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

811-21219

 

Eaton Vance Insured California Municipal Bond Fund II

(Exact name of registrant as specified in charter)

 

The Eaton Vance Building, 255 State Street, Boston, Massachusetts

 

02109

(Address of principal executive offices)

 

(Zip code)

 

Maureen A. Gemma

The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

(617) 482-8260

 

 

Date of fiscal year end:

September 30

 

 

Date of reporting period:

September 30, 2008

 

 



 

Item 1. Reports to Stockholders

 



Annual Report September 30, 2008

EATON VANCE
INSURED
MUNICIPAL
BOND
FUNDS

CLOSED-END FUNDS:

Insured Municipal II

Insured California II

Insured Florida Plus

Insured Massachusetts

Insured Michigan

Insured New Jersey

Insured New York II

Insured Ohio

Insured Pennsylvania



IMPORTANT NOTICES REGARDING PRIVACY,
DELIVERY OF SHAREHOLDER DOCUMENTS,
PORTFOLIO HOLDINGS, AND PROXY VOTING

Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy ("Privacy 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. This may include information such as name, address, social security number, tax status, account balances and transactions.

•  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). In the normal course of servicing a customer's account, Eaton Vance may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker/dealers.

•  Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information.

•  We reserve the right to change our Privacy Policy at any time upon proper notification to you. Customers may want to review our Policy periodically for changes by accessing the link on our homepage: www.eatonvance.com.

Our pledge of privacy applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Boston Management and Research, and Eaton Vance Distributors, Inc.

In addition, our Privacy Policy only applies to those Eaton Vance customers who are individuals and who have a direct relationship with us. If a customer's account (i.e., fund shares) is held in the name of a third-party financial adviser/ broker-dealer, it is likely that only such adviser's privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures.

For more information about Eaton Vance's Privacy Policy, please call 1-800-262-1122.

Delivery of Shareholder Documents. The Securities and Exchange Commission (the "SEC") permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called "householding" and it helps eliminate duplicate mailings to shareholders.

Eaton Vance, or your financial adviser, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial adviser, otherwise.

If you would prefer that your Eaton Vance documents not be householded, please contact Eaton Vance at 1-800-262-1122, or contact your financial adviser.

Your instructions that householding not apply to delivery of your Eaton Vance documents will be effective within 30 days of receipt by Eaton Vance or your financial adviser.

Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio (if applicable) will file a schedule of its portfolio holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Form N-Q will be available on the Eaton Vance website www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC's website at www.sec.gov. Form N-Q may also be reviewed and copied at the SEC's public reference room in Washington, D.C. (call 1-800-732-0330 for information on the operation of the public reference room).

Proxy Voting. 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 (if applicable) 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 and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12 month period ended June 30, without charge, upon request, by calling 1-800-262-1122. This description is also available on the SEC's website at www.sec.gov.




 

Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

 

TABLE OF CONTENTS

 

Management’s Discussion of Fund Performance

2

 

 

Performance Information and Portfolio Composition

 

 

 

Eaton Vance Insured Municipal Bond Fund II

4

Eaton Vance Insured California Municipal Bond Fund II

5

Eaton Vance Insured Florida Plus Municipal Bond Fund

6

Eaton Vance Insured Massachusetts Municipal Bond Fund

7

Eaton Vance Insured Michigan Municipal Bond Fund

8

Eaton Vance Insured New Jersey Municipal Bond Fund

9

Eaton Vance Insured New York Municipal Bond Fund II

10

Eaton Vance Insured Ohio Municipal Bond Fund

11

Eaton Vance Insured Pennsylvania Municipal Bond Fund

12

 

 

Financial Statements

13

 

 

Federal Tax Information

77

 

 

Notice to Shareholders

78

 

 

Annual Meeting of Shareholders

79

 

 

Dividend Reinvestment Plan

80

 

 

Board of Trustees’ Annual Approval of the Investment Advisory Agreements

82

 

 

Management and Organization

85

 

1



 

Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

 

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

 

Eaton Vance Insured Municipal Bond Funds (the “Funds”) are closed-end funds traded on the NYSE Alternext U.S., which are designed to provide current income exempt from regular federal income tax, federal alternative minimum tax and, in state specific funds, state personal income taxes, as applicable. The Funds invest primarily in high-grade municipal securities that are insured as to the timely payment of principal and interest.

 

Economic and Market Conditions

 

Economic growth in the third quarter of 2008 retracted 0.3%, down from a positive second quarter growth rate of 2.8%, according to preliminary data released by the U.S. Department of Commerce. Most of the major Gross Domestic Product (GDP) components led to the decline; however, most influential was a sharp downturn in personal consumption expenditures by consumers. While high commodity prices began to mitigate over the quarter, management believes consumers continued to pare costs as they remained cautious of what increasingly has become a weaker economic environment. Rising unemployment levels, now at a five-year high, combined with the fading effect of government economic stimulus checks, have led to constrained personal consumption and overall economic contraction for the quarter. The housing market continues to weigh on the economy, with new home sales continuing to fall and existing home sales beginning to stabilize only as cautious buyers begin to see value in distressed pricing. Low home prices continue to pressure consumers and banks, causing increased bank foreclosures and more mark-to-market write downs of mortgage-backed securities at commercial banks and financial institutions.

 

During the Funds’ fiscal year, the capital markets have experienced historic events resulting in unprecedented volatility. During the second week of September 2008, the federal government took control of federally-chartered mortgage giants Fannie Mae and Freddie Mac. The following week, Lehman Brothers filed for bankruptcy protection and Merrill Lynch was acquired by Bank of America. Later in the month, Goldman Sachs and Morgan Stanley petitioned the Federal Reserve (the Fed) to become bank holding companies. These actions, in conjunction with Bear Stearns’ acquisition by JP Morgan in March 2008, drastically redefined the Wall Street landscape. In addition to the independent Wall Street brokerages, the banking sector was shaken by the failure of Washington Mutual and the sale of Wachovia. In the insurance sector, the federal government provided an $85 billion loan to help stabilize American International Group, Inc. (AIG). Finally, the U.S. Congress approved a $700 billion program authorizing the federal government to purchase troubled assets from financial institutions.

 

During the period, the Fed left rates unchanged at its June, August and September 2008 meetings after lowering the Federal Funds rate to 2.0% from 5.25% between August 2007 and May 2008. In addition to its interest rate policy, the Fed has also taken extraordinary action through a variety of innovative lending techniques in an attempt to facilitate an easing of the credit crisis.

 

Management Discussion

 

The Funds invest primarily in bonds with stated maturities of 10 years or longer at the time of investment, as longer-maturity bonds historically have provided greater tax-exempt income for investors than shorter-maturity bonds.

 

Relative to their benchmark, the Lehman Brothers Municipal Bond Index(1) (the “Index”) a broad-based, unmanaged index of municipal bonds the Funds underperformed for the year ended September 30, 2008. As a result of an active management style that focuses on income and longer call protection, each Fund generally holds longer-maturity bonds. Management believes that much of the Funds’ underperformance can be attributed to the shift of investors’ capital into shorter- maturity bonds, a result of the broader-based credit crisis that has rattled the fixed-income markets since August 2007. This underperformance was magnified by the Funds’ use of leverage and leveraged investments. The move to shorter-term investments was originally driven by uncertainty surrounding financial companies’ exposure to subprime mortgage-backed debt but later spread to the municipal market when major municipal bond insurers suffered rating downgrades due to their exposure to mortgage-related structured products.

 

The ratio of yields on current coupon AAA-rated insured bonds to the yield on 30-year Treasury bonds was 124 .1% as of September 30, 2008, with many

 


(1)

It is not possible to invest directly in an Index. The Index’s total return does not reflect expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Index.

 

 

Private insurance does not eliminate the risk of loss associated with Fund shares.

 

Past performance is no guarantee of future results.

 

The views expressed throughout this report are those of the portfolio managers and are current only through the end of the period of the report as stated on the cover. These views are subject to change at any time based upon market or other conditions, and the investment adviser disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund are based on many factors, may not be relied on as an indication of trading intent on behalf of any Eaton Vance fund. Portfolio information provided in the report may not be representative of the Funds’ current or future investments and may change due to active management.

 

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



 

individual bonds trading higher than 124.1%.(1) Management believes that this was the result of dislocation in the fixed-income marketplace caused by fears of the broader credit crisis, insurance companies’ mark-to-market risks and the decentralized nature of the municipal marketplace. Historically, this is a rare occurrence in the municipal bond market and is generally considered a signal that municipal bonds are significantly undervalued relative to taxable Treasury bonds.

 

Against this backdrop, management continues to manage all of its municipal funds with the same relative value approach that it has traditionally employed – maintaining a long-term perspective when markets exhibit extreme short-term volatility. We believe this approach has provided excellent long-term benefits to our investors over time.

 

A NOTE REGARDING AUCTION PREFERRED SHARES (APS)

 

As has been widely reported since mid-February 2008, the normal functioning of the auction market in the United States for certain types of “auction rate securities” has been disrupted by an imbalance between buy and sell orders. Consistent with patterns in the broader market for auction rate securities, the Funds have, since mid-February, experienced unsuccessful APS auctions. In the event of an unsuccessful auction, the affected APS remain outstanding, and the dividend rate reverts to the specified maximum payable rate.

 

During the year ended September 30, 2008, certain Funds redeemed a portion of their outstanding APS. Information relating to these redemptions is contained in Note 2 to the Financial Statements. The replacement financing for the redeemed APS was provided through the creation of tender option bonds (TOB5).(2) The cost to the Funds of the new TOB financing is expected, over time, to be lower than the total cost of APS based on the maximum applicable dividend rates. Each Fund’s APS percentage (i.e. APS at liquidation value as a percentage of the Fund’s net assets applicable to common shares plus APS) as of September 30, 2008 is reflected on the Fund-specific pages following this letter The leverage created by APS and TOB investments provides an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and share price of the common shares).

 

From October 27, 2008 through October 31, 2008, after the end of the reporting period, certain Funds voluntarily redeemed a portion of their outstanding APS to reduce the amount of the Funds’ financial leverage. Information relating to these redemptions is contained in Note 13 to the Financial Statements.

 


(1)

Source: Bloomberg L.P. Yields are a compilation of a representative variety of general obligations and are not necessarily representative of a Fund’s yield.

 

 

(2)

Source: See Note 1H to Financial Statements for more information on TOB investments.

 

3



 

Eaton Vance Insured Municipal Bond Fund II as of September 30, 2008

 

PERFORMANCE INFORMATION AND PORTFOLIO COMPOSITION

 

Fund Performance(1)

 

NYSE Alternext U.S. Symbol

 

EIV

 

 

 

 

 

Average Annual Total Return (by share price)

 

 

 

One Year

 

-13.61

%

Five Years

 

2.88

 

Life of Fund (11/29/02)

 

2.92

 

 

 

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

-23.08

%

Five Years

 

0.65

 

Life of Fund (11/29/02)

 

1.97

 

 

 

 

 

Premium/(Discount) to NAV

 

5.62

%

 

Market Yields

 

Market Yield(2)

 

6.70

%

Taxable-Equivalent Market Yield(3)

 

10.31

 

 

Index performance(4) Average Annual Total Returns

 

 

 

Lehman Brothers Municipal Bond Index

 

Lehman Brothers Municipal Bond Long 22+ Index

 

One Year

 

-1.87

%

-9.55

%

Five Years

 

2.84

 

2.46

 

Life of Fund (11/30/02)

 

3.47

 

3.11

 

 

Lipper Averages(5) Average Annual Total Returns

 

Lipper Insured Municipal Debt Funds (Leveraged) Classification (by net asset value)

 

 

 

One Year

 

-11.20

%

Five Years

 

1.18

 

Life of Fund (11/30/02)

 

2.39

 

 

Portfolio Manager: William H. Ahern, Jr., CFA

 

Rating Distribution*(6)

 

By total investments

 

 


*

The rating distribution presented above includes the ratings of securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements. Absent such securities, the Fund’s rating distribution at 9/30/08 is as follows and the average rating is AA:

 

AAA

 

35.0

%

AA

 

48.6

%

A

 

9.6

%

BBB

 

6.1

%

B

 

0.7

%

 

Fund Statistics(7)

 

·

Number of Issues:

 

82

 

·

Average Maturity:

 

26.8

years

·

Average Effective Maturity:

 

26.1

years

·

Average Call Protection:

 

11.8

years

·

Average Dollar Price:

 

$

77.99

 

·

APS Leverage:**

 

21.1

%

·

TOB Leverage:**

 

27.1

%

 


**

APS leverage represents the liquidation value of the Fund’s Auction Preferred Shares (APS) outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and TOB Floating Rate Notes. TOB leverage represents the amount of Floating Rate Notes outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and Floating Rate Notes. Floating Rate Notes in both calculations reflect adjustments for executed but unsettled TOB transactions and the effect of TOBs purchased in secondary market transactions.

 

(1) Returns are historical and are calculated by determining the percentage change in share price or net asset value (as applicable) with all distributions reinvested. The Fund’s performance at market share price will differ from its results at NAV. Although share price performance generally reflects investment results over time, during shorter periods, returns at share price can also be affected by factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for the Fund’s shares, or changes in Fund distributions. Performance results reflect the effects of APS outstanding and TOB investments, which are forms of investment leverage. Use of leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares).

 

(2) The Fund’s market yield is calculated by dividing the last dividend paid per common share of the fiscal year by the share price at the end of the fiscal year and annualizing the result.

 

(3) Taxable-equivalent figure assumes a maximum 35.00% federal income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

 

(4) It is not possible to invest directly in an Index. The Indices’ total returns do not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Indices. Index performance is available as of month end only.

 

(5) The Lipper Averages are the average annual total returns, at net asset value, of the funds that are in the same Lipper Classification as the Fund. It is not possible to invest in a Lipper Classification. Lipper Classifications may include insured and uninsured funds, as well as leveraged and unleveraged funds. The Lipper Insured Municipal Debt Funds (Leveraged) Classification (closed-end) contained 23 funds for the 1-year, 5-year and Life-of-Fund periods. Lipper Averages are available as of month end only.

 

(6) Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund. Although the investment adviser considers ratings when making investment decisions, it performs its own credit and investment analysis and does not rely primarily on the ratings assigned by the rating services. Credit quality can change from time to time, and recently issued credit ratings may not fully reflect the actual risks posed by a particular security or the issuer’s current financial condition.

 

(7) Fund holdings information excludes securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements.

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when sold, 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. For performance as of the most recent month end, please refer to www.eatonvance.com.

 

4



 

Eaton Vance Insured California Municipal Bond Fund II as of September 30, 2008

 

PERFORMANCE INFORMATION AND PORTFOLIO COMPOSITION

 

Fund Performance(1)

 

NYSE Alternext U.S. Symbol

 

EIA

 

 

 

 

 

Average Annual Total Return (by share price)

 

 

 

One Year

 

-23.40

%

Five Years

 

-0.03

 

Life of Fund (11/29/02)

 

0.15

 

 

 

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

-19.81

%

Five Years

 

0.87

 

Life of Fund (11/29/02)

 

1.85

 

 

 

 

 

Premium/(Discount) to NAV

 

-9.37

%

 

Market Yields

 

Market Yield(2)

 

6.84

%

Taxable-Equivalent Market Yield(3)

 

11.60

 

 

Index Performance(4) Average Annual Total Returns

 

 

 

Lehman Brothers Municipal Bond Index

 

Lehman Brothers Municipal Bond Long 22+ Index

 

One Year

 

-1.87

%

-9.55

%

Five Years

 

2.84

 

2.46

 

Life of Fund (11/30/02)

 

3.47

 

3.11

 

 

Lipper Averages(5) Average Annual Total Returns

 

Lipper Single State Insured Municipal Debt Funds Classification (by net asset value)

 

 

 

One Year

 

-10.12

%

Five Years

 

1.81

 

Life of Fund (11/30/02)

 

2.81

 

 

Portfolio Manager: Cynthia J. Clemson

 

Rating Distribution*(6)

 

By total investments

 

 


*

The rating distribution presented above includes the ratings of securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements. Absent such securities, the Fund’s rating distribution at 9/30/08 is as follows and the average rating is AA:

 

AAA

 

23.8

%

AA

 

60.3

%

A

 

10.2

%

BBB

 

5.7

%

 

Fund Statistics(7)

 

·

Number of Issues:

 

53

 

·

Average Maturity:

 

24.4

years

·

Average Effective Maturity:

 

24.3

years

·

Average Call Protection:

 

7.9

years

·

Average Dollar Price:

 

$

77.16

 

·

APS Leverage:**

 

32.2

%

·

TOB Leverage:**

 

13.1

%

 


**

APS leverage represents the liquidation value of the Fund’s Auction Preferred Shares (APS) outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and TOB Floating Rate Notes. TOB leverage represents the amount of Floating Rate Notes outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and Floating Rate Notes. Floating Rate Notes in both calculations reflect adjustments for executed but unsettled TOB transactions and the effect of TOBs purchased in secondary market transactions.

 

(1) Returns are historical and are calculated by determining the percentage change in share price or net asset value (as applicable) with all distributions reinvested. The Fund’s performance at market share price will differ from its results at NAV. Although share price performance generally reflects investment results over time, during shorter periods, returns at share price can also be affected by factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for the Fund’s shares, or changes in Fund distributions. Performance results reflect the effects of APS outstanding and TOB investments, which are forms of investment leverage. Use of leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares).

 

(2) The Fund’s market yield is calculated by dividing the last dividend paid per common share of the fiscal year by the share price at the end of the fiscal year and annualizing the result.

 

(3) Taxable-equivalent figure assumes a maximum 41.05% combined federal and state income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

 

(4) It is not possible to invest directly in an Index. The Indices’ total returns do not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Indices. Index performance is available as of month end only.

 

(5) The Lipper Averages are the average annual total returns, at net asset value, of the funds that are in the same Lipper Classification as the Fund. It is not possible to invest in a Lipper Classification. Lipper Classifications may include insured and uninsured funds, as well as leveraged and unleveraged funds. The Lipper Single State Insured Municipal Debt Funds Classification (closed-end) contained 44 funds for the 1-year, 5-year and Life-of-Fund periods. Lipper Averages are available as of month end only.

 

(6) Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund. Although the investment adviser considers ratings when making investment decisions, it performs its own credit and investment analysis and does not rely primarily on the ratings assigned by the rating services. Credit quality can change from time to time, and recently issued credit ratings may not fully reflect the actual risks posed by a particular security or the issuer’s current financial condition.

 

(7) Fund holdings information excludes securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements.

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when sold, 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. For performance as of the most recent month end, please refer to www.eatonvance.com.

 

5



 

Eaton Vance Insured Florida Plus Municipal Bond Fund as of September 30, 2008

 

PERFORMANCE INFORMATION AND PORTFOLIO COMPOSITION

 

Fund Performance(1)

 

NYSE Alternext U.S. Symbol

 

EIF

 

 

 

 

 

Average Annual Total Return (by share price)

 

 

 

One Year

 

-21.55

%

Five Years

 

-1.03

 

Life of Fund (11/29/02)

 

-0.37

 

 

 

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

-19.38

%

Five Years

 

0.63

 

Life of Fund (11/29/02)

 

1.61

 

 

 

 

 

Premium/(Discount) to NAV

 

-10.86

%

 

Market Yields

 

Market Yield(2)

 

6.58

%

Taxable-Equivalent Market Yield(3)

 

10.12

 

 

Index Performance(4) Average Annual Total Returns

 

 

 

Lehman Brothers Municipal Bond Index

 

Lehman Brothers Municipal Bond Long 22+ Index

 

One Year

 

-1.87

%

-9.55

%

Five Years

 

2.84

 

2.46

 

Life of Fund (11/30/02)

 

3.47

 

3.11

 

 

Lipper averages(5) Average Annual Total Returns

 

Lipper Single State Insured Municipal Debt Funds Classification (by net asset value)

 

 

 

One Year

 

-10.12

%

Five Years

 

1.81

 

Life of Fund (11/30/02)

 

2.81

 

 

Portfolio Manager: Craig R. Brandon, CFA

 

Rating Distribution*(6)

 

By total investments

 

 


*

The rating distribution presented above includes the ratings of securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements. Absent such securities, the Fund’s rating distribution at 9/30/08 is as follows and the average rating is AA+:

 

AAA

 

67.3

%

AA

 

21.9

%

A

 

8.5

%

Non-Rated

 

2.3

%

 

Fund Statistics(7)

 

·

Number of Issues:

 

52

 

·

Average Maturity:

 

25.4

years

·

Average Effective Maturity:

 

25.4

 

·

Average Call Protection:

 

11.4

years

·

Average Dollar Price:

 

$

83.40

 

·

APS Leverage:**

 

16.8

%

·

TOB Leverage:**

 

29.5

%

 


**

APS leverage represents the liquidation value of the Fund’s Auction Preferred Shares (APS) outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and TOB Floating Rate Notes. TOB leverage represents the amount of Floating Rate Notes outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and Floating Rate Notes. Floating Rate Notes in both calculations reflect adjustments for executed but unsettled TOB transactions and the effect of TOBs purchased in secondary market transactions.

 

(1) Returns are historical and are calculated by determining the percentage change in share price or net asset value (as applicable) with all distributions reinvested. The Fund’s performance at market share price will differ from its results at NAV. Although share price performance generally reflects investment results over time, during shorter periods, returns at share price can also be affected by factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for the Fund’s shares, or changes in Fund distributions. Performance results reflect the effects of APS outstanding and TOB investments, which are forms of investment leverage. Use of leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares).

 

(2) The Fund’s market yield is calculated by dividing the last dividend paid per common share of the fiscal year by the share price at the end of the fiscal year and annualizing the result.

 

(3) Taxable-equivalent figure assumes a maximum 35.00% federal income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

 

(4) It is not possible to invest directly in an Index. The Indices’ total returns do not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Indices. Index performance is available as of month end only.

 

(5) The Lipper Averages are the average annual total returns, at net asset value, of the funds that are in the same Lipper Classification as the Fund. It is not possible to invest in a Lipper Classification. Lipper Classifications may include insured and uninsured funds, as well as leveraged and unleveraged funds. The Lipper Single State Insured Municipal Debt Funds Classification (closed-end) contained 44 funds for the 1-year, 5-year and Life-of-Fund periods. Lipper Averages are available as of month end only.

 

(6) Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund. Although the investment adviser considers ratings when making investment decisions, it performs its own credit and investment analysis and does not rely primarily on the ratings assigned by the rating services. Credit quality can change from time to time, and recently issued credit ratings may not fully reflect the actual risks posed by a particular security or the issuer’s current financial condition.

 

(7) Fund holdings information excludes securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements.

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when sold, 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. For performance as of the most recent month end, please refer to www.eatonvance.com.

 

Effective January 1, 2008, the name of Eaton Vance Insured Florida Plus Municipal Bond Fund was changed from Eaton Vance Insured Florida Municipal Bond Fund.

 

6



 

Eaton Vance Insured Massachusetts Municipal Bond Fund as of September 30, 2008

 

PERFORMANCE INFORMATION AND PORTFOLIO COMPOSITION

 

Fund Performance(1)

 

NYSE Alternext U.S. Symbol

 

MAB

 

 

 

 

 

Average Annual Total Return (by share price)

 

 

 

One Year

 

-2.46

%

Five Years

 

4.82

 

Life of Fund (11/29/02)

 

5.09

 

 

 

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

-15.70

%

Five Years

 

1.88

 

Life of Fund (11/29/02)

 

2.82

 

 

 

 

 

Premium/(Discount) to NAV

 

13.60

%

 

Market Yields

 

Market Yield(2)

 

4.96

%

Taxable-Equivalent Market Yield(3)

 

8.06

 

 

Index Performance(4) Average Annual Total Returns

 

 

 

Lehman Brothers Municipal Bond Index

 

Lehman Brothers Municipal Bond Long 22+ Index

 

One Year

 

-1.87

%

-9.55

%

Five Years

 

2.84

 

2.46

 

Life of Fund (11/30/02)

 

3.47

 

3.11

 

 

Lipper Averages(5) Average Annual Total Returns

 

Lipper Single State Insured Municipal Debt Funds Classification (by net asset value)

 

 

 

One Year

 

-10.12

%

Five Years

 

1.81

 

Life of Fund (11/30/02)

 

2.81

 

 

Portfolio Manager: Robert B. MacIntosh, CFA

 

Rating Distribution*(6)

 

By total investments

 

 


*

The rating distribution presented above includes the ratings of securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements. Absent such securities, the Fund’s rating distribution at 9/30/08 is as follows and the average rating is AA-:

 

AAA

 

17.7

%

AA

 

44.8

%

A

 

30.1

%

BBB

 

1.9

%

Non-Rated

 

5.5

%

 

Fund Statistics(7)

 

·

Number of Issues:

 

39

 

·

Average Maturity:

 

26.2

years

·

Average Effective Maturity:

 

24.5

years

·

Average Call Protection:

 

10.8

years

·

Average Dollar Price:

 

$

86.88

 

·

APS Leverage:**

 

34.9

%

·

TOB Leverage:**

 

10.4

%

 


**

APS leverage represents the liquidation value of the Fund’s Auction Preferred Shares (APS) outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and TOB Floating Rate Notes. TOB leverage represents the amount of Floating Rate Notes outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and Floating Rate Notes. Floating Rate Notes in both calculations reflect adjustments for executed but unsettled TOB transactions and the effect of TOBs purchased in secondary market transactions.

 

(1) Returns are historical and are calculated by determining the percentage change in share price or net asset value (as applicable) with all distributions reinvested. The Fund’s performance at market share price will differ from its results at NAV. Although share price performance generally reflects investment results over time, during shorter periods, returns at share price can also be affected by factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for the Fund’s shares, or changes in Fund distributions. Performance results reflect the effects of APS outstanding and TOB investments, which are forms of investment leverage. Use of leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares).

 

(2) The Fund’s market yield is calculated by dividing the last dividend paid per common share of the fiscal year by the share price at the end of the fiscal year and annualizing the result.

 

(3) Taxable-equivalent figure assumes a maximum 38.45% combined federal and state income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

 

(4) It is not possible to invest directly in an Index. The Indices’ total returns do not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Indices. Index performance is available as of month end only.

 

(5) The Lipper Averages are the average annual total returns, at net asset value, of the funds that are in the same Lipper Classification as the Fund. It is not possible to invest in a Lipper Classification. Lipper Classifications may include insured and uninsured funds, as well as leveraged and unleveraged funds. The Lipper Single State Insured Municipal Debt Funds Classification (closed-end) contained 44 funds for the 1-year, 5-year and Life-of-Fund periods. Lipper Averages are available as of month end only.

 

(6) Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund. Although the investment adviser considers ratings when making investment decisions, it performs its own credit and investment analysis and does not rely primarily on the ratings assigned by the rating services. Credit quality can change from time to time, and recently issued credit ratings may not fully reflect the actual risks posed by a particular security or the issuer’s current financial condition.

 

(7) Fund holdings information excludes securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements.

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when sold, 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. For performance as of the most recent month end, please refer to www.eatonvance.com.

 

7



 

Eaton Vance Insured Michigan Municipal Bond Fund as of September 30, 2008

 

PERFORMANCE INFORMATION AND PORTFOLIO COMPOSITION

 

Fund Performance(1)

 

NYSE Alternext U.S. Symbol

 

MIW

 

 

 

 

 

Average Annual Total Return (by share price)

 

 

 

One Year

 

-21.97

%

Five Years

 

-1.00

 

Life of Fund (11/29/02)

 

0.03

 

 

 

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

-12.66

%

Five Years

 

2.67

 

Life of Fund (11/29/02)

 

3.32

 

 

 

 

 

Premium/(Discount) to NAV

 

-17.26

%

 

Market Yields

 

Market Yield(2)

 

6.52

%

Taxable-Equivalent Market Yield(3)

 

10.49

 

 

Index Performance(4) Average Annual Total Returns

 

 

 

Lehman Brothers Municipal Bond Index

 

Lehman Brothers Municipal Bond Long 22+ Index

 

One Year

 

-1.87

%

-9.55

%

Five Years

 

2.84

 

2.46

 

Life of Fund (11/30/02)

 

3.47

 

3.11

 

 

Lipper Averages(5) Average Annual Total Returns

 

Lipper Single State Insured Municipal Debt Funds Classification (by net asset value)

 

 

 

One Year

 

-10.12

%

Five Years

 

1.81

 

Life of Fund (11/30/02)

 

2.81

 

 

Portfolio Manager: William H. Ahern, Jr., CFA

 

Rating Distribution*(6)

 

By total investments

 

 


*

There were no securities held by special purpose vehicles in which the Fund holds a residual interest at September 30, 2008. The average rating was AA.

 

Fund Statistics

 

·

Number of Issues:

 

36

 

·

Average Maturity:

 

22.4

years

·

Average Effective Maturity:

 

18.2

years

·

Average Call Protection:

 

6.3

years

·

Average Dollar Price:

 

$

88.06

 

·

APS Leverage:**

 

41.5

%

 


**

APS leverage represents the liquidation value of the Fund’s Auction Preferred Shares (APS) outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares.

 

(1) Returns are historical and are calculated by determining the percentage change in share price or net asset value (as applicable) with all distributions reinvested. The Fund’s performance at market share price will differ from its results at NAV. Although share price performance generally reflects investment results over time, during shorter periods, returns at share price can also be affected by factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for the Fund’s shares, or changes in Fund distributions. Performance results reflect the effect of APS outstanding, which is a form of investment leverage. Use of leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares.)

 

(2) The Fund’s market yield is calculated by dividing the last dividend paid per common share of the fiscal year by the share price at the end of the fiscal year and annualizing the result.

 

(3) Taxable-equivalent figure assumes a maximum 37.83% combined federal and state income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

 

(4) It is not possible to invest directly in an Index. The Indices’ total returns do not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Indices. Index performance is available as of month end only.

 

(5) The Lipper Averages are the average annual total returns, at net asset value, of the funds that are in the same Lipper Classification as the Fund. It is not possible to invest in a Lipper Classification. Lipper Classifications may include insured and uninsured funds, as well as leveraged and unleveraged funds. The Lipper Single State Insured Municipal Debt Funds Classification (closed-end) contained 44 funds for the 1-year, 5-year and Life-of-Fund periods. Lipper Averages are available as of month end only.

 

(6) Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund. Although the investment adviser considers ratings when making investment decisions, it performs its own credit and investment analysis and does not rely primarily on the ratings assigned by the rating services. Credit quality can change from time to time, and recently issued credit ratings may not fully reflect the actual risks posed by a particular security or the issuer’s current financial condition.

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when sold, 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. For performance as of the most recent month end, please refer to www.eatonvance.com.

 

8



 

Eaton Vance Insured New Jersey Municipal Bond Fund as of September 30, 2008

 

PERFORMANCE INFORMATION AND PORTFOLIO COMPOSITION

 

Fund Performance(1)

 

NYSE Alternext U.S. Symbol

 

EMJ

 

 

 

 

 

Average Annual Total Return (by share price)

 

 

 

One Year

 

-13.88

%

Five Years

 

2.18

 

Life of Fund (11/29/02)

 

2.91

 

 

 

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

-18.15

%

Five Years

 

2.02

 

Life of Fund (11/29/02)

 

3.06

 

 

 

 

 

Premium/(Discount) to NAV

 

-0.83

%

 

Market Yields

 

Market Yield(2)

 

6.19

%

Taxable-Equivalent Market Yield(3)

 

10.46

 

 

Index Performance(4) Average Annual Total Returns

 

 

 

Lehman Brothers Municipal Bond Index

 

Lehman Brothers Municipal Bond Long 22+ Index

 

One Year

 

-1.87

%

-9.55

%

Five Years

 

2.84

 

2.46

 

Life of Fund (11/30/02)

 

3.47

 

3.11

 

 

Lipper Averages(5) Average Annual Total Returns

 

Lipper Single State Insured Municipal Debt Funds Classification (by net asset value)

 

 

 

One Year

 

-10.12

%

Five Years

 

1.81

 

Life of Fund (11/30/02)

 

2.81

 

 

Portfolio Manager: Robert B. MacIntosh, CFA

 

Rating Distribution*(6)

 

By total investments

 

 


*

The rating distribution presented above includes the ratings of securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements. Absent such securities, the Fund’s rating distribution at 9/30/08 is as follows and the average rating is AA:

 

AAA

 

38.6

%

AA

 

35.1

%

A

 

17.5

%

BBB

 

8.8

%

 

Fund Statistics(7)

 

·

Number of Issues:

 

64

 

·

Average Maturity:

 

23.5

years

·

Average Effective Maturity:

 

23.5

years

·

Average Call Protection:

 

11.8

years

·

Average Dollar Price:

 

$

77.82

 

·

APS Leverage:**

 

34.2

%

·

TOB Leverage:**

 

13.9

%

 


**

APS leverage represents the liquidation value of the Fund’s Auction Preferred Shares (APS) outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and TOB Floating Rate Notes. TOB leverage represents the amount of Floating Rate Notes outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and Floating Rate Notes. Floating Rate Notes in both calculations reflect adjustments for executed but unsettled TOB transactions and the effect of TOBs purchased in secondary market transactions.

 

(1) Returns are historical and are calculated by determining the percentage change in share price or net asset value (as applicable) with all distributions reinvested. The Fund’s performance at market share price will differ from its results at NAV. Although share price performance generally reflects investment results over time, during shorter periods, returns at share price can also be affected by factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for the Fund’s shares, or changes in Fund distributions. Performance results reflect the effects of APS outstanding and TOB investments, which are forms of investment leverage. Use of leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares).

 

(2) The Fund’s market yield is calculated by dividing the last dividend paid per common share of the fiscal year by the share price at the end of the fiscal year and annualizing the result.

 

(3) Taxable-equivalent figure assumes a maximum 40.83% combined federal and state income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

 

(4) It is not possible to invest directly in an Index. The Indices’ total returns do not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Indices. Index performance is available as of month end only.

 

(5) The Lipper Averages are the average annual total returns, at net asset value, of the funds that are in the same Lipper Classification as the Fund. It is not possible to invest in a Lipper Classification. Lipper Classifications may include insured and uninsured funds, as well as leveraged and unleveraged funds. The Lipper Single State Insured Municipal Debt Funds Classification (closed-end) contained 44 funds for the 1-year, 5-year and Life-of-Fund periods. Lipper Averages are available as of month end only.

 

(6) Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund. Although the investment adviser considers ratings when making investment decisions, it performs its own credit and investment analysis and does not rely primarily on the ratings assigned by the rating services. Credit quality can change from time to time, and recently issued credit ratings may not fully reflect the actual risks posed by a particular security or the issuer’s current financial condition.

 

(7) Fund holdings information excludes securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements.

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when sold, 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. For performance as of the most recent month end, please refer to www.eatonvance.com.

 

9



 

Eaton Vance Insured New York Municipal Bond Fund II as of September 30, 2008

 

PERFORMANCE INFORMATION AND PORTFOLIO COMPOSITION

 

Fund Performance(1)

 

NYSE Alternext U.S. Symbol

 

NYH

 

 

 

 

 

Average Annual Total Return (by share price)

 

 

 

One Year

 

-21.80

%

Five Years

 

1.39

 

Life of Fund (11/29/02)

 

1.25

 

 

 

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

-19.25

%

Five Years

 

1.49

 

Life of Fund (11/29/02)

 

2.76

 

 

 

 

 

Premium/(Discount) to NAV

 

-8.24

%

 

Market Yields

 

Market Yield(2)

 

6.68

%

Taxable-Equivalent Market Yield(3)

 

11.03

 

 

Index Performance(4) Average Annual Total Returns

 

 

 

Lehman Brothers Municipal Bond Index

 

Lehman Brothers Municipal Bond Long 22+ Index

 

One Year

 

-1.87

%

-9.55

%

Five Years

 

2.84

 

2.46

 

Life of Fund (11/30/02)

 

3.47

 

3.11

 

 

Lipper Averages(5) Average Annual Total Returns

 

Lipper Single State Insured Municipal Debt Funds Classification (by net asset value)

 

 

 

One Year

 

-10.12

%

Five Years

 

1.81

 

Life of Fund (11/30/02)

 

2.81

 

 

Portfolio Manager: Craig R. Brandon, CFA

 

Rating Distribution*(6)

 

By total investments

 

 


*

The rating distribution presented above includes the ratings of securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements. Absent such securities, the Fund’s rating distribution at 9/30/08 is as follows and the average rating is AA-:

 

AAA

 

12.2

%

AA

 

64.4

%

A

 

12.5

%

BBB

 

7.7

%

Non-Rated

 

3.2

%

 

Fund Statistics(7)

 

·

Number of Issues:

 

45

 

·

Average Maturity:

 

26.9

years

·

Average Effective Maturity:

 

26.1

years

·

Average Call Protection:

 

10.0

years

·

Average Dollar Price:

 

$

83.60

 

·

APS Leverage:**

 

24.5

%

·

TOB Leverage:**

 

21.0

%

 


**

APS leverage represents the liquidation value of the Fund’s Auction Preferred Shares (APS) outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and TOB Floating Rate Notes. TOB leverage represents the amount of Floating Rate Notes outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and Floating Rate Notes. Floating Rate Notes in both calculations reflect adjustments for executed but unsettled TOB transactions and the effect of TOBs purchased in secondary market transactions.

 

(1) Returns are historical and are calculated by determining the percentage change in share price or net asset value (as applicable) with all distributions reinvested. The Fund’s performance at market share price will differ from its results at NAV. Although share price performance generally reflects investment results over time, during shorter periods, returns at share price can also be affected by factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for the Fund’s shares, or changes in Fund distributions. Performance results reflect the effects of APS outstanding and TOB investments, which are forms of investment leverage. Use of leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares).

 

(2) The Fund’s market yield is calculated by dividing the last dividend paid per common share of the fiscal year by the share price at the end of the fiscal year and annualizing the result.

 

(3) Taxable-equivalent figure assumes a maximum 39.45% combined federal and state income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

 

(4) It is not possible to invest directly in an Index. The Indices’ total returns do not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Indices. Index performance is available as of month end only.

 

(5) The Lipper Averages are the average annual total returns, at net asset value, of the funds that are in the same Lipper Classification as the Fund. It is not possible to invest in a Lipper Classification. Lipper Classifications may include insured and uninsured funds, as well as leveraged and unleveraged funds. The Lipper Single State Insured Municipal Debt Funds Classification (closed-end) contained 44 funds for the 1-year, 5-year and Life-of-Fund periods. Lipper Averages are available as of month end only.

 

(6) Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund. Although the investment adviser considers ratings when making investment decisions, it performs its own credit and investment analysis and does not rely primarily on the ratings assigned by the rating services. Credit quality can change from time to time, and recently issued credit ratings may not fully reflect the actual risks posed by a particular security or the issuer’s current financial condition.

 

(7) Fund holdings information excludes securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements.

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when sold, 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. For performance as of the most recent month end, please refer to www.eatonvance.com.

 

10



 

Eaton Vance Insured Ohio Municipal Bond Fund as of September 30, 2008

 

PERFORMANCE INFORMATION AND PORTFOLIO COMPOSITION

 

Fund Performance(1)

 

NYSE Alternext U.S. Symbol

 

EIO

 

 

 

 

 

Average Annual Total Return (by share price)

 

 

 

One Year

 

-13.81

%

Five Years

 

0.36

 

Life of Fund (11/29/02)

 

1.22

 

 

 

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

-20.51

%

Five Years

 

0.24

 

Life of Fund (11/29/02)

 

1.34

 

 

 

 

 

Premium/(Discount) to NAV

 

-0.71

%

 

Market Yields

 

Market Yield(2)

 

5.71

%

Taxable-Equivalent Market Yield(3)

 

9.40

 

 

Index Performance(4) Average Annual Total Returns

 

 

 

Lehman Brothers Municipal Bond Index

 

Lehman Brothers Municipal Bond Long 22+ Index

 

One Year

 

-1.87

%

-9.55

%

Five Years

 

2.84

 

2.46

 

Life of Fund (11/30/02)

 

3.47

 

3.11

 

 

Lipper Averages(5) Average Annual Total Returns

 

Lipper Single State Insured Municipal Debt Funds Classification (by net asset value)

 

 

 

One Year

 

-10.12

%

Five Years

 

1.81

 

Life of Fund (11/30/02)

 

2.81

 

 

Portfolio Manager: William H. Ahern, Jr., CFA

 

Rating Distribution*(6)

 

By total investments

 

 


*

The rating distribution presented above includes the ratings of securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements. Absent such securities, the Fund’s rating distribution at 9/30/08 is as follows and the average rating is AA:

 

AAA

 

33.4

%

AA

 

46.7

%

A

 

10.6

%

BBB

 

5.1

%

Non-Rated

 

4.2

%

 

Fund Statistics(7)

 

·

Number of Issues:

 

56

 

·

Average Maturity:

 

23.2

years

·

Average Effective Maturity:

 

22.8

years

·

Average Call Protection:

 

9.1

years

·

Average Dollar Price:

 

$

78.75

 

·

APS Leverage:**

 

41.0

%

·

TOB Leverage:**

 

5.7

%

 


**

APS leverage represents the liquidation value of the Fund’s Auction Preferred Shares (APS) outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and TOB Floating Rate Notes. TOB leverage represents the amount of Floating Rate Notes outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and Floating Rate Notes. Floating Rate Notes in both calculations reflect adjustments for executed but unsettled TOB transactions and the effect of TOBs purchased in secondary market transactions.

 

(1) Returns are historical and are calculated by determining the percentage change in share price or net asset value (as applicable) with all distributions reinvested. The Fund’s performance at market share price will differ from its results at NAV. Although share price performance generally reflects investment results over time, during shorter periods, returns at share price can also be affected by factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for the Fund’s shares, or changes in Fund distributions. Performance results reflect the effects of APS outstanding and TOB investments, which are forms of investment leverage. Use of leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares.)

 

(2) The Fund’s market yield is calculated by dividing the last dividend paid per common share of the fiscal year by the share price at the end of the fiscal year and annualizing the result.

 

(3) Taxable-equivalent figure assumes a maximum 39.26% combined federal and state income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

 

(4) It is not possible to invest directly in an Index. The Indices’ total returns do not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Indices. Index performance is available as of month end only.

 

(5) The Lipper Averages are the average annual total returns, at net asset value, of the funds that are in the same Lipper Classification as the Fund. It is not possible to invest in a Lipper Classification. Lipper Classifications may include insured and uninsured funds, as well as leveraged and unleveraged funds. The Lipper Single State Insured Municipal Debt Funds Classification (closed-end) contained 44 funds for the 1-year, 5-year and Life-of-Fund periods. Lipper Averages are available as of month end only.

 

(6) Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund. Although the investment adviser considers ratings when making investment decisions, it performs its own credit and investment analysis and does not rely primarily on the ratings assigned by the rating services. Credit quality can change from time to time, and recently issued credit ratings may not fully reflect the actual risks posed by a particular security or the issuer’s current financial condition.

 

(7) Fund holdings information excludes securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements.

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when sold, 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. For performance as of the most recent month end, please refer to www.eatonvance.com.

 

11



 

Eaton Vance Insured Pennsylvania Municipal Bond Fund as of September 30, 2008

 

PERFORMANCE INFORMATION AND PORTFOLIO COMPOSITION

 

Fund Performance(1)

 

NYSE Alternext U.S. Symbol

 

EIP

 

 

 

 

 

Average Annual Total Return (by share price)

 

 

 

One Year

 

0.88

%

Five Years

 

4.65

 

Life of Fund (11/29/02)

 

4.81

 

 

 

 

 

Average Annual Total Return (by net asset value)

 

 

 

One Year

 

-16.07

%

Five Years

 

2.07

 

Life of Fund (11/29/02)

 

2.90

 

 

 

 

 

Premium/(Discount) to NAV

 

11.39

%

 

Market Yields

 

Market Yield(2)

 

5.30

%

Taxable-Equivalent Market Yield(3)

 

8.41

 

 

Index Performance(4) Average Annual Total Returns

 

 

 

Lehman Brothers Municipal Bond Index

 

Lehman Brothers Municipal Bond Long 22+ Index

 

One Year

 

-1.87

%

-9.55

%

Five Years

 

2.84

 

2.46

 

Life of Fund (11/30/02)

 

3.47

 

3.11

 

 

Lipper Averages(5) Average Annual Total Returns

 

Lipper Single State Insured Municipal Debt Funds Classification (by net asset value)

 

 

 

One Year

 

-10.12

%

Five Years

 

1.81

 

Life of Fund (11/30/02)

 

2.81

 

 

Portfolio Manager: Adam A. Weigold, CFA

 

Rating Distribution*(6)

 

By total investments

 

 


*

The rating distribution presented above includes the ratings of securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements. Absent such securities, the Fund’s rating distribution at 9/30/08 is as follows and the average rating is AA:

 

AAA

 

26.6

%

AA

 

46.7

%

A

 

22.9

%

BBB

 

2.5

%

Non-Rated

 

1.3

%

 

Fund Statistics(7)

 

·

Number of Issues:

 

58

 

·

Average Maturity:

 

23.2

years

·

Average Effective Maturity:

 

21.3

years

·

Average Call Protection:

 

8.1

years

·

Average Dollar Price:

 

$

85.35

 

·

APS Leverage:**

 

40.5

%

·

TOB Leverage:**

 

4.3

%

 


**

APS leverage represents the liquidation value of the Fund’s Auction Preferred Shares (APS) outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and TOB Floating Rate Notes. TOB leverage represents the amount of Floating Rate Notes outstanding at 9/30/08 as a percentage of the Fund’s net assets applicable to common shares plus APS and Floating Rate Notes. Floating Rate Notes in both calculations reflect adjustments for executed but unsettled TOB transactions and the effect of TOBs purchased in secondary market transactions.

 

(1) Returns are historical and are calculated by determining the percentage change in share price or net asset value (as applicable) with all distributions reinvested. The Fund’s performance at market share price will differ from its results at NAV. Although share price performance generally reflects investment results over time, during shorter periods, returns at share price can also be affected by factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for the Fund’s shares, or changes in Fund distributions. Performance results reflect the effects of APS outstanding and TOB investments, which are forms of investment leverage. Use of leverage creates an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater volatility of net asset value and market price of common shares.)

 

(2) The Fund’s market yield is calculated by dividing the last dividend paid per common share of the fiscal year by the share price at the end of the fiscal year and annualizing the result.

 

(3) Taxable-equivalent figure assumes a maximum 37.00% combined federal and state income tax rate. A lower tax rate would result in a lower tax-equivalent figure.

 

(4) It is not possible to invest directly in an Index. The Indices’ total returns do not reflect the expenses that would have been incurred if an investor individually purchased or sold the securities represented in the Indices. Index performance is available as of month end only.

 

(5) The Lipper Averages are the average annual total returns, at net asset value, of the funds that are in the same Lipper Classification as the Fund. It is not possible to invest in a Lipper Classification. Lipper Classifications may include insured and uninsured funds, as well as leveraged and unleveraged funds. The Lipper Single State Insured Municipal Debt Funds Classification (closed-end) contained 44 funds for the 1-year, 5-year and Life-of-Fund periods. Lipper Averages are available as of month end only.

 

(6) Rating Distribution is determined by dividing the total market value of the issues by the total investments of the Fund. Although the investment adviser considers ratings when making investment decisions, it performs its own credit and investment analysis and does not rely primarily on the ratings assigned by the rating services. Credit quality can change from time to time, and recently issued credit ratings may not fully reflect the actual risks posed by a particular security or the issuer’s current financial condition.

 

(7) Fund holdings information excludes securities held by special purpose vehicles in which the Fund holds a residual interest. See Note 1H to the Fund’s financial statements.

 

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value or share price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when sold, 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. For performance as of the most recent month end, please refer to www.eatonvance.com.

 

12



Eaton Vance Insured Municipal Bond Fund II as of September 30, 2008

PORTFOLIO OF INVESTMENTS

Tax-Exempt Investments — 195.1%      
Principal Amount
(000's omitted)
 
Security
 
Value
 
Electric Utilities — 1.0%      
$ 1,600     Sabine River Authority, TX, (TXU Energy Co. LLC),
5.20%, 5/1/28
  $ 1,126,192    
          $ 1,126,192    
General Obligations — 3.0%      
$ 3,500     New York, NY, 5.25%, 1/15/33(1)   $ 3,315,900    
          $ 3,315,900    
Hospital — 5.7%      
$ 400     Camden County, NJ, Improvement Authority, (Cooper Health
System), 5.00%, 2/15/25
  $ 344,024    
  900     Camden County, NJ, Improvement Authority, (Cooper Health
System), 5.00%, 2/15/35
    720,162    
  750     Camden County, NJ, Improvement Authority, (Cooper Health
System), 5.25%, 2/15/27
    656,063    
  500     Hawaii Department of Budget and Finance, (Hawaii Pacific
Health), 5.60%, 7/1/33
    446,615    
  1,315     Highlands County, FL, Health Facilities Authority,
(Adventist Health System), 5.25%, 11/15/36
    1,137,107    
  2,255     Knox County, TN, Health, Educational and Housing
Facilities Board, (Covenant Health), 0.00%, 1/1/38
    294,593    
  5,000     Knox County, TN, Health, Educational and Housing
Facilities Board, (Covenant Health), 0.00%, 1/1/39
    607,550    
  1,000     Lehigh County, PA, General Purpose Authority,
(Lehigh Valley Health Network), 5.25%, 7/1/32
    856,120    
  1,440     Michigan Hospital Finance Authority, (Henry Ford Health
System), 5.00%, 11/15/38
    1,163,995    
            $ 6,226,229    
Industrial Development Revenue — 8.8%      
$ 2,185     Liberty Development Corp., NY, (Goldman Sachs
Group, Inc.), 5.25%, 10/1/35
  $ 1,837,082    
  4,750     Liberty Development Corp., NY, (Goldman Sachs
Group, Inc.), 5.25%, 10/1/35(1)
    3,993,781    
  4,885     St. John Baptist Parish, LA, (Marathon Oil Corp.),
5.125%, 6/1/37
    3,782,700    
            $ 9,613,563    
Insured-Electric Utilities — 21.0%      
$ 690     Burlington, KS, Pollution Control Revenue,
(Kansas Gas & Electric Co.), (MBIA), 5.30%, 6/1/31
  $ 619,972    
  22,685     Chelan County, WA, Public Utility District No. 1,
(Columbia River), (MBIA), 0.00%, 6/1/23
    9,571,255    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Electric Utilities (continued)      
$ 3,900     JEA, FL, Electric System Revenue, (FSA),
5.00%, 10/1/34
  $ 3,683,394    
  5,000     Kentucky Municipal Power Agency, (Prairie Street
Project), (MBIA), 5.00%, 9/1/37
    4,354,100    
  2,990     Mississippi Development Bank, (Municipal Energy),
(XLCA), 5.00%, 3/1/41
    2,406,920    
  2,990     Missouri Joint Municipal Electric Utility Commission,
(AMBAC), 4.50%, 1/1/37
    2,435,086    
            $ 23,070,727    
Insured-Escrowed / Prerefunded — 2.8%      
$ 2,895     Pittsburgh, PA, Water and Sewer Authority, (AMBAC),
Prerefunded to 6/1/12, 5.125%, 12/1/27(1)
  $ 3,087,923    
          $ 3,087,923    
Insured-General Obligations — 16.0%      
$ 2,550     Butler County, KS, Unified School District No. 394,
(FSA), 3.50%, 9/1/24(2)
  $ 2,027,505    
  1,885     California, (AMBAC), (FSA), 3.50%, 10/1/27     1,364,589    
  12,165     Chabot-Las Positas, CA, Community College District,
(AMBAC), 0.00%, 8/1/43
    1,349,342    
  17,000     Coast Community College District, CA, (Election of 2002),
(FSA), 0.00%, 8/1/33
    3,785,560    
  2,995     District of Columbia, (FGIC), 4.75%, 6/1/33     2,599,001    
  1,500     Goodyear, AZ, (MBIA), 3.00%, 7/1/26     1,062,045    
  5,500     Washington, (FSA), 5.00%, 7/1/25(1)     5,347,595    
            $ 17,535,637    
Insured-Hospital — 32.8%      
$ 1,500     California Statewide Communities Development Authority,
(Sutter Health), (FSA), 5.05%, 8/15/38(1)
  $ 1,374,795    
  50     Colorado Health Facilities Authority,
(Catholic Health), (FSA), 5.10%, 10/1/41
    45,837    
  2,200     Colorado Health Facilities Authority,
(Catholic Health), (FSA), 5.10%, 10/1/41(1)
    2,016,828    
  3,500     Highlands County, FL, Health Facilities Authority,
(Adventist Health System), (BHAC),
5.25%, 11/15/36(1)
    3,248,035    
  1,520     Highlands County, FL, Health Facilities Authority,
(Adventist Health System), (BHAC), 5.25%, 11/15/36
    1,410,575    
  1,700     Highlands County, FL, Health Facilities Authority,
(Adventist Health System), (MBIA), 5.00%, 11/15/35
    1,534,403    
  2,500     Illinois Finance Authority, (Children's Memorial Hospital),
(AGC), 5.25%, 8/15/47(1)
    2,228,950    

 

See notes to financial statements
13



Eaton Vance Insured Municipal Bond Fund II as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Hospital (continued)      
$ 115     Indiana Health and Educational Facility Finance Authority,
(Sisters of St. Francis Health Services), (FSA),
5.25%, 5/15/41
  $ 106,725    
  2,500     Indiana Health and Educational Facility Finance Authority,
(Sisters of St. Francis Health Services), (FSA),
5.25%, 5/15/41(1)
    2,320,100    
  2,500     Maricopa County, AZ, Industrial Development Authority,
(Catholic Healthcare West), (BHAC), 5.25%, 7/1/32
    2,335,875    
  9,000     Maryland Health and Higher Educational Facilities Authority,
(Medlantic/Helix Issue), (FSA), 5.25%, 8/15/38
    8,482,860    
  455     New Jersey Health Care Facilities Financing Authority,
(Hackensack University Medical Center), (AGC),
5.25%, 1/1/31
    434,843    
  1,000     New Jersey Health Care Facilities Financing Authority,
(Hackensack University Medical Center), (AGC),
5.25%, 1/1/36(1)
    951,280    
  500     New Jersey Health Care Facilities Financing Authority,
(Meridian Health Center), Series V, (AGC),
5.00%, 7/1/38(1)
    463,550    
  2,750     New York Dormitory Authority, (Health Quest Systems),
(AGC), 5.125%, 7/1/37(1)
    2,590,335    
  3,095     Vermont Educational and Health Buildings Financing
Agency, (Fletcher Allen Health), (FSA), 5.00%, 12/1/34
    2,798,097    
  1,300     Washington Health Care Facilities Authority, (Providence
Health Care), Series C, (FSA), 5.25%, 10/1/33
    1,224,197    
  1,895     Washington Health Care Facilities Authority, (Providence
Health Care), Series D, (FSA), 5.25%, 10/1/33
    1,784,503    
  650     Washington Health Care Facilities Authority, (Providence
Health Care), Series E, (FSA), 5.25%, 10/1/33
    612,098    
            $ 35,963,886    
Insured-Lease Revenue / Certificates of
Participation — 11.1%
     
$ 4,600     Hudson, NY, Infrastructure Corp., (MBIA),
4.50%, 2/15/47
  $ 3,621,396    
  4,250     Massachusetts Development Finance Agency, (MBIA),
5.125%, 2/1/34
    4,016,548    
  3,250     San Diego County, CA, Water Authority,
Certificates of Participation, (FSA), 5.00%, 5/1/38(1)
    3,013,725    
  110     San Diego County, CA, Water Authority,
Certificates of Participation, (FSA), 5.00%, 5/1/38
    102,003    
  1,500     Tri-Creek Middle School Building Corp., IN, (FSA),
5.25%, 1/15/34(1)
    1,429,305    
            $ 12,182,977    
Insured-Other Revenue — 0.4%      
$ 2,540     Harris County-Houston, TX, Sports Authority, (MBIA),
0.00%, 11/15/34
  $ 415,646    
            $ 415,646    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Private Education — 4.4%      
$ 2,500     Massachusetts Development Finance Agency,
(Boston University), (XLCA), 6.00%, 5/15/59
  $ 2,515,475    
  2,500     Massachusetts Development Finance Agency,
(Franklin W. Olin College), (XLCA), 5.25%, 7/1/33
    2,283,575    
            $ 4,799,050    
Insured-Public Education — 5.3%      
$ 6,300     University of South Alabama, (BHAC), 5.00%, 8/1/38   $ 5,840,289    
            $ 5,840,289    
Insured-Special Tax Revenue — 13.2%      
$ 5,415     Metropolitan Pier and Exposition Authority, IL,
(McCormick Place Expansion), (MBIA),
0.00%, 12/15/34
  $ 1,152,962    
  4,000     Metropolitan Pier and Exposition Authority, IL,
(McCormick Place Expansion), (MBIA),
5.25%, 6/15/42
    3,869,640    
  2,500     New York Convention Center Development Corp.,
Hotel Occupancy Tax, (AMBAC), 4.75%, 11/15/45
    2,219,475    
  2,985     New York Convention Center Development Corp.,
Hotel Occupancy Tax, (AMBAC), 5.00%, 11/15/44
    2,691,933    
  35,675     Puerto Rico Sales Tax Financing, (AMBAC),
0.00%, 8/1/54
    1,992,092    
  6,085     Puerto Rico Sales Tax Financing, (MBIA),
0.00%, 8/1/44
    654,442    
  12,065     Puerto Rico Sales Tax Financing, (MBIA),
0.00%, 8/1/45
    1,216,272    
  7,595     Puerto Rico Sales Tax Financing, (MBIA),
0.00%, 8/1/46
    716,284    
            $ 14,513,100    
Insured-Transportation — 26.3%      
$ 11,900     E-470 Public Highway Authority, CO, (MBIA),
0.00%, 9/1/22
  $ 4,978,127    
  10,000     Maryland Transportation Authority, (FSA),
5.00%, 7/1/41(1)
    9,446,500    
  5,215     Minneapolis-St. Paul, MN, Metropolitan Airports
Commission, (FGIC), 4.50%, 1/1/32
    4,276,144    
  13,885     Nevada Department of Business and Industry, (Las Vegas
Monorail -1st Tier), (AMBAC), 0.00%, 1/1/20
    4,941,671    
  5,800     Texas Turnpike Authority, (AMBAC), 5.00%, 8/15/42     5,172,092    
            $ 28,814,534    

 

See notes to financial statements
14



Eaton Vance Insured Municipal Bond Fund II as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Water and Sewer — 21.2%      
$ 3,335     Atlanta, GA, Water and Wastewater, (MBIA),
5.00%, 11/1/39
  $ 3,023,544    
  1,250     District of Columbia Water and Sewer Authority, (AGC),
5.00%, 10/1/34(1)
    1,159,200    
  3,860     Houston, TX, Utility System, (FSA), 5.00%, 11/15/33     3,578,838    
  4,295     Ogden City, UT, Water and Sewer, (FSA),
4.50%, 6/15/38
    3,598,265    
  11,390     Pearland, TX, Waterworks and Sewer Systems, (MBIA),
3.50%, 9/1/31
    7,996,349    
  4,215     Seattle, WA, Drain and Wastewater Revenue, (FSA),
5.00%, 6/1/38
    3,908,106    
            $ 23,264,302    
Insured-Water Revenue — 21.1%      
$ 7,000     Contra Costa, CA, Water District, (FSA),
5.00%, 10/1/32(1)
  $ 6,653,436    
  5,500     Los Angeles, CA, Department of Water & Power,
(BHAC), (FGIC), 5.00%, 7/1/43(1)
    5,032,665    
  755     Marysville, OH, Wastewater Treatment System, (XLCA),
4.75%, 12/1/46
    599,546    
  6,110     Massachusetts Water Resources Authority, (AMBAC),
4.00%, 8/1/40
    4,592,520    
  6,750     Metropolitan Water District, CA, (BHAC), (FGIC),
5.00%, 10/1/36(1)
    6,316,312    
            $ 23,194,479    
Other Revenue — 0.4%      
$ 500     Main Street National Gas, Inc., GA, 5.50%, 9/15/27   $ 395,415    
            $ 395,415    
Special Tax Revenue — 0.6%      
$ 700     New Jersey Economic Development Authority,
(Cigarette Tax), 5.50%, 6/15/24
  $ 611,688    
            $ 611,688    
Total Tax-Exempt Investments — 195.1%
(identified cost $243,407,579)
  $ 213,971,537    
Auction Preferred Shares Plus Cumulative
Unpaid Dividends — (40.8)%
  $ (44,757,550 )  
Other Assets, Less Liabilities — (54.3)%   $ (59,566,300 )  
Net Assets Applicable to
Common Shares — 100.0%
  $ 109,647,687    

 

AGC - Assured Guaranty Corp.

AMBAC - AMBAC Financial Group, Inc.

BHAC - Berkshire Hathaway Assurance Corp.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

XLCA - XL Capital Assurance, Inc.

At September 30, 2008, the concentration of the Fund's investments in the various states, determined as a percentage of total investments, is as follows:

California     13.6 %  
Washington     10.5 %  
Others, representing less than 10% individually     75.9 %  

 

The Fund invests primarily in debt securities issued by municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2008, 90.0% of total 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 3.6% to 31.6% of total investments.

(1)  Security represents the underlying municipal obligation of an inverse floating rate obligation held by the Fund.

(2)  Security (or a portion thereof) has been segregated to cover margin requirements on open financial futures contracts.

See notes to financial statements
15



Eaton Vance Insured California Municipal Bond Fund II as of September 30, 2008

PORTFOLIO OF INVESTMENTS

Tax-Exempt Investments — 167.5%      
Principal Amount
(000's omitted)
 
Security
 
Value
 
Escrowed / Prerefunded — 0.00%      
$ 10     California Department of Water Resources, (Central Valley),
Prerefunded to 12/1/08, 5.00%, 12/1/29
  $ 10,135    
            $ 10,135    
Hospital — 14.6%      
$ 1,445     California Health Facilities Financing Authority,
(Cedars-Sinai Medical Center), 5.00%, 11/15/34
  $ 1,259,751    
  2,940     California Statewide Communities Development Authority,
(Huntington Memorial Hospital), 5.00%, 7/1/35
    2,515,788    
  500     California Statewide Communities Development Authority,
(John Muir Health), 5.00%, 8/15/36
    434,490    
  1,900     California Statewide Communities Development Authority,
(Kaiser Permanente), 5.25%, 3/1/45
    1,692,539    
  555     Washington Township Health Care District, 5.00%, 7/1/32     473,942    
            $ 6,376,510    
Insured-Electric Utilities — 6.1%      
$ 1,475     Glendale Electric, (MBIA), 5.00%, 2/1/32   $ 1,365,820    
  1,370     Sacramento Municipal Electric Utility District, (FSA),
5.00%, 8/15/28(1)
    1,313,512    
            $ 2,679,332    
Insured-Escrowed / Prerefunded — 0.9%      
$ 395     Orange County Water District, Certificates of Participation,
(MBIA), Escrowed to Maturity, 5.00%, 8/15/34
  $ 373,192    
            $ 373,192    
Insured-General Obligations — 50.1%      
$ 740     Antelope Valley Community College District,
(Election of 2004), (MBIA), 5.25%, 8/1/39
  $ 701,387    
  8,680     Arcadia Unified School District, (FSA), 0.00%, 8/1/38     1,375,780    
  3,115     Arcadia Unified School District, (FSA), 0.00%, 8/1/40     434,636    
  3,270     Arcadia Unified School District, (FSA), 0.00%, 8/1/41     429,286    
  820     California, (AMBAC), 5.00%, 4/1/27     763,764    
  1,500     Carlsbad Unified School District, (Election 2006), (MBIA),
5.25%, 8/1/32
    1,435,065    
  19,350     Chabot-Las Positas Community College District, (AMBAC),
0.00%, 8/1/43
    2,146,302    
  5,000     Clovis Unified School District, (FGIC), 0.00%, 8/1/20     2,751,350    
  6,675     Coast Community College District, (Election of 2002),
(FSA), 0.00%, 8/1/35
    1,310,236    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-General Obligations (continued)      
$ 1,080     El Camino Hospital District, (MBIA), 4.45%, 8/1/36   $ 885,114    
  2,350     Long Beach Unified School District, (Election of 1999),
(FSA), 5.00%, 8/1/31
    2,236,189    
  1,845     Los Osos Community Services, Wastewater Assessment District,
(MBIA), 5.00%, 9/2/33
    1,559,597    
  1,000     Mount Diablo Unified School District, (FSA),
5.00%, 8/1/25(2)
    966,790    
  4,300     San Mateo County Community College District,
(Election of 2001), (FGIC), 0.00%, 9/1/21
    2,103,947    
  1,620     Santa Clara Unified School District, (Election of 2004),
(FSA), 4.375%, 7/1/30
    1,376,077    
  3,200     Union Elementary School District, (FGIC), 0.00%, 9/1/22     1,447,744    
            $ 21,923,264    
Insured-Hospital — 6.2%      
$ 1,250     California Statewide Communities Development Authority,
(Kaiser Permanente), (BHAC), 5.00%, 3/1/41(1)
  $ 1,116,200    
  1,750     California Statewide Communities Development Authority,
(Sutter Health), (FSA), 5.05%, 8/15/38(1)
    1,603,927    
            $ 2,720,127    
Insured-Lease Revenue / Certificates of
Participation — 15.0%
     
$ 4,250     California Public Works Board Lease Revenue,
(Department of General Services), (AMBAC),
5.00%, 12/1/27
  $ 3,942,852    
  1,750     San Diego County Water Authority,
Certificates of Participation, (FSA), 5.00%, 5/1/38(1)
    1,622,775    
  1,075     San Jose Financing Authority, (Civic Center), (AMBAC),
5.00%, 6/1/32
    992,225    
            $ 6,557,852    
Insured-Public Education — 12.7%      
$ 4,000     California State University, (AMBAC), 5.00%, 11/1/33   $ 3,678,440    
  2,000     California State University, (BHAC), (FSA),
5.00%, 11/1/39(1)
    1,853,140    
            $ 5,531,580    
Insured-Special Assessment Revenue — 16.1%      
$ 2,500     Cathedral City Public Financing Authority, (Housing
Redevelopment), (MBIA), 5.00%, 8/1/33
  $ 2,290,500    
  2,500     Cathedral City Public Financing Authority, (Tax
Allocation Redevelopment), (MBIA), 5.00%, 8/1/33
    2,290,500    

 

See notes to financial statements
16



Eaton Vance Insured California Municipal Bond Fund II as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Special Assessment Revenue (continued)      
$ 1,750     Irvine Public Facility and Infrastructure Authority,
(AMBAC), 5.00%, 9/2/26
  $ 1,587,915    
  945     Murrieta Redevelopment Agency Tax, (MBIA),
5.00%, 8/1/32
    851,322    
            $ 7,020,237    
Insured-Special Tax Revenue — 10.8%      
$ 2,195     Hesperia Public Financing Authority, (Redevelopment and
Housing Project), (XLCA), 5.00%, 9/1/37
  $ 1,794,851    
  13,650     Puerto Rico Sales Tax Financing, (AMBAC),
0.00%, 8/1/54
    762,216    
  2,325     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/44     250,054    
  4,610     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/45     464,734    
  2,905     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/46     273,971    
  260     San Francisco Bay Area Rapid Transportation District,
Sales Tax Revenue, (AMBAC), 5.00%, 7/1/31
    247,429    
  985     San Francisco Bay Area Rapid Transportation District,
Sales Tax Revenue, (AMBAC), 5.125%, 7/1/36
    945,501    
            $ 4,738,756    
Insured-Transportation — 6.7%      
$ 2,000     Puerto Rico Highway and Transportation Authority, (FGIC),
5.25%, 7/1/39
  $ 1,812,400    
  3,670     San Joaquin Hills Transportation Corridor Agency, (MBIA),
0.00%, 1/15/27
    1,099,348    
            $ 2,911,748    
Insured-Utilities — 3.7%      
$ 1,750     Los Angeles Department of Water and Power, (FGIC),
5.125%, 7/1/41
  $ 1,618,348    
            $ 1,618,348    
Insured-Water Revenue — 19.1%      
$ 1,235     Calleguas Las Virgines Public Financing Authority,
(Municipal Water District), (BHAC), (FGIC),
4.75%, 7/1/37
  $ 1,090,554    
  2,500     Contra Costa Water District, (FSA), 5.00%, 10/1/32(1)     2,375,802    
  1,500     Los Angeles Department of Water and Power, (AMBAC),
(BHAC), 5.00%, 7/1/26(1)
    1,461,990    
  1,500     Los Angeles Department of Water and Power, (MBIA),
3.00%, 7/1/30
    990,150    
  1,475     San Francisco City and County Public Utilities Commission,
(FSA), 4.25%, 11/1/33
    1,189,647    
  1,655     Santa Clara Valley Water District, (FSA), 3.75%, 6/1/28     1,263,791    
            $ 8,371,934    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Water Revenue — 5.5%  
$ 2,490     California Department of Water Resources, (Central Valley),
5.00%, 12/1/29
  $ 2,386,267    
        $ 2,386,267    
Total Tax-Exempt Investments — 167.5%
(identified cost $83,317,575)
  $ 73,219,282    
Auction Preferred Shares Plus Cumulative
Unpaid Dividends — (58.9)%
  $ (25,751,803 )  
Other Assets, Less Liabilities — (8.6)%   $ (3,749,112 )  
Net Assets Applicable to
Common Shares — 100.0%
  $ 43,718,367    

 

AMBAC - AMBAC Financial Group, Inc.

BHAC - Berkshire Hathaway Assurance Corp.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

XLCA - XL Capital Assurance, Inc.

The Fund invests primarily in debt securities issued by California 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 September 30, 2008, 88.0% of total 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 2.5% to 26.4% of total investments.

(1)  Security represents the underlying municipal obligation of an inverse floating rate obligation held by the Fund.

(2)  Security (or a portion thereof) has been segregated to cover margin requirements on open financial futures contracts.

See notes to financial statements
17



Eaton Vance Insured Florida Plus Municipal Bond as of September 30, 2008

PORTFOLIO OF INVESTMENTS

Tax-Exempt Investments — 178.7%      
Principal Amount
(000's omitted)
 
Security
 
Value
 
Hospital — 4.3%      
$ 500     Michigan Hospital Finance Authority, (Henry Ford
Health System), 5.00%, 11/15/38
  $ 404,165    
  900     South Miami Health Facilities Authority, (Baptist Health),
5.00%, 8/15/42(1)
    756,621    
  100     South Miami Health Facilities Authority, (Baptist Health),
5.00%, 8/15/42
    84,067    
            $ 1,244,853    
Industrial Development Revenue — 4.9%      
$ 545     Liberty Development Corp., NY, (Goldman Sachs Group, Inc.),
5.25%, 10/1/35
  $ 458,220    
  1,175     Liberty Development Corp., NY, (Goldman Sachs Group, Inc.),
5.25%, 10/1/35(1)
    987,935    
            $ 1,446,155    
Insured-Electric Utilities — 5.5%      
$ 800     Jacksonville Electric Authority, Electric System Revenue,
(FSA), 4.75%, 10/1/34
  $ 706,952    
  1,000     Northern Municipal Power Agency, IL,
(Prairie Street Project), (MBIA), 5.00%, 1/1/32
    898,480    
            $ 1,605,432    
Insured-Escrowed / Prerefunded — 2.1%      
$ 610     Tampa Bay Water Utility System, (FGIC),
Prerefunded to 10/1/08, 4.75%, 10/1/27
  $ 616,124    
            $ 616,124    
Insured-General Obligations — 22.0%      
$ 1,975     Bowling Green, OH, City School District, (FSA),
5.00%, 12/1/34
  $ 1,849,094    
  1,155     King County, WA, Public Hospital District No. 1, (AGC),
5.00%, 12/1/37
    1,063,639    
  1,000     Mobile, AL, (FSA), 5.00%, 2/15/28     946,500    
  1,000     Olentangy, OH, Local School District, (AGC),
5.00%, 12/1/36
    931,430    
  3,005     San Juan, CA, Unified School District, (FSA),
0.00%, 8/1/23
    1,301,556    
  950     West Virginia, (FGIC), 0.00%, 11/1/26     331,312    
            $ 6,423,531    
Insured-Hospital — 32.0%      
$ 250     California Statewide Communities Development Authority,
(Sutter Health), (FSA), 5.05%, 8/15/38(1)
  $ 229,133    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Hospital (continued)      
$ 190     Indiana Health and Educational Facility Finance Authority,
(Sisters of St. Francis Health Services), (FSA),
5.25%, 5/15/41
  $ 176,328    
  2,500     Indiana Health and Educational Facility Finance Authority,
(Sisters of St. Francis Health Services), (FSA),
5.25%, 5/15/41(1)
    2,320,100    
  2,000     Maricopa County, AZ, Industrial Development Authority,
(Catholic Healthcare West), (BHAC), 5.25%, 7/1/32
    1,868,700    
  1,700     Maryland Health and Higher Educational Facilities Authority,
(Lifebridge Health), (AGC), 4.75%, 7/1/47(1)
    1,464,354    
  545     New Jersey Health Care Facilities Financing Authority,
(Hackensack University Medical Center), (AGC),
5.25%, 1/1/31
    520,856    
  1,000     New Jersey Health Care Facilities Financing Authority,
(Hackensack University Medical Center), (AGC),
5.25%, 1/1/36(1)
    951,280    
  2,000     Vermont Educational and Health Buildings Financing Agency,
(Fletcher Allen Health), (FSA), 5.00%, 12/1/34
    1,808,140    
            $ 9,338,891    
Insured-Lease Revenue / Certificates of
Participation — 12.9%
     
$ 2,000     San Diego County, CA, Water Authority, Certificates of
Participation, (FSA), 5.00%, 5/1/38(1)
  $ 1,854,600    
  2,000     Tri-Creek Middle School Building Corp., IN, (FSA),
5.25%, 1/15/34(1)
    1,905,740    
            $ 3,760,340    
Insured-Public Education — 9.6%      
$ 2,000     University of South Alabama, (BHAC), 5.00%, 8/1/38   $ 1,854,060    
  1,025     University of Vermont and State Agricultural College, (MBIA),
5.00%, 10/1/40
    937,896    
            $ 2,791,956    
Insured-Special Tax Revenue — 22.2%      
$ 1,580     Baton Rouge, LA, Public Improvement, (FSA),
4.25%, 8/1/32
  $ 1,287,858    
  1,275     Jacksonville, Excise Tax, (FGIC), 5.125%, 10/1/27     1,216,184    
  600     Miami-Dade County, Special Obligation, (MBIA),
0.00%, 10/1/35
    108,012    
  8,000     Miami-Dade County, Special Obligation, (MBIA),
0.00%, 10/1/39
    1,091,520    
  1,020     New York Convention Center Development Corp.,
Hotel Occupancy Tax, (AMBAC), 5.00%, 11/15/44
    919,856    
  9,835     Puerto Rico Sales Tax Financing, (AMBAC), 0.00%, 8/1/54     549,186    
  1,690     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/44     181,760    
  3,350     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/45     337,713    

 

See notes to financial statements
18



Eaton Vance Insured Florida Plus Municipal Bond as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Special Tax Revenue — (continued)      
$ 2,105     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/46   $ 198,523    
  1,120     Sunrise Public Facilities, (MBIA), 0.00%, 10/1/20     590,274    
            $ 6,480,886    
Insured-Transportation — 23.9%      
$ 1,155     Central Puget Sound, WA, Regional Transportation Authority,
Sales & Use Tax Revenue, (FSA), 5.00%, 11/1/34(2)
  $ 1,084,557    
  420     Chicago, IL, (O'Hare International Airport), (FSA),
4.50%, 1/1/38
    349,196    
  2,820     Chicago, IL, (O'Hare International Airport), (FSA),
5.00%, 1/1/33
    2,586,278    
  1,295     Maryland Transportation Authority, (FSA), 5.00%, 7/1/41     1,223,295    
  1,605     Port Palm Beach District, (Improvements), (XLCA),
0.00%, 9/1/24
    639,962    
  1,950     Port Palm Beach District, (Improvements), (XLCA),
0.00%, 9/1/25
    729,085    
  1,000     Port Palm Beach District, (Improvements), (XLCA),
0.00%, 9/1/26
    349,710    
            $ 6,962,083    
Insured-Water and Sewer — 27.1%      
$ 2,000     Austin, TX, Water and Wastewater System, (FSA),
5.00%, 11/15/33(1)
  $ 1,854,320    
  1,000     Emerald Coast, Utility Authority Revenue, (FGIC),
4.75%, 1/1/31
    832,460    
  2,000     Fernley, NV, (AGC), 5.00%, 2/1/38(1)     1,855,040    
  350     Houston, TX, Utility System, (FSA), 5.00%, 11/15/33     324,506    
  1,000     Ogden City, UT, Sewer and Water Revenue, (FSA),
4.50%, 6/15/33
    849,880    
  570     Pearland, TX, Waterworks and Sewer Systems, (FSA),
4.50%, 9/1/34
    479,564    
  1,830     Wichita, KS, Water and Sewer Utility, (AGC),
5.00%, 10/1/31
    1,709,129    
            $ 7,904,899    
Insured-Water Revenue — 5.6%      
$ 1,500     Detroit, MI, Water Supply System, (BHAC), (FGIC),
4.50%, 7/1/29
  $ 1,278,555    
  390     Tampa Bay Water Utility System, (FGIC), 4.75%, 10/1/27     348,590    
            $ 1,627,145    
Private Education — 6.6%      
$ 2,000     Massachusetts Health and Educational Facilities Authority,
(Harvard University), 5.00%, 10/1/38(1)
  $ 1,933,660    
            $ 1,933,660    

 


 
Value
 
Total Tax-Exempt Investments — 178.7%
(identified cost $58,156,051)
  $ 52,135,955    
Auction Preferred Shares Plus Cumulative
Unpaid Dividends — (31.2)%
  $ (9,102,243 )  
Other Assets, Less Liabilities — (47.5)%   $ (13,862,195 )  
Net Assets Applicable to
Common Shares — 100.0%
  $ 29,171,517    

 

AGC - Assured Guaranty Corp.

AMBAC - AMBAC Financial Group, Inc.

BHAC - Berkshire Hathaway Assurance Corp.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

XLCA - XL Capital Assurance, Inc.

At September 30, 2008, the concentration of the Fund's investments in the various states, determined as a percentage of total investments, is as follows:

Florida     15.5 %  
Others, representing less than 10% individually     84.5 %  

 

The Fund invests primarily in debt securities issued by Florida and other state 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 September 30, 2008, 91.1% of total 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 2.9% to 44.4% of total investments.

(1)  Security represents the underlying municipal obligation of an inverse floating rate obligation held by the Fund.

(2)  Security (or a portion thereof) has been segregated to cover margin requirements on open financial futures contracts.

See notes to financial statements
19




Eaton Vance Insured Massachusetts Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS

Tax-Exempt Investments — 165.2%      
Principal Amount
(000's omitted)
 
Security
 
Value
 
Escrowed / Prerefunded — 5.7%      
$ 500     Massachusetts Development Finance Agency, (Massachusetts
College of Pharmacy),
Prerefunded to 7/1/13, 5.75%, 7/1/33
  $ 555,280    
  600     Massachusetts Development Finance Agency, (Western
New England College), Prerefunded to 12/1/12,
6.125%, 12/1/32
    669,180    
            $ 1,224,460    
Hospital — 6.4%      
$ 1,075     Massachusetts Health and Educational Facilities Authority,
(Dana-Farber Cancer Institute), 5.00%, 12/1/37
  $ 968,521    
  55     Massachusetts Health and Educational Facilities Authority,
(Partners Healthcare Systems), 5.75%, 7/1/32
    54,537    
  370     Massachusetts Health and Educational Facilities Authority,
(South Shore Hospital), 5.75%, 7/1/29
    343,749    
            $ 1,366,807    
Insured-Escrowed / Prerefunded — 5.4%      
$ 2,900     Massachusetts College Building Authority, (MBIA),
Escrowed to Maturity, 0.00%, 5/1/26
  $ 1,102,638    
  50     Massachusetts Health and Educational Facilities Authority,
(New England Medical Center), (FGIC), Prerefunded to
5/15/12, 5.00%, 5/15/25
    53,038    
            $ 1,155,676    
Insured-General Obligations — 13.1%      
$ 2,000     Massachusetts, (MBIA), 5.25%, 8/1/28   $ 1,958,840    
  965     Milford, (FSA), 4.25%, 12/15/46     777,086    
  75     Sandwich, (MBIA), 4.50%, 7/15/29     67,647    
            $ 2,803,573    
Insured-Hospital — 4.7%      
$ 1,160     Massachusetts Health and Educational Facilities Authority,
(New England Medical Center), (FGIC), 5.00%, 5/15/25
  $ 993,076    
            $ 993,076    
Insured-Lease Revenue / Certificates of
Participation — 15.7%
     
$ 1,750     Massachusetts Development Finance Agency, (MBIA),
5.125%, 2/1/34
  $ 1,653,872    
  1,000     Plymouth County Correctional Facility, (AMBAC),
5.00%, 4/1/22
    993,210    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Lease Revenue / Certificates of
Participation (continued)
     
$ 795     Puerto Rico Public Buildings Authority, (CIFG),
5.25%, 7/1/36
  $ 698,328    
            $ 3,345,410    
Insured-Other Revenue — 7.3%      
$ 1,500     Massachusetts Development Finance Agency,
(WGBH Educational Foundation), (AMBAC),
5.75%, 1/1/42
  $ 1,546,305    
            $ 1,546,305    
Insured-Pooled Loans — 10.4%      
$ 2,400     Puerto Rico Municipal Finance Agency, (FSA),
5.00%, 8/1/27(1)
  $ 2,209,960    
            $ 2,209,960    
Insured-Private Education — 27.1%      
$ 1,000     Massachusetts Development Finance Agency, (Boston
University), (XLCA), 5.375%, 5/15/39
  $ 936,660    
  1,105     Massachusetts Development Finance Agency, (Boston
University), (XLCA), 6.00%, 5/15/59
    1,111,840    
  750     Massachusetts Development Finance Agency, (College of
the Holy Cross), (AMBAC), 5.25%, 9/1/32(1)
    734,967    
  1,500     Massachusetts Development Finance Agency,
(Franklin W. Olin College), (XLCA), 5.25%, 7/1/33
    1,370,145    
  750     Massachusetts Development Finance Agency, (Massachusetts
College of Pharmacy), (AGC), 5.00%, 7/1/35
    692,798    
  1,000     Massachusetts Development Finance Agency,
(Massachusetts College of Pharmacy), (AGC), 5.00%, 7/1/37
    918,670    
            $ 5,765,080    
Insured-Public Education — 12.4%      
$ 700     Massachusetts College Building Authority, (XLCA),
5.50%, 5/1/39
  $ 673,925    
  1,000     Massachusetts Health and Educational Facilities Authority,
(University of Massachusetts), (FGIC), 5.125%, 10/1/34
    925,060    
  1,150     Massachusetts Health and Educational Facilities Authority,
(Worcester State College), (AMBAC), 5.00%, 11/1/32
    1,050,801    
            $ 2,649,786    
Insured-Special Tax Revenue — 16.3%      
$ 1,280     Martha's Vineyard Land Bank, (AMBAC), 5.00%, 5/1/32   $ 1,243,686    
  290     Massachusetts Bay Transportation Authority, Revenue
Assessment, (MBIA), 4.00%, 7/1/33
    225,133    

 

See notes to financial statements
20



Eaton Vance Insured Massachusetts Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Special Tax Revenue (continued)      
$ 1,350     Massachusetts School Building Authority, Dedicated Sales
Tax Revenue, (AMBAC), 4.75%, 8/15/32
  $ 1,199,826    
  6,200     Puerto Rico Sales Tax Financing, (AMBAC), 0.00%, 8/1/54     346,208    
  1,055     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/44     113,465    
  2,095     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/45     211,197    
  1,325     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/46     124,961    
            $ 3,464,476    
Insured-Transportation — 10.8%      
$ 3,700     Massachusetts Turnpike Authority, (MBIA),
0.00%, 1/1/28
  $ 1,161,356    
  1,250     Massachusetts Turnpike Authority, Metropolitan Highway
System, (AMBAC), 5.00%, 1/1/39
    1,137,775    
            $ 2,299,131    
Insured-Water Revenue — 14.8%      
$ 1,125     Massachusetts Water Resources Authority, (AMBAC),
4.00%, 8/1/40
  $ 845,595    
  2,425     Massachusetts Water Resources Authority, (FSA),
5.00%, 8/1/32
    2,304,987    
            $ 3,150,582    
Private Education — 12.3%      
$ 750     Massachusetts Development Finance Agency,
(Middlesex School), 5.00%, 9/1/33
  $ 685,207    
  2,000     Massachusetts Health and Educational Facilities Authority,
(Harvard University), 5.00%, 10/1/38(1)
    1,933,660    
            $ 2,618,867    
Senior Living / Life Care — 2.8%      
$ 745     Massachusetts Development Finance Agency,
(Berkshire Retirement), 5.15%, 7/1/31
  $ 602,161    
            $ 602,161    
Total Tax-Exempt Investments — 165.2%
(identified cost $38,732,071)
  $ 35,195,350    
Auction Preferred Shares Plus Cumulative
Unpaid Dividends — (63.8)%
  $ (13,596,809 )  
Other Assets, Less Liabilities — (1.4)%   $ (287,729 )  
Net Assets Applicable to
Common Shares — 100.0%
  $ 21,310,812    

 

AGC - Assured Guaranty Corp.

AMBAC - AMBAC Financial Group, Inc.

CIFG - CIFG Assurance North America, Inc.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

XLCA - XL Capital Assurance, Inc.

The Fund invests primarily in debt securities issued by Massachusetts municipalities. In addition, 10.5% of the Fund's total investments at September 30, 2008 were invested in municipal obligations issued by Puerto Rico. 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 September 30, 2008, 83.5% of total 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 2.0% to 25.8% of total investments.

(1)  Security represents the underlying municipal obligation of an inverse floating rate obligation held by the Fund.

See notes to financial statements
21



Eaton Vance Insured Michigan Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS

Tax-Exempt Investments — 161.6%      
Principal Amount
(000's omitted)
 
Security
 
Value
 
Electric Utilities — 6.0%      
$ 1,250     Michigan Strategic Fund, (Detroit Edison Pollution Control),
5.45%, 9/1/29
  $ 1,146,625    
            $ 1,146,625    
Escrowed/Prerefunded — 8.5%      
$ 1,500     Michigan Hospital Finance Authority, (Sparrow Obligation
Group), Prerefunded to 11/15/11,
5.625%, 11/15/36
  $ 1,621,110    
            $ 1,621,110    
Hospital — 14.0%      
$ 400     Michigan Hospital Finance Authority, (Chelsea Community
Hospital), 5.00%, 5/15/30
  $ 317,876    
  1,000     Michigan Hospital Finance Authority, (Oakwood Hospital
System), 5.75%, 4/1/32
    930,700    
  1,500     Michigan Hospital Finance Authority, (Trinity Health),
5.375%, 12/1/30
    1,413,765    
            $ 2,662,341    
Insured-Electric Utilities — 2.2%      
$ 500     Michigan Strategic Fund, (Detroit Edison Co.), (XLCA),
5.25%, 12/15/32
  $ 418,385    
            $ 418,385    
Insured-Escrowed / Prerefunded — 32.8%      
$ 750     Detroit School District, (School Bond Loan Fund), (FSA),
Prerefunded to 5/1/12, 5.125%, 5/1/31
  $ 798,398    
  1,250     Detroit Sewer Disposal, (FGIC), Prerefunded to 7/1/11,
5.125%, 7/1/31
    1,321,487    
  1,500     Lansing Building Authority, (MBIA), Prerefunded to 6/1/13,
5.00%, 6/1/29
    1,602,420    
  1,150     Michigan Hospital Finance Authority, (St. John Health System),
(AMBAC), Escrowed to Maturity, 5.00%, 5/15/28
    1,117,720    
  1,300     Reed City Public Schools, (FSA), Prerefunded to 5/1/14,
5.00%, 5/1/29
    1,393,288    
            $ 6,233,313    
Insured-General Obligations — 16.1%      
$ 1,960     Grand Rapids and Kent County Joint Building Authority,
(DeVos Place), (MBIA), 0.00%, 12/1/27(1)
  $ 637,000    
  750     Greenville Public Schools, (MBIA), 5.00%, 5/1/25     727,755    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-General Obligations (continued)      
$ 1,330     Okemos Public School District, (MBIA), 0.00%, 5/1/19   $ 765,801    
  1,000     Pinconning Area Schools, (FSA), 5.00%, 5/1/33     935,550    
            $ 3,066,106    
Insured-Hospital — 10.1%      
$ 500     Michigan Hospital Finance Authority, (Mid-Michigan
Obligation Group), (AMBAC), 5.00%, 4/15/32
  $ 433,415    
  1,590     Royal Oak Hospital Finance Authority, (William Beaumont
Hospital), (MBIA), 5.25%, 11/15/35
    1,487,540    
            $ 1,920,955    
Insured-Lease Revenue / Certificates of
Participation — 19.2%
     
$ 1,750     Michigan House of Representatives, (AMBAC),
0.00%, 8/15/22
  $ 811,615    
  2,615     Michigan House of Representatives, (AMBAC),
0.00%, 8/15/23
    1,130,961    
  3,100     Michigan State Building Authority, (FGIC),
0.00%, 10/15/30
    736,343    
  1,000     Michigan State Building Authority, (FGIC), (FSA),
0.00%, 10/15/29
    265,650    
  795     Puerto Rico Public Buildings Authority, (CIFG),
5.25%, 7/1/36
    698,328    
            $ 3,642,897    
Insured-Public Education — 16.9%      
$ 1,500     Central Michigan University, (AMBAC), 5.05%, 10/1/32   $ 1,380,675    
  750     Lake Superior State University, (AMBAC),
5.125%, 11/15/26
    718,770    
  1,200     Wayne University, (MBIA), 5.00%, 11/15/37     1,105,152    
            $ 3,204,597    
Insured-Sewer Revenue — 2.2%      
$ 500     Detroit Sewer Disposal System, (MBIA),
4.50%, 7/1/35
  $ 409,715    
            $ 409,715    
Insured-Special Tax Revenue — 16.0%      
$ 7,030     Puerto Rico Sales Tax Financing, (AMBAC),
0.00%, 8/1/54
  $ 392,555    
  845     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/44     90,880    
  1,675     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/45     168,857    
  1,115     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/46     105,155    

 

See notes to financial statements
22



Eaton Vance Insured Michigan Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Special Tax Revenue (continued)      
$ 1,500     Wayne Charter County, (Airport Hotel-Detroit
Metropolitan Airport), (MBIA), 5.00%, 12/1/30
  $ 1,377,495    
  1,000     Ypsilanti Community Utilities Authority, (Sanitary Sewer
System), (FGIC), 5.00%, 5/1/32
    914,600    
            $ 3,049,542    
Insured-Utilities — 7.7%      
$ 1,000     Lansing Board of Water and Light, (Water Supply, Steam
and Electric Utility), (FSA), 5.00%, 7/1/25
  $ 966,880    
  510     Lansing Board of Water and Light, (Water Supply,
Steam and Electric Utility), (FSA), 5.00%, 7/1/26
    493,634    
            $ 1,460,514    
Insured-Water Revenue — 7.6%      
$ 1,600     Detroit Water Supply System, (FGIC), 5.00%, 7/1/30   $ 1,439,152    
            $ 1,439,152    
Private Education — 2.3%      
$ 500     Michigan Higher Education Facilities Authority,
(Hillsdale College), 5.00%, 3/1/35
  $ 440,725    
            $ 440,725    
Total Tax-Exempt Investments — 161.6%
(identified cost $32,795,562)
  $ 30,715,977    
Auction Preferred Shares Plus Cumulative
Unpaid Dividends — (71.0)%
  $ (13,500,000 )  
Other Assets, Less Liabilities — 9.4%   $ 1,791,441    
Net Assets Applicable to
Common Shares — 100.0%
  $ 19,007,418    

 

AMBAC - AMBAC Financial Group, Inc.

CIFG - CIFG Assurance North America, Inc.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

XLCA - XL Capital Assurance, Inc.

The Fund invests primarily in debt securities issued by Michigan 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 September 30, 2008, 80.9% of total 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 1.4% to 27.6% of total investments.

(1)  Security (or a portion thereof) has been segregated to cover margin requirements on open financial futures contracts.

See notes to financial statements
23



Eaton Vance Insured New Jersey Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS

Tax-Exempt Investments — 185.1%      
Principal Amount
(000's omitted)
 
Security
 
Value
 
Hospital — 15.5%      
$ 100     Camden County Improvement Authority, (Cooper Health
System), 5.00%, 2/15/25
  $ 86,006    
  180     Camden County Improvement Authority, (Cooper Health
System), 5.00%, 2/15/35
    144,032    
  150     Camden County Improvement Authority, (Cooper Health
System), 5.25%, 2/15/27
    131,213    
  1,300     Camden County Improvement Authority, (Cooper Health
System), 5.75%, 2/15/34
    1,160,302    
  600     New Jersey Health Care Facilities Financing Authority,
(Atlanticare Regional Medical Center), 5.00%, 7/1/37
    517,122    
  610     New Jersey Health Care Facilities Financing Authority,
(Capital Health System), 5.375%, 7/1/33
    528,040    
  575     New Jersey Health Care Facilities Financing Authority,
(Capital Health System), 5.75%, 7/1/23
    553,380    
  250     New Jersey Health Care Facilities Financing Authority,
(Hunterdon Medical Center), 5.125%, 7/1/35
    220,262    
  1,705     New Jersey Health Care Facilities Financing Authority,
(South Jersey Hospital), 5.00%, 7/1/46
    1,428,978    
            $ 4,769,335    
Insured-Electric Utilities — 4.2%      
$ 650     Puerto Rico Electric Power Authority, (FGIC),
5.25%, 7/1/34
  $ 595,953    
  750     Puerto Rico Electric Power Authority, (FGIC),
5.25%, 7/1/35
    685,680    
            $ 1,281,633    
Insured-General Obligations — 34.9%      
$ 2,260     Bayonne, (FSA), 0.00%, 7/1/22   $ 1,060,641    
  2,415     Bayonne, (FSA), 0.00%, 7/1/23     1,056,538    
  560     Chesterfield Township School District, (AGC),
4.50%, 2/1/38
    493,657    
  2,000     Hudson County Improvement Authority, (MBIA),
0.00%, 12/15/38
    319,000    
  5,500     Irvington Township, (FSA), 0.00%, 7/15/26     1,978,460    
  2,785     Jackson Township School District, (MBIA), 2.50%, 6/15/27     1,792,510    
  180     Madison Borough Board of Education, (MBIA),
4.75%, 7/15/35
    165,665    
  2,570     Monroe Township Board of Education, Middlesex County,
(AGC), 4.75%, 3/1/34
    2,379,820    
  265     Nutley School District, (MBIA), 4.50%, 7/15/29     238,092    
  310     Nutley School District, (MBIA), 4.75%, 7/15/30     288,095    
  410     Nutley School District, (MBIA), 4.75%, 7/15/31     380,337    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-General Obligations (continued)      
$ 430     Nutley School District, (MBIA), 4.75%, 7/15/32   $ 398,201    
  210     South Orange and Maplewood School District,
(AGC), 4.625%, 1/15/26
    194,737    
            $ 10,745,753    
Insured-Hospital — 22.8%      
$ 2,750     New Jersey Health Care Facilities Financing Authority,
(Englewood Hospital), (MBIA), 5.00%, 8/1/31
  $ 2,505,635    
  1,045     New Jersey Health Care Facilities Financing Authority,
(Hackensack University Medical Center), (AGC),
5.25%, 1/1/31
    998,707    
  2,000     New Jersey Health Care Facilities Financing Authority,
(Hackensack University Medical Center), (AGC),
5.25%, 1/1/36(1)
    1,902,560    
  1,175     New Jersey Health Care Facilities Financing Authority,
(Meridian Health Center), Series II, (AGC), 5.00%, 7/1/38
    1,089,342    
  250     New Jersey Health Care Facilities Financing Authority,
(Meridian Health Center), Series V, (AGC), 5.00%, 7/1/38(1)
    231,775    
  310     New Jersey Health Care Facilities Financing Authority,
(Meridian Health Center), Series V, (AGC), 5.00%, 7/1/38
    287,401    
            $ 7,015,420    
Insured-Lease Revenue / Certificates of
Participation — 17.1%
     
$ 445     Gloucester County Improvements Authority, (MBIA),
4.75%, 9/1/30
  $ 410,223    
  265     Lafayette Yard Community Development Corporation,
(Hotel and Conference Center), (FGIC), 5.00%, 4/1/35
    243,519    
  1,250     Middlesex County, (MBIA), 5.00%, 8/1/31     1,183,175    
  1,000     New Jersey Economic Development Authority,
(School Facilities), (AMBAC), 5.00%, 9/1/37
    934,820    
  1,000     New Jersey Economic Development Authority,
(School Facilities), (AMBAC), (FSA), 5.00%, 9/1/37
    952,980    
  915     Newark Housing Authority, (Newark Marine Terminal),
(MBIA), 5.00%, 1/1/32
    839,028    
  795     Puerto Rico Public Buildings Authority, (CIFG),
5.25%, 7/1/36
    698,328    
            $ 5,262,073    
Insured-Pooled Loans — 8.5%      
$ 2,850     Puerto Rico Municipal Finance Agency, (FSA),
5.00%, 8/1/27(1)
  $ 2,624,327    
            $ 2,624,327    

 

See notes to financial statements
24



Eaton Vance Insured New Jersey Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Public Education — 14.1%      
$ 1,945     New Jersey Educational Facilities Authority,
(College of New Jersey), (FSA), 5.00%, 7/1/32(1)
  $ 1,832,801    
  725     New Jersey Educational Facilities Authority,
(Montclair State University), (MBIA), 3.75%, 7/1/24
    570,778    
  1,000     New Jersey Educational Facilities Authority,
(Rowan University), (FSA), (FGIC), 3.00%, 7/1/27
    671,350    
  645     New Jersey Educational Facilities Authority,
(William Paterson University), (AGC), 4.75%, 7/1/34
    589,085    
  740     University of New Jersey Medicine and Dentistry,
(AMBAC), 5.00%, 4/15/32
    667,990    
            $ 4,332,004    
Insured-Sewer Revenue — 5.9%      
$ 1,175     Ocean County Utilities Authority, (MBIA), 5.25%, 1/1/26   $ 1,151,406    
  2,000     Rahway Valley Sewerage Authority, (MBIA),
0.00%, 9/1/27
    656,200    
            $ 1,807,606    
Insured-Special Tax Revenue — 7.5%      
$ 2,390     New Jersey Economic Development Authority,
(Motor Vehicle Surcharges), (XLCA), 0.00%, 7/1/26
  $ 805,645    
  1,120     New Jersey Economic Development Authority,
(Motor Vehicle Surcharges), (XLCA), 0.00%, 7/1/27
    353,181    
  8,940     Puerto Rico Sales Tax Financing, (AMBAC),
0.00%, 8/1/54
    499,210    
  1,520     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/44     163,476    
  3,015     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/45     303,942    
  1,900     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/46     179,189    
            $ 2,304,643    
Insured-Transportation — 37.8%      
$ 1,015     Delaware River Joint Toll Bridge Commission, (MBIA),
5.00%, 7/1/35
  $ 956,435    
  2,000     New Jersey Transportation Trust Fund Authority,
(Transportation System), (AMBAC), 4.75%, 12/15/37
    1,796,380    
  3,235     New Jersey Transportation Trust Fund Authority,
(Transportation System), (BHAC), (FGIC),
0.00%, 12/15/31
    853,393    
  1,000     New Jersey Turnpike Authority, (BHAC), (FSA),
5.25%, 1/1/29
    990,080    
  3,875     Port Authority of New York and New Jersey, (FSA),
5.00%, 11/1/27(1)
    3,732,016    
  1,250     Port Authority of New York and New Jersey, (FSA),
5.00%, 8/15/33
    1,191,788    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Transportation (continued)      
$ 2,000     Puerto Rico Highway and Transportation Authority, (AGC),
5.25%, 7/1/34
  $ 1,879,060    
  270     Puerto Rico Highway and Transportation Authority, (MBIA),
5.25%, 7/1/35
    245,832    
            $ 11,644,984    
Insured-Water and Sewer — 8.3%      
$ 4,500     Middlesex County Improvements Authority, (Perth Amboy),
(AMBAC), 0.00%, 9/1/24
  $ 1,785,960    
  1,320     Passaic Valley Sewerage Commissioners, (FGIC),
2.50%, 12/1/32
    757,495    
            $ 2,543,455    
Senior Living / Life Care — 1.7%      
$ 600     New Jersey Economic Development Authority,
(Fellowship Village), 5.50%, 1/1/25
  $ 533,094    
            $ 533,094    
Special Tax Revenue — 1.3%      
$ 500     New Jersey Economic Development Authority,
(Cigarette Tax), 5.50%, 6/15/31
  $ 419,230    
            $ 419,230    
Transportation — 5.5%      
$ 1,825     South Jersey Port Authority, (Marine Terminal),
5.10%, 1/1/33
  $ 1,693,180    
            $ 1,693,180    
Total Tax-Exempt Investments — 185.1%
(identified cost $63,241,570)
  $ 56,976,737    
Auction Preferred Shares Plus Cumulative
Unpaid Dividends — (66.0)%
  $ (20,304,728 )  
Other Assets, Less Liabilities — (19.1)%   $ (5,896,465 )  
Net Assets Applicable to
Common Shares — 100.0%
  $ 30,775,544    

 

See notes to financial statements
25



Eaton Vance Insured New Jersey Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

AGC - Assured Guaranty Corp.

AMBAC - AMBAC Financial Group, Inc.

BHAC - Berkshire Hathaway Assurance Corp.

CIFG - CIFG Assurance North America, Inc.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

XLCA - XL Capital Assurance, Inc.

The Fund invests primarily in debt securities issued by New Jersey municipalities. In addition, 13.8% of the Fund's total investments at September 30, 2008 were invested in municipal obligations issued by Puerto Rico. 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 September 30, 2008, 87.0% of total 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 1.2% to 28.4% of total investments.

(1)  Security represents the underlying municipal obligation of an inverse floating rate obligation held by the Fund.

See notes to financial statements
26




Eaton Vance Insured New York Municipal Bond Fund II as of September 30, 2008

PORTFOLIO OF INVESTMENTS


Tax-Exempt Investments — 172.3%
     
Principal Amount
(000's omitted)
 
Security
 
Value
 
General Obligations — 7.1%      
$ 500     New York, 5.25%, 8/15/26   $ 484,750    
  1,650     New York, 5.25%, 1/15/28     1,601,193    
            $ 2,085,943    
Hospital — 2.4%      
$ 750     Suffolk County Industrial Development Agency,
(Huntington Hospital), 5.875%, 11/1/32
  $ 699,315    
            $ 699,315    
Industrial Development Revenue — 3.6%      
$ 400     Liberty Development Corp., (Goldman Sachs Group, Inc.),
5.25%, 10/1/35
  $ 336,308    
  600     Liberty Development Corp., (Goldman Sachs Group, Inc.),
5.25%, 10/1/35(1)
    504,478    
  240     Liberty Development Corp., (Goldman Sachs Group, Inc.),
5.50%, 10/1/37
    208,572    
            $ 1,049,358    
Insured-Electric Utilities — 3.4%      
$ 1,195     New York Power Authority, (MBIA), 4.50%, 11/15/47   $ 991,468    
            $ 991,468    
Insured-Escrowed / Prerefunded — 1.4%      
$ 1,385     New York Dormitory Authority, (Memorial Sloan-Kettering
Cancer Center), (MBIA), Escrowed to Maturity,
0.00%, 7/1/30
  $ 417,896    
            $ 417,896    
Insured-General Obligations — 7.1%      
$ 2,245     New York Dormitory Authority, (School Districts
Financing Program), (MBIA), 5.00%, 10/1/30
  $ 2,083,854    
            $ 2,083,854    
Insured-Hospital — 3.2%      
$ 1,000     New York Dormitory Authority, (Health Quest Systems),
(AGC), 5.125%, 7/1/37(1)
  $ 941,940    
            $ 941,940    
Insured-Housing — 3.2%      
$ 1,000     New York City Housing Corp., (MBIA), 4.95%, 11/1/33   $ 930,730    
            $ 930,730    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Lease Revenue / Certificates of
Participation — 10.6%
     
$ 3,085     Hudson Infrastructure Corp., (MBIA), 4.50%, 2/15/47   $ 2,428,697    
  795     Puerto Rico Public Buildings Authority, (CIFG),
5.25%, 7/1/36
    698,328    
            $ 3,127,025    
Insured-Other Revenue — 20.4%      
$ 1,930     New York City Cultural Resource Trust, (American Museum of
Natural History), (MBIA), 5.00%, 7/1/44
  $ 1,773,979    
  2,500     New York City Cultural Resource Trust, (Museum of
Modern Arts), (AMBAC), (BHAC), 5.125%, 7/1/31(1)
    2,404,025    
  390     New York City Industrial Development Agency,
(Queens Baseball Stadium), (AMBAC), 5.00%, 1/1/39
    344,705    
  1,825     New York City Industrial Development Agency,
(Yankee Stadium), (MBIA), 4.75%, 3/1/46
    1,497,650    
            $ 6,020,359    
Insured-Private Education — 32.9%      
$ 1,000     New York City Industrial Development Agency,
(New York University), (AMBAC), 5.00%, 7/1/31
  $ 944,130    
  1,440     New York Dormitory Authority, (Barnard College), (FGIC),
5.00%, 7/1/24
    1,317,773    
  2,500     New York Dormitory Authority, (Brooklyn Law School),
(XLCA), 5.125%, 7/1/30
    2,336,600    
  85     New York Dormitory Authority, (Fordham University), (AGC),
(BHAC), 5.00%, 7/1/38
    79,629    
  2,250     New York Dormitory Authority, (Fordham University), (AGC),
(BHAC), 5.00%, 7/1/38(1)
    2,107,822    
  1,000     New York Dormitory Authority, (New York University),
(AMBAC), (BHAC), 5.00%, 7/1/31(1)
    949,130    
  500     New York Dormitory Authority, (Skidmore College), (FGIC),
5.00%, 7/1/33
    467,650    
  110     New York Dormitory Authority, (University of Rochester),
(MBIA), 5.00%, 7/1/27
    104,594    
  5,425     Oneida County Industrial Development Agency,
(Hamilton College), (MBIA), 0.00%, 7/1/32
    1,382,290    
            $ 9,689,618    
Insured-Public Education — 4.7%      
$ 1,500     New York Dormitory Authority, (City University),
(AMBAC), 5.25%, 7/1/30
  $ 1,403,550    
            $ 1,403,550    
Insured-Special Tax Revenue — 24.6%      
$ 700     New York Convention Center Development Corp.,
Hotel Occupancy Tax, (AMBAC), 4.75%, 11/15/45
  $ 621,453    

 

See notes to financial statements
27



Eaton Vance Insured New York Municipal Bond Fund II as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Special Tax Revenue (continued)      
$ 1,900     New York Convention Center Development Corp.,
Hotel Occupancy Tax, (AMBAC), 5.00%, 11/15/44
  $ 1,713,458    
  1,700     Puerto Rico Infrastructure Financing Authority, (AMBAC),
0.00%, 7/1/35
    309,638    
  9,835     Puerto Rico Sales Tax Financing, (AMBAC), 0.00%, 8/1/54     549,186    
  20,540     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/44     2,209,077    
  3,350     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/45     337,713    
  2,105     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/46     198,523    
  1,380     Sales Tax Asset Receivables Corp., (AMBAC),
5.00%, 10/15/29
    1,324,455    
            $ 7,263,503    
Insured-Transportation — 27.6%      
$ 2,000     Metropolitan Transportation Authority, (FGIC),
5.25%, 11/15/31
  $ 1,904,740    
  890     Port Authority of New York and New Jersey, (FSA),
5.00%, 8/15/24
    871,808    
  2,500     Port Authority of New York and New Jersey, (FSA),
5.00%, 11/1/27(1)
    2,407,449    
  600     Port Authority of New York and New Jersey, (FSA),
5.00%, 8/15/33(2)
    572,058    
  550     Puerto Rico Highway and Transportation Authority, (MBIA),
5.25%, 7/1/35
    500,769    
  2,000     Triborough Bridge and Tunnel Authority, (MBIA),
5.00%, 11/15/32
    1,869,700    
            $ 8,126,524    
Insured-Water and Sewer — 8.7%      
$ 2,750     New York City Municipal Water Finance Authority,
(Water and Sewer System), (AMBAC), (BHAC),
5.00%, 6/15/38(1)
  $ 2,564,842    
            $ 2,564,842    
Other Revenue — 5.1%      
$ 1,500     Puerto Rico Infrastructure Financing Authority,
5.50%, 10/1/32
  $ 1,510,290    
            $ 1,510,290    
Private Education — 6.3%      
$ 1,000     Dutchess County Industrial Development Agency,
(Marist College), 5.00%, 7/1/22
  $ 952,110    
  1,000     New York City Industrial Development Agency,
(St. Francis College), 5.00%, 10/1/34
    894,490    
            $ 1,846,600    

 

 
Value
 
Total Tax-Exempt Investments — 172.3%
(identified cost $57,517,797)
  $ 50,752,815    
Auction Preferred Shares Plus Cumulative
Unpaid Dividends — (45.0)%
  $ (13,250,000 )  
Other Assets, Less Liabilities — (27.3)%   $ (8,044,057 )  
Net Assets Applicable to
Common Shares — 100.0%
  $ 29,458,758    

 

AGC - Assured Guaranty Corp.

AMBAC - AMBAC Financial Group, Inc.

BHAC - Berkshire Hathaway Assurance Corp.

CIFG - CIFG Assurance North America, Inc.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

XLCA - XL Capital Assurance, Inc.

The Fund invests primarily in debt securities issued by New York municipalities. In addition, 12.4% of the Fund's total investments at September 30, 2008 were invested in municipal obligations issued by Puerto Rico. 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 September 30, 2008, 85.8% of total 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 1.4% to 33.0% of total investments.

(1)  Security represents the underlying municipal obligation of an inverse floating rate obligation held by the Fund.

(2)  Security (or a portion thereof) has been segregated to cover margin requirements on open financial futures contracts.

See notes to financial statements
28



Eaton Vance Insured Ohio Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS

Tax-Exempt Investments — 177.8%      
Principal Amount
(000's omitted)
 
Security
 
Value
 
General Obligations — 1.7%      
$ 500     County of Franklin, 5.00%, 12/1/27(1)   $ 490,895    
            $ 490,895    
Hospital — 7.1%      
$ 900     Cuyahoga County, (Cleveland Clinic Health System),
5.50%, 1/1/29
  $ 840,573    
  500     Miami County, (Upper Valley Medical Center),
5.25%, 5/15/26
    429,320    
  1,000     Ohio Higher Educational Facilities Authority,
(University Hospital Health Systems, Inc.),
4.75%, 1/15/46
    763,190    
            $ 2,033,083    
Insured-Electric Utilities — 21.2%      
$ 700     American Municipal Power-Ohio, Inc., (Prairie State Energy
Campus), (AGC), 5.25%, 2/15/33
  $ 666,694    
  1,000     Cleveland Public Power System, (MBIA), 0.00%, 11/15/38     162,200    
  4,000     Ohio Municipal Electric Generation Agency, (MBIA),
0.00%, 2/15/25
    1,476,440    
  1,775     Ohio Municipal Electric Generation Agency, (MBIA),
0.00%, 2/15/26
    611,310    
  5,000     Ohio Municipal Electric Generation Agency, (MBIA),
0.00%, 2/15/27
    1,605,200    
  1,775     Ohio Water Development Authority, (Dayton Power & Light),
(FGIC), 4.80%, 1/1/34
    1,522,204    
            $ 6,044,048    
Insured-Escrowed / Prerefunded — 1.9%      
$ 500     Springboro Community School District, (MBIA),
Prerefunded to 6/1/14, 5.00%, 12/1/32
  $ 537,095    
            $ 537,095    
Insured-General Obligations — 49.3%      
$ 1,500     Ashtabula School District, (Construction Improvements),
(FGIC), 5.00%, 12/1/30
  $ 1,395,405    
  400     Bowling Green City School District, (FSA), 5.00%, 12/1/34     374,500    
  200     Brookfield Local School District, (FSA), 5.00%, 1/15/30     188,726    
  1,000     Cleveland Municipal School District, (FSA),
5.00%, 12/1/27
    949,090    
  1,105     Clyde-Green Springs Exempted Village School District, (FSA),
4.50%, 12/1/31
    945,294    
  2,075     Cuyahoga Community College District, (AMBAC),
5.00%, 12/1/32
    1,883,000    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-General Obligations (continued)      
$ 1,000     Milford Exempt Village School District, (AGC),
5.25%, 12/1/36
  $ 967,100    
  1,500     Olentangy Local School District, (AGC), 5.00%, 12/1/36     1,397,145    
  430     Olentangy Local School District, (FSA), 4.50%, 12/1/32     367,534    
  500     Olmsted Falls City School District, (XLCA), 5.00%, 12/1/35     452,530    
  540     Pickerington Local School District, (MBIA), 4.25%, 12/1/34     439,830    
  2,400     Plain School District, (FGIC), 0.00%, 12/1/27     772,752    
  750     St. Mary's School District, (FSA), 5.00%, 12/1/35     695,385    
  500     Tecumseh School District, (FGIC), 4.75%, 12/1/31     440,460    
  2,000     Wapakoneta City School District, (FSA), 4.75%, 12/1/35     1,810,440    
  1,000     Zanesville School District, (School Improvements), (MBIA),
5.05%, 12/1/29
    964,640    
            $ 14,043,831    
Insured-Hospital — 11.9%      
$ 980     Hamilton County, (Cincinnati Children's Hospital), (FGIC),
5.00%, 5/15/32
  $ 789,596    
  1,500     Hamilton County, (Cincinnati Children's Hospital), (FGIC),
5.125%, 5/15/28
    1,261,290    
  440     Lorain County, (Catholic Healthcare Partners), (FSA),
Variable Rate, 0.708%, 2/1/29(2)(3)(5)
    314,670    
  1,250     Ohio Higher Educational Facility Commission,
(University Hospital Health Systems, Inc.), (AMBAC),
4.75%, 1/15/46
    1,019,775    
            $ 3,385,331    
Insured-Lease Revenue / Certificates of
Participation — 6.3%
     
$ 795     Puerto Rico Public Buildings Authority, (CIFG),
5.25%, 7/1/36
  $ 698,328    
  235     Puerto Rico Public Buildings Authority, Government
Facilities Revenue, (XLCA), 5.25%, 7/1/36
    206,424    
  1,000     Summit County, (Civic Theater Project), (AMBAC),
5.00%, 12/1/33
    904,490    
            $ 1,809,242    
Insured-Pooled Loans — 2.8%      
$ 850     Puerto Rico Municipal Finance Agency, (FSA),
5.00%, 8/1/27(4)
  $ 783,486    
            $ 783,486    
Insured-Public Education — 21.9%      
$ 3,000     Cincinnati Technical and Community College, (AMBAC),
5.00%, 10/1/28
  $ 2,754,630    
  500     Ohio University, (FSA), 5.00%, 12/1/33     465,465    

 

See notes to financial statements
29



Eaton Vance Insured Ohio Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Public Education (continued)      
$ 1,170     Ohio University, (FSA), 5.25%, 12/1/23   $ 1,172,539    
  1,000     University of Akron, (FSA), 5.00%, 1/1/38     922,150    
  1,000     University of Cincinnati, (AMBAC), 5.00%, 6/1/31     921,010    
            $ 6,235,794    
Insured-Sewer Revenue — 4.2%      
$ 755     Marysville Wastewater Treatment System, (XLCA),
4.75%, 12/1/46
  $ 599,546    
  750     Marysville Wastewater Treatment System, (XLCA),
4.75%, 12/1/47
    594,030    
            $ 1,193,576    
Insured-Special Tax Revenue — 21.8%      
$ 4,315     Hamilton County Sales Tax, (AMBAC), 0.00%, 12/1/22   $ 1,935,234    
  5,000     Hamilton County Sales Tax, (AMBAC), 0.00%, 12/1/23     2,088,050    
  1,000     Hamilton County Sales Tax, (AMBAC), 0.00%, 12/1/24     389,940    
  8,685     Puerto Rico Sales Tax Financing, (AMBAC), 0.00%, 8/1/54     484,971    
  1,480     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/44     159,174    
  2,935     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/45     295,877    
  1,845     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/46     174,002    
  750     Trumbull County, (FSA), 5.00%, 12/1/37     696,795    
            $ 6,224,043    
Insured-Transportation — 13.3%      
$ 3,580     Cleveland Airport System, (FSA), 5.00%, 1/1/31   $ 3,312,646    
  500     Puerto Rico Highway and Transportation Authority, (AGC),
(CIFG), 5.25%, 7/1/41(4)
    465,367    
            $ 3,778,013    
Pooled Loans — 8.3%      
$ 1,450     Cuyahoga County Port Authority, (Garfield Heights),
5.25%, 5/15/23
  $ 1,280,452    
  1,140     Rickenbacker Port Authority, Oasbo Expanded Asset
Pool Loan, 5.375%, 1/1/32(4)
    1,079,861    
            $ 2,360,313    
Private Education — 6.1%      
$ 850     Ohio Higher Educational Facilities Authority,
(John Carroll University), 5.25%, 11/15/33
  $ 792,753    
  1,000     Ohio Higher Educational Facilities Authority,
(Oberlin College), 5.00%, 10/1/33
    942,860    
            $ 1,735,613    

 

 
Value
 
Total Tax-Exempt Investments — 177.8%
(identified cost $56,806,132)
  $ 50,654,363    
Auction Preferred Shares Plus Cumulative
Unpaid Dividends — (76.8)%
  $ (21,887,234 )  
Other Assets, Less Liabilities — (1.0)%   $ (272,508 )  
Net Assets Applicable to
Common Shares — 100.0%
  $ 28,494,621    

 

AGC - Assured Guaranty Corp.

AMBAC - AMBAC Financial Group, Inc.

CIFG - CIFG Assurance North America, Inc.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

XLCA - XL Capital Assurance, Inc.

The Fund invests primarily in debt securities issued by Ohio 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 September 30, 2008, 86.9% of total 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 2.3% to 25.6% 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 sold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2008, the aggregate value of these securities is $314,670 or 1.1% of the Fund's net assets applicable to common shares.

(3)  Security has been issued as a leveraged inverse floater bond. The stated interest rate represents the rate in effect at September 30, 2008.

(4)  Security represents the underlying municipal obligation of an inverse floating rate obligation held by the Fund.

(5)  Security is subject to a shortfall agreement which may require the Fund to pay amounts to a counterparty in the event of a significant decline in the market value of the security.

See notes to financial statements
30



Eaton Vance Insured Pennsylvania Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS

Tax-Exempt Investments — 178.2%      
Principal Amount
(000's omitted)
 
Security
 
Value
 
Escrowed / Prerefunded — 2.3%      
$ 750     Lancaster County Hospital Authority, (Lancaster General
Hospital), Prerefunded to 9/15/13, 5.50%, 3/15/26
  $ 815,663    
            $ 815,663    
Hospital — 10.6%      
$ 850     Lancaster County Hospital Authority, (Lancaster General
Hospital), 4.50%, 3/15/36
  $ 701,726    
  350     Lebanon County Health Facility Authority,
(Good Samaritan Hospital), 6.00%, 11/15/35
    313,523    
  1,500     Lehigh County General Purpose Authority,
(Lehigh Valley Health Network), 5.25%, 7/1/32
    1,284,180    
  750     Pennsylvania Higher Educational Facilities Authority,
(UPMC Health System), 6.00%, 1/15/31
    764,512    
  875     Philadelphia Hospitals and Higher Education
Facilities Authority, (Children's Hospital), 4.50%, 7/1/37
    702,013    
            $ 3,765,954    
Insured-Electric Utilities — 5.5%      
$ 2,235     Lehigh County Industrial Development Authority,
(PPL Electric Utilities Corp.), (FGIC), 4.75%, 2/15/27
  $ 1,960,274    
            $ 1,960,274    
Insured-Escrowed / Prerefunded — 9.7%      
$ 1,750     Pittsburgh Water and Sewer Authority, (AMBAC),
Prerefunded to 6/1/12, 5.125%, 12/1/27(1)
  $ 1,866,620    
  270     Southcentral General Authority, (Wellspan Health), (MBIA),
Escrowed to Maturity, 5.25%, 5/15/31
    269,274    
  1,230     Southcentral General Authority, (Wellspan Health), (MBIA),
Prerefunded to 5/15/11, 5.25%, 5/15/31
    1,312,656    
            $ 3,448,550    
Insured-General Obligations — 29.1%      
$ 1,650     Armstrong County, (MBIA), 5.40%, 6/1/31   $ 1,632,857    
  500     Canon McMillan School District, (FGIC), 5.25%, 12/1/34     476,735    
  1,000     Central Greene School District, (FSA), 5.00%, 2/15/35     937,360    
  1,000     Erie School District, (AMBAC), 0.00%, 9/1/30     266,770    
  1,000     Hollidaysburg School District, (FSA), 4.75%, 3/15/30     901,050    
  2,555     McKeesport School District, (MBIA), 0.00%, 10/1/21     1,242,803    
  1,500     Norwin School District, (FSA), 3.25%, 4/1/27     1,045,530    
  1,000     Pine-Richland School District, (FSA), 5.00%, 9/1/29     945,390    
  1,500     Reading School District, (FSA), 5.00%, 3/1/35     1,390,185    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-General Obligations (continued)      
$ 1,000     Scranton School District, (FSA), 5.00%, 7/15/38   $ 924,320    
  2,550     Shaler Area School District, (XLCA), 0.00%, 9/1/33     535,602    
            $ 10,298,602    
Insured-Hospital — 6.7%      
$ 1,620     Lehigh County General Purpose Authority, (Lehigh Valley
Health Network), (FSA), 5.00%, 7/1/35(1)
  $ 1,481,741    
  1,000     Washington County Hospital Authority, (Washington
Hospital), (AMBAC), 5.125%, 7/1/28
    900,510    
            $ 2,382,251    
Insured-Lease Revenue / Certificates of
Participation — 3.1%
     
$ 1,215     Philadelphia Authority for Industrial Development,
(One Benjamin Franklin), (FSA), 4.75%, 2/15/27
  $ 1,086,817    
            $ 1,086,817    
Insured-Private Education — 21.4%      
$ 1,000     Chester County Industrial Development Authority,
Educational Facility, (Westtown School), (AMBAC),
5.00%, 1/1/31
  $ 921,730    
  3,315     Delaware County, (Villanova University), (MBIA),
5.00%, 12/1/28
    3,098,961    
  1,735     Pennsylvania Higher Educational Facilities Authority,
(Drexel University), (MBIA), 5.00%, 5/1/37
    1,591,967    
  1,755     Pennsylvania Higher Educational Facilities Authority,
(Temple University), (MBIA), 4.50%, 4/1/36
    1,514,337    
  500     Pennsylvania Higher Educational Facilities Authority,
(University of the Sciences in Philadelphia), (AGC),
5.00%, 11/1/37
    460,505    
            $ 7,587,500    
Insured-Public Education — 14.9%      
$ 500     Lycoming County Authority, (Pennsylvania College of
Technology), (AGC), 5.50%, 10/1/37
  $ 490,060    
  2,400     Lycoming County Authority, (Pennsylvania College of
Technology), (AMBAC), 5.25%, 5/1/32
    2,296,704    
  1,000     Pennsylvania Higher Educational Facilities Authority,
(Clarion University Foundation), (XLCA), 5.00%, 7/1/33
    843,500    
  500     State Public School Building Authority, (Delaware County
Community College), (FSA), 5.00%, 10/1/27
    475,280    
  375     State Public School Building Authority, (Delaware
County Community College), (FSA), 5.00%, 10/1/29
    353,152    
  875     State Public School Building Authority, (Delaware
County Community College), (FSA), 5.00%, 10/1/32
    814,879    
            $ 5,273,575    

 

See notes to financial statements
31



Eaton Vance Insured Pennsylvania Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

Principal Amount
(000's omitted)
 
Security
 
Value
 
Insured-Sewer Revenue — 16.1%      
$ 1,500     Allegheny County Sanitation Authority, (MBIA),
5.00%, 12/1/22
  $ 1,465,965    
  1,000     Ambridge Borough Municipal Authority, Sewer Revenue,
(FSA), 4.60%, 10/15/41
    828,670    
  1,920     Erie Sewer Authority, (AMBAC), 0.00%, 12/1/26     650,093    
  1,555     Erie Sewer Authority, Series A, (AMBAC), 0.00%, 12/1/25     563,532    
  2,155     Erie Sewer Authority, Series B, (AMBAC), 0.00%, 12/1/25     780,972    
  1,500     University Area Joint Authority, (MBIA), 5.00%, 11/1/26     1,429,545    
            $ 5,718,777    
Insured-Special Tax Revenue — 17.1%      
$ 4,350     Pittsburgh and Allegheny County Public Auditorium Authority,
(AMBAC), 5.00%, 2/1/29
  $ 3,865,889    
  25,410     Puerto Rico Sales Tax Financing, (AMBAC), 0.00%, 8/1/54     1,418,895    
  1,775     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/44     190,901    
  3,520     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/45     354,851    
  2,220     Puerto Rico Sales Tax Financing, (MBIA), 0.00%, 8/1/46     209,368    
            $ 6,039,904    
Insured-Transportation — 19.2%      
$ 2,000     Allegheny County Port Authority, (FGIC), 5.00%, 3/1/25   $ 1,903,080    
  1,000     Allegheny County Port Authority, (FGIC), 5.00%, 3/1/29     908,270    
  2,075     Pennsylvania Turnpike Commission, (FSA),
5.25%, 7/15/30(2)
    2,027,441    
  2,100     Puerto Rico Highway and Transportation Authority,
(AGC), (CIFG), 5.25%, 7/1/41(1)
    1,954,543    
            $ 6,793,334    
Insured-Utilities — 7.4%      
$ 3,000     Philadelphia Gas Works Revenue, (AMBAC),
5.00%, 10/1/37
  $ 2,619,630    
            $ 2,619,630    
Insured-Water and Sewer — 0.4%      
$ 150     Saxonburg Water and Sewer Authority, (AGC),
5.00%, 3/1/35
  $ 137,271    
            $ 137,271    
Insured-Water Revenue — 3.4%      
$ 1,530     Philadelphia Water and Wastewater, (AMBAC),
4.25%, 11/1/31
  $ 1,200,560    
            $ 1,200,560    

 

Principal Amount
(000's omitted)
 
Security
 
Value
 
Private Education — 7.4%      
$ 3,000     Pennsylvania Higher Educational Facilities Authority,
(University of Pennsylvania), 4.75%, 7/15/35
  $ 2,636,790    
            $ 2,636,790    
Senior Living / Life Care — 1.2%      
$ 200     Montgomery County Industrial Development Authority,
(Foulkeways at Gwynedd), 5.00%, 12/1/24
  $ 168,200    
  300     Montgomery County Industrial Development Authority,
(Foulkeways at Gwynedd), 5.00%, 12/1/30
    240,486    
            $ 408,686    
Transportation — 2.7%      
$ 1,010     Delaware River Joint Toll Bridge Commission,
5.00%, 7/1/28
  $ 940,330    
            $ 940,330    
Total Tax-Exempt Investments — 178.2%
(identified cost $70,321,835)
  $ 63,114,468    
Short-Term Investments — 4.2%      
Principal Amount
(000's omitted)
 
Description
 
Value
 
$ 1,500     Harrisburg Authority, (Cumberland Valley School), (FSA),
(SPA: Dexia Credit Local), Variable Rate, 8.11%, 3/1/34(3)
  $ 1,500,000    
            $ 1,500,000    
Total Short-Term Investments — 4.2%
(identified cost $1,500,000)
  $ 1,500,000    
Total Investments — 182.4%
(identified cost $71,821,835)
  $ 64,614,468    
Auction Preferred Shares Plus Cumulative
Unpaid Dividends — (73.5)%
  $ (26,041,771 )  
Other Assets, Less Liabilities — (8.9)%   $ (3,159,815 )  
Net Assets Applicable to
Common Shares — 100.0%
  $ 35,412,882    

 

See notes to financial statements
32



Eaton Vance Insured Pennsylvania Municipal Bond Fund as of September 30, 2008

PORTFOLIO OF INVESTMENTS CONT'D

AGC - Assured Guaranty Corp.

AMBAC - AMBAC Financial Group, Inc.

CIFG - CIFG Assurance North America, Inc.

FGIC - Financial Guaranty Insurance Company

FSA - Financial Security Assurance, Inc.

MBIA - Municipal Bond Insurance Association

SPA - Standby Bond Purchase Agreement

XLCA - XL Capital Assurance, Inc.

The Fund invests primarily in debt securities issued by Pennsylvania 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 September 30, 2008, 86.7% of total 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 2.1% to 27.0% of total investments.

(1)  Security represents the underlying municipal obligation of an inverse floating rate obligation held by the Fund.

(2)  Security (or a portion thereof) has been segregated to cover margin requirements on open financial futures contracts.

(3)  Variable rate demand obligation. The stated interest rate represents the rate in effect at September 30, 2008.

See notes to financial statements
33




Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS

Statements of Assets and Liabilities

As of September 30, 2008

    Insured
Municipal Fund II
  Insured
California Fund II
  Insured Florida
Plus Fund
 
Assets  
Investments —  
Identified cost   $ 243,407,579     $ 83,317,575     $ 58,156,051    
Unrealized depreciation     (29,436,042 )     (10,098,293 )     (6,020,096 )  
Investments, at value   $ 213,971,537     $ 73,219,282     $ 52,135,955    
Cash   $     $ 2,039,179     $ 389,569    
Interest receivable     2,910,747       815,250       816,832    
Receivable for investments sold     7,973,377       6,464,936       2,394,156    
Receivable from transfer agent     20,785                
Receivable for variation margin on open financial futures contracts     1,163,438       177,969       159,375    
Receivable for open swap contracts     72,401       36,832       22,035    
Deferred debt issuance costs     169,380       31,640       53,660    
Total assets   $ 226,281,665     $ 82,785,088     $ 55,971,582    
Liabilities  
Payable for floating rate notes issued   $ 64,250,000     $ 13,155,000     $ 17,495,000    
Payable for closed swap contracts     49,297       18,692       12,530    
Due to custodian     7,058,751                
Payable to affiliates:  
Investment adviser fee     79,123       30,877       20,645    
Interest expense and fees payable     298,024       43,421       102,020    
Accrued expenses     141,233       66,928       67,627    
Total liabilities   $ 71,876,428     $ 13,314,918     $ 17,697,822    
Auction preferred shares at liquidation value plus cumulative unpaid dividends     44,757,550       25,751,803       9,102,243    
Net assets applicable to common shares   $ 109,647,687     $ 43,718,367     $ 29,171,517    
Sources of Net Assets  
Common shares, $0.01 par value, unlimited number of shares authorized   $ 99,369     $ 38,640     $ 25,755    
Additional paid-in capital     140,904,552       54,770,871       36,502,545    
Accumulated net realized loss     (3,416,699 )     (1,310,121 )     (1,385,331 )  
Accumulated undistributed (distributions in excess of) net investment income     1,164,595       248,219       (2,243 )  
Net unrealized depreciation     (29,104,130 )     (10,029,242 )     (5,969,209 )  
Net assets applicable to common shares   $ 109,647,687     $ 43,718,367     $ 29,171,517    
Auction Preferred Shares Issued and Outstanding
(Liquidation preference of $25,000 per share)
 
      1,788       1,028       364    
Common Shares Outstanding  
      9,936,889       3,863,961       2,575,502    
Net Asset Value Per Common Share  
Net assets applicable to common shares ÷ common shares issued and outstanding   $ 11.03     $ 11.31     $ 11.33    

 

See notes to financial statements
34



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Assets and Liabilities

As of September 30, 2008

    Insured
Massachusetts Fund
  Insured
Michigan Fund
  Insured
New Jersey Fund
 
Assets  
Investments —  
Identified cost   $ 38,732,071     $ 32,795,562     $ 63,241,570    
Unrealized depreciation     (3,536,721 )     (2,079,585 )     (6,264,833 )  
Investments, at value   $ 35,195,350     $ 30,715,977     $ 56,976,737    
Cash   $ 2,670,819     $ 1,325,282     $ 2,874,288    
Interest receivable     470,269       471,733       594,831    
Receivable for investments sold     699,205                
Receivable from transfer agent     4,268             4,748    
Receivable for variation margin on open financial futures contracts           53,125          
Receivable for open swap contracts     17,143       8,954       24,987    
Deferred debt issuance costs     7,840             8,820    
Total assets   $ 39,064,894     $ 32,575,071     $ 60,484,411    
Liabilities  
Payable for floating rate notes issued   $ 4,060,000     $     $ 8,246,000    
Payable for investments purchased                 1,016,271    
Payable for closed swap contracts     8,627       7,395       12,530    
Payable to affiliates:  
Investment adviser fee     14,582       12,857       21,367    
Interest expense and fees payable     24,170             52,849    
Accrued expenses     49,894       47,401       55,122    
Total liabilities   $ 4,157,273     $ 67,653     $ 9,404,139    
Auction preferred shares at liquidation value plus cumulative unpaid dividends     13,596,809       13,500,000       20,304,728    
Net assets applicable to common shares   $ 21,310,812     $ 19,007,418     $ 30,775,544    
Sources of Net Assets  
Common shares, $0.01 par value, unlimited number of shares authorized   $ 17,566     $ 15,118     $ 25,688    
Additional paid-in capital     24,890,893       21,413,714       36,415,014    
Accumulated net realized gain (loss)     (128,731 )     (446,018 )     318,681    
Accumulated undistributed net investment income     50,662       83,742       256,007    
Net unrealized depreciation     (3,519,578 )     (2,059,138 )     (6,239,846 )  
Net assets applicable to common shares   $ 21,310,812     $ 19,007,418     $ 30,775,544    
Auction Preferred Shares Issued and Outstanding
(Liquidation preference of $25,000 per share)
 
      543       540       812    
Common Shares Outstanding  
      1,756,566       1,511,845       2,568,849    
Net Asset Value Per Common Share  
Net assets applicable to common shares ÷ common shares issued and outstanding   $ 12.13     $ 12.57     $ 11.98    

 

See notes to financial statements
35



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Assets and Liabilities

As of September 30, 2008

    Insured
New York Fund II
  Insured
Ohio Fund
  Insured
Pennsylvania Fund
 
Assets  
Investments —  
Identified cost   $ 57,517,797     $ 56,806,132     $ 71,821,835    
Unrealized depreciation     (6,764,982 )     (6,151,769 )     (7,207,367 )  
Investments, at value   $ 50,752,815     $ 50,654,363     $ 64,614,468    
Cash   $ 2,471,266     $ 543,217     $ 1,258,925    
Interest receivable     748,673       703,849       877,947    
Receivable for investments sold                 936,397    
Receivable from transfer agent           5,699       3,131    
Receivable for variation margin on open financial futures contracts     162,031       262,969       278,906    
Receivable for open swap contracts     22,377       16,702       11,703    
Deferred debt issuance costs     37,240                
Total assets   $ 54,194,402     $ 52,186,799     $ 67,981,477    
Liabilities  
Payable for floating rate notes issued   $ 11,335,000     $ 1,705,000     $ 3,960,000    
Payable for investments purchased                 2,428,070    
Payable for closed swap contracts     12,530       12,119       11,914    
Payable to affiliates:  
Investment adviser fee     20,668       20,055       34,290    
Interest expense and fees payable     64,886       11,730       20,922    
Accrued expenses     52,560       56,040       71,628    
Total liabilities   $ 11,485,644     $ 1,804,944     $ 6,526,824    
Auction preferred shares at liquidation value plus cumulative unpaid dividends     13,250,000       21,887,234       26,041,771    
Net assets applicable to common shares   $ 29,458,758     $ 28,494,621     $ 35,412,882    
Sources of Net Assets  
Common shares, $0.01 par value, unlimited number of shares authorized   $ 25,560     $ 25,139     $ 29,444    
Additional paid-in capital     36,216,411       35,624,767       41,731,540    
Accumulated net realized gain (loss)     (396,522 )     (1,130,738 )     547,333    
Accumulated undistributed net investment income     326,581       53,629       239,893    
Net unrealized depreciation     (6,713,272 )     (6,078,176 )     (7,135,328 )  
Net assets applicable to common shares   $ 29,458,758     $ 28,494,621     $ 35,412,882    
Auction Preferred Shares Issued and Outstanding
(Liquidation preference of $25,000 per share)
 
      530       875       1,040    
Common Shares Outstanding  
      2,555,954       2,513,872       2,944,354    
Net Asset Value Per Common Share  
Net assets applicable to common shares ÷ common shares issued and outstanding   $ 11.53     $ 11.33     $ 12.03    

 

See notes to financial statements
36



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Operations

For the Year Ended September 30, 2008

    Insured
Municipal Fund II
  Insured
California Fund II
  Insured Florida
Plus Fund
 
Investment Income  
Interest   $ 13,063,721     $ 4,659,339     $ 3,144,651    
Total investment income   $ 13,063,721     $ 4,659,339     $ 3,144,651    
Expenses  
Investment adviser fee   $ 1,248,247     $ 480,133     $ 320,826    
Trustees' fees and expenses     9,263       4,925       1,942    
Custodian fee     128,022       44,731       50,322    
Transfer and dividend disbursing agent fees     38,578       30,492       27,467    
Legal and accounting services     62,015       47,853       197,001    
Printing and postage     31,272       10,011       6,971    
Interest expense and fees     1,299,805       226,456       278,691    
Preferred shares service fee     198,710       81,494       49,453    
Miscellaneous     43,783       49,343       34,591    
Total expenses   $ 3,059,695     $ 975,438     $ 967,264    
Deduct —  
Allocation of expenses to affiliate   $ 246,273     $ 94,649     $ 63,328    
Reduction of custodian fee     47,574       20,146       16,151    
Total expense reductions   $ 293,847     $ 114,795     $ 79,479    
Net expenses   $ 2,765,848     $ 860,643     $ 887,785    
Net investment income   $ 10,297,873     $ 3,798,696     $ 2,256,866    
Realized and Unrealized Gain (Loss)  
Net realized gain (loss) —  
Investment transactions   $ 1,211,588     $ 68,080     $ (220,593 )  
Financial futures contracts     (2,150,106 )     (385,855 )     (253,767 )  
Swap contracts     (2,357,909 )     (962,913 )     (582,977 )  
Net realized loss   $ (3,296,427 )   $ (1,280,688 )   $ (1,057,337 )  
Change in unrealized appreciation (depreciation) —  
Investments   $ (38,243,746 )   $ (12,578,226 )   $ (7,828,092 )  
Financial futures contracts     198,539       13,007       19,221    
Swap contracts     33,563       12,601       8,497    
Net change in unrealized appreciation (depreciation)   $ (38,011,644 )   $ (12,552,618 )   $ (7,800,374 )  
Net realized and unrealized loss   $ (41,308,071 )   $ (13,833,306 )   $ (8,857,711 )  
Distributions to preferred shareholders  
From net investment income   $ (1,667,740 )   $ (900,022 )   $ (665,172 )  
From net realized gain     (1,161,353 )     (203,364 )        
Net decrease in net assets from operations   $ (33,839,291 )   $ (11,137,996 )   $ (7,266,017 )  

 

See notes to financial statements
37



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Operations

For the Year Ended September 30, 2008

    Insured
Massachusetts Fund
  Insured
Michigan Fund
  Insured
New Jersey Fund
 
Investment Income  
Interest   $ 2,250,912     $ 1,918,341     $ 3,436,133    
Total investment income   $ 2,250,912     $ 1,918,341     $ 3,436,133    
Expenses  
Investment adviser fee   $ 224,245     $ 195,103     $ 330,320    
Trustees' fees and expenses     1,697       826       1,963    
Custodian fee     32,894       30,905       43,074    
Transfer and dividend disbursing agent fees     24,740       26,784       33,044    
Legal and accounting services     41,538       43,743       51,875    
Printing and postage     6,061       6,223       9,102    
Interest expense and fees     179,720       117,971       435,894    
Preferred shares service fee     37,711       33,823       55,291    
Miscellaneous     30,869       29,262       37,521    
Total expenses   $ 579,475     $ 484,640     $ 998,084    
Deduct —  
Allocation of expeses to affiliate   $ 44,153     $ 38,252     $ 65,095    
Reduction of custodian fee     6,948       2,710       17,061    
Total expense reductions   $ 51,101     $ 40,962     $ 82,156    
Net expenses   $ 528,374     $ 443,678     $ 915,928    
Net investment income   $ 1,722,538     $ 1,474,663     $ 2,520,205    
Realized and Unrealized Gain (Loss)  
Net realized gain (loss) —  
Investment transactions   $ 636,237     $ 260,734     $ 1,145,676    
Financial futures contracts     (30,173 )     (54,838 )     (50,288 )  
Swap contracts     (491,785 )     (252,190 )     (721,982 )  
Disposal of investment in violation of restrictions and net increase from payment by affiliate           0          
Net realized gain (loss)   $ 114,279     $ (46,294 )   $ 373,406    
Change in unrealized appreciation (depreciation) —  
Investments   $ (5,347,960 )   $ (3,887,732 )   $ (9,093,593 )  
Financial futures contracts     (6,911 )     8,090       (11,518 )  
Swap contracts     5,817       5,110       8,444    
Net change in unrealized appreciation (depreciation)   $ (5,349,054 )   $ (3,874,532 )   $ (9,096,667 )  
Net realized and unrealized loss   $ (5,234,775 )   $ (3,920,826 )   $ (8,723,261 )  
Distributions to preferred shareholders  
From net investment income   $ (507,893 )   $ (445,847 )   $ (504,278 )  
From net realized gain                 (291,600 )  
Net decrease in net assets from operations   $ (4,020,130 )   $ (2,892,010 )   $ (6,998,934 )  

 

See notes to financial statements
38



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Operations

For the Year Ended September 30, 2008

    Insured
New York Fund II
  Insured
Ohio Fund
  Insured
Pennsylvania Fund
 
Investment Income  
Interest   $ 3,024,165     $ 2,948,313     $ 3,915,610    
Total investment income   $ 3,024,165     $ 2,948,313     $ 3,915,610    
Expenses  
Investment adviser fee   $ 321,848     $ 312,729     $ 378,287    
Trustees' fees and expenses     1,941       1,917       2,005    
Custodian fee     43,734       40,691       45,892    
Transfer and dividend disbursing agent fees     36,439       33,789       37,683    
Legal and accounting services     41,671       48,399       58,328    
Printing and postage     8,058       9,112       11,133    
Interest expense and fees     166,105       102,516       440,189    
Preferred shares service fee     53,908       54,804       65,001    
Miscellaneous     35,404       31,941       32,340    
Total expenses   $ 709,108     $ 635,898     $ 1,070,858    
Deduct —  
Allocation of expenses to affiliate   $ 63,447     $ 61,627     $ 74,487    
Reduction of custodian fee     19,060       7,969       8,867    
Total expense reductions   $ 82,507     $ 69,596     $ 83,354    
Net expenses   $ 626,601     $ 566,302     $ 987,504    
Net investment income   $ 2,397,564     $ 2,382,011     $ 2,928,106    
Realized and Unrealized Gain (Loss)  
Net realized gain (loss) —  
Investment transactions   $ 519,360     $ 172,029     $ 876,255    
Financial futures contracts     (262,636 )     (575,299 )     19,218    
Swap contracts     (589,749 )     (453,299 )     (381,562 )  
Net realized gain (loss)   $ (333,025 )   $ (856,569 )   $ 513,911    
Change in unrealized appreciation (depreciation) —  
Investments   $ (8,612,420 )   $ (8,370,853 )   $ (9,526,198 )  
Financial futures contracts     19,317       24,915       70,048    
Swap contracts     8,483       8,293       (46,350 )  
Net change in unrealized appreciation (depreciation)   $ (8,584,620 )   $ (8,337,645 )   $ (9,502,500 )  
Net realized and unrealized loss   $ (8,917,645 )   $ (9,194,214 )   $ (8,988,589 )  
Distributions to preferred shareholders  
From net investment income   $ (606,399 )   $ (749,701 )   $ (694,287 )  
From net realized gain     (125,820 )           (222,716 )  
Net decrease in net assets from operations   $ (7,252,300 )   $ (7,561,904 )   $ (6,977,486 )  

 

See notes to financial statements
39



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Changes in Net Assets

For the Year Ended September 30, 2008

Increase (Decrease) in Net Assets   Insured
Municipal Fund II
  Insured
California Fund II
  Insured Florida
Plus Fund
 
From operations —  
Net investment income   $ 10,297,873     $ 3,798,696     $ 2,256,866    
Net realized loss from investment transactions, financial futures contracts and swap contracts     (3,296,427 )     (1,280,688 )     (1,057,337 )  
Net change in unrealized appreciation (depreciation) from investments, financial futures contracts and
swap contracts
    (38,011,644 )     (12,552,618 )     (7,800,374 )  
Distributions to preferred shareholders —  
From net investment income     (1,667,740 )     (900,022 )     (665,172 )  
From net realized gain     (1,161,353 )     (203,364 )        
Net decrease in net assets from operations   $ (33,839,291 )   $ (11,137,996 )   $ (7,266,017 )  
Distributions to common shareholders —  
From net investment income   $ (7,415,109 )   $ (2,675,734 )   $ (1,648,331 )  
From net realized gain     (2,838,122 )     (503,981 )        
Total distributions to common shareholders   $ (10,253,231 )   $ (3,179,715 )   $ (1,648,331 )  
Capital share transactions
Reinvestment of distributions to common shareholders
  $ 128,062     $ 26,286     $    
Net increase in net assets from capital share transactions   $ 128,062     $ 26,286     $    
Net decrease in net assets   $ (43,964,460 )   $ (14,291,425 )   $ (8,914,348 )  
Net Assets Applicable to Common Shares  
At beginning of year   $ 153,612,147     $ 58,009,792     $ 38,085,865    
At end of year   $ 109,647,687     $ 43,718,367     $ 29,171,517    
Accumulated undistributed (distributions in excess of)
net investment income included in net assets applicable to
common shares
 
At end of year   $ 1,164,595     $ 248,219     $ (2,243 )  

 

See notes to financial statements
40



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Changes in Net Assets

For the Year Ended September 30, 2008

Increase (Decrease) in Net Assets   Insured
Massachusetts Fund
  Insured
Michigan Fund
  Insured
New Jersey Fund
 
From operations —  
Net investment income   $ 1,722,538     $ 1,474,663     $ 2,520,205    
Net realized gain (loss) from investment transactions, financial futures contracts, swap contracts
and disposal of investments in violation of restrictions and net increase from  
payment by affiliates
    114,279       (46,294 )     373,406    
Net change in unrealized appreciation (depreciation) from investments, financial futures contracts and
swap contracts
    (5,349,054 )     (3,874,532 )     (9,096,667 )  
Distributions to preferred shareholders —  
From net investment income     (507,893 )     (445,847 )     (504,278 )  
From net realized gain                 (291,600 )  
Net decrease in net assets from operations   $ (4,020,130 )   $ (2,892,010 )   $ (6,998,934 )  
Distributions to common shareholders —  
From net investment income   $ (1,176,916 )   $ (1,012,419 )   $ (1,811,913 )  
From net realized gain                 (724,973 )  
Total distributions to common shareholders   $ (1,176,916 )   $ (1,012,419 )   $ (2,536,886 )  
Capital share transactions
Reinvestment of distributions to common shareholders
  $ 31,699     $     $ 48,919    
Net increase in net assets from capital share transactions   $ 31,699     $     $ 48,919    
Net decrease in net assets   $ (5,165,347 )   $ (3,904,429 )   $ (9,486,901 )  
Net Assets Applicable to Common Shares  
At beginning of year   $ 26,476,159     $ 22,911,847     $ 40,262,445    
At end of year   $ 21,310,812     $ 19,007,418     $ 30,775,544    
Accumulated undistributed net investment income
included in net assets applicable to common shares
 
At end of year   $ 50,662     $ 83,742     $ 256,007    

 

See notes to financial statements
41



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Changes in Net Assets

For the Year Ended September 30, 2008

Increase (Decrease) in Net Assets   Insured
New York Fund II
  Insured
Ohio Fund
  Insured
Pennsylvania Fund
 
From operations —  
Net investment income   $ 2,397,564     $ 2,382,011     $ 2,928,106    
Net realized gain (loss) from investment transactions, financial futures contracts and swap contracts     (333,025 )     (856,569 )     513,911    
Net change in unrealized appreciation (depreciation) from investments, financial futures contracts and
swap contracts
    (8,584,620 )     (8,337,645 )     (9,502,500 )  
Distributions to preferred shareholders —  
From net investment income     (606,399 )     (749,701 )     (694,287 )  
From net realized gain     (125,820 )           (222,716 )  
Net decrease in net assets from operations   $ (7,252,300 )   $ (7,561,904 )   $ (6,977,486 )  
Distributions to common shareholders —  
From net investment income   $ (1,785,552 )   $ (1,571,565 )   $ (2,040,898 )  
From net realized gain     (459,185 )           (539,189 )  
Total distributions to common shareholders   $ (2,244,737 )   $ (1,571,565 )   $ (2,580,087 )  
Capital share transactions
Reinvestment of distributions to common shareholders
  $ 8,866     $ 11,173     $ 15,455    
Net increase in net assets from capital share transactions   $ 8,866     $ 11,173     $ 15,455    
Net decrease in net assets   $ (9,488,171 )   $ (9,122,296 )   $ (9,542,118 )  
Net Assets Applicable to Common Shares  
At beginning of year   $ 38,946,929     $ 37,616,917     $ 44,955,000    
At end of year   $ 29,458,758     $ 28,494,621     $ 35,412,882    
Accumulated undistributed net investment income
included in net assets applicable to common shares
 
At end of year   $ 326,581     $ 53,629     $ 239,893    

 

See notes to financial statements
42



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Changes in Net Assets

For the Year Ended September 30, 2007

Increase (Decrease) in Net Assets   Insured
Municipal Fund II
  Insured
California Fund II
  Insured Florida
Plus Fund
 
From operations —  
Net investment income   $ 10,398,200     $ 3,787,436     $ 2,518,890    
Net realized gain from investment transactions, financial futures contracts, swap contracts,
and disposal of investments in violation of restrictions and net increase from payments to affiliates
    3,268,176       1,478,049       158,502    
Net change in unrealized appreciation (depreciation) from investments, financial futures contracts and
swap contracts
    (7,067,317 )     (2,630,581 )     (1,228,867 )  
Distributions to preferred shareholders —  
From net investment income     (3,009,366 )     (1,088,414 )     (797,008 )  
Net increase in net assets from operations   $ 3,589,693     $ 1,546,490     $ 651,517    
Distributions to common shareholders —  
From net investment income   $ (7,466,114 )   $ (2,736,166 )   $ (1,694,472 )  
Total distributions to common shareholders   $ (7,466,114 )   $ (2,736,166 )   $ (1,694,472 )  
Capital share transactions
Reinvestment of distributions to common shareholders
  $ 25,683     $     $    
Net increase in net assets from capital share transactions   $ 25,683     $     $    
Net decrease in net assets   $ (3,850,738 )   $ (1,189,676 )   $ (1,042,955 )  
Net Assets Applicable to Common Shares  
At beginning of year   $ 157,462,885     $ 59,199,468     $ 39,128,820    
At end of year   $ 153,612,147     $ 58,009,792     $ 38,085,865    
Accumulated undistributed net investment income
included in net assets applicable to common shares
 
At end of year   $ 40,482     $ 40,236     $ 47,293    

 

See notes to financial statements
43



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Changes in Net Assets

For the Year Ended September 30, 2007

Increase (Decrease) in Net Assets   Insured
Massachusetts Fund
  Insured
Michigan Fund
  Insured
New Jersey Fund
 
From operations —  
Net investment income   $ 1,699,016     $ 1,489,658     $ 2,555,222    
Net realized gain from investment transactions, financial futures contracts, swap contracts,
and disposal of investments in violation of restrictions and net increase from payments to affiliates
    122,669       154,136       1,166,389    
Net change in unrealized appreciation (depreciation) from investments, financial futures contracts and
swap contracts
    (1,064,726 )     (621,430 )     (1,549,597 )  
Distributions to preferred shareholders —  
From net investment income     (514,151 )     (435,251 )     (732,552 )  
Net increase in net assets from operations   $ 242,808     $ 587,113     $ 1,439,462    
Distributions to common shareholders —  
From net investment income   $ (1,203,685 )   $ (1,009,900 )   $ (1,820,869 )  
Total distributions to common shareholders   $ (1,203,685 )   $ (1,009,900 )   $ (1,820,869 )  
Capital share transactions
Reinvestment of distributions to common shareholders
  $ 17,788     $     $ 24,197    
Net increase in net assets from capital share transactions   $ 17,788     $     $ 24,197    
Net decrease in net assets   $ (943,089 )   $ (422,787 )   $ (357,210 )  
Net Assets Applicable to Common Shares  
At beginning of year   $ 27,419,248     $ 23,334,634     $ 40,619,655    
At end of year   $ 26,476,159     $ 22,911,847     $ 40,262,445    
Accumulated undistributed net investment income
included in net assets applicable to common shares
 
At end of year   $ 19,274     $ 72,841     $ 43,808    

 

See notes to financial statements
44



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Changes in Net Assets

For the Year Ended September 30, 2007

Increase (Decrease) in Net Assets   Insured
New York Fund II
  Insured
Ohio Fund
  Insured
Pennsylvania Fund
 
From operations —  
Net investment income   $ 2,476,368     $ 2,428,283     $ 2,929,661    
Net realized gain from investment transactions, financial futures contracts and swap contracts     313,563       187,769       710,389    
Net change in unrealized appreciation (depreciation) from investments, financial futures contracts and
swap contracts
    (960,870 )     (1,107,087 )     (1,298,960 )  
Distributions to preferred shareholders —  
From net investment income     (534,850 )     (756,723 )     (856,964 )  
From net realized gain     (200,979 )              
Net increase in net assets from operations   $ 1,093,232     $ 752,242     $ 1,484,126    
Distributions to common shareholders —  
From net investment income   $ (1,780,878 )   $ (1,669,755 )   $ (2,045,499 )  
From net realized gain     (634,133 )              
Total distributions to common shareholders   $ (2,415,011 )   $ (1,669,755 )   $ (2,045,499 )  
Capital share transactions
Reinvestment of distributions to common shareholders
  $ 5,574     $ 2,860     $    
Net increase in net assets from capital share transactions   $ 5,574     $ 2,860     $    
Net decrease in net assets   $ (1,316,205 )   $ (914,653 )   $ (561,373 )  
Net Assets Applicable to Common Shares  
At beginning of year   $ 40,263,134     $ 38,531,570     $ 45,516,373    
At end of year   $ 38,946,929     $ 37,616,917     $ 44,955,000    
Accumulated undistributed net investment income
included in net assets applicable to common shares
 
At end of year   $ 323,815     $ 13,950     $ 60,972    

 

See notes to financial statements
45



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Cash Flows

For the Year Ended September 30, 2008

Cash Flows From Operating Activities   Insured
Municipal Fund II
  Insured
Florida Plus Fund
 
Net decrease in net assets from operations   $ (33,839,291 )   $ (7,266,017 )  
Distributions to preferred shareholders     2,829,093       665,172    
Net decrease in net assets from operations excluding distributions to preferred shareholders   $ (31,010,198 )   $ (6,600,845 )  
Adjustments to reconcile net decrease in net assets from
operations to net cash provided by (used in) operating activities:
 
Investments purchased     (135,172,857 )     (62,083,877 )  
Investments sold     164,836,352       66,445,950    
Net accretion/amortization of premium (discount)     (2,112,248 )     (430,623 )  
Decrease in interest receivable     507,409       281,567    
Increase in receivable for investments sold     (7,973,377 )     (2,394,156 )  
Increase in receivable for variation margin on open financial futures contracts     (1,163,438 )     (159,375 )  
Increase in receivable for open swap contracts     (17,142 )     (4,323 )  
Increase in receivable from transfer agent     (20,785 )        
Decrease in payable for when-issued securities     (512,200 )        
Decrease in payable for open swap contracts     (16,421 )     (4,174 )  
Decrease in payable for closed swap contracts     (223,299 )     (107,292 )  
Increase in payable to affiliate for investment adviser fee     439       829    
Increase (decrease) in interest expense and fees payable     (241,759 )     32,712    
Increase in accrued expenses     44,617       10,537    
Net change in unrealized (appreciation) depreciation from investments     38,243,746       7,828,092    
Net realized (gain) loss from investments     (1,211,588 )     220,593    
Net cash provided by operating activities   $ 23,957,251     $ 3,035,615    
Cash Flows From Financing Activities  
Deferred debt issuance costs   $ (169,380 )   $ (53,660 )  
Cash distributions paid to common shareholders, net of reinvestments     (10,125,169 )     (1,648,331 )  
Distributions to preferred shareholders     (2,789,523 )     (676,799 )  
Liquidation of auction preferred shares     (42,800,000 )     (13,400,000 )  
Proceeds from secured borrowings     79,770,000       22,270,000    
Repayment of secured borrowings     (55,090,000 )     (9,160,000 )  
Increase in due to custodian     7,058,751          
Net cash used in financing activities   $ (24,145,321 )   $ (2,668,790 )  
Net increase (decrease) in cash   $ (188,070 )   $ 366,825    
Cash at beginning of year   $ 188,070     $ 22,744    
Cash at end of year   $     $ 389,569    
Supplemental disclosure of cash flow information:  
Noncash financing activities not included herein consist of reinvestment of dividends and distributions of:   $ 128,062     $    

 

See notes to financial statements
46



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Statements of Cash Flows

For the Year Ended September 30, 2008

Cash Flows From Operating Activities   Insured
Massachusetts Fund
  Insured
New Jersey Fund
 
Net decrease in net assets from operations   $ (4,020,130 )   $ (6,998,934 )  
Distributions to preferred shareholders     507,893       795,878    
Net decrease in net assets from operations excluding distributions to preferred shareholders   $ (3,512,237 )   $ (6,203,056 )  
Adjustments to reconcile net decrease in net assets from
operations to net cash provided by (used in) operating activities:
 
Investments purchased     (5,158,523 )     (31,399,447 )  
Investments sold     13,725,943       39,245,656    
Net accretion/amortization of premium (discount)     (157,965 )     (535,765 )  
Decrease in interest receivable     121,402       159,277    
Decrease (increase) in receivable for investments sold     (699,205 )     928,616    
Increase in receivable for open swap contracts     (2,943 )     (4,270 )  
Increase in receivable from transfer agent     (4,268 )     (4,748 )  
Increase in payable for investments purchased           1,016,271    
Decrease in payable for when-issued securities     (1,022,380 )     (1,333,800 )  
Decrease in payable for open swap contracts     (2,874 )     (4,174 )  
Decrease in payable for closed swap contracts     (94,720 )     (137,248 )  
Increase in payable to affiliate for investment adviser fee     869       881    
Decrease in interest expense and fees payable     (35,473 )     (54,417 )  
Increase (decrease) in accrued expenses     (2,296 )     5,173    
Net change in unrealized (appreciation) depreciation from investments     5,347,960       9,093,593    
Net realized gain from investments     (636,237 )     (1,145,676 )  
Net cash provided by operating activities   $ 7,867,053     $ 9,626,866    
Cash Flows From Financing Activities  
Deferred debt issuance costs   $ (7,840 )   $ (8,820 )  
Cash distributions paid to common shareholders, net of reinvestments     (1,145,217 )     (2,487,967 )  
Distributions to preferred shareholders     (490,734 )     (804,835 )  
Liquidation of auction preferred shares     (1,925,000 )     (2,200,000 )  
Proceeds from secured borrowings     1,960,000       5,721,000    
Repayment of secured borrowings     (4,665,000 )     (7,055,000 )  
Net cash used in financing activities   $ (6,273,791 )   $ (6,835,622 )  
Net increase in cash   $ 1,593,262     $ 2,791,244    
Cash at beginning of year   $ 1,077,557     $ 83,044    
Cash at end of year   $ 2,670,819     $ 2,874,288    
Supplemental disclosure of cash flow information:  
Noncash financing activities not included herein consist of reinvestment of dividends and distributions of:   $ 31,699     $ 48,919    

 

See notes to financial statements
47




Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Municipal Fund II  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Net asset value — Beginning of year (Common shares)   $ 15.470     $ 15.860     $ 15.310     $ 15.030     $ 14.790    
Income (loss) from operations  
Net investment income(1)   $ 1.037     $ 1.048     $ 1.058     $ 1.094     $ 1.162    
Net realized and unrealized gain (loss)     (4.159 )     (0.383 )     0.605       0.359       0.334    
Distributions to preferred shareholders  
From net investment income     (0.168 )     (0.303 )     (0.265 )     (0.169 )     (0.080 )  
From net realized gain     (0.117 )                 (2)      (0.017 )  
Total income (loss) from operations   $ (3.407 )   $ 0.362     $ 1.398     $ 1.284     $ 1.399    
Less distributions to common shareholders  
From net investment income   $ (0.747 )   $ (0.752 )   $ (0.848 )   $ (1.001 )   $ (1.001 )  
From net realized gain     (0.286 )                 (0.003 )     (0.158 )  
Total distributions to common shareholders   $ (1.033 )   $ (0.752 )   $ (0.848 )   $ (1.004 )   $ (1.159 )  
Net asset value — End of year (Common shares)   $ 11.030     $ 15.470     $ 15.860     $ 15.310     $ 15.030    
Market value — End of year (Common shares)   $ 11.650     $ 14.550     $ 15.310     $ 16.170     $ 14.820    
Total Investment Return on Net Asset Value(3)      (23.08 )%     2.43 %(4)      9.56 %     8.77 %     10.00 %  
Total Investment Return on Market Value(3)      (13.61 )%     (0.20 )%(4)      0.13 %     16.51 %     14.59 %  

 

See notes to financial statements
48



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Municipal Fund II  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Ratios/Supplemental Data  
Net assets applicable to common shares, end of year (000's omitted)   $ 109,648     $ 153,612     $ 157,463     $ 151,937     $ 149,057    
Ratios (As a percentage of average daily net assets applicable
to common shares):(5)
 
Expenses excluding interest and fees     1.09 %     1.00 %(6)     1.02 %     1.03 %     1.00 %  
Interest and fee expense(7)     0.93 %     0.99 %     0.91 %     0.62 %     0.36 %  
Total expenses before custodian fee reduction     2.02 %     1.99 %(6)     1.93 %     1.65 %     1.36 %  
Expenses after custodian fee reduction excluding interest and fees     1.05 %     0.99 %(6)     1.01 %     1.02 %     1.00 %  
Net investment income     7.40 %     6.62 %     6.87 %     7.11 %     7.92 %  
Portfolio Turnover     54 %     31 %     26 %     10 %     28 %  

 

The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:

Ratios (As a percentage of average daily net assets applicable
to common shares and preferred shares):(5)
 
Expenses excluding interest and fees     0.69 %     0.64 %(6)     0.65 %     0.65 %     0.63 %  
Interest and fee expense(7)     0.60 %     0.64 %     0.58 %     0.40 %     0.23 %  
Total expenses before custodian fee reduction     1.29 %     1.28 %(6)     1.23 %     1.05 %     0.86 %  
Expenses after custodian fee reduction excluding interest and fees     0.67 %     0.63 %(6)     0.64 %     0.65 %     0.62 %  
Net investment income     4.73 %     4.25 %     4.37 %     4.52 %     4.94 %  
Senior Securities:  
Total preferred shares outstanding     1,788       3,500       3,500       3,500       3,500    
Asset coverage per preferred share(8)   $ 86,356     $ 68,894     $ 69,992     $ 68,411     $ 67,599    
Involuntary liquidation preference per preferred share(9)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    
Approximate market value per preferred share(9)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    

 

(1)  Computed using average common shares outstanding.

(2)  Equal to less than $0.001 per share.

(3)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.

(4)  During the year ended September 30, 2007, the adviser fully reimbursed the Fund for a realized loss on the disposal of an investment security which did not meet investment guidelines. The loss had no effect on total return.

(5)  Ratios do not reflect the effect of dividend payments to preferred shareholders.

(6)  The investment adviser was allocated a portion of the Fund's operating expenses (equal to less than 0.01% of average daily net assets for the year ended September 30, 2007). Absent this allocation, total return would be lower.

(7)  Interest and fee expense relates to the liability for floating rate notes issued in conjunction with inverse floater securities transactions (see Note 1H).

(8)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(9)  Plus accumulated and unpaid dividends.

See notes to financial statements
49



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured California Fund II  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Net asset value — Beginning of year (Common shares)   $ 15.020     $ 15.330     $ 14.810     $ 14.510     $ 14.560    
Income (loss) from operations  
Net investment income(1)   $ 0.983     $ 0.981     $ 0.989     $ 1.008     $ 1.060    
Net realized and unrealized gain (loss)     (3.583 )     (0.301 )     0.547       0.360       (0.022 )  
Distributions to preferred shareholders  
From net investment income     (0.233 )     (0.282 )     (0.243 )     (0.145 )     (0.076 )  
From net realized gain     (0.053 )                       (0.004 )  
Total income (loss) from operations   $ (2.886 )   $ 0.398     $ 1.293     $ 1.223     $ 0.958    
Less distributions to common shareholders  
From net investment income   $ (0.693 )   $ (0.708 )   $ (0.773 )   $ (0.923 )   $ (0.948 )  
From net realized gain     (0.131 )                       (0.060 )  
Total distributions to common shareholders   $ (0.824 )   $ (0.708 )   $ (0.773 )   $ (0.923 )   $ (1.008 )  
Net asset value — End of year (Common shares)   $ 11.310     $ 15.020     $ 15.330     $ 14.810     $ 14.510    
Market value — End of year (Common shares)   $ 10.250     $ 14.250     $ 14.635     $ 14.770     $ 14.580    
Total Investment Return on Net Asset Value(2)      (19.81 )%     2.75 %     9.15 %     8.65 %     6.84 %  
Total Investment Return on Market Value(2)      (23.40 )%     2.11 %     4.49 %     7.84 %     13.27 %  

 

See notes to financial statements
50



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured California Fund II  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Ratios/Supplemental Data  
Net assets applicable to common shares, end of year (000's omitted)   $ 43,718     $ 58,010     $ 59,199     $ 57,187     $ 55,955    
Ratios (As a percentage of average daily net assets applicable
to common shares):(3)
 
Expenses excluding interest and fees     1.23 %     1.11 %(4)     1.13 %     1.10 %     1.09 %  
Interest and fee expense(5)     0.42 %     0.50 %     0.48 %     0.31 %     0.15 %  
Total expenses before custodian fee reduction     1.65 %     1.61 %(4)     1.61 %     1.41 %     1.24 %  
Expenses after custodian fee reduction excluding interest and fees     1.19 %     1.09 %(4)     1.11 %     1.06 %     1.08 %  
Net investment income     7.11 %     6.42 %     6.66 %     6.81 %     7.27 %  
Portfolio Turnover     22 %     37 %     13 %     13 %     11 %  

 

The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:

Ratios (As a percentage of average daily net assets applicable
to common shares and preferred shares):(3)
 
Expenses excluding interest and fees     0.76 %     0.71 %(4)     0.71 %     0.69 %     0.68 %  
Interest and fee expense(5)     0.26 %     0.32 %     0.30 %     0.20 %     0.09 %  
Total expenses before custodian fee reduction     1.02 %     1.03 %(4)     1.01 %     0.89 %     0.77 %  
Expenses after custodian fee reduction excluding interest and fees     0.74 %     0.69 %(4)     0.70 %     0.67 %     0.67 %  
Net investment income     4.42 %     4.09 %     4.19 %     4.28 %     4.54 %  
Senior Securities:  
Total preferred shares outstanding     1,028       1,350       1,350       1,350       1,350    
Asset coverage per preferred share(6)   $ 67,578     $ 67,980     $ 68,858     $ 67,364     $ 66,455    
Involuntary liquidation preference per preferred share(7)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    
Approximate market value per preferred share(7)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    

 

(1)  Computed using average common shares outstanding.

(2)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.

(3)  Ratios do not reflect the effect of dividend payments to preferred shareholders.

(4)  The investment adviser was allocated a portion of the Fund's operating expenses (equal to less than 0.01% of average daily net assets for the year ended September 30, 2007). Absent this allocation, total return would be lower.

(5)  Interest and fee expense relates to the liability for floating rate notes issued in conjunction with inverse floater securities transactions (see Note 1H).

(6)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(7)  Plus accumulated and unpaid dividends.

See notes to financial statements
51



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Florida Plus Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Net asset value — Beginning of year (Common shares)   $ 14.790     $ 15.190     $ 14.870     $ 14.520     $ 14.550    
Income (loss) from operations  
Net investment income(1)   $ 0.876     $ 0.978     $ 0.981     $ 1.018     $ 1.062    
Net realized and unrealized gain (loss)     (3.438 )     (0.411 )     0.348       0.399       0.002 (2)   
Distributions to preferred shareholders  
From net investment income     (0.258 )     (0.309 )     (0.266 )     (0.159 )     (0.077 )  
From net realized gain                             (0.007 )  
Total income (loss) from operations   $ (2.820 )   $ 0.258     $ 1.063     $ 1.258     $ 0.980    
Less distributions to common shareholders  
From net investment income   $ (0.640 )   $ (0.658 )   $ (0.743 )   $ (0.908 )   $ (0.930 )  
From net realized gain                             (0.080 )  
Total distributions to common shareholders   $ (0.640 )   $ (0.658 )   $ (0.743 )   $ (0.908 )   $ (1.010 )  
Net asset value — End of year (Common shares)   $ 11.330     $ 14.790     $ 15.190     $ 14.870     $ 14.520    
Market value — End of year (Common shares)   $ 10.100     $ 13.550     $ 14.410     $ 14.980     $ 14.750    
Total Investment Return on Net Asset Value(3)      (19.38 )%     2.00 %     7.64 %     8.85 %     7.12 %  
Total Investment Return on Market Value(3)      (21.55 )%     (1.48 )%     1.37 %     7.94 %     12.29 %  

 

See notes to financial statements
52



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Florida Plus Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Ratios/Supplemental Data  
Net assets applicable to common shares, end of year (000's omitted)   $ 29,172     $ 38,086     $ 39,129     $ 38,269     $ 37,211    
Ratios (As a percentage of average daily net assets applicable
to common shares):(4)
 
Expenses excluding interest and fees     1.74 %     1.17 %(5)     1.20 %     1.17 %     1.14 %  
Interest and fee expense(6)     0.78 %     0.48 %     0.47 %     0.29 %     0.18 %  
Total expenses before custodian fee reduction     2.52 %     1.65 %(5)     1.67 %     1.46 %     1.32 %  
Expenses after custodian fee reduction excluding interest and fees     1.70 %     1.16 %(5)     1.19 %     1.16 %     1.14 %  
Net investment income     6.29 %     6.48 %     6.63 %     6.84 %     7.30 %  
Portfolio Turnover     102 %     32 %     16 %     13 %     17 %  

 

The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:

Ratios (As a percentage of average daily net assets applicable
to common shares and preferred shares):(4)
 
Expenses excluding interest and fees     1.13 %     0.74 %(5)     0.76 %     0.74 %     0.71 %  
Interest and fee expense(6)     0.50 %     0.30 %     0.29 %     0.18 %     0.11 %  
Total expenses before custodian fee reduction     1.63 %     1.04 %(5)     1.05 %     0.92 %     0.82 %  
Expenses after custodian fee reduction excluding interest and fees     1.10 %     0.73 %(5)     0.75 %     0.73 %     0.71 %  
Net investment income     4.08 %     4.10 %     4.17 %     4.30 %     4.55 %  
Senior Securities:  
Total preferred shares outstanding     364       900       900       900       900    
Asset coverage per preferred share(7)   $ 105,148     $ 67,333     $ 68,489     $ 67,528     $ 66,348    
Involuntary liquidation preference per preferred share(8)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    
Approximate market value per preferred share(8)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    

 

(1)  Computed using average common shares outstanding.

(2)  The 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 reinvested shares of the Fund and the amount of the per share realized and unrealized gains and losses at such time.

(3)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.

(4)  Ratios do not reflect the effect of dividend payments to preferred shareholders.

(5)  The investment adviser was allocated a portion of the Fund's operating expenses (equal to less than 0.01% of average daily net assets for the year ended September 30, 2007). Absent this allocation, total return would be lower.

(6)  Interest and fee expense relates to the liability for floating rate notes issued in conjunction with inverse floater securities transactions (see Note 1H).

(7)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(8)  Plus accumulated and unpaid dividends.

See notes to financial statements
53



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Massachusetts Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Net asset value — Beginning of year (Common shares)   $ 15.090     $ 15.640     $ 15.100     $ 14.870     $ 14.670    
Income (loss) from operations  
Net investment income(1)   $ 0.981     $ 0.969     $ 0.983     $ 1.031     $ 1.109    
Net realized and unrealized gain (loss)     (2.981 )     (0.540 )     0.613       0.290       0.350    
Distributions to preferred shareholders  
From net investment income     (0.289 )     (0.293 )     (0.256 )     (0.143 )     (0.069 )  
From net realized gain                             (0.017 )  
Total income (loss) from operations   $ (2.289 )   $ 0.136     $ 1.340     $ 1.178     $ 1.373    
Less distributions to common shareholders  
From net investment income   $ (0.671 )   $ (0.686 )   $ (0.800 )   $ (0.948 )   $ (0.948 )  
From net realized gain                             (0.225 )  
Total distributions to common shareholders   $ (0.671 )   $ (0.686 )   $ (0.800 )   $ (0.948 )   $ (1.173 )  
Net asset value — End of year (Common shares)   $ 12.130     $ 15.090     $ 15.640     $ 15.100     $ 14.870    
Market value — End of year (Common shares)   $ 13.780     $ 14.820     $ 16.090     $ 17.350     $ 15.570    
Total Investment Return on Net Asset Value(2)      (15.70 )%     0.88 %(3)      9.14 %     7.74 %     9.74 %  
Total Investment Return on Market Value(2)      (2.46 )%     (3.72 )%(3)      (2.28 )%     18.23 %     16.66 %  

 

See notes to financial statements
54



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Massachusetts Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Ratios/Supplemental Data  
Net assets applicable to common shares, end of year (000's omitted)   $ 21,311     $ 26,476     $ 27,419     $ 26,441     $ 25,982    
Ratios (As a percentage of average daily net assets applicable
to common shares):(4)
 
Expenses excluding interest and fees     1.41 %     1.25 %(5)     1.29 %     1.25 %     1.24 %  
Interest and fee expense(6)     0.71 %     0.98 %     1.54 %     1.26 %     0.79 %  
Total expenses before custodian fee reduction     2.12 %     2.23 %(5)     2.83 %     2.51 %     2.03 %  
Expenses after custodian fee reduction excluding interest and fees     1.38 %     1.25 %(5)     1.26 %     1.24 %     1.24 %  
Net investment income     6.83 %     6.27 %     6.50 %     6.79 %     7.58 %  
Portfolio Turnover     12 %     15 %     15 %     11 %     33 %  

 

The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:

Ratios (As a percentage of average daily net assets applicable
to common shares and preferred shares):(4)
 
Expenses excluding interest and fees     0.88 %     0.81 %(5)     0.81 %     0.79 %     0.77 %  
Interest and fee expense(6)     0.45 %     0.62 %     0.97 %     0.80 %     0.49 %  
Total expenses before custodian fee reduction     1.33 %     1.43 %(5)     1.78 %     1.59 %     1.26 %  
Expenses after custodian fee reduction excluding interest and fees     0.87 %     0.80 %(5)     0.80 %     0.78 %     0.77 %  
Net investment income     4.27 %     3.99 %     4.10 %     4.29 %     4.72 %  
Senior Securities:  
Total preferred shares outstanding     543       620       620       620       620    
Asset coverage per preferred share(7)   $ 64,287     $ 67,711     $ 69,229     $ 67,649     $ 66,907    
Involuntary liquidation preference per preferred share(8)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    
Approximate market value per preferred share(8)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    

 

(1)  Computed using average common shares outstanding.

(2)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.

(3)  During the year ended September 30, 2007, the Fund realized a gain on the disposal of an investment security which did not meet investment guidelines. The gain was less than $  0.01 per share and had no effect on total return.

(4)  Ratios do not reflect the effect of dividend payments to preferred shareholders.

(5)  The investment adviser was allocated a portion of the Fund's operating expenses (equal to less than 0.01% of average daily net assets for the year ended September 30, 2007). Absent this allocation, total return would be lower.

(6)  Interest and fee expense relates to the liability for floating rate notes issued in conjunction with inverse floater securities transactions (see Note 1H).

(7)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(8)  Plus accumulated and unpaid dividends.

See notes to financial statements
55



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Michigan Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Net asset value — Beginning of year (Common shares)   $ 15.150     $ 15.430     $ 15.000     $ 14.840     $ 14.520    
Income (loss) from operations  
Net investment income(1)   $ 0.975     $ 0.985     $ 0.991     $ 1.039     $ 1.105    
Net realized and unrealized gain (loss)     (2.590 )     (0.309 )     0.462       0.233       0.252    
Distributions to preferred shareholders  
From net investment income     (0.295 )     (0.288 )     (0.252 )     (0.164 )     (0.089 )  
Total income (loss) from operations   $ (1.910 )   $ 0.388     $ 1.201     $ 1.108     $ 1.268    
Less distributions to common shareholders  
From net investment income   $ (0.670 )   $ (0.668 )   $ (0.771 )   $ (0.948 )   $ (0.948 )  
Total distributions to common shareholders   $ (0.670 )   $ (0.668 )   $ (0.771 )   $ (0.948 )   $ (0.948 )  
Net asset value — End of year (Common shares)   $ 12.570     $ 15.150     $ 15.430     $ 15.000     $ 14.840    
Market value — End of year (Common shares)   $ 10.400     $ 14.030     $ 14.190     $ 16.200     $ 15.490    
Total Investment Return on Net Asset Value(2)      (12.66 )%(3)      2.81 %     8.44 %     7.52 %     8.96 %  
Total Investment Return on Market Value(2)      (21.97 )%(3)      3.53 %     (7.67 )%     11.26 %     14.60 %  

 

See notes to financial statements
56



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Michigan Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Ratios/Supplemental Data  
Net assets applicable to common shares, end of year (000's omitted)   $ 19,007     $ 22,912     $ 23,335     $ 22,670     $ 22,396    
Ratios (As a percentage of average daily net assets applicable
to common shares):(4)
 
Expenses excluding interest and fees     1.49 %     1.29 %(5)     1.32 %     1.28 %     1.28 %  
Interest and fee expense(6)     0.54 %     0.98 %     0.90 %     0.60 %     0.33 %  
Expenses before custodian fee reduction     2.03 %     2.27 %(5)     2.22 %     1.88 %     1.61 %  
Expenses after custodian fee reduction     1.48 %     1.27 %(5)     1.30 %     1.27 %     1.27 %  
Net investment income     6.72 %     6.43 %     6.62 %     6.88 %     7.56 %  
Portfolio Turnover     11 %     6 %     6 %     5 %     7 %  

 

The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:

Ratios (As a percentage of average daily net assets applicable
to common shares and preferred shares):(4)
 
Expenses excluding interest and fees     0.93 %     0.81 %(5)     0.83 %     0.81 %     0.79 %  
Interest and fee expense(6)     0.33 %     0.62 %     0.56 %     0.38 %     0.21 %  
Expenses before custodian fee reduction     1.26 %     1.43 %(5)     1.39 %     1.19 %     1.00 %  
Expenses after custodian fee reduction     0.92 %     0.80 %(5)     0.82 %     0.80 %     0.78 %  
Net investment income     4.16 %     4.06 %     4.15 %     4.32 %     4.69 %  
Senior Securities:  
Total preferred shares outstanding     540       540       540       540       540    
Asset coverage per preferred share(7)   $ 60,199     $ 67,442     $ 68,222     $ 66,986     $ 66,475    
Involuntary liquidation preference per preferred share(8)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    
Approximate market value per preferred share(8)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    

 

(1)  Computed using average common shares outstanding.

(2)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.

(3)  During the year ended September 30, 2008, the adviser fully reimbursed the Fund for a realized loss on the disposal of an investment security which did not meet investment guidelines. The loss had no effect on total return.

(4)  Ratios do not reflect the effect of dividend payments to preferred shareholders.

(5)  The investment adviser was allocated a portion of the Fund's operating expenses (equal to less than 0.01% of average daily net assets for the year ended September 30, 2007). Absent this allocation, total return would be lower.

(6)  Interest and fee expense relates to the liability for floating rate notes issued in conjunction with inverse floater securities transactions (see Note 1H).

(7)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(8)  Plus accumulated and unpaid dividends.

See notes to financial statements
57




Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured New Jersey Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Net asset value — Beginning of year (Common shares)   $ 15.690     $ 15.840     $ 15.240     $ 14.990     $ 14.760    
Income (loss) from operations  
Net investment income(1)   $ 0.982     $ 0.996     $ 1.002     $ 1.039     $ 1.117    
Net realized and unrealized gain (loss)     (3.393 )     (0.150 )     0.671       0.330       0.361    
Distributions to preferred shareholders  
From net investment income     (0.196 )     (0.286 )     (0.253 )     (0.159 )     (0.067 )  
From net realized gain     (0.114 )                       (0.015 )  
Total income (loss) from operations   $ (2.721 )   $ 0.560     $ 1.420     $ 1.210     $ 1.396    
Less distributions to common shareholders  
From net investment income   $ (0.706 )   $ (0.710 )   $ (0.820 )   $ (0.960 )   $ (0.960 )  
From net realized gain     (0.283 )                       (0.206 )  
Total distributions to common shareholders   $ (0.989 )   $ (0.710 )   $ (0.820 )   $ (0.960 )   $ (1.166 )  
Net asset value — End of year (Common shares)   $ 11.980     $ 15.690     $ 15.840     $ 15.240     $ 14.990    
Market value — End of year (Common shares)   $ 11.880     $ 14.790     $ 16.400     $ 16.240     $ 15.490    
Total Investment Return on Net Asset Value(2)      (18.15 )%     3.64 %     9.65 %     8.18 %     9.83 %  
Total Investment Return on Market Value(2)      (13.88 )%     (5.66 )%     6.53 %     11.56 %     15.37 %  

 

See notes to financial statements
58



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured New Jersey Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Ratios/Supplemental Data  
Net assets applicable to common shares, end of year (000's omitted)   $ 30,776     $ 40,262     $ 40,620     $ 39,032     $ 38,326    
Ratios (As a percentage of average daily net assets applicable
to common shares):(3)
 
Expenses excluding interest and fees     1.33 %     1.14 %(4)     1.19 %     1.15 %     1.13 %  
Interest and fee expense(5)     1.16 %     0.92 %     0.86 %     0.59 %     0.31 %  
Total expenses before custodian fee reduction     2.49 %     2.06 %(4)     2.05 %     1.74 %     1.44 %  
Expenses after custodian fee reduction excluding interest and fees     1.28 %     1.11 %(4)     1.16 %     1.14 %     1.13 %  
Net investment income     6.72 %     6.29 %     6.59 %     6.78 %     7.54 %  
Portfolio Turnover     48 %     27 %     22 %     15 %     19 %  

 

The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:

Ratios (As a percentage of average daily net assets applicable
to common shares and preferred shares):(3)
 
Expenses excluding interest and fees     0.84 %     0.73 %(4)     0.75 %     0.73 %     0.71 %  
Interest and fee expense(5)     0.73 %     0.59 %     0.55 %     0.38 %     0.20 %  
Total expenses before custodian fee reduction     1.57 %     1.32 %(4)     1.30 %     1.11 %     0.91 %  
Expenses after custodian fee reduction excluding interest and fees     0.81 %     0.72 %(4)     0.73 %     0.72 %     0.71 %  
Net investment income     4.24 %     4.05 %     4.18 %     4.31 %     4.73 %  
Senior Securities:  
Total preferred shares outstanding     812       900       900       900       900    
Asset coverage per preferred share(6)   $ 62,907     $ 69,751     $ 70,144     $ 68,375     $ 67,588    
Involuntary liquidation preference per preferred share(7)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    
Approximate market value per preferred share(7)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    

 

(1)  Computed using average common shares outstanding.

(2)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.

(3)  Ratios do not reflect the effect of dividend payments to preferred shareholders.

(4)  The investment adviser was allocated a portion of the Fund's operating expenses (equal to less than 0.01% of average daily net assets for the year ended September 30, 2007). Absent this allocation, total return would be lower.

(5)  Interest and fee expense relates to the liability for floating rate notes issued in conjunction with inverse floater securities transactions (see Note 1H).

(6)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(7)  Plus accumulated and unpaid dividends.

See notes to financial statements
59



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured New York Fund II  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Net asset value — Beginning of year (Common shares)   $ 15.240     $ 15.760     $ 15.300     $ 14.910     $ 14.870    
Income (loss) from operations  
Net investment income(1)   $ 0.938     $ 0.969     $ 0.990     $ 1.008     $ 1.080    
Net realized and unrealized gain (loss)     (3.483 )     (0.256 )     0.542       0.462       0.223    
Distributions to preferred shareholders  
From net investment income     (0.237 )     (0.209 )     (0.240 )     (0.148 )     (0.063 )  
From net realized gain     (0.049 )     (0.079 )     (0.015 )           (0.016 )  
Total income (loss) from operations   $ (2.831 )   $ 0.425     $ 1.277     $ 1.322     $ 1.224    
Less distributions to common shareholders  
From net investment income   $ (0.699 )   $ (0.697 )   $ (0.732 )   $ (0.932 )   $ (0.963 )  
From net realized gain     (0.180 )     (0.248 )     (0.085 )           (0.221 )  
Total distributions to common shareholders   $ (0.879 )   $ (0.945 )   $ (0.817 )   $ (0.932 )   $ (1.184 )  
Net asset value — End of year (Common shares)   $ 11.530     $ 15.240     $ 15.760     $ 15.300     $ 14.910    
Market value — End of year (Common shares)   $ 10.580     $ 14.440     $ 14.420     $ 14.570     $ 14.460    
Total Investment Return on Net Asset Value(2)      (19.25 )%     3.00 %     9.02 %     9.17 %     8.75 %(3)   
Total Investment Return on Market Value(2)      (21.80 )%     6.66 %     4.75 %     7.19 %     14.39 %(3)   

 

See notes to financial statements
60



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured New York Fund II  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Ratios/Supplemental Data  
Net assets applicable to common shares, end of year (000's omitted)   $ 29,459     $ 38,947     $ 40,263     $ 39,101     $ 38,089    
Ratios (As a percentage of average daily net assets applicable
to common shares):(4)
 
Expenses excluding interest and fees     1.33 %     1.16 %(5)     1.14 %     1.21 %     1.14 %  
Interest and fee expense(6)     0.46 %     0.46 %     0.42 %     0.28 %     0.16 %  
Total expenses before custodian fee reduction     1.79 %     1.62 %(5)     1.56 %     1.49 %     1.30 %  
Expenses after custodian fee reduction excluding interest and fees     1.28 %     1.14 %(5)     1.11 %     1.19 %     1.13 %  
Net investment income     6.67 %     6.24 %     6.48 %     6.60 %     7.31 %  
Portfolio Turnover     44 %     38 %     26 %     29 %     26 %  

 

The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:

Ratios (As a percentage of average daily net assets applicable
to common shares and preferred shares):(4)
 
Expenses excluding interest and fees     0.83 %     0.74 %(5)     0.72 %     0.77 %     0.71 %  
Interest and fee expense(6)     0.29 %     0.29 %     0.27 %     0.18 %     0.10 %  
Total expenses before custodian fee reduction     1.12 %     1.03 %(5)     0.99 %     0.95 %     0.81 %  
Expenses after custodian fee reduction excluding interest and fees     0.80 %     0.73 %(5)     0.71 %     0.76 %     0.71 %  
Net investment income     4.17 %     3.98 %     4.11 %     4.18 %     4.58 %  
Senior Securities:  
Total preferred shares outstanding     530       900       900       900       900    
Asset coverage per preferred share(7)   $ 80,583     $ 68,285     $ 69,746     $ 68,450     $ 67,323    
Involuntary liquidation preference per preferred share(8)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    
Approximate market value per preferred share(8)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    

 

(1)  Computed using average common shares outstanding.

(2)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.

(3)  During the year ended September 30, 2004, the investment adviser reimbursed the Fund for a net loss realized on the disposal of an investment in violation of restrictions. The reimbursement was less than $  0.01 per common share and had no effect on total investment return on net asset value and total investment return on market value for the year ended September 30, 2004.

(4)  Ratios do not reflect the effect of dividend payments to preferred shareholders.

(5)  The investment adviser was allocated a portion of the Fund's operating expenses (equal to less than 0.01% of average daily net assets for the year ended September 30, 2007). Absent this allocation, total return would be lower.

(6)  Interest and fee expense relates to the liability for floating rate notes issued in conjunction with inverse floater securities transactions (see Note 1H).

(7)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(8)  Plus accumulated and unpaid dividends.

See notes to financial statements
61



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Ohio Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Net asset value — Beginning of year (Common shares)   $ 14.970     $ 15.330     $ 14.830     $ 14.640     $ 14.620    
Income (Loss) from Operations  
Net investment income(1)   $ 0.948     $ 0.966     $ 0.978     $ 1.006     $ 1.054    
Net realized and unrealized gain (loss)     (3.665 )     (0.361 )     0.497       0.219       0.018    
Distributions to preferred shareholders  
From net investment income     (0.298 )     (0.301 )     (0.263 )     (0.173 )     (0.086 )  
From net realized gain                             (0.003 )  
Total income (loss) from operations   $ (3.015 )   $ 0.304     $ 1.212     $ 1.052     $ 0.983    
Less Distributions to Common Shareholders  
From net investment income   $ (0.625 )   $ (0.664 )   $ (0.712 )   $ (0.862 )   $ (0.930 )  
From net realized gain                             (0.033 )  
Total distributions to common shareholders   $ (0.625 )   $ (0.664 )   $ (0.712 )   $ (0.862 )   $ (0.963 )  
Net asset value End of year (Common shares)   $ 11.330     $ 14.970     $ 15.330     $ 14.830     $ 14.640    
Market value End of year (Common shares)   $ 11.250     $ 13.710     $ 14.600     $ 14.510     $ 15.200    
Total Investment Return on Net Asset Value(2)      (20.51 )%     2.17 %     8.58 %     7.29 %     6.94 %  
Total Investment Return on Market Value(2)      (13.81 )%     (1.75 )%     5.69 %     1.11 %     12.49 %  

 

See notes to financial statements
62



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Ohio Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Ratios/Supplemental Data  
Net assets applicable to common shares, end of year (000's omitted)   $ 28,495     $ 37,617     $ 38,532     $ 37,255     $ 36,746    
Ratios (as a percentage of average daily net assets applicable
to common shares):(3)
 
Expenses excluding interest and fees     1.35 %     1.16 %(4)     1.19 %     1.18 %     1.17 %  
Interest and fee expense(5)     0.29 %     0.53 %     0.41 %     0.25 %     0.13 %  
Total expenses before custodian fee reduction     1.64 %     1.69 %(4)     1.60 %     1.43 %     1.30 %  
Expenses after custodian fee reduction excluding interest and fees     1.33 %     1.14 %(4)     1.16 %     1.16 %     1.16 %  
Net investment income     6.82 %     6.33 %     6.56 %     6.76 %     7.30 %  
Portfolio Turnover     22 %     30 %     16 %     8 %     23 %  

 

The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:

Ratios (as a percentage of average daily net assets applicable
to common shares and preferred shares):(3)
 
Expenses excluding interest and fees     0.83 %     0.74 %(4)     0.75 %     0.74 %     0.73 %  
Interest and fee expense(5)     0.18 %     0.34 %     0.26 %     0.16 %     0.08 %  
Total expenses before custodian fee reduction     1.01 %     1.08 %(4)     1.01 %     0.90 %     0.81 %  
Expenses after custodian fee reduction excluding interest and fees     0.82 %     0.72 %(4)     0.73 %     0.73 %     0.72 %  
Net investment income     4.19 %     4.03 %     4.14 %     4.26 %     4.55 %  
Senior Securities:  
Total preferred shares outstanding     875       875       875       875       875    
Asset coverage per preferred share(6)   $ 57,579     $ 67,991     $ 69,036     $ 67,586     $ 66,999    
Involuntary liquidation preference per preferred share(7)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    
Approximate market value per preferred share(7)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    

 

(1)  Computed using average common shares outstanding.

(2)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.

(3)  Ratios do not reflect the effect of dividend payments to preferred shareholders.

(4)  The investment adviser was allocated a portion of the Fund's operating expenses (equal to less than 0.01% of average daily net assets for the year ended September 30, 2007). Absent this allocation, total return would be lower.

(5)  Interest and fee expense relates to the liability for floating rate notes issued in conjunction with inverse floater securities transactions (see Note 1H).

(6)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(7)  Plus accumulated and unpaid dividends.

See notes to financial statements
63



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Pennsylvania Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Net asset value — Beginning of year (Common shares)   $ 15.270     $ 15.470     $ 14.930     $ 14.410     $ 14.580    
Income (Loss) from Operations  
Net investment income(1)   $ 0.995     $ 0.995     $ 0.994     $ 1.019     $ 1.068    
Net realized and unrealized gain (loss)     (3.047 )     (0.209 )     0.559       0.587       (0.066 )  
Distributions to preferred shareholders  
From net investment income     (0.236 )     (0.291 )     (0.266 )     (0.173 )     (0.083 )  
From net realized gain     (0.076 )                       (0.011 )  
Total income (loss) from operations   $ (2.364 )   $ 0.495     $ 1.287     $ 1.433     $ 0.908    
Less Distributions to Common Shareholders  
From net investment income   $ (0.693 )   $ (0.695 )   $ (0.747 )   $ (0.913 )   $ (0.938 )  
From net realized gain     (0.183 )                       (0.140 )  
Total distributions to common shareholders   $ (0.876 )   $ (0.695 )   $ (0.747 )   $ (0.913 )   $ (1.078 )  
Net asset value End of year (Common shares)   $ 12.030     $ 15.270     $ 15.470     $ 14.930     $ 14.410    
Market value End of year (Common shares)   $ 13.400     $ 14.150     $ 15.020     $ 15.540     $ 14.980    
Total Investment Return on Net Asset Value(2)      (16.07 )%     3.44 %     9.00 %     10.01 %     6.43 %  
Total Investment Return on Market Value(2)      0.88 %     (1.28 )%     1.68 %     10.15 %     12.57 %  

 

See notes to financial statements
64



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FINANCIAL STATEMENTS CONT'D

Financial Highlights

Selected data for a common share outstanding during the periods stated

    Insured Pennsylvania Fund  
    Year Ended September 30,  
    2008   2007   2006   2005   2004  
Ratios/Supplemental Data  
Net assets applicable to common shares, end of year (000's omitted)   $ 35,413     $ 44,955     $ 45,516     $ 43,920     $ 42,352    
Ratios (as a percentage of average daily net assets applicable
to common shares):(3)
 
Expenses excluding interest and fees     1.30 %     1.15 %(4)     1.18 %     1.16 %     1.12 %  
Interest and fee expense(5)     1.03 %     0.83 %     0.78 %     0.41 %     0.25 %  
Total expenses before custodian fee reduction     2.33 %     1.98 %(4)     1.96 %     1.57 %     1.37 %  
Expenses after custodian fee reduction excluding interest and fees     1.28 %     1.12 %(4)     1.15 %     1.15 %     1.11 %  
Net investment income     6.86 %     6.45 %     6.64 %     6.91 %     7.37 %  
Portfolio Turnover     28 %     24 %     22 %     19 %     15 %  

 

The ratios reported above are based on net assets applicable solely to common shares. The ratios based on net assets, including amounts related to preferred shares, are as follows:

Ratios (as a percentage of average daily net assets applicable
to common shares and preferred shares):(3)
 
Expenses excluding interest and fees     0.81 %     0.73 %(4)     0.74 %     0.73 %     0.69 %  
Interest and fee expense(5)     0.64 %     0.53 %     0.49 %     0.26 %     0.15 %  
Total expenses before custodian fee reduction     1.45 %     1.26 %(4)     1.23 %     0.99 %     0.84 %  
Expenses after custodian fee reduction excluding interest and fees     0.80 %     0.71 %(4)     0.72 %     0.72 %     0.69 %  
Net investment income     4.26 %     4.10 %     4.17 %     4.32 %     4.58 %  
Senior Securities:  
Total preferred shares outstanding     1,040       1,040       1,040       1,040       1,040    
Asset coverage per preferred share(6)   $ 59,091     $ 68,233     $ 68,770     $ 67,232     $ 65,723    
Involuntary liquidation preference per preferred share(7)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    
Approximate market value per preferred share(7)   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    

 

(1)  Computed using average common shares outstanding.

(2)  Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested.

(3)  Ratios do not reflect the effect of dividend payments to preferred shareholders.

(4)  The investment adviser was allocated a portion of the Fund's operating expenses (equal to less than 0.01% of average daily net assets for the year ended September 30, 2007). Absent this allocation, total return would be lower.

(5)  Interest and fee expense relates to the liability for floating rate notes issued in conjunction with inverse floater securities transactions (see Note 1H).

(6)  Calculated by subtracting the Fund's total liabilities (not including the preferred shares) from the Fund's total assets, and dividing this by the number of preferred shares outstanding.

(7)  Plus accumulated and unpaid dividends.

See notes to financial statements
65




Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

NOTES TO FINANCIAL STATEMENTS

1  Significant Accounting Policies

Eaton Vance Insured Municipal Bond Fund II (Insured Municipal Fund II), Eaton Vance Insured California Municipal Bond Fund II (Insured California Fund II), Eaton Vance Insured Florida Plus Municipal Bond Fund (formerly, Eaton Vance Insured Florida Municipal Bond Fund) (Insured Florida Plus Fund), Eaton Vance Insured Massachusetts Municipal Bond Fund (Insured Massachusetts Fund), Eaton Vance Insured Michigan Municipal Bond Fund (Insured Michigan Fund), Eaton Vance Insured New Jersey Municipal Bond Fund (Insured New Jersey Fund), Eaton Vance Insured New York Municipal Bond Fund II (Insured New York Fund II), Eaton Vance Insured Ohio Municipal Bond Fund (Insured Ohio Fund) and Eaton Vance Insured Pennsylvania Municipal Bond Fund (Insured Pennsylvania Fund), (each individually referred to as the Fund, and collectively, the Funds), are Massachusetts business trusts registered under the Investment Company Act of 1940, as amended (the 1940 Act), as non-diversified, closed-end management investment companies. Each Fund seeks to provide current income exempt from regular federal income tax, including alternative minimum tax, and, in state specific funds, taxes in its specified state, as applicable.

The following is a summary of significant accounting policies of the Funds. The policies are in conformity with accounting principles generally accepted in the United States of America.

A  Investment Valuation — Municipal bonds and taxable obligations, if any, are generally valued on the basis of valuations furnished by a pricing vendor, as derived from such vendor's pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and asked prices, broker/dealer quotations, benchmark curves or information pertaining to the issuer. The pricing vendor may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security. Financial futures contracts and options on financial futures contracts listed on commodity exchanges are valued based on the closing price on the primary exchange on which such contracts trade. Interest rate swaps are normally valued using valuations provided by a pricing vendor. Such vendor valuations are based on the present value of fixed and projected floating rate cash flows over the term of the swap contract. Future cash flows are discounted to their present value using swap curves provided by electronic data services or by broker/dealers. Short-term obligations, maturing in sixty days or less, are valued at amortized cost, which approximates market value. Investments for which valuations or market quotations are not readily available, and investments for which the price of a security is not believed to represent its fair market value, are valued at fair value using methods determined in good faith by or at the direction of the Trustees.

B  Investment Transactions and Related Income — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost. Interest income is recorded 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 substantially all of its taxable, if any, and tax-exempt net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. Each Fund intends to satisfy conditions which will enable it to designate distributions from the interest income generated by its investments in municipal obligations, which are exempt from regular federal income tax when received by each Fund, as exempt-interest dividends.

At September 30, 2008, the following Funds, for federal income tax purposes, had capital loss carryforwards which will reduce each Fund's taxable income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Funds of any liability for federal income or excise tax. The amounts and expiration dates of the capital loss carryforwards are as follows:

Fund   Amount   Expiration Date  
Insured Municipal II   $ 658,427     September 30, 2016  
Insured California II     52,500     September 30, 2016  
Insured Florida Plus
    314,751
31,250
    September 30, 2013
September 30, 2016
 
Insured Massachusetts     179,329     September 30, 2013  

 


66



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

NOTES TO FINANCIAL STATEMENTS CONT'D

Fund   Amount   Expiration Date  
Insured Michigan   $ 399,841     September 30, 2013
 
      1,883     September 30, 2016  
Insured New York II     41,818     September 30, 2016  
Insured Ohio 321,978 September 30, 2013
    83,319     September 30, 2016  

 

During the year ended September 30, 2008, capital loss carryforwards of $68,630 were utilized to offset net realized gains by the Insured Massachusetts Fund.

Additionally, at September 30, 2008, the Insured Municipal Fund II, Insured California Fund II, Insured Florida Plus Fund, Insured Michigan Fund, Insured New York Fund II and Insured Ohio Fund had net capital losses of $2,429,590, $1,393,815, $1,018,249, $35,944, $228,414 and $789,562, respectively, attributable to security transactions incurred after October 31, 2007. These net capital losses are treated as arising on the first day of the Funds' taxable year ending September 30, 2009.

As of September 30, 2008, the Funds had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each of the Funds' federal tax returns filed in the 3-year period ended September 30, 2008 remains subject to examination by the Internal Revenue Service.

D  Expense Reduction — State Street Bank and Trust Company (SSBT) serves as custodian of the Funds. Pursuant to the respective custodian agreements, SSBT receives a fee reduced by credits, which are determined based on the average daily cash balance each Fund maintains with SSBT. All credit balances, if any, used to reduce each Fund's custodian fees are reported as a reduction of expenses in the Statements of Operations.

E  Legal Fees — Legal fees and other related expenses incurred as part of negotiations of the terms and requirement 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.

F  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.

G  Indemnifications — Under each Fund's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to each Fund, and shareholders are indemnified against personal liability for the obligations of each Fund. Additionally, in the normal course of business, each Fund enters into agreements with service providers that may contain indemnification clauses. Each Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against each Fund that have not yet occurred.

H  Floating Rate Notes Issued in Conjunction with Securities Held — The Funds may invest in inverse floating rate securities, also referred to as tender option bonds (TOBs), whereby a Fund may sell a fixed rate bond to a broker for cash. At the same time, the Fund buys a residual interest in the assets and cash flows of a Special-Purpose Vehicle (the SPV), (which is generally organized as a trust), set up by the broker, often referred to as an inverse floating rate obligation (Inverse Floater). The broker deposits a fixed rate bond into the SPV with the same CUSIP number as the fixed rate bond sold to the broker by the Fund, and which may have been, but is not required to be, the fixed rate bond purchased from the Fund (the Fixed Rate Bond). The SPV also issues floating rate notes (Floating Rate Notes) which are sold to third-parties. The Funds may enter into shortfall and forbearance agreements with the broker by which a Fund agrees to reimburse the broker, in certain circumstances, for the difference between the liquidation value of the Fixed Rate Bond held by the SPV and the liquidation value of the Floating Rate Notes, as well as any shortfalls in interest cash flows. The Inverse Floater held by a Fund gives the Fund the right (1) to cause the holders of the Floating Rate Notes to tender their notes at par, and (2) to have the broker transfer the Fixed Rate Bond held by the SPV to the Fund, thereby collapsing the SPV. Pursuant to Financial Accounting Standards Board (FASB) Statement No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" (FAS 140), the Funds account for the transaction described above as a secured borrowing by including the Fixed Rate Bond in their Portfolio of Investments and the Floating Rate Notes as a liability under the caption "Payable for floating rate notes


67



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

NOTES TO FINANCIAL STATEMENTS CONT'D

issued" in their Statement of Assets and Liabilities. The Floating Rate Notes have interest rates that generally reset weekly and their holders have the option to tender their notes to the broker for redemption at par at each reset date. Interest expense related to the Funds' liability with respect to Floating Rate Notes is recorded as incurred. Structuring fees paid to the liquidity provider upon the creation of an SPV have been recorded as debt issuance costs and are being amortized as interest expense to the expected maturity date of the related trust. At September 30, 2008, the amounts of the Funds' Floating Rate Notes and related interest rates and collateral were as follows:

Fund   Floating
Rate Notes
Outstanding
  Interest Rate
or Range of
Interest
Rates
  Collateral for
Floating Rate
Notes
Outstanding
 
Insured Municipal II   $ 64,250,000     4.45% - 7.07%   $ 71,897,237    
Insured California II     13,155,000     4.22% - 7.07%     15,598,251    
Insured Florida Plus     17,495,000     4.75% - 6.98%     18,498,486    
Insured Massachusetts     4,060,000     4.75% - 6.92%     4,878,587    
Insured New Jersey     8,246,000     4.97% - 7.08%     10,323,479    
Insured New York II     11,335,000     4.07% - 7.08%     11,879,686    
Insured Ohio     1,705,000     6.06% - 6.92%     2,328,714    
Insured Pennsylvania     3,960,000     6.06% - 6.31%     5,302,904    

 

The Funds' exposure under shortfall and forbearance agreements that were entered into as of September 30, 2008 was approximately $1,561,000, $281,000, $515,000, $26,000, $71,000 and $342,000 for Insured Municipal Fund II, Insured California Fund II , Insured Florida Plus Fund, Insured Massachusetts Fund, Insured New Jersey Fund and Insured New York Fund II, respectively, and none for Insured Michigan Fund, Insured Ohio Fund and Insured Pennsylvania Fund.

The Funds' investment policies and restrictions expressly permit investments in Inverse Floaters. Inverse floating rate securities typically offer the potential for yields exceeding the yields available on fixed rate bonds with comparable credit quality and maturity. These securities tend to underperform the market for fixed rate bonds in a rising long-term interest rate environment, but tend to outperform the market for fixed rate bonds when long-term interest rates decline. The value and income of inverse floating rate securities are generally more volatile than that of a fixed rate bond. The Funds' investment policies do not allow the Funds to borrow money for purposes of making investments. Management believes that the Funds' restrictions on borrowing money and issuing senior securities (other than as specifically permitted) do not apply to Floating Rate Notes issued by the SPV and included as a liability in the Funds' Statement of Assets and Liabilities. As secured indebtedness issued by an SPV, Floating Rate Notes are distinct from the borrowings and senior securities to which the Funds' restrictions apply. Inverse Floaters held by the Funds are securities exempt from registration under Rule 144A of the Securities Act of 1933.

I  Financial Futures Contracts — The Funds may enter into financial futures contracts. The Funds' investment in financial futures contracts is designed for hedging against changes in interest rates or as a substitute for the purchase of securities. Upon entering into a financial futures contract, a Fund is required to deposit with the broker, either in cash or securities, an amount equal to a certain percentage of the purchase price (initial margin). Subsequent payments, known as variation margin, are made or received by the Fund each business day, depending on the daily fluctuations in the value of the underlying security, and are recorded as unrealized gains or losses by the Fund. Gains (losses) are realized upon the expiration or closing of the financial futures contracts. Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. In entering such contracts, the Fund bears the risk if the counterparties do not perform under the contracts' terms.

J  Interest Rate Swaps — The Funds 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, a Fund makes periodic payments at a fixed interest rate and, in exchange, 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 or losses. The value of the swap is determined by changes in the relationship between two rates of interest. A Fund is exposed to credit loss in the event of non-performance by the swap counterparty. Risk may also arise from movements in interest rates.

K  When-Issued Securities and Delayed Delivery Transactions — The Funds may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. At the


68



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

NOTES TO FINANCIAL STATEMENTS CONT'D

time the transaction is negotiated, the price of the security that will be delivered is fixed. The Funds maintain security positions for these commitments such that sufficient liquid assets will be available to make payments upon settlement. Securities purchased on a delayed delivery or when-issued basis are marked-to-market daily and begin earning interest on settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

L  Statement of Cash Flows — The cash amount shown in the Statement of Cash Flows of a Fund is the amount included in the Fund's Statement of Assets and Liabilities and represents the cash on hand at its custodian and does not include any short-term investments.

2  Auction Preferred Shares

Each Fund issued Auction Preferred Shares (APS) on January 15, 2003 in a public offering. The underwriting discounts and other offering costs incurred in connection with the offering were recorded as a reduction of the paid-in capital of the common shares of each respective Fund. Dividends on the APS, which accrue daily, are cumulative at rates which are reset every seven days by an auction, unless a special dividend period has been set. If the APS auctions do not successfully clear the dividend payment rate over the next period for the APS holders is set at a specified maximum applicable rate until such time as the APS auctions are successful. The maximum applicable rate on the APS is 110% (150% for taxable distributions) of the greater of the 1) "AA" Financial Composite Commercial Paper Rate or 2) Taxable Equivalent of the Short-Term Municipal Obligation Rate on the date of the auction. Series of APS are identical in all respects except for the reset dates of the dividend rates.

During the year ended September 30, 2008, certain Funds made a partial redemption of their APS at a liquidation price of $25,000 per share. The replacement financing was provided through the creation of TOB trusts, whereby a Fund transferred highly rated bonds held in its portfolio to an SPV (see Note 1H) and used the proceeds from the sale of the Floating Rate Notes to replace the APS. Such Floating Rate Notes have a liquidity backstop financing facility provided by a major financial institution. The number of APS redeemed and redemption amount (excluding the final dividend payment) during the year ended September 30, 2008 and the number of APS issued and outstanding as of September 30, 2008 were as follows:

Fund   APS
Redeemed
During the
Period
  Redemption
Amount
  APS Issued
and
Outstanding
 
Insured Municipal II  
Series A     856     $ 21,400,000       894    
Series B     856       21,400,000       894    
Insured California II     322       8,050,000       1,028    
Insured Florida Plus     536       13,400,000       364    
Insured Massachusetts     77       1,925,000       543    
Insured Michigan                 540    
Insured New Jersey     88       2,200,000       812    
Insured New York II     370       9,250,000       530    
Insured Ohio                 875    
Insured Pennsylvania                 1,040    

 

The APS are redeemable at the option of each Fund at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, on any dividend payment date. The APS are also subject to mandatory redemption at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, if a Fund is in default for an extended period on its asset maintenance requirements with respect to the APS. If the dividends on the APS remain unpaid in an amount equal to two full years' dividends, the holders of the APS as a class have the right to elect a majority of the Board of Trustees. In general, the holders of the APS and the common shares have equal voting rights of one vote per share, except that the holders of the APS, as a separate class, have the right to elect at least two members of the Board of Trustees. The APS have a liquidation preference of $25,000 per share, plus accumulated and unpaid dividends. Each Fund is required to maintain certain asset coverage with respect to the APS as defined in the Funds' By-Laws and the 1940 Act. Each Fund pays an annual fee equivalent to 0.25% of the liquidation value of the APS to broker-dealers as a service fee.

3  Distributions to Shareholders

Each Fund intends to make monthly distributions of net investment income to common shareholders, after payment of any dividends on any outstanding APS. In addition, at least annually, each Fund intends to distribute all or substantially all of its net realized capital gains, if any. Distributions to common shareholders are recorded on the ex-dividend date. Distributions to preferred shareholders are recorded daily and are


69



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

NOTES TO FINANCIAL STATEMENTS CONT'D

payable at the end of each dividend period. The dividend rates for APS at September 30, 2008, and the amount of dividends paid (including capital gains, if any) to APS shareholders, average APS dividend rates, and dividend rate ranges for the year then ended were as follows:

Fund   APS Dividend
Rates at
September 30,
2008
  Dividends
Paid to
APS
Shareholders
  Average
APS
Dividend
Rates
  Dividend
Rate
Ranges (%)
 
Insured Municipal II  
Series A     12.26 %   $ 1,408,763       3.77 %   2.00 - 12.26  
Series B     10.21       1,420,330       3.61     2.10 - 10.21  
Insured California II     12.26       1,103,386       3.39     2.00 - 12.26  
Insured Florida Plus     11.35       665,172       3.43     1.85 - 11.35  
Insured Massachusetts     7.16       507,893       3.37     1.99 - 11.73  
Insured Michigan     12.57       445,847       3.29     1.24 - 12.57  
Insured New Jersey     8.50       795,878       3.62     1.00 - 11.35  
Insured New York II     12.57       732,219       3.41     2.54 - 12.57  
Insured Ohio     10.21       749,701       3.43     2.48 - 10.21  
Insured Pennsylvania     11.73       917,003       3.53     1.00 - 11.73  

 

Beginning February 13, 2008 and consistent with the patterns in the broader market for auction-rate securities, the Funds' APS auctions were unsuccessful in clearing due to an imbalance of sell orders over bids to buy the APS. As a result, the dividend rates of the APS were reset to the maximum applicable rates. The table above reflects such maximum dividend rates for each series as of September 30, 2008.

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.

The tax character of distributions declared for the years ended September 30, 2008 and September 30, 2007 was as follows:

Year Ended September 30, 2008   Insured
Municipal
Fund II
  Insured
California
Fund II
  Insured
Florida
Plus Fund
  Insured
Massachusetts
Fund
  Insured
Michigan
Fund
 
Distributions declared from:  
Tax-exempt income   $ 9,080,464     $ 3,574,712     $ 2,300,996     $ 1,684,809     $ 1,458,266    
Ordinary income   $ 2,407     $ 1,272     $ 12,507     $     $    
Long-term capital gains   $ 3,999,453     $ 707,117     $     $     $    
Year Ended September 30, 2008   Insured
New Jersey
Fund
  Insured
New York
Fund II
  Insured
Ohio
Fund
  Insured
Pennsylvania
Fund
     
Distributions declared from:  
Tax-exempt income   $ 2,315,970     $ 2,393,749     $ 2,321,266     $ 2,735,185            
Ordinary income   $ 221     $     $     $            
Long-term capital gains   $ 1,016,573     $ 583,207     $     $ 761,905            
Year Ended September 30, 2007   Insured
Municipal
Fund II
  Insured
California
Fund II
  Insured
Florida
Plus Fund
  Insured
Massachusetts
Fund
  Insured
Michigan
Fund
 
Distributions declared from:  
Tax-exempt income   $ 10,474,981     $ 3,824,580     $ 2,491,480     $ 1,717,836     $ 1,445,151    
Ordinary income   $ 499     $     $     $     $    
Year Ended September 30, 2007   Insured
New Jersey
Fund
  Insured
New York
Fund II
  Insured
Ohio
Fund
  Insured
Pennsylvania
Fund
     
Distributions declared from:  
Tax-exempt income   $ 2,553,421     $ 2,315,728     $ 2,426,478     $ 2,902,463            
Long term capital gains   $     $ 775,353     $     $            
Short term capital gains   $     $ 59,759     $     $            

 


70



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

NOTES TO FINANCIAL STATEMENTS CONT'D

During the year ended September 30, 2008, the following amounts were reclassified due to differences between book and tax accounting, primarily for accretion of market discount and the tax treatment of distributions in excess of net tax-exempt income.

    Insured
Municipal
Fund II
  Insured
California
Fund II
  Insured
Florida Plus
Fund
  Insured
Massachusetts
Fund
  Insured
Michigan
Fund
 
Increase (decrease):  
Paid-in capital   $     $     $ (12,507 )   $     $    
Accumulated net realized gain (loss)   $ 90,911     $ 14,957     $ 5,406     $ 6,341     $ 5,496    
Accumulated undistributed net investment income   $ (90,911 )   $ (14,957 )   $ 7,101     $ (6,341 )   $ (5,496 )  
    Insured
New Jersey
Fund
  Insured
New York
Fund II
  Insured
Ohio
Fund
  Insured
Pennsylvania
Fund
     
Increase (decrease):  
Paid-in capital   $ 243     $     $     $            
Accumulated net realized gain (loss)   $ (8,428 )   $ 2,847     $ 21,066     $ 14,000            
Accumulated undistributed net investment income   $ 8,185     $ (2,847 )   $ (21,066 )   $ (14,000 )          

 

These reclassifications had no effect on the net assets or net value per share of the Funds.

As of September 30, 2008, the components of distributable earnings (accumulated losses) and unrealized appreciation (depreciation) on a tax basis were as follows:

    Insured
Municipal
Fund II
  Insured
California
Fund II
  Insured
Florida Plus
Fund
  Insured
Massachusetts
Fund
  Insured
Michigan
Fund
 
Undistributed income   $ 1,222,145     $ 300,022     $     $ 72,471     $ 83,742    
Capital loss carryforward and post October losses   $ (3,088,017 )   $ (1,446,315 )   $ (1,364,250 )   $ (179,329 )   $ (437,668 )  
Net unrealized depreciation   $ (29,432,812 )   $ (9,893,048 )   $ (5,990,290 )   $ (3,468,980 )   $ (2,067,488 )  
Other temporary differences   $ (57,550 )   $ (51,803 )   $ (2,243 )   $ (21,809 )   $    
    Insured
New Jersey
Fund
  Insured
New York
Fund II
  Insured
Ohio
Fund
  Insured
Pennsylvania
Fund
     
Undistributed income   $ 260,734     $ 326,581     $ 65,863     $ 309,385            
Undistributed long-term capital gains   $ 305,428     $     $     $ 481,093            
Capital loss carryforward and post October losses   $     $ (270,232 )   $ (1,194,859 )   $            
Net unrealized depreciation   $ (6,226,592 )   $ (6,839,562 )   $ (6,014,055 )   $ (7,096,809 )          
Other temporary differences   $ (4,728 )   $     $ (12,234 )   $ (41,771 )          

 

The differences between components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to wash sales, the timing of recognizing distributions to shareholders, futures contracts, swap contracts, accretion of market discount and inverse floaters.

4  Investment Adviser Fee and Other Transactions with Affiliates

The investment adviser fee is earned by Eaton Vance Management (EVM) as compensation for investment advisory services rendered to each Fund. The fee is computed at an annual rate of 0.55% of each Fund's average weekly gross assets and is payable monthly. Average weekly gross assets include the principal amount of any indebtness for money borrowed, including debt securities issued by a Fund and the amount of any outstanding APS issued by the Fund.


71



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

NOTES TO FINANCIAL STATEMENTS CONT'D

Pursuant to a fee reduction agreement with EVM, average weekly gross assets are calculated by adding to net assets the liquidation value of a Fund's APS then outstanding and the amount payable by the Fund to floating rate note holders, such adjustment being limited to the value of the APS outstanding prior to any APS redemptions by the Fund. EVM also serves as the administrator of each Fund, but receives no compensation.

In addition, EVM has contractually agreed to reimburse the Funds for fees and other expenses at an annual rate of 0.15% of average weekly gross assets of each Fund during the first five full years of its operations, 0.10% of a Fund's average weekly gross assets in year six, and 0.05% in year seven. The Funds concluded their first five full years of operations on November 29, 2007. For the year ended September 30, 2008, the investment adviser fee and expenses contractually reduced by EVM were as follows:

Fund   Investment
Adviser
Fee
  Expenses
Reduced by
EVM
 
Insured Municipal II   $ 1,248,247     $ 246,273    
Insured California II     480,133       94,649    
Insured Florida Plus     320,826       63,328    
Insured Massachusetts     224,245       44,153    
Insured Michigan     195,103       38,252    
Insured New Jersey     330,320       65,095    
Insured New York II     321,848       63,447    
Insured Ohio     312,729       61,627    
Insured Pennsylvania     378,287       74,487    

 

Except for Trustees of the Funds who are not members of EVM's organization, officers and Trustees receive remuneration for their services to the Funds out of the investment adviser fee. Trustees of the Funds who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the year ended September 30, 2008, no significant amounts have been deferred. Certain officers and Trustees of the Funds are officers of EVM.

During the year ended September 30, 2008, the Insured Michigan Fund realized a loss of $2,557 due to the sale of an investment security not meeting investment guidelines, and was reimbursed for such loss by EVM.

5  Purchases and Sales of Investments

Purchases and sales of investments, other than short-term obligations, for the year ended September 30, 2008 were as follows:

Fund   Purchases   Sales  
Insured Municipal II   $ 135,172,857     $ 164,836,352    
Insured California II     19,656,979       32,602,358    
Insured Florida Plus     62,083,877       66,445,950    
Insured Massachusetts     5,158,523       13,725,943    
Insured Michigan     4,228,510       12,024,023    
Insured New Jersey     31,399,447       39,245,656    
Insured New York II     26,322,957       33,413,343    
Insured Ohio     13,010,693       18,376,308    
Insured Pennsylvania     20,693,758       26,372,745    

 

6  Common Shares of Beneficial Interest

Common shares issued pursuant to the Funds' dividend reinvestment plan for the years ended September 30, 2008 and September 30, 2007 were as follows:

    Year Ended September 30,  
Fund   2008   2007  
Insured Municipal II     9,912       1,599    
Insured California II     2,036          
Insured Florida Plus              
Insured Massachusetts     2,256       1,147    
Insured Michigan              
Insured New Jersey     3,482       1,531    
Insured New York II     667       359    
Insured Ohio     959       186    
Insured Pennsylvania     1,182          

 

7  Federal Income Tax Basis of Investments

The cost and unrealized appreciation (depreciation) of investments of each Fund at September 30, 2008, as determined on a federal income tax basis, were as follows:

Insured Municipal Fund II  
Aggregate cost   $ 186,111,751    
Gross unrealized appreciation   $ 63,947    
Gross unrealized depreciation     (29,569,160 )  
Net unrealized depreciation   $ (29,505,213 )  

 


72



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

NOTES TO FINANCIAL STATEMENTS CONT'D

Insured California Fund II  
Aggregate cost   $ 72,659,162    
Gross unrealized appreciation   $ 182,417    
Gross unrealized depreciation     (10,112,297 )  
Net unrealized depreciation   $ (9,929,880 )  
Insured Florida Plus Fund  
Aggregate cost   $ 42,153,280    
Gross unrealized appreciation   $ 21,995    
Gross unrealized depreciation     (6,034,320 )  
Net unrealized depreciation   $ (6,012,325 )  
Insured Massachusetts Fund  
Aggregate cost   $ 34,621,473    
Gross unrealized appreciation   $ 196,097    
Gross unrealized depreciation     (3,682,220 )  
Net unrealized depreciation   $ (3,486,123 )  
Insured Michigan Fund  
Aggregate cost   $ 32,792,419    
Gross unrealized appreciation   $ 467,684    
Gross unrealized depreciation     (2,544,126 )  
Net unrealized depreciation   $ (2,076,442 )  
Insured New Jersey Fund  
Aggregate cost   $ 54,982,316    
Gross unrealized appreciation   $ 13,253    
Gross unrealized depreciation     (6,264,832 )  
Net unrealized depreciation   $ (6,251,579 )  
Insured New York Fund II  
Aggregate cost   $ 46,279,754    
Gross unrealized appreciation   $ 10,440    
Gross unrealized depreciation     (6,872,379 )  
Net unrealized depreciation   $ (6,861,939 )  

 

Insured Ohio Fund  
Aggregate cost   $ 54,980,120    
Gross unrealized appreciation   $ 160,234    
Gross unrealized depreciation     (6,190,991 )  
Net unrealized depreciation   $ (6,030,757 )  
Insured Pennsylvania Fund  
Aggregate cost   $ 68,932,980    
Gross unrealized appreciation   $ 269,389    
Gross unrealized depreciation     (7,377,901 )  
Net unrealized depreciation   $ (7,108,512 )  

 

8  Overdraft Advances

Pursuant to the respective custodian agreements, SSBT may, in its discretion, advance funds to the Funds to make properly authorized payments. When such payments result in an overdraft, the Funds are obligated to repay SSBT at the current rate of interest charged by SSBT for secured loans (currently, a rate above the Federal Funds rate). This obligation is payable on demand to SSBT. SSBT has a lien on a Fund's assets to the extent of any overdraft. At September 30, 2008, the Insured Municipal Fund II had a payment due to SSBT pursuant to the foregoing arrangement of $7,058,751.

9  Financial Instruments

The Funds may trade in financial instruments with off-balance sheet risk in the normal course of their investing activities. These financial instruments may include financial 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 Fund has in particular classes of financial instruments and does not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered.


73



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

NOTES TO FINANCIAL STATEMENTS CONT'D

A summary of obligations under these financial instruments at September 30, 2008 is as follows:

Futures Contracts

Fund   Expiration
Date
  Contracts   Position   Aggregate
Cost
  Value   Net Unrealized
Appreciation
 
Insured
Municipal II
 
12/08
  438
U.S. Treasury Bond
 
Short
  $ (51,580,792 )   $ (51,321,281 )   $ 259,511    
Insured
California II
  12/08   67
U.S. Treasury Bond
 
Short
  $ (7,882,735 )   $ (7,850,516 )   $ 32,219    
Insured
Florida
Plus
  12/08   60
U.S. Treasury Bond
 
Short
  $ (7,059,165 )   $ (7,030,313 )   $ 28,852    
Insured
Michigan
  12/08   20
U.S. Treasury Bond
 
Short
  $ (2,354,931 )   $ (2,343,438 )   $ 11,493    
Insured
New York II
  12/08   61
U.S. Treasury Bond
 
Short
  $ (7,176,818 )   $ (7,147,485 )   $ 29,333    
Insured
Ohio
  12/08   99
U.S. Treasury Bond
 
Short
  $ (11,656,907 )   $ (11,600,016 )   $ 56,891    
Insured
Pennsylvania
  12/08   105
U.S. Treasury Bond
 
Short
  $ (12,363,383 )   $ (12,303,047 )   $ 60,336    

 

Interest Rate Swaps

Insured Municipal Fund II



Counterparty
  Notional
Amount
  Annual
Fixed Rate
Paid By Fund
  Floating
Rate
Paid To Fund
  Effective Date/
Termination
Date
  Net Unrealized
Appreciation
 
JPMorgan Chase Co.   $ 3,000,000       4.743 %   3-month
USD-LIBOR-BBA
  September 14, 2009/
September 14, 2039
  $ 18,700    
Merrill Lynch
Capital Services, Inc.
    4,550,000       4.682 %   3-month
USD-LIBOR-BBA
  April 1, 2009/
April 1, 2039
    25,308    
Morgan Stanley
Capital Services, Inc.
    4,150,000       4.691 %   3-month
USD-LIBOR-BBA
  June 11, 2009/
June 11, 2039
    28,393    
    $ 72,401    

 

Insured California Fund II



Counterparty
  Notional
Amount
  Annual
Fixed Rate
Paid By Fund
  Floating
Rate
Paid To Fund
  Effective Date/
Termination
Date
  Net Unrealized
Appreciation
 
JPMorgan Chase Co.   $ 1,137,500       4.743 %   3-month
USD-LIBOR-BBA
  September 14, 2009/
September 14, 2039
  $ 7,091    
Merrill Lynch
Capital Services, Inc.
    3,625,000       4.682 %   3-month
USD-LIBOR-BBA
  April 1, 2009/
April 1, 2039
    20,163    
Morgan Stanley
Capital Services, Inc.
    1,400,000       4.691 %   3-month
USD-LIBOR-BBA
  June 11, 2009/
June 11, 2039
    9,578    
    $ 36,832    

 

Insured Florida Plus Fund



Counterparty
  Notional
Amount
  Annual
Fixed Rate
Paid By Fund
  Floating
Rate
Paid To Fund
  Effective Date/
Termination
Date
  Net Unrealized
Appreciation
 
JPMorgan Chase Co.   $ 762,500       4.743 %   3-month
USD-LIBOR-BBA
  September 14, 2009/
September 14, 2039
  $ 4,753    
Merrill Lynch
Capital Services, Inc.
    2,000,000       4.682 %   3-month
USD-LIBOR-BBA
  April 1, 2009/
April 1, 2039
    11,124    
Morgan Stanley
Capital Services, Inc.
    900,000       4.691 %   3-month
USD-LIBOR-BBA
  June 11, 2009/
June 11, 2039
    6,158    
    $ 22,035    

 

Insured Massachusetts Fund



Counterparty
  Notional
Amount
  Annual
Fixed Rate
Paid By Fund
  Floating
Rate
Paid To Fund
  Effective Date/
Termination
Date
  Net Unrealized
Appreciation
 
JPMorgan Chase Co.   $ 525,000       4.743 %   3-month
USD-LIBOR-BBA
  September 14, 2009/
September 14, 2039
  $ 3,272    
Merrill Lynch
Capital Services, Inc.
    1,725,000       4.682 %   3-month
USD-LIBOR-BBA
  April 1, 2009/
April 1, 2039
    9,595    
Morgan Stanley
Capital Services, Inc.
    625,000       4.691 %   3-month
USD-LIBOR-BBA
  June 11, 2009/
June 11, 2039
    4,276    
    $ 17,143    

 

Insured Michigan Fund



Counterparty
  Notional
Amount
  Annual
Fixed Rate
Paid By Fund
  Floating
Rate
Paid To Fund
  Effective Date/
Termination
Date
  Net Unrealized
Appreciation
 
JPMorgan Chase Co.   $ 450,000       4.743 %   3-month
USD-LIBOR-BBA
  September 14, 2009/
September 14, 2039
  $ 2,805    
Merrill Lynch
Capital Services, Inc.
    675,000       4.682 %   3-month
USD-LIBOR-BBA
  April 1, 2009/
April 1, 2039
    3,754    
Morgan Stanley
Capital Services, Inc.
    350,000       4.691 %   3-month
USD-LIBOR-BBA
  June 11, 2009/
June 11, 2039
    2,395    
    $ 8,954    

 

Insured New Jersey Fund



Counterparty
  Notional
Amount
  Annual
Fixed Rate
Paid By Fund
  Floating
Rate
Paid To Fund
  Effective Date/
Termination
Date
  Net Unrealized
Appreciation
 
JPMorgan Chase Co.   $ 762,500       4.743 %   3-month
USD-LIBOR-BBA
  September 14, 2009/
September 14, 2039
  $ 4,753    
Merrill Lynch
Capital Services, Inc.
    2,500,000       4.682 %   3-month
USD-LIBOR-BBA
  April 1, 2009/
April 1, 2039
    13,905    
Morgan Stanley
Capital Services, Inc.
    925,000       4.691 %   3-month
USD-LIBOR-BBA
  June 11, 2009/
June 11, 2039
    6,329    
    $ 24,987    

 


74



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

NOTES TO FINANCIAL STATEMENTS CONT'D

Insured New York Fund II



Counterparty
  Notional
Amount
  Annual
Fixed Rate
Paid By Fund
  Floating
Rate
Paid To Fund
  Effective Date/
Termination
Date
  Net Unrealized
Appreciation
 
JPMorgan Chase Co.   $ 762,500       4.743 %   3-month
USD-LIBOR-BBA
  September 14, 2009/
September 14, 2039
  $ 4,753    
Merrill Lynch
Capital Services, Inc.
    2,000,000       4.682 %   3-month
USD-LIBOR-BBA
  April 1, 2009/
April 1, 2039
    11,124    
Morgan Stanley
Capital Services, Inc.
    950,000       4.691 %   3-month
USD-LIBOR-BBA
  June 11, 2009/
June 11, 2039
    6,500    
    $ 22,377    

 

Insured Ohio Fund



Counterparty
  Notional
Amount
  Annual
Fixed Rate
Paid By Fund
  Floating
Rate
Paid To Fund
  Effective Date/
Termination
Date
  Net Unrealized
Appreciation
 
JPMorgan Chase Co.   $ 737,500       4.743 %   3-month
USD-LIBOR-BBA
  September 14, 2009/
September 14, 2039
  $ 4,597    
Merrill Lynch
Capital Services, Inc.
    1,100,000       4.682 %   3-month
USD-LIBOR-BBA
  April 1, 2009/
April 1, 2039
    6,118    
Morgan Stanley
Capital Services, Inc.
    875,000       4.691 %   3-month
USD-LIBOR-BBA
  June 11, 2009/
June 11, 2039
    5,987    
    $ 16,702    

 

Insured Pennsylvania Fund



Counterparty
  Notional
Amount
  Annual
Fixed Rate
Paid By Fund
  Floating
Rate
Paid To Fund
  Effective Date/
Termination
Date
  Net Unrealized
Appreciation
 
JPMorgan Chase Co.   $ 725,000       4.743 %   3-month
USD-LIBOR-BBA
  September 14, 2009/
September 14, 2039
  $ 4,519    
Morgan Stanley
Capital Services, Inc.
    1,050,000       4.691 %   3-month
USD-LIBOR-BBA
  June 11, 2009/
June 11, 2039
    7,184    
    $ 11,703    

 

The effective date represents the date on which a Fund and the counterparty to the interest rate swap contract begin interest payment accruals.

At September 30, 2008, the Funds had sufficient cash and/or securities to cover commitments under these contracts.

10  Recently Issued Accounting Pronouncements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (FAS 157), "Fair Value Measurements". FAS 157 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States of America and expands disclosure about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007. As of September 30, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures may be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements on changes in net assets for the period.

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161 (FAS 161), "Disclosures about Derivative Instruments and Hedging Activities". FAS 161 requires enhanced disclosures about an entity's derivative and hedging activities, including qualitative disclosures about the objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk related contingent features in derivative instruments. FAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. Management is currently evaluating the impact the adoption of FAS 161 will have on the Fund's financial statement disclosures.

11  Name Change

Effective January 1, 2008, the name of the Eaton Vance Insured Florida Plus Municipal Bond Fund was changed from Eaton Vance Insured Florida Municipal Bond Fund.

12  Plan of Reorganization

In August 2008, the Trustees of the Insured Florida Plus Fund approved an Agreement and Plan of Reorganization (the Agreement) whereby the Eaton Vance Insured Municipal Bond Fund (Insured Municipal Fund) would acquire substantially all the assets and assume substantially all the liabilities of the Insured Florida Plus Fund in exchange for common shares of the Insured Municipal Fund and cash consideration equal to the aggregate liquidation value of its APS. The proposed reorganization was approved by the shareholders of the Insured Florida Plus Fund on October 31, 2008. Subject to the satisfaction of the conditions in the Agreement, the transaction is expected to occur no later than December 31, 2008.

13  Subsequent Event

The Insured Michigan Fund, Insured New Jersey Fund, Insured Ohio Fund and Insured Pennsylvania Fund redeemed 7, 28, 126 and 86 outstanding APS, respectively, at various dividend payment dates from October 27, 2008 through October 31, 2008 at a liquidation price of $25,000 per share plus accumulated but unpaid dividends.


75




Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustees and Shareholders of Eaton Vance Insured Municipal Bond Fund II, Eaton Vance Insured California Municipal Bond Fund II, Eaton Vance Insured Florida Plus Municipal Bond Fund (formerly Eaton Vance Insured Florida Municipal Bond Fund), Eaton Vance Insured Massachusetts Municipal Bond Fund, Eaton Vance Insured Michigan Municipal Bond Fund, Eaton Vance Insured New Jersey Municipal Bond Fund, Eaton Vance Insured New York Municipal Bond Fund II, Eaton Vance Insured Ohio Municipal Bond Fund, and Eaton Vance Insured Pennsylvania Municipal Bond Fund:

We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Eaton Vance Insured Municipal Bond Fund II, Eaton Vance Insured California Municipal Bond Fund II, Eaton Vance Insured Florida Plus Municipal Bond Fund (formerly Eaton Vance Insured Florida Municipal Bond Fund), Eaton Vance Insured Massachusetts Municipal Bond Fund, Eaton Vance Insured Michigan Municipal Bond Fund, Eaton Vance Insured New Jersey Municipal Bond Fund, Eaton Vance Insured New York Municipal Bond Fund II, Eaton Vance Insured Ohio Municipal Bond Fund, and Eaton Vance Insured Pennsylvania Municipal Bond Fund (collectively, the "Funds") as of September 30, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the statements of cash flows of Eaton Vance Insured Municipal Bond Fund II, Eaton Vance Insured Florida Plus Municipal Bond Fund, Eaton Vance Insured Massachusetts Municipal Bond Fund, and Eaton Vance Insured New Jersey Municipal Bond Fund for the year ended September 30, 2008. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned at September 30, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Eaton Vance Insured Municipal Bond Fund II, Eaton Vance Insured California Municipal Bond Fund II, Eaton Vance Insured Florida Plus Municipal Bond Fund, Eaton Vance Insured Massachusetts Municipal Bond Fund, Eaton Vance Insured Michigan Municipal Bond Fund, Eaton Vance Insured New Jersey Municipal Bond Fund, Eaton Vance Insured New York Municipal Bond Fund II, Eaton Vance Insured Ohio Municipal Bond Fund, and Eaton Vance Insured Pennsylvania Municipal Bond Fund as of September 30, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the cash flows of Eaton Vance Insured Municipal Bond Fund II, Eaton Vance Insured Florida Plus Municipal Bond Fund, Eaton Vance Insured Massachusetts Municipal Bond Fund, and Eaton Vance Insured New Jersey Municipal Bond Fund for the year ended September 30, 2008, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 17, 2008


76



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

FEDERAL TAX INFORMATION (Unaudited)

The Form 1099-DIV you receive in January 2009 will show the tax status of all distributions paid to your account in calendar 2008. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in a Fund. As required by the Internal Revenue Code regulations, shareholders must be notified within 60 days of a Fund's fiscal year end regarding exempt-interest dividends and capital gain dividends.

Exempt-Interest Dividends — The Funds designate the following amounts of dividends from net investment income as an exempt-interest dividend.

Eaton Vance Insured Municipal Bond Fund II     99.97 %  
Eaton Vance Insured California Municipal Bond Fund II     99.96 %  
Eaton Vance Insured Florida Plus Municipal Bond Fund     99.46 %  
Eaton Vance Insured Massachusetts Municipal Bond Fund     100.00 %  
Eaton Vance Insured Michigan Municipal Bond Fund     100.00 %  
Eaton Vance Insured New Jersey Municipal Bond Fund     99.99 %  
Eaton Vance Insured New York Municipal Bond Fund II     100.00 %  
Eaton Vance Insured Ohio Municipal Bond Fund     100.00 %  
Eaton Vance Insured Pennsylvania Municipal Bond Fund     100.00 %  

 

Capital Gain Dividends — The Eaton Vance Insured Municipal Bond Fund II, Insured California Municipal Bond Fund II, Insured New Jersey Municipal Bond Fund, Insured New York Municipal Bond Fund II and Insured Pennsylvania Municipal Bond Fund designate $3,999,475, $707,345, $1,016,573, $585,005 and $761,905, respectively, as a capital gain dividend.


77




Eaton Vance Insured Municipal Bond Funds

NOTICE TO SHAREHOLDERS

During normal market conditions, at least 80% of each Fund's net assets will be invested in municipal obligations, the interest on which is exempt from federal income tax, including alternative minimum tax, and applicable state taxes, and that are insured as to principal and interest payments. On March 12, 2008, the Funds implemented a revised investment policy that such insurance will be from insurers having a claims-paying ability rated at least Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's Ratings Group ("S&P") or Fitch Ratings ("Fitch"), provided that at least 50% of such net assets is invested in obligations insured by insurers having a claims-paying ability rated at least A by Moody's, S&P or Fitch. Previously, such insurance was required to be provided by insurers having a claims-paying ability rated Aaa by Moody's or AAA by S&P or Fitch. In connection with the foregoing, the Funds' previous policy to invest at least 80% of its net assets in obligations rated Aaa by Moody's or AAA by S&P or Fitch or, if unrated, determined to be of comparable quality by the adviser, was eliminated. Also effective March 12, 2008, the policy with respect to the balance of each Fund's assets was revised such that each Fund may invest up to 20% of its net assets in unrated obligations deemed by the investment adviser to be of investment grade quality and obligations that are uninsured.

On February 11, 2008, the Funds revised their minimum ratings policies to clarify that when an obligation is rated in different rating categories by Moody's, S&P or Fitch, the highest rating applies.

Effective January 1, 2008, the Eaton Vance Insured Florida Plus Municipal Bond Fund changed its name from Eaton Vance Insured Florida Municipal Bond Fund and announced a policy to increase its exposure to municipal obligations of issuers outside the State of Florida, transforming the Fund in an orderly manner over time into a diversified, national municipal bond fund.

Effective January 1, 2008, the Eaton Vance Insured Michigan Municipal Bond Fund's investment objective was revised to reflect the repeal of the Michigan single business tax and the effectiveness of the new Michigan business tax. The new objective is to provide current income exempt from federal income tax, including alternative minimum tax, and Michigan state and city income taxes and the net income tax portion of the Michigan business tax.

Effective October 1, 2007, Adam A. Weigold assumed portfolio management responsibilities for the Eaton Vance Insured Pennsylvania Municipal Bond Fund. Mr. Weigold also serves as portfolio manager for other Eaton Vance funds. He was appointed a portfolio manager in 2007 and has been a Vice President of Eaton Vance Management since 2003 and a municipal credit analyst at Eaton Vance for more than five years.


78



Eaton Vance Insured Municipal Bond Funds as of September 30, 2008

ANNUAL MEETING OF SHAREHOLDERS (Unaudited)

Each Fund held its Annual Meeting of Shareholders on July 25, 2008. The following action was taken by the shareholders of each Fund:

Item 1: The election of Ralph F. Verni as a Class I Trustee of each Fund for a one-year term expiring in 2009, and Ronald A. Pearlman and Heidi L. Steiger as Class III Trustees of each Fund for a three-year term expiring in 2011. Mr. Verni was designated the Nominee to be elected by APS shareholders:

    Nominee for Class I
Trustee Elected by
APS Shareholders
Ralph F. Verni
  Nominee for Class III
Trustee Elected by
All Shareholders
Ronald A. Pearlman
  Nominee for Class III
Trustee Elected by
All Shareholders
Heidi L. Steiger
 
Insured Municipal Fund II:  
For     2,918       9,265,708       9,271,474    
Withheld     359       208,671       202,905    
Insured California Fund II:  
For     947       3,641,110       3,650,685    
Withheld     147       37,108       27,533    
Insured Massachusetts Fund:  
For     529       1,650,463       1,651,983    
Withheld     49       32,617       31,097    
Insured Michigan Fund:  
For     443       1,451,446       1,451,446    
Withheld     12       29,614       29,614    
Insured New Jersey Fund:  
For     648       2,505,895       2,504,251    
Withheld     119       14,930       16,574    
Insured New York Fund II:  
For     868       2,415,842       2,422,642    
Withheld     22       45,284       38,484    
Insured Ohio Fund:  
For     846       2,346,181       2,350,019    
Withheld     26       36,465       32,627    
Insured Pennsylvania Fund:  
For     1,017       2,786,431       2,795,881    
Withheld     9       52,515       43,065    

 

Results are rounded to the nearest whole number.


79



Eaton Vance Insured Municipal Bond Funds

DIVIDEND REINVESTMENT PLAN

Each Fund offers a dividend reinvestment plan (the Plan) pursuant to which shareholders may elect to have dividends and capital gains distributions automatically reinvested in common shares (the Shares) of the same Fund. You may elect to participate in the Plan by completing the Dividend Reinvestment Plan Application Form. If you do not participate, you will receive all distributions in cash paid by check mailed directly to you by American Stock Transfer & Trust Company as dividend paying agent. On the distribution payment date, if the net asset value per Share is equal to or less than the market price per Share plus estimated brokerage commissions, then new Shares will be issued. The number of Shares shall be determined by the greater of the net asset value per Share or 95% of the market price. Otherwise, Shares generally will be purchased on the open market by the Plan Agent. Distributions subject to income tax (if any) are taxable whether or not shares are reinvested.

If your shares are in the name of a brokerage firm, bank, or other nominee, you can ask the firm or nominee to participate in the Plan on your behalf. If the nominee does not offer the Plan, you will need to request that your shares be re-registered in your name with each Fund's transfer agent, American Stock Transfer & Trust Company, or you will not be able to participate.

The Plan Agent's service fee for handling distributions will be paid by each Fund. Each participant will be charged their pro rata share of brokerage commissions on all open-market purchases.

Plan participants may withdraw from the Plan at any time by writing to the Plan Agent at the address noted on the following page. If you withdraw, you will receive shares in your name for all Shares credited to your account under the Plan. If a participant elects by written notice to the Plan Agent to have the Plan Agent sell part or all of his or her Shares and remit the proceeds, the Plan Agent is authorized to deduct a $5.00 fee plus brokerage commissions from the proceeds.

If you wish to participate in the Plan and your shares are held in your own name, you may complete the form on the following page and deliver it to the Plan Agent.

Any inquiries regarding the Plan can be directed to the Plan Agent, American Stock Transfer & Trust Company, at 1-866-439-6787.


80



Eaton Vance Insured Municipal Bond Funds

APPLICATION FOR PARTICIPATION IN DIVIDEND REINVESTMENT PLAN

This form is for shareholders who hold their common shares in their own names. If your common shares are held in the name of a brokerage firm, bank, or other nominee, you should contact your nominee to see if it will participate in the Plan on your behalf. If you wish to participate in the Plan, but your brokerage firm, bank, or nominee is unable to participate on your behalf, you should request that your common shares be re-registered in your own name which will enable your participation in the Plan.

The following authorization and appointment is given with the understanding that I may terminate it at any time by terminating my participation in the Plan as provided in the terms and conditions of the Plan.

  Please print exact name on account:

  Shareholder signature  Date

  Shareholder signature  Date

  Please sign exactly as your common shares are registered. All persons whose names appear on the share certificate must sign.

YOU SHOULD NOT RETURN THIS FORM IF YOU WISH TO RECEIVE YOUR DIVIDENDS AND DISTRIBUTIONS IN CASH. THIS IS NOT A PROXY.

This authorization form, when signed, should be mailed to the following address:

Eaton Vance Insured Municipal Bond Funds
c/o American Stock Transfer & Trust Company
P.O. Box 922
Wall Street Station
New York, NY 10269-0560

Number of Employees

Each Fund is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as a closed-end, nondiversified, management investment company and has no employees.

Number of Shareholders

As of September 30, 2008, our records indicate that there are 34, 9, 6, 6, 7, 11, 18, 13 and 38 registered shareholders for Insured Municipal Fund II, Insured California Fund II, Insured Florida Plus Fund, Insured Massachusetts Fund, Insured Michigan Fund, Insured New Jersey Fund, Insured New York Fund II, Insured Ohio Fund and Insured Pennsylvania Fund, respectively, and approximately 4,803, 1,566, 1,591, 925, 961, 1,474, 1,291, 1,441 and 1,843 shareholders owning the Fund shares in street name, such as through brokers, banks and financial intermediaries for Insured Municipal Fund II, Insured California Fund II, Insured Florida Plus Fund, Insured Massachusetts Fund, Insured Michigan Fund, Insured New Jersey Fund, Insured New York Fund II, Insured Ohio Fund and Insured Pennsylvania Fund, respectively.

If you are a street name shareholder and wish to receive Fund reports directly, which contain important information about a Fund, please write or call:

Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
1-800-225-6265

NYSE Alternext US symbols

Insured Municipal Fund II  EIV

Insured California Fund II  EIA

Insured Florida Plus Fund  EIF

Insured Massachusetts Fund  MAB

Insured Michigan Fund  MIW

Insured New Jersey Fund  EMJ

Insured New York Fund II  NYH

Insured Ohio Fund  EIO

Insured Pennsylvania Fund  EIP


81



Eaton Vance Insured Municipal Bond Funds

BOARD OF TRUSTEES' ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENTS

Overview of the Contract Review Process

The Investment Company Act of 1940, as amended (the "1940 Act"), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuance is approved at least annually by the fund's board of trustees, including by a vote of a majority of the trustees who are not "interested persons" of the fund ("Independent Trustees"), cast in person at a meeting called for the purpose of considering such approval.

At a meeting of the Boards of Trustees (each a "Board") of the Eaton Vance group of mutual funds (the "Eaton Vance Funds") held on April 21, 2008, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing advisory and sub-advisory agreements for the Eaton Vance Funds for an additional one-year period. In voting its approval, the Board relied upon the affirmative recommendation of the Contract Review Committee of the Board (formerly the Special Committee), which is a committee comprised exclusively of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished for a series of meetings of the Contract Review Committee held in February, March and April 2008. Such information included, among other things, the following:

Information about Fees, Performance and Expenses

•  An independent report comparing the advisory and related fees paid by each fund with fees paid by comparable funds;

•  An independent report comparing each fund's total expense ratio and its components to comparable funds;

•  An independent report comparing the investment performance of each fund to the investment performance of comparable funds over various time periods;

•  Data regarding investment performance in comparison to relevant peer groups of funds and appropriate indices;

•  Comparative information concerning fees charged by each adviser for managing other mutual funds and institutional accounts using investment strategies and techniques similar to those used in managing the fund;

•  Profitability analyses for each adviser with respect to each fund;

Information about Portfolio Management

•  Descriptions of the investment management services provided to each fund, including the investment strategies and processes employed, and any changes in portfolio management processes and personnel;

•  Information concerning the allocation of brokerage and the benefits received by each adviser as a result of brokerage allocation, including information concerning the acquisition of research through "soft dollar" benefits received in connection with the funds' brokerage, and the implementation of a soft dollar reimbursement program established with respect to the funds;

•  Data relating to portfolio turnover rates of each fund;

•  The procedures and processes used to determine the fair value of fund assets and actions taken to monitor and test the effectiveness of such procedures and processes;

Information about each Adviser

•  Reports detailing the financial results and condition of each adviser;

•  Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and information relating to their compensation and responsibilities with respect to managing other mutual funds and investment accounts;

•  Copies of the Codes of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes;

•  Copies of or descriptions of each adviser's proxy voting policies and procedures;

•  Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates on behalf of the funds (including descriptions of various compliance programs) and their record of compliance with investment policies and restrictions, including policies with respect to market-timing, late trading and selective portfolio disclosure, and with policies on personal securities transactions;

•  Descriptions of the business continuity and disaster recovery plans of each adviser and its affiliates;

Other Relevant Information

•  Information concerning the nature, cost and character of the administrative and other non-investment management services provided by Eaton Vance Management and its affiliates;

•  Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds' administrator; and

•  The terms of each advisory agreement.


82



Eaton Vance Insured Municipal Bond Funds

BOARD OF TRUSTEES' ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENTS CONT'D

In addition to the information identified above, the Contract Review Committee considered information provided from time to time by each adviser throughout the year at meetings of the Board and its committees. Over the course of the twelve-month period ended April 30, 2008, the Board met eleven times and the Contract Review Committee, the Audit Committee and the Governance Committee, each of which is a Committee comprised solely of Independent Trustees, met twelve, seven and five times, respectively. At such meetings, the Trustees received, among other things, presentations by the portfolio managers and other investment professionals of each adviser relating to the investment performance of each fund and the investment strategies used in pursuing the fund's investment objective. The Portfolio Management Committee and the Compliance Reports and Regulatory Matters Committee are newly established and did not meet during the twelve-month period ended April 30, 2008.

For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of advisory agreements. In addition, in cases where the fund's investment adviser has engaged a sub-adviser, the Board considered similar information about the sub-adviser when considering the approval of any sub-advisory agreement.

The Contract Review Committee was assisted throughout the contract review process by Goodwin Procter LLP, legal counsel for the Independent Trustees. The members of the Contract Review Committee relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each advisory and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each advisory and sub-advisory agreement.

Results of the Process

Based on its consideration of the foregoing, and such other information as it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuance of the investment advisory agreements of the following funds:

•  Eaton Vance Insured Municipal Bond Fund II

•  Eaton Vance Insured California Municipal Bond Fund II

•  Eaton Vance Insured Florida Plus Municipal Bond Fund

•  Eaton Vance Insured Massachusetts Municipal Bond Fund

•  Eaton Vance Insured Michigan Municipal Bond Fund

•  Eaton Vance Insured New Jersey Municipal Bond Fund

•  Eaton Vance Insured New York Municipal Bond Fund II

•  Eaton Vance Insured Ohio Municipal Bond Fund

•  Eaton Vance Insured Pennsylvania Municipal Bond Fund

(the "Funds"), each with Eaton Vance Management (the "Adviser"), including their fee structures, is in the interests of shareholders and, therefore, the Contract Review Committee recommended to the Board approval of each agreement. The Board accepted the recommendation of the Contract Review Committee as well as the factors considered and conclusions reached by the Contract Review Committee with respect to each agreement. Accordingly, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for each Fund.

Nature, Extent and Quality of Services

In considering whether to approve the investment advisory agreements of the Funds, the Board evaluated the nature, extent and quality of services provided to the Funds by the Adviser.

The Board considered the Adviser's management capabilities and investment process with respect to the types of investments held by each Fund, including the education, experience and number of its investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Funds. In particular, the Board evaluated, where relevant, the abilities and experience of such investment personnel in analyzing factors such as credit risk, tax efficiency, and special considerations relevant to investing in municipal bonds. Specifically, the Board considered the Adviser's large municipal bond team, which includes portfolio managers and credit specialists who provide services to the Funds. The Board also took into account the resources dedicated to portfolio management and other services, including the compensation paid to recruit and retain investment personnel, and the time and attention devoted to each Fund by senior management.

The Board also reviewed the compliance programs of the Adviser and relevant affiliates thereof. Among other matters, the Board considered compliance and reporting matters relating to personal trading by investment personnel, selective disclosure of portfolio


83



Eaton Vance Insured Municipal Bond Funds

BOARD OF TRUSTEES' ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENTS CONT'D

holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also evaluated the responses of the Adviser and its affiliates to requests from regulatory authorities such as the Securities and Exchange Commission.

The Board also considered shareholder and other administrative services provided or managed by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large family of funds.

After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the respective investment advisory agreement.

Fund Performance

The Board compared each Fund's investment performance to a relevant universe of similarly managed funds identified by an independent data provider and appropriate benchmark indices. The Board reviewed comparative performance data for the one- and three-year periods ended September 30, 2007 for each Fund. On the basis of the foregoing and other relevant information, the Board concluded that the performance of each Fund was satisfactory.

Management Fees and Expenses

The Board reviewed contractual investment advisory fee rates, including any administrative fee rates, payable by each Fund (referred to collectively as "management fees"). As part of its review, the Board considered each Fund's management fee and total expense ratio for the year ended September 30, 2007, as compared to a group of similarly managed funds selected by an independent data provider. The Board considered the fact that the Adviser had waived fees and/or paid expenses for each of the Funds.

After reviewing the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded with respect to each Fund that the management fees charged to the Fund for advisory and related services and the total expense ratio of the Fund are reasonable.

Profitability

The Board reviewed the level of profits realized by the Adviser and, if applicable, its affiliates in providing investment advisory and administrative services to each Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized with and without regard to revenue sharing or other payments by the Adviser and its affiliates to third parties in respect of distribution services. The Board also considered other direct or indirect benefits received by the Adviser and its affiliates in connection with their relationship with the Funds.

The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are reasonable.

Economies of Scale

In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and each Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from the economies of scale with respect to the management of any specific fund or group of funds. The Board also considered the fact that none of the Funds is continuously offered and concluded that, in light of the level of the adviser's profits with respect to each Fund, the implementation of breakpoints in the advisory fee schedule is not appropriate at this time. Based upon the foregoing, the Board concluded that the benefits from economies of scale are currently being shared equitably by the Adviser and its affiliates and each Fund.


84




Eaton Vance Insured Municipal Bond Funds

MANAGEMENT AND ORGANIZATION

Fund Management. The Trustees and officers of Eaton Vance Insured Municipal Bond Fund II (EIV), Eaton Vance Insured California Municipal Bond Fund II (EIA), Eaton Vance Insured Florida Plus Municipal Bond Fund (EIF), Eaton Vance Insured Massachusetts Municipal Bond Fund (MAB), Eaton Vance Insured Michigan Municipal Bond Fund (MIW), Eaton Vance Insured New Jersey Municipal Bond Fund (EMJ), Eaton Vance Insured New York Municipal Bond Fund II (NYH), Eaton Vance Insured Ohio Municipal Bond Fund (EIO), and Eaton Vance Insured Pennsylvania Municipal Bond Fund (EIP), (the Funds) are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. The "noninterested Trustees" consist of those Trustees who are not "interested persons" of the Funds, as that term is defined under the 1940 Act. The business address of each Trustee and officer is The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109. As used below, "EVC" refers to Eaton Vance Corp., "EV" refers to Eaton Vance, Inc., "EVM" refers to Eaton Vance Management, "BMR" refers to Boston Management and Research and "EVD" refers to Eaton Vance Distributors, Inc. EVC and EV are the corporate parent and trustee, respectively, of EVM and BMR. EVD is the Funds' principal underwriter and a wholly-owned subsidiary of EVC. Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with EVM listed below.

    Name and
Date of Birth
  Position(s)
with the
Funds
  Term of
Office and
Length of
Service
  Principal Occupation(s)
During Past Five Years
  Number of Portfolios
in Fund Complex
Overseen By
Trustee(1) 
  Other Directorships Held  
Interested Trustee                          
Thomas E. Faust Jr. 5/31/58   Class II Trustee   Until 2010. 3 years. Since 2007.   Chairman, Chief Executive Officer and President of EVC, Director and President of EV, Chief Executive Officer and President of EVM and BMR, and Director of EVD. Trustee and/or Officer of 173 registered investment companies and 5 private investment companies managed by EVM or BMR. Mr. Faust is an interested person because of his positions with EVM, BMR, EVD, EVC and EV, which are affiliates of each Fund.   173   Director of EVC  
Noninterested Trustees                          
Benjamin C. Esty(A)
1/2/63
  Class II Trustee   Until 2010. 3 years. Since 2005.   Roy and Elizabeth Simmons Professor of Business Administration, Harvard University Graduate School of Business Administration.   173   None  
Allen R. Freedman
4/3/40
  Class II Trustee   Until 2010. 3 years. Since 2007.   Former Chairman (2002-2004) and a Director (1983-2004) of Systems & Computer Technology Corp. (provider of software to higher education). Formerly, a Director of Loring Ward International (fund distributor) (2005-2007). Formerly, Chairman and a Director of Indus International Inc. (provider of enterprise management software to the power generating industry) (2005-2007)   173   Director of Assurant, Inc. (insurance provider) and Stonemor Partners L.P. (owner and operator of cemeteries)  
William H. Park
9/19/47
  Class I Trustee   Until 2009. 3 years. Since 2003.   Vice Chairman, Commercial Industrial Finance Corp. (specialty finance company) (since 2006). Formerly, President and Chief Executive Officer, Prizm Capital Management, LLC (investment management firm) (2002-2005).   173   None  
Ronald A. Pearlman
7/10/40
  Class III Trustee   Until 2011 (except for EIF which is until 2008). 3 years. Since 2003.   Professor of Law, Georgetown University Law Center.   173   None  
Heidi L. Steiger
7/8/53
  Class III Trustee   Until 2011 (except for EIF which is until 2008). 3 years (except for EIF which is 1 year). Since 2007.   Managing Partner, Topridge Associates LLC (global wealth management firm) (since 2008); Senior Adviser (since 2008), President, (2005-2008), Lowenhaupt Global Advisors, LLC (global wealth management firm). Formerly, President and Contributing Editor, Worth Magazine (2004-2005). Formerly, Executive Vice President and Global Head of Private Asset Management (and various other positions), Neuberger Berman (investment firm) (1986-2004).   173   Director of Nuclear Electric Insurance Ltd. (nuclear insurance provider) and Aviva USA (insurance provider)  

 


85



Eaton Vance Insured Municipal Bond Funds

MANAGEMENT AND ORGANIZATION CONT'D

    Name and
Date of Birth
  Position(s)
with the
Funds
  Term of
Office and
Length of
Service
  Principal Occupation(s)
During Past Five Years
  Number of Portfolios
in Fund Complex
Overseen By
Trustee(1) 
  Other Directorships Held  
Noninterested Trustees (continued)                          
Lynn A. Stout
9/14/57
  Class I Trustee   Until 2009. 3 years. Since 2002.   Paul Hastings Professor of Corporate and Securities Law (since 2006) and Professor of Law (2001-2006), University of California at Los Angeles School of Law.   173   None  
Ralph F. Verni(A)
1/26/43
  Chairman of the Board and Class I Trustee   Until 2009. 3 years. Trustee since 2005; Chairman since 2007.   Consultant and private investor.   173   None  
Principal Officers who are not Trustees                          

 

Name and
Date of Birth
  Position(s)
with the
Funds
  Term of
Office and
Length of
Service
  Principal Occupation(s)
During Past Five Years
 
Cynthia J. Clemson 3/2/63   President of EIA, EIF, MIW, NYH, EIO and EIP; Vice President of MAB, EIV and EMJ   President of EIA, EIF, MIW, NYH, EIO and EIP since 2005 and Vice President of MAB, EIV and EMJ since 2004   Vice President of EVM and BMR. Officer of 90 registered investment companies managed by EVM or BMR.  
Robert B. MacIntosh 1/22/57   President of MAB, EIV and EMJ; Vice President of EIA, EIF, MIW, NYH, EIO and EIP   President of MAB, EIV and EMJ since 2005 and Vice President of EIA, EIF, MIW, NYH, EIO and EIP since 2002   Vice President of EVM and BMR. Officer of 90 registered investment companies managed by EVM or BMR.  
William H. Ahern, Jr. 7/28/59   Vice President of MIW, EIV and EIO   Vice President of MIW since 2002; of EIV since 2004; and of EIO since 2005   Vice President of EVM and BMR. Officer of 75 registered investment companies managed by EVM or BMR.  
Craig R. Brandon 12/21/66   Vice President of EIF and NYH   Vice President of EIF since 2004 and of NYH since 2005   Vice President of EVM and BMR. Officer of 44 registered investment companies managed by EVM or BMR.  
Thomas M. Metzold 8/3/58   Vice President of EIF   Since 2005   Vice President of EVM and BMR. Officer of 43 registered investment companies managed by EVM or BMR.  
Adam A. Weigold 3/22/75   Vice President of EIP   Since 2007   Vice President of EVM and BMR. Officer of 71 registered investment companies managed by EVM or BMR.  
Barbara E. Campbell 6/19/57   Treasurer   Since 2005   Vice President of EVM and BMR. Officer of 173 registered investment companies managed by EVM or BMR.  
Maureen A. Gemma 5/24/60   Secretary and Chief Legal Officer   Secretary since 2007 and Chief Legal Officer since 2008   Vice President of EVM and BMR. Officer of 173 registered investment companies managed by EVM or BMR.  
Paul M. O'Neil 7/11/53   Chief Compliance Officer   Since 2004   Vice President of EVM and BMR. Officer of 173 registered investment companies managed by EVM or BMR.  

 

(1)  Includes both master and feeder funds in a master-feeder structure.

(A)  APS Trustee.


86



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Investment Adviser and Administrator
of Eaton Vance Insured Municipal Bond Funds
Eaton Vance Management

The Eaton Vance Building
255 State Street
Boston, MA 02109

Custodian
State Street Bank and Trust Company

200 Clarendon Street
Boston, MA 02116

Transfer Agent
American Stock Transfer & Trust Company

35 Maiden Lane
Plaza Level
New York, NY 10038

Independent Registered Public Accounting Firm
Deloitte & Touche LLP

200 Berkeley Street
Boston, MA 02116-5022

Eaton Vance Insured Municipal Bond Funds
The Eaton Vance Building
255 State Street
Boston, MA 02109



1557-11/08  9IMBIISRC




 

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, an independent trustee, as its audit committee financial expert.  Mr. Park is a certified public accountant who is the Vice Chairman of Commercial Industrial Finance Corp (specialty finance company). Previously, he served as President and Chief Executive Officer of Prizm Capital Management, LLC (investment management firm) and as Executive Vice President and Chief Financial Officer of United Asset Management Corporation (“UAM”) (a holding company owning institutional investment management firms).

 

Item 4. Principal Accountant Fees and Services

 

(a) –(d)

 

The following table presents the aggregate fees billed to the registrant for the registrant’s fiscal years ended September 30, 2007 and September 30, 2008 by the Fund’s principal accountant for professional services rendered for the audit of the registrant’s annual financial statements and fees billed for other services rendered by the principal accountant during such period.

 

Fiscal Years Ended

 

9/30/07

 

9/30/08

 

 

 

 

 

 

 

Audit Fees

 

$

28,930

 

$

25,340

 

 

 

 

 

 

 

Audit-Related Fees(1)

 

3,785

 

3,915

 

 

 

 

 

 

 

Tax Fees(2)

 

6,883

 

7,130

 

 

 

 

 

 

 

All Other Fees(3)

 

0

 

45

 

 

 

 

 

 

 

Total

 

$

39,598

 

$

36,430

 

 


(1)                        Audit-related fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under the category of audit fees and specifically include fees for the performance of certain agreed-upon procedures relating to the registrant’s auction preferred shares.

 

(2)                        Tax fees consist of the aggregate fees billed for professional services rendered by the principal accountant relating to tax compliance, tax advice, and tax planning and specifically include fees for tax return preparation.

 

(3)                             All other fees consist of the aggregate fees billed for products and services provided by the registrant’s principal accountant other than audit, audit-related, and tax services.

 

(e)(1) The registrant’s audit committee has adopted policies and procedures relating to the pre-approval of services provided by the registrant’s principal accountant (the “Pre-Approval Policies”).  The Pre-Approval Policies establish a framework intended to assist the audit committee in the proper discharge of its pre-approval responsibilities.  As a general matter, the Pre-Approval Policies (i) specify certain types of audit, audit-related, tax, and other services determined to be pre-approved by the audit committee; and (ii) delineate specific procedures governing the mechanics of the pre-approval process, including the approval and monitoring of audit and non-audit service fees.  Unless a service is specifically pre-approved under the Pre-Approval Policies, it must be separately pre-approved by the audit committee.

 

The Pre-Approval Policies and the types of audit and non-audit services pre-approved therein must be reviewed and ratified by the registrant’s audit

 



 

committee at least annually.  The registrant’s audit committee maintains full responsibility for the appointment, compensation, and oversight of the work of the registrant’s principal accountant.

 

(e)(2) No services described in paragraphs (b)-(d) above were approved by the registrant’s audit committee pursuant to the “de minimis exception” set forth in Rule 2-01 (c)(7)(i)(C) of Regulation S-X.

 

(f) Not applicable.

 

(g) The following table presents (i) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed to the registrant by the registrant’s principal accountant for the registrant’s fiscal year ended September 30, 2007 and the fiscal year ended September 30, 2008; and (ii) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed to the Eaton Vance organization by the registrant’s principal accountant for the same time periods.

 

Fiscal Years Ended

 

9/30/07

 

9/30/08

 

 

 

 

 

 

 

Registrant

 

$

10,668

 

$

11,045

 

 

 

 

 

 

 

Eaton Vance(1)

 

$

289,446

 

$

325,801

 

 

 

 

 

 

 

Total

 

$

300,114

 

$

336,846

 

 


(1)

 

The investment adviser to the registrant, as well as any of its affiliates that provide ongoing services to the registrant, are subsidiaries of Eaton Vance Corp.

 

(h) The registrant’s audit committee has considered whether the provision by the registrant’s principal accountant of non-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X is compatible with maintaining the principal accountant’s independence.

 

Item 5.  Audit Committee of Listed registrants

 

The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities and Exchange Act of 1934, as amended. William H. Park (Chair), Lynn A. Stout, Heidi L. Steiger and Ralph E. Verni are the members of the registrant’s audit committee.

 

Item 6. Schedule of Investments

 

Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR.

 



 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

 

The Board of Trustees of the Trust has adopted a proxy voting policy and procedure (the “Fund Policy”), pursuant to which the Trustees have delegated proxy voting responsibility to the Fund’s investment adviser and adopted the investment adviser’s proxy voting policies and procedures (the “Policies”) which are described below.  The Trustees will review the Fund’s proxy voting records from time to time and will annually consider approving the Policies for the upcoming year.  In the event that a conflict of interest arises between the Fund’s shareholders and the investment adviser, the administrator, or any of their affiliates or any affiliate of the Fund, the investment adviser will generally refrain from voting the proxies related to the companies giving rise to such conflict until it consults with the Board’s Special Committee except as contemplated under the Fund Policy.  The Board’s Special Committee will instruct the investment adviser on the appropriate course of action.

 

The Policies are designed to promote accountability of a company’s management to its shareholders and to align the interests of management with those shareholders. An independent proxy voting service (“Agent”), currently Institutional Shareholder Services, Inc., has been retained to assist in the voting of proxies through the provision of vote analysis, implementation and recordkeeping and disclosure services.  The investment adviser will generally vote proxies through the Agent.  The Agent is required to vote all proxies and/or refer then back to the investment adviser pursuant to the Policies.  It is generally the policy of the investment adviser to vote in accordance with the recommendation of the Agent.  The Agent shall refer to the investment adviser proxies relating to mergers and restructurings, and the disposition of assets, termination, liquidation and mergers contained in mutual fund proxies.  The investment adviser will normally vote against anti-takeover measures and other proposals designed to limit the ability of shareholders to act on possible transactions, except in the case of closed-end management investment companies.  The investment adviser generally supports management on social and environmental proposals.  The investment adviser may abstain from voting from time to time where it determines that the costs associated with voting a proxy outweighs the benefits derived from exercising the right to vote or the economic effect on shareholders interests or the value of the portfolio holding is indeterminable or insignificant.

 

In addition, the investment adviser will monitor situations that may result in a conflict of interest between the Fund’s shareholders and the investment adviser, the administrator, or any of their affiliates or any affiliate of the Fund by maintaining a list of significant existing and prospective corporate clients.  The investment adviser’s personnel responsible for reviewing and voting proxies on behalf of the Fund will report any proxy received or expected to be received from a company included on that list to the personal of the investment adviser identified in the Policies. If such personnel expects to instruct the Agent to vote such proxies in a manner inconsistent with the guidelines of the Policies or the recommendation of the Agent, the personnel will consult with members of senior management of the investment adviser to determine if a material conflict of interests exists.  If it is determined that a material conflict does exist, the investment adviser will seek instruction on how to vote from the Special Committee.

 

Information on how the Fund voted proxies relating to portfolio securities during the most recent 12 month period ended June 30 is available (1) without charge, upon request, by calling 1-800-262-1122, and (2) on the Securities and Exchange Commission’s website at http://www.sec.gov.

 



 

Item 8. Portfolio Managers of Closed-End Management Investment Companies

 

Insured California Municipal Bond Fund II, Insured Florida Plus Municipal Bond Fund, Insured Massachusetts Municipal Bond Fund, Insured Michigan Municipal Bond Fund, Insured Municipal Bond Fund II, Insured New York Municipal Bond Fund II, Insured New Jersey Municipal Bond Fund, Insured Ohio Municipal Bond Fund, Insured Pennsylvania Municipal Bond Fund

 

Portfolio Management

 

Cynthia J. Clemson, portfolio manager of Eaton Vance Insured California Municipal Bond Fund II, Robert B. MacIntosh, portfolio manager of Eaton Vance Insured Massachusetts Municipal Bond Fund and Eaton Vance Insured New Jersey Municipal Bond Fund, William H. Ahern, Jr., portfolio manager of Eaton Vance Insured Michigan Municipal Bond Fund, Eaton Vance Insured Municipal Bond Fund II and Eaton Vance Insured Ohio Municipal Bond Fund, Craig R. Brandon, portfolio manager of Eaton Vance Insured Florida Plus Municipal Bond Fund and Eaton Vance Insured New York Municipal Bond Fund II and Adam A. Weigold, portfolio manager of Eaton Vance Insured Pennsylvania Municipal Bond Fund are responsible for the overall and day-to-day management of each Fund’s investments.

 

Ms. Clemson and Mr. MacIntosh have been Eaton Vance portfolio managers since 1991 and are Vice Presidents of Eaton Vance Management (“EVM”) and Boston Management and Research (“BMR”).  Mr. Ahern has been an Eaton Vance portfolio manager since 1993 and is a Vice President of EVM and BMR.  Mr. Brandon has been an Eaton Vance analyst since 1998 and a portfolio manager since 2004, and is a Vice President of EVM and BMR.  Mr. Weigold has been a credit analyst with Eaton Vance since 1991 and a portfolio manager since 2007, and is a Vice President of EVM and BMR.  This information is provided as of the date of filing of this report.

 

The following tables show, as of each Fund’s most recent fiscal year end, the number of accounts each portfolio manager managed in each of the listed categories and the total assets in the accounts managed within each category.  The table also shows the number of accounts with respect to which the advisory fee is based on the performance of the account, if any, and the total assets in those accounts.

 

 

 

Number
of All
Accounts

 

Total Assets
of All
Accounts*

 

Number of
Accounts
Paying a
Performance Fee

 

Total Assets of
Accounts Paying a
Performance Fee*

 

Insured California Municipal Bond Fund II

 

 

 

 

 

 

 

 

 

Cynthia J. Clemson

 

 

 

 

 

 

 

 

 

Registered Investment Companies

 

10

 

$

2,902.7

 

0

 

$

0

 

Other Pooled Investment Vehicles

 

0

 

$

0

 

0

 

$

0

 

Other Accounts

 

0

 

$

0

 

0

 

$

0

 

 

 

 

 

 

 

 

 

 

 

Insured Massachusetts Municipal Bond Fund

 

 

 

 

 

 

 

 

 

Insured New Jersey Municipal Bond Fund

 

 

 

 

 

 

 

 

 

Robert B. MacIntosh

 

 

 

 

 

 

 

 

 

Registered Investment Companies

 

10

 

$

2,180.8

 

0

 

$

0

 

Other Pooled Investment Vehicles

 

0

 

$

0

 

0

 

$

0

 

Other Accounts

 

224

 

$

181.8

 

0

 

$

0

 

 



 

 

 

Number
of All
Accounts

 

Total Assets
of All
Accounts*

 

Number of
Accounts
Paying a
Performance Fee

 

Total Assets of
Accounts Paying a
Performance Fee*

 

Insured Municipal Bond Fund II

 

 

 

 

 

 

 

 

 

Insured Michigan Municipal Bond Fund

 

 

 

 

 

 

 

 

 

Insured Ohio Municipal Bond Fund

 

 

 

 

 

 

 

 

 

William H. Ahern

 

 

 

 

 

 

 

 

 

Registered Investment Companies

 

14

 

$

1,758.4

 

0

 

$

0

 

Other Pooled Investment Vehicles

 

0

 

$

0

 

0

 

$

0

 

Other Accounts

 

0

 

$

0

 

0

 

$

0

 

 

 

 

 

 

 

 

 

 

 

Insured Florida Plus Municipal Bond Fund

 

 

 

 

 

 

 

 

 

Insured New York Municipal Bond Fund II

 

 

 

 

 

 

 

 

 

Craig R. Brandon

 

 

 

 

 

 

 

 

 

Registered Investment Companies

 

12

 

$

1,303.6

 

0

 

$

0

 

Other Pooled Investment Vehicles

 

0

 

$

0

 

0

 

$

0

 

Other Accounts

 

0

 

$

0

 

0

 

$

0

 

 

 

 

 

 

 

 

 

 

 

Insured Pennsylvania Municipal Bond Fund

 

 

 

 

 

 

 

 

 

Adam A. Weigold

 

 

 

 

 

 

 

 

 

Registered Investment Companies

 

12

 

$

1,420.7

 

0

 

$

0

 

Other Pooled Investment Vehicles

 

0

 

$

0

 

0

 

$

0

 

Other Accounts

 

0

 

$

0

 

0

 

$

0

 

 


*In millions of dollars. For registered investment companies, assets represent net assets of all open-end investment companies and gross assets of all closed-end investment companies.

 

The following table shows the dollar range of Fund shares beneficially owned by each portfolio manager as of each Fund’s most recent fiscal year end.

 

 

 

Dollar Range of
Equity Securities
Owned in the
Fund

 

 

 

Insured California II

 

 

Cynthia J. Clemson

 

None

 

 

 

Insured Massachusetts

 

 

Insured New Jersey

 

 

Robert B. MacIntosh

 

None

 

 

 

Insured Michigan

 

 

Insured Municipal II

 

 

Insured Ohio

 

 

William H. Ahern, Jr.

 

None

Insured Florida Plus

 

 

Insured New York II

 

 

Craig R. Brandon

 

None

 

 

 

Insured Pennsylvania

 

 

Adam A. Weigold

 

None

 



 

Potential for Conflicts of Interest.  It is possible that conflicts of interest may arise in connection with a portfolio manager’s management of the Fund’s investments on the one hand and investments of other accounts for which a portfolio manager is responsible on the other.  For example, a portfolio manager may have conflicts of interest in allocating management time, resources and investment opportunities among the Fund and other accounts he or she advises.  In addition, due to differences in the investment strategies or restrictions between the Fund and the other accounts, a portfolio manager may take action with respect to another account that differs from the action taken with respect to the Fund.  In some cases, another account managed by a portfolio manager may compensate the investment adviser or sub-adviser based on the performance of the securities held by that account. The existence of such a performance based fee may create additional conflicts of interest for a portfolio manager in the allocation of management time, resources and investment opportunities.  Whenever conflicts of interest arise, a portfolio manager will endeavor to exercise his or her discretion in a manner that he or she believes is equitable to all interested persons.  EVM has adopted several policies and procedures designed to address these potential conflicts including:  a code of ethics; and policies which govern the investment adviser’s trading practices, including among other things the aggregation and allocation of trades among clients, brokerage allocation, cross trades and best execution.

 

Compensation Structure for EVM

 

Compensation of EVM’s portfolio managers and other investment professionals has three primary components:  (1) a base salary, (2) an annual cash bonus, and (3) annual stock-based compensation consisting of options to purchase shares of EVC’s nonvoting common stock and/or restricted shares of EVC’s nonvoting common stock.  EVM’s investment professionals also receive certain retirement, insurance and other benefits that are broadly available to EVM’s employees.  Compensation of EVM’s investment professionals is reviewed primarily on an annual basis.  Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid or put into effect at or shortly after the October 31st fiscal year end of EVC.

 

Method to Determine Compensation.  EVM compensates its portfolio managers based primarily on the scale and complexity of their portfolio responsibilities and the total return performance of managed funds and accounts versus appropriate peer groups or benchmarks.  Performance is normally based on periods ending on the September 30th preceding fiscal year end.  Fund performance is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc.  When a fund’s peer group as determined by Lipper or Morningstar is deemed by EVM’s management not to provide a fair comparison, performance may instead be evaluated primarily against a custom peer group.  In evaluating the performance of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance over longer and shorter periods.  For funds that are tax-managed or otherwise have an objective of after-tax returns, performance is measured net of taxes.  For other funds, performance is evaluated on a pre-tax basis.  In addition to rankings within peer groups of funds on the basis of absolute performance, consideration may also be given to risk-adjusted performance.  For funds with an investment objective other than total return (such as current income), consideration will also be given to the fund’s success in achieving its objective.  For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis, based on averages or weighted averages among managed funds and accounts.  Funds and accounts that have performance-based advisory fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.

 

The compensation of portfolio managers with other job responsibilities (such as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of such responsibilities and the managers’ performance in meeting them.

 

EVM seeks to compensate portfolio managers commensurate with their responsibilities and performance, and competitive with other firms within the investment management industry.  EVM participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus and stock-based compensation levels for portfolio managers and other investment professionals.  Salaries, bonuses and stock-based compensation are also influenced by the

 



 

operating performance of EVM and its parent company. The overall annual cash bonus pool is based on a substantially fixed percentage of pre-bonus operating income. While the salaries of EVM’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

No such purchases this period.

 

Item 10. Submission of Matters to a Vote of Security Holders.

 

No Material Changes.

 

Item 11. 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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12. 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.

 



 

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 Insured California Municipal Bond Fund II

 

By:

/s/Cynthia J. Clemson

 

 

Cynthia J. Clemson

 

 

President

 

 

 

 

 

 

 

Date:

November 17, 2008

 

 

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/Barbara E. Campbell

 

 

Barbara E. Campbell

 

 

Treasurer

 

 

 

 

 

 

 

Date:

November 17, 2008

 

 

 

 

 

 

 

By:

/s/Cynthia J. Clemson

 

 

Cynthia J. Clemson

 

 

President

 

 

 

 

 

 

 

Date:

November 17, 2008