<PAGE>
KANSAS MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.0%
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Electric Utilities -- 4.6%
- ---------------------------------------------------------------------------
$ 150 Guam Power Authority, 6.625%, 10/1/14 $ 168,149
450 Puerto Rico Electric Power Authority, 414,846
5.00%, 7/1/28
- ---------------------------------------------------------------------------
$ 582,995
- ---------------------------------------------------------------------------
Escrowed / Prerefunded -- 5.3%
- ---------------------------------------------------------------------------
$ 65 Kansas City, Utility System, (FGIC), $ 71,974
Prerefunded to 09/01/04, 6.375%, 9/1/23
415 Labette County, SFMR, Escrowed to 182,206
Maturity, 0.00%, 12/1/14
1,000 Saline County, SFMR, Escrowed to 412,810
Maturity, 0.00%, 12/1/15
- ---------------------------------------------------------------------------
$ 666,990
- ---------------------------------------------------------------------------
General Obligations -- 12.5%
- ---------------------------------------------------------------------------
$ 400 Douglas County, Unified School District $ 421,235
#497, 6.00%, 9/1/15
890 Johnson County, Unified School District 864,474
#229, 5.00%, 10/1/16
500 Puerto Rico, 0.00%, 7/1/18 178,140
110 Topeka, 5.00%, 8/15/12 108,701
- ---------------------------------------------------------------------------
$ 1,572,550
- ---------------------------------------------------------------------------
Hospital -- 6.0%
- ---------------------------------------------------------------------------
$ 225 Atchison, (Atchison Hospital Assn.), $ 217,823
5.70%, 11/15/18
250 Lawrence, (Lawrence Memorial Hospital), 256,953
6.20%, 7/1/19
300 Newton, (Newton Healthcare Corp.), 286,521
5.75%, 11/15/24
- ---------------------------------------------------------------------------
$ 761,297
- ---------------------------------------------------------------------------
Housing -- 20.1%
- ---------------------------------------------------------------------------
$ 60 Kansas City, Mortgage Revenue, (GNMA), $ 61,013
(AMT), 5.30%, 5/1/07
65 Kansas City, Mortgage Revenue, (GNMA), 66,155
(AMT), 5.30%, 11/1/07
145 Kansas City, Mortgage Revenue, (GNMA), 149,073
(AMT), 5.90%, 11/1/27
300 Kansas City, Mortgage Revenue, (GNMA), 313,986
(AMT), 7.00%, 12/1/11
220 Kansas City, Multifamily, (FHA), 6.70%, 225,135
7/1/23
100 Kansas Development Authority, SFMR, 103,818
(FHA), (Martin Creek), 6.60%, 8/1/34
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Housing (continued)
- ---------------------------------------------------------------------------
$ 85 Olathe and Labette County, SFMR, (GNMA), $ 94,113
(AMT), 8.10%, 8/1/23
140 Olathe, Mortgage Revenue, (GNMA), (AMT), 145,830
7.60%, 3/1/07
250 Olathe, Multifamily, (FNMA), 6.45%, 263,213
6/1/19
210 Puerto Rico Housing Finance Corp., 218,182
7.50%, 4/1/22
160 Sedgwick and Shawnee County, SFMR, 178,051
(GNMA), 7.75%, 11/1/24
290 Sedgwick County, SFMR, (GNMA), 8.00%, 322,141
5/1/25
35 Sedgwick County, SFMR, (GNMA), 8.20%, 38,721
5/1/14
350 Wichita, Multifamily, (Broadmoor Chelsea 357,140
Apartments), (FNMA), (AMT), 5.65%,
7/1/16
- ---------------------------------------------------------------------------
$ 2,536,571
- ---------------------------------------------------------------------------
Industrial Development Revenue -- 4.1%
- ---------------------------------------------------------------------------
$ 350 Puerto Rico Port Authority, (American $ 364,315
Airlines), (AMT), 6.30%, 6/1/23
160 Topeka IDA, (Resers Fine Foods, Inc.), 156,584
(AMT), 5.40%, 4/1/05
- ---------------------------------------------------------------------------
$ 520,899
- ---------------------------------------------------------------------------
Insured-Education -- 1.9%
- ---------------------------------------------------------------------------
$ 250 Johnson County Community College, $ 238,873
(Student Commons and Parking Systems),
(MBIA), 5.05%, 11/15/21
- ---------------------------------------------------------------------------
$ 238,873
- ---------------------------------------------------------------------------
Insured-Electric Utilities -- 6.8%
- ---------------------------------------------------------------------------
$ 345 Burlington PCR, (Kansas Gas & Electric $ 366,770
Co.), (MBIA), 7.00%, 6/1/31
100 Puerto Rico Electric Power Authority, 107,375
STRIPES, (FSA), Variable Rate, 7/1/02(1)
400 Wellington Electric Waterworks and 387,508
Authority Revenue, (AMBAC), 5.20%,
5/1/23
- ---------------------------------------------------------------------------
$ 861,653
- ---------------------------------------------------------------------------
Insured-General Obligations -- 11.1%
- ---------------------------------------------------------------------------
$ 200 Harvey County, Unified School District $ 184,084
#373, (FSA), 4.80%, 9/1/18
200 Johnson County, Unified School District 217,412
#231, (FGIC), 6.00%, 10/1/16
500 Sedgwick County, Unified School District 473,449
#267, (AMBAC), 5.00%, 11/1/19
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
KANSAS MUNICIPALS PORTFOLIO AS OF JULY 31, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ---------------------------------------------------------------------------
<C> <S> <C>
Insured-General Obligations (continued)
- ---------------------------------------------------------------------------
$ 250 Sedgwick County, Unified School District $ 273,455
#267, (AMBAC), 6.15%, 11/1/09
230 Sedgwick County, Unified School District 251,579
#267, (AMBAC), 6.15%, 11/1/10
- ---------------------------------------------------------------------------
$ 1,399,979
- ---------------------------------------------------------------------------
Insured-Hospital -- 11.7%
- ---------------------------------------------------------------------------
$ 250 Kansas DFA, (Medical Center, Inc.), $ 248,515
(MBIA), 5.50%, 11/15/22
500 Kansas DFA, (St. Luke's), (MBIA), 487,384
5.375%, 11/15/26
500 Kansas DFA, (Stormont-Vail) (MBIA), 525,954
5.80%, 11/15/11
200 Olathe, Health Facilities, (Evangelical 207,440
Lutheran Good Samaritan Society),
(AMBAC), 6.00%, 5/1/19
- ---------------------------------------------------------------------------
$ 1,469,293
- ---------------------------------------------------------------------------
Insured-Housing -- 2.6%
- ---------------------------------------------------------------------------
$ 100 Puerto Rico Housing Finance Corp., $ 101,635
(AMBAC), 7.50%, 10/1/11
145 Sedgwick County, Mortgage Loan Revenue, 149,366
(MBIA), (GNMA), (AMT), 7.50%, 12/1/09
75 Sedgwick County, Mortgage Loan Revenue, 77,342
(MBIA), (GNMA), (AMT), 7.50%, 12/1/10
- ---------------------------------------------------------------------------
$ 328,343
- ---------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 3.7%
- ---------------------------------------------------------------------------
$ 500 Kansas DFA, (Sisters Of Charity $ 464,414
Leavenworth), (MBIA), 5.00%, 12/1/25
- ---------------------------------------------------------------------------
$ 464,414
- ---------------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.2%
- ---------------------------------------------------------------------------
$ 175 Puerto Rico Infrastructure Financing $ 145,521
Authority, (AMBAC), Variable Rate,
7/1/28(1)
- ---------------------------------------------------------------------------
$ 145,521
- ---------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
<C> <S> <C>
- ---------------------------------------------------------------------------
Insured-Transportation -- 1.5%
- ---------------------------------------------------------------------------
$ 200 Puerto Rico Highway and Transportation $ 188,488
Authority, (AMBAC), 5.00%, 7/1/28
- ---------------------------------------------------------------------------
$ 188,488
- ---------------------------------------------------------------------------
Insured-Utilities -- 1.2%
- ---------------------------------------------------------------------------
$ 135 Kansas City, Utility System, (FGIC), $ 145,642
6.375%, 9/1/23
- ---------------------------------------------------------------------------
$ 145,642
- ---------------------------------------------------------------------------
Insured-Water and Sewer -- 2.7%
- ---------------------------------------------------------------------------
$ 400 Wyandotte County & Kansas City, (MBIA), $ 338,940
4.50%, 9/1/28
- ---------------------------------------------------------------------------
$ 338,940
- ---------------------------------------------------------------------------
Transportation -- 3.0%
- ---------------------------------------------------------------------------
$ 400 Puerto Rico Highway and Transportation $ 372,872
Authority, 5.00%, 7/1/22
- ---------------------------------------------------------------------------
$ 372,872
- ---------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $12,538,681) $ 12,595,320
- ---------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
The Portfolio invests primarily in debt securities issued by Kansas
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1999, 44.9% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 2.3% to 23.0% of total investments.
(1) Security has been issued as an inverse floater bond.
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED HAWAII KANSAS
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
Assets
- ----------------------------------------------------------------------------------------
Investments --
Identified cost $27,896,035 $ 18,612,858 $ 12,538,681
Unrealized appreciation 373,165 312,802 56,639
- ----------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $28,269,200 $ 18,925,660 $ 12,595,320
- ----------------------------------------------------------------------------------------
Cash $ 351,832 $ 347,835 $ 271,880
Receivable for investments sold 25,429 -- 10,197
Interest receivable 448,550 185,951 173,263
Receivable from the Investment Adviser -- 24,254 21,308
Other assets 8,548 8,419 7,989
- ----------------------------------------------------------------------------------------
TOTAL ASSETS $29,103,559 $ 19,492,119 $ 13,079,957
- ----------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------
Payable to affiliate for Trustees' fees $ 135 $ 135 $ 135
Other accrued expenses 4,460 5,543 5,684
- ----------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 4,595 $ 5,678 $ 5,819
- ----------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $29,098,964 $ 19,486,441 $ 13,074,138
- ----------------------------------------------------------------------------------------
Sources of Net Assets
- ----------------------------------------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $28,725,799 $ 19,173,639 $ 13,017,499
Net unrealized appreciation (computed on
the basis of identified cost) 373,165 312,802 56,639
- ----------------------------------------------------------------------------------------
TOTAL $29,098,964 $ 19,486,441 $ 13,074,138
- ----------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED HAWAII KANSAS
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
Investment Income
- --------------------------------------------------------------------------------------
Interest $ 792,391 $ 544,884 $ 354,916
- --------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 792,391 $ 544,884 $ 354,916
- --------------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------------
Investment adviser fee $ 28,063 $ 15,340 $ 10,028
Trustees fees and expenses 194 194 194
Custodian fee 12,322 13,252 13,295
Legal and accounting services 8,840 8,840 8,593
Amortization of organization expenses 201 331 184
Miscellaneous 6,024 3,276 3,180
- --------------------------------------------------------------------------------------
TOTAL EXPENSES $ 55,644 $ 41,233 $ 35,474
- --------------------------------------------------------------------------------------
Deduct --
Preliminary reduction of investment
adviser fee $ -- $ 15,340 $ 10,028
Preliminary allocation of expenses to
the Investment Adviser -- 24,254 21,308
Reduction of custodian fee 6,560 1,639 4,138
- --------------------------------------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 6,560 $ 41,233 $ 35,474
- --------------------------------------------------------------------------------------
NET EXPENSES $ 49,084 $ -- $ --
- --------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 743,307 $ 544,884 $ 354,916
- --------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- --------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 78,601 $ 35,456 $ (65,642)
Financial futures contracts 18,253 47,758 12,019
- --------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ 96,854 $ 83,214 $ (53,623)
- --------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $(1,749,139) $ (1,177,306) $ (588,519)
Financial futures contracts -- -- 787
- --------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $(1,749,139) $ (1,177,306) $ (587,732)
- --------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS $(1,652,285) $ (1,094,092) $ (641,355)
- --------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (908,978) $ (549,208) $ (286,439)
- --------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS (UNAUDITED) CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JULY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED HAWAII KANSAS
Increase (Decrease) in Net Assets PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
From operations --
Net investment income $ 743,307 $ 544,884 $ 354,916
Net realized gain (loss) 96,854 83,214 (53,623)
Net change in unrealized appreciation
(depreciation) (1,749,139) (1,177,306) (587,732)
- ----------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS $ (908,978) $ (549,208) $ (286,439)
- ----------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 4,190,309 $ 1,187,885 $ 1,321,097
Withdrawals (2,321,983) (1,541,784) (841,798)
- ----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL TRANSACTIONS $ 1,868,326 $ (353,899) $ 479,299
- ----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ 959,348 $ (903,107) $ 192,860
- ----------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------
At beginning of period $28,139,616 $ 20,389,548 $ 12,881,278
- ----------------------------------------------------------------------------------------
AT END OF PERIOD $29,098,964 $ 19,486,441 $ 13,074,138
- ----------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JANUARY 31, 1999
<TABLE>
<CAPTION>
FLORIDA INSURED HAWAII KANSAS
Increase (Decrease) in Net Assets PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,347,962 $ 1,069,839 $ 641,820
Net realized gain 87,420 267,003 73,744
Net change in unrealized appreciation
(depreciation) 301,762 (89,480) 21,642
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,737,144 $ 1,247,362 $ 737,206
- ----------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 6,379,597 $ 2,231,345 $ 2,114,772
Withdrawals (4,827,198) (2,953,293) (1,389,324)
- ----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL TRANSACTIONS $ 1,552,399 $ (721,948) $ 725,448
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 3,289,543 $ 525,414 $ 1,462,654
- ----------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------
At beginning of year $24,850,073 $ 19,864,134 $ 11,418,624
- ----------------------------------------------------------------------------------------
AT END OF YEAR $28,139,616 $ 20,389,548 $ 12,881,278
- ----------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
FLORIDA INSURED PORTFOLIO
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JANUARY 31,
JULY 31, 1999 --------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995(1)
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ---------------------------------------------------------------------------------------------------------------------
Net expenses(2) 0.38%(3) 0.18% 0.07% 0.09% 0.07% 0.01%(3)
Net expenses after custodian fee
reduction 0.34%(3) 0.11% 0.00% 0.02% 0.00% --
Net investment income 5.13%(3) 5.21% 5.63% 5.76% 5.82% 5.73%(3)
Portfolio Turnover 21% 9% 34% 36% 32% 33%
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $29,099 $28,140 $24,850 $24,204 $21,416 $14,400
- ---------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the investment adviser fee, an allocation of
expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios would have been as
follows:
Expenses 0.30% 0.48% 0.39% 0.39% 0.41%(3)
Expenses after custodian fee reduction 0.23% 0.41% 0.32% 0.32% --
Net investment income 5.09% 5.22% 5.46% 5.50% 5.33%(3)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, March 2, 1994, to January 31,
1995.
(2) The expense ratios for the year ended January 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for the prior period have
not been adjusted to reflect this change.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
HAWAII PORTFOLIO
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JANUARY 31,
JULY 31, 1999 --------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995(1)
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ---------------------------------------------------------------------------------------------------------------------
Net expenses(2) 0.02%(3) 0.04% 0.03% 0.04% 0.06% 0.06%(3)
Net expenses after custodian fee
reduction 0.00%(3) 0.00% 0.00% 0.00% 0.00% --
Net investment income 5.50%(3) 5.39% 5.70% 5.96% 6.01% 6.03%(3)
Portfolio Turnover 9% 29% 27% 21% 19% 66%
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $19,486 $20,390 $19,864 $16,014 $15,578 $12,865
- ---------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the investment adviser fee, an allocation of
expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios would have been as
follows:
Expenses(2) 0.42%(3) 0.28% 0.46% 0.43% 0.41% 0.38%(3)
Expenses after custodian fee reduction 0.40%(3) 0.24% 0.43% 0.39% 0.35% --
Net investment income 5.10%(3) 5.15% 5.27% 5.57% 5.66% 5.70%(3)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, March 2, 1994, to January 31,
1995.
(2) The expense ratios for the year ended January 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for the prior period have
not been adjusted to reflect this change.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
28
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
KANSAS PORTFOLIO
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JANUARY 31,
JULY 31, 1999 --------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995(1)
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets+
- ---------------------------------------------------------------------------------------------------------------------
Net expenses(2) 0.06%(3) 0.06% 0.05% 0.08% 0.09% 0.01%(3)
Net expenses after custodian fee
reduction 0.00%(3) 0.00% 0.00% 0.00% 0.00% --
Net investment income 5.42%(3) 5.34% 5.79% 5.91% 5.93% 5.68%(3)
Portfolio Turnover 9% 33% 17% 49% 21% 12%
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S
OMITTED) $13,074 $12,881 $11,419 $11,736 $11,609 $ 8,306
- ---------------------------------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolio may reflect a reduction of the investment adviser fee, an allocation of
expenses to the Investment Adviser, or both. Had such actions not been taken, the ratios would have been as
follows:
Expenses(2) 0.54%(3) 0.36% 0.57% 0.48% 0.50% 0.43%(3)
Expenses after custodian fee reduction 0.48%(3) 0.30% 0.52% 0.40% 0.41% --
Net investment income 4.94%(3) 5.04% 5.27% 5.51% 5.52% 5.26%(3)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, March 2, 1994, to January 31,
1995.
(2) The expense ratios for the year ended January 31, 1996 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratios for the prior period have
not been adjusted to reflect this change.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
Florida Insured Municipals Portfolio ("Florida Insured Portfolio"), Hawaii
Municipals Portfolio ("Hawaii Portfolio") and Kansas Municipals Portfolio
("Kansas Portfolio"), collectively the Portfolios, are registered under the
Investment Company Act of 1940, as amended, as non-diversified open-end
management investment companies. The Portfolios were organized as trusts
under the laws of the State of New York on May 1, 1992 for the Hawaii
Portfolio and October 25, 1993 for the Florida Insured Portfolio and the
Kansas Portfolio. The Declarations of Trust permit the Trustees to issue
interests in the Portfolios. The following is a summary of significant
accounting policies consistently followed by the Portfolios in the
preparation of their financial statements. The policies are in conformity
with generally accepted accounting principles.
A Investment Valuations -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest bid and asked prices. Futures contracts and options on
financial futures contracts listed on commodity exchanges are valued at
closing settlement prices. Over-the-counter options on financial futures
contracts are normally valued at the mean between the latest bid and asked
prices. Short-term obligations, maturing in sixty days or less, are valued at
amortized cost, which approximates value. Investments for which valuations or
market quotations are unavailable are valued at fair value using methods
determined in good faith by or at the direction of the Trustees.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount when required for federal
income tax purposes.
C Income Taxes -- The Portfolios are treated as partnerships for Federal tax
purposes. No provision is made by the Portfolios for federal or state taxes
on any taxable income of the Portfolios because each investor in the
Portfolios is ultimately responsible for the payment of any taxes. Since some
of the Portfolios' investors are regulated investment companies that invest
all or substantially all of their assets in the Portfolios, the Portfolios
normally must satisfy the applicable source of income and diversification
requirements (under the Internal Revenue Code) in order for their respective
investors to satisfy them. The Portfolios will allocate at least annually
among their respective investors each investor's distributive share of the
Portfolios' net taxable (if any) and tax-exempt investment income, net
realized capital gains, and any other items of income, gain, loss, deduction
or credit. Interest income received by the Portfolios on investments in
municipal bonds, which is excludable from gross income under the Internal
Revenue Code, will retain its status as income exempt from federal income tax
when allocated to each Portfolio's investors. The portion of such interest,
if any, earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item for investors.
D Deferred Organization Expenses -- Costs incurred by a Portfolio in connection
with its organization are being amortized on the straight-line basis over
five years.
E Financial Futures Contracts -- Upon the entering of a financial futures
contract, a Portfolio is required to deposit ("initial margin") either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are
made or received by a Portfolio ("margin maintenance") each day, dependent on
the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by a Portfolio. A
Portfolio's investment in financial futures contracts is designed only to
hedge against anticipated future changes in interest rates. Should interest
rates move unexpectedly, a Portfolio may not achieve the anticipated benefits
of the financial futures contracts and may realize a loss.
F Options on Financial Futures Contracts -- Upon the purchase of a put option
on a financial futures contract by a Portfolio, the premium paid is recorded
as an investment, the value of which is marked-to-market daily. When a
purchased option expires, the Portfolio will realize a loss in the amount of
cost of the option. When a Portfolio enters into a closing sales transaction,
the Portfolio will realize a gain or loss depending on whether the sales
proceeds from the closing sale transaction are greater or less than the cost
of the option. When a Portfolio exercises a put option, settlement is made in
cash. The risk associated with purchasing options is limited to the premium
originally paid.
G When-issued and Delayed Delivery Transactions -- The Portfolios may engage in
when-issued or delayed delivery transactions. The Portfolios record
when-issued securities on trade date and maintain security positions such
that sufficient liquid assets will be available to make payments for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked-to-market daily and begin accruing interest on
settlement date.
30
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
H Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolios. Pursuant to the respective custodian agreements, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balances each Portfolio maintains with IBT. All significant credit
balances used to reduce the Portfolios' custodian fees are reflected as a
reduction of expenses on the Statement of Operations.
I Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
J Other -- Investment transactions are accounted for on a trade date basis.
K Interim Financial Statements -- The interim financial statements relating to
July 31, 1999 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the
Portfolios' management, reflect all adjustments necessary for the fair
presentation of the financial statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
- -------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to each Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e., income other than gains from the sale of
securities). For the six months ended July 31, 1999, each Portfolio incurred
advisory fees as follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT EFFECTIVE RATE*
<S> <C> <C>
- --------------------------------------------------------------------
Florida Insured $ 28,063 0.19%
Hawaii 15,340 0.15%
Kansas 10,028 0.15%
</TABLE>
* As a percentage of average daily net assets.
To enhance the net income of the Hawaii Portfolio and Kansas Portfolio, BMR
made a reduction of its fee in the amount of $15,340 and $10,028,
respectively, and $24,254 and $21,308, respectively, of expenses related to
the operation of the Portfolios were allocated to BMR. Except as to Trustees
of the Portfolio who are not members of EVM's or BMR's organization, officers
and Trustees receive remuneration for their services to the Portfolios out of
such investment adviser fee.
Certain officers and Trustees of the Portfolios are officers of the above
organizations.
Trustees of the Portfolios that are not affiliated with the Investment
Adviser may elect to defer receipt of all or a percentage of their annual
fees in accordance with the terms of the Trustees Deferred Compensation Plan.
For the six months ended July 31, 1999, no significant amounts have been
deferred.
3 Investments
- -------------------------------------------
Purchases and sales of investments, other than U.S. Government securities,
put option transactions and short-term obligations, for the six months ended
July 31, 1999, were as follows:
<TABLE>
<CAPTION>
FLORIDA INSURED PORTFOLIO
<S> <C>
- -----------------------------------------------------
Purchases $ 7,510,686
Sales 6,075,534
<CAPTION>
HAWAII PORTFOLIO
<S> <C>
- -----------------------------------------------------
Purchases $ 1,662,624
Sales 1,834,011
<CAPTION>
KANSAS PORTFOLIO
<S> <C>
- -----------------------------------------------------
Purchases $ 1,713,140
Sales 1,124,945
</TABLE>
4 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at July 31, 1999, as computed on a
federal income tax basis, are as follows:
<TABLE>
<S> <C>
FLORIDA INSURED PORTFOLIO
- ------------------------------------------------------
AGGREGATE COST $ 27,896,035
- ------------------------------------------------------
Gross unrealized appreciation $ 1,136,192
Gross unrealized depreciation (763,027)
- ------------------------------------------------------
NET UNREALIZED APPRECIATION $ 373,165
- ------------------------------------------------------
</TABLE>
31
<PAGE>
EATON VANCE MUNICIPALS PORTFOLIOS AS OF JULY 31, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
<TABLE>
<S> <C>
HAWAII PORTFOLIO
- ------------------------------------------------------
AGGREGATE COST $ 18,612,858
- ------------------------------------------------------
Gross unrealized appreciation $ 691,685
Gross unrealized depreciation (378,883)
- ------------------------------------------------------
NET UNREALIZED APPRECIATION $ 312,802
- ------------------------------------------------------
KANSAS PORTFOLIO
- ------------------------------------------------------
AGGREGATE COST $ 12,538,681
- ------------------------------------------------------
Gross unrealized appreciation $ 297,030
Gross unrealized depreciation (240,391)
- ------------------------------------------------------
NET UNREALIZED APPRECIATION $ 56,639
- ------------------------------------------------------
</TABLE>
5 Line of Credit
- -------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and its affiliates in a $130 million unsecured line of credit agreement
with a group of banks. The Portfolios may temporarily borrow from the line of
credit to satisfy redemption requests or settle investment transactions.
Interest is charged to each portfolio or fund based on its borrowings at an
amount above either the Eurodollar rate or federal funds rate. In addition, a
fee computed at an annual rate of 0.10% on the daily unused portion of the
line of credit is allocated among the participating portfolios and funds at
the end of each quarter. The Portfolios did not have any significant
borrowings or allocated fees during the six months ended July 31, 1999.
6 Financial Instruments
- -------------------------------------------
The Portfolios regularly trade in financial instruments with off-balance
sheet risk in the normal course of their investing activities to assist in
managing exposure to various market risks. These financial instruments
include futures contracts and may involve, to a varying degree, elements of
risk in excess of the amounts recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment a Portfolio has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
At July 31, 1999, there were no outstanding obligations under these financial
instruments.
32
<PAGE>
MUNICIPALS PORTFOLIOS
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Cynthia J. Clemson
Vice President and Portfolio
Manager of Florida Insured
Municipals Portfolio
Robert B. MacIntosh
Vice President and Portfolio
Manager of Hawaii Municipals
Portfolio
Timothy T. Browse
Vice President and Portfolio
Manager of Kansas
Municipals Portfolio
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer,
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking
Emeritus, Harvard University Graduate School of
Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
33
