----------------------------------------------------
NET UNREALIZED APPRECIATION $ 154,719
-----------------------------------------------------
<CAPTION>
HAWAII PORTFOLIO
<S> <C>
-----------------------------------------------------
AGGREGATE COST $16,864,862
-----------------------------------------------------
Gross unrealized appreciation $ 453,387
Gross unrealized depreciation (578,828)
-----------------------------------------------------
NET UNREALIZED DEPRECIATION $ (125,441)
-----------------------------------------------------
<CAPTION>
KANSAS PORTFOLIO
<S> <C>
-----------------------------------------------------
AGGREGATE COST $11,722,985
-----------------------------------------------------
Gross unrealized appreciation $ 163,728
Gross unrealized depreciation (408,920)
-----------------------------------------------------
NET UNREALIZED DEPRECIATION $ (245,192)
-----------------------------------------------------
</TABLE>
5 Line of Credit
-------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and its affiliates in a $150 million unsecured line of credit agreement
with a group of banks. The 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, 2000.
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.
A summary of obligations under these financial instruments at July 31, 2000
is as follows:
<TABLE>
<CAPTION>
FUTURES
CONTRACTS
EXPIRATION NET UNREALIZED
PORTFOLIO DATE CONTRACTS POSITION DEPRECIATION
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------
Florida Insured 9/00 7 U.S. Treasury Bond Short $ (695)
------------------------------------------------------------------------------------------------
Hawaii 9/00 9 U.S. Treasury Bond Short (30,743)
</TABLE>
At July 31, 2000, the Portfolios had sufficient cash and/or securities to
cover margin requirements on open futures contracts.
35
<PAGE>
EATON VANCE MUNICIPALS FUNDS AS OF JULY 31, 2000
INVESTMENT 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 of the Board,
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
Thomas M. Metzold
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 of the Board,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
36
<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
PFPC, Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02904-9653
(800) 262-1122
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.
--------------------------------------------------------------------------------
335-9/00 3CSRC
