<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
EATON VANCE MUNICIPALS 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-04409
Eaton Vance Municipals 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)
August 31
---------
Date of Fiscal Year End
February 29, 2004
-----------------
Date of Reporting Period
ITEM 1. REPORTS TO STOCKHOLDERS
<Page>
[EV LOGO]
[GRAPHIC IMAGE]
SEMIANNUAL REPORT FEBRUARY 29, 2004
[GRAPHIC IMAGE]
EATON VANCE MUNICIPALS TRUST
[GRAPHIC IMAGE]
ALABAMA
ARKANSAS
GEORGIA
KENTUCKY
LOUISIANA
MARYLAND
MISSOURI
NORTH CAROLINA
OREGON
SOUTH CAROLINA
TENNESSEE
VIRGINIA
<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 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 MUNICIPALS FUNDS as of February 29, 2004
LETTER TO SHAREHOLDERS
[PHOTO OF THOMAS J. FETTER ]
Thomas J. Fetter
President
Amid the market volatility 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. 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 Investors Service, Standard & Poor's and Fitch Ratings - 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
President
April 12, 2004
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 MUNICIPALS FUNDS as of February 29, 2004
MARKET RECAP
By some measures, the U.S. economy gathered momentum in the six months ended
February 29, 2004. Consumer confidence improved somewhat, giving a boost to
consumer spending. Businesses, which have constrained plant and equipment
investments in recent years, began to step up their capital spending plans.
However, even as investors noted signs of a stronger economy, the bond market
posted solid returns during the period.
THE BUSINESS SERVICE AND CONSTRUCTION SECTORS WERE AMONG THE LEADERS IN JOB
CREATION IN 2003...
Following several years of retrenchment, capital spending - a key ingredient in
a meaningful recovery - showed some signs of life in 2003. That trend provided
some hope for an eventual revival in the manufacturing sector. The residential
housing market remained strong, providing continued support to the construction
sector. Meanwhile, the business and financial services sectors saw an increase
in hiring, as the financial markets rallied and merger and acquisition activity
gained momentum.
WITH LITTLE THREAT OF INFLATION, THE FEDERAL RESERVE MAINTAINED INTEREST RATES
AT A RECORD LOW...
The nation's Gross Domestic Product expanded by 4.1% in the fourth quarter of
2003, following an 8.2% jump in the third quarter. While these reports confirmed
that a recovery was in progress, the slow pace of job creation remained a
concern. The nation's unemployment rate was 5.6% in February 2004, down from
5.9% a year ago. However, nearly three years after the onset of the 2001
recession, total jobs had still not recovered to pre-recession levels, a trend
last seen in 1939.
Despite a spike in gasoline and heating oil prices - and the ever-rising cost of
health care - core inflation remained surprisingly tame, as productivity gains,
global competition and a growing outsourcing trend kept wage increases at a
minimum. Retail prices were generally flat and manufacturers, despite increases
in key components like energy and steel, kept prices stable. With inflation
under control, the Federal Reserve has held its Federal Funds rate - a key
short-term interest rate barometer - at 1.00%, where it has stood since June
2003.
[CHART]
MUNICIPAL BOND YIELDS EQUAL 96% OF TREASURY YIELDS
4.68% 7.20%
30-YEAR AAA-RATED TAXABLE EQUIVALENT YIELD
GENERAL OBLIGATION (GO) BONDS* IN 35.0% TAX BRACKET
4.85%
30-YEAR TREASURY BOND
PRINCIPAL AND INTEREST PAYMENTS OF TREASURY SECURITIES ARE GUARANTEED BY THE
U.S. GOVERNMENT.
* GO YIELDS ARE A COMPILATION OF A REPRESENTATIVE VARIETY OF GENERAL OBLIGATIONS
AND ARE NOT NECESSARILY REPRESENTATIVE OF THE FUNDS' YIELD. STATISTICS AS OF
FEBRUARY 29, 2004
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
SOURCE: BLOOMBERG, L.P.
The municipal bond market outperformed the Treasury market during the six-month
period ended February 29, 2004. Ten-year Treasury bond yields - which were
around 4.52% at August 31, 2003 - declined to 3.99% by February 29, 2004, while
10-year municipal yields fell from 4.22% to 3.48%. The Lehman Brothers Municipal
Bond Index posted a total return of 6.52% for the six months ended February 29,
2004.*
STATE TAX RATES ROSE AGAIN IN 2003, INCREASING THE BURDEN ON STATE TAXPAYERS...
According to the Tax Foundation, state tax increases in 2002 were estimated at
$7.6 billion, and estimated at roughly twice that figure in 2003. Over the past
decade, the fastest growing category of state tax collections was individual
income taxes, which rose at an average annual rate of 7.7%. That trend has left
taxpayers with a larger state tax bill and made a strong case for municipal
bonds as one of the few remaining ways to pare one's tax burden. Thus, we
continue to believe that municipal bonds remain a worthwhile consideration for
tax-conscious investors.
* It is not possible to invest directly in an Index.
THE VIEWS EXPRESSED THROUGHOUT THIS REPORT ARE THOSE OF THE VARIOUS PORTFOLIO
MANAGERS AND ARE CURRENT ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS
STATED ON THE COVER. THESE VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON
MARKET OR OTHER CONDITIONS, AND EATON VANCE DISCLAIMS ANY RESPONSIBILITY TO
UPDATE SUCH VIEWS. THESE VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND,
BECAUSE INVESTMENT DECISIONS FOR AN EATON VANCE FUND ARE BASED ON MANY FACTORS,
MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON BEHALF OF ANY EATON
VANCE FUND.
3
<Page>
EATON VANCE ALABAMA MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF WILLIAM H. AHERN]
William H. Ahern
Portfolio Manager
MANAGEMENT UPDATE
- - Alabama's economy remained sluggish in 2003. The manufacturing decline
continued, although the auto industry registered some gains. Residential
construction continued to benefit from low interest rates, but the service
sector reflected weakness in health care and leisure. The state's jobless rate
was 5.6% in February 2004, down slightly from 5.7% a year ago.
- - In a slow economic recovery, management focused on public purpose bonds, which
tend to be less sensitive to fluctuations in the economy. The Portfolio had
its largest investment in insured* water and sewer bonds, whose revenues come
from non-discretionary water bill payments.
- - Insured* general obligation bonds (GOs) were key investments for the
Portfolio. Given the state's slow recovery following the economic slowdown,
insured* bonds added an additional measure of protection, and provided quality
and a dependable revenue stream.
- - The Portfolio's insured* education bond investments included a range of
issuers within the state university system. Typically, education bonds are
relatively insulated from the vagaries of the economic cycle.
- - The Portfolio had a significant weighting in insured* escrowed/prerefunded
bonds. These bonds are unusual in that - in addition to being insured* - they
are prerefunded and backed by Treasury bonds. They are therefore viewed as
very high quality.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 50
- - Average Maturity: 21.6 years
- - Average Rating: AA+
- - Average Call: 6.9 years
- - Average Dollar Price: $102.27
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 6.43% and 6.02%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$10.11 on February 29, 2004 from $9.72 on August 31, 2003, and the
reinvestment of $0.230 per share in tax-free income.(2) For Class B, this
return resulted from an increase in NAV per share to $11.11 from $10.69, and
the reinvestment of $0.218 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$10.11 per share for Class A and $11.11 for Class B, the distribution rates
were 4.54% and 3.81%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 7.35% and 6.17%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 3.13%
and 2.54%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 5.07% and 4.11% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 74.5%
AA 1.9%
A 9.3%
BBB 12.9%
Non-Rated 1.4%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 7.24% 6.43%
Five Years 5.32 4.52
Ten Years 5.41 4.77
Life of Fund+ 5.15 5.57
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 2.18% 1.43%
Five Years 4.30 4.18
Ten Years 4.90 4.77
Life of Fund+ 4.65 5.57
</Table>
+ Inception date: Class A: 12/7/93; Class B: 5/1/92
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 38.25%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
4
<Page>
EATON VANCE ARKANSAS MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF THOMAS M. METZOLD]
Thomas M. Metzold
Portfolio Manager
MANAGEMENT UPDATE
- - Arkansas's employment growth remained weak in 2003, as durable goods
manufacturing was slow to recover to pre-recession levels. Residential
construction was one of the strongest job generators. The state's farm economy
was strong, supported by firm prices for crops such as soybeans. The state's
jobless rate was 5.5% in February 2004, down from 5.7% a year ago.
- - Hospital bonds were the Portfolio's largest sector weighting at February 29,
2004. Management focused on institutions prominent in their urban markets or
sole providers in rural communities. We believe these characteristics have
made them somewhat less vulnerable to the difficulties facing the hospital
industry.
- - Industrial development revenue bonds (IDR) provided good sources of income for
the Portfolio for the six months ended February 29, 2004. IDRs in the
Portfolio represented areas that could benefit from a stronger economy,
including industrial products, airlines and paper products.
- - Insured* water and sewer bonds constituted another defensive sector in an
uncertain economy. The state has experienced rising infrastructure needs,
resulting in more opportunities in water and sewer issues.
- - Call protection remained an important consideration. Management eliminated
bonds with poor call features in favor of non-callable bonds and issues with
more attractive characteristics, thereby enhancing the Portfolio's
appreciation potential.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 60
- - Average Maturity: 18.6 years
- - Average Rating: AA-
- - Average Call: 6.9 years
- - Average Dollar Price: $105.54
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 7.28% and 6.89%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$10.19 on February 29, 2004 from $9.73 on August 31, 2003, and the
reinvestment of $0.242 per share in tax-free income.(2) For Class B, this
return resulted from an increase in NAV per share to $10.95 from $10.46, and
the reinvestment of $0.225 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$10.19 per share for Class A and $10.95 for Class B, the distribution rates
were 4.75% and 4.02%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 7.88% and 6.67%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 3.69%
and 3.08%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 6.12% and 5.11% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 48.5%
AA 7.7%
A 24.6%
BBB 12.8%
BB 1.7%
Non-Rated 4.7%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 8.19% 7.34%
Five Years 5.57 4.79
Ten Years 5.38 4.80
Life of Fund+ 5.32 5.44
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 3.09% 2.34%
Five Years 4.55 4.46
Ten Years 4.87 4.80
Life of Fund+ 4.82 5.44
</Table>
+ Inception date: Class A: 2/9/94; Class B: 10/2/92
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 39.69%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
5
<Page>
EATON VANCE GEORGIA MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF CYNTHIA J. CLEMSON]
Cynthia J. Clemson
Portfolio Manager
MANAGEMENT UPDATE
- - Georgia, the Southeast region's most hard-hit state in the recession of 2001,
gained new momentum in 2003. While housing remained steady, job growth in
professional and business services was strong, especially in Atlanta, which
accounts for 55% of the state's employment. The state's February 2004 jobless
rate was 3.8%, down from 4.8% a year ago.
- - Industrial development revenue bonds were the Portfolio's largest sector
weighting at February 29, 2004. These holdings were well diversified and
financed economic initiatives for companies that produce paper, food,
beverages, transportation, personal care products and fuel additives.
- - Insured* water and sewer issues were significant investments. Georgia's
population growth has escalated the pace of residential building, increasing
the need for water infrastructure improvements. That trend has resulted in
additional opportunities within this sector.
- - Management also took advantage of the quality and opportunities for
diversification in Puerto Rico bonds. The Portfolio's Puerto Rico holdings
included general obligations, as well as issues for highway construction,
lease revenue, special tax revenue and electric utilities.
- - Management continued its efforts to fine-tune coupon structure and and improve
call protection. These adjustments were part of an ongoing commitment to
protect against untimely calls and improve the overall performance
characteristics of the Portfolio.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 56
- - Average Maturity: 20.6 years
- - Average Rating: AA+
- - Average Call: 8.2 years
- - Average Dollar Price: $107.90
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 7.87% and 7.49%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$9.75 on February 29, 2004 from $9.26 on August 31, 2003, and the reinvestment
of $0.232 per share in tax-free income.(2) For Class B, this return resulted
from an increase in NAV per share to $10.42 from $9.90, and the reinvestment
of $0.215 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$9.75 per share for Class A and $10.42 for Class B, the distribution rates
were 4.78% and 4.06%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 7.82% and 6.64%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 4.12%
and 3.58%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 6.74% and 5.86% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 60.3%
AA 16.2%
A 13.4%
BBB 2.8%
BB 1.3%
Non-Rated 6.0%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 8.82% 7.95%
Five Years 5.41 4.64
Ten Years 5.17 4.61
Life of Fund+ 4.93 5.21
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 3.64% 2.95%
Five Years 4.39 4.30
Ten Years 4.65 4.61
Life of Fund+ 4.43 5.21
</Table>
+ Inception date: Class A: 12/7/93; Class B: 12/23/91
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 38.90%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
6
<Page>
EATON VANCE KENTUCKY MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF WILLIAM H. AHERN]
William H. Ahern
Portfolio Manager
MANAGEMENT UPDATE
- - The Kentucky economy formed a mixed picture in 2003. More
manufacturing-intensive than the nation as a whole, Kentucky saw continued job
losses from layoffs and plant closings. Residential construction remained a
solid source of job growth. The commonwealth'sFebruary 2004 jobless rate was
5.3%, down from 6.1% a year ago.
- - Insured* transportation bonds constituted the Portfolio's largest sector
weighting at February 29, 2004. Investments included bonds for revitalization
of the state's turnpike system, as well as county airport authorities, which
are key elements of the region's economic infrastructure.
- - Industrial development revenue bonds played a large role in the Portfolio.
Management maintained an exposure to economically sensitive areas that it
believed could benefit from a sustained recovery in the economy, including
retailing, energy, metals, chemicals and transportation.
- - Insured* lease revenue/certificates of participation remained large
investments for the Portfolio. These agreements provide combined financing for
communities, affording them a flexible and cost-effective funding source for
joint borrowers.
- - Amid continued low interest rates, management continued to adjust coupon
structure and upgrade call characteristics. Coupon structure and call features
can have a significant influence on the Portfolio's performance.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 51
- - Average Maturity: 17.9 years
- - Average Rating: AA
- - Average Call: 7.0 years
- - Average Dollar Price: $97.19
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 5.88% and 5.60%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$9.56 on February 29, 2004 from $9.24 on August 31, 2003, and the reinvestment
of $0.220 per share in tax-free income.(2) For Class B, this return resulted
from an increase in NAV per share to $10.32 from $9.97, and the reinvestment
of $0.204 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$9.56 per share for Class A and $10.32 for Class B, the distribution rates
were 4.57% and 3.83%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 7.48% and 6.27%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 3.16%
and 2.53%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 5.17% and 4.14% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 55.0%
AA 19.6%
A 9.2%
BBB 5.9%
Non-Rated 10.3%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 5.50% 4.84%
Five Years 4.57 3.84
Ten Years 5.01 4.44
Life of Fund+ 4.73 5.07
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 0.53% -0.16%
Five Years 3.56 3.50
Ten Years 4.50 4.44
Life of Fund+ 4.23 5.07
</Table>
+ Inception date: Class A: 12/7/93; Class B: 12/23/91
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 38.90%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
7
<Page>
EATON VANCE LOUISIANA MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF ROBERT B. MACINTOSH]
Robert B. MacIntosh
Portfolio Manager
MANAGEMENT UPDATE
- - Louisiana's economy suffered from a continuing slowdown in the key
petrochemicals sector and some service areas. However, construction showed a
marked improvement over 2002, while the education and health care industries
continued to expand. The state's February 2004 jobless rate was 5.8%, down
from 6.4% a year ago.
- - Insured* education bonds were the Portfolio's largest sector weighting at
February 29, 2004. In the uncertain Louisiana economy, these bonds have had
appeal for investors. Tuition costs have tended to outpace inflation - even
during the recent recession - giving some institutions in the education sector
a pricing advantage over economically sensitive industries.
- - Insured* general obligation bonds (GOs) represented a large investment for the
Portfolio. With the sustainability of the recovery still in question,
management believes the financial outlook for many states and municipalities
remains guarded. Insured* GOs represented quality and a dependable revenue
stream.
- - Insured* special tax revenue bonds were major investments for the Portfolio.
These bonds financed large-scale public projects and are secured by sources
that included sales tax revenues and gas and fuel taxes.
- - Management continued to adapt the Portfolio's coupon structure. The Portfolio
took advantage of an increase in retail demand to make these adjustments,
selling bonds that had recently outperformed in favor of what we believe are
more compelling coupons.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 41
- - Average Maturity: 21.5 years
- - Average Rating: AA+
- - Average Call: 7.9 years
- - Average Dollar Price: $97.26
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 6.66% and 6.39%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$10.01 on February 29, 2004 from $9.61 on August 31, 2003, and the
reinvestment of $0.234 per share in tax-free income.(2) For Class B, this
return resulted from an increase in NAV per share to $10.58 from $10.15, and
the reinvestment of $0.213 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$10.01 per share for Class A and $10.58 for Class B, the distribution rates
were 4.73% and 3.99%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 7.74% and 6.53%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 3.72%
and 3.11%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 6.09% and 5.09% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 82.0%
A 8.5%
BBB 8.3%
Non-rated 1.2%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 6.79% 5.97%
Five Years 5.28 4.46
Ten Years 5.30 4.55
Life of Fund+ 5.24 5.33
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 1.72% 0.97%
Five Years 4.27 4.12
Ten Years 4.79 4.55
Life of Fund+ 4.73 5.33
</Table>
+ Inception date: Class A: 2/14/94; Class B: 10/2/92
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 38.90%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
8
<Page>
EATON VANCE MARYLAND MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF WILLIAM H. AHERN]
William H. Ahern
Portfolio Manager
MANAGEMENT UPDATE
- - Maryland's economy grew moderately in 2003, as manufacturers in areas such as
electronics reported stronger demand. The state's financial services sector
was helped by stronger financial markets. The farm sector was adversely
impacted by excessive rainfall. The state's February 2004 jobless rate was
4.0%, down from 4.5% a year ago.
- - The Portfolio remained very selective in its insured* hospital investments,
the Portfolio's largest sector weighting at February 29, 2004. Management
focused on issues for facilities with sound financial fundamentals, in-demand
health care specialties and prestigious medical school affiliations.
- - Escrowed/prerefunded bonds were significant investments for the Portfolio.
Pre-refunded and backed by Treasury bonds, escrowed issues often provide
above-average coupons, are deemed very high quality and are valued by
investors in any credit environment.
- - Education bonds were prominent investments for the Portfolio. In addition to
bonds for universities in the state system, the Portfolio had investments in
issues that provided financing for smaller private colleges.
- - The Portfolio continued to emphasize diversification. Management found
additional opportunities for diversification in selected Puerto Rico bonds,
including general obligations, insured* hospitals, insured* electric
utilities, insured* special tax revenue and insured* transportation bonds.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 56
- - Average Maturity: 22.7 years
- - Average Rating: AA
- - Average Call: 8.7 years
- - Average Dollar Price: $107.69
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 6.02% and 5.67%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$9.80 on February 29, 2004 from $9.50 on August 31, 2003, and the reinvestment
of $0.224 per share in tax-free income and $0.042 per share in capital gain
distributions.(2) For Class B, this return resulted from an increase in NAV
per share to $10.69 from $10.36, and the reinvestment of $0.210 per share in
tax-free income and $0.042 per share in capital gain distributions.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$9.80 per share for Class A and $10.69 for Class B, the distribution rates
were 4.58% and 3.85%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 7.40% and 6.22%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 3.94%
and 3.45%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 6.36% and 5.57% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 54.9%
AA 19.3%
A 10.2%
BBB 5.7%
CCC 2.4%
Non-rated 7.5%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 5.41% 4.65%
Five Years 4.76 3.95
Ten Years 5.07 4.40
Life of Fund+ 4.82 5.20
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 0.38% -0.35%
Five Years 3.76 3.61
Ten Years 4.55 4.40
Life of Fund+ 4.32 5.20
</Table>
+ Inception date: Class A: 12/10/93; Class B: 2/3/92
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 38.09%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
9
<Page>
EATON VANCE MISSOURI MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF CYNTHIA J. CLEMSON]
Cynthia J. Clemson
Portfolio Manager
MANAGEMENT UPDATE
- - Missouri's economy failed to generate many new jobs in 2003. Areas such as
manufacturing, telecom and energy were under pressure, as selected industry
layoffs remained a grim reality. Housing remained a bright spot, however,
boosted by low interest rates. The state's February 2004 jobless rate was
5.1%, down from 5.5% a year ago.
- - Hospital bonds and insured* hospital bonds were among the Portfolio's largest
sector weightings at February 29, 2004. Investments represented a
geographically diverse range of hospitals, with an emphasis on institutions
management believes have good cost structures, good market share and the
ability to form strategic alliances with other institutions.
- - Insured* lease revenue/certificates of participation (COPs) were prominent
investments. These instruments provide a joint mechanism for financing,
whereby different communities can receive more cost-effective and flexible
funding for public projects.
- - Industrial development revenue bonds (IDR) provided the portfolio with an
exposure to economically sensitive bonds. The Portfolio's IDR investments
included projects in the retail, air cargo, chemical, beverage and consumer
products sectors of the economy.
- - The Portfolio has continued to pursue broad diversification - according to
market segment, issuer and coupon distribution. In addition, amid an increased
pace of bond calls, call protection remained a prime strategic consideration.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 52
- - Average Maturity: 19.4 years
- - Average Rating: AA
- - Average Call: 7.4 years
- - Average Dollar Price: $99.72
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 6.43% and 6.01%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$10.26 on February 29, 2004 from $9.89 on August 31, 2003, and the
reinvestment of $0.260 per share in tax-free income.(2) For Class B, this
return resulted from an increase in NAV per share to $11.33 from $10.93, and
the reinvestment of $0.250 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$10.26 per share for Class A and $11.33 for Class B, the distribution rates
were 5.08% and 4.33%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 8.31% and 7.09%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 3.75%
and 3.12%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 6.14% and 5.11% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 62.2%
AA 5.7%
A 9.4%
BBB 9.2%
BB 2.1%
Non-Rated 11.4%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 6.75% 5.87%
Five Years 5.39 4.55
Ten Years 5.65 5.01
Life of Fund+ 5.43 5.88
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 1.72% 0.87%
Five Years 4.37 4.21
Ten Years 5.14 5.01
Life of Fund+ 4.93 5.88
</Table>
+ Inception date: Class A: 12/7/93; Class B: 5/1/92
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 38.90%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
10
<Page>
EATON VANCE NORTH CAROLINA MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF THOMAS M. METZOLD]
Thomas M. Metzold
Portfolio Manager
MANAGEMENT UPDATE
- - The North Carolina economy struggled in 2003. Job creation remained elusive,
with losses exacerbated by the bankruptcy of a major textile maker.
Residential construction generally held steady, while the farm sector was set
back by heavy rains. The state's February 2004 jobless rate was 6.0%, down
from 6.4% a year ago.
- - Electric utilities represented the Portfolio's largest sector weighting at
February 29, 2004. County power suppliers have benefited from strong
population growth in recent years. The industry has also benefited from
restructuring and rate-setting reforms.
- - Escrowed/prerefunded bonds remained a large commitment. Pre-refunded and
backed by Treasury bonds, escrowed issues often provide above-average coupons
and are deemed very high quality, a characteristic valued by investors in a
still-uncertain economic outlook.
- - Education bonds provided the Portfolio with good quality and liquidity from
well-regarded issuers. The Portfolio's investments included some of the
state's finest universities, which have historically enjoyed high applicant
demand and rising revenues.
- - As of March 1, 2004, Thomas M. Metzold became the portfolio manager of Eaton
Vance North Carolina Municipals Fund. Mr. Metzold has been with Eaton Vance
since 1987, is a Vice-President of Eaton Vance Management and currently
manages 7 municipal bond portfolios.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 59
- - Average Maturity: 18.9 years
- - Average Rating: AA
- - Average Call: 8.3 years
- - Average Dollar Price: $103.12
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 6.49% and 6.06%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$9.70 on February 29, 2004 from $9.32 on August 31, 2003, and the reinvestment
of $0.219 per share in tax-free income.(2) For Class B, this return resulted
from an increase in NAV per share to $10.43 from $10.03, and the reinvestment
of $0.202 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$9.70 per share for Class A and $10.43 for Class B, the distribution rates
were 4.48% and 3.76%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 7.51% and 6.30%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 3.44%
and 2.82%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 5.77% and 4.73% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 51.3%
AA 23.4%
A 12.0%
BBB 13.2%
Non-Rated 0.1%
</Table>
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 6.67% 5.91%
Five Years 4.83 4.04
Ten Years 5.02 4.34
Life of Fund+ 4.81 5.14
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 1.56% 0.91%
Five Years 3.81 3.70
Ten Years 4.51 4.34
Life of Fund+ 4.32 5.14
</Table>
+ Inception date: Class A: 12/7/93; Class B: 10/23/91
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 40.36%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
11
<Page>
EATON VANCE OREGON MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF THOMAS M. METZOLD]
Thomas M. Metzold
Portfolio Manager
MANAGEMENT UPDATE
- - Oregon continued to experience job losses in 2003, with manufacturing -
especially computers and electronic products - taking the biggest hit. In a
difficult climate, the service sectors - finance, real estate, health care and
education - generated modest new job creation. The February 2004 jobless rate
was 7.1%, down from 7.9% a year ago.
- - Housing bonds represented the Portfolio's largest sector weighting at February
29, 2004. Because housing bonds constitute a significant portion of Oregon's
municipal issuance, the Portfolio was able to establish good geographical
diversification in a variety of single-and multi-family housing projects.
- - The Portfolio maintained a significant investment in general obligation (GO)
and insured* GO bonds. The Portfolio's GO investments included state bonds for
elderly and disabled housing, higher education and veterans welfare, as well
as community college district bonds.
- - Management remained very selective with respect to its industrial development
revenue (IDR) holdings. The Portfolio's IDR investments focused primarily on
the state's key paper industry, as well as selected airline bonds.
- - Call protection remained a priority of the Portfolio. Where possible,
management sought to eliminate bonds with poor call features in favor of those
with more call protection. Adequate call protection allows bonds to
participate more fully in market rallies.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 60
- - Average Maturity: 20.5 years
- - Average Rating: AA-
- - Average Call: 5.7 years
- - Average Dollar Price: $99.67
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 7.22% and 6.89%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$9.85 on February 29, 2004 from $9.42 on August 31, 2003, and the reinvestment
of $0.244 per share in tax-free income.(2) For Class B, this return resulted
from an increase in NAV per share to $10.77 from $10.30, and the reinvestment
of $0.234 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$9.85 per share for Class A and $10.77 for Class B, the distribution rates
were 5.01% and 4.29%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 8.47% and 7.25%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 4.13%
and 3.54%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 6.98% and 5.98% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 41.8%
AA 35.2%
A 5.3%
BBB 1.3%
BB 4.8%
Non-Rated 11.6%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 8.75% 7.92%
Five Years 5.28 4.45
Ten Years 5.19 4.56
Life of Fund+ 5.01 5.42
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 3.53% 2.92%
Five Years 4.26 4.12
Ten Years 4.68 4.56
Life of Fund+ 4.50 5.42
</Table>
+ Inception date: Class A: 12/28/93; Class B: 12/24/91
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 40.85%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
12
<Page>
EATON VANCE SOUTH CAROLINA MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF THOMAS J. FETTER]
Thomas J. Fetter
President,
Portfolio Manager
MANAGEMENT UPDATE
- - The South Carolina economy struggled with layoffs in manufacturing in 2003.
Job losses in the textile, apparel, chemicals, and machinery sectors were
especially severe. Segments of the service sector generated some job growth,
notably health care, transportation and retailing. The state's February 2004
jobless rate was 6.3%, down from 6.5% a year earlier.
- - Insured* water and sewer issues were the Portfolio's largest sector weighting
at February 29, 2004. Population growth and the demand of new auto plants have
increased the need for facility upgrades and produced additional opportunities
in water and sewer bonds.
- - General obligation bonds constituted a major sector weighting for the
Portfolio. Given the continuing narrow quality spreads within the municipal
market, these issues remained a key factor in management's efforts to upgrade
credit quality.
- - In an economy slow to recover from the recession, the Portfolio had exposure
to essential services bonds. Sectors such as insured* electric utilities have
enjoyed relatively stable revenues, an attractive feature for investors in an
uncertain economy.
- - The Portfolio made structural changes to adjust to shifting market conditions.
Management maintained a well-diversified coupon allocation, balancing
higher-income issues with interest-rate-sensitive, low-coupon issues for
appreciation potential.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 52
- - Average Maturity: 22.3 years
- - Average Rating: AA+
- - Average Call: 8.4 years
- - Average Dollar Price: $107.51
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 8.45% and 7.98%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$9.99 on February 29, 2004 from $9.45 on August 31, 2003, and the reinvestment
of $0.251 per share in tax-free income.(2) For Class B, this return resulted
from an increase in NAV per share to $10.58 from $10.02, and the reinvestment
of $0.233 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$9.99 per share for Class A and $10.58 for Class B, the distribution rates
were 5.11% and 4.40%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 8.45% and 7.28%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 4.11%
and 3.52%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 6.80% and 5.82% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 55.8%
AA 15.1%
A 18.8%
BBB 9.3%
Non-Rated 1.0%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 9.17% 8.22%
Five Years 5.31 4.48
Ten Years 5.23 4.67
Life of Fund+ 5.16 5.22
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 3.98% 3.22%
Five Years 4.28 4.14
Ten Years 4.72 4.67
Life of Fund+ 4.65 5.22
</Table>
+ Inception date: Class A: 2/14/94; Class B: 10/2/92
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 39.55%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
13
<Page>
EATON VANCE TENNESSEE MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF CYNTHIA J. CLEMSON]
Cynthia J. Clemson
Portfolio Manager
MANAGEMENT UPDATE
- - Tennessee's economy performed better in 2003 than in the previous two years,
although job growth remained elusive. Manufacturing losses continued,
especially in the textile and apparel segments. However, the continued
expansion of the state's auto and health care sectors provided a partial
buffer. The February 2004 jobless rate was 5.0%, down from 5.4% a year ago.
- - Insured* general obligations (GOs) represented the Portfolio's largest
weighting at February 29, 2004. Given the sluggish pace of the recovery,
insured* GOs remained immune from the revenue concerns that continued to
plague some industrial sectors of the economy.
- - Insured* electric utilities bonds played a prominent role in the Portfolio.
These utility issues are attractive to investors in an uncertain economic
outlook because they represent an essential service and are backed by
non-discretionary expenditures.
- - Insured* escrowed/prerefunded bonds were among the Portfolio's largest
holdings. Because the bonds are pre-refunded, or escrowed, and backed by
Treasury bonds, they are deemed very high quality.
- - Management continued to adjust the Portfolio's coupon structure to reflect
changing market conditions. In addition, amid an increased pace of bond calls,
call protection has been a very important consideration for the Portfolio.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 53
- - Average Maturity: 18.5 years
- - Average Rating: AA+
- - Average Call: 8.2 years
- - Average Dollar Price: $107.38
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 6.27% and 6.00%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$10.16 on February 29, 2004 from $9.79 on August 31, 2003, and the
reinvestment of $0.238 per share in tax-free income.(2) For Class B, this
return resulted from an increase in NAV per share to $11.07 from $10.66, and
the reinvestment of $0.224 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$10.16 per share for Class A and $11.07 for Class B, the distribution rates
were 4.70% and 3.97%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 7.69% and 6.50%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 3.24%
and 2.61%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 5.30% and 4.27% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 72.9%
AA 15.1%
A 4.3%
BBB 4.8%
BB 1.0%
Non-Rated 1.9%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 6.79% 6.01%
Five Years 5.53 4.75
Ten Years 5.53 4.92
Life of Fund+ 5.29 5.61
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 1.70% 1.01%
Five Years 4.50 4.42
Ten Years 5.02 4.92
Life of Fund+ 4.79 5.61
</Table>
+ Inception date: Class A: 12/9/93; Class B: 8/25/92
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 38.90%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
14
<Page>
EATON VANCE VIRGINIA MUNICIPALS FUND as of February 29, 2004
INVESTMENT UPDATE
[PHOTO OF ROBERT B. MACINTOSH]
Robert B. MacIntosh
Portfolio Manager
MANAGEMENT UPDATE
- - Virginia's economy posted job growth in the second half of 2003, although
total employment remained below the pre-recession levels. Services, government
and finance continued to generate new jobs, while textile, apparel and
furniture manufacturing declined. The February 2004 jobless rate was 3.4%,
down from 4.1% year ago.
- - Insured* transportation bonds were the Portfolio's largest sector weighting at
February 29, 2004. Investments included airports, highways, bridges and
tunnels. Backed by toll fees, highways and tunnels provide, in management's
opinion, a relatively stable revenue source in an uncertain economic climate.
- - Insured* hospital bonds played a significant role in the Portfolio. The
Portfolio's investments were diversified geographically throughout the state
and included some of the nation's finest acute care facilities. These
hospitals offer a wide variety of specialized medical care, including cancer
treatment, cardiac and pediatric care.
- - Insured* education bonds were prominent in the Portfolio. Because these issues
finance colleges and universities whose revenues are based on tuition and
student fees, management considers their revenue base less vulnerable to a
reversal in economic activity.
- - The Portfolio extended its efforts to diversify sector and coupon structure.
Management also continued to improve call protection in order to protect
against untimely calls and improve the Portfolio's performance potential.
PORTFOLIO STATISTICS(6)
<Table>
- - Number of Issues: 59
- - Average Maturity: 21.8 years
- - Average Rating: AA+
- - Average Call: 11.3 years
- - Average Dollar Price: $110.43
</Table>
THE FUND
- - During the six months ended February 29, 2004, the Fund's Class A and Class B
shares had total returns of 7.49% and 7.04%, respectively.(1) For Class A,
this return resulted from an increase in net asset value (NAV) per share to
$9.86 on February 29, 2004 from $9.39 on August 31, 2003, and the reinvestment
of $0.227 per share in tax-free income.(2) For Class B, this return resulted
from an increase in NAV per share to $10.91 from $10.40, and the reinvestment
of $0.216 per share in tax-free income.(2)
- - Based on the Fund's most recent dividends and NAVs on February 29, 2004 of
$9.86 per share for Class A and $10.91 for Class B, the distribution rates
were 4.62% and 3.89%, respectively.(3) The distribution rates of Class A and
Class B are equivalent to taxable rates of 7.54% and 6.35%, respectively.(4)
- - The SEC 30-day yields for Class A and B shares at February 29, 2004 were 3.84%
and 3.29%, respectively.(5) The SEC 30-day yields of Class A and Class B are
equivalent to taxable yields of 6.27% and 5.37% respectively.(4)
[CHART]
RATING DISTRIBUTION(6)
<Table>
AAA 66.7%
AA 12.1%
A 11.0%
BBB 4.8%
BB 1.2%
Non-Rated 4.2%
</Table>
* Private insurance does not decrease the risk of loss of principal associated
with an insured investment.
FUND INFORMATION
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
PERFORMANCE(7) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
One Year 7.80% 6.97%
Five Years 5.20 4.39
Ten Years 5.33 4.68
Life of Fund+ 5.06 5.57
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
One Year 2.67% 1.97%
Five Years 4.18 4.05
Ten Years 4.82 4.68
Life of Fund+ 4.56 5.57
</Table>
+ Inception date: Class A: 12/17/93; Class B: 7/26/91
(1) THESE RETURNS DO NOT INCLUDE THE 4.75% MAXIMUM SALES CHARGE FOR CLASS A
SHARES OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES (CDSC) FOR CLASS
B SHARES. IF THE SALES CHARGE WAS DEDUCTED, THE PERFORMANCE WOULD BE
REDUCED. (2) A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO FEDERAL INCOME
AND STATE INCOME TAX AND/OR FEDERAL ALTERNATIVE MINIMUM TAX. (3) 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. (4) TAXABLE-EQUIVALENT RATES ASSUME MAXIMUM 38.74%
COMBINED FEDERAL AND STATE INCOME TAX RATE. A LOWER RATE WOULD RESULT IN
LOWER TAX-EQUIVALENT FIGURES. (5) 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. (6)
RATING DISTRIBUTION AND PORTFOLIO STATISTICS MAY NOT BE REPRESENTATIVE OF
THE PORTFOLIO'S CURRENT OR FUTURE INVESTMENTS. (7) 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.
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
LOWER OR HIGHER THAN THE QUOTED RETURN.
15
<Page>
EATON VANCE MUNICIPALS FUNDS as of February 29, 2004
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investment in Municipals Portfolio --
Identified cost $ 60,400,081 $ 41,867,671 $ 52,306,960 $ 61,583,004
Unrealized appreciation 5,254,952 2,906,237 4,991,071 6,820,389
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN PORTFOLIO, AT VALUE $ 65,655,033 $ 44,773,908 $ 57,298,031 $ 68,403,393
- -----------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 76,647 66,200 4,304 1,045
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 65,731,680 $ 44,840,108 $ 57,302,335 $ 68,404,438
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for Fund shares redeemed $ 14,826 $ 68,744 $ 29,983 $ 4,132
Dividends payable 88,300 60,310 81,206 89,866
Payable to affiliate for service fees 21,548 14,606 18,625 22,367
Accrued expenses 27,838 25,288 24,168 27,795
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 152,512 $ 168,948 $ 153,982 $ 144,160
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 65,579,168 $ 44,671,160 $ 57,148,353 $ 68,260,278
- -----------------------------------------------------------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Paid-in capital $ 62,001,075 $ 42,810,585 $ 58,055,707 $ 66,305,217
Accumulated net realized loss from Portfolio
(computed on the basis of identified cost) (1,555,074) (1,011,980) (5,950,710) (4,772,717)
Accumulated undistributed (distributions in excess
of) net investment income (121,785) (33,682) 52,285 (92,611)
Net unrealized appreciation from Portfolio
(computed on the basis of identified cost) 5,254,952 2,906,237 4,991,071 6,820,389
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 65,579,168 $ 44,671,160 $ 57,148,353 $ 68,260,278
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
NET ASSETS $ 9,695,135 $ 10,265,295 $ 5,218,311 $ 4,723,686
SHARES OUTSTANDING 958,844 1,007,695 534,944 494,035
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial
interest outstanding) $ 10.11 $ 10.19 $ 9.75 $ 9.56
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of net asset value
per share) $ 10.61 $ 10.70 $ 10.24 $ 10.04
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
NET ASSETS $ 55,884,033 $ 34,405,865 $ 51,930,042 $ 63,536,592
SHARES OUTSTANDING 5,028,369 3,143,516 4,982,673 6,158,442
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION
PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial
interest outstanding) $ 11.11 $ 10.95 $ 10.42 $ 10.32
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
See notes to financial statements
16
<Page>
<Table>
<Caption>
LOUISIANA FUND MARYLAND FUND MISSOURI FUND NORTH CAROLINA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investment in Municipals Portfolio --
Identified cost $ 26,686,893 $ 73,726,250 $ 53,643,378 $ 80,427,296
Unrealized appreciation 2,064,550 2,345,459 5,257,151 7,210,668
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN PORTFOLIO, AT VALUE $ 28,751,443 $ 76,071,709 $ 58,900,529 $ 87,637,964
- -----------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 1,038 7,811 18,389 861
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 28,752,481 $ 76,079,520 $ 58,918,918 $ 87,638,825
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for Fund shares redeemed $ 6,632 $ 33,729 $ 110,930 $ 115,563
Dividends payable 38,782 100,363 85,940 110,433
Payable to affiliate for service fees 9,536 25,030 19,030 28,576
Accrued expenses 10,968 23,353 19,128 31,640
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 65,918 $ 182,475 $ 235,028 $ 286,212
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 28,686,563 $ 75,897,045 $ 58,683,890 $ 87,352,613
- -----------------------------------------------------------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Paid-in capital $ 28,914,006 $ 74,136,632 $ 54,096,066 $ 86,963,917
Accumulated net realized loss from Portfolio
(computed on the basis of identified cost) (2,344,141) (847,327) (871,268) (6,772,610)
Accumulated undistributed (distributions in excess
of) net investment income 52,148 262,281 201,941 (49,362)
Net unrealized appreciation from Portfolio
(computed on the basis of identified cost) 2,064,550 2,345,459 5,257,151 7,210,668
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 28,686,563 $ 75,897,045 $ 58,683,890 $ 87,352,613
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
NET ASSETS $ 6,128,758 $ 7,301,304 $ 8,995,777 $ 9,608,142
SHARES OUTSTANDING 612,051 745,077 877,204 990,944
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial
interest outstanding) $ 10.01 $ 9.80 $ 10.26 $ 9.70
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of net asset value
per share) $ 10.51 $ 10.29 $ 10.77 $ 10.18
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
NET ASSETS $ 22,557,805 $ 68,595,741 $ 49,688,113 $ 77,744,471
SHARES OUTSTANDING 2,132,079 6,417,256 4,386,977 7,454,372
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION
PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial
interest outstanding) $ 10.58 $ 10.69 $ 11.33 $ 10.43
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
See notes to financial statements
17
<Page>
<Table>
<Caption>
OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investment in Municipals Portfolio --
Identified cost $ 79,889,352 $ 50,971,413 $ 45,471,902 $ 105,252,209
Unrealized appreciation 5,036,137 3,540,380 4,351,715 10,876,633
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN PORTFOLIO, AT VALUE $ 84,925,489 $ 54,511,793 $ 49,823,617 $ 116,128,842
- -----------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 62,286 19,101 89,848 57,729
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 84,987,775 $ 54,530,894 $ 49,913,465 $ 116,186,571
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for Fund shares redeemed $ 122,110 $ 8,848 $ 11,153 $ 123,784
Dividends payable 123,790 83,187 66,286 152,281
Payable to affiliate for service fees 27,688 17,652 16,193 37,846
Accrued expenses 22,652 24,985 15,622 35,314
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 296,240 $ 134,672 $ 109,254 $ 349,225
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 84,691,535 $ 54,396,222 $ 49,804,211 $ 115,837,346
- -----------------------------------------------------------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Paid-in capital $ 82,339,262 $ 54,073,307 $ 46,880,720 $ 110,228,772
Accumulated net realized loss from Portfolio
(computed on the basis of identified cost) (2,766,650) (3,262,115) (1,464,293) (5,409,135)
Accumulated undistributed net investment income 82,786 44,650 36,069 141,076
Net unrealized appreciation from Portfolio
(computed on the basis of identified cost) 5,036,137 3,540,380 4,351,715 10,876,633
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 84,691,535 $ 54,396,222 $ 49,804,211 $ 115,837,346
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
NET ASSETS $ 11,154,939 $ 13,107,635 $ 10,890,310 $ 11,276,287
SHARES OUTSTANDING 1,133,020 1,312,594 1,071,396 1,143,505
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial
interest outstanding) $ 9.85 $ 9.99 $ 10.16 $ 9.86
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 95.25 of net asset value
per share) $ 10.34 $ 10.49 $ 10.67 $ 10.35
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
NET ASSETS $ 73,536,596 $ 41,288,587 $ 38,913,901 $ 104,561,059
SHARES OUTSTANDING 6,829,612 3,900,945 3,515,969 9,580,821
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION
PRICE PER SHARE
(net assets DIVIDED BY shares of beneficial
interest outstanding) $ 10.77 $ 10.58 $ 11.07 $ 10.91
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
On sales of $25,000 or more, the offering price of Class A shares is reduced.
See notes to financial statements
18
<Page>
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004
<Table>
<Caption>
ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest allocated from Portfolio $ 1,766,356 $ 1,238,139 $ 1,610,283 $ 1,868,916
Expenses allocated from Portfolio (144,387) (87,432) (122,762) (152,005)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $ 1,621,969 $ 1,150,707 $ 1,487,521 $ 1,716,911
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Trustees fees and expenses $ 870 $ 87 $ 870 $ 870
Distribution and service fees
Class A 9,672 9,851 4,643 4,496
Class B 264,186 162,617 241,296 300,242
Legal and accounting services 7,394 6,805 8,735 7,392
Printing and postage 1,856 182 2,046 3,393
Custodian fee 5,876 4,765 5,115 6,029
Transfer and dividend disbursing agent fees 21,158 9,966 18,724 20,386
Miscellaneous -- 43 113 66
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 311,012 $ 194,316 $ 281,542 $ 342,874
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 1,310,957 $ 956,391 $ 1,205,979 $ 1,374,037
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 784,387 $ 67,852 $ 241 $ 71,722
Financial futures contracts (499,907) (34,072) (370,644) (527,546)
Interest rate swap contracts -- (274,450) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ 284,480 $ (240,670) $ (370,403) $ (455,824)
- -----------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 2,379,173 $ 2,468,792 $ 3,567,413 $ 2,903,137
Financial futures contracts (111,538) (296,561) (357,012) (146,971)
Interest rate swap contracts -- 70,930 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $ 2,267,635 $ 2,243,161 $ 3,210,401 $ 2,756,166
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 2,552,115 $ 2,002,491 $ 2,839,998 $ 2,300,342
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 3,863,072 $ 2,958,882 $ 4,045,977 $ 3,674,379
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
19
<Page>
<Table>
<Caption>
LOUISIANA FUND MARYLAND FUND MISSOURI FUND NORTH CAROLINA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest allocated from Portfolio $ 820,662 $ 2,151,872 $ 1,661,591 $ 2,377,936
Expenses allocated from Portfolio (57,612) (177,959) (127,450) (202,900)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $ 763,050 $ 1,973,913 $ 1,534,141 $ 2,175,036
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Trustees fees and expenses $ 87 $ 870 $ 870 $ 871
Distribution and service fees
Class A 6,067 7,841 7,696 9,361
Class B 107,067 328,980 234,635 369,882
Legal and accounting services 7,437 7,853 8,627 7,439
Printing and postage 538 2,796 2,730 3,814
Custodian fee 3,920 6,722 5,411 7,252
Transfer and dividend disbursing agent fees 6,627 22,742 19,244 27,497
Registration fees -- 4,000 3,830 --
Miscellaneous 903 36 1,449 165
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 132,646 $ 381,840 $ 284,492 $ 426,281
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 630,404 $ 1,592,073 $ 1,249,649 $ 1,748,755
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 45,018 $ 259,718 $ 82,927 $ 1,621,985
Financial futures contracts (214,734) (828,434) (350,804) (597,003)
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ (169,716) $ (568,716) $ (267,877) $ 1,024,982
- -----------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 1,519,195 $ 3,441,431 $ 2,728,800 $ 2,959,412
Financial futures contracts (192,739) (193,711) (356,783) (553,924)
- -----------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $ 1,326,456 $ 3,247,720 $ 2,372,017 $ 2,405,488
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 1,156,740 $ 2,679,004 $ 2,104,140 $ 3,430,470
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,787,144 $ 4,271,077 $ 3,353,789 $ 5,179,225
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
20
<Page>
<Table>
<Caption>
OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest allocated from Portfolio $ 2,485,331 $ 1,593,953 $ 1,323,978 $ 3,158,329
Expenses allocated from Portfolio (198,600) (115,048) (99,456) (273,587)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME FROM PORTFOLIO $ 2,286,731 $ 1,478,905 $ 1,224,522 $ 2,884,742
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Trustees fees and expenses $ 870 $ 870 $ 87 $ 1,741
Distribution and service fees
Class A 10,379 12,246 9,755 10,016
Class B 344,986 192,742 185,173 493,764
Legal and accounting services 9,114 11,015 7,505 7,939
Printing and postage 2,870 -- 1,703 4,309
Custodian fee 7,093 4,979 4,925 10,255
Transfer and dividend disbursing agent fees 23,838 12,257 12,732 31,192
Registration fees 2,799 500 2,100 --
Miscellaneous 2,024 182 1,346 100
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 403,973 $ 234,791 $ 225,326 $ 559,316
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 1,882,758 $ 1,244,114 $ 999,196 $ 2,325,426
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 425,870 $ 392,995 $ 36,087 $ 280,166
Financial futures contracts (23,588) (251,961) (312,273) (835,804)
Interest rate swap contracts (748,500) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ (346,218) $ 141,034 $ (276,186) $ (555,638)
- -----------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 4,554,097 $ 3,031,440 $ 2,467,724 $ 6,907,986
Financial futures contracts (759,351) (306,285) (323,366) (799,715)
Interest rate swap contracts 193,446 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $ 3,988,192 $ 2,725,155 $ 2,144,358 $ 6,108,271
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 3,641,974 $ 2,866,189 $ 1,868,172 $ 5,552,633
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 5,524,732 $ 4,110,303 $ 2,867,368 $ 7,878,059
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
21
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND
- -----------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,310,957 $ 956,391 $ 1,205,979 $ 1,374,037
Net realized gain (loss) 284,480 (240,670) (370,403) (455,824)
Net change in unrealized appreciation
(depreciation) 2,267,635 2,243,161 3,210,401 2,756,166
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 3,863,072 $ 2,958,882 $ 4,045,977 $ 3,674,379
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (224,826) $ (239,435) $ (113,183) $ (104,768)
Class B (1,089,089) (705,098) (1,056,045) (1,239,471)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (1,313,915) $ (944,533) $ (1,169,228) $ (1,344,239)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 850,135 $ 1,001,436 $ 837,054 $ 442,550
Class B 1,198,423 373,517 1,337,457 898,044
Net asset value of shares issued to shareholders
in payment of distributions declared
Class A 106,970 148,276 43,717 42,137
Class B 572,547 440,645 577,814 644,113
Cost of shares redeemed
Class A (862,669) (813,517) (137,642) (160,203)
Class B (3,323,743) (1,949,361) (2,394,282) (3,416,617)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ (1,458,337) $ (799,004) $ 264,118 $ (1,549,976)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 1,090,820 $ 1,215,345 $ 3,140,867 $ 780,164
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period $ 64,488,348 $ 43,455,815 $ 54,007,486 $ 67,480,114
- -----------------------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $ 65,579,168 $ 44,671,160 $ 57,148,353 $ 68,260,278
- -----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED
(DISTRIBUTIONS IN EXCESS OF) NET
INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF PERIOD $ (121,785) $ (33,682) $ 52,285 $ (92,611)
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
22
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS LOUISIANA FUND MARYLAND FUND MISSOURI FUND NORTH CAROLINA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 630,404 $ 1,592,073 $ 1,249,649 $ 1,748,755
Net realized gain (loss) (169,716) (568,716) (267,877) 1,024,982
Net change in unrealized appreciation
(depreciation) 1,326,456 3,247,720 2,372,017 2,405,488
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,787,144 $ 4,271,077 $ 3,353,789 $ 5,179,225
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (145,238) $ (183,148) $ (199,134) $ (216,588)
Class B (455,448) (1,357,773) (1,092,801) (1,511,567)
From net realized gain
Class A -- (35,150) -- --
Class B -- (276,795) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (600,686) $ (1,852,866) $ (1,291,935) $ (1,728,155)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 226,908 $ 580,631 $ 1,837,062 $ 872,448
Class B 426,220 1,595,508 782,827 646,821
Net asset value of shares issued to shareholders
in payment of distributions declared
Class A 83,527 105,317 130,220 122,037
Class B 145,174 1,073,180 683,830 837,653
Cost of shares redeemed
Class A (459,891) (1,710,637) (558,569) (1,110,884)
Class B (1,261,327) (6,680,946) (3,433,821) (6,749,772)
- -----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND SHARE
TRANSACTIONS $ (839,389) $ (5,036,947) $ (558,451) $ (5,381,697)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ 347,069 $ (2,618,736) $ 1,503,403 $ (1,930,627)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period $ 28,339,494 $ 78,515,781 $ 57,180,487 $ 89,283,240
- -----------------------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $ 28,686,563 $ 75,897,045 $ 58,683,890 $ 87,352,613
- -----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED
(DISTRIBUTIONS IN EXCESS OF) NET
INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF PERIOD $ 52,148 $ 262,281 $ 201,941 $ (49,362)
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
23
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,882,758 $ 1,244,114 $ 999,196 $ 2,325,426
Net realized gain (loss) (346,218) 141,034 (276,186) (555,638)
Net change in unrealized appreciation
(depreciation) 3,988,192 2,725,155 2,144,358 6,108,271
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 5,524,732 $ 4,110,303 $ 2,867,368 $ 7,878,059
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (262,945) $ (316,829) $ (232,869) $ (236,663)
Class B (1,580,009) (904,100) (789,156) (2,072,237)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (1,842,954) $ (1,220,929) $ (1,022,025) $ (2,308,900)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 1,183,356 $ 2,452,476 $ 2,243,052 $ 2,197,976
Class B 1,507,544 1,127,754 661,527 1,572,635
Net asset value of shares issued to shareholders
in payment of distributions declared
Class A 141,353 155,820 142,802 118,356
Class B 1,012,479 513,998 460,536 1,271,827
Cost of shares redeemed
Class A (403,032) (887,223) (912,766) (1,009,021)
Class B (4,844,198) (3,041,203) (2,869,437) (7,099,027)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ (1,402,498) $ 321,622 $ (274,286) $ (2,947,254)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 2,279,280 $ 3,210,996 $ 1,571,057 $ 2,621,905
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period $ 82,412,255 $ 51,185,226 $ 48,233,154 $ 113,215,441
- -----------------------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $ 84,691,535 $ 54,396,222 $ 49,804,211 $ 115,837,346
- -----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF PERIOD $ 82,786 $ 44,650 $ 36,069 $ 141,076
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
24
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 2003
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND
- -----------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 2,694,981 $ 1,895,266 $ 2,453,598 $ 2,794,319
Net realized gain (loss) 134,429 527,436 (333,636) (2,678,901)
Net change in unrealized appreciation
(depreciation) (1,468,945) (1,636,116) (612,968) 1,374,471
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,360,465 $ 786,586 $ 1,506,994 $ 1,489,889
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (417,696) $ (413,160) $ (198,222) $ (180,714)
Class B (2,277,117) (1,484,720) (2,180,570) (2,628,757)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (2,694,813) $ (1,897,880) $ (2,378,792) $ (2,809,471)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 2,512,499 $ 2,590,733 $ 1,753,939 $ 1,724,659
Class B 5,215,444 1,650,051 4,422,007 4,440,184
Net asset value of shares issued to shareholders
in payment of distributions declared
Class A 192,025 122,551 66,482 69,064
Class B 1,019,795 814,033 905,625 1,186,406
Cost of shares redeemed
Class A (1,145,837) (382,455) (937,940) (552,531)
Class B (6,181,176) (3,321,738) (7,155,620) (7,483,374)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ 1,612,750 $ 1,473,175 $ (945,507) $ (615,592)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ 278,402 $ 361,881 $ (1,817,305) $ (1,935,174)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of year $ 64,209,946 $ 43,093,934 $ 55,824,791 $ 69,415,288
- -----------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 64,488,348 $ 43,455,815 $ 54,007,486 $ 67,480,114
- -----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED
(DISTRIBUTIONS IN EXCESS OF) NET
INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF YEAR $ (118,827) $ (45,540) $ 15,534 $ (122,409)
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
25
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS LOUISIANA FUND MARYLAND FUND MISSOURI FUND NORTH CAROLINA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,294,519 $ 3,347,141 $ 2,598,861 $ 3,774,472
Net realized gain (loss) 234,944 437,591 375,821 (833,850)
Net change in unrealized appreciation
(depreciation) (896,513) (2,115,612) (1,480,015) (1,726,154)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 632,950 $ 1,669,120 $ 1,494,667 $ 1,214,468
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (285,308) $ (442,117) $ (355,941) $ (461,944)
Class B (931,391) (2,872,943) (2,290,716) (3,344,556)
From net realized gain
Class A -- (1,906) -- --
Class B -- (13,334) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (1,216,699) $ (3,330,300) $ (2,646,657) $ (3,806,500)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 1,086,583 $ 3,428,872 $ 2,311,813 $ 2,378,386
Class B 1,542,740 5,168,903 3,567,519 4,670,222
Net asset value of shares issued to shareholders
in payment of distributions declared
Class A 164,740 202,544 219,751 260,011
Class B 270,705 1,381,714 1,156,655 1,570,321
Cost of shares redeemed
Class A (977,808) (6,215,752) (1,366,847) (2,057,374)
Class B (2,441,655) (9,044,584) (6,162,631) (10,481,119)
- -----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND SHARE
TRANSACTIONS $ (354,695) $ (5,078,303) $ (273,740) $ (3,659,553)
- -----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (938,444) $ (6,739,483) $ (1,425,730) $ (6,251,585)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of year $ 29,277,938 $ 85,255,264 $ 58,606,217 $ 95,534,825
- -----------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 28,339,494 $ 78,515,781 $ 57,180,487 $ 89,283,240
- -----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED
(DISTRIBUTIONS IN EXCESS OF) NET
INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF YEAR $ 22,430 $ 211,129 $ 244,227 $ (69,962)
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
26
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
- -----------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 3,819,834 $ 2,183,737 $ 2,014,978 $ 4,877,084
Net realized gain (loss) 53,388 444,288 132,379 (166,417)
Net change in unrealized appreciation
(depreciation) (2,528,160) (1,603,577) (763,780) (2,469,255)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,345,062 $ 1,024,448 $ 1,383,577 $ 2,241,412
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders --
From net investment income
Class A $ (447,680) $ (450,133) $ (388,311) $ (423,343)
Class B (3,301,340) (1,722,947) (1,661,963) (4,350,127)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (3,749,020) $ (2,173,080) $ (2,050,274) $ (4,773,470)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 3,267,117 $ 4,257,563 $ 4,647,403 $ 2,035,957
Class B 5,947,664 6,526,520 3,702,463 5,944,063
Net asset value of shares issued to shareholders
in payment of distributions declared
Class A 245,328 187,413 230,900 201,910
Class B 1,783,128 711,966 803,049 2,175,773
Cost of shares redeemed
Class A (1,109,299) (2,385,191) (2,331,404) (918,702)
Class B (8,816,208) (3,806,803) (5,911,758) (12,929,005)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ 1,317,730 $ 5,491,468 $ 1,140,653 $ (3,490,004)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS $ (1,086,228) $ 4,342,836 $ 473,956 $ (6,022,062)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of year $ 83,498,483 $ 46,842,390 $ 47,759,198 $ 119,237,503
- -----------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 82,412,255 $ 51,185,226 $ 48,233,154 $ 113,215,441
- -----------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF YEAR $ 42,982 $ 21,465 $ 58,898 $ 124,550
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
27
<Page>
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
ALABAMA FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003 2002(1)(2) 2001(1) 2000(1) 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.720 $ 9.920 $ 9.960 $ 9.410 $ 9.430 $ 10.040
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.230 $ 0.475 $ 0.471 $ 0.479 $ 0.481 $ 0.481
Net realized and unrealized gain (loss) 0.390 (0.206) (0.042) 0.548 (0.015) (0.599)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.620 $ 0.269 $ 0.429 $ 1.027 $ 0.466 $ (0.118)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.230) $ (0.469) $ (0.469) $ (0.477) $ (0.486) $ (0.492)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.230) $ (0.469) $ (0.469) $ (0.477) $ (0.486) $ (0.492)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.110 $ 9.720 $ 9.920 $ 9.960 $ 9.410 $ 9.430
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.43% 2.74% 4.49% 11.22% 5.22% (1.29)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 9,695 $ 9,226 $ 7,846 $ 6,256 $ 6,198 $ 6,198
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.76%(5) 0.76% 0.82% 0.83% 0.81% 0.77%
Expenses after custodian fee reduction(4) 0.76%(5) 0.74% 0.81% 0.81% 0.80% 0.76%
Net investment income 4.65%(5) 4.78% 4.83% 4.95% 5.26% 4.87%
Portfolio Turnover of the Portfolio 14% 10% 25% 14% 8% 23%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
increase net realized and unrealized loss per share by $0.001 and increase
the ratio of net investment income to average net assets from 4.82% to
4.83%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
28
<Page>
<Table>
<Caption>
ALABAMA FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003 2002(1)(2) 2001(1) 2000(1) 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.690 $ 10.910 $ 10.960 $ 10.350 $ 10.370 $ 11.040
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.212 $ 0.439 $ 0.440 $ 0.444 $ 0.449 $ 0.447
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 0.421 (0.219) (0.050) 0.611 (0.017) (0.657)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.633 $ 0.220 $ 0.390 $ 1.055 $ 0.432 $ (0.210)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.213) $ (0.440) $ (0.440) $ (0.445) $ (0.452) $ (0.460)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.213) $ (0.440) $ (0.440) $ (0.445) $ (0.452) $ (0.460)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 11.110 $ 10.690 $ 10.910 $ 10.960 $ 10.350 $ 10.370
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.02% 2.02% 3.70% 10.45% 4.38% (2.02)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 55,884 $ 55,263 $ 56,363 $ 57,782 $ 59,904 $ 75,475
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.51%(5) 1.51% 1.57% 1.58% 1.62% 1.54%
Expenses after custodian fee reduction(4) 1.51%(5) 1.49% 1.56% 1.56% 1.61% 1.53%
Net investment income 3.90%(5) 4.04% 4.09% 4.20% 4.48% 4.11%
Portfolio Turnover of the Portfolio 14% 10% 25% 14% 8% 23%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
increase net realized and unrealized loss per share by $0.001 and increase
the ratio of net investment income to average net assets from 4.08% to
4.09%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
29
<Page>
<Table>
<Caption>
ARKANSAS FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003 2002(1)(2) 2001 2000(1) 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.730 $ 9.980 $ 9.960 $ 9.520 $ 9.510 $ 10.070
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.245 $ 0.490 $ 0.486 $ 0.495 $ 0.489 $ 0.497
Net realized and unrealized gain (loss) 0.457 (0.251) 0.023 0.439 0.020 (0.555)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.702 $ 0.239 $ 0.509 $ 0.934 $ 0.509 $ (0.058)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.242) $ (0.489) $ (0.489) $ (0.494) $ (0.499) $ (0.502)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.242) $ (0.489) $ (0.489) $ (0.494) $ (0.499) $ (0.502)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.190 $ 9.730 $ 9.980 $ 9.960 $ 9.520 $ 9.510
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 7.28% 2.42% 5.31% 10.08% 5.62% (0.67)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 10,265 $ 9,480 $ 7,383 $ 5,162 $ 4,757 $ 4,167
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.70%(5) 0.73% 0.81% 0.77% 0.84% 0.71%
Expenses after custodian fee reduction(4) 0.70%(5) 0.71% 0.80% 0.75% 0.83% 0.69%
Net investment income 4.92%(5) 4.90% 4.95% 5.11% 5.25% 4.94%
Portfolio Turnover of the Portfolio 7% 25% 23% 9% 14% 24%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
decrease net realized and unrealized gain per share by $0.001 and increase
the ratio of net investment income to average net assets from 4.94% to
4.95%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
30
<Page>
<Table>
<Caption>
ARKANSAS FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003 2002(1)(2) 2001 2000(1) 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.460 $ 10.720 $ 10.690 $ 10.210 $ 10.190 $ 10.800
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.222 $ 0.444 $ 0.447 $ 0.453 $ 0.454 $ 0.443
Net realized and unrealized gain (loss) 0.488 (0.259) 0.028 0.472 0.011 (0.605)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.710 $ 0.185 $ 0.475 $ 0.925 $ 0.465 $ (0.162)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.220) $ (0.445) $ (0.445) $ (0.445) $ (0.445) $ (0.448)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.220) $ (0.445) $ (0.445) $ (0.445) $ (0.445) $ (0.448)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.950 $ 10.460 $ 10.720 $ 10.690 $ 10.210 $ 10.190
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.89% 1.72% 4.60% 9.27% 4.75% (1.60)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 34,406 $ 33,975 $ 35,711 $ 37,059 $ 37,340 $ 46,077
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.45%(5) 1.48% 1.56% 1.52% 1.58% 1.56%
Expenses after custodian fee reduction(4) 1.45%(5) 1.46% 1.55% 1.50% 1.57% 1.54%
Net investment income 4.17%(5) 4.17% 4.24% 4.36% 4.56% 4.17%
Portfolio Turnover of the Portfolio 7% 25% 23% 9% 14% 24%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
decrease net realized and unrealized gain per share by $0.001 and increase
the ratio of net investment income to average net assets from 4.23% to
4.24%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
31
<Page>
<Table>
<Caption>
GEORGIA FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED)(1) 2003(1) 2002(1)(2) 2001(1) 2000 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.260 $ 9.410 $ 9.480 $ 9.020 $ 8.990 $ 9.730
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.238 $ 0.478 $ 0.485 $ 0.470 $ 0.479 $ 0.476
Net realized and unrealized gain (loss) 0.484 (0.162) (0.089) 0.463 0.031 (0.730)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.722 $ 0.316 $ 0.396 $ 0.933 $ 0.510 $ (0.254)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.232) $ (0.466) $ (0.466) $ (0.473) $ (0.480) $ (0.486)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.232) $ (0.466) $ (0.466) $ (0.473) $ (0.480) $ (0.486)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 9.750 $ 9.260 $ 9.410 $ 9.480 $ 9.020 $ 8.990
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 7.87% 3.39% 4.38% 10.65% 6.00% (2.78)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 5,218 $ 4,234 $ 3,425 $ 8,441 $ 7,614 $ 2,554
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.77%(5) 0.77% 0.85% 0.80% 0.79% 0.80%
Expenses after custodian fee reduction(4) 0.77%(5) 0.75% 0.84% 0.77% 0.77% 0.76%
Net investment income 5.02%(5) 5.07% 5.24% 5.12% 5.29% 4.97%
Portfolio Turnover of the Portfolio 2% 16% 18% 8% 13% 38%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
increase net realized and unrealized loss per share by $0.001 and increase
the ratio of net investment income to average net assets from 5.23% to
5.24%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
32
<Page>
<Table>
<Caption>
GEORGIA FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED)(1) 2003(1) 2002(1)(2) 2001(1) 2000 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.900 $ 10.050 $ 10.120 $ 9.630 $ 9.600 $ 10.380
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.217 $ 0.437 $ 0.439 $ 0.429 $ 0.426 $ 0.433
Net realized and unrealized gain (loss) 0.514 (0.164) (0.086) 0.493 0.039 (0.771)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.731 $ 0.273 $ 0.353 $ 0.922 $ 0.465 $ (0.338)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.211) $ (0.423) $ (0.423) $ (0.432) $ (0.435) $ (0.442)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.211) $ (0.423) $ (0.423) $ (0.432) $ (0.435) $ (0.442)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.420 $ 9.900 $ 10.050 $ 10.120 $ 9.630 $ 9.600
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 7.49% 2.72% 3.64% 9.82% 5.09% (3.44)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 51,930 $ 49,773 $ 52,400 $ 55,051 $ 55,245 $ 68,432
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.52%(5) 1.52% 1.60% 1.56% 1.58% 1.55%
Expenses after custodian fee reduction(4) 1.52%(5) 1.50% 1.59% 1.53% 1.56% 1.51%
Net investment income 4.29%(5) 4.34% 4.43% 4.38% 4.64% 4.24%
Portfolio Turnover of the Portfolio 2% 16% 18% 8% 13% 38%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
increase net realized and unrealized loss per share by $0.001 and increase
the ratio of net investment income to average net assets from 4.42% to
4.43%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
33
<Page>
<Table>
<Caption>
KENTUCKY FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED)(1) 2003(1) 2002(1)(2) 2001(1) 2000 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.240 $ 9.420 $ 9.500 $ 9.160 $ 9.410 $ 9.910
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.223 $ 0.446 $ 0.463 $ 0.446 $ 0.498 $ 0.493
Net realized and unrealized gain (loss) 0.317 (0.174) (0.091) 0.378 (0.246) (0.491)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM OPERATIONS $ 0.540 $ 0.272 $ 0.372 $ 0.824 $ 0.252 $ 0.002
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.220) $ (0.452) $ (0.452) $ (0.484) $ (0.502) $ (0.502)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.220) $ (0.452) $ (0.452) $ (0.484) $ (0.502) $ (0.502)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 9.560 $ 9.240 $ 9.420 $ 9.500 $ 9.160 $ 9.410
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 5.88% 2.90% 4.09% 9.26% 2.87% (0.05)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 4,724 $ 4,248 $ 3,103 $ 7,645 $ 5,858 $ 1,387
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.76%(5) 0.77% 0.80% 0.85% 0.82% 0.83%
Expenses after custodian fee reduction(4) 0.76%(5) 0.75% 0.79% 0.81% 0.80% 0.81%
Net investment income 4.75%(5) 4.73% 4.97% 4.79% 5.40% 5.03%
Portfolio Turnover of the Portfolio 2% 10% 5% 15% 11% 11%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.002,
increase net realized and unrealized loss per share by $0.002 and increase
the ratio of net investment income to average net assets from 4.95% to
4.97%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
34
<Page>
<Table>
<Caption>
KENTUCKY FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED)(1) 2003(1) 2002(1)(2) 2001(1) 2000 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.970 $ 10.160 $ 10.250 $ 9.870 $ 10.120 $ 10.660
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.204 $ 0.408 $ 0.418 $ 0.406 $ 0.451 $ 0.453
Net realized and unrealized gain (loss) 0.345 (0.188) (0.098) 0.416 (0.241) (0.533)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.549 $ 0.220 $ 0.320 $ 0.822 $ 0.210 $ (0.080)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.199) $ (0.410) $ (0.410) $ (0.442) $ (0.460) $ (0.460)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.199) $ (0.410) $ (0.410) $ (0.442) $ (0.460) $ (0.460)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.320 $ 9.970 $ 10.160 $ 10.250 $ 9.870 $ 10.120
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 5.60% 2.15% 3.26% 8.56% 2.21% (0.84)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 63,537 $ 63,232 $ 66,312 $ 72,000 $ 75,590 $ 96,005
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.51%(5) 1.52% 1.55% 1.59% 1.62% 1.56%
Expenses after custodian fee reduction(4) 1.51%(5) 1.50% 1.54% 1.55% 1.60% 1.54%
Net investment income 4.01%(5) 4.01% 4.17% 4.08% 4.67% 4.30%
Portfolio Turnover of the Portfolio 2% 10% 5% 15% 11% 11%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.002,
increase net realized and unrealized loss per share by $0.002 and increase
the ratio of net investment income to average net assets from 4.15% to
4.17%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
35
<Page>
<Table>
<Caption>
LOUISIANA FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003 2002(1)(2) 2001(1) 2000(1) 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.610 $ 9.790 $ 9.810 $ 9.240 $ 9.240 $ 9.990
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.245 $ 0.490 $ 0.486 $ 0.463 $ 0.472 $ 0.486
Net realized and unrealized gain (loss) 0.389 (0.208) (0.047) 0.573 0.001 (0.735)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.634 $ 0.282 $ 0.439 $ 1.036 $ 0.473 $ (0.249)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.234) $ (0.462) $ (0.459) $ (0.466) $ (0.473) $ (0.501)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.234) $ (0.462) $ (0.459) $ (0.466) $ (0.473) $ (0.501)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.010 $ 9.610 $ 9.790 $ 9.810 $ 9.240 $ 9.240
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.66% 2.89% 4.66% 11.51% 5.43% (2.73)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 6,129 $ 6,027 $ 5,885 $ 5,555 $ 4,566 $ 4,102
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.74%(5) 0.74% 0.80% 0.83% 0.73% 0.63%
Expenses after custodian fee reduction(4) 0.74%(5) 0.72% 0.78% 0.80% 0.69% 0.60%
Net investment income 5.00%(5) 5.00% 5.05% 4.88% 5.28% 4.93%
Portfolio Turnover of the Portfolio 3% 21% 25% 14% 14% 20%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.015,
increase net realized and unrealized loss per share by $0.015 and increase
the ratio of net investment income to average net assets from 4.90% to
5.05%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
36
<Page>
<Table>
<Caption>
LOUISIANA FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003 2002(1)(2) 2001(1) 2000(1) 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.150 $ 10.350 $ 10.380 $ 9.770 $ 9.760 $ 10.570
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.220 $ 0.441 $ 0.438 $ 0.414 $ 0.424 $ 0.429
Net realized and unrealized gain (loss) 0.419 (0.227) (0.056) 0.615 0.008 (0.790)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.639 $ 0.214 $ 0.382 $ 1.029 $ 0.432 $ (0.361)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.209) $ (0.414) $ (0.412) $ (0.419) $ (0.422) $ (0.449)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.209) $ (0.414) $ (0.412) $ (0.419) $ (0.422) $ (0.449)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.580 $ 10.150 $ 10.350 $ 10.380 $ 9.770 $ 9.760
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.39% 2.05% 3.82% 10.78% 4.66% (3.63)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 22,558 $ 22,312 $ 23,393 $ 23,584 $ 23,779 $ 28,542
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.49%(5) 1.49% 1.55% 1.59% 1.55% 1.47%
Expenses after custodian fee reduction(4) 1.49%(5) 1.47% 1.53% 1.56% 1.51% 1.44%
Net investment income 4.25%(5) 4.25% 4.30% 4.14% 4.49% 4.08%
Portfolio Turnover of the Portfolio 3% 21% 25% 14% 14% 20%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.015,
increase net realized and unrealized loss per share by $0.015 and increase
the ratio of net investment income to average net assets from 4.15% to
4.30%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
37
<Page>
<Table>
<Caption>
MARYLAND FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED)(1) 2003(1) 2002(1)(2) 2001 2000(1) 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.500 $ 9.700 $ 9.700 $ 9.160 $ 9.230 $ 10.050
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.231 $ 0.454 $ 0.452 $ 0.462 $ 0.445 $ 0.451
Net realized and unrealized gain (loss) 0.335 (0.203) (0.003)(3) 0.511 (0.065) (0.785)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.566 $ 0.251 $ 0.449 $ 0.973 $ 0.380 $ (0.334)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.224) $ (0.449) $ (0.449) $ (0.433) $ (0.450) $ (0.486)
From net realized gain (0.042) (0.002) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.266) $ (0.451) $ (0.449) $ (0.433) $ (0.450) $ (0.486)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 9.800 $ 9.500 $ 9.700 $ 9.700 $ 9.160 $ 9.230
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 6.02% 2.58% 4.80% 10.88% 4.35% (3.47)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 7,301 $ 8,085 $ 10,820 $ 6,331 $ 3,200 $ 3,574
Ratios (As a percentage of average daily net assets):
Expenses(5) 0.78%(6) 0.78% 0.85% 0.83% 0.73% 0.81%
Expenses after custodian fee reduction(5) 0.78%(6) 0.76% 0.83% 0.78% 0.71% 0.78%
Net investment income 4.81%(6) 4.67% 4.73% 4.99% 4.98% 4.65%
Portfolio Turnover of the Portfolio 6% 28% 25% 18% 9% 31%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by less
than $0.001, increase net realized and unrealized loss per share by less
than $0.001 and increase the ratio of net investment income to average net
assets by less than 0.01%. Per share data and ratios for the periods prior
to September 1, 2001 have not been restated to reflect this change in
presentation.
(3) Per share amount is not in accord with the net realized and unrealized gain
(loss) on investments for the period because of the timing of sales of Fund
shares and the amount of the per share realized and unrealized gains and
losses at such time.
(4) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(5) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(6) Annualized.
See notes to financial statements
38
<Page>
<Table>
<Caption>
MARYLAND FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED)(1) 2003(1) 2002(1)(2) 2001 2000(1) 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.360 $ 10.580 $ 10.580 $ 10.000 $ 10.080 $ 10.980
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.212 $ 0.416 $ 0.419 $ 0.431 $ 0.401 $ 0.425
Net realized and unrealized gain (loss) 0.365 (0.222) (0.007)(3) 0.546 (0.067) (0.874)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.577 $ 0.194 $ 0.412 $ 0.977 $ 0.334 $ (0.449)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.205) $ (0.412) $ (0.412) $ (0.397) $ (0.414) $ (0.451)
From net realized gain (0.042) (0.002) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.247) $ (0.414) $ (0.412) $ (0.397) $ (0.414) $ (0.451)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.690 $ 10.360 $ 10.580 $ 10.580 $ 10.000 $ 10.080
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 5.67% 1.80% 4.02% 9.98% 3.50% (4.25)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 68,596 $ 70,431 $ 74,435 $ 75,790 $ 78,272 $ 91,321
Ratios (As a percentage of average daily net assets):
Expenses(5) 1.53%(6) 1.53% 1.60% 1.57% 1.60% 1.58%
Expenses after custodian fee reduction(5) 1.53%(6) 1.51% 1.58% 1.52% 1.58% 1.55%
Net investment income 4.05%(6) 3.92% 4.02% 4.21% 4.11% 3.98%
Portfolio Turnover of the Portfolio 6% 28% 25% 18% 9% 31%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by less
than $0.001, increase net realized and unrealized loss per share by less
than $0.001 and increase the ratio of net investment income to average net
assets by less than 0.01%. Per share data and ratios for the periods prior
to September 1, 2001 have not been restated to reflect this change in
presentation.
(3) Per share amount is not in accord with the net realized and unrealized gain
(loss) on investments for the period because of the timing of sales of Fund
shares and the amount of the per share realized and unrealized gains and
losses at such time.
(4) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(5) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(6) Annualized.
See notes to financial statements
39
<Page>
<Table>
<Caption>
MISSOURI FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED)(1) 2003(1) 2002(1)(2) 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.890 $ 10.090 $ 10.130 $ 9.550 $ 9.630 $ 10.270
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.250 $ 0.510 $ 0.520 $ 0.520 $ 0.520 $ 0.495
Net realized and unrealized gain (loss) 0.380 (0.192) (0.043) 0.561 (0.103) (0.638)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.630 $ 0.318 $ 0.477 $ 1.081 $ 0.417 $ (0.143)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.260) $ (0.518) $ (0.517) $ (0.501) $ (0.497) $ (0.497)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.260) $ (0.518) $ (0.517) $ (0.501) $ (0.497) $ (0.497)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.260 $ 9.890 $ 10.090 $ 10.130 $ 9.550 $ 9.630
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.43% 3.18% 4.92% 11.65% 4.60% (1.52)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 8,996 $ 7,311 $ 6,301 $ 4,378 $ 4,132 $ 4,692
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.79%(5) 0.79% 0.80% 0.82% 0.81% 0.72%
Expenses after custodian fee reduction(4) 0.79%(5) 0.77% 0.79% 0.80% 0.80% 0.70%
Net investment income 4.99%(5) 5.06% 5.24% 5.34% 5.54% 5.10%
Portfolio Turnover of the Portfolio 4% 20% 8% 8% 8% 21%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
increase net realized and unrealized loss per share by $0.001 and increase
the ratio of net investment income to average net assets from 5.23% to
5.24%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
40
<Page>
<Table>
<Caption>
MISSOURI FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED)(1) 2003(1) 2002(1)(2) 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.930 $ 11.140 $ 11.190 $ 10.550 $ 10.650 $ 11.380
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.237 $ 0.482 $ 0.494 $ 0.493 $ 0.486 $ 0.471
Net realized and unrealized gain (loss) 0.408 (0.201) (0.053) 0.622 (0.121) (0.736)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.645 $ 0.281 $ 0.441 $ 1.115 $ 0.365 $ (0.265)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.245) $ (0.491) $ (0.491) $ (0.475) $ (0.465) $ (0.465)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.245) $ (0.491) $ (0.491) $ (0.475) $ (0.465) $ (0.465)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 11.330 $ 10.930 $ 11.140 $ 11.190 $ 10.550 $ 10.650
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.01% 2.52% 4.09% 10.84% 3.62% (2.46)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 49,688 $ 49,870 $ 52,305 $ 53,027 $ 54,531 $ 63,470
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.54%(5) 1.54% 1.55% 1.57% 1.62% 1.56%
Expenses after custodian fee reduction(4) 1.54%(5) 1.52% 1.54% 1.55% 1.61% 1.54%
Net investment income 4.28%(5) 4.32% 4.50% 4.54% 4.69% 4.19%
Portfolio Turnover of the Portfolio 4% 20% 8% 8% 8% 21%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
increase net realized and unrealized loss per share by $0.001 and increase
the ratio of net investment income to average net assets from 4.49% to
4.50%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
41
<Page>
<Table>
<Caption>
NORTH CAROLINA FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003(1) 2002(1)(2) 2001(1) 2000(1) 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.320 $ 9.600 $ 9.670 $ 9.260 $ 9.260 $ 9.880
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.221 $ 0.447 $ 0.467 $ 0.477 $ 0.481 $ 0.483
Net realized and unrealized gain (loss) 0.378 (0.275) (0.085) 0.403 0.003 (0.616)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.599 $ 0.172 $ 0.382 $ 0.880 $ 0.484 $ (0.133)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.219) $ (0.452) $ (0.452) $ (0.470) $ (0.484) $ (0.487)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.219) $ (0.452) $ (0.452) $ (0.470) $ (0.484) $ (0.487)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 9.700 $ 9.320 $ 9.600 $ 9.670 $ 9.260 $ 9.260
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.49% 1.80% 4.12% 9.77% 5.51% (1.46)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 9,608 $ 9,351 $ 9,036 $ 7,917 $ 12,696 $ 12,697
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.77%(5) 0.79% 0.83% 0.84% 0.85% 0.79%
Expenses after custodian fee reduction(4) 0.77%(5) 0.77% 0.83% 0.81% 0.82% 0.78%
Net investment income 4.68%(5) 4.69% 4.93% 5.09% 5.34% 4.97%
Portfolio Turnover of the Portfolio 16% 21% 21% 28% 17% 3%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
increase net realized and unrealized loss per share by $0.001 and increase
the ratio of net investment income to average net assets from 4.92% to
4.93%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
42
<Page>
<Table>
<Caption>
NORTH CAROLINA FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003(1) 2002(1)(2) 2001(1) 2000(1) 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.030 $ 10.310 $ 10.390 $ 9.970 $ 9.960 $ 10.630
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.199 $ 0.405 $ 0.427 $ 0.431 $ 0.449 $ 0.438
Net realized and unrealized gain (loss) 0.398 (0.277) (0.099) 0.423 0.006 (0.662)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.597 $ 0.128 $ 0.328 $ 0.854 $ 0.455 $ (0.224)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.197) $ (0.408) $ (0.408) $ (0.434) $ (0.445) $ (0.446)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.197) $ (0.408) $ (0.408) $ (0.434) $ (0.445) $ (0.446)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.430 $ 10.030 $ 10.310 $ 10.390 $ 9.970 $ 9.960
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.06% 1.23% 3.29% 8.78% 4.79% (2.24)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 77,744 $ 79,932 $ 86,449 $ 92,747 $ 97,244 $116,110
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.52%(5) 1.54% 1.58% 1.59% 1.57% 1.58%
Expenses after custodian fee reduction(4) 1.52%(5) 1.52% 1.58% 1.56% 1.54% 1.57%
Net investment income 3.93%(5) 3.96% 4.20% 4.26% 4.63% 4.19%
Portfolio Turnover of the Portfolio 16% 21% 21% 28% 17% 3%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
increase net realized and unrealized loss per share by $0.001 and increase
the ratio of net investment income to average net assets from 4.19% to
4.20%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
43
<Page>
<Table>
<Caption>
OREGON FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003(1) 2002(1)(2) 2001 2000(1) 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.420 $ 9.690 $ 9.720 $ 9.370 $ 9.380 $ 9.870
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.249 $ 0.496 $ 0.489 $ 0.484 $ 0.490 $ 0.489
Net realized and unrealized gain (loss) 0.425 (0.278) (0.031) 0.354 (0.012) (0.491)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.674 $ 0.218 $ 0.458 $ 0.838 $ 0.478 $ (0.002)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.244) $ (0.488) $ (0.488) $ (0.488) $ (0.488) $ (0.488)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.244) $ (0.488) $ (0.488) $ (0.488) $ (0.488) $ (0.488)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 9.850 $ 9.420 $ 9.690 $ 9.720 $ 9.370 $ 9.380
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 7.22% 2.30% 4.90% 9.20% 5.39% (0.11)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 11,155 $ 9,778 $ 7,638 $ 5,367 $ 3,459 $ 2,658
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.79%(5) 0.80% 0.81% 0.83% 0.75% 0.71%
Expenses after custodian fee reduction(4) 0.79%(5) 0.78% 0.80% 0.82% 0.74% 0.70%
Net investment income 5.18%(5) 5.19% 5.11% 5.09% 5.38% 5.02%
Portfolio Turnover of the Portfolio 2% 16% 21% 13% 25% 35%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 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 5.08% to
5.11%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
44
<Page>
<Table>
<Caption>
OREGON FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003(1) 2002(1)(2) 2001 2000(1) 1999(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.300 $ 10.600 $ 10.630 $ 10.250 $ 10.260 $ 10.800
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.234 $ 0.466 $ 0.459 $ 0.452 $ 0.452 $ 0.449
Net realized and unrealized gain (loss) 0.465 (0.309) (0.035) 0.380 (0.010) (0.537)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.699 $ 0.157 $ 0.424 $ 0.832 $ 0.442 $ (0.088)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.229) $ (0.457) $ (0.454) $ (0.452) $ (0.452) $ (0.452)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.229) $ (0.457) $ (0.454) $ (0.452) $ (0.452) $ (0.452)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.770 $ 10.300 $ 10.600 $ 10.630 $ 10.250 $ 10.260
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.89% 1.49% 4.13% 8.32% 4.52% (0.92)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 73,537 $ 72,634 $ 75,861 $ 78,458 $ 79,756 $ 91,295
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.54%(5) 1.55% 1.56% 1.58% 1.60% 1.57%
Expenses after custodian fee reduction(4) 1.54%(5) 1.53% 1.55% 1.57% 1.59% 1.56%
Net investment income 4.44%(5) 4.45% 4.39% 4.37% 4.56% 4.19%
Portfolio Turnover of the Portfolio 2% 16% 21% 13% 25% 35%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 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 4.36% to
4.39%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
45
<Page>
<Table>
<Caption>
SOUTH CAROLINA FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED)(1) 2003 2002(1)(2) 2001(1) 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.450 $ 9.660 $ 9.710 $ 9.200 $ 9.320 $ 10.090
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.255 $ 0.488 $ 0.483 $ 0.483 $ 0.502 $ 0.490
Net realized and unrealized gain (loss) 0.536 (0.213) (0.052) 0.520 (0.123) (0.767)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.791 $ 0.275 $ 0.431 $ 1.003 $ 0.379 $ (0.277)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.251) $ (0.485) $ (0.481) $ (0.493) $ (0.499) $ (0.493)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.251) $ (0.485) $ (0.481) $ (0.493) $ (0.499) $ (0.493)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 9.990 $ 9.450 $ 9.660 $ 9.710 $ 9.200 $ 9.320
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 8.45% 2.88% 4.61% 11.24% 4.30% (2.91)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 13,108 $ 10,727 $ 8,907 $ 4,236 $ 1,553 $ 1,757
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.75%(5) 0.73% 0.80% 0.75% 0.70% 0.78%
Expenses after custodian fee reduction(4) 0.75%(5) 0.71% 0.78% 0.70% 0.68% 0.75%
Net investment income 5.27%(5) 5.06% 5.05% 5.14% 5.54% 4.98%
Portfolio Turnover of the Portfolio 33% 37% 15% 21% 12% 26%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 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 5.02% to
5.05%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
46
<Page>
<Table>
<Caption>
SOUTH CAROLINA FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED)(1) 2003 2002(1)(2) 2001(1) 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.020 $ 10.250 $ 10.300 $ 9.760 $ 9.900 $ 10.720
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.233 $ 0.441 $ 0.441 $ 0.445 $ 0.446 $ 0.448
Net realized and unrealized gain (loss) 0.556 (0.231) (0.057) 0.542 (0.134) (0.820)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.789 $ 0.210 $ 0.384 $ 0.987 $ 0.312 $ (0.372)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.229) $ (0.440) $ (0.434) $ (0.447) $ (0.452) $ (0.448)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.229) $ (0.440) $ (0.434) $ (0.447) $ (0.452) $ (0.448)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.580 $ 10.020 $ 10.250 $ 10.300 $ 9.760 $ 9.900
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 7.98% 2.06% 3.87% 10.39% 3.32% (3.63)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 41,289 $ 40,459 $ 37,935 $ 35,378 $ 33,452 $ 42,600
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.50%(5) 1.48% 1.56% 1.49% 1.59% 1.51%
Expenses after custodian fee reduction(4) 1.50%(5) 1.46% 1.54% 1.44% 1.57% 1.48%
Net investment income 4.54%(5) 4.33% 4.35% 4.84% 4.65% 4.26%
Portfolio Turnover of the Portfolio 33% 37% 15% 21% 12% 26%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 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 4.32% to
4.35%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
47
<Page>
<Table>
<Caption>
TENNESSEE FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003 2002(1)(2) 2001 2000(1) 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.790 $ 9.910 $ 9.920 $ 9.480 $ 9.460 $ 9.980
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.234 $ 0.469 $ 0.479 $ 0.484 $ 0.482 $ 0.489
Net realized and unrealized gain (loss) 0.374 (0.111) (0.011) 0.434 0.020 (0.519)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.608 $ 0.358 $ 0.468 $ 0.918 $ 0.502 $ (0.030)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.238) $ (0.478) $ (0.478) $ (0.478) $ (0.482) $ (0.490)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.238) $ (0.478) $ (0.478) $ (0.478) $ (0.482) $ (0.490)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.160 $ 9.790 $ 9.910 $ 9.920 $ 9.480 $ 9.460
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.27% 3.65% 4.91% 9.94% 5.57% (0.39)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 10,890 $ 9,051 $ 6,672 $ 4,654 $ 3,557 $ 2,870
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.73%(5) 0.74% 0.76% 0.76% 0.83% 0.70%
Expenses after custodian fee reduction(4) 0.73%(5) 0.71% 0.74% 0.72% 0.81% 0.69%
Net investment income 4.69%(5) 4.72% 4.91% 5.03% 5.23% 4.96%
Portfolio Turnover of the Portfolio 7% 17% 19% 11% 9% 13%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by less
than $0.001, increase net realized and unrealized loss per share by less
than $0.001 and increase the ratio of net investment income to average net
assets by less than 0.01%. Per share data and ratios for the periods prior
to September 1, 2001 have not been restated to reflect this change in
presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
48
<Page>
<Table>
<Caption>
TENNESSEE FUND -- CLASS B
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003 2002(1)(2) 2001 2000(1) 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.660 $ 10.800 $ 10.800 $ 10.320 $ 10.280 $ 10.840
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.215 $ 0.433 $ 0.444 $ 0.451 $ 0.452 $ 0.446
Net realized and unrealized gain (loss) 0.414 (0.133) (0.004) 0.466 0.023 (0.564)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.629 $ 0.300 $ 0.440 $ 0.917 $ 0.475 $ (0.118)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.219) $ (0.440) $ (0.440) $ (0.437) $ (0.435) $ (0.442)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.219) $ (0.440) $ (0.440) $ (0.437) $ (0.435) $ (0.442)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 11.070 $ 10.660 $ 10.800 $ 10.800 $ 10.320 $ 10.280
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 6.00% 2.79% 4.22% 9.09% 4.82% (1.19)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 38,914 $ 39,182 $ 41,087 $ 42,550 $ 41,372 $ 46,389
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.48%(5) 1.49% 1.51% 1.51% 1.57% 1.51%
Expenses after custodian fee reduction(4) 1.48%(5) 1.46% 1.49% 1.47% 1.55% 1.50%
Net investment income 3.95%(5) 3.99% 4.19% 4.30% 4.50% 4.15%
Portfolio Turnover of the Portfolio 7% 17% 19% 11% 9% 13%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by less
than $0.001, increase net realized and unrealized loss per share by less
than $0.001 and increase the ratio of net investment income to average net
assets by less than 0.01%. Per share data and ratios for the periods prior
to September 1, 2001 have not been restated to reflect this change in
presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
49
<Page>
<Table>
<Caption>
VIRGINIA FUND -- CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 -----------------------------------------------------
(UNAUDITED) 2003(1) 2002(1)(2) 2001(1) 2000(1) 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 9.390 $ 9.600 $ 9.700 $ 9.220 $ 9.300 $ 9.870
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.227 $ 0.463 $ 0.475 $ 0.464 $ 0.481 $ 0.503
Net realized and unrealized gain (loss) 0.470 (0.217) (0.119) 0.492 (0.072) (0.582)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.697 $ 0.246 $ 0.356 $ 0.956 $ 0.409 $ (0.079)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.227) $ (0.456) $ (0.456) $ (0.476) $ (0.489) $ (0.491)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.227) $ (0.456) $ (0.456) $ (0.476) $ (0.489) $ (0.491)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 9.860 $ 9.390 $ 9.600 $ 9.700 $ 9.220 $ 9.300
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 7.49% 2.58% 3.82% 10.66% 4.66% (0.90)%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 11,276 $ 9,477 $ 8,357 $ 7,164 $ 3,632 $ 3,528
Ratios (As a percentage of average daily net assets):
Expenses(4) 0.78%(5) 0.81% 0.82% 0.84% 0.81% 0.73%
Expenses after custodian fee reduction(4) 0.78%(5) 0.80% 0.82% 0.82% 0.80% 0.71%
Net investment income 4.75%(5) 4.83% 4.99% 4.89% 5.34% 5.00%
Portfolio Turnover of the Portfolio 10% 20% 33% 39% 23% 17%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
increase net realized and unrealized loss per share by $0.001 and increase
the ratio of net investment income to average net assets from 4.98% to
4.99%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
50
<Page>
<Table>
<Caption>
VIRGINIA FUND -- CLASS B
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ------------------------------------------------------
(UNAUDITED) 2003(1) 2002(1)(2) 2001(1) 2000(1) 1999
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value -- Beginning of period $ 10.400 $ 10.630 $ 10.730 $ 10.200 $ 10.290 $ 10.930
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS
Net investment income $ 0.213 $ 0.434 $ 0.448 $ 0.435 $ 0.456 $ 0.450
Net realized and unrealized gain (loss) 0.508 (0.240) (0.124) 0.545 (0.083) (0.629)
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.721 $ 0.194 $ 0.324 $ 0.980 $ 0.373 $ (0.179)
- ----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From net investment income $ (0.211) $ (0.424) $ (0.424) $ (0.450) $ (0.463) $ (0.461)
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS $ (0.211) $ (0.424) $ (0.424) $ (0.450) $ (0.463) $ (0.461)
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF PERIOD $ 10.910 $ 10.400 $ 10.630 $ 10.730 $ 10.200 $ 10.290
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 7.04% 1.81% 3.14% 9.86% 3.80% (1.75)%
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $ 104,561 $ 103,739 $ 110,881 $ 114,367 $ 111,662 $ 133,522
Ratios (As a percentage of average daily net assets):
Expenses(4) 1.53%(5) 1.56% 1.57% 1.60% 1.60% 1.58%
Expenses after custodian fee reduction(4) 1.53%(5) 1.55% 1.57% 1.58% 1.59% 1.56%
Net investment income 4.02%(5) 4.09% 4.25% 4.19% 4.57% 4.19%
Portfolio Turnover of the Portfolio 10% 20% 33% 39% 23% 17%
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Net investment income per share was computed using average shares
outstanding.
(2) The Fund, through its investment in the Portfolio, has adopted the
provisions of the revised AICPA Audit and Accounting Guide for Investment
Companies and began using the interest method to amortize premiums on
fixed-income securities. The effect of this change for the year ended
August 31, 2002 was to increase net investment income per share by $0.001,
increase net realized and unrealized loss per share by $0.001 and increase
the ratio of net investment income to average net assets from 4.24% to
4.25%. Per share data and ratios for the periods prior to September 1, 2001
have not been restated to reflect this change in presentation.
(3) Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. Total return
is not computed on an annualized basis.
(4) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(5) Annualized.
See notes to financial statements
51
<Page>
EATON VANCE MUNICIPALS FUNDS as of February 29, 2004
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 SIGNIFICANT ACCOUNTING POLICIES
Eaton Vance Municipals 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 Trust presently consists of twenty-eight Funds,
twelve of which, each non-diversified, are included in these financial
statements. They include Eaton Vance Alabama Municipals Fund (Alabama Fund),
Eaton Vance Arkansas Municipals Fund (Arkansas Fund), Eaton Vance Georgia
Municipals Fund (Georgia Fund), Eaton Vance Kentucky Municipals Fund
(Kentucky Fund), Eaton Vance Louisiana Municipals Fund (Louisiana Fund),
Eaton Vance Maryland Municipals Fund (Maryland Fund), Eaton Vance Missouri
Municipals Fund (Missouri Fund), Eaton Vance North Carolina Municipals Fund
(North Carolina Fund), Eaton Vance Oregon Municipals Fund (Oregon Fund),
Eaton Vance South Carolina Municipals Fund (South Carolina Fund), Eaton Vance
Tennessee Municipals Fund (Tennessee Fund) and Eaton Vance Virginia
Municipals Fund (Virginia Fund), (collectively, the Funds). The Funds offer
two 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 declining contingent deferred sales charge (see
Note 6). The Trustees have adopted a conversion feature pursuant to which
Class B shares of each Fund automatically convert to Class A shares eight
years after their purchase as described in each Fund's prospectus. 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. Each Fund invests all of its investable assets in interests in a
separate corresponding open-end management investment company (a Portfolio),
a New York Trust, having the same investment objective as its corresponding
Fund. The Alabama Fund invests its assets in the Alabama Municipals
Portfolio, the Arkansas Fund invests its assets in the Arkansas Municipals
Portfolio, the Georgia Fund invests its assets in the Georgia Municipals
Portfolio, the Kentucky Fund invests its assets in the Kentucky Municipals
Portfolio, the Louisiana Fund invests its assets in the Louisiana Municipals
Portfolio, the Maryland Fund invests its assets in the Maryland Municipals
Portfolio, the Missouri Fund invests its assets in the Missouri Municipals
Portfolio, the North Carolina Fund invests its assets in the North Carolina
Municipals Portfolio, the Oregon Fund invests its assets in the Oregon
Municipals Portfolio, the South Carolina Fund invests its assets in the South
Carolina Municipals Portfolio, the Tennessee Fund invests its assets in the
Tennessee Municipals Portfolio and the Virginia Fund invests its assets in
the Virginia Municipals Portfolio. The value of each Fund's investment in its
corresponding Portfolio reflects the Fund's proportionate interest in the net
assets of that Portfolio (approximately 99.9% at February 29, 2004 for each
Fund). The performance of each Fund is directly affected by the performance
of its corresponding Portfolio. The financial statements of each Portfolio,
including the portfolio of investments, are included elsewhere in this report
and should be read in conjunction with each Fund's financial statements.
The following is a summary of significant accounting policies consistently
followed by the Trust 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 -- Valuation of securities by the Portfolios is
discussed in Note 1A of the Portfolios' Notes to Financial Statements, which
are included elsewhere in this report.
B INCOME -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or accretion of discount.
C FEDERAL TAXES -- Each 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. At August 31, 2003,
the Funds, for federal income tax purposes, had capital loss carryovers which
will reduce taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Internal Revenue Code,
and thus will reduce the amount of the distributions to shareholders which
would otherwise be necessary to relieve the Funds of any liability for
federal
52
<Page>
income or excise tax. The amounts and expiration dates of the capital loss
carryovers are as follows:
<Table>
<Caption>
FUND AMOUNT EXPIRES
-----------------------------------------------------
Alabama $ 405,357 August 31, 2011
136,447 August 31, 2010
272,583 August 31, 2008
94,556 August 31, 2005
988,165 August 31, 2004
Arkansas 336,826 August 31, 2009
251,575 August 31, 2005
186,510 August 31, 2004
Georgia 295,816 August 31, 2011
223,748 August 31, 2009
41,652 August 31, 2008
5,072,486 August 31, 2004
Kentucky 134,770 August 31, 2010
233,391 August 31, 2005
1,094,148 August 31, 2004
Louisiana 183,393 August 31, 2010
159,254 August 31, 2009
527,106 August 31, 2008
250,387 August 31, 2005
1,271,552 August 31, 2004
Missouri 475,094 August 31, 2010
113,141 August 31, 2005
14,016 August 31, 2004
North Carolina 73,745 August 31, 2005
6,919,660 August 31, 2004
Oregon 87,267 August 31, 2009
147,651 August 31, 2008
924,680 August 31, 2005
1,336,365 August 31, 2004
South Carolina 347,930 August 31, 2010
155,263 August 31, 2008
25,336 August 31, 2007
183,416 August 31, 2005
2,712,740 August 31, 2004
Tennessee 246,996 August 31, 2005
928,970 August 31, 2004
Virginia 730,517 August 31, 2010
168,858 August 31, 2009
3,521,424 August 31, 2004
</Table>
Dividends paid by each Fund from net interest on tax-exempt municipal bonds
allocated from its corresponding Portfolio are not includable by shareholders
as gross income for federal income tax purposes because each Fund and
Portfolio intend to meet certain requirements of the Internal Revenue Code
applicable to regulated investment companies which will enable the Funds to
pay tax-exempt interest dividends. The portion of such interest, if any,
earned on private activity bonds issued after August 7, 1986 may be
considered a tax preference item to shareholders.
Additionally, at August 31, 2003, Kentucky Fund, North Carolina Fund and
Virginia Fund had net capital losses of $2,797,374, $836,551, and $424,073
respectively, attributable to security transactions incurred after October
31, 2002. These are treated as arising on the first day of each Fund's
taxable year ending August 31, 2004.
D EXPENSE REDUCTION -- Investors Bank & Trust Company (IBT) serves as
custodian to the Funds and the Portfolios. Pursuant to the respective
custodian agreements, IBT receives a fee reduced by credits which are
determined based on the average daily cash balances the Funds or the
Portfolios maintain with IBT. All significant credit balances used to reduce
each Fund's custodian fees are reported as a reduction of operating expenses
on the Statements of Operations.
E USE OF ESTIMATES -- The preparation of the financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expense during the
reporting period. Actual results could differ from those estimates.
F EXPENSES -- The majority of expenses of the Trust are directly
identifiable to an individual fund. Expenses which are not readily
identifiable to a specific fund are allocated taking into consideration,
among other things, the nature and type of expense and the relative size of
the funds.
G 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.
H OTHER -- Investment transactions are accounted for on a trade-date basis.
53
<Page>
I INTERIM FINANCIAL STATEMENTS -- The interim financial statements relating
to February 29, 2004 and for the six months then ended have not been audited
by independent certified public accountants, but in the opinion of the Funds'
management reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 DISTRIBUTIONS TO SHAREHOLDERS
The net income of each 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 declared separately for each
class of shares. Distributions are paid monthly. Distributions of allocated
realized capital gains, if any, are made at least annually. Shareholders may
reinvest income and capital gain distributions in additional shares of the
same class of a Fund at the net asset value as of the ex-dividend date.
Distributions are paid in the form of additional shares of the same class or,
at the election of the shareholder, in cash.
The Funds distinguish 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 Funds' Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Such shares may be issued in a number of different series (such as
the Funds) and classes. Transactions in Fund shares were as follows:
<Table>
<Caption>
ALABAMA FUND
-------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 85,549 253,872
Issued to shareholders electing to
receive payments of distributions
in Fund shares 10,721 19,464
Redemptions (86,139) (115,690)
------------------------------------------------------------------------------------
NET INCREASE 10,131 157,646
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
ALABAMA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 109,832 478,349
Issued to shareholders electing to
receive payments of distributions
in Fund shares 52,280 93,673
Redemptions (303,704) (569,034)
------------------------------------------------------------------------------------
NET INCREASE (DECREASE) (141,592) 2,988
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
ARKANSAS FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 99,655 260,820
Issued to shareholders electing to
receive payments of distributions
in Fund shares 14,775 12,384
Redemptions (80,859) (38,863)
------------------------------------------------------------------------------------
NET INCREASE 33,571 234,341
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
ARKANSAS FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 34,963 154,802
Issued to shareholders electing to
receive payments of distributions
in Fund shares 40,991 76,262
Redemptions (181,577) (312,574)
------------------------------------------------------------------------------------
NET DECREASE (105,623) (81,510)
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
GEORGIA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 87,701 185,809
Issued to shareholders electing to
receive payments of distributions
in Fund shares 4,560 7,065
Redemptions (14,522) (99,484)
------------------------------------------------------------------------------------
NET INCREASE 77,739 93,390
------------------------------------------------------------------------------------
</Table>
54
<Page>
<Table>
<Caption>
GEORGIA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 130,891 439,205
Issued to shareholders electing to
receive payments of distributions
in Fund shares 56,587 89,735
Redemptions (234,850) (711,548)
------------------------------------------------------------------------------------
NET DECREASE (47,372) (182,608)
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
KENTUCKY FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 46,869 181,905
Issued to shareholders electing to
receive payments of distributions
in Fund shares 4,447 7,336
Redemptions (16,957) (58,976)
------------------------------------------------------------------------------------
NET INCREASE 34,359 130,265
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
KENTUCKY FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 88,250 436,325
Issued to shareholders electing to
receive payments of distributions
in Fund shares 63,162 116,438
Redemptions (335,536) (735,760)
------------------------------------------------------------------------------------
NET DECREASE (184,124) (182,997)
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
LOUISIANA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 23,119 110,097
Issued to shareholders electing to
receive payments of distributions
in Fund shares 8,459 16,826
Redemptions (46,844) (100,628)
------------------------------------------------------------------------------------
NET INCREASE (DECREASE) (15,266) 26,295
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
LOUISIANA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 41,012 147,908
Issued to shareholders electing to
receive payments of distributions
in Fund shares 13,941 26,091
Redemptions (120,757) (236,601)
------------------------------------------------------------------------------------
NET DECREASE (65,804) (62,602)
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MARYLAND FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 60,041 354,621
Issued to shareholders electing to
receive payments of distributions
in Fund shares 10,869 20,847
Redemptions (176,734) (639,921)
------------------------------------------------------------------------------------
NET DECREASE (105,824) (264,453)
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MARYLAND FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 151,599 485,863
Issued to shareholders electing to
receive payments of distributions
in Fund shares 101,636 130,013
Redemptions (634,051) (851,414)
------------------------------------------------------------------------------------
NET DECREASE (380,816) (235,538)
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MISSOURI FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 181,250 227,719
Issued to shareholders electing to
receive payments of distributions
in Fund shares 12,874 21,825
Redemptions (55,800) (135,437)
------------------------------------------------------------------------------------
NET INCREASE 138,324 114,107
------------------------------------------------------------------------------------
</Table>
55
<Page>
<Table>
<Caption>
MISSOURI FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 70,448 318,793
Issued to shareholders electing to
receive payments of distributions
in Fund shares 61,356 103,698
Redemptions (308,809) (553,142)
------------------------------------------------------------------------------------
NET DECREASE (177,005) (130,651)
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
NORTH CAROLINA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 91,852 250,128
Issued to shareholders electing to
receive payments of distributions
in Fund shares 12,790 27,368
Redemptions (116,839) (215,969)
------------------------------------------------------------------------------------
NET INCREASE (DECREASE) (12,197) 61,527
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
NORTH CAROLINA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 63,269 455,090
Issued to shareholders electing to
receive payments of distributions
in Fund shares 81,731 153,209
Redemptions (662,096) (1,024,553)
------------------------------------------------------------------------------------
NET DECREASE (517,096) (416,254)
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
OREGON FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 121,945 340,699
Issued to shareholders electing to
receive payments of distributions
in Fund shares 14,546 25,706
Redemptions (41,651) (116,645)
------------------------------------------------------------------------------------
NET INCREASE 94,840 249,760
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
OREGON FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 141,998 567,056
Issued to shareholders electing to
receive payments of distributions
in Fund shares 95,560 170,205
Redemptions (458,816) (844,495)
------------------------------------------------------------------------------------
NET DECREASE (221,258) (107,234)
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SOUTH CAROLINA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 252,495 442,811
Issued to shareholders electing to
receive payments of distributions
in Fund shares 15,897 19,527
Redemptions (90,560) (249,315)
------------------------------------------------------------------------------------
NET INCREASE 177,832 213,023
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SOUTH CAROLINA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 108,691 639,522
Issued to shareholders electing to
receive payments of distributions
in Fund shares 49,733 69,752
Redemptions (294,955) (373,129)
------------------------------------------------------------------------------------
NET INCREASE (DECREASE) (136,531) 336,145
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
TENNESSEE FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 223,419 462,924
Issued to shareholders electing to
receive payments of distributions
in Fund shares 14,231 23,252
Redemptions (91,110) (234,372)
------------------------------------------------------------------------------------
NET INCREASE 146,540 251,804
------------------------------------------------------------------------------------
</Table>
56
<Page>
<Table>
<Caption>
TENNESSEE FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 60,746 341,873
Issued to shareholders electing to
receive payments of distributions
in Fund shares 42,202 74,063
Redemptions (263,970) (544,964)
------------------------------------------------------------------------------------
NET DECREASE (161,022) (129,028)
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
VIRGINIA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS A (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 226,522 212,727
Issued to shareholders electing to
receive payments of distributions
in Fund shares 12,226 21,108
Redemptions (104,064) (95,245)
------------------------------------------------------------------------------------
NET INCREASE 134,684 138,590
------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
VIRGINIA FUND
--------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED
CLASS B (UNAUDITED) AUGUST 31, 2003
------------------------------------------------------------------------------------
Sales 147,842 559,358
Issued to shareholders electing to
receive payments of distributions
in Fund shares 119,038 204,805
Redemptions (664,505) (1,220,982)
------------------------------------------------------------------------------------
NET DECREASE (397,625) (456,819)
------------------------------------------------------------------------------------
</Table>
4 TRANSACTIONS WITH AFFILIATES
Eaton Vance Management (EVM) serves as the Administrator of each Fund, but
receives no compensation. Each of the Portfolios has engaged Boston
Management and Research (BMR), a subsidiary of EVM, to render investment
advisory services. See Note 2 of the Portfolios' Notes to Financial
Statements which are included elsewhere in this report. Certain officers and
Trustees of the Funds and of the Portfolios are officers of the above
organizations. Except for Trustees of the Funds and Portfolios who are not
members of EVM's or BMR's organization, officers and Trustees receive
remuneration for their services to each fund out of the investment adviser
fee earned by BMR. EVM serves as the sub-transfer agent of the Funds and
receives from the transfer agent an aggregate fee based upon the actual
expenses incurred by EVM in the performance of those services. For the six
months ended February 29, 2004, EVM earned $1,144, $995, $1,142, $1,787,
$443, $1,644, $1,483, $2,194, $1,758, $817, $1,054 and $2,549 in sub-transfer
agent fees from Alabama Fund, Arkansas Fund, Georgia Fund, Kentucky Fund,
Louisiana Fund, Maryland Fund, Missouri Fund, North Carolina Fund, Oregon
Fund, South Carolina Fund, Tennessee Fund and Virginia Fund, respectively.
The Funds were informed that Eaton Vance Distributors, Inc. (EVD), a
subsidiary of EVM and the Funds' principal underwriter, received $1,311,
$2,181, $1,761, $1,116, $564, $912, $3,082, $1,210, $2,964, $2,372, $4,618
and $3,331 from the Alabama Fund, Arkansas Fund, Georgia Fund, Kentucky Fund,
Louisiana Fund, Maryland Fund, Missouri Fund, North Carolina Fund, Oregon
Fund, South Carolina Fund, Tennessee Fund and Virginia Fund, respectively, as
its portion of the sales charge on sales of Class A shares for the six months
ended February 29, 2004.
5 DISTRIBUTION AND SERVICE PLANS
Each Fund has in effect a distribution plan for Class B (Class B Plan)
pursuant to Rule 12b-1 under the Investment Company Act of 1940 and a service
plan for Class A (Class A Plans) (collectively, the Plans). The Plans require
the Class B shares to pay EVD amounts not exceeding 1/365 of 0.75%
(annualized) of each Fund's daily net assets attributable to Class B for
providing ongoing distribution services and facilities to the respective
Fund. Each 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 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 of EVD reduced by the aggregate amount of
contingent deferred sales charges (see Note 6) and amounts theretofore paid
to EVD by Class B. The amount payable to EVD with respect to each day is
accrued on such day as a liability of each Fund's Class B shares and,
accordingly, reduces each Fund's Class B net assets. For the six months ended
February 29, 2004, the Class B shares of the Alabama Fund, Arkansas Fund,
Georgia Fund, Kentucky Fund, Louisiana Fund, Maryland Fund, Missouri Fund,
North Carolina Fund, Oregon Fund, South Carolina Fund, Tennessee Fund and
Virginia Fund paid $208,568, $128,382, $190,497, $237,033, $84,526, $259,721,
$185,238, $292,012, $272,357, $152,165, $146,189 and $389,814, respectively,
to EVD, representing 0.75% (annualized) of each Fund's Class B average daily
net assets. At February 29, 2004, the
57
<Page>
amount of Uncovered Distribution Charges of EVD calculated under the Class B
Plans for Alabama Fund, Arkansas Fund, Georgia Fund, Kentucky Fund, Louisiana
Fund, Maryland Fund, Missouri Fund, North Carolina Fund, Oregon Fund, South
Carolina Fund, Tennessee Fund and Virginia Fund were approximately
$1,306,000, $978,000, $1,523,000, $1,227,000, $772,000, $2,995,000, $541,000,
$1,585,000, $1,643,000, $1,279,000, $742,000 and $1,455,000, respectively.
The Plans authorize each Fund to make payments of service fees to EVD,
investment dealers and other persons in amounts equal to 0.20% (annualized)
of each Fund's average daily net assets for any fiscal year. Service fee
payments will be made for personal services and/or the maintenance of
shareholder accounts. Service fees paid to EVD and investment dealers are
separate and distinct from the sales commissions and distribution fees
payable by each Fund to EVD, and as such are not subject to automatic
discontinuance when there are no outstanding Uncovered Distribution Charges
of EVD. For the six months ended February 29, 2004, Alabama Fund, Arkansas
Fund, Georgia Fund, Kentucky Fund, Louisiana Fund, Maryland Fund, Missouri
Fund, North Carolina Fund, Oregon Fund, South Carolina Fund, Tennessee Fund
and Virginia Fund paid or accrued service fees to or payable to EVD in the
amount of $9,672, $9,851, $4,643, $4,496 $6,067, $7,841, $7,696, $9,361,
$10,379, $12,246, $9,755, and $10,016, respectively, for Class A shares, and
$55,618, $34,235, $50,799, $63,209, $22,541, $69,259, $49,397, $77,870,
$72,629, $40,577, $38,984 and $103,950, respectively, for Class B shares.
Certain officers and Trustees of the Funds are officers or directors of EVD.
6 CONTINGENT DEFERRED SALES CHARGE
A contingent deferred sales charge (CDSC) generally is imposed on redemptions
of Class B shares made within six years of purchase. 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 gains
distributions. The Class B CDSC is imposed at declining rates that begin at
5% in the case of redemptions in the first and second year after purchase,
declining one percentage point each subsequent year. No CDSC is levied on
shares which have been sold to EVD or its affiliates or to their respective
employees or clients and may be waived under certain other limited
conditions. CDSC charges received on Class B redemptions are paid to EVD to
reduce the amount of Uncovered Distribution Charges calculated under each
Fund's Class B Plan (see Note 5). CDSC charges received on Class B
redemptions when no Uncovered Distribution Charges exist for Class B will be
credited to each Fund. EVD received approximately $15,000, $11,000, $28,000,
$21,000, $8,000, $24,000, $17,000, $24,000, $17,000, $34,000, $21,000 and
$22,000 of CDSC paid by Class B shareholders of Alabama Fund, Arkansas Fund,
Georgia Fund, Kentucky Fund, Louisiana Fund, Maryland Fund, Missouri Fund,
North Carolina Fund, Oregon Fund, South Carolina Fund, Tennessee Fund and
Virginia Fund, respectively, for the six months ended February 29, 2004.
EVD received approximately $11,000 and $1,000 of CDSC paid by Class A
shareholders of Maryland Fund and Tennessee Fund and no CDSC paid by Class A
shareholders of Alabama Fund, Arkansas Fund, Georgia Fund, Kentucky Fund,
Louisiana Fund, Missouri Fund, North Carolina Fund, Oregon Fund, South
Carolina Fund and Virginia Fund for the six months ended February 29, 2004.
7 INVESTMENT TRANSACTIONS
Increases and decreases in each Fund's investment in its corresponding
Portfolio for the six months ended February 29, 2004 were as follows:
<Table>
ALABAMA FUND
--------------------------------------------------------------------------------
Increases $1,978,327
Decreases 5,213,690
ARKANSAS FUND
--------------------------------------------------------------------------------
Increases $1,308,958
Decreases 3,386,896
GEORGIA FUND
--------------------------------------------------------------------------------
Increases $2,221,100
Decreases 3,365,346
KENTUCKY FUND
--------------------------------------------------------------------------------
Increases $1,441,305
Decreases 4,630,430
LOUISIANA FUND
--------------------------------------------------------------------------------
Increases $ 653,016
Decreases 2,323,083
MARYLAND FUND
--------------------------------------------------------------------------------
Increases $2,295,867
Decreases 9,555,427
MISSOURI FUND
--------------------------------------------------------------------------------
Increases $2,628,283
Decreases 4,683,585
</Table>
58
<Page>
<Table>
NORTH CAROLINA FUND
--------------------------------------------------------------------------------
Increases $1,561,563
Decreases 9,073,503
OREGON FUND
--------------------------------------------------------------------------------
Increases $2,684,238
Decreases 6,403,137
SOUTH CAROLINA FUND
--------------------------------------------------------------------------------
Increases $3,687,696
Decreases 4,734,722
TENNESSEE FUND
--------------------------------------------------------------------------------
Increases $2,876,013
Decreases 4,605,642
VIRGINIA FUND
--------------------------------------------------------------------------------
Increases $3,793,427
Decreases 9,579,545
</Table>
8 SHAREHOLDER MEETING
The Funds held a Special Meeting of Shareholders on February 20, 2004. At the
Special Meeting, shareholders voted to change each Fund's diversification
status from diversified to non-diversified. The results of the vote were as
follows:
<Table>
<Caption>
ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND LOUISIANA FUND MARYLAND FUND
---------------------------------------------------------------------------------------------------------------------------------
Affirmative 2,911,947 2,318,628 2,611,257 3,121,371 1,299,409 3,831,711
Against 130,811 97,899 226,740 365,818 103,031 352,555
Abstain 239,468 174,451 127,618 180,200 26,437 212,012
<Caption>
MISSOURI FUND NORTH CAROLINA FUND OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
---------------------------------------------------------------------------------------------------------------------------------
Affirmative 2,485,553 4,301,421 3,611,917 2,450,382 1,969,463 5,552,402
Against 311,312 412,988 365,270 148,470 137,456 483,436
Abstain 214,123 328,378 418,034 116,428 228,874 275,671
</Table>
59
<Page>
ALABAMA MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 98.3%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
EDUCATION -- 2.3%
$ 1,500 Birmingham-Southern College Building Authority,
5.35%, 12/1/19 $ 1,515,930
- ----------------------------------------------------------------------------------------------
$ 1,515,930
- ----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 1.6%
$ 1,000 Puerto Rico Electric Power Authority, 5.125%, 7/1/29 $ 1,051,480
- ----------------------------------------------------------------------------------------------
$ 1,051,480
- ----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 6.3%
$ 1,750 Marshall County, Healthcare Authority,
(Boaz-Albertville Medical Center),
Prerefunded to 1/1/05, 7.00%, 1/1/20 $ 1,869,717
2,000 Tallassee IDB, (United Technologies), Prerefunded
to 8/1/06, 6.10%, 8/1/14 2,263,180
- ----------------------------------------------------------------------------------------------
$ 4,132,897
- ----------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 2.4%
$ 1,125 Huntsville, 5.25%, 5/1/31 $ 1,207,001
550 Puerto Rico, 0.00%, 7/1/15 344,448
- ----------------------------------------------------------------------------------------------
$ 1,551,449
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 6.7%
$ 1,000 Cullman Medical Clinic Board, (Cullman Regional Medical
Center), 6.50%, 2/15/23 $ 1,004,170
1,250 Huntsville, Health Care Authority, 5.75%, 6/1/31 1,323,200
1,000 Marshall County, Health Care Authority, 5.75%, 1/1/32 1,046,820
935 Oneonta Eastern Healthcare Facility Financing Authority,
7.75%, 7/1/21 1,053,343
- ----------------------------------------------------------------------------------------------
$ 4,427,533
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 5.0%
$ 1,000 Courtland, Solid Waste Disposal, (Champion International
Corp.), (AMT), 6.70%, 11/1/29 $ 1,086,470
750 Phenix County, Industrial Development Board Environmental
Improvements, 6.10%, 5/15/30 793,575
1,180 Puerto Rico Port Authority, (American Airlines), (AMT),
6.25%, 6/1/26 914,677
500 Selma, Solid Waste Disposal, (International Paper), (AMT),
6.00%, 12/1/17 510,770
- ----------------------------------------------------------------------------------------------
$ 3,305,492
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 13.3%
$ 1,775 Alabama Agricultural and Mechanical University, (MBIA),
5.00%, 11/1/25 $ 1,848,716
1,500 Alabama State University, (MBIA), 5.25%, 3/1/33 1,602,120
750 Auburn University, (MBIA), 5.00%, 6/1/26 781,207
7,500 University of South Alabama, (AMBAC), 0.00%, 11/15/16 4,488,600
- ----------------------------------------------------------------------------------------------
$ 8,720,643
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 2.7%
$ 1,500 Puerto Rico Electric Power Authority, (FSA), 4.75%, 7/1/24 $ 1,543,350
165 Puerto Rico Electric Power Authority, (MBIA), Variable Rate,
7/1/29(1)(2) 201,897
- ----------------------------------------------------------------------------------------------
$ 1,745,247
- ----------------------------------------------------------------------------------------------
INSURED-ESCROWED / PREREFUNDED -- 10.4%
$ 1,310 Jefferson County, Sewer, (FGIC), Prerefunded to 2/1/09,
5.00%, 2/1/33 $ 1,485,907
1,190 Jefferson County, Sewer, (FGIC), Prerefunded to 2/1/09,
5.00%, 2/1/33 1,355,160
1,000 Jefferson County, Sewer, (FGIC), Prerefunded to 2/1/09,
5.125%, 2/1/39 1,140,070
1,750 Scottsboro, Water, Sewer and Gas, (AMBAC), Prerefunded to
6/1/04, 6.50%, 12/1/14 1,810,358
1,000 West Morgan-East Lawrence, Water Authority, (FSA),
Prerefunded to 8/15/04, 6.85%, 8/15/25 1,047,470
- ----------------------------------------------------------------------------------------------
$ 6,838,965
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 13.4%
$ 1,500 Etowah County, Board of Education, (FSA),
5.00%, 9/1/28 $ 1,571,700
2,000 Gadsden, (AMBAC), 5.125%, 8/1/28 2,132,740
1,000 Homewood, (MBIA), 5.00%, 9/1/31 1,044,010
500 Madison, Warrants, (MBIA), 5.00%, 9/1/27 518,685
700 Puerto Rico, (FSA), Variable Rate, 7/1/27(1)(2) 903,175
1,495 Tuscaloosa, (MBIA), 5.20%, 7/1/31 1,594,717
1,000 Walker County, Public Building, Bridge and Road Tax,
(AMBAC), 5.00%, 2/1/32 1,045,680
- ----------------------------------------------------------------------------------------------
$ 8,810,707
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 8.8%
$ 3,000 Birmingham, Care Facility Financing Authority,
(Children's Hospital), (AMBAC), 5.00%, 6/1/32 $ 3,104,640
1,500 East Alabama, Health Care Authority, (MBIA),
5.00%, 9/1/27 1,556,940
1,000 Huntsville, Health Care Authority, (MBIA), 5.40%, 6/1/22 1,101,120
- ----------------------------------------------------------------------------------------------
$ 5,762,700
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
60
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 2.6%
$ 1,000 Puerto Rico Public Finance Corp., (AMBAC),
5.50%, 8/1/27 $ 1,181,460
400 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 12/1/19(1)(2) 553,004
- ----------------------------------------------------------------------------------------------
$ 1,734,464
- ----------------------------------------------------------------------------------------------
INSURED-SPECIAL TAX REVENUE -- 1.9%
$ 1,825 Birmingham Jefferson, Civic Center Authority, (MBIA),
0.00%, 9/1/18 $ 971,831
250 Puerto Rico Infrastructure Financing Authority, (AMBAC),
Variable Rate, 7/1/07(1)(3) 269,075
- ----------------------------------------------------------------------------------------------
$ 1,240,906
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 3.5%
$ 1,000 Alabama State Docks Department, (MBIA), (AMT),
6.30%, 10/1/21(4) $ 1,120,710
500 Huntsville-Madison County Airport, (AMT), (MBIA),
5.40%, 7/1/19 541,295
1,000 Puerto Rico Highway and Transportation Authority, (AMBAC),
0.00%, 7/1/16 621,520
- ----------------------------------------------------------------------------------------------
$ 2,283,525
- ----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 16.6%
$ 2,500 Birmingham, Waterworks and Sewer Board, (MBIA),
5.25%, 1/1/33 $ 2,670,200
1,000 Helena, Utilities Board Water and Sewer, (MBIA),
5.25%, 4/1/33 1,069,680
1,000 Helena, Utilities Board Water and Sewer, (MBIA),
5.25%, 4/1/27 1,070,140
1,000 Opelika, Water Works Board Utility, (FSA),
5.125%, 6/1/31 1,053,020
500 Ozark, Utilities Board Water and Sewer, (AMBAC),
5.00%, 9/1/31 519,125
3,075 Prichard Water and Sewer, (AMBAC), 6.125%, 11/15/14 3,243,479
1,195 Warrior River, Water Authority, (FSA), 5.25%, 8/1/23 1,299,981
- ----------------------------------------------------------------------------------------------
$ 10,925,625
- ----------------------------------------------------------------------------------------------
LEASE REVENUE / CERTIFICATES OF PARTICIPATION -- 0.8%
$ 500 Puerto Rico, (Guaynabo Municipal Government
Center Lease), 5.625%, 7/1/22 $ 524,160
- ----------------------------------------------------------------------------------------------
$ 524,160
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 98.3%
(IDENTIFIED COST $59,153,385) $ 64,571,723
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 1.7% $ 1,083,340
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 65,655,063
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Insurance Association
The Portfolio invests primarily in debt securities issued by Alabama
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 February 29, 2004, 74.4% 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 an
individual financial institution ranged from 6.2% to 29.4% of total investments.
(1) 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.
(2) Security has been issued as a leveraged inverse floater bond.
(3) Security has been issued as an inverse floater bond.
(4) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
61
<Page>
ARKANSAS MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 101.5%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
EDUCATION -- 6.4%
$ 2,250 Conway, Public Facilities Board, (Hendrix College),
6.00%, 10/1/26 $ 2,354,377
500 University of Arkansas Student Fee, Phillips College,
5.00%, 9/1/17 517,135
- ----------------------------------------------------------------------------------------------
$ 2,871,512
- ----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 1.3%
$ 550 Jefferson, Pollution Control, (Entergy Arkansas),
6.30%, 6/1/18 $ 562,512
- ----------------------------------------------------------------------------------------------
$ 562,512
- ----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 1.7%
$ 700 Arkansas State Student Loan Authority, (AMT),
Prerefunded to 6/1/06, 6.25%, 6/1/10 $ 767,578
- ----------------------------------------------------------------------------------------------
$ 767,578
- ----------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 6.6%
$ 2,750 Arkansas State College Savings, 0.00%, 6/1/14 $ 1,874,152
2,000 Puerto Rico, 0.00%, 7/1/18 1,063,760
- ----------------------------------------------------------------------------------------------
$ 2,937,912
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 12.5%
$ 500 Arkansas Development Finance Authority, (Washington
Regional Medical Center), 7.375%, 2/1/29 $ 549,100
800 Arkansas Development Finance Authority, (White River
Medical Center), 5.60%, 6/1/24 823,080
750 Baxter County, Community Hospital District,
5.625%, 9/1/28 759,907
1,000 Conway, Health Facilities Board, (Conway Regional
Medical Center), 6.40%, 8/1/29 1,068,120
250 North Little Rock, Health Facilities Board, (Baptist Health),
5.70%, 7/1/22 263,275
1,250 Paragould, Hospital, (Methodist Hospital Corp.),
6.375%, 10/1/17 1,314,663
785 Pulaski County, (Children's Hospital), 5.25%, 3/1/16 817,593
- ----------------------------------------------------------------------------------------------
$ 5,595,738
- ----------------------------------------------------------------------------------------------
HOUSING -- 4.0%
$ 285 Arkansas Development Finance Authority, SFM, (GNMA),
(AMT), 7.45%, 1/1/27 $ 296,654
245 Arkansas Development Finance Authority, SFM,
(GNMA/FNMA), (AMT), 5.00%, 1/1/29 251,502
785 Arkansas Development Finance Authority, SFM,
(GNMA/FNMA), (AMT), 6.70%, 7/1/27 815,623
485 North Little Rock, Residential Housing Facilities,
(Parkstone Place), 6.50%, 8/1/21 451,103
- ----------------------------------------------------------------------------------------------
$ 1,814,882
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 10.4%
$ 400 Arkansas Development Finance Authority, Industrial Facility
Revenue, (Potlatch Corp.), (AMT), 7.75%, 8/1/25 $ 447,356
2,000 Baxter, (Aeroquip Corp.), 5.80%, 10/1/13 2,308,560
750 Calhoun County, Solid Waste Disposal Revenue,
(Georgia-Pacific Corp.), (AMT), 6.375%, 11/1/26 754,125
250 Pine Bluff, Environmental Improvements Revenue,
(International Paper Co.), (AMT), 6.70%, 8/1/20 277,220
1,150 Puerto Rico Port Authority, (American Airlines), (AMT),
6.25%, 6/1/26 891,423
- ----------------------------------------------------------------------------------------------
$ 4,678,684
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 6.5%
$ 310 Arkansas State University, (Consolidated Building System),
(AMBAC), 5.10%, 4/1/24 $ 328,684
200 Arkansas State University, (Newport Campus), (AMBAC),
4.625%, 5/1/23 202,870
1,000 Pulaski Technical College, (State Tuition and Fee), (AMBAC),
4.80%, 3/1/28 1,024,550
750 University of Arkansas, (Fayetteville Campus), (FGIC),
5.00%, 12/1/32 784,928
500 University of Central Arkansas, (AMBAC), 6.125%, 4/1/26 553,140
- ----------------------------------------------------------------------------------------------
$ 2,894,172
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 5.1%
$ 250 North Little Rock, Electric System, (MBIA), 6.50%, 7/1/10 $ 305,940
1,000 North Little Rock, Electric System, (MBIA), 6.50%, 7/1/15 1,260,720
500 Puerto Rico Electric Power Authority, (FSA), Variable Rate,
7/1/29(1)(2) 574,540
135 Puerto Rico Electric Power Authority, DRIVERS, (FSA),
Variable Rate, 7/1/29(2)(3) 165,189
- ----------------------------------------------------------------------------------------------
$ 2,306,389
- ----------------------------------------------------------------------------------------------
INSURED-ESCROWED / PREREFUNDED -- 2.7%
$ 500 Harrison, Residential Housing Facility Board, Single Family
Mortgage, (FGIC), Escrowed to Maturity, 7.40%, 9/1/11 $ 644,555
500 Rogers, School District, (AMBAC), Prerefunded to 8/1/07,
5.00%, 2/1/27 555,910
- ----------------------------------------------------------------------------------------------
$ 1,200,465
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
62
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 8.8%
$ 500 Arkansas State College Savings, (FGIC), 0.00%, 6/1/17 $ 288,430
1,500 Benton, School District, (AMBAC), 4.50%, 2/1/28 1,488,870
500 Little Rock, School District, (FSA), 5.25%, 2/1/33 542,195
500 Puerto Rico, (FGIC), Variable Rate, 7/1/32(2)(3) 584,735
160 Puerto Rico, (MBIA), Variable Rate, 7/1/20(2)(3) 252,475
250 Springdale, School District, (AMBAC), 4.50%, 6/1/24 251,575
500 Valley View, School District, (AMBAC), 5.00%, 2/1/33 511,430
- ----------------------------------------------------------------------------------------------
$ 3,919,710
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 9.4%
$ 500 Arkansas Development Finance Authority, (Public Health
Laboratory), (AMBAC), 3.90%, 12/1/24 $ 501,310
500 Arkansas Development Finance Authority, (Public Health
Laboratory), (AMBAC), 5.00%, 12/1/18 550,880
2,000 Jonesboro, Residential Housing and Health Care Facilities
Board Hospital, (Saint Bernard Regional Medical Center),
(AMBAC), 5.90%, 7/1/16(4) 2,224,980
400 Saline County, Retirement Housing and Healthcare Facilities
Board, (Evan Lutheran Good Samaritan), (AMBAC),
5.80%, 5/1/11 429,336
500 Saline County, Retirement Housing and Healthcare Facilities
Board, (Evan Lutheran Good Samaritan), (AMBAC),
6.00%, 6/1/18 511,940
- ----------------------------------------------------------------------------------------------
$ 4,218,446
- ----------------------------------------------------------------------------------------------
INSURED-HOUSING -- 2.3%
$ 500 Arkansas State University, (Housing System), (FGIC),
4.75%, 3/1/24(5) $ 515,065
500 Arkansas State University, (Housing System), (FGIC),
5.00%, 3/1/34(5) 526,230
- ----------------------------------------------------------------------------------------------
$ 1,041,295
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 0.7%
$ 240 Puerto Rico Public Finance Corp., (AMBAC), Variable Rate,
12/1/19(2)(3) $ 331,802
- ----------------------------------------------------------------------------------------------
$ 331,802
- ----------------------------------------------------------------------------------------------
INSURED-OTHER REVENUE -- 1.2%
$ 500 Arkansas Development Finance Authority, (MT Magazine),
(FSA), 5.00%, 1/1/20 $ 543,090
- ----------------------------------------------------------------------------------------------
$ 543,090
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 0.5%
$ 200 Puerto Rico Highway and Transportation Authority, (FSA),
Variable Rate, 7/1/32(2)(3) $ 233,894
- ----------------------------------------------------------------------------------------------
$ 233,894
- ----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 9.0%
$ 1,250 Arkansas Community Water System, Public Water Authority,
(MBIA), 5.00%, 10/1/42 $ 1,296,163
665 Arkansas Community Water System, Public Water Authority,
(MBIA), 5.00%, 10/1/33 694,479
500 Conway, Water Revenue, (FGIC), 5.125%, 12/1/23 535,150
1,395 Fort Smith, Water and Sewer, (FSA), 5.00%, 10/1/23 1,485,326
- ----------------------------------------------------------------------------------------------
$ 4,011,118
- ----------------------------------------------------------------------------------------------
SPECIAL TAX REVENUE -- 6.4%
$ 250 Arkansas, (Federal Highway) Grant Anticipation Tax Revenue,
5.00%, 8/1/14 $ 282,218
2,000 Little Rock, Hotel and Restaurant Gross Receipts Tax,
7.375%, 8/1/15 2,564,000
- ----------------------------------------------------------------------------------------------
$ 2,846,218
- ----------------------------------------------------------------------------------------------
TRANSPORTATION -- 3.0%
$ 500 Northwest Arkansas Regional Airport Authority, (AMT),
5.00%, 2/1/18 $ 521,375
750 Northwest Arkansas Regional Airport Authority, (AMT),
7.625%, 2/1/27 805,515
- ----------------------------------------------------------------------------------------------
$ 1,326,890
- ----------------------------------------------------------------------------------------------
WATER AND SEWER -- 3.0%
$ 1,000 Arkansas Development Finance Authority, (Waste Water
System), 5.00%, 6/1/22(6) $ 1,058,880
250 Arkansas Development Finance Authority, (Waste Water
System), 5.50%, 12/1/19 294,318
- ----------------------------------------------------------------------------------------------
$ 1,353,198
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 101.5%
(IDENTIFIED COST $42,252,727) $ 45,455,505
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- (1.5)% $ (681,576)
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 44,773,929
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
See notes to financial statements
63
<Page>
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Insurance Association
The Portfolio invests primarily in debt securities issued by Arkansas
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 February 29, 2004, 45.5% 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 an
individual financial institution ranged from 7.8% to 20.8% 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 has been issued as a leveraged inverse floater bond.
(4) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(5) When-issued security.
(6) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
64
<Page>
GEORGIA MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 98.8%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
EDUCATION -- 2.7%
$ 1,500 Fulton County, Development Authority, (Georgia Technology
Foundation), 5.00%, 11/1/31 $ 1,567,980
- ----------------------------------------------------------------------------------------------
$ 1,567,980
- ----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 4.1%
$ 1,000 Georgia Municipal Electric Power Authority, 0.00%, 1/1/12 $ 693,620
1,000 Georgia Municipal Electric Power Authority, 8.25%, 1/1/11 1,313,040
665 Puerto Rico Electric Power Authority, 0.00%, 7/1/17 372,187
- ----------------------------------------------------------------------------------------------
$ 2,378,847
- ----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 1.8%
$ 800 Forsyth County, Hospital Authority, (Georgia Baptist Health
Care System), Escrowed to Maturity, 6.375%, 10/1/28 $ 1,014,576
- ----------------------------------------------------------------------------------------------
$ 1,014,576
- ----------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 3.8%
$ 300 Alpharetta, 6.50%, 5/1/10 $ 357,786
500 Georgia State, 6.30%, 3/1/08 583,695
1,000 Puerto Rico Aqueduct and Sewer Authority, 6.25%, 7/1/12 1,217,260
- ----------------------------------------------------------------------------------------------
$ 2,158,741
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 2.6%
$ 500 Baldwin County, Hospital Authority, (Oconee Regional
Medical Center), 5.375%, 12/1/28 $ 436,640
1,000 Gainesville and Hall County, Hospital Authority, (Northeast
Georgia Health System, Inc.), 5.50%, 5/15/31 1,037,930
- ----------------------------------------------------------------------------------------------
$ 1,474,570
- ----------------------------------------------------------------------------------------------
HOUSING -- 4.2%
$ 325 Atlanta Urban Residential Finance Authority, (New
Community John Hope), (AMT), 7.25%, 6/1/07 $ 327,792
815 Georgia Housing Finance Authority, (AMT),
5.85%, 12/1/28 855,505
600 Georgia Private Colleges and Universities Authority, Student
Housing Revenue, (Mercer Housing Corp.), 6.00%, 6/1/31 622,668
600 Multifamily Housing Pass Through Certificates (Laurenceville),
(AMT), 6.00%, 11/1/33 629,448
- ----------------------------------------------------------------------------------------------
$ 2,435,413
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 13.5%
$ 2,000 Albany Dougherty, Payroll Development Authority, Solid
Waste Disposal, (Proctor and Gamble),
(AMT), 5.20%, 5/15/28(1) $ 2,155,040
700 Cartersville, Development Authority, (Anheuser-Busch),
(AMT), 5.95%, 2/1/32 755,167
1,000 Cartersville, Development Authority, (Anheuser-Busch),
(AMT), 7.375%, 5/1/09 1,215,210
750 Effingham County, Solid Waste Disposal, (Fort James),
(AMT), 5.625%, 7/1/18 717,090
1,250 Puerto Rico Port Authority, (American Airlines), (AMT),
6.25%, 6/1/26 968,937
968 Savannah EDA, (Intercat-Savannah, Inc.), (AMT),
9.00%, 1/1/15 916,703
1,000 Vienna Water and Sewer, (Cargill), (AMT), 6.00%, 9/1/14 1,021,630
- ----------------------------------------------------------------------------------------------
$ 7,749,777
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 5.4%
$ 1,500 Fulton County, Development Authority, (Tuff Morehouse),
(AMBAC), 5.00%, 2/1/34 $ 1,564,020
1,500 Georgia Private Colleges and Universities Authority,
(Agnes Scott College), (MBIA), 4.75%, 6/1/28 1,523,940
- ----------------------------------------------------------------------------------------------
$ 3,087,960
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 6.4%
$ 3,100 Georgia Municipal Electric Power Authority, (MBIA),
5.50%, 1/1/20 $ 3,642,841
- ----------------------------------------------------------------------------------------------
$ 3,642,841
- ----------------------------------------------------------------------------------------------
INSURED-ESCROWED / PREREFUNDED -- 5.7%
$ 1,500 Atlanta Airport, (FGIC), Prerefunded to 1/1/10,
5.60%, 1/1/30 $ 1,771,035
1,320 Atlanta, Water and Sewer, (FGIC), Prerefunded to 5/1/09,
5.00%, 11/1/38 1,509,446
- ----------------------------------------------------------------------------------------------
$ 3,280,481
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 2.5%
$ 900 Puerto Rico, (FSA), Variable Rate, 7/1/27(2)(3) $ 1,161,225
160 Puerto Rico, (MBIA), Variable Rate, 7/1/20(2)(3) 252,475
- ----------------------------------------------------------------------------------------------
$ 1,413,700
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
65
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 2.7%
$ 1,000 Henry County, Hospital Authority Revenue, (Henry Medical
Center, Inc.), (AMBAC), 6.00%, 7/1/29 $ 1,155,020
400 Medical Center Hospital Authority, (Columbus Regional
Healthcare System), (MBIA), Variable Rate, 8/1/10(2)(3) 416,692
- ----------------------------------------------------------------------------------------------
$ 1,571,712
- ----------------------------------------------------------------------------------------------
INSURED-HOUSING -- 0.9%
$ 500 Bulloch County, Development Authority, (Georgia Southern
University ), (AMBAC), 4.75%, 8/1/28 $ 508,985
- ----------------------------------------------------------------------------------------------
$ 508,985
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 4.6%
$ 1,000 East Point Building Authority, (FGIC), 6.00%, 2/1/10 $ 1,023,950
1,000 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 6/1/26(2)(4) 1,080,920
400 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 12/1/19(2)(3) 553,004
- ----------------------------------------------------------------------------------------------
$ 2,657,874
- ----------------------------------------------------------------------------------------------
INSURED-SPECIAL TAX REVENUE -- 3.2%
$ 1,000 George L. Smith, (Georgia World Congress Center-Domed
Stadium), (MBIA), (AMT), 5.50%, 7/1/20 $ 1,086,060
700 Puerto Rico Infrastructure Financing Authority, (AMBAC),
Variable Rate, 7/1/28(3) 780,115
- ----------------------------------------------------------------------------------------------
$ 1,866,175
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 9.8%
$ 1,000 Metropolitan Atlanta Rapid Transit Authority,
(AMBAC), 6.25%, 7/1/11 $ 1,219,020
1,000 Metropolitan Atlanta Rapid Transit Authority, (AMBAC),
6.25%, 7/1/20 1,250,640
1,500 Metropolitan Atlanta Rapid Transit Authority, (MBIA),
Variable Rate, 7/1/20(2)(4) 1,766,565
750 Puerto Rico Highway and Transportation Authority,
(AMBAC), 0.00%, 7/1/18 420,188
300 Puerto Rico Highway and Transportation Authority,
(MBIA), 5.00%, 7/1/36 322,887
500 Puerto Rico Highway and Transportation Authority,
(MBIA), Variable Rate, 7/1/36(2)(3) 614,450
- ----------------------------------------------------------------------------------------------
$ 5,593,750
- ----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 12.2%
$ 1,180 Atlanta, Water and Sewer, (FGIC), 5.00%, 11/1/38 $ 1,219,318
660 Atlanta, Water and Sewer, (MBIA), 5.00%, 11/1/33 688,987
500 Atlanta, Water and Wastewater, (MBIA), 5.00%, 11/1/39 518,545
2,000 Augusta, Water and Sewer, (FSA), 5.00%, 10/1/32 2,094,940
500 Augusta, Water and Sewer, (FSA), 5.25%, 10/1/30 537,305
1,000 Henry County, Water and Sewer Authority, (FGIC),
5.625%, 2/1/30 1,121,150
750 South Fulton, Water & Sewer Authority, (MBIA),
5.00%, 1/1/33 785,715
- ----------------------------------------------------------------------------------------------
$ 6,965,960
- ----------------------------------------------------------------------------------------------
LEASE REVENUE / CERTIFICATES OF PARTICIPATION -- 3.4%
$ 2,300 Fulton County, Building Authority, Judicial Center,
0.00%, 1/1/10 $ 1,948,261
- ----------------------------------------------------------------------------------------------
$ 1,948,261
- ----------------------------------------------------------------------------------------------
SENIOR LIVING / LIFE CARE -- 1.9%
$ 1,385 De Kalb County, Private Hospital Authority, (Atlanta, Inc.),
8.50%, 3/1/25(5) $ 563,169
500 Fulton County, Residential Elderly Care Facility Authority,
(Canterbury Court), 6.30%, 10/1/24 522,290
- ----------------------------------------------------------------------------------------------
$ 1,085,459
- ----------------------------------------------------------------------------------------------
WATER AND SEWER -- 7.4%
$ 1,000 De Kalb County, Water and Sewer, 5.00%, 10/1/28 $ 1,038,560
1,000 De Kalb County, Water and Sewer, 5.125%, 10/1/31 1,052,070
1,000 Forsyth County, Water and Sewer Authority, 5.00%, 4/1/32 1,050,040
1,000 Gwinnett County, Water and Sewer Authority, 5.25%, 8/1/24 1,085,520
- ----------------------------------------------------------------------------------------------
$ 4,226,190
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 98.8%
(IDENTIFIED COST $51,291,056) $ 56,629,252
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 1.2% $ 668,808
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 57,298,060
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Insurance Association
The Portfolio invests primarily in debt securities issued by Georgia
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 February 29,
See notes to financial statements
66
<Page>
2004, 54.0% 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 an individual financial
institution ranged from 6.7% to 20.5% of total investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(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 has been issued as a leveraged inverse floater bond.
(4) Security has been issued as an inverse floater bond.
(5) The Portfolio is accruing only partial interest on this security.
See notes to financial statements
67
<Page>
KENTUCKY MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 97.9%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 4.4%
$ 3,500 Puerto Rico Electric Power Authority, 0.00%, 7/1/17 $ 1,958,880
1,000 Puerto Rico Electric Power Authority, 5.125%, 7/1/29 1,051,480
- ----------------------------------------------------------------------------------------------
$ 3,010,360
- ----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 6.8%
$ 1,000 Elsmmere, (Courtaulds Pkg, Inc.), Prerefunded to 4/1/05,
6.75%, 4/1/10 $ 1,079,720
1,200 Florence, Housing Facilities, (Blue Grass Housing),
Prerefunded to 7/1/07, 7.625%, 5/1/27 1,438,200
1,030 Kentucky, League of Cities Funding Trust, Certificates of
Participation, Prerefunded to 8/1/04, 6.15%, 8/1/13 1,073,404
545 Russell, Health Systems, Prerefunded to 7/1/06,
8.10%, 7/1/15 640,468
350 Russell, Health Systems, Prerefunded to 7/1/06,
8.10%, 7/1/15 402,440
- ----------------------------------------------------------------------------------------------
$ 4,634,232
- ----------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 4.3%
$ 1,465 Bowling Green, 5.30%, 6/1/19 $ 1,625,476
1,000 Lexington-Fayette Urban County, (County Detention Center),
4.75%, 5/1/20 1,041,190
250 Lexington-Fayette Urban County, (County Detention Center),
4.75%, 5/1/24 255,242
- ----------------------------------------------------------------------------------------------
$ 2,921,908
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 1.5%
$ 1,000 Kentucky Economic Development Finance Authority,
(Catholic Health), 5.00%, 12/1/27 $ 1,014,680
- ----------------------------------------------------------------------------------------------
$ 1,014,680
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 13.8%
$ 2,000 Ashland, Solid Waste Disposal, (Ashland Oil), (AMT),
7.125%, 2/1/22 $ 2,094,560
1,500 Hancock County, (Southwire Co.), (AMT), 7.75%, 7/1/25 1,516,875
1,000 Jefferson County, Pollution Control, (E.I. du Pont de Nemours),
6.30%, 7/1/12 1,033,840
600 Kenton County Airport, (Delta Airlines), (AMT),
6.125%, 2/1/22 513,042
250 Kenton County Airport, (Delta Airlines), (AMT),
7.50%, 2/1/12 249,185
1,500 Perry County, Solid Waste Disposal, (TJI International),
(AMT), 6.80%, 5/1/26 1,578,840
560 Powderly, (KMart Corp.), 6.90%, 3/1/07 550,670
1,820 Wickliffe, Solid Waste Disposal, (Westvaco Corp.),
(AMT), 6.375%, 4/1/26 1,872,198
- ----------------------------------------------------------------------------------------------
$ 9,409,210
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 6.3%
$ 1,000 Kentucky Economic Development Finance Authority,
(Centre College), (FSA), 5.00%, 4/1/32 $ 1,047,030
2,000 Lexington-Fayette Urban County, (University of Kentucky,
Alumni Association, Inc.), (MBIA), 5.00%, 11/1/18 2,173,380
1,000 University of Kentucky, University Consolidated Revenue,
(FGIC), 5.00%, 5/1/19 1,077,400
- ----------------------------------------------------------------------------------------------
$ 4,297,810
- ----------------------------------------------------------------------------------------------
INSURED-ESCROWED / PREREFUNDED -- 3.1%
$ 2,000 Louisville and Jefferson County, Metropolitan Sewer District
and Drainage System, (AMBAC), Prerefunded to 11/15/04,
6.75%, 5/15/25 $ 2,122,460
- ----------------------------------------------------------------------------------------------
$ 2,122,460
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 2.7%
$ 350 Puerto Rico General Obligation, (FSA),
Variable Rate, 7/1/27(1)(2) $ 451,588
200 Puerto Rico General Obligation, (MBIA),
Variable Rate, 7/1/20(1)(2) 315,594
1,000 Warren County, (Judicial Office Building and Parks),
(AMBAC), 5.20%, 9/1/29 1,059,120
- ----------------------------------------------------------------------------------------------
$ 1,826,302
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 6.4%
$ 850 Jefferson County, Health Facilities Authority,
(University Medical Center), (MBIA), 5.25%, 7/1/22 $ 906,483
11,775 Kentucky EDA, (Norton Healthcare, Inc.), (MBIA),
0.00%, 10/1/27 3,500,472
- ----------------------------------------------------------------------------------------------
$ 4,406,955
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 9.2%
$ 1,350 Hardin County, School District Finance Corp., School
Building, (FSA), 4.75%, 7/1/21 $ 1,412,060
1,000 Kentucky Property and Buildings Commission, (FSA),
5.00%, 8/1/21 1,063,350
1,000 Louisville, Parking Authority, (MBIA), 5.00%, 6/1/32 1,045,420
1,000 Puerto Rico Public Building Authority, (AMBAC),
5.50%, 7/1/21 1,188,360
1,000 Puerto Rico Public Building Authority, (XLCA),
5.50%, 7/1/21 1,182,810
</Table>
See notes to financial statements
68
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION (CONTINUED)
$ 300 Puerto Rico Public Finance Corp., (AMBAC), Variable Rate,
12/1/19(1)(2) $ 414,753
- ----------------------------------------------------------------------------------------------
$ 6,306,753
- ----------------------------------------------------------------------------------------------
INSURED-SPECIAL TAX REVENUE -- 1.9%
$ 250 Puerto Rico Infrastructure Financing Authority, (AMBAC),
Variable Rate, 7/1/07(1)(3) $ 269,075
1,000 Puerto Rico Infrastructure Financing Authority, (AMBAC),
5.00%, 7/1/28 1,038,150
- ----------------------------------------------------------------------------------------------
$ 1,307,225
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 17.2%
$ 3,000 Kenton County Airport, (MBIA), (AMT),
6.30%, 3/1/15(4) $ 3,385,680
1,195 Kenton County Airport, (MBIA), (AMT), 6.45%, 3/1/15 1,380,476
1,000 Kentucky EDA, (State Turnpike Revitalization), (FGIC),
0.00%, 1/1/10 845,610
1,000 Louisville and Jefferson County, Regional Airport Authority,
(MBIA), (AMT), 5.00%, 7/1/18 1,041,580
750 Louisville and Jefferson County, Regional Airport Authority,
(MBIA), (AMT), 5.00%, 7/1/25 768,165
5,000 Puerto Rico Highway and Transportation Authority, (AMBAC),
0.00%, 7/1/18 2,801,250
1,500 Puerto Rico Highway and Transportation Authority, (AMBAC),
5.00%, 7/1/28 1,562,250
- ----------------------------------------------------------------------------------------------
$ 11,785,011
- ----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 5.3%
$ 1,500 Boone-Florence Water Commission, Water Supply System,
(FGIC), 5.00%, 12/1/27 $ 1,579,455
1,000 Campbell and Kenton County, District No. 1, (FSA),
5.00%, 8/1/31 1,046,500
1,000 Louisville and Jefferson County, Metropolitan Sewer District
and Drainage System, (FGIC), 5.00%, 5/15/30 1,034,050
- ----------------------------------------------------------------------------------------------
$ 3,660,005
- ----------------------------------------------------------------------------------------------
LEASE REVENUE / CERTIFICATES OF PARTICIPATION -- 10.2%
$ 1,000 Jefferson County, (Capital Projects Corp.),
0.00%, 8/15/12 $ 741,740
4,990 Jefferson County, (Capital Projects Corp.), 0.00%, 8/15/15 3,112,163
1,000 Kenton County, (Public Properties Corp.), 5.00%, 3/1/29 1,023,690
2,000 Owensboro County, Airport Lease, (AMT), 5.875%, 6/1/15 2,069,620
- ----------------------------------------------------------------------------------------------
$ 6,947,213
- ----------------------------------------------------------------------------------------------
SENIOR LIVING / LIFE CARE -- 4.8%
$ 3,000 Kenton County, (Highland Terrace), (AMT),
FHA, 6.95%, 12/1/26 $ 3,287,550
- ----------------------------------------------------------------------------------------------
$ 3,287,550
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 97.9%
(IDENTIFIED COST $59,917,601) $ 66,937,674
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 2.1% $ 1,465,748
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 68,403,422
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Insurance Association
XLCA - XL Capital Assurance, Inc.
The Portfolio invests primarily in debt securities issued by Kentucky
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 February 29, 2004, 53.4% 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 an
individual financial institution ranged from 1.8% to 21.7% of total investments.
(1) 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.
(2) Security has been issued as a leveraged inverse floater bond.
(3) Security has been issued as an inverse floater bond.
(4) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
69
<Page>
LOUISIANA MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 100.8%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 3.9%
$ 595 Louisiana Public Facilities Authority, (General Health
Systems), 6.80%, 11/1/16 $ 608,025
500 Louisiana Public Facilities Authority, (Tuoro Infirmary),
5.625%, 8/15/29 511,395
- ----------------------------------------------------------------------------------------------
$ 1,119,420
- ----------------------------------------------------------------------------------------------
HOUSING -- 6.2%
$ 225 Louisiana HFA, Single Family, (GNMA), (AMT),
8.00%, 3/1/25 $ 232,805
1,160 Louisiana HFA, Single Family, (GNMA/FNMA),
0.00%, 6/1/27 332,711
390 Louisiana Public Facilities Authority, (Eden Point),
6.25%, 3/1/34 349,939
835 New Orleans Home Mortgage Authority, Single Family,
(GNMA/FNMA), (AMT), 6.30%, 6/1/28 863,674
- ----------------------------------------------------------------------------------------------
$ 1,779,129
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 5.4%
$ 475 Louisiana Environmental Facilities and Community
Development Authority, (Senior-Air Cargo),
(AMT), 6.65%, 1/1/25 $ 498,294
500 Saint Bernard Parish, (Mobil Oil), 5.90%, 11/1/26 529,665
500 South Louisiana Port Commission, (Cargill), 5.85%, 4/1/17 536,000
- ----------------------------------------------------------------------------------------------
$ 1,563,959
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 18.5%
$ 500 Lafayette Public Trust Financing Authority, (Ragin Cajun
Facility, Inc.), (MBIA), 5.00%, 10/1/32 $ 526,380
1,000 Louisiana Public Facilities Authority, (Dillard University),
(AMBAC), 5.30%, 8/1/26 1,071,130
750 Louisiana Public Facilities Authority, (Tulane University),
(AMBAC), 5.00%, 7/1/32 782,700
500 Louisiana Public Facilities Authority, (Tulane University),
(AMBAC), 5.00%, 2/15/26 520,820
1,100 Louisiana State University, (FGIC), 5.75%, 7/1/14 1,140,205
1,200 New Orleans, Finance Authority, (Xavier University),
(MBIA), 5.30%, 6/1/32 1,280,124
- ----------------------------------------------------------------------------------------------
$ 5,321,359
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 3.4%
$ 1,750 Puerto Rico Electric Power Authority, (MBIA),
0.00%, 7/1/17 $ 973,315
- ----------------------------------------------------------------------------------------------
$ 973,315
- ----------------------------------------------------------------------------------------------
INSURED-ESCROWED / PREREFUNDED -- 4.9%
$ 2,475 Jefferson Parish, Home Mortgage Authority, Single Family,
(FGIC), Escrowed to Maturity, 0.00%, 5/1/17(1) $ 1,411,022
- ----------------------------------------------------------------------------------------------
$ 1,411,022
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 16.0%
$ 250 Calcasieu Parish, School District, (FGIC), 5.25%, 5/1/20 $ 276,532
500 Louisiana, (FGIC), 5.00%, 11/15/20 538,900
2,250 New Orleans, (AMBAC), 0.00%, 9/1/15 1,400,715
2,400 New Orleans, (AMBAC), 0.00%, 9/1/16 1,412,904
335 Puerto Rico, (FGIC), Variable Rate, 7/1/32(2)(3) 391,772
300 Puerto Rico, (FSA), Variable Rate, 7/1/27(2)(3) 387,075
120 Puerto Rico, (MBIA), Variable Rate, 7/1/20(2)(3) 189,356
- ----------------------------------------------------------------------------------------------
$ 4,597,254
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 2.9%
$ 750 Terrebonne Parish, Hospital Service District No. 1
(Terrebonne General Medical Center), (AMBAC),
5.50%, 4/1/33 $ 820,733
- ----------------------------------------------------------------------------------------------
$ 820,733
- ----------------------------------------------------------------------------------------------
INSURED-INDUSTRIAL DEVELOPMENT REVENUE -- 4.5%
$ 1,250 Louisiana Environmental Facilities and Community
Development Authority, (BRCC Facility Corp.), (MBIA),
5.00%, 12/1/32 $ 1,301,738
- ----------------------------------------------------------------------------------------------
$ 1,301,738
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 4.5%
$ 500 Calcasieu Parish Public Trust Authority Student Lease,
(McNeese Student Housing), (MBIA), 5.25%, 5/1/33 $ 532,250
500 Louisiana Environmental Facilities and Community
Development Authority, (Jefferson Parking Garage),
(AMBAC), 5.00%, 9/1/31 518,525
180 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 12/1/19(2)(3) 248,852
- ----------------------------------------------------------------------------------------------
$ 1,299,627
- ----------------------------------------------------------------------------------------------
INSURED-OTHER REVENUE -- 4.5%
$ 500 Louisiana Environmental Facilities and Community
Development Authority, (Capital and Equipment Acquisition),
(AMBAC), 4.50%, 12/1/18 $ 530,220
700 Louisiana Environmental Facilities and Community
Development Authority, (Parking Facility Corp. Garage),
(AMBAC), 5.375%, 10/1/31 750,862
- ----------------------------------------------------------------------------------------------
$ 1,281,082
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
70
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-SPECIAL TAX REVENUE -- 9.5%
$ 750 Jefferson, District Sales Tax and Sales Tax Revenue,
(AMBAC), 5.25%, 12/1/22 $ 816,645
1,000 Louisiana Gas and Fuels Tax, (AMBAC), 5.00%, 6/1/32 1,043,300
450 Puerto Rico Infrastructure Financing Authority, (AMBAC),
Variable Rate, 7/1/07(2)(4) 484,335
350 Puerto Rico Infrastructure Financing Authority, (AMBAC),
Variable Rate, 7/1/28(3) 390,058
- ----------------------------------------------------------------------------------------------
$ 2,734,338
- ----------------------------------------------------------------------------------------------
OTHER REVENUE -- 4.8%
$ 350 Puerto Rico Infrastructure Financing Authority,
Variable Rate, 10/1/32(2)(3) $ 480,039
1,000 Tobacco Settlement Financing Corp., 5.875%, 5/15/39 887,010
- ----------------------------------------------------------------------------------------------
$ 1,367,049
- ----------------------------------------------------------------------------------------------
SENIOR LIVING / LIFE CARE -- 8.2%
$ 500 Louisiana HFA, (Saint Dominic Assisted Care Facility),
(GNMA), 6.85%, 9/1/25 $ 529,825
1,000 Louisiana HFA, (Saint Joseph's Manor Retirement Center),
(GNMA), 7.80%, 12/1/35 1,067,690
750 Louisiana PFA, (Glen Retirement System), 6.70%, 12/1/25 774,240
- ----------------------------------------------------------------------------------------------
$ 2,371,755
- ----------------------------------------------------------------------------------------------
TRANSPORTATION -- 3.6%
$ 1,000 Louisiana Offshore Terminal Authority, Deepwater Port
Revenue, (Loop, LLC), 5.20%, 10/1/18 $ 1,047,780
- ----------------------------------------------------------------------------------------------
$ 1,047,780
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 100.8%
(IDENTIFIED COST $26,742,781) $ 28,989,560
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- (0.8)% $ (238,096)
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 28,751,464
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Insurance Association
The Portfolio invests primarily in debt securities issued by Louisiana
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 February 29, 2004, 68.1% 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 an
individual financial institution ranged from 1.3% to 37.2% of total investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(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 has been issued as a leveraged inverse floater bond.
(4) Security has been issued as an inverse floater bond.
See notes to financial statements
71
<Page>
MARYLAND MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 99.0%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
COGENERATION -- 1.7%
$ 1,250 Maryland Energy Cogeneration, (AES Warrior Run),
(AMT), 7.40%, 9/1/19 $ 1,280,475
- ----------------------------------------------------------------------------------------------
$ 1,280,475
- ----------------------------------------------------------------------------------------------
EDUCATION -- 8.6%
$ 4,000 Maryland HEFA, (Johns Hopkins University),
5.00%, 7/1/32(1) $ 4,194,360
1,300 Maryland HEFA, (Maryland Institute College of Art),
5.50%, 6/1/32 1,350,687
500 Maryland HEFA, (Maryland Institute College of Art),
5.50%, 6/1/21 528,265
425 Westminster, Educational Facilities, (McDaniel College),
5.50%, 4/1/27 442,841
- ----------------------------------------------------------------------------------------------
$ 6,516,153
- ----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 5.0%
$ 1,500 Calvert, PCR, (Baltimore Gas and Electric),
5.55%, 7/15/14 $ 1,540,080
2,225 Prince George's County, PCR, (Potomac Electric),
6.375%, 1/15/23 2,268,632
- ----------------------------------------------------------------------------------------------
$ 3,808,712
- ----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 8.6%
$ 1,125 Baltimore, SFMR, (Inner Harbor), Escrowed to Maturity,
8.00%, 12/1/10 $ 1,496,069
250 Guam Power Authority, Prerefunded to 10/1/04,
6.625%, 10/1/14 263,430
4,000 Maryland HEFA, (Johns Hopkins University), Prerefunded to
7/1/09, 6.00%, 7/1/39 4,787,840
- ----------------------------------------------------------------------------------------------
$ 6,547,339
- ----------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 4.5%
$ 1,500 Anne Arundel County, 5.00%, 3/1/16 $ 1,673,220
1,000 Montgomery County, 5.25%, 10/1/19 1,123,050
1,100 Puerto Rico, 0.00%, 7/1/16 653,741
- ----------------------------------------------------------------------------------------------
$ 3,450,011
- ----------------------------------------------------------------------------------------------
HEALTH CARE-MISCELLANEOUS -- 1.8%
$ 1,330 Baltimore County, Economic Development Revenue,
(Revisions, Inc.), 8.50%, 8/15/25 $ 1,388,946
- ----------------------------------------------------------------------------------------------
$ 1,388,946
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 7.7%
$ 2,000 Maryland HEFA, (Johns Hopkins Hospital),
5.125%, 11/15/34 $ 2,093,360
1,000 Maryland HEFA, (Kennedy Krieger Children's Hospital),
5.50%, 7/1/33 1,033,500
800 Maryland HEFA, (University of Maryland Medical System),
6.75%, 7/1/30 912,920
1,355 Prince George's County, (Greater SouthEast Healthcare
System), 6.375%, 1/1/13(2) 474,250
3,800 Prince George's County, (Greater SouthEast Healthcare
System), 6.375%, 1/1/23(2) 1,330,000
- ----------------------------------------------------------------------------------------------
$ 5,844,030
- ----------------------------------------------------------------------------------------------
HOUSING -- 3.1%
$ 1,000 Maryland Community Development Administration
Multifamily, FHA, (AMT), 6.70%, 5/15/36 $ 1,039,430
1,000 Montgomery County, Housing Opportunities Commission,
SFMR, 0.00%, 7/1/28 265,580
1,000 Prince George's County, Housing Authority, (Langely Gardens),
(AMT), 5.875%, 2/20/39 1,063,250
- ----------------------------------------------------------------------------------------------
$ 2,368,260
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 3.4%
$ 1,350 Allegany, PCR, (Westvaco Corp.), 6.20%, 1/1/08 $ 1,389,568
1,000 Maryland EDA, (AFCO Cargo), (AMT), 6.50%, 7/1/24 935,810
240 Maryland EDA, (Air Cargo), (AMT), 7.34%, 7/1/24 244,474
- ----------------------------------------------------------------------------------------------
$ 2,569,852
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 8.1%
$ 460 Maryland HEFA, (College Of Notre Dame), (MBIA),
5.30%, 10/1/18 $ 538,145
1,000 Maryland HEFA, (Loyola College), (MBIA),
5.00%, 10/1/39 1,038,620
2,850 Maryland HEFA, (Loyola College), (MBIA),
5.375%, 10/1/26 3,106,215
1,200 Morgan State University, Academic and Facilities, (MBIA),
6.10%, 7/1/20 1,493,724
- ----------------------------------------------------------------------------------------------
$ 6,176,704
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 4.6%
$ 1,500 Puerto Rico Electric Power Authority, (FSA), 5.125%, 7/1/26 $ 1,619,220
1,550 Puerto Rico Electric Power Authority, (MBIA),
Variable Rate, 7/1/29(3)(4) 1,896,611
- ----------------------------------------------------------------------------------------------
$ 3,515,831
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
72
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-ESCROWED / PREREFUNDED -- 8.6%
$ 1,175 Maryland HEFA, (Good Samaritan Hospital), (AMBAC),
Escrowed to Maturity, 5.75%, 7/1/19 $ 1,203,364
3,000 Maryland HEFA, (Helix Health Issue), (AMBAC), Escrowed
to Maturity, 5.00%, 7/1/27 3,267,720
2,000 Maryland Transportation Authority, Baltimore-Washington
International Airport, (FGIC), Prerefunded to 7/1/04,
(AMT), 6.25%, 7/1/14 2,073,940
- ----------------------------------------------------------------------------------------------
$ 6,545,024
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 2.9%
$ 500 Puerto Rico, (FSA), 5.125%, 7/1/30 $ 531,150
350 Puerto Rico, (FSA), Variable Rate, 7/1/27(3)(4) 451,588
1,000 Puerto Rico, (MBIA), 5.50%, 7/1/29 1,184,940
- ----------------------------------------------------------------------------------------------
$ 2,167,678
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 9.6%
$ 1,400 Maryland HEFA, (Anne Arundel Health System), (FSA),
5.00%, 7/1/29 $ 1,488,886
1,280 Maryland HEFA, (Medlantic), (AMBAC), Variable Rate,
8/15/38(3)(4) 1,749,043
660 Maryland HEFA, (Medlantic/Helix Issue), (AMBAC),
5.25%, 8/15/38 740,612
3,150 Puerto Rico ITEM & EC, (Auxilio Mutuo Obligated Group),
(MBIA), 6.25%, 7/1/24 3,328,070
- ----------------------------------------------------------------------------------------------
$ 7,306,611
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 0.9%
$ 500 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 12/1/19(3)(4) $ 691,255
- ----------------------------------------------------------------------------------------------
$ 691,255
- ----------------------------------------------------------------------------------------------
INSURED-SPECIAL TAX REVENUE -- 1.4%
$ 1,000 Puerto Rico Infrastructure Financing Authority, (AMBAC),
Variable Rate, 7/1/07(3)(5) $ 1,076,300
- ----------------------------------------------------------------------------------------------
$ 1,076,300
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 5.5%
$ 1,500 Maryland Transportation Authority, Baltimore-Washington
International Airport, (AMBAC), 5.00%, 3/1/27 $ 1,589,880
1,500 Maryland Transportation Authority, Baltimore-Washington
International Airport, (AMBAC), (AMT), 5.25%, 3/1/27 1,594,095
500 Puerto Rico Highway and Transportation Authority,
(MBIA), 5.50%, 7/1/36 581,980
335 Puerto Rico Highway and Transportation Authority,
(MBIA), Variable Rate, 1/1/19(3)(4) 447,379
- ----------------------------------------------------------------------------------------------
$ 4,213,334
- ----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 8.1%
$ 1,500 Baltimore, (Water Projects), (FGIC), 5.00%, 7/1/23 $ 1,602,045
1,000 Baltimore, (Water Projects), (FGIC), 5.125%, 7/1/42 1,054,910
1,000 Baltimore, Wastewater, (FGIC), 5.00%, 7/1/22 1,106,310
2,000 Baltimore, Wastewater, (MBIA), 5.65%, 7/1/20 2,357,280
- ----------------------------------------------------------------------------------------------
$ 6,120,545
- ----------------------------------------------------------------------------------------------
OTHER REVENUE -- 2.5%
$ 750 Maryland HEFA, (Board of Child Care), 5.375%, 7/1/32 $ 786,675
1,000 Maryland HEFA, (Board of Child Care), 5.625%, 7/1/22 1,085,810
- ----------------------------------------------------------------------------------------------
$ 1,872,485
- ----------------------------------------------------------------------------------------------
SPECIAL TAX REVENUE -- 1.8%
$ 500 Baltimore, (Strathdale Manor), 7.00%, 7/1/33 $ 513,065
800 Frederick County, Urbana Community Development
Authority, 6.625%, 7/1/25 833,976
- ----------------------------------------------------------------------------------------------
$ 1,347,041
- ----------------------------------------------------------------------------------------------
WATER AND SEWER -- 0.6%
$ 480 Maryland Water Quality Financing Administration Revolving
Loan Fund, 6.55%, 9/1/14 $ 484,531
- ----------------------------------------------------------------------------------------------
$ 484,531
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 99.0%
(IDENTIFIED COST $72,672,445) $ 75,291,117
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 1.0% $ 780,622
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 76,071,739
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Insurance Association
The Portfolio invests primarily in debt securities issued by Maryland
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
See notes to financial statements
73
<Page>
February 29, 2004, 50.2% 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 an individual
financial institution ranged from 5.4% to 21.2% of total investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(2) Non-income producing security.
(3) 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.
(4) Security has been issued as a leveraged inverse floater bond.
(5) Security has been issued as an inverse floater bond.
See notes to financial statements
74
<Page>
MISSOURI MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 97.1%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 5.8%
$ 1,000 Lake of the Ozarks, (Community Bridge Corp.), Prerefunded
to 12/1/06, 6.40%, 12/1/25 $ 1,155,690
1,005 Missouri HEFA, (Lake of the Ozarks General Hospital),
Prerefunded to 2/15/06, 6.50%, 2/15/21 1,123,952
1,000 Saint Louis County, Mortgage Revenue, (GNMA), (AMT),
Escrowed to Maturity, 5.40%, 1/1/16 1,150,900
- ----------------------------------------------------------------------------------------------
$ 3,430,542
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 13.2%
$ 1,950 Missouri HEFA, (Barnes Jewish Christian),
5.25%, 5/15/14 $ 2,198,898
1,500 Missouri HEFA, (Childrens Mercy Hospital), 5.30%, 5/15/28 1,529,685
1,000 Missouri HEFA, (Freeman Health Systems), 5.25%, 2/15/18 1,015,570
1,000 Missouri HEFA, (Jefferson Memorial Hospital),
6.80%, 5/15/25 1,034,150
495 Missouri HEFA, (Lake of the Ozarks General Hospital),
6.50%, 2/15/21 516,909
250 Missouri HEFA, (Lake Regional Health System),
5.70%, 2/15/34 261,502
1,250 West Plains IDA, (Ozarks Medical Center), 5.65%, 11/15/22 1,196,462
- ----------------------------------------------------------------------------------------------
$ 7,753,176
- ----------------------------------------------------------------------------------------------
HOUSING -- 2.4%
$ 960 Jefferson County IDA, Multifamily, (Riverview Bend
Apartments), (AMT), 6.75%, 11/1/29 $ 919,344
225 Missouri Housing Development Authority, SFMR, (GNMA),
(AMT), 6.45%, 9/1/27 236,605
125 Missouri Housing Development Authority, SFMR, (GNMA),
(AMT), 6.75%, 6/1/24 125,561
145 Missouri Housing Development Authority, SFMR, (GNMA),
(AMT), 7.25%, 9/1/26 146,972
- ----------------------------------------------------------------------------------------------
$ 1,428,482
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 8.2%
$ 825 Jefferson County, (Kmart Corp.), 6.40%, 8/1/08 $ 702,199
650 Kansas City IDA, (Airline Cargo Facilities), (AMT),
8.50%, 1/1/17 680,199
1,000 Missouri Development Finance Authority, Solid Waste Disposal,
(Proctor and Gamble Paper Products), (AMT),
5.20%, 3/15/29 1,086,310
1,200 Missouri Environmental Improvement and Energy
Resources Authority, (American Cyanamid), 5.80%, 9/1/09 1,310,100
1,000 Saint Louis, IDA, (Anheuser-Busch), (AMT),
5.875%, 11/1/26 1,041,680
- ----------------------------------------------------------------------------------------------
$ 4,820,488
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 1.7%
$ 1,000 Missouri HEFA, (St. Louis University High School),
(AMBAC), 4.75%, 10/1/24 $ 1,016,920
- ----------------------------------------------------------------------------------------------
$ 1,016,920
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 6.9%
$ 2,250 Missouri Environmental Improvement and Energy Resources
Authority, (Union Electric), (AMBAC), (AMT),
5.45%, 10/1/28 $ 2,383,065
1,000 Puerto Rico Electric Power Authority, (MBIA),
5.00%, 7/1/32(1) 1,062,050
400 Puerto Rico Electric Power Authority, (MBIA),
Variable Rate, 7/1/16(2)(3) 638,176
- ----------------------------------------------------------------------------------------------
$ 4,083,291
- ----------------------------------------------------------------------------------------------
INSURED-ESCROWED / PREREFUNDED -- 0.9%
$ 575 Missouri HEFA, (Saint Louis Children's Hospital), (MBIA),
Escrowed to Maturity, 0.00%, 5/15/08 $ 521,836
- ----------------------------------------------------------------------------------------------
$ 521,836
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 7.6%
$ 2,000 Puerto Rico General Obligation, (FGIC), 5.00%, 7/1/32 $ 2,112,980
900 Puerto Rico, (FSA), Variable Rate, 7/1/27(2)(3) 1,161,225
2,000 Saint Charles County, (Francis Howell School District),
(FGIC), 0.00%, 3/1/16 1,224,020
- ----------------------------------------------------------------------------------------------
$ 4,498,225
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 10.3%
$ 9,500 Missouri HEFA, (Lester Cox Medical Center),
(MBIA), 0.00%, 9/1/20 $ 4,461,770
1,500 North Kansas City, (North Kansas City Memorial Hospital),
(FSA), 5.125%, 11/15/33 1,594,530
- ----------------------------------------------------------------------------------------------
$ 6,056,300
- ----------------------------------------------------------------------------------------------
INSURED-HOUSING -- 2.7%
$ 1,500 SCA, MFMR Receipts, Springfield, (FSA), 7.10%, 1/1/30 $ 1,558,215
- ----------------------------------------------------------------------------------------------
$ 1,558,215
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
75
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE /
CERTIFICATES OF PARTICIPATION -- 9.4%
$ 1,000 Jackson County, Leasehold Revenue, (Truman Sports),
(AMBAC), 0.00%, 12/1/20 $ 461,280
2,000 Jackson County, Leasehold Revenue, (Truman Sports),
(MBIA), 5.00%, 12/1/27 2,104,300
300 Puerto Rico Public Building Authority, (CIFG),
Variable Rate, 7/1/36(2)(3) 357,546
1,000 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 6/1/26(2)(4) 1,080,920
400 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 12/1/19(2)(3) 553,004
2,000 Saint Louis IDA, (Convention Center Hotel), (AMBAC),
0.00%, 7/15/19 1,001,040
- ----------------------------------------------------------------------------------------------
$ 5,558,090
- ----------------------------------------------------------------------------------------------
INSURED-OTHER REVENUE -- 2.7%
$ 750 Missouri Development Finance Authority, Cultural Facility,
(Nelson Gallery Foundation), (MBIA), 5.00%, 12/1/30 $ 784,035
750 Missouri Development Finance Authority, Cultural Facility,
(Nelson Gallery Foundation), (MBIA), 5.25%, 12/1/22 816,780
- ----------------------------------------------------------------------------------------------
$ 1,600,815
- ----------------------------------------------------------------------------------------------
INSURED-SPECIAL TAX REVENUE -- 7.1%
$ 1,750 Bi-State Development Agency, Illinois Metropolitan District,
(Metrolink Cross County), (FSA), 5.00%, 10/1/32 $ 1,842,313
1,500 Bi-State Development Agency, Illinois Metropolitan District,
(Saint Clair County Metrolink Extension), (MBIA),
5.00%, 7/1/28 1,558,770
700 Puerto Rico Infrastructure Financing Authority, (AMBAC),
Variable Rate, 7/1/28(3) 780,115
- ----------------------------------------------------------------------------------------------
$ 4,181,198
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 3.4%
$ 250 Puerto Rico Highway and Transportation Authority,
(FSA), 5.00%, 7/1/32 $ 264,123
500 Puerto Rico Highway and Transportation Authority,
(MBIA), Variable Rate, 1/1/19(2)(3) 667,730
910 Saint Louis Airport, (Lambert International Airport),
(FGIC), (AMT), 6.00%, 7/1/14 1,087,186
- ----------------------------------------------------------------------------------------------
$ 2,019,039
- ----------------------------------------------------------------------------------------------
OTHER REVENUE -- 0.9%
$ 500 Saint Louis IDA, (Saint Louis Science Center),
6.40%, 11/1/19 $ 507,855
- ----------------------------------------------------------------------------------------------
$ 507,855
- ----------------------------------------------------------------------------------------------
POOLED LOANS -- 4.8%
$ 2,750 Missouri Higher Education Loan Authority, Student Loan,
(AMT), 5.45%, 2/15/09 $ 2,809,290
- ----------------------------------------------------------------------------------------------
$ 2,809,290
- ----------------------------------------------------------------------------------------------
SENIOR LIVING / LIFE CARE -- 7.0%
$ 1,000 Kansas City IDR, (Kingswood Manor), 5.80%, 11/15/17 $ 921,640
500 Lees Summit IDA, Health Facility, (John Knox Village),
5.70%, 8/15/22 529,415
1,500 Missouri HEFA, (Lutheran Senior Services), 6.375%, 2/1/27 1,563,105
1,000 Saint Louis County IDA, Health Facilities Revenue,
(Jewish Center), 5.50%, 2/20/36 1,072,430
- ----------------------------------------------------------------------------------------------
$ 4,086,590
- ----------------------------------------------------------------------------------------------
WATER AND SEWER -- 2.1%
$ 540 Missouri Environmental Improvement and Energy Resources
Authority, (Revolving Fund Program), 7.20%, 7/1/16 $ 562,291
1,000 Missouri Environmental Improvement and Energy Resources
Authority, (Revolving Fund Program), Water Pollution Control,
0.00%, 1/1/14 683,700
- ----------------------------------------------------------------------------------------------
$ 1,245,991
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 97.1%
(IDENTIFIED COST $51,580,635) $ 57,176,343
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 2.9% $ 1,724,213
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 58,900,556
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
CIFG - CDC IXIS Financial Guaranty North America, Inc.
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association (Ginnie Mae)
MBIA - Municipal Bond Insurance Association
The Portfolio invests primarily in debt securities issued by Missouri
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 February 29, 2004, 54.4% 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 an
individual financial institution ranged from 0.6% to 22.1% of total investments.
See notes to financial statements
76
<Page>
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(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 has been issued as a leveraged inverse floater bond.
(4) Security has been issued as an inverse floater bond.
See notes to financial statements
77
<Page>
NORTH CAROLINA MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 99.2%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
EDUCATION -- 10.4%
$ 2,950 North Carolina Educational Facilities Finance Agency,
(Duke University), 5.125%, 10/1/41 $ 3,078,177
300 North Carolina Educational Facilities Finance Agency,
(High Point University), 5.125%, 9/1/21 313,302
8,410 University of North Carolina at Chapel Hill, 0.00%, 8/1/17 4,833,143
1,980 University of North Carolina at Chapel Hill, 0.00%, 8/1/21 896,287
- ----------------------------------------------------------------------------------------------
$ 9,120,909
- ----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 20.1%
$ 1,015 Chatham County Industrial Facilities and Pollution,
(Carolina Power and Light), 6.30%, 6/15/14 $ 1,034,041
5,000 North Carolina Eastern Municipal Power Agency,
6.125%, 1/1/09 5,681,300
1,250 North Carolina Eastern Municipal Power Agency,
6.75%, 1/1/26 1,402,325
3,500 North Carolina Municipal Power Agency, (Catawba),
6.50%, 1/1/20 3,933,790
2,000 Puerto Rico Electric Power Authority, 0.00%, 7/1/17 1,112,360
2,000 Puerto Rico Electric Power Authority, 0.00%, 7/1/17 1,119,360
2,000 Puerto Rico Electric Power Authority,
Variable Rate, 7/1/29(1)(2) 2,205,920
1,000 Wake County, Industrial Facilities and Pollution Control
Financing Authority, (Carolina Power and Light Co.),
5.375%, 2/1/17 1,091,000
- ----------------------------------------------------------------------------------------------
$ 17,580,096
- ----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 14.0%
$ 1,500 Charlotte, Water and Sewer, Prerefunded to 6/1/10,
5.25%, 6/1/25 $ 1,756,380
3,410 North Carolina Eastern Municipal Power Agency, Escrowed
to Maturity, 4.00%, 1/1/18 3,499,410
2,210 North Carolina Eastern Municipal Power Agency, Escrowed
to Maturity, 5.00%, 1/1/17 2,513,654
440 North Carolina Eastern Municipal Power Agency, Escrowed
to Maturity, 5.00%, 1/1/21 487,749
1,500 North Carolina Medical Care Commission, (Annie Penn
Memorial Hospital), Prerefunded to 1/1/15,
5.375%, 1/1/22 1,711,170
2,000 Winston-Salem, Water and Sewer System, Prerefunded to
6/1/11, 5.125%, 6/1/28 2,330,480
- ----------------------------------------------------------------------------------------------
$ 12,298,843
- ----------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 4.1%
$ 1,000 Charlotte, 5.00%, 7/1/29 $ 1,057,680
1,000 Charlotte, 5.60%, 6/1/20 1,152,890
1,000 New Hanover County, 5.75%, 11/1/17 1,180,770
400 North Carolina, Variable Rate, 3/1/28(1)(2) 227,724
- ----------------------------------------------------------------------------------------------
$ 3,619,064
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 9.0%
$ 1,750 Charlotte-Mecklenberg Hospital Authority, 5.00%, 1/15/31 $ 1,795,185
3,400 North Carolina Medical Care Commission, (Duke University
Hospital), 0.00%, 6/1/09 2,808,026
1,000 North Carolina Medical Care Commission, (Gaston Health
Care), 5.00%, 2/15/29 1,008,960
500 North Carolina Medical Care Commission, (Halifax Regional
Medical Center), 5.00%, 8/15/24 478,080
250 North Carolina Medical Care Commission, (Novant
Health, Inc.), 5.00%, 11/1/20 266,678
1,000 North Carolina Medical Care Commission, (Southeastern
Regional Medical Center), 5.375%, 6/1/32 1,032,310
500 North Carolina Medical Care Commission, (Union Regional
Medical Center), 5.375%, 1/1/32 515,445
- ----------------------------------------------------------------------------------------------
$ 7,904,684
- ----------------------------------------------------------------------------------------------
HOUSING -- 3.4%
$ 1,400 Charlotte Housing Authority, (Double Oaks), FHA, (FNMA),
7.35%, 5/15/26 $ 1,504,538
285 Guam Housing Corp., Single Family, (AMT), 5.75%, 9/1/31 325,154
1,055 North Carolina HFA, MFMR, (AMT), 6.45%, 9/1/27 1,101,863
970 Raleigh Housing Authority, Multifamily, (Cedar Point),
7.00%, 11/1/30(3) 99,425
- ----------------------------------------------------------------------------------------------
$ 3,030,980
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 1.1%
$ 850 Robeson County, Industrial Facilities and Pollution Control
Financing Authority, (Campbell Soup), 6.40%, 12/1/06 $ 959,574
- ----------------------------------------------------------------------------------------------
$ 959,574
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 5.5%
$ 1,375 East Carolina University, (AMBAC), 5.25%, 11/1/21 $ 1,506,821
1,320 North Carolina Educational Facilities Finance Agency,
(Johnson & Wales University), (XLCA), 5.00%, 4/1/33 1,379,281
1,900 University of North Carolina, (MBIA), 4.50%, 10/1/18(4) 1,964,600
- ----------------------------------------------------------------------------------------------
$ 4,850,702
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 1.7%
$ 1,500 North Carolina Eastern Municipal Power Agency, (FSA),
Variable Rate, 1/1/19(1)(2) $ 1,511,055
- ----------------------------------------------------------------------------------------------
$ 1,511,055
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
78
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 4.2%
$ 1,000 Puerto Rico Commonwealth, (FGIC), 5.50%, 7/1/22 $ 1,184,230
280 Puerto Rico General Obligation, (MBIA),
Variable Rate, 7/1/20(2)(5) 441,832
945 Smithville Township, Brunswick County, (MBIA),
5.00%, 6/1/23 1,016,177
995 Smithville Township, Brunswick County, (MBIA),
5.00%, 6/1/24 1,065,317
- ----------------------------------------------------------------------------------------------
$ 3,707,556
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 5.3%
$ 500 Cumberland County Hospital, (MBIA), 0.00%, 10/1/09 $ 430,335
1,200 North Carolina Medical Care Commission, (Betsy Johnson),
(FSA), 5.375%, 10/1/24 1,317,816
935 North Carolina Medical Care Commission, (Memorial
Mission Hospital), (FSA), 0.00%, 10/1/06 895,281
1,000 North Carolina Medical Care Commission, (Wakemed),
(AMBAC), 5.00%, 10/1/32 1,046,010
1,500 North Carolina Medical Care Commission, (Wilson
Memorial Hospital), (AMBAC), 0.00%, 11/1/15 934,875
- ----------------------------------------------------------------------------------------------
$ 4,624,317
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 0.7%
$ 420 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 12/1/19(2)(5) $ 580,654
- ----------------------------------------------------------------------------------------------
$ 580,654
- ----------------------------------------------------------------------------------------------
INSURED-SPECIAL TAX REVENUE -- 1.0%
$ 800 Puerto Rico Infrastructure Financing Authority, (AMBAC),
Variable Rate, 7/1/07(1)(2) $ 861,040
- ----------------------------------------------------------------------------------------------
$ 861,040
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 4.4%
$ 1,375 Puerto Rico Highway and Transportation Authority, (MBIA),
5.50%, 7/1/36 $ 1,600,445
1,000 Puerto Rico Highway and Transportation Authority, (MBIA),
Variable Rate, 7/1/36(2)(5) 1,228,900
1,000 Raleigh Durham, Airport Authority, (FGIC), 5.00%, 11/1/31 1,040,430
- ----------------------------------------------------------------------------------------------
$ 3,869,775
- ----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 4.0%
$ 1,745 Broad River, Water Authority Water System, (MBIA),
5.375%, 6/1/26 $ 1,898,228
1,500 Kannapolis, Water and Sewer, (FSA), (AMT), 5.25%, 2/1/26 1,583,610
- ----------------------------------------------------------------------------------------------
$ 3,481,838
- ----------------------------------------------------------------------------------------------
LEASE REVENUE / CERTIFICATES OF PARTICIPATION -- 3.0%
$ 1,000 Charlotte, (Government Facilities), 5.00%, 6/1/28 $ 1,045,480
1,500 Charlotte, (Government Facilities), 5.00%, 6/1/33 1,563,690
- ----------------------------------------------------------------------------------------------
$ 2,609,170
- ----------------------------------------------------------------------------------------------
OTHER REVENUE -- 1.6%
$ 1,000 Puerto Rico Infrastructure Financing Authority,
Variable Rate, 10/1/34(2)(5) $ 1,371,540
- ----------------------------------------------------------------------------------------------
$ 1,371,540
- ----------------------------------------------------------------------------------------------
WATER AND SEWER -- 5.7%
$ 1,700 Charlotte, Storm Water, 5.00%, 6/1/25 $ 1,795,999
2,975 Charlotte, Water and Sewer, 5.125%, 6/1/26 3,164,805
- ----------------------------------------------------------------------------------------------
$ 4,960,804
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 99.2%
(IDENTIFIED COST $79,206,668) $ 86,942,601
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 0.8% $ 695,385
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 87,637,986
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
FGIC - Financial Guaranty Insurance Company
FHA - Federal Housing Authority
FNMA - Federal National Mortgage Association (Fannie Mae)
FSA - Financial Security Assurance, Inc.
HFA - Housing Facilities Authority
MBIA - Municipal Bond Insurance Association
MFMR - Multi Family Mortgage Revenue
XLCA - XL Capital Assurance, Inc.
The Portfolio invests primarily in debt securities issued by North Carolina
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 February 29, 2004, 27.0% of the securities in the portfolio of
See notes to financial statements
79
<Page>
investments are backed by bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentage insured by an
individual financial institution ranged from 1.6% to 11.1% 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) Non-income producing security.
(4) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(5) Security has been issued as a leveraged inverse floater bond.
See notes to financial statements
80
<Page>
OREGON MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 97.4%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
COGENERATION -- 2.4%
$ 2,000 Western Generation Agency, (Wauna Cogeneration),
(AMT), 7.40%, 1/1/16 $ 2,047,780
- ----------------------------------------------------------------------------------------------
$ 2,047,780
- ----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 3.1%
$ 1,000 Northern Wasco County, (Bonneville Power Administration),
5.20%, 12/1/24 $ 1,022,550
1,000 Port of Morrow, Pollution Control, (Portland General Electric),
5.20%, 5/1/33 1,053,890
1,000 Puerto Rico Electric Power Authority, 0.00%, 7/1/17 559,680
- ----------------------------------------------------------------------------------------------
$ 2,636,120
- ----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 2.7%
$ 2,000 Medford, Rogue Valley Memorial Hospital, Escrowed to
Maturity, 6.25%, 12/1/07 $ 2,305,700
- ----------------------------------------------------------------------------------------------
$ 2,305,700
- ----------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 15.2%
$ 1,565 Oregon Board of Higher Education, 0.00%, 8/1/20 $ 741,387
1,000 Oregon Board of Higher Education, 5.00%, 8/1/22 1,053,990
4,425 Oregon Elderly and Disabled Housing, (AMT), 5.65%, 8/1/26 4,526,023
1,680 Oregon Veterans Welfare, 5.50%, 12/1/42 1,760,422
705 Oregon Veterans Welfare, 5.90%, 10/1/17 747,638
1,250 Portland, Community College District, 5.00%, 6/1/21 1,325,187
4,850 Puerto Rico, 0.00%, 7/1/17 2,734,721
- ----------------------------------------------------------------------------------------------
$ 12,889,368
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 4.5%
$ 2,105 Hood River County, Health Facilities Authority, Elderly
Housing, (Down Manor), 6.50%, 1/1/17 $ 2,227,974
1,500 Umatilla County, Hospital Facility Authority, (Catholic
Health Initiatives), 5.50%, 3/1/32 1,608,600
- ----------------------------------------------------------------------------------------------
$ 3,836,574
- ----------------------------------------------------------------------------------------------
HOUSING -- 18.8%
$ 970 Oregon Health Authority, (Trillium Affordable Housing),
(AMT), 6.75%, 2/15/29 $ 886,919
750 Oregon Housing and Community Services Department,
MFMR, (AMT), 5.70%, 7/1/29 780,862
1,500 Oregon Housing and Community Services Department,
MFMR, (AMT), 6.20%, 7/1/28 1,570,650
1,130 Oregon Housing and Community Services Department,
SFMR, (AMT), 6.20%, 7/1/27 1,183,483
905 Oregon Housing and Community Services Department, SFMR,
(AMT), 6.40%, 7/1/26 939,435
975 Oregon Housing and Community Services Department, SFMR,
(AMT), 6.45%, 7/1/26 1,012,547
3,710 Portland Housing Authority, MFMR, (Berry Ridge), (AMT),
6.30%, 5/1/29 3,872,572
2,875 Portland Housing Authority, MFMR, (Cherry Blossom),
(AMT), 6.20%, 12/20/36 3,046,206
1,000 Portland Housing Authority, MFMR, (Village Court),
6.00%, 1/1/27 1,120,510
1,500 Washington County Housing Authority, MFMR, (Bethany
Meadows), (AMT), 5.85%, 9/1/27 1,560,165
- ----------------------------------------------------------------------------------------------
$ 15,973,349
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 9.8%
$ 500 Oregon EDA, (Georgia-Pacific), (AMT), 5.70%, 12/1/25 $ 462,450
3,500 Port of Astoria, PCR, (James River Corp.), 6.55%, 2/1/15 3,512,530
835 Port of Portland, (North Portland Crown Zellerbach Corp.),
6.125%, 5/15/08 839,634
2,250 Port of Portland, Special Obligation Revenue Bonds,
(Delta Airlines, Inc.), (AMT), 6.20%, 9/1/22 1,910,115
1,250 Puerto Rico Port Authority, (American Airlines), (AMT),
6.25%, 6/1/26 968,938
820 Puerto Rico Port Authority, (American Airlines), (AMT),
6.30%, 6/1/23 644,012
- ----------------------------------------------------------------------------------------------
$ 8,337,679
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 6.3%
$ 4,850 Oregon Health Science University, (MBIA), 0.00%, 7/1/21 $ 2,196,323
1,500 Oregon Health Science University, (MBIA), 5.00%, 7/1/32 1,569,750
1,500 Oregon Health, Housing, Educational and Cultural Facilities
Authority, (Lewis and Clark College), (MBIA),
6.125%, 10/1/24 1,570,605
- ----------------------------------------------------------------------------------------------
$ 5,336,678
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 4.7%
$ 750 Emerald People's Utility District, (FSA), 5.25%, 11/1/22 $ 824,895
1,000 Eugene, Electric Utility, (FSA), 5.25%, 8/1/22 1,087,980
1,000 Puerto Rico Electric Power Authority, (FSA), 5.125%, 7/1/26 1,079,480
1,800 Puerto Rico Electric Power Authority, (MBIA), 0.00%, 7/1/17 1,001,124
- ----------------------------------------------------------------------------------------------
$ 3,993,479
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
81
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 10.1%
$ 2,000 Clackamas County, School District No. 007J, (Lake Oswego),
(MBIA), 5.00%, 6/1/26(1) $ 2,088,300
1,000 Columbia, School District No. 502, (FGIC), 0.00%, 6/1/17 576,260
200 Jefferson County, School District No. 509J, (FGIC),
5.00%, 6/15/22 212,616
500 Jefferson County, School District No. 509J, (FGIC),
5.25%, 6/15/19 555,340
1,300 Puerto Rico, (FGIC), Variable Rate, 7/1/32(2)(3) 1,520,311
200 Puerto Rico, (MBIA), Variable Rate, 7/1/20(2)(3) 315,594
1,000 Salem-Keizer, School District No. 24J, (FGIC),
5.00%, 6/1/17 1,136,330
950 Umatilla County, School District No. 008R, (MBIA),
Variable Rate, 6/15/19(2)(4) 1,139,839
1,000 Yamhill County, School District No. 029J, (MBIA),
4.75%, 6/15/23 1,030,020
- ----------------------------------------------------------------------------------------------
$ 8,574,610
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 0.6%
$ 500 Oregon Health, Housing, Educational and Cultural Facilities
Authority, (Peace Health), (AMBAC), 5.00%, 11/15/32 $ 519,145
- ----------------------------------------------------------------------------------------------
$ 519,145
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 2.4%
$ 1,500 Oregon Department of Administration Services, (MBIA),
5.25%, 11/1/20 $ 1,646,595
300 Puerto Rico Public Finance Corp., (AMBAC), Variable Rate,
12/1/19(2)(3) 414,753
- ----------------------------------------------------------------------------------------------
$ 2,061,348
- ----------------------------------------------------------------------------------------------
INSURED-SPECIAL TAX REVENUE -- 2.4%
$ 1,000 Portland, Arena Natural Gas Tax Revenue, (AMBAC),
0.00%, 6/1/17 $ 484,040
1,400 Puerto Rico Infrastructure Financing Authority, (AMBAC),
Variable Rate, 7/1/28(3) 1,560,230
- ----------------------------------------------------------------------------------------------
$ 2,044,270
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 1.0%
$ 700 Puerto Rico Highway and Transportation Authority, (FSA),
Variable Rate, 7/1/32(2)(3) $ 818,629
- ----------------------------------------------------------------------------------------------
$ 818,629
- ----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 4.2%
$ 1,575 Albany, Water Revenue, (FGIC), 5.125%, 8/1/26 $ 1,678,194
1,000 Portland, Sewer System, (FSA), 5.00%, 6/1/23 1,061,190
750 Washington County, Clean Water Services, (Senior Lien),
(FGIC), 5.00%, 10/1/21 796,913
- ----------------------------------------------------------------------------------------------
$ 3,536,297
- ----------------------------------------------------------------------------------------------
MISCELLANEOUS -- 0.6%
$ 300 Puerto Rico Infrastructure Financing Authority, Variable Rate,
10/1/32(2)(3) $ 485,769
- ----------------------------------------------------------------------------------------------
$ 485,769
- ----------------------------------------------------------------------------------------------
SENIOR LIVING / LIFE CARE -- 2.1%
$ 1,750 Clackamas County, Hospital Facility Authority, (Homewoods),
5.15%, 10/20/37 $ 1,803,883
- ----------------------------------------------------------------------------------------------
$ 1,803,883
- ----------------------------------------------------------------------------------------------
SPECIAL TAX REVENUE -- 4.0%
$ 2,475 Portland Limited Tax General Obligation, 0.00%, 6/1/22 $ 1,040,861
2,000 Tri-County Metropolitan Transportation District, Variable Rate,
8/1/19(2)(4) 2,312,640
- ----------------------------------------------------------------------------------------------
$ 3,353,501
- ----------------------------------------------------------------------------------------------
TRANSPORTATION -- 2.5%
$ 2,000 Oregon Department of Transportation, (Highway User Tax),
5.125%, 11/15/26 $ 2,122,800
- ----------------------------------------------------------------------------------------------
$ 2,122,800
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 97.4%
(IDENTIFIED COST $76,881,490) $ 82,676,979
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 2.6% $ 2,248,539
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 84,925,518
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Insurance Association
The Portfolio invests primarily in debt securities issued by Oregon
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 February 29, 2004, 32.5% 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
See notes to financial statements
82
<Page>
insured by an individual financial institution ranged from 3.6% to 15.2% of
total investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(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 has been issued as a leveraged inverse floater bond.
(4) Security has been issued as an inverse floater bond.
See notes to financial statements
83
<Page>
SOUTH CAROLINA MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 97.4%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 2.2%
$ 1,150 Darlington County, (Carolina Power and Light),
6.60%, 11/1/10 $ 1,183,453
- ----------------------------------------------------------------------------------------------
$ 1,183,453
- ----------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 10.7%
$ 350 Beaufort County, School District, 5.00%, 3/1/20 $ 375,638
1,500 Charleston County, School District, 5.00%, 2/1/25 1,574,490
695 Kershaw County, School District, 5.00%, 2/1/18 753,178
600 Orangeburg County, Consolidated School District No. 5,
5.625%, 3/1/19 688,704
1,000 Puerto Rico Commonwealth, Variable Rate, 7/1/29(1)(2) 1,275,750
1,085 Richland County, General Obligation, Sewer System,
(Broad River), 5.125%, 3/1/29 1,151,033
- ----------------------------------------------------------------------------------------------
$ 5,818,793
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 10.0%
$ 200 Horry County, (Conway Hospital), 6.75%, 7/1/12 $ 202,782
1,000 Lexington County, (Health Services District, Inc.),
5.50%, 11/1/32 1,047,690
1,000 Medical University Hospital Authority, 6.50%, 8/15/32 1,070,780
1,500 South Carolina Jobs Economic Development Authority,
(Bon Secours Health System, Inc.), 5.625%, 11/15/30 1,530,915
1,500 South Carolina Jobs Economic Development Authority,
(Palmetto Health), 6.375%, 8/1/34 1,600,470
- ----------------------------------------------------------------------------------------------
$ 5,452,637
- ----------------------------------------------------------------------------------------------
HOUSING -- 4.0%
$ 1,280 South Carolina Housing Finance Authority, MFMR,
(Runaway Bay Apartments), 6.20%, 12/1/20 $ 1,338,790
830 South Carolina Housing Finance Authority, SFMR,
6.45%, 7/1/17 850,758
- ----------------------------------------------------------------------------------------------
$ 2,189,548
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 9.4%
$ 1,400 Darlington County, (Sonoco Products), 6.00%, 4/1/26 $ 1,461,376
195 Florence County, (Stone Container), 7.375%, 2/1/07 197,946
400 Puerto Rico Port Authority, (American Airlines), (AMT),
6.25%, 6/1/26 310,060
1,400 Richland County, Environmental Improvement,
(International Paper Co.), (AMT), 6.10%, 4/1/23 1,524,586
1,500 Spartanburg County, Solid Waste, (Bavarian Motor
Works Corp.), (AMT), 7.55%, 11/1/24 1,605,600
- ----------------------------------------------------------------------------------------------
$ 5,099,568
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 1.0%
$ 500 Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental, Residual Certificates, (MBIA),
Variable Rate, 7/1/33(2)(3) $ 566,570
- ----------------------------------------------------------------------------------------------
$ 566,570
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 6.6%
$ 1,000 Piedmont Municipal Power Agency, (MBIA),
4.00%, 1/1/23(4) $ 941,120
195 Piedmont Municipal Power Agency, (MBIA), 6.30%, 1/1/14 197,771
750 Puerto Rico Electric Power Authority, (FSA), Variable Rate,
7/1/29(1)(2) 861,810
500 South Carolina Public Service Authority, (FSA),
5.125%, 1/1/37 524,715
1,000 South Carolina Public Service Authority, (FSA),
5.125%, 1/1/21 1,088,290
- ----------------------------------------------------------------------------------------------
$ 3,613,706
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 4.8%
$ 1,300 Berkeley County, (FSA), 2.00%, 9/1/25 $ 855,751
1,000 Lancaster County, School District, (FSA), 4.75%, 3/1/18 1,051,390
330 Puerto Rico, (FGIC), Variable Rate, 7/1/32(2)(3) 385,925
200 Puerto Rico, (MBIA), Variable Rate, 7/1/20(2)(3) 315,594
- ----------------------------------------------------------------------------------------------
$ 2,608,660
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 3.9%
$ 1,000 South Carolina Jobs Economic Development Authority,
(Connie Lee), (Oconee Memorial Hospital),
6.15%, 3/1/25 $ 1,063,810
1,000 Spartanburg County, (Health Services District, Inc.),
(FSA), 5.25%, 4/15/32 1,057,670
- ----------------------------------------------------------------------------------------------
$ 2,121,480
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 2.0%
$ 500 Charleston County, (Charleston Public Facilities Corp.),
(MBIA), 6.10%, 6/1/11 $ 516,255
415 Puerto Rico Public Finance Corp., (AMBAC), Variable Rate,
12/1/19(2)(3) 573,742
- ----------------------------------------------------------------------------------------------
$ 1,089,997
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
84
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-MISCELLANEOUS -- 3.6%
$ 1,660 Puerto Rico Municipal Finance Agency, (FSA),
Variable Rate, 8/1/27(2)(3) $ 1,960,477
- ----------------------------------------------------------------------------------------------
$ 1,960,477
- ----------------------------------------------------------------------------------------------
INSURED-SPECIAL TAX REVENUE -- 0.5%
$ 260 Puerto Rico Infrastructure Financing Authority, (AMBAC),
Variable Rate, 7/1/28(3) $ 289,757
- ----------------------------------------------------------------------------------------------
$ 289,757
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 7.0%
$ 330 Puerto Rico Highway and Transportation Authority,
(FSA), Variable Rate, 7/1/32(2)(3) $ 385,925
2,000 South Carolina Transportation Infrastructure, (AMBAC),
5.00%, 10/1/33 2,093,040
1,250 South Carolina Transportation Infrastructure, (AMBAC),
5.25%, 10/1/31 1,329,113
- ----------------------------------------------------------------------------------------------
$ 3,808,078
- ----------------------------------------------------------------------------------------------
INSURED-UTILITIES -- 10.4%
$ 2,000 Greer, Combined Utility System, (AMBAC),
5.50%, 9/1/32 $ 2,347,440
1,000 Greer, Combined Utility System, (AMBAC), 5.50%, 9/1/27 1,165,320
2,000 South Carolina Jobs Economic Development Authority,
(South Carolina Electric and Gas Co.), (AMBAC),
5.20%, 11/1/27 2,137,020
- ----------------------------------------------------------------------------------------------
$ 5,649,780
- ----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 13.1%
$ 1,035 Anderson County, Water System, (FSA), 5.00%, 7/15/32 $ 1,082,527
750 Beaufort-Jasper, Water and Sewer Authority, (FSA),
5.00%, 3/1/26 786,038
1,000 Dorchester County, Water and Sewer System, (MBIA),
5.00%, 10/1/28 1,053,630
1,000 Easley, (FSA), 5.00%, 12/1/27 1,050,660
1,500 Grand Strand, Water and Sewer Authority, (FSA),
5.00%, 6/1/26 1,573,860
500 Spartanburg, Sanitary Sewer District, (MBIA),
5.00%, 3/1/26 518,765
1,000 Spartanburg, Sewer System, (MBIA), 5.25%, 3/1/30 1,080,420
- ----------------------------------------------------------------------------------------------
$ 7,145,900
- ----------------------------------------------------------------------------------------------
LEASE REVENUE / CERTIFICATES OF PARTICIPATION -- 1.4%
$ 750 Lexington County School District, 6.90%, 7/1/08 $ 780,015
- ----------------------------------------------------------------------------------------------
$ 780,015
- ----------------------------------------------------------------------------------------------
OTHER REVENUE -- 4.9%
$ 550 Puerto Rico Infrastructure Financing Authority,
Variable Rate, 10/1/32(2)(3) $ 754,347
2,000 Tobacco Settlement Management Authority,
6.375%, 5/15/28 1,914,340
- ----------------------------------------------------------------------------------------------
$ 2,668,687
- ----------------------------------------------------------------------------------------------
POOLED LOANS -- 1.9%
$ 1,000 South Carolina Education Authority, Student Loan, (AMT),
6.30%, 9/1/08 $ 1,023,520
- ----------------------------------------------------------------------------------------------
$ 1,023,520
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 97.4%
(IDENTIFIED COST $49,217,788) $ 53,070,626
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 2.6% $ 1,441,190
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 54,511,816
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Insurance Association
MFMR - Multi Family Mortgage Revenue
SFMR - Single Family Mortgage Revenue
The Portfolio invests primarily in debt securities issued by South Carolina
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 February 29, 2004, 52.4% 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 an
individual financial institution ranged from 0.7% to 23.1% 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 has been issued as a leveraged inverse floater bond.
(4) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
See notes to financial statements
85
<Page>
TENNESSEE MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 96.9%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
EDUCATION -- 3.1%
$ 1,500 Metropolitan Government of Nashville and Davidson County,
(Vanderbilt University), 5.00%, 10/1/28 $ 1,554,300
- ----------------------------------------------------------------------------------------------
$ 1,554,300
- ----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 2.1%
$ 1,000 Metropolitan Government of Nashville and Davidson County,
Electric Revenue, 5.125%, 5/15/26 $ 1,050,470
- ----------------------------------------------------------------------------------------------
$ 1,050,470
- ----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 6.0%
$ 750 Metropolitan Government of Nashville and Davidson County,
(Charity Obligated Group), Prerefunded to 11/1/10,
5.125%, 11/1/27 $ 853,507
950 Tennessee Local Development Authority, Community Provider,
Prerefunded to 10/1/04, 6.55%, 10/1/23 1,000,464
1,000 Tennessee State Veterans' Homes Board, (Humboldt),
Prerefended to 2/1/06, 6.65%, 2/1/14 1,121,800
- ----------------------------------------------------------------------------------------------
$ 2,975,771
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 6.8%
$ 500 Knox County, HEFA, (East Tennessee Hospital),
5.75%, 7/1/33 $ 518,800
1,000 Montgomery County, (Clarksville Regional Health System),
5.375%, 1/1/28 998,590
750 Sullivan County, Health Education and Facility Board,
(Wellmont Health System), 6.25%, 9/1/22 808,717
1,000 Sumner County, (Sumner Regional Health Systems),
7.50%, 11/1/14(1) 1,041,490
- ----------------------------------------------------------------------------------------------
$ 3,367,597
- ----------------------------------------------------------------------------------------------
HOUSING -- 3.9%
$ 750 Metropolitan Government of Nashville and Davidson County,
(The Park at Hermitage), 5.90%, 2/1/19 $ 765,660
645 Tennessee Housing Development Agency, (AMT),
5.375%, 7/1/23 673,457
500 Tennessee Housing Development Agency, (AMT),
5.75%, 7/1/24 507,120
- ----------------------------------------------------------------------------------------------
$ 1,946,237
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 4.6%
$ 750 Chattanooga, (E.I. du Pont de Nemours), 6.35%, 7/1/22 $ 773,925
500 Hardeman County, (Correctional Facilities Corp.),
7.75%, 8/1/17 527,240
500 Humphreys County, (E.I. du Pont de Nemours), (AMT),
6.70%, 5/1/24 514,070
500 McMinn County, (Calhoun Newsprint - Bowater), (AMT),
7.40%, 12/1/22 505,475
- ----------------------------------------------------------------------------------------------
$ 2,320,710
- ----------------------------------------------------------------------------------------------
INSURED-COGENERATION -- 3.1%
$ 1,500 Metropolitan Government of Nashville and Davidson County,
(AMBAC), 5.00%, 10/1/33 $ 1,568,685
- ----------------------------------------------------------------------------------------------
$ 1,568,685
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 5.1%
$ 1,000 Metropolitan Government of Nashville and Davidson County,
(Meharry Medical College), (AMBAC), 5.00%, 12/1/24 $ 1,029,640
1,230 Metropolitan Government of Nashville and Davidson County,
(Meharry Medical College), (AMBAC), 6.00%, 12/1/19 1,500,059
- ----------------------------------------------------------------------------------------------
$ 2,529,699
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 12.9%
$ 1,000 Lawrenceburg, Electric, (MBIA), 6.625%, 7/1/18 $ 1,294,580
1,750 Madison County Suburban Utility District, (MBIA),
5.00%, 2/1/19 1,885,187
400 Memphis, Electric System, (MBIA), Variable Rate,
12/1/11(2)(3) 575,248
1,000 Pleasant View Utility District, (MBIA), 5.00%, 9/1/32 1,043,690
500 Puerto Rico Electric Power Authority, (FSA), 5.125%, 7/1/26 539,740
150 Puerto Rico Electric Power Authority, (MBIA), 5.00%, 7/1/20 169,895
500 Puerto Rico Electric Power Authority, (MBIA), 5.00%, 7/1/32 531,025
250 Puerto Rico Electric Power Authority, (MBIA),
Variable Rate, 7/1/16(2)(3) 398,860
- ----------------------------------------------------------------------------------------------
$ 6,438,225
- ----------------------------------------------------------------------------------------------
INSURED-ESCROWED / PREREFUNDED -- 9.6%
$ 250 Chattanooga, (Memorial Hospital), (MBIA), Escrowed to
Maturity, 6.625%, 9/1/09 $ 305,970
1,500 Johnson City, Health and Educational Facilities Board,
(Johnson City Medical Center), (MBIA), Prerefunded
to 7/1/23, 5.125%, 7/1/25 1,650,150
1,000 Johnson, School District Sales Tax, (AMBAC), Prerefunded
to 5/1/06, 6.70%, 5/1/21 1,116,200
1,500 Shelby County, (Lebonheur Children's Hospital), (MBIA),
Escrowed to Maturity, 5.50%, 8/15/12 1,734,825
- ----------------------------------------------------------------------------------------------
$ 4,807,145
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
86
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 15.9%
$ 1,425 Franklin, Special School District, (FSA), 0.00%, 6/1/19 $ 733,419
2,500 Franklin, Special School District, (FSA), 0.00%, 6/1/20 1,210,525
500 Greene County, (FGIC), 5.00%, 6/1/26 521,755
500 Lawrenceburg, Public Building Authority, (Electric
System-Public Works), (AMBAC), 5.00%, 7/1/26 548,010
1,000 Lawrenceburg, Public Building Authority, (Electric
System-Public Works), (FSA), 5.00%, 7/1/26 1,040,120
500 Lincoln County, (FGIC), 5.25%, 4/1/21 574,485
250 Montgomery County, (FGIC), 4.75%, 5/1/20(4) 266,600
1,750 Puerto Rico, (FGIC), 5.00%, 7/1/32 1,848,858
700 Puerto Rico, (FSA), Variable Rate, 7/1/27(2)(3) 903,175
250 Putnam County, (FGIC), 5.25%, 4/1/20 288,913
- ----------------------------------------------------------------------------------------------
$ 7,935,860
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 4.4%
$ 500 Bristol, (Bristol Memorial Hospital), (FGIC),
6.75%, 9/1/10 $ 614,400
1,500 Knox County, HEFA, (Covenant Health), (FSA),
5.00%, 1/1/26 1,562,475
- ----------------------------------------------------------------------------------------------
$ 2,176,875
- ----------------------------------------------------------------------------------------------
INSURED-HOUSING -- 2.1%
$ 1,000 Knox County, SCA Realty, MFMR, (FSA),
7.125%, 1/1/30(5) $ 1,038,990
- ----------------------------------------------------------------------------------------------
$ 1,038,990
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 3.8%
$ 750 Puerto Rico Public Buildings Authority, (CIFG),
5.25%, 7/1/19 $ 869,348
500 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 6/1/26(2)(6) 540,460
340 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 12/1/19(2)(3) 470,053
- ----------------------------------------------------------------------------------------------
$ 1,879,861
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 6.6%
$ 1,500 Memphis-Shelby County Airport Authority, (MBIA),
(AMT), 6.00%, 3/1/24 $ 1,690,050
1,000 Memphis-Shelby County Airport Authority, (MBIA), (AMT),
6.50%, 2/15/09 1,178,310
300 Puerto Rico Highway and Transportation Authority,
(MBIA), Variable Rate, 1/1/19(2)(3) 400,638
- ----------------------------------------------------------------------------------------------
$ 3,268,998
- ----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 6.9%
$ 1,000 Clarksville, Water, Sewer and Gas, (FSA), 5.25%, 2/1/18 $ 1,149,220
1,000 Metropolitan Government of Nashville and Davidson County,
Water System, (FGIC), 5.20%, 1/1/13 1,147,560
2,000 Metropolitan Government of Nashville and Davidson County,
Water System, (MBIA), 0.00%, 5/15/17 1,144,820
- ----------------------------------------------------------------------------------------------
$ 3,441,600
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 96.9%
(IDENTIFIED COST $43,640,750) $ 48,301,023
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 3.1% $ 1,522,624
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 49,823,647
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
CIFG - CDC IXIS Financial Guaranty North America, Inc.
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Insurance Association
The Portfolio invests primarily in debt securities issued by Tennessee
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 February 29, 2004, 72.6% 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 an
individual financial institution ranged from 1.8% to 29.0% of total investments.
(1) Security (or a portion thereof) has been segregated to cover margin
requirements on open financial futures contracts.
(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 has been issued as a leveraged inverse floater bond.
(4) When-issued security.
(5) Security (or a portion thereof) has been segregated to cover when-issued
securities.
(6) Security has been issued as an inverse floater bond.
See notes to financial statements
87
<Page>
VIRGINIA MUNICIPALS PORTFOLIO as of February 29, 2004
PORTFOLIO OF INVESTMENTS (UNAUDITED)
TAX-EXEMPT INVESTMENTS -- 98.0%
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
EDUCATION -- 2.9%
$ 3,250 University of Virginia, 5.00%, 6/1/33 $ 3,418,285
- ----------------------------------------------------------------------------------------------
$ 3,418,285
- ----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 1.0%
$ 1,000 Puerto Rico Electric Power Authority, Variable Rate,
7/1/29(1)(2) $ 1,102,960
- ----------------------------------------------------------------------------------------------
$ 1,102,960
- ----------------------------------------------------------------------------------------------
ESCROWED / PREREFUNDED -- 0.9%
$ 1,000 Washington County IDA, (Johnston Memorial Hospital),
Prerefunded to 7/1/05, 6.00%, 7/1/14 $ 1,083,700
- ----------------------------------------------------------------------------------------------
$ 1,083,700
- ----------------------------------------------------------------------------------------------
GENERAL OBLIGATIONS -- 4.3%
$ 1,165 Arlington County, 5.25%, 6/1/18(3) $ 1,303,006
1,390 Peninsula Airport Commission, (City Guaranteed), (AMT),
5.50%, 7/15/21 1,515,267
2,000 Virginia Public School Authority, 5.00%, 8/1/21 2,141,600
- ----------------------------------------------------------------------------------------------
$ 4,959,873
- ----------------------------------------------------------------------------------------------
HOSPITAL -- 9.2%
$ 2,250 Albemarle County IDA, (Martha Jefferson Hospital),
5.25%, 10/1/35 $ 2,314,282
1,500 Fairfax County IDA, (Inova Health System), 5.00%, 8/15/14 1,699,260
2,000 Fairfax County IDA, (Inova Health System), 5.00%, 8/15/15 2,244,120
1,250 Fredericksburg IDA, (Medicorp Health System),
5.125%, 6/15/33 1,274,450
1,000 Henrico County EDA, (Bon Secours Health System, Inc.),
5.60%, 11/15/30 1,045,130
1,000 Loudoun County IDA, (Loudon Hospital Center),
6.00%, 6/1/22 1,075,240
1,000 Loudoun County IDA, (Loudon Hospital Center),
6.10%, 6/1/32 1,063,350
- ----------------------------------------------------------------------------------------------
$ 10,715,832
- ----------------------------------------------------------------------------------------------
HOUSING -- 2.8%
$ 1,000 Alexandria Redevelopment and Housing Authority, MFMR,
(Buckingham Village Apartments), (AMT), 5.45%, 7/1/18 $ 1,011,870
2,160 Multifamily Housing Bond Pass Through Certificates of
Beneficial Owners, (Prince William County), (AMT),
6.00%, 11/1/33 2,266,013
- ----------------------------------------------------------------------------------------------
$ 3,277,883
- ----------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT REVENUE -- 7.0%
$ 1,250 James City County IDA, (Anheuser Busch), (AMT),
6.00%, 4/1/32 $ 1,316,725
2,275 Norfolk Airport Authority, (AMT), 6.25%, 1/1/30 2,313,379
1,000 Peninsula Ports Authority Revenue (CSX Transportation),
6.00%, 12/15/12 1,066,450
2,000 Prince William County IDA, (Potomac Hospital Corp.),
5.35%, 10/1/36 2,074,840
1,435 West Point, (Chesapeake Corp.), (AMT), 6.375%, 3/1/19 1,361,384
- ----------------------------------------------------------------------------------------------
$ 8,132,778
- ----------------------------------------------------------------------------------------------
INSURED-EDUCATION -- 9.3%
$ 3,000 Virginia College Building Authority, (Regent University),
(MBIA), 5.125%, 10/1/31 $ 3,154,230
6,705 Virginia College Building Authority, (Washington and
Lee University), (MBIA), 5.25%, 1/1/31 7,683,930
- ----------------------------------------------------------------------------------------------
$ 10,838,160
- ----------------------------------------------------------------------------------------------
INSURED-ELECTRIC UTILITIES -- 3.2%
$ 165 Puerto Rico Electric Power Authority, (MBIA), Variable Rate,
7/1/29(2)(4) $ 201,897
700 Puerto Rico Electric Power Authority, (MBIA), Variable Rate,
7/1/16(2)(4) 1,116,808
1,000 Puerto Rico Electric Power Authority, (XLCA), 5.375%, 7/1/18 1,177,140
1,000 Puerto Rico Electric Power Authority, RITES, (FSA),
Variable Rate, 7/1/20(2)(4) 1,223,620
- ----------------------------------------------------------------------------------------------
$ 3,719,465
- ----------------------------------------------------------------------------------------------
INSURED-GENERAL OBLIGATIONS -- 2.6%
$ 1,000 Cheasapeake, General Obligation, Water and Sewer,
(FGIC), 5.00%, 6/1/33 $ 1,051,780
1,000 Puerto Rico, (FSA), Variable Rate, 7/1/27(2)(4) 1,290,250
400 Puerto Rico, (MBIA), Variable Rate, 7/1/20(2)(4) 631,188
- ----------------------------------------------------------------------------------------------
$ 2,973,218
- ----------------------------------------------------------------------------------------------
INSURED-HOSPITAL -- 10.0%
$ 2,000 Danville IDA, (Danville Regional Medical Center),
(AMBAC), 5.25%, 10/1/28 $ 2,247,000
1,500 Henrico County, (Bon Secour Health Systems),
(MBIA), 6.25%, 8/15/20 1,878,210
5,000 Virginia Beach, (Virginia Beach Memorial Hospital),
(AMBAC), 5.125%, 2/15/18 5,640,300
1,600 Winchester IDA, (Winchester Medical Center),
(AMBAC), Variable Rate, 1/21/14(1) 1,853,568
- ----------------------------------------------------------------------------------------------
$ 11,619,078
- ----------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
88
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
(000'S OMITTED) SECURITY VALUE
- ----------------------------------------------------------------------------------------------
INSURED-HOUSING -- 1.8%
$ 2,000 Virginia HDA, (MBIA), 5.375%, 7/1/36 $ 2,059,740
- ----------------------------------------------------------------------------------------------
$ 2,059,740
- ----------------------------------------------------------------------------------------------
INSURED-LEASE REVENUE / CERTIFICATES
OF PARTICIPATION -- 1.6%
$ 900 Powhatan County, EDA Lease Revenue (AMBAC),
5.25%, 7/15/33 $ 966,888
600 Puerto Rico Public Finance Corp., (AMBAC),
Variable Rate, 12/1/19(2)(4) 829,506
- ----------------------------------------------------------------------------------------------
$ 1,796,394
- ----------------------------------------------------------------------------------------------
INSURED-TRANSPORTATION -- 14.9%
$ 5,000 Chesapeake Bay Bridge and Tunnel Commission District,
(General Resolution), (MBIA), 5.50%, 7/1/25 $ 5,843,850
1,000 Metro Washington, DC, Authority Airport System,
(FGIC), (AMT), 5.00%, 10/1/33 1,031,100
1,000 Metro Washington, DC, Authority Airport System,
(FGIC), (AMT), 5.25%, 10/1/32 1,051,320
3,255 Metro Washington, DC, Authority Airport System,
(MBIA), (AMT), 5.50%, 10/1/27 3,514,293
1,000 Norfolk Airport Authority, (FGIC), 5.125%, 7/1/31 1,049,950
250 Puerto Rico Highway and Transportation Authority, (MBIA),
Variable Rate, 7/1/36(2)(4) 307,225
3,900 Richmond, Metropolitan Authority Expressway, (FGIC),
5.25%, 7/15/22 4,450,446
- ----------------------------------------------------------------------------------------------
$ 17,248,184
- ----------------------------------------------------------------------------------------------
INSURED-UTILITIES -- 1.8%
$ 2,000 Richmond, Public Utilities, (FSA), 5.00%, 1/15/27 $ 2,095,940
- ----------------------------------------------------------------------------------------------
$ 2,095,940
- ----------------------------------------------------------------------------------------------
INSURED-WATER AND SEWER -- 7.9%
$ 1,000 Henry County, Public Service Authority, Water and Sewer,
(FSA), 5.50%, 11/15/19 $ 1,184,670
1,500 Norfolk Water Authority, (MBIA), 5.90%, 11/1/25 1,633,575
2,495 Spotsylvania County, Water and Sewer, (FSA),
4.75%, 6/1/32 2,527,086
1,000 Upper Occoquan Sewage Authority, (MBIA), 5.15%, 7/1/20 1,136,310
2,500 Virginia Resource Authority, (MBIA), 5.50%, 5/1/26 2,733,450
- ----------------------------------------------------------------------------------------------
$ 9,215,091
- ----------------------------------------------------------------------------------------------
OTHER REVENUE -- 2.6%
$ 1,250 Prince William County IDA, (Catholic Diocese Arlington),
5.50%, 10/1/33 $ 1,278,650
1,300 Puerto Rico Infrastructure Financing Authority,
Variable Rate, 10/1/34(2)(4) 1,783,002
- ----------------------------------------------------------------------------------------------
$ 3,061,652
- ----------------------------------------------------------------------------------------------
SPECIAL TAX REVENUE -- 2.2%
$ 1,495 Dulles Community Development Authority,
(Dulles Town Center), 6.25%, 3/1/26 $ 1,507,244
1,000 Heritage Hunt Community Development Authority,
6.85%, 3/1/19 1,055,950
- ----------------------------------------------------------------------------------------------
$ 2,563,194
- ----------------------------------------------------------------------------------------------
TRANSPORTATION -- 5.3%
$ 1,250 Virginia Port Authority, (AMT), 5.90%, 7/1/16 $ 1,320,238
3,000 Virginia Transportation Board, 0.00%, 4/1/26 997,350
3,500 Virginia Transportation Board, U.S. Route 58 Corridor,
5.125%, 5/15/19 3,830,295
- ----------------------------------------------------------------------------------------------
$ 6,147,883
- ----------------------------------------------------------------------------------------------
WATER AND SEWER -- 6.7%
$ 4,250 Fairfax County Water Authority, 5.00%, 4/1/21 $ 4,769,648
1,000 Fairfax County Water Authority, 5.00%, 4/1/32 1,046,830
1,750 Virginia Resource Authority, Clean Water, (Revolving Fund),
5.625%, 10/1/22 2,000,775
- ----------------------------------------------------------------------------------------------
$ 7,817,253
- ----------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT INVESTMENTS -- 98.0%
(IDENTIFIED COST $102,210,337) $ 113,846,563
- ----------------------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES -- 2.0% $ 2,282,307
- ----------------------------------------------------------------------------------------------
NET ASSETS -- 100.0% $ 116,128,870
- ----------------------------------------------------------------------------------------------
</Table>
AMBAC - AMBAC Financial Group, Inc.
AMT - Interest earned from these securities may be considered a tax preference
item for purposes of the Federal Alternative Minimum Tax.
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
MBIA - Municipal Bond Insurance Association
XLCA - XL Capital Assurance, Inc.
The Portfolio invests primarily in debt securities issued by Virginia
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 February 29, 2004, 54.1% 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
See notes to financial statements
89
<Page>
insured by an individual financial institution ranged from 1.0% to 28.0% 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.
See notes to financial statements
90
<Page>
EATON VANCE MUNICIPALS PORTFOLIOS as of February 29, 2004
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
AS OF FEBRUARY 29, 2004
<Table>
<Caption>
ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments --
Identified cost $ 59,153,385 $ 42,252,727 $ 51,291,056 $ 59,917,601
Unrealized appreciation 5,418,338 3,202,778 5,338,196 7,020,073
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $ 64,571,723 $ 45,455,505 $ 56,629,252 $ 66,937,674
- -------------------------------------------------------------------------------------------------------------------------------
Cash $ 432,217 $ -- $ 23,951 $ 671,494
Receivable for investments sold -- -- -- 75,000
Interest receivable 736,220 594,955 745,122 814,913
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 65,740,160 $ 46,050,460 $ 57,398,325 $ 68,499,081
- -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for daily variation margin
on open financial futures
contracts $ 67,781 $ 60,312 $ 83,531 $ 78,094
Demand note payable -- 100,000 -- --
Payable for when-issued securities -- 1,033,380 -- --
Due to bank -- 66,956 -- --
Accrued expenses 17,316 15,883 16,734 17,565
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 85,097 $ 1,276,531 $ 100,265 $ 95,659
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
INVESTORS' INTEREST IN PORTFOLIO $ 65,655,063 $ 44,773,929 $ 57,298,060 $ 68,403,422
- -------------------------------------------------------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Net proceeds from capital
contributions and withdrawals $ 60,400,110 $ 41,867,712 $ 52,306,989 $ 61,583,031
Net unrealized appreciation
(computed on the basis of
identified cost) 5,254,953 2,906,217 4,991,071 6,820,391
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 65,655,063 $ 44,773,929 $ 57,298,060 $ 68,403,422
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
91
<Page>
<Table>
<Caption>
LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments --
Identified cost $ 26,742,781 $ 72,672,445 $ 51,580,635 $ 79,206,668
Unrealized appreciation 2,246,779 2,618,672 5,595,708 7,735,933
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $ 28,989,560 $ 75,291,117 $ 57,176,343 $ 86,942,601
- -------------------------------------------------------------------------------------------------------------------------------
Cash $ -- $ -- $ 1,127,227 $ --
Receivable for investments sold 14,914 558,814 35,000 --
Interest receivable 386,063 888,284 660,955 951,194
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 29,390,537 $ 76,738,215 $ 58,999,525 $ 87,893,795
- -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for daily variation margin
on open financial futures
contracts $ 46,406 $ 108,906 $ 81,469 $ 134,062
Demand note payable 500,000 500,000 -- 100,000
Due to bank 76,761 38,711 -- 3,542
Accrued expenses 15,906 18,859 17,500 18,205
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 639,073 $ 666,476 $ 98,969 $ 255,809
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
INVESTORS' INTEREST IN PORTFOLIO $ 28,751,464 $ 76,071,739 $ 58,900,556 $ 87,637,986
- -------------------------------------------------------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Net proceeds from capital
contributions and withdrawals $ 26,686,916 $ 73,726,277 $ 53,643,403 $ 80,427,318
Net unrealized appreciation
(computed on the basis of
identified cost) 2,064,548 2,345,462 5,257,153 7,210,668
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 28,751,464 $ 76,071,739 $ 58,900,556 $ 87,637,986
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
92
<Page>
<Table>
<Caption>
OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments --
Identified cost $ 76,881,490 $ 49,217,788 $ 43,640,750 $ 102,210,337
Unrealized appreciation 5,795,489 3,852,838 4,660,273 11,636,226
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT VALUE $ 82,676,979 $ 53,070,626 $ 48,301,023 $ 113,846,563
- -------------------------------------------------------------------------------------------------------------------------------
Cash 1,239,769 628,557 1,285,810 $ --
Receivable for investments sold 205,000 -- -- 2,438,800
Interest receivable 1,010,278 911,486 593,067 1,555,152
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 85,132,026 $ 54,610,669 $ 50,179,900 $ 117,840,515
- -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased $ -- $ -- $ -- $ 1,179,139
Payable for daily variation margin
on open financial futures
contracts 187,656 82,500 74,250 195,937
Demand note payable -- -- -- 300,000
Payable for when-issued securities -- -- 265,709 --
Due to bank -- -- -- 15,656
Accrued expenses 18,852 16,353 16,294 20,913
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 206,508 $ 98,853 $ 356,253 $ 1,711,645
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $ 84,925,518 $ 54,511,816 $ 49,823,647 $ 116,128,870
- -------------------------------------------------------------------------------------------------------------------------------
SOURCES OF NET ASSETS
Net proceeds from capital
contributions and withdrawals $ 79,889,380 $ 50,971,436 $ 45,471,930 $ 105,252,237
Net unrealized appreciation
(computed on the basis of
identified cost) 5,036,138 3,540,380 4,351,717 10,876,633
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 84,925,518 $ 54,511,816 $ 49,823,647 $ 116,128,870
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
93
<Page>
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004
<Table>
<Caption>
ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 1,766,360 $ 1,238,139 $ 1,610,284 $ 1,868,916
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 1,766,360 $ 1,238,139 $ 1,610,284 $ 1,868,916
- -------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment adviser fee $ 105,120 $ 56,844 $ 84,416 $ 111,364
Trustees fees and expenses 3,354 861 3,354 3,354
Legal and accounting services 12,696 11,666 14,069 13,910
Custodian fee 19,614 14,586 17,214 19,903
Miscellaneous 3,603 3,475 3,709 3,474
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 144,387 $ 87,432 $ 122,762 $ 152,005
- -------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 1,621,973 $ 1,150,707 $ 1,487,522 $ 1,716,911
- -------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 784,387 $ 67,852 $ 241 $ 71,722
Financial futures contracts (499,908) (34,072) (370,644) (527,546)
Interest rate swap contracts -- (274,450) -- --
- -------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ 284,479 $ (240,670) $ (370,403) $ (455,824)
- -------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost
basis) $ 2,379,173 $ 2,468,793 $ 3,567,413 $ 2,903,139
Financial futures contracts (111,539) (296,561) (357,011) (146,971)
Interest rate swap contracts -- 70,930 -- --
- -------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $ 2,267,634 $ 2,243,162 $ 3,210,402 $ 2,756,168
- -------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 2,552,113 $ 2,002,492 $ 2,839,999 $ 2,300,344
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 4,174,086 $ 3,153,199 $ 4,327,521 $ 4,017,255
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
94
<Page>
<Table>
<Caption>
LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 820,663 $ 2,151,872 $ 1,661,592 $ 2,377,938
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 820,663 $ 2,151,872 $ 1,661,592 $ 2,377,938
- -------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment adviser fee $ 29,241 $ 133,953 $ 88,275 $ 155,986
Trustees fees and expenses 871 3,354 3,354 3,354
Legal and accounting services 13,702 13,704 14,750 13,704
Custodian fee 10,701 22,711 16,763 25,361
Miscellaneous 3,097 4,237 4,308 4,496
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 57,612 $ 177,959 $ 127,450 $ 202,901
- -------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 763,051 $ 1,973,913 $ 1,534,142 $ 2,175,037
- -------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 45,018 $ 259,718 $ 82,927 $ 1,621,985
Financial futures contracts (214,734) (828,434) (350,804) (597,003)
- -------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ (169,716) $ (568,716) $ (267,877) $ 1,024,982
- -------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost
basis) $ 1,519,195 $ 3,441,433 $ 2,728,801 $ 2,959,412
Financial futures contracts (192,739) (193,711) (356,783) (553,924)
- -------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $ 1,326,456 $ 3,247,722 $ 2,372,018 $ 2,405,488
- -------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 1,156,740 $ 2,679,006 $ 2,104,141 $ 3,430,470
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,919,791 $ 4,652,919 $ 3,638,283 $ 5,605,507
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
95
<Page>
<Table>
<Caption>
OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 2,485,332 $ 1,593,954 $ 1,323,978 $ 3,158,330
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 2,485,332 $ 1,593,954 $ 1,323,978 $ 3,158,330
- -------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment adviser fee $ 151,235 $ 79,388 $ 66,945 $ 219,138
Trustees fees and expenses 3,355 3,354 870 4,399
Legal and accounting services 15,813 11,840 13,602 14,853
Custodian fee 22,995 15,943 14,093 29,184
Miscellaneous 5,202 4,523 3,946 6,013
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES $ 198,600 $ 115,048 $ 99,456 $ 273,587
- -------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $ 2,286,732 $ 1,478,906 $ 1,224,522 $ 2,884,743
- -------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) --
Investment transactions
(identified cost basis) $ 425,870 $ 392,996 $ 36,087 $ 280,167
Financial futures contracts (23,588) (251,961) (312,273) (835,804)
Interest rate swap contracts (748,500) -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) $ (346,218) $ 141,035 $ (276,186) $ (555,637)
- -------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost
basis) $ 4,554,098 $ 3,031,440 $ 2,467,726 $ 6,907,986
Financial futures contracts (759,351) (306,285) (323,366) (799,716)
Interest rate swap contracts 193,446 -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $ 3,988,193 $ 2,725,155 $ 2,144,360 $ 6,108,270
- -------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 3,641,975 $ 2,866,190 $ 1,868,174 $ 5,552,633
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 5,928,707 $ 4,345,096 $ 3,092,696 $ 8,437,376
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
96
<Page>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,621,973 $ 1,150,707 $ 1,487,522 $ 1,716,911
Net realized gain (loss) 284,479 (240,670) (370,403) (455,824)
Net change in unrealized
appreciation (depreciation) 2,267,634 2,243,162 3,210,402 2,756,168
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 4,174,086 $ 3,153,199 $ 4,327,521 $ 4,017,255
- -------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 1,978,327 $ 1,308,958 $ 2,221,100 $ 1,441,305
Withdrawals (5,213,690) (3,386,896) (3,365,346) (4,630,430)
- -------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (3,235,363) $ (2,077,938) $ (1,144,246) $ (3,189,125)
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 938,723 $ 1,075,261 $ 3,183,275 $ 828,130
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period $ 64,716,340 $ 43,698,668 $ 54,114,785 $ 67,575,292
- -------------------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $ 65,655,063 $ 44,773,929 $ 57,298,060 $ 68,403,422
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
97
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 763,051 $ 1,973,913 $ 1,534,142 $ 2,175,037
Net realized gain (loss) (169,716) (568,716) (267,877) 1,024,982
Net change in unrealized
appreciation (depreciation) 1,326,456 3,247,722 2,372,018 2,405,488
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,919,791 $ 4,652,919 $ 3,638,283 $ 5,605,507
- -------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 653,016 $ 2,295,867 $ 2,628,283 $ 1,561,563
Withdrawals (2,323,083) (9,555,427) (4,683,585) (9,073,503)
- -------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (1,670,067) $ (7,259,560) $ (2,055,302) $ (7,511,940)
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
NET ASSETS $ 249,724 $ (2,606,641) $ 1,582,981 $ (1,906,433)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period $ 28,501,740 $ 78,678,380 $ 57,317,575 $ 89,544,419
- -------------------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $ 28,751,464 $ 76,071,739 $ 58,900,556 $ 87,637,986
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
98
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 2,286,732 $ 1,478,906 $ 1,224,522 $ 2,884,743
Net realized gain (loss) (346,218) 141,035 (276,186) (555,637)
Net change in unrealized
appreciation (depreciation) 3,988,193 2,725,155 2,144,360 6,108,270
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 5,928,707 $ 4,345,096 $ 3,092,696 $ 8,437,376
- -------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 2,684,238 $ 3,687,696 $ 2,876,013 $ 3,793,427
Withdrawals (6,403,137) (4,734,722) (4,605,642) (9,579,545)
- -------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (3,718,899) $ (1,047,026) $ (1,729,629) $ (5,786,118)
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS $ 2,209,808 $ 3,298,070 $ 1,363,067 $ 2,651,258
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of period $ 82,715,710 $ 51,213,746 $ 48,460,580 $ 113,477,612
- -------------------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD $ 84,925,518 $ 54,511,816 $ 49,823,647 $ 116,128,870
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
99
<Page>
FOR THE YEAR ENDED AUGUST 31, 2003
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS ALABAMA PORTFOLIO ARKANSAS PORTFOLIO GEORGIA PORTFOLIO KENTUCKY PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 3,313,142 $ 2,300,813 $ 3,017,352 $ 3,496,419
Net realized gain (loss) 134,430 527,436 (333,635) (2,678,901)
Net change in unrealized
appreciation (depreciation) (1,468,945) (1,636,116) (612,968) 1,374,471
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 1,978,627 $ 1,192,133 $ 2,070,749 $ 2,191,989
- -------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 7,826,188 $ 4,263,125 $ 6,128,727 $ 6,168,539
Withdrawals (9,563,241) (5,016,611) (10,414,983) (10,294,305)
- -------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (1,737,053) $ (753,486) $ (4,286,256) $ (4,125,766)
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
NET ASSETS $ 241,574 $ 438,647 $ (2,215,507) $ (1,933,777)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of year $ 64,474,766 $ 43,260,021 $ 56,330,292 $ 69,509,069
- -------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 64,716,340 $ 43,698,668 $ 54,114,785 $ 67,575,292
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
100
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS LOUISIANA PORTFOLIO MARYLAND PORTFOLIO MISSOURI PORTFOLIO NORTH CAROLINA PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 1,570,788 $ 4,158,293 $ 3,185,742 $ 4,690,094
Net realized gain (loss) 234,944 437,591 375,821 (833,851)
Net change in unrealized
appreciation (depreciation) (896,513) (2,115,611) (1,480,015) (1,726,154)
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 909,219 $ 2,480,273 $ 2,081,548 $ 2,130,089
- -------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 2,630,038 $ 8,575,652 $ 5,893,727 $ 7,117,679
Withdrawals (4,426,484) (17,793,080) (9,406,029) (15,522,233)
- -------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (1,796,446) $ (9,217,428) $ (3,512,302) $ (8,404,554)
- -------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (887,227) $ (6,737,155) $ (1,430,754) $ (6,274,465)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of year $ 29,388,967 $ 85,415,535 $ 58,748,329 $ 95,818,884
- -------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 28,501,740 $ 78,678,380 $ 57,317,575 $ 89,544,419
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
101
<Page>
<Table>
<Caption>
INCREASE (DECREASE) IN NET ASSETS OREGON PORTFOLIO SOUTH CAROLINA PORTFOLIO TENNESSEE PORTFOLIO VIRGINIA PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
From operations --
Net investment income $ 4,649,972 $ 2,630,849 $ 2,480,931 $ 6,057,000
Net realized gain (loss) 53,387 444,288 132,379 (166,417)
Net change in unrealized
appreciation (depreciation) (2,528,160) (1,603,577) (763,780) (2,469,255)
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 2,175,199 $ 1,471,560 $ 1,849,530 $ 3,421,328
- -------------------------------------------------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 9,291,990 $ 10,958,295 $ 8,308,589 $ 7,960,993
Withdrawals (12,365,559) (7,921,651) (9,554,586) (17,554,176)
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL TRANSACTIONS $ (3,073,569) $ 3,036,644 $ (1,245,997) $ (9,593,183)
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
NET ASSETS $ (898,370) $ 4,508,204 $ 603,533 $ (6,171,855)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
At beginning of year $ 83,614,080 $ 46,705,542 $ 47,857,047 $ 119,649,467
- -------------------------------------------------------------------------------------------------------------------------------
AT END OF YEAR $ 82,715,710 $ 51,213,746 $ 48,460,580 $ 113,477,612
- -------------------------------------------------------------------------------------------------------------------------------
</Table>
See notes to financial statements
102
<Page>
SUPPLEMENTARY DATA
<Table>
<Caption>
ALABAMA PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.44%(2) 0.46% 0.45% 0.46% 0.49% 0.46%
Expenses after custodian fee reduction 0.44%(2) 0.44% 0.44% 0.44% 0.48% 0.45%
Net investment income 4.95%(2) 5.08% 5.21% 5.31% 5.57% 5.18%
Portfolio Turnover 14% 10% 25% 14% 8% 23%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 6.59% 3.09% 4.86% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 65,655 $ 64,716 $ 64,475 $ 64,271 $ 66,653 $ 82,141
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets from 5.20% to 5.21%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
103
<Page>
<Table>
<Caption>
ARKANSAS PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.40%(2) 0.41% 0.40% 0.39% 0.46% 0.45%
Expenses after custodian fee reduction 0.40%(2) 0.39% 0.39% 0.37% 0.45% 0.43%
Net investment income 5.20%(2) 5.22% 5.38% 5.48% 5.65% 5.25%
Portfolio Turnover 7% 25% 23% 9% 14% 24%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 7.45% 2.81% 5.83% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 44,774 $ 43,699 $ 43,260 $ 42,662 $ 42,233 $ 50,491
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets from 5.37% to 5.38%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
104
<Page>
<Table>
<Caption>
GEORGIA PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.44%(2) 0.46% 0.46% 0.45% 0.49% 0.46%
Expenses after custodian fee reduction 0.44%(2) 0.44% 0.45% 0.42% 0.47% 0.42%
Net investment income 5.35%(2) 5.38% 5.55% 5.47% 5.69% 5.31%
Portfolio Turnover 2% 16% 18% 8% 13% 38%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 8.07% 3.82% 4.82% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 57,298 $ 54,115 $ 56,330 $ 63,673 $ 63,067 $ 71,220
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets from 5.54% to 5.55%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
105
<Page>
<Table>
<Caption>
KENTUCKY PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.45%(2) 0.46% 0.45% 0.48% 0.52% 0.49%
Expenses after custodian fee reduction 0.45%(2) 0.44% 0.44% 0.44% 0.50% 0.47%
Net investment income 5.06%(2) 5.05% 5.25% 5.17% 5.75% 5.36%
Portfolio Turnover 2% 10% 5% 15% 11% 11%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 6.15% 3.22% 4.39% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 68,403 $ 67,575 $ 69,509 $ 79,821 $ 81,708 $ 97,762
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets from 5.23% to 5.25%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
106
<Page>
<Table>
<Caption>
LOUISIANA PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.40%(2) 0.40% 0.40% 0.43% 0.39% 0.37%
Expenses after custodian fee reduction 0.40%(2) 0.38% 0.38% 0.40% 0.35% 0.34%
Net investment income 5.32%(2) 5.33% 5.43% 5.28% 5.63% 5.16%
Portfolio Turnover 3% 21% 25% 14% 14% 20%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 6.97% 3.16% 5.02% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 28,751 $ 28,502 $ 29,389 $ 29,155 $ 28,441 $ 32,668
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets from 5.28% to 5.43%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
107
<Page>
<Table>
<Caption>
MARYLAND PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.46%(2) 0.47% 0.48% 0.47% 0.51% 0.49%
Expenses after custodian fee reduction 0.46%(2) 0.45% 0.46% 0.42% 0.49% 0.46%
Net investment income 5.10%(2) 4.96% 5.12% 5.30% 5.18% 5.05%
Portfolio Turnover 6% 28% 25% 18% 9% 31%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 6.22% 2.90% 5.17% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 76,072 $ 78,678 $ 85,416 $ 82,797 $ 81,676 $ 95,223
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets by less than 0.01%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
108
<Page>
<Table>
<Caption>
MISSOURI PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.45%(2) 0.45% 0.44% 0.45% 0.49% 0.46%
Expenses after custodian fee reduction 0.45%(2) 0.43% 0.43% 0.43% 0.48% 0.44%
Net investment income 5.36%(2) 5.39% 5.60% 5.65% 5.80% 5.28%
Portfolio Turnover 4% 20% 8% 8% 8% 21%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 6.58% 3.65% 5.24% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 58,901 $ 57,318 $ 58,748 $ 57,548 $ 58,927 $ 68,264
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets from 5.59% to 5.60%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
109
<Page>
<Table>
<Caption>
NORTH CAROLINA PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.46%(2) 0.48% 0.48% 0.49% 0.52% 0.50%
Expenses after custodian fee reduction 0.46%(2) 0.46% 0.48% 0.46% 0.49% 0.49%
Net investment income 4.97%(2) 4.99% 5.28% 5.34% 5.66% 5.24%
Portfolio Turnover 16% 21% 21% 28% 17% 3%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 6.61% 2.29% 4.43% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 87,638 $ 89,544 $ 95,819 $ 101,025 $ 110,493 $ 129,330
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets from 5.27% to 5.28%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
110
<Page>
<Table>
<Caption>
OREGON PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.48%(2) 0.49% 0.46% 0.48% 0.51% 0.48%
Expenses after custodian fee reduction 0.48%(2) 0.47% 0.45% 0.47% 0.50% 0.47%
Net investment income 5.49%(2) 5.50% 5.46% 5.45% 5.63% 5.27%
Portfolio Turnover 2% 16% 21% 13% 25% 35%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 7.45% 2.58% 5.28% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 84,926 $ 82,716 $ 83,614 $ 83,951 $ 83,712 $ 94,317
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets from 5.43% to 5.46%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
111
<Page>
<Table>
<Caption>
SOUTH CAROLINA PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.43%(2) 0.43% 0.40% 0.39% 0.44% 0.43%
Expenses after custodian fee reduction 0.43%(2) 0.41% 0.38% 0.34% 0.42% 0.40%
Net investment income 5.58%(2) 5.36% 5.49% 5.56% 5.77% 5.33%
Portfolio Turnover 33% 37% 15% 21% 12% 26%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 8.55% 3.15% 5.07% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 54,512 $ 51,214 $ 46,706 $ 39,821 $ 35,070 $ 44,833
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets from 5.46% to 5.49%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
112
<Page>
<Table>
<Caption>
TENNESSEE PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.41%(2) 0.42% 0.40% 0.41% 0.44% 0.42%
Expenses after custodian fee reduction 0.41%(2) 0.39% 0.38% 0.37% 0.42% 0.41%
Net investment income 5.01%(2) 5.05% 5.27% 5.39% 5.61% 5.23%
Portfolio Turnover 7% 17% 19% 11% 9% 13%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 6.56% 3.90% 5.38% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 49,824 $ 48,461 $ 47,857 $ 47,369 $ 45,015 $ 49,407
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets by less than 0.01%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
113
<Page>
<Table>
<Caption>
VIRGINIA PORTFOLIO
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2004 ---------------------------------------------------------
(UNAUDITED) 2003 2002(1) 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratios (As a percentage of average daily net assets):
Expenses 0.48%(2) 0.50% 0.49% 0.49% 0.54% 0.50%
Expenses after custodian fee reduction 0.48%(2) 0.49% 0.49% 0.47% 0.53% 0.48%
Net investment income 5.05%(2) 5.13% 5.31% 5.28% 5.61% 5.26%
Portfolio Turnover 10% 20% 33% 39% 23% 17%
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 7.61% 2.89% 4.25% -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S OMITTED) $ 116,129 $ 113,478 $ 119,649 $ 122,103 $ 115,776 $ 137,624
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) The Portfolio has adopted the provisions of the revised AICPA Audit and
Accounting Guide for Investment Companies and began using the interest
method to amortize premiums on fixed-income securities. The effect of this
change for the year ended August 31, 2002 was to increase the ratio of net
investment income to average net assets from 5.30% to 5.31%. Ratios for the
periods prior to September 1, 2001 have not been restated to reflect this
change in presentation.
(2) Annualized.
(3) Total return is required to be disclosed for fiscal years beginning after
December 15, 2000.
See notes to financial statements
114
<Page>
EATON VANCE MUNICIPALS PORTFOLIOS as of February 29, 2004
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 SIGNIFICANT ACCOUNTING POLICIES
Alabama Municipals Portfolio (Alabama Portfolio), Arkansas Municipals
Portfolio (Arkansas Portfolio), Georgia Municipals Portfolio (Georgia
Portfolio), Kentucky Municipals Portfolio (Kentucky Portfolio), Louisiana
Municipals Portfolio (Louisiana Portfolio), Maryland Municipals Portfolio
(Maryland Portfolio), Missouri Municipals Portfolio (Missouri Portfolio),
North Carolina Municipals Portfolio (North Carolina Portfolio), Oregon
Municipals Portfolio (Oregon Portfolio), South Carolina Municipals Portfolio
(South Carolina Portfolio), Tennessee Municipals Portfolio (Tennessee
Portfolio) and Virginia Municipals Portfolio (Virginia Portfolio),
collectively the Portfolios, are registered under the Investment Company Act
of 1940, as amended, as non-diversified open-end management investment
companies. The Portfolios, which were organized as trusts under the laws of
the State of New York on May 1, 1992, seek to achieve current income exempt
from regular federal income tax and from particular state or local income or
other taxes. The Declarations of Trust permit the Trustees to issue interests
in the Portfolios. At February 29, 2004, Eaton Vance Alabama Municipals Fund,
Eaton Vance Arkansas Municipals Fund, Eaton Vance Georgia Municipals Fund,
Eaton Vance Kentucky Municipals Fund, Eaton Vance Louisiana Municipals Fund,
Eaton Vance Maryland Municipals Fund, Eaton Vance Missouri Municipals Fund,
Eaton Vance North Carolina Municipals Fund, Eaton Vance Oregon Municipals
Fund, Eaton Vance South Carolina Municipals Fund, Eaton Vance Tennessee
Municipals Fund and Eaton Vance Virginia Municipals Fund each held an
approximate 99.9% interest in its corresponding Portfolio. The following is a
summary of significant accounting policies of the Portfolios. 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 bid and asked prices. Financial futures contracts and
options on financial futures contracts listed on commodity exchanges are
valued at closing settlement prices. Over-the-counter options on financial
futures contracts are normally valued at the mean between the latest bid and
asked prices. Interest rate swaps are normally valued on the basis of
valuations furnished by a broker. Short-term obligations, maturing in sixty
days or less, are valued at amortized cost, which approximates value.
Investments for which valuations or market quotations are unavailable are
valued at fair value using methods determined in good faith by or at the
direction of the Trustees.
B INCOME -- Interest income is determined on the basis of interest accrued,
adjusted for amortization of premium or discount.
C FEDERAL TAXES -- The Portfolios are treated as partnerships for Federal tax
purposes. No provision is made by the Portfolios for federal or state taxes
on any taxable income of the Portfolios because each investor in the
Portfolios is ultimately responsible for the payment of any taxes. Since some
of the Portfolios' investors are regulated investment companies that invest
all or substantially all of their assets in the Portfolios, the Portfolios
normally must satisfy the applicable source of income and diversification
requirements (under the Internal Revenue Code) in order for their respective
investors to satisfy them. The Portfolios will allocate at least annually
among their respective investors each investor's distributive share of the
Portfolios' net taxable (if any) and tax-exempt investment income, net
realized capital gains, and any other items of income, gain, loss, deduction
or credit. Interest income received by the Portfolios on investments in
municipal bonds, which is excludable from gross income under the Internal
Revenue Code, will retain its status as income exempt from federal income tax
when allocated to each Portfolio's investors. The portion of such interest,
if any, earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item for investors.
D FINANCIAL FUTURES CONTRACTS -- Upon the entering of a financial futures
contract, a Portfolio is required to deposit (initial margin) either in cash
or securities an amount equal to a certain percentage of the purchase price
indicated in the financial futures contract. Subsequent payments are made or
received by a Portfolio (margin maintenance) each day, dependent on the daily
fluctuations in the value of the underlying security, and are recorded for
book purposes as unrealized gains or losses by a Portfolio. A Portfolio's
investment in financial futures contracts is designed for both hedging
against anticipated future changes in interest rates and investment purposes.
Should interest rates move unexpectedly, a Portfolio may not achieve the
anticipated benefits of the financial futures contracts and may realize a
loss.
115
<Page>
E OPTIONS ON FINANCIAL FUTURES CONTRACTS -- Upon the purchase of a put option
on a financial futures contract by a Portfolio, the premium paid is recorded
as an investment, the value of which is marked-to-market daily. When a
purchased option expires, a Portfolio will realize a loss in the amount of
the cost of the option. When a Portfolio enters into a closing sale
transaction, a Portfolio 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 a Portfolio exercises a put option, settlement is
made in cash. The risk associated with purchasing put options is limited to
the premium originally paid.
F 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.
G WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Portfolios may engage
in when-issued and delayed delivery transactions. The Portfolios record
when-issued securities on trade date and maintain security positions such
that sufficient liquid assets will be available to make payments for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked-to-market daily and begin earning interest on
settlement date.
H INTEREST RATE SWAPS -- A Portfolio 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 or sale of
securities. Pursuant to these agreements, the Portfolios make semi-annual
payments at a fixed interest rate. In exchange, a Portfolio 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
Portfolio is exposed to credit loss in the event of non-performance by the
swap counterparty. However, the Portfolio does not anticipate non-performance
by the counterparty. Risk may also arise from the unanticipated movements in
value of interest rates.
I OTHER -- Investment transactions are accounted for on a trade date basis.
Realized gains and losses are computed based on the specific identification
of the securities sold.
J EXPENSE REDUCTION -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolios. Pursuant to the respective custodian agreements,
IBT receives a fee reduced by credits which are determined based on the
average daily cash balances each Portfolio maintains with IBT. All
significant credit balances used to reduce the Portfolios' custodian fees are
reported as a reduction of total expenses in the Statements of Operations.
K USE OF ESTIMATES -- The preparation of the financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expense during the
reporting period. Actual results could differ from those estimates.
L INDEMNIFICATIONS -- Under a Portfolio'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 Portfolio.
Interestholders in the Portfolio are jointly and severally liable for the
liabilities and obligations of the Portfolio in the event that the Portfolio
fails to satisfy such liabilities and obligations; provided, however, that,
to the extent assets are available in the Portfolio, the Portfolio may, under
certain circumstances, indemnify interestholders from and against any claim
or liability to which such holder may become subject by reason of being or
having been an interestholder in the Portfolio. Additionally, in the normal
course of business, the Portfolio enters into agreements with service
providers that may contain indemnification clauses. The Portfolio's maximum
exposure under these arrangements is unknown as this would involve future
claims that may be made against the Portfolio that have not yet occurred.
M INTERIM FINANCIAL STATEMENTS -- The interim financial statements relating
to February 29, 2004 and for the six months then ended have not been audited
by independent certified public accountants, but in the opinion of the
Portfolios' management reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
116
<Page>
2 INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by Boston Management and Research (BMR),
a wholly-owned subsidiary of Eaton Vance Management (EVM), as compensation
for management and investment advisory services rendered to each Portfolio.
The fee is based upon a percentage of average daily net assets plus a
percentage of gross income (i.e., income other than gains from the sale of
securities). For the six months ended February 29, 2004, the Portfolios paid
advisory fees as follows:
<Table>
<Caption>
PORTFOLIO AMOUNT EFFECTIVE RATE*
-------------------------------------------------------------
Alabama $ 105,120 0.32%
Arkansas 56,844 0.26%
Georgia 84,416 0.30%
Kentucky 111,364 0.33%
Louisiana 29,241 0.20%
Maryland 133,953 0.35%
Missouri 88,275 0.31%
North Carolina 155,986 0.36%
Oregon 151,235 0.36%
South Carolina 79,388 0.30%
Tennessee 66,945 0.27%
Virginia 219,138 0.38%
</Table>
* As a percentage of average daily net assets (annualized).
Except as to Trustees of the Portfolios who are not members of EVM's or BMR's
organization, officers and Trustees receive remuneration for their services
to the Portfolios out of such investment adviser fee.
Trustees of the Portfolios that are not affiliated with the Investment
Adviser may elect to defer receipt of all or a percentage of their annual
fees in accordance with the terms of the Trustees Deferred Compensation Plan.
For the six months ended February 29, 2004, no significant amounts have been
deferred.
Certain officers and Trustees of the Portfolios are officers of the above
organizations.
During the six months ended February 29, 2004, certain Portfolios engaged in
purchase and sale transactions with other Portfolios that also utilize BMR as
an investment adviser. These purchase and sale transactions complied with
Rule 17a-7 under the Investment Company Act of 1940 and amounted to:
<Table>
<Caption>
PORTFOLIO PURCHASES SALES
--------------------------------------------------------------
Arkansas $ 507,980 $ 1,327,058
Georgia 306,603 --
Tennessee -- 109,163
</Table>
3 INVESTMENTS
Purchases and sales of investments, other than U.S. Government securities,
purchased options and short-term obligations, for the six months ended
February 29, 2004, were as follows:
<Table>
ALABAMA PORTFOLIO
Purchases $ 8,761,221
Sales 11,446,817
ARKANSAS PORTFOLIO
Purchases $ 3,087,755
Sales 3,183,859
GEORGIA PORTFOLIO
Purchases $ 1,061,471
Sales 1,357,325
KENTUCKY PORTFOLIO
Purchases $ 1,007,880
Sales 3,704,675
LOUISIANA PORTFOLIO
Purchases $ 886,356
Sales 1,708,062
MARYLAND PORTFOLIO
Purchases $ 4,377,118
Sales 9,628,318
MISSOURI PORTFOLIO
Purchases $ 2,032,165
Sales 3,924,203
</Table>
117
<Page>
<Table>
NORTH CAROLINA PORTFOLIO
Purchases $ 13,705,302
Sales 20,072,074
OREGON PORTFOLIO
Purchases $ 1,602,059
Sales 5,695,965
SOUTH CAROLINA PORTFOLIO
Purchases $ 17,371,249
Sales 19,575,704
TENNESSEE PORTFOLIO
Purchases $ 3,497,110
Sales 3,586,428
VIRGINIA PORTFOLIO
Purchases $ 10,788,410
Sales 15,599,868
</Table>
4 FEDERAL INCOME TAX BASIS OF UNREALIZED APPRECIATION (DEPRECIATION)
The cost and unrealized appreciation (depreciation) in value of the
investments owned by each Portfolio at February 29, 2004, as computed on a
federal income tax basis, are as follows:
<Table>
ALABAMA PORTFOLIO
AGGREGATE COST $ 59,142,895
--------------------------------------------------------------
Gross unrealized appreciation $ 5,661,343
Gross unrealized depreciation (232,515)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 5,428,828
--------------------------------------------------------------
ARKANSAS PORTFOLIO
AGGREGATE COST $ 42,244,771
--------------------------------------------------------------
Gross unrealized appreciation $ 3,469,192
Gross unrealized depreciation (258,458)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 3,210,734
--------------------------------------------------------------
GEORGIA PORTFOLIO
AGGREGATE COST $ 51,212,773
--------------------------------------------------------------
Gross unrealized appreciation $ 6,561,073
Gross unrealized depreciation (1,144,594)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 5,416,479
--------------------------------------------------------------
KENTUCKY PORTFOLIO
AGGREGATE COST $ 59,860,592
--------------------------------------------------------------
Gross unrealized appreciation $ 7,096,136
Gross unrealized depreciation (19,054)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 7,077,082
--------------------------------------------------------------
LOUISIANA PORTFOLIO
AGGREGATE COST $ 26,507,251
--------------------------------------------------------------
Gross unrealized appreciation $ 2,582,758
Gross unrealized depreciation (100,449)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 2,482,309
--------------------------------------------------------------
MARYLAND PORTFOLIO
AGGREGATE COST $ 72,647,254
--------------------------------------------------------------
Gross unrealized appreciation $ 5,966,186
Gross unrealized depreciation (3,322,323)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 2,643,863
--------------------------------------------------------------
MISSOURI PORTFOLIO
AGGREGATE COST $ 51,549,120
--------------------------------------------------------------
Gross unrealized appreciation $ 5,914,809
Gross unrealized depreciation (287,586)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 5,627,223
--------------------------------------------------------------
NORTH CAROLINA PORTFOLIO
AGGREGATE COST $ 79,124,752
--------------------------------------------------------------
Gross unrealized appreciation $ 8,678,535
Gross unrealized depreciation (860,686)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 7,817,849
--------------------------------------------------------------
</Table>
118
<Page>
<Table>
OREGON PORTFOLIO
AGGREGATE COST $ 76,803,882
--------------------------------------------------------------
Gross unrealized appreciation $ 6,115,428
Gross unrealized depreciation (242,331)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 5,873,097
--------------------------------------------------------------
SOUTH CAROLINA PORTFOLIO
AGGREGATE COST $ 49,207,319
--------------------------------------------------------------
Gross unrealized appreciation $ 3,898,361
Gross unrealized depreciation (35,054)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 3,863,307
--------------------------------------------------------------
TENNESSEE PORTFOLIO
AGGREGATE COST $ 43,636,066
--------------------------------------------------------------
Gross unrealized appreciation $ 4,664,957
Gross unrealized depreciation --
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 4,664,957
--------------------------------------------------------------
VIRGINIA PORTFOLIO
AGGREGATE COST $ 102,153,950
--------------------------------------------------------------
Gross unrealized appreciation $ 11,699,341
Gross unrealized depreciation (6,728)
--------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 11,692,613
--------------------------------------------------------------
</Table>
5 LINE OF CREDIT
The Portfolios participate with other portfolios and funds managed by BMR and
EVM and its affiliates in a $150 million unsecured line of credit agreement
with a group of banks. Borrowings will be made by the Portfolios solely to
facilitate the handling of unusual and/or unanticipated short-term cash
requirements. Interest is charged to each participating portfolio or fund
based on its borrowings at an amount above either the Eurodollar rate or
federal funds rate. In addition, a fee computed at an annual rate of 0.10% on
the daily unused portion of the line of credit is allocated among the
participating portfolios and funds at the end of each quarter. At February
29, 2004, the Arkansas Portfolio, the Louisiana Portfolio, the Maryland
Portfolio, the North Carolina Portfolio, and the Virginia Portfolio had
balances outstanding pursuant to this line of credit of $100,000, $500,000,
$500,000, $100,000 and $300,000, respectively. The Portfolios did not have
any significant borrowings or allocated fees during the six months ended
February 29, 2004.
6 FINANCIAL INSTRUMENTS
The Portfolios regularly trade in financial instruments with off-balance
sheet risk in the normal course of their investing activities to assist in
managing exposure to various market risks. These financial instruments
include futures contracts and 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 a Portfolio has in particular classes of
financial instruments and does not necessarily represent the amounts
potentially subject to risk. The measurement of the risks associated with
these instruments is meaningful only when all related and offsetting
transactions are considered.
A summary of obligations held under these financial instruments at February
29, 2004, is as follows:
FUTURES CONTRACTS
<Table>
<Caption>
EXPIRATION NET UNREALIZED
PORTFOLIO DATE CONTRACTS POSITION DEPRECIATION
----------------------------------------------------------------------------------
Alabama 3/04 57 U.S. Treasury Bond Short $ (148,722)
6/04 9 U.S. Treasury Bond Short (14,663)
----------------------------------------------------------------------------------
Arkansas 3/04 50 U.S. Treasury Bond Short (230,876)
3/04 20 U.S. Treasury Note Short (65,685)
----------------------------------------------------------------------------------
Georgia 3/04 81 U.S. Treasury Bond Short (347,125)
----------------------------------------------------------------------------------
Kentucky 3/04 67 U.S. Treasury Bond Short (185,019)
6/04 9 U.S. Treasury Bond Short (14,663)
----------------------------------------------------------------------------------
Louisiana 3/04 45 U.S. Treasury Bond Short (182,231)
----------------------------------------------------------------------------------
Maryland 3/04 93 U.S. Treasury Bond Short (252,030)
6/04 13 U.S. Treasury Bond Short (21,180)
----------------------------------------------------------------------------------
Missouri 3/04 79 U.S. Treasury Bond Short (338,555)
----------------------------------------------------------------------------------
North Carolina 3/04 130 U.S. Treasury Bond Short (525,265)
----------------------------------------------------------------------------------
Oregon 3/04 165 U.S. Treasury Bond Short (627,983)
3/04 40 U.S. Treasury Note Short (131,368)
----------------------------------------------------------------------------------
South Carolina 3/04 80 U.S. Treasury Bond Short (312,458)
----------------------------------------------------------------------------------
Tennessee 3/04 72 U.S. Treasury Bond Short (308,556)
----------------------------------------------------------------------------------
Virginia 3/04 190 U.S. Treasury Bond Short (759,593)
</Table>
At February 29, 2004, the Portfolios had sufficient cash and/or securities to
cover margin requirements on open futures contracts.
119
<Page>
7 INTERESTHOLDER MEETING
Each Portfolio held a Special Meeting of Interestholders on February 20,
2004. At the Special Meeting, shareholders voted to change each Portfolio's
diversification status from diversified to non-diversified. The results of
the vote were as follows. Results are rounded to the nearest whole number:
<Table>
<Caption>
ALABAMA FUND ARKANSAS FUND GEORGIA FUND KENTUCKY FUND LOUISIANA FUND MARYLAND FUND
---------------------------------------------------------------------------------------------------------------------------
Affirmative 89% 89% 88% 85% 91% 87%
Against 4% 4% 8% 10% 7% 8%
Abstain 7% 7% 4% 5% 2% 5%
<Caption>
MISSOURI FUND NORTH CAROLINA FUND OREGON FUND SOUTH CAROLINA FUND TENNESSEE FUND VIRGINIA FUND
---------------------------------------------------------------------------------------------------------------------------
Affirmative 83% 85% 82% 90% 84% 88%
Against 10% 8% 8% 6% 6% 8%
Abstain 7% 7% 10% 4% 10% 4%
</Table>
120
<Page>
EATON VANCE MUNICIPALS FUNDS
INVESTMENT MANAGEMENT
EATON VANCE MUNICIPALS FUNDS
OFFICERS
Thomas J. Fetter
President
James B. Hawkes
Vice President and Trustee
Robert B. MacIntosh
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
TRUSTEES
Samuel L. Hayes, III
William H. Park
Ronald A. Pearlman
Norton H. Reamer
Lynn A. Stout
MUNICIPALS PORTFOLIOS
OFFICERS
Thomas J. Fetter
President and Portfolio Manager of South Carolina
Municipals Portfolio
James B. Hawkes
Vice President and Trustee
William H. Ahern, Jr.
Vice President and Portfolio Manager of Alabama, Kentucky,
and Maryland Municipals Portfolios
Cynthia J. Clemson
Vice President and Portfolio Manager of Georgia, Missouri,
and Tennessee Municipals Portfolios
Robert B. MacIntosh
Vice President and Portfolio Manager of Louisiana and
Virginia Municipals Portfolios
Thomas M. Metzold
Vice President and Portfolio Manager of Arkansas, North
Carolina and Oregon Municipals Portfolios
Kristin S. Anagnost
Treasurer of Louisiana, Missouri, Oregon and Tennessee
Municipals Portfolios
Barbara E. Campbell
Treasurer of Alabama, Arkansas, Georgia, Kentucky, Maryland,
North Carolina, South Carolina and Virginia Municipals
Portfolios
Alan R. Dynner
Secretary
TRUSTEES
Samuel L. Hayes, III
William H. Park
Ronald A. Pearlman
Norton H. Reamer
Lynn A. Stout
121
<Page>
PORTFOLIO INVESTMENT ADVISER
BOSTON MANAGEMENT AND RESEARCH
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
FUND ADMINISTRATOR
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.
P.O. BOX 43027
PROVIDENCE, RI 02940-3027
1-800-331-1710
EATON VANCE MUNICIPALS TRUST
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
This report must be preceded or accompanied by a current prospectus. Before
investing, investors should consider carefully a Fund's investment
objective(s), risks and charges and expenses. The Funds' current prospectus
contains this and other information abo ut each Fund and is available through
your financial advisor. Please read the prospectus carefully before you invest
or send money.
<Page>
445-4/04 12MUNISRC
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE ALABAMA MUNICIPALS FUND)
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 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: April 20, 2004
--------------
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE ARKANSAS MUNICIPALS FUND)
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 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: April 20, 2004
--------------
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE GEORGIA MUNICIPALS FUND)
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 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: April 20, 2004
--------------
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE KENTUCKY MUNICIPALS FUND)
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 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: April 20, 2004
--------------
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE LOUISIANA MUNICIPALS
FUND)
By: /S/ Thomas J. Fetter
----------------------------------
President
Date: April 20, 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
----------------------------------
Treasurer
Date: April 20, 2004
--------------
By: /S/ Thomas J. Fetter
----------------------------------
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE MARYLAND MUNICIPALS FUND)
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 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: April 20, 2004
--------------
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE MISSOURI MUNICIPALS FUND)
By: /S/ Thomas J. Fetter
----------------------------------
President
Date: April 20, 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
----------------------------------
Treasurer
Date: April 20, 2004
--------------
By: /S/ Thomas J. Fetter
----------------------------------
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE NORTH CAROLINA MUNICIPALS
FUND)
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 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: April 20, 2004
--------------
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE OREGON MUNICIPALS FUND)
By:
/S/ Thomas J. Fetter
President
Date: April 20, 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
Treasurer
Date: April 20, 2004
--------------
By:
/S/ Thomas J. Fetter
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE SOUTH CAROLINA MUNICIPALS
FUND)
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 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: April 20, 2004
--------------
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE TENNESSEE MUNICIPALS
FUND)
By:
/S/ Thomas J. Fetter
President
Date: APRIL 20, 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
Treasurer
Date: April 20, 2004
--------------
By:
/S/ Thomas J. Fetter
President
Date: April 20, 2004
--------------
<Page>
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
The registrant undertakes to provide a copy of such code of ethics to any person
upon request, without charge, by calling 1-800-262-1122.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated William H. Park, Samuel L. Hayes, III and
Norton H. Reamer, each an independent trustee, as its audit committee financial
experts. Mr. Park is a certified public accountant who is the President and
Chief Executive Officer of Prizm Capital Management, LLC (a fixed income
investment management firm). Previously, he served as Executive Vice President
and Chief Financial Officer of United Asset Management Corporation ("UAM") (a
holding company 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
Not required in this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not required in this filing.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in this filing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
<Page>
ITEM 10. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant's internal controls over
financial reporting during the period that has materially affected, or is
reasonably likely to materially affect the registrant's internal control over
financial reporting.
ITEM 11. 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 MUNICIPALS TRUST (ON BEHALF OF EATON VANCE VIRGINIA MUNICIPALS FUND)
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 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: April 20, 2004
--------------
By: /s/ Thomas J. Fetter
----------------------------------
Thomas J. Fetter
President
Date: April 20, 2004
--------------