<Page>
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-04015
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Eaton Vance Mutual Funds Trust
------------------------------
(Exact Name of Registrant as Specified in Charter)
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Address of principal Executive Offices)
Alan R. Dynner
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Name and Address of Agent for Services)
(617) 482-8260
--------------
(Registrant's Telephone Number)
October 31, 2003
----------------
Date of Fiscal Year End
April 30, 2003
--------------
Date of Reporting Period
- --------------------------------------------------------------------------------
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
[EV LOGO]
[CURRENCY]
SEMIANNUAL REPORT APRIL 30, 2003
EATON VANCE
HIGH
INCOME
FUND
[MONUMENTS]
[CITY SKYLINE]
<Page>
IMPORTANT NOTICE REGARDING DELIVERY
OF SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission (SEC) permits mutual funds to deliver
only one copy of shareholder documents, including prospectuses, proxy statements
and shareholder reports, to fund investors with multiple accounts at the same
residential or post office box address. This practice is often called
"householding" and it helps eliminate duplicate mailings to shareholders.
EATON VANCE, OR YOUR FINANCIAL ADVISER, MAY HOUSEHOLD THE MAILING OF YOUR
DOCUMENTS INDEFINITELY UNLESS YOU INSTRUCT EATON VANCE, OR YOUR FINANCIAL
ADVISER, OTHERWISE.
If you would prefer that your Eaton Vance documents not be householded, please
contact Eaton Vance at 1-800-262-1122, or contact your financial adviser.
Your instructions that householding not apply to delivery of your Eaton Vance
documents will be effective within 30 days of receipt by Eaton Vance or your
financial adviser.
<Page>
EATON VANCE HIGH INCOME FUND AS OF APRIL 30, 2003
INVESTMENT UPDATE
INVESTMENT ENVIRONMENT
- - The high-yield market has improved significantly in the past six months,
helped by more stable corporate earnings, improved technical conditions and
widespread bond-buybacks. Credit spreads narrowed by more than 375 basis
points (3.75%) at April 30 from their October peak. Access to capital
markets has improved, as banks and companies have worked to resolve
liquidity problems. Trailing 12-month default rates - nearly 10% a year ago
- fell to around 7% at April 30, 2003.
THE FUND
PERFORMANCE FOR THE PAST SIX MONTHS
- - During the six months ended April 30, 2003, the Fund's Class B shares had a
total return of 19.31%. This return resulted from an increase in net asset
value (NAV) to $4.72 per share on April 30, 2003 from $4.15 on October 31,
2002 and the reinvestment of $0.209 in dividends.(1)
- - The Fund's Class C shares had a total return of 19.22% during the period,
the result of an increase in NAV to $6.23 per share on April 30, 2003 from
$5.48 per share on October 31, 2002 and the reinvestment of $0.276 in
dividends.(1)
- - Based on the Fund's most recent distributions and NAVs on April 30, 2003 of
$4.72 per share for Class B and $6.23 for Class C, the Class B and Class C
distribution rate was 8.86% for each Class.(2) The SEC 30-day yield for
Class B and C shares at April 30, 2003 was 8.45%.(3)
THE VIEWS EXPRESSED IN THIS REPORT ARE THOSE OF THE PORTFOLIO MANAGERS AND ARE
CURRENT ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THESE VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER
CONDITIONS, AND EATON VANCE DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS.
THESE VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE INVESTMENT
DECISIONS FOR AN EATON VANCE FUND ARE BASED ON MANY FACTORS, MAY NOT BE RELIED
ON AS AN INDICATION OF TRADING INTENT ON BEHALF OF ANY EATON VANCE FUND.
RECENT PORTFOLIO DEVELOPMENTS
- - As part of a strategic shift in January, the Portfolio began to reduce its
holdings in BB-rated bonds - which had increased temporarily amid the
recession and post-September 11 concerns to around one-third of the
Portfolio - in favor of B-rated bonds, its traditional investment universe.
By April 30, 2003, the Portfolio's investment mix was approximately 80% in
B-rated and lower bonds, with the BB-rated portion declining to around 20%.
- - In light of their strong performances in 2002 and fuller valuations, the
Portfolio reduced its exposure to the energy and gaming sectors during the
period. Management redirected the proceeds of these sales into cyclical
areas we believe are likely to benefit from a stronger economy - including
utilities, chemicals and paper.
- - Utility bonds were among the Portfolio's strongest performers. Many power
generators have restructured their bank debt, opting for secured term loans
and easing the fears of bankruptcy that plagued the sector in 2002. That
shift has enhanced these companies' access to the capital markets and
prompted a rally in the sector.
- - Amid tighter bank credit conditions, some former investment-grade credits
turned to the high-yield markets for financing. The Portfolio found several
investment possibilities among leading household consumer names, especially
companies within the food and leisure areas.
- - The Portfolio benefited from debt-reduction programs among some of its
largest holdings. Many companies took advantage of last year's downturn in
bond prices by repurchasing their own bonds at significantly lower prices.
With revenue growth limited by a slow economy, cutting costs and capital
expenditures has become an effective method to improve balance sheets and
increase shareholder value.
MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED.
FUND INFORMATION
AS OF APRIL 30, 2003
<Table>
<Caption>
PERFORMANCE(4) CLASS B CLASS C
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (AT NET ASSET VALUE)
One Year 8.66% 8.67%
Five Years -0.26 -0.25
Ten Years 5.35 N.A.
Life of Fund+ 6.75 4.80
<Caption>
SEC AVERAGE ANNUAL TOTAL RETURNS (INCLUDING SALES CHARGE OR APPLICABLE CDSC)
One Year 3.74 7.69%
Five Years -0.50 -0.25
Ten Years 5.35 N.A.
Life of Fund+ 6.75 4.80
</Table>
+ Inception dates: Class B: 8/19/86; Class C: 6/8/94
TEN LARGEST HOLDINGS(5) BY TOTAL NET ASSETS
<Table>
AES Corp. 2.2%
CSC Holdings, Inc. 2.1
Amkor Technologies, Inc. 1.6
Nextel Communications, Inc. 1.6
Allied Waste 1.3
Lyondell Chemical Co. 1.3
Comstock Resources, Inc. 1.3
Qwest Services Corp. 1.2
American Tower Corp. 1.2
Port Arthur Finance Corp. 1.2
</Table>
(1) Return does not reflect applicable contingent deferred sales charge (CDSC).
(2) The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated by dividing the last distribution per share
(annualized) by the net asset value. (3) The Fund's SEC yield is calculated
by dividing the net investment income per share for the 30-day period by
the offering price at the end of the period and annualizing the result. (4)
Returns are historical and calculated by determining the percentage change
in net asset value with all distributions reinvested. Class B SEC returns
reflect applicable CDSC based on following schedule: 5% - 1st year; 5% -
2nd year; 4% - 3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th year. Class
1-year SEC return reflects 1% CDSC. (5) Ten largest holdings represent
15.0% of the Portfolio's investments, determined by dividing the total
market value of the holdings by the Portfolio's total net assets. Holdings
are subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that shares, when redeemed, may be worth more
or less than their original cost.
2
<Page>
EATON VANCE HIGH INCOME FUND AS OF APRIL 30, 2003
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<Table>
<Caption>
AS OF APRIL 30, 2003
Assets
- --------------------------------------------------------
Investment in High Income Portfolio, at
value
(identified cost, $865,674,404) $ 862,430,312
Receivable for Fund shares sold 2,356,469
- --------------------------------------------------------
TOTAL ASSETS $ 864,786,781
- --------------------------------------------------------
Liabilities
- --------------------------------------------------------
Dividends payable $ 2,709,574
Payable for Fund shares redeemed 1,335,466
Payable to affiliate for distribution
and service fees 162,659
Payable to affiliate for Trustees' fees 164
Accrued expenses 226,424
- --------------------------------------------------------
TOTAL LIABILITIES $ 4,434,287
- --------------------------------------------------------
NET ASSETS $ 860,352,494
- --------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------
Paid-in capital $1,313,103,942
Accumulated net realized loss from
Portfolio (computed on the basis of
identified cost) (446,154,569)
Accumulated distributions in excess of
net investment income (3,352,787)
Net unrealized depreciation from
Portfolio (computed on the basis of
identified cost) (3,244,092)
- --------------------------------------------------------
TOTAL $ 860,352,494
- --------------------------------------------------------
Class B Shares
- --------------------------------------------------------
NET ASSETS $ 617,328,088
SHARES OUTSTANDING 130,882,354
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 4.72
- --------------------------------------------------------
Class C Shares
- --------------------------------------------------------
NET ASSETS $ 243,024,406
SHARES OUTSTANDING 39,028,021
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 6.23
- --------------------------------------------------------
</Table>
STATEMENT OF OPERATIONS
<Table>
<Caption>
FOR THE SIX MONTHS ENDED
APRIL 30, 2003
Investment Income
- ------------------------------------------------------
Interest allocated from Portfolio $ 42,448,895
Dividends allocated from Portfolio 769,331
Miscellaneous income allocated from
Portfolio 628,047
Expenses allocated from Portfolio (2,651,588)
- ------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $ 41,194,685
- ------------------------------------------------------
Expenses
- ------------------------------------------------------
Trustees' fees and expenses $ 1,717
Distribution and service fees
Class B 2,812,657
Class C 1,072,571
Transfer and dividend disbursing agent
fees 448,158
Printing and postage 60,131
Custodian fee 17,017
Registration fees 14,151
Legal and accounting services 13,749
Miscellaneous 19,206
- ------------------------------------------------------
TOTAL EXPENSES $ 4,459,357
- ------------------------------------------------------
NET INVESTMENT INCOME $ 36,735,328
- ------------------------------------------------------
Realized and Unrealized Gain (Loss) from Portfolio
- ------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ (3,553,005)
Foreign currency and forward foreign
currency exchange
contract transactions (561,006)
- ------------------------------------------------------
NET REALIZED LOSS $ (4,114,011)
- ------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 90,908,966
Foreign currency and forward foreign
currency exchange contracts (76,025)
- ------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ 90,832,941
- ------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 86,718,930
- ------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $123,454,258
- ------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
3
<Page>
EATON VANCE HIGH INCOME FUND AS OF APRIL 30, 2003
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED
INCREASE (DECREASE) APRIL 30, 2003 YEAR ENDED
IN NET ASSETS (UNAUDITED) OCTOBER 31, 2002
- ----------------------------------------------------------------------------
From operations --
Net investment income $ 36,735,328 $ 78,289,221
Net realized loss (4,114,011) (154,522,319)
Net change in unrealized
appreciation (depreciation) 90,832,941 31,930,088
- ----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 123,454,258 $ (44,303,010)
- ----------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class B $ (26,940,818) $ (57,516,234)
Class C (10,262,362) (20,648,106)
Tax return of capital
Class B -- (5,430,924)
Class C -- (1,684,183)
- ----------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (37,203,180) $ (85,279,447)
- ----------------------------------------------------------------------------
Transactions in shares of beneficial
interest --
Proceeds from sale of shares
Class B $ 55,945,588 $ 133,663,908
Class C 40,023,210 117,544,022
Net asset value of shares issued to
shareholders in payment of
distributions declared
Class B 8,200,713 18,743,810
Class C 4,701,720 9,698,960
Cost of shares redeemed
Class B (39,547,664) (175,856,757)
Class C (20,585,365) (100,298,477)
- ----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ 48,738,202 $ 3,495,466
- ----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ 134,989,280 $ (126,086,991)
- ----------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------
At beginning of period $ 725,363,214 $ 851,450,205
- ----------------------------------------------------------------------------
AT END OF PERIOD $ 860,352,494 $ 725,363,214
- ----------------------------------------------------------------------------
Accumulated distributions in
excess of net investment income
included in net assets
- ----------------------------------------------------------------------------
AT END OF PERIOD $ (3,352,787) $ (2,884,935)
- ----------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
4
<Page>
EATON VANCE HIGH INCOME FUND AS OF APRIL 30, 2003
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
CLASS B
------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 ----------------------------------------------
(UNAUDITED) 2002(1) 2001 2000(2)(3)
- ----------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 4.150 $ 4.860 $ 6.180 $ 7.270
- ----------------------------------------------------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------
Net investment income $ 0.207 $ 0.431 $ 0.601 $ 0.418
Net realized and unrealized
gain (loss) 0.572 (0.672) (1.206) (1.090)
- ----------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.779 $ (0.241) $ (0.605) $ (0.672)
- ----------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------
From net investment income $ (0.209) $ (0.429) $ (0.670) $ (0.418)
From tax return of capital -- (0.040) (0.045) --
- ----------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.209) $ (0.469) $ (0.715) $ (0.418)
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 4.720 $ 4.150 $ 4.860 $ 6.180
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 19.31% (5.46)% (10.39)% (9.70)%
- ----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $617,328 $530,326 $648,544 $721,339
Ratios (As a percentage of
average daily net assets):
Expenses(5) 1.83%(6) 1.79% 1.83% 1.78%(6)
Net investment income 9.45%(6) 9.30% 10.91% 10.37%(6)
Portfolio Turnover of the
Portfolio 50% 88% 83% 41%
- ----------------------------------------------------------------------------------------------------
<Caption>
CLASS B
-------------------------------------
YEAR ENDED MARCH 31,
-------------------------------------
2000(2) 1999 1998
- ------------------------------
Net asset value -- Beginning
of period $ 7.510 $ 8.030 $ 7.220
- ------------------------------
Income (loss) from operations
- ------------------------------
Net investment income $ 0.702 $ 0.685 $ 0.658
Net realized and unrealized
gain (loss) (0.242) (0.543) 0.774
- ------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 0.460 $ 0.142 $ 1.432
- ------------------------------
Less distributions
- ------------------------------
From net investment income $ (0.700) $ (0.662) $ (0.622)
From tax return of capital -- -- --
- ------------------------------
TOTAL DISTRIBUTIONS $ (0.700) $ (0.662) $ (0.622)
- ------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 7.270 $ 7.510 $ 8.030
- ------------------------------
TOTAL RETURN(4) 6.36% 2.08% 20.59%
- ------------------------------
Ratios/Supplemental Data
- ------------------------------
Net assets, end of period
(000's omitted) $758,686 $689,140 $693,818
Ratios (As a percentage of
average daily net assets):
Expenses(5) 1.74% 1.75% 1.73%
Net investment income 9.49% 9.13% 8.58%
Portfolio Turnover of the
Portfolio 113% 150% 137%
- ------------------------------
</Table>
(1) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for
Investment Companies and began using the interest method to amortize
premiums on fixed-income securities. The effect of this change for the
year ended October 31, 2002 was to decrease net investment income per
share by $0.010, decrease net realized and unrealized losses per share
by $0.010 and decrease the ratio of net investment income to average net
assets from 9.52% to 9.30%. Per share data and ratios for the periods
prior to November 1, 2001 have not been restated to reflect this change
in presentation.
(2) Net investment income per share was computed using average shares
outstanding.
(3) For the seven-month period ended October 31, 2000.
(4) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total
return is not computed on an annualized basis.
(5) Includes the Fund's share of the Portfolio's allocated expenses.
(6) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
5
<Page>
EATON VANCE HIGH INCOME FUND AS OF APRIL 30, 2003
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
CLASS C
---------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, YEAR ENDED MARCH 31,
APRIL 30, 2003 ---------------------------------------------- -----------------------
(UNAUDITED) 2002(1) 2001 2000(2)(3) 2000(2) 1999
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning
of period $ 5.480 $ 6.410 $ 8.130 $ 9.560 $ 9.880 $10.560
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.274 $ 0.567 $ 0.796 $ 0.551 $ 0.915 $ 0.901
Net realized and unrealized
gain (loss) 0.752 (0.878) (1.590) (1.435) (0.321) (0.715)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 1.026 $ (0.311) $ (0.794) $ (0.884) $ 0.594 $ 0.186
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.276) $ (0.572) $ (0.864) $ (0.546) $(0.914) $(0.866)
From tax return of capital -- (0.047) (0.062) -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.276) $ (0.619) $ (0.926) $ (0.546) $(0.914) $(0.866)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 6.230 $ 5.480 $ 6.410 $ 8.130 $ 9.560 $ 9.880
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 19.22% (5.37)% (10.31)% (9.70)% 6.26% 2.08%
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000's omitted) $243,024 $195,037 $202,906 $191,027 $36,851 $61,660
Ratios (As a percentage of
average daily net assets):
Expenses(5) 1.83%(6) 1.79% 1.82% 1.82%(6) 1.78% 1.79%
Net investment income 9.44%(6) 9.28% 10.85% 10.40%(6) 9.42% 9.18%
Portfolio Turnover of the
Portfolio 50% 88% 83% 41% 113% 150%
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for
Investment Companies and began using the interest method to amortize
premiums on fixed-income securities. The effect of this change for the
year ended October 31, 2002 was to decrease net investment income per
share by $0.010, decrease net realized and unrealized losses per share
by $0.010 and decrease the ratio of net investment income to average net
assets from 9.50% to 9.28%. Per share data and ratios for the periods
prior to November 1, 2001 have not been restated to reflect this change
in presentation.
(2) Net investment income per share was computed using average shares
outstanding.
(3) For the seven-month period ended October 31, 2000.
(4) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total
return is not computed on an annualized basis.
(5) Includes the Fund's share of the Portfolio's allocated expenses.
(6) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
6
<Page>
EATON VANCE HIGH INCOME FUND AS OF APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
Eaton Vance High Income Fund (the Fund) is a diversified series of Eaton
Vance Mutual Funds Trust (the Trust). The Trust is an entity of the type
commonly known as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as an open-end, management
investment company. The Fund offers two classes of shares. Class B shares and
Class C shares are sold at net asset value and are subject to a contingent
deferred sales charge (see Note 6). Each class represents a pro rata interest
in the Fund, but votes separately on class-specific matters and (as noted
below) is subject to different expenses. Realized and unrealized gains and
losses are allocated daily to each class of shares based on the relative net
assets of each class to the total net assets of the Fund. Net investment
income, other than class specific expenses, is allocated daily to each class
of shares based upon the ratio of the value of each class' paid shares to the
total value of all paid shares. Each class of shares differs in its
distribution plan and certain other class specific expenses. The Fund invests
all of its investable assets in interests in the High Income Portfolio (the
Portfolio), a New York Trust, having the same investment objective as the
Fund. The value of the Fund's investment in the Portfolio reflects the Fund's
proportionate interest in the net assets of the Portfolio (81.8% at
April 30, 2003). The performance of the Fund is directly affected by the
performance of the Portfolio. The financial statements of the Portfolio,
including the portfolio of investments, are included elsewhere in this report
and should be read in conjunction with the Fund's financial statements.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in
the United States of America.
A Investment Valuation -- Valuation of securities by the Portfolio is discussed
in Note 1A of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.
B Income -- The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the fund determined in accordance with accounting
principles generally accepted in the United States of America.
C Federal Taxes -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its taxable income, including any
net realized gain on investments. Accordingly, no provision for federal
income or excise tax is necessary. At October 31, 2002, the Fund, for federal
income tax purposes, had a capital loss carryover of $438,488,962, which will
reduce the Fund's taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Internal Revenue Code and
thus will reduce the amount of distributions to shareholders which would
otherwise be necessary to relieve the Fund of any liability for federal
income or excise tax. Such capital loss carryover will expire on October 31,
2010 ($143,280,458), October 31, 2009 ($235,765,703), March 31, 2008
($30,521,427), March 31, 2007 ($3,342,613), March 31, 2005 ($7,020,394),
March 31, 2004 ($5,868,015), and March 31, 2003 ($12,690,352) respectively.
D Other -- Investment transactions are accounted for on a trade-date basis.
E Use of Estimates -- The preparation of the financial statements in conformity
with accounting principles generally accepted in the United States of America
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.
F Expenses -- The majority of expenses of the Trust are directly identifiable
to an individual fund. Expenses which are not readily identifiable to a
specific fund are allocated taking into consideration, among other things,
the nature and type of expense and the relative size of the funds.
G Interim Financial Statements -- The interim financial statements relating to
April 30, 2003 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders
- -------------------------------------------
The net income of the Fund is determined daily and substantially all of the
net income so determined is declared as a dividend to shareholders of record
at the time of declaration. Such daily dividends are paid monthly.
Distributions of realized capital gains, if any, are made at least annually.
Shareholders may reinvest capital gain
7
<Page>
EATON VANCE HIGH INCOME FUND AS OF APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
distributions in additional shares of the Fund at the net asset value as of
the ex-dividend date. Distributions are paid in the form of additional shares
of the Fund or, at the election of the shareholder, in cash. The Fund
distinguishes between distributions on a tax basis and a financial reporting
basis. Accounting principles generally accepted in the United States of
America require that only distributions in excess of tax basis earnings and
profits be reported in the financial statements as a return of capital.
Permanent differences between book and tax accounting relating to
distributions are reclassified to paid-in capital.
3 Shares of Beneficial Interest
- -------------------------------------------
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Transactions in Fund shares were as follows:
<Table>
<Caption>
SIX MONTHS ENDED
APRIL 30, 2003 YEAR ENDED
CLASS B (UNAUDITED) OCTOBER 31, 2002
----------------------------------------------------------------------------
Sales 12,687,834 28,496,851
Issued to shareholders electing to
receive payments of distributions in
Fund shares 1,865,643 4,036,471
Redemptions (11,514,383) (38,252,450)
----------------------------------------------------------------------------
NET INCREASE (DECREASE) 3,039,094 (5,719,128)
----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SIX MONTHS ENDED
APRIL 30, 2003 YEAR ENDED
CLASS C (UNAUDITED) OCTOBER 31, 2002
----------------------------------------------------------------------------
Sales 6,892,678 18,705,008
Issued to shareholders electing to
receive payments of distributions in
Fund shares 805,821 1,591,855
Redemptions (4,284,667) (16,335,479)
----------------------------------------------------------------------------
NET INCREASE 3,413,832 3,961,384
----------------------------------------------------------------------------
</Table>
4 Transactions with Affiliates
- -------------------------------------------
Eaton Vance Management (EVM) serves as the administrator of the Fund, but
receives no compensation. The Portfolio has engaged Boston Management and
Research (BMR), a subsidiary of EVM, to render investment advisory services.
See Note 2 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report. Effective August 1, 2002, EVM serves as
the sub-transfer agent of the Fund and receives from the transfer agent an
aggregate fee based upon the actual expenses incurred by EVM in the
performance of those services. Except as to Trustees of the Fund and the
Portfolio who are not members of EVM's or BMR's organization, officers and
Trustees receive remuneration for their services to the Fund out of such
investment adviser fee.
Certain officers and Trustees of the Fund and of the Portfolio are officers
of the above organizations.
5 Distribution and Service Plans
- -------------------------------------------
The Fund has in effect distribution plans for Class B Shares (the Class B
Plan) and Class C Shares (Class C Plan) pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (collectively, the Plans). The Class B and
Class C Plans require the Fund to pay Eaton Vance Distributors, Inc. (EVD)
amounts equal to 1/365 of 0.75% of the Fund's average daily net assets
attributable to Class B and Class C shares for providing ongoing distribution
services and facilities to the Fund. The Fund will automatically discontinue
payments to EVD during any period in which there are no outstanding Uncovered
Distribution Charges, which are equivalent to the sum of (i) 5% and 6.25% of
the aggregate amount received by the Fund for the Class B and Class C shares
sold, respectively, plus, (ii) interest calculated by applying the rate of 1%
over the prevailing prime rate to the outstanding balance of Uncovered
Distribution Charges of EVD of each respective class, reduced by the
aggregate amount of contingent deferred sales charges (see Note 6) and daily
amounts theretofore paid to EVD by each respective class. The Fund paid or
accrued $2,109,493 and $804,428 for Class B and Class C shares, respectively,
to or payable to EVD for the six months ended April 30, 2003 representing
0.75% (annualized) of the average daily net assets for Class B and Class C
shares. At April 30, 2003, the amount of Uncovered Distribution Charges of
EVD calculated under the Plan was approximately $29,166,000 and $29,761,000
for Class B and Class C shares, respectively.
The Plans authorize the Fund to make payments of service fees to EVD,
investment dealers and other persons in amounts not exceeding 0.25% of the
Fund's average daily net assets attributable to Class B and Class C shares
for each fiscal year. Service fee payments will be made for personal services
and/or the maintenance of shareholder accounts. Service fees are separate and
distinct from the sales commissions and distribution fees payable by the Fund
to EVD and, as such, are not subject to automatic discontinuance where there
are no outstanding Uncovered
8
<Page>
EATON VANCE HIGH INCOME FUND AS OF APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
Distribution Charges of EVD. Service fee payments for the six months ended
April 30, 2003 amounted to $703,164 and $268,143 for Class B and Class C,
respectively.
Certain officers and Trustees of the Fund are officers or directors of EVD.
6 Contingent Deferred Sales Charge
- -------------------------------------------
A contingent deferred sales charge (CDSC) generally is imposed on redemptions
of Class B shares made within six years of purchase and on redemptions of
Class C shares made within one year of purchase. Generally, the CDSC is based
upon the lower of the net asset value at date of redemption or date of
purchase. No charge is levied on shares acquired by reinvestment of dividends
or capital gains distributions. Class B CDSC is imposed at declining rates
that begin at 5% in the case of redemptions in the first and second year
after purchase, declining one percentage point each subsequent year. Class C
shares will be subject to a 1% CDSC if redeemed within one year of purchase.
No CDSC is levied on shares which have been sold to EVM or its affiliates or
to their respective employees or clients and may be waived under certain
other limited conditions. CDSC charges are paid to EVD to reduce the amount
of Uncovered Distribution Charges calculated under the Fund's Distribution
Plan. CDSC charges received when no Uncovered Distribution Charges exist will
be retained by the Fund. EVD received approximately $693,000 and $45,000 of
CDSC paid by shareholders for Class B shares and Class C shares,
respectively, for the six months ended April 30, 2003.
7 Investment Transactions
- -------------------------------------------
Increases and decreases in the Fund's investment in the Portfolio for the six
months ended April 30, 2003, aggregated $99,136,606 and $104,439,349,
respectively.
9
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SENIOR FLOATING-RATE INTERESTS -- 2.4%(1)(2)
<Table>
<Caption>
PRINCIPAL
SECURITY AMOUNT VALUE
- -------------------------------------------------------------------------------
Broadcasting and Cable -- 0.4%
- -------------------------------------------------------------------------------
Century Cable Holdings, LLC, Term Loan,
Maturing 12/31/09 2,500,000 $ 2,015,625
Century Cable Holdings, Term Loan B,
Maturing 6/30/09 850,000 688,044
Olympus Cable Holdings, LLC, Term
Loan A, Maturing 6/30/10 1,000,000 843,929
- -------------------------------------------------------------------------------
$ 3,547,598
- -------------------------------------------------------------------------------
Chemicals -- 0.1%
- -------------------------------------------------------------------------------
Huntsman Co., LLC, Term A,
Maturing 3/31/07 1,013,712 $ 959,648
Huntsman Co., LLC, Term B,
Maturing 3/31/07 486,288 460,352
- -------------------------------------------------------------------------------
$ 1,420,000
- -------------------------------------------------------------------------------
Printing and Business Products -- 0.2%
- -------------------------------------------------------------------------------
Merrill Corp., Term Loan A,
Maturing 11/15/06 1,852,860 $ 1,681,470
Merrill Corp., Term Loan B,
Maturing 11/15/07 536,010 486,430
- -------------------------------------------------------------------------------
$ 2,167,900
- -------------------------------------------------------------------------------
Utility -- 0.5%
- -------------------------------------------------------------------------------
El Paso Corp., Term Loan B,
Maturing 3/12/05 5,200,000 $ 5,174,000
- -------------------------------------------------------------------------------
$ 5,174,000
- -------------------------------------------------------------------------------
Wireless Communication Services -- 1.2%
- -------------------------------------------------------------------------------
Alamosa Holdings LLC, Term Loan,
Maturing 2/14/08 2,650,000 $ 2,345,250
IPCS Wireless Revolving Loan,
Maturing 6/30/08(3)(4) 6,857,143 4,436,572
IPCS Wireless, Term Loan B,
Maturing 6/30/08(3)(4) 3,685,714 2,384,657
Spectrasite Communications Inc., Term
Loan B, Maturing 6/30/06 3,782,434 3,593,313
- -------------------------------------------------------------------------------
$ 12,759,792
- -------------------------------------------------------------------------------
Total Senior Floating-Rate Interests
(identified cost $26,263,757) $ 25,069,290
- -------------------------------------------------------------------------------
</Table>
CORPORATE BONDS & NOTES -- 94.6%
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Aerospace and Defense -- 2.0%
- -------------------------------------------------------------------------------
Dunlop Stand Aero Holdings, Sr. Notes,
11.875%, 5/15/09 $ 10,410 $ 10,878,450
K&F Industries, Sr. Sub. Notes,
9.625%, 12/15/10 1,450 1,573,250
Transdigm, Inc., 10.375%, 12/1/08 8,180 8,752,600
- -------------------------------------------------------------------------------
$ 21,204,300
- -------------------------------------------------------------------------------
Airlines -- 1.7%
- -------------------------------------------------------------------------------
American Airlines, 7.80%, 10/1/06 $ 6,963 $ 2,818,158
American Airlines, 7.858%, 10/1/11 260 241,924
Continental Airlines, 7.033%, 6/15/11 4,917 2,580,495
Continental Airlines, 7.08%, 11/1/04 567 346,736
Continental Airlines, 7.434%, 9/15/04 2,740 1,533,467
Delta Air Lines, 6.65%, 3/15/04 2,705 2,502,125
Delta Air Lines, 8.30%, 12/15/29 1,005 608,025
Northwest Airlines, Inc.,
8.375%, 3/15/04 1,500 1,237,500
Northwest Airlines, Inc.,
8.875%, 6/1/06 5,910 3,575,550
Northwest Airlines, Inc., 8.52%, 4/7/04 1,590 1,311,750
Northwest Airlines, Inc., Sr. Notes,
9.875%, 3/15/07 2,790 1,660,050
- -------------------------------------------------------------------------------
$ 18,415,780
- -------------------------------------------------------------------------------
Apparel -- 1.9%
- -------------------------------------------------------------------------------
GFSI, Inc., Sr. Sub. Notes, Series B,
9.625%, 3/1/07 $ 970 $ 809,950
Phillips Van-Heusen, Sr. Notes,
8.125%, 5/1/13(5) 2,475 2,475,000
Russell Corp., 9.25%, 5/1/10 1,977 2,154,930
Tropical Sportswear International,
11.00%, 6/15/08 4,225 4,330,625
William Carter, Series B,
10.875%, 8/15/11 8,890 9,934,575
- -------------------------------------------------------------------------------
$ 19,705,080
- -------------------------------------------------------------------------------
Appliances -- 0.1%
- -------------------------------------------------------------------------------
Salton, Inc., Sr. Sub. Notes,
12.25%, 4/15/08 $ 985 $ 1,029,325
- -------------------------------------------------------------------------------
$ 1,029,325
- -------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
10
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Auto and Parts -- 2.0%
- -------------------------------------------------------------------------------
Collins and Aikman Products,
10.75%, 12/31/11 $ 3,530 $ 3,635,900
CSK Auto, Inc., 12.00%, 6/15/06 6,330 6,970,912
Dana Corp., 10.125%, 3/15/10 4,075 4,584,375
Dura Operating Corp., 8.625%, 4/15/12 840 875,700
Rexnord Corp., Sr. Sub. Notes,
10.125%, 12/15/12(5) 1,665 1,798,200
TRW Automotive, Inc., Sr. Notes,
9.375%, 2/15/13(5) 2,445 2,683,387
- -------------------------------------------------------------------------------
$ 20,548,474
- -------------------------------------------------------------------------------
Broadcasting and Cable -- 7.7%
- -------------------------------------------------------------------------------
Adelphia Communications, Sr. Notes,
Series B, 9.25%, 10/1/49(4) $ 6,175 $ 2,994,875
Avalon Cable Holdings, LLC, Sr. Disc.
Notes, 11.875%, (0% until 2003) 12/1/08 1,615 1,550,400
Charter Communication Holdings, Sr.
Disc. Notes, 12.126%, (0% until
2006) 1/15/12 520 210,600
Charter Communication Holdings, Sr.
Disc. Notes, 13.50%, (0% until
2006) 1/15/11 6,710 3,053,050
Charter Communication Holdings, Sr.
Disc. Notes, 9.92%, (0% until
2004), 4/1/11 1,190 690,200
Charter Communication Holdings, Sr.
Notes, 8.25%, 4/1/07 1,040 696,800
Charter Communication Holdings, Sr.
Notes, 10.00%, 4/1/09 4,765 3,168,725
Charter Communication Holdings, Sr.
Notes, 10.75%, 10/1/09 1,965 1,316,550
Corus Entertainment, Inc., Sr. Sub.
Notes, 8.75%, 3/1/12 3,770 4,071,600
CSC Holdings, Inc., Sr. Notes,
7.875%, 12/15/07 4,835 5,113,012
CSC Holdings, Inc., Sr. Sub. Notes,
9.875%, 2/15/13 1,130 1,189,325
CSC Holdings, Inc., Sr. Sub. Notes,
10.50%, 5/15/16 1,945 2,202,712
DirecTV Holdings/Finance, Sr. Notes,
8.375%, 3/15/13(5) 3,245 3,650,625
Echostar DBS Corp., Sr. Notes,
9.125%, 1/15/09 2,110 2,384,300
Granite Broadcasting Corp., Sr. Sub.
Notes, 9.375%, 12/1/05 470 463,537
Granite Broadcasting Corp., Sr. Sub.
Notes, 10.375%, 5/15/05 5,975 5,975,000
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Broadcasting and Cable (continued)
- -------------------------------------------------------------------------------
Insight Communications, Sr. Disc. Notes,
12.25%, (0% until 2006) 2/15/11 $ 10,040 $ 7,956,700
Mediacom Broadband LLC, 11.00%, 7/15/13 910 1,039,675
Mediacom LLC/Capital Corp., Sr. Notes,
9.50%, 1/15/13 9,382 10,132,560
Muzak Holdings LLC, 9.875%, 3/15/09 2,625 2,454,375
Muzak Holdings LLC, Sr. Disc. Notes,
13.00%, (0% until 2004), 3/15/10 5,853 3,672,757
Nexstar Finance Holding LLC, Inc., Sr.
Disc. Notes, 0.00%, 4/1/13(5) 4,345 2,813,387
Nextmedia Operating, Inc.,
10.75%, 7/1/11 1,650 1,835,625
Paxson Communications Corp., 12.25% (0%
unitl 2006), 12.25%, (0% until 2006)
1/15/09 4,345 3,671,525
Pegasus Communications Corp., Sr. Notes,
9.625%, 10/15/05 375 346,875
Pegasus Communications Corp., Sr. Notes,
9.75%, 12/1/06 245 226,625
Pegasus Communications Corp., Sr. Notes,
12.50%, 8/1/07 3,155 3,060,350
Pegasus Satellite, 12.375%, 8/1/06 4,995 4,845,150
Young Broadcasting, Inc.,
10.00%, 3/1/11 820 889,700
- -------------------------------------------------------------------------------
$ 81,676,615
- -------------------------------------------------------------------------------
Building Materials -- 0.7%
- -------------------------------------------------------------------------------
Associated Materials, Inc.,
9.75%, 4/15/12 $ 2,040 $ 2,233,800
Louisiana Pacific Corp., Sr. Sub. Notes,
10.875%, 11/15/08 3,895 4,381,875
Ryland Group, Sr. Notes, 9.75%, 9/1/10 310 353,787
- -------------------------------------------------------------------------------
$ 6,969,462
- -------------------------------------------------------------------------------
Business Services - Miscellaneous -- 2.4%
- -------------------------------------------------------------------------------
Coinmach Corp., Sr. Notes, 9.00%, 2/1/10 $ 5,425 $ 5,804,750
Moore North American Finance, Sr. Notes,
7.875%, 1/15/11(5) 1,995 2,134,650
PCA LLC/PCA Finance Corp., Sr. Notes,
11.875%, 8/1/09 4,806 5,094,360
R.H. Donnelley Finance Corp., Sr. Sub.
Notes, 10.875%, 12/15/12(5) 4,780 5,556,750
Synagro Technologies, Inc., Sr. Sub.
Notes, 9.50%, 4/1/09 1,360 1,468,800
Universal City Development, Sr. Notes,
11.75%, 4/1/10(5) 4,400 4,763,000
- -------------------------------------------------------------------------------
$ 24,822,310
- -------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
11
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Chemicals -- 5.3%
- -------------------------------------------------------------------------------
Avecia Group PLC, 11.00%, 7/1/09 $ 4,257 $ 3,895,155
Equistar Chemical, Sr. Notes,
10.625%, 5/1/11(5) 2,650 2,815,625
Hercules, Inc., 11.125%, 11/15/07 5,300 6,015,500
HMP Equity Holdings Corp.,
0.00%, 5/15/08(5) 8,010 3,799,543
Huntsman Co., LLC, Sr. Notes,
9.875%, 3/1/09(5) 1,960 2,136,400
Lyondell Chemical Co., 9.50%, 12/15/08 3,120 3,198,000
Lyondell Chemical Co.,
9.50%, 12/15/08(5) 6,075 6,226,875
Lyondell Chemical Co., 11.125%, 7/15/12 4,045 4,388,825
MacDermid, Inc., 9.125%, 7/15/11 2,215 2,469,725
Methanex Corp., Sr. Notes,
8.75%, 8/15/12 2,815 3,117,612
Noveon, Inc., 11.00%, 2/28/11 680 771,800
OM Group, Inc., 9.25%, 12/15/11 3,660 3,147,600
Resolution Performance, Sr. Sub. Notes,
9.50%, 4/15/10(5) 3,225 3,466,875
Resolution Performance, Sr. Sub. Notes,
13.50%, 11/15/10 5,720 6,163,300
Texas Petrochemical Corp., Sr. Sub.
Notes, 11.125%, 7/1/06 3,010 1,730,750
United Industries Corp., Sr. Sub. Notes,
9.875%, 4/1/09(5) 1,980 2,108,700
- -------------------------------------------------------------------------------
$ 55,452,285
- -------------------------------------------------------------------------------
Consumer Products -- 1.6%
- -------------------------------------------------------------------------------
Amscan Holdings, Inc., Sr. Sub. Notes,
9.875%, 12/15/07 $ 1,935 $ 1,903,556
Fedders North America, 9.375%, 8/15/07 6,085 5,111,400
Fedders North America, Series B,
9.375%, 8/15/07 795 667,800
Hockey Co., 11.25%, 4/15/09 6,095 6,689,262
Weight Watcher International, Inc.,
13.00%, 10/1/09 1,870 2,159,850
- -------------------------------------------------------------------------------
$ 16,531,868
- -------------------------------------------------------------------------------
Containers and Packaging -- 3.6%
- -------------------------------------------------------------------------------
BWAY Corp., Sr. Sub. Notes,
10.00%, 10/15/10(5) $ 2,075 $ 2,168,375
Crown Holdings SA, 9.50%, 3/1/11(5) 1,625 1,738,750
Crown Holdings SA, 10.875%, 3/1/13(5) 3,935 4,259,637
Graham Packaging Co., 8.75%, 1/15/08 830 838,300
MDP Acquisitions PLC, Sr. Notes,
9.625%, 10/1/12(5) 6,325 6,894,250
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Containers and Packaging (continued)
- -------------------------------------------------------------------------------
Owens-Brockway Glass Containers, Sr.
Notes, 8.25%, 5/15/13(5) $ 4,575 $ 4,735,756
Riverwood International Corp.,
10.875%, 4/1/08 6,185 6,416,937
Smurfit-Stone Container, 8.25%, 10/1/12 4,200 4,588,500
Stone Container Corp., Sr. Notes,
8.375%, 7/1/12 5,310 5,801,175
- -------------------------------------------------------------------------------
$ 37,441,680
- -------------------------------------------------------------------------------
Drugs -- 0.5%
- -------------------------------------------------------------------------------
Alaris Medical Systems, Series B,
11.625%, 12/1/06 $ 3,620 $ 4,253,500
Alpharma, Inc., Sr. Notes,
8.625%, 5/1/11(5) 1,180 1,227,200
- -------------------------------------------------------------------------------
$ 5,480,700
- -------------------------------------------------------------------------------
Electronic Components -- 0.6%
- -------------------------------------------------------------------------------
Sanmina-Sci Corp., 10.375%, 1/15/10(5) $ 4,115 $ 4,711,675
Solectron Corp., 0.00%, 11/20/20 3,545 1,936,456
- -------------------------------------------------------------------------------
$ 6,648,131
- -------------------------------------------------------------------------------
Electronic Equipment -- 0.1%
- -------------------------------------------------------------------------------
Flextronics International Ltd., Sr. Sub.
Notes, 9.875%, 7/1/10 $ 430 $ 483,750
Hexcel Corp., 9.875%, 10/1/08(5) 800 860,000
- -------------------------------------------------------------------------------
$ 1,343,750
- -------------------------------------------------------------------------------
Electronics - Instruments -- 0.1%
- -------------------------------------------------------------------------------
Wesco Distribution, Inc., 9.125%, 6/1/08 $ 1,605 $ 1,452,525
- -------------------------------------------------------------------------------
$ 1,452,525
- -------------------------------------------------------------------------------
Energy Services -- 1.9%
- -------------------------------------------------------------------------------
Hornbeck Leevac Marine Service, Sr.
Notes, 10.625%, 8/1/08 $ 2,173 $ 2,357,705
Mirant Corp., Sr. Notes,
7.40%, 7/15/04(5) 3,485 3,049,375
Port Arthur Finance Corp.,
12.50%, 1/15/09 11,022 12,620,259
Sierra Pacific Resources,
8.75%, 5/15/05 2,315 2,257,125
- -------------------------------------------------------------------------------
$ 20,284,464
- -------------------------------------------------------------------------------
Entertainment -- 3.9%
- -------------------------------------------------------------------------------
AMF Bowling Worldwide, Sr. Sub. Notes,
13.00%, 2/28/08 $ 3,815 $ 4,148,812
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
12
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Entertainment (continued)
- -------------------------------------------------------------------------------
Carmike Cinemas, 10.375%, 2/1/09 $ 6,108 $ 6,237,795
Hollywood Entertainment,
9.625%, 3/15/11 6,195 6,721,575
Premier Parks, Inc., Sr. Notes,
9.75%, 6/15/07 1,610 1,678,425
Royal Caribbean Cruises, 7.25%, 3/15/18 1,570 1,365,900
Royal Caribbean Cruises, Sr. Notes,
7.25%, 8/15/06 785 781,075
Royal Caribbean Cruises, Sr. Notes,
8.75%, 2/2/11 8,840 9,016,800
Six Flags, Inc., Sr. Notes,
8.875%, 2/1/10 3,278 3,294,390
Six Flags, Inc., Sr. Notes,
9.50%, 2/1/09 455 466,375
Six Flags, Inc., Sr. Notes,
9.75%, 4/15/13(5) 6,555 6,866,362
- -------------------------------------------------------------------------------
$ 40,577,509
- -------------------------------------------------------------------------------
Foods -- 5.1%
- -------------------------------------------------------------------------------
American Seafood Group LLC,
10.125%, 4/15/10 $ 5,665 $ 6,118,200
B&G Foods, Inc., 9.625%, 8/1/07 1,040 1,077,700
Burns Philip Capital Ltd.,
9.75%, 7/15/12(5) 3,765 3,783,825
Dean Foods Co., Sr. Notes,
8.15%, 8/1/07 1,950 2,113,158
Del Monte Corp., Sr. Sub. Notes,
8.625%, 12/15/12(5) 5,170 5,590,062
Doane Pet Care Co., Sr. Notes,
10.75%, 3/1/10(5) 6,055 6,584,812
Dole Foods Co., Sr. Notes,
8.875%, 3/15/11(5) 7,965 8,701,763
Luigino's, Inc., Sr. Sub. Notes,
10.00%, 2/1/06 3,505 3,645,200
Michael Foods, 11.75%, 4/1/11 6,125 7,013,125
New World Pasta Company, 9.25%, 2/15/09 6,317 1,452,910
Premier International Foods, Sr. Notes,
12.00%, 9/1/09 7,167 7,919,535
- -------------------------------------------------------------------------------
$ 54,000,290
- -------------------------------------------------------------------------------
Gaming -- 1.5%
- -------------------------------------------------------------------------------
Argosy Gaming Co., 10.75%, 6/1/09 $ 1,895 $ 2,103,450
Chukchansi EDA, Sr. Notes,
14.50%, 6/15/09(5) 5,865 6,136,256
Penn National Gaming, Inc.,
11.125%, 3/1/08 6,970 7,719,275
- -------------------------------------------------------------------------------
$ 15,958,981
- -------------------------------------------------------------------------------
Health Services -- 2.8%
- -------------------------------------------------------------------------------
Magellan Health Services, Sr. Notes,
9.375%, 11/15/07(5)(6) $ 3,870 $ 3,502,350
Pacificare Health System,
10.75%, 6/1/09 4,810 5,351,125
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Health Services (continued)
- -------------------------------------------------------------------------------
Rotech Healthcare, Inc., Sr. Sub. Notes,
9.50%, 4/1/12 $ 3,250 $ 3,315,000
Select Medical Corp., Sr. Sub. Notes,
9.50%, 6/15/09 6,945 7,465,875
Vanguard Health Systems, 9.75%, 8/1/11 9,740 9,886,100
- -------------------------------------------------------------------------------
$ 29,520,450
- -------------------------------------------------------------------------------
Housing, Real Estate Development -- 0.4%
- -------------------------------------------------------------------------------
Ryland Group, Sr. Sub. Notes,
9.125%, 6/15/11 $ 3,590 $ 4,011,825
- -------------------------------------------------------------------------------
$ 4,011,825
- -------------------------------------------------------------------------------
Information Technology Services -- 0.0%
- -------------------------------------------------------------------------------
Diva Systems Corp., Sr. Notes,
12.625%, 3/1/08(4) $ 11,215 $ 392,525
- -------------------------------------------------------------------------------
$ 392,525
- -------------------------------------------------------------------------------
Lodging -- 0.8%
- -------------------------------------------------------------------------------
Extended Stay America, Inc., Sr. Sub
Notes, 9.875%, 6/15/11 $ 830 $ 867,350
HMH Properties, Inc., 7.875%, 8/1/05 4,630 4,699,450
HMH Properties, Inc., 7.875%, 8/1/08 830 842,450
Host Marriott L.P., 9.25%, 10/1/07 1,550 1,631,375
Host Marriott L.P., 9.50%, 1/15/07 420 443,625
- -------------------------------------------------------------------------------
$ 8,484,250
- -------------------------------------------------------------------------------
Lodging and Gaming -- 5.1%
- -------------------------------------------------------------------------------
Ameristar Casinos, Inc., 10.75%, 2/15/09 $ 1,885 $ 2,120,625
Hollywood Casino Shreveport, First
Mortgage Bonds, 13.00%, 8/1/06 3,445 2,721,550
John Q Hamons Hotels/Finance, Series B,
8.875%, 5/15/12 1,320 1,372,800
Majestic Star LLC, 10.875%, 7/1/06 5,865 6,114,263
Mandalay Resort Group, Sr. Notes,
9.50%, 8/1/08 2,565 2,853,563
Mandalay Resort Group, Sr. Sub. Notes,
10.25%, 8/1/07 855 949,050
MGM Grand, Inc., 9.75%, 6/1/07 3,400 3,825,000
MGM Mirage, Inc., 8.50%, 9/15/10 1,635 1,839,375
MTR Gaming Group, 9.75%, 4/1/10(5) 2,555 2,669,975
Park Place Entertainment, Sr. Sub.
Notes, 8.125%, 5/15/11 110 116,875
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
13
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Lodging and Gaming (continued)
- -------------------------------------------------------------------------------
Park Place Entertainment, Sr. Sub.
Notes, 8.875%, 9/15/08 $ 70 $ 75,775
Sun International Hotels, Sr. Sub.
Notes, 8.875%, 8/15/11 7,095 7,556,175
Venetian Casino/Las Vegas Sands,
11.00%, 6/15/10 9,140 10,076,850
Waterford Gaming LLC, Sr. Notes,
9.50%, 3/15/10(5) 11,128 11,906,960
- -------------------------------------------------------------------------------
$ 54,198,836
- -------------------------------------------------------------------------------
Machinery -- 2.3%
- -------------------------------------------------------------------------------
Briggs & Stratton Corp., Sr. Notes,
8.875%, 3/15/11 $ 4,960 $ 5,580,000
Flowserve Corp., 12.25%, 8/15/10 4,065 4,613,775
Manitowoc Co., Inc. (The),
10.50%, 8/1/12 905 990,975
Manitowoc Co., Inc. (The), Sr. Sub.
Notes, 10.375%, 5/15/11 EUR 2,540 2,886,151
Terex Corp., 9.25%, 7/15/11 2,620 2,816,500
Terex Corp., 10.375%, 4/1/11 6,800 7,582,000
- -------------------------------------------------------------------------------
$ 24,469,401
- -------------------------------------------------------------------------------
Manufacturing -- 2.2%
- -------------------------------------------------------------------------------
Dresser, Inc., 9.375%, 4/15/11 $ 3,965 $ 4,103,775
Fastentech, Inc, Sr. Notes,
11.50%, 5/1/11(5) 2,295 2,375,325
Foamex L.P., 9.875%, 6/15/07 860 193,500
Foamex L.P./Capital Corp.,
10.75%, 4/1/09 2,905 2,048,025
Roller Bearing Holdings Co., Sr. Disc.
Notes, 13.00%, 6/15/09(5) 11,485 10,393,925
Tekni-Plex, Inc., Sr. Sub. Notes,
12.75%, 6/15/10(5) 1,635 1,606,388
Tyco International Group SA,
3.125%, 1/15/23(5) 1,225 1,247,969
Tyco International Group SA,
5.80%, 8/1/06 395 391,050
Venture Holding Trust, Sr. Notes,
9.50%, 7/1/05(4) 3,811 1,143,300
- -------------------------------------------------------------------------------
$ 23,503,257
- -------------------------------------------------------------------------------
Medical Products -- 0.8%
- -------------------------------------------------------------------------------
Advanced Medical Optics, Sr. Sub. Notes,
9.25%, 7/15/10 $ 2,545 $ 2,710,425
Hanger Orthopedic Group,
10.375%, 2/15/09 1,040 1,138,800
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Medical Products (continued)
- -------------------------------------------------------------------------------
Medquest, Inc., 11.875%, 8/15/12 $ 5,375 $ 4,998,750
- -------------------------------------------------------------------------------
$ 8,847,975
- -------------------------------------------------------------------------------
Metals - Industrial -- 0.6%
- -------------------------------------------------------------------------------
AK Steel Corp., 7.75%, 6/15/12 $ 3,285 $ 2,886,694
AK Steel Corp., 7.875%, 2/15/09 1,225 1,093,313
United States Steel LLC, Sr. Notes,
10.75%, 8/1/08 2,240 2,441,600
- -------------------------------------------------------------------------------
$ 6,421,607
- -------------------------------------------------------------------------------
Networking Products -- 0.3%
- -------------------------------------------------------------------------------
Lucent Technologies, 5.50%, 11/15/08 $ 4,160 $ 3,546,400
- -------------------------------------------------------------------------------
$ 3,546,400
- -------------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 5.0%
- -------------------------------------------------------------------------------
Amerigas Partners LP, Sr. Notes,
8.875%, 5/20/11 $ 4,215 $ 4,573,275
ANR Pipeline Co., Sr. Notes,
8.875%, 3/15/10(5) 1,600 1,776,000
CMS Panhandle Hldg Co., Sr. Notes,
6.50%, 7/15/09 2,040 2,096,100
DI Industries, Inc., (Grey Wolf, Inc.),
Sr. Notes, 8.875%, 7/1/07 490 507,763
Dynegy Holdings, Inc., Sr. Notes,
6.875%, 4/1/11 6,130 5,241,150
Dynegy Holdings, Inc., Sr. Notes,
7.45%, 7/15/06 835 791,163
Dynegy Holdings, Inc., Sr. Notes,
8.125%, 3/15/05 3,935 3,826,788
El Paso Energy Partners, Sr. Sub. Notes,
8.50%, 6/1/10(5) 2,975 3,220,438
Grant Geophysical, Inc., Sr. Notes,
Series B, 9.75%, 2/15/08(4) 3,570 910,350
Northwest Pipeline Corp., Sr. Notes,
8.125%, 3/1/10(5) 825 903,375
Premco Refining Group, Sr. Notes,
9.50%, 2/1/13(5) 5,035 5,639,200
Ram Energy, Inc., Sr. Notes,
11.50%, 2/15/08 4,602 1,633,710
SESI, LLC, 8.875%, 5/15/11 11,063 11,782,095
Southern Natural Gas, 8.00%, 3/1/32 3,525 3,621,938
Southern Natural Gas, Sr. Notes,
8.875%, 3/15/10(5) 1,200 1,332,000
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
14
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Oil and Gas - Equipment and Services (continued)
- -------------------------------------------------------------------------------
Williams Cos., Inc. (The),
7.875%, 1/15/06 $ 5,060 $ 4,908,200
- -------------------------------------------------------------------------------
$ 52,763,545
- -------------------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 3.1%
- -------------------------------------------------------------------------------
Abraxas Petroleum Corp., (PIK),
11.50%, 5/1/07(5) $ 6,367 $ 2,769,645
Chesapeake Energy Corp., Sr. Notes,
8.50%, 3/15/12 900 958,500
Comstock Resources, Inc.,
11.25%, 5/1/07 12,230 13,208,400
Continental Resources, 10.25%, 8/1/08 5,940 5,910,300
El Paso Energy Partners, 8.50%, 6/1/11 2,905 3,144,663
El Paso Energy Partners, Sr. Sub. Notes,
10.625%, 12/1/12(5) 3,115 3,597,825
Grey Wolf, Inc., Series C,
8.875%, 7/1/07 635 655,638
Plains E&P Co., 8.75%, 7/1/12 2,650 2,848,750
- -------------------------------------------------------------------------------
$ 33,093,721
- -------------------------------------------------------------------------------
Oil and Gas - Refining -- 0.1%
- -------------------------------------------------------------------------------
Clark R&M, Inc., Sr. Sub. Notes,
8.875%, 11/15/07 $ 210 $ 212,625
Western Gas Resources, 10.00%, 6/15/09 935 1,023,825
- -------------------------------------------------------------------------------
$ 1,236,450
- -------------------------------------------------------------------------------
Oil Companies - Exploration & Production -- 0.2%
- -------------------------------------------------------------------------------
Plains All American Pipeline, Series B,
7.75%, 10/15/12 $ 2,095 $ 2,294,025
- -------------------------------------------------------------------------------
$ 2,294,025
- -------------------------------------------------------------------------------
Paper and Forest Products -- 1.4%
- -------------------------------------------------------------------------------
Buckeye Technologies, Inc., Sr. Sub.
Notes, 8.00%, 10/15/10 $ 1,070 $ 989,750
Buckeye Technologies, Inc., Sr. Sub.
Notes, 9.25%, 9/15/08 830 817,550
Georgia-Pacific Corp., Debs,
9.50%, 12/1/11 5,725 6,082,813
Georgia-Pacific Corp., Sr. Notes,
9.375%, 2/1/13(5) 3,040 3,359,200
Longview Fibre Co., Sr. Sub. Notes,
10.00%, 1/15/09 2,495 2,694,600
Tembec Industries, Inc.,
8.625%, 6/30/09(5) 1,200 1,254,000
- -------------------------------------------------------------------------------
$ 15,197,913
- -------------------------------------------------------------------------------
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Printing and Business Products -- 1.0%
- -------------------------------------------------------------------------------
MDC Communications Corp., Sr. Sub.
Notes, 10.50%, 12/1/06 $ 1,875 $ 1,715,808
Merrill Corp., Series A, (PIK),
12.00%, 5/1/09(3)(6) 867 698,208
Merrill Corp., Series B, (PIK),
12.00%, 5/1/09(3)(6) 4,183 2,865,614
Xerox Capital Trust, 8.00%, 2/1/27 5,520 4,802,400
- -------------------------------------------------------------------------------
$ 10,082,030
- -------------------------------------------------------------------------------
Printing or Publishing - Diversification -- 1.3%
- -------------------------------------------------------------------------------
Hollinger Participation, Sr. Notes,
(PIK), 12.125%, 11/15/10(5) $ 12,541 $ 13,340,470
- -------------------------------------------------------------------------------
$ 13,340,470
- -------------------------------------------------------------------------------
Publishing -- 1.6%
- -------------------------------------------------------------------------------
American Media, Inc., Series B,
10.25%, 5/1/09 $ 209 $ 227,810
American Media, Inc., Sr. Sub. Notes,
8.875%, 1/15/11(5) 2,435 2,648,063
Canwest Media, Inc., Sr. Sub. Notes,
10.625%, 5/15/11 5,310 6,079,950
Liberty Group Operating, 9.375%, 2/1/08 2,655 2,648,363
Vertis, Inc., Sr. Notes,
10.875%, 6/15/09(5) 4,590 4,842,450
- -------------------------------------------------------------------------------
$ 16,446,636
- -------------------------------------------------------------------------------
Retail - Apparel -- 0.6%
- -------------------------------------------------------------------------------
Mothers Work, Inc., 11.25%, 8/1/10 $ 5,720 $ 6,292,000
- -------------------------------------------------------------------------------
$ 6,292,000
- -------------------------------------------------------------------------------
Retail - General -- 0.4%
- -------------------------------------------------------------------------------
Remington Arms Company,
10.50%, 2/1/11(5) $ 2,435 $ 2,641,975
Tuesday Morning Corp., Sr. Sub. Notes,
11.00%, 12/15/07 1,719 1,813,545
- -------------------------------------------------------------------------------
$ 4,455,520
- -------------------------------------------------------------------------------
Semiconductors -- 3.3%
- -------------------------------------------------------------------------------
AMI Semiconductor, Inc., Sr. Sub Notes,
10.75%, 2/1/13(5) $ 4,435 $ 4,834,150
Amkor Technologies, Inc.,
5.00%, 3/15/07 400 334,000
Amkor Technologies, Inc., 5.75%, 6/1/06 400 355,500
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
15
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Semiconductors (continued)
- -------------------------------------------------------------------------------
Amkor Technologies, Inc., Sr. Notes,
9.25%, 5/1/06 $ 11,385 $ 11,954,250
Amkor Technologies, Inc., Sr. Notes,
9.25%, 2/15/08 3,085 3,308,663
Amkor Technologies, Inc., Sr. Sub.
Notes, 10.50%, 5/1/09 1,645 1,735,475
Chippac International Ltd.,
12.75%, 8/1/09 4,975 5,596,875
Fairchild Semiconductor, Sr. Sub Notes,
10.50%, 2/1/09 2,888 3,263,440
ON Semiconductor Corp., Variable
Rate, 5/15/08 3,320 3,170,600
SCG Holding & Semiconductor Corp.,
12.00%, 8/1/09 890 654,150
- -------------------------------------------------------------------------------
$ 35,207,103
- -------------------------------------------------------------------------------
Services -- 0.8%
- -------------------------------------------------------------------------------
Coyne International Enterprises, Sr.
Sub. Notes, 11.25%, 6/1/08 $ 2,250 $ 1,358,438
Kindercare Learning Centers, Inc., Sr.
Sub. Notes, 9.50%, 2/15/09 7,045 6,974,550
- -------------------------------------------------------------------------------
$ 8,332,988
- -------------------------------------------------------------------------------
Telecommunication Equipment -- 0.6%
- -------------------------------------------------------------------------------
Nortel Networks Ltd., 4.25%, 9/1/08 $ 4,590 $ 3,849,863
Nortel Networks Ltd., 6.125%, 2/15/06 2,235 2,176,331
- -------------------------------------------------------------------------------
$ 6,026,194
- -------------------------------------------------------------------------------
Transportation -- 1.1%
- -------------------------------------------------------------------------------
Pacer International, Inc.,
11.75%, 6/1/07 $ 7,809 $ 8,238,495
Petroleum Helicopters, Series B,
9.375%, 5/1/09 2,180 2,398,000
QDI LLC, (PIK), Variable Rate, 6/15/08 951 383,966
QDI LLC, Jr. Sub. Notes, (PIK), Variable
Rate, 6/15/09(5) 228 35,053
- -------------------------------------------------------------------------------
$ 11,055,514
- -------------------------------------------------------------------------------
Utilities -- 2.3%
- -------------------------------------------------------------------------------
El Paso Corp., Sr. Notes, 7.00%, 5/15/11 $ 10,010 $ 8,758,750
Gemstone Investors Ltd.,
7.71%, 10/31/04(5) 4,020 3,889,350
National Waterworks, Inc., Sr. Sub.
Notes, 10.50%, 12/1/12(5) 2,925 3,202,875
Orion Power Holdings, Inc., Sr. Notes,
12.00%, 5/1/10 6,490 7,074,100
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Utilities (continued)
- -------------------------------------------------------------------------------
Tiers-Mier, 7.20%, 6/15/04(5) $ 1,935 $ 1,712,475
- -------------------------------------------------------------------------------
$ 24,637,550
- -------------------------------------------------------------------------------
Utility - Electric Power Generation -- 3.3%
- -------------------------------------------------------------------------------
AES Corp., 8.875%, 11/1/27 $ 1,040 $ 785,200
AES Corp., 10.00%, 7/15/05(5) 4,853 5,119,915
AES Corp., Sr. Notes, 8.75%, 6/15/08 9,105 8,831,850
AES Corp., Sr. Notes, 8.875%, 2/15/11 695 667,200
AES Corp., Sr. Notes, 9.375%, 9/15/10 1,875 1,846,875
AES Corp., Sr. Sub. Notes,
8.50%, 11/1/07 4,825 4,439,000
AES Corp., Sr. Sub. Notes,
10.25%, 7/15/06 2,045 2,034,775
Calpine Corp., 8.50%, 5/1/08 4,940 3,667,950
Calpine Corp., Sr. Notes,
8.25%, 8/15/05 3,750 3,168,750
Calpine Corp., Sr. Notes,
8.50%, 2/15/11 5,775 4,244,625
- -------------------------------------------------------------------------------
$ 34,806,140
- -------------------------------------------------------------------------------
Waste Management -- 1.8%
- -------------------------------------------------------------------------------
Allied Waste, 9.25%, 9/1/12(5) $ 3,505 $ 3,855,500
Allied Waste, 10.00%, 8/1/09 5,275 5,664,031
Allied Waste, Series B, 8.875%, 4/1/08 4,120 4,470,200
Stericycle, Inc., 12.375%, 11/15/09 3,883 4,504,280
- -------------------------------------------------------------------------------
$ 18,494,011
- -------------------------------------------------------------------------------
Wireless Communication Services -- 6.3%
- -------------------------------------------------------------------------------
American Tower Corp. (Escrow Unit),
0.00%, 8/1/08(5) $ 5,070 $ 3,194,100
American Tower Corp., Sr. Notes,
9.375%, 2/1/09 9,345 9,298,275
Crown Castle International Corp., Sr.
Notes, 9.50%, 8/1/11 3,675 3,619,875
Crown Castle International Corp., Sr.
Notes, 10.75%, 8/1/11 1,195 1,236,825
Insight Midwest/Insight Capital, Sr.
Notes, 10.50%, 11/1/10 4,835 5,378,938
IWO Holdings, Inc., 14.00%, 1/15/11 7,490 1,310,750
Nextel Communications, Inc.,
6.00%, 6/1/11 5,230 5,354,213
Nextel Communications, Inc., Sr. Disc.
Notes, 9.95%, 2/15/08 970 1,023,350
Nextel Communications, Inc., Sr. Disc.
Notes, 10.65%, 9/15/07 5,710 6,009,775
Nextel Communications, Inc., Sr. Notes,
9.375%, 11/15/09 285 309,225
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
16
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------
Wireless Communication Services (continued)
- -------------------------------------------------------------------------------
Nextel Communications, Inc., Sr. Notes,
12.00%, 11/1/08 $ 4,180 $ 4,514,400
Nextel Partners, Inc., 12.50%, 11/15/09 4,310 4,719,450
Nextel Partners, Inc., Sr. Disc. Notes,
14.00%, (0% until 2004), 2/1/09 2,965 3,024,300
Nextel Partners, Inc., Sr. Notes,
11.00%, 3/15/10 3,635 3,834,925
NII Holdings Ltd., 13.00%, (0% until
2004), 11/1/09 1,141 858,905
Ono Finance PLC, 13.00%, 5/1/09 2,850 1,667,250
Ono Finance PLC, Sr. Notes,
14.00%, 2/15/11 3,672 2,148,120
PTC International Finance II SA,
11.25%, 12/1/09 1,670 1,870,400
PTC International Finance II SA,
11.25%, 12/1/09 EUR 3,010 3,768,594
Rural Cellular Corp., Sr. Sub. Notes,
9.75%, 1/15/10 535 468,125
TSI Telecommunication, Series B,
12.75%, 2/1/09 1,605 1,580,925
Ubiquitel Operating Co., 14.00%, (0%
until 2005), 4/15/10(5) 2,077 695,795
- -------------------------------------------------------------------------------
$ 65,886,515
- -------------------------------------------------------------------------------
Wireline Communication Services -- 2.4%
- -------------------------------------------------------------------------------
Colt Telecom Group PLC, Sr. Disc. Notes,
12.00%, 12/15/06 $ 1,560 $ 1,396,200
Qwest Capital Funding, 5.875%, 8/3/04 3,930 3,713,850
Qwest Corp., 8.875%, 3/15/12(5) 6,555 7,210,500
Qwest Services Corp.,
13.50%, 12/15/10(5) 11,820 13,179,300
- -------------------------------------------------------------------------------
$ 25,499,850
- -------------------------------------------------------------------------------
Total Corporate Bonds & Notes
(identified cost $979,524,212) $ 998,088,230
- -------------------------------------------------------------------------------
</Table>
COMMON STOCKS, WARRANTS AND RIGHTS -- 0.7%
<Table>
<Caption>
SECURITY SHARES VALUE
- -------------------------------------------------------------------------------
Chemicals -- 0.0%
- -------------------------------------------------------------------------------
Pioneer Companies, Inc., Common(3)(4) 67,381 $ 252,679
- -------------------------------------------------------------------------------
$ 252,679
- -------------------------------------------------------------------------------
<Caption>
SECURITY SHARES VALUE
- -------------------------------------------------------------------------------
Lodging and Gaming -- 0.0%
- -------------------------------------------------------------------------------
Peninsula Gaming LLC, Convertible
Preferred Membership Interests(3)(4)(7) 25,351 $ 152,107
- -------------------------------------------------------------------------------
$ 152,107
- -------------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 0.2%
- -------------------------------------------------------------------------------
Williams Cos., Inc. (The) 280,000 $ 1,946,000
- -------------------------------------------------------------------------------
$ 1,946,000
- -------------------------------------------------------------------------------
Oil and Gas - Exploration and Production -- 0.0%
- -------------------------------------------------------------------------------
Abraxas Petroleum Corp., Common(4)(7) 327,367 $ 225,883
- -------------------------------------------------------------------------------
$ 225,883
- -------------------------------------------------------------------------------
Printing and Business Products -- 0.0%
- -------------------------------------------------------------------------------
Merrill Corp., Warrants, Class
A(3)(4)(7) 9,547 $ 0
- -------------------------------------------------------------------------------
$ 0
- -------------------------------------------------------------------------------
Restaurants -- 0.0%
- -------------------------------------------------------------------------------
New World Coffee, Warrants,
Exp. 6/15/06(3)(4)(7) 687 $ 7
- -------------------------------------------------------------------------------
$ 7
- -------------------------------------------------------------------------------
Semiconductors -- 0.0%
- -------------------------------------------------------------------------------
Asat Finance, Warrants Exp.
11/1/06(3)(4) 5,660 $ 5,604
- -------------------------------------------------------------------------------
$ 5,604
- -------------------------------------------------------------------------------
Services -- 0.0%
- -------------------------------------------------------------------------------
HF Holdings, Inc., Warrants, Exp.
9/27/09(3)(4) 13,600 $ 0
- -------------------------------------------------------------------------------
$ 0
- -------------------------------------------------------------------------------
Transportation -- 0.0%
- -------------------------------------------------------------------------------
Quality Distribution, Inc., Warrants,
Exp. 1/15/07(3)(4) 3,266 $ 0
VS Holdings, Inc., Common(3)(4)(7) 88,916 133,374
- -------------------------------------------------------------------------------
$ 133,374
- -------------------------------------------------------------------------------
Wireless Communication Services -- 0.4%
- -------------------------------------------------------------------------------
American Tower Corp., Warrants Exp.
8/1/08 Strike .01 5,070 $ 382,785
NII Holdings, Inc., Common, Class B(4) 123,452 3,450,483
- -------------------------------------------------------------------------------
$ 3,833,268
- -------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
17
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<Table>
<Caption>
SECURITY SHARES VALUE
- -------------------------------------------------------------------------------
Wireline Communication Services -- 0.1%
- -------------------------------------------------------------------------------
Flag Telecom Group Ltd., Common(3)(4) 16,252 $ 511,938
- -------------------------------------------------------------------------------
$ 511,938
- -------------------------------------------------------------------------------
Total Common Stocks, Warrants and Rights
(identified cost $24,379,693) $ 7,060,860
- -------------------------------------------------------------------------------
</Table>
CONVERTIBLE PREFERRED STOCKS -- 0.2%
<Table>
<Caption>
SECURITY SHARES VALUE
- -------------------------------------------------------------------------------
Business Services - Miscellaneous -- 0.2%
- -------------------------------------------------------------------------------
Titan Capital Trust 54,940 $ 2,705,795
- -------------------------------------------------------------------------------
$ 2,705,795
- -------------------------------------------------------------------------------
Total Convertible Preferred Stocks
(identified cost $2,295,851) $ 2,705,795
- -------------------------------------------------------------------------------
</Table>
PREFERRED STOCKS -- 1.7%
<Table>
<Caption>
SECURITY SHARES VALUE
- -------------------------------------------------------------------------------
Broadcasting and Cable -- 1.4%
- -------------------------------------------------------------------------------
CSC Holdings, Inc., Series M, 11.125% 136,138 $ 14,260,455
- -------------------------------------------------------------------------------
$ 14,260,455
- -------------------------------------------------------------------------------
Containers and Packaging -- 0.0%
- -------------------------------------------------------------------------------
Owens-Illinois, Inc. 10,540 $ 272,722
- -------------------------------------------------------------------------------
$ 272,722
- -------------------------------------------------------------------------------
<Caption>
SECURITY SHARES VALUE
- -------------------------------------------------------------------------------
Wireless Communication Services -- 0.3%
- -------------------------------------------------------------------------------
Dobson Communications Corp., 12.25%
(PIK) 2,155 $ 1,880,237
Nextel Communications Corp., 13%,
Series D, (PIK) 177 185,408
Rural Cellular Corp., 12.25% (PIK) 6,333 1,029,144
- -------------------------------------------------------------------------------
$ 3,094,789
- -------------------------------------------------------------------------------
Total Preferred Stocks
(identified cost $20,108,085) $ 17,627,966
- -------------------------------------------------------------------------------
Total Investments -- 99.6%
(identified cost $1,052,571,598) $1,050,552,141
- -------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 0.4% $ 4,266,031
- -------------------------------------------------------------------------------
Net Assets -- 100.0% $1,054,818,172
- -------------------------------------------------------------------------------
</Table>
EUR - Euro Dollar
(1) Senior floating rate interests often require prepayments from excess
cash flows or permit the borrower to repay at its election. The degree
to which borrowers repay, whether as a contractual requirement or at
their election, cannot be predicted with accuracy. As a result, the
actual remaining maturity may be substantially less than the stated
maturities shown. However, it is anticipated that the senior
floating-rate interests will have an expected average life of
approximately two to four years.
(2) Interest rates are periodically predetermined by a reference to a base
lending rate plus a premium. These base lending rates are generally (i)
the prime rate offered by one or more major United States banks or (ii)
the lending rate offered by one or more European banks such as the
London Inter-Bank Offered Rate (LIBOR).
(3) Security valued at fair value using methods determined in good faith by
or at the direction of the Trustees.
(4) Non-income producing security.
(5) 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.
(6) The Portfolio is accruing only partial interest on this security.
(7) Restricted security.
SEE NOTES TO FINANCIAL STATEMENTS
18
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<Table>
<Caption>
AS OF APRIL 30, 2003
Assets
- --------------------------------------------------------
Investments, at value
(identified cost, $1,052,571,598) $1,050,552,141
Cash 164,019
Receivable for investments sold 28,880,148
Interest and dividends receivable 26,652,127
Prepaid expenses 1,608
- --------------------------------------------------------
TOTAL ASSETS $1,106,250,043
- --------------------------------------------------------
Liabilities
- --------------------------------------------------------
Payable for investments purchased $ 33,226,726
Demand note payable 17,900,000
Payable for open forward foreign
currency contracts 186,700
Payable to affiliate for Trustees' fees 1,164
Accrued expenses 117,281
- --------------------------------------------------------
TOTAL LIABILITIES $ 51,431,871
- --------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $1,054,818,172
- --------------------------------------------------------
Sources of Net Assets
- --------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $1,056,986,292
Net unrealized depreciation (computed on
the basis of identified cost) (2,168,120)
- --------------------------------------------------------
TOTAL $1,054,818,172
- --------------------------------------------------------
</Table>
STATEMENT OF OPERATIONS
<Table>
<Caption>
FOR THE SIX MONTHS ENDED
APRIL 30, 2003
Investment Income
- ------------------------------------------------------
Interest $ 51,980,965
Dividends 942,122
Miscellaneous 769,448
- ------------------------------------------------------
TOTAL INVESTMENT INCOME $ 53,692,535
- ------------------------------------------------------
Expenses
- ------------------------------------------------------
Investment adviser fee $ 2,978,494
Trustees' fees and expenses 11,760
Custodian fee 158,770
Legal and accounting services 37,229
Miscellaneous 60,733
- ------------------------------------------------------
TOTAL EXPENSES $ 3,246,986
- ------------------------------------------------------
NET INVESTMENT INCOME $ 50,445,549
- ------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ (4,389,810)
Foreign currency and forward foreign
currency exchange contract
transactions (687,038)
- ------------------------------------------------------
NET REALIZED LOSS $ (5,076,848)
- ------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $129,956,449
Foreign currency and forward foreign
currency exchange contracts (92,755)
- ------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $129,863,694
- ------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $124,786,846
- ------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $175,232,395
- ------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
19
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED
INCREASE (DECREASE) APRIL 30, 2003 YEAR ENDED
IN NET ASSETS (UNAUDITED) OCTOBER 31, 2002
- -------------------------------------------------------------------------------
From operations --
Net investment income $ 50,445,549 $ 119,457,638
Net realized loss (5,076,848) (205,022,014)
Net change in unrealized
appreciation (depreciation) 129,863,694 39,826,356
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 175,232,395 $ (45,738,020)
- -------------------------------------------------------------------------------
Capital transactions --
Contributions $ 106,730,971 $ 311,202,692
Withdrawals (116,798,266) (562,562,133)
- -------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (10,067,295) $ (251,359,441)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ 165,165,100 $ (297,097,461)
- -------------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------------
At beginning of period $ 889,653,072 $ 1,186,750,533
- -------------------------------------------------------------------------------
AT END OF PERIOD $ 1,054,818,172 $ 889,653,072
- -------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
20
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 ---------------------------------------
(UNAUDITED) 2002(1) 2001 2000(2)
- ---------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------
Ratios (As a percentage of average daily net
assets):
Expenses 0.68%(3) 0.64% 0.67% 0.67%(3)
Net investment income 10.54%(3) 10.38% 11.96% 11.46%(3)
Portfolio Turnover 50% 88% 83% 41%
- ---------------------------------------------------------------------------------------------
TOTAL RETURN(4) 19.98% (4.36)% -- --
- ---------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(000'S OMITTED) $1,054,818 $889,653 $1,186,751 $1,163,806
- ---------------------------------------------------------------------------------------------
<Caption>
YEAR ENDED MARCH 31,
---------------------------------------
2000 1999 1998
- ------------------------------
Ratios/Supplemental Data
- ------------------------------
Ratios (As a percentage of ave
assets):
Expenses 0.64% 0.65% 0.63%
Net investment income 10.54% 10.23% 9.63%
Portfolio Turnover 113% 150% 137%
- ------------------------------
TOTAL RETURN(4) -- -- --
- ------------------------------
NET ASSETS, END OF PERIOD
(000'S OMITTED) $1,184,998 $1,039,223 $960,501
- ------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of
this change for the year ended October 31, 2002 was to decrease the
ratio of net investment income to average net assets from 10.59% to
10.38%. Ratios for the periods prior to November 1, 2001 have not been
restated to reflect this change in presentation.
(2) For the seven-month period ended October 31, 2000.
(3) Annualized.
(4) Total return is required to be disclosed for fiscal years beginning
after December 15, 2000.
SEE NOTES TO FINANCIAL STATEMENTS
21
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
High Income 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. At April 30, 2003 Eaton Vance High Income Fund, Eaton Vance
Floating-Rate High Income Fund and Eaton Vance Strategic Income Fund held an
approximate 81.8%, 6.1% and 5.4% interest in the Portfolio, respectively. The
following is a summary of significant accounting policies of the Portfolio.
The policies are in conformity with accounting principles generally accepted
in the United States of America.
A Investment Valuations -- Investments listed on securities exchanges are
valued at closing sale prices. Investments listed on the NASDAQ National
Market System are valued at the NASDAQ official closing price. Listed or
unlisted investments for which closing sale prices are not available are
valued at the mean between the latest bid and asked prices. Fixed income
investments (other than short-term obligations), including listed investments
and investments for which price quotations are available, will normally be
valued on the basis of market valuations furnished by a pricing service.
Financial futures contracts listed on commodity exchanges are valued at
closing settlement prices. Short-term obligations, maturing in sixty days or
less, are valued at amortized cost, which approximates fair value. The
Portfolio also invests in interests in senior floating rate loans (Senior
Loans). The Portfolio's investment adviser, Boston Management and Research
(BMR) a wholly owned subsidiary of Eaton Vance Management (EVM), has
characterized certain Senior Loans as liquid based on a predetermined
acceptable number and range of market quotations available. Such loans are
valued on the basis of market valuations furnished by a pricing service.
Investments for which there are no quotations or valuations 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.
C Income Taxes -- The Portfolio has elected to be treated as a partnership for
United States 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 Financial Futures Contracts -- Upon the entering of a financial futures
contract, the 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 the 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 the Portfolio.
The Portfolio's investment in financial futures contracts is designed only to
hedge against anticipated future changes in interest rates. Should interest
rates move unexpectedly, the Portfolio may not achieve the anticipated
benefits of the financial futures contracts and may realize a loss.
E Foreign Currency Translation -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing on
the respective dates of such transactions. Realized gains or losses on
investment transactions attributable to changes in foreign currency exchange
rates are recorded for financial statement purposes as net realized gains and
losses on investments. That portion of unrealized gains and losses on
investments that results from fluctuations in foreign currency exchange rates
is not separately disclosed.
F Forward Foreign Currency Exchange Contracts -- The Portfolio may enter into
forward foreign currency exchange contracts for the purchase or sale of a
specific foreign currency at a fixed price on a future date. Risks may arise
upon entering these contracts from the potential inability of counterparties
to meet the terms of their contracts and from movements in the value of a
foreign currency relative to the U.S. dollar. The Portfolio will enter into
forward contracts for hedging purposes as well as non-hedging purposes. The
forward
22
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
foreign currency exchange contracts are adjusted by the daily exchange rate
of the underlying currency and any gains or losses are recorded for financial
statement purposes as unrealized until such time as the contracts have been
closed.
G Use of Estimates -- The preparation of the financial statements in conformity
with accounting principles generally accepted in the United States of America
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 amount of revenue and expense during the
reporting period. Actual results could differ from those estimates.
H Other -- Investment transactions are accounted for on a trade date basis.
Realized gains and losses are computed based on the specific identification
of the securities sold.
I Interim Financial Statements -- The interim financial statements relating to
April 30, 2003 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 BMR, a wholly-owned subsidiary of
EVM, as compensation for management and investment advisory services rendered
to the 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 April 30, 2003, the fee was
equivalent to 0.62 % (annualized) of the Portfolio's average daily net assets
and amounted to $2,978,494. 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 officers and Trustees of the Portfolio are officers of
the above organizations. Trustees of the Portfolio that are not affiliated
with the Investment Adviser may elect to defer receipt of all or a portion of
their annual fees in accordance with the terms of the Trustees Deferred
Compensation Plan. For the six months ended April 30, 2003, no significant
amounts have been deferred.
3 Investments
- -------------------------------------------
The Portfolio invests primarily in debt securities. The ability of the
issuers of the debt securities held by the Portfolio to meet their
obligations may be affected by economic developments in a specific industry.
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $538,046,715 and $470,823,163,
respectively, for the six months ended April 30, 2003.
4 Line of Credit
- -------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR and
EVM and its affiliates in a $150 million unsecured line of credit agreement
with a group of banks. Borrowings will be made by the Portfolio solely to
facilitate the handling of unusual and/or unanticipated short-term cash
requirements. Interest is charged to each participating portfolio or fund
based on its borrowings at an amount above either the Eurodollar rate or
federal funds rate. In addition, a fee computed at an annual rate of 0.10% on
the daily unused portion of the line of credit is allocated among the
participating portfolios and funds at the end of each quarter. At April 30,
2003, the Portfolio had a balance outstanding pursuant to this line of credit
of $17,900,000. The Portfolio did not have any significant borrowings or
allocated fees during the six months ended April 30, 2003.
5 Financial Instruments
- -------------------------------------------
The Portfolio regularly trades in financial instruments with off-balance
sheet risk in the normal course of its investing activities to assist in
managing exposure to various market risks. These financial instruments
include written options, forward foreign currency contracts and financial
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
the 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
23
<Page>
HIGH INCOME PORTFOLIO AS OF APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
offsetting transactions are considered. A summary of obligations under these
financial instruments at April 30, 2003 is as follows:
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<Table>
<Caption>
SALES
----------------------------------------------------------------------------------------
SETTLEMENT IN EXCHANGE FOR NET UNREALIZED
DATE(S) DELIVER (IN U.S. DOLLARS) DEPRECIATION
----------------------------------------------------------------------------------------
Euro Dollar
5/22/03 6,146,255 6,655,380 (186,700)
----------------------------------------------------------------------------------------
$ 6,655,380 $ (186,700)
----------------------------------------------------------------------------------------
</Table>
6 Federal Income Tax Basis of Unrealized Appreciation (Depreciation)
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at April 30, 2003 as computed on a federal income tax
basis, were as follows:
<Table>
AGGREGATE COST $1,055,023,854
--------------------------------------------------------
Gross unrealized appreciation $ 84,520,588
Gross unrealized depreciation (88,992,301)
--------------------------------------------------------
NET UNREALIZED DEPRECIATION $ (4,471,713)
--------------------------------------------------------
</Table>
7 Restricted Securities
- -------------------------------------------
At April 30, 2003, the Portfolio owned the following securities (representing
less than 0.1% of net assets) which were restricted as to public resale and
not registered under the Securities Act of 1933 (excluding Rule 144A
securities). The Portfolio has various registration rights (exercisable under
a variety of circumstances) with respect to these securities. The fair value
of these securities is determined based on valuations provided by brokers
when available, or if not available, they are valued at fair value using
methods determined in good faith by or at the direction of the Trustees.
<Table>
<Caption>
DATE OF
DESCRIPTION ACQUISITION SHARES/FACE COST FAIR VALUE
------------------------------------------------------------------------------------------
COMMON STOCKS, WARRANTS AND RIGHTS
------------------------------------------------------------------------------------------
Abraxas Petroleum
Corp., Common 1/28/03 327,367 $ 884,238 $ 225,883
Merrill Corp., Warrants, Class A 3/10/03 9,547 0 0
New World Coffee, Warrants, Exp. 6/15/06 6/15/01 687 0 7
Peninsula Gaming LLC, Convertible
Preferred Membership Interests 7/08/99 25,351 0 152,107
VS Holdings, Inc., Common 4/03/02 88,916 1,111,000 133,374
------------------------------------------------------------------------------------------
$1,995,238 $ 511,371
------------------------------------------------------------------------------------------
</Table>
24
<Page>
INVESTMENT MANAGEMENT
EATON VANCE HIGH INCOME FUND
Officers
Thomas E. Faust Jr.
President
William H. Ahern, Jr.
Vice President
Thomas J. Fetter
Vice President
Michael R. Mach
Vice President
Robert B. MacIntosh
Vice President
Duncan W. Richardson
Vice President
Walter A. Row III
Vice President
Judith A. Saryan
Vice President
Susan Schiff
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
Donald R. Dwight
James B. Hawkes
Samuel L. Hayes, III
Norton H. Reamer
Lynn A. Stout
William H. Park
HIGH INCOME PORTFOLIO
Officers
Michael W. Weilheimer
President and Co-Portfolio Manager
Thomas P. Huggins
Vice President and
Co-Portfolio Manager
Barbara E. Campbell
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
Donald R. Dwight
James B. Hawkes
Samuel L. Hayes, III
Norton H. Reamer
Lynn A. Stout
William H. Park
25
<Page>
INVESTMENT ADVISER OF HIGH INCOME PORTFOLIO
BOSTON MANAGEMENT AND RESEARCH
The Eaton Vance Building
255 State Street
Boston, MA 02109
ADMINISTRATOR OF EATON VANCE HIGH INCOME FUND
EATON VANCE MANAGEMENT
The Eaton Vance Building
255 State Street
Boston, MA 02109
PRINCIPAL UNDERWRITER
EATON VANCE DISTRIBUTORS, INC.
The Eaton Vance Building
255 State Street
Boston, MA 02109
(617) 482-8260
CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
PFPC INC.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
EATON VANCE FUNDS
EATON VANCE MANAGEMENT
BOSTON MANAGEMENT AND RESEARCH
EATON VANCE DISTRIBUTORS, INC.
PRIVACY NOTICE
The Eaton Vance organization is committed to ensuring your financial privacy.
This notice is being sent to comply with privacy regulations of the Securities
and Exchange Commission. Each of the above financial institutions has in effect
the following policy with respect to nonpublic personal information about its
customers:
- - Only such information received from you, through application forms or
otherwise, and information about your Eaton Vance fund transactions will be
collected.
- - None of such information about you (or former customers) will be disclosed
to anyone, except as permitted by law (which includes disclosure to
employees necessary to service your account).
- - Policies and procedures (including physical, electronic and procedural
safeguards) are in place that are designed to protect the confidentiality
of such information.
For more information about Eaton Vance's privacy policies,
call:1-800-262-1122
EATON VANCE HIGH INCOME FUND
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
This report must be preceded or accompanied by a current prospectus
which contains more complete information on the Fund, including its
sales charges and expenses. Please read the prospectus carefully
before you invest or send money.
446-6/03 HISRC
<Page>
ITEM 2. CODE OF ETHICS
Not Required in Filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not Required in Filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not Required in Filing.
ITEMS 5-6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not Required in Filing.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS
(a) and (b) Exhibit is attached to Filing.
(c) Exhibit is attached to Filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Mutual Funds Trust
By: /s/ Thomas E. Faust Jr.
-----------------------------
Thomas E. Faust Jr.
President
Date: June 18, 2003
-----------------------------
<Page>
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ James L. O'Connor
-----------------------------
James L. O'Connor
Treasurer
Date: June 18, 2003
-----------------------------
By: /s/ Thomas E. Faust Jr.
-----------------------------
Thomas E. Faust Jr.
President
Date: June 18, 2003
-----------------------------