SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 2002
                          Commission File No. 000-32633

                      Belmar Capital Fund LLC (the "Fund")
                      ------------------------------------
             (Exact name of registrant as specified in its charter)


                 Delaware                           04-3508106
                 --------               -----------------------------------
          (State of organization)       (I.R.S. Employer Identification No.)


            The Eaton Vance Building
      255 State Street, Boston, Massachusetts                     02109
      ---------------------------------------                      -----
     (Address of principal executive offices)                    (Zip Code)


Registrant's telephone number: 617-482-8260
                               ------------

Securities registered pursuant to Section 12(g) of the Act:

           Limited Liability Company Interests in the Fund ("Shares")
           ----------------------------------------------------------
                                (Title of class)

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     Aggregate market value of the Shares held by  non-affiliates of Registrant,
based on the closing net asset value on February 28, 2003 was $1,510,938,223.23.
Calculation  of holdings by  non-affiliates  is based upon the  assumption,  for
these purposes only, that the Registrant's  manager,  its executive officers and
directors  and  persons  holding  5% or  more  of the  Registrant's  Shares  are
affiliates.

                           Incorporation by Reference:
                           ---------------------------

     The financial statements contained in Registrant's Form 10-K filed with the
Securities   and  Exchange   Commission  on  March  27,  2002   (Accession   No.
0000940394-02-000196)  have been  incorporated  into the following Parts of this
report: Part II and Part III.

                    The Exhibit Index is located on page 97.

<PAGE>


                             BELMAR CAPITAL FUND LLC

                               Index to Form 10-K

Item                                                                       Page
----                                                                       ----
                                     PART I

1     Business.............................................................  1
           Fund Overview...................................................  1
                Structure of the Fund......................................  1
                Fund Management............................................  1
                The Fund's Offering........................................  1

           The Fund's Investment in Belvedere Capital Fund
           Company LLC and Tax-Managed Growth Portfolio....................  2
                The Company................................................  2
                The Portfolio..............................................  2
                The Portfolio's Investment Objective and Policies..........  2
                The Portfolio's Tax Management Strategies..................  3

           The Fund's Real Estate Investments through
           Belmar Realty Corporation.......................................  3
                Real Estate Joint Venture Investments......................  4
                Partnership Preference Units...............................  5
                Organization of Belmar Realty and the Real Estate
                Joint Venture..............................................  5

           Fund Borrowings.................................................  6
                Interest Rate Swap Agreements..............................  6

           The Eaton Vance Organization....................................  6

2     Properties...........................................................  7

3     Legal Proceedings....................................................  7

4     Submission of Matters to a Vote of Security Holders..................  7

                                     PART II

5     Determining Net Asset Value, Market for Fund Shares and Related
      Shareholder Matters...................................................  7
           Market Information, Restrictions on Transfers and
           Redemption of Shares.............................................  7
                Transfers of Fund Shares....................................  7
                Redemption of Fund Shares...................................  8
                Determining Net Asset Value.................................  9
                Historic Net Asset Values................................... 10
           Record Holders of Shares of the Fund............................. 10

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           Distributions ................................................... 10
                Income and Capital Gain Distributions....................... 10
                Special Distributions....................................... 11
           Recent Sales of Unregistered Securities.......................... 11

6     Selected Financial Data............................................... 12
           Table of Selected Financial Data................................. 12

7     Management's Discussion and Analysis of Financial Condition and
      Results of Operations................................................. 13
           Results of Operations............................................ 13
                Performance of the Fund..................................... 14
                Performance of the Portfolio................................ 14
                Performance of Real Estate Investments...................... 15
                Performance of Interest Rate Swaps.......................... 15
           Liquidity and Capital Resources.................................. 16
                Outstanding Borrowings...................................... 16
                Liquidity................................................... 16
           Critical Accounting Policies..................................... 16

7A    Quantitative and Qualitative Disclosures About Market Risk............ 17
           Quantitative Information About Market Risk....................... 17
                Interest Rate Risk.......................................... 17
           Qualitative Information About Market Risk........................ 20
                Risks Associated with Equity Investing...................... 20
                Risks of Investing in Foreign Securities.................... 21
                Risks of Certain Investment Techniques...................... 21
                Risks of Real Estate Investments............................ 22
                Risks of Leverage........................................... 23

8     Financial Statements and Supplementary Data........................... 23

9     Changes in and Disagreements with Accountants on
      Accounting and Financial Disclosures.................................. 24

                                    PART III

10    Directors and Executive Officers...................................... 24
           Directors and Executive Officers of Eaton Vance, Inc............. 25

11    Executive Compensation     ........................................... 25
                The Fund's Investment Advisory and Administrative Fee....... 26
                Belmar Realty's Management Fee.............................. 26
                The Portfolio's Investment Advisory Fee..................... 27

12    Security Ownership of Certain Beneficial Owners and Management........ 27
                Security Ownership of Certain Beneficial Owners............. 27
                Security Ownership of Management............................ 27
                Changes in Control.......................................... 27

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13    Certain Relationships and Related Transactions........................ 27
                Servicing Fees Paid by the Company.......................... 27
                Servicing Fees Paid by the Fund............................. 27
                Distribution Fees Paid to EV Distributors................... 28
                Redemption Fees............................................. 28

14    Controls and Procedures............................................... 28

                                     PART IV

15    Exhibits, Financial Statements and Reports on Form 8-K................ 28

FINANCIAL STATEMENTS........................................................ 31

SIGNATURES.................................................................. 94

CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002................................................................. 95

EXHIBIT INDEX............................................................... 97

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                                   PART I

ITEM 1.  BUSINESS.
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FUND  OVERVIEW.  Belmar  Capital Fund LLC (the  "Fund") is a private  investment
company  organized  to  provide  diversification  and  tax-sensitive  investment
management  to  investors  holding  large and  concentrated  positions in equity
securities of selected public companies.  The Fund's investment  objective is to
achieve  long-term,  after-tax returns for persons who have invested in the Fund
("Shareholders").  The Fund, a Delaware limited liability company, commenced its
investment  operations on March 17, 2000. Limited liability company interests of
the Fund ("Shares") were issued to Shareholders at five closings during 2000. At
each Fund closing,  the Fund accepted  contributions  of stock from investors in
exchange  for  Shares  of  the  Fund  (the  "exchange  transaction").  The  Fund
discontinued  offering  Shares on November  29,  2000 and no future  offering is
anticipated.

STRUCTURE   OF  THE  FUND.   The  Fund  is   structured   to  provide   tax-free
diversification and tax-sensitive investment management to Shareholders. To meet
the  objective  of  tax-free  diversification,  the Fund must  satisfy  specific
requirements of the Internal  Revenue Code of 1986, as amended (the "Code").  In
order for the  contributions of appreciated stock to the Fund by Shareholders to
be nontaxable,  not more than 80% of the Fund's assets (calculated in the manner
prescribed)  may consist of "stocks and  securities"  as defined in the Code. To
meet  this  requirement,  the Fund  invests  at least  20% of its  assets  as so
determined  in certain  real  estate  investments  (see "The  Fund's Real Estate
Investments  through Belmar Realty  Corporation"  below). The Fund invests up to
80% of its assets in a  diversified  portfolio of common stocks (see "The Fund's
Investment  in  Belvedere  Capital  Fund  Company  LLC  and  Tax-Managed  Growth
Portfolio"  below).  The Fund acquires its real estate investments with borrowed
funds, as described below under "Fund Borrowings".

There is no trading  market for the Fund's  Shares.  As described  further under
"Redemption  of Fund  Shares" in Item 5(a),  Fund  Shares may be redeemed on any
business  day.  The Fund plans to satisfy  redemption  requests  principally  by
distributing  securities,  but may also distribute cash. The value of securities
and cash  distributed to satisfy a redemption  will equal the net asset value of
the number of Shares being redeemed (less any applicable redemption fees).

The Fund intends to distribute each year the amount of its net investment income
for such  year,  if any.  The Fund also  intends  to make  annual  capital  gain
distributions  equal to  approximately  22% of the  amount  of its net  realized
capital  gains,  if any,  other than  precontribution  gain.  The Fund's  income
distributions  are not  expected  to be  significant.  The Fund  intends  to pay
distributions  (if any) on the last business day of each fiscal year of the Fund
(which concludes on December 31) or shortly  thereafter.  See "Distributions" in
Item 5(c).

FUND  MANAGEMENT.  The  manager of the Fund is Eaton  Vance  Management  ("Eaton
Vance"),  a Massachusetts  business trust  registered as an investment  adviser.
Eaton Vance and its  wholly-owned  subsidiary,  Boston  Management  and Research
("Boston Management"), provide management and advisory services to the Fund, its
real estate subsidiary and the investment  portfolios in which the Fund invests.
Eaton  Vance and  Boston  Management  provide  advisory,  administration  and/or
management services to over 170 investment companies,  as well as individual and
institutional investors. As of December 31, 2002, Eaton Vance and its affiliates
managed approximately $55 billion on behalf of clients.

THE FUND'S OFFERING.  Shares of the Fund were privately offered and sold only to
"accredited  investors"  as defined in Rule 501(a) under the  Securities  Act of
1933, as amended,  (the  "Securities  Act") who were "qualified  purchasers" (as
defined in Section 2(a)(51)(A) of the Investment Company Act of 1940, as amended
(the "1940 Act")). The offering was conducted by Eaton Vance Distributors, Inc.,

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a wholly-owned subsidiary of Eaton Vance, ("EV Distributors") as placement agent
and by certain subagents  appointed by EV Distributors.  The Shares were offered
and sold in reliance upon an exemption  from  registration  provided by Rule 506
under the  Securities  Act. The Fund issued Shares to  Shareholders  at closings
taking place on March 17, 2000, May 16, 2000, July 19, 2000, September 27, 2000,
and November 29, 2000. At the five closings,  an aggregate of 25,888,893  Shares
were issued in exchange for Shareholder contributions totaling $2.6 billion.

THE FUND'S  INVESTMENT  IN BELVEDERE  CAPITAL  FUND COMPANY LLC AND  TAX-MANAGED
GROWTH  PORTFOLIO.  At each Fund  closing,  all of the  securities  accepted for
contribution to the Fund were contributed by the Fund to Belvedere  Capital Fund
Company LLC (the  "Company"),  a Massachusetts  limited  liability  company,  in
exchange for shares of the Company.  The Company then contributed the securities
received from the Fund to  Tax-Managed  Growth  Portfolio (the  "Portfolio")  in
exchange  for an interest in the  Portfolio.  The  Portfolio  is a  diversified,
open-end  management  investment  company registered under the 1940 Act with net
assets of  approximately  $14.6  billion as of December 31, 2002. As of December
31, 2002, the Fund's investment in the Portfolio through the Company had a value
of approximately $1.6 billion (equal to approximately  67.3% of the Fund's total
assets on a consolidated basis).

THE  COMPANY.  As of December  31, 2002,  the  investment  assets of the Company
consisted  exclusively  of  an  interest  in  the  Portfolio  with  a  value  of
approximately $8.8 billion.  As of such date, the Fund owned approximately 18.8%
of the Company's  outstanding shares. The other investors in the Company include
five other investment funds sponsored by the Eaton Vance  organization,  as well
as qualified individual investors who acquired shares of the Company in exchange
for  portfolios  of  acceptable  securities.  Under  the 1940  Act,  the Fund is
permitted  to invest  through  the  Company  in the  Portfolio,  but it does not
satisfy the conditions of the 1940 Act for investing directly in the Portfolio.

THE  PORTFOLIO.  The  Portfolio  was  organized in 1995 as the  successor to the
investment  operations  of Eaton Vance  Tax-Managed  Growth  Fund 1.0  (formerly
Capital  Exchange  Fund),  a mutual fund  established  in 1966 and managed  from
inception for long-term,  after-tax returns. As of December 31, 2002,  investors
in the Portfolio  included seven  investors in addition to the Company,  four of
which acquire  interests in the Portfolio with cash on a continuous  basis.  All
investors in the Portfolio are sponsored by or affiliated  with Eaton Vance.  As
of December 31, 2002,  the Company owned  approximately  60.1% of the Portfolio.
The Fund invests in the Portfolio  because it is a  well-established  investment
portfolio  that has an investment  objective and policies that are compatible to
those of the Fund. Investing in the Portfolio enables the Fund to participate in
a substantially  larger and more diversified  investment portfolio than it could
achieve by managing the contributed securities directly.

THE PORTFOLIO'S  INVESTMENT OBJECTIVE AND POLICIES.  The investment objective of
the Portfolio is to achieve  long-term,  after-tax  returns for its investors by
investing  in a  diversified  portfolio  of  equity  securities.  The  Portfolio
emphasizes investments in common stocks of domestic and foreign growth companies
that are  considered  to be high in quality and  attractive  in their  long-term
investment  prospects.  The Portfolio  seeks to invest in a broadly  diversified
portfolio  of stocks  and to invest  primarily  in  established  companies  with
characteristics of above-average  growth,  predictability and stability that are
acquired with the expectation of being held for a period of years.  Under normal
market  conditions,  the Portfolio will invest  primarily in common stocks.  The
Portfolio  acquires  securities  through  contributions  from the Company and by
purchasing securities with cash invested in the Portfolio by other investors.

Although the Portfolio may, in addition to investing in common stocks, invest in
investment-grade  preferred  stocks  and  debt  securities,  purchases  of  such
securities are normally limited to securities convertible into common stocks and
temporary  investments in short-term  notes and government  obligations.  During
periods in which the investment  adviser to the Portfolio  believes that returns
on common stock  investments  may be  unfavorable,  the  Portfolio  may invest a

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portion of its assets in U.S. government obligations and high quality short-term
notes. The Portfolio's holdings represent a number of different industries.  Not
more than 25% of the  Portfolio's  assets may be invested in the  securities  of
issuers  having  their  principal   business  activity  in  the  same  industry,
determined as of the time of acquisition of any such securities.

THE PORTFOLIO'S  TAX MANAGEMENT  STRATEGIES.  In its  operations,  the Portfolio
seeks to achieve  long-term,  after-tax  returns in part by minimizing the taxes
incurred by  investors  in the  Portfolio  in  connection  with the  Portfolio's
investment  income and realized  capital gains.  Taxes on investment  income are
minimized by investing primarily in lower-yielding securities. Taxes on realized
capital  gains are  minimized by avoiding or  minimizing  the sale of securities
holdings with large accumulated  capital gains. The Portfolio generally seeks to
avoid realizing short-term capital gains.

When a decision is made to sell a particular appreciated security, the Portfolio
will  select  for sale the  share  lots  resulting  in the  most  favorable  tax
treatment,  generally  those with  holding  periods  sufficient  to qualify  for
long-term capital gain treatment that have the highest cost basis. The Portfolio
may, when deemed prudent by its investment  adviser,  sell securities to realize
capital losses that can be used to offset  realized  gains.  While the Portfolio
generally  retains the  securities  contributed to the Portfolio by the Company,
the Portfolio has the  flexibility to sell  contributed  securities.  Securities
acquired  by the  Portfolio  with  cash  may be  sold  in  accordance  with  the
tax-management  strategies  described above. In lieu of selling a security,  the
Portfolio  may hedge  its  exposure  to that  security  by using the  techniques
described below. The Portfolio also disposes of contributed  securities  through
its  practice  of  settling  redemptions  by a  distribution  of  securities  as
described in Item 5(a) under  "Redemption of Fund Shares".  As described in Item
5(a), settling redemptions with securities may result in certain tax benefits to
the Portfolio, the Company, the Fund and the redeeming Shareholder.

To protect against price declines in securities  holdings with large accumulated
capital gains, the Portfolio may use various investment  techniques,  including,
but not limited  to, the  purchase of put  options on  securities  held,  equity
collars  (combining the purchase of a put option and the sale of a call option),
equity  swaps,  covered  short  sales,  forward  sales of stocks  held,  and the
purchase and sale of futures  contracts on stocks and stock  indexes and options
thereon.  By using these  techniques  rather than selling such  securities,  the
Portfolio can, within certain  limits,  reduce its exposure to price declines in
the securities  without  realizing  substantial  capital gains under current tax
law.

The Portfolio's  ability to utilize  covered short sales,  certain equity swaps,
forward sales,  futures and certain equity collar  strategies as a tax-efficient
management  technique  with  respect to holdings of  appreciated  securities  is
limited to circumstances  in which the hedging  transaction is closed out within
thirty  days after the end of the  taxable  year of the  Portfolio  in which the
hedging  transaction  was initiated and the  underlying  appreciated  securities
position is held  unhedged  for at least the next sixty days after such  hedging
transaction is closed.  The use of these  investment  techniques may require the
Portfolio to commit or make available cash and, therefore,  may not be available
at such times as the  Portfolio  has limited  holdings of cash.  At December 31,
2002,  the  Portfolio  held three short  positions on a security with a combined
value equal to approximately  0.3% of the Portfolio's net assets.  The Portfolio
paid commissions totaling  approximately  $30,000 in connection with these short
sales.  The Portfolio did not otherwise  employ any of the techniques  described
above during the year ended December 31, 2002.

THE FUND'S REAL ESTATE INVESTMENTS THROUGH BELMAR REALTY  CORPORATION.  Separate
from its  investment in the Portfolio  through the Company,  the Fund invests in
certain  real  estate   investments   through  its  subsidiary,   Belmar  Realty
Corporation  ("Belmar  Realty").  As referred  to above  under "Fund  Overview -
Structure of the Fund",  the Fund invests in real estate  investments to satisfy
certain  requirements of the Code for contributions of appreciated stocks to the
Fund by Shareholders to be nontaxable. As of December 31, 2002, the consolidated
real  estate  assets  of  Belmar  Realty  totaled  $754.3  million.  The  Fund's
consolidated real estate investments represented 30.8% of the Fund's assets on a

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consolidated  basis at December  31,  2002.  The Fund  acquired  its real estate
investments with borrowed funds, as described below under "Fund Borrowings". The
Fund  seeks a return on its real  estate  investments  over the  long-term  that
exceeds the cost of the borrowings incurred to acquire such investments.

At December  31, 2002,  Belmar  Realty  invested in a real estate joint  venture
("Real  Estate Joint  Venture")  that is  controlled  by Belmar  Realty and in a
portfolio  of  income-producing   preferred  equity  interests  in  real  estate
operating partnerships that generally are affiliated with and controlled by real
estate  investment  trusts  ("REITs")  that are  publicly  traded  ("Partnership
Preference  Units").  As of  December  31,  2002,  approximately  27.0%  of  the
consolidated  real estate  investments  of Belmar  Realty were Real Estate Joint
Venture  assets  and  approximately  73.0%  were  Partnership   Preference  Unit
investments.

In the  future,  Belmar  Realty  may  invest  in  other  types  of  real  estate
investments,  such as interests in real properties  subject to long-term leases.
Belmar Realty may purchase real estate investments from, and sell them to, other
investment funds sponsored by the Eaton Vance organization and REIT subsidiaries
of such  investment  funds  that are  similar to Belmar  Realty.  Certain of the
Partnership  Preference  Units owned by Belmar  Realty at December 31, 2002 were
acquired from such REIT subsidiaries.

Boston Management  serves as manager of Belmar Realty. In that capacity,  Boston
Management manages the investment and reinvestment of Belmar Realty's assets and
administers its affairs.

REAL ESTATE JOINT VENTURE INVESTMENTS. At December 31, 2002, Belmar Realty owned
a  controlling   interest  in  one  Real  Estate  Joint  Venture,  Bel  Alliance
Apartments,  LLC ("Bel Apartments").  The day-to-day operating management of the
Real Estate Joint Venture is provided by the real estate operating  company (the
"Operating  Partner") that is the principal minority investor in the Real Estate
Joint  Venture.  A board of managers  controlled by Belmar  Realty  oversees the
performance  of the  Operating  Partner and controls the major  decisions of the
Real Estate Joint Venture.

The assets of the Real Estate  Joint  Venture  consist of  nineteen  multifamily
residential  properties  acquired  from or in  conjunction  with  the  Operating
Partner of the Real Estate Joint Venture.  See Item 2.  Distributable cash flows
from the Real Estate  Joint  Venture  are  allocated  in a manner that  provides
Belmar Realty:  1) a priority position versus the Operating Partner with respect
to a fixed  annual  preferred  return;  and 2)  participation  on a pro  rata or
reduced  basis in  distributable  cash flows in excess of the  annual  preferred
return of Belmar  Realty and a  subordinated  preferred  return of the Operating
Partner.

Financing  for the Real Estate Joint  Venture  consists  primarily of fixed-rate
secured  mortgage  debt  obligations  of the  Real  Estate  Joint  Venture  that
generally are without recourse to Belmar Realty and the Fund. Both Belmar Realty
and the  Operating  Partner  invested  equity in the Real Estate Joint  Venture.
Belmar  Realty's  equity in the Real Estate Joint Venture was acquired using the
proceeds of Fund borrowings.  At acquisition,  Belmar Realty's equity investment
in Bel Apartments was approximately $39.4 million.

The Operating  Partner of Bel Apartments is Alliance GD GT, LLC, an affiliate of
Alliance  Holdings LLC  ("Alliance").  Alliance,  a privately  owned real estate
company with management operating headquarters in Houston,  Texas, is one of the
largest  owners and  operators of  multifamily  residential  communities  in the
United States. Alliance specializes in middle-income,  market-rent  communities,
predominantly  in the  Southeastern  and  Southwestern  portions of the country.
Alliance  maintains  regional  management  and  construction  offices in Dallas,
Texas,  Greenville,  South Carolina and Charlotte,  North Carolina and currently
operates more than 52,000 apartment units in 19 states. Alliance owns 40% of the

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issued and  outstanding  shares of Bel  Apartments  that are  entitled  to Board
representation.

The  Real  Estate  Joint  Venture  includes  a  buy/sell  provision  that can be
activated by either Belmar Realty or the Operating  Partner after a fixed period
of  years.  Pursuant  to the  buy/sell  provision  entered  into at the time Bel
Apartments was established, either Belmar Realty or the Bel Apartments Operating
Partner can give notice after September 8, 2010 either to buy the other's equity
interest in Bel Apartments or to sell its own equity interest in Bel Apartments.

A  purchase  or  sale  pursuant  to a  buy/sell  provision  would  be  made at a
negotiated price. The agreement  containing the buy/sell provision applicable to
the Real Estate Joint Venture  continues  indefinitely,  but could be terminated
upon the receipt of the requisite approval of the owners of the voting interests
in the Real Estate Joint  Venture.  The sale to Belmar  Realty by the  Operating
Partner of the Operating  Partner's  interest in Bel Apartments would not affect
the REIT  qualification  of Bel Apartments.  If Belmar Realty were to dispose of
its  interest  in the  Real  Estate  Joint  Venture  pursuant  to  the  buy/sell
provision,  it may acquire an interest in a different real estate  investment to
replace the investment sold.

PARTNERSHIP   PREFERENCE  UNITS.  Belmar  Realty's  investments  in  Partnership
Preference  Units represent  preferred equity interests in real estate operating
partnerships  that are affiliated with publicly traded REITs.  The assets of the
partnerships that issue the Partnership  Preference Units owned by Belmar Realty
consist of direct or indirect ownership interests in real properties,  including
manufactured home  communities,  multifamily  properties,  office and industrial
properties,  self-storage  facilities  and  shopping  centers.  The  Partnership
Preference Units owned by Belmar Realty as of December 31, 2002 are described in
Item 7A and in the Consolidated  Portfolio of Investments included in the Fund's
Financial Statements, which are incorporated by reference into Item 8.

Each issue of  Partnership  Preference  Units held by Belmar Realty pays regular
quarterly  distributions  at fixed  rates from the net  profits  of the  issuing
partnership  and Belmar Realty has a preferred  interest in such  distributions.
Belmar Realty acquired its Partnership  Preference Units in private transactions
from the issuers of such units or from  subsidiaries of other  investment  funds
sponsored by Eaton Vance. None of the issues of Partnership  Preference Units is
or will be registered under the Securities Act and each issue is thus subject to
restrictions on transfer.

Belmar Realty will acquire  Partnership  Preference Units issued by partnerships
that are not  publicly-traded  partnerships  within the meaning of Code  Section
7704(b). When acquired,  Partnership Preference Units will have a remaining life
of at least five years  (subject to earlier  call  provisions)  and will not, by
their terms, be readily  convertible or exchangeable  into cash or securities of
the affiliated public company.  Partnership  Preference Units are not rated by a
nationally-recognized  rating  agency,  and such interests may not be as high in
quality as issues that are rated investment grade.

ORGANIZATION  OF BELMAR REALTY AND THE REAL ESTATE JOINT VENTURE.  Belmar Realty
and the Real  Estate  Joint  Venture  operate in such a manner as to qualify for
taxation as a REIT under the Code.  As REITs,  Belmar Realty and the Real Estate
Joint Venture generally are not subject to federal income tax on that portion of
their ordinary income or taxable gain that is distributed to  stockholders  each
year.  The Fund owns 100% of the  common  stock  issued  by Belmar  Realty,  and
intends to hold all of Belmar Realty's common stock at all times.  Belmar Realty
and the Operating  Partner own all of the common shares or similar  interests of
the Real Estate Joint Venture.

Belmar  Realty and the Real Estate  Joint  Venture  also have  issued  preferred
shares to satisfy certain requirements of the Code relating to qualifications as
a REIT. The preferred shares of each such entity are owned by approximately  105
charitable  organizations.  As of  December  31,  2002,  the total  value of the
preferred  shares of each of Belmar  Realty  and Bel  Apartments  was  $210,000.

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Dividends on preferred  shares are cumulative and payable annually at a dividend
rate of 8% per year. The dividends  paid on preferred  shares have priority over
payments on common shares.  For the fiscal year ended December 31, 2002,  Belmar
Realty paid distributions to preferred  shareholders of $16,800.  Bel Apartments
made no distributions to preferred shareholders during 2002.

FUND BORROWINGS.  To finance its investments in Partnership Preference Units and
its equity in the Real Estate Joint Venture held through Belmar Realty, the Fund
has entered into a revolving  securitization  facility  (the  "Commercial  Paper
Facility") of up to $700 million with two affiliated  special purpose commercial
paper issuers (the "CP Issuers") and Citicorp North  America,  Inc. as agent for
the CP  Issuers.  The  Commercial  Paper  Facility is  supported  by a committed
liquidity facility (the "Liquidity Facility") provided by Citibank,  N.A., under
which  borrowings  may be made for a maximum term of seven years from the Fund's
initial closing.

The CP Issuers fund  advances  under the  Commercial  Paper  Facility by issuing
highly rated  commercial  paper notes. On borrowings  under the Commercial Paper
Facility,  the Fund pays a rate of  interest  equal to the CP  Issuers'  cost of
funding  plus a margin and  certain  administrative  and other  fees.  Such fees
amount to  approximately  0.32% of the  borrowings  under the  Commercial  Paper
Facility.  In the event that the CP Issuers are unable or  unwilling to maintain
advances to the Fund, they may assign advances to the providers of the Liquidity
Facility.  Borrowings under the Liquidity  Facility will be at an annual rate of
one-month  LIBOR  plus  0.75%.  There  were no  borrowings  under the  Liquidity
Facility during the year ended December 31, 2002.

Interest  expense also includes a commitment  fee of 0.15% of the unused portion
of  the  Liquidity  Facility  and a  loan  structure  fee  of  less  than  0.01%
(annualized) of the total amount available under the Commercial Paper Facility.

The Fund's  obligations  under the  Commercial  Paper Facility and the Liquidity
Facility  (collectively,  the  "Credit  Facility")  are  secured  by a pledge of
substantially  all of its  assets.  Obligations  under the Credit  Facility  are
without recourse to Fund's Shareholders.  As described above,  financing for the
Real Estate Joint Venture consists primarily of fixed-rate secured mortgage debt
obligations of the Real Estate Joint Venture that generally are without recourse
to Belmar Realty and the Fund. For more information,  see "Liquidity and Capital
Resources" in Item 7.

INTEREST RATE SWAP  AGREEMENTS.  The Fund has entered into  cancelable  interest
rate  swap  agreements  (the  "swap  agreements")  with  Merrill  Lynch  Capital
Services,  Inc. ("MLCS") to fix the cost of borrowings under the Credit Facility
used to acquire Belmar Realty's equity in its real estate investments.  The Fund
has the right to terminate the swap agreements  beginning in 2003,  generally at
dates  corresponding  approximately to the initial call dates of the Partnership
Preference Units held by Belmar Realty. MLCS is a secured party under the Credit
Facility.   See  Note  7  to  the  Fund's  Consolidated   Financial   Statements
incorporated by reference into Item 8.

THE EATON VANCE  ORGANIZATION.  The Eaton Vance organization  sponsors the Fund.
Eaton Vance serves as the Fund's manager. Boston Management serves as the Fund's
investment  adviser and as manager of Belmar Realty.  EV Distributors  served as
the Fund's  placement  agent. The Fund's business affairs are conducted by Eaton
Vance (as its manager) and its  investment  operations  are  conducted by Boston
Management (as its adviser).  The Fund's  officers are employees of Eaton Vance.
Eaton Vance,  Boston  Management and EV Distributors  are indirect  wholly-owned
subsidiaries  of Eaton Vance Corp.  ("EVC"),  a publicly-held  holding  company,
which through its affiliates and  subsidiaries  engages  primarily in investment
management, administration and marketing activities.

As noted  above,  the Fund pursues its  objective  primarily by investing in the
Company.  The Company invests  exclusively in the Portfolio.  Boston  Management
acts as  investment  adviser of the  Portfolio  and manager of the  Company.  EV

                                       6
<PAGE>

Distributors  acts as placement  agent for the Company and the Portfolio.  As of
December  31, 2002,  the assets of the Fund  represented  approximately  4.3% of
assets under  management by Eaton Vance and its  affiliates.  The offices of the
Fund,  Eaton Vance,  Boston  Management and EV  Distributors  are located at 255
State Street, Boston, Massachusetts 02109.

ITEM 2.  PROPERTIES.
--------------------

The Fund does not own any physical  properties,  other than  indirectly  through
Belmar Realty's investments in Partnership  Preference Units and the Real Estate
Joint Venture.  At December 31, 2002, Belmar Realty owned a majority interest in
one Real Estate Joint Venture, Bel Apartments, whose assets are reflected in the
consolidated  financial  statements of the Fund.  Bel  Apartments  owns nineteen
multifamily  residential  properties  located in eight states (Texas,  Virginia,
South Carolina,  Missouri,  Nevada,  Georgia, North Carolina and Florida). As of
December 31, 2002,  Belmar Realty held  investments  in  Partnership  Preference
Units of nine issuers.

ITEM 3.  LEGAL PROCEEDINGS.
---------------------------

Although in the ordinary  course of business,  the Fund,  Belmar  Realty and the
Real Estate Joint Venture may become involved in legal proceedings,  the Fund is
not aware of any  material  pending  legal  proceedings  to which any of them is
subject.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
-------------------------------------------------------------

No items were  submitted  to a vote of security  holders  during the fiscal year
ended December 31, 2002.

                                     PART II

ITEM 5.  DETERMINING  NET  ASSET  VALUE,  MARKET  FOR FUND  SHARES  AND  RELATED
SHAREHOLDER MATTERS.
--------------------------------------------------------------------------------

This Item and other Items in this report contain summaries of certain provisions
contained  in the  Limited  Liability  Company  Agreement  of the Fund (the "LLC
Agreement"),  which is filed as an exhibit to the Fund's registration  statement
on Form 10. All such  summaries  are  qualified in their  entirety by the actual
provisions of the LLC Agreement, which are incorporated by reference herein.

(a)  MARKET INFORMATION, RESTRICTIONS ON TRANSFERS AND REDEMPTION OF SHARES.
----------------------------------------------------------------------------

TRANSFERS OF FUND SHARES.  There is no established public trading market for the
Shares of the Fund. Other than transfers to the Fund in a redemption,  transfers
of Shares are expressly  prohibited by the LLC Agreement of the Fund without the
consent of Eaton Vance.  Eaton Vance's  consent to a transfer may be withheld in
its sole discretion for any reason or for no reason.

The Shares have not been and will not be registered  under the  Securities  Act,
and may not be resold unless an exemption from such  registration  is available.
Shareholders  have no right to require  registration  of the Shares and the Fund
does not intend to  register  the Shares  under the  Securities  Act or take any
action to cause an exemption (whether pursuant to Rule 144 of the Securities Act
or otherwise) to be available.

The Fund is not and will not be  registered  under the 1940 Act, and no transfer
of Shares may be made if, as  determined  by Eaton Vance or counsel to the Fund,
such transfer would result in the Fund being required to be registered under the
1940 Act. In addition,  no transfer of Shares may be made unless, in the opinion
of counsel for the Fund,  such transfer  would not result in  termination of the

                                       7
<PAGE>

Fund for purposes of Section 708 to the Code or result in the  classification of
the  Fund as an  association  or a  publicly  traded  partnership  taxable  as a
corporation under the Code.

In no event  shall all or any part of a  Shareholder's  Shares be  assigned to a
minor or an incompetent,  unless in trust for the benefit of such person. Shares
may be sold,  transferred,  assigned or otherwise  disposed of by a  Shareholder
only if it is  determined  by Eaton  Vance or  counsel  to the  Fund  that  such
transfer,  assignment or  disposition  would not violate  federal  securities or
state   securities  or  "blue  sky"  laws  (including   investor   qualification
standards).

There  are no  outstanding  options  or  warrants  to  purchase,  or  securities
convertible into, Shares of the Fund. Shares of the Fund cannot be sold pursuant
to Rule 144 under the Securities  Act, and the Fund does not propose to publicly
offer any of its Shares at any time.

REDEMPTION  OF FUND  SHARES.  Shares of the Fund may be redeemed on any business
day. The redemption  price of Shares that are redeemed is based on the net asset
value next computed after receipt of the  redemption  request.  Shares  redeemed
within three years of issuance are generally  subject to a redemption  fee equal
to 1% of the net asset value of the Shares redeemed. See Item 13 below.

The Fund  plans to  satisfy  redemption  requests  principally  by  distributing
securities drawn from the Portfolio,  but may also distribute cash. If requested
by a  redeeming  Shareholder,  the Fund will  satisfy a  redemption  request  by
distributing  securities  that were  contributed  by the redeeming  Shareholder,
provided  that  such  securities  are  held  in the  Portfolio  at the  time  of
redemption.  The securities contributed by a Shareholder will not be distributed
to any other Shareholder in the Fund (or to any other investor in the Company or
the Portfolio) during the first seven years following their contribution  unless
the contributing Shareholder has withdrawn from the Fund.

Under  most  circumstances,  a  redemption  from the Fund that is  settled  with
securities  as described  herein will not result in the  recognition  of capital
gains by the Fund or by the redeeming  Shareholder.  The  redeeming  Shareholder
would generally recognize capital gains upon the sale of the securities received
upon the  redemption.  If a redeeming  Shareholder  receives cash in addition to
securities to settle a  redemption,  the amount of cash received will be taxable
to the Shareholder to the extent it exceeds such Shareholder's tax basis in Fund
Shares.   Shareholders   should   consult  their  tax  advisors  about  the  tax
consequences of redeeming Fund Shares.

A  Shareholder  redemption  request  within  seven  years of a  contribution  of
securities by such  Shareholder  will  ordinarily  be satisfied by  distributing
securities that were contributed by such  Shareholder,  prior to distributing to
such  Shareholder  any  other  securities  held  in  the  Portfolio.  Securities
contributed by a Shareholder  may be distributed  to other  Shareholders  in the
Fund (or to other  investors  in the Company or the  Portfolio)  after a holding
period of at least seven years and, if so distributed, would not be available to
meet subsequent redemption requests made by the contributing Shareholder.

If  requested  by a redeeming  Shareholder  making a  redemption  of at least $1
million  occurring more than seven years after such  Shareholder's  admission to
the Fund,  the Fund will  generally  distribute to the  redeeming  Shareholder a
diversified basket of securities representing a range of industry groups that is
drawn from the Portfolio,  but the selection of individual  securities  would be
made by Boston  Management in its sole  discretion.  No interests in Real Estate
Joint Ventures,  Partnership  Preference Units or other real estate  investments
held by Belmar  Realty will be  distributed  to meet a redemption  request,  and
"restricted  securities"  will  be  distributed  only  to  the  Shareholder  who
contributed such securities or such Shareholder's successor in interest.

Other  than as set  forth  above,  the  allocation  of each  redemption  between
securities and cash and the selection of securities to be distributed will be at
the sole  discretion of Boston  Management.  Distributed  securities may include

                                       8
<PAGE>

securities  contributed  by  Shareholders  as well as other  readily  marketable
securities held in the Portfolio.  The value of securities and cash  distributed
to meet a  redemption  will  equal the net asset  value of the  number of Shares
being  redeemed less the  applicable  redemption  fee, if any. The Fund's Credit
Facility prohibits the Fund from honoring  redemption requests while there is an
event of default outstanding under the Credit Facility.

The Fund may compulsorily redeem all or a portion of the Shares of a Shareholder
if the Fund has determined  that such  redemption is necessary or appropriate to
avoid  registration  of the Fund or the Company  under the 1940 Act, or to avoid
adverse tax or other  consequences  to the Portfolio,  the Company,  the Fund or
Fund  Shareholders.  No  redemption  fee is payable in the event of a compulsory
redemption.

A capital  account for each  Shareholder is maintained on the books of the Fund.
The account reflects the value of such Shareholder's interest in the Fund, which
is adjusted for profits, liabilities and distributions allocable to such account
in accordance with Article 6 of the Fund's LLC Agreement. Subject to the consent
of the manager of the Fund, a  Shareholder  may make an estate  freeze  election
pursuant to which all or a portion of such Shareholder's  Shares will be divided
into Preferred Shares and Common Shares ("Estate Freeze Shares").  Such division
will be made in accordance  with the terms of the LLC  Agreement.  Estate Freeze
Shares are not  transferable  without the consent of the Fund's manager and have
no redemption rights or voting or consent rights.

DETERMINING  NET ASSET VALUE.  Boston  Management,  as  investment  adviser,  is
responsible  for  determining  the  value  of  the  Fund's  assets.  The  Fund's
custodian, Investors Bank & Trust Company, calculates the value of the assets of
the  Fund,  the  Company  and the  Portfolio  each day  that the New York  Stock
Exchange ("NYSE") is open for trading, as of the close of regular trading on the
NYSE.  The Fund's net asset value per Share is  calculated by dividing the value
of the  Fund's  total  assets,  less its  liabilities,  by the  number of Shares
outstanding.

The  Fund's  net assets  are  valued in  accordance  with the  Fund's  valuation
procedures and reflect the value of its directly-held assets and liabilities, as
well as the net asset  value of the  Fund's  investment  in the  Portfolio  held
through the Company and in real estate  investments  held through Belmar Realty.
The Trustees of the Portfolio have established the following  procedures for the
fair  valuation  of the  Portfolio's  assets  under  normal  market  conditions.
Marketable  securities listed on foreign or U.S. securities  exchanges or on the
NASDAQ National Market System generally are valued at closing sale prices or, if
there  were no sales,  at the mean  between  the  closing  bid and asked  prices
therefor on the exchange where such securities are principally traded or on such
National  Market System (such prices may not be used,  however,  where an active
over-the-counter  market in an exchange listed security better reflects  current
market value).

Unlisted or listed  securities  for which  closing sale prices are not available
are valued at the mean  between  the latest bid and asked  prices.  An option is
valued at the last sale price as quoted on the  principal  exchange  or board of
trade on which such option or  contract is traded,  or in the absence of a sale,
at the  mean  between  the last  bid and  asked  prices.  Futures  positions  on
securities or  currencies  are generally  valued at closing  settlement  prices.
Short-term  debt  securities  with a  remaining  maturity of 60 days or less are
valued at amortized cost. If securities were acquired with a remaining  maturity
of more than 60 days, their amortized cost value will be based on their value on
the sixty-first day prior to maturity.  Other fixed income and debt  securities,
including  listed  securities  and  securities  for which price  quotations  are
available,  will  normally be valued on the basis of  valuations  furnished by a
pricing service.  All other securities are valued at fair value as determined in
good faith by or at the direction of the Portfolio's Trustees.

9
<PAGE>

Generally,  trading  in  the  foreign  securities  owned  by  the  Portfolio  is
substantially  completed  each day at  various  times  prior to the close of the
NYSE. The values of these  securities used in determining the net asset value of
the  Portfolio  generally  are computed as of such times.  Occasionally,  events
affecting the value of foreign  securities  may occur between such times and the
close  of the  NYSE,  which  will not be  reflected  in the  computation  of the
Portfolio's  net asset value (unless the Portfolio  deems that such events would
materially affect its net asset value, in which case an adjustment would be made
and reflected in such computation).  Foreign securities and currency held by the
Portfolio will be valued in U.S. dollars; the Portfolio's custodian will compute
such values based on foreign  currency  exchange rate quotations  supplied by an
independent quotation service. The Fund's real estate investments will be valued
each day as determined in good faith by Boston Management, as investment adviser
to Belmar Realty, after consideration of relevant factors, data and information.
The procedures for valuing  Belmar  Realty's  assets are described in Item 7A(b)
under "Risks of Real Estate  Investments".  Boston  Management values the Fund's
interest  rate swap  agreements  based upon dealer and  counterparty  quotes and
pricing models.

HISTORIC NET ASSET VALUES. Set forth below are the high and low net asset values
("NAVs") per Share of the Fund for each full quarter during the two fiscal years
ended  December 31, 2002 and 2001,  the closing NAV on the last  business day of
each full quarter, and the percentage change in NAV during each such quarter.

                                                                      Quarterly
                                                      NAV at         % Change in
Quarter Ended        High NAV        Low NAV        Quarter End         NAV (1)
-------------        --------         -------       -----------      -----------
   12/31/02          $  73.16         $62.79          $69.87             5.75%
    9/30/02          $  77.71         $63.11          $66.07           -15.67%
    6/30/02          $  88.25         $76.72          $78.35           -11.31%
    3/31/02          $  90.50         $82.92          $88.34             1.11%
   12/31/01          $  88.73         $77.55          $87.37            12.91%
    9/30/01          $  93.07         $71.34          $78.07           -15.58%
    6/30/01          $  98.30         $82.56          $92.48             6.15%
    3/31/01          $ 100.21         $83.53          $87.12           -10.95%

(1)  Past performance is no guarantee of future results.  Investment  return and
     principal  value will fluctuate so that Shares,  if redeemed,  may be worth
     more or less than their original cost.  Changes in NAV are historical.  For
     more  information  about the  performance  of the Fund,  see  "Management's
     Discussion  and Analysis of Financial  Condition and Results of Operations"
     in Item 7.

(b)  RECORD HOLDERS OF SHARES OF THE FUND.
------------------------------------------

As of March 14, 2003, there were 800 record holders of Shares of the Fund.

(c)  DISTRIBUTIONS.
-------------------

INCOME AND CAPITAL GAIN DISTRIBUTIONS.  The Fund intends to distribute each year
the amount of its net  investment  income for such year,  if any.  The Fund also
intends to make annual capital gain distributions  equal to approximately 22% of
the amount of its net realized capital gains, if any, other than precontribution
gain. The Fund's net investment income and net realized gains include the Fund's
allocated  share of the net  investment  income and net realized gains of Belmar
Realty,  the Company  and,  indirectly,  the  Portfolio.  Because the  Portfolio
invests  primarily  in lower  yielding  securities,  seeks  to avoid  short-term
capital gains and bears certain ongoing expenses, it is not expected that income
distributions  will be significant.  The Fund intends to pay  distributions  (if
any) on the last  business day of each fiscal year of the Fund (which  concludes
on December 31) or shortly thereafter.

                                       10
<PAGE>

Shareholder  distributions  with respect to net  investment  income and realized
post-contribution  gains  will be made pro rata in  proportion  to the number of
Shares  held  as of the  record  date  of the  distribution.  All  distributions
(including Special Distributions  described below) are paid by the Fund in cash.
Distributions are generally not taxable to the recipient  Shareholder unless the
distributions  exceed the recipient  Shareholder's tax basis in Fund Shares. The
Fund's  Credit  Facility  prohibits  the Fund from  making any  distribution  to
Shareholders  while  there is an event of default  outstanding  under the Credit
Facility.

The Fund's  distribution rates with respect to realized gains may be adjusted at
a future time to reflect changes in the effective  maximum  marginal  individual
federal tax rate applicable to long-term capital gains. On January 17, 2003, the
Fund made a distribution of $1.70 per Share to Shareholders of record on January
16, 2003. The Fund made no distributions in 2002. On December 31, 2001, the Fund
made a distribution of $0.79 per Share to Shareholders of record on December 28,
2001.

SPECIAL DISTRIBUTIONS.  In addition to the capital gain distributions  described
above,  the Fund also makes  distributions  whenever a Shareholder  recognizes a
precontribution gain (other than precontribution gain allocated to a Shareholder
in  connection  with a  tender  offer  or other  extraordinary  corporate  event
involving   a   security   contributed   by  such   Shareholder)   (a   "Special
Distribution").  Special Distributions  generally equal approximately 22% of the
amount of realized  precontribution gains plus approximately 6% of the allocated
precontribution   gain  or  such  other  percentage  as  deemed  appropriate  to
compensate  Shareholders  receiving such distributions for taxes that may be due
in connection with the precontribution gain and Special  Distributions.  Special
Distributions   will  be  made   solely   to  the   Shareholders   to  whom  the
precontribution  gain is  allocated.  The Fund does not  intend to make  Special
Distributions  to a  Shareholder  in respect of  realized  precontribution  gain
allocated  to  a  Shareholder  in  connection  with  a  tender  offer  or  other
extraordinary   corporate  event  involving  a  security   contributed  by  such
Shareholder.  For the fiscal year ended December 31, 2001, the Fund made Special
Distributions  of  approximately   $1.8  million.   The  Fund  made  no  Special
Distributions in 2002.

(d)  RECENT SALES OF UNREGISTERED SECURITIES.
---------------------------------------------

The Fund held its initial  closing on March 17,  2000,  at which time  qualified
purchasers  contributed  equity  securities with an aggregate  exchange value of
$639.3  million in exchange  for an  aggregate  of  6,375,154.663  Shares of the
Fund.*  Shares of the Fund were issued in the initial  closing at $100 per Share
(less any applicable selling commission).

The  Fund  held a second  closing  on May 16,  2000,  at  which  time  qualified
purchasers  contributed  equity  securities with an aggregate  exchange value of
$413.5 million in exchange for an aggregate of 4,131,103.610 Shares of the Fund.
The  Fund  held a third  closing  on July 19,  2000,  at  which  time  qualified
purchasers  contributed  equity  securities with an aggregate  exchange value of
$635.8 million in exchange for an aggregate of 6,127,268.215 Shares of the Fund.
The Fund held a fourth  closing on September 27, 2000,  at which time  qualified
purchasers  contributed  equity  securities with an aggregate  exchange value of
$310.1 million in exchange for an aggregate of 3,015,087.501 Shares of the Fund.
The Fund held a fifth and final  closing on  November  29,  2000,  at which time
qualified  purchasers  contributed  equity securities with an aggregate exchange
value of $606.8 million in exchange for an aggregate of 6,240,279.455  Shares of
the Fund.

In  connection  with each of the  closings,  Shares  of the Fund were  privately
offered and sold only to accredited  investors who were qualified  purchasers in
the manner  described  in Item 1. Shares  were  issued at each of the  foregoing
closings after the initial  closing at a price per share based on the Fund's net



*    Prior to the initial  closing,  Eaton Vance  purchased  1,050 Shares of the
     Fund for $105.000. No selling commission applied to such purchase.

                                       11
<PAGE>

asset value per share determined as of the close of the NYSE on the business day
immediately preceding the closing.

ITEM 6.  SELECTED FINANCIAL DATA.
---------------------------------

TABLE OF SELECTED  FINANCIAL DATA. The Fund commenced its investment  operations
on March 17, 2000. The  consolidated  data referred to below reflects the Fund's
results  for the fiscal  years ended  December  31, 2002 and 2001 and the period
from March 17, 2000  through  December  31, 2000.  The other  consolidated  data
referred to below is as of each year or period end.
<TABLE>
<CAPTION>
                                                      Fiscal Year Ended      Fiscal Year Ended          Period Ended
                                                      December 31, 2002     December 31, 2001(1)    December 31, 2000(1)
                                                      -----------------     --------------------    --------------------
<S>                                                   <C>                   <C>                     <C>

Total investment income                                   $99,814,835            $103,489,725            $53,330,719

Interest expense                                          $69,238,008             $71,529,573            $31,403,533

Net expenses (including interest expense)                 $97,375,572            $102,836,368            $45,082,887

Net investment income                                      $2,015,209                $432,985             $7,919,195

Minority interest in net income of controlled
subsidiary                                                  $(424,054)              $(220,372)             $(328,637)

Net realized gain (loss)                                    $(791,249)            $(9,873,535)           $13,706,147

Net change in unrealized appreciation
(depreciation)                                          $(417,581,832)          $(230,675,625)          $(74,236,068)

Net decrease in net assets from operations              $(416,357,872)          $(240,116,175)          $(52,610,726)

Total assets                                           $2,445,639,296          $2,967,430,657         $3,325,479,191

Loan payable                                             $596,500,000            $613,500,000           $613,500,000

Mortgages payable                                        $162,461,900            $175,470,843           $176,647,796

Net assets                                             $1,620,229,805          $2,108,684,133         $2,457,715,428

Shares outstanding                                         23,190,678              24,134,504             25,122,311

Net asset value and redemption price per Share                 $69.87                  $87.37                 $97.83

Net decrease in net assets from operations per Share          $(17.50)                 $(9.67)                $(1.87)

Distribution paid per Share                                     $0.00(3)                $0.79(2)               $0.30(2)
</TABLE>

(1)  Certain  amounts  have been  reclassified  to conform with the current year
     presentation.
(2)  Special  Distributions  of $0.073 and $0.03 per Share were paid  during the
     year or period  ended  December  31, 2001 and 2000,  respectively.  Special
     Distributions are not made on a pro rata basis. See Item 5(c).
(3)  On January 17,  2003,  the Fund made a  distribution  of $1.70 per Share to
     Shareholders of record on January 16, 2003.

                                       12
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
--------------------------------------------------------------------------------

The information in this report contains  forward-looking  statements  within the
meaning of the federal securities laws. Forward-looking statements typically are
identified by use of terms such as "may," "will," "should,"  "might,"  "expect,"
"anticipate,"  "estimate"  and  similar  words,  although  some  forward-looking
statements  are expressed  differently.  The Fund's actual  results could differ
materially  from those  contained  in the  forward-looking  statements  due to a
number of factors.  The Fund  undertakes no  obligation  to update  publicly any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise,  except as required by applicable  law.  Factors that could
affect the Fund's performance  include a decline in the U.S. stock markets or in
general  economic  conditions,  adverse  developments  affecting the real estate
industry or fluctuations in interest rates. See "Qualitative  Information  About
Market Risk" in Item 7A below.

The  following  discussion  should  be  read  in  conjunction  with  the  Fund's
consolidated  financial  statements and related notes  incorporated by reference
into Item 8.

RESULTS OF OPERATIONS. Increases and decreases in the Fund's net asset value per
Share  are  derived  from net  investment  income  or  loss,  and  realized  and
unrealized gains and losses on investments,  including security investments held
through the Fund's  indirect  interest  (through the Company) in the  Portfolio,
real estate investments held through Belmar Realty and any direct investments of
the Fund.  Expenses of the Fund  include the  expenses of Belmar  Realty and the
Real Estate Joint Venture, the Fund's proportionate share of the expenses of the
Company,  and,  indirectly,  the  Portfolio,  as well as the actual and  accrued
expenses of the Fund. The Fund's most significant  expense is interest  incurred
on Fund  borrowings.  Fund borrowings are used primarily to finance the purchase
of real estate investments through Belmar Realty.

The Fund's realized and unrealized  gains and losses on investments are based on
its  allocated  share of the  realized  and  unrealized  gains and losses of the
Company, and indirectly the Portfolio,  as well as realized and unrealized gains
and losses on real estate  investments held through Belmar Realty and the Fund's
interest rate swap  agreements.  The realized and unrealized gains and losses on
investments have the most  significant  impact on the Fund's net asset value per
Share and result from sales of such  investments and changes in their underlying
value.  The investments of the Portfolio  consist  primarily of common stocks of
domestic and foreign growth  companies that are considered to be high in quality
and attractive in their long-term investment  prospects.  Because the securities
holdings  of the  Portfolio  are broadly  diversified,  the  performance  of the
Portfolio  cannot  be  attributed  to one  particular  stock  or one  particular
industry or market  sector.  The  performance  of the Portfolio and the Fund are
substantially influenced by the overall performance of the U.S. stock market, as
well as by the relative performance versus the overall market of specific stocks
and classes of stocks in which the Portfolio maintains large positions.

Through  the impact of  interest  rates on the value of  Partnership  Preference
Units and, to a lesser degree, the Real Estate Joint Venture held through Belmar
Realty and the Fund's positions in interest rate swap  agreements,  movements in
interest  rates also affect the  performance  of the Fund.  Because  Partnership
Preference  Units are fixed rate  instruments,  an increase  in  interest  rates
generally  will cause a decline in their value and a decrease in interest  rates
generally will cause an increase in their value.  The Fund's interest rate swaps
generally  will increase in value when interest rates rise and decrease in value
when rates fall.

                                       13
<PAGE>

PERFORMANCE  OF THE FUND.(1) The Fund's total return for the year ended December
31, 2002, was -20.03%.  This return  reflects a decrease in the Fund's net asset
value per share from $87.37 to $69.87.  For comparison,  the S&P 500 had a total
return of -22.09% over the same period.(2) The combined impact on performance of
the Fund's investment  activities outside of the Portfolio was modestly negative
for the year ended December 31, 2002.  The  performance of the Fund trailed that
of the Portfolio by approximately 0.51% for the year.

The Fund  achieved a total  return of -9.90% for the fiscal year ended  December
31,  2001.  This  return  reflected a decrease in the Fund's net asset value per
share from $97.83 to $87.37  during the year,  and a  distribution  of $0.79 per
share at the  conclusion of the year.  For  comparison,  the S&P 500 had a total
return of -11.88% over the same period.(2) For the year ended December 31, 2001,
the  performance  of the Fund  trailed that of the  Portfolio  by  approximately
0.23%.

PERFORMANCE OF THE PORTFOLIO.  Like 2001, the past year was extremely  turbulent
for equities and for growth stocks in particular. While the Portfolio's absolute
performance for the year of -19.52% was disappointing, as in 2001, the Portfolio
outperformed the S&P 500, which had a return of -22.09%.(2)

The  Portfolio's  relative  outperformance  versus the S&P 500 was a function of
allocation  in the  outperforming  sectors  and  stock  selection  within  those
sectors.  The Portfolio's sector allocation remained  relatively  unaltered from
2001 in that the Portfolio  continued to focus on investments in the industrial,
consumer  staples  and  consumer  discretionary  sectors.   Investments  in  the
airfreight and  aerospace-defense  industries  were  particularly  beneficial to
performance,  as were  investments  in  household  products  and  food  and drug
retailing.  Financial  stocks,  while not  performing  well on the  whole,  also
contributed  modestly to relative  performance in 2002,  due to the  Portfolio's
stock selections within that sector.

As in 2001,  lack of earnings  visibility,  economic  uncertainty  and generally
unattractive   valuations  steered  the  Portfolio  away  from  the  information
technology and  telecommunications  sectors, the two worst performing sectors in
2002. While the Portfolio was  underweighted in these sectors versus the S&P 500
in 2002, its performance  was impacted by the weak  performance of some wireless
communications  stocks. The Portfolio's health care investments were also a drag
on   performance,   specifically   stocks   in   health   care   equipment   and
pharmaceuticals.  In addition,  an  underweighting  in the materials  sector and
stock  selections in metals,  mining,  paper and forest  products had a slightly
negative impact on performance.

Volatility, by some measures, was at record levels last year. Boston Management,
the Portfolio's investment adviser,  views portfolio  diversification as a means
to help dampen the  volatility  of  individual  stocks or the market as a whole.
Although the  Portfolio's  investment  risks are primarily  managed  through the
stock-by-stock  fundamental  research conducted by Boston Management's  research
staff, exposure to each segment of the economy is also closely monitored. During
2002, the Portfolio's  exposure to sector  concentrations in the health care and
financial sectors was reduced as compared to 2001.

The  volatility  in the  market  this  year  provided  the  Portfolio  with many
opportunities  to employ  tax-managed  strategies.  The market's  downward  bias
allowed the Portfolio to actively harvest tax losses.  Having tax losses on hand
increases  the  Portfolio's   management   flexibility,   allowing  it  to  sell
appreciated  stocks  without  generating net capital gains that would be taxable



(1)  Past performance is no guarantee of future results.  Investment  return and
     principal value will fluctuate so that Shares, when redeemed,  may be worth
     more or less than their original cost.

(2)  It is not possible to invest directly in an Index.

                                       14
<PAGE>

for  the  Portfolio's  investors.  This  loss-harvesting  strategy  also  helped
preserve shareholder value,  limiting the Portfolio's risk exposure to declining
stocks.

Looking  forward,  the  near-term  direction of the market or economy  cannot be
accurately  forecasted.  Historically,  success in the equity  market comes from
having a long-term  perspective and realistic  expectations for return given the
level of risk an investor is willing to tolerate. The longer-term success of the
Portfolio  will be  determined  by the ability of Boston  Management's  research
staff  to  deliver  superior  stock  selection  versus  the  benchmark.   Boston
Management's  analysts have been  observing  stabilization  in many areas of the
economy, so there is reason to be encouraged on the economic front,  despite the
lack of robust growth.

It does not appear  that the market will  anytime  soon  consistently  reach the
20%-plus annual returns seen in the late 1990s.  Expectations  for equity market
returns  should be more  modest.  The  Portfolio  believes  that its  investment
approach,  with  broad  diversification  and  active  risk  management  and  tax
management,  is  particularly  well suited to the more  difficult  equity market
anticipated for the years ahead.

PERFORMANCE  OF REAL ESTATE  INVESTMENTS.  For the year ended December 31, 2002,
the  Fund's  real  estate  operations  (conducted  through a Real  Estate  Joint
Venture) reflected  weakening  multifamily market fundamentals and the uncertain
outlook  for the U.S.  economy  as a whole.  Rental  income  decreased  to $34.8
million for the year from $35.3  million for 2001, a decrease of $0.5 million or
1%, while property  operating  expenses (before debt service) decreased to $17.9
million for the year from $18.6  million for 2001, a decrease of $0.7 million or
4%. The  decrease in rental  income was  principally  due to a reduction  in the
number of properties  held by the Fund's Real Estate Joint  Venture  during 2002
and increased rental  concessions.  The decrease in property  operating expenses
was  principally due to a reduction in the number of properties held during 2002
as well as lower utility costs,  administrative  expenses and maintenance costs,
offset in part by higher property insurance costs.  Throughout 2002, Real Estate
Joint Venture  operations  were  affected by  deteriorating  multifamily  market
fundamentals  in most  regions  with  falling  occupancy  levels and rising rent
concessions.  Given the continued  uncertain  outlook for the U.S.  economy as a
whole,  expectations  are that operating  results in 2003 will be modestly below
the levels of 2002.

As of December 31, 2002,  the estimated fair value of the real  properties  held
through the Fund's Real Estate  Joint  Venture was $203.9  million,  compared to
$229.1  million at the end of 2001,  a  decrease  of $25.2  million or 11%.  The
decrease  in  real  property  value  was due to a  reduction  in the  number  of
properties  held by the Fund's  Real  Estate  Joint  Venture  during  2002.  The
decrease  was also due, in part,  to modest  decreases  in property  values that
resulted  from  declines in  near-term  earnings  expectations  and the economic
downturn.  Despite  weaker  market  conditions,  declines  in asset  values  for
multifamily properties have generally been modest as decreases in capitalization
rates have largely offset declining income level expectations.

For the year ended  December 31, 2002,  the Fund's  investments  in  Partnership
Preference  Units  generally   benefited  from  declining   interest  rates  and
tightening   spreads  in  income-oriented   securities,   particularly  in  real
estate-related  securities.  Because the Fund sold Partnership  Preference Units
during 2002,  the estimated  fair value of the Fund's  investment in Partnership
Preference  Units decreased by 6% during the year from $587.6 million at the end
of 2001 to $550.4  million at  December  31,  2002.  The  decrease  in value was
offset, in part, by increases in the value of Partnership  Preference Units held
by the Fund at year-end.  Dividends earned from the Partnership Preference Units
for 2002 totaled $52.1 million compared to $57.0 million for 2001, a decrease of
$4.9 million or 9%. The decrease was due to fewer  Partnership  Preference Units
held in 2002.

PERFORMANCE  OF INTEREST RATE SWAPS.  For the year ended  December 31, 2002, the
fair value of the Fund's interest rate swap agreements declined by approximately

                                       15
<PAGE>

$2.8  million.  This  decline in value was the  result of a decline in  interest
rates during the year.  For  comparison,  the fair value of the Fund's  interest
rate swap agreements  declined by approximately  $8.8 million for the year ended
December 31, 2001.

LIQUIDITY AND CAPITAL RESOURCES.
--------------------------------

OUTSTANDING  BORROWINGS.  As of  December  31,  2002,  the Fund had  outstanding
borrowings of $596.5 million and unused loan commitments of $103.5 million under
the Credit Facility. The Credit Facility is used primarily to finance the Fund's
equity in its real  estate  investments  and will  continue  to be used for such
purpose in the future.  The Credit Facility will also provide for any short-term
liquidity  needs of the Fund.  In the future,  the Fund may increase the size of
the Credit  Facility  (subject to lender  consent) and the amount of outstanding
borrowings thereunder for these purposes.

As of December 31, 2002, Bel Apartments had outstanding borrowings consisting of
fixed-rate secured mortgage debt obligations of $162.5 million.

LIQUIDITY.  The Fund may  redeem  shares of the  Company  at any time.  Both the
Company and the Portfolio normally follow the practice of satisfying redemptions
by  distributing  securities  drawn  from the  Portfolio.  The  Company  and the
Portfolio may also satisfy  redemptions by distributing cash. As of December 31,
2002, the Portfolio had cash and short-term investments totaling $132.9 million.
The Portfolio participates in a $150 million multi-fund unsecured line of credit
agreement with a group of banks.  The Portfolio may temporarily  borrow from the
line of credit to satisfy  redemption  requests in cash or to settle  investment
transactions.  The Portfolio had no outstanding borrowings at December 31, 2002.
To ensure liquidity for investors in the Portfolio, the Portfolio may not invest
more than 15% of its net assets in illiquid  assets.  As of December  31,  2002,
illiquid assets  (consisting of restricted  securities not available for current
public sale) constituted 0.4% of the net assets of the Portfolio.

The  liquidity  of Belmar  Realty's  Real Estate  Joint  Venture  investment  is
extremely limited,  and relies  principally upon buy/sell  arrangements with the
Operating  Partners  that may be exercised  after a specified  period (up to ten
years) after the formation of the Real Estate Joint Venture. Transfers of Belmar
Realty's  interest in the Real Estate  Joint  Venture to parties  other than the
Operating Partner are restricted by terms of the operating management agreement,
buy/sell   arrangement   with  the  Operating   Partner,   and  lender   consent
requirements.  The  Partnership  Preference  Units held by Belmar Realty are not
registered under the Securities Act and are subject to substantial  restrictions
on transfer. As such, they are illiquid.

CRITICAL  ACCOUNTING  POLICIES.  The  Fund's  discussion  and  analysis  of  its
financial  condition  and  results  of  operations  are  based  upon the  Fund's
consolidated  financial statements,  which have been prepared in accordance with
accounting  principles  generally accepted in the United States of America.  The
preparation of these financial  statements  requires the Fund to make estimates,
judgments  and  assumptions   that  affect  the  reported   amounts  of  assets,
liabilities,  revenues and expenses.  The Fund bases these estimates,  judgments
and  assumptions on historical  experience and on other various factors that are
believed to be reasonable  under the  circumstances.  Actual  results may differ
from these estimates under different assumptions or conditions.

The Fund's  critical  accounting  policies  affect the Fund's  more  significant
estimates and assumptions used in valuing the Fund's real estate investments and
interest rate swap agreements.  Prices are not readily available for these types
of  investments  and  therefore  are  valued  on  an  ongoing  basis  by  Boston
Management, in its capacity as manager of Belmar Realty, in the case of the real
estate investments, and in its capacity as the Fund's investment adviser, in the
case of the interest rate swap agreements.

                                       16
<PAGE>

In  estimating  the  value of the  Fund's  investments  in real  estate,  Boston
Management takes into account relevant factors, data and information,  including
with respect to investments in Partnership  Preference  Units,  information from
dealers  and  similar  firms  with  knowledge  of such  issues and the prices of
comparable  preferred  equity  securities  and other  fixed or  adjustable  rate
instruments having similar investment  characteristics.  Real estate investments
other than  Partnership  Preference Units are generally stated at estimated fair
values based upon  independent  valuations  assuming an orderly  disposition  of
assets.  Detailed  investment  valuations  are  performed at least  annually and
reviewed  periodically.  Interim  valuations  reflect  results of operations and
distributions,  and may be  adjusted if there has been a  significant  change in
economic circumstances since the most recent independent  valuation.  Given that
such  valuations  include  many  assumptions,  including  but not  limited to an
orderly  disposition  of  assets,  values  may differ  from  amounts  ultimately
realized.  Boston Management,  as the Fund's investment adviser,  determines the
value of interest rate swaps, and, in doing so, may consider among other things,
dealer and counter-party quotes and pricing models.

The policies for valuing real estate investments involve  significant  judgments
that are based upon, without limitation, general economic conditions, the supply
and demand for  different  types of real  properties,  the  financial  health of
tenants,  the timing of lease  expirations  and  terminations,  fluctuations  in
rental rates and operating costs, exposure to adverse  environmental  conditions
and losses from  casualty  or  condemnation,  interest  rates,  availability  of
financing,  managerial  performance and government  rules and  regulations.  The
valuations  of  Partnership  Preference  Units  held  by the  Fund  through  its
investment in Belmar Realty fluctuate over time to reflect, among other factors,
changes  in  interest  rates,  changes  in  perceived  riskiness  of such  units
(including  call risk),  changes in the  perceived  riskiness of  comparable  or
similar  securities  trading in the public market and the  relationship  between
supply and demand for  comparable  or similar  securities  trading in the public
market.

The value of  interest  rate swaps may be subject  to wide  swings in  valuation
caused  by  changes  in  interest  rates  and in the  prices  of the  underlying
instrument. Interest rate swaps may be difficult to value since such instruments
may be considered illiquid.  Fluctuations in the value of Partnership Preference
Units  derived  from  changes in general  interest  rates can be  expected to be
offset in part (but not  entirely) by changes in the value of interest rate swap
agreements or other  interest rate hedges  entered into by the Fund with respect
to its borrowings.  Fluctuations in the value of real estate investments derived
from  other  factors   besides  general   interest  rate  movements   (including
issuer-specific and sector-specific credit concerns,  property-specific concerns
and changes in interest rate spread relationships) will not be offset by changes
in the value of interest  rate swap  agreements  or other  interest  rate hedges
entered into by the Fund.  Changes in the  valuation of  Partnership  Preference
Units not offset by changes in the valuation of interest rate swap agreements or
other  interest rate hedges entered into by the Fund and changes in the value of
other real estate  investments will cause the performance of the Fund to deviate
from the performance of the Portfolio.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
---------------------------------------------------------------------

(a)  QUANTITATIVE INFORMATION ABOUT MARKET RISK.
------------------------------------------------

INTEREST  RATE RISK.  The Fund's  primary  exposure to interest rate risk arises
from its real estate  investments  that are  financed by the Fund with  floating
rate  borrowings  under the Credit Facility and by fixed-rate  secured  mortgage
debt  obligations  of the  Real  Estate  Joint  Venture.  The  interest  rate on
borrowings under the Fund's Credit Facility is reset at regular  intervals based
on the CP Issuers'  cost of financing  plus a margin of  one-month  LIBOR plus a
premium.  The Fund utilizes  cancelable interest rate swap agreements to fix the
cost of its borrowings  under the Credit  Facility and to mitigate the impact of
interest  rate  changes on the Fund's  net asset  value.  Under the terms of the
interest  rate swap  agreements,  the Fund makes cash payments at fixed rates in
exchange for floating rate payments that fluctuate with one-month  LIBOR. In the
future, the Fund may use other interest rate hedging arrangements (such as caps,

                                       17
<PAGE>

floors and collars) to fix or limit  borrowing  costs.  The use of interest rate
hedging   arrangements  is  a  specialized   activity  that  may  be  considered
speculative and which can expose the Fund to significant loss.

The value of  Partnership  Preference  Units and, to a lesser  degree,  the Real
Estate Joint Venture mortgages is sensitive to interest rate risk.  Increases in
interest rates generally will have an adverse affect on the value of Partnership
Preference Units and the Real Estate Joint Venture.

The following table summarizes the contractual  maturities and  weighted-average
interest rates  associated  with the Fund's  significant  non-trading  financial
instruments.  The Fund has no market risk sensitive instruments held for trading
purposes.  This information  should be read in conjunction with Notes 7 and 8 to
the Fund's Consolidated Financial Statements incorporated by reference into Item
8.


                            Interest Rate Sensitivity
            Cost, Principal (Notional) Amount by Contractual Maturity
                    For the Twelve Months Ended December 31,

<TABLE>
<CAPTION>
                                                                                                    Estimated Fair
                             2003-2006           2007            Thereafter           Total             Value
                           --------------- ------------------ ------------------ ---------------- -------------------
<S>                        <C>                <C>                <C>               <C>               <C>
Rate sensitive
liabilities:
--------------------------
Long-term debt:
--------------------------
Fixed-rate mortgages                                             $162,461,900      $162,461,900      $186,000,000
Average interest rate                                                    8.50%             8.50%
--------------------------
Variable-rate Credit                          $596,500,000                         $596,500,000      $596,500,000
 Facility
Average interest rate                                 1.41%                                1.41%
-------------------------- --------------- ------------------ ------------------ ---------------- -------------------
Rate sensitive
 derivative financial
 instruments:
--------------------------
Pay fixed/
Receive variable
interest rate swap                            $602,017,000                         $602,017,000      $(47,057,312)
contracts
Average pay rate                                      8.96%                                8.96%
Average receive rate                                  1.41%                                1.41%
-------------------------- --------------- ------------------ ------------------ ---------------- -------------------
Rate sensitive
investments:
--------------------------
Fixed-rate Partnership
Preference Units:
--------------------------
Cabot Industrial
Properties, L.P., 8.625%
Series B Cumulative
Redeemable Preferred
Units, Callable 4/29/04,
Current Yield: 9.13%                                             $ 55,831,200      $ 55,831,200      $ 61,404,200
--------------------------
</TABLE>
                                       18
<PAGE>

                            Interest Rate Sensitivity
            Cost, Principal (Notional) Amount by Contractual Maturity
                    For the Twelve Months Ended December 31,

<TABLE>
<CAPTION>
                                                                                                    Estimated Fair
                             2003-2006           2007            Thereafter           Total             Value
                           --------------- ------------------ ------------------ ---------------- -------------------
<S>                        <C>                <C>                <C>                <C>              <C>
Camden Operating, L.P.,
8.50% Series B
Cumulative Redeemable
Perpetual Preferred
Units, Callable 2/23/04,
Current Yield: 8.28%                                             $58,869,144        $58,869,144      $70,062,720
--------------------------
CP Limited Partnership,
8.125% Series A
Cumulative Redeemable
Preferred Units,
Callable 4/20/03,
Current Yield: 9.27%                                             $60,844,550       $60,844,550       $65,726,700
--------------------------
Essex Portfolio, L.P.,
7.875% Series B
Cumulative Redeemable
Preferred Units,
Callable 2/6/03, Current
Yield: 9.17%                                                     $11,997,050       $11,997,050       $13,949,715
--------------------------
Essex Portfolio, L.P.,
9.30% Series D
Cumulative Redeemable
Preferred Units,
Callable 7/28/04,
Current Yield: 9.37%                                             $43,009,575       $43,009,575       $49,631,200
--------------------------
Essex Portfolio, L.P.,
9.125% Series C
Cumulative Redeemable
Preferred Units,
Callable 11/24/03,
Current Yield: 9.37%                                             $ 3,383,200       $ 3,383,200       $ 3,895,864
--------------------------
Kilroy Realty, L.P.,
8.075% Series A
Cumulative Redeemable
Preferred Units,
Callable 2/6/03, Current
Yield: 9.95%                                                     $26,693,820       $26,693,820       $29,365,223
--------------------------
Kilroy Realty, L.P.,
9.375% Series C
Cumulative Redeemable
Preferred Units,
Callable 11/24/03,
Current Yield: 10.15%                                            $30,266,640       $30,266,640       $32,328,730
--------------------------
</TABLE>

                                       19
<PAGE>

                            Interest Rate Sensitivity
            Cost, Principal (Notional) Amount by Contractual Maturity
                    For the Twelve Months Ended December 31,

<TABLE>
<CAPTION>
                                                                                                    Estimated Fair
                             2003-2006           2007            Thereafter           Total             Value
                           --------------- ------------------ ------------------ ---------------- -------------------
<S>                        <C>             <C>                   <C>               <C>               <C>
PSA Institutional
Partners, L.P., 9.50%
Series N Cumulative
Redeemable Perpetual
Preferred Units,
Callable 3/17/05,
Current Yield: 8.73%                                             $64,418,165       $64,418,165       $69,508,775
--------------------------
Prentiss Properties
Acquisition Partners,
L.P., 8.30% Series B
Cumulative Redeemable
Perpetual Preferred
Units, Callable 6/25/03,
Current Yield: 9.68%                                             $37,660,205       $37,660,205       $41,308,715
--------------------------
Regency Centers, L.P.,
8.125% Series A
Cumulative Redeemable
Preferred Units,
Callable 6/25/03,
Current Yield: 8.28%                                             $39,693,050       $39,693,050       $49,064,000
--------------------------
Regency Centers, L.P.,
9.125% Series D
Cumulative Redeemable
Preferred Units,
Callable 9/29/04,
Current Yield: 8.68%                                             $12,924,525       $12,924,525       $15,769,050
--------------------------
Sun Communities
Operating L.P., 8.875%
Series A Cumulative
Redeemable Perpetual
Preferred Units,
Callable 9/29/04,
Current Yield: 9.18%                                             $44,052,800       $44,052,800       $48,338,000
-------------------------- --------------- ------------------ ------------------ ---------------- -------------------
</TABLE>

(b)  QUALITATIVE INFORMATION ABOUT MARKET RISK.
---------------------------------------------------

RISKS  ASSOCIATED  WITH  EQUITY  INVESTING.  The  value of Fund  Shares  may not
increase and may decline.  The performance of the Fund fluctuates.  There can be
no assurance that the  performance of the Fund will match that of the U.S. stock
market or that of other equity funds.  In managing the Portfolio for  long-term,
after-tax returns,  the Portfolio's  investment adviser generally seeks to avoid
or minimize sales of securities with large accumulated capital gains,  including
contributed securities.  Such securities constitute a substantial portion of the
assets of the Portfolio.  Although the Portfolio may utilize certain  management
strategies in lieu of selling appreciated securities, the Portfolio's, and hence
the Fund's,  exposure to losses during stock market  declines may nonetheless be
higher  than  funds  that do not follow a general  policy of  avoiding  sales of
highly-appreciated securities.

                                       20
<PAGE>

RISKS OF INVESTING IN FOREIGN  SECURITIES.  The Portfolio  invests in securities
issued  by  foreign  companies  and the Fund may  acquire  foreign  investments.
Foreign  investments  involve  considerations  and possible  risks not typically
associated with investing in the United States. The value of foreign investments
to U.S.  investors  may be  adversely  affected  by changes in  currency  rates.
Foreign  brokerage  commissions,  custody fees and other costs of investing  are
generally higher than in the United States, and foreign  investments may be less
liquid,  more  volatile and subject to more  government  regulation  than in the
United States.  Foreign investments could be adversely affected by other factors
not  present  in  the  United  States,  including  expropriation,   confiscatory
taxation, lack of uniform accounting and auditing standards, armed conflict, and
potential difficulty in enforcing contractual obligations.

RISKS  OF  CERTAIN  INVESTMENT  TECHNIQUES.   In  managing  the  Portfolio,  the
investment  adviser may purchase or sell  derivative  instruments  (which derive
their  value  by  reference  to  other  securities,   indexes,   instruments  or
currencies) to hedge against  securities  price declines and currency  movements
and to enhance returns. Such transactions may include,  without limitation,  the
purchase and sale of futures  contracts on stocks and stock  indexes and options
thereon;  the purchase of put options and the sale of call options on securities
held;  equity  swaps;  forward  sales of stocks;  and the  purchase  and sale of
forward currency exchange contracts and currency futures. The Portfolio may make
short sales of securities provided that it holds an equal amount of the security
sold short (or securities  convertible  into or exchangeable for an equal amount
of the securities  sold short without  payment of additional  consideration)  or
cash or other liquid  securities in an amount equal to the current  market value
of the securities sold short. The Portfolio may also lend portfolio securities.

The use of these  investment  techniques is a  specialized  activity that may be
considered  speculative  and  which can  expose  the Fund and the  Portfolio  to
significant  risk of loss.  Successful  use of these  investment  techniques  is
subject to the ability and performance of the investment adviser. The Fund's and
the Portfolio's ability to achieve their investment  objectives may be adversely
affected by the use of these  techniques.  The writer of an option or a party to
an equity swap may incur losses that substantially exceed the payments,  if any,
received from a counterparty.  Forward sales,  swaps, caps, floors,  collars and
over-the-counter  options are private contracts in which there is also a risk of
loss in the event of a default on an obligation to pay by the counterparty. Such
instruments  may be  difficult  to value,  may be illiquid and may be subject to
wide  swings in  valuation  caused  by  changes  in the price of the  underlying
security,  index,  instrument  or  currency.  In  addition,  if the  Fund or the
Portfolio  has  insufficient  cash  to meet  margin,  collateral  or  settlement
requirements,   it  may  have  to  sell   assets  to  meet  such   requirements.
Alternatively, should the Fund or the Portfolio fail to meet these requirements,
the counterparty or broker may liquidate positions of the Fund or the Portfolio.
The Portfolio may also have to sell or deliver securities  holdings in the event
that it is not able to purchase securities on the open market to cover its short
positions or to close out or satisfy an exercise  notice with respect to options
positions it has sold.  In any of these cases,  such sales may be made at prices
or in circumstances that the investment adviser considers unfavorable.

The Portfolio's  ability to utilize  covered short sales,  certain equity swaps,
forward  sales,  futures and certain  equity collar  strategies  (combining  the
purchase  of a put  option  and the sale of a call  option)  as a  tax-efficient
management  technique  with  respect to holdings of  appreciated  securities  is
limited to circumstances  in which the hedging  transaction is closed out within
thirty days of the end of the taxable year of the Portfolio in which the hedging
transaction was initiated and the underlying  appreciated securities position is
held unhedged for at least the next sixty days after such hedging transaction is
closed.  There  can be no  assurance  that  counterparties  will at all times be
willing to enter into covered  short sales,  forward  sales of stocks,  interest
rate hedges, equity swaps and other derivative instrument  transactions on terms
satisfactory  to the  Fund or the  Portfolio.  The  Fund's  and the  Portfolio's
ability to enter into such  transactions  may also be limited by covenants under
the Fund's Credit  Facility,  the federal margin  regulations and other laws and
regulations.  The  Portfolio's  use  of  certain  investment  techniques  may be

                                       21
<PAGE>

constrained  because  the  Portfolio  is  a  diversified,   open-end  management
investment  company registered under the 1940 Act and because other investors in
the Portfolio are regulated investment companies under Subchapter M of the Code.
Moreover,  the Fund and the  Portfolio  are  subject to  restrictions  under the
federal  securities laws on their ability to enter into  transactions in respect
of  securities  that are subject to  restrictions  on  transfer  pursuant to the
Securities Act.

RISKS OF REAL ESTATE  INVESTMENTS.  The success of Belmar  Realty's  real estate
investments  depends in part on many factors  related to the real estate market.
These factors include,  without  limitation,  general economic  conditions,  the
supply and demand for different types of real  properties,  the financial health
of tenants,  the timing of lease expirations and  terminations,  fluctuations in
rental rates and operating costs, exposure to adverse  environmental  conditions
and losses  from  casualty or  condemnation,  fluctuations  in  interest  rates,
availability  of  financing,   managerial  performance,   government  rules  and
regulations, and acts of God (whether or not insured against).

The performance of the Real Estate Joint Venture is substantially  influenced by
the property management  capabilities of the Operating Partner and conditions in
the specific real estate  sub-markets in which the properties  owned by the Real
Estate  Joint  Venture are  located.  The  Operating  Partner will be subject to
substantial  conflicts of interest in structuring,  operating and winding up the
Real Estate Joint Venture. The Operating Partner will have an economic incentive
to maximize  the prices at which it sells  properties  to the Real Estate  Joint
Venture and to minimize the prices at which it acquires properties from the Real
Estate Joint Venture. The Operating Partner may devote greater attention or more
resources to managing its  wholly-owned  properties  than properties held by the
Real Estate Joint Venture.  Future  investment  opportunities  identified by the
Operating  Partner  will  more  likely be  pursued  independently,  rather  than
through, the Real Estate Joint Venture.  Financial  difficulties  encountered by
the Operating  Partner in its other businesses may interfere with the operations
of the Real Estate Joint Venture.

The  debt of the  Real  Estate  Joint  Venture  is  fixed-rate,  secured  by the
underlying  properties and with limited recourse to Belmar Realty.  However, the
availability  of financing and other  financial  conditions  can have a material
impact on  property  values  and  therefore  on the value of Real  Estate  Joint
Venture assets. There can be no assurance that Belmar Realty's ownership of real
estate investments will be an economic success.

The success of investments in Partnership  Preference Units depends upon factors
relating  to  the  issuing  partnerships  that  may  affect  such  partnerships'
profitability and their ability to make  distributions to holders of Partnership
Preference Units. Belmar Realty's interests in the Real Estate Joint Venture and
Partnership  Preference  Units are not registered  under the federal  securities
laws and are subject to restrictions on transfer. Due to their illiquidity, they
may be difficult to value and the ongoing value of the investments is uncertain.
Because   the    Partnership    Preference    Units   are   not   rated   by   a
nationally-recognized  rating  agency,  they may be subject to more  credit risk
than securities that are rated investment grade.

The ongoing value of Belmar Realty's investment in the Real Estate Joint Venture
will be  substantially  uncertain.  The  real  properties  held  through  Belmar
Realty's Real Estate Joint Venture  generally  will be stated at estimated  fair
value  based on  independent  valuations,  assuming  an orderly  disposition  of
assets.   Independent   valuations  include  property   appraisals  by  numerous
appraisers that are licensed in their respective  states and not affiliated with
Eaton  Vance  or  the  Real  Estate  Joint  Venture's  Operating  Partner.  Such
appraisals   are  performed  in  accordance   with  the  Uniform   Standards  of
Professional Appraisal Practice of the Appraisal Standards Board, as well as the
Code of Professional Ethics and Standards of Professional  Appraisal Practice of
the Appraisal  Institute (and other  relevant  standards).  Detailed  investment
evaluations  will be  performed at least  annually  and  reviewed  periodically.
Interim valuations will reflect results of operations and distributions, and may
be adjusted to reflect significant  changes in economic  circumstances since the
most recent  independent  valuation.  Given that such  valuations  include  many

                                       22
<PAGE>

assumptions,  including,  but not limited to, an orderly  disposition of assets,
values may differ from amounts ultimately realized.

Investments  in  Partnership  Preference  Units  will  be  valued  primarily  by
referencing market trading prices for comparable  preferred equity securities or
other fixed-rate  instruments  having similar  investment  characteristics.  The
valuations of Partnership Preference Units fluctuate over time to reflect, among
other factors,  changes in interest rates, changes in the perceived riskiness of
such  units  (including  call  risk),  changes  in the  perceived  riskiness  of
comparable  or  similar   securities  trading  in  the  public  market  and  the
relationship  between  supply and demand for  comparable  or similar  securities
trading in the public  market.  Increases in interest rates and increases in the
perceived  riskiness  of such units or  comparable  or similar  securities  will
adversely affect the valuation of the Partnership Preference Units. Fluctuations
in the value of  Partnership  Preference  Units  derived from changes in general
interest  rates can be  expected  to be offset  in part  (but not  entirely)  by
changes in the value of interest  rate swap  agreements  or other  interest rate
hedges entered into by the Fund with respect to its borrowings  under the Credit
Facility.

Fluctuations in the value of Partnership  Preference Units and Real Estate Joint
Venture equity that are derived from other factors besides general interest rate
movements  (including   issuer-specific  and  sector-specific  credit  concerns,
property-specific  concerns and changes in interest  rate spread  relationships)
will not be offset by changes in the value of interest  rate swap  agreements or
other  interest  rate hedges  entered into by the Fund.  Changes in the value of
real estate  investments not offset by changes in the valuation of interest rate
swap  agreements  or other  interest  rate hedges  entered into by the Fund will
cause  the  performance  of the  Fund to  deviate  from the  performance  of the
Portfolio.  Over time,  the  performance  of the Fund can be expected to be more
volatile than the performance of the Portfolio.

RISKS OF LEVERAGE.  Although intended to add to returns,  the borrowing of funds
to  purchase  real  estate  investments  exposes  the Fund to the risk  that the
returns  achieved on the real estate  investments will be lower than the cost of
borrowing  to purchase  such assets and that the  leveraging  of the Fund to buy
such assets will therefore diminish the returns achieved by the Fund as a whole.
In  addition,  there  is a risk  that  the  availability  of  financing  will be
interrupted  at some  future  time,  requiring  the Fund to sell assets to repay
outstanding  borrowings or a portion  thereof.  It may be necessary to make such
sales at unfavorable  prices.  The Fund's  obligations under the Credit Facility
are secured by a pledge of its assets. In the event of default, the lender could
elect to sell assets of the Fund without regard to  consequences  of such action
for  Shareholders.  The rights of the lender to receive  payments of interest on
and repayments of principal of borrowings  under the Credit  Facility are senior
to the rights of the Shareholders.

Under  the  terms of the  Credit  Facility,  the Fund is not  permitted  to make
distributions  of  cash  or  securities  while  there  is an  event  of  default
outstanding under the Credit Facility.  During such periods,  the Fund would not
be able to honor redemption  requests or make cash  distributions.  In addition,
the rights of lenders  under the  mortgages  used to finance  Real Estate  Joint
Venture properties are senior to Belmar Realty's right to receive  distributions
from the Real Estate Joint Venture.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
----------------------------------------------------

The Fund's financial  statements for the year ended December 31, 2002,  together
with the auditors' report thereon,  appearing on pages 31 through 93 hereof, are
incorporated herein by reference.  The Fund's financial statements and auditors'
report thereon for the fiscal year ended  December 31, 2001,  appearing on pages
19 through 49 of the Fund's  Form 10-K filed with the  Securities  and  Exchange
Commission on March 27, 2002, are also incorporated herein by reference.

                                       23
<PAGE>

The following is a summary of unaudited  quarterly  results of operations of the
Fund for 2002 and 2001.
<TABLE>
<CAPTION>
                                                                                        2002
                                                            -------------------------------------------------------------
                                                                  First        Second          Third         Fourth
                                                                Quarter        Quarter        Quarter        Quarter
                                                            -------------------------------------------------------------
<S>                                                           <C>          <C>             <C>             <C>
Investment income                                             $25,147,757    $25,342,553     $24,358,376   $24,966,149
Minority interest in net income of controlled subsidiaries      $(114,392)      $(97,540)      $(155,365)     $(56,757)
Net investment income                                            $136,091       $892,658        $292,119      $694,341
Net increase (decrease) in net assets from operations         $23,339,084  $(238,084,568)  $(290,536,145)  $88,923,757

Per share data:(1)
Investment income                                                   $1.04          $1.06          $ 1.03         $1.07
Net investment income                                               $0.01          $0.04          $ 0.01         $0.03
Net increase (decrease) in net assets from operations               $0.97         $(9.97)        $(12.34)        $3.81


                                                                                              2001
                                                                   ---------------------------------------------------------------
                                                                        First          Second          Third          Fourth
                                                                       Quarter(2)     Quarter(2)     Quarter(2)      Quarter(2)
                                                                   ---------------------------------------------------------------
Investment income                                                      $26,249,128    $16,312,734     $25,930,738    $34,997,125
Minority interest in net (income) loss of controlled subsidiaries        $(243,400)     $(113,488)        $61,619        $74,897
Net investment income (loss)                                             $(283,351)   $(9,508,567)     $2,056,093     $8,168,810
Net increase (decrease) in net assets from operations                $(266,844,341)  $134,700,054   $(352,657,924)  $244,686,036

Per share data:(1)
Investment income                                                            $1.05          $0.66          $ 1.06          $1.44
Net investment income (loss)                                                $(0.01)        $(0.39)         $ 0.08          $0.34
Net increase (decrease) in net assets from operations                      $(10.66)         $5.46         $(14.37)        $10.09
</TABLE>

(1)  Based on average Shares outstanding.
(2)  Certain  amounts  have been  reclassified  to conform with the current year
     presentation.


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURES.
--------------------------------------------------------------------------------

There have been no changes in, or disagreements with, accountants on accounting
and financial disclosures.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS.
-------------------------------------------

The Fund is  managed  by Eaton  Vance.  Thomas E.  Faust  Jr.  and  Michelle  A.
Alexander  serve as the  Fund's  Chief  Executive  Officer  and Chief  Financial
Officer,   respectively.   Information  about  Mr.  Faust  appears  below  under
"Directors  and  Officers of Eaton  Vance,  Inc." Ms.  Alexander  (33) is a Vice
President of Eaton Vance and Boston Management. She also serves as an officer of
various investment companies managed by Eaton Vance or Boston Management and has
been an  employee  of Eaton  Vance  since  1997.  As members of the Eaton  Vance
organization,  Mr. Faust and Ms. Alexander receive no compensation from the Fund
for serving as Fund officers.

Boston  Management  is  investment  adviser  to the Fund and the  Portfolio  and
manager of Belmar Realty. The portfolio manager of the Fund and the Portfolio is
Duncan W. Richardson,  Senior Vice President and Chief Equity Investment Officer
of Eaton Vance and Boston  Management.  Mr.  Richardson has been employed by the
Eaton Vance  organization  since 1987 and has served as portfolio manager of the
Fund since its inception and of the  Portfolio and its  predecessor  since 1990.

24
<PAGE>

Boston  Management  has an  experienced  team  of  analysts  that  provides  Mr.
Richardson with research and  recommendations on investments,  including William
R. Cross who is  primarily  responsible  for  providing  research  and  analysis
relating to the Fund's real estate  investments  held through Belmar  Realty.  A
majority of Mr.  Richardson's  time is spent  managing the Portfolio and related
entities.

As  disclosed  under "The Eaton Vance  Organization"  in Item 1, Eaton Vance and
Boston Management are indirect wholly-owned  subsidiaries of EVC. The non-voting
common  stock of EVC is listed and traded on the NYSE.  All shares of the voting
common stock of EVC are held in a voting trust, the voting trustees of which are
senior officers of the Eaton Vance  organization.  Eaton Vance,  Inc.  ("EV"), a
wholly-owned subsidiary of EVC, is the sole trustee of Eaton Vance and of Boston
Management,  each of which is a Massachusetts  business trust.  The names of the
executive  officers  and  the  directors  of EV and  their  ages  and  principal
occupations are set forth below.

DIRECTORS AND EXECUTIVE OFFICERS OF EATON VANCE, INC.
-----------------------------------------------------

James B. Hawkes (61) is Chairman, President and Chief Executive Officer of Eaton
Vance,  Boston  Management,  EVC and EV and a Director of EVC and EV. He is also
Vice  President  and  Director of EV  Distributors.  He is also a Trustee and an
officer  of  various  investment  companies  managed  by Eaton  Vance or  Boston
Management and has been employed by Eaton Vance since 1970.

Thomas E.  Faust Jr.  (44) is  Executive  Vice  President  and Chief  Investment
Officer of Eaton Vance, Boston Management, EVC and EV, and a Director of EVC. He
is also an officer of various  investment  companies  managed by Eaton  Vance or
Boston Management and has been employed by Eaton Vance since 1985.

Alan R. Dynner (62) is Vice  President,  Chief Legal  Officer and  Secretary  of
Eaton  Vance,  Boston  Management,  EVC, EV  Distributors  and EV. He is also an
officer  of  various  investment  companies  managed  by Eaton  Vance or  Boston
Management and has been employed by Eaton Vance since 1996.

William M. Steul (60) is Vice  President  and Chief  Financial  Officer of Eaton
Vance,  Boston  Management,  EVC  and  EV.  He  is  also  Vice  President  of EV
Distributors. He has been employed by Eaton Vance since 1994.

ITEM 11.  EXECUTIVE COMPENSATION.
---------------------------------

As noted in Item 10, the officers of the Fund receive no  compensation  from the
Fund. The Fund's manager,  Eaton Vance, and its affiliates receive  compensation
from the Fund for  services  provided  to the  Fund.  Set  forth  below  are the
investment  advisory and  administrative  fees,  servicing fees and distribution
fees paid or payable by, or allocable to, the Fund and the management  fees paid
or payable by Belmar  Realty for the fiscal  years ended  December  31, 2002 and
2001.  Information  about  advisory  and  management  fees  is  provided  below.
Information about distribution and servicing fees appears in Item 13.

                                       25
<PAGE>

--------------------------------------------------------------------------------
                                                   Year Ended       Year Ended
                                                   December 31,     December 31,
                                                       2002             2001
--------------------------------------------------------------------------------
Advisory and Administrative Fees Paid or
 Payable by the Fund*                               $1,246,862      $1,894,261
--------------------------------------------------------------------------------
Management Fees Paid or Payable by Belmar Realty    $4,553,263      $4,681,124
--------------------------------------------------------------------------------
Fund's Allocable Portion of the Portfolio's
 Advisory Fees**                                    $8,125,471      $9,584,860
--------------------------------------------------------------------------------
Servicing Fees Paid or Payable by the Fund          $1,825,665      $2,173,560
--------------------------------------------------------------------------------
Fund's Allocable Portion of the Company's
 Servicing Fees                                     $2,795,415      $3,315,172
--------------------------------------------------------------------------------
Distribution Fees Paid or Payable by the Fund*      $1,847,235      $2,189,875
--------------------------------------------------------------------------------

*    Boston  Management  has  agreed  to waive  the  portion  of the  investment
     advisory and administrative fee payable by the Fund to the extent that such
     fee, together with the distribution fee payable by the Fund,  exceeds 0.60%
     of the average  daily gross  assets of the Fund  reduced by that portion of
     the advisory or management  fees payable by the Portfolio and Belmar Realty
     that  is  attributable  to the  value  of the  Fund's  direct  or  indirect
     investments  therein.  The  amount  shown  reflects  this  waiver by Boston
     Management.

**   For its fiscal years ended  December 31, 2002 and 2001,  advisory fees paid
     or  payable  by  the  Portfolio   totaled   $71,564,552  and   $76,812,367,
     respectively.  For 2002,  the Company's  allocable  portion of that fee was
     $41,180,870,  of which  $8,125,471 was allocable to the Fund. For 2001, the
     Company's  allocable  portion  of  that  fee  was  $42,233,575,   of  which
     $9,584,860 was allocable to the Fund.

THE FUND'S INVESTMENT  ADVISORY AND  ADMINISTRATIVE  FEE. Under the terms of the
Fund's investment  advisory and administrative  agreement,  Boston Management is
entitled to receive, subject to the fee waiver described in the next sentence, a
monthly advisory and  administrative fee at the rate of 1/20th of 1% (equivalent
to 0.60%  annually) of the average daily gross assets of the Fund reduced by the
portion of the monthly advisory or management fees for such month payable by the
Portfolio  and Belmar  Realty  that is  attributable  to the value of the Fund's
direct or indirect  investments  therein (but no such reduction shall be made to
the  extent  that any such fee or  portion  thereof  has been  waived  by Boston
Management).  Boston  Management has agreed to waive that portion of the monthly
investment  advisory  and  administrative  fee payable by the Fund to the extent
that such fee, together with the distribution fees payable by the Fund (see Item
13 below),  exceeds  1/20th of 1% of the average  daily gross assets of the Fund
reduced by the portion of the monthly advisory or management fees for such month
payable by the Portfolio and Belmar Realty that is  attributable to the value of
the Fund's direct or indirect  investments  therein (but no such reduction shall
be made to the extent  that any such fee or portion  thereof  has been waived by
Boston  Management).  The term "gross assets of the Fund" means the value of all
Fund assets (including the Fund's interest in the Company and the Fund's ratable
share of the assets of its controlled  subsidiaries),  without  reduction by any
liabilities.

BELMAR REALTY'S  MANAGEMENT  FEE. Under the terms of Belmar Realty's  management
agreement  with  Boston  Management,   Boston  Management   receives  a  monthly
management fee at the rate of 1/20th of 1% (equivalent to 0.60% annually) of the
average  daily gross assets of Belmar  Realty.  The term "gross assets of Belmar
Realty"  means  the  current  value of all  assets  of  Belmar  Realty,  without
reduction by any liabilities.

                                       26
<PAGE>

THE  PORTFOLIO'S  INVESTMENT  ADVISORY FEE.  Under the terms of the  Portfolio's
investment advisory agreement with Boston Management, Boston Management receives
a monthly advisory fee as follows:

                                                 Annual Fee Rate
   Average Daily Net Assets for the Month        (for each level)
--------------------------------------------------------------------
   Up to $500 million                                 0.6250%
   $500 million but less than $1 billion              0.5625%
   $1 billion but less than $1.5 billion              0.5000%
   $1.5 billion but less than $7 billion              0.4375%
   $7 billion but less than $10 billion               0.4250%
   $10 billion but less than $15 billion              0.4125%
   $15 billion and over                               0.4000%

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
-------------------------------------------------------------------------

SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL OWNERS. To the knowledge of the Fund,
no person beneficially owns more than five percent of the Shares of the Fund.

SECURITY OWNERSHIP OF MANAGEMENT. As of March 14, 2003, Eaton Vance, the manager
of the Fund,  beneficially  owned 1,088.383 Shares of the Fund. The Shares owned
by Eaton Vance represent less than 1% of the  outstanding  Shares of the Fund as
of March 14, 2003.  None of the other entities or individuals  named in response
to Item 10 above beneficially owned Shares of the Fund as of such date.

CHANGES IN CONTROL.  Not applicable.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
---------------------------------------------------------

See the information set forth under Item 11 above.

SERVICING FEES PAID BY THE COMPANY.  Pursuant to a servicing  agreement  between
the  Company  and  EV  Distributors,  the  Company  pays a  servicing  fee to EV
Distributors  for  providing  certain  services  and  information  to direct and
indirect  investors in the  Company.  The  servicing  fee is paid on a quarterly
basis,  at an annual rate of 0.15% of the  Company's  average  daily net assets.
With  respect to  investors  in the  Company  and  Shareholders  of the Fund who
subscribed   through  a  subagent,   EV  Distributors  has  assigned   servicing
responsibilities  and fees to the applicable  subagent,  beginning twelve months
after  the  issuance  of  shares  of the  Company  or Shares of the Fund to such
persons.  The Fund will assume its allocated  share of the  Company's  servicing
fee.  The  servicing  fee  payable in respect  of the Fund's  investment  in the
Company is credited toward the Fund servicing fee described below. See the table
in Item 11 for the  servicing  fees  attributable  to the Fund during the fiscal
years ended December 31, 2002 and 2001.

SERVICING FEES PAID BY THE FUND.  Pursuant to a servicing  agreement between the
Fund and EV  Distributors,  the Fund pays a servicing fee to EV Distributors for
providing  certain services and information to the Shareholders of the Fund. The
servicing  fee is paid on a  quarterly  basis at an annual  rate of 0.25% of the
Fund's  average daily net assets.  With respect to  Shareholders  who subscribed
through a subagent, EV Distributors has assigned servicing  responsibilities and
fees to the applicable  subagent,  beginning twelve months after the issuance of
Shares of the Fund to such persons.  The Fund's allocated share of the servicing
fee paid by the Company is credited  toward the Fund's  servicing  fee  payment,
thereby  reducing the amount of the servicing  fee payable by the Fund.  See the
table in Item 11 for the  servicing  fees paid or payable by the Fund during the
fiscal years ended December 31, 2002 and 2001.

                                       27
<PAGE>

DISTRIBUTION  FEES  PAID TO EV  DISTRIBUTORS.  Under  the  terms  of the  Fund's
placement  agreement with EV  Distributors,  EV Distributors  receives a monthly
distribution  fee at an annual rate of 0.10% of the average  daily net assets of
the Fund as compensation  for its services as placement  agent. The distribution
fee accrued from the Fund's  initial  closing and will  continue for a period of
ten years  (subject to the annual  approval of EV). See the table in Item 11 for
the distribution  fees paid or payable by the Fund during the fiscal years ended
December 31, 2002 and 2001.

REDEMPTION FEES.  Shares of the Fund redeemed within three years of issuance are
generally  subject to a redemption fee equal to 1% of the net asset value of the
Shares redeemed. The redemption fee is payable to EV Distributors in cash by the
Fund on behalf of the redeeming  Shareholder.  No  redemption  fee is imposed on
Shares of the Fund held for at least three years,  Shares  acquired  through the
reinvestment of Fund distributions,  Shares redeemed in connection with a tender
offer or other extraordinary corporate event involving securities contributed by
the redeeming Shareholder,  or Shares redeemed following the death of all of the
initial  owners  of  the  Shares  redeemed.  In  addition,  no  fee  applies  to
redemptions  made  pursuant to a systematic  redemption  plan  established  by a
Shareholder  with the Fund.  During the fiscal year ended  December 31, 2002, EV
Distributors  received  redemption  fees of $293,328  from the Fund on behalf of
redeeming Shareholders.

ITEM 14.  CONTROLS AND PROCEDURES.
----------------------------------

Within the 90-day period prior to the filing of this report, Eaton Vance and the
Fund's Chief  Executive  Officer and Chief  Financial  Officer have conducted an
evaluation of the effectiveness of disclosure  controls and procedures  pursuant
to Rule 13a-14 under the Securities  Exchange Act of 1934, as amended.  Based on
that  evaluation,  the  Chief  Executive  Officer  and Chief  Financial  Officer
concluded that the disclosure  controls and procedures are, to the best of their
knowledge,  effective in ensuring that all material  information  required to be
filed in this  annual  report has been made  known to them in a timely  fashion.
There have been no significant changes in internal controls,  or in factors that
could significantly  affect internal controls,  subsequent to the date the Chief
Executive Officer and Chief Financial Officer completed their evaluation.

The complete and entire management, control and operation of the Fund are vested
in the Fund's manager, Eaton Vance. The Fund's organizational structure does not
provide for a board of directors or a board audit committee. As such, the Fund's
Chief  Executive  Officer  and Chief  Financial  Officer  intend  to report  any
significant  deficiency  in the design or operation of internal  controls  which
could  adversely  affect the Fund's  ability to record,  process,  summarize and
report  financial  data, and any fraud,  whether or not material,  that involves
management or other employees who have a significant role in the Fund's internal
controls, to Eaton Vance.

                                     PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K.
-----------------------------------------------------------------

(a)  The  following  is a  list  of all  financial  statements  incorporated  by
     reference into this report from the Fund's Form 10-K filed March 27, 2002:

(1)  (i)  Consolidated Portfolio of Investments as of December 31, 2001

          Consolidated  Statement of Assets and  Liabilities  as of December 31,
          2001

          Consolidated  Statement  of  Operations  for  the  fiscal  year  ended
          December 31, 2001

                                       28
<PAGE>

          Consolidated  Statements  of Changes in Net Assets for the fiscal year
          ended  December  31, 2001 and the period  from the start of  business,
          March 17, 2000 to December 31, 2000

          Consolidated  Statement  of Cash  Flows  for  the  fiscal  year  ended
          December 31, 2001

          Financial Highlights for the fiscal year ended December 31, 2001

          Notes to Consolidated Financial Statements

          Independent Auditors' Report dated March 1, 2002

          Portfolio  of  Investments  of  Tax-Managed  Growth  Portfolio  as  of
          December 31, 2001

          Statement of Assets and Liabilities of Tax-Managed Growth Portfolio as
          of December 31, 2001

          Statement of Operations of Tax-Managed Growth Portfolio for the fiscal
          year ended December 31, 2001

          Statements of Changes in Net Assets of  Tax-Managed  Growth  Portfolio
          for the fiscal years ended December 31, 2001 and December 31, 2000

          Supplementary  Data of  Tax-Managed  Growth  Portfolio  for the fiscal
          years ended December 31, 2001,  December 31, 2000,  December 31, 1999,
          the two month period ended  December 31, 1998,  the fiscal years ended
          October 31, 1998 and October 31, 1997

          Notes to Financial Statements

          Independent Auditors' Report dated February 15, 2002

     (ii) The following is a list of all financial statements filed as a part of
          this report:

          Consolidated Portfolio of Investments as of December 31, 2002

          Consolidated  Statement of Assets and  Liabilities  as of December 31,
          2002

          Consolidated  Statement  of  Operations  for  the  fiscal  year  ended
          December 31, 2002

          Consolidated  Statements of Changes in Net Assets for the fiscal years
          ended December 31, 2002 and December 31, 2001

          Consolidated  Statement  of Cash  Flows  for  the  fiscal  year  ended
          December 31, 2002

          Financial Highlights for the fiscal year ended December 31, 2002

          Notes to Consolidated Financial Statements

          Independent Auditors' Report dated February 28, 2003

          Portfolio  of  Investments  of  Tax-Managed  Growth  Portfolio  as  of
          December 31, 2002

                                       29
<PAGE>

          Statement of Assets and Liabilities of Tax-Managed Growth Portfolio as
          of December 31, 2002

          Statement of Operations of Tax-Managed Growth Portfolio for the fiscal
          year ended December 31, 2002

          Statements of Changes in Net Assets of  Tax-Managed  Growth  Portfolio
          for the fiscal years ended December 31, 2002 and December 31, 2001

          Supplementary  Data of  Tax-Managed  Growth  Portfolio  for the fiscal
          years ended December 31, 2002,  December 31, 2001,  December 31, 2000,
          December 31, 1999,  the two month period ended  December 31, 1998, and
          the fiscal year ended October 31, 1998

          Notes to Financial Statements

          Independent Auditors' Report dated February14, 2003

(b)  Reports on Form 8-K:

          None.

(c)  A list of the exhibits filed as a part of this Form 10-K is included in the
     Exhibit Index appearing on page 97 hereof.

                                       30
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

CONSOLIDATED PORTFOLIO OF INVESTMENTS

INVESTMENT IN BELVEDERE CAPITAL

FUND COMPANY LLC -- 68.6%



SECURITY                                    SHARES        VALUE

---------------------------------------------------------------------
Investment in Belvedere Capital Fund
Company LLC (Belvedere Capital)           12,878,595   $1,645,261,953
---------------------------------------------------------------------
Total Investment in Belvedere Capital
   (identified cost, $2,374,972,625)                   $1,645,261,953
---------------------------------------------------------------------


PARTNERSHIP PREFERENCE UNITS -- 22.9%



SECURITY                                    UNITS          VALUE

---------------------------------------------------------------------
Cabot Industrial Properties, L.P.
(Delaware Limited Partnership affiliate
of Cabot Industrial Trust), 8.625%
Series B Cumulative Redeemable Preferred
Units, Callable from 4/29/04+(1)           1,300,000   $   61,404,200
Camden Operating, L.P. (Delaware Limited
Partnership affiliate of Camden Property
Trust), 8.50% Series B Cumulative
Redeemable Perpetual Preferred Units,
Callable from 2/23/04+(1)                  2,730,000       70,062,720
CP Limited Partnership (Maryland Limited
Partnership affiliate of Chateau
Communities, Inc.), 8.125% Series A
Cumulative Redeemable Preferred Units,
Callable from 4/20/03+(1)                  1,500,000       65,726,700
Essex Portfolio, L.P. (California
Limited Partnership affiliate of Essex
Property Trust, Inc.), 7.875% Series B
Cumulative Redeemable Preferred Units,
Callable from 2/6/03+(1)                     325,000       13,949,715
Essex Portfolio, L.P. (California
Limited Partnership affiliate of Essex
Property Trust, Inc.), 9.30% Series D
Cumulative Redeemable Preferred Units,
Callable from 7/28/04+(1)                  2,000,000       49,631,200
Essex Portfolio, L.P. (California
Limited Partnership affiliate of Essex
Property Trust, Inc.), 9.125% Series C
Cumulative Redeemable Preferred Units,
Callable from 11/24/03+(1)                    80,000        3,895,864
Kilroy Realty, L.P. (Delaware Limited
Partnership affiliate of Kilroy Realty
Corporation), 8.075% Series A Cumulative
Redeemable Preferred Units, Callable
from 2/6/03+(1)                              724,000       29,365,223

                                       31
<PAGE>

SECURITY                                     UNITS          VALUE

---------------------------------------------------------------------
Kilroy Realty, L.P. (Delaware Limited
Partnership affiliate of Kilroy Realty
Corporation), 9.375% Series C Cumulative
Redeemable Preferred Units, Callable
from 11/24/03+(1)                            700,000       32,328,730
PSA Institutional Partners, L.P.
(California Limited Partnership
affiliate of Public Storage, Inc.),
9.50% Series N Cumulative Redeemable
Perpetual Preferred Units, Callable
from 3/17/05+(1)                           2,555,000       69,508,775
Prentiss Properties Acquisition
Partners, L.P. (Delaware Limited
Partnership affiliate of Prentiss
Properties Trust), 8.30% Series B
Cumulative Redeemable Perpetual
Preferred Units, Callable
from 6/25/03+(1)                             963,536       41,308,715
Regency Centers, L.P. (Delaware Limited
Partnership affiliate of Regency Realty
Corporation), 8.125% Series A Cumulative
Redeemable Preferred Units, Callable
from 6/25/03+(1)                           1,000,000       49,064,000
Regency Centers, L.P. (Delaware Limited
Partnership affiliate of Regency Realty
Corporation), 9.125% Series D Cumulative
Redeemable Preferred Units, Callable
from 9/29/04+(1)                             150,000       15,769,050
Sun Communities Operating L.P. (Michigan
Limited Partnership affiliate of Sun
Communities, Inc.), 8.875% Series A
Cumulative Redeemable Perpetual
Preferred Units, Callable
from 9/29/04+(1)                           2,000,000       48,338,000
---------------------------------------------------------------------
Total Partnership Preference Units
   (identified cost, $489,643,924)                     $  550,352,892
---------------------------------------------------------------------

                                       32
<PAGE>


OTHER REAL ESTATE INVESTMENTS -- 8.5%



DESCRIPTION                                            VALUE

---------------------------------------------------------------------
Rental Property(1)(2)                                  $  203,940,755
---------------------------------------------------------------------
Total Other Real Estate Investments
   (identified cost, $228,372,139)                     $  203,940,755
---------------------------------------------------------------------
Total Investments -- 100.0%
   (identified cost, $3,092,988,688)                   $2,399,555,600
---------------------------------------------------------------------


+    Security  exempt from  registration  under the  Securities  Act of 1933. At
     December 31, 2002, the value of these securities totaled  $550,352,892,  or
     34.0% of net assets.
(1)  Investment valued at estimated fair value using methods  determined in good
     faith by or at the direction of the Manager of Belmar Realty Corporation.
(2)  Rental property represents  nineteen  multi-family  residential  properties
     located in eight states. None of the individual  properties  represent more
     than 5% of net assets.

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       33
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF ASSETS
AND LIABILITIES



AS OF DECEMBER 31, 2002

Assets
--------------------------------------------------------
Total investments, at value (identified
   cost, $3,092,988,688)                  $2,399,555,600
Cash                                           6,149,096
Escrow deposits -- restricted                  4,583,810
Dividends and interest receivable              2,456,370
Receivable for securities sold                29,285,540
Other assets                                   3,608,880
--------------------------------------------------------
TOTAL ASSETS                              $2,445,639,296
--------------------------------------------------------

Liabilities
--------------------------------------------------------
Loan payable -- Credit Facility           $  596,500,000
Mortgages payable                            162,461,900
Open interest rate swap contracts, at
   value                                      47,057,312
Swap interest payable                          1,696,469
Notes payable to minority shareholder            565,972
Security deposits                                776,772
Accrued expenses:
   Interest expense                            2,487,473
   Property taxes                              3,143,437
   Other expenses and liabilities              1,601,191
Minority interests in controlled
   subsidiaries                                9,118,965
--------------------------------------------------------
TOTAL LIABILITIES                         $  825,409,491
--------------------------------------------------------
NET ASSETS FOR 23,190,678 FUND SHARES
   OUTSTANDING                            $1,620,229,805
--------------------------------------------------------
Shareholders' Capital
--------------------------------------------------------
SHAREHOLDERS' CAPITAL                     $1,620,229,805
--------------------------------------------------------

Net Asset Value and Redemption
Price Per Share
--------------------------------------------------------
($1,620,229,805  DIVIDED BY 23,190,678
   FUND SHARES OUTSTANDING)               $        69.87
--------------------------------------------------------

                                       34
<PAGE>


CONSOLIDATED STATEMENT OF OPERATIONS



FOR THE YEAR ENDED
DECEMBER 31, 2002

Investment Income
-------------------------------------------------------
Dividends allocated from Belvedere
   Capital (net of foreign taxes,
   $230,203)                               $ 23,452,669
 Interest allocated from Belvedere
   Capital                                      677,946
Expenses allocated from Belvedere
   Capital                                  (11,284,744)
-------------------------------------------------------
Net investment income allocated from
   Belvedere Capital                      $  12,845,871
Dividends from Partnership Preference
   Units                                     52,071,790
Rental income                                34,819,869
Interest                                         77,305
-------------------------------------------------------
TOTAL INVESTMENT INCOME                   $  99,814,835
-------------------------------------------------------
Expenses
-------------------------------------------------------
Investment advisory and administrative
   fees                                   $   7,647,360
Property management fees                      1,375,915
Distribution and servicing fees               3,672,900
Interest expense on Credit Facility          13,623,896
Interest expense on swap contracts           40,731,435
Interest expense on mortgages                14,882,677
Property and maintenance expenses            11,756,824
Property taxes and insurance                  4,734,164
Miscellaneous                                   797,636
-------------------------------------------------------
TOTAL EXPENSES                            $  99,222,807
-------------------------------------------------------
Deduct --
   Reduction of investment advisory and
      administrative fees                 $   1,847,235
-------------------------------------------------------
NET EXPENSES                              $  97,375,572
-------------------------------------------------------
Net investment income before minority
   interest in net income of controlled
   subsidiary                             $   2,439,263
Minority interest in net income of
   controlled subsidiary                       (424,054)
-------------------------------------------------------

NET INVESTMENT INCOME                     $   2,015,209
-------------------------------------------------------

                                       35
<PAGE>


Realized and Unrealized Gain (Loss)
-------------------------------------------------------
Net realized gain (loss) --
   Investment transactions from
      Belvedere Capital
      (identified cost basis)             $  (1,023,197)
   Investment transactions (identified
      cost basis)                              (763,095)
   Investment transactions in other
      investments
      (identified cost basis)                (2,338,586)
   Investment transactions in
      Partnership Preference Units
      (identified cost basis)                 5,116,279
   Investment transactions in other real
      estate investments (net of
      minority interest in realized loss
      of controlled subsidiary of
      $476,023)                              (1,782,650)
-------------------------------------------------------
NET REALIZED LOSS                         $    (791,249)
-------------------------------------------------------
Change in unrealized appreciation
   (depreciation) --
   Investment in Belvedere Capital
      (identified cost basis)             $(424,007,010)
   Investments in Partnership Preference
      Units (identified cost basis)          17,761,335
   Investment in other real estate
      Investments (net of minority
      interest in unrealized loss of
      controlled subsidiary of
      $3,723,223)                            (8,518,155)
   Interest rate swap contracts              (2,818,002)
-------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
   (DEPRECIATION)                         $(417,581,832)
-------------------------------------------------------

NET REALIZED AND UNREALIZED LOSS          $(418,373,081)
-------------------------------------------------------

NET DECREASE IN NET ASSETS FROM
   OPERATIONS                             $(416,357,872)
-------------------------------------------------------


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       36
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

CONSOLIDATED FINANCIAL STATEMENTS CONT'D

CONSOLIDATED STATEMENTS OF CHANGES
IN NET ASSETS



INCREASE (DECREASE)                          YEAR ENDED          YEAR ENDED
IN NET ASSETS                            DECEMBER 31, 2002   DECEMBER 31, 2001
------------------------------------------------------------------------------
Net investment income                     $      2,015,209   $        432,985
Net realized loss from
   investment transactions                        (791,249)        (9,873,535)
Net change in unrealized appreciation
   (depreciation) of investments              (417,581,832)      (230,675,625)
------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS
   FROM OPERATIONS                        $   (416,357,872)  $   (240,116,175)
------------------------------------------------------------------------------
Transactions in Fund Shares --
   Net asset value of Fund Shares issued
      to Fund Shareholders in payment of
      distributions declared              $             --   $      7,580,098
   Net asset value of Fund
      Shares redeemed                          (72,096,456)       (95,708,530)
------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND
   SHARE TRANSACTIONS                     $    (72,096,456)  $    (88,128,432)
------------------------------------------------------------------------------
Distributions --
   Distributions to Shareholders          $             --   $    (19,000,496)
   Special Distributions to Shareholders                --         (1,786,192)
------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS                       $             --   $    (20,786,688)
------------------------------------------------------------------------------

NET DECREASE IN NET ASSETS                $   (488,454,328)  $   (349,031,295)
------------------------------------------------------------------------------

Net Assets
------------------------------------------------------------------------------
At beginning of year                      $  2,108,684,133   $   2,457,715,428
------------------------------------------------------------------------------
AT END OF YEAR                            $   1,620,229,805  $   2,108,684,133
------------------------------------------------------------------------------

                                       37
<PAGE>


CONSOLIDATED STATEMENT OF CASH FLOWS



                                              YEAR ENDED
INCREASE (DECREASE) IN CASH               DECEMBER 31, 2002

------------------------------------------------------------
Cash Flows From (For) Operating
   Activities --
Net decrease in net assets from
   operations                             $    (416,357,872)
Adjustments to reconcile net decrease in
   net assets from operations to net
   cash flows from operating activities--
   Amortization of debt issuance costs              346,549
   Net investment income allocated from
      Belvedere Capital                         (12,845,871)
   Decrease in dividends and interest
      receivable                                  2,478,889
   Increase in interest payable for open
      swap contracts                                248,825
   Decrease in escrow deposits                    1,251,018
   Decrease in other assets                          25,690
   Increase in accrued property taxes               108,785
   Decrease in security deposits,
      accrued interest, and accrued
      other expenses and liabilities             (1,104,644)
   Proceeds from sales of Partnership
      Preference Units                           60,076,602
   Proceeds from sale of common stock            90,874,505
   Proceeds from other investments               65,062,425
   Purchases of other investments               (67,401,013)
   Improvements to rental property               (1,963,230)
   Decrease in cash due to sale of one
      multifamily real estate property              (17,946)
   Net increase in investment in
      Belvedere Capital                        (116,904,831)
   Decrease in short-term investments             3,919,805
   Minority interest in net income of
      controlled subsidiary                         424,054
   Net realized loss from investment
      transactions                                  791,249
   Net change in unrealized
      (appreciation) depreciation
      of investments                            417,581,832
------------------------------------------------------------
NET CASH FLOWS FROM OPERATING ACTIVITIES  $      26,594,821
------------------------------------------------------------
Cash Flows For Financing Activities --
   Payments on Credit Facility            $     (17,000,000)
   Payments on mortgages                         (1,237,423)
   Payment on notes payable to minority
      shareholder                                  (134,028)
   Payments for Fund Shares redeemed             (3,715,985)
   Distributions paid to minority
      shareholder                                   (16,800)
------------------------------------------------------------
NET CASH FLOWS FOR FINANCING ACTIVITIES   $     (22,104,236)
------------------------------------------------------------

                                       38
<PAGE>


NET INCREASE IN CASH                      $       4,490,585
------------------------------------------------------------

CASH AT BEGINNING OF YEAR                 $       1,658,511
------------------------------------------------------------

CASH AT END OF YEAR                       $       6,149,096
------------------------------------------------------------
Supplemental Disclosure and Non-cash
Investing and Financing Activities
------------------------------------------------------------
Interest paid for loan -- Credit
   Facility                               $      11,186,341
Interest paid for mortgages               $      14,515,550
Interest paid for swap contracts          $      40,482,610
Market value of securities distributed
   in payment of redemptions              $      68,380,471
Market value of real property and other
   assets, net of current liabilities,
   disposed of in conjunction with the
   sale of one multifamily property in
   other real estate investments          $      10,281,661
Mortgage disposed of in conjunction with
   the sale of one multifamily property
   in other real estate investments       $      11,776,683
------------------------------------------------------------


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       39
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

CONSOLIDATED FINANCIAL STATEMENTS CONT'D

FINANCIAL HIGHLIGHTS



FOR THE YEAR ENDED DECEMBER 31, 2002

------------------------------------------------------------------------------
Net asset value -- Beginning of year                              $   87.370
------------------------------------------------------------------------------
Income (loss) from operations
------------------------------------------------------------------------------
Net investment income(6)                                          $    0.085
Net realized and unrealized loss                                     (17.585)
------------------------------------------------------------------------------
TOTAL LOSS FROM OPERATIONS                                        $  (17.500)
------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR                                    $   69.870
------------------------------------------------------------------------------

TOTAL RETURN(1)                                                       (20.03)%
------------------------------------------------------------------------------




                                         AS A PERCENTAGE     AS A PERCENTAGE
                                           OF AVERAGE           OF AVERAGE
RATIOS                                    NET ASSETS(5)     GROSS ASSETS(2)(5)

------------------------------------------------------------------------------
Expenses of Consolidated Real Property
 Subsidiary
  Interest and other borrowing costs(7)           0.64%                  0.45%
  Operating expenses(7)                           0.78%                  0.54%
Belmar Capital Fund LLC Expenses
  Interest and other borrowing costs(4)           2.95%                  2.07%
  Investment advisory and administrative
   fees, servicing fees and other Fund
   operating expenses(3)(4)                       1.16%                  0.82%
Total expenses                                    5.53%                  3.88%
Net investment income                             0.11%                  0.08%
------------------------------------------------------------------------------

                                       40
<PAGE>


                             AS A PERCENTAGE OF          AS A PERCENTAGE OF
RATIOS                     AVERAGE NET ASSETS(5)    AVERAGE GROSS ASSETS(2)(5)

Supplemental Data
------------------------------------------------------------------------------
Net assets, end of year (000's omitted)                      $1,620,230
Portfolio turnover of
   Tax-Managed Growth Portfolio                                      23%
------------------------------------------------------------------------------

(1)  Returns are  calculated by determining  the percentage  change in net asset
     value with all distributions reinvested.
(2)  Average  Gross Assets is defined as the average  daily amount of all assets
     of Belmar Capital Fund LLC (Belmar  Capital)  (including  Belmar  Capital's
     interest in  Belvedere  Capital Fund  Company LLC  (Belvedere  Capital) and
     Belmar Capital's ratable share of the assets of its directly and indirectly
     controlled  subsidiaries),  without reduction by any liabilities (Note 1B).
     For this purpose, the assets of Belmar Realty Corporation's (Belmar Realty)
     controlled  subsidiaries are reduced by the proportionate interests therein
     of investors other than Belmar Realty.
(3)  Includes Belmar Capital's share of Belvedere  Capital's allocated expenses,
     including those expenses allocated from the Portfolio.
(4)  Includes the expenses of Belmar Capital and Belmar Realty. Does not include
     expenses of the real estate subsidiary, majority owned by Belmar Realty.
(5)  For the purpose of  calculating  ratios,  the income and expenses of Belmar
     Realty's controlled  subsidiary are reduced by the proportionate  interests
     therein of investors other than Belmar Realty.
(6)  Calculated using average shares outstanding.
(7)  Includes Belmar  Realty's  proportional  share of expenses  incurred by its
     majority-owned subsidiary (Note 1).

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       41
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 Organization
-------------------------------------------
A    Investment  Objective  -- Belmar  Capital  Fund LLC  (Belmar  Capital) is a
     Delaware limited liability company established to offer diversification and
     tax-sensitive   investment   management   to  persons   holding  large  and
     concentrated  positions in equity  securities  of selected  publicly-traded
     companies.  The  investment  objective  of  Belmar  Capital  is to  achieve
     long-term,    after-tax    returns   for   Belmar   Capital    shareholders
     (Shareholders).   Belmar  Capital  pursues  this  objective   primarily  by
     investing  indirectly in Tax-Managed  Growth Portfolio (the  Portfolio),  a
     diversified,  open-end  management  investment company registered under the
     Investment Company Act of 1940, as amended. The Portfolio is organized as a
     trust under the laws of the State of New York. Belmar Capital maintains its
     investment in the Portfolio by investing in Belvedere  Capital Fund Company
     LLC (Belvedere Capital), a separate Massachusetts limited liability company
     that  invests  exclusively  in the  Portfolio.  The  performance  of Belmar
     Capital and Belvedere Capital is directly and substantially affected by the
     performance of the Portfolio. Separate from its investment in the Portfolio
     through  Belvedere  Capital,  Belmar Capital  invests in real estate assets
     including  income-producing  preferred  equity  interests  in  real  estate
     operating  partnerships  (Partnership  Preference  Units)  affiliated  with
     publicly-traded  real estate  investment  trusts (REITs) and an interest in
     real  properties  held  through  a  joint  venture  that  is  a  controlled
     subsidiary of Belmar Realty Corporation (Belmar Realty).

B    Subsidiaries   --  Belmar  Capital  invests  in  real  estate  through  its
     subsidiary  Belmar  Realty.  At December 31, 2002,  Belmar Realty  invested
     directly in  Partnership  Preference  Units and indirectly in real property
     through  a  controlled  subsidiary,   Bel  Alliance  Apartments,  LLC  (Bel
     Apartments).

     Belmar Realty -- Belmar Realty invests  directly in Partnership  Preference
     Units and also holds a majority interest in Bel Apartments. At December 31,
     2002, Belmar Capital owned 100% of the common stock issued by Belmar Realty
     and  intends  to hold all of Belmar  Realty's  common  stock at all  times.
     Additionally,  2,100  shares  of  preferred  stock  of  Belmar  Realty  are
     outstanding  at December 31, 2002.  The preferred  stock has a par value of
     $0.01 per share and is redeemable by Belmar Realty at a redemption price of
     $100 per share after the occurrence of certain tax events or after December
     31,  2005.  Dividends on the  preferred  stock are  cumulative  and payable
     annually equal to $8 per share. The interest in preferred stock is recorded
     as  minority   interest  on  the  Consolidated   Statement  of  Assets  and
     Liabilities.

     Bel Apartments -- Bel  Apartments,  a  majority-owned  subsidiary of Belmar
     Realty, owns nineteen  multi-family  residential  properties  consisting of
     5,403 units (collectively,  the Bel Apartments Properties) located in eight
     states (South Carolina, Texas, Florida, North Carolina,  Missouri, Georgia,
     Virginia and Nevada).  The average  occupancy rate was approximately 92% at
     December  31,  2002.  Belmar  Realty  owns 100% of the Class A Units of Bel
     Apartments, representing 60% of the voting interests in Bel Apartments, and
     a minority shareholder (the Bel Apartments Minority  Shareholder) owns 100%
     of the  Class B units,  representing  40% of the  voting  interests  in Bel
     Apartments. The Class B equity interest is recorded as minority interest on
     the  Consolidated   Statement  of  Assets  and  Liabilities.   The  primary
     distinctions  between  the two  classes  of  shares  are  the  distribution
     priority and voting rights. Belmar Realty has priority in distributions and
     has greater  voting rights than the holders of the Class B units.  Pursuant
     to a  buy/sell  agreement  entered  into at the  time  Bel  Apartments  was
     established,   either  Belmar  Realty  or  the  Bel   Apartments   Minority
     Shareholder can give notice on or after September 8, 2010 either to buy the

                                       42
<PAGE>

     other's  equity  interest  in Bel  Apartments  or to sell  its  own  equity
     interest in Bel Apartments.

     The accompanying  consolidated financial statements include the accounts of
     Belmar Capital, Belmar Realty and Bel Apartments (collectively,  the Fund).
     All material intercompany accounts and transactions have been eliminated.

     The audited financial statements of the Portfolio,  including the Portfolio
     of Investments, are included elsewhere in this report and should be read in
     conjunction with the Fund's financial statements.

2 Significant Accounting Policies
-------------------------------------------
     The following is a summary of significant  accounting policies consistently
     followed  by the  Fund in the  preparation  of its  consolidated  financial
     statements.  The  policies are in  conformity  with  accounting  principles
     generally accepted in the United States of America.

A    Investment Costs -- The Fund's investment assets were principally  acquired
     through  contributions  of common  stock by  Shareholders  in exchange  for
     Shares of the Fund,  through  private  purchases of Partnership  Preference
     Units and other real estate investments,  and through contributions of real
     estate  investments  in  exchange  for cash and a  minority  interest  in a
     controlled  subsidiary.  The Fund  immediately  exchanged  the  contributed

                                       43
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D

     securities  into  Belvedere  Capital  for  shares  thereof,  and  Belvedere
     Capital,  in  turn,   immediately   thereafter  exchanged  the  contributed
     securities into the Portfolio for an interest in the Portfolio. The cost at
     which the Fund's  investments of  contributed  securities is carried in the
     consolidated   financial   statements  is  the  value  of  the  contributed
     securities  as of  the  close  of  business  on  the  day  prior  to  their
     contribution to the Fund. The initial tax basis of the Fund's investment in
     the Portfolio  through  Belvedere  Capital is the same as the  contributing
     Shareholders' basis in securities  contributed to the Fund. The initial tax
     and financial  reporting  basis of the Fund's  investments  in  Partnership
     Preference  Units  and  other  real  estate  purchased  by the  Fund is the
     purchase  cost.  The initial cost at which the Fund's  investments  in real
     estate  contributed  to the Fund is carried in the  consolidated  financial
     statements is the market value on the  contribution  date.  The initial tax
     basis  of  real  estate   investments   contributed  to  the  Fund  is  the
     contributor's tax basis at the time of contribution or value at the time of
     contribution, depending on the taxability of the contribution.

B    Investment  Valuations  -- The Fund's  investments  consist of  Partnership
     Preference  Units,  other real  property  investments,  shares of Belvedere
     Capital and short-term debt securities. Belvedere Capital's only investment
     is an  interest  in the  Portfolio,  the value of which is  derived  from a
     proportional  interest  therein.  Additionally,  the Fund has entered  into
     interest rate swap  agreements  (Note 7). The valuation  policy followed by
     the Fund, Belvedere Capital and the Portfolio is as follows:

     Marketable  securities,  including  options,  that are listed on foreign or
     U.S.  securities  exchanges  or in the NASDAQ  National  Market  System are
     valued at closing sale prices on the  exchange  where such  securities  are
     principally  traded.  Futures  positions on securities  or  currencies  are
     generally  valued  at  closing  settlement   prices.   Unlisted  or  listed
     securities  for which  closing sale prices are not  available are valued at
     the  mean  between  the  latest  bid  and  asked  prices.  Short-term  debt
     securities  with a  remaining  maturity  of 60 days or less are  valued  at
     amortized cost, which  approximates fair value. Other fixed income and debt
     securities,  including  listed  securities  and  securities for which price
     quotations  are available,  are normally  valued on the basis of valuations
     furnished by a pricing service. Investments held by the Portfolio for which
     valuations or market  quotations are  unavailable  are valued at fair value
     using  methods  determined  in good  faith  by or at the  direction  of the
     Trustees.  Investments  held by the Fund for  which  valuations  or  market
     quotations  are   unavailable  are  valued  at  fair  value  using  methods
     determined  in  good  faith  by  Boston  Management  and  Research  (Boston
     Management),  a wholly-owned  subsidiary of Eaton Vance  Management  (Eaton
     Vance),  as Investment  Adviser of Belmar  Capital and as Manager of Belmar
     Realty.  Interest rate swap contracts for which prices are  unavailable are
     valued as determined in good faith by Boston Management.

     The value of the Fund's real estate investments is determined in good faith
     by Boston Management,  as Manager of Belmar Realty, taking into account all
     relevant  factors,  data  and  information,   including,  with  respect  to
     investments in Partnership  Preference Units,  information from dealers and
     similar  firms with  knowledge of such issues and the prices of  comparable
     preferred equity  securities and other fixed or adjustable rate instruments
     having similar investment characteristics.  Real estate investments,  other
     than Partnership  Preference  Units, are generally stated at estimated fair
     values based upon independent valuations assuming an orderly disposition of
     assets.  Detailed investment valuations are performed at least annually and
     reviewed periodically. Interim valuations reflect results of operations and
     distributions,  and may be adjusted if there has been a significant  change

                                       44
<PAGE>

     in  economic  circumstances  since the most recent  independent  valuation.
     Given that such  valuations  include many  assumptions,  including  but not
     limited  to, an  orderly  disposition  of assets,  values  may differ  from
     amounts ultimately realized.

C    Interest  Rate Swaps -- Belmar  Capital has entered into interest rate swap
     agreements  with  respect to its  borrowings  and real estate  investments.
     Pursuant to these agreements, Belmar Capital makes periodic payments to the
     counterparty  at  predetermined  fixed rates in exchange for  floating-rate
     payments from the counterparty that fluctuate with one-month LIBOR.  During
     the terms of the  outstanding  swap  agreements,  changes in the underlying
     values of the swaps are  recorded  as  unrealized  gains or losses.  Belmar
     Capital is exposed to credit  loss in the event of  non-performance  by the
     swap counterparty.  Risks may arise from the unanticipated movements in the
     value of interest rates.

D    Written  Options  -- The  Portfolio  and the  Fund  may  write  listed  and
     over-the-counter  call  options  on  individual  securities,  on baskets of
     securities and on stock market indices.  Upon the writing of a call option,
     an  amount  equal  to the  premium  received  by the  Portfolio  or Fund is
     included in the  Statement of Assets and  Liabilities  as a liability.  The
     amount of the  liability is  subsequently  marked-to-market  to reflect the
     current  value of the option  written  in  accordance  with the  investment
     valuation policies discussed above.  Premiums received from writing options

                                       45
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D

     that expire are treated as realized gains.  Premiums  received from writing
     options that are exercised or are closed are added to or offset against the
     proceeds or amount paid on the  transaction  to determine the realized gain
     or loss. The Portfolio or Fund as a writer of an option may have no control
     over whether the  underlying  securities  may be sold and as a result bears
     the market  risk of an  unfavorable  change in the price of the  securities
     underlying the written option.

E    Purchased Options -- Upon the purchase of a put option, the premium paid by
     the  Portfolio  or  Fund  is  included  in  the  Statement  of  Assets  and
     Liabilities as an investment.  The amount of the investment is subsequently
     marked-to-market  to  reflect  the  current  market  value  of  the  option
     purchased,  in accordance with the investment  valuation policies discussed
     above.  If an option which the Portfolio or Fund has  purchased  expires on
     the stipulated  expiration  date, the Portfolio or Fund will realize a loss
     in the amount of the cost of the option.  If the  Portfolio  or Fund enters
     into a closing sale transaction,  the Portfolio or Fund will realize a gain
     or loss,  depending  on whether the sales  proceeds  from the closing  sale
     transaction  are  greater  or less  than  the  cost of the  option.  If the
     Portfolio  or Fund  exercises a put option,  it will realize a gain or loss
     from the sale of the  underlying  security and the proceeds  from such sale
     will be decreased by the premium originally paid.

F    Rental  Operations -- The apartment units held by Bel Apartments are leased
     to residents generally for terms of one year or less, with monthly payments
     due in advance.

     The mortgage  escrow  accounts  consist of deposits for real estate  taxes,
     insurance,  reserve for  replacements and capital repairs that are required
     under the mortgage  agreements.  The escrow accounts also include  security
     deposit  accounts.  The  mortgage  escrow  accounts  are held by  financial
     institutions and controlled by the lenders (Note 8).

     Costs  incurred in connection  with  acquisitions  of properties  have been
     capitalized.  Significant  betterments and  improvements are capitalized as
     part of real property.

G    Income -- Dividend income is reported on the ex-dividend  date and interest
     income is recorded on the accrual  basis.  Rental income is recorded on the
     accrual basis based upon the terms of the lease agreements.

     Belvedere  Capital's  net  investment  income or loss consists of Belvedere
     Capital's  pro rata share of the net  investment  income of the  Portfolio,
     less all actual or accrued  expenses of Belvedere  Capital,  determined  in
     accordance  with  accounting  principles  generally  accepted in the United
     States of America. The Fund's net investment income or loss consists of the
     Fund's pro rata share of the net  investment  income of Belvedere  Capital,
     plus all  income  earned on the  Fund's  direct  and  indirect  investments
     (including Partnership Preference Units and other real property),  less all
     actual and  accrued  expenses of the Fund  determined  in  accordance  with
     accounting principles generally accepted in the United States of America.

H    Deferred  Costs --  Deferred  mortgage  origination  expenses  incurred  in
     connection  with the financing of Bel  Apartments  are  amortized  over the
     terms of the  respective  loans.  Deferred loan costs are included in other
     assets in the accompanying consolidated financial statements.

I    Income Taxes -- Belmar  Capital,  Belvedere  Capital and the  Portfolio are
     treated as partnerships for federal income tax purposes.

                                       46
<PAGE>

     As a result,  Belmar  Capital,  Belvedere  Capital and the Portfolio do not
     incur  federal  income tax  liability,  and the  shareholders  and partners
     thereof  are  individually  responsible  for taxes on items of  partnership
     income,  gain,  loss and  deduction.  The  policy of Belmar  Realty and Bel
     Apartments is to comply with the Internal  Revenue Code of 1986, as amended
     applicable to REITs. Belmar Realty and Bel Apartments will generally not be
     subject to federal  income tax to the  extent  that they  distribute  their
     earnings to their  stockholders each year and maintain their  qualification
     as a REIT.

J    Other -- Investment transactions are accounted for on a trade-date basis.

K    Use of Estimates -- The  preparation of financial  statements in conformity
     with  accounting  principles  generally  accepted  in the United  States of
     America  requires  management to make estimates and assumptions that affect
     the reported amounts of assets and liabilities at the date of the financial
     statements  and the  reported  amounts  of income  and  expense  during the
     reporting period. Actual results could differ from those estimates.

3 Distributions to Shareholders
-------------------------------------------
     Belmar  Capital  intends  to  distribute  each  year the  amount of its net
     investment  income for the year,  if any,  and 22% of the amount of its net
     realized  capital gains for such year, if any,  other than  precontribution
     gains allocated to a Shareholder in connection with a tender offer or other

                                       47
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D

     extraordinary  event  with  respect  to  a  security  contributed  by  that
     Shareholder or such  Shareholder's  predecessor  in interest.  In addition,
     whenever  a  distribution  in respect  of a  precontribution  gain is made,
     Belmar Capital  intends to make a supplemental  distribution  to compensate
     Shareholders  receiving  such  distributions  for taxes  that may be due on
     income specially allocated in connection with the precontribution  gain and
     supplemental  distributions.  Capital gain distributions that are made with
     respect to realized  precontribution gains and the associated  supplemental
     distributions (collectively,  Special Distributions) will be made solely to
     the Shareholders to whom such realized  precontribution  gain is allocated.
     There were no Special  Distributions  paid or accrued during the year ended
     December 31, 2002.

     In  addition,  Belmar  Realty  and  Bel  Apartments  intend  to  distribute
     substantially all of their taxable income earned by the respective entities
     during the year.

     Distributions  made to  Shareholders  electing  the  Fund's  Estate  Freeze
     feature (Note 4) will be paid, first, to holders of Preferred Shares to the
     extent of the unpaid  cumulative  annual  priority  return of the Preferred
     Shares  and,  second,  to the  holders  of the  associated  Common  Shares.
     Distributions  made in respect of any  realized  precontribution  gains and
     associated supplemental distributions will be apportioned between Preferred
     Shares and Common Shares  consistent  with the  allocation to the Preferred
     Shares and Common  Shares of such  realized  precontribution  gains.  It is
     expected that substantially all Belmar Capital  distributions in respect of
     Estate  Freeze  Shares will be paid to holders of Preferred  Shares  rather
     than holders of Common Shares. Distributions on Estate Freeze Shares may be
     reinvested  in Belmar  Capital to  purchase  undivided  Fund  Shares at the
     Fund's net asset value per share on the date of reinvestment.

4 Shareholder Transactions
-------------------------------------------
     Belmar Capital may issue an unlimited  number of full and  fractional  Fund
     Shares. Transactions in Fund Shares were as follows:



                                           YEAR ENDED            YEAR ENDED
                                       DECEMBER 31, 2002     DECEMBER 31, 2001

------------------------------------------------------------------------------
Issued to Shareholders electing to
receive payment of distributions in
Fund Shares                                   --                   86,413
Redemptions                                (943,826)           (1,074,220)
------------------------------------------------------------------------------
NET DECREASE                               (943,826)             (987,807)
------------------------------------------------------------------------------

     Redemptions of Fund Shares held less than three years are generally subject
     to a redemption  fee of 1% of the net asset value of Fund Shares  redeemed.
     The  redemption  fee  is  paid  to  Eaton  Vance  Distributors,   Inc.  (EV
     Distributors) by Belmar Capital on behalf of the redeeming Shareholder.  No
     charge  is  levied on  redemptions  of Fund  Shares  acquired  through  the
     reinvestment  of  distributions,  Fund Shares redeemed in connection with a
     tender offer or other extraordinary corporate event or Fund Shares redeemed
     following  the  death of all of the  initial  holders  of the  Fund  Shares
     redeemed.  In addition,  no fee applies to  redemptions  made pursuant to a

                                       48
<PAGE>

     Systematic  Redemption  Plan whereby a  Shareholder  can redeem up to 2% of
     Fund Shares  held on a quarterly  basis.  For the year ended  December  31,
     2002, EV Distributors received $293,328 in redemption fees.

     Shareholders in Belmar Capital are entitled to restructure their Fund Share
     interests  under  what is termed  an Estate  Freeze  Election.  Under  this
     election,  Fund Shares are divided into Preferred Shares and Common Shares.
     Preferred Shares have a preferential  right over the  corresponding  Common
     Shares  equal  to (i)  95% of the  original  capital  contribution  made in
     respect of the undivided  Shares from which the Preferred Shares and Common
     Shares were derived,  plus (ii) an annuity priority return equal to 8.5% of
     the  Preferred  Shares'  preferential  interest  in  the  original  capital
     contribution of the undivided Fund Shares. The associated Common Shares are
     entitled  to the  remaining  5% of the  original  capital  contribution  in
     respect of the undivided Shares,  plus any returns thereon in excess of the
     fixed annual  priority of the Preferred  Shares.  At December 31, 2002, the
     Preferred  Shares were valued at $69.87 and the Common Shares had no value.
     The  existence  of  restructured  Fund  Shares  does not  adversely  affect
     Shareholders who do not participate in the election nor do the restructured
     Fund  Shares  have  preferential  rights to Fund  Shares that have not been
     restructured.  Shareholders  who subdivide  Fund Shares under this election
     sacrifice certain rights and privileges that they would otherwise have with
     respect to the Fund  Shares so  divided,  including  redemption  rights and
     voting and consent rights.  Upon the twentieth  anniversary of the issuance
     of the associated  undivided Fund Shares to the original  holders  thereof,
     Preferred  and  Common  Shares  will  automatically  convert  into full and
     fractional undivided Fund Shares.

5 Investment Transactions
-------------------------------------------
     For the year ended  December 31, 2002,  increases  and  decreases of Belmar
     Capital's  investment  in Belvedere  Capital  aggregated  $246,297,586  and

                                       49
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D

     $318,696,366,  respectively.  Included in the decrease in the investment in
     Belvedere   Capital   is  the   receipt   of   common   stock   through   a
     redemption-in-kind  that was subsequently sold for  $120,160,045.  Sales of
     other investments aggregated $65,062,425 during the year ended December 31,
     2002. Sales of Partnership  Preference Units aggregated  $60,076,602 during
     the year ended  December 31, 2002.  There were no purchases of  Partnership
     Preference Units during the year ended December 31, 2002.

     Sales of the Partnership  Preference  Units for the year ended December 31,
     2002 represent amounts sold to other funds sponsored by Eaton Vance.

     There were no  acquisitions  of other real  property  during the year ended
     December 31, 2002. In June 2002, a multifamily  residential  property owned
     by Bel Apartments  was sold to an affiliate of the Bel Apartments  Minority
     Shareholder.  Belmar Capital  recognized a loss of  $1,782,650,  net of the
     minority interest in such loss, of $476,023.

6 Indirect Investment in Portfolio
-------------------------------------------
     Belvedere  Capital's  interest in the  Portfolio at December 31, 2002,  was
     $8,753,268,522,  representing  60.1% of the  Portfolio's  net  assets.  The
     Fund's   investment   in  Belvedere   Capital  at  December  31,  2002  was
     $1,645,261,953,  representing  18.8% of  Belvedere  Capital's  net  assets.
     Investment income allocated to Belvedere Capital from the Portfolio for the
     year ended December 31, 2002 totaled  $123,096,851,  of which  $24,130,615,
     was allocated to the Fund. Expenses allocated to Belvedere Capital from the
     Portfolio  for the year ended  December  31, 2002 totaled  $42,648,896,  of
     which  $8,418,124,  was allocated to the Fund.  Belvedere Capital allocated
     additional  expenses to the Fund of $2,866,620  for the year ended December
     31, 2002,  representing  $71,205 of operating  expenses and  $2,795,415  of
     service fees (Note 9).

7 Cancelable Interest Rate Swap Agreements
-------------------------------------------
     Belmar Capital has entered into cancelable interest rate swap agreements in
     connection with its real estate investments and the associated  borrowings.
     Under such agreements,  Belmar Capital has agreed to make periodic payments
     at fixed rates in exchange for payments at floating rates.  The notional or
     contractual amounts of these instruments may not necessarily  represent the
     amounts   potentially  subject  to  risk.  The  measurement  of  the  risks
     associated  with these  investments is meaningful  only when  considered in
     conjunction  with all related assets,  liabilities  and  agreements.  As of
     December 31, 2002, Belmar Capital has entered into cancelable interest rate
     swap agreements with Merrill Lynch Capital Services, Inc., as listed below.

                                       50
<PAGE>


NOTIONAL                           INITIAL                   UNREALIZED
AMOUNT                             OPTIONAL     FINAL        DEPRECIATION AT
(000'S    FIXED    FLOATING        TERMINATION  TERMINATION  DECEMBER 31,
OMITTED)  RATE     RATE            DATE         DATE         2002

-----------------------------------------------------------------------------
$27,500   8.96%   LIBOR + 0.40%    3/05         3/30         $3,589,811
 19,146   9.09%   LIBOR + 0.40%    4/04         3/30          1,721,750
 43,181   9.20%   LIBOR + 0.40%    6/03         3/30          1,544,077
 21,766   9.24%   LIBOR + 0.40%    4/03         3/30            491,825
 38,102   9.11%   LIBOR + 0.40%    2/04         3/30          3,020,889
 20,659   9.13%   LIBOR + 0.40%   11/03         3/30          1,317,687
 23,027   9.05%   LIBOR + 0.40%    7/04         3/30          2,366,994
 10,773   9.54%   LIBOR + 0.40%    4/03         3/30            253,235
 12,984   9.50%   LIBOR + 0.40%    6/03         3/30            483,956
  9,608   9.46%   LIBOR + 0.40%   11/03         3/30            647,043
 13,274   9.42%   LIBOR + 0.40%    2/04         3/30          1,111,586
 12,063   9.38%   LIBOR + 0.40%    4/04         3/30          1,145,024
 10,799   9.35%   LIBOR + 0.40%    7/04         3/30          1,178,045
 41,185   9.31%   LIBOR + 0.40%    9/04         3/30          4,841,445
  7,255   9.26%   LIBOR + 0.40%    3/05         3/30          1,013,121
 22,982   9.17%   LIBOR + 0.40%    2/03         3/30            163,553
 28,305   9.15%   LIBOR + 0.40%    4/03         3/30            631,854
 32,404   9.13%   LIBOR + 0.40%    6/03         3/30          1,146,899
  3,383   9.08%   LIBOR + 0.40%   11/03         3/30            213,883
 12,062   9.00%   LIBOR + 0.40%    2/04         3/30            936,025
 24,622   8.985%  LIBOR + 0.40%    4/04         3/30          2,167,107
  9,184   8.97%   LIBOR + 0.40%    7/04         3/30            927,854
 13,454   8.93%   LIBOR + 0.40%    9/04         3/30          1,459,523
 17,888   8.87%   LIBOR + 0.40%    3/05         3/30          2,283,727
 39,407   7.46%   LIBOR + 0.40%     --          9/10          8,423,378
 11,776   8.34%   LIBOR + 0.40%    3/05         3/30          1,287,360
  2,338   8.41%   LIBOR + 0.40%    9/04         3/30            220,542
 23,636   8.48%   LIBOR + 0.40%    2/04         3/30          1,623,935
 20,625   8.60%   LIBOR + 0.40%    6/03         3/30            655,632
 28,629   8.66%   LIBOR + 0.40%    2/03         3/30            189,552
-----------------------------------------------------------------------------
                                                            $47,057,312
-----------------------------------------------------------------------------

                                       51
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D

8 Debt
-------------------------------------------
A    Mortgages -- Rental  property held by Bel  Apartments  is financed  through
     mortgages. The mortgages are secured by the rental property,  mortgage loan
     deposit accounts,  including all subaccounts thereunder,  and an assignment
     of certain leases and rents and are without recourse to the other assets of
     Belmar  Capital and Belmar  Realty.  The estimated fair value of the rental
     property securing the loans is $203,940,755 at December 31, 2002.  Balances
     outstanding at December 31, 2002 are as follows:



                                   MONTHLY
                                   PRINCIPAL
                         ANNUAL    AND
                         INTEREST  INTEREST    BALANCE AT
  MATURITY DATE          RATE      PAYMENT     DECEMBER 31, 2002

  -----------------------------------------------------------------
  October 1, 2010         8.58%   $  165,866      $ 21,110,511
  October 1, 2010         8.54%      458,550        58,569,564
  October 1, 2010         8.55%      364,480        46,513,766
  October 1, 2010         8.54%      207,681        26,526,990
  October 1, 2027         7.68%       73,293         9,741,069
  -----------------------------------------------------------------
                                  $1,269,870      $162,461,900
  -----------------------------------------------------------------

     Scheduled repayments of mortgages, for the years subsequent to December 31,
     2002 are as follows:


    YEAR ENDING DECEMBER 31,                  AMOUNT

    ------------------------------------------------------
    2003                                      $  1,304,708
    2004                                         1,382,578
    2005                                         1,544,087
    2006                                         1,681,676
    2007                                         1,831,540
    Thereafter                                 154,717,311
    ------------------------------------------------------
                                              $162,461,900
    ------------------------------------------------------


     The estimated  market value of the mortgage notes payable is  approximately
     $186,000,000  at December 31, 2002.  The mortgage  notes payable  cannot be
     prepaid or otherwise disposed of without incurring a substantial prepayment
     penalty or without the sale of the rental property financed by the mortgage
     notes  payable.  Management  has no  current  plans to prepay or  otherwise
     dispose of the mortgage notes payable or sell the related  rental  property
     prior to the maturity  date.  The market value of the mortgages is based on
     estimates  using  discounted  cash flow analysis and  currently  prevailing
     rates.  Considerable  judgment is necessary in interpreting  market data to
     develop  estimates at market  value.  The use of different  assumptions  or
     estimation methodologies may have a material effect on the estimated market
     value.

                                       52
<PAGE>

B    Credit   Facility  --  Belmar   Capital   has  entered   into  a  revolving
     securitization   facility  (the   Commercial   Paper  Facility)  of  up  to
     $700,000,000 with two affiliated  special purpose  commercial paper issuers
     (the CP  Issuers)  and  Citicorp  North  America,  Inc. as agent for the CP
     Issuers.  The  Commercial  Paper  Facility  is  supported  by  a  committed
     liquidity  facility (the Liquidity  Facility)  provided by Citibank,  N.A.,
     under which  borrowings  may be made for a maximum term of seven years from
     Belmar Capital's initial closing.

     The CP Issuers fund advances under the Commercial Paper Facility by issuing
     highly rated  commercial  paper notes.  On borrowings  under the Commercial
     Paper  Facility,  Belmar  Capital  pays a rate of interest  equal to the CP
     Issuers' cost of funding plus a margin and certain administrative and other
     fees. Such fees amount to  approximately  0.32% of the borrowings under the
     Commercial  Paper Facility.  Initial  borrowings under the Commercial Paper
     Facility   have  been  used  to   purchase   qualifying   assets,   to  pay
     organizational  costs and selling  expenses of the Fund, and to provide for
     short-term  liquidity needs of the Fund.  Additional  borrowings  under the
     Commercial Paper Facility may be made in the future for these purposes.  At
     December 31, 2002, amounts  outstanding under the Commercial Paper Facility
     totaled  $596,500,000.  In the  event  that the CP  Issuers  are  unable or
     unwilling to maintain advances to Belmar Capital,  they may assign advances
     to the providers of the Liquidity Facility.  Borrowings under the Liquidity
     Facility  will be at an annual rate of  one-month  LIBOR plus 0.75%.  There
     were no  borrowings  under the  Liquidity  Facility  during  the year ended
     December 31, 2002.

     Interest  expense  also  includes a  commitment  fee of 0.15% of the unused
     portion of the Liquid  Facility and a loan structure fee of less than 0.01%
     (annualized)  of the total  amount  available  under the  Commercial  Paper
     Facility.

     Belmar  Capital's  obligations  under the  Commercial  Paper  Facility  and
     Liquidity  Facility  are  secured by a pledge of  substantially  all of its
     assets,  including  Belmar  Realty  common  stock and  shares of  Belvedere
     Capital held by the Fund.

C    Notes Payable -- The Bel Apartments  Minority  Shareholder  loaned $600,000
     and $100,000 to Bel Apartments in November and December 2001, respectively.
     Interest on the notes is payable at a rate of 10% per annum.  The principal
     balance of the notes  plus  accrued  interest  thereon is due in August and
     December 2003. At December 31, 2002, the aggregate amount outstanding under
     the notes is $565,972.  For the year ended December 31, 2002, interest paid
     or accrued to the Bel Apartments Minority Shareholder totaled $60,548.

     Belmar Realty loaned  $900,000 and $150,000 to Bel Apartments in August and
     ember 2001, respectively.

                                       53
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D

     Interest on the notes is payable at a rate of 10% per annum.  The remaining
     principal  balance of the notes plus accrued  interest is due in August and
     December 2003. At December 31, 2002, the aggregate amount outstanding under
     the notes is $866,708.  For the year ended December 31, 2002, interest paid
     or accrued to Belmar Realty totaled $92,202.  All balances and transactions
     related to the notes made by Belmar  Realty  have been  eliminated  through
     consolidation of the financial statements.

9 Management Fee and Other Transactions with Affiliates
------------------------------------------------------------
     Belmar  Capital  and  the  Portfolio  have  engaged  Boston  Management  as
     investment  adviser.  Under the terms of the  advisory  agreement  with the
     Portfolio,  Boston Management receives a monthly advisory fee of 5/96 of 1%
     (0.625%  annually) of the average  daily net assets of the  Portfolio up to
     $500,000,000  and at reduced  rates as daily net assets  exceed that level.
     For the year ended  December 31, 2002,  the advisory fee  applicable to the
     Portfolio  was 0.44% of  average  daily  net  assets.  Belvedere  Capital's
     allocated  portion  of  the  advisory  fee  totaled  $41,180,780  of  which
     $8,125,471  was allocated to Belmar Capital for the year ended December 31,
     2002.

     In addition,  Boston Management is, subject to the fee cap described below,
     entitled to receive a monthly advisory and administrative fee of 1/20 of 1%
     (0.60%  annually) of the average daily gross assets of Belmar Capital.  The
     term "gross  assets" with  respect to Belmar  Capital is defined to include
     the  current  value of all of Belmar  Capital's  assets  (including  Belmar
     Capital's  interest in Belvedere Capital and Belmar Capital's ratable share
     of the assets of its  directly  and  indirectly  controlled  subsidiaries),
     without reduction by any liabilities.  Belmar Realty pays Boston Management
     a  monthly  management  fee at a rate of 1/20 of 1%  (equivalent  to  0.60%
     annually)  of the average  daily gross  assets of Belmar  Realty.  The term
     "gross  assets"  with  respect to Belmar  Realty is defined to include  the
     current value of all assets of Belmar  Realty,  including  Belmar  Realty's
     ratable share of the assets of its controlled subsidiary, without reduction
     by any  liabilities.  For this  purpose,  the  assets  of  Belmar  Realty's
     controlled subsidiary are reduced by the proportionate interests therein of
     investors  other than Belmar Realty.  For the year ended December 31, 2002,
     the advisory and  administrative fee payable to Boston Management by Belmar
     Capital,  plus the  management  fee payable to Boston  Management by Belmar
     Realty, less Belmar Capital's  allocated share of the Portfolio's  advisory
     fee, totaled $7,647,360.

     Eaton Vance and Boston Management do not receive separate  compensation for
     serving as Manager of Belmar  Capital  and  Manager of  Belvedere  Capital,
     respectively.

     As compensation for its services as placement agent, Belmar Capital pays EV
     Distributors  a  monthly  distribution  fee  at  a  rate  of  1/120  of  1%
     (equivalent  to 0.10%  annually)  of  Belmar  Capital's  average  daily net
     assets. For the year ended December 31, 2002, Belmar Capital's distribution
     fees paid or accrued to EV Distributors totaled $1,847,235.

     Payments  to  the  Eaton  Vance   organization  for  investment   advisory,
     management,  administration and distribution services made by or in respect
     of Belmar  Capital on a direct or  indirect  basis are subject to a monthly
     fee cap at a rate of 1/20th of 1%  (equivalent  to 0.60%  annually)  of the
     average daily gross assets of Belmar Capital (as defined  above).  Payments
     subject  to the  monthly  fee  cap  are  the  distribution  fee  paid to EV
     Distributors,  Belmar  Capital's  attributable  share of the  advisory  and
     management  fees  paid by the  Portfolio  and  Belmar  Realty,  and  Belmar

                                       54
<PAGE>


     Capital's advisory and administrative  fee. Boston Management has agreed to
     waive a portion of the monthly  advisory and  administrative  fee otherwise
     payable by Belmar  Capital as necessary to comply with the monthly fee cap.
     For the  year  ended  December  31,  2002,  Boston  Management  has  waived
     $1,847,235 of the advisory and administrative fee of Belmar Capital.

     Pursuant  to  a  servicing  agreement  between  Belvedere  Capital  and  EV
     Distributors, Belvedere Capital pays a servicing fee to EV Distributors for
     providing  certain services and information to Shareholders.  The servicing
     fee is paid on a quarterly  basis at an annual  rate of 0.15% of  Belvedere
     Capital's  average  daily net assets and totaled  $14,167,556  for the year
     ended  December  31,  2002,  of which  $2,795,415  was  allocated to Belmar
     Capital.  Pursuant to a servicing  agreement  between Belmar Capital and EV
     Distributors,  Belmar Capital pays a servicing fee to EV  Distributors on a
     quarterly  basis at an  annual  rate of 0.25% of Belmar  Capital's  average
     daily net assets,  less Belmar  Capital's  allocated share of the servicing
     fee payable by Belvedere Capital. For the year ended December 31, 2002, the
     servicing fee paid directly by Belmar Capital  totaled  $1,825,665.  Of the
     amounts  allocated  to and  incurred  by Belmar  Capital for the year ended
     December 31, 2002, $4,606,555 was paid or accrued to subagents.

     Bel Apartments  indirectly holds real property through its interest in five
     operating  partnerships.  Each  operating  partnership  has entered  into a
     management  agreement  with an  affiliate  of the Bel  Apartments  Minority
     Shareholder (Note 1B). The management  agreements  provide for a management
     fee and allow for reimbursement to the manager for payroll and other direct
     expenses   incurred  by  the  manager  for  managing  the  Bel   Apartments
     Properties.

                                       55
<PAGE>

BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D

     For the year  ended  December  31,  2002,  Bel  Apartments  paid or accrued
     property management fees of $1,375,915.

10 Segment Information
-------------------------------------------
     Belmar  Capital  pursues its  investment  objective  primarily by investing
     indirectly in the Portfolio through Belvedere  Capital.  The Portfolio is a
     diversified   investment  company  of  equity  securities  that  emphasizes
     investments in common stocks of domestic and foreign growth  companies that
     are  considered  to be high in quality and  attractive  in their  long-term
     investment  prospects.  Separate from its investment in Belvedere  Capital,
     Belmar Capital invests in real estate assets through its subsidiary  Belmar
     Realty. Belmar Realty invests directly in Partnership  Preference Units and
     indirectly in real property through a controlled subsidiary, Bel Apartments
     (Note 1). Belmar Capital evaluates  performance of the reportable  segments
     based on the net increase  (decrease) in net assets from  operations of the
     respective  segment,  which  includes net  investment  income or loss,  net
     realized gain (loss), and unrealized gain (loss).  The accounting  policies
     of the  reportable  segments are the same as those for Belmar  Capital on a
     consolidated  basis (Note 2). No reportable  segments have been aggregated.
     Reportable information by segment is as follows:



                                   TAX-MANAGED
FOR THE YEAR ENDED                    GROWTH         REAL
DECEMBER 31, 2002                   PORTFOLIO*      ESTATE      TOTAL

------------------------------------------------------------------------------
Revenues                         $  12,845,871 $ 86,920,215  $  99,766,086
Interest expense on mortgages           --      (14,882,677)   (14,882,677)
Interest expense on Credit Facility     --      (11,989,028)   (11,989,028)
Interest expense on swap contracts      --      (40,731,435)   (40,731,435)
Operating expenses                  (1,246,862) (22,848,604)   (24,095,466)
Minority interest in net income of
 controlled subsidiary                  --         (424,054)      (424,054)
------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS)     $  11,599,009 $ (3,955,583) $   7,643,426
Net realized gain (loss)            (1,786,292)   3,333,629      1,547,337
Change in unrealized gain (loss)  (424,007,010)   6,425,178   (417,581,832)
------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS OF
REPORTABLE SEGMENTS              $(414,194,293) $  5,803,224 $ (408,391,069)
------------------------------------------------------------------------------
Segment assets(1)               $1,674,547,493  $766,408,400 $2,440,955,893
Segment liabilities                     --       753,620,279    753,620,279
------------------------------------------------------------------------------
NET ASSETS OF REPORTABLE
SEGMENTS                        $1,674,547,493  $ 12,788,121 $1,687,335,614
------------------------------------------------------------------------------

*    Belmar Capital invests  indirectly in Tax-Managed  Growth Portfolio through
     Belvedere Capital.
(1)  Includes $29,285,500 of accounts receivable for investments sold.

                                       56
<PAGE>


     The following  tables  reconcile the reported  segment  information  to the
     consolidated financial statements for the year ended December 31, 2002:


    --------------------------------------------------------
    Revenue:
       Revenues from reportable segments      $   99,766,086
       Unallocated revenue                            48,749
    --------------------------------------------------------
    TOTAL REVENUE                             $   99,814,835
    --------------------------------------------------------
    Net increase (decrease) in net assets from operations:
       Net decrease in net assets from
        operations of reportable segments     $ (408,391,069)
       Unallocated revenue                            48,749
       Unallocated realized loss                  (2,338,586)
       Unallocated expenses                       (5,676,966)
    --------------------------------------------------------
    TOTAL NET DECREASE IN NET ASSETS FROM
     OPERATIONS                               $ (416,357,872)
    --------------------------------------------------------
    Net assets:
       Net assets of reportable segments      $1,687,335,614
       Unallocated cash                            4,683,403
       Loan payable -- Credit Facility           (71,580,000)
       Other liabilities                            (209,212)
    --------------------------------------------------------
    TOTAL NET ASSETS                          $1,620,229,805
    --------------------------------------------------------

                                       57
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS
OF BELMAR CAPITAL FUND LLC AND SUBSIDIARIES:
---------------------------------------------

We  have  audited  the  accompanying   consolidated   statement  of  assets  and
liabilities,  including the  consolidated  portfolio of  investments,  of Belmar
Capital Fund LLC and Subsidiaries  (collectively,  the Fund), as of December 31,
2002, and the related  consolidated  statements of operations and cash flows for
the year then ended,  the  consolidated  statements of changes in net assets for
each of the two years in the period then ended and financial  highlights for the
year then ended.  These  financial  statements and financial  highlights are the
responsibility  of the Fund's  management.  Our  responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  Our  procedures  included  confirmation  of securities  owned as of
December 31, 2002 by correspondence  with the custodian.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated  financial statements and financial highlights
referred to above  present  fairly,  in all  material  respects,  the  financial
position of the Fund as of December 31, 2002 and the results of its  operations,
the changes in its net assets, its cash flows, and the financial  highlights for
the respective stated periods in conformity with accounting principles generally
accepted in the United States of America.

DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 28, 2003

                                       58
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS

COMMON STOCKS -- 98.9%



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Aerospace and Defense -- 3.0%
--------------------------------------------------------------------------
Boeing Company (The)                            785,510    $    25,913,975
General Dynamics                              2,655,000        210,727,350
Honeywell International, Inc.                   292,998          7,031,952
Northrop Grumman Corp.                        1,084,235        105,170,795
Raytheon Company                                313,599          9,643,169
Rockwell Collins, Inc.                          203,032          4,722,524
United Technologies Corp.                     1,205,679         74,679,757
--------------------------------------------------------------------------
                                                           $   437,889,522
--------------------------------------------------------------------------
Air Freight and Logistics -- 2.7%
--------------------------------------------------------------------------
FedEx Corporation                             2,306,578    $   125,062,659
Robinson (C.H.) Worldwide, Inc.               1,203,674         37,554,629
United Parcel Service, Inc. Class B           3,640,273        229,628,421
--------------------------------------------------------------------------
                                                           $   392,245,709
--------------------------------------------------------------------------
Airlines -- 0.0%
--------------------------------------------------------------------------
Southwest Airlines, Inc.                         17,221    $       239,372
--------------------------------------------------------------------------
                                                           $       239,372
--------------------------------------------------------------------------
Auto Components -- 0.2%
--------------------------------------------------------------------------
ArvinMeritor, Inc.                               33,635    $       560,695
Borg-Warner Automotive, Inc.                    203,981         10,284,722
Dana Corp.                                       46,137            542,571
Delphi Automotive Systems Corp.                   6,338             51,021
Federal Signal Corp.                            283,471          5,505,007
Johnson Controls, Inc.                          128,040         10,264,967
Visteon Corp.                                    15,135            105,340
--------------------------------------------------------------------------
                                                           $    27,314,323
--------------------------------------------------------------------------
Automobiles -- 0.3%
--------------------------------------------------------------------------
DaimlerChrysler AG                                7,000    $       214,550
Ford Motor Co.                                  146,202          1,359,679
General Motors Corp.                             13,896            512,207
Harley-Davidson, Inc.                           714,700         33,019,140
Honda Motor Co. Ltd. ADR                         20,000            361,200
--------------------------------------------------------------------------
                                                           $    35,466,776
--------------------------------------------------------------------------
Banks -- 8.8%
--------------------------------------------------------------------------
AmSouth Bancorporation                          832,318    $    15,980,506

                                       59
<PAGE>


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------

Banks (continued)
--------------------------------------------------------------------------
Associated Banc-Corp.                           749,148    $    25,426,083
Bank of America Corporation                   1,996,299        138,882,521
Bank of Hawaii Corp.                             49,425          1,502,026
Bank of Montreal                                271,403          7,197,608
Bank of New York Co., Inc. (The)                454,051         10,879,062
Bank One Corp.                                1,526,487         55,793,100
Banknorth Group, Inc.                            65,720          1,485,272
BB&T Corp.                                    1,169,217         43,249,337
Charter One Financial, Inc.                     251,896          7,236,972
City National Corp.                             273,260         12,020,707
Colonial Bancgroup, Inc. (The)                  396,090          4,725,354
Comerica, Inc.                                  222,464          9,619,343
Commerce Bancshares, Inc.                       179,374          7,047,604
Community First Bancshares, Inc.                360,184          9,530,469
Compass Bancshares, Inc.                        359,763         11,249,789
Credit Suisse Group(1)                          155,136          3,364,598
Fifth Third Bancorp                           1,047,527         61,332,706
First Citizens BancShares, Inc.                  48,696          4,704,034
First Financial Bancorp.                         48,948            802,307
First Midwest Bancorp, Inc.                     815,329         21,777,438
First Tennessee National Corporation             70,143          2,520,939
FleetBoston Financial Corporation               708,165         17,208,409
Golden West Financial Corporation               121,800          8,746,458
GreenPoint Financial Corp.                      620,983         28,056,012
GreenPoint Financial Corp.(2)(3)                100,000          4,516,306
Hibernia Corp. Class A                          187,345          3,608,265
Huntington Bancshares, Inc.                     578,423         10,822,294
Investors Financial Services Corp.              475,402         13,021,261
Keycorp                                         651,954         16,390,124
M&T Bank Corp.                                   39,116          3,103,855
Marshall & Ilsley Corp.                         683,798         18,722,389
Mellon Financial Corporation                    221,912          5,794,122
National City Corp.                           1,288,252         35,195,045
National Commerce Financial Corp.             1,113,055         26,546,362
North Fork Bancorporation, Inc.                  53,534          1,806,237
Northern Trust Corp.                            221,188          7,752,639
PNC Bank Corp.                                  150,003          6,285,126
Popular, Inc.                                       716             24,201
Regions Financial Corp.                       1,624,786         54,202,861
Royal Bank of Canada                            438,749         16,119,638
Royal Bank of Scotland Group PLC                 52,322          1,253,156


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       60
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------

Banks (continued)
--------------------------------------------------------------------------
Royal Bank of Scotland Group PLC
(A.V.S.)                                         50,837    $        44,800
S&T Bancorp, Inc.                               100,000          2,505,100
Societe Generale                                809,647         47,117,023
SouthTrust Corp.                                331,989          8,249,927
Southwest Bancorporation of Texas,
Inc.(1)                                         815,601         23,497,465
Sovereign Bancorporation, Inc.                   26,692            375,023
SunTrust Banks, Inc.                            404,246         23,009,682
Synovus Financial Corp.                       1,303,564         25,289,142
TCF Financial Corporation                        28,000          1,223,320
U.S. Bancorp                                  4,363,624         92,596,101
UBS AG(1)                                        32,525          1,565,103
Union Planters Corp.                            725,968         20,428,740
Valley National Bancorp                         382,725         10,092,458
Wachovia Corp.                                1,704,138         62,098,789
Washington Mutual, Inc.                       2,083,493         71,943,013
Wells Fargo & Company                         2,670,930        125,186,489
Westamerica Bancorporation                      266,506         10,708,211
Whitney Holding Corp.                           359,920         11,996,134
Zions Bancorporation                            227,671          8,958,626
--------------------------------------------------------------------------
                                                           $ 1,282,387,681
--------------------------------------------------------------------------
Beverages -- 4.3%
--------------------------------------------------------------------------
Anheuser-Busch Companies, Inc.                3,192,296    $   154,507,126
Coca-Cola Company (The)                       3,873,680        169,744,658
Coca-Cola Enterprises, Inc.                   1,729,424         37,563,089
Panamerican Beverages, Inc.                      80,000          1,662,400
PepsiCo., Inc.                                6,158,804        260,024,705
--------------------------------------------------------------------------
                                                           $   623,501,978
--------------------------------------------------------------------------
Biotechnology -- 1.5%
--------------------------------------------------------------------------
Amgen, Inc.(1)                                3,354,935    $   162,177,558
Applera Corp. - Celera Genomics Group(1)         26,000            248,300
Genzyme Corp. - General Division(1)           1,325,812         39,204,261
Gilead Sciences, Inc.(1)                         77,490          2,634,660
Incyte Pharmaceuticals, Inc.(1)               1,118,525          5,100,474
Invitrogen Corp.(1)                             179,449          5,614,959
Vertex Pharmaceuticals, Inc.(1)                  13,000            206,050
--------------------------------------------------------------------------
                                                           $   215,186,262
--------------------------------------------------------------------------

                                       61
<PAGE>


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Building Products -- 0.7%
--------------------------------------------------------------------------
American Standard Companies, Inc.(1)            331,609    $    23,590,664
Masco Corporation                             3,895,436         81,998,928
--------------------------------------------------------------------------
                                                           $   105,589,592
--------------------------------------------------------------------------
Chemicals -- 1.1%
--------------------------------------------------------------------------
Airgas, Inc.(1)                                 469,801    $     8,104,067
Arch Chemicals, Inc.                              4,950             90,337
Bayer AG ADR                                     40,000            866,000
Dow Chemical Co. (The)                          251,078          7,457,017
DuPont (E.I.) de Nemours & Co.                1,252,589         53,109,774
Eastman Chemical Co.                                148              5,442
Ecolab, Inc.                                    300,326         14,866,137
International Flavors & Fragrances, Inc.         50,247          1,763,670
MacDermid, Inc.                                  61,937          1,415,260
Monsanto Company                                 94,435          1,817,874
Olin Corp.                                        9,900            153,945
PPG Industries, Inc.                             23,742          1,190,661
Rohm and Haas, Co.                                2,380             77,302
RPM, Inc.                                       470,138          7,183,709
Sigma-Aldrich Corp.                             630,897         30,724,684
Solutia Inc.                                     99,629            361,653
Syngenta AG(1)                                   10,030            115,546
Valspar Corp.                                   818,316         36,153,201
--------------------------------------------------------------------------
                                                           $   165,456,279
--------------------------------------------------------------------------
Commercial Services and Supplies -- 5.0%
--------------------------------------------------------------------------
Allied Waste Industries, Inc.(1)              1,675,000    $    16,750,000
Apollo Group, Inc. Class A(1)                     7,599            334,356
Arbitron, Inc.(1)                                30,885          1,034,647
Automatic Data Processing, Inc.               4,747,523        186,340,278
Avery Dennison Corp.                          1,332,004         81,358,804
Banta Corp.                                      42,341          1,324,003
BISYS Group, Inc. (The)(1)                      280,492          4,459,823
Block (H&R), Inc.                               732,354         29,440,631
Bowne & Company                                 172,640          2,063,048
Cendant Corp.(1)                                549,359          5,757,282
Century Business Services, Inc.(1)              400,000          1,060,000
Ceridian Corp.(1)                               166,750          2,404,535
Certegy, Inc.(1)                                 42,862          1,052,262
Cintas Corp.                                  1,020,305         46,678,954
Concord EFS, Inc.(1)                            531,454          8,365,086


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       62
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------

Commercial Services and Supplies (continued)
--------------------------------------------------------------------------
Consolidated Graphics, Inc.(1)                   70,215    $     1,562,284
CSG Systems International, Inc.(1)               41,116            561,233
Deluxe Corporation                               80,675          3,396,417
Donnelley (R.R.) & Sons Co.                     200,521          4,365,342
DST Systems, Inc.(1)                            391,034         13,901,259
eFunds Corp.(1)                                  44,484            405,249
Equifax, Inc.                                    85,724          1,983,653
First Data Corp.                              4,150,162        146,957,236
Gevity HR, Inc.                                  78,125            316,406
Harland (John H.) Co.                            51,540          1,140,580
HON Industries, Inc.                          1,561,853         44,169,203
Imagistics International Inc.(1)                  2,482             49,640
Manpower, Inc.                                  112,000          3,572,800
Miller (Herman) Inc.                            577,903         10,633,415
Navigant Consulting, Inc.(1)                    496,795          2,931,090
Navigant International, Inc.(1)                  44,278            545,948
Paychex, Inc.                                 1,548,895         43,214,170
Pitney Bowes, Inc.                               89,799          2,932,835
Proquest Company(1)                             115,000          2,254,000
ServiceMaster Co.                               938,668         10,419,215
Spherion Corp.(1)                                90,000            603,000
Steelcase Inc.                                  123,000          1,348,080
Sylvan Learning Systems, Inc.(1)                815,396         13,372,494
Waste Management, Inc.                        1,310,285         30,031,732
--------------------------------------------------------------------------
                                                           $   729,090,990
--------------------------------------------------------------------------
Communications Equipment -- 1.2%
--------------------------------------------------------------------------
3Com Corp.(1)                                   873,949    $     4,046,384
ADC Telecommunications, Inc.(1)                 370,286            773,899
Advanced Fibre Communication, Inc.(1)            15,000            250,200
Alcatel S.A. ADR                                 43,728            194,152
Avaya, Inc.(1)                                   65,196            159,730
Ciena Corp.(1)                                  380,378          1,955,143
Cisco Systems, Inc.(1)                        3,718,338         48,710,228
Comverse Technology, Inc.(1)                    386,378          3,871,508
Corning, Inc.(1)                                705,943          2,336,671
Enterasys Networks, Inc.(1)                      61,088             95,297
JDS Uniphase Corp.(1)                           266,080            657,218
Lucent Technologies, Inc.(1)                    654,299            824,417
McData Corp., Class A(1)                         22,604            160,488
Motorola, Inc.                                  604,394          5,228,008
Nokia Corp., Class A, ADR                     6,050,307         93,779,758

                                       63
<PAGE>


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------

Communications Equipment (continued)
--------------------------------------------------------------------------
Nortel Networks Corp.(1)                      1,663,151    $     2,677,673
Qualcomm, Inc.(1)                               344,112         12,522,236
Riverstone Networks, Inc.(1)                     31,344             66,449
Tellabs, Inc.(1)                                118,404            860,797
--------------------------------------------------------------------------
                                                           $   179,170,256
--------------------------------------------------------------------------
Computers and Peripherals -- 3.2%
--------------------------------------------------------------------------
Dell Computer Corp.(1)                        3,963,089    $   105,973,000
EMC Corp.(1)                                  1,014,343          6,228,066
Gateway, Inc.(1)                                 99,407            312,138
Hewlett-Packard Co.                           2,235,064         38,800,711
International Business Machines Corp.         1,442,028        111,757,170
Lexmark International Group, Inc.(1)          3,269,528        197,806,444
Network Appliance, Inc.(1)                      488,000          4,880,000
Palm, Inc.(1)                                    65,230          1,024,111
Sun Microsystems, Inc.(1)                       537,670          1,672,154
--------------------------------------------------------------------------
                                                           $   468,453,794
--------------------------------------------------------------------------
Construction and Engineering -- 0.1%
--------------------------------------------------------------------------
Dycom Industries, Inc.(1)                       160,464    $     2,126,148
Jacobs Engineering Group, Inc.(1)               325,090         11,573,204
Salient 3 Communications, Inc., Class A          78,125             54,687
--------------------------------------------------------------------------
                                                           $    13,754,039
--------------------------------------------------------------------------
Construction Materials -- 0.1%
--------------------------------------------------------------------------
CRH plc                                         329,450    $     4,076,249
Vulcan Materials Company                        184,512          6,919,200
--------------------------------------------------------------------------
                                                           $    10,995,449
--------------------------------------------------------------------------
Containers and Packaging -- 0.1%
--------------------------------------------------------------------------
Bemis Co.                                       141,000    $     6,997,830
Caraustar Industries, Inc.(1)                   264,862          2,510,892
Sealed Air Corp.(1)                             174,914          6,524,292
Sonoco Products Co.                             160,690          3,684,622
Temple-Inland, Inc.                              12,632            566,040
--------------------------------------------------------------------------
                                                           $    20,283,676
--------------------------------------------------------------------------
Distillers and Vintners -- 0.0%
--------------------------------------------------------------------------
Brown-Forman Corp. Class A                       15,296    $     1,024,832
--------------------------------------------------------------------------
                                                           $     1,024,832
--------------------------------------------------------------------------


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       64
<PAGE>



TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Distributors -- 0.0%
--------------------------------------------------------------------------
Genuine Parts Company                           188,609    $     5,809,157
--------------------------------------------------------------------------
                                                           $     5,809,157
--------------------------------------------------------------------------
Diversified Financials -- 5.8%
--------------------------------------------------------------------------
Affiliated Managers Group(1)                     13,680    $       688,104
American Express Co.                            925,031         32,699,846
Bear Stearns Companies, Inc.                     16,237            964,478
Capital One Financial Corp.                   1,270,025         37,745,143
Citigroup Inc.                                4,258,531        149,857,706
E*Trade Group, Inc.(1)                          288,290          1,401,089
Fannie Mae                                    1,187,100         76,366,143
Federated Investors, Inc.                     1,634,947         41,478,605
Finova Group, Inc.(1)                           175,587             28,094
Franklin Resources, Inc.                      1,903,317         64,865,043
Freddie Mac                                     180,047         10,631,775
Goldman Sachs Group, Inc.                         9,627            655,599
Household International, Inc.                 1,102,873         30,670,898
ING groep, N.V. ADR                             210,570          3,545,999
Knight Trading Group, Inc.(1)                 1,750,000          8,382,500
Legg Mason, Inc.                                 17,641            856,294
Lehman Brothers Holdings, Inc.                   55,756          2,971,237
MBNA Corporation                                391,431          7,445,018
Merrill Lynch & Co., Inc.                     1,869,290         70,939,555
Moody's Corp.                                    20,004            825,965
Morgan (J.P.) Chase & Co.                       432,106         10,370,544
Morgan Stanley Dean Witter & Co.              4,625,985        184,669,321
Morgan Stanley Dean Witter & Co.(2)(3)          150,000          5,982,760
Nuveen (John) Co.                               150,000          3,802,500
Price (T. Rowe) Group, Inc.                     171,926          4,690,141
Providian Financial Corp.(1)                    597,678          3,878,930
Raymond James Financial, Inc.                    98,225          2,905,495
Schwab (Charles) & Co.                          998,190         10,830,361
SLM Corp.                                       601,833         62,506,375
State Street Corp.                              328,000         12,792,000
Stilwell Financial, Inc.(1)                      95,458          1,247,636
Waddell & Reed Financial, Inc., Class A         150,751          2,965,272
--------------------------------------------------------------------------
                                                           $   849,660,426
--------------------------------------------------------------------------
Diversified Telecommunication Services -- 2.5%
--------------------------------------------------------------------------
Alltel Corp.                                  1,663,732    $    84,850,332
At Home Corporation Series A(1)(2)              371,895                744

                                       65
<PAGE>


SECURITY                                        SHARES           VALUE

--------------------------------------------------------------------------

Diversified Telecommunication Services (continued)
--------------------------------------------------------------------------
AT&T Corp.                                      473,339    $    12,358,881
BCE, Inc.                                     4,000,000         72,040,000
BellSouth Corp.                               1,460,642         37,786,809
Broadwing, Inc.(1)                              324,311          1,141,575
Citizens Communications Co.(1)                   59,563            628,390
Deutsche Telekom AG                           1,684,272         21,390,254
ITC DeltaCom, Inc.(1)                             6,373             14,849
McLeodUSA(1)                                     35,538             29,852
NTL, Inc.(1)                                    400,390              6,406
PTEK Holdings, Inc.(1)                           28,000            123,200
Qwest Communications International,
Inc.(1)                                          59,924            299,620
RSL Communications Ltd.(1)                      747,161                 97
SBC Communications, Inc.                      2,622,841         71,105,219
Sprint Corp. - FON Group                        150,796          2,183,526
Talk America Holdings, Inc.(1)                   82,458            461,765
Verizon Communications                        1,345,782         52,149,053
WorldCom, Inc.(1)                               232,818             32,129
WorldCom, Inc. - MCI Group                       46,372              8,347
--------------------------------------------------------------------------
                                                           $   356,611,048
--------------------------------------------------------------------------
Electric Utilities -- 0.2%
--------------------------------------------------------------------------
Ameren Corp.                                      5,000    $       207,850
American Electric Power, Inc.                       960             26,237
Dominion Resources, Inc.                         10,464            574,474
Exelon Corp.                                    500,000         26,385,000
PG&E Corp.(1)                                    47,705            663,100
TECO Energy, Inc.                                40,000            618,800
TXU Corp.                                       250,196          4,673,661
Wisconsin Energy Corp.                            9,576            241,315
--------------------------------------------------------------------------
                                                           $    33,390,437
--------------------------------------------------------------------------
Electrical Equipment -- 0.5%
--------------------------------------------------------------------------
American Power Conversion Corp.(1)               36,671    $       555,566
Baldor Electric Co.                             149,060          2,943,935
Emerson Electric Co.                          1,048,511         53,316,784
Energizer Holdings(1)                           141,981          3,961,270
Rockwell International Corp.                    179,520          3,717,859
Thomas & Betts Corp.(1)                         114,600          1,936,740
--------------------------------------------------------------------------
                                                           $    66,432,154
--------------------------------------------------------------------------


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       66
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Electronic Equipment and Instruments -- 0.5%
--------------------------------------------------------------------------
Agilent Technologies, Inc.(1)                   218,644    $     3,926,846
Arrow Electronics, Inc.(1)                        8,750            111,913
Flextronics International Ltd.(1)               182,816          1,497,263
Jabil Circuit, Inc.(1)                        2,127,971         38,133,240
Millipore Corporation(1)                        101,440          3,448,960
Molex, Inc., Class A                            112,582          2,239,256
PerkinElmer, Inc.                               300,081          2,475,668
Plexus Corp.(1)                                 209,946          1,843,326
Roper Industries, Inc.                           23,122            846,265
Sanmina Corp.(1)                              1,186,972          5,329,504
Solectron Corporation(1)                      1,818,848          6,456,910
Teledyne Technologies Incorporated(1)             6,117             95,915
Waters Corp.(1)                                 198,320          4,319,410
X-Rite Incorporated                             361,707          2,528,332
--------------------------------------------------------------------------
                                                           $    73,252,808
--------------------------------------------------------------------------
Energy Equipment and Services -- 1.2%
--------------------------------------------------------------------------
Baker Hughes, Inc.                              520,182    $    16,744,659
Core Laboratories N.V.(1)                       205,000          2,326,750
Grant Prideco, Inc.(1)                          160,681          1,870,327
Halliburton Company                             502,602          9,403,683
Nabors Industries, Ltd.(1)                      223,291          7,875,474
National-Oilwell, Inc.(1)                       686,929         15,002,529
Schlumberger Ltd.                             2,370,713         99,783,310
Smith International, Inc.(1)                    140,000          4,566,800
Transocean Sedco Forex, Inc.                     71,442          1,657,454
Weatherford International Ltd.(1)               188,681          7,534,032
--------------------------------------------------------------------------
                                                           $   166,765,018
--------------------------------------------------------------------------
Food and Drug Retailing -- 2.0%
--------------------------------------------------------------------------
Albertson's, Inc.                               820,296    $    18,259,789
Casey's General Stores, Inc.                     91,201          1,113,564
CVS Corp.                                       193,763          4,838,262
Kroger Co. (The)(1)                           1,113,221         17,199,264
Safeway, Inc.(1)                              1,210,097         28,267,866
Sysco Corp.                                   6,819,724        203,159,578
Walgreen Co.                                    631,784         18,441,775
Winn-Dixie Stores, Inc.                         271,444          4,147,664
--------------------------------------------------------------------------
                                                           $   295,427,762
--------------------------------------------------------------------------

                                       67
<PAGE>


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Food Products -- 3.5%
--------------------------------------------------------------------------
Archer-Daniels-Midland Co.                      316,652    $     3,926,485
Campbell Soup Co.                             1,243,047         29,174,313
Conagra Inc.                                  1,654,583         41,381,121
Dean Foods Co.(1)                               336,144         12,470,942
Del Monte Foods, Co.(1)                         103,109            793,939
General Mills, Inc.                             253,123         11,884,125
Heinz (H.J.) Co.                                230,876          7,588,894
Hershey Foods Corp.                             243,006         16,388,325
JM Smucker Co.                                   19,342            770,005
Kellogg Co.                                      80,407          2,755,548
Kraft Foods, Inc.                               387,000         15,065,910
McCormick & Co., Inc.                           482,002         11,182,446
Nestle SA                                       200,000         42,363,998
Riviana Foods, Inc.                             250,000          6,755,250
Sara Lee Corp.                                5,587,965        125,785,092
Smithfield Foods, Inc.(1)                     4,207,530         83,477,395
Tyson Foods, Inc.                               405,548          4,550,249
Unilever ADR                                  1,100,000         67,881,000
Wrigley (Wm.) Jr. Company Class A               444,868         24,414,356
--------------------------------------------------------------------------
                                                           $   508,609,393
--------------------------------------------------------------------------
Gas Utilities -- 0.5%
--------------------------------------------------------------------------
Kinder Morgan, Inc.                           1,788,072    $    75,581,803
--------------------------------------------------------------------------
                                                           $    75,581,803
--------------------------------------------------------------------------
Health Care Equipment and Supplies -- 1.7%
--------------------------------------------------------------------------
Advanced Medical Optics                           7,631    $        91,343
Bausch & Lomb, Inc.                             145,054          5,221,944
Baxter International, Inc.                    3,059,912         85,677,536
Becton & Dickinson and Co.                       89,913          2,759,430
Biomet, Inc.                                    411,340         11,789,004
Boston Scientific Corporation(1)                540,985         23,002,682
Dentsply International, Inc.                     11,325            421,290
Edwards Lifesciences Corp.(1)                    29,878            760,993
Guidant Corp.(1)                                 54,616          1,684,904
Hillenbrand Industries, Inc.                    647,179         31,265,217
Lumenis Ltd.(1)                                 112,000            224,000
Medtronic, Inc.                               1,692,376         77,172,346
St. Jude Medical, Inc.(1)                        10,014            397,756
Steris Corp.(1)                                  36,246            878,966
VISX, Inc.(1)                                    50,000            479,000


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       68
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------

Health Care Equipment and Supplies (continued)
--------------------------------------------------------------------------
Zimmer Holdings, Inc.(1)                        244,725    $    10,160,982
--------------------------------------------------------------------------
                                                           $   251,987,393
--------------------------------------------------------------------------
Health Care Providers and Services -- 2.2%
--------------------------------------------------------------------------
AmerisourceBergen Corp.                          30,800    $     1,672,748
Andrx Group(1)                                  393,772          5,776,635
Beverly Enterprises, Inc.(1)                    357,143          1,017,858
Cardinal Health, Inc.                         1,883,537        111,486,555
Caremark Rx, Inc.(1)                             17,696            287,560
Cigna Corp.                                      11,836            486,696
HCA Inc.                                        253,484         10,519,586
Health Management Associates, Inc.,
Class A                                       1,536,833         27,509,311
HealthSouth Corp.(1)                            319,506          1,341,925
IDX Systems Corp.(1)                             60,000          1,021,800
IMS Health, Inc.                                498,012          7,968,192
McKesson HBOC, Inc.                              49,513          1,338,336
Parexel International Corp.(1)                   35,000            384,650
Quest Diagnostics, Inc.(1)                      231,250         13,158,125
Quintiles Transnational Corp.(1)                343,408          4,155,237
Renal Care Group, Inc.(1)                       371,007         11,738,661
Schein (Henry), Corp.(1)                      1,272,548         57,264,660
Service Corp. International(1)                  145,389            482,691
Stewart Enterprises, Inc.(1)                    114,000            635,094
Sunrise Assisted Living, Inc.(1)                144,000          3,584,160
Tenet Healthcare Corp.(1)                         3,961             64,960
UnitedHealth Group, Inc.                        305,124         25,477,854
Ventiv Health, Inc.(1)                          160,833            326,652
Wellpoint Health Networks(1)                    504,000         35,864,640
--------------------------------------------------------------------------
                                                           $   323,564,586
--------------------------------------------------------------------------
Hotels, Restaurants and Leisure -- 1.5%
--------------------------------------------------------------------------
Brinker International, Inc.(1)                  582,237    $    18,777,143
Carnival Corporation                            554,748         13,840,963
CBRL Group, Inc.                                 62,047          1,869,476
Evans (Bob) Farms, Inc.                          51,662          1,206,308
Gaylord Entertainment Co.(1)                    428,482          8,826,729
International Game Technology(1)                100,000          7,592,000
International Speedway Corporation              118,344          4,413,048
Jack in the Box, Inc.(1)                        500,000          8,645,000
Lone Star Steakhouse & Saloon, Inc.             145,981          2,823,273

                                       69
<PAGE>


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------

Hotels, Restaurants and Leisure (continued)
--------------------------------------------------------------------------
Marriott International, Inc.                    332,517    $    10,929,834
McDonald's Corp.                              1,373,682         22,088,807
MGM Grand, Inc.(1)                               94,445          3,113,852
Outback Steakhouse, Inc.                      1,610,923         55,480,188
Outback Steakhouse, Inc.(2)(3)                   31,784          1,093,683
Papa John's International, Inc.(1)              199,760          5,569,309
Royal Caribbean Cruises Ltd.                    500,000          8,350,000
Sonic Corp.(1)                                  106,510          2,182,390
Starbucks Corp.(1)                            1,330,334         27,112,207
Yum! Brands, Inc.(1)                            436,380         10,569,124
--------------------------------------------------------------------------
                                                           $   214,483,334
--------------------------------------------------------------------------
Household Durables -- 0.6%
--------------------------------------------------------------------------
Blyth Industries, Inc.                        1,042,766    $    27,904,418
Department 56, Inc.(1)                          255,162          3,291,590
Fortune Brands Inc.                             142,143          6,611,071
Helen of Troy Ltd.(1)                            20,000            232,800
Interface, Inc. Class B(2)                      171,613            526,852
Interface, Inc. Class A                          19,538             59,982
Leggett & Platt, Inc.                         1,432,606         32,147,679
Maytag Corp.                                     27,073            771,581
Newell Rubbermaid, Inc.                         402,694         12,213,709
Snap-On, Inc.                                    51,429          1,445,669
--------------------------------------------------------------------------
                                                           $    85,205,351
--------------------------------------------------------------------------
Household Products -- 1.8%
--------------------------------------------------------------------------
Clorox Co. (The)                                 53,688    $     2,214,630
Colgate-Palmolive Co.                           563,176         29,527,318
Kimberly-Clark Corp.                          1,920,274         91,155,407
Procter & Gamble Co.                          1,680,808        144,448,640
--------------------------------------------------------------------------
                                                           $   267,345,995
--------------------------------------------------------------------------
Industrial Conglomerates -- 1.5%
--------------------------------------------------------------------------
3M Co.                                          223,875    $    27,603,788
General Electric Co.                          6,597,241        160,642,818
Teleflex, Inc.                                   47,559          2,039,806
Tyco International Ltd.                       1,191,481         20,350,495
--------------------------------------------------------------------------
                                                           $   210,636,907
--------------------------------------------------------------------------
Insurance -- 6.9%
--------------------------------------------------------------------------
21st Century Insurance Group                     70,700    $       885,164


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       70
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------

Insurance (continued)
--------------------------------------------------------------------------
Aegon N.V. ADR                                5,048,336    $    64,770,151
AFLAC Corp.                                   1,292,702         38,936,184
Allmerica Financial Corp.(1)                      1,500             15,150
Allstate Corp. (The)                             79,875          2,954,576
American International Group, Inc.            5,394,313        312,061,007
AON Corp.                                       908,574         17,162,963
Berkshire Hathaway, Inc., Class A(1)                386         28,081,500
Berkshire Hathaway, Inc., Class B(1)             39,680         96,144,640
Chubb Corporation                               104,951          5,478,442
Commerce Group, Inc.                            120,000          4,498,800
Delphi Financial Group Inc.                       6,448            244,766
Gallagher (Arthur J.) and Co.                 1,028,843         30,227,407
Hartford Financial Services Group, Inc.          36,048          1,637,661
Jefferson-Pilot Corp.                           190,173          7,247,493
Kansas City Life Insurance Co.                   70,800          2,683,320
Lincoln National Corp.                           52,903          1,670,677
Manulife Financial Corp.(1)                      74,958          1,627,338
Marsh & McLennan Cos., Inc.                   4,128,592        190,782,236
Mercury General Corp.                             2,000             75,160
MetLife, Inc.                                 1,969,700         53,260,688
MGIC Investment Corp.                            85,000          3,510,500
Old Republic International Corp.                 72,603          2,032,884
Progressive Corp.                             1,905,100         94,550,113
Radian Group, Inc.                               30,800          1,144,220
Safeco Corp.                                     17,439            604,610
St. Paul Companies, Inc. (The)                  323,841         11,026,786
Torchmark Corp.                                 289,585         10,578,540
Travelers Property Casualty - Class A(1)        173,919          2,547,913
Travelers Property Casualty - Class B(1)        357,326          5,234,826
UICI(1)                                          75,030          1,166,717
UnumProvident Corp.                              52,000            912,080
XL Capital Ltd., Class A                         79,232          6,120,672
--------------------------------------------------------------------------
                                                           $   999,875,184
--------------------------------------------------------------------------
Internet and Catalog Retail -- 0.0%
--------------------------------------------------------------------------
eBay, Inc.(1)                                    34,268    $     2,324,056
School Specialty Corp.(1)                        49,197            982,956
--------------------------------------------------------------------------
                                                           $     3,307,012
--------------------------------------------------------------------------

                                       71
<PAGE>


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Internet Software and Services -- 0.0%
--------------------------------------------------------------------------
Retek, Inc.(1)                                  465,615    $     1,266,473
--------------------------------------------------------------------------
                                                           $     1,266,473
--------------------------------------------------------------------------
IT Consulting and Services -- 0.9%
--------------------------------------------------------------------------
Accenture Ltd.(1)                             3,638,000    $    65,447,620
Acxiom Corp.(1)                                 579,019          8,905,312
Acxiom Corp.(1)(2)(3)                            68,785          1,056,326
Affiliated Computer Services(1)                 200,654         10,564,433
Computer Sciences Corp.(1)                      390,302         13,445,904
Electronic Data Systems Corp.                   157,712          2,906,632
Gartner Group, Inc., Class A(1)                   4,811             44,261
Gartner Group, Inc., Class B(1)                  92,416            873,331
Keane, Inc.(1)                                  119,224          1,071,824
Perot Systems Corp.(1)                          747,730          8,015,666
Safeguard Scientifics, Inc.(1)                   26,579             36,147
SunGard Data Systems, Inc.(1)                   867,786         20,445,038
Synavant, Inc.(1)                                13,700             12,741
--------------------------------------------------------------------------
                                                           $   132,825,235
--------------------------------------------------------------------------
Leisure Equipment and Products -- 0.1%
--------------------------------------------------------------------------
Eastman Kodak Co.                               156,267    $     5,475,596
Mattel, Inc.                                     19,627            375,857
--------------------------------------------------------------------------
                                                           $     5,851,453
--------------------------------------------------------------------------
Machinery -- 2.9%
--------------------------------------------------------------------------
Caterpillar, Inc.                                23,255    $     1,063,219
Danaher Corporation                           1,915,985        125,880,215
Deere & Co.                                   3,450,000        158,182,500
Dionex Corp.(1)                                 501,890         14,891,076
Donaldson Company, Inc.                          40,220          1,447,920
Dover Corp.                                     610,289         17,796,027
Illinois Tool Works, Inc.                     1,138,513         73,843,953
ITT Industries, Inc.                              4,214            255,748
Nordson Corporation                             163,978          4,071,574
Parker-Hannifin Corporation                     125,359          5,782,811
SPX Corp.(1)                                     95,724          3,584,864
Tecumseh Products Co., Class A                  156,420          6,902,815
Wabtec                                          232,061          3,258,136
--------------------------------------------------------------------------
                                                           $   416,960,858
--------------------------------------------------------------------------


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       72
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



SECURITY                                      SHARES           VALUE

--------------------------------------------------------------------------
Media -- 6.9%
--------------------------------------------------------------------------
ADVO, Inc.(1)                                   580,339    $    19,052,529
AOL Time Warner, Inc.(1)                      1,400,796         18,350,428
Belo (A.H.) Corp.                               542,924         11,575,140
Cablevision Systems Corp.(1)                    207,410          3,472,043
Catalina Marketing Corp.(1)                      89,203          1,650,256
Clear Channel Communications, Inc.(1)           448,274         16,716,137
Comcast Corp. Class A(1)                      1,965,628         46,329,852
Comcast Corp. Class A Special(1)              1,042,262         23,544,699
Cox Communications, Inc., Class A(1)            352,265         10,004,326
Disney (Walt) Company                         5,039,433         82,193,152
EchoStar Communications, Class A(1)              35,150            782,439
Entercom Communications Corp.(1)                 20,000            938,400
Entercom Communications Corp.(1)(2)(3)          200,000          9,378,526
Gannett Co., Inc.                             1,208,627         86,779,419
General Motors Corp., H Class(1)                275,262          2,945,303
Havas Advertising, S.A. ADR                   3,142,938         12,477,464
Interpublic Group of Companies., Inc.         2,495,261         35,133,275
Interpublic Group of Companies.,
Inc.(2)(3)                                      100,000          1,405,888
KnightRidder, Inc.                               18,123          1,146,280
Lamar Advertising Co.(1)                        845,318         28,444,951
Liberty Media Corp. Class A(1)                1,225,175         10,953,065
Liberty Media Corp. Class B(1)                   32,876            302,459
MacClatchy Co. (The)                             48,066          2,726,784
McGraw-Hill Companies, Inc. (The)             2,028,164        122,582,232
Meredith Corp.                                  190,000          7,810,900
New York Times Co. (The), Class A               317,259         14,508,254
News Corporation Ltd.                            93,965          2,128,307
Omnicom Group, Inc.                           3,546,255        229,088,073
Publicis Groupe SA                              368,212          7,798,992
Reuters Holdings plc ADR                        270,131          4,646,253
Scripps (The E.W) Company                        25,533          1,964,764
TMP Worldwide, Inc.(1)                          154,426          1,746,558
Tribune Co.                                     654,327         29,745,705
Univision Communications, Inc.(1)               963,184         23,598,008
Viacom, Inc., Class A(1)                         29,774          1,215,077
Viacom, Inc., Class B(1)                      2,637,818        107,517,462
Vivendi Universal S.A. ADR                      490,725          7,885,951
Washington Post Co. (The)                        11,352          8,377,776
Westwood One, Inc.(1)                           122,400          4,572,864
WPP Group plc                                   139,450          1,065,057

                                       73
<PAGE>


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------

Media (continued)
--------------------------------------------------------------------------
WPP Group plc ADR                               188,507    $     7,140,645
--------------------------------------------------------------------------
                                                           $ 1,009,695,693
--------------------------------------------------------------------------
Metals and Mining -- 0.3%
--------------------------------------------------------------------------
Alcoa, Inc.                                   1,406,287    $    32,035,218
Allegheny Technologies, Inc.                     21,408            133,372
Nucor Corp.                                     239,966          9,910,596
Phelps Dodge Corp.(1)                            18,854            596,729
Steel Dynamics, Inc.(1)                         311,800          3,750,954
Worthington Industries, Inc.                    147,466          2,247,382
--------------------------------------------------------------------------
                                                           $    48,674,251
--------------------------------------------------------------------------
Multiline Retail -- 3.0%
--------------------------------------------------------------------------
99 Cents Only Stores(1)                       1,142,232    $    30,680,352
Costco Wholesale Corp.(1)                        77,258          2,167,859
Dollar General Corp.                            249,983          2,987,297
Dollar Tree Stores, Inc.(1)                   1,024,932         25,182,579
Dollar Tree Stores, Inc.(1)(2)(3)                30,000            736,824
Dollar Tree Stores, Inc.(1)(2)(3)                 5,000            122,778
Family Dollar Stores, Inc.                    2,618,411         81,720,607
Kohls Corp.(1)                                   49,500          2,769,525
May Department Stores Co. (The)                 596,760         13,713,545
Neiman Marcus Group, Inc. (The)(1)               27,117            741,108
Nordstrom, Inc.                                  65,692          1,246,177
Penney (J.C.) Company, Inc.                     539,766         12,420,016
Sears, Roebuck & Co.                             15,750            377,213
Target Corp.                                  2,824,259         84,727,770
Wal-Mart Stores, Inc.                         3,579,444        180,797,716
--------------------------------------------------------------------------
                                                           $   440,391,366
--------------------------------------------------------------------------
Multi-Utilities and Unregulated Power -- 0.0%
--------------------------------------------------------------------------
AES Corporation(1)                               49,542    $       149,617
Duke Energy Corp.                                45,234            883,872
Dynegy, Inc.                                     63,525             74,960
El Paso Corp.                                   175,909          1,224,327
Enron Corp.(1)(2)                                17,000              1,054
National Fuel Gas Co.                             4,000             82,920
Williams Companies. Inc. (The)                  222,833            601,649
--------------------------------------------------------------------------
                                                           $     3,018,399
--------------------------------------------------------------------------


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       74
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Office Electronics -- 0.0%
--------------------------------------------------------------------------
Ikon Office Solutions, Inc.                      99,415    $       710,817
Xerox Corp.(1)                                   20,000            161,000
Zebra Technologies Corp., Class A(1)              6,000            343,800
--------------------------------------------------------------------------
                                                           $     1,215,617
--------------------------------------------------------------------------
Oil and Gas -- 4.4%
--------------------------------------------------------------------------
Anadarko Petroleum Corp.                      2,591,941    $   124,153,974
Apache Corporation                              986,372         56,213,340
Ashland, Inc.                                   115,544          3,296,470
BP plc ADR                                    3,190,393        129,689,475
Burlington Resources, Inc.                      930,802         39,698,705
ChevronTexaco Corporation                       805,697         53,562,737
ConocoPhillips                                  386,960         18,724,994
Devon Energy Corp.                              724,853         33,270,753
Exxon Mobil Corp.                             4,388,503        153,334,295
Kerr - McGee Corp.                              267,327         11,842,586
Marathon Oil Corp.                              350,450          7,461,081
Murphy Oil Corporation                           59,400          2,545,290
Newfield Exploration Company(1)                  60,000          2,163,000
Ocean Energy Inc.                               200,000          3,994,000
Royal Dutch Petroleum Co.                        84,624          3,725,148
Syntroleum Corp.(1)                               2,735              4,732
Valero Energy Corp.                              51,510          1,902,779
--------------------------------------------------------------------------
                                                           $   645,583,359
--------------------------------------------------------------------------
Paper and Forest Products -- 0.2%
--------------------------------------------------------------------------
Georgia-Pacific Corp.                           647,827    $    10,468,884
International Paper Co.                         219,061          7,660,563
Louisiana-Pacific Corp.(1)                       70,750            570,245
MeadWestvaco Corp.                               84,358          2,084,486
Weyerhaeuser Co.                                119,608          5,885,910
--------------------------------------------------------------------------
                                                           $    26,670,088
--------------------------------------------------------------------------
Personal Products -- 1.1%
--------------------------------------------------------------------------
Avon Products, Inc.                             134,700    $     7,256,289
Gillette Company                              2,998,197         91,025,261
Lauder (Estee) Companies, Inc.                2,092,312         55,237,037
Water Pik Technologies(1)                         2,141             15,736
--------------------------------------------------------------------------
                                                           $   153,534,323
--------------------------------------------------------------------------

                                       75
<PAGE>


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Pharmaceuticals -- 6.6%
--------------------------------------------------------------------------
Abbott Laboratories                           2,268,381    $    90,735,240
Allergan, Inc.                                   52,340          3,015,831
Bristol-Myers Squibb Company                  2,879,723         66,665,587
Elan Corp., PLC ADR(1)                           31,838             78,321
Forest Laboratories, Inc.(1)                    328,400         32,255,448
GlaxoSmithKline plc                             503,923         18,876,956
Johnson & Johnson                             2,920,807        156,876,544
King Pharmaceuticals, Inc.(1)                 2,085,117         35,843,161
Lilly (Eli) & Co.                             2,130,682        135,298,307
Merck & Co., Inc.                             1,585,166         89,736,247
Mylan Laboratories, Inc.                          3,037            105,991
Novo Nordisk ADR                                292,277          8,446,805
Pfizer, Inc.                                  5,629,045        172,079,906
Pharmacia Corp.                                 540,149         22,578,228
Schering AG ADR                                  25,000          1,072,500
Schering-Plough Corp.                         1,855,738         41,197,384
Sepracor, Inc.(1)                                 4,000             38,680
Teva Pharmaceutical Industries Ltd. ADR         600,000         23,166,000
Watson Pharmaceuticals, Inc.(1)               1,190,893         33,666,545
Wyeth Corp.                                     718,378         26,867,337
--------------------------------------------------------------------------
                                                           $   958,601,018
--------------------------------------------------------------------------
Real Estate -- 0.2%
--------------------------------------------------------------------------
AvalonBay Communities, Inc.                      55,000    $     2,152,700
Catellus Development Corp.(1)                   415,722          8,252,082
Equity Office Properties Trust                    2,812             70,244
Jones Lang Lasalle, Inc.(1)                     154,567          2,377,240
Plum Creek Timber Co., Inc.                     415,793          9,812,715
Trammell Crow Co.(1)                            861,878          7,756,902
--------------------------------------------------------------------------
                                                           $    30,421,883
--------------------------------------------------------------------------
Road and Rail -- 0.2%
--------------------------------------------------------------------------
ANC Rental Corporation(1)                       497,025    $        24,851
Burlington Northern Santa Fe Corp.              214,841          5,588,014
CSX Corporation                                  46,652          1,320,718
Florida East Coast Industries, Inc.             122,888          2,851,002
Heartland Express, Inc.(1)                      283,930          6,505,120
Heartland Express, Inc.(1)(2)(3)                435,436          9,961,310
Kansas City Southern Industries, Inc.(1)         15,215            182,580
Norfolk Southern Corp.                            3,090             61,769


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       76
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------

Road and Rail (continued)
--------------------------------------------------------------------------
Union Pacific Corp.                              92,156    $     5,517,380
--------------------------------------------------------------------------
                                                           $    32,012,744
--------------------------------------------------------------------------
Semiconductor Equipment and Products -- 1.4%
--------------------------------------------------------------------------
Agere Systems, Inc.(1)                            7,560    $        10,886
Agere Systems, Inc., Class B(1)                 188,938            264,513
Altera Corp.(1)                                  80,516            992,762
Analog Devices, Inc.(1)                         740,630         17,678,838
Applied Materials, Inc.(1)                      196,824          2,564,617
Applied Materials, Inc.(1)(2)(3)                215,968          2,809,842
Broadcom Corp.(1)                               234,000          3,524,040
Conexant Systems, Inc.(1)                       134,174            216,020
Cypress Semiconductor Corporation(1)            152,742            873,684
Intel Corp.                                   5,993,950         93,325,802
Intel Corp.(2)(3)                               250,000          3,891,040
Intel Corp.(2)(3)                               250,000          3,889,094
Intel Corp.(2)(3)                               500,000          7,775,269
Intel Corp.(2)(3)                               375,000          5,829,992
KLA-Tencor Corp.(1)                              94,066          3,327,114
KLA-Tencor Corp.(1)(2)(3)                        35,000          1,237,228
Lam Research Corp.(1)                            44,051            475,751
Linear Technologies Corp.                        87,760          2,257,187
LSI Logic Corporation(1)                        132,810            766,314
Maxim Integrated Products Co.                   274,351          9,064,557
Mykrolis Corp.(1)                                68,655            501,182
Skyworks Solutions, Inc.(1)                      98,686            850,673
Teradyne, Inc.(1)                                27,996            364,228
Texas Instruments, Inc.                       2,589,577         38,869,551
Xilinx, Inc.(1)                                  68,518          1,411,471
--------------------------------------------------------------------------
                                                           $   202,771,655
--------------------------------------------------------------------------
Software -- 2.4%
--------------------------------------------------------------------------
Adobe Systems, Inc.                             231,936    $     5,752,245
Ascential Software Corp.(1)                       6,127             14,705
BMC Software, Inc.(1)                            27,000            461,970
Cadence Design Systems, Inc.(1)                 900,000         10,611,000
Check Point Software Technologies
Ltd.(1)                                         143,568          1,862,077
Cognos, Inc.(1)                                  77,000          1,805,650
Computer Associates International, Inc.          32,395            437,333
Compuware Corp.(1)                              153,744            737,971
Edwards (J.D.) & Co.(1)                         891,844         10,060,000

                                       77
<PAGE>


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------

Software (continued)
--------------------------------------------------------------------------
Fair, Isaac and Co., Inc.                       744,545    $    31,792,072
Henry (Jack) & Associates                       201,006          2,420,112
I2 Technologies, Inc.(1)                        233,752            268,815
Intuit, Inc.(1)                                 956,635         44,885,314
Microsoft Corp.(1)                            3,703,047        191,447,530
National Instruments Corp.(1)                   466,603         15,159,931
Oracle Corp.(1)                                 737,178          7,961,522
Parametric Technology Corp.(1)                   94,600            238,392
PeopleSoft, Inc.(1)                             384,478          7,035,947
Reynolds & Reynolds, Co.                        451,043         11,488,065
Siebel Systems, Inc.(1)                       1,216,472          9,001,893
VERITAS Software Corp.(1)                        43,942            686,374
Wind River Systems, Inc.(1)                     111,410            456,781
--------------------------------------------------------------------------
                                                           $   354,585,699
--------------------------------------------------------------------------
Specialty Retail -- 2.8%
--------------------------------------------------------------------------
Abercrombie & Fitch Co.(1)                       10,900    $       223,014
AutoNation, Inc.(1)                           3,829,750         48,101,660
Best Buy Co., Inc.(1)                           113,610          2,743,682
Burlington Coat Factory Warehouse Corp.         628,228         11,276,693
Carmax, Inc.(1)                                  67,797          1,212,210
Circuit City Stores, Inc.                       216,000          1,602,720
Gap, Inc. (The)                                  21,812            338,522
Home Depot, Inc. (The)                        6,702,847        160,600,214
Limited Brands, Inc.                            847,878         11,810,941
Lowe's Companies                              2,379,050         89,214,375
Office Depot, Inc.(1)                           245,021          3,616,510
OfficeMax, Inc.(1)                              912,117          4,560,585
Payless Shoesource, Inc.(1)                       7,700            396,319
Pep Boys - Manny, Moe & Jack (The)               83,415            967,614
Pier 1 Imports, Inc.                            300,000          5,679,000
RadioShack Corp.                                677,904         12,703,921
Sherwin-Williams Co. (The)                       80,069          2,261,949
Staples, Inc.(1)                                 92,500          1,692,750
Tiffany & Co.                                    88,000          2,104,080
TJX Companies, Inc. (The)                     2,000,000         39,040,000
Too, Inc.(1)                                     38,284            900,440
United Rentals, Inc.(1)                         401,179          4,316,686
--------------------------------------------------------------------------
                                                           $   405,363,885
--------------------------------------------------------------------------


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       78
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Textiles, Apparel and Luxury Goods -- 0.1%
--------------------------------------------------------------------------
Coach, Inc.(1)                                  182,860    $     6,019,751
Nike Inc., Class B                               78,316          3,482,713
Unifi, Inc.(1)                                   42,921            225,335
--------------------------------------------------------------------------
                                                           $     9,727,799
--------------------------------------------------------------------------
Tobacco -- 0.1%
--------------------------------------------------------------------------
Philip Morris Companies, Inc.                   495,730    $    20,091,937
UST, Inc.                                           439             14,676
--------------------------------------------------------------------------
                                                           $    20,106,613
--------------------------------------------------------------------------
Trading Companies and Distributors -- 0.0%
--------------------------------------------------------------------------
MSC Industrial Direct Co.(1)                      5,000    $        88,750
--------------------------------------------------------------------------
                                                           $        88,750
--------------------------------------------------------------------------
Water Utilities -- 0.0%
--------------------------------------------------------------------------
American Waterworks Co.                          76,039    $     3,458,254
--------------------------------------------------------------------------
                                                           $     3,458,254
--------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.1%
--------------------------------------------------------------------------
AT&T Wireless Services, Inc.(1)               1,502,536    $     8,489,328
Nextel Communications, Inc., Class A(1)          73,122            844,559
Sprint Corp. - PCS Group(1)                      19,754             86,523
Telephone and Data Systems, Inc.                 46,394          2,181,446
Vodafone Group plc ADR                           50,617            917,180
--------------------------------------------------------------------------
                                                           $    12,519,036
--------------------------------------------------------------------------
Total Common Stocks
   (identified cost $14,682,605,092)                       $14,411,340,749
--------------------------------------------------------------------------


CONVERTIBLE PREFERRED STOCKS -- 0.0%

                                       79
<PAGE>


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Multi-Utilities and Unregulated Power -- 0.0%
--------------------------------------------------------------------------
Enron Corp.(1)(2)                                11,050    $        18,706
--------------------------------------------------------------------------
                                                           $        18,706
--------------------------------------------------------------------------
Total Convertible Preferred Stocks
   (identified cost $4,500,777)                            $        18,706
--------------------------------------------------------------------------

PREFERRED STOCKS -- 0.0%


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Banks -- 0.0%
--------------------------------------------------------------------------
Wachovia Corp. (Dividend Equalization
Preferred Shares)(1)(2)                         166,518    $        20,815
--------------------------------------------------------------------------
                                                           $        20,815
--------------------------------------------------------------------------
Total Preferred Stocks
   (identified cost $39,407)                               $        20,815
--------------------------------------------------------------------------

RIGHTS -- 0.0%


SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Banks -- 0.0%
--------------------------------------------------------------------------
Bank United Corp. (Litigation Contingent
Payment Rights)(1)                              102,072    $        10,207
--------------------------------------------------------------------------
                                                           $        10,207
--------------------------------------------------------------------------
Computers and Business Equipment -- 0.0%
--------------------------------------------------------------------------
Seagate Technology, Inc. (Tax
Refund Rights)(1)(2)                            197,392    $             0
--------------------------------------------------------------------------
                                                           $             0
--------------------------------------------------------------------------
Diversified Telecommunication Services -- 0.0%
--------------------------------------------------------------------------
McLeodUSA (Escrow Rights)(1)(2)               1,592,200    $             0
--------------------------------------------------------------------------
                                                           $             0
--------------------------------------------------------------------------
Total Rights
   (identified cost $50,596)                               $        10,207
--------------------------------------------------------------------------


COMMERCIAL PAPER -- 0.9%

                                       80
<PAGE>
                                          PRINCIPAL
                                          AMOUNT
SECURITY                                  (000'S OMITTED)      VALUE

--------------------------------------------------------------------------
American Express Credit Corp., 1.28%,
1/6/03                                     $     20,000     $ 19,996,444
Cortez Capital Corp., 1.36%, 1/15/03             29,000       28,984,662
G. E. Capital Corp., 1.25%, 1/2/03               12,276       12,275,574
Old Line Funding Corp., 1.36%, 1/17/03           27,603       27,586,316
Transamerica Finance Corp., 1.35%,
1/8/03                                           25,000       24,993,438


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       81
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

PORTFOLIO OF INVESTMENTS CONT'D



                                            PRINCIPAL
                                             AMOUNT
SECURITY                                  (000'S OMITTED)     VALUE

--------------------------------------------------------------------------
Trident Cptl Fnce Inc., 1.36%, 1/16/03           18,933    $    18,922,271
--------------------------------------------------------------------------
Total Commercial Paper
   (at amortized cost, $132,758,705)                       $   132,758,705
--------------------------------------------------------------------------
Total Investments -- 99.8%
   (identified cost $14,819,954,577)                       $14,544,149,182
--------------------------------------------------------------------------


SECURITIES SOLD SHORT -- -0.3%



SECURITY                                       SHARES           VALUE

--------------------------------------------------------------------------
Kinder Morgan, Inc.                           1,000,000    $   (42,270,000)
--------------------------------------------------------------------------
Total Securities Sold Short
   (proceeds $42,473,701)                                  $   (42,270,000)
--------------------------------------------------------------------------
Other Assets, Less Liabilities
   excluding securities sold short -- 0.5%                 $    69,642,406
--------------------------------------------------------------------------
Net Assets -- 100.0%                                       $14,571,521,588
--------------------------------------------------------------------------


 ADR - American Depositary Receipt

(1)  Non-income producing security.
(2)  Security valued at fair value using methods  determined in good faith by or
     at the direction of the Trustees.
(3)  Security  restricted  from resale for a period not exceeding two years.  At
     December 31, 2002,  the value of these  securities  totaled  $59,686,866 or
     0.4% of net assets.

                       SEE NOTES TO FINANCIAL STATEMENTS

                                       82
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES



AS OF DECEMBER 31, 2002

Assets
---------------------------------------------------------
Investments, at value
   (identified cost, $14,819,954,577)     $14,544,149,182
Cash                                               93,887
Deposits with brokers for securities
   sold short                                  42,473,701
Receivable for investments sold                 4,812,234
Dividends and interest receivable              22,219,628
Tax reclaim receivable                            426,060
Other assets                                       47,529
---------------------------------------------------------
TOTAL ASSETS                              $14,614,222,221
---------------------------------------------------------

Liabilities
---------------------------------------------------------
Securities sold short, at value
   (proceeds received $42,473,701)        $    42,270,000
Payable for dividends on securities sold
   short                                          250,000
Payable to affiliate for Trustees' fees             7,500
Accrued expenses                                  173,133
---------------------------------------------------------
TOTAL LIABILITIES                         $    42,700,633
---------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
   INTEREST IN PORTFOLIO                  $14,571,521,588
---------------------------------------------------------

Sources of Net Assets
---------------------------------------------------------
Net proceeds from capital contributions
   and withdrawals                        $14,847,095,575
Net unrealized depreciation (computed on
   the basis of identified cost)             (275,573,987)
---------------------------------------------------------
TOTAL                                     $14,571,521,588
---------------------------------------------------------

                                       83
<PAGE>


STATEMENT OF OPERATIONS



FOR THE YEAR ENDED
DECEMBER 31, 2002

Investment Income
---------------------------------------------------------
Dividends (net of foreign taxes,
   $2,032,262)                            $   207,295,027
Interest                                        5,997,055
---------------------------------------------------------
TOTAL INVESTMENT INCOME                   $   213,292,082
---------------------------------------------------------

Expenses
---------------------------------------------------------
Investment adviser fee                    $    71,564,552
Trustees' fees and expenses                        29,796
Custodian fee                                   1,992,078
Dividends on securities sold short                250,000
Legal and accounting services                      95,485
Miscellaneous                                     210,130
---------------------------------------------------------
TOTAL EXPENSES                            $    74,142,041
---------------------------------------------------------

NET INVESTMENT INCOME                     $   139,150,041
---------------------------------------------------------

Realized and Unrealized Gain (Loss)
---------------------------------------------------------
Net realized gain (loss) --
   Investment transactions (identified
      cost basis)                         $  (459,951,418)
   Foreign currency transactions                  (45,422)
---------------------------------------------------------
NET REALIZED LOSS                         $  (459,996,840)
---------------------------------------------------------
Change in unrealized appreciation
   (depreciation) --
   Investments (identified cost basis)    $(3,312,778,452)
   Securities sold short                          203,701
   Foreign currency                                27,187
---------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
   (DEPRECIATION) $(3,312,547,564)
---------------------------------------------------------

NET REALIZED AND UNREALIZED LOSS          $(3,772,544,404)
---------------------------------------------------------

NET DECREASE IN NET ASSETS FROM
   OPERATIONS                             $(3,633,394,363)
---------------------------------------------------------


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       84
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

FINANCIAL STATEMENTS CONT'D

STATEMENTS OF CHANGES IN NET ASSETS



INCREASE (DECREASE)                           YEAR ENDED         YEAR ENDED
IN NET ASSETS                             DECEMBER 31, 2002  DECEMBER 31, 2001

------------------------------------------------------------------------------
From operations --
   Net investment income                  $     139,150,041  $    113,393,699
   Net realized loss                           (459,996,840)     (360,120,300)
   Net change in unrealized appreciation
      (depreciation)                         (3,312,547,564)   (1,605,211,090)
------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
   OPERATIONS                             $  (3,633,394,363) $ (1,851,937,691)
------------------------------------------------------------------------------
Capital transactions --
   Contributions                          $   2,786,165,872  $  3,921,075,957
   Withdrawals                               (2,917,114,901)   (2,118,342,171)
------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
   FROM CAPITAL TRANSACTIONS              $    (130,949,029) $  1,802,733,786
------------------------------------------------------------------------------

NET DECREASE IN NET ASSETS                $  (3,764,343,392) $    (49,203,905)
------------------------------------------------------------------------------

Net Assets
------------------------------------------------------------------------------
At beginning of year                      $  18,335,864,980  $ 18,385,068,885
------------------------------------------------------------------------------
AT END OF YEAR                            $  14,571,521,588  $ 18,335,864,980
------------------------------------------------------------------------------


                       SEE NOTES TO FINANCIAL STATEMENTS

                                       85
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

FINANCIAL STATEMENTS CONT'D

SUPPLEMENTARY DATA

                                            YEAR ENDED DECEMBER 31,
                                ----------------------------------------------
                                    2002        2001        2000        1999

------------------------------------------------------------------------------
Ratios/Supplemental Data
 ------------------------------------------------------------------------------
Ratios (As a percentage of
 average daily net assets):
  Expenses                          0.45%        0.45%       0.45%       0.46%
  Net investment income             0.85%        0.64%       0.67%       0.72%
Portfolio Turnover                    23%          18%         13%         11%
------------------------------------------------------------------------------
TOTAL RETURN(3)                  (19.52)%      (9.67)%         --          --
------------------------------------------------------------------------------
NET ASSETS, END OF YEAR
 (000'S OMITTED)            $14,571,522  $18,335,865  $18,385,069  $15,114,649
------------------------------------------------------------------------------


                                   PERIOD ENDED                YEAR ENDED
                                DECEMBER 31, 1998(1)        OCTOBER 31, 1998

------------------------------------------------------------------------------
Ratios/Supplemental Data
------------------------------------------------------------------------------
Ratios (As a percentage of
 average daily net assets):
   Expenses                            0.48%(2)                0.50%
   Net investment income               0.72%(2)                0.78%
Portfolio Turnover                        3%                     12%
-----------------------------------------------------------------------------
TOTAL RETURN(3)                           --                     --
-----------------------------------------------------------------------------
NET ASSETS, END OF YEAR
(000'S OMITTED)                       $8,704,859             $6,985,678
-----------------------------------------------------------------------------


(1)  For the two-month period ended December 31, 1998.
(2)  Annualized.
(3)  Total return is required to be disclosed for fiscal years  beginning  after
     December 15, 2000

                       SEE NOTES TO FINANCIAL STATEMENTS

                                       86
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

NOTES TO FINANCIAL STATEMENTS

1 Significant Accounting Policies
-------------------------------------------
     Tax-Managed  Growth  Portfolio  (the  Portfolio)  is  registered  under the
     Investment  Company Act of 1940,  as amended,  as a  diversified,  open-end
     management  investment  company.  The  Portfolio,  which was organized as a
     trust under the laws of the State of New York on December 1, 1995, seeks to
     provide long-term after-tax returns by investing in a diversified portfolio
     of equity  securities.  The  Declaration  of Trust  permits the Trustees to
     issue interests in the Portfolio. The following is a summary of significant
     accounting  policies   consistently   followed  by  the  Portfolio  in  the
     preparation  of its  financial  statements.  The policies are in conformity
     with  accounting  principles  generally  accepted  in the United  States of
     America.

A    Investment Valuations -- Marketable securities, including options, that are
     listed on foreign or U.S.  securities  exchanges or in the NASDAQ  National
     Market System are valued at closing sale prices on the exchange  where such
     securities  are  principally  traded.  Futures  positions on  securities or
     currencies are generally valued at closing settlement  prices.  Unlisted or
     listed  securities  for which  closing  sale prices are not  available  are
     generally  valued at the mean  between  the  latest  bid and asked  prices.
     Short-term debt securities with a remaining maturity of 60 days or less are
     valued at amortized cost, which approximates fair value. Other fixed income
     and debt securities,  including listed  securities and securities for which
     price  quotations  are  available,  will normally be valued on the basis of
     valuations  furnished by a pricing  service.  Over-the-counter  options are
     normally  valued  at the mean  between  the  latest  bid and  asked  price.
     Investments for which  valuations or market  quotations are unavailable are
     valued at fair value using  methods  determined  in good faith by or at the
     direction of the Trustees.

B    Income Taxes -- The Portfolio is treated as a  partnership  for federal tax
     purposes.  No provision is made by the Portfolio for federal or state taxes
     on any  taxable  income  of the  Portfolio  because  each  investor  in the
     Portfolio  is  ultimately  responsible  for the payment of any taxes on its
     share of such taxable income.  Since some of the Portfolio's  investors are
     regulated  investment  companies  that invest all or  substantially  all of
     their assets in the  Portfolio,  the  Portfolio  normally  must satisfy the
     applicable  source of income and  diversification  requirements  (under the
     Internal  Revenue  Code) in order for its  investors to satisfy  them.  The
     Portfolio  will  allocate,  at least  annually  among its  investors,  each
     investor's distributive share of the Portfolio's net investment income, net
     realized  capital  gains or losses,  and any other  items of income,  gain,
     loss, deduction or credit.

C    Futures Contracts -- Upon the entering of a financial futures contract, the
     Portfolio  is required to deposit  either in cash or  securities  an amount
     (initial  margin)  equal to a  certain  percentage  of the  purchase  price
     indicated in the financial futures contract.  Subsequent  payments are made
     or received by the Portfolio (margin  maintenance)  each day,  dependent on
     daily  fluctuations  in the  value  of the  underlying  security,  and  are
     recorded for book purposes as unrealized  gains or losses by the Portfolio.
     The Portfolio's  investment in financial  futures  contracts is designed to
     hedge  against  anticipated  future  changes  in the  price of  current  or
     anticipated  portfolio  positions.  Should  prices move  unexpectedly,  the
     Portfolio may not achieve the anticipated benefits of the financial futures
     contracts and may realize a loss.

D    Put  Options -- Upon the  purchase  of a put option by the  Portfolio,  the
     premium  paid  is  recorded  as  an  investment,  the  value  of  which  is

                                       87
<PAGE>

     marked-to-market daily. When a purchased option expires, the Portfolio will
     realize a loss in the amount of the cost of the option.  When the Portfolio
     enters into a closing sale  transaction,  the Portfolio will realize a gain
     or loss  depending  on whether the sales  proceeds  from the  closing  sale
     transaction  are  greater  or less  than the cost of the  option.  When the
     Portfolio  exercises a put  option,  settlement  is made in cash.  The risk
     associated  with  purchasing  options is limited to the premium  originally
     paid.

E    Securities Sold Short -- The Portfolio may sell a security short if it owns
     at least an equal  amount of the  security  sold short or another  security
     exchangeable for an equal amount of the security sold short in anticipation
     of a decline in the  market  price of the  securities  or in order to hedge
     portfolio positions.  The Portfolio will generally borrow the security sold
     in order to make delivery to the buyer. Upon executing the transaction, the
     Portfolio records the proceeds as deposits with brokers in the Statement of
     Assets and Liabilities and establishes an offsetting payable for securities
     sold short for the securities due on settlement.  The proceeds are retained
     by the  broker as  collateral  for the short  position.  The  liability  is
     marked-to-market  and the  Portfolio is required to pay the lending  broker
     any dividend or interest  income earned while the short position is open. A
     gain or loss is recorded when the security is delivered to the broker.  The
     Portfolio  may recognize a loss on the  transaction  if the market value of
     the securities sold increases before the securities are delivered.

                                       88
<PAGE>



TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

NOTES TO FINANCIAL STATEMENTS CONT'D

F    Foreign  Currency  Translation -- Investment  valuations,  other assets and
     liabilities  initially  expressed in foreign  currencies are converted each
     business day into U.S. dollars based upon current exchange rates. Purchases
     and sales of foreign  investment  securities  and income and  expenses  are
     converted into U.S.  dollars based upon currency  exchange rates prevailing
     on the respective dates of such transactions. Recognized gains or losses on
     investment transactions attributable to foreign currency exchange rates are
     recorded for financial  statement purposes as net realized gains and losses
     on investments.  That portion of unrealized gains and losses on investments
     that results from  fluctuations in foreign  currency  exchange rates is not
     separately disclosed.

G    Other -- Investment  transactions are accounted for on a trade-date  basis.
     Dividend  income is  recorded  on the  ex-dividend  date.  However,  if the
     ex-dividend date has passed,  certain dividends from foreign securities are
     recorded as the  Portfolio is informed of the  ex-dividend  date.  Interest
     income is recorded on the accrual basis.

H    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.

2 Investment Adviser Fee and Other Transactions with Affiliates
---------------------------------------------------------------
     The  investment  adviser fee is earned by Boston  Management  and  Research
     (Boston  Management),  a wholly-owned  subsidiary of Eaton Vance Management
     (Eaton Vance),  as  compensation  for  management  and investment  advisory
     services rendered to the Portfolio.  Under the advisory  agreement,  Boston
     Management  receives a monthly advisory fee of 5/96 of 1% (0.625% annually)
     of the average daily net assets of the Portfolio up to $500,000,000, and at
     reduced  rates as daily net assets  exceed that  level.  For the year ended
     December 31,  2002,  the adviser fee was 0.44% of the  Portfolio's  average
     daily net assets.  Except for Trustees of the Portfolio who are not members
     of Eaton Vance's or Boston Management's organization, officers and Trustees
     receive  remuneration  for  their  services  to the  Portfolio  out of such
     investment  adviser fee.  Trustees of the Portfolio 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 December 31, 2002,
     no significant amounts have been deferred.

     Certain  officers and Trustees of the  Portfolio  are officers of the above
     organizations.

3 Investment Transactions
-------------------------------------------
     For the year ended December 31, 2002,  purchases and sales of  investments,
     other  than   short-term   obligations,   aggregated   $3,708,519,991   and
     $3,826,197,983,  respectively. In addition, investments having an aggregate
     market value of  $969,441,055  at dates of withdrawal  were  distributed in
     payment for capital  withdrawals.  During the year ended December 31, 2002,
     investors contributed securities with a value of $1,378,394,239.

                                       89
<PAGE>

4 Federal Income Tax Basis of Unrealized Appreciation (Depreciation)
--------------------------------------------------------------------
     The  cost  and  unrealized  appreciation  (depreciation)  in  value  of the
     investments  owned at December 31, 2002 as computed on a federal income tax
     basis, were as follows:


    AGGREGATE COST                            $5,279,824,520
    --------------------------------------------------------
    Gross unrealized appreciation             $9,292,814,140
    Gross unrealized depreciation                (28,489,478)
    --------------------------------------------------------
    NET UNREALIZED APPRECIATION               $9,264,324,662
    --------------------------------------------------------


5 Financial Instruments
-------------------------------------------
     The Portfolio may trade in financial  instruments  with  off-balance  sheet
     risk in the normal course of its investing activities to assist in managing
     exposure to various  market  risks.  These  financial  instruments  include
     written options,  forward foreign currency exchange contracts and financial
     futures contracts and may involve, to a varying degree, elements of risk in
     excess of the amounts recognized for financial statement purposes.

     The notional or  contractual  amounts of these  instruments  represent  the
     investment the Portfolio has in particular classes of financial instruments
     and does not necessarily represent the amounts potentially subject to risk.
     The  measurement  of  the  risks  associated  with  these   instruments  is
     meaningful   only  when  all  related  and  offsetting   transactions   are
     considered.  The  Portfolio did not have any open  obligations  under these
     financial instruments at December 31, 2002.

                                       90
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

NOTES TO FINANCIAL STATEMENTS CONT'D

6 Line of Credit
-------------------------------------------
     The  Portfolio  participates  with other  portfolios  and funds  managed by
     Boston  Management  and Eaton Vance and its  affiliates  in a $150  million
     unsecured line of credit  agreement with a group of banks.  Borrowings will
     be made by the  Portfolio  solely to  facilitate  the  handling  of unusual
     and/or unanticipated  short-term cash requirements.  Interest is charged to
     each  participating  portfolio or fund based on its borrowings at an amount
     above either the Eurodollar rate or Federal Funds rate. In addition,  a fee
     computed at an annual rate of 0.10% on the daily unused portion of the line
     of credit is allocated among the participating  portfolios and funds at the
     end of each quarter. The Portfolio did not have any significant  borrowings
     or allocated fees during the year ended December 31, 2002.

7 Restricted Securities
-------------------------------------------
     At  December  31,  2002,  the  Portfolio  owned  the  following  securities
     (representing 0.4% of net assets) which were restricted as to public resale
     and not  registered  under the  Securities  Act of 1933. The securities are
     valued at fair value using  methods  determined  in good faith by or at the
     direction of the Trustees.



                               DATE OF
DESCRIPTION                  ACQUISITION  SHARES      COST      FAIR VALUE

------------------------------------------------------------------------------
Acxiom Corp.                  12/18/02    68,785  $ 1,000,007  $ 1,056,326
Applied Materials, Inc.       12/18/02   215,968    2,988,826    2,809,842
Dollar Tree Stores, Inc.       3/19/02    30,000    1,001,995      736,824
Dollar Tree Stores, Inc.       5/22/02     5,000      192,081      122,778
Entercom Communications Corp.  5/22/02   200,000   10,415,398    9,378,526
GreenPoint Financial Corp.     3/19/02   100,000    4,536,185    4,516,306
Heartland Express, Inc.       12/18/02   435,436   10,000,005    9,961,310
Intel Corp.                   12/18/02   375,000    6,698,687    5,829,992
Intel Corp.                    10/9/02   500,000    6,600,085    7,775,269
Intel Corp.                    3/19/02   250,000    7,893,143    3,891,040
Intel Corp.                    7/30/02   250,000    4,715,416    3,889,094
Interpublic Group of
 Companies., Inc.             12/18/02   100,000    1,354,965    1,405,888
KLA-Tencor Corp.               5/22/02    35,000    2,046,381    1,237,228
Morgan Stanley Dean Witter &
 Co.                           7/30/02   150,000    5,926,597    5,982,760
Outback Steakhouse, Inc.       7/30/02    31,784    1,000,011    1,093,683
------------------------------------------------------------------------------
                                                   $66,369,782  $59,686,866
------------------------------------------------------------------------------

                                       91
<PAGE>


TAX-MANAGED GROWTH PORTFOLIO AS OF DECEMBER 31, 2002

INDEPENDENT AUDITORS' REPORT

TO THE TRUSTEES AND INVESTORS
OF TAX-MANAGED GROWTH PORTFOLIO:
---------------------------------------------

We have audited the accompanying statement of assets and liabilities,  including
the portfolio of investments, of Tax-Managed Growth Portfolio (the Portfolio) as
of December 31, 2002, and the related  statement of operations for the year then
ended,  the statements of changes in net assets for the two years then ended and
the supplementary data for the four years ended December 31, 2002, the two-month
period ended  December 31, 1998 and for the year ended  October 31, 1998.  These
financial  statements  and  supplementary  data  are the  responsibility  of the
Portfolio's  management.  Our  responsibility  is to express an opinion on these
financial statements and supplementary data based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements and supplementary  data are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 2002 by  correspondence  with the custodian.
An audit also includes assessing the accounting  principles used and significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

In our opinion,  such financial  statements and  supplementary  data referred to
above present fairly, in all material  respects,  the financial  position of the
Portfolio  as of  December  31,  2002,  and the results of its  operations,  the
changes in its net assets and its  supplementary  data for the respective stated
periods in  conformity  with  accounting  principles  generally  accepted in the
United States of America.

DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 14, 2003

                                       92
<PAGE>


BELMAR CAPITAL FUND LLC AS OF DECEMBER 31, 2002

Investment Adviser of
Tax-Managed Growth Portfolio and
Belmar Capital Fund LLC

Boston Management and Research
The Eaton Vance Building
255 State Street
Boston, MA 02109

Manager of Belmar
Realty Corporation

Boston Management and Research
The Eaton Vance Building
255 State Street
Boston, MA 02109

Manager of Belmar Capital Fund LLC

Eaton Vance Management
The Eaton Vance Building
255 State Street
Boston, MA 02109

Custodian and Transfer Agent

Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116

Independent Auditors

Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116

                                       93
<PAGE>

                                   SIGNATURES


Pursuant to the  requirements  of Section 13 of the  Securities  Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on its
behalf by the  undersigned,  thereunto duly authorized on the 26th day of March,
2003.


                                        BELMAR CAPITAL FUND LLC
                                        (Registrant)

                                        By: /s/ Michelle A. Alexander
                                            ------------------------------------
                                            Michelle A. Alexander
                                            Duly Authorized Officer and
                                            Principal Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
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/ Thomas E. Faust Jr.
                                            ------------------------------------
                                            Thomas E. Faust Jr.
                                            Chief Executive Officer

Date:    March 26, 2003


                                        By: /s/ Michelle A. Alexander
                                            ------------------------------------
                                            Michelle A. Alexander
                                            Chief Financial Officer

Date:    March 26, 2003

                                       94
<PAGE>


                            CERTIFICATION PURSUANT TO
                                 SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

I, Thomas E. Faust Jr., certify that:

1. I have reviewed this annual report on Form 10-K of Belmar Capital Fund LLC;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods  presented in this annual report;  4. The
registrant's  other  certifying  officers and I are responsible for establishing
and maintaining  disclosure  controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this annual report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions  about the  effectiveness  of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 26, 2003                       /s/ Thomas E. Faust Jr.
                                           -------------------------------
                                           Thomas E. Faust Jr.
                                           Chief Executive Officer

                                       95
<PAGE>


                            CERTIFICATION PURSUANT TO
                                 SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

I, Michelle A. Alexander, certify that:

1. I have reviewed this annual report on Form 10-K of Belmar Capital Fund LLC;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this annual report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions  about the  effectiveness  of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 26, 2003                       /s/ Michelle A. Alexander
                                           -------------------------------
                                           Michelle A. Alexander
                                           Chief Financial Officer

                                       96
<PAGE>

                                  EXHIBIT INDEX

Exhibit No.    Description
-----------    -----------

    3          Copy of Limited  Liability  Company  Agreement  of the Fund dated
               March  17,  2000  filed  as  Exhibit  3  to  the  Fund's  Initial
               Registration  Statement  on Form 10 and  incorporated  herein  by
               reference.  (Note:  the LLC Agreement  also defines the rights of
               the holders of Shares of the Fund)

    4          Copy of Revolving  Securitization  facility dated as of March 17,
               2000;  Agreement of Amendment  thereto  dated as of May 16, 2000;
               Agreement  of  Amendment  thereto  dated  as of  July  19,  2000;
               Agreement of Amendment  thereto  dated as of September  27, 2000;
               Agreement  of  Amendment  thereto  dated as of November 29, 2000;
               Agreement of Amendment thereto dated as of February 22, 2001; and
               Agreement of Amendment  thereto  dated as of March 15, 2001 filed
               as Exhibit 4 to the Fund's Initial Registration Statement on Form
               10 and incorporated herein by reference.

    9          Not applicable and not filed.

   10(1)       Copy of Investment Advisory and Administration  Agreement between
               the Fund and Boston  Management and Research dated March 10, 2000
               filed  as  Exhibit  10(1)  to  the  Fund's  Initial  Registration
               Statement on Form 10 and incorporated herein by reference.

   10(2)       Copy of Management  Agreement  between Belmar Realty  Corporation
               and Boston  Management and Research dated March 10, 2000 filed as
               Exhibit  10(2) to the Fund's  Initial  Registration  Statement on
               Form 10 and incorporated herein by reference.

   10(2)(a)    Copy of  Amendment No. 1 to Management  Agreement  between Belmar
               Realty Corporation and Boston Management and Research dated as of
               January 2, 2001 filed as Exhibit 10(2)(a) to the Fund's Form 10-Q
               for the  period ended September 30, 2001  and incorporated herein
               by reference.

   10(3)       Copy of Investor  Servicing  Agreement between the Fund and Eaton
               Vance Distributors, Inc. dated December 15, 1999 filed as Exhibit
               10(3) to the Fund's Initial Registration Statement on Form 10 and
               incorporated herein by reference.

   10(4)       Copy of Custody and Transfer  Agency  Agreement  between the Fund
               and Investors  Bank & Trust Company dated December 15, 1999 filed
               as Exhibit 10(4) to the Fund's Initial Registration  Statement on
               Form 10 and incorporated herein by reference.

   11          Not applicable and not filed.

   12          Not applicable and not filed.

   21          List of Subsidiaries of the Fund filed herewith.

   24          Not applicable and not filed.

                                       97
<PAGE>

   99.1        Certification  Pursuant  to 18 U.S.C.  Section  1350,  as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

   99.2        Certification  Pursuant  to 18 U.S.C.  Section  1350,  as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

   99.3        Form N-SAR of Eaton Vance Tax-Managed  Growth Portfolio (File No.
               811-7409)  for its fiscal  year  ended  December  31,  2002 filed
               electronically  with the Securities and Exchange Commission under
               the  Investment  Company Act of 1940 on March 3, 2003  (Accession
               No.  0000940394-03-000125)   (incorporated  herein  by  reference
               pursuant to Rule 12b-32).

                                       98