The Eaton Vance Municipals Trust II
For the Florida Insured, Hawaii & Kansas Municipals Funds
[LOGO]
Annual Shareholders Report
January 31, 1997
<TABLE>
<CAPTION>
Florida Insured Municipals Portfolio
Portfolio of Investments - January 31, 1997
Tax-Exempt Investments - 100%
Ratings (Unaudited)
- ------------------ Principal
Amount
Standard (000
Moody's & Poor's Omitted) Security Value
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Escrowed - 2.5%
Aaa AAA $500 Gainsville, Florida
Utility, 8.125%,
10/1/14(2) $633,065
-----------
Housing - 12.1%
Aaa NR $365 Duval, Florida HFA
SFMR (GNMA)
(AMT), 6.70%, 10/1/26 $378,618
Aaa AAA 750 Escambia, Florida
HFA SFMR (GNMA)
(AMT), 7.00%, 4/1/28 794,663
Aaa NR 740 Manatee, Florida
HFA SFMR (GNMA)
(AMT), 6.875%,
11/1/26 786,716
NR AAA 1,000 Pinellas, Florida
HFA SFMR (GNMA)
(AMT), 6.70%, 2/1/28 1,038,360
-----------
$2,998,357
-----------
Insured Education - 3.5%
Aaa AAA $500 Florida A&M
University (MBIA),
5.625%, 7/1/25 $494,380
Aaa AAA 400 University of Florida
(MBIA), 5.50%, 7/1/23 384,120
-----------
$878,500
-----------
Insured Electric Utilities - 5.2%
Aaa AAA $445 Citrus, Florida PCR
FL Power (MBIA),
6.35%, 2/1/22 $470,369
Aaa AAA 895 Florida State Municipal
Power Agency -
Stanton II Project
(AMBAC), 4.50%,
10/1/27 722,023
Aaa AAA 50 Key West, Florida
Utility Board Electric
Revenue (AMBAC),
6.75%, 10/1/13 54,710
Aaa AAA 50 Puerto Rico Electric
Power Authority -
Stripes (FSA),
Variable, 7/1/02 (1) 54,438
-----------
$1,301,540
-----------
Insured General
Obligation - 3.7%
Aaa AAA $1,000 Massachusetts Turnpike
Authority Revenue
(FGIC), 5.125%, 1/1/23 $916,890
-----------
Insured Hospitals - 0.9%
Aaa AAA $200 Dade, Florida - Jackson
Memorial Hospital
(MBIA), 4.875%, 6/1/15 $180,210
Aaa AAA 50 Hillsborough, Florida -
Tampa General Hospital
(FSA), 6.375%, 10/1/13 52,718
-----------
$232,928
-----------
Insured Housing - 8.3%
Aaa AAA $500 Florida HFA - Maitland
Club Apartments
(AMBAC) (AMT),
6.875%, 8/1/26 $526,780
Aaa AAA 500 Florida HFA -
Spinnaker Cove
Apartments (AMBAC)
(AMT), 6.50%, 7/1/36 512,520
Aaa AAA 1,000 Florida HFA -
Mariner Club
Apartments (AMBAC),
6.375%, 9/1/36 1,015,900
-----------
$2,055,200
-----------
Insured Industrial
Development Revenue - 2.0%
Aaa AAA $500 Dade Florida Resource
Recovery (AMBAC)
(AMT), 5.50%, 10/1/13 $491,930
-----------
Insured Special Tax - 29.4%
Aaa AAA $1,000 Bradenton, Florida
Special Revenue Sub
Lien (FGIC), 5.00%,
10/1/15 $940,370
Aaa AAA 500 Broward, Florida
Professional Sports
Facilities (MBIA),
5.625%, 9/1/28 493,425
Aaa AAA $500 Dade, Florida
Convention Center
Special Tax (AMBAC),
5.00%, 10/1/35 $447,320
Aaa AAA 1,225 Florida State Finance
Department -
Environmental
Preservation (MBIA),
4.75%, 7/1/09 1,152,002
Aaa AAA 1,000 Jacksonville, Florida
Excise Taxes Revenue
(FGIC), 5.00%, 10/1/16 931,760
Aaa AAA 1,000 Jacksonville, Florida
Sales Tax River City
(FGIC) (AMT), 5.70%,
10/1/09 1,023,320
Aaa AAA 745 Jacksonville, Florida
Sales Tax River City
(FGIC), 5.375%,
10/1/18 719,067
Aaa AAA 250 Orange, Florida Tourist
Development Tax
(MBIA), 6.00%,
10/1/24 256,895
Aaa AAA 795 St. Petersburg, Florida
Excise Tax (FGIC),
5.00%, 10/1/16 736,273
Aaa AAA 340 Sunrise, Florida Public
Facilities Capital
Appreciation (MBIA),
0%, 10/1/15 119,952
Aaa AAA 500 Tampa Florida
Occupational - License
Tax (FGIC), 5.50%,
10/1/27 482,805
-----------
$7,303,189
-----------
Insured Transportation - 7.8%
Aaa AAA $1,000 Dade, Florida Seaport
Revenue (MBIA),
5.125%, 10/1/16 $946,580
Aaa AAA 500 Florida State Turnpike
Authority (FGIC),
5.00%, 7/1/19 455,110
Aaa AAA 500 Florida State Turnpike
Authority (FGIC),
5.50%, 7/1/21 487,840
Aaa AAA 50 Greater Orlando,
Florida Aviation
Authority (FGIC)
(AMT), 6.375%, 10/1/21 52,463
-----------
$1,941,993
-----------
Insured Water & Sewer - 24.6%
Aaa AAA $130 Charlotte, Florida
Utility Revenue
(FGIC), 5.625%,
10/1/21 $128,621
Aaa AAA 75 Cocoa, Florida
Water & Sewer
(AMBAC), 5.00%,
10/1/23 (2) 67,228
Aaa AAA 750 Dade, Florida
Water & Sewer System
(FGIC), 5.50%, 10/1/25 726,300
Aaa AAA 325 Dade, Florida
Water & Sewer System
(FGIC), 5.375%,
10/1/16 317,648
Aaa AAA 735 Enterprise, Florida
Community District
Water & Sewer
(MBIA), 6.125%, 5/1/24 758,424
Aaa AAA 1,000 Jacksonville, Florida
Water & Sewer
(AMBAC), 6.35%,
8/1/25 1,050,430
Aaa AAA 1,000 Lee, Florida Utility -
Bonita Springs Project
(MBIA) (AMT), 6.05%,
11/1/20 1,021,690
Aaa AAA 70 North Port, Florida
Utility (FGIC), 6.25%,
10/1/17 73,443
Aaa AAA 500 North Port, Florida
Utility (FGIC), 6.25%,
10/1/22 523,635
Aaa AAA 155 Sanford, Florida
Water & Sewer
(AMBAC), 4.50%,
10/1/21 127,934
Aaa AAA 400 Titisville, Florida
Water & Sewer
(MBIA), 6.00%, 10/1/24 411,032
Aaa AAA 1,000 Vero Beach, Florida
Water & Sewer
(FGIC), 5.00%, 12/1/21 899,580
-----------
$6,105,965
-----------
Total Tax-Exempt Investments
(Identified cost, $23,841,427) $24,859,557
-----------
(1) Security has been issued as an inverse floater bond.
(2) Security has been segregated to cover margin requirements for open financial futures contracts.
AMT - Interest earned from these securities may be considered a tax preference item for purposes
of the Federal Alternative Minimum Tax.
The Portfolio primarily invests in debt securities issued by Florida municipalities. The ability
of the issuers of the debt securities to meet their obligations may be affected by economic
developments in a specific industry or municipality. In order to reduce the risk associated
with such economic developments, at January 31, 1997, 85.4% of the securities in the portfolio
of investments are backed by bond insurance of various financial institutions and financial
guaranty assurance agencies. At January 31, 1997, the Portfolio's insured securities by financial
institution are as follows:
% of
Market Value Market Value
------------- ------------
American Municipal Bond
Assurance Corp. (AMBAC) $ 5,016,775 20.2%
Financial Guaranty Assurance
Assoc. (FGIC) 9,415,126 37.9
Financial Security
Assurance (FSA) 107,156 0.4
Municipal Bond Insurance
Assoc. (MBIA) 6,689,079 26.9
----------- ----
Total $21,228,136 85.4%
=========== ====
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Hawaii Municipals Portfolio
Portfolio of Investments - January 31, 1997
Tax-Exempt Investments - 100%
Ratings (Unaudited)
- ------------------ Principal
Amount
Standard (000
Moody's & Poor's Omitted) Security Value
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Obligations - 17.7%
Aa AA $140 State of Hawaii, 5.75%,
1/1/11 $146,632
Aa AA 1,000 State of Hawaii, 5.25%,
6/1/13 975,830
Aa AA 750 City and County of
Honolulu, Hawaii,
4.75%, 9/1/17 663,863
NR BBB 590 Government of Guam,
5.375%, 11/15/13 548,612
Baa1 A 500 Puerto Rico Public
Buildings Authority,
Public Education and
Health Facilities,
5.50%, 7/1/21 474,580
------------
$2,809,517
------------
Hospitals - 13.2%
Aa3 AA $400 State of Hawaii
Department of Budget
and Finance,
Kaiser Permanente,
6.25%, 3/1/21 $411,667
A A 625 State of Hawaii
Department of Budget
and Finance,
Kapiolani Health
System, 6.00%, 7/1/19 626,394
Aa3 AA 800 State of Hawaii
Department of Budget
and Finance, Queens
Health System, 5.75%,
7/1/26 788,232
NR AAA 250 Puerto Rico Industrial,
Tourist, Educational,
Medical and
Environmental Control
Authority, Doctor Pila
Hospital Project, (FHA),
6.25%, 8/1/32 262,218
------------
$2,088,511
------------
Housing - 7.4%
Aa A $1,000 State of Hawaii
Housing Finance and
Development SFMB,
5.90%, 7/1/27 (2) $999,940
Aa A 175 State of Hawaii
Housing Finance and
Development SFMB,
(AMT), 6.00%, 7/1/26 173,556
------------
$1,173,496
------------
Industrial Development/Pollution
Control - 5.3%
A1 AA- $550 Puerto Rico Industrial,
Tourist, Educational,
Medical and
Environmental Control
Authority, Upjohn
Company Project,
7.50%, 12/1/23 $597,008
Baa3 BB+ 50 Puerto Rico Port
Authority, American
Airlines, (AMT),
6.25%, 6/1/26 51,348
Baa3 BB+ 180 Puerto Rico Port
Authority, American
Airlines, (AMT),
6.30%, 6/1/23 183,848
------------
$832,204
------------
Insured Education - 6.4%
Aaa AAA $500 University of Hawaii
Board of Regents,
University System,
(AMBAC), 5.65%,
10/1/12 $506,625
Aaa AAA 500 Hawaii State Housing
Development
Corporation,
University of Hawaii,
(AMBAC), 5.65%,
10/1/16 500,550
------------
$1,007,175
------------
Insured General
Obligations - 12.5%
Aaa AAA $700 County of Hawaii,
Hawaii, (FGIC), 5.55%,
5/1/10 $721,357
Aaa AAA 305 County of Kauai,
Hawaii, (MBIA), 5.90%,
2/1/14 313,503
Aaa AAA 250 County of Maui, Hawaii,
(FGIC), 5.75%, 1/1/13 253,170
Aaa AAA 250 County of Maui, Hawaii,
(FGIC), 5.125%,
12/15/13 240,693
Aaa AAA 500 Commonwealth of
Puerto Rico, (MBIA),
5.00%, 7/1/21 455,670
------------
$1,984,393
------------
Insured Hospitals - 1.3%
Aaa AAA $100 State of Hawaii
Department of Budget
and Finance Queen's
Medical Center, (FGIC),
6.50%, 7/1/12 $103,609
Aaa AAA 100 State of Hawaii
Department of Budget
and Finance St. Francis
Medical Centers,
(CGIC), 6.50%, 7/1/22 107,161
------------
$210,770
------------
Insured Housing - 3.4%
Aaa AAA $495 Honolulu Hawaii City
& County Mortgage
Revenue Bonds, Smith
Beretania Project,
(MBIA), 7.80%, 7/1/24 $532,407
------------
Insured Transportation - 11.9%
Aaa AAA $500 State of Hawaii Airports
System, (AMT), (FGIC),
7.50%, 7/1/20 $548,140
Aaa AAA 100 State of Hawaii Airports
System, (AMT), (MBIA),
6.90%, 7/1/12 114,656
Aaa AAA 245 State of Hawaii Airports
System, (AMT), (MBIA),
7.00%, 7/1/18 268,694
Aaa AAA 250 State of Hawaii Harbor
Revenue, (AMT),
(MBIA), 7.00%, 7/1/17 270,188
Aaa AAA 650 State of Hawaii Harbor
Revenue, (AMT),
(FGIC), 6.375%, 7/1/24 681,350
------------
$1,883,028
------------
Insured Utilities - 8.6%
Aaa AAA $500 State of Hawaii
Department of Budget
and Finance, Hawaii
Electric Company, Inc.,
(AMT), (MBIA), 6.60%,
1/1/25 $539,645
Aaa AAA 500 State of Hawaii
Department of Budget
and Finance, Hawaii
Electric Company, Inc.,
(AMT), (MBIA), 6.20%,
5/1/26 517,345
Aaa AAA 200 State of Hawaii
Department of Budget
and Finance, Hawaii
Electric Company, Inc.,
(MBIA), 5.875%,
12/1/26 198,588
Aaa AAA 100 Puerto Rico Electric
Power Authority
Stripes, (FSA),
Variable, 7/1/03 (1) 110,375
------------
$1,365,953
------------
Special Tax - 2.9%
Baa1 A $250 Puerto Rico Highway
and Transportation
Authority, 5.50%,
7/1/36 $239,345
Baa1 A 125 Puerto Rico Highway
and Transportation
Authority, 5.00%,
7/1/22 110,350
NR NR 100 Virgin Islands Public
Finance Authority,
7.25%, 10/1/18 106,628
------------
$456,323
------------
Transportation - 5.6%
Aa AA $715 State of Hawaii Highway
Revenue, 5.00%,
7/1/12 $684,934
NR BBB 200 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 206,266
------------
$891,200
------------
Water and Sewer - 3.8%
Aa AA $600 Honolulu City and
County Water Supply
System, 5.80%, 7/1/16 $607,212
------------
Total Tax-Exempt Investments
(Identified cost, $14,793,835) $ 15,842,189
------------
<CAPTION>
- ----------------------------------------------------------------------------------
Put Options on Financial Futures Contracts - 0%
- ----------------------------------------------------------------------------------
Contracts
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
10 30 year U.S. Treasury
Bond, American,
Expiration 2/22/97,
Strike Price $108
(identified
cost, $4,896) $ 1,719
------------
Total Investments
(Identified cost, $14,798,731) $ 15,843,908
============
(1) Security has been issued as an inverse floater bond.
(2) Security has been segregated to cover margin requirements for open financial
futures contracts.
AMT - Interest earned from these securities may be considered a tax preference item
for purposes of the Federal Alternative Minimum Tax.
The Portfolio primarily invests in debt securities issued by Hawaii municipalities.
The ability of the issuers of the debt securities to meet their obligations may be
affected economic developments in a specific industry or municipality. In order to
reduce the risk associated with such economic developments, at January 31, 1997,
44.1% of the securities in the portfolio of investments are backed by bond insurance
of various financial institutions and financial guaranty assurance agencies. The
percentage by financial institution ranged from 0.7% to 20.3% of total investments.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Kansas Municipals Portfolio
Portfolio of Investments - January 31, 1997
Tax-Exempt Investments - 100%
Ratings (Unaudited)
- -------------------Principal
Amount
Standard (000
Moody's & Poor's Omitted) Security Value
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Obligation Local - 2.5%
Aa1 NR $300 City of Leawood,
5.00%, 9/1/15 $285,513
-----------
General Obligation
School District - 17.8%
Aa NR $400 Douglas County,
(Lawrence), USD No.
497, 6.00%, 9/1/15 $414,360
Aa AA 300 Johnson Co. KS USD
#229, 5.00%, 10/1/14 285,603
Aa AA 890 Johnson Co. KS USD
#229, 5.00%, 10/1/16 834,322
Aa1 AA 500 Johnson Co. KS USD
#512, 5.125%, 10/1/16 475,005
-----------
$2,009,290
-----------
General Obligation
Territory - 2.0%
Baa1 A $250 Puerto Rico Aqueduct
& Sewer Authority,
Revenue Bonds,
5.00%, 7/1/19 $226,382
-----------
Hospitals - 5.9%
A3 NR $250 City of Lawrence,
(Lawrence Memorial),
Hospital Revenue
Bonds, 6.20%, 7/1/19 $255,265
Aa3 AA 455 Shawnee County,
(Sisters of Charity),
Revenue Bonds,
5.00%, 12/1/23 412,903
-----------
$668,168
-----------
Housing - 25.9%
NR AAA $230 City of Kansas City,
Multifamily Housing
Revenue Bonds
(MFHRB), (FHA
Insured-Rainbow
Towers), 6.70%, 7/1/23 $234,724
NR AAA 405 City of Kansas City,
SFH (GNMA), 7.00%,
12/1/11 419,932
Aaa NR 85 City of Kansas City,
SFH (GNMA), 5.30%,
5/1/07 84,357
Aaa NR 85 City of Kansas City,
SFH (GNMA), 5.30%,
11/1/07 $84,334
Aaa NR 200 City of Kansas City,
SFH (GNMA), 5.90%,
11/1/27 198,018
NR AAA 225 City of Olathe, Kansas,
SFH (AMT),(GNMA),
7.60%, 3/1/07 235,620
NR AAA 250 City of Olathe, Kansas,
MFHRB (FNMA)
(Deerfield Apartments),
6.45%, 6/1/19 257,205
Aaa NR 200 Cities of Olathe and of
Labette, Collateralized
Single Family Mortgage
Revenue Bonds,
(CSFMRB) (GNMA),
8.10%, 8/1/23 222,108
Aa NR 100 Kansas Development
Authority SFH
FHA, (Martin
Creek), 6.60%, 08/1/34 102,177
Aaa NR 45 Sedgwick County SFH,
(GNMA), Ser 94 B
8.20%, 05/1/14 49,841
Aaa NR 235 Sedgwick and Shawnee
Counties, CSFMRB
(GNMA), 7.75%,
11/1/24 265,421
Aaa NR 455 Sedgwick and Shawnee
Counties, CSFMRB
(GNMA), 8.00%, 5/1/25 504,181
NR AA 250 Puerto Rico Housing
Finance Corporation,
MFMRB 7.50%,
4/1/22 263,895
-----------
$2,921,813
-----------
Industrial Development
Revenue - 2.6%
A2 NR $100 Puerto Rico I.M.E.
(American Home
Products), 5.10%,
12/1/18 $91,560
Baa3 BB+ $200 Puerto Rico Port
Authority, (American
Airlines), 6.30%, 6/1/23 204,276
-----------
$295,836
-----------
Insured Health Care - 4.5%
Aaa AAA $500 Kansas Dev. Finance
Auth., Health Facilities,
(Stormont-Vail), (MBIA),
5.80%, 11/15/11 $513,745
-----------
Insured Housing - 4.0%
Aaa AAA $215 Sedgwick County
Mortgage Lein Ser 89 A,
(GNMA), (MBIA),
7.50%, 12/1/09 $227,614
Aaa AAA 115 Sedgwick County
Mortgage Lein Ser 89 A,
(GNMA), (MBIA),
7.50%, 12/1/10 (2) 121,618
Aaa AAA 100 Puerto Rico Housing
Finance Corp.,
MFHRB, (AMBAC),
7.50%, 10/1/11 104,636
-----------
$453,868
-----------
Insured Utilities - 4.3%
Aaa AAA $345 City of Burlington,
PCR, (Kansas Gas &
Electric Co.) (MBIA),
7.00%, 06/1/31 (2) $380,180
Aaa AAA 100 Puerto Rico Electric
Power Authority, Power
Revenue Bonds, (FSA),
Residual Interest Bonds,
Variable 7/1/02 (1) 108,875
-----------
$489,055
-----------
Insured General
Obligations - 3.3%
Aaa AAA $150 City of Garnett,
Combined Utility
Revenue Bonds,
(MBIA),
6.00%, 10/1/17 $153,831
Aaa AAA 200 City of Kansas City,
Utility System Revenue
Bonds, (FGIC),
6.375%, 9/1/23 213,580
-----------
$367,411
-----------
Insured General Obligations
School District - 4.6%
Aaa AAA $250 Sedgwick County, USD
No. 267, (AMBAC),
6.15%, 11/1/09 $269,507
Aaa AAA 230 Sedgwick County, USD
No. 267, (AMBAC),
6.15%, 11/1/10 246,268
-----------
$515,775
-----------
Insured Hospitals - 17.6%
Aaa AAA $1,000 Kansas Dev. Finance
Authority, Health Facilities
Revenue Bonds, (HFRB)
(St. Lukes / Shawnee
Mission), (MBIA),
5.375%, 11/15/26 $959,800
Aaa AAA 200 City of Olathe, HFRB
(Evangelical Lutheran
Good Samaritan Society)
(AMBAC), 6.00%,
5/1/19 203,456
Aaa AAA 895 Shawnee County,
HFRB (Menninger
Foundation) (FSA),
5.00%, 8/15/16 823,203
-----------
$1,986,459
-----------
Transportation - 3.6%
NR BBB $100 Guam Airport Authority
General Revenue Bonds,
6.50%, 10/1/23 $102,482
NR BBB 300 Guam Airport Authority
General Revenue Bonds,
(AMT), 6.70%,
10/1/23 309,399
-----------
$411,881
-----------
Utility - 1.4%
NR BBB $150 Guam Power Authority
Revenue Bonds, 6.625%,
10/1/14 $155,838
-----------
Total Tax-Exempt Investments $11,301,034
(identified cost $11,067,069) ===========
(1) Security has been issued as an inverse floater bond.
(2) Security has been segregated to cover margin requirements for open financial futures contracts.
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 January 31, 1997, 38.3% 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 by financial institution ranged from 1.9% to 20.9% of total
investments.
See notes to financial statements
</TABLE>
Municipals Portfolios
Financial Statements
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
January 31, 1997
Florida Insured Hawaii Kansas
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
Assets:
Investments --
Identified cost $23,841,427 $14,798,731 $11,067,069
Unrealized appreciation 1,018,130 1,045,177 233,965
----------- ----------- -----------
Total investments, at value (Note 1A) $24,859,557 $15,843,908 $11,301,034
Cash 858 908 185,908
Receivable from the Investment
Adviser (Note 2) 28,072 35,083 28,114
Interest receivable 430,064 157,824 222,930
Deferred organization expenses (Note 1D) 5,048 4,619 4,564
----------- ----------- -----------
Total assets $25,323,599 $16,042,342 $11,742,550
----------- ----------- -----------
Liabilities:
Payable for investments purchased $ 922,208 $ -- $ --
Payable for daily variation margin on
open financial futures contracts
(Note 1E) 8,744 11,375 3,132
Demand note payable (Note 5) 186,000 13,000 --
Payable to affiliate --
Trustee fees 13 13 13
Accrued expenses 2,775 4,029 3,685
----------- ----------- -----------
Total liabilities $ 1,119,740 $ 28,417 $ 6,830
----------- ----------- -----------
Net Assets applicable to investors'
interest in Portfolio $24,203,859 $16,013,925 $11,735,720
=========== =========== ===========
Sources of Net Assets:
Net proceeds from capital contributions
and withdrawals $23,194,473 $14,948,327 $11,495,966
Unrealized appreciation of investments
and financial futures contracts
(computed on the basis of
identified cost) 1,009,386 1,065,598 239,754
----------- ----------- -----------
Total $24,203,859 $16,013,925 $11,735,720
=========== =========== ===========
See notes to financial statements
</TABLE>
<TABLE>
Statements of Operations
For the Year Ended January 31, 1997
Florida Insured Hawaii Kansas
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
Investment Income:
Interest income $1,332,951 $ 924,536 $ 696,638
---------- --------- ---------
Expenses --
Investment adviser fee (Note 2) $ 41,276 $ 24,762 $ 18,746
Compensation of Trustees not members of
the Investment Adviser's organization 139 139 139
Legal and accounting services 18,615 18,597 15,466
Custodian fees (Note 1H) 17,879 13,062 11,584
Bond pricing 5,427 5,684 6,591
Amortization of organization expenses
(Note 1D) 2,430 2,221 2,196
Miscellaneous 4,919 2,169 1,534
---------- --------- ---------
Total expenses $ 90,685 $ 66,634 $ 56,256
---------- --------- ---------
Deduct --
Reduction of investment adviser fee
(Note 2) $ 41,276 $ 24,762 $ 18,746
Allocation of expenses to the investment
adviser (Note 2) 28,072 35,083 28,114
Reduction of custodian fee (Note 1H) 17,461 6,789 9,396
---------- --------- ---------
Total $ 86,809 $ 66,634 $ 56,256
---------- --------- ---------
Net expenses $ 3,876 $ -- $ --
---------- --------- ---------
Net investment income $1,329,075 $ 924,536 $ 696,638
---------- --------- ---------
Realized and Unrealized Gain (Loss):
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 135,300 $ (28,255) $ 135,431
Financial futures contracts (201,480) (59,990) (18,658)
---------- --------- ---------
Net realized gain (loss) $ (66,180) $ (88,245) $ 116,773
---------- --------- ---------
Change in unrealized appreciation
(depreciation) --
Investments $ (657,383) $(310,319) $(405,198)
Financial futures contracts (8,744) 20,422 6,615
---------- --------- ---------
Net unrealized depreciation $ (666,127) $(289,897) $(398,583)
---------- --------- ---------
Net realized and unrealized loss $ (732,307) $(378,142) $(281,810)
---------- --------- ---------
Net increase in net assets from operations $ 596,768 $ 546,394 $ 414,828
========== ========= =========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
For the Year Ended January 31, 1997
Florida Insured Hawaii Kansas
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 1,329,075 $ 924,536 $ 696,638
Net realized gain (loss) (66,180) (88,245) 116,773
Change in unrealized appreciation (666,127) (289,897) (398,583)
----------- ----------- -----------
Net increase in net assets from operations $ 596,768 $ 546,394 $ 414,828
----------- ----------- -----------
Capital transactions --
Contributions $ 7,574,982 $ 2,082,938 $ 2,234,921
Withdrawals (5,383,691) (2,193,484) (2,522,670)
----------- ----------- -----------
Increase (decrease) in net assets
resulting from capital transactions $ 2,191,291 $ (110,546) $ (287,749)
----------- ----------- -----------
Total increase in net assets $ 2,788,059 $ 435,848 $ 127,079
Net Assets:
At beginning of year 21,415,800 15,578,077 11,608,641
----------- ----------- -----------
At end of year $24,203,859 $16,013,925 $11,735,720
=========== =========== ===========
For the Year Ended January 31, 1996
Florida Insured Hawaii Kansas
Portfolio Portfolio Portfolio
----------- ----------- -----------
Increase (Decrease) in Net Assets:
From operations --
Net investment income $ 1,016,847 $ 890,336 $ 590,562
Net realized loss (93,236) (221,382) (12,613)
Change in unrealized appreciation 1,447,272 1,475,473 756,065
----------- ----------- -----------
Net increase in net assets from operations $ 2,370,883 $ 2,144,427 $ 1,334,014
----------- ----------- -----------
Capital transactions --
Contributions $ 7,413,811 $ 3,305,491 $ 3,013,009
Withdrawals (2,768,845) (2,736,380) (1,044,410)
----------- ----------- -----------
Increase in net assets resulting
from capital transactions $ 4,644,966 $ 569,111 $ 1,968,599
----------- ----------- -----------
Total increase in net assets $ 7,015,849 $ 2,713,538 $ 3,302,613
Net Assets:
At beginning of year 14,399,951 12,864,539 8,306,028
----------- ----------- -----------
At end of year $21,415,800 $15,578,077 $11,608,641
=========== =========== ===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Supplementary Data
Florida Insured Portfolio Hawaii Portfolio
------------------------------ --------------------------------
Year Ended January 31, Year Ended January 31,
------------------------------ --------------------------------
1997 1996 1995* 1997 1996 1995*
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ratios (As a percentage of average daily net assets):**
Net expenses (1) 0.09% 0.07% 0.01%+ 0.04% 0.06% 0.06%+
Expenses after custodian fee reduction 0.02% 0.00% -- 0.00% 0.00% --
Net investment income 5.76% 5.82% 5.73%+ 5.96% 6.01% 6.03%+
Portfolio Turnover 36% 32% 33% 21% 19% 66%
**The operating expenses of the Portfolios reflect a reduction of the investment adviser fee and/or allocation of expenses
to the Investment Adviser. Had such actions not been taken, the ratios would have been as follows:
Ratios (As a percentage of average daily net assets):
Expenses (1) 0.39% 0.39% 0.41%+ 0.43% 0.41% 0.38%+
Expenses after custodian fee reduction 0.32% 0.32% -- 0.39% 0.35% --
Net investment income 5.46% 5.50% 5.33%+ 5.57% 5.66% 5.70%+
+ Annualized.
* For the period from the start of business, March 2, 1994, to January 31, 1995.
(1) The expense ratios for the years ended January 31, 1997 and 1996 have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require each Portfolio to increase their expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratios for the period ended January 31, 1995 have not
been adjusted to reflect this change.
Kansas Portfolio
---------------------------------
Year Ended January 31,
---------------------------------
1997 1996 1995*
-------- -------- --------
Ratios (As a percentage of average daily net assets):**
Net expenses (1) 0.08% 0.09% 0.01%+
Expenses after custodian fee reduction 0.00% 0.00% --
Net investment income 5.91% 5.93% 5.68%+
Portfolio Turnover 49% 21% 12%
**The operating expenses of the Portfolio reflect a reduction of the investment adviser fee and/or allocation of expenses
to the Investment Adviser. Had such actions not been taken, the ratios would have been as follows:
Ratios (As a percentage of average daily net assets):
Net expenses (1) 0.48% 0.50% 0.43%+
Expenses after custodian fee reduction 0.40% 0.41% --
Net investment income 5.51% 5.52% 5.26%+
+ Annualized.
* For the period from the start of business, March 2, 1994, to January 31, 1995.
(1) The expense ratios for the years ended January 31, 1996 and 1997 have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require each Portfolio to increase their expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratios for the period ended January 31, 1995 have not
been adjusted to reflect this change.
See notes to financial statements
</TABLE>
Notes to Financial Statements
(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 non-diversified
open-end management investment companies which 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 Kansas Portfolio. The Declarations of Trust permit the
Trustees to issue interest in the Portfolios. The following is a
summary of significant accounting policies consistently followed by
the Portfolios in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting
principles.
A. Investment Valuations - Municipal bonds are normally valued on the
basis of valuations furnished by a pricing service. Taxable
obligations, if any, for which price quotations are readily available
are normally valued at the mean between the latest bid and asked
prices. Futures contracts and options on financial futures contracts
listed on commodity exchanges are valued at closing settlement prices.
Over the counter options on financial futures contracts are normally
valued at the mean between the latest bid and asked prices. Short-term
obligations, maturing in sixty days or less, are valued at amortized
cost, which approximates value. Investments for which valuations or
market quotations are unavailable are valued at fair value using
methods determined in good faith by or at the direction of the
Trustees.
B. Income - Interest income is determined on the basis of interest
accrued, adjusted for amortization of premium or discount when
required for federal income tax purposes.
C. Income Taxes - The Portfolios are treated as partnerships for
Federal tax purposes. No provision is made by the Portfolios for
federal or state taxes on any taxable income of the Portfolios because
each investor in the Portfolios is ultimately responsible for the
payment of any taxes. Since some of the Portfolio's 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, deductions 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 investor. The portion of such interest, if any, earned on
private activity bonds issued after August 7, 1986, may be considered
a tax preference item for investors.
D. Deferred Organization Expenses - Costs incurred by a Portfolio in
connection with its organization are being amortized on a straight-
line basis over five years.
E. Financial Futures Contracts - Upon the entering of 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 a financial futures contract is designed only to hedge
against anticipated futures changes in interest rates. Should interest
rates move unexpectedly, a Portfolio may not achieve the anticipated
benefits of the financial futures contracts and may realize a loss.
F. Options on Financial Futures Contracts - Upon the purchase of a put
option on a financial futures contract by a Portfolio, the premium
paid is recorded as an investment, the value of which is marked-to-
market daily. When a purchased option expires, a Portfolio will
realize a loss in the amount of the cost of the option. When a
Portfolio enters into a closing sales transaction, the Portfolio will
realize a gain or loss depending on whether the sales proceeds from
the closing sales transaction is greater or less than the cost of the
option. When a Portfolio exercises a put option, settlement is made in
cash. The risk associated with purchasing options is limited to the
premium originally paid.
G. When-issued and Delayed Delivery Transactions - The Portfolios may
engage in when-issued 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 accruing interest on settlement date.
H. Expense Reduction - Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolios. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by credits which are determined
based on the average daily cash balances each Portfolio maintains with
IBT. All significant credit balances used to reduce the Portfolios'
custodian fees are reported as a reduction of expenses in the
statements of operations.
I. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
J. Other - Investment transactions are accounted for on a trade-date
basis.
(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 year ended January 31,
1997, each Portfolio incurred advisory fees as follows:
Amount Effective Rate*
---------- --------------
Florida Insured $41,276 0.18%
Hawaii 24,762 0.16%
Kansas 18,746 0.16%
* as a percentage of average daily net assets
To enhance the net income of the Florida Insured Portfolio, Hawaii
Portfolio and Kansas Portfolio, BMR made a reduction of its fee in the
amount of $41,276, $24,762, and $18,746, respectively, and $28,072,
$35,083 and $28,114, respectively, of expenses related to the
operation of the Portfolios were allocated to BMR. Except as to
Trustees of the Portfolios 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 of the officers and Trustees of the Portfolios are officers
and directors/trustees 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 year ended January 31, 1997, 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 year ended January 31, 1997 were as follows:
Florida Hawaii Kansas
Insured Portfolio Portfolio Portfolio
-------------- ------------ ------------
Purchases $13,217,658 $3,937,228 $6,008,107
Sales 8,158,981 3,202,989 5,675,976
(4) Federal Income Tax Basis of Investments
The cost and unrealized appreciation/depreciation in value of the
investments owned by each Portfolio at January 31, 1997, as
computed on a federal income tax basis, are as follows:
Florida Hawaii Kansas
Insured Portfolio Portfolio Portfolio
-------------- ------------- -------------
Aggregate cost $ 23,841,427 $ 14,798,731 $ 11,067,069
============ ============= =============
Gross unrealized
appreciation $ 1,067,357 $ 1,056,008 $ 290,709
Gross unrealized
depreciation 49,227 10,831 56,744
------------ ------------- -------------
Net unrealized
appreciation $ 1,018,130 $ 1,045,177 $ 233,965
============ ============= =============
(5) Line of Credit
The Portfolios participate with other portfolios and funds managed by
BMR and EVM and its affiliates in a $120 million unsecured line of
credit with a bank. Borrowings will be made by the Portfolios 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 the bank's base rate or at an
amount above either the banks' adjusted certificate of deposit rate, a
Eurodollar rate or federal funds effective rate.
In addition, a fee computed at an annual rate of 0.15% on the daily
unused portion of the facility is allocated among the participating
portfolios and funds at the end of each quarter. At January 31, 1997,
the Florida Insured Portfolio and the Hawaii Portfolio had a balance
outstanding pursuant to this line of credit of $186,000 and $13,000,
respectively. The Florida Insured Portfolio, Hawaii Portfolio, and
Kansas Portfolio did not have any significant borrowings or allocated
fees during the year ended.
(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.
<TABLE>
<CAPTION>
A summary of obligations under these financial instruments at January
31, 1997 is as follows:
Futures Net Unrealized
Contracts Appreciation/
Portfolio Expiration Date Contracts Position (Depreciation)
- ---------- -------------- ------------- ---------- ----------------
<S> <C> <C> <C> <C>
Florida Insured 3/97 25 U.S. Treasury Bond Short $(8,744)
Hawaii 3/97 13 U.S. Treasury Bond Short 20,421
Kansas 3/97 4 U.S. Treasury Bond Short 5,789
At January 31, 1997, the Portfolios had sufficient cash and/or securities segregated
to cover margin requirements on open futures contracts.
</TABLE>
Independent Auditors' Report
To the Trustees and Investors of
Florida Insured Municipals Portfolio
Hawaii Municipals Portfolio
Kansas Municipals Portfolio:
We have audited the accompanying statements of assets and liabilities
including the portfolio of investments of Florida Insured Municipals
Portfolio, Hawaii Municipals Portfolio and Kansas Municipals Portfolio
as of January 31, 1997, the related statements of operations for the
year then ended, the statements of changes in net assets for the years
ended January 31, 1997 and 1996 and supplementary data for the years
ended January 31, 1997 and 1996 and for the period from the start of
business, March 2, 1994, to January 31, 1995. These financial
statements and supplementary data are the responsibility of each
Portfolio's management. Our responsibility is to express an opinion on
these financial statements and supplementary data based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and supplementary data are free of material misstatement. Our
procedures included confirmation of securities owned at January 31,
1997 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other audit procedures.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and supplementary data
referred to above present fairly, in all material respects, the
financial position of the Florida Insured Municipals Portfolio, Hawaii
Municipals Portfolio, and Kansas Municipals Portfolio at January 31,
1997 and the results of their operations, the changes in their net
assets, and their supplementary data for the respective stated periods
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
March 7, 1997
Investment Management
Officers
Thomas J. Fetter
President and Portfolio Manager of
Florida Insured Municipals Portfolio
James B. Hawkes
Vice President, Trustee
Robert B. MacIntosh
Vice President of Florida Insured,
Hawaii and Kansas Municipals Portfolios
and Portfolio Manager of Hawaii
Municipals Portfolio
Nicole Anderes
Vice President and Portfolio Manager
of Kansas Municipals Portfolio
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspaper of New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate
School of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
