<Page>
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04015
---------
Eaton Vance Mutual Funds Trust
-------------------------------
(Exact Name of Registrant as Specified in Charter)
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
-----------------------------------------------------------------------
(Address of Principal Executive Offices)
Alan R. Dynner
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
-----------------------------------------------------------------------
(Name and Address of Agent for Services)
(617) 482-8260
--------------
(Registrant's Telephone Number)
December 31
-----------
Date of Fiscal Year End
December 31, 2003
-----------------
Date of Reporting Period
<Page>
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
[EV LOGO]
[GRAPHIC IMAGE]
ANNUAL REPORT DECEMBER 31, 2003
[GRAPHIC IMAGE]
EATON VANCE MUNICIPAL BOND FUND
[GRAPHIC IMAGE]
<Page>
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
IMPORTANT NOTICE
REGARDING DELIVERY OF
SHAREHOLDER DOCUMENTS
The Securities and Exchange Commission (SEC) permits 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.
From time to time, funds are required to vote proxies related to the securities
held by the funds. The Eaton Vance Funds or their underlying Portfolios vote
proxies according to a set of policies and procedures approved by the Funds' and
Portfolios' Boards. You may obtain a description of these policies and
procedures without charge, upon request, by calling 1-800-262-1122. This
description is also available on the Securities and Exchange Commission's
website at http://www.sec.gov.
<Page>
EATON VANCE MUNICIPAL BOND FUND AS OF DECEMBER 31, 2003
LETTER TO SHAREHOLDERS
[PHOTO OF THOMAS J. FETTER]
Thomas J. Fetter
Vice President
Amid the market volatility and external political shocks of recent years, many
investors have become more concerned with risk management. That trend has been
especially true in the municipal bond market, where the use of bond insurance
has become increasingly common. Vice Today, roughly half of all municipal bond
issuance is composed of insured bonds. As part of our continuing educational
series, we thought it might be helpful to discuss bond insurance and its impact
on the municipal market.
THE USE OF BOND INSURANCE HAS GROWN DRAMATICALLY OVER THE YEARS...
Municipal bond insurance was initially developed in 1971, when AMBAC Assurance
Corp., the nation's first municipal insurer, offered insurance as a way to
guarantee principal and interest payments on bond issues in the event of a bond
default. Over the following three decades, the municipal market has witnessed a
surge in the use of insurance. For example, in 1980, just 3% of all municipal
issuance was insured. However, by late 2003, that figure had risen to roughly
50%. Insurance has clear benefits for purchasers: the elimination of default
risk of the underlying issuer, AAA quality ratings and an enhancement of an
issue's liquidity. (It's important to note that, while insured bonds are insured
as to principal and interest payments, they still remain subject to interest
rate and market risks.)
THE MECHANICS OF MUNICIPAL BOND INSURANCE...
We start with the underlying reality that an issuer with a AAA credit rating
will pay less in interest expense than an issuer with a lower credit rating.
Thus, an issuer must first determine whether purchasing insurance is financially
feasible. That is, will the interest savings offset the cost of insurance? If
so, the issuer must then qualify for insurance. Just as an individual must
qualify for insurance, so must a bond issuer meet certain criteria. The issuer
provides key financial data and documents to potential insurers that are then
used to assess the issuer's financial strength and underlying fundamentals. If
the issuer qualifies, insurance is then effected by "direct purchase," with the
payment of a one-time premium by the issuer. The premium fee is calculated as a
percentage of the value of the bond issue - typically, around 50 basis points
(0.50%), but more if the credit entails higher risk. (An alternative method of
purchase involves "elective bidding," in which the insurance is purchased by
bond dealers, who determine at the time the bond is sold whether it is more
attractive as an insured or uninsured bond.)
IN-DEPTH CREDIT ANALYSIS INCLUDES INSURERS AS WELL AS BOND ISSUERS...
When analyzing municipal bonds, an investor naturally researches the issuer's
fundamentals. However, if the bond is insured, the analyst is concerned with the
soundness of the insurer as well. At Eaton Vance, analysis of the insured
segment is an integral part of our total municipal research effort. Research
includes, among other areas, analysis of an insurer's claims-paying ability, its
capital structure and the overall quality of its portfolio of policies. Based on
claims-paying ability, there are currently six bond insurers rated AAA by
Moody's Investor Services, Standard & Poor's and Fitch - the nation's leading
rating agencies.
INSURERS CAN PLAY A VALUABLE ROLE IN STRUCTURING BOND DEALS AND IMPROVING CREDIT
QUALITY...
Insurers play an important role in capital formation for municipal borrowers,
working closely with municipal officials to forge deals that raise capital for
vital projects at affordable interest rates. In so doing, the insurers can help
states and municipalities achieve more efficient fiscal management. Insurers
often re-structure bond deals by insisting on provisions that are intended to
make the deal more secure. That has proved a major benefit to investors in
recent years. In a more risk-conscious climate, we believe that an ongoing
analysis of the insured market is a necessary discipline to invest successfully
in today's municipal market.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter
Vice President
February 11, 2004
[SIDENOTE]
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.
2
<Page>
EATON VANCE MUNICIPAL BOND FUND AS OF DECEMBER 31, 2003
MANAGEMENT DISCUSSION
[PHOTO OF THOMAS J. FETTER]
Thomas J. Fetter
Vice President,
Portfolio Manager
AN INTERVIEW WITH THOMAS J. FETTER, VICE PRESIDENT AND PORTFOLIO MANAGER OF
EATON VANCE MUNICIPAL BOND FUND.
Q: Tom, how did the Fund perform in 2003?
A: Eaton Vance Municipal Bond Fund Class A had a total return of 7.17% during
the year ended December 31, 2003, the result of an increase in net asset
value per share (NAV) from $9.72 on December 31, 2002 to $9.90 on December
31, 2003, and the reinvestment of $0.497 in dividends.(1)
Class B shares had a total return of 6.26% for the year ended December 31,
2003, the result of an increase in NAV from $9.66 on December 31, 2002 to
$9.83 on December 31, 2003, and the reinvestment of $0.418 in dividends.(1)
Class I shares had a total return of 7.38% for the year ended December 31,
2003.(1) That return was the result of an increase in NAV from $10.62 on
December 31, 2002 to $10.81 on December 31, 2003, and the reinvestment of
$0.571 in dividends.
Based on the Fund's most recent dividends and NAVs on December 31, 2003 of
$9.90 per share for Class A, $9.83 for Class B, and $10.81 for Class I, the
distribution rates were 5.21%, 4.36% and 5.47%, respectively.(2) The
distribution rates of Class A, Class B and Class I are equivalent to taxable
rates of 8.02%, 6.71% and 8.42%, respectively.(3)
The SEC 30-day yields for Class A, Class B and Class I shares at December 31
were 5.04%, 4.54% and 5.54%, respectively.(4) The SEC 30-day yields are
equivalent to taxable yields of 7.75%, 6.98% and 8.52%, respectively.(3)
Q: HOW DID THE MUNICIPAL BOND MARKET PERFORM IN 2003?
A: The municipal market once again turned in a solid performance in 2003, as
investors were drawn to the attractive yields available in tax-exempt bonds,
as the Treasury market faltered in the second half amid signs that the
economy was staging a recovery. Corporate profits were higher, getting a
boost from increased productivity. Manufacturing showed signs of increased
demand, benefiting somewhat from the weaker dollar.
However, despite these positive trends, job growth remained disappointingly
slow. Inflation remained tame, allowing the Federal Reserve to retain an
accommodative but
[SIDENOTE]
FUND INFORMATION
AS OF DECEMBER 31, 2003
<Table>
<Caption>
PERFORMANCE(5) CLASS A CLASS B CLASS I
- ---------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (AT NET ASSET VALUE)
One Year 7.17% 6.26% 7.38%
Five Years 5.32 4.56 5.54
Ten Years N.A. N.A. 6.17
Life of Fund+ 5.46 4.50 7.39
SEC AVERAGE ANNUAL TOTAL RETURNS (INCLUDING SALES
CHARGE OR APPLICABLE CDSC)
One Year 2.13% 1.26% 7.38%
Five Years 4.29 4.23 5.54
Ten Years N.A. N.A. 6.17
Life of Fund+ 4.60 4.37 7.39
</Table>
+ Inception dates: Class A: 1/6/98; Class B: 1/14/98; Class I: 3/16/78
[CHART]
FIVE LARGEST SECTOR WEIGHTINGS(6)
<Table>
Escrowed - Prerefunded 11.3%
Other Revenue 8.4%
Special Tax Revenue 8.0%
Electric Utilities 7.3%
General Obligations 6.5%
</Table>
(1) These returns do not include the 4.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for
Class B shares. There is generally no sales charge for Class I shares. (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. Aportion of the Fund's income may be
subject to federal and state income tax and/or federal alternative minimum
tax. (3) Taxable-equivalent rates assume maximum 35.0% federal income tax
rate. A lower rate would result in lower tax-equivalent figures. (4) 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. (5) Returns are historical and are calculated by
determining the percentage change in net asset value with all distributions
reinvested. SEC returns for Class A reflect the maximum 4.75% sales charge.
SEC returns for Class B reflect applicable CDSC based on the following
schedule: 5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th
year; 1% - 6th year. (6) Five Largest Sector Weightings account for 41.5% of
the Fund's net assets, determined by dividing the total market value of the
holdings by the total net assets. Weightings 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. Performance is for the stated time
period only; due to market volatility, the Fund's current performance may be
different.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS. For federal income tax
purposes, 99.94% of the total dividends paid by the Fund from net investment
income during the year ended December 31, 2003 was designated as an
exempt-interest dividend.
3
<Page>
vigilant monetary policy. In this climate, the municipal market slightly
outperformed the Treasury market. During 2003, 10-year Treasury bond yields
rose from 3.82% to 3.95%. In contrast, yields for 10-year municipal bonds
DECLINED modestly, from 3.89% to 3.85%.The Lehman Brothers Municipal Bond
Index - a broad-based, unmanaged index of municipal bonds - posted a
respectable 5.31% total return for the year ended December 31, 2003.(1)
Q: HOW HAVE YOU POSITIONED THE FUND IN RECENT MONTHS?
A: While this has been a year during which the national economy has gained some
traction, many states have continued to struggle. Therefore, our analysts
have monitored state finances closely for any changes in their revenue
outlook, trends that could have an impact on our sector focus and credit
selection. At December 31, 2003, the Fund's largest sector weightings were:
escrowed/prerefunded bonds, at 11.3%; other revenue, at 8.4%; special tax
revenue, at 8.0%; electric utilities, at 7.3%; and general obligations, at
6.5%.(2)
Q: IN THE CURRENT ENVIRONMENT, HAVE YOU CONTINUED TO EMPHASIZE QUALITY WITHIN
THE FUND?
A: Yes, quality has remained a major focus, and, given that consideration, the
Fund's largest sector weighting was escrowed/prerefunded bonds.
Escrowed/prerefunded issues are those that have been pre-refunded by their
issuers to take advantage of lower rates, not unlike the widespread
refinancing of mortgages by homeowners.
Escrowed/prerefunded bonds are backed by Treasury bonds, whose principal and
interest payments are used to pay the interest and principal payments of the
escrowed issue. The escrowed/prerefunded bonds are therefore deemed to be
high quality by investors.
Q: ELECTRIC UTILITIES ALSO CONSTITUTED A SIGNIFICANT INVESTMENT WEIGHTING FOR
THE FUND. WHAT WAS THEIR APPEAL?
A: Electric utilities are considered essential services bonds. That is, they
finance projects needed to maintain the operations of utilities that provide
vital power service. Because utility bill payments are generally
non-discretionary expenses, the bonds have relatively stable revenues, a
characteristic that tends to make them resistant to economic fluctuations.
Some of the Fund's electric utility bonds were for issuers in centers of high
population growth or in communities that are promoting large industrial
development. The prospect of rising usage levels in these areas provided an
added measure of comfort for these essential services bonds.
Q: SPECIAL TAX REVENUE BONDS PLAYED A PROMINENT PART IN THE FUND. WHAT IS THEIR
ROLE?
A: Special tax revenue bonds are used by communities to finance public
projects in specifically designated locales. The range of projects may
include: transportation projects, road construction, utility projects, solid
waste projects,
[SIDENOTE]
[CHART]
FUND QUALITY WEIGHTINGS(2)
<Table>
AAA 40.2%
AA 8.1%
A 11.1%
BBB 10.8%
BB 2.1%
B 0.3%
CCC 0.2%
Non-Rated 27.2%
</Table>
FUND OVERVIEW(2)
<Table>
Number of Issues 135
Average Rating A
Average Maturity 21.9 Yrs.
Effective Maturity 14.6 Yrs.
Average Call 10.1 Yrs.
Average Dollar Price $93.80
</Table>
(1) It is not possible to invest directly in an Index.
(2) Because the Fund is actively managed, Fund Quality Weightings and Fund
Overview are subject to change.
4
<Page>
co-generation facilities and commercial empowerment zone financing. The bonds
are backed by special taxes that - unlike universally levied property taxes
or local and state income taxes - are levied only on the residents or
property owners that are direct beneficiaries of the projects. These bonds
afford communities more flexibility in financing of local projects.
Q: WERE THERE ANY AREAS OF THE MARKET IN WHICH YOU PARED THE FUND'S EXPOSURE?
A: Yes. The Fund's investment in hospital bonds is significantly lower than a
year ago. The hospital sector has always been very competitive, but those
pressures have intensified in recent years. With the cost of health care
rising sharply, institutions are faced with the dilemma of needing to contain
costs, where possible, while still providing quality care. Therefore, we've
become increasingly discriminating toward hospital bonds.
We also remained selective with respect to industrial development revenue
(IDR) bonds. These bonds are closely tied to the business climate and
fundamentals of the underlying issuer. During the economic slowdown, many
IDRs underperformed, reflecting the deteriorating fundamentals of issuers.
The IDR sector recovered some ground in 2003 with signs of a stronger
economy. However, given the uncertainties that tend to characterize the early
stages of a recovery, we have continued to limit the Fund's exposure to the
IDR sector.
[CHART]
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE MUNICIPAL
BOND FUND CLASS I VS. THE LEHMAN BROTHERS MUNICIPAL BOND INDEX*
DECEMBER 31, 1993 - DECEMBER 31, 2003
EATON VANCE MUNICIPAL BOND FUND- CLASS I
Inception: 3/16/78
<Table>
<Caption>
FUND FUND LEHMAN BROTHERS
VALUE AT VALUE WITH MUNICIPAL BOND
DATE NAV SALES CHARGE INDEX
- -------------------------------------------------------------
12/31/1993 10,000 N/A 10,000
1/31/1994 10,115 10,114
2/28/1994 9,831 9,852
3/31/1994 9,326 9,451
4/30/1994 9,357 9,531
5/31/1994 9,474 9,614
6/30/1994 9,407 9,555
7/31/1994 9,573 9,730
8/31/1994 9,633 9,764
9/30/1994 9,457 9,621
10/31/1994 9,270 9,450
11/30/1994 9,032 9,279
12/31/1994 9,273 9,483
1/31/1995 9,596 9,754
2/28/1995 9,901 10,038
3/31/1995 9,963 10,153
4/30/1995 9,974 10,165
5/31/1995 10,263 10,490
6/30/1995 10,141 10,398
7/31/1995 10,184 10,496
8/31/1995 10,269 10,630
9/30/1995 10,312 10,697
10/31/1995 10,525 10,852
11/30/1995 10,739 11,032
12/31/1995 10,889 11,138
1/31/1996 10,955 11,223
2/29/1996 10,902 11,147
3/31/1996 10,728 11,004
4/30/1996 10,685 10,973
5/31/1996 10,696 10,969
6/30/1996 10,762 11,088
7/31/1996 10,883 11,189
8/31/1996 10,872 11,186
9/30/1996 11,062 11,343
10/31/1996 11,230 11,471
11/30/1996 11,444 11,681
12/31/1996 11,410 11,632
1/31/1997 11,456 11,654
2/28/1997 11,559 11,761
3/31/1997 11,409 11,604
4/30/1997 11,513 11,701
5/31/1997 11,688 11,877
6/30/1997 11,968 12,004
7/31/1997 12,460 12,336
8/31/1997 12,296 12,220
9/30/1997 12,509 12,365
10/31/1997 12,687 12,445
11/30/1997 12,759 12,518
12/31/1997 13,022 12,701
1/31/1998 13,177 12,832
2/28/1998 13,219 12,836
3/31/1998 13,267 12,847
4/30/1998 13,191 12,789
5/31/1998 13,398 12,992
6/30/1998 13,445 13,043
7/31/1998 13,456 13,075
8/31/1998 13,703 13,277
9/30/1998 13,887 13,443
10/31/1998 13,799 13,443
11/30/1998 13,872 13,490
12/31/1998 13,901 13,524
1/31/1999 14,079 13,685
2/28/1999 13,943 13,625
3/31/1999 13,980 13,644
4/30/1999 14,015 13,678
5/31/1999 13,855 13,598
6/30/1999 13,544 13,403
7/31/1999 13,527 13,452
8/31/1999 13,220 13,344
9/30/1999 13,095 13,349
10/31/1999 12,771 13,205
11/30/1999 12,913 13,345
12/31/1999 12,694 13,246
1/31/2000 12,514 13,188
2/29/2000 12,805 13,341
3/31/2000 13,280 13,633
4/30/2000 13,095 13,552
5/31/2000 12,898 13,482
6/30/2000 13,377 13,839
7/31/2000 13,694 14,031
8/31/2000 13,970 14,248
9/30/2000 13,823 14,174
10/31/2000 14,003 14,328
11/30/2000 14,139 14,437
12/31/2000 14,677 14,793
1/31/2001 14,630 14,940
2/28/2001 14,749 14,987
3/31/2001 14,919 15,122
4/30/2001 14,579 14,958
5/31/2001 14,823 15,119
6/30/2001 15,007 15,220
7/31/2001 15,371 15,445
8/31/2001 15,752 15,700
9/30/2001 15,612 15,647
10/31/2001 15,787 15,825
11/30/2001 15,646 15,700
12/31/2001 15,431 15,552
1/31/2002 15,714 15,821
2/28/2002 15,947 16,012
3/31/2002 15,637 15,698
4/30/2002 15,846 16,005
5/31/2002 15,981 16,102
6/30/2002 16,130 16,273
7/31/2002 16,390 16,482
8/31/2002 16,605 16,680
9/30/2002 17,054 17,045
10/31/2002 16,609 16,763
11/30/2002 16,556 16,693
12/31/2002 16,950 17,045
1/31/2003 16,786 17,002
2/28/2003 17,016 17,240
3/31/2003 17,060 17,250
4/30/2003 17,232 17,364
5/31/2003 17,619 17,771
6/30/2003 17,500 17,695
7/31/2003 16,956 17,076
8/31/2003 17,168 17,203
9/30/2003 17,725 17,709
10/31/2003 17,705 17,620
11/30/2003 18,050 17,804
12/31/2003 18,201 17,951
</Table>
<Table>
<Caption>
PERFORMANCE** CLASS A CLASS B CLASS I
- --------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(AT NET ASSET VALUE)
One Year 7.17% 6.26% 7.38%
Five Years 5.32 4.56 5.54
Ten Years N.A. N.A. 6.17
Life of Fund+ 5.46 4.50 7.39
SEC AVERAGE ANNUAL TOTAL RETURNS
(INCLUDING SALES CHARGE OR
APPLICABLE CDSC)
One Year 2.13% 1.26% 7.38%
Five Years 4.29 4.23 5.54
Ten Years N.A. N.A. 6.17
Life of Fund+ 4.60 4.37 7.39
</Table>
+Inception dates: Class A: 1/6/98; Class B: 1/14/98; Class I: 3/16/78
* Source: Thomson Financial.
The chart compares the Fund's Class I total return with that of the Lehman
Brothers Municipal Bond Index, a broad-based, unmanaged market index of
municipal bonds. Returns are calculated by determining the percentage change
in net asset value (NAV) with all distributions reinvested. The lines on the
chart represent the total returns of $10,000 hypothetical investments in the
Fund's Class I shares and the Index. The Index's total return does not
reflect commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest directly in an Index. An investment in the Fund's
Class A shares on 1/6/98 at net asset value would have been worth $13,742 on
December 31, 2003; $13,008, including sales charge. An investment in the
Fund's Class B shares on 1/14/98 at net asset value would have been worth
$13,002 on December 31, 2003; $12,904, including the Fund's applicable CDSC.
** Returns are calculated by determining the percentage change in net asset
value (NAV) with all distributions reinvested. SEC returns reflect applicable
sales charge as noted.
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. Performance is for the stated time
period only; due to market volatility, the Fund's current performance may be
different. The performance graph and table above do not reflect the deduction
of taxes that a shareholder would incur on some Fund distributions or the
redemption of Fund shares.
[SIDENOTE]
THE VIEWS EXPRESSED IN THIS REPORT ARE THOSE OF THE PORTFOLIO MANAGER 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.
5
<Page>
EATON VANCE MUNICIPAL BOND FUND AS OF DECEMBER 31, 2003
PORTFOLIO OF INVESTMENTS
TAX-EXEMPT INVESTMENTS -- 98.0%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- -----------------------------------------------------------------------------------------------
EDUCATION -- 2.4%
$ 1,375 Massachusetts Development Finance Agency,
(Boston University), 5.45%, 5/15/59 $ 1,421,337
2,500 Massachusetts HEFA, (Harvard University),
5.125%, 7/15/37 2,594,450
1,750 Ohio Higher Educational Facilities Authority,
(Oberlin College), Variable Rate, 10/1/29(1)(2) 1,831,217
- -----------------------------------------------------------------------------------------------
$ 5,847,004
- -----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 7.3%
$ 2,500 Brazos River Authority, TX, (Reliant Energy, Inc.),
5.375%, 4/1/19 $ 2,429,375
500 Connecticut Development Authority,
(Connecticut Light and Power),
Variable Rate, 9/1/22(1)(2) 563,300
500 Connecticut Development Authority,
(Western Mass Electric),
Variable Rate, 9/1/22(1)(2) 563,300
2,100 Mississippi Business Finance Corp.,
(System Energy Resources, Inc.), 5.90%, 5/1/22 2,108,400
5,000 North Carolina Municipal Power Agency No. 1,
(Catawba Electric), 5.50%, 1/1/14 5,536,300
2,000 Sam Rayburn, TX, Municipal Power Agency,
6.00%, 10/1/21 2,076,260
4,435 San Antonio, TX, Electric and Natural Gas,
4.50%, 2/1/21 4,441,830
- -----------------------------------------------------------------------------------------------
$ 17,718,765
- -----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 11.3%
$ 14,000 Dawson Ridge, CO, Metropolitan District #1,
Escrowed to Maturity, 0.00%, 10/1/22 $ 5,390,000
10,000 Foothill/Eastern Transportation Corridor Agency, CA,
Escrowed to Maturity, 0.00%, 1/1/18 5,337,600
1,500 Forsyth County, GA, Hospital Authority,
(Georgia Baptist Health Care System),
Escrowed to Maturity, 6.375%, 10/1/28 1,852,710
1,000 Maricopa County, AZ, IDA, (Place Five and The Greenery),
Escrowed to Maturity, 8.625%, 1/1/27 1,236,700
5,500 Massachusetts Turnpike Authority, Escrowed to Maturity,
5.00%, 1/1/20(3) 6,027,780
2,500 San Joaquin Hills Transportation Corridor Agency, CA,
Toll Road Bonds, Escrowed to Maturity, 0.00%, 1/1/14 1,678,300
10,000 San Joaquin Hills Transportation Corridor Agency, CA,
Toll Road Bonds, Escrowed to Maturity, 0.00%, 1/1/25 3,455,200
6,000 Savannah, GA, EDA, Escrowed to Maturity,
0.00%, 12/1/21 2,447,580
- -----------------------------------------------------------------------------------------------
$ 27,425,870
- -----------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 6.5%
$ 2,600 California, 5.25%, 4/1/30 $ 2,610,998
2,380 California, 5.50%, 11/1/33 2,448,092
3,000 California, 5.25%, 2/1/33 3,007,380
2,000 New York, NY, 5.25%, 1/15/28 2,061,640
1,725 New York, NY, Variable Rate, 6/1/28(2)(4) 1,888,099
1,500 North Carolina, Variable Rate, 3/1/28(1)(2) 779,385
3,000 North East, TX, Independent School District,
5.00%, 2/1/30 3,046,230
- -----------------------------------------------------------------------------------------------
$ 15,841,824
- -----------------------------------------------------------------------------------------------
HEALTH CARE-MISCELLANEOUS -- 3.3%
$ 3,000 Allegheny County, PA, IDA, (Residential Resources, Inc.),
6.50%, 9/1/21 $ 2,898,930
220 Suffolk County, NY, Industrial Development Agency,
Civic Facility Revenue, (Alliance of Long Island Agencies),
7.50%, 9/1/15 235,539
130 Suffolk County, NY, Industrial Development Agency,
Civic Facility Revenue, (Alliance of Long Island Agencies),
7.50%, 9/1/15 139,182
125 Suffolk County, NY, Industrial Development Agency,
Civic Facility Revenue, (Alliance of Long Island Agencies),
7.50%, 9/1/15 133,829
2,287 Tax Revenue Exempt Securities Trust,
Community Health Provider, (Pooled Loan Program
Various States Trust Certificates), 5.50%, 12/1/36 2,198,083
1,921 Tax Revenue Exempt Securities Trust,
Community Health Provider, (Pooled Loan Program
Various States Trust Certificates), 5.50%, 12/1/36 1,846,390
544 Tax Revenue Exempt Securities Trust,
Community Health Provider, (Pooled Loan Program
Various States Trust Certificates), 6.00%, 12/1/36 548,736
- -----------------------------------------------------------------------------------------------
$ 8,000,689
- -----------------------------------------------------------------------------------------------
HOSPITAL -- 5.8%
$ 1,500 California Health Facilities Authority,
(Cedars Sinai Medical Center),
Variable Rate, 12/1/34(1)(2) $ 1,730,775
990 Chautauqua County, NY, IDA,
(Women's Christian Association), 6.40%, 11/15/29 911,622
1,600 Louisiana Public Facilities Authority,
(General Health Systems), 6.80%, 11/1/16 1,606,320
3,000 New Jersey Health Care Facilities Financing Authority,
(Trinitas Hospital), 7.50%, 7/1/30 3,280,860
1,240 Oklahoma Development Finance Authority,
(Hillcrest Healthcare), 5.20%, 8/15/11 1,034,569
400 Oklahoma Development Finance Authority,
(Hillcrest Healthcare), 5.75%, 8/15/15 332,136
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- -----------------------------------------------------------------------------------------------
HOSPITAL (CONTINUED)
$ 1,575 Oneida County, NY, IDA, (St. Elizabeth Medical Center),
5.75%, 12/1/19 $ 1,400,175
265 Prince George's County, MD, (Greater Southeast
Healthcare System), 6.20%, 1/1/08(5) 92,750
1,030 Prince George's County, MD, (Greater Southeast
Healthcare System), 6.375%, 1/1/23(5) 360,500
1,135 Rochester, MN, Health Care Facilities, (Mayo Clinic),
Variable Rate, 11/15/27(1)(2) 1,284,048
1,100 San Benito, CA, Health Care District, 5.40%, 10/1/20 1,017,621
1,000 Sullivan County, TN, Health Educational and Facility Board,
(Wellmont Health System), 6.25%, 9/1/22 1,053,640
- -----------------------------------------------------------------------------------------------
$ 14,105,016
- -----------------------------------------------------------------------------------------------
HOUSING -- 3.2%
$ 1,300 Florida Capital Projects Finance Authority,
Student Housing Revenue, (Florida University),
7.75%, 8/15/20 $ 1,331,213
185 Florida Capital Projects Finance Authority,
Student Housing Revenue, (Florida University),
9.50%, 8/15/05 184,578
2,500 Georgia Private Colleges and Universities Authority,
Student Housing Revenue, (Mercer Housing Corp.),
6.00%, 6/1/31 2,565,400
1,380 Lake Creek, CO, (Affordable Housing Corp.),
6.25%, 12/1/23 1,253,123
840 Maricopa County, AZ, IDA, (National Health Facilities II),
6.375%, 1/1/19 764,887
1,210 North Little Rock, AR, Residential Housing Facilities,
(Parkstone Place), 6.50%, 8/1/21 1,120,508
490 Texas Student Housing Corp., (University of Northern Texas),
9.375%, 7/1/06 478,823
- -----------------------------------------------------------------------------------------------
$ 7,698,532
- -----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 3.4%
$ 305 Florence County, SC, (Stone Container),
7.375%, 2/1/07 $ 309,557
1,000 Hardeman County, TN, (Correctional Facilities Corp.),
7.75%, 8/1/17 1,053,080
1,750 New Jersey EDA, (Holt Hauling), 7.75%, 3/1/27(5) 1,732,500
2,500 Nez Perce County, ID, Pollution Control,
7.00%, 12/1/14 2,702,125
2,450 Port Camas-Washougan, WA, (James River),
6.70%, 4/1/23 2,391,518
- -----------------------------------------------------------------------------------------------
$ 8,188,780
- -----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 2.4%
$ 2,000 New York Dormitory Authority, (New York University),
(AMBAC), 5.50%, 7/1/31 $ 2,296,400
1,600 Rhode Island Health and Educational Building Corp.,
(School of Design), (MBIA), 5.00%, 6/1/31 1,641,632
1,750 Virginia College Building Authority, (Washington and
Lee University), (MBIA), 5.25%, 1/1/31 1,940,785
- -----------------------------------------------------------------------------------------------
$ 5,878,817
- -----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 4.1%
$ 6,500 Long Island Power Authority, NY, Electric System, (FSA),
0.00%, 6/1/25 $ 2,307,305
30 Los Angeles, CA, Department of Water and Power,
(MBIA), Variable Rate, 2/15/24(2)(4) 222,555
6,405 Matagorda County, TX, Navigation District No. 1,
(Centerpoint Energy, Inc./Houston Light & Power Co.),
(MBIA), 4.00%, 10/15/15 6,537,135
2,865 Ohio Municipal Electric Generation Agency, (MBIA),
0.00%, 2/15/29 798,647
- -----------------------------------------------------------------------------------------------
$ 9,865,642
- -----------------------------------------------------------------------------------------------
INSURED-ESCROWED / PREREFUNDED -- 1.6%
$ 2,000 Metropolitan Transportation Authority of New York,
(FGIC), Prerefunded to 10/1/15, 5.00%, 4/1/23 $ 2,259,080
1,500 Metropolitan Transportation Authority, NY,
Commuter Facilities, (AMBAC), Escrowed to Maturity,
5.00%, 7/1/20 1,610,325
- -----------------------------------------------------------------------------------------------
$ 3,869,405
- -----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 4.9%
$ 1,320 California, (AMBAC), Variable Rate, 11/1/19(1)(2) $ 1,621,105
125 California, (FGIC), Variable Rate, 12/1/29(2)(4) 394,500
1,500 California, Residual Certificates, (AMBAC),
Variable Rate, 10/1/30(2)(4) 1,779,315
750 California, RITES, (AMBAC),
Variable Rate, 2/1/23(2)(4) 876,420
2,340 Merced, CA, Union High School District, (FGIC),
0.00%, 8/1/20 1,049,350
5,000 St. Louis, MO, Board of Education, (FSA), 0.00%, 4/1/15 3,105,000
3,000 Township of Irvington, NJ, (MBIA), 5.00%, 7/15/33 3,095,280
- -----------------------------------------------------------------------------------------------
$ 11,920,970
- -----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 1.9%
$ 1,260 Maryland HEFA, (Medlantic), (AMBAC),
Variable Rate, 8/15/38(2)(4) $ 1,589,603
1,775 Maryland HEFA, (Medlantic/Helix Issue), (AMBAC),
5.25%, 8/15/38 1,929,762
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- -----------------------------------------------------------------------------------------------
INSURED-HOSPITAL (CONTINUED)
$ 100 Maryland HEFA, (Medlantic/Helix Issue), (FSA),
5.25%, 8/15/38 $ 108,719
800 Maryland HEFA, (Medlantic/Helix Issue), (FSA),
Variable Rate, 8/15/38(2)(4) 1,009,272
- -----------------------------------------------------------------------------------------------
$ 4,637,356
- -----------------------------------------------------------------------------------------------
INSURED-HOUSING -- 0.9%
$ 1,000 SCA MFMR Receipts, Burnsville, MN, (FSA),
7.10%, 1/1/30 $ 1,039,370
1,000 SCA MFMR Receipts, Springfield, MO, (FSA),
7.10%, 1/1/30 1,039,370
- -----------------------------------------------------------------------------------------------
$ 2,078,740
- -----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES OF
PARTICIPATION -- 2.8%
$ 10,000 Anaheim, CA, Public Financing Authority
Lease Revenue, (FSA), 0.00%, 9/1/31 $ 2,305,100
12,800 Anaheim, CA, Public Financing Authority Lease Revenue,
(FSA), 0.00%, 9/1/29 3,297,152
2,500 Saint Louis, MO, IDA, (Convention Center Hotel), (AMBAC),
0.00%, 7/15/19 1,203,575
- -----------------------------------------------------------------------------------------------
$ 6,805,827
- -----------------------------------------------------------------------------------------------
INSURED-SPECIAL TAX REVENUE -- 0.7%
$ 4,000 Hamilton County, OH, Sales Tax, (AMBAC),
0.00%, 12/1/22 $ 1,606,800
- -----------------------------------------------------------------------------------------------
$ 1,606,800
- -----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 5.1%
$ 10,000 Central Texas Turnpike Authority, (AMBAC),
0.00%, 8/15/21 $ 4,151,800
1,500 New Jersey Turnpike Authority, RITES, (MBIA),
Variable Rate, 7/1/23(2)(4) 1,885,605
1,930 Ohio Turnpike Commission, (FGIC), 5.50%, 2/15/26 2,191,206
2,250 Puerto Rico Highway and Transportation Authority,
(XLCA), 5.50%, 7/1/36 2,513,610
1,500 South Carolina State Transportation Infrastructure Bank,
(AMBAC), 5.00%, 10/1/33 1,537,830
- -----------------------------------------------------------------------------------------------
$ 12,280,051
- -----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 2.1%
$ 1,000 Henry County, GA, Water and Sewer Authority, (FGIC),
5.625%, 2/1/30(3) $ 1,100,950
1,000 JEA, FL, Water and Sewer, (AMBAC), 4.75%, 10/1/43 1,000,230
$ 3,000 Metropolitan Water District,
(Southern California Waterworks), (MBIA),
Variable Rate, 7/1/27(2)(4) $ 3,093,510
- -----------------------------------------------------------------------------------------------
$ 5,194,690
- -----------------------------------------------------------------------------------------------
NURSING HOME -- 3.5%
$ 960 Bell County, TX, (Heritage Oaks Healthcare),
6.70%, 6/1/29 $ 664,742
1,350 Bell County, TX, (Riverside Healthcare, Inc. -
Normandy Terrace), 9.00%, 4/1/23 1,136,403
870 Clovis, NM, IDR, (Retirement Ranches, Inc.),
7.75%, 4/1/19 901,181
1,100 Massachusetts IFA, (Age Institute of Massachusetts),
8.05%, 11/1/25 1,094,214
1,165 Montgomery, PA, IDA, (Advancement of Geriatric
Health Care Institute), 8.375%, 7/1/23 1,079,606
530 Ohio HFA, Retirement Rental Housing,
(Encore Retirement Partners), 6.75%, 3/1/19 455,297
2,000 Orange County, FL, Health Facilities Authority,
(Westminster Community Care), 6.60%, 4/1/24 1,544,600
261 Tarrant County, TX, Health Facilities Authority,
8.00%, 9/1/25(5) 39,138
392 Tarrant County, TX, Health Facilities Authority,
(3927 Foundation), 10.25%, 9/1/19(5) 11,773
1,677 Wisconsin HEFA, (Wisconsin Illinois Senior Housing),
7.00%, 8/1/29 1,567,751
- -----------------------------------------------------------------------------------------------
$ 8,494,705
- -----------------------------------------------------------------------------------------------
OTHER REVENUE -- 8.4%
$ 1,000 Barona, CA, (Band of Mission Indians),
8.25%, 1/1/20 $ 1,051,670
2,950 California Statewide Communities Development
Authority, (East Valley Tourist Development Authority),
8.25%, 10/1/14 2,792,146
1,500 Capital Trust Agency, FL, (Seminole Tribe Convention),
8.95%, 10/1/33 1,763,070
2,500 Capital Trust Agency, FL, (Seminole Tribe Convention),
10.00%, 10/1/33 3,107,925
4,735 Golden Tobacco Securitization Corp., CA,
6.75%, 6/1/39 4,667,526
990 Iowa Finance Authority, (Southbridge Mall),
6.375%, 12/1/13 919,106
1,000 Mohegan Tribe Indians, CT, Gaming Authority,
(Public Improvements), 6.25%, 1/1/21 1,079,840
1,000 Santa Fe, NM, (Crow Hobbs), 8.50%, 9/1/16 1,024,730
1,500 Tobacco Settlement Financing Corp., NJ,
Variable Rate, 6/1/39(1)(2) 1,457,265
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- -----------------------------------------------------------------------------------------------
OTHER REVENUE (CONTINUED)
$ 2,500 Tobacco Settlement Management Authority, SC,
6.375%, 5/15/28 $ 2,355,175
- -----------------------------------------------------------------------------------------------
$ 20,218,453
- -----------------------------------------------------------------------------------------------
SENIOR LIVING / LIFE CARE -- 3.8%
$ 1,125 Albuquerque, NM, Retirement Facilities, (La Vida Liena
Retirement Center), 5.75%, 12/15/28 $ 1,030,511
1,445 Albuquerque, NM, Retirement Facilities, (La Vida Liena
Retirement Center), 6.60%, 12/15/28 1,405,378
865 Bell County, TX, Health Facilities Authority,
(Care Institute, Inc. - Texas), 9.00%, 11/1/24 901,512
1,205 Grove City, PA, Area Hospital Authority, (Grove Manor),
6.625%, 8/15/29 1,204,144
1,500 Kansas City, MO, IDA, (Kingswood United Methodist Manor),
5.875%, 11/15/29 1,301,040
1,500 New Jersey EDA, (Fellowship Village), 5.50%, 1/1/25 1,455,510
1,485 North Miami, FL, Health Facilities Authority, (Imperial Club),
6.75%, 1/1/33 1,260,810
980 St. Paul, MN, Housing and Redevelopment,
(Care Institute, Inc. - Highland), 8.75%, 11/1/24(6) 609,913
- -----------------------------------------------------------------------------------------------
$ 9,168,818
- -----------------------------------------------------------------------------------------------
SPECIAL TAX REVENUE -- 8.0%
$ 750 Baltimore, MD, (Strathdale Manor), 7.00%, 7/1/33 $ 764,228
1,465 Bell Mountain Ranch, CO, Metropolitan District,
6.625%, 11/15/25 1,504,379
2,350 Brentwood, CA, Infrastructure Financing Authority,
6.375%, 9/2/33 2,420,806
1,000 Capistrano, CA, Unified School District, 6.00%, 9/1/33 1,011,230
2,000 Cleveland-Cuyahoga County, OH, Port Authority,
7.00%, 12/1/18 2,055,200
140 Fleming Island, FL, Plantation Community
Development District, 6.30%, 2/1/05 140,665
1,500 Frederick County, MD, Urbana Community
Development Authority, 6.625%, 7/1/25 1,558,290
1,000 Heritage Harbour, FL, South Community
Development District, 5.25%, 11/1/08 1,002,670
1,535 Lincoln, CA, Public Financing Authority, (Twelve Bridges),
6.20%, 9/2/25 1,595,418
1,200 New York City, NY, Transitional Finance Authority,
4.75%, 11/1/23 1,214,376
1,245 New York City, NY, Transitional Finance Authority,
4.75%, 11/15/23 1,258,234
3,500 New York State Local Government Assistance Corp.,
5.00%, 4/1/21 3,762,780
1,000 Tiverton, RI, Obligation Tax Increment,
(Mount Hope Bay Village), 6.875%, 5/1/22 1,006,480
- -----------------------------------------------------------------------------------------------
$ 19,294,756
- -----------------------------------------------------------------------------------------------
TRANSPORTATION -- 4.6%
$ 1,500 Connector 2000 Association, Inc., SC, Bridge &
Toll Road, (Southern Connector), 5.25%, 1/1/23 $ 678,615
5,000 Metropolitan Transportation Authority, NY,
5.25%, 11/15/31 5,169,850
3,500 New Jersey Transportation Trust Fund Authority,
Variable Rate, 6/15/17(1)(2) 3,957,065
1,200 Port Authority of New York and New Jersey,
5.375%, 3/1/28 1,319,496
- -----------------------------------------------------------------------------------------------
$ 11,125,026
- -----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 98.0%
(IDENTIFIED COST $222,244,304) $ 237,266,536
- -----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 2.0% $ 4,811,637
- -----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 242,078,173
- -----------------------------------------------------------------------------------------------
</Table>
FSA - Financial Security Assurance, Inc.
FGIC - Financial Guaranty Insurance Company
AMBAC - AMBAC Financial Group, Inc.
MBIA - Municipal Bond Insurance Association
XLCA - XL Capital Assurance, Inc.
At December 31, 2003, the concentration of the Fund's investments in the various
states, determined as a percentage of net assets, is as follows:
<Table>
California 20.4%
New York 11.5%
Texas 10.7%
Others, representing less than 10% individually 55.4%
</Table>
The Fund invests primarily in debt securities issued by municipalities. The
ability of the issuers of the debt securities to meet their obligations may be
affected by economic developments in a specific industry or municipality. In
order to reduce the risk associated with such economic developments, at December
31, 2003, 27.0% of the securities in the portfolio of investments are backed by
bond insurance of various financial institutions and financial guaranty
assurance agencies. The aggregate percentage insured by financial institutions
ranged from 1.1% to 8.9% of total investments.
(1) Security has been issued as an inverse floater bond.
(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(3) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(4) Security has been issued as a leveraged inverse floater bond.
(5) Non-income producing security.
(6) The Fund is accruing only partial interest on this security.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<Page>
EATON VANCE MUNICIPAL BOND FUND as of December 31, 2003
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AS OF DECEMBER 31, 2003
<Table>
ASSETS
Investments, at value (identified cost, $222,244,304) $ 237,266,536
Cash 696,052
Receivable for investments sold 210,000
Receivable for Fund shares sold 421,177
Interest receivable 4,256,911
- -----------------------------------------------------------------------------------------------
TOTAL ASSETS $ 242,850,676
- -----------------------------------------------------------------------------------------------
LIABILITIES
Dividends payable $ 501,353
Payable for Fund shares redeemed 114,927
Payable for daily variation margin on open financial futures contracts 75,000
Payable to affiliate for Trustees' fees 3,476
Accrued expenses 77,747
- -----------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 772,503
- -----------------------------------------------------------------------------------------------
NET ASSETS $ 242,078,173
- -----------------------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Paid-in capital $ 230,817,775
Accumulated net realized loss
(computed on the basis of identified cost) (5,041,050)
Accumulated undistributed net investment income 1,423,466
Net unrealized appreciation (computed on the basis of identified cost) 14,877,982
- -----------------------------------------------------------------------------------------------
TOTAL $ 242,078,173
- -----------------------------------------------------------------------------------------------
CLASS A SHARES
NET ASSETS $ 102,526,391
SHARES OUTSTANDING 10,359,620
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial interest outstanding) $ 9.90
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of $9.90) $ 10.39
- -----------------------------------------------------------------------------------------------
CLASS B SHARES
NET ASSETS $ 61,792,713
SHARES OUTSTANDING 6,285,352
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial interest outstanding) $ 9.83
- -----------------------------------------------------------------------------------------------
CLASS I SHARES
NET ASSETS $ 77,759,069
SHARES OUTSTANDING 7,191,583
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial interest outstanding) $ 10.81
- -----------------------------------------------------------------------------------------------
</Table>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
DECEMBER 31, 2003
<Table>
INVESTMENT INCOME
Interest $ 14,854,809
- -----------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 14,854,809
- -----------------------------------------------------------------------------------------------
EXPENSES
Investment adviser fee $ 1,146,090
Trustees' fees and expenses 14,257
Distribution and service fees
Class A 238,566
Class B 613,019
Custodian fee 108,462
Transfer and dividend disbursing agent fees 85,819
Legal and accounting services 46,625
Registration fees 43,466
Printing and postage 21,759
Miscellaneous 33,010
- -----------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 2,351,073
- -----------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 12,503,736
- -----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss)--
Investment transactions (identified cost basis) $ 1,445,690
Financial futures contracts (948,370)
Interest rate swap contracts (341,727)
- -----------------------------------------------------------------------------------------------
NET REALIZED GAIN $ 155,593
- -----------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments (identified cost basis) $ 2,069,415
Financial futures contracts 819,874
Interest rate swap contracts 345,834
- -----------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $ 3,235,123
- -----------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 3,390,716
- -----------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 15,894,452
- -----------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
INCREASE (DECREASE) YEAR ENDED YEAR ENDED
IN NET ASSETS DECEMBER 31, 2003 DECEMBER 31, 2002
- ------------------------------------------------------------------------------------------
From operations --
Net investment income $ 12,503,736 $ 11,380,794
Net realized gain (loss) 155,593 (959,018)
Net change in unrealized
appreciation (depreciation) 3,235,123 8,618,259
- -----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 15,894,452 $ 19,040,035
- -----------------------------------------------------------------------------------------
Distributions to shareholders
From net investment income
Class A $ (4,868,041) $ (3,962,814)
Class B (2,670,880) (2,080,477)
Class I (4,211,012) (4,590,765)
- -----------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (11,749,933) $ (10,634,056)
- -----------------------------------------------------------------------------------------
Transactions in shares of beneficial interest
Proceeds from sale of shares
Class A $ 42,885,166 $ 39,921,365
Class B 13,209,162 22,411,423
Class I 4,584,428 12,842,101
Net asset value of shares issued to
shareholders in payment
of distributions declared
Class A 2,192,516 1,584,543
Class B 1,432,994 1,050,757
Class I 2,211,783 2,244,643
Cost of shares redeemed
Class A (29,313,768) (27,618,507)
Class B (11,304,192) (8,111,867)
Class I (12,960,340) (21,777,791)
- -----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ 12,937,749 $ 22,546,667
- -----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 17,082,268 $ 30,952,646
- -----------------------------------------------------------------------------------------
NET ASSETS
At beginning of year $ 224,995,905 $ 194,043,259
- ------------------------------------------------------------------------------------------
AT END OF YEAR $ 242,078,173 $ 224,995,905
- ------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME
INCLUDED IN NET ASSETS
AT END OF YEAR $ 1,423,466 $ 839,334
- ------------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<Page>
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
CLASS A
--------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2003(1) 2002(1) 2001(1)(2) 2000 1999
- --------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of year $ 9.72 $ 9.34 $ 9.37 $ 8.59 $ 9.970
- --------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.526 $ 0.522 $ 0.497 $ 0.502 $ 0.505
Net realized and unrealized gain (loss) 0.151 0.347 (0.040) 0.776 (1.357)
- --------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.677 $ 0.869 $ 0.457 $ 1.278 $ (0.852)
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.497) $ (0.489) $ (0.487) $ (0.498) $ (0.512)
From net realized gain (0.016)
- --------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.497) $ (0.489) $ (0.487) $ (0.498) $ (0.528)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.900 $ 9.720 $ 9.340 $ 9.370 $ 8.590
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 7.17% 9.51% 4.96% 15.38% (8.85)%
- --------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $ 102,526 $ 85,048 $ 68,124 $ 53,271 $ 49,427
Ratios (As a percentage of average daily
net assets):
Expenses 0.89% 0.91% 0.93% 0.97% 0.71%
Expenses after custodian fee reduction 0.89% 0.91% 0.90% 0.96% 0.69%
Net investment income 5.42% 5.47% 5.27% 5.60% 5.31%
Portfolio Turnover 34% 21% 13% 46% 80%
- --------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund 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 December 31, 2001 was to increase net investment income per
share by $0.003, increase net realized and unrealized loss per share by
$0.003, and increase the ratio of net investment income to average net
assets from 5.23% to 5.27%. Per share data and ratios for the periods prior
to January 1, 2001 have not been restated to reflect this change in
presentation.
(3) Returns are historical and are calculated using the percentage change in net
asset value with all distributions reinvested. Total return is not computed
on an annualized basis.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<Page>
<Table>
<Caption>
CLASS B
--------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2003(1) 2002(1) 2001(1)(2) 2000 1999
- --------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of year $ 9.660 $ 9.280 $ 9.300 $ 8.520 $ 9.880
- --------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.450 $ 0.447 $ 0.433 $ 0.426 $ 0.431
Net realized and unrealized gain (loss) 0.142 0.348 (0.036) 0.779 (1.343)
- --------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.592 $ 0.795 $ 0.397 $ 1.205 $ (0.912)
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.422) $ (0.415) $ (0.417) $ (0.425) $ (0.432)
From net realized gain -- -- -- -- (0.016)
- --------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.422) $ (0.415) $ (0.417) $ (0.425) $ (0.448)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 9.830 $ 9.660 $ 9.280 $ 9.300 $ 8.520
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.26% 8.72% 4.36% 14.58% (9.51)%
- --------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $ 61,793 $ 57,347 $ 40,168 $ 28,222 $ 22,738
Ratios (As a percentage of average daily
net assets):
Expenses 1.64% 1.66% 1.68% 1.71% 1.47%
Expenses after custodian fee reduction 1.64% 1.66% 1.65% 1.70% 1.45%
Net investment income 4.67% 4.71% 4.62% 4.86% 4.61%
Portfolio Turnover 34% 21% 13% 46% 80%
- --------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund 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 December 31, 2001 was to increase net investment income per
share by $0.003, increase net realized and unrealized loss per share by
$0.003, and increase the ratio of net investment income to average net
assets from 4.58% to 4.62%. Per share data and ratios for the periods prior
to January 1, 2001 have not been restated to reflect this change in
presentation.
(3) Returns are historical and are calculated using the percentage change in net
asset value with all distributions reinvested. Total return is not computed
on an annualized basis.
SEE NOTES TO FINANCIAL STATEMENTS.
13
<Page>
<Table>
<Caption>
CLASS I
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2003(1) 2002(1) 2001(1)(2) 2000 1999
--------------------------------------------------------------
Net asset value -- Beginning of year $ 10.620 $ 10.200 $ 10.240 $ 9.380 $ 10.870
- --------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.602 $ 0.598 $ 0.570 $ 0.560 $ 0.553
Net realized and unrealized gain (loss) 0.159 0.383 (0.053) 0.857 (1.464)
- --------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.761 $ 0.981 $ 0.517 $ 1.417 $ (0.911)
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.571) $ (0.561) $ (0.557) $ (0.557) $ (0.563)
From net realized gain -- -- -- -- (0.016)
- --------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.571) $ (0.561) $ (0.557) $ (0.557) $ (0.579)
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $ 10.810 $ 10.620 $ 10.200 $ 10.240 $ 9.380
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 7.38% 9.84% 5.14% 15.63% (8.69)%
- --------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $ 77,759 $ 82,600 $ 85,751 $ 85,656 $ 84,938
Ratios (As a percentage of average daily
net assets):
Expenses 0.64% 0.66% 0.69% 0.77% 0.69%
Expenses after custodian fee reduction 0.64% 0.66% 0.66% 0.76% 0.67%
Net investment income 5.68% 5.73% 5.53% 5.82% 5.38%
Portfolio Turnover 34% 21% 13% 46% 80%
- --------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund 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 December 31, 2001 was to increase net investment income per
share by $0.003, increase net realized and unrealized loss per share by
$0.003, and increase the ratio of net investment income to average net
assets from 5.50% to 5.53%. Per share data and ratios for the periods prior
to January 1, 2001 have not been restated to reflect this change in
presentation.
(3) Returns are historical and are calculated using the percentage change in net
asset value with all distributions reinvested. Total return is not computed
on an annualized basis.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<Page>
EATON VANCE MUNICIPAL BOND FUND as of December 31, 2003
NOTES TO FINANCIAL STATEMENTS
1 SIGNIFICANT ACCOUNTING POLICIES
Eaton Vance Municipal Bond 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 three classes of shares. Class A shares
are generally sold subject to a sales charge imposed at time of purchase.
Class B shares are sold at net asset value and are subject to a contingent
deferred sales charge (see Note 6). Class I shares generally are sold at net
asset value. 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 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 VALUATIONS -- Municipal bonds are normally valued on the basis
of valuations furnished by a pricing service. Taxable obligations, if any,
for which price quotations are readily available are normally valued at the
mean between the latest available bid and asked prices. Futures contracts
and options on financial futures contracts listed on commodity exchanges are
valued at closing settlement prices. Over-the-counter options on financial
futures are normally valued at the mean between the latest bid and asked
prices. Investments, if any, for which there are no such valuations are
valued at fair value using methods determined in good faith by or at the
direction of the Trustees. Short-term obligations, maturing in sixty days or
less, are valued at amortized cost, which approximates value.
B INCOME -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount on long-term debt
securities.
C INCOME 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 and tax-exempt
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary. Dividends paid by
the Fund from net interest on tax-exempt municipal bonds are not includable
by shareholders as gross income for federal income tax purposes because the
Fund intends to meet certain requirements of the Internal Revenue Code
applicable to regulated investment companies which will enable the Fund to
pay exempt-interest dividends. At December 31, 2003, the Fund, for federal
income tax purposes, had a capital loss carryover of $4,579,196 which will
reduce the taxable income arising from future net realized gains 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. The capital loss carryover expires on December 31,
2008 ($2,939,035) and December 31, 2010 ($1,640,161). At December 31, 2003,
net capital losses of $943,516 attributable to security transactions
incurred after October 31, 2003 are treated as arising on the first day of
the Fund's taxable year ending December 31, 2004.
D INTEREST RATE SWAPS -- The Fund may enter into interest rate swap
agreements to enhance return, to hedge against fluctuations in securities
prices or interest rates or as substitution for the purchase and sale of
securities. Pursuant to these agreements, the Fund makes bi-annual payments
at a fixed interest rate. In exchange, the Fund receives payments based on
the interest rate of a benchmark industry index. During the term of the
outstanding swap agreement, changes in the underlying value of the swap are
recorded as unrealized gains and losses. The value of the swap is determined
by changes in the relationship between two rates of interest. The Fund is
exposed to credit loss in the event of non-performance by the swap
counterparty. However, the Fund does not anticipate non-performance by the
counterparty. Risk may also arise from the unanticipated movements in value
of interest rates.
E FINANCIAL FUTURES CONTRACTS -- Upon the entering of a financial futures
contract, the Fund 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 Fund (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 Fund. The Fund's
investment in financial futures contracts is designed for both hedging
against anticipated future
15
<Page>
changes in interest rates and investment purposes. Should interest rates
move unexpectedly, the Fund may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss.
F PUT OPTIONS ON FINANCIAL FUTURES CONTRACTS -- Upon the purchase of a put
option on a financial futures contract by the Fund, the premium paid is
recorded as an investment, the value of which is marked-to-market daily.
When a purchased option expires, the Fund will realize a loss in the amount
of the cost of the option. When the Fund enters into a closing sale
transaction, the Fund will realize a gain or loss depending on whether the
sales proceeds from the closing sale transaction are greater or less than
the cost of the option. When the Fund exercises a put option, settlement is
made in cash. The risk associated with purchasing options is limited to the
premium originally paid.
G WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked-to-market daily and begin accruing interest on
settlement date.
H LEGAL FEES -- Legal fees and other related expenses incurred as part of
negotiations of the terms and requirements of capital infusions, or that are
expected to result in the restructuring of or a plan of reorganization for
an investment are recorded as realized losses. Ongoing expenditures to
protect or enhance an investment are treated as operating expenses.
I EXPENSE REDUCTION -- Investors Bank & Trust Company (IBT) serves as
custodian to the Fund. Pursuant to the custodian agreement, IBT receives a
fee reduced by credits which are determined based on the average daily cash
balance the Fund maintains with IBT. All significant credit balances used to
reduce the Fund's custodian fees are reported as a reduction of total
expenses in the Statement of Operations.
J USE OF ESTIMATES -- The preparation of 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.
K INDEMNIFICATIONS -- Under the Trust's organizational documents, its
officers and Trustees may be indemnified against certain liabilities and
expenses arising out of the performance of their duties to the Fund and
shareholders are indemnified against personal liability for the obligations
of the Trust. Additionally, in the normal course of business, the Fund
enters into agreements with service providers that may contain
indemnification clauses. The Fund's maximum exposure under these
arrangements is unknown as this would involve future claims that may be made
against the Fund that have not yet occurred.
L 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.
M OTHER -- Investment transactions are accounted for on a trade-date basis.
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. Distributions are paid monthly. Distributions
are paid in the form of additional shares or, at the election of the
shareholder, in cash. Distributions of realized capital gains, if any, are
made at least annually. Shareholders may reinvest capital gain distributions
in additional shares of the Fund at the net asset value as of the
ex-dividend date.
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
16
<Page>
beneficial interest (without par value). Transactions in Fund shares were as
follows:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
----------------------------
CLASS A 2003 2002
------------------------------------------------------------------------------------
Sales 4,424,206 4,179,136
Issued to shareholders electing to receive
payments of distributions in Fund shares 225,789 165,415
Redemptions (3,037,727) (2,891,261)
------------------------------------------------------------------------------------
NET INCREASE 1,612,268 1,453,290
------------------------------------------------------------------------------------
<Caption>
YEAR ENDED DECEMBER 31,
----------------------------
CLASS B 2003 2002
------------------------------------------------------------------------------------
Sales 1,373,788 2,355,259
Issued to shareholders electing to receive
payments of distributions in Fund shares 148,636 110,452
Redemptions (1,175,062) (856,953)
------------------------------------------------------------------------------------
NET INCREASE 347,362 1,608,758
------------------------------------------------------------------------------------
<Caption>
YEAR ENDED DECEMBER 31,
----------------------------
CLASS I 2003 2002
------------------------------------------------------------------------------------
Sales 434,841 1,236,107
Issued to shareholders electing to receive
payments of distributions in Fund shares 208,638 214,711
Redemptions (1,228,733) (2,076,970)
------------------------------------------------------------------------------------
NET DECREASE (585,254) (626,152)
------------------------------------------------------------------------------------
</Table>
4 INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee, computed at the monthly rate of 0.025% (0.300%
per annum) of the average daily net assets and 3.00% of gross income
(excluding net realized gains on sales of securities) up to $500 million and
at reduced rates as daily net assets exceed that level, was earned by Eaton
Vance Management (EVM), as compensation for management and investment
advisory services rendered to the Fund. For the year ended December 31,
2003, the fee was equivalent to 0.49% of the Fund's average daily net assets
for such period and amounted to $1,146,090. Except as to Trustees of the
Fund who are not members of EVM's organization, officers and Trustees
receive remuneration for their services to the Fund out of such investment
adviser fee. 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 activities. For the year ended
December 31, 2003, EVM earned $9,566 in sub-transfer agent fees. The Fund
was informed that Eaton Vance Distributors, Inc. (EVD), a subsidiary of EVM
and the Fund's principal underwriter, received $32,360 and $743 from the
Fund as its portion of the sales charge on sales of Class A and Class I
shares, respectively, for the year ended December 31, 2003.
Trustees of the Fund 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 December 31, 2003, no significant amounts have been deferred.
Certain officers and Trustees of the Fund are officers of the above
organizations.
5 DISTRIBUTION AND SERVICE PLANS
The Fund has in effect a distribution plan for Class B shares (Class B Plan)
pursuant to Rule 12b-1 under the Investment Company Act of 1940 and a
Service Plan for Class A shares (Class A Plan) (collectively, the Plans).
The Class B Plan requires the Fund to pay the principal underwriter, EVD,
amounts equal to 1/365 of 0.75% of the Fund's daily net assets attributable
to Class B 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% of the aggregate amount received
by the Fund for the Class B shares sold plus, (ii) interest calculated by
applying the rate of 1% over the prevailing prime rate to the outstanding
balance of Uncovered Distribution Charges due EVD reduced by the aggregate
amount of contingent deferred sales charges (see Note 6) and amounts
theretofore paid to or payable to EVD. The amount payable to EVD with
respect to each day is accrued on such day as a liability of the Fund and,
accordingly, reduces the Class B net assets. The Fund paid or accrued
distribution fees of $459,764 for Class B shares to EVD for the year ended
December 31, 2003, representing 0.75% of the average daily net assets for
Class B shares. At December 31, 2003, the amount of Uncovered Distribution
Charges EVD calculated under the Class B Plan was approximately $2,046,000.
The Plans authorize the Fund to make payments of service fees to EVD,
investment dealers and other persons in amounts not exceeding 0.25%
(annually) of the Fund's average daily net assets attributable to Class A
and Class B 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 when there are no outstanding Uncovered
Distribution Charges of EVD. Service fees for the year
17
<Page>
ended December 31, 2003 amounted to $238,566 and $153,255 for Class A and
Class B shares, respectively.
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. Class A
shares may be subject to a 1% CDSC if redeemed within 18 months of purchase
(depending on the circumstances 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 gain distributions. The Class B CDSC is imposed at
declining rates that begin at 5% in the first and second year after
purchase, declining one percentage point each subsequent year. 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 Class B Distribution
Plan (see Note 5). CDSC charges received when no Uncovered Distribution
Charges exist will be credited to the Fund. EVD received approximately
$29,000 and $155,000 of CDSC paid by Class A and Class B shareholders,
respectively, for the year ended December 31, 2003.
7 PURCHASES AND SALES OF INVESTMENTS
The Fund invests primarily in debt securities. The ability of the issuers of
the debt securities held by the Fund to meet their obligations may be
affected by economic developments in a specific industry or municipality.
Purchases and sales of investments, other than short-term obligations,
aggregated $91,848,694 and $78,206,063 respectively.
8 LINE OF CREDIT
The Fund participates with other portfolios and funds managed by EVM and
affiliates in a $150 million unsecured line of credit with a group of banks.
Borrowings will be made by the Fund 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 Fund did not have any
significant borrowings or allocated fees during the year ended December 31,
2003.
9 FEDERAL INCOME TAX BASIS OF UNREALIZED APPRECIATION (DEPRECIATION)
The cost and unrealized appreciation (depreciation) of investments of the
Fund at December 31, 2003, as computed on a federal income tax basis, were
as follows:
<Table>
AGGREGATE COST $ 221,906,892
------------------------------------------------------------------
Gross unrealized appreciation $ 20,422,561
Gross unrealized depreciation (5,062,917)
------------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 15,359,644
------------------------------------------------------------------
</Table>
10 FINANCIAL INSTRUMENTS
The Fund 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
futures contracts and interest rate swaps 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 Fund has in particular classes of financial
instruments and does not necessarily represent the amounts potentially
subject to risk. The measurement of the risks associated with these
instruments is meaningful only when all related and offsetting transactions
are considered.
A summary of obligations under these financial instruments at December 31,
2003, is as follows:
<Table>
<Caption>
FUTURES CONTRACTS
--------------------------------------------------------------------
EXPIRATION NET UNREALIZED
DATE(S) CONTRACTS POSITION DEPRECIATION
--------------------------------------------------------------------
3/04 600 U.S. Treasury Bond Short $ (144,250)
</Table>
At December 31, 2003, the Fund had sufficient cash and/or securities to
cover margin requirements on open future contracts.
18
<Page>
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES OF THE EATON VANCE MUTUAL FUNDS TRUST AND SHAREHOLDERS OF EATON
VANCE MUNICIPAL BOND FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Eaton Vance Municipal Bond Fund (the Fund) (one
of the series of Eaton Vance Mutual Funds Trust) as of December 31, 2003, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period ended December 31,
2003. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights 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 financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities held as of December 31, 2003 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Eaton Vance
Municipal Bond Fund as of December 31, 2003, the results of its operations, the
changes in its net assets and its financial highlights for the respective stated
periods in conformity with accounting principles generally accepted in the
United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 19, 2004
19
<Page>
EATON VANCE MUNICIPAL BOND FUND
MANAGEMENT AND ORGANIZATION
Fund Management. The Trustees of Eaton Vance Mutual Funds Trust (the Trust) are
responsible for the overall management and supervision of the Trust's affairs.
The Trustees and officers of the Trust 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 hold indefinite
terms of office. The "noninterested Trustees" consist of those Trustees who are
not "interested persons" of the Trust, 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
and a wholly-owned subsidiary of EVM.
<Table>
<Caption>
TERM OF NUMBER OF PORTFOLIOS
POSITION(S) OFFICE AND IN FUND COMPLEX
NAME AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY
DATE OF BIRTH TRUST SERVICE DURING PAST FIVE YEARS TRUSTEE(1) OTHER DIRECTORSHIPS HELD
- ----------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE(S)
Jessica M. Bibliowicz Trustee Since 1998 Chairman, President and Chief 193 Director of National
11/28/59 Executive Officer of National Financial Partners
Financial Partners (financial
services company) (since
April 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 Since 1991 Chairman, President and Chief 195 Director of EVC
11/9/41 Executive Officer of BMR,
EVC, EVM and EV; Director of
EV; Vice President and
Director of EVD. Trustee
and/or officer of 195
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 Fund.
NONINTERESTED TRUSTEE(S)
Samuel L. Hayes, III Trustee Since 1986 Jacob H. Schiff Professor of 195 Director of Tiffany & Co.
2/23/35 Investment Banking Emeritus, (specialty retailer) and
Harvard University Graduate Telect, Inc.
School of Business (telecommunication services
Administration. company)
William H. Park Trustee Since 2003 President and Chief Executive 192 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 192 None
7/10/40 University Law Center (since
1999). Tax Partner,
Covington & Burling,
Washington, DC (1991-2000).
Norton H. Reamer Trustee Since 1986 President, Chief Executive 195 None
9/21/35 Officer and a Director of
Asset Management Finance
Corp. (a specialty finance
company serving the
investment management
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
of 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).
</Table>
20
<Page>
<Table>
<Caption>
TERM OF NUMBER OF PORTFOLIOS
POSITION(S) OFFICE AND IN FUND COMPLEX
NAME AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY
DATE OF BIRTH TRUST SERVICE DURING PAST FIVE YEARS TRUSTEE(1) OTHER DIRECTORSHIPS HELD
- ----------------------------------------------------------------------------------------------------------------------------------
NONINTERESTED TRUSTEE(S) (CONTINUED)
Lynn A. Stout Trustee Since 1998 Professor of Law, University 195 None
9/14/57 of California at Los Angeles
School of Law (since
July 2001). Formerly,
Professor of Law, Georgetown
University Law Center.
</Table>
PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES
<Table>
<Caption>
POSITION(S) OFFICE AND
NAME AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S)
DATE OF BIRTH TRUST SERVICE DURING PAST FIVE YEARS
- -----------------------------------------------------------------------------------------------
Thomas E. Faust Jr. President Since 2002 Executive Vice President of EVM, BMR, EVC
5/31/58 and 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 54 registered investment
companies managed by EVM or BMR.
William H. Ahern, Jr. Vice President Since 1995 Vice President of EVM and BMR. Officer of
7/28/59 35 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 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 Managing Director and Senior Analyst for
Robertson Stephens (1998-1999). Officer of
26 registered investment companies managed
by EVM or BMR.
Robert B. MacIntosh Vice President Since 1998 Vice President of EVM and BMR. Officer of
1/22/57 127 registered investment companies managed
by EVM or BMR.
Duncan W. Richardson Vice President Since 2001 Senior Vice President and Chief Equity
10/26/57 Investment Officer of EVM and BMR. Officer
of 42 registered investment companies
managed by EVM or BMR.
Walter A. Row, III Vice President Since 2001 Director of Equity Research and a Vice
7/20/57 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 Portfolio Manager and Equity Analyst for
State Street Global Advisers (1980-1999).
Officer of 25 registered investment
companies managed by EVM or BMR.
Susan Schiff Vice President Since 2002 Vice President of EVM and BMR. Officer of
3/13/61 26 registered investment companies managed
by EVM or BMR.
Alan R. Dynner Secretary Since 1997 Vice President, Secretary and Chief Legal
10/10/40 Officer of BMR, EVM, EVD, EV and EVC.
Officer of 195 registered investment
companies managed by EVM or BMR.
James L. O'Connor Treasurer Since 1989 Vice President of BMR, EVM and EVD. Officer
4/1/45 of 116 registered investment companies
managed by EVM or BMR.
</Table>
(1) Includes both master and feeder funds in a master-feeder structure.
The SAI for the Fund includes additional information about the Trustees and
officers of the Fund can be obtained without charge by calling 1-800-225-6265.
21
<Page>
INVESTMENT ADVISER
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
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
200 Berkeley Street
Boston, MA
02116-5022
EATON VANCE MUNICIPAL BOND 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.
<Page>
279-2/04 MBSRC
<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
<Page>
Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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, Chief Executive Officer and a Director of Asset Management Finance
Corp. (a specialty finance company serving the investment management industry)
and is President of Unicorn Corporation (an investment and financial advisory
services company). Formerly, Mr. Reamer was Chairman of Hellman, Jordan
Management Co., Inc. (an investment management company) and Advisory Director of
Berkshire Capital Corporation (an investment banking firm), Chairman of the
Board of UAM and Chairman, President and Director of the UAM Funds (mutual
funds).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a)-(d)
The following table presents aggregate fees billed to the registrant for the
fiscal years ended December 31, 2002, and 2003 by the registrant's principal
accountant for professional services rendered for the audit of the registrant's
annual financial statements and fees billed for other services rendered by the
principal accountant during those periods.
<Table>
<Caption>
YEARS ENDED DECEMBER 31, 2003 2002
- -----------------------------------------------------------------------------------------
Audit Fees $ 37,265 $ 26,151
Audit-Related Fees(1) $ 0 $ 0
Tax Fees(2) $ 5,400 $ 5,300
All Other Fees(3) $ 0 $ 0
--------------------------------------------
Total $ 42,665 $ 31,451
============================================
</Table>
(1) Audit-related fees consist of the aggregate fees billed for assurance
and related services that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported
under the category of audit fees.
(2) Tax fees consist of the aggregate fees billed for professional services
rendered by the principal accountant relating to tax compliance, tax
advice, and tax planning and specifically include fees for tax return
preparation and other related tax compliance/planning matters.
(3) All other fees consist of the aggregate fees billed for products and
services provided by the registrant's principal accountant other than
audit, audit-related, and tax services.
(e)(1) The registrant's audit committee has adopted policies and procedures
relating to the pre-approval of services provided by the registrant's principal
accountant (the "Pre-Approval Policies"). The Pre-Approval Policies establish a
framework intended to assist the audit committee in the proper discharge of its
pre-approval responsibilities. As a general matter, the Pre-Approval Policies
(i) specify certain types of audit, audit-related, tax, and other services
determined to be pre-approved by the audit committee; and (ii) delineate
specific procedures governing the mechanics of the pre-approval process,
including the approval and monitoring of audit
<Page>
and non-audit service fees. Unless a service is specifically pre-approved under
the Pre-Approval Policies, it must be separately pre-approved by the audit
committee.
The Pre-Approval Policies and the types of audit and non-audit services
pre-approved therein must be reviewed and ratified by the registrant's audit
committee at least annually. The registrant's audit committee maintains full
responsibility for the appointment, compensation, and oversight of the work of
the registrant's principal accountant.
(e)(2) No services described in paragraphs (b)-(d) above were approved by the
registrant's audit committee pursuant to the "de minimis exception" set forth in
Rule 2-01 (c)(7)(i)(C) of Regulation S-X.
(f) Not applicable.
(g) Aggregate non-audit fees (i.e., fees for audit-related, tax, and other
services) billed by the registrant's principal accountant for services rendered
to the registrant for each of the registrant's last two fiscal years (2002 and
2003) were $5,300 and $5,400, respectively. Aggregate non-audit fees (i.e., fees
for audit-related, tax, and other services) billed by the registrant's principal
accountant for services rendered to the Eaton Vance organization (which includes
the registrant's investment adviser and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services to the
registrant) for each of the registrant's last two fiscal years (2002 and 2003)
were $ 336,546 and $458,168 respectively.
(h) The registrant's audit committee has considered whether the provision by the
registrant's principal accountant of non-audit services to the registrant's
investment adviser and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the registrant that
were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X is
compatible with maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not Required in 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,
<Page>
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.
Eaton Vance Mutual Funds Trust (On behalf of Eaton Vance Municipal Bond Fund)
- -----------------------------------------------------------------------------
By: /S/ Thomas E. Faust Jr.
-------------------------
Thomas E. Faust Jr.
President
Date: February 19, 2004
-----------------
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: February 19, 2004
-----------------
By: /S/ Thomas E. Faust Jr.
-------------------------
Thomas E. Faust Jr.
President
Date: February 19, 2004
-----------------