<PAGE>
Florida Insured Municipals Portfolio as of January 31, 1999
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
Ratings(Unaudited) Principal
- ------------------ Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
Escrowed / Prerefunded -- 1.8%
- -------------------------------------------------------------------------
Aaa AAA $1,160 Dade County, Professional
Sports Franchise, (MBIA),
Escrowed to Maturity,
0.00%, 10/1/19 $ 423,852
Aaa AAA 70 North Port, Utility
Revenue, (FGIC),
Prerefunded to 10/1/02,
6.25%, 10/1/17(1) 78,001
- -------------------------------------------------------------------------
$ 501,853
- -------------------------------------------------------------------------
Housing -- 13.7%
- -------------------------------------------------------------------------
Aaa NR $ 345 Duval County HFA, SFMR,
(GNMA), (AMT), 6.70%,
10/1/26 $ 371,555
Aaa AAA 750 Escambia County HFA, SFMR,
(GNMA), (AMT), 7.00%, 4/1/28 829,253
Aaa NR 715 Manatee County, HFA, SFMR,
(GNMA), (AMT), 6.875%,
11/1/26 804,754
Aaa NR 1,000 Pinellas County HFA, SFMR,
(AMT), 5.80%, 3/1/29 1,039,420
NR AAA 795 Pinellas County HFA, SFMR,
(GNMA), (AMT), 6.70%, 2/1/28 857,678
- -------------------------------------------------------------------------
$ 3,902,660
- -------------------------------------------------------------------------
Insured-Education -- 1.9%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Florida A&M University,
(Student Apartment
Facilities), (MBIA),
5.625%, 7/1/25 $ 529,880
- -------------------------------------------------------------------------
$ 529,880
- -------------------------------------------------------------------------
Insured-Electric Utilities -- 8.3%
- -------------------------------------------------------------------------
Aaa AAA $ 445 Citrus County, PCR, (MBIA),
6.35%, 2/1/22 $ 488,094
Aaa AAA 895 Florida State Municipal
Power Agency, (Stanton),
(AMBAC), 4.50%, 10/1/27 835,554
Aaa AAA 1,000 Puerto Rico Electric Power
Authority, (MBIA), 5.50%,
7/1/25 1,043,580
- -------------------------------------------------------------------------
$ 2,367,228
- -------------------------------------------------------------------------
Insured-General Obligations -- 8.5%
- -------------------------------------------------------------------------
Aaa AAA $ 1,000 Florida Board of Education,
(Capital Outlay), (FGIC),
4.50%, 6/1/23(2) $ 944,120
Aaa AAA 1,000 Florida Board of Education,
(Capital Outlay), (MBIA),
4.50%, 6/1/24(2) 944,330
Aaa AAA 500 Miami-Dade County, School
District, (FSA), 5.375%,
8/1/15 547,210
- -------------------------------------------------------------------------
$ 2,435,660
- -------------------------------------------------------------------------
Insured-Hospital -- 2.6%
- -------------------------------------------------------------------------
Aaa AAA $ 200 Dade, Public Facilities
Revenue, (Jackson Memorial
Hospital), (MBIA), 4.875%,
6/1/15 $ 200,854
Aaa AAA 500 Sarasota County, Public
Hospital Board, (Sarasota
Memorial Hospital), (MBIA),
5.25%, 7/1/24 528,645
- -------------------------------------------------------------------------
$ 729,499
- -------------------------------------------------------------------------
Insured-Housing -- 11.3%
- -------------------------------------------------------------------------
NR A $ 500 Clearwater HFA, (Hamptons
at Clearwater), (ACA),
5.35%, 5/1/24 $ 508,955
Aaa AAA 500 Florida HFA, (Maitland Club
Apartments), (AMBAC),
(AMT), 6.875%, 8/1/26 551,985
Aaa AAA 1,000 Florida HFA, (Mariner Club
Apartments), (AMBAC),
(AMT), 6.375%, 9/1/36 1,087,710
Aaa AAA 500 Florida HFA, (MBIA), (AMT),
5.90%, 7/1/29 529,515
Aaa AAA 500 Florida HFA, (Spinnaker
Cove Apartments), (AMBAC),
(AMT), 6.50%, 7/1/36 547,060
- -------------------------------------------------------------------------
$ 3,225,225
- -------------------------------------------------------------------------
Insured-Industrial Development Revenue -- 1.9%
- ------------------------------------------------------------------------
Aaa AAA $ 500 Dade County Resources
Recovery Facilities,
(AMBAC), (AMT),
5.50%, 10/1/13(1) $ 537,000
- -------------------------------------------------------------------------
$ 537,000
- -------------------------------------------------------------------------
See notes to financial statements
18
<PAGE>
Florida Insured Municipals Portfolio as of January 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
Ratings(Unaudited) Principal
- ------------------ Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
Insured-Miscellaneous -- 1.7%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Jacksonville, Capital
Improvement Revenue,
(Stadium Project), (AMBAC),
4.75%, 10/1/25 $ 485,610
- -------------------------------------------------------------------------
$ 485,610
- -------------------------------------------------------------------------
Insured-Special Tax Revenue -- 16.8%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Bradenton, Special Revenue
Sub-Lien, (FGIC), 5.00%,
10/1/15 $ 512,880
Aaa AAA 1,000 Jacksonville, Excise Taxes
Revenue, (FGIC), (AMT),
0.00%, 10/1/10 596,900
Aaa AAA 500 Jacksonville, Excise Taxes
Revenue, (FGIC), 5.00%,
10/1/16 510,370
Aaa AAA 1,000 Jacksonville, Excise Taxes
Revenue, (FGIC), (AMT),
5.70%, 10/1/09 1,058,670
Aaa AAA 250 Orange, Tourist Development
Tax, (MBIA), 6.00%, 10/1/24 284,260
Aaa AAA 505 St. Petersburg Excise Tax,
(FGIC), 5.00%, 10/1/16 511,807
Aaa AAA 340 Sunrise Public Facilities,
(MBIA), 0.00%, 10/1/15 154,683
Aaa AAA 500 Tampa, Occupational License
Tax Revenue, (FGIC), 5.50%,
10/1/27 528,975
Aaa AAA 2,000 Tampa, Utility Tax Revenue,
(AMBAC), 0.00%, 4/1/22(1) 632,540
- -------------------------------------------------------------------------
$ 4,791,085
- -------------------------------------------------------------------------
Insured-Transportation -- 10.8%
- -------------------------------------------------------------------------
Aaa AAA $1,000 Dade County Aviation
Facilities, (Miami
International Airport),
(FSA), (AMT), 5.125%,
10/1/22 $ 1,001,560
Aaa AAA 1,000 Dade County, Seaport
Revenue, (MBIA), 5.125%,
10/1/16 1,031,560
Aaa AAA 1,000 Florida Ports Financing
Commission, (State
Transportation Trust Fund),
(MBIA), (AMT), 5.375%,
6/1/27 1,027,880
- -------------------------------------------------------------------------
$ 3,061,000
- -------------------------------------------------------------------------
Insured-Water and Sewer -- 20.7%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Dade County, Water And
Sewer System, (FGIC),
5.25%, 10/1/26 $ 515,005
Aaa AAA 325 Dade County, Water and
Sewer System, (FGIC),
5.375%, 10/1/16 344,484
Aaa AAA 735 Enterprise Community
Development District,
(MBIA), 6.125%, 5/1/24(1) 808,235
Aaa AAA 1,000 Jacksonville, (AMBAC),
(AMT), 6.35%, 8/1/25 1,130,120
Aaa AAA 1,000 Lee County IDA, (Bonita
Springs), (MBIA), (AMT),
6.05%, 11/1/20 1,080,580
Aaa AAA 500 North Port, Utility
Revenue, (FGIC), 6.25%,
10/1/22 557,150
Aaa AAA 400 Titisville, (MBIA), 6.00%,
10/1/24 454,816
Aaa AAA 1,000 Vero Beach, (FGIC),
5.00%, 12/1/21 1,001,850
- -------------------------------------------------------------------------
$ 5,892,240
- -------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $26,336,636) $28,458,940
- -------------------------------------------------------------------------
AMT - Interest earned from these securities may be considered a
tax preference item for purposes of the Federal Alternative Minimum
Tax.
The Portfolio primarily invests in debt securities issued by Florida
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduce the risk associated with
such economic developments, at January 31, 1999, 86.3% of the securities
in the portfolio of investments are backed by bond insurance of various
financial institutions and financial guaranty assurance agencies. At
January 31, 1999, the Portfolio's insured securities by financial institution
are as follows:
% of
Market Value Market Value
- -------------------------------------------------------------------------
American Capital Access (ACA) $ 508,955 1.8%
American Municipal Bond Assurance
Corp. (AMBAC) 5,807,579 20.4
Financial Guaranty Insurance
Corp. (FGIC) 7,160,212 25.2
Financial Security Assurance
(FSA) 1,548,770 5.4
Municipal Bond Insurance Assoc.
(MBIA) 9,530,764 33.5
- -------------------------------------------------------------------------
Total $24,556,280 86.3%
- -------------------------------------------------------------------------
(1) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(2) When-issued security.
See notes to financial statements
19
<PAGE>
Hawaii Municipals Portfolio as of January 31, 1999
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
Electric Utilities -- 3.1%
- -------------------------------------------------------------------------
Baa1 BBB+ $1,500 Puerto Rico Electric Power
Authority, 0.00%, 7/1/17 $ 620,430
- -------------------------------------------------------------------------
$ 620,430
- -------------------------------------------------------------------------
General Obligations -- 5.1%
- -------------------------------------------------------------------------
A1 A+ $ 140 Hawaii State, 5.75%, 1/1/11 $ 157,868
Aa2 AA 750 Honolulu, 4.75%, 9/1/17 744,023
Baa1 A 285 Puerto Rico, Public
Improvement, 0.00%, 7/1/15 132,260
- -------------------------------------------------------------------------
$ 1,034,151
- -------------------------------------------------------------------------
Hospital -- 15.9%
- -------------------------------------------------------------------------
A3 A $ 200 Hawaii State Department of
Budget and Finance, (Kaiser
Permanente), 5.15%, 3/1/15 $ 202,308
A2 A 635 Hawaii State Department of
Budget and Finance,
(Kapiolani Health System),
6.00%, 7/1/19 675,964
A1 AA- 870 Hawaii State Department of
Budget and Finance, (Queens
Health System), 5.75%,
7/1/26 932,361
NR BB 750 Hawaii State Department of
Budget and Finance,
(Wahiawa General Hospital),
7.50%, 7/1/12 808,500
NR BBB+ 300 Hawaii State Department of
Budget and Finance, (Wilcox
Memorial Hospital), 5.35%,
7/1/18 291,519
NR BBB+ 300 Hawaii State Department of
Budget and Finance, (Wilcox
Memorial Hospital), 5.50%,
7/1/28 293,988
- -------------------------------------------------------------------------
$ 3,204,640
- -------------------------------------------------------------------------
Housing -- 7.0%
- -------------------------------------------------------------------------
NR AAA $ 200 Guam Housing Corp., Single
Family, 5.75%, 9/1/31 $ 218,510
Aa1 AA 1,000 Hawaii State Housing
Finance and Development,
Single Family, 5.90%, 7/1/27 1,048,869
Aa1 AA 145 Hawaii State Housing
Finance and Development,
Single Family, (AMT),
6.00%, 7/1/26 151,606
- -------------------------------------------------------------------------
$ 1,418,985
- -------------------------------------------------------------------------
Industrial Development Revenue -- 2.8%
- -------------------------------------------------------------------------
Ba2 BB $ 370 Hawaii State Department of
Transportation,
(Continental Airlines,
Inc.), (AMT), 5.625%,
11/15/27 $ 369,704
Baa3 BBB- 180 Puerto Rico Port Authority,
(American Airlines), (AMT),
6.30%, 6/1/23 191,444
- -------------------------------------------------------------------------
$ 561,148
- -------------------------------------------------------------------------
Insured-Education -- 5.3%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Hawaii State Housing
Development Corp.,
(University of Hawaii),
(AMBAC), 5.65%, 10/1/16 $ 533,320
Aaa AAA 500 University of Hawaii Board
of Regents, University
System, (AMBAC),
5.65%, 10/1/12 537,335
- -------------------------------------------------------------------------
$ 1,070,655
- -------------------------------------------------------------------------
Insured-Electric Utilities -- 8.6%
- -------------------------------------------------------------------------
Aaa AAA $1,000 Hawaii State Department of
Budget and Finance,
(Hawaiian Electric Co.),
(MBIA), (AMT), 5.65%,
10/1/27 $ 1,067,469
Aaa AAA 500 Hawaii State Department of
Budget and Finance,
(Hawaiian Electric Co.,
Inc.), (MBIA), (AMT),
6.60%, 1/1/25 560,230
Aaa AAA 100 Puerto Rico Electric Power
Authority, "STRIPES",
(FSA), Variable
Rate, 7/1/03(1) 116,625
- -------------------------------------------------------------------------
$ 1,744,324
- -------------------------------------------------------------------------
Insured-General Obligations -- 14.9%
- -------------------------------------------------------------------------
Aaa AAA $ 350 Hawaii County, (FGIC),
5.55%, 5/1/10 $ 389,848
Aaa AAA 400 Hawaii State, (FGIC),
5.00%, 10/1/17 404,096
Aaa AAA 250 Honolulu, (FGIC),
5.00%, 11/1/16 254,883
Aaa AAA 305 Kauai County, (MBIA),
5.90%, 2/1/14 333,649
Aaa AAA 910 Maui County, (FGIC),
5.00%, 9/1/17 919,282
Aaa AAA 250 Maui County, (FGIC),
5.25%, 3/1/18 258,813
Aaa AAA 420 Maui County, (FGIC),
5.30%, 9/1/14 444,011
- -------------------------------------------------------------------------
$ 3,004,582
- -------------------------------------------------------------------------
See notes to financial statements
20
<PAGE>
Hawaii Municipals Portfolio as of January 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
Ratings (Unaudited) Principal
- ------------------ Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
Insured-Hospital -- 3.0%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Hawaii State Department of
Budget and Finance, (Queens
Health System), (MBIA),
5.00%, 7/1/28 $ 497,310
Aaa AAA 100 Hawaii State Department of
Budget and Finance, (St.
Francis Medical Center),
(FSA), 6.50%, 7/1/22 109,648
- -------------------------------------------------------------------------
$ 606,958
- -------------------------------------------------------------------------
Insured-Housing -- 2.5%
- -------------------------------------------------------------------------
Aaa AAA $ 480 Honolulu, Mortgage Revenue
Bonds, (Smith Beretania),
(FHA Insured) (MBIA),
7.80%, 7/1/24 $ 512,155
- -------------------------------------------------------------------------
$ 512,155
- -------------------------------------------------------------------------
Insured-Lease Revenue / Certificates of Participation -- 1.2%
- -------------------------------------------------------------------------
Aaa AAA $ 250 Hawaii State, (Kapolei
State Office Building),
(AMBAC),
5.00%, 5/1/18 $ 250,313
- -------------------------------------------------------------------------
$ 250,313
- -------------------------------------------------------------------------
Insured-Transportation -- 8.1%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Hawaii State Airports
System, (FGIC), (AMT),
7.50%, 7/1/20 $ 535,100
Aaa AAA 100 Hawaii State Airports
System, (MBIA), (AMT),
6.90%, 7/1/12 122,015
Aaa AAA 245 Hawaii State Airports
System, (MBIA), (AMT),
7.00%, 7/1/18 266,636
Aaa AAA 650 Hawaii State Harbor
Revenue, (FGIC), (AMT),
6.375%, 7/1/24 721,403
- -------------------------------------------------------------------------
$ 1,645,154
- -------------------------------------------------------------------------
Insured-Water and Sewer -- 5.3%
- -------------------------------------------------------------------------
Aaa AAA $1,000 Honolulu, City and County
Waste Water Systems,
(FGIC), 0.00%, 7/1/18 $ 380,320
Aaa AAA 730 Honolulu, City and County
Waterworks System Revenue,
(FGIC), 4.50%, 7/1/28 683,105
- -------------------------------------------------------------------------
$ 1,063,425
- -------------------------------------------------------------------------
Special Tax Revenue -- 2.8%
- -------------------------------------------------------------------------
NR AAA $ 300 Puerto Rico, Infrastructure
Financing Authority, $ 301,476
Variable Rate, 7/1/28(1)
NR BBB- 250 Virgin Islands PFA,
5.625%, 10/1/25 257,798
- -------------------------------------------------------------------------
$ 559,274
- -------------------------------------------------------------------------
Transportation -- 11.2%
- -------------------------------------------------------------------------
Aa3 AA $ 715 Hawaii State Highway
Revenue, 5.00%, 7/1/12 $ 734,520
Aa3 AA 250 Hawaii State Highway
Revenue, 5.50%, 7/1/18 271,770
Baa1 A 1,300 Puerto Rico Highway and
Transportation Authority,
4.75%, 7/1/38 1,260,544
- -------------------------------------------------------------------------
$ 2,266,834
- -------------------------------------------------------------------------
Water and Sewer -- 3.2%
- -------------------------------------------------------------------------
Aa3 AA $ 600 Honolulu, Water Supply
System, 5.80%, 7/1/16 $ 651,660
- -------------------------------------------------------------------------
$ 651,660
- -------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $18,724,580) $20,214,688
- -------------------------------------------------------------------------
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 January 31, 1999, 49.0% 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 1.1% to 24.7% of total investments.
(1) Security has been issued as an inverse floater bond.
See notes to financial statements
21
<PAGE>
Kansas Municipals Portfolio as of January 31, 1999
PORTFOLIO OF INVESTMENTS
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
Electric Utilities -- 1.3%
- -------------------------------------------------------------------------
NR BBB $ 150 Guam Power Authority,
6.625%, 10/1/14 $ 166,484
- -------------------------------------------------------------------------
$ 166,484
- -------------------------------------------------------------------------
Escrowed / Prerefunded -- 5.0%
- -------------------------------------------------------------------------
Aaa A- $ 415 Labette County, SFMR,
Escrowed to Maturity,
0.00%, 12/1/14 $ 195,477
Aaa NR 1,000 Saline County, SFMR, 1983
Series A, Escrowed to
Maturity, 0.00%, 12/1/15 437,510
- -------------------------------------------------------------------------
$ 632,987
- -------------------------------------------------------------------------
General Obligations -- 12.2%
- -------------------------------------------------------------------------
Aa3 NR $ 400 Douglas County, Unified
School District #497,
6.00%, 9/1/15 $ 435,844
Aa1 AA 890 Johnson County, Unified
School District #229,
5.00%, 10/1/16 906,357
Baa1 A 500 Puerto Rico, 0.00%, 7/1/18 196,385
- -------------------------------------------------------------------------
$ 1,538,586
- -------------------------------------------------------------------------
Hospital -- 6.3%
- -------------------------------------------------------------------------
NR NR $ 225 Atchison, (Atchison
Hospital Assn.), 5.70%,
11/15/18 $ 227,502
A3 NR 250 Lawrence, (Lawrence
Memorial Hospital), 6.20%,
7/1/19 267,078
NR BBB- 300 Newton, (Newton Healthcare
Corp.), 5.75%, 11/15/24 303,330
- -------------------------------------------------------------------------
$ 797,910
- -------------------------------------------------------------------------
Housing -- 22.2%
- -------------------------------------------------------------------------
Aaa NR $ 65 Kansas City, Mortgage
Revenue, (GNMA), (AMT),
5.30%, 5/1/07 $ 67,851
Aaa NR 65 Kansas City, Mortgage
Revenue, (GNMA), (AMT),
5.30%, 11/1/07 67,991
Aaa NR 155 Kansas City, Mortgage
Revenue, (GNMA), (AMT),
5.90%, 11/1/27 162,993
NR AAA 345 Kansas City, Mortgage
Revenue, (GNMA), (AMT),
7.00%, 12/1/11 364,982
NR AAA 220 Kansas City, Multifamily,
(FHA), 6.70%, 7/1/23 228,116
Aa NR 100 Kansas Development
Authority, Single Family,
(FHA), (Martin Creek),
6.60%, 8/1/34 105,738
Aaa NR 110 Olathe and Labette County,
SFMR, (GNMA), (AMT), 8.10%,
8/1/23 124,099
NR AAA 170 Olathe, Mortgage Revenue,
(GNMA), (AMT), 7.60%, 3/1/07 178,779
NR AAA 250 Olathe, Multifamily,
(FNMA), 6.45%, 6/1/19 268,308
NR AA 210 Puerto Rico Housing Finance
Corp., 7.50%, 4/1/22 221,903
Aaa NR 195 Sedgwick and Shawnee
County, SFMR, (GNMA),
7.75%, 11/1/24(1) 221,586
Aaa NR 350 Sedgwick County, SFMR,
(GNMA), 8.00%, 5/1/25 396,365
Aaa NR 35 Sedgwick County, SFMR,
(GNMA), 8.20%, 5/1/14 39,516
NR AAA 350 Wichita, Multifamily,
(Broadmoor Chelsea
Apartments), (FNMA), (AMT),
5.65%, 7/1/16 364,735
- -------------------------------------------------------------------------
$ 2,812,962
- -------------------------------------------------------------------------
Industrial Development Revenue -- 1.3%
- -------------------------------------------------------------------------
NR NR $ 160 Topeka IDA, (Resers Fine
Foods, Inc.), (AMT), 5.40%,
4/1/05 $ 160,829
- -------------------------------------------------------------------------
$ 160,829
- -------------------------------------------------------------------------
Insured-Education -- 2.0%
- -------------------------------------------------------------------------
Aaa AAA $ 250 Johnson County Community
College, (Student Commons
and Parking Systems),
(MBIA), 5.05%, 11/15/21 $ 251,228
- -------------------------------------------------------------------------
$ 251,228
- -------------------------------------------------------------------------
Insured-Electric Utilities -- 11.0%
- -------------------------------------------------------------------------
Aaa AAA $ 345 Burlington PCR, (Kansas Gas
& Electric Co.), (MBIA),
7.00%, 6/1/31(1) $ 375,943
Aaa AAA 100 Puerto Rico Electric Power
Authority, "STRIPES",
(FSA), Variable
Rate, 7/1/02(2) 113,125
Aaa AAA 500 Puerto Rico Electric Power
Authority, (FSA), 4.75%,
7/1/21 491,515
Aaa AAA 400 Wellington Electric
Waterworks and Authority
Revenue, (AMBAC),
5.20%, 5/1/23 409,560
- -------------------------------------------------------------------------
$ 1,390,143
- -------------------------------------------------------------------------
See notes to financial statements
22
<PAGE>
Kansas Municipals Portfolio as of January 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
Insured-General Obligations -- 13.5%
- -------------------------------------------------------------------------
Aaa AAA $ 200 Harvey County, Unified
School District #373,
(FSA), 4.80%, 9/1/18 $ 199,212
Aaa AAA 200 Johnson County, Unified
School District #231,
(FGIC), 6.00%, 10/1/16 233,472
Aaa AAA 200 Kansas City, Utility
Systems, (FGIC),
6.375%, 9/1/23 226,614
Aaa AAA 500 Sedgwick County, Unified
School District #267,
(AMBAC), 5.00%, 11/1/19 502,650
Aaa AAA 250 Sedgwick County, Unified
School District #267,
(AMBAC), 6.15%, 11/1/09 286,220
Aaa AAA 230 Sedgwick County, Unified
School District #267,
(AMBAC), 6.15%, 11/1/10 263,322
- -------------------------------------------------------------------------
$ 1,711,490
- -------------------------------------------------------------------------
Insured-Hospital -- 12.2%
- -------------------------------------------------------------------------
Aaa NR $ 250 Kansas State DFA, (Medical
Center Inc.), (MBIA),
5.50%, 11/15/22 $ 261,230
Aaa AAA 500 Kansas State DFA, (St.
Luke's), (MBIA), 5.375%,
11/15/26 515,710
Aaa AAA 500 Kansas State DFA,
(Stormont-Vail) (MBIA),
5.80%, 11/15/11 551,035
Aaa AAA 200 Olathe, Health Facilities,
(Evangelical Lutheran Good
Samaritan Society),
(AMBAC), 6.00%, 5/1/19 219,670
- -------------------------------------------------------------------------
$ 1,547,645
- -------------------------------------------------------------------------
Insured-Housing -- 2.9%
- -------------------------------------------------------------------------
NR AA $ 100 Puerto Rico Housing Finance
Corp., (AMBAC), 7.50%,
10/1/11 $ 103,205
Aaa AAA 165 Sedgwick County, Mortgage
Loan Revenue, (MBIA),
(GNMA), (AMT), 7.50%,
12/1/09 170,996
Aaa AAA 85 Sedgwick County, Mortgage
Loan Revenue, (MBIA),
(GNMA), (AMT), 7.50%,
12/1/10 88,089
- -------------------------------------------------------------------------
$ 362,290
- -------------------------------------------------------------------------
Insured-Senior Living / Life Care -- 4.0%
- -------------------------------------------------------------------------
Aaa AAA $ 500 Kansas State DFA, (Sisters
Of Charity Leavenworth),
(MBIA), 5.00%, 12/1/25 $ 500,165
- -------------------------------------------------------------------------
$ 500,165
- -------------------------------------------------------------------------
Insured-Water and Sewer -- 3.0%
- -------------------------------------------------------------------------
Aaa AAA $ 400 Wyandotte County & Kansas
City, (MBIA), 4.50%, 9/1/28 $ 377,212
- -------------------------------------------------------------------------
$ 377,212
- -------------------------------------------------------------------------
Transportation -- 3.1%
- -------------------------------------------------------------------------
Baa1 A- $ 400 Puerto Rico Highway and
Transportation Authority,
5.00%, 7/1/22 $ 398,072
- -------------------------------------------------------------------------
$ 398,072
- -------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $12,002,845) $12,648,003
- -------------------------------------------------------------------------
AMT - Interest earned from these securities may be considered a
tax preference item for purposes of the Federal Alternative Minimum
Tax.
The Portfolio invests primarily in debt securities issued by Kansas
municipalities. The ability of the issuers of the debt securities to meet
their obligations may be affected by economic developments in a specific
industry or municipality. In order to reduce the risk associated with
such economic developments, at January 31, 1999, 48.5% 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 3.6% to 24.4% of total
investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(2) Security has been issued as an inverse floater bond.
See notes to financial statements
23
<PAGE>
Eaton Vance Municipals Portfolios as of January 31, 1999
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
As of January 31, 1999
<TABLE>
<CAPTION>
Florida
Insured Hawaii Kansas
Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
- -----------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $26,336,636 $18,724,580 $12,002,845
Unrealized appreciation 2,122,304 1,490,108 645,158
- -----------------------------------------------------------------------------------------------------------------
Investments, at value $28,458,940 $20,214,688 $12,648,003
- -----------------------------------------------------------------------------------------------------------------
Cash $ 1,128,707 $ 868 $ 41,719
Receivable for investments sold -- -- 25,399
Interest receivable 420,328 188,551 150,226
Receivable from the Investment Adviser 3,403 17,604 17,654
Deferred organization expenses 201 331 184
- -----------------------------------------------------------------------------------------------------------------
Total assets $30,011,579 $20,422,042 $12,883,185
- -----------------------------------------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------------------------------------
Payable for when-issued securities $ 1,867,805 $ -- $ --
Demand note payable -- 30,000 --
Payable for daily variation margin on open financial futures contracts -- -- 187
Payable to affiliate for Trustees' fees -- 64 64
Other accrued expenses 4,158 2,430 1,656
- -----------------------------------------------------------------------------------------------------------------
Total liabilities $ 1,871,963 $ 32,494 $ 1,907
- -----------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $28,139,616 $20,389,548 $12,881,278
- -----------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- -----------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $26,017,312 $18,899,440 $12,236,907
Net unrealized appreciation (computed on the basis of identified cost) 2,122,304 1,490,108 644,371
- -----------------------------------------------------------------------------------------------------------------
Total $28,139,616 $20,389,548 $12,881,278
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
24
<PAGE>
Eaton Vance Municipals Portfolios as of January 31, 1999
FINANCIAL STATEMENTS CONT'D
Statement of Operations
For the Year Ended January 31, 1999
<TABLE>
<CAPTION>
Florida Insured Hawaii Kansas
Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
- ------------------------------------------------------------------------------------------------
Interest $ 1,375,409 $ 1,069,839 $ 641,820
- ------------------------------------------------------------------------------------------------
Total investment income $ 1,375,409 $ 1,069,839 $ 641,820
- ------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------
Investment adviser fee $ 48,856 $ 30,797 $ 18,618
Trustees fees and expenses 1,887 319 319
Custodian fee 18,457 15,097 11,733
Legal and accounting services 1,134 1,132 4,690
Amortization of organization expenses 2,430 2,078 2,196
Miscellaneous 5,271 6,317 6,098
- ------------------------------------------------------------------------------------------------
Total expenses $ 78,035 $ 55,740 $ 43,654
- ------------------------------------------------------------------------------------------------
Deduct --
Reduction of investment adviser fee $ 28,821 $ 30,797 $ 18,618
Allocation of expenses to the Investment Adviser 3,403 17,604 17,654
Reduction of custodian fee 18,364 7,339 7,382
- ------------------------------------------------------------------------------------------------
Total expense reductions $ 50,588 $ 55,740 $ 43,654
- ------------------------------------------------------------------------------------------------
Net expenses $ 27,447 $ -- $ --
- ------------------------------------------------------------------------------------------------
Net investment income $ 1,347,962 $ 1,069,839 $ 641,820
- ------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 75,215 $ 295,989 $ 101,748
Financial futures contracts 12,205 (28,986) (28,004)
- ------------------------------------------------------------------------------------------------
Net realized gain $ 87,420 $ 267,003 $ 73,744
- ------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 288,779 $ (101,778) $ 16,060
Financial futures contracts 12,983 12,298 5,582
- ------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ 301,762 $ (89,480) $ 21,642
- ------------------------------------------------------------------------------------------------
Net realized and unrealized gain $ 389,182 $ 177,523 $ 95,386
- ------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 1,737,144 $ 1,247,362 $ 737,206
- ------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
25
<PAGE>
Eaton Vance Municipals Portfolios as of January 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 January 31, 1999
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended January 31, 1998
<TABLE>
<CAPTION>
Florida Insured Hawaii Kansas
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
From operations --
Net investment income $ 1,337,092 $ 1,031,743 $ 666,134
Net realized gain 301,794 269,040 86,194
Net change in unrealized appreciation (depreciation) 811,156 513,990 382,975
- ---------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 2,450,042 $ 1,814,773 $ 1,135,303
- ---------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 5,342,239 $ 4,723,447 $ 1,495,952
Withdrawals (7,146,067) (2,688,011) (2,948,351)
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital transactions $ (1,803,828) $ 2,035,436 $ (1,452,399)
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ 646,214 $ 3,850,209 $ (317,096)
- ---------------------------------------------------------------------------------------------------------------
Net Assets
- ---------------------------------------------------------------------------------------------------------------
At beginning of year $ 24,203,859 $ 16,013,925 $ 11,735,720
- ---------------------------------------------------------------------------------------------------------------
At end of year $ 24,850,073 $ 19,864,134 $ 11,418,624
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
27
<PAGE>
Eaton Vance Municipals Portfolios as of January 31, 1999
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Florida Insured Portfolio
---------------------------------------------------
Year Ended January 31,
---------------------------------------------------
1999 1998 1997 1996 1995(1)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets+
- ----------------------------------------------------------------------------------------------
Net expenses(2) 0.18% 0.07% 0.09% 0.07% 0.01%(3)
Net expenses after custodian fee 0.11% 0.00% 0.02% 0.00% --
reduction
Net investment income 5.21% 5.63% 5.76% 5.82% 5.73%(3)
Portfolio Turnover 9% 34% 36% 32% 33%
- ----------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $28,140 $24,850 $24,204 $21,416 $14,400
- ----------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolios 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:
<CAPTION>
<S> <C> <C> <C> <C> <C>
Expenses(2) 0.30% 0.48% 0.39% 0.39% 0.41%(3)
Expenses after custodian fee 0.23% 0.41% 0.32% 0.32% --
reduction
Net investment income 5.09% 5.22% 5.46% 5.50% 5.33%(3)
- ----------------------------------------------------------------------------------------------
<CAPTION>
Hawaii Portfolio
---------------------------------------------------
Year Ended January 31,
---------------------------------------------------
1999 1998 1997 1996 1995(1)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets+
- ----------------------------------------------------------------------------------------------
Net expenses(2) 0.04% 0.03% 0.04% 0.06% 0.06%(3)
Net expenses after custodian fee 0.00% 0.00% 0.00% 0.00% --
reduction
Net investment income 5.39% 5.70% 5.96% 6.01% 6.03%(3)
Portfolio Turnover 29% 27% 21% 19% 66%
- ----------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $20,390 $19,864 $16,014 $15,578 $12,865
- ----------------------------------------------------------------------------------------------
+ The operating expenses of the Portfolios 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:
<CAPTION>
<S> <C> <C> <C> <C> <C>
Expenses(2) 0.28% 0.46% 0.43% 0.41% 0.38%(3)
Expenses after custodian fee 0.24% 0.43% 0.39% 0.35% --
reduction
Net investment income 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 Portfolios to increase their
expense ratios by the effect of any expense offset arrangements with their
service providers. The expense ratios for each of the prior periods have not
been adjusted to reflect this change.
(3) Annualized.
See notes to financial statements
28
<PAGE>
Eaton Vance Municipals Portfolios as of January 31, 1999
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Kansas Portfolio
--------------------------------------------------------------------
Year Ended January 31,
--------------------------------------------------------------------
1999 1998 1997 1996 1995(1)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets+
- ----------------------------------------------------------------------------------------------------------------------
Net expenses(2) 0.06% 0.05% 0.08% 0.09% 0.01%(3)
Net expenses after custodian fee reduction 0.00% 0.00% 0.00% 0.00% --
Net investment income 5.34% 5.79% 5.91% 5.93% 5.68%(3)
Portfolio Turnover 33% 17% 49% 21% 12%
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $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:
<CAPTION>
<S> <C> <C> <C> <C> <C>
Expenses(2) 0.36% 0.57% 0.48% 0.50% 0.43%(3)
Expenses after custodian fee reduction 0.30% 0.52% 0.40% 0.41% --
Net investment income 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 January 31, 1999
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
------------------------------------------------------------------------------
Florida Insured Municipals Portfolio ("Florida Insured Portfolio"), Hawaii
Municipals Portfolio ("Hawaii Portfolio") and Kansas Municipals Portfolio
("Kansas Portfolio"), collectively the Portfolios, are registered under the
Investment Company Act of 1940, as 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
30
<PAGE>
Eaton Vance Municipals Portfolios as of January 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
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.
2 Investment Adviser Fee and Other Transactions with Affiliates
------------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation for
management and investment advisory services rendered to each Portfolio. The
fee is based upon a percentage of average daily net assets plus a percentage
of gross income (i.e., income other than gains from the sale of securities).
For the year ended January 31, 1999, each Portfolio incurred advisory fees as
follows:
Portfolio Amount Effective Rate*
------------------------------------------------------------------------------
Florida Insured $48,856 0.19%
Hawaii 30,797 0.16%
Kansas 18,618 0.15%
* As a percentage of average daily net assets.
To enhance the net income of the Florida Insured Portfolio, Hawaii Portfolio
and Kansas Portfolio, BMR made a reduction of its fee in the amount of
$28,821, $30,797 and $18,618, respectively, and $3,403, $17,604 and $17,654,
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 of the officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations.
Trustees of the Portfolios that are not affiliated with the Investment Adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of the Trustees Deferred Compensation Plan. For the
year ended January 31, 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 year ended January 31,
1999 were as follows:
Florida Insured Portfolio
------------------------------------------------------------------------------
Purchases $ 5,967,242
Sales 2,370,428
Hawaii Portfolio
------------------------------------------------------------------------------
Purchases $ 6,349,648
Sales 5,697,572
Kansas Portfolio
------------------------------------------------------------------------------
Purchases $ 4,946,778
Sales 3,906,251
4 Federal Income Tax Basis of Investments
-----------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at January 31, 1999, as computed on a
federal income tax basis, are as follows:
Florida Insured Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 26,336,636
------------------------------------------------------------------------------
Gross unrealized appreciation $ 2,147,073
Gross unrealized depreciation (24,769)
------------------------------------------------------------------------------
Net unrealized appreciation $ 2,122,304
------------------------------------------------------------------------------
31
<PAGE>
Eaton Vance Municipals Portfolios as of January 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
Hawaii Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 18,724,580
------------------------------------------------------------------------------
Gross unrealized appreciation $ 1,501,775
Gross unrealized depreciation (11,667)
------------------------------------------------------------------------------
Net unrealized appreciation $ 1,490,108
------------------------------------------------------------------------------
Kansas Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 12,002,845
------------------------------------------------------------------------------
Gross unrealized appreciation $ 645,158
Gross unrealized depreciation --
------------------------------------------------------------------------------
Net unrealized appreciation $ 645,158
------------------------------------------------------------------------------
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. At January 31, 1999, the Hawaii Portfolio had a
balance outstanding pursuant to this line of credit of $30,000. The Portfolios
did not have any significant borrowings or allocated fees during the year
ended January 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.
A summary of obligations under these financial instruments at January 31,
1999, is as follows:
Futures
Contracts
Expiration Net Unrealized
Portfolio Date Contracts Position Depreciation
------------------------------------------------------------------------------
Kansas 3/99 1 U.S. Treasury Bond Short $787
------------------------------------------------------------------------------
At January 31, 1999, the Portfolio had sufficient cash and/or securities to
cover margin requirements on open futures contracts.
32
<PAGE>
Eaton Vance Municipals Portfolios as of January 31, 1999
INDEPENDENT AUDITORS' REPORT
To the Trustees and Investors of
Florida Insured Municipals Portfolio
Hawaii Municipals Portfolio
Kansas Municipals Portfolio:
- --------------------------------------------------------------------------------
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Florida Insured Municipals Portfolio, Hawaii
Municipals Portfolio and Kansas Municipals Portfolio as of January 31, 1999, the
related statements of operations for the year then ended, the statements of
changes in net assets for the years ended January 31, 1999 and 1998 and the
supplementary data for each of the four years in the period ended January 31,
1999 and for the period from the start of business, March 2, 1994, to January
31, 1995. These financial statements and supplementary data are the
responsibility of each Portfolio's management. Our responsibility is to express
an opinion on these financial statements and supplementary data based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities held as of
January 31, 1999 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other audit procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial position of Florida Insured Municipals
Portfolio, Hawaii Municipals Portfolio and Kansas Municipals Portfolio at
January 31, 1999, and the results of their operations, the changes in their net
assets, and their supplementary data for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
March 5, 1999
33
<PAGE>
Eaton Vance Municipals Portfolio as of January 31, 1999
Municipals Portfolios
Officers
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Cynthia J. Clemson
Vice President
Portfolio Manager of Florida
Insured Municipals Portfolio
Robert B. MacIntosh
Vice President
Portfolio Manager of Hawaii
Municipals Portfolio
Timothy T. Browse
Vice President
Portfolio Manager of Kansas
Municipals Portfolio
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Independent Trustees
Jessica M. Bibliowicz
President and Chief Operating Officer,
John A. Levin & Co.
Director, Baker, Fentress & Company
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
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
34
