<PAGE>
MUTUAL FUNDS
FOR PEOPLE
[LOGO] WHO PAY
TAXES-Registered Trademark- [MONEY]
SEMIANNUAL REPORT JULY 31, 2000
EATON VANCE
HIGH YIELD
[MAN ON MUNICIPALS
HORSE] FUND
[EATON VANCE
75TH ANNIVERSARY
LOGO]
[BUILDINGS]
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND as of July 31, 2000
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I N V E S T M E N T U P D A T E
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INVESTMENT ENVIRONMENT
[PHOTO] ----------------------
The Economy
- Gross domestic product grew by 4.8% in the first quarter
of 2000 and 5.2% in the second quarter, according to
adjusted figures. Despite the strong economic results,
Thomas M. Metzold inflation remained subdued as businesses continued to
Portfolio Manager register gains in productivity.
- At its Open Market Committee meeting in May, the Federal Reserve raised the
target rate for its Federal Funds rate -- a key barometer of short-term
interest rates by 50 basis points (.50%). That move marked the sixth increase
since June 1999, for a total of 175 basis points (1.75%).
- Following a period of rising interest rates and difficulties for key issuers
like health care and basic industries, the municipal bond market mounted a
modest recovery in the first half of 2000. The Lehman Brothers Municipal Bond
Index rose 6.40% for the six months ended July 31, 2000.(1)
The Fund
--------------------------------------------------------------------------------
Management Discussion
- In a rising interest rate environment, management maintained a relatively
long duration. If the Federal Reserve is near the end of its rate hike cycle,
the Portfolio could be well-positioned in the event of a sustained bond
rally.
- The Portfolio maintained an exposure to the rebounding steel sector among its
industrial development revenue bond holdings. Industry cost cutting has made
domestic steel companies increasingly competitive with foreign imports.
- Within the hospital sector, the Portfolio focused on well-regarded,
financially sound institutions. The Portfolio's investments included a
non-rated issue for Georgia Baptist Hospital of Atlanta, which provides acute
care and speciality care for the residents of Forsyth County.
Performance for the Past Six Months
- During the six months ended July 31, 2000, the Fund's Class A shares had a
total return of 3.54%.(2) This return resulted from an increase in net asset
value (NAV) to $9.81 per share on July 31, 2000 from $9.79 on January 31,
2000, and the reinvestment of $0.321 in tax-free income.(3)
- The Fund's Class B shares had a total return of 3.06% during the same
period,(2) the result of an increase in NAV to $9.77 per share from $9.75
per share, and the reinvestment of $0.274 in tax-free income.(3)
- The Fund's Class C shares had a total return of 3.15% during the same
period,(2) the result of an increase in NAV to $9.06 per share from $9.03
per share, and the reinvestment of $0.251 in tax-free income.(3)
- Based on the Fund's most recent dividends and NAVs on July 31, 2000 of $9.81
per share for Class A, $9.77 per share for Class B and $9.06 for Class C, the
distribution rates were 6.57%, 5.68% and 5.57%, respectively.(4) The
distribution rates of Class A, Class B and Class C are equivalent to taxable
rates of 10.88%,9.40% and 9.22%, respectively.(5)
- The SEC 30-day yields for Class A, Class B and Class C share at July 31 were
6.82%, 6.41% and 6.34%, respectively.(6) The SEC 30-day yields of Class A,
Class B and Class C are equivalent to taxable yields of 11.29%, 10.61% and
10.50%, respectively.(5)
FUND OVERVIEW(7)
---------------------------------------
Number of Issues 141
Average Maturity 23.8 Yrs.
Average Rating BB+
Average Call 8.4 Yrs.
Average Dollar Price $90.20
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FUND INFORMATION
as of July 31, 2000
<TABLE>
<CAPTION>
Performance(8) Class A Class B Class C
<S> <C> <C> <C>
Average Annual Total Returns (at net asset value)
One Year -3.76% -4.53% -4.48%
Life of Fund+ 6.03 5.14 2.04
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
----------------------------------------------------------------------------
One Year -8.31% -9.04% -5.38%
Life of Fund+ 5.00 4.82 2.04
</TABLE>
+Inception Dates - Class A: 8/7/95; Class B: 8/7/95; Class C: 6/18/97
RATING DISTRIBUTION(7) By total investments
[PIE CHART]
1() It is not possible to invest directly in an Index. (2) 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 the Fund's Class B and
Class C shares. (3) A portion of the Fund's income could be subject to federal
income tax and/or alternative minimum tax. Income may be subject to state tax.
(4) 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. (5) Taxable-equivalent rates assume
maximum 39.60% combined federal and state income tax rate. A lower rate would
result in lower tax-equivalent figures. (6) 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. (7) Fund
Overview and Rating Distribution are subject to change. (8) 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. 1-year SEC return for Class C includes
1% CDSC.
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.
2
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND AS OF JULY 31, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF JULY 31, 2000
<S> <C>
Assets
------------------------------------------------------
Investment in High Yield Municipals
Portfolio, at value
(identified cost, $358,453,578) $326,942,969
Receivable for Fund shares sold 1,283,673
------------------------------------------------------
TOTAL ASSETS $328,226,642
------------------------------------------------------
Liabilities
------------------------------------------------------
Dividends payable $ 1,068,060
Payable for Fund shares redeemed 747,498
Accrued expenses 105,633
------------------------------------------------------
TOTAL LIABILITIES $ 1,921,191
------------------------------------------------------
NET ASSETS $326,305,451
------------------------------------------------------
Sources of Net Assets
------------------------------------------------------
Paid-in capital $365,920,720
Accumulated net realized loss from
Portfolio (computed on the basis of
identified cost) (7,353,461)
Accumulated distributions in excess of
net investment income (751,199)
Net unrealized depreciation from
Portfolio (computed on the basis of
identified cost) (31,510,609)
------------------------------------------------------
TOTAL $326,305,451
------------------------------------------------------
Class A Shares
------------------------------------------------------
NET ASSETS $113,051,665
SHARES OUTSTANDING 11,524,346
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.81
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of $9.81) $ 10.30
------------------------------------------------------
Class B Shares
------------------------------------------------------
NET ASSETS $197,316,294
SHARES OUTSTANDING 20,195,118
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.77
------------------------------------------------------
Class C Shares
------------------------------------------------------
NET ASSETS $ 15,937,492
SHARES OUTSTANDING 1,759,633
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 9.06
------------------------------------------------------
</TABLE>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JULY 31, 2000
<S> <C>
Investment Income
-----------------------------------------------------
Interest allocated from Portfolio $12,445,720
Expenses allocated from Portfolio (1,177,322)
-----------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $11,268,398
-----------------------------------------------------
Expenses
-----------------------------------------------------
Trustees fees and expenses $ 2,179
Distribution and service fees
Class A 90,283
Class B 965,801
Class C 81,020
Transfer and dividend disbursing agent
fees 146,682
Registration fees 45,936
Amortization of organization expenses 18,416
Printing and postage 17,616
Custodian fee 16,197
Legal and accounting services 14,706
Miscellaneous 8,081
-----------------------------------------------------
TOTAL EXPENSES $ 1,406,917
-----------------------------------------------------
NET INVESTMENT INCOME $ 9,861,481
-----------------------------------------------------
Realized and Unrealized
Gain (Loss) from Portfolio
-----------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $(2,994,640)
-----------------------------------------------------
NET REALIZED LOSS $(2,994,640)
-----------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 3,543,134
-----------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $ 3,543,134
-----------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 548,494
-----------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $10,409,975
-----------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INCREASE (DECREASE) JULY 31, 2000 YEAR ENDED
IN NET ASSETS (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------
From operations --
Net investment income $ 9,861,481 $ 21,262,983
Net realized loss (2,994,640) (2,693,860)
Net change in unrealized
appreciation (depreciation) 3,543,134 (54,966,051)
----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 10,409,975 $ (36,396,928)
----------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (3,689,463) $ (7,866,145)
Class B (5,620,554) (12,139,741)
Class C (452,786) (1,250,912)
In excess of net investment income
Class A -- (63,815)
Class B -- (18,596)
----------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (9,762,803) $ (21,339,209)
----------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 11,312,437 $ 45,591,473
Class B 11,001,494 54,465,067
Class C 2,809,536 13,119,026
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class A 1,003,131 3,299,679
Class B 1,639,069 4,079,737
Class C 251,974 788,006
Cost of shares redeemed
Class A (14,042,966) (43,081,449)
Class B (20,123,101) (57,070,198)
Class C (4,850,619) (17,217,692)
----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS $ (10,999,045) $ 3,973,649
----------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (10,351,873) $ (53,762,488)
----------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
JULY 31, 2000 YEAR ENDED
NET ASSETS (UNAUDITED) JANUARY 31, 2000
----------------------------------------------------------------------------
<S> <C> <C>
At beginning of period $ 336,657,324 $ 390,419,812
----------------------------------------------------------------------------
AT END OF PERIOD $ 326,305,451 $ 336,657,324
----------------------------------------------------------------------------
Accumulated distributions in
excess of net investment income
included in net assets
----------------------------------------------------------------------------
AT END OF PERIOD $ (751,199) $ (849,877)
----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 ----------------------
(UNAUDITED) 2000 1999(1)
<S> <C> <C> <C>
----------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 9.790 $ 11.380 $ 11.570
----------------------------------------------------------------------------
Income (loss) from operations
----------------------------------------------------------------------------
Net investment income $ 0.321 $ 0.640 $ 0.647
Net realized and unrealized
gain (loss) 0.020 (1.585) (0.176)
----------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.341 $ (0.945) $ 0.471
----------------------------------------------------------------------------
Less distributions
----------------------------------------------------------------------------
From net investment income $ (0.321) $ (0.640) $ (0.647)
In excess of net investment
income -- (0.005) (0.014)
----------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.321) $ (0.645) $ (0.661)
----------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.810 $ 9.790 $ 11.380
----------------------------------------------------------------------------
TOTAL RETURN(2) 3.54% (8.62)% 4.16%
----------------------------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $113,052 $114,610 $128,347
Ratios (As a percentage of
average daily net assets):
Expenses(3) 1.04%(4) 1.01% 0.95%
Expenses after custodian
fee reduction(3) 1.04%(4) 1.00% 0.94%
Net investment income 6.61%(4) 5.95% 5.60%
Portfolio Turnover of the
Portfolio 6% 58% 25%
----------------------------------------------------------------------------
</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 the Portfolio's allocated expenses.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 --------------------------------------------------------
(UNAUDITED) 2000 1999(1) 1998 1997 1996(2)
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 9.750 $11.330 $11.520 $10.620 $10.650 $10.000
--------------------------------------------------------------------------------------------------------------
Income (loss) from operations
--------------------------------------------------------------------------------------------------------------
Net investment income $ 0.279 $0.554 $0.554 $0.594 $0.626 $ 0.299
Net realized and unrealized
gain (loss) 0.017 (1.579) (0.167) 0.916 (0.026) 0.657
--------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.296 $(1.025 ) $0.387 $1.510 $0.600 $ 0.956
--------------------------------------------------------------------------------------------------------------
Less distributions
--------------------------------------------------------------------------------------------------------------
From net investment income $ (0.276) $(0.554 ) $(0.554 ) $(0.594 ) $(0.626 ) $(0.299)
In excess of net investment
income -- (0.001) (0.023) (0.016) (0.003) (0.007)
From net realized gain -- -- -- -- (0.001) --
--------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.276) $(0.555 ) $(0.577 ) $(0.610 ) $(0.630 ) $(0.306)
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.770 $9.750 $11.330 $11.520 $10.620 $10.650
--------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 3.06% (9.32)% 3.44% 14.67% 5.90% 9.40%
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $197,316 $204,348 $237,497 $191,706 $123,024 $43,520
Ratios (As a percentage of
average daily net assets):
Expenses(4) 1.87%(5) 1.77% 1.72% 1.76% 1.36% 0.88%(5)
Expenses after custodian
fee reduction(4) 1.87%(5) 1.76% 1.71% 1.74% 1.32% 0.88%(5)
Net investment income 5.78%(5) 5.18% 4.83% 5.36% 5.91% 5.86%(5)
Portfolio Turnover of the
Portfolio 6% 58% 25% 8% 41% 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 Administrator, 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) 1.73% 1.77%(5)
Expenses after custodian
fee reduction(4) 1.69% 1.77%(5)
Net investment income 5.54% 4.97%(5)
Net investment income per
share $0.587 $ 0.254
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the start of business, August 7, 1995, to
January 31, 1996.
(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 the Portfolio's allocated expenses.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS C
------------------------------------------
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 ----------------------
(UNAUDITED) 2000 1999(1)
<S> <C> <C> <C>
----------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 9.030 $10.490 $10.680
----------------------------------------------------------------------------
Income (loss) from operations
----------------------------------------------------------------------------
Net investment income $ 0.256 $ 0.505 $ 0.506
Net realized and unrealized
gain (loss) 0.025 (1.460) (0.169)
----------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.281 $(0.955) $ 0.337
----------------------------------------------------------------------------
Less distributions
----------------------------------------------------------------------------
From net investment income $(0.251) $(0.505) $(0.506)
In excess of net investment
income -- -- (0.021)
----------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $(0.251) $(0.505) $(0.527)
----------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 9.060 $ 9.030 $10.490
----------------------------------------------------------------------------
TOTAL RETURN(2) 3.15% (9.38)% 3.22%
----------------------------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $15,937 $17,699 $24,576
Ratios (As a percentage of
average daily net assets):
Expenses(3) 1.88%(4) 1.84% 1.79%
Expenses after custodian
fee reduction(3) 1.88%(4) 1.83% 1.78%
Net investment income 5.76%(4) 5.09% 4.73%
Portfolio Turnover of the
Portfolio 6% 58% 25%
----------------------------------------------------------------------------
</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 the Portfolio's allocated expenses.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
-------------------------------------------
Eaton Vance High Yield Municipals Fund (the Fund) is a diversified series of
Eaton Vance Municipals Trust II (the Trust). The Trust is an entity of the
type commonly known as a Massachusetts business trust and is registered under
the Investment Company Act of 1940, as amended, as an open-end, management
investment company. The Fund offers three classes of shares. Class A shares
are generally sold subject to a sales charge imposed at time of purchase.
Class B and Class C 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 classes' 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. The Fund invests all of its investable assets in interests in High
Yield Municipals Portfolio (the Portfolio), a New York Trust, having the same
investment objective as the Fund. The value of the Fund's investment in the
Portfolio reflects the Fund's proportionate interest in the net assets of the
Portfolio (99.9% at July 31, 2000). The performance of the Fund is directly
affected by the performance of the Portfolio. The financial statements of the
Portfolio, including the portfolio of investments, are included elsewhere in
this report and should be read in conjunction with the Fund's
financial statements.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A Investment Valuation -- Valuation of securities by the Portfolio is discussed
in Note 1A of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.
B Income -- The Fund's net investment income consists of the Fund's pro-rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund determined in accordance with generally accepted
accounting principles.
C Federal Taxes -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable (if any) 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 Fund, for federal income tax purposes, had a capital
loss carryover of $4,114,673, which will reduce the Fund's 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 Fund of any liability for federal income or excise tax. A portion of such
capital loss carryovers were acquired through a Fund Reorganization and may
be subject to certain limitations. Such capital loss carryover will expire
January 31, 2008 ($2,693,858) and January 31, 2006 ($1,420,815). Dividends
paid by the Fund from net tax-exempt interest on municipal bonds allocated
from the Portfolio are not includable by shareholders as gross income for
federal income tax purposes because the Fund and Portfolio intend to meet
certain requirements of the Internal Revenue Code applicable to regulated
investment companies which will enable the Fund to pay exempt-interest
dividends. The portion of such interest, if any, earned on private activity
bonds issued after August 7, 1986, may be considered a tax preference item
to shareholders.
D Deferred Organization Expenses -- Costs incurred by the Fund in connection
with its organization are being amortized on the straight-line basis over
five years and are fully amortized at July 31, 2000.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to the Fund and the Portfolio. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by credits which are determined based
on the average daily cash balances the Fund or the Portfolio maintains with
IBT. All significant credit balances used to reduce the Fund's custodian fees
are reported as a reduction of total expenses in the Statement of Operations.
F 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.
G Other -- Investment transactions are accounted for on a trade-date basis.
8
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
H 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 Fund's
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 the Fund is determined daily, and substantially all of the
net income so determined is declared as a dividend to shareholders of record
at the time of declaration. Distributions are paid monthly. Distributions of
allocated realized capital gains, if any, are made at least annually.
Shareholders may reinvest capital gain distributions in additional shares of
the Fund at the net asset value as of the ex-dividend date. Distributions are
paid in the form of additional shares or, at the election of the shareholder,
in cash. The Fund distinguishes between distributions on a tax basis and a
financial reporting basis. Generally accepted accounting principles require
that only distributions in excess of tax basis earnings and profits be
reported in the financial statements as a return of capital. Differences in
the recognition or classification of income between the financial statements
and tax earnings and profits which result in temporary over-distributions for
financial statement purposes are classified as distributions in excess of net
investment income or net realized gain on investments. Permanent differences
between book and tax accounting relating to distributions are reclassified to
paid-in capital.
3 Shares of Beneficial Interest
-------------------------------------------
The Fund's 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 Fund) and classes. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JULY 31, 2000 YEAR ENDED
CLASS A (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------
Sales 1,153,565 4,219,333
Issued to shareholders electing to
receive payments of distributions in
Fund shares 102,534 308,513
Redemptions (1,435,930) (4,101,777)
----------------------------------------------------------------------------
NET INCREASE (DECREASE) (179,831) 426,069
----------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
JULY 31, 2000 YEAR ENDED
CLASS B (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------
Sales 1,131,168 5,062,706
Issued to shareholders electing to
receive payments of distributions in
Fund shares 168,414 381,157
Redemptions (2,062,790) (5,455,288)
----------------------------------------------------------------------------
NET DECREASE (763,208) (11,425)
----------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
JULY 31, 2000 YEAR ENDED
CLASS C (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------
Sales 311,827 1,306,680
Issued to shareholders electing to
receive payments of distributions in
Fund shares 27,896 79,526
Redemptions (539,196) (1,768,824)
----------------------------------------------------------------------------
NET DECREASE (199,473) (382,618)
----------------------------------------------------------------------------
</TABLE>
4 Investment Adviser Fee and Other Transactions with Affiliates
-------------------------------------------
Eaton Vance Management (EVM) serves as the administrator of the Fund, but
receives no compensation. The Portfolio has engaged Boston Management and
Research (BMR), a subsidiary of EVM, to render investment advisory services
(See Note 2 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report). Except as to Trustees of the Fund and the
Portfolio who are not members of EVM's or BMR's organization, officers and
Trustees receive remuneration for their services to the Fund out of the
investment advisor fee earned by BMR. Certain officers and Trustees of the
Fund and of the Portfolio are officers of EVM and BMR. Eaton Vance
Distributors, Inc. (EVD), a subsidiary of EVM and the Fund's principal
underwriter, received $12,963 as its portion of the sales charge on sales of
Class A shares for the six months ended July 31, 2000.
5 Distribution and Service Plans
-------------------------------------------
The Fund has in effect distribution plans for Class B Shares (Class B Plan)
and Class C Shares (Class C Plan) pursuant to Rule 12b-1 under the Investment
Company Act of 1940 and a service plan for Class A shares (Class A Plan)
(collectively, the Plans). The Class B and Class C Plans require the Fund to
pay amounts equal to 1/365 of 0.75% (annualized) of the Fund's average daily
net assets attributable to Class B and Class C shares for providing
9
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
ongoing distribution services and facilities to the Fund. The 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% and 6.25% of the aggregate amount received by the Fund for
the Class B and Class C shares sold, respectively, 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 of each
respective class, reduced by the aggregate amount of contingent deferred
sales charges (see Note 6) and daily amounts theretofore paid to EVD by each
respective class. The Fund paid or accrued $739,855 and $60,765 for Class B
and Class C shares, respectively, to or payable to EVD for the year ended
July 31, 2000, representing 0.75% (annualized) and 0.75% (annualized) of the
average daily net assets for Class B and Class C shares, respectively. At
July 31, 2000, the amount of Uncovered Distribution Charges of EVD calculated
under the Plan was approximately $8,810,000 and $2,325,000 for Class B and
Class C shares, respectively.
The Plans authorize the Fund to make payments of service fees to EVD,
investment dealers and other persons in amounts not exceeding 0.25% of the
Fund's average daily net assets attributable to Class A, Class B, and
Class C shares for each fiscal year. The Trustees initially implemented the
Plans by authorizing the Fund to make quarterly payments of service fees to
EVD and investment dealers in amounts equal to 0.25% per annum of the Fund's
average daily net assets attributable to 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 0.25% per annum of the 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. The Class C Plan permits the Fund
to make monthly payments of service fees in amounts not expected to exceed
0.25% of the Fund's average daily net assets attributable to Class C shares
for any fiscal year. Service fee payments will be made for personal services
and/or the maintenance of shareholder accounts. Service fees are separate and
distinct from the sales commissions and distribution fees payable by the Fund
to EVD and, as such are not subject to automatic discontinuance where there
are no outstanding Uncovered Distribution Charges of EVD. Service fee
payments for the six months July 31, 2000 amounted to $90,283, $225,946, and
$20,255 for Class A, Class B, and Class C shares, respectively.
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 and on redemptions of
Class C shares made within one year 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 shares acquired by reinvestment of dividends
or capital gain distributions. Class B 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. Class C
shares will be subject to a 1% CDSC if redeemed within one year of purchase.
No CDSC is levied on 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 the Fund's Distribution
Plan (see Note 5). CDSC charges received when no Uncovered Distribution
Charges exist will be credited to the Fund. EVD received approximately
$503,000 and $5,000 of CDSC paid by shareholders for Class B shares and
Class C shares, respectively, for the six months ended July 31, 2000.
7 Investment Transactions
-------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio for the six
months ended July 31, 2000 aggregated $24,100,508 and $47,767,592,
respectively.
10
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 97.7%
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Assisted Living -- 5.4%
------------------------------------------------------------------------
$ 2,500 Arizona Health Facilities Authority, $ 2,168,475
(Care Institute, Inc. - Mesa),
7.625%, 1/1/26
1,000 Chester, PA, IDA, (Senior Life-Choice of 1,066,240
Kimberton), (AMT), 8.50%, 9/1/25
1,970 Chester, PA, IDA, (Senior Life-Choice of 2,030,873
Paoli, L.P.), (AMT), 8.05%, 1/1/24
1,585 Delaware PA, IDA, (Glen Riddle), (AMT), 1,700,467
8.625%, 9/1/25
1,000 Glen Cove, NY, IDA, (The Regency at Glen 310,120
Cove), 0.00%, 1/1/13
1,000 Glen Cove, NY, IDA, (The Regency at Glen 294,750
Cove), 0.00%, 7/1/13
1,000 Glen Cove, NY, IDA, (The Regency at Glen 280,060
Cove), 0.00%, 1/1/14
1,000 Glen Cove, NY, IDA, (The Regency at Glen 266,300
Cove), 0.00%, 7/1/14
1,000 Glen Cove, NY, IDA, (The Regency at Glen 253,070
Cove), 0.00%, 1/1/15
1,000 Glen Cove, NY, IDA, (The Regency at Glen 240,570
Cove), 0.00%, 7/1/15
1,000 Glen Cove, NY, IDA, (The Regency at Glen 228,680
Cove), 0.00%, 1/1/16
1,000 Glen Cove, NY, IDA, (The Regency at Glen 217,340
Cove), 0.00%, 7/1/16
1,000 Glen Cove, NY, IDA, (The Regency at Glen 206,480
Cove), 0.00%, 1/1/17
1,000 Glen Cove, NY, IDA, (The Regency at Glen 196,290
Cove), 0.00%, 7/1/17
1,000 Glen Cove, NY, IDA, (The Regency at Glen 186,570
Cove), 0.00%, 1/1/18
1,000 Glen Cove, NY, IDA, (The Regency at Glen 177,310
Cove), 0.00%, 7/1/18
1,000 Glen Cove, NY, IDA, (The Regency at Glen 168,560
Cove), 0.00%, 1/1/19
1,000 Glen Cove, NY, IDA, (The Regency at Glen 160,210
Cove), 0.00%, 7/1/19
3,740 Illinois Development Finance Authority, 3,848,759
(Care Institute, Inc.), 7.80%, 6/1/25
3,500 New Jersey EDA, (Chelsea at East 3,602,760
Brunswick), (AMT), 8.25%, 10/1/20
------------------------------------------------------------------------
$ 17,603,884
------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Cogeneration -- 4.6%
------------------------------------------------------------------------
$ 7,000 Maryland Energy Cogeneration, (AES $ 7,122,500
Warrior Run), (AMT), 7.40%, 9/1/19
3,500 Palm Beach County, FL, (Okeelanta 1,890,000
Power), (AMT), 6.85%, 2/15/21(1)
4,000 Palm Beach County, FL, (Osceola Power), 2,130,000
(AMT), 6.95%, 1/1/22(1)
1,000 Pennsylvania EDA, (Northampton 996,620
Generating), Junior Liens, (AMT),
6.875%, 1/1/11
560 Robbins, IL, Resource Recovery, (AMT), 262,466
0.00%, 10/15/09
279 Robbins, IL, Resource Recovery, (AMT), 268,511
7.25%, 10/15/09
1,206 Robbins, IL, Resource Recovery, (AMT), 1,130,803
7.25%, 10/15/24
1,797 Robbins, IL, Resource Recovery, (AMT), 797,812
8.375%, 10/15/16(1)
703 Robbins, IL, Resource Recovery, (AMT), 312,187
8.375%, 10/15/16(1)
------------------------------------------------------------------------
$ 14,910,899
------------------------------------------------------------------------
Education -- 0.6%
------------------------------------------------------------------------
$ 2,000 New Hampshire HEFA, (Colby-Sawyer $ 2,080,600
College), 7.50%, 6/1/26
------------------------------------------------------------------------
$ 2,080,600
------------------------------------------------------------------------
Electric Utilities -- 3.7%
------------------------------------------------------------------------
$ 1,250 Connecticut Development Authority, $ 1,050,350
(Connecticut Light and Power), Variable
Rate, 9/1/28(2)(3)
2,500 Connecticut Development Authority, 2,100,700
(Western Mass Electric), Variable Rate,
9/1/28(2)(3)
3,500 Intermountain Power Agency, UT, 3,552,500
Variable Rate, 7/1/11(2)
4,000 Salt River, AZ, Agricultural Improvement 3,280,960
and Power District Electric, Residual
Certificates, Variable Rate,
1/1/25(2)(3)
2,000 Southern California Public Power 2,125,000
Authority, Variable Rate, 7/1/12(2)
------------------------------------------------------------------------
$ 12,109,510
------------------------------------------------------------------------
Escrowed / Prerefunded -- 2.0%
------------------------------------------------------------------------
$11,195 Colorado HFA, (Liberty Heights), $ 2,846,665
Escrowed to Maturity, 0.00%, 7/15/22
10,000 Dawson Ridge, CO, Metropolitan District 2,215,900
#1, Escrowed to Maturity,
0.00%, 10/1/22
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
HIGH YIELD 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>
------------------------------------------------------------------------
Escrowed / Prerefunded (continued)
------------------------------------------------------------------------
$ 3,500 Dawson Ridge, CO, Metropolitan District $ 775,565
#1, Escrowed to Maturity, 0.00%, 10/1/22
3,295 Illinois Development Finance Authority, 688,194
(Regency Park), Escrowed to Maturity,
0.00%, 7/15/25
------------------------------------------------------------------------
$ 6,526,324
------------------------------------------------------------------------
General Obligations -- 1.7%
------------------------------------------------------------------------
$ 2,290 Bell Mountain Ranch, CO, Metropolitan $ 2,103,113
District, 6.625%, 11/15/25
3,450 Bell Mountain Ranch, CO, Metropolitan 3,437,131
District, 7.375%, 11/15/19
------------------------------------------------------------------------
$ 5,540,244
------------------------------------------------------------------------
Health Care-Miscellaneous -- 7.0%
------------------------------------------------------------------------
$ 2,845 Illinois Development Finance Authority, $ 2,375,888
(Community Rehabilitation Providers),
5.60%, 7/1/19
3,500 Osceola County, FL, IDA, Community 3,578,190
Pooled Loan-93, 7.75%, 7/1/17
2,535 Tax Revenue Exempt Securities Trust, 2,540,397
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 6.75%, 12/1/36
1,307 Tax Revenue Exempt Securities Trust, 1,329,254
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 7.00%, 12/1/36
1,081 Tax Revenue Exempt Securities Trust, 1,099,383
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 7.00%, 12/1/36
2,358 Tax Revenue Exempt Securities Trust, 2,412,686
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 7.75%, 12/1/36
1,983 Tax Revenue Exempt Securities Trust, 2,048,854
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 7.90%, 12/1/36
372 Tax Revenue Exempt Securities Trust, 389,839
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.25%, 12/1/36
845 Tax Revenue Exempt Securities Trust, 888,090
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.375%, 12/1/36
2,341 Tax Revenue Exempt Securities Trust, 2,454,301
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.50%, 12/1/36
983 Tax Revenue Exempt Securities Trust, 1,051,824
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.70%, 12/1/36
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Health Care-Miscellaneous (continued)
------------------------------------------------------------------------
$ 1,965 Tax Revenue Exempt Securities Trust, $ 2,109,191
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.81%, 12/1/36
590 Tax Revenue Exempt Securities Trust, 631,041
Community Health Provider, (Pooled Loan
Program Various States Trust
Certificates), 8.875%, 12/1/36
------------------------------------------------------------------------
$ 22,908,938
------------------------------------------------------------------------
Hospital -- 9.5%
------------------------------------------------------------------------
$ 2,500 California Health Facilities Financing $ 2,622,225
Authority, (Cedars-Sinai Medical
Center), Variable Rate, 12/1/34(2)(3)
2,250 Chautauqua County, NY, IDA, (Women's 1,942,785
Christian Association), 6.40%, 11/15/29
10,000 Colorado Health Facilities Authority, 9,314,100
(Rocky Mountain Adventist),
6.625%, 2/1/22
3,685 Forsyth County, GA, Hospital Authority, 3,216,747
(Georgia Baptist Health Care System),
6.25%, 10/1/18
3,700 Forsyth County, GA, Hospital Authority, 3,166,645
(Georgia Baptist Health Care System),
6.375%, 10/1/28
2,500 Hidalgo County, TX, Health Services 2,414,875
Corp., (Mission Hospital, Inc.),
6.875%, 8/15/26(4)
400 Monroeville, PA, Hospital Authority, 379,632
(Forbes Health System), 5.75%, 10/1/05
1,000 Monroeville, PA, Hospital Authority, 800,000
(Forbes Health System), 6.25%, 10/1/15
2,000 New Hampshire HEFA, (Littleton Hospital 1,579,360
Assn.), 6.00%, 5/1/28
2,205 Philadelphia, PA, HEFA, (Graduate Health 766,237
System), 6.625%, 7/1/21(1)
3,170 Philadelphia, PA, HEFA, (Graduate Health 1,101,575
System), 7.00%, 7/1/05(1)
875 Prince George's County, MD, (Greater 306,250
Southeast Healthcare System),
6.375%, 1/1/13(1)
5,900 Prince George's County, MD, (Greater 2,065,000
Southeast Healthcare System),
6.375%, 1/1/23(1)
1,785 San Gorgonio, CA, (Memorial Health Care 1,471,911
District), 5.75%, 5/1/20
------------------------------------------------------------------------
$ 31,147,342
------------------------------------------------------------------------
Housing -- 8.1%
------------------------------------------------------------------------
$ 1,465 Atlanta, GA, Urban Residential Finance $ 1,423,467
Authority, (New Community John Hope
Project), 7.25%, 6/1/07
2,395 Cuyahoga County, (Rolling Hills Apts.), 2,295,105
(AMT), 8.00%, 1/1/28
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
HIGH YIELD 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>
------------------------------------------------------------------------
Housing (continued)
------------------------------------------------------------------------
$ 1,900 Jefferson County, MO, IDA, Multifamily, $ 1,873,495
(Riverview Bend Apartments), (AMT),
6.75%, 11/1/29
500 Jefferson County, MO, IDA, Multifamily, 493,270
(Riverview Bend Apartments), (AMT),
7.125%, 11/1/29
3,680 Lucas County, OH, (Country Creek), 3,448,197
(AMT), 8.00%, 7/1/26
4,250 Maricopa County, AZ, IDA, (National 3,960,490
Health Facilities II), 6.375%, 1/1/19
1,500 Maricopa County, AZ, IDA, (National 1,384,725
Health Facilities II), 6.625%, 7/1/33
2,400 Maricopa County, AZ, IDA, (National 2,154,216
Health Facilities II), 8.00%, 1/1/34
5,000 Muni Mae Tax Revenue Exempt Bond, (AMT), 4,966,850
Variable Rate, 6/30/09
1,500 Oregon Health Authority, (Trillium 1,384,320
Affordable Housing), (AMT),
6.75%, 2/15/29
3,400 Oregon Health Authority, (Trillium 3,137,792
Affordable Housing), (AMT),
6.75%, 8/15/29
------------------------------------------------------------------------
$ 26,521,927
------------------------------------------------------------------------
Industrial Development Revenue -- 20.5%
------------------------------------------------------------------------
$ 2,440 Abia Development Corp., TX, (Austin $ 2,209,347
Cargoport Development), (AMT),
6.50%, 10/1/24
2,815 Abia Development Corp., TX, (Austin 3,081,806
Cargoport Development), (AMT),
9.25%, 10/1/21
2,000 Camden County, NJ, (Holt Hauling), 1,983,220
(AMT), 9.875%, 1/1/21
3,900 Carbon County, UT, (Laidlaw 3,558,672
Environmental Services Inc.), (AMT),
7.45%, 7/1/17
4,000 Charleston County, SC, IDA, (Zeigler 2,200,000
Coal Holding), 6.95%, 8/10/28
5,000 Clark County, NV, (Nevada Power), (AMT), 3,771,000
Variable Rate, 10/1/30
1,390 Florence County, SC, (Stone Container 1,392,349
Co.), 7.375%, 2/1/07
2,700 Hancock County, KY, (Southwire Co.), 2,766,123
(AMT), 7.75%, 7/1/26
4,000 Hardeman County, TN, (Correctional 4,117,240
Facilities Corp.), 7.75%, 8/1/17
3,715 Iowa Finance Authority, (Southbridge 3,673,578
Mall), 6.375%, 12/1/13
3,880 Kansas City, MO, IDA, (Airline Cargo 4,124,828
Facilities), (AMT), 8.50%, 1/1/17
2,970 Kimball, NE, EDA, (Clean Harbors Inc.), 3,062,189
(AMT), 10.75%, 9/1/26
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Industrial Development Revenue (continued)
------------------------------------------------------------------------
$ 2,730 Maryland EDA, (AFCO Cargo), (AMT), $ 2,456,154
6.50%, 7/1/24
1,700 Michigan Strategic Fund, (Crown Paper), 1,160,250
(AMT), 6.50%, 8/1/21
1,095 New Albany, IN, IDA, K-Mart Co., 1,127,193
7.40%, 6/1/06
2,750 New Hampshire Business Finance 1,890,625
Authority, (Crown Paper Co.), (AMT),
7.875%, 7/1/26
3,500 New Jersey EDA, (Continental Airlines), 3,199,385
(AMT), 6.25%, 9/15/29
2,500 New Jersey EDA, (Continental Airlines), 2,053,225
(AMT), Variable Rate, 9/15/29
500 New Jersey EDA, (Holt Hauling), 489,050
8.95%, 12/15/18
4,000 New Jersey EDA, (Holt Hauling), (AMT), 3,886,480
7.90%, 3/1/27
4,000 Ohio Solid Waste Revenue, (Republic 800,000
Engineered Steels), (AMT),
9.00%, 6/1/21
2,000 Perry County, KY, TJ International Inc., 1,971,960
(AMT), 6.55%, 4/15/27
500 Philadelphia, PA, IDA, (Refrigerated 488,980
Enterprises), (AMT), 9.05%, 12/1/19
3,500 Riverdale Village, IL, (ACME Metals, 2,800,000
Inc.), (AMT), 7.90%, 4/1/24
3,345 Riverdale Village, IL, (ACME Metals, 2,676,000
Inc.), (AMT), 7.95%, 4/1/25
3,091 Santa Fe, NM, (1st Interstate Plaza), 3,181,262
8.00%, 7/1/13
3,000 Skowhegan, ME, (S.D. Warren Co.), (AMT), 2,906,910
6.65%, 10/15/15
------------------------------------------------------------------------
$ 67,027,826
------------------------------------------------------------------------
Insured-Hospital -- 0.7%
------------------------------------------------------------------------
$ 2,415 California Statewide Communities $ 2,474,699
Development Authority, (Sutter Health)
Residual Certificates, (FSA), Variable
Rate, 8/15/27(3)(5)
------------------------------------------------------------------------
$ 2,474,699
------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 0.4%
------------------------------------------------------------------------
$ 1,500 San Mateo County, CA, Joint Powers $ 1,261,530
Financing Authority, (FSA), Variable
Rate, 7/15/29(2)(3)
------------------------------------------------------------------------
$ 1,261,530
------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
HIGH YIELD 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 -- 1.5%
------------------------------------------------------------------------
$ 7,000 Pennsylvania Turnpike Commission Oil $ 5,046,860
Franchise, (AMBAC), Variable Rate,
12/1/27(2)(3)
------------------------------------------------------------------------
$ 5,046,860
------------------------------------------------------------------------
Insured-Transportation -- 1.7%
------------------------------------------------------------------------
$ 2,000 New Jersey Turnpike Authority, (MBIA), $ 1,917,920
Variable Rate, 1/1/30(3)(5)
3,750 Niagara, NY, Frontier Airport Authority, 3,572,100
(Buffalo Niagara International Airport),
(MBIA), (AMT), Variable Rate,
4/1/29(2)(3)
------------------------------------------------------------------------
$ 5,490,020
------------------------------------------------------------------------
Miscellaneous -- 3.1%
------------------------------------------------------------------------
$ 3,755 Atlanta, Downtown Development Authority, $ 3,885,599
Childcare Facilities, (Central Atlanta
Hospitality Childcare Inc.),
8.00%, 1/1/26
3,000 Colorado River Indian Tribe, AZ, 2,970,330
6.25%, 8/1/04
1,285 Pittsfield Township, MI, (Arbor 1,290,770
Hospice), 8.125%, 8/15/17
1,900 Union, OR, Facility Revenue, (Buffalo 1,851,531
Peak Golf Club), 6.75%, 7/1/24
------------------------------------------------------------------------
$ 9,998,230
------------------------------------------------------------------------
Nursing Home -- 8.4%
------------------------------------------------------------------------
$ 3,335 Clovis, NM, IDR, (Retirement Ranches, $ 3,358,912
Inc.), 7.75%, 4/1/19
3,600 Colorado HFA, (Volunteers of America), 2,921,364
5.875%, 7/1/28
2,300 Colorado HFA, (Volunteers of America), 1,896,235
5.75%, 7/1/20
1,100 Colorado HFA, Residential Care 904,981
Facilities, (Volunteers of America),
6.00%, 7/1/29
2,175 Kansas City, MO, IDA, (Beverly 2,213,519
Enterprises, Inc.), 8.00%, 12/1/02
2,500 Massachusetts IFA, (Age Institute of 2,598,775
Massachusetts), 8.05%, 11/1/25
3,200 Minneapolis, MN, (Walker Methodist 2,673,312
Senior Services), 6.00%, 11/15/28
1,195 Mississippi Business Finance Corp., 1,196,314
(Magnolia Healthcare), 7.99%, 7/1/25
7,500 Tarrant County, TX, Health Facilities, 2,637,000
(3927 Foundation), 10.25%, 9/1/19
3,370 Westmoreland, PA, (Highland Health 3,582,984
Systems, Inc.), 9.25%, 6/1/22
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
------------------------------------------------------------------------
Nursing Home (continued)
------------------------------------------------------------------------
$ 3,790 Wisconsin HEFA, (Wisconsin Illinois $ 3,527,277
Senior Housing), 7.00%, 8/1/29
------------------------------------------------------------------------
$ 27,510,673
------------------------------------------------------------------------
Senior Living / Life Care -- 10.0%
------------------------------------------------------------------------
$ 8,000 Albuquerque, NM, Retirement Facilities, $ 6,904,640
(La Vida Liena Retirement Center),
6.60%, 12/15/28
3,500 Delaware County, PA, White Horse 3,502,800
Village, 7.30%, 7/1/14
2,000 Grove City, PA, Area Hospital Authority, 1,773,800
(Grove Manor), 6.625%, 8/15/29
7,500 Kansas City, MO, IDA, (Kingswood United 6,006,525
Methodist Manor), 5.875%, 11/15/29
3,545 Louisiana HFA, (HCC Assisted Living 3,727,851
Group 1), (AMT), 9.00%, 3/1/25
5,355 Massachusetts IFA, (Forge Hill), (AMT), 4,476,673
6.75%, 4/1/30
5,240 North Miami, FL, Health Care Facilities, 4,639,863
(Imperial Club), 8.00%, 1/1/33
2,000 Ohio HFA, Retirement Rental Housing, 1,743,560
(Encore Retirement Partners),
6.75%, 3/1/19
------------------------------------------------------------------------
$ 32,775,712
------------------------------------------------------------------------
Solid Waste -- 1.0%
------------------------------------------------------------------------
$ 3,400 Morgantown, KY, Solid Waste Revenue, $ 3,407,412
(IMCO Recycling, Inc.), 7.45%, 5/1/22
------------------------------------------------------------------------
$ 3,407,412
------------------------------------------------------------------------
Special Tax Revenue -- 2.9%
------------------------------------------------------------------------
$ 3,800 Cottonwood, CO, Water and Sanitation $ 3,909,554
District, 7.75%, 12/1/20
1,500 Dulles, VA, Community Development 1,417,815
Authority, (Dulles Town Center),
6.25%, 3/1/26
4,250 Frederick County, MD, Urbana Community 4,084,717
Development Authority, 6.625%, 7/1/25
------------------------------------------------------------------------
$ 9,412,086
------------------------------------------------------------------------
Transportation -- 4.2%
------------------------------------------------------------------------
$ 500 Eagle County, CO, (Eagle County Airport $ 506,760
Terminal), (AMT), 7.50%, 5/1/21
2,985 Monroe County, NY, Airport Authority, 3,216,397
DRIVERS, (AMT), 8.364%, 1/1/18(2)(3)
5,000 New Jersey Transportation Authority, 4,544,150
Variable Rate, 6/15/17(2)(3)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
HIGH YIELD 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>
------------------------------------------------------------------------
Transportation (continued)
------------------------------------------------------------------------
$ 5,250 Northwest Arkansas Regional Airport $ 5,328,225
Authority, (AMT), 7.625%, 2/1/27
------------------------------------------------------------------------
$ 13,595,532
------------------------------------------------------------------------
Water and Sewer -- 0.7%
------------------------------------------------------------------------
$ 3,000 Metropolitan Water District, CA, $ 2,306,130
(Southern California Waterworks),
Variable Rate, 7/1/27(3)(5)
------------------------------------------------------------------------
$ 2,306,130
------------------------------------------------------------------------
Total Tax-Exempt Investments -- 97.7%
(identified cost $351,170,365) $319,656,378
------------------------------------------------------------------------
Other Assets, Less Liabilities -- 2.3% $ 7,423,160
------------------------------------------------------------------------
Net Assets -- 100.0% $327,079,538
------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax
preference item for purposes of the Federal Alternative Minimum Tax.
At July 31, 2000, the concentration of the Portfolio's investments in the
various states, determined as a percentage of net assets, is as follows:
<TABLE>
<S> <C>
Colorado 10.3%
Others, representing less than 10% individually 87.4%
</TABLE>
(1) Non-income producing security.
(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.
(4) Security (or a portion thereof) has been segregated to cover when-
issued securities.
(5) Security has been issued as a leveraged inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF JULY 31, 2000
<S> <C>
Assets
------------------------------------------------------
Investments, at value
(identified cost, $351,170,365) $319,656,378
Cash 313,878
Receivable for when-issued securities 1,293,218
Receivable for investments sold 237,598
Interest receivable 6,948,831
------------------------------------------------------
TOTAL ASSETS $328,449,903
------------------------------------------------------
Liabilities
------------------------------------------------------
Payable for when-issued securities $ 1,338,358
Accrued expenses 32,007
------------------------------------------------------
TOTAL LIABILITIES $ 1,370,365
------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $327,079,538
------------------------------------------------------
Sources of Net Assets
------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $358,593,525
Net unrealized depreciation (computed on
the basis of identified cost) (31,513,987)
------------------------------------------------------
TOTAL $327,079,538
------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JULY 31, 2000
<S> <C>
Investment Income
-----------------------------------------------------
Interest $12,450,795
-----------------------------------------------------
TOTAL INVESTMENT INCOME $12,450,795
-----------------------------------------------------
Expenses
-----------------------------------------------------
Investment adviser fee $ 1,005,874
Trustees fees and expenses 13,955
Custodian fee 70,188
Legal and accounting services 38,957
Miscellaneous 48,828
-----------------------------------------------------
TOTAL EXPENSES $ 1,177,802
-----------------------------------------------------
NET INVESTMENT INCOME $11,272,993
-----------------------------------------------------
Realized and Unrealized Gain (Loss)
-----------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $(2,995,829)
-----------------------------------------------------
NET REALIZED LOSS $(2,995,829)
-----------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 3,544,562
-----------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $ 3,544,562
-----------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 548,733
-----------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $11,821,726
-----------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INCREASE (DECREASE) JULY 31, 2000 YEAR ENDED
IN NET ASSETS (UNAUDITED) JANUARY 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------
From operations --
Net investment income $ 11,272,993 $ 24,535,713
Net realized loss (2,995,829) (2,694,168)
Net change in unrealized
appreciation (depreciation) 3,544,562 (54,986,374)
----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 11,821,726 $ (33,144,829)
----------------------------------------------------------------------------
Capital transactions --
Contributions $ 24,100,508 $ 114,068,297
Withdrawals (47,767,592) (132,907,536)
----------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (23,667,084) $ (18,839,239)
----------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (11,845,358) $ (51,984,068)
----------------------------------------------------------------------------
Net Assets
----------------------------------------------------------------------------
At beginning of period $ 338,924,896 $ 390,908,964
----------------------------------------------------------------------------
AT END OF PERIOD $ 327,079,538 $ 338,924,896
----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED JANUARY 31,
JULY 31, 2000 --------------------------------------------------------
(UNAUDITED) 2000 1999 1998 1997 1996(1)
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data+
--------------------------------------------------------------------------------------------------------------
Ratios (As a percentage of
average daily net assets):
Net expenses 0.72%(2) 0.68% 0.67% 0.68% 0.34% 0.06%(2)
Net expenses after
custodian fee reduction 0.72%(2) 0.67% 0.66% 0.66% 0.30% 0.06%(2)
Net investment income 6.90% 6.25% 5.88% 6.43% 6.96% 6.95%(2)
Portfolio Turnover 6% 58% 25% 8% 41% 32%
--------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(000'S OMITTED) $327,080 $338,925 $390,909 $303,209 $180,700 $72,077
--------------------------------------------------------------------------------------------------------------
+ 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 0.71% 0.71%(2)
Expenses after custodian
fee reduction 0.67% 0.71%(2)
Net investment income 6.59% 6.30%(2)
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, August 7, 1995, to
January 31, 1996.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
-------------------------------------------
High Yield Municipals Portfolio (the Portfolio) is registered under the
Investment Company Act of 1940, as a diversified open-end management
investment company, which was organized as a trust under the laws of the
State of New York on May 1, 1995. The Portfolio seeks to achieve high current
income exempt from regular federal income tax. The Declaration of Trust
permits the Trustees to issue interests in the Portfolio. The following is a
summary of significant accounting policies of the Portfolio. The policies are
in conformity with generally accepted accounting principles.
A Investment Valuation -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts listed on
commodity exchanges are valued at closing settlement prices. Short-term
obligations maturing in sixty days or less are valued at amortized cost which
approximates value. Investments for which valuations or market quotations are
unavailable are valued at fair value using methods determined in good faith
by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C Income Taxes -- The Portfolio is treated as a partnership for federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes. Since some of the
Portfolio's investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolio, the Portfolio normally
must satisfy the applicable source of income and diversification requirements
(under the Internal Revenue Code) in order for its investors to satisfy them.
The Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net taxable (if any) and
tax-exempt investment income, net realized capital gains, and any other items
of income, gain, loss, deduction or credit. Interest income received by the
Portfolio on investments in municipal bonds, which is excludable from gross
income under the Internal Revenue Code, will retain its status as income
exempt from Federal income tax when allocated to the Portfolio's investors.
The portion of such interest, if any, earned on private activity bonds issued
after August 7, 1986 may be considered a tax preference item for investors.
D Financial Futures Contracts -- Upon the entering of a financial futures
contract, the Portfolio is required to deposit (initial margin) either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by the Portfolio (margin maintenance) each day, dependent on
the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by the Portfolio.
The Portfolio's investment in financial futures contracts is designed only to
hedge against anticipated futures changes in interest rates. Should interest
rates move unexpectedly, the Portfolio may not achieve the anticipated
benefits of the financial futures contracts and may realize a loss.
E Legal Fees -- Legal fees and other related expenses incurred as part of
negotiations of the terms and requirements of capital infusions, or that are
expected to result in the restructuring of or a plan of reorganization for an
investment are recorded as realized losses. Ongoing expenditures to protect
or enhance an investment are treated as operating expenses.
F When-issued and Delayed Delivery Transactions -- The Portfolio may engage in
when-issued and delayed delivery transactions. The Portfolio records
when-issued securities on trade date and maintains security positions such
that sufficient liquid assets will be available to make payments for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked-to-market daily and begin accruing interest on
settlement date.
G Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolio. Pursuant to the custodian agreement, IBT receives a fee
reduced by credits which are determined based on the average daily cash
balances the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reported as a reduction of
operating expenses on 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
19
<PAGE>
HIGH YIELD MUNICIPALS PORTFOLIO AS OF JULY 31, 2000
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
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.
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
Portfolio's 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 the Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e. income other than gains from the sales of
securities). For the six months ended July 31, 2000, the fee was equivalent
to 0.62% (annualized) of the Portfolio's average net assets for such period
and amounted to $1,005,874. Except as to Trustees of the Portfolio who are
not members of EVM's or BMR's organization, officers and Trustees receive
remuneration for their services to the Portfolio out of such investment
adviser fee. Certain officers and Trustees of the Portfolio are officers of
the above organizations. Trustees of the Portfolio that are not affiliated
with the Investment Adviser may elect to defer receipt of all or a percentage
of their annual fees in accordance with the terms of the Trustees Deferred
Compensation Plan. For the 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 and
short-term obligations, aggregated $20,225,381 and $38,048,305, respectively,
for the six months ended July 31, 2000.
4 Federal Income Tax Basis of Investments
-------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at July 31, 2000 as computed on a federal income tax basis,
were as follows:
<TABLE>
<S> <C>
AGGREGATE COST $351,170,365
------------------------------------------------------
Gross unrealized appreciation $ 5,788,184
Gross unrealized depreciation (37,302,171)
------------------------------------------------------
NET UNREALIZED DEPRECIATION $(31,513,987)
------------------------------------------------------
</TABLE>
5 Line of Credit
-------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $150 million unsecured line of credit agreement
with a group of banks. Borrowings will be made by the Portfolio solely to
facilitate the handling of unusual and/or unanticipated short-term cash
requirements. Interest is charged to each participating 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 Portfolio
did not have any significant borrowings or allocated fees during the six
months ended July 31, 2000.
6 Financial Instruments
-------------------------------------------
The Portfolio regularly trades in financial instruments with off-balance
sheet risk in the normal course of its investing activities to assist in
managing exposure to various market risks. These financial instruments
include futures contracts and may involve, to a varying degree, elements of
risk in excess of the amounts recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment the Portfolio has in particular classes of financial instruments
and do not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered. At July 31,
2000, there were no obligations under these financial instruments
outstanding.
20
<PAGE>
EATON VANCE HIGH YIELD MUNICIPALS FUND AS OF JULY 31, 2000
INVESTMENT MANAGEMENT
EATON VANCE HIGH YIELD MUNICIPALS FUND
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
HIGH YIELD MUNICIPALS PORTFOLIO
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Thomas Metzold
Vice President and
Portfolio Manager
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking
Emeritus, Harvard University Graduate School of
Business Adminstration
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
21
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
INVESTMENT ADVISER OF HIGH YIELD MUNICIPALS PORTFOLIO
BOSTON MANAGEMENT AND RESEARCH
The Eaton Vance Building
255 State Street
Boston, MA 02109
ADMINISTRATOR OF EATON VANCE HIGH YIELD MUNICIPALS FUND
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 HIGH YIELD MUNICIPALS FUND
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 distribution
plan, sales charges and expenses. Please read the prospectus carefully before
you invest or send money.
--------------------------------------------------------------------------------
416-9/00 HYSRC
