<PAGE>
Florida Insured Municipals Portfolio as of July 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
Housing -- 16.0%
- -------------------------------------------------------------------------
<C> <C> <C> <S> <C>
Aaa NR $ 360 Duval County, FL, Housing
Finance Authority, Single
Family Mortgage Revenue,
(GNMA), (AMT),
6.70%, 10/1/26 $ 383,803
Aaa AAA 750 Escambia, FL, HFA, SFMR,
(GNMA), (AMT), 7.00%, 4/1/28 814,178
Aaa NR 740 Manatee, FL, HFA, SFMR,
(GNMA), (AMT), 6.875%,
11/1/26 818,810
Aaa NR 1,000 Pinellas County, FL, HFA,
SFMR, (AMT), 5.80%, 3/1/29 1,016,820
NR AAA 795 Pinellas, FL, HFA, SFMR,
(GNMA), (AMT), 6.70%, 2/1/28 849,092
- -------------------------------------------------------------------------
$ 3,882,703
- -------------------------------------------------------------------------
Insured-Education -- 2.1%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Florida A&M University,
(Student Apartment
Facilities), (MBIA), 5.625%,
7/1/25 $ 513,935
- -------------------------------------------------------------------------
$ 513,935
- -------------------------------------------------------------------------
Insured-Electric Utilities -- 4.5%
- -------------------------------------------------------------------------
Aaa AAA $ 445 Citrus County, FL, PCR,
(MBIA), 6.35%, 2/1/22 $ 489,460
Aaa AAA 895 Florida State Municipal
Power Agency, (Stanton
Project), (AMBAC),
4.50%, 10/1/27 798,823
Aaa AAA 50 Key West, FL, Utility Board
of Electric Revenue,
(AMBAC),
6.75%, 10/1/13 55,300
- -------------------------------------------------------------------------
$ 1,343,583
- -------------------------------------------------------------------------
Insured-General Obligations -- 4.0%
- -------------------------------------------------------------------------
Aaa AAA $1,000 Massachusetts State
Turnpike Authority, (FGIC),
5.125%, 1/1/23 $ 981,150
- -------------------------------------------------------------------------
$ 981,150
- -------------------------------------------------------------------------
Insured-Hospitals -- 0.8%
- -------------------------------------------------------------------------
Aaa AAA $ 200 Dade, FL, Public Facilities
Revenue, (Jackson Memorial
Hospital), (MBIA), 4.875%,
6/1/15 $ 191,594
- -------------------------------------------------------------------------
$ 191,594
- -------------------------------------------------------------------------
Insured-Housing -- 10.9%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Florida Health Facilities
Authority, (Maitland Club
Apartments), (AMBAC),
(AMT), 6.875%, 8/1/26 $ 541,375
Aaa AAA 1,000 Florida HFA, (Mariner Club
Apartments), (AMBAC),
(AMT), 6.375%, 9/1/36/(1)/ 1,054,840
Aaa AAA 500 Florida HFA, (MBIA),
5.90%, 7/1/29 512,890
Aaa AAA 500 Florida HFA, (Spinnaker
Cove Apartments), (AMBAC),
(AMT), 6.50%, 7/1/36 532,570
- -------------------------------------------------------------------------
$ 2,641,675
- -------------------------------------------------------------------------
Insured-Industrial Development Revenue -- 2.1%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Dade County, FL, Resources
Recovery Facilities,
(AMBAC), (AMT),
5.50%, 10/1/13/(2)/ $ 515,110
- -------------------------------------------------------------------------
$ 515,110
- -------------------------------------------------------------------------
Insured-Special Tax Revenue -- 29.6%
- -------------------------------------------------------------------------
Aaa AAA $1,000 Bradenton, FL, Special
Revenue Sub-Lien, (FGIC),
5.00%, 10/1/15 $ 994,030
Aaa AAA 1,225 Florida State Finance
Department, Environmental
Preservation, (MBIA),
4.75%, 7/1/09 1,226,556
Aaa AAA 1,000 Jacksonville, FL, Excise
Taxes Revenue, (FGIC),
5.00%, 10/1/16 986,590
Aaa AAA 1,000 Jacksonville, FL, Excise
Taxes Revenue, (FGIC),
5.70%, 10/1/09 1,044,380
Aaa AAA 745 Jacksonville, FL, Sales
Tax, (River City
Renaissance Project),
(FGIC), 5.375%, 10/1/18 752,189
Aaa AAA 500 Lakeland, FL, Capital
Improvement Revenue,
(MBIA),
5.00%, 10/1/17(3) 491,855
Aaa AAA 250 Orange, FL, Tourist
Development Tax, (MBIA),
6.00%, 10/1/24 268,375
Aaa AAA 290 St. Petersburg, FL, Excise
Tax Revenue, (FGIC), 5.00%,
10/1/16 288,388
Aaa AAA 505 St. Petersburg, FL, Excise
Tax Revenue, (FGIC), 5.00%,
10/1/16 492,804
Aaa AAA 340 Sunrise, FL, Public
Facilities Revenue, (MBIA),
0.00%, 10/1/15 133,800
Aaa AAA 500 Tampa, FL, Occupational
License Tax Revenue,
(FGIC), 5.50%, 10/1/27 509,150
- -------------------------------------------------------------------------
$ 7,188,117
- -------------------------------------------------------------------------
</TABLE>
See notes to financial statements
15
<PAGE>
Florida Insured Municipals Portfolio as of July 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Transportation -- 4.1%
- -------------------------------------------------------------------------
Aaa AAA $1,000 Dade County, FL, Seaport
Revenue, (MBIA), 5.125%,
10/1/16 $ 993,290
- -------------------------------------------------------------------------
$ 993,290
- -------------------------------------------------------------------------
Insured-Water and Sewer -- 24.9%
- -------------------------------------------------------------------------
Aaa AAA $ 325 Dade County, FL, Water and
Sewer System, (FGIC),
5.375%, 10/1/16 $ 333,005
Aaa AAA 750 Dade County, FL, Water and
Sewer System, (FGIC),
5.50%, 10/1/25 763,388
Aaa AAA 735 Enterprise Community
Development District, FL,
Water and Sewer Revenue,
(MBIA), 6.125%, 5/1/24/(2)/ 787,075
Aaa AAA 1,000 Jacksonville, FL, Water and
Sewer Revenue, (AMBAC),
6.35%, 8/1/25 1,085,690
Aaa AAA 1,000 Lee County, FL, (Bonita
Springs), (MBIA), (AMT),
6.05%, 11/1/20 1,054,579
Aaa AAA 70 North Port, FL, Utility
Revenue, (FGIC), 6.25%,
10/1/17 76,089
Aaa AAA 500 North Port, FL, Utility
Revenue, (FGIC), 6.25%,
10/1/22 542,770
Aaa AAA 400 Titisville, FL, Water and
Sewer Revenue, (MBIA),
6.00%, 10/1/24 429,400
Aaa AAA 1,000 Vero Beach, FL, Water and
Sewer Revenue, (FGIC),
5.00%, 12/1/21 965,800
- -------------------------------------------------------------------------
$ 6,037,796
- -------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $22,448,019) $24,288,953
- -------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax
preference item for purposes of the Federal Alternative
Minimum Tax.
The Portfolio primarily invests in debt securities issued by Florida
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by economic developments in a specific industry or
municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1997, 84.0% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. At July 31, 1997, the Portfolio's insured
securities by financial institution are as follows:
<TABLE>
<CAPTION>
% of
Market Value Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
American Municipal Bond Assurance Corp.
(AMBAC) $4,583,708 18.9%
Financial Guaranty Insurance Corp.
(FGIC) 8,729,733 35.9
Municipal Bond Insurance Assoc. (MBIA) 7,092,810 29.2
- --------------------------------------------------------------------------------
Total $20,406,251 84.0%
- --------------------------------------------------------------------------------
</TABLE>
/(1)/ Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
/(2)/ Security has been segregated to cover when-issued securities.
/(3)/ When-issued security.
See notes to financial statements
16
<PAGE>
Hawaii Municipals Portfolio as of July 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ------------------- Principal
Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Obligations -- 15.4%
- -------------------------------------------------------------------------
Aa AA $ 750 City and County of
Honolulu, HI, 4.75%, 9/1/17 $ 712,695
NR BBB 640 Government of Guam,
5.375%, 11/15/13 634,803
Baa1 A 500 Puerto Rico Public
Buildings Authority, Public
Education and Health
Facilities, 5.50%, 7/1/21 503,480
Aa3 A+ 1,000 State of Hawaii, 5.25%,
6/1/13/(1)/ 1,008,230
Aa3 A+ 140 State of Hawaii, 5.75%,
1/1/11 153,184
- -------------------------------------------------------------------------
$ 3,012,392
- -------------------------------------------------------------------------
Hospitals -- 15.7%
- -------------------------------------------------------------------------
NR AAA $ 250 Puerto Rico Industrial,
Tourist, Educational,
Medical and Environmental
Control Authority, (Doctor
Pila Hospital), (FHA),
6.25%, 8/1/32 $ 272,925
Aa3 AA 400 State of Hawaii Department
of Budget and Finance,
(Kaiser Permanente), 6.25%,
3/1/21 423,984
A A 625 State of Hawaii Department
of Budget and Finance,
(Kapiolani Health System),
6.00%, 7/1/19 648,456
Aa3 AA 870 State of Hawaii Department
of Budget and Finance,
(Queens Health System),
5.75%, 7/1/26 898,449
NR BBB- 750 State of Hawaii Department
of Budget and Finance,
Special Purpose Mortgage
Revenue, (Wahiawa General
Hospital), 7.50%, 7/1/12 827,273
- -------------------------------------------------------------------------
$ 3,071,087
- -------------------------------------------------------------------------
Housing -- 8.7%
- -------------------------------------------------------------------------
Aa1 AA $ 500 State of Hawaii Housing
Finance and Development
Corp., 5.75%, 7/1/30/(2)/ $ 502,545
Aa1 AA 1,000 State of Hawaii Housing
Finance and Development,
Single Family Mortgage
Bonds, 5.90%, 7/1/27/(3)/ 1,025,010
Aa1 AA 175 State of Hawaii Housing
Finance and Development,
Single Family Mortgage
Bonds, (AMT), 6.00%, 7/1/26 178,866
- -------------------------------------------------------------------------
$ 1,706,421
- -------------------------------------------------------------------------
Industrial Development Revenue / Pollution
Control Revenue -- 3.0%
- -------------------------------------------------------------------------
A1 AA- $ 550 Puerto Rico Industrial,
Tourist, Educational,
Medical and Environmental
Control Authority, (Upjohn
Co.), 7.50%, 12/1/23 $ 592,642
- -------------------------------------------------------------------------
$ 592,642
- -------------------------------------------------------------------------
Insured-Education -- 5.3%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Hawaii State Housing
Development Corp.,
(University of Hawaii),
(AMBAC), 5.65%, 10/1/16 $ 519,795
Aaa AAA 500 University of Hawaii Board
of Regents, University
System, (AMBAC),
5.65%, 10/1/12 521,045
- -------------------------------------------------------------------------
$ 1,040,840
- -------------------------------------------------------------------------
Insured-Electric Utilities -- 6.1%
- -------------------------------------------------------------------------
Aaa AAA $ 100 Commonwealth of Puerto Rico
Electric Power Authority,
(FSA), Variable
Rate, 7/1/03/(4)/ $ 114,125
- -------------------------------------------------------------------------
Aaa AAA 500 State of Hawaii Department
of Budget and Finance,
(Hawaii Electric Co.,
Inc.), (AMT), (MBIA),
6.20%, 5/1/26 533,085
- -------------------------------------------------------------------------
Aaa AAA 500 State of Hawaii Department
of Budget and Finance,
(Hawaii Electric Co.,
Inc.), (AMT), (MBIA),
6.60%, 1/1/25 551,200
- -------------------------------------------------------------------------
$ 1,198,410
- -------------------------------------------------------------------------
Insured-General Obligations -- 17.3%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Commonwealth of Puerto
Rico, (MBIA), 5.00%, 7/1/21 $ 487,715
Aaa AAA 700 County of Hawaii, HI,
(FGIC), 5.55%, 5/1/10 756,525
Aaa AAA 305 County of Kauai, HI,
(MBIA), 5.90%, 2/1/14 323,733
Aaa AAA 910 County of Maui, HI, (FGIC),
5.00%, 9/1/17 891,882
Aaa AAA 250 County of Maui, HI, (FGIC),
5.125%, 12/15/13 251,270
Aaa AAA 420 County of Maui, HI, (FGIC),
5.30%, 9/1/14 430,156
Aaa AAA 250 County of Maui, HI, (FGIC),
5.75%, 1/1/13 258,240
- -------------------------------------------------------------------------
$ 3,399,521
- -------------------------------------------------------------------------
</TABLE>
See notes to financial statements
17
<PAGE>
Hawaii Municipals Portfolio as of July 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Insured-Hospitals -- 1.1%
- -------------------------------------------------------------------------
Aaa AAA $ 100 State of Hawaii Department
of Budget and Finance,
(Queen's Medical Center),
(FGIC), 6.50%, 7/1/12 $ 102,460
Aaa AAA 100 State of Hawaii Department
of Budget and Finance, (St.
Francis Medical Centers),
(CGIC), 6.50%, 7/1/22 110,289
- -------------------------------------------------------------------------
$ 212,749
- -------------------------------------------------------------------------
Insured-Housing -- 7.7%
- -------------------------------------------------------------------------
Aaa AAA $ 490 City and County of
Honolulu, HI, Mortgage
Revenue Bonds, (Smith
Beretania), (MBIA), 7.80%,
7/1/24 $ 528,700
Aaa AAA 1,000 Puerto Rico Public
Buildings Authority,
(AMBAC), 5.00%, 7/1/27 972,730
- -------------------------------------------------------------------------
$ 1,501,430
- -------------------------------------------------------------------------
Insured-Transportation -- 9.7%
- -------------------------------------------------------------------------
Aaa AAA $ 500 State of Hawaii Airports
System, (AMT), (FGIC),
7.50%, 7/1/20 $ 548,895
Aaa AAA 100 State of Hawaii Airports
System, (AMT), (MBIA),
6.90%, 7/1/12 118,405
Aaa AAA 245 State of Hawaii Airports
System, (AMT), (MBIA),
7.00%, 7/1/18 268,738
Aaa AAA 650 State of Hawaii Harbor
Revenue, (AMT), (FGIC),
6.375%, 7/1/24/(1)/ 700,219
Aaa AAA 250 State of Hawaii Harbor
Revenue, (AMT), (MBIA),
7.00%, 7/1/17 271,070
- -------------------------------------------------------------------------
$ 1,907,327
- -------------------------------------------------------------------------
Special Tax Revenue -- 1.1%
- -------------------------------------------------------------------------
Baa1 A $ 100 Puerto Rico Highway and
Transportation Authority,
5.50%, 7/1/36 $ 102,245
NR NR 100 Virgin Islands Public
Finance Authority, 7.25%,
10/1/18 110,901
- -------------------------------------------------------------------------
$ 213,146
- -------------------------------------------------------------------------
Transportation -- 5.7%
- -------------------------------------------------------------------------
NR BBB $ 200 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 $ 215,578
Baa3 BBB- 180 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.30%, 6/1/23 190,751
Aa3 AA 715 State of Hawaii Highway
Revenue, 5.00%, 7/1/12 711,253
- -------------------------------------------------------------------------
$ 1,117,582
- -------------------------------------------------------------------------
Water and Sewer -- 3.2%
- -------------------------------------------------------------------------
Aa AA $ 600 City and County of
Honolulu, HI, Water Supply
System,
5.80%, 7/1/16 $ 631,386
- -------------------------------------------------------------------------
$ 631,386
- -------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $17,950,322) $19,604,933
- -------------------------------------------------------------------------
</TABLE>
AMT - Interest earned from these securities may be considered a tax
preference item for purposes of the Federal Alternative
Minimum Tax.
The portfolio invests primarily in debt securities issued by Hawaii
municipalities. The ability of the issuers of the debt securities to meet their
obligations may be affected by the economic developments in a specific industry
or municipality. In order to reduce the risk associated with such economic
developments, at July 31, 1997, 47.2% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by
financial institutions ranged from 0.6% to 20.7% of total investments.
(1) Security has been segregated to cover when-issued securities.
(2) When-issued security.
(3) Security has been segregated to cover margin requirements on open financial
futures contracts.
(4) Security has been issued as an inverse floater bond.
See notes to financial statements
18
<PAGE>
Kansas Municipals Portfolio as of July 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited)
- --------------------Principal
Standard Amount
& (000
Moody's Poor's omitted) Security Value
- --------------------------------------------------------------------------------
Electric Utilities -- 1.4%
- --------------------------------------------------------------------------------
NR BBB $ 150 Guam Power Authority
Revenue, 6.625%, 10/1/14 $ 163,302
- --------------------------------------------------------------------------------
$ 163,302
- --------------------------------------------------------------------------------
General Obligations -- 24.4%
- --------------------------------------------------------------------------------
Aa NR $ 400 Douglas County, KS, USD
#497, 6.00%, 9/1/15 $ 428,092
Aa1 AA 300 Johnson County, KS, USD
#229, 5.00%, 10/1/14 300,579
Aa1 AA 890 Johnson County, KS, USD
#229, 5.00%, 10/1/16 885,594
Aa1 AA 500 Johnson County, KS, USD
#512, 5.125%, 10/1/16 500,180
Aa1 NR 300 Leawood, KS, 5.00%, 9/1/15 301,074
Baa1 A 500 Puerto Rico Aqueduct and
Sewer Authority, 5.00%,
7/1/19 483,185
- --------------------------------------------------------------------------------
$ 2,898,704
- --------------------------------------------------------------------------------
Hospitals -- 2.2%
- --------------------------------------------------------------------------------
A3 NR $ 250 Lawrence, KS, Hospital
Revenue, (Lawrence Memorial
Hospital), 6.20%, 7/1/19 $ 264,355
- --------------------------------------------------------------------------------
$ 264,355
- --------------------------------------------------------------------------------
Housing -- 28.6%
- --------------------------------------------------------------------------------
Aaa NR $ 70 Kansas City, KS, Mortgage
Revenue, (AMT), (GNMA),
5.30%, 5/1/07 $ 71,000
Aaa NR 70 Kansas City, KS, Mortgage
Revenue, (AMT), (GNMA),
5.30%, 11/1/07 71,040
Aaa NR 160 Kansas City, KS, Mortgage
Revenue, (AMT), (GNMA),
5.90%, 11/1/27 162,658
NR AAA 395 Kansas City, KS, Mortgage
Revenue, (AMT), (GNMA),
7.00%, 12/1/11 418,874
NR AAA 220 Kansas City, KS,
Multifamily Housing
Revenue, (FHA), 6.70%,
7/1/23 226,292
Aa NR 100 Kansas Development
Authority, Single Family
Housing, (FHA), (Martin
Creek), 6.60%, 8/1/34 104,009
Aaa A- $ 415 Labette County, KS, Single
Family Mortgage Revenue,
0.00%, 12/1/14 168,876
Aaa NR 195 Olathe and Labette County,
KS, Single Family Mortgage
Revenue, (GNMA), 8.10%,
8/1/23 218,837
NR AAA 220 Olathe, KS, Mortgage Loan
Revenue, (GNMA), 7.60%,
3/1/07 232,826
NR AAA 250 Olathe, KS, Multifamily
Housing Revenue, (FNMA),
6.45%, 6/1/19 262,670
NR AA 250 Puerto Rico Housing Finance
Corp., 7.50%, 4/1/22 264,180
Aaa NR 235 Sedgwick and Shawnee
County, KS, Single Family
Revenue, (GNMA), 7.75%,
11/1/24 272,786
Aaa NR 455 Sedgwick County, KS, Single
Family Mortgage Revenue,
(GNMA), 8.00%,
5/1/25 514,396
Aaa NR 45 Sedgwick County, KS, Single
Family Mortgage Revenue,
(GNMA), 8.20%,
5/1/14 50,863
NR AAA 350 Wichita, KS, Multifamily
Housing Revenue, (Broadmoor
Chelsea Apartments), (AMT)
(FNMA), 5.65%,
7/1/16 356,902
- --------------------------------------------------------------------------------
$ 3,396,209
- --------------------------------------------------------------------------------
Industrial Development Revenue /
Pollution Control Revenue -- 2.2%
- --------------------------------------------------------------------------------
A2 NR $ 100 Puerto Rico Industrial,
Medical and Environmental
Pollution Control Facility
Finance Authority,
(American Home Products),
5.10%, 12/1/18 $ 98,207
- --------------------------------------------------------------------------------
Baa3 BBB- 150 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.30%, 6/1/23 158,960
- --------------------------------------------------------------------------------
$ 257,167
- --------------------------------------------------------------------------------
Insured-Electric Utilities -- 4.2%
- --------------------------------------------------------------------------------
Aaa AAA $ 345 Burlington, KS, Pollution
Control Revenue, (Kansas
Gas & Electric Co.),
(MBIA), 7.00%, 6/1/31/(1)/ $ 382,267
- --------------------------------------------------------------------------------
Aaa AAA 100 Puerto Rico Electric Power
Authority, (FSA), Variable
Rate, 7/1/02/(2)/ 112,000
- --------------------------------------------------------------------------------
$ 494,267
- --------------------------------------------------------------------------------
See notes to financial statements
19
<PAGE>
Kansas Municipals Portfolio as of July 31, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
<C> <C> <C> <S> <C>
Insured-General Obligations -- 7.7%
- -------------------------------------------------------------------------
Aaa AAA $ 150 Garnett, KS, Combined
Utility Revenue Bonds,
(MBIA), 6.00%, 10/1/17 $ 157,770
Aaa AAA 200 Kansas City, KS, Utility
Systems Revenue, (FGIC),
6.375%, 9/1/23 222,214
Aaa AAA 250 Sedgwick County, KS, USD
#267, (AMBAC), 6.15%,
11/1/09 277,055
Aaa AAA 230 Sedgwick County, KS, USD
#267, (AMBAC), 6.15%,
11/1/10 253,396
- -------------------------------------------------------------------------
$ 910,435
- -------------------------------------------------------------------------
Insured-Hospitals -- 22.0%
- -------------------------------------------------------------------------
Aaa AAA $1,000 Kansas State Development
Finance Authority, Health
Facilities Revenue, (St.
Luke's), (MBIA),
5.375%, 11/15/26 $ 1,002,849
Aaa AAA 500 Kansas State Development
Finance Authority, Health
Facilities, (Stormont-Vail)
(MBIA), 5.80%, 11/15/11 534,065
Aaa AAA 200 Olathe, KS, Health
Facilities, (Evangelical
Lutheran Good Samaritan
Society), (AMBAC), 6.00%,
5/1/19 211,692
Aaa AAA 895 Shawnee County, KS, Health
Care Facilities, (Menninger
Foundation), (FSA), 5.00%,
8/15/16 867,200
- -------------------------------------------------------------------------
$ 2,615,806
- -------------------------------------------------------------------------
Insured-Housing -- 3.7%
- -------------------------------------------------------------------------
Aaa AAA $ 100 Puerto Rico Housing Finance
Corp., (AMBAC), 7.50%,
10/1/11 $ 104,585
Aaa AAA 205 Sedgwick County, KS,
Mortgage Loan Revenue,
(MBIA), (GNMA),
7.50%, 12/1/09 216,935
Aaa AAA 110 Sedgwick County, KS,
Mortgage Loan Revenue,
(MBIA), (GNMA),
7.50%, 12/1/10 116,345
- -------------------------------------------------------------------------
$ 437,865
- -------------------------------------------------------------------------
Transportation -- 3.6%
- -------------------------------------------------------------------------
NR BBB $ 100 Guam Airport Authority,
6.50%, 10/1/23 $ 106,702
NR BBB 300 Guam Airport Authority,
(AMT), 6.70%, 10/1/23 323,367
- -------------------------------------------------------------------------
$ 430,069
- -------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $11,264,704) $11,868,179
- -------------------------------------------------------------------------
</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, 1997, 36.6% of the securities in the portfolio of
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage by financial
institution ranged from 1.9% to 17.5% of total investments.
/(1)/ Security has been segregated to cover margin requirements on open
financial futures contracts.
/(2)/ Security has been issued as an inverse floater bond.
See notes to financial statements
20
<PAGE>
EV Municipals Portfolios as of July 31, 1997
FINANCIAL STATEMENTS (Unaudited)
Statements of Assets and Liabilities
As of July 31, 1997
<TABLE>
<CAPTION>
Florida Insured Hawaii Kansas
Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $22,448,019 $ 17,950,322 $11,264,704
Unrealized appreciation 1,840,934 1,654,611 603,475
- ------------------------------------------------------------------------------------------------------------------------------------
Investments at value (Note 1A) $24,288,953 $ 19,604,933 $11,868,179
- ------------------------------------------------------------------------------------------------------------------------------------
Cash $ 265 $ 107,333 $ 566
Receivable for investments sold 205,000 -- --
Interest receivable 397,841 180,004 194,465
Receivable from Investment Adviser (Note 2) 27,593 27,059 22,356
Deferred organization expenses (Note 1D) 3,846 3,520 3,478
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $24,923,498 $ 19,922,849 $12,089,044
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Payable for investments purchased $ 488,622 $ 503,274 $ --
Demand note payable (Note 5) 665,000 -- 442,000
Payable for variation margin on open financial futures contracts (Note 1E) 7,125 2,625 1,500
Accrued expenses 8,166 5,396 6,753
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 1,168,913 $ 511,295 $ 450,253
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $23,754,585 $ 19,411,554 $11,638,791
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net proceeds from capital contributions and withdrawals $22,041,431 $ 17,828,574 $11,063,839
Net unrealized appreciation of investments (computed on the basis of
identified cost) 1,713,154 1,582,980 574,952
- ------------------------------------------------------------------------------------------------------------------------------------
Total $23,754,585 $ 19,411,554 $11,638,791
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
21
<PAGE>
EV Municipals Portfolios as of July 31, 1997
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
For the Six Months Ended July 31, 1997
<TABLE>
<CAPTION>
Florida Insured Hawaii Kansas
Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income (Note 1B)
- -------------------------------------------------------------------------------------------------------------------------------
Interest $ 674,768 $ 486,177 $ 342,233
- -------------------------------------------------------------------------------------------------------------------------------
Total investment income $ 674,768 $ 486,177 $ 342,233
- -------------------------------------------------------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 21,264 $ 12,927 $ 9,004
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 102 102 102
Custodian fee (Note 1H) 7,612 4,988 2,930
Legal and accounting services 16,838 16,837 12,821
Bond pricing 3,502 1,470 3,523
Amortization of organization expenses (Note 1D) 1,202 1,099 1,086
Miscellaneous 6,493 4,900 4,824
- -------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 57,013 $ 42,323 $ 34,290
- -------------------------------------------------------------------------------------------------------------------------------
Deduct --
Preliminary allocation of expenses to the Investment Adviser (Note 2) $ 27,593 $ 27,059 $ 22,356
Preliminary reduction of investment adviser fee (Note 2) 21,264 12,927 9,004
Reduction of custodian fee (Note 1H) 8,156 2,337 2,930
- -------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 57,013 $ 42,323 $ 34,290
- -------------------------------------------------------------------------------------------------------------------------------
Net expenses $ -- $ -- $ --
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 674,768 $ 486,177 $ 342,233
- -------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 201,129 $ 13,184 $ 50,554
Financial futures contracts (145,778) 13,158 9,476
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment transactions $ 55,351 $ 26,342 $ 60,030
- -------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 822,804 $ 609,434 $ 369,510
Financial futures contracts (119,036) (92,052) (34,312)
- -------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments $ 703,768 $ 517,382 $ 335,198
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 759,119 $ 543,724 $ 395,228
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $1,433,887 $1,029,901 $ 737,461
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
22
<PAGE>
EV Municipals Portfolios as of July 31, 1997
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended July 31, 1997
<TABLE>
<CAPTION>
Florida Insured Hawaii Kansas
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
From operations --
Net investment income $ 674,768 $ 486,177 $ 342,233
Net realized gain on investments 55,351 26,342 60,030
Net change in unrealized appreciation (depreciation)
of investments 703,768 517,382 335,198
- ----------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 1,433,887 $ 1,029,901 $ 737,461
- ----------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 2,201,073 $ 3,763,737 $ 702,792
Withdrawals (4,084,234) (1,396,009) (1,537,182)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital transactions $(1,883,161) $ 2,367,728 $ (834,390)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ (449,274) $ 3,397,629 $ (96,929)
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------
At beginning of period $24,203,859 $ 16,013,925 $11,735,720
- ----------------------------------------------------------------------------------------------------------------------------
At end of period $23,754,585 $ 19,411,554 $11,638,791
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
23
<PAGE>
EV Municipals Portfolios as of July 31, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended January 31, 1997
<TABLE>
<CAPTION>
Florida Insured Hawaii Kansas
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
From operations --
Net investment income $ 1,329,075 $ 924,536 $ 696,638
Net realized gain (loss) on investments (66,180) (88,245) 116,773
Net change in unrealized appreciation (depreciation)
of investments (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)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital transactions $ 2,191,291 $ (110,546) $ (287,749)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets $ 2,788,059 $ 435,848 $ 127,079
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
24
<PAGE>
EV Municipals Portfolios as of July 31, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Florida Insured Portfolio Hawaii Portfolio
---------------------------------------- -----------------------------------------
Six Months Six Months
Ended Year Ended January 31, Ended Year Ended January 31,
July 31, 1997 -------------------------- July 31, 1997 ---------------------------
(Unaudited) 1997 1996 1995* (Unaudited) 1997 1996 1995*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets: ++
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.07%++ 0.09% 0.07% 0.01%++ 0.03% ++ 0.04% 0.06% 0.06%++
Net expenses, after custodian fee reduction 0.00%++ 0.02% 0.00% -- 0.00%++ 0.00% 0.00% --
Net investment income 5.77%++ 5.76% 5.82% 5.73%++ 5.87%++ 5.96% 6.01% 6.03%++
Portfolio Turnover 11% 36% 32% 33% 6% 21% 19% 66%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $ 23,755 $24,204 $21,416 $14,400 $ 19,412 $16,014 $15,578 $12,865
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
++ The operating expenses of the Portfolios may reflect a reduction of the
investment adviser fee and/or an allocation of expenses to the Investment
Adviser. Had such actions not been taken, the ratios would have been as
follows:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses/(1)/ 0.49%+ 0.39% 0.39% 0.41%+ 0.51%+ 0.43% 0.41% 0.38%+
Expenses after custodian fee reduction 0.42%+ 0.32% 0.32% -- 0.48%+ 0.39% 0.35% --
Net investment income 5.35%+ 5.46% 5.50% 5.33%+ 5.38%+ 5.57% 5.66% 5.70%+
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, March 2, 1994, to January 31,
1995.
/(1)/ The expense ratios for the periods ended on and after, January 31, 1996
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Fund, as well as its corresponding
Portfolio to increase its expense ratios by the effect of any offset
arrangements with 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
25
<PAGE>
EV Municipals Portfolios as of July 31, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Kansas Portfolio
-----------------------------------------
Six Months
Ended Year Ended January 31,
July 31, 1997 ------------------------
(Unaudited) 1997 1996 1995*
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios to average daily net assets++:
- --------------------------------------------------------------------------------------------------------------------------
Expenses /(1)/ 0.05%+ 0.08% 0.09% 0.01%+
Net expenses, after custodian fee reduction 0.00%+ 0.00% 0.00% --
Net investment income 5.92%+ 5.91% 5.93% 5.68%+
Portfolio Turnover 5% 49% 21% 12%
- --------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $ 11,639 $11,736 $11,609 $ 8,306
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Portfolio reflect a reduction of the
investment adviser fee and/or an allocation of expenses to the Investment
Adviser. Had such actions not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C> <C> <C> <C>
Expenses/(1)/ 0.59%+ 0.48% 0.50% 0.43%+
Expenses after custodian fee reduction 0.54%+ 0.40% 0.41% --
Net investment income 5.38%+ 5.51% 5.52% 5.26%+
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, March 2, 1994, to January 31,
1995.
/(1)/ The expense ratios for the periods ended on and after January 31, 1996,
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require each Fund, as well as its corresponding
Portfolio to increase its expense ratios by the effect of any offset
arrangements with 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
26
<PAGE>
EV Municipals Portfolio as of July 31, 1997
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.
27
<PAGE>
EV Municipals Portfolio as of July 31, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
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.
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 Information -- The interim financial statements relating
to July 31, 1997 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the
Portfolios' management reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
-----------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to each Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e., income other than gains from the sale of
securities). For the six months ended July 31, 1997, each Portfolio incurred
advisory fees as follows:
<TABLE>
<CAPTION>
Portfolio Amount Effective Rate*
-----------------------------------------------------------------------------
<S> <C> <C>
Florida Insured $21,264 0.18%
Hawaii 12,927 0.16%
Kansas 9,004 0.16%
</TABLE>
*As a percentage of average daily net assets (annualized).
To enhance the net income of the Florida Insured Portfolio, Hawaii Portfolio
and Kansas Portfolio, BMR made a preliminary reduction of its fee in the
amount of $21,264, $12,927, and $9,004, respectively, and $27,593, $27,059,
and $22,356, respectively, of expenses related to the operation of the
Portfolios were allocated, on a preliminary basis, 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 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 six months ended July 31, 1997, no significant amounts have been
deferred.
28
<PAGE>
EV Municipals Portfolio as of July 31, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
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, 1997 were as follows:
<TABLE>
<CAPTION>
Florida Insured Portfolio
---------------------------------------------------
<S> <C>
Purchases $2,643,655
Sales 4,255,871
Hawaii Portfolio
---------------------------------------------------
Purchases $4,127,395
Sales 996,178
Kansas Portfolio
---------------------------------------------------
Purchases $ 723,272
Sales 582,901
</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, 1997, as computed on a
federal income tax basis, are as follows:
<TABLE>
<CAPTION>
Florida Insured Portfolio
---------------------------------------------------
<S> <C>
Aggregate Cost $22,448,019
---------------------------------------------------
Gross unrealized appreciation $ 1,840,934
Gross unrealized depreciation -
---------------------------------------------------
Net unrealized appreciation $ 1,840,934
---------------------------------------------------
Hawaii Portfolio
---------------------------------------------------
Aggregate Cost $17,950,322
---------------------------------------------------
Gross unrealized appreciation $ 1,656,339
Gross unrealized depreciation 1,728
---------------------------------------------------
Net unrealized appreciation $ 1,654,611
---------------------------------------------------
Kansas Portfolio
---------------------------------------------------
Aggregate Cost $11,264,704
---------------------------------------------------
Gross unrealized appreciation $ 603,475
Gross unrealized depreciation -
---------------------------------------------------
Net unrealized appreciation $ 603,475
---------------------------------------------------
</TABLE>
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 agreement
with a group of banks. 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 fund or portfolio based on its
borrowings at the bank's base rate or at an amount above either the bank's
adjusted certificate of deposit rate, 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 July 31, 1997, the
Florida Insured Portfolio and the Kansas Portfolio had balances outstanding
pursuant to this line of credit of $665,000 and $442,000, respectively. The
Portfolios did not have any significant borrowings or allocated fees during
the six months ended July 31, 1997.
6 Financial Instruments
-----------------------------------------------------------------------------
The Portfolios regularly trade in financial instruments with off-balance
sheet risk in the normal course of their investing activities to assist in
managing exposure to various market risks. These financial instruments
include futures contracts and may involve, to a varying degree, elements of
risk in excess of the amounts recognized for financial statement purposes.
The notional or contractual amounts of these instruments represent the
investment a Portfolio has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
A summary of obligations under these financial instruments at July 31, 1997,
is as follows:
<TABLE>
<CAPTION>
Futures
Contracts
Expiration Net Unrealized
Portfolio Date Contracts Position Depreciation
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida
Insured 9/97 19 US Treasury Bond Short $127,780
--------------------------------------------------------------------------
Hawaii 9/97 10 US Treasury Bond Short $ 71,631
--------------------------------------------------------------------------
Kansas 9/97 4 US Treasury Bond Short $ 28,523
--------------------------------------------------------------------------
</TABLE>
At July 31,1997 each Portfolio had sufficient cash and/or securities to
cover margin requirements on open futures contracts.
29
<PAGE>
EV Municipals Portfolios as of July 31, 1997
INVESTMENT MANAGEMENT
<TABLE>
<CAPTION>
EV Municipals Portfolios
<S> <C>
Officers Independent Trustees
Thomas J. Fetter Donald R. Dwight
President of the Florida President, Dwight Partners, Inc.
Insured, Hawaii and Kansas Chairman, Newspaper of New England, Inc.
Municipals Portfolios and
Portfolio Manager of Florida Samuel L. Hayes, III
Insured Municipals Portfolio Jacob H. Schiff Professor of Investment
Banking, Harvard University Graduate School of
James B. Hawkes Business Administration
Vice President and Trustee
Norton H. Reamer
Robert B. MacIntosh President and Director, United Asset
Vice President of Florida Management Corporation
Insured, Hawaii and Kansas
Municipals Portfolios and John L. Thorndike
Portfolio Manager of Hawaii Formerly Director, Fiduciary Company Incorporated
Municipals Portfolio
Jack L. Treynor
Nicole Anderes Investment Adviser and Consultant
Vice President and Portfolio
Manager of Kansas
Municipals Portfolio
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
</TABLE>
30
