<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited)
Statements of Assets and Liabilities
As of February 28, 1998
<TABLE>
<CAPTION>
Alabama Portfolio Arkansas Portfolio Georgia Portfolio Kentucky Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Investments --
Identified cost $87,219,402 $53,904,584 $82,080,212 $108,588,633
Unrealized appreciation 8,596,826 4,490,308 7,628,833 9,836,085
- ------------------------------------------------------------------------------------------------------------------------------------
Investments at value (Note 1A) $95,816,228 $58,394,892 $89,709,045 $118,424,718
- ------------------------------------------------------------------------------------------------------------------------------------
Cash $ 1,266,417 $ 83 $ 81 $ 332,769
Receivable for investments sold -- 657,405 1,503,017 --
Interest receivable 1,512,913 901,009 1,189,872 1,922,429
Deferred organization expenses (Note 1D) -- 1,505 42 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $98,595,558 $59,954,894 $92,402,057 $120,679,916
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for when-issued securities (Note 1G) $ -- $ -- $ 490,018 $ 1,809,200
Demand note payable (Note 5) -- 665,000 552,000 --
Payable for daily variation margin on open financial
futures contracts (Note 1E) 13,781 3,938 13,500 16,875
Payable to affiliate for Trustees' fees (Note 2) 1,451 5,255 1,122 1,436
Accrued expenses 15,733 11,525 11,293 13,995
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 30,965 $ 685,718 $ 1,067,933 $ 1,841,506
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in
Portfolio $98,564,593 $59,269,176 $91,334,124 $118,838,410
- ------------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and
withdrawals $89,973,531 $54,787,261 $83,709,132 $109,007,126
Net unrealized appreciation of investments
(computed on the basis of identified cost) 8,591,062 4,481,915 7,624,992 9,831,284
- ------------------------------------------------------------------------------------------------------------------------------------
Total $98,564,593 $59,269,176 $91,334,124 $118,838,410
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
95
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Assets and Liabilities
As of February 28, 1998
<TABLE>
<CAPTION>
Louisiana Maryland Missouri North Carolina
Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments --
Identified cost $ 33,028,050 $100,786,895 $ 70,126,590 $139,689,431
Unrealized appreciation 2,153,479 6,931,533 7,726,055 14,604,568
- ------------------------------------------------------------------------------------------------------------------------------------
Investments at value (Note 1A) $ 35,181,529 $107,718,428 $ 77,852,645 $154,293,999
- ------------------------------------------------------------------------------------------------------------------------------------
Cash $ 621,262 $ 1,720,743 $ 142,983 $ 491,000
Receivable for investments sold -- -- 5,000 50,000
Interest receivable 576,308 1,426,264 970,845 2,325,414
Deferred organization expenses (Note 1D) 1,384 75 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 36,380,483 $110,865,510 $ 78,971,473 $157,160,413
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased $ 1,388,504 $ -- $ -- $ --
Payable for when-issued securities (Note 1G) 468,880 5,234,413 -- 674,162
Payable for variation margin on open financial futures
contracts (Note 1E) 4,781 7,312 11,250 21,094
Payable to affiliate for Trustees' fees (Note 2) 280 1,436 1,122 1,870
Accrued expenses 3,993 12,478 7,435 17,600
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 1,866,438 $ 5,255,639 $ 19,807 $ 714,726
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $ 34,514,045 $105,609,871 $ 78,951,666 $156,445,687
- ------------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $ 32,362,777 $ 98,693,925 $ 71,228,812 $141,850,874
Net unrealized appreciation of investments (computed on the
basis of identified cost) 2,151,268 6,915,946 7,722,854 14,594,813
- ------------------------------------------------------------------------------------------------------------------------------------
Total $ 34,514,045 $105,609,871 $ 78,951,666 $156,445,687
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
96
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Assets and Liabilities
As of February 28, 1998
<TABLE>
<CAPTION>
South Carolina Tennessee
Assets Oregon Portfolio Portfolio Portfolio Virginia Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments --
Identified cost $ 99,512,231 $ 48,723,252 $ 49,198,539 $140,880,567
Unrealized appreciation 7,911,783 4,707,082 4,228,450 13,410,196
- ------------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Note 1A) $107,424,014 $ 53,430,334 $ 53,426,989 $154,290,763
- ------------------------------------------------------------------------------------------------------------------------------------
Cash $ 152,824 $ 187,073 $ 493 $ 116,118
Interest receivable 1,477,875 728,046 768,384 2,379,833
Deferred organization expenses (Note 1D) -- 1,384 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $109,054,713 $ 54,346,837 $ 54,195,866 $156,786,714
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for when-issued securities (Note 1G) $ -- $ 1,178,745 $ -- $ --
Demand note payable (Note 5) -- -- 181,000 --
Payable for daily variation margin on open
financial futures contracts (Note 1E) -- 11,250 7,875 11,531
Payable to affiliate for Trustees' fees (Note 2) 1,452 5,255 2,997 1,870
Accrued expenses 10,614 9,602 4,617 23,605
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities $ 12,066 $ 1,204,852 $ 196,489 $ 37,006
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $109,042,647 $ 53,141,985 $ 53,999,377 $156,749,708
- ------------------------------------------------------------------------------------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $101,130,864 $ 48,441,393 $ 49,773,167 $143,364,092
Net unrealized appreciation of investments (computed on the
basis of identified cost) 7,911,783 4,700,592 4,226,210 13,385,616
- ------------------------------------------------------------------------------------------------------------------------------------
Total $109,042,647 $ 53,141,985 $ 53,999,377 $156,749,708
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
97
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
<TABLE>
<CAPTION>
For the Six Months Ended February 28, 1998
Alabama Portfolio Arkansas Portfolio Georgia Portfolio Kentucky Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest income $ 2,859,405 $ 1,737,589 $ 2,716,113 $ 3,559,592
- ------------------------------------------------------------------------------------------------------------------------------------
Total income $ 2,859,405 $ 1,737,589 $ 2,716,113 $ 3,559,592
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 187,142 $ 96,193 $ 171,727 $ 240,241
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 2,486 -- 1,525 2,007
Custodian fee (Note 1I) 31,831 22,308 27,762 36,048
Legal and accounting services 25,602 23,500 23,499 25,600
Amortization of organization expenses (Note 1D) 615 660 1,076 511
Miscellaneous 12,443 7,843 5,852 3,982
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 260,119 $ 150,504 $ 231,441 $ 308,389
- ------------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1I) $ 5,656 $ 4,399 $ 7,478 $ 8,952
- ------------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 5,656 $ 4,399 $ 7,478 $ 8,952
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 254,463 $ 146,105 $ 223,963 $ 299,437
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 2,604,942 $ 1,591,484 $ 2,492,150 $ 3,260,155
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 595,134 $ 536,316 $ 1,047,900 $ 1,111,625
Financial futures contracts (563,613) (255,994) (401,179) (454,932)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment transactions $ 31,521 $ 280,322 $ 646,721 $ 656,693
- ------------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 1,909,955 $ 1,123,032 $ 1,524,390 $ 1,824,655
Financial futures contracts 22,154 (21,589) 34,814 31,170
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments $ 1,932,109 $ 1,101,443 $ 1,559,204 $ 1,855,825
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 1,963,630 $ 1,381,765 $ 2,205,925 $ 2,512,518
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 4,568,572 $ 2,973,249 $ 4,698,075 $ 5,772,673
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
98
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
For the Six Months Ended February 28, 1998
<TABLE>
<CAPTION>
Louisiana Maryland Missouri North Carolina
Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest income $ 1,005,879 $ 2,982,945 $ 2,281,303 $ 4,696,575
- ------------------------------------------------------------------------------------------------------------------------------------
Total income $ 1,005,879 $ 2,982,945 $ 2,281,303 $ 4,696,575
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 39,212 $ 202,356 $ 137,655 $ 335,671
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 836 4,455 3,230 3,507
Custodian fee (Note 1I) 14,015 38,433 25,654 46,865
Legal and accounting services 16,900 25,600 20,000 25,600
Amortization of organization expenses (Note 1D) 664 749 549 1,583
Miscellaneous 1,906 4,914 4,835 13,893
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 73,533 $ 276,507 $ 191,923 $ 427,119
- ------------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1I) $ 7,271 $ 24,741 $ 4,832 $ 18,737
- ------------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 7,271 $ 24,741 $ 4,832 $ 18,737
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 66,262 $ 251,766 $ 187,091 $ 408,382
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 939,617 $ 2,731,179 $ 2,094,212 $ 4,288,193
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost
basis) $ 393,633 $ 1,060,741 $ 686,800 $ 2,470,431
Financial futures contracts (178,020) (398,376) (331,310) (1,024,189)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment transactions $ 215,613 $ 662,365 $ 355,490 $ 1,446,242
- ------------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 447,372 $ 1,847,502 $ 1,734,837 $ 2,089,664
Financial futures contracts 18,190 (36,114) 29,012 102,989
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments $ 465,562 $ 1,811,388 $ 1,763,849 $ 2,192,653
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments $ 681,175 $ 2,473,753 $ 2,119,339 $ 3,638,895
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 1,620,792 $ 5,204,932 $ 4,213,551 $ 7,927,088
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
99
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Operations
For the Six Months Ended February 28, 1998
<TABLE>
<CAPTION>
Oregon South Carolina Tennessee Virginia
Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income (Note 1B)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest income $ 3,217,520 $ 1,567,164 $ 1,552,188 $ 4,620,957
- ------------------------------------------------------------------------------------------------------------------------------------
Total income $ 3,217,520 $ 1,567,164 $ 1,552,188 $ 4,620,957
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 213,913 $ 79,364 $ 81,019 $ 328,450
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 4,227 -- 5,105 3,507
Custodian fee (Note 1I) 33,613 15,819 20,497 54,084
Legal and accounting services 22,044 23,501 20,000 25,501
Amortization of organization expenses (Note 1D) 848 707 1,084 1,258
Interest expense -- 7,629 -- --
Miscellaneous 6,037 2,629 1,514 13,207
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses $ 280,682 $ 129,649 $ 129,219 $ 426,007
- ------------------------------------------------------------------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1I) $ 6,485 $ -- $ 6,409 $ 14,184
- ------------------------------------------------------------------------------------------------------------------------------------
Total expense reductions $ 6,485 $ -- $ 6,409 $ 14,184
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses $ 274,197 $ 129,649 $ 122,810 $ 411,823
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 2,943,323 $ 1,437,515 $ 1,429,378 $ 4,209,134
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost
basis) $ 949,588 $ 622,499 $ 365,718 $ 2,284,353
Financial futures contracts (327,439) (15,862) (234,394) (626,776)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investment transactions $ 622,149 $ 606,637 $ 131,324 $ 1,657,577
- ------------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 1,522,983 $ 649,027 $ 928,076 $ 1,781,654
Financial futures contracts (50,937) (6,490) 20,309 (56,837)
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments $ 1,472,046 $ 642,537 $ 948,385 $ 1,724,817
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 2,094,195 $ 1,249,174 $ 1,079,709 $ 3,382,394
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 5,037,518 $ 2,686,689 $ 2,509,087 $ 7,591,528
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
100
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended February 28, 1998
<TABLE>
<CAPTION>
Alabama Arkansas Georgia Kentucky
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 2,604,942 $ 1,591,484 $ 2,492,150 $ 3,260,155
Net realized gain on investment transactions 31,521 280,322 646,721 656,693
Net change in unrealized appreciation
(depreciation) of investments 1,932,109 1,101,443 1,559,204 1,855,825
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 4,568,572 $ 2,973,249 $ 4,698,075 $ 5,772,673
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 2,713,155 $ 933,140 $ 1,833,123 $ 2,308,262
Withdrawals (11,073,131) (7,323,031) (10,359,141) (12,352,729)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $ (8,359,976) $ (6,389,891) $ (8,526,018) $ (10,044,467)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (3,791,404) $ (3,416,642) $ (3,827,943) $ (4,271,794)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of period $ 102,355,997 $ 62,685,818 $ 95,162,067 $ 123,110,204
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $ 98,564,593 $ 59,269,176 $ 91,334,124 $ 118,838,410
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
101
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended February 28, 1998
<TABLE>
<CAPTION>
Louisiana Maryland Missouri North Carolina
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 939,617 $ 2,731,179 $ 2,094,212 $ 4,288,193
Net realized gain on investment transactions 215,613 662,365 355,490 1,446,242
Net change in unrealized appreciation
(depreciation) of investments 465,562 1,811,388 1,763,849 2,192,653
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 1,620,792 $ 5,204,932 $ 4,213,551 $ 7,927,088
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 1,604,720 $ 3,114,767 $ 2,263,089 $ 3,418,506
Withdrawals (3,143,596) (10,110,915) (7,406,690) (22,470,871)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $ (1,538,876) $ (6,996,148) $ (5,143,601) $ (19,052,365)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets $ 81,916 $ (1,791,216) $ (930,050) $ (11,125,277)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of period $ 34,432,129 $ 107,401,087 $ 79,881,716 $ 167,570,964
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $ 34,514,045 $ 105,609,871 $ 78,951,666 $ 156,445,687
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
102
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS (Unaudited) CONT'D
Statements of Changes in Net Assets
For the Six Months Ended February 28, 1998
<TABLE>
<CAPTION>
Oregon South Carolina Tennessee Virginia
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 2,943,323 $ 1,437,515 $ 1,429,378 $ 4,209,134
Net realized gain on investment transactions 622,149 606,637 131,324 1,657,577
Net change in unrealized appreciation
(depreciation) of investments 1,472,046 642,537 948,385 1,724,817
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 5,037,518 $ 2,686,689 $ 2,509,087 $ 7,591,528
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 1,533,124 $ 1,305,961 $ 2,195,745 $ 3,574,464
Withdrawals (11,220,761) (4,820,590) (4,867,135) (16,073,816)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital
transactions $ (9,687,637) $ (3,514,629) $ (2,671,390) $ (12,499,352)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (4,650,119) $ (827,940) $ (162,303) $ (4,907,824)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of period $ 113,692,766 $ 53,969,925 $ 54,161,680 $ 161,657,532
- ------------------------------------------------------------------------------------------------------------------------------------
At end of period $ 109,042,647 $ 53,141,985 $ 53,999,377 $ 156,749,708
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
103
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended August 31, 1997
<TABLE>
<CAPTION>
Increase (Decrease) in Net Assets Alabama Arkansas Georgia Kentucky
Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 5,801,367 $ 3,707,520 $ 5,659,411 $ 7,114,833
Net realized gain (loss) on investments 36,452 (196,863) 619,588 790,878
Net change in unrealized appreciation
(depreciation) of investments 3,859,164 2,344,431 2,869,835 4,675,966
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 9,696,983 $ 5,855,088 $ 9,148,834 $ 12,581,677
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 4,814,194 $ 1,860,201 $ 5,129,603 $ 4,738,142
Withdrawals (20,698,730) (19,132,688) (28,090,665) (27,227,068)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital transactions $ (15,884,536) $ (17,272,487) $ (22,961,062) $ (22,488,926)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (6,187,553) $ (11,417,399) $ (13,812,228) $ (9,907,249)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 108,543,550 $ 74,103,217 $ 108,974,295 $ 133,017,453
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 102,355,997 $ 62,685,818 $ 95,162,067 $ 123,110,204
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
104
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended August 31, 1997
<TABLE>
<CAPTION>
Louisiana Maryland Missouri North Carolina
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 2,044,687 $ 5,868,209 $ 4,530,872 $ 9,890,637
Net realized gain on investment transactions 17,105 583,641 47,598 2,200,237
Net change in unrealized appreciation
(depreciation) of investments 1,149,891 3,765,437 3,709,574 4,378,307
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 3,211,683 $ 10,217,287 $ 8,288,044 $ 16,469,181
- -----------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 2,993,205 $ 6,463,344 $ 2,387,301 $ 5,496,793
Withdrawals (6,821,430) (19,867,889) (15,955,992) (41,439,395)
- -----------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital transactions $ (3,828,225) $ (13,404,545) $ (13,568,691) $ (35,942,602)
- -----------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (616,542) $ (3,187,258) $ (5,280,647) $ (19,473,421)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 35,048,671 $ 110,588,345 $ 85,162,363 $ 187,044,385
- -----------------------------------------------------------------------------------------------------------------------------------
At end of year $ 34,432,129 $ 107,401,087 $ 79,881,716 $ 167,570,964
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
105
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
For the Year Ended August 31, 1997
<TABLE>
<CAPTION>
Oregon South Carolina Tennessee Virginia
Increase (Decrease) in Net Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations --
Net investment income $ 6,643,900 $ 3,172,029 $ 3,029,119 $ 9,461,124
Net realized gain (loss) on investment transactions (379,737) (187,278) (147,294) 1,844,132
Net change in unrealized appreciation
(depreciation) of investments 3,337,142 2,182,137 2,422,406 4,117,767
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 9,601,305 $ 5,166,888 $ 5,304,231 $ 15,423,023
- ------------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 5,759,540 $ 2,536,482 $ 3,539,000 $ 7,439,212
Withdrawals (31,426,734) (12,051,592) (10,746,904) (38,849,024)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from capital transactions $ (25,667,194) $ (9,515,110) $ (7,207,904) $ (31,409,812)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets $ (16,065,889) $ (4,348,222) $ (1,903,673) $ (15,986,789)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
At beginning of year $ 129,758,655 $ 58,318,147 $ 56,065,353 $ 177,644,321
- ------------------------------------------------------------------------------------------------------------------------------------
At end of year $ 113,692,766 $ 53,969,925 $ 54,161,680 $ 161,657,532
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
106
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Alabama Portfolio
----------------------------------------------------------------------------------------
Year Ended
--------------------------------------------------------------------
Six Months Ended August 31, Sept. 30,
February 28, 1998 ---------------------------------------------------- ---------------
(Unaudited) 1997 1996 1995 1994* 1993**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:++
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses /(1)/ 0.53%+ 0.50% 0.49% 0.47% 0.44%+ 0.25%+
Net expenses after custodian
fee reduction 0.51%+ 0.49% 0.45% -- -- --
Net investment income 5.26%+ 5.47% 5.50% 5.77% 5.37%+ 5.52%+
Portfolio Turnover 9% 23% 52% 51% 26% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 98,565 $ 102,356 $ 108,544 $ 118,486 $ 117,163 $ 83,628
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Portfolio may reflect a reduction of the
investment adviser fee, an allocation of expenses to the Adviser, or
both. Had such actions not been taken, the ratios would have been as
follows:
<TABLE>
<S> <C>
Expenses /(1)/ 0.35%+
Net investment income 5.42%+
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to
September 30, 1993.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
107
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Arkansas Portfolio
------------------------------------------------------------------
Year Ended
-----------------------------------------------
Six Months Ended August 31,
February 28, 1998 -----------------------------------------------
(Unaudited) 1997 1996 1995 1994*
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets:++
- -----------------------------------------------------------------------------------------------------------------------
Net expenses/(1)/ 0.50%+ 0.49% 0.48% 0.46% 0.24%+
Net expenses after custodian fee reduction 0.48%+ 0.48% 0.46% -- --
Net investment income 5.25%+ 5.40% 5.40% 5.69% 5.60%+
Portfolio Turnover 9% 17% 11% 23% 16%
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $59,269 $62,686 $74,103 $81,535 $82,917
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Portfolio may reflect a reduction of the
investment adviser fee, an allocation of expenses to the Adviser, or both.
Had such actions not been taken, the ratios would have been as follows:
<TABLE>
<S> <C>
Expenses/(1)/ 0.43%+
Net investment income 5.41%+
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, February 1, 1994 to August 31,
1994.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
108
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Georgia Portfolio
--------------------------------------------------------------------------------
Year Ended
--------------------------------------------------------------
Six Months Ended August 31, Sept. 30,
February 28, 1998 ------------------------------------------------ ------------
(Unaudited) 1997 1996 1995 1994* 1993**
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.50%+ 0.49% 0.50% 0.46% 0.44%+ 0.40%+
Expenses after custodian fee reduction 0.48%+ 0.47% 0.45% -- -- --
Net investment income 5.36%+ 5.55% 5.59% 5.73% 5.37%+ 5.37%+
Portfolio Turnover 10% 13% 21% 48% 45% 35%
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $91,334 $95,162 $108,974 $122,949 $137,724 $119,311
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
109
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Kentucky Portfolio
-----------------------------------------------------------------------------------
Year Ended
-----------------------------------------------------------------
Six Months Ended August 31, Sept. 30,
February 28, 1998 --------------------------------------------------- ------------
(Unaudited) 1997 1996 1995 1994* 1993**
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> A
Ratios to average daily net assets:
- --------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.51%+ 0.51% 0.53% 0.49% 0.46%+ 0.40%+
Expenses after custodian fee reduction 0.50%+ 0.48% 0.50% -- -- --
Net investment income 5.41%+ 5.56% 5.49% 5.75% 5.39%+ 5.40%+
Portfolio Turnover 10% 28% 28% 30% 21% 11%
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $118,838 $123,110 $133,017 $145,269 $145,210 $117,936
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
110
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Louisiana Portfolio
---------------------------------------------------------------------
Year Ended
-------------------------------------------------
Six Months Ended August 31,
February 28, 1998 -------------------------------------------------
(Unaudited) 1997 1996 1995 1994*
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets:++
- -----------------------------------------------------------------------------------------------------------------------------
Net expenses/(1)/ 0.43%+ 0.40% 0.30% 0.22% 0.14%+
Net expenses after custodian fee reduction 0.38%+ 0.38% 0.23% -- --
Net investment income 5.45%+ 5.85% 5.90% 6.06% 5.86%+
Portfolio Turnover 23% 27% 99% 46% 21%
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $34,514 $34,432 $35,049 $34,309 $31,423
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ 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:
<TABLE>
<S> <C> <C> <C>
Expenses/(1)/ 0.41% 0.33% 0.33%+
Expenses after custody fee reduction 0.35% -- --
Net investment income 5.79% 5.95% 5.67%+
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, February 1, 1994 to August 31,
1994.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
111
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Maryland Portfolio
------------------------------------------------------------------------------
Year Ended
------------------------------------------------------------
Six Months Ended August 31, Sept. 30,
February 28, 1998 ----------------------------------------------- -----------
(Unaudited) 1997 1996 1995 1994* 1993**
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:++
- -----------------------------------------------------------------------------------------------------------------------------
Net expenses /(1)/ 0.52%+ 0.48% 0.51% 0.47% 0.44%+ 0.36%+
Net expenses after custodian fee reduction 0.48%+ 0.45% 0.48% -- -- --
Net investment income 5.16%+ 5.38% 5.50% 5.79% 5.44%+ 5.41%+
Portfolio Turnover 18% 30% 33% 30% 41% 34%
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $105,610 $107,401 $110,588 $115,004 $117,856 $94,213
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ 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:
<TABLE>
<S> <C>
Expenses/(1)/ 0.38%+
Net investment income 5.39%+
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
112
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Missouri Portfolio
-------------------------------------------------------------------------------
Year Ended
-------------------------------------------------------------
Six Months Ended August 31, Sept. 30,
February 28, 1998 ------------------------------------------------ -----------
(Unaudited) 1997 1996 1995 1994* 1993**
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- ----------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.49%+ 0.47% 0.49% 0.48% 0.45%+ 0.40%+
Expenses after custodian fee reduction 0.48%+ 0.46% 0.47% -- -- --
Net investment income 5.32%+ 5.52% 5.52% 5.76% 5.36%+ 5.36%+
Portfolio Turnover 4% 5% 36% 24% 28% 6%
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $78,952 $79,882 $85,162 $93,162 $95,167 $75,273
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
113
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
North Carolina Portfolio
------------------------------------------------------------------------------------
Year Ended
-------------------------------------------------------------------
Six Months Ended August 31, Sept. 30,
February 28, 1998 ----------------------------------------------------- -------------
(Unaudited) 1997 1996 1995 1994* 1993**
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.53%+ 0.52% 0.52% 0.48% 0.46%+ 0.43%+
Expenses after custodian fee reduction 0.51%+ 0.50% 0.48% -- -- --
Net investment income 5.32%+ 5.53% 5.51% 5.78% 5.40%+ 5.43%+
Portfolio Turnover 15% 42% 54% 33% 37% 21%
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $156,446 $167,571 $187,044 $195,179 $199,772 $172,534
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
114
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Oregon Portfolio
----------------------------------------------------------------------------------
Year Ended
----------------------------------------------------------------
Six Months Ended August 31, Sept. 30,
February 28, 1998 --------------------------------------------------- ------------
(Unaudited) 1997 1996 1995 1994* 1993**
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.51%+ 0.56% 0.50% 0.50% 0.46%+ 0.43%+
Expenses after custodian fee reduction 0.50%+ 0.55% 0.47% -- -- --
Net investment income 5.37%+ 5.46% 5.37% 5.60% 5.26%+ 5.30%+
Portfolio Turnover 4% 22% 28% 22% 15% 32%
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $109,043 $113,693 $129,759 $146,391 $153,119 $127,497
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
115
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
South Carolina Portfolio
-------------------------------------------------------------------
Year Ended
-------------------------------------------------
Six Months Ended August 31,
February 28, 1998 -------------------------------------------------
(Unaudited) 1997 1996 1995 1994*
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- -------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.49%+ 0.51% 0.53% 0.44% 0.37%+
Expenses after custodian fee reduction 0.49%+ 0.50% 0.51% -- --
Net investment income 5.41%+ 5.59% 5.65% 5.81% 5.47%+
Portfolio Turnover 14% 8% 36% 75% 23%
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $53,142 $53,970 $58,318 $61,412 $62,265
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, February 1, 1994 to August 31,
1994.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
116
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Tennessee Portfolio
---------------------------------------------------------------------------------
Year Ended
--------------------------------------------------------------
Six Months Ended August 31, Sept. 30,
February 28, 1998 ----------------------------------------------- -------------
(Unaudited) 1997 1996 1995 1994* 1993**
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:++
- -------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.48%+ 0.43% 0.45% 0.41% 0.36%+ 0.08%+
Expenses after custodian fee reduction 0.46%+ 0.42% 0.43% -- -- --
Net investment income 5.27%+ 5.48% 5.52% 5.81% 5.49%+ 5.60%+
Portfolio Turnover 10% 3% 39% 20% 10% 69%
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted) $53,999 $54,162 $56,065 $58,673 $56,496 $39,266
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
++ The operating expenses of the Portfolio may reflect a reduction of the
Investment Adviser fee, an allocation of expenses to the Adviser, or both.
Had such actions not been taken, the ratios and net investment income per
share would have been as follows:
<TABLE>
<S> <C>
Expenses/(1)/ 0.31%+
Net investment income 5.37%+
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
117
<PAGE>
EV Municipals Portfolios as of February 28, 1998
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Virginia Portfolio
-----------------------------------------------------------------------------------
Year Ended
-----------------------------------------------------------------
Six Months Ended August 31, Sept. 30,
February 28, 1998 --------------------------------------------------- ------------
(Unaudited) 1997 1996 1995 1994* 1993**
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average daily net assets:
- --------------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 0.54%+ 0.52% 0.51% 0.48% 0.46%+ 0.43%+
Expenses after custodian fee reduction 0.52%+ 0.49% 0.48% -- -- --
Net investment income 5.32%+ 5.53% 5.55% 5.81% 5.49%+ 5.49%+
Portfolio Turnover 6% 25% 30% 38% 48% 29%
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's omitted) $156,750 $161,658 $177,644 $191,748 $194,519 $174,260
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the eleven months ended August 31, 1994.
** For the period from the start of business, February 1, 1993, to September
30, 1993.
/(1)/ The expense ratios for the year ended August 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 each of
the prior periods have not been adjusted to reflect this change.
See notes to financial statements
118
<PAGE>
EV Municipals Portfolios as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1 Significant Accounting Policies
------------------------------------------------------------------------------
Alabama Municipals Portfolio (Alabama Portfolio), Arkansas Municipals
Portfolio (Arkansas Portfolio), Georgia Municipals Portfolio (Georgia
Portfolio), Kentucky Municipals Portfolio (Kentucky Portfolio), Louisiana
Municipals Portfolio (Louisiana Portfolio), Maryland Municipals Portfolio
(Maryland Portfolio), Missouri Municipals Portfolio (Missouri Portfolio),
North Carolina Municipals Portfolio (North Carolina Portfolio), Oregon
Municipals Portfolio (Oregon Portfolio), South Carolina Municipals Portfolio
(South Carolina Portfolio), Tennessee Municipals Portfolio (Tennessee
Portfolio) and Virginia Municipals Portfolio (Virginia Portfolio),
collectively the Portfolios, are registered under the Investment Company Act
of 1940, as amended, as non-diversified open-end management investment
companies which were organized as trusts under the laws of the State of New
York on May 1, 1992. The Declarations of Trust permit the Trustees to issue
interests in the Portfolios. The following is a summary of significant
accounting policies of the Portfolios. 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 Federal 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 purchase of a put option on a
financial futures contract by a Portfolio, the premium paid is recorded as an
investment, the value of which is marked-to-market daily. When a purchased
option expires, a Portfolio will realize a loss in the amount of the cost of
the option. When a Portfolio enters into a closing sale transaction, the
Portfolio will realize a gain or loss depending on whether the sales
119
<PAGE>
EV Municipals Portfolios as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
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 and delayed delivery transactions. The Portfolios record when-
issued securities on trade date and maintain security positions such that
sufficient liquid assets will be available to make payments for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis are
marked-to-market daily and begin earning interest on settlement date.
H Other -- Investment transactions are accounted for on a trade date basis.
I Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolios. Pursuant to the 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 each Portfolio's custodian fees are reported as a
reduction of expenses in the Statement of Operations.
J Use of Estimates -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of revenue and expense during the reporting period. Actual results
could differ from those estimates.
K Interim Financial Information-- The interim financial statements relating to
February 28, 1998 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the
Portfolio's management, reflect all adjustments, consisting only of normal
recurring adjustments necessary for the fair presentation of the financial
statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
------------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation for
management and investment advisory services rendered to 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 February 28, 1998, the Portfolios paid advisory fees
as follows:
Portfolio Amount Effective Rate*
------------------------------------------------------------------------------
Alabama $ 187,142 0.38%
Arkansas 96,193 0.32%
Georgia 171,727 0.37%
Kentucky 240,241 0.40%
Louisiana 39,212 0.23%
Maryland 202,356 0.38%
Missouri 137,655 0.35%
North Carolina 335,671 0.42%
Oregon 213,913 0.39%
South Carolina 79,364 0.30%
Tennessee 81,019 0.30%
Virginia 328,450 0.42%
* Advisory fees paid as a percentage of average daily net assets (annualized).
Except as to Trustees of the Portfolios who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services to
the Portfolios out of such investment adviser fee.
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 February 28, 1998, no significant amounts have been deferred.
Certain of the officers and Trustees of the Portfolios are officers and
directors/trustees of the above organizations.
120
<PAGE>
EV Municipals Portfolios as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
3 Investments
------------------------------------------------------------------------------
Purchases and sales of investments, other than U.S. Government securities,
purchased options and short-term obligations, for the six months ended
February 28, 1998 were as follows:
Alabama Portfolio
------------------------------------------------------------------------------
Purchases $ 8,729,809
Sales 16,643,921
Arkansas Portfolio
------------------------------------------------------------------------------
Purchases $ 5,221,428
Sales 10,875,500
Georgia Portfolio
------------------------------------------------------------------------------
Purchases $ 9,362,636
Sales 15,975,154
Kentucky Portfolio
------------------------------------------------------------------------------
Purchases $11,554,595
Sales 19,534,740
Louisiana Portfolio
------------------------------------------------------------------------------
Purchases $ 8,231,039
Sales 7,840,203
Maryland Portfolio
------------------------------------------------------------------------------
Purchases $19,534,037
Sales 21,233,944
Missouri Portfolio
------------------------------------------------------------------------------
Purchases $ 3,004,105
Sales 7,267,496
North Carolina Portfolio
------------------------------------------------------------------------------
Purchases $23,357,430
Sales 40,237,585
Oregon Portfolio
------------------------------------------------------------------------------
Purchases $ 3,890,593
Sales 13,460,890
South Carolina Portfolio
------------------------------------------------------------------------------
Purchases $ 7,550,174
Sales 9,631,716
Tennessee Portfolio
------------------------------------------------------------------------------
Purchases $ 5,487,975
Sales 6,178,638
Virginia Portfolio
------------------------------------------------------------------------------
Purchases $ 9,876,067
Sales 21,955,564
4 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at February 28, 1998, as computed on a
federal income tax basis, are as follows:
Alabama Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 87,219,402
------------------------------------------------------------------------------
Gross unrealized appreciation $ 8,602,546
Gross unrealized depreciation (5,720)
------------------------------------------------------------------------------
Net unrealized appreciation $ 8,596,826
------------------------------------------------------------------------------
Arkansas Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 53,904,584
------------------------------------------------------------------------------
Gross unrealized appreciation $ 4,501,056
Gross unrealized depreciation (10,748)
------------------------------------------------------------------------------
Net unrealized appreciation $ 4,490,308
------------------------------------------------------------------------------
Georgia Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 82,080,212
------------------------------------------------------------------------------
Gross unrealized appreciation $ 7,712,596
Gross unrealized depreciation (83,763)
------------------------------------------------------------------------------
Net unrealized appreciation $ 7,628,833
------------------------------------------------------------------------------
121
<PAGE>
EV Municipals Portfolios as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
Kentucky Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 108,588,633
------------------------------------------------------------------------------
Gross unrealized appreciation $ 9,884,682
Gross unrealized depreciation (48,597)
------------------------------------------------------------------------------
Net unrealized appreciation $ 9,836,085
------------------------------------------------------------------------------
Louisiana Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 33,028,050
------------------------------------------------------------------------------
Gross unrealized appreciation $ 2,460,615
Gross unrealized depreciation (307,136)
------------------------------------------------------------------------------
Net unrealized appreciation $ 2,153,479
------------------------------------------------------------------------------
Maryland Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 100,786,895
------------------------------------------------------------------------------
Gross unrealized appreciation $ 6,965,618
Gross unrealized depreciation (34,085)
------------------------------------------------------------------------------
Net unrealized appreciation $ 6,931,533
------------------------------------------------------------------------------
Missouri Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 70,126,590
------------------------------------------------------------------------------
Gross unrealized appreciation $ 7,726,055
Gross unrealized depreciation --
------------------------------------------------------------------------------
Net unrealized appreciation $ 7,726,055
------------------------------------------------------------------------------
North Carolina Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 139,689,431
------------------------------------------------------------------------------
Gross unrealized appreciation $ 14,625,092
Gross unrealized depreciation (20,524)
------------------------------------------------------------------------------
Net unrealized appreciation $ 14,604,568
------------------------------------------------------------------------------
Oregon Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 99,512,231
------------------------------------------------------------------------------
Gross unrealized appreciation $ 7,924,008
Gross unrealized depreciation (12,225)
------------------------------------------------------------------------------
Net unrealized appreciation $ 7,911,783
------------------------------------------------------------------------------
South Carolina Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 48,723,252
------------------------------------------------------------------------------
Gross unrealized appreciation $ 4,713,611
Gross unrealized depreciation (6,529)
------------------------------------------------------------------------------
Net unrealized appreciation $ 4,707,082
------------------------------------------------------------------------------
Tennessee Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 49,198,539
------------------------------------------------------------------------------
Gross unrealized appreciation $ 4,241,529
Gross unrealized depreciation (13,079)
------------------------------------------------------------------------------
Net unrealized appreciation $ 4,228,450
------------------------------------------------------------------------------
Virginia Portfolio
------------------------------------------------------------------------------
Aggregate Cost $ 140,880,567
------------------------------------------------------------------------------
Gross unrealized appreciation $ 13,458,682
Gross unrealized depreciation (48,486)
------------------------------------------------------------------------------
Net unrealized appreciation $ 13,410,196
------------------------------------------------------------------------------
5 Line of Credit
------------------------------------------------------------------------------
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and its affiliates in a $100 million unsecured line of credit agreement
with a group of banks. Borrowings will be made by the portfolios or funds
solely to facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Interest is charged to each portfolio or fund based on its
borrowings at an amount above either the Eurodollar rate or federal funds
effective rate. In addition, a fee computed at an annual rate of 0.10% on the
daily unused portion of the
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<PAGE>
EV Municipals Portfolios as of February 28, 1998
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
facility is allocated among the participating portfolios and funds at the end
of each quarter. At February 28, 1998, the Arkansas Portfolio, Kentucky
Portfolio and Tennessee Portfolio had balances outstanding pursuant to this
line of credit of $665,000, $552,000 and $181,000, respectively. At February
28, 1998, the average daily loan balance was $236,391 and the average interest
rate was 6.4% for the South Carolina Portfolio. The maximum borrowing
outstanding for the South Carolina Portfolio at any time during the six months
ended February 28, 1998 was $2,032,000. The Portfolios (with the exception of
the South Carolina Portfolio) did not have any significant borrowings or
allocated fees during the six months ended February 28, 1998.
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 February 28,
1998, is as follows:
Futures
Contracts Net Unrealized
Expiration Appreciation
Portfolio Date Contracts Position (Depreciation)
------------------------------------------------------------------------------
Alabama 6/98 49 U.S. Treasury Bonds Short $ (5,764)
------------------------------------------------------------------------------
Arkansas 6/98 14 U.S. Treasury Bonds Short $ (8,393)
------------------------------------------------------------------------------
Georgia 6/98 48 U.S. Treasury Bonds Short $ (3,841)
------------------------------------------------------------------------------
Kentucky 6/98 60 U.S. Treasury Bonds Short $ (4,801)
------------------------------------------------------------------------------
Louisiana 6/98 17 U.S. Treasury Bonds Short $ (2,211)
------------------------------------------------------------------------------
Maryland 6/98 26 U.S. Treasury Bonds Short $ (15,587)
------------------------------------------------------------------------------
Missouri 6/98 40 U.S. Treasury Bonds Short $ (3,201)
------------------------------------------------------------------------------
North Carolina 6/98 75 U.S. Treasury Bonds Short $ (9,755)
------------------------------------------------------------------------------
South Carolina 6/98 40 U.S. Treasury Bonds Short $ (6,490)
------------------------------------------------------------------------------
Tennessee 6/98 28 U.S. Treasury Bonds Short $ (2,240)
------------------------------------------------------------------------------
Virginia 6/98 41 U.S. Treasury Bonds Short $ (24,580)
------------------------------------------------------------------------------
At February 28, 1998, the Portfolios had sufficient cash and/or securities
segregated to cover margin requirements on open futures contracts.
123
<PAGE>
EV Municipals Portfolio as of February 28, 1998
INVESTMENT MANAGEMENT
Municipals Portfolios
Officers
Thomas J. Fetter
President and Portfolio
Manager of South Carolina
Municipals Portfolio
James B. Hawkes
Vice President and Trustee
William H. Ahern, Jr.
Vice President and Portfolio Manager
of Alabama Municipals Portfolio
Robert B. MacIntosh
Vice President and Portfolio Manager
of Louisiana and North Carolina
Municipals Portfolios
Timothy T. Browse
Vice President and Portfolio Manager
of Arkansas, Maryland and
Virginia Municipals Portfolios
Cynthia J. Clemson
Vice President and Portfolio Manager
of Georgia, Kentucky, Missouri, and
Tennessee Municipals Portfolios
Thomas M. Metzold
Vice President and Portfolio Manager of Oregon Municipals Portfolio
Independent Trustees
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking, Harvard University Graduate
School of Business Administration
Norton H. Reamer
President and Director, United Asset
Management Corporation
John L. Thorndike
Formerly Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
124
