<PAGE>
Cash Management Portfolio as of December 31, 1997
PORTFOLIO OF INVESTMENTS
Commercial Paper -- 48.2%
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ---------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Agricultural Services -- 1.3%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,500 Cargill, Inc., 5.65%, 3/23/98 $ 2,468,219
- -----------------------------------------------------------------------------------------
$ 2,468,219
- -----------------------------------------------------------------------------------------
Banking and Finance -- 19.6%
- -----------------------------------------------------------------------------------------
P-1 A-1 $ 2,500 American Express Credit Corp.,
5.83%, 1/7/98 $ 2,497,571
P-1 A-1+ 1,400 Asset Securitization Coop.
Corp., 5.61%, 1/8/98/(1)/ 1,398,473
P-1 A-1+ 2,000 Asset Securitization Coop.
Corp., 5.73%, 2/26/98/(1)/ 1,982,173
P-1 A-1+ 2,700 Associates Corp. of No.
America, 5.66%, 2/11/98 2,682,595
P-1 A-1+ 1,600 Associates Corp. of No.
America, 5.68%, 2/13/98 1,589,145
P-1 A-1+ 2,900 Central Corporate Credit
Union, 5.90%, 1/12/98 2,894,772
P-1 A-1+ 2,000 CIESCO, 5.60%, 1/30/98 1,990,978
P-1 A-1+ 2,000 CIESCO, 5.65%, 2/10/98 1,987,445
P-1 A-1+ 2,500 CIT Group Holdings, Inc.,
5.83%, 1/21/98 2,491,903
P-1 A-1+ 2,500 Corporate Asset Funding Co.,
5.77%, 2/13/98 2,482,770
P-1 A-1 2,000 Corporate Receivables Corp.,
5.875%, 1/14/98(2) 1,995,757
P-1 A-1+ 2,000 CXC, Inc., 5.73%, 1/16/98/(1)/ 1,995,225
P-1 A-1+ 1,500 Delaware Funding Corp.,
5.63%, 1/15/98/(1)/ 1,496,716
P-1 A-1+ 1,000 Delaware Funding Corp.,
5.90%, 1/30/98/(2)/ 995,247
P-1 A-1+ 4,000 Norwest Financial, Inc.,
5.53%, 2/12/98 3,974,193
P-1 A-1+ 3,500 U.S. Central Credit Union,
5.75%, 2/17/98 3,473,726
- -----------------------------------------------------------------------------------------
$ 35,928,689
- -----------------------------------------------------------------------------------------
Business Products and Services -- 1.3%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,300 Pitney Bowes Credit Corp.,
5.85%, 1/21/98 $ 2,292,525
- -----------------------------------------------------------------------------------------
$ 2,292,525
- -----------------------------------------------------------------------------------------
Chemicals -- 1.4%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 630 E.I. Dupont de Nemours & Co.,
5.51%, 1/12/98 $ 628,940
P-1 A-1+ 2,000 E.I. Dupont de Nemours & Co.,
5.73%, 2/6/98/(2)/ 1,988,540
- -----------------------------------------------------------------------------------------
$ 2,617,480
- -----------------------------------------------------------------------------------------
Communications Equipment -- 3.3%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,000 Ameritech Corp.,
5.55%, 1/26/98/(1)/ $ 1,992,291
P-1 A-1+ 1,700 Ameritech Corp.,
5.72%, 2/4/98/(1)/ 1,690,816
P-1 A-1+ 2,500 AT&T Corp., 5.65%, 3/27/98 2,466,649
- -----------------------------------------------------------------------------------------
$ 6,149,756
- -----------------------------------------------------------------------------------------
Electric Utilities -- 2.9%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,800 National Rural Utilities Coop.
Finance Corp., 5.58%, 1/15/98 $ 2,793,924
P-1 A-1+ 2,500 Teco Finance, Inc.,
5.72%, 2/18/98/(1)/ 2,480,933
- -----------------------------------------------------------------------------------------
$ 5,274,857
- -----------------------------------------------------------------------------------------
Electrical and Electronic Equipment -- 3.6%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,000 General Electric Capital
Corp., 5.69%, 2/20/98 $ 1,984,194
P-1 A-1+ 1,500 General Electric Capital
Corp., 5.70%, 1/28/98 1,493,588
P-1 A-1+ 1,400 General Electric Capital
Corp., 5.70%, 3/20/98 1,382,710
P-1 A-1+ 1,765 Motorola Credit Corp.,
5.70%, 2/24/98 1,749,909
- -----------------------------------------------------------------------------------------
$ 6,610,401
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
14
<PAGE>
Cash Management Portfolio as of December 31, 1997
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited)
- ---------------------- Principal
Amount
Standard (000's
Moody's & Poor's omitted) Security Value
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Food and Beverages -- 2.2%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 4,100 Coca-Cola Co.,
5.51%, 1/12/98/(1)/ $ 4,093,097
- -----------------------------------------------------------------------------------------
$ 4,093,097
- -----------------------------------------------------------------------------------------
Household Products -- 0.8%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 1,460 Procter & Gamble Co.,
5.70%, 3/11/98 $ 1,444,050
- -----------------------------------------------------------------------------------------
$ 1,444,050
- -----------------------------------------------------------------------------------------
Insurance -- 8.8%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,500 AI Credit Corp., 5.55%, 1/13/98 $ 2,495,375
P-1 A-1+ 1,900 AI Credit Corp., 5.55%, 1/13/98 1,896,485
P-1 A-1 2,500 American General Corp.,
5.75%, 2/27/98 2,477,240
P-1 A-1+ 2,000 APC Funding Corp.,
5.75%, 3/3/98 1,980,514
P-1 A-1+ 1,620 MetLife Funding Inc.,
5.67%, 1/20/98 1,615,152
P-1 A-1+ 1,459 MetLife Funding Inc.,
5.75%, 3/17/98 1,441,522
P-1 A-1+ 950 MetLife Funding Inc.,
5.90%, 2/5/98 944,551
P-1 A-1 1,000 Prudential Funding Corp.,
5.82%, 1/16/98 997,575
P-1 A-1+ 1,000 USAA Capital Corp.,
5.64%, 2/27/98 991,070
P-1 A-1+ 1,400 USAA Capital Corp.,
5.76%, 1/27/98 1,394,176
- -----------------------------------------------------------------------------------------
$ 16,233,660
- -----------------------------------------------------------------------------------------
Oil -- 1.7%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 785 Chevron Oil Finance Co.,
5.95%, 1/9/98 $ 783,962
P-1 A-1+ 2,380 Exxon Imperial U.S., Inc.,
5.85%, 1/8/98/(1)/ 2,377,293
- -----------------------------------------------------------------------------------------
$ 3,161,255
- -----------------------------------------------------------------------------------------
Pharmaceutical -- 1.3%
- -----------------------------------------------------------------------------------------
P-1 A-1+ $ 2,315 Novartis Finance Corp.,
5.85%, 1/9/98/(1)/ $ 2,311,991
- -----------------------------------------------------------------------------------------
$ 2,311,991
- -----------------------------------------------------------------------------------------
Total Commercial Paper, at value
(identified cost $88,585,980) $ 88,585,980
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
15
<PAGE>
Cash Management Portfolio as of December 31, 1997
PORTFOLIO OF INVESTMENTS CONT'D
U.S. Government Obligations -- 51.8%
Principal
Amount
(000's
omitted) Security Value
- --------------------------------------------------------------------------
$ 60,000 FHLMC Discount Notes,
5.70%, 1/5/98 $ 59,961,999
10,000 FHLMC Discount Notes,
5.70%, 1/12/98 9,982,582
1,330 FNMA Discount Notes,
5.46%, 1/20/98 1,326,168
1,000 FHLB Discount Notes,
5.46%, 1/23/98 996,664
5,000 FHLMC Discount Notes,
5.49%, 1/23/98 4,983,225
5,500 FNMA Discount Notes,
5.48%, 1/29/98 5,476,557
5,000 FHLMC Discount Notes,
5.65%, 2/19/98 4,961,549
3,000 FNMA Discount Notes,
5.64%, 2/25/98 2,974,150
2,600 FNMA Discount Notes,
5.58%, 3/6/98 2,574,208
1,950 FNMA Discount Notes,
5.60%, 3/30/98 1,923,307
- --------------------------------------------------------------------------------
Total U.S. Government Obligations, at value
(identified cost $95,160,409) $ 95,160,409
- --------------------------------------------------------------------------------
Total Investments -- 100.0%
(identified cost $183,746,389) $183,746,389
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 0% $ (6,186)
- --------------------------------------------------------------------------------
Net Assets -- 100% $183,740,203
- --------------------------------------------------------------------------------
FHLB-Federal Home Loan Bank
FHLMC-Federal Home Mortgage Corporation (Freddie Mac)
FNMA-Federal National Mortgage Association (Fannie Mae)
/(1)/A security which has been issued under section 4(2) of the Securities Act
of 1933 and is generally regarded as restricted and illiquid. This security
may be resold in transactions exempt from registration or to the public if
the security is registered. All such securities held have been deemed by
the Portfolio's Trustees to be liquid and were purchased with the
expectation that resale would not be necessary. At December 31, 1997, the
value of these securities amounted to $21,819,008 or 11.9% of the
Portfolio's net assets.
/(2)/Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. It is the
Portfolio's intention to hold the security until maturity. At December 31,
1997, the value of these securities amounted to $4,979,544 or 2.7% of the
Portfolio's net assets.
See notes to financial statements
16
<PAGE>
Cash Management Portfolio as of December 31, 1997
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
As of December 31, 1997
Assets
- --------------------------------------------------------------------------------
Investments, at value (Note 1A) $183,746,389
Cash 19,962
Deferred organization expenses (Note 1D) 3,634
- --------------------------------------------------------------------------------
Total assets $183,769,985
- --------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------
Payable to affiliate for Trustees' fees (Note 2) $ 1,637
Accrued expenses 28,145
- --------------------------------------------------------------------------------
Total liabilities $ 29,782
- --------------------------------------------------------------------------------
Net Assets (representing paid-in capital) $183,740,203
- --------------------------------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $183,740,203
- --------------------------------------------------------------------------------
Total $183,740,203
- --------------------------------------------------------------------------------
Statement of Operations
For the Year Ended
December 31, 1997
Investment Income (Note 1B)
- --------------------------------------------------------------------------------
Interest income $ 8,048,280
- --------------------------------------------------------------------------------
Expenses
- --------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 724,890
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 5,663
Custodian fee 94,846
Legal and accounting services 29,679
Amortization of organization expenses (Note 1D) 2,727
Miscellaneous 4,479
- --------------------------------------------------------------------------------
Total expenses $ 862,284
- --------------------------------------------------------------------------------
Net investment income $ 7,185,996
- --------------------------------------------------------------------------------
See notes to financial statements
17
<PAGE>
Cash Management Portfolio as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
Increase (Decrease) Year Ended Year Ended
in Net Assets December 31, 1997 December 31, 1996
- -------------------------------------------------------------------------------
From operations --
Net investment income $ 7,185,996 $ 9,078,037
- -------------------------------------------------------------------------------
Capital transactions --
Contributions $ 791,713,159 $ 1,075,567,385
Withdrawals (806,819,022) (1,097,885,067)
- -------------------------------------------------------------------------------
Net decrease in net assets from
capital transactions $ (15,105,863) $ (22,317,682)
- -------------------------------------------------------------------------------
Net decrease in net assets $ (7,919,867) $ (13,239,645)
- -------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------
At beginning of year $ 191,660,070 $ 204,899,715
- -------------------------------------------------------------------------------
At end of year $ 183,740,203 $ 191,660,070
- -------------------------------------------------------------------------------
See notes to financial statements
18
<PAGE>
Cash Management Portfolio as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------
1997 1996 1995 1994*
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------------------
Expenses 0.59% 0.59% 0.60% 0.58%+
Net investment income 4.96% 4.83% 5.36% 4.22%+
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, May 2, 1994, to December 31, 1994.
See notes to financial statements
19
<PAGE>
Cash Management Portfolio as of December 31, 1997
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
-----------------------------------------------------------------------------
Cash Management Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company
which was organized as a trust under the laws of the State of New York on May
1, 1992. The Declaration of Trust permits the Trustees to issue interests in
the Portfolio. The following is a summary of significant accounting policies
of the Portfolio. The policies are in conformity with generally accepted
accounting principles.
A Security Valuation -- The Portfolio values investment securities utilizing
the amortized cost valuation technique permitted by Rule 2a-7 of the
Investment Company Act of 1940, pursuant to which the Portfolio must comply
with certain conditions. This technique involves initially valuing a
portfolio security at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium. It is the normal
practice of the Portfolio to hold portfolio securities to maturity and
realize par value unless such sale or other disposition is mandated by
withdrawal requests or other extraordinary circumstances.
B Income -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or accretion of discount when required
for federal income tax purposes.
C Income Taxes -- The Portfolio is treated as a partnership for Federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
ultimately responsible for the payment of any taxes. Since some of the
Portfolio's investors are regulated investment companies that invest all or
substantially all of their assets in the Portfolio, the Portfolio normally
must satisfy the applicable source of income and diversification requirements
(under the Internal Revenue Code), in order for its investors to satisfy
them. The Portfolio will allocate at least annually, among its investors each
investor's distributive share of the Portfolio's net taxable investment
income, net realized capital gains, and any other items of income, gain,
loss, deduction or credit.
D Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian to the Portfolio. Pursuant to the respective custodian agreements,
IBT receives a fee reduced by credits which are determined based on the
average daily cash balances the Portfolio maintains with IBT. All significant
credit balances used to reduce the Portfolio's custodian fees are reported as
a reduction of operating expenses on the Statement of Operations.
F 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 income and expense during the reporting period. Actual results could
differ from those estimates.
G 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 the Portfolio.
The fee is computed at the rate of 1/2 of 1% per annum of the Portfolio's
average daily net assets and amounted to $724,890 for the year ended December
31, 1997. 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 Portfolio out of such investment adviser fee.
Certain of the officers and Trustees of the Portfolio are officers and
directors/trustees of the above organizations.
20
<PAGE>
Cash Management Portfolio as of December 31, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
3 Line of Credit
----------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR or
EVM and its affiliates in a committed $100 million unsecured line of credit
agreement with a group of banks. The Portfolio may temporarily borrow from
the line of credit to satisfy withdrawal requests or settle investment
transactions. Interest is charged to each participating portfolio or fund
based on its borrowings at an amount above the eurodollar rate or federal
funds rate. In addition, a fee computed at an annual rate of 0.10% on the
daily unused portion of the line of credit is allocated among the
participating portfolios and funds at the end of each quarter. The Portfolio
did not have any significant borrowings or allocated fees during the year
ended December 31, 1997.
4 Investments
----------------------------------------------------------------------------
Purchases and sales (including maturities) of investments, during the year
ended December 31, 1997, exclusive of U.S. Government securities aggregated
$1,103,278,435 and $1,059,766,438, respectively. Purchases and sales
(including maturities) of U.S. Government Agency securities aggregated
$431,080,785 and $490,559,838, respectively.
21
<PAGE>
Cash Management Portfolio as of December 31, 1997
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Investors
of Cash Management Portfolio:
- -------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities of Cash
Management Portfolio (the Portfolio), including the portfolio of investments, as
of December 31, 1997, and the related statement of operations for the year then
ended, the statements of changes in net assets for the two years in the period
then ended and the supplementary data for each of the three years in the period
then ended and for the period from May 2, 1994 (start of business) to December
31, 1994. These financial statements and supplementary data are the
responsibility of the 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 audits 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 owned at December
31, 1997 by correspondence with the custodian. 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, the financial statements and supplementary data referred to
above present fairly, in all material respects, the financial position of the
Portfolio, as of December 31, 1997, the results of its operations for the year
then ended, the changes in net assets for the two years in the period then ended
and supplementary data for each of the three years then ended and for the period
from May 2, 1994 (start of business) to December 31, 1994, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 6, 1998
22
<PAGE>
Money Market Portfolio as of December 31, 1997
INVESTMENT MANAGEMENT
Cash Management Portfolio
Officers
M. Dozier Gardner
President and Trustee
James B. Hawkes
Vice President and Trustee
Michael B. Terry
Vice President and Portfolio Manager
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
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
Director, Fiduciary Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
23
