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FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-09837
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Tax-Managed Multi-Cap Opportunity Portfolio
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(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
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(Registrant's Telephone Number)
October 31
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Date of Fiscal Year End
October 31, 2003
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Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
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TAX-MANAGED MULTI-CAP OPPORTUNITY PORTFOLIO as of October 31, 2003
PORTFOLIO OF INVESTMENTS
COMMON STOCKS -- 84.9%
<Table>
<Caption>
SECURITY SHARES VALUE
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BIOTECHNOLOGY -- 1.4%
ArQule Inc.(1) 27,000 $ 140,400
Celgene Corp.(1) 13,000 541,970
Cephalon, Inc.(1) 3,500 164,360
Kosan Biosciences, Inc.(1) 42,713 391,678
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$ 1,238,408
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BROADCASTING AND CABLE -- 3.2%
Comcast Corp., Special Class A(1) 22,100 $ 720,902
EchoStar Communications Corp., Class A(1) 20,000 766,400
Liberty Media Corp.(1) 1,000 10,090
NTL, Inc.(1) 21,000 1,296,330
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$ 2,793,722
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BROADCASTING AND RADIO -- 0.3%
Cumulus Media, Inc., Class A(1) 16,000 $ 299,680
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$ 299,680
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BUILDING - RESIDENTIAL -- 2.1%
Lennar Corp., Class A 10,000 $ 918,500
M.D.C. Holdings, Inc. 13,000 875,160
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$ 1,793,660
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BUSINESS SERVICES -- 5.4%
BearingPoint, Inc.(1) 45,000 $ 423,000
Coinstar, Inc.(1) 100,000 1,465,000
Heidrick and Struggles International, Inc.(1) 42,000 829,500
Hudson Highland Group, Inc.(1) 6,375 140,441
Integrated Alarm Services Group, Inc.(1) 21,300 187,653
Navigant Consulting, Inc.(1) 34,000 558,620
Sotheby's Holdings, Inc., Class A(1) 100,000 1,065,000
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$ 4,669,214
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COMMUNICATIONS SERVICES -- 0.5%
Cubic Corp. 15,000 $ 426,000
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$ 426,000
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COMPUTER SERVICES -- 0.7%
Cognizant Technology Solutions Corp.(1) 14,000 $ 635,460
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$ 635,460
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<Caption>
SHARES VALUE
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COMPUTERS - INTEGRATED SYSTEMS -- 1.0%
Diebold, Inc. 15,000 $ 855,900
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$ 855,900
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COMPUTERS AND BUSINESS EQUIPMENT -- 0.6%
Insight Enterprises, Inc.(1) 30,000 $ 504,600
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$ 504,600
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DISTRIBUTION SERVICES -- 0.8%
Central European Distribution Corp.(1) 18,800 $ 706,692
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$ 706,692
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DRUGS -- 6.6%
American Pharmaceutical Partners, Inc.(1) 43,479 $ 1,058,714
Biovail Corp.(1) 111,000 2,669,550
Dr. Reddy's Laboratories Ltd. 15,000 399,900
Taro Pharmaceutical Industries Ltd.(1) 13,500 867,375
Teva Pharmaceutical Industries Ltd. 13,000 739,570
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$ 5,735,109
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EDUCATION -- 2.1%
Apollo Group, Inc., Class A(1) 5,500 $ 349,415
Sylvan Learning Systems, Inc.(1) 51,400 1,454,620
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$ 1,804,035
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ELECTRONIC EQUIPMENT & INSTRUMENTS -- 0.5%
FEI Co.(1) 15,000 $ 356,250
L-3 Communications Holdings, Inc.(1) 2,000 93,480
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$ 449,730
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ELECTRONIC MANUFACTURING SERVICES -- 0.5%
FLIR Systems, Inc.(1) 14,000 $ 437,640
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$ 437,640
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ENERGY SOURCES -- 0.5%
AES Corp.(1) 50,000 $ 437,500
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$ 437,500
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FINANCIAL SERVICES -- 7.2%
Countrywide Financial Corp. 9,000 $ 946,080
Freddie Mac 15,000 841,950
Mitsubishi Tokyo Financial Group, Inc. ADR 200,000 1,468,000
</Table>
See notes to financial statements.
17
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<Table>
<Caption>
SHARES VALUE
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FINANCIAL SERVICES (CONTINUED)
Providian Financial Corp.(1) 162,000 $ 1,799,820
Student Loan Corp., (The) 2,500 323,800
W Holding Company, Inc. 39,200 912,968
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$ 6,292,618
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GAMING -- 0.5%
Shuffle Master, Inc.(1) 13,000 $ 395,720
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$ 395,720
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HEALTH CARE SERVICES -- 5.5%
American Healthcorp, Inc.(1) 16,900 $ 700,505
Community Health Systems, Inc.(1) 24,000 576,480
Davita, Inc.(1) 50 1,755
Health Management Associates, Inc., Class A 24,000 531,600
Lincare Holdings, Inc.(1) 15,000 584,100
MIM Corp.(1) 57,860 340,795
United Surgical Partners International, Inc.(1) 67,000 2,020,720
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$ 4,755,955
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INSURANCE -- 9.3%
Endurance Specialty Holdings, Ltd. 5,600 $ 165,592
Everest Re Group Ltd. 19,603 1,626,069
Platinum Underwriters Holdings, Ltd. 14,446 415,178
PMI Group, Inc. 56,500 2,159,995
Progressive Corp. 14,500 1,070,100
Radian Group, Inc. 41,000 2,168,900
Triad Guaranty, Inc.(1) 9,800 483,434
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$ 8,089,268
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INTERNET SERVICES -- 7.1%
At Road, Inc.(1) 35,000 $ 451,500
InterActiveCorp(1) 107,800 3,957,338
Monster Worldwide, Inc.(1) 9,900 252,153
Yahoo!, Inc.(1) 35,000 1,529,500
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$ 6,190,491
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MEDICAL PRODUCTS -- 3.5%
ICU Medical, Inc.(1) 54,000 $ 1,824,660
I-Flow Corp.(1) 50,000 727,500
Labopharm, Inc.(1) 80,000 $ 461,600
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$ 3,013,760
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METALS - STEEL -- 0.4%
Schnitzer Steel Industries, Inc. 10,000 $ 376,800
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$ 376,800
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MINING -- 1.2%
Aber Diamond Corp.(1) 7,000 $ 220,563
Inco Ltd.(1) 26,000 863,200
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$ 1,083,763
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MORTGAGE BANK -- 1.0%
Doral Financial Corp. 17,000 $ 858,500
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$ 858,500
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OIL AND GAS - EQUIPMENT AND SERVICES -- 0.6%
Halliburton Co. 22,000 $ 525,360
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$ 525,360
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OIL AND GAS - EXPLORATION AND PRODUCTION -- 1.5%
Chesapeake Energy Corp. 82,000 $ 978,260
Plains Exploration and Production Co.(1) 27,000 366,390
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$ 1,344,650
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PHARMACEUTICALS -- 0.4%
Watson Pharmaceuticals, Inc.(1) 10,000 $ 392,700
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$ 392,700
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RETAIL -- 6.4%
BJ's Wholesale Club, Inc.(1) 40,800 $ 1,048,152
CSK Auto Corp.(1) 27,000 463,050
Hollywood Entertainment Corp.(1) 39,400 598,880
Kmart Holding Corp.(1) 50,000 1,449,500
Linens 'n Things, Inc.(1) 54,000 1,594,080
Select Comfort Corp.(1) 100 3,130
Tweeter Home Entertainment Group, Inc.(1) 45,000 375,750
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$ 5,532,542
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RETAIL - FOOD AND DRUG -- 0.6%
Starbucks Corp.(1) 17,000 $ 537,200
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$ 537,200
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RETAIL - SPECIALTY AND APPAREL -- 1.7%
Burberry Group PLC 120,000 $ 801,680
Vans, Inc.(1) 25,000 280,750
</Table>
See notes to financial statements.
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<Table>
<Caption>
SHARES VALUE
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RETAIL - SPECIALTY AND APPAREL (CONTINUED)
Warnaco Group, Inc., (The)(1) 23,000 $ 401,350
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$ 1,483,780
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SEMICONDUCTOR EQUIPMENT -- 0.4%
Veeco Instruments, Inc.(1) 15,000 $ 380,100
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$ 380,100
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SEMICONDUCTORS -- 2.3%
Motorola, Inc. 55,000 $ 744,150
SIPEX Corp.(1) 140,000 1,226,400
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$ 1,970,550
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SOFTWARE -- 0.5%
Manugistics Group, Inc.(1) 55,000 $ 399,300
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$ 399,300
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SPECIALTY RETAIL -- 5.8%
Bombay Co., Inc. (The)(1) 35,000 $ 461,300
CarMax, Inc.(1) 16,000 504,160
Copart, Inc.(1) 18,282 227,977
MSC Industrial Direct Co., Inc. 17,000 402,050
NBTY, Inc.(1) 105,000 2,861,250
Rona, Inc.(1) 30,200 560,445
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$ 5,017,182
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TELECOMMUNICATIONS - SERVICES -- 0.0%
IDT Corp.(1) 1,000 $ 18,550
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$ 18,550
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WIRELESS COMMUNICATIONS -- 2.8%
Nextel Communications, Inc.(1) 36,000 $ 871,200
NII Holdings, Inc., Class B(1) 6,000 462,540
Nokia Oyj ADR 22,000 373,780
Turkcell Iletisim Hizmetleri A.S.(1) 40,000 760,000
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$ 2,467,520
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TOTAL COMMON STOCKS
(IDENTIFIED COST $59,821,413) $ 77,963,959
</Table>
EXCHANGE TRADED FUNDS -- 4.7%
<Table>
<Caption>
SECURITY SHARES VALUE
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Nasdaq-100 Index Trading Stock(1) 115,000 $ 4,050,300
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TOTAL EXCHANGE TRADED FUNDS
(IDENTIFIED COST $3,994,525) $ 4,050,300
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</Table>
SHORT-TERM INVESTMENTS -- 4.7%
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
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Investors Bank & Trust Company Time Deposit,
1.08%, 11/3/03 $ 4,108 $ 4,108,000
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TOTAL SHORT-TERM INVESTMENTS
(AT AMORTIZED COST, $4,108,000) $ 4,108,000
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</Table>
COMMERCIAL PAPER -- 3.7%
<Table>
<Caption>
PRINCIPAL
AMOUNT
SECURITY (000'S OMITTED) VALUE
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Cafco LLC, 1.05%, 11/12/03 $ 1,600 $ 1,599,487
CRC Funding LLC, 1.05%, 11/24/03 1,600 1,598,927
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TOTAL COMMERCIAL PAPER
(AT AMORTIZED COST, $3,198,414) $ 3,198,414
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TOTAL INVESTMENTS -- 98.0%
(IDENTIFIED COST $71,122,352) $ 85,270,373
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</Table>
SECURITIES SOLD SHORT -- (1.7)%
<Table>
<Caption>
SECURITY SHARES VALUE
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Yahoo!, Inc. 35,000 $ (1,529,500)
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TOTAL SECURITIES SOLD SHORT
(PROCEEDS $1,144,289) $ (1,529,500)
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OTHER ASSETS, LESS LIABILITIES
EXCLUDING SECURITIES SOLD SHORT -- 3.7% $ 3,247,480
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NET ASSETS -- 100.0% $ 86,988,353
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</Table>
ADR - American Depositary Receipt
(1) Non-income producing security.
See notes to financial statements.
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TAX-MANAGED MULTI-CAP OPPORTUNITY PORTFOLIO as of October 31, 2003
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AS OF OCTOBER 31, 2003
<Table>
ASSETS
Investments, at value (identified cost, $71,122,352) $ 85,270,373
Cash 508
Deposits with brokers for securities sold short 1,144,289
Receivable for investments sold 3,896,601
Interest and dividends receivable 1,131
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TOTAL ASSETS $ 90,312,902
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LIABILITIES
Payable for investments purchased $ 1,766,153
Payable to affiliate for Trustees' fees 148
Payable for securities sold short, at value (proceeds received of $1,144,289) 1,529,500
Accrued expenses 28,748
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TOTAL LIABILITIES $ 3,324,549
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NET ASSETS APPLICABLE TO INVESTORS' INTEREST IN PORTFOLIO $ 86,988,353
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SOURCES OF NET ASSETS
Net proceeds from capital contributions and withdrawals $ 73,225,543
Net unrealized appreciation (computed on the basis of identified cost) 13,762,810
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TOTAL $ 86,988,353
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</Table>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
OCTOBER 31, 2003
<Table>
INVESTMENT INCOME
Dividends (net of foreign taxes, $5,175) $ 117,475
Interest 34,417
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TOTAL INVESTMENT INCOME $ 151,892
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EXPENSES
Investment adviser fee $ 398,799
Trustees' fees and expenses 1,329
Custodian fee 55,521
Legal and accounting services 25,982
Miscellaneous 4,616
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TOTAL EXPENSES $ 486,247
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NET INVESTMENT LOSS $ (334,355)
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REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 8,863,307
Foreign currency transactions (398)
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NET REALIZED GAIN $ 8,862,909
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Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 10,327,075
Securities sold short (385,211)
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NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $ 9,941,864
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NET REALIZED AND UNREALIZED GAIN $ 18,804,773
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NET INCREASE IN NET ASSETS FROM OPERATIONS $ 18,470,418
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</Table>
See notes to financial statements.
20
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
INCREASE (DECREASE) YEAR ENDED YEAR ENDED
IN NET ASSETS OCTOBER 31, 2003 OCTOBER 31, 2002
- -----------------------------------------------------------------------------------
From operations --
Net investment loss $ (334,355) $ (281,818)
Net realized gain (loss) 8,862,909 (10,717,936)
Net change in unrealized appreciation
(depreciation) 9,941,864 1,856,909
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NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 18,470,418 $ (9,142,845)
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Capital transactions --
Contributions $ 37,008,735 $ 42,921,678
Withdrawals (17,386,798) (19,274,525)
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NET INCREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ 19,621,937 $ 23,647,153
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NET INCREASE IN NET ASSETS $ 38,092,355 $ 14,504,308
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NET ASSETS
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At beginning of year $ 48,895,998 $ 34,391,690
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AT END OF YEAR $ 86,988,353 $ 48,895,998
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</Table>
See notes to financial statements.
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<Page>
SUPPLEMENTARY DATA
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
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2003 2002 2001 2000(1)
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RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.79% 0.82% 1.09% 1.36%(2)
Expenses after custodian fee reduction 0.79% 0.82% 1.09% 1.28%(2)
Net investment loss (0.54)% (0.58)% (0.36)% (0.21)%(2)
Portfolio Turnover 224% 225% 324% 90%
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TOTAL RETURN(3) 34.80% (12.80)% -- --
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NET ASSETS, END OF YEAR (000'S OMITTED) $ 86,988 $ 48,896 $ 34,392 $ 4,012
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</Table>
(1) For the period from the commencement of investment operations, June 29,
2000 to October 31, 2000.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements.
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TAX-MANAGED MULTI-CAP OPPORTUNITY PORTFOLIO as of October 31, 2003
NOTES TO FINANCIAL STATEMENTS
1 SIGNIFICANT ACCOUNTING POLICIES
Tax-Managed Multi-Cap Opportunity Portfolio (formerly Capital Appreciation
Portfolio) (the Portfolio) is registered under the Investment Company Act of
1940, as amended, as a diversified open-end investment management company.
The Portfolio, which was organized as a trust under the laws of the State of
New York on February 28, 2000, seeks to achieve long-term, after-tax returns
by investing in a diversified portfolio of equity securities. The Declaration
of Trust permits the Trustees to issue beneficial interests in the Portfolio.
At October 31, 2003, the Eaton Vance Tax-Managed Multi-Cap Opportunity Fund
held approximately 65.0% interest in the Portfolio and one other investor
owned an interest greater than 10% that was approximatley 34.9%. The
following is a summary of significant accounting policies consistently
followed by the Portfolio 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 -- Marketable securities, including options, that are
listed on foreign or U.S. securities exchanges are valued at closing sale
prices, on the exchange where such securities are principally traded.
Marketable securities listed in the NASDAQ National Market System are valued
at the NASDAQ official closing price. Unlisted or listed securities for which
closing sale prices are not available are generally valued at the mean
between the latest bid and asked prices. Futures positions on securities or
currencies are generally valued at closing settlement prices. Short-term debt
securities with a remaining maturity of 60 days or less are valued at
amortized cost, which approximates fair value. Other fixed income and debt
securities, including listed securities and securities for which price
quotations are available, will normally be valued on the basis of valuations
furnished by a pricing service. Over-the-counter options are normally valued
at the mean between the last bid and asked price. Investments for which
valuations or market quotations are unavailable are valued at fair value
using methods determined in good faith by or at the direction of the
Trustees.
B INCOME -- Dividend income is recorded on the ex-dividend date for dividends
received in cash and/or securities. However, if the ex-dividend date has
passed, certain dividends from foreign securities are recorded as the
Portfolio is informed of the ex-dividend date. Interest income is recorded on
the accrual basis.
C INCOME TAXES -- The Portfolio has elected to be treated as a partnership
for federal tax purposes. No provision is made by the Portfolio for federal
or state taxes on any taxable income of the Portfolio because each investor
in the Portfolio is ultimately responsible for the payment of any taxes.
Since at least one of the Portfolio's investors is a regulated investment
company that invests all or substantially all of its 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
investment income, net realized capital gains, and any other items of income,
gain, loss, deduction or credit.
D EXPENSE REDUCTION -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT receives
a fee reduced by credits which are determined based on the average daily cash
balance the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reported as a reduction of
total expenses on the Statement of Operations.
E SECURITIES SOLD SHORT -- The Portfolio may sell a security short if it owns
at least an equal amount of the security sold short or another security
exchangeable for an equal amount of the security sold short without payment
of further compensation (a short sale against the box) in anticipation of a
decline in the market price of the securities or in order to hedge portfolio
positions. The Portfolio will generally borrow the security sold in order to
make the delivery to the buyer. Upon executing the transaction, the Portfolio
records the proceeds as deposits with brokers in the Statement of Assets and
Liabilities and establishes an offsetting payable for securities sold short
for the securities due on settlement. The proceeds are retained by the broker
as collateral for the short position. The liability is marked to market on a
daily basis and the Portfolio is required to pay the lending broker any
dividend or interest income earned while the short position is open. A gain
or loss is recorded when the security is delivered to the broker. The
Portfolio may recognize a loss on the transaction if the market value of the
securities sold increases before the securities are delivered.
F OTHER -- Investment transactions are accounted for on the date the
securities are purchased or sold. Realized gains and losses are computed
based on the specific identification of securities sold.
G USE OF ESTIMATES -- The preparation of the financial statements in
conformity with accounting principles generally accepted in the United States
of America requires
23
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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.
2 INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to the Portfolio.
Under the advisory agreement, BMR receives a monthly advisory fee equal to
0.65% annually of average daily net assets of the Portfolio up to $500
million, and at reduced rates as daily net assets exceed that level. For the
year ended October 31, 2003, the advisory fee amounted to $398,799. Except
for 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. Trustees of the
Portfolio that are not affiliated with the Investment Adviser may elect to
defer receipt of all or a percentage of their annual fees in accordance with
the terms of the Trustees Deferred Compensation Plan. For the year ended
October 31, 2003, no significant amounts have been deferred.
Certain officers and Trustees of the Portfolio are officers of the above
organizations.
3 INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregated $140,288,961 and $129,666,087, respectively, for the year ended
October 31, 2003.
4 FEDERAL INCOME TAX BASIS OF UNREALIZED APPRECIATION (DEPRECIATION)
The cost and unrealized appreciation (depreciation) in value of the
investments owned at October 31, 2003 as computed on a federal income tax
basis, were as follows:
<Table>
AGGREGATE COST $ 72,041,055
------------------------------------------------------
Gross unrealized appreciation $ 14,011,155
Gross unrealized depreciation (781,837)
------------------------------------------------------
NET UNREALIZED APPRECIATION $ 13,229,318
------------------------------------------------------
</Table>
5 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. The Portfolio
did not have any significant borrowings or allocated fees during the year
ended October 31, 2003.
6 FINANCIAL INSTRUMENTS
The Portfolio may trade 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 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 offsetting transactions
are considered. At October 31, 2003 there were no outstanding obligations
under these financial instruments.
7 INTERESTHOLDER MEETING (UNAUDITED)
The Portfolio held a Special Meeting of Interestholders on June 6, 2003 to
elect Trustees. The results of the vote were as follows:
<Table>
<Caption>
INTEREST IN THE PORTFOLIO
----------------------------
NOMINEE FOR TRUSTEE AFFIRMATIVE WITHHOLD
-----------------------------------------------------------
Jessica M. Bibliowicz 99% 1%
Donald R. Dwight 99% 1%
James B. Hawkes 99% 1%
Samuel L. Hayes, III 99% 1%
William H. Park 99% 1%
Norton H. Reamer 99% 1%
Lynn A. Stout 99% 1%
</Table>
Results are rounded to the nearest whole number.
Donald R. Dwight retired as a Trustee effective July 1, 2003 pursuant to the
mandatory retirement policy of the Portfolio.
24
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TAX-MANAGED MULTI-CAP OPPORTUNITY PORTFOLIO as of October 31, 2003
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND INVESTORS OF TAX-MANAGED
MULTI-CAP OPPORTUNITY PORTFOLIO:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Tax-Managed Multi-Cap Opportunity Portfolio
(the Portfolio) as of October 31, 2003, and the related statement of operations
for the year then ended, the statements of changes in net assets for the years
ended October 31, 2003 and 2002, and the supplementary data for each of the
three years in the period ended October 31, 2003, and for the period from the
start of business June 29, 2000 to October 31, 2000. These financial statements
and supplementary data are the responsibility of the Portfolio's management. Our
responsibility is to express an opinion on these financial statements and
supplementary data based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and supplementary data are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities held at October 31, 2003 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other audit
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and supplementary data present fairly,
in all material respects, the financial position of Tax-Managed Multi-Cap
Opportunity Portfolio at October 31, 2003, the results of its operations, the
changes in its net assets and the supplementary data for the respective stated
periods in conformity with accounting principles generally accepted in the
United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 16, 2003
25
<Page>
EATON VANCE TAX-MANAGED MULTI-CAP OPPORTUNITY FUND
MANAGEMENT AND ORGANIZATION
Fund Management. The Trustees of Eaton Vance Mutual Funds Trust (the Trust) and
Tax-Managed Multi-Cap Opportunity Portfolio (the Portfolio) are responsible for
the overall management and supervision of the Trust's and Portfolio's affairs.
The Trustees and officers of the Trust and the Portfolio are listed below.
Except as indicated, each individual has held the office shown or other offices
in the same company for the last five years. Trustees and officers of the Trust
and the Portfolio hold indefinite terms of office. The "noninterested Trustees"
consist of those Trustees who are not "interested persons" of the Trust and the
Portfolio, as that term is defined under the 1940 Act. The business address of
each Trustee and officer is The Eaton Vance Building, 255 State Street, Boston,
Massachusetts 02109. As used below, "EVC" refers to Eaton Vance Corp., "EV"
refers to Eaton Vance, Inc., "EVM" refers to Eaton Vance Management, "BMR"
refers to Boston Management and Research, and "EVD" refers to Eaton Vance
Distributors, Inc. EVC and EV are the corporate parent and trustee,
respectively, of EVM and BMR. EVD is the Fund's principal underwriter, the
Portfolio's placement agent and wholly-owned subsidiary of EVM.
<Table>
<Caption>
POSITION(S) TERM OF NUMBER OF PORTFOLIOS
WITH THE OFFICE AND IN FUND COMPLEX OTHER
NAME AND TRUST AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH THE PORTFOLIO SERVICE DURING PAST FIVE YEARS TRUSTEE(1) HELD
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE(S)
Jessica M. Bibliowicz Trustee Trustee of the Chairman, President and Chief 192 Director of
11/28/59 Trust since Executive Officer of National National
1998; of the Financial Partners (financial Financial
Portfolio services company) (since April Partners
since 2000 1999). President and Chief
Operating Officer of John A. Levin
& Co. (registered investment
adviser) (July 1997 to April 1999)
and a Director of Baker, Fentress &
Company, which owns John A. Levin &
Co. (July 1997 to April 1999). Ms.
Bibliowicz is an interested person
because of her affiliation with a
brokerage firm.
James B. Hawkes Trustee Trustee of the Chairman, President and Chief 194 Director of EVC
11/9/41 Trust since Executive Officer of BMR, EVC, EVM
1991; of the and EV; Director of EV; Vice
Portfolio since President and Director of EVD.
2000 Trustee and/or officer of 194
registered investment companies in
the Eaton Vance Fund Complex. Mr.
Hawkes is an interested person
because of his positions with BMR,
EVM, EVC and EV, which are
affiliates of the Trust and the
Portfolio.
NONINTERESTED TRUSTEE(S)
Samuel L. Hayes, III Trustee Trustee of the Jacob H. Schiff Professor of 194 Director of
2/23/35 Trust since Investment Banking Emeritus, Tiffany & Co.
1986; of the Harvard University Graduate School (specialty
Portfolio since of Business Administration. retailer) and
2000 Telect, Inc.
(telecommunication
services company)
William H. Park Trustee Since 2003 President and Chief Executive 191 None
9/19/47 Officer, Prizm Capital Management,
LLC (investment management firm)
(since 2002). Executive Vice
President and Chief Financial
Officer, United Asset Management
Corporation (a holding company
owning institutional investment
management firms) (1982-2001).
Ronald A. Pearlman Trustee Since 2003 Professor of Law, Georgetown 191 None
7/10/40 University Law Center (since 1999).
Tax Partner Covington & Burling,
Washington, DC (1991-2000).
</Table>
26
<Page>
<Table>
<Caption>
POSITION(S) TERM OF NUMBER OF PORTFOLIOS
WITH THE OFFICE AND IN FUND COMPLEX OTHER
NAME AND TRUST AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH THE PORTFOLIO SERVICE DURING PAST FIVE YEARS TRUSTEE(1) HELD
- ---------------------------------------------------------------------------------------------------------------------------------
NONINTERESTED TRUSTEE(S) (CONTINUED)
Norton H. Reamer Trustee Trustee of the President and Chief Executive 194 None
9/21/35 Trust since Officer of Asset Management Finance
1986; of the Corp. (a specialty finance company
Portfolio since serving the investment management
2000 industry) (since October 2003).
President, Unicorn Corporation (an
investment and financial advisory
services company) (since September
2000). Formerly, Chairman, Hellman,
Jordan Management Co., Inc. (an
investment management company)
(2000-2003). Formerly, Advisory
Director, Berkshire Capital
Corporation (investment banking
firm) (2002-2003). Formerly,
Chairman of the Board, United Asset
Management Corporation (a holding
company owning institutional
investment management firms) and
Chairman, President and Director,
UAM Funds (mutual funds)
(1980-2000).
Lynn A. Stout Trustee Trustee of the Professor of Law, University of 194 None
9/14/57 Trust since California at Los Angeles School of
1998; of Law (since July 2001). Formerly,
the Portfolio Professor of Law, Georgetown
since 2000 University Law Center.
</Table>
PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES
<Table>
<Caption>
POSITION(S) TERM OF
WITH THE OFFICE AND
NAME AND TRUST AND LENGTH OF PRINCIPAL OCCUPATION(S)
DATE OF BIRTH THE PORTFOLIO SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------------------------------
Thomas E. Faust Jr. President of Since 2002 Executive Vice President of EVM, BMR, EVC and
5/31/58 the Trust EV; Chief Investment Officer of EVM and BMR
and Director of EVC. Chief Executive Officer
of Belair Capital Fund LLC, Belcrest Capital
Fund LLC, Belmar Capital Fund LLC, Belport
Capital Fund LLC, and Belrose Capital Fund
LLC (private investment companies sponsored
by EVM). Officer of 53 registered investment
companies managed by EVM or BMR.
William H. Ahern, Jr. Vice President Since 1995 Vice President of EVM and BMR. Officer of 35
7/28/59 of the Trust registered investment companies managed by
EVM or BMR.
Arieh Coll Vice President Since 2002 Vice President of EVM and BMR. Officer of 3
11/9/63 of the Portfolio registered investment companies managed by
EVM or BMR.
Thomas J. Fetter Vice President Since 1997 Vice President of EVM and BMR. Trustee and
8/20/43 of the Trust President of The Massachusetts Health &
Education Tax-Exempt Trust. Officer of 127
registered investment companies managed by
EVM or BMR.
Michael R. Mach Vice President Since 1999 Vice President of EVM and BMR. Previously,
7/15/47 of the Trust Managing Director and Senior Analyst for
Robertson Stephens (1998-1999). Officer of 25
registered investment companies managed by
EVM or BMR.
Robert B. MacIntosh Vice President Since 1998 Vice President of EVM and BMR. Officer of 127
1/22/57 of the Trust registered investment companies managed by
EVM or BMR.
Duncan W. Richardson Vice President Vice President of the Trust Senior Vice President and Chief Equity
10/26/57 of the Trust; since 2001; President of the Investment Officer of EVM and BMR. Officer of
President Portfolio since 2002 41 registered investment companies managed by
of the Portfolio EVM or BMR.
</Table>
27
<Page>
<Table>
<Caption>
POSITION(S) TERM OF
WITH THE OFFICE AND
NAME AND TRUST AND LENGTH OF PRINCIPAL OCCUPATION(S)
DATE OF BIRTH THE PORTFOLIO SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------------------------------
Walter A. Row, III Vice President Since 2001 Director of Equity Research and a Vice
7/20/57 of the Trust President of EVM and BMR. Officer of 22
registered investment companies managed by
EVM or BMR.
Judith A. Saryan Vice President Since 2003 Vice President of EVM and BMR. Previously,
8/21/54 of the Trust Portfolio Manager and Equity Analyst for
State Street Global Advisers (1980-1999).
Officer of 24 registered investment companies
managed by EVM or BMR.
Susan Schiff Vice President Since 2002 Vice President of EVM and BMR. Officer of 26
3/13/61 of the Trust registered investment companies managed by
EVM or BMR.
Alan R. Dynner Secretary Secretary of the Trust Vice President, Secretary and Chief Legal
10/10/40 since 1997; of the Officer of BMR, EVM, EVD, EV and EVC. Officer
Portfolio since 2000 of 194 registered investment companies
managed by EVM or BMR.
Kristin S. Anagnost Treasurer of Since 2002(2) Assistant Vice President of EVM and BMR.
6/12/65 the Portfolio Officer of 109 registered investment
companies managed by EVM or BMR.
James L. O'Connor Treasurer of the Trust Since 1989 Vice President of BMR, EVM and EVD. Officer
4/1/45 of 115 registered investment companies
managed by EVM or BMR.
</Table>
(1) Includes both master and feeder funds in a master-feeder structure
(2) Prior to 2002, Ms. Anagnost served as Assistant Treasurer of the Portfolio
since 2000.
The SAI for the Fund includes additional information about the Trustees and
officers of the Fund and the Portfolio and can be obtained without charge by
calling 1-800-225-6265.
28
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company
<Page>
owning institutional investment management firms). Mr. Hayes is the Jacob H.
Schiff Professor of Investment Banking Emeritus of the Harvard University
Graduate School of Business Administration. Mr. Reamer is the President of
Unicorn Capital (an investment and financial advisory services company),
Chairman of Hellman, Jordan Management Co., Inc. (an investment management
company) and Advisory Director of Berkshire Capital Corporation (an investment
banking firm). Previously, Mr. Reamer was Chairman of the Board of UAM and
Chairman, President and Director of the UAM Funds (mutual funds).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this 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)(1) Registrant's Code of Ethics - Not applicable (please see Item 2).
(a)(2)(i) Treasurer's Section 302 certification.
(a)(2)(ii) President's Section 302 certification.
(b) Combined Section 906 certification.
<Page>
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.
Tax-Managed Multi-Cap Opportunity Portfolio
- -------------------------------------------
By: /S/ Duncan W. Richardson
-------------------------------
Duncan W. Richardson
President
Date: December 16, 2003
-----------------
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/ Kristin S. Anagnost
-------------------------------
Kristin S. Anagnost
Treasurer
Date: December 16, 2003
-----------------
By: /S/ Duncan W. Richardson
-------------------------------
Duncan W. Richardson
President
Date: December 16, 2003
-----------------