<PAGE>
TABLE OF CONTENTS
President's Letter 1
Portfolio Manager Remarks 2
Report of Independent Accountants 4
Statement of Net Assets 5
Statement of Operations 8
Statements of Changes in Net Assets 9
Notes to Financial Statements 10
Financial Highlights 12
[PHOTO]
Dear Investor:
Financial professionals continue to be amazed by the almost paradoxical US
economy. We've enjoyed years of consistent expansion and a declining level of
unemployment without definitive signs of higher inflation. In fact, by most
measures, price inflation has been steadily declining. Business productivity has
been increasing, boosting profit margins and earnings. These remarkable
conditions have helped fuel another leg in the long bull market. Stock price
gains have been supported all along by a long-term rally in the bond market.
It's easy to drift away from your long-term investment goals during roaring
markets. For that reason, we've been encouraging investors thrilled with the
market's recent returns to submit to an occasional reality check and make sure
their performance expectations are inline with historical norms. While that's
always sound advice, it should not cause you to believe that our long-term
forecast is anything less than optimistic.
Our positive outlook is based on two fundamental waves of change that will
continue to reshape the investment landscape. First, we believe the 20th century
inflation wave has crested and is now receding, a development that is leading to
greater price equilibrium on a global scale. This allows investors, businesses
and consumers to make more certain plans for the future, reducing uncertainty
and boosting confidence. Second, baby boomers' demand for investment products
will continue to grow as this generation approaches retirement, leading to
continued strong flows of money into the stock market and increased investment
in our bond markets. Strong demand from investors during this time of shrinking
supply of available stocks and bonds fundamentally supports securities prices
and helps cushion downturns when they occur.
Looking to the shorter-term outlook, it is likely that we will continue to
experience a high degree of volatility in the US and global stock and bond
markets. Continued uncertainty over the impact of the Asian economic crisis
means that investors may tend to be more skittish than usual. But, for informed
and patient investors, today's stock and bond markets still offer tremendous
long term potential. We appreciate your investment in Calvert Group.
Sincerely,
/s/ Barbara J. Krumsiek
Barbara J. Krumsiek
President and CEO
February 5, 1998
ANNUAL REPORT CALVERT FIRST GOVERNMENT MONEY MARKET FUND - 1
<PAGE>
PORTFOLIO STATISTICS
DECEMBER 31, 1997
ANNUALIZED TOTAL RETURNS
<TABLE>
<CAPTION>
6 MONTHS ENDED
6/30/97 12/31/97
- --------------------------------------------------------------------------------
<S> <C> <C>
First Government Money Market 4.82% 5.12%
Lipper US Gov't. Money Market Funds Average 4.07% 4.55%
<CAPTION>
WEIGHTED AVERAGE MATURITY
6/30/97 12/31/97
- --------------------------------------------------------------------------------
<S> <C> <C>
36 days 52 days
</TABLE>
CREDIT QUALITY DISTRIBUTION
The Fund invests solely in debt obligations issued or guaranteed by the United
States, its agencies or instrumentalities, assignments of interest in such
obligations, and commitments to purchase such obligations ("U.S.
Government-backed obligations"). The Fund may invest in US Government-backed
obligations subject to repurchase agreements with the recognized securities
dealers and banks.
SOURCE: LIPPER ANALYTICAL SERVICES, INC.
[PHOTO]
A DISCUSSION WITH PORTFOLIO MANAGER, BETH BUNNELL HUNTER
HOW WOULD YOU CHARACTERIZE THE INVESTMENT CLIMATE OVER THE PAST 12 MONTHS?
Short-term rates trended higher early in the year on expectations that the
Federal Reserve would take steps to tighten monetary policy and slow the pace of
economic growth. In March, the Fed raised its target rate for the federal funds
rate, the rate banks charge each other for overnight loans to meet reserve
requirements, by 25 basis points, but then took no further action. Short-term
securities reversed course and yields trended downward for the remainder of the
year.
WHAT WAS YOUR STRATEGY?
During the first half of the year, when it appeared likely the Federal Reserve
would take steps to raise rates, we shortened maturity so we would have cash
available to reinvest in higher yielding securities. Around mid-year, when it
became less likely rates would move higher, we modified our strategy and began
to lengthen maturity. The Fund's weighted average maturity was 52 days at the
close of the period, compared to 45 days at the start.
The composition of the Portfolio has not changed greatly since our last report.
As always, we seek the highest yielding money-market-eligible securities with
minimal credit risk. One such purchase made during this reporting period was our
acquisition of Rural Electric Co-Op Grantor Trust Certificates. The US
Government, acting through the Department of Agriculture, unconditionally
guarantees the timely payment of principal and interest on the notes which
comprise the trust. This uniquely structured security performs like many other
variable rate demand notes at a slight spread over the London Interbank Offered
Rate (LIBOR), a key lending rate.
2 - CALVERT FIRST GOVERNMENT MONEY MARKET FUND ANNUAL REPORT
<PAGE>
PORTFOLIO STATISTICS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
AS OF 12/31/97
- ---------------------------------------
<S> <C>
One year 5.00%
Five year 4.27%
Ten year 5.33%
Since inception 7.54%
(12/7/76)
</TABLE>
LONG-TERM PERFORMANCE
CHANGE IN VALUE OF $10,000 INVESTMENT.
Line graph here showing comparison from 1/1/88 to 12/31/97.
Calvert First Gov't. Money Market Fund $16,811
TOTAL RETURNS ASSUME REINVESTMENT OF DIVIDENDS.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
SOURCE: LIPPER ANALYTICAL SERVICES, INC.
HOW DID THE FUND PERFORM RELATIVE TO ITS PEERS?
The First Government Money Market Fund's 12-month total return was 10 basis
points above the return on the Lipper US Government Money Market Funds Average.
This Fund performed well against its peers, ranking 10th out of 118 funds in the
category.
WHAT DEVELOPMENTS DO YOU SEE AHEAD FOR THE SHORT-TERM MARKETS?
Continued low inflation despite strong economic growth and real wage gains kept
the Fed on hold for the balance of 1997. Looking forward, the Asian financial
crisis may influence US monetary policy, as the Fed will consider the impact of
a change in rates on jittery global economies. At this point, the Fed appears to
be in a "wait-and-see" mode.
The Fed continues to weigh its concerns for tight labor markets and the impact
rising wages could have on the economy against reports indicating that inflation
does not look to be much of a threat. Thus, money market rates should remain
relatively stable.
January 22, 1998
ANNUAL REPORT CALVERT FIRST GOVERNMENT MONEY MARKET FUND - 3
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of First Variable Rate Fund for Government Income and
Shareholders of Calvert First Government Money Market Fund:
We have audited the accompanying statement of net assets of Calvert First
Government Money Market Fund (one of the portfolios comprising First Variable
Rate Fund for Government Income) as of December 31, 1997, and the related
statement of operations for the year then ended, statements of changes in net
assets for each of the two years in the period then ended and financial
highlights for each of the four years in the period 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 and financial highlights based on our audits. The financial
highlights for the year ended December 31, 1993 were audited by other auditors
whose report dated January 31, 1994 expressed an unqualified opinion thereon.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
December 31, 1997, by correspondence with the custodian and brokers. 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Calvert First Government Money Market Fund as of December 31, 1997, the results
of its operations, the changes in its net assets and financial highlights for
the respective periods stated in the first paragraph, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
February 6, 1998
4 - CALVERT FIRST GOVERNMENT MONEY MARKET FUND ANNUAL REPORT
<PAGE>
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
U.S. GOVERNMENT PRINCIPAL
AGENCY OBLIGATIONS - 39.4% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Bank,
5.87%, 2/13/98. . . . . . . . . . . . . . . . . $2,000,000 $2,000,301
5.435%, 3/11/98 . . . . . . . . . . . . . . . . 2,800,000 2,798,542
5.54%, 4/15/98. . . . . . . . . . . . . . . . . 5,000,000 4,919,978
6.00%, 12/30/98 . . . . . . . . . . . . . . . . 6,000,000 6,000,000
Federal Home Loan Mortgage Corporation,
6.905%, 4/13/98 . . . . . . . . . . . . . . . . 2,500,000 2,508,299
Federal Home Loan Mortgage Corporation,
Discount Notes, 5.50%, 2/11/98. . . . . . . . . 6,000,000 5,962,417
Federal National Mortgage Association,
5.79%, 3/25/98. . . . . . . . . . . . . . . . . 2,900,000 2,900,669
5.35%, 4/1/98 . . . . . . . . . . . . . . . . . 5,000,000 4,995,253
Federal National Mortgage Association,
Discount Notes:
5.48%, 1/29/98. . . . . . . . . . . . . . . . . 10,000,000 9,957,378
5.50%, 2/5/98 . . . . . . . . . . . . . . . . . 6,000,000 5,967,917
5.54%, 2/24/98. . . . . . . . . . . . . . . . . 6,000,000 5,950,140
5.58%, 3/6/98 . . . . . . . . . . . . . . . . . 6,000,000 5,940,480
5.55%, 3/25/98. . . . . . . . . . . . . . . . . 5,000,000 4,936,021
5.52%, 4/24/98. . . . . . . . . . . . . . . . . 5,000,000 4,913,367
5.48%, 5/20/98. . . . . . . . . . . . . . . . . 6,000,000 5,873,047
5.50%, 6/5/98 . . . . . . . . . . . . . . . . . 5,000,000 4,881,597
Student Loan Marketing Association,
Short Term Notes,
5.779%, 5/21/98 . . . . . . . . . . . . . . . . 6,000,000 6,000,000
5.79%, 9/16/98. . . . . . . . . . . . . . . . . 5,000,000 5,001,670
------------
Total U.S. Government Agency Obligations
(Cost $91,507,076). . . . . . . . . . . . . . . 91,507,076
------------
DEPOSITORY RECEIPTS FOR U.S. GOVERNMENT
GUARANTEED LOANS - 9.3%+
- --------------------------------------------------------------------------------
Colson Services Corporation Loan Sets: *
9.59375%, 1/13/98 . . . . . . . . . . . . . . . 4,702 4,700
8.75%, 8/10/99. . . . . . . . . . . . . . . . . 43,604 43,604
8.59375%, 1/17/10 . . . . . . . . . . . . . . . 93,274 94,482
8.50%, 9/27/05. . . . . . . . . . . . . . . . . 200,160 201,423
8.34375%, 2/28/00-3/12/00 . . . . . . . . . . . 175,155 175,140
8.25%, 8/1/00 . . . . . . . . . . . . . . . . . 32,062 32,062
7.50%, 6/5/09-3/23/12 . . . . . . . . . . . . . 2,171,383 2,197,518
7.375%, 2/25/02-9/9/06 . . . . . . . . . . . . 216,695 217,712
7.375, 3/12/05-5/14/12. . . . . . . . . . . . . 1,955,848 1,959,346
7.25%, 8/1/10-1/22/11 . . . . . . . . . . . . . 820,747 821,503
7.25%, 3/19/11-8/10/12. . . . . . . . . . . . . 10,306,916 10,328,645
7.25%, 10/30/01-9/2/12. . . . . . . . . . . . . 4,125,748 4,133,741
7.09375%, 3/18/08-4/26/09 . . . . . . . . . . . 718,610 720,847
7.34375%, 5/1/00-7/23/10. . . . . . . . . . . . 523,222 523,554
6.84375%, 5/18/02 . . . . . . . . . . . . . . . 41,658 41,658
------------
Total Depository Receipts for U.S. Government
Guaranteed Loans (Cost $21,495,935) . . . . . . 21,495,935
------------
</TABLE>
ANNUAL REPORT CALVERT FIRST GOVERNMENT MONEY MARKET FUND - 5
<PAGE>
<TABLE>
<CAPTION>
COLLATERALIZED BY PRINCIPAL
U.S. GOVERNMENT SECURITIES - 4.8% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Roamingwood, Pennsylvania Sewer and Water
Association VRDN,
10.25%, 6/1/13. . . . . . . . . . . . . . . . . $7,505,000 $7,637,927
San Bernardino Public Safety Authority,
7.25%, 1/1/98 . . . . . . . . . . . . . . . . . 3,420,000 3,420,000
------------
Total Collateralized by U.S. Government
Securities
(Cost $11,057,927). . . . . . . . . . . . . . . 11,057,927
------------
ESCROWED IN U.S. TREASURY OBLIGATIONS - 3.4%
- --------------------------------------------------------------------------------
Public Building Commission of Chicago,
Series 1996, 6.05%,
1/1/98. . . . . . . . . . . . . . . . . . . . . 7,845,000 7,845,000
------------
Total Escrowed in U.S. Treasury Obligations
(Cost $7,845,000) . . . . . . . . . . . . . . . 7,845,000
------------
VARIABLE RATE LOANS GUARANTEED BY AGENCIES
OF THE U.S. GOVERNMENT - 12.3% +
- --------------------------------------------------------------------------------
Audley Investments Opic Cops VRDN,
5.90%, 11/29/04 . . . . . . . . . . . . . . . . 8,000,000 8,000,000
Loan pools:
8.59375%, 3/30/99 . . . . . . . . . . . . . . . 38,027 38,027
7.00%, 8/15/12. . . . . . . . . . . . . . . . . 1,590,918 1,570,846
6.25%, 3/1/07 . . . . . . . . . . . . . . . . . 1,002,512 984,091
Rural Electric Coop Grantor Trust
Certificates VRDN, 6.10%,
12/15/17. . . . . . . . . . . . . . . . . . . . 18,000,000 18,000,000
------------
Total Variable Rate Loans Guaranteed by Agencies
of the U.S. Government (Cost $28,592,964) . . . 28,592,964
------------
REPURCHASE AGREEMENTS, FOR DELIVERY AT COST,
COLLATERALIZED BY SECURITIES ISSUED OR
GUARANTEED BY THE U.S. GOVERNMENT - 29.4%
- --------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette Securities, Inc.:
6.55%, dated 12/31/97, due 1/1/98
(Collateral: $23,817,039 FNMA,
6.44%, 12/24/07). . . . . . . . . . . . . . . . 23,300,000 23,300,000
UBS Securities, Inc.: 6.75%, dated 12/31/97,
due 1/1/98 (Collateral: $35,983,865 FHLMC
Pool #G00815, 7.00%, 12/1/27) . . . . . . . . . 35,000,000 35,000,000
Paine Webber, Inc.: 5.75%, dated 12/8/97,
due 1/7/98 (Collateral: $10,233,738 FNMA
Pool #G397051, 7.00%, 8/1/27) . . . . . . . . . 10,000,000 10,000,000
------------
Total Repurchase Agreements (Cost $68,300,000) . . 68,300,000
------------
TOTAL INVESTMENTS
(Cost $228,798,902) - 98.6% . . . . . . . 228,798,902
Other assets and liabilities, net - 1.4% . . 3,225,876
------------
NET ASSETS - 100.0% . . . . . . . . . . . . . . $232,024,778
------------
------------
</TABLE>
6 - CALVERT FIRST GOVERNMENT MONEY MARKET FUND ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
NET ASSETS CONSIST OF: VALUE
<S> <C>
Paid-in capital applicable to 232,513,728
outstanding shares of beneficial interest,
unlimited number of no par shares authorized. . $232,267,027
Undistributed net investment income. . . . . . . . 17,933
Accumulated net realized gain (loss)
on investments. . . . . . . . . . . . . . . . . (260,182)
------------
NET ASSETS. . . . . . . . . . . . . . . . . . . $232,024,778
------------
------------
NET ASSET VALUE PER SHARE . . . . . . . . . . . $1.00
------------
------------
</TABLE>
+ REPRESENTS RATES IN EFFECT AT DECEMBER 31, 1997, AFTER REGULARLY SCHEDULED
ADJUSTMENTS ON SUCH DATE. INTEREST RATES ADJUST MONTHLY AND QUARTERLY,
GENERALLY AT THE BEGINNING OF THE MONTH OR CALENDAR QUARTER, OR
SEMIANNUALLY BASED ON PRIME PLUS CONTRACTED ADJUSTMENTS. AS OF DECEMBER 31,
1997, THE PRIME INTEREST RATE WAS 8.5%.
* COLSON SERVICES CORPORATION IS THE CUSTODIAN, COLLECTION, AND TRANSFER
AGENT FOR CERTAIN OF THE FUND'S U.S. GOVERNMENT GUARANTEED VARIABLE RATE
LOANS. EACH DEPOSITORY RECEIPT PERTAINS TO A SET, GROUPED BY INTEREST RATE,
OF THESE LOANS.
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT FIRST GOVERNMENT MONEY MARKET FUND - 7
<PAGE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
NET INVESTMENT INCOME
- --------------------------------------------------------------------------------
<S> <C>
Investment Income
Interest income . . . . . . . . . . . . . . . . . . . . . . . $13,714,627
------------
Expenses
Investment advisory fee . . . . . . . . . . . . . . . . . . . 1,206,618
Transfer agency fees and expenses . . . . . . . . . . . . . . 447,044
Trustees' fees and expenses . . . . . . . . . . . . . . . . . 32,992
Custodian fees. . . . . . . . . . . . . . . . . . . . . . . . 34,842
Registration fees . . . . . . . . . . . . . . . . . . . . . . 36,233
Reports to shareholders . . . . . . . . . . . . . . . . . . . 138,948
Professional fees . . . . . . . . . . . . . . . . . . . . . . 27,223
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 44,476
------------
Total expenses . . . . . . . . . . . . . . . . . . . . . . 1,968,376
Fees paid indirectly . . . . . . . . . . . . . . . . . . . (34,842)
------------
Net expenses. . . . . . . . . . . . . . . . . . . . . . 1,933,534
------------
NET INVESTMENT INCOME. . . . . . . . . . . . . . . . 11,781,093
------------
------------
</TABLE>
<TABLE>
REALIZED GAIN (LOSS) ON INVESTMENTS
- --------------------------------------------------------------------------------
<S> <C>
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . 11,055
------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $11,792,148
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8 - CALVERT FIRST GOVERNMENT MONEY MARKET FUND ANNUAL REPORT
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . $11,781,093 $11,620,255
Net realized gain (loss). . . . . . . . . . . . 11,055 18,329
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . 11,792,148 11,638,584
------------ ------------
Distributions to shareholders from
Net investment income . . . . . . . . . . . . . (11,790,757) (11,593,209)
------------ ------------
Capital share transactions
Shares sold . . . . . . . . . . . . . . . . . . 390,048,098 380,258,409
Reinvestment of distributions . . . . . . . . . 11,513,525 11,294,463
Shares redeemed . . . . . . . . . . . . . . . .(408,957,845) (393,328,271)
------------ ------------
Total capital share transactions . . . . . . (7,396,222) (1,775,399)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . (7,394,831) (1,730,024)
<CAPTION>
NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C>
Beginning of year. . . . . . . . . . . . . . . . . 239,419,609 241,149,633
------------ ------------
End of year (including undistributed net
investment income of $17,933 and $27,597,
respectively) . . . . . . . . . . . . . . . . .$232,024,778 $239,419,609
------------ ------------
------------ ------------
<CAPTION>
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------
Shares sold. . . . . . . . . . . . . . . . . . . . 390,048,098 380,258,409
Reinvestment of distributions. . . . . . . . . . . 11,513,525 11,294,463
Shares redeemed. . . . . . . . . . . . . . . . . .(408,957,845) (393,328,271)
------------ ------------
Net share activity. . . . . . . . . . . . . . . (7,396,222) (1,775,399)
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT FIRST GOVERNMENT MONEY MARKET FUND - 9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
GENERAL: The Calvert First Government Money Market Fund (the "Fund"), a series
of First Variable Rate Fund for Government Income, is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The operations of each series are accounted for separately. The Fund
offers shares of beneficial interest to the public with no sales charge.
SECURITY VALUATION: Securities are valued at amortized cost which approximates
market.
REPURCHASE AGREEMENTS: The Fund may enter into repurchase agreements with
recognized financial institutions or registered broker/dealers and, in all
instances, holds underlying securities with a value exceeding the total
repurchase price, including accrued interest. Although risk is mitigated by the
collateral, the Fund could experience a delay in recovering its value and a
possible loss of income or value if the counterparty fails to perform in
accordance with the terms of the agreement.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Interest income, accretion of discount and amortization
of premium are recorded on an accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded by
the Fund on ex-dividend date. Dividends from net investment income are accrued
daily and paid monthly. Distributions from net realized capital gains, if any,
are paid at least annually. Distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles; accordingly, periodic reclassifications are made within the Fund's
capital accounts to reflect income and gains available for distribution under
income tax regulations.
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
EXPENSE OFFSET ARRANGEMENTS: The Fund has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Fund's cash on deposit with the bank. Such a deposit arrangement is an
alternative to overnight investments.
FEDERAL INCOME TAXES: No provision for federal income or excise tax is required
since the Fund intends to continue to qualify as a regulated investment company
under the Internal Revenue Code and to distribute substantially all of its
earnings.
NOTE B -- RELATED PARTY TRANSACTIONS
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Trustees of the Fund.
For its services, the Advisor receives a monthly fee based on the following
annual rates of average daily net assets:
10 - CALVERT FIRST GOVERNMENT MONEY MARKET FUND ANNUAL REPORT
<PAGE>
.50% on the first $500 million, .45% on the next $400 million, .40% on the next
$400 million, .35% on the next $700 million and .30% on the excess of $2
billion.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and
principal underwriter for the Fund.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Fund.
Each Trustee who is not affiliated with the Advisor received an annual fee of
$20,500 plus up to $1,500 for each Board and Committee meeting attended.
Trustee's fees are allocated to each of the funds served.
NOTE C -- INVESTMENT ACTIVITY
The cost of investments owned at December 31, 1997 was substantially the same
for federal income tax and financial reporting purposes. Net capital loss
carryforwards, for federal income tax purposes, of $260,182 at December 31, 1997
may be utilized to offset current and future capital gains until expiration
through 2001.
NOTE D -- LINE OF CREDIT
Effective July 1, 1997, a financing agreement is in place with all Calvert Group
Funds and State Street Bank and Trust Company ("the Bank"). Under the agreement,
the Bank is providing an unsecured line of credit facility, in the aggregate
amount of $50 million ($25 million committed and $25 million uncommitted), to be
accessed by the Funds for temporary or emergency purposes only. Borrowings under
this facility bear interest at the overnight Federal Funds Rate plus .50% per
annum. A commitment fee of .10% per annum will be incurred on the unused portion
of the committed facility which will be allocated to all participating funds.
This fee is paid quarterly in arrears. The Fund had no loans outstanding
pursuant to this line of credit at December 31, 1997.
ANNUAL REPORT CALVERT FIRST GOVERNMENT MONEY MARKET FUND - 11
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . $1.00 $1.00 $1.00
-------- -------- --------
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . .049 .047 .051
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . (.049) (.047) (.051)
-------- -------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . $1.00 $1.00 $1.00
-------- -------- --------
-------- -------- --------
Total return . . . . . . . . . . . . . . . 5.00% 4.79% 5.22%
-------- -------- --------
-------- -------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . 4.88% 4.69% 5.04%
-------- -------- --------
-------- -------- --------
Total expenses+ . . . . . . . . . . . . .82% .86% .89%
-------- -------- --------
-------- -------- --------
Net expenses. . . . . . . . . . . . . . .80% .85% .88%
-------- -------- --------
-------- -------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . $232,025 $239,420 $241,150
-------- -------- --------
-------- -------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . 232,514 239,910 241,685
-------- -------- --------
-------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED
----------------------------
DECEMBER 31, DECEMBER 31,
1994 1993
- ------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . $1.00 $1.00
-------- --------
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . . . . .036 .027
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . . . . (.036) (.027)
-------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . $1.00 $1.00
-------- --------
-------- --------
Total return . . . . . . . . . . . . . . . . . . . . . . 3.66% 2.70%
-------- --------
-------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . . . . 3.56% 2.66%
-------- --------
-------- --------
Total expenses +. . . . . . . . . . . . . . . . . . . -- --
-------- --------
-------- --------
Net expenses. . . . . . . . . . . . . . . . . . . . . .81% .81%
-------- --------
-------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . $230,183 $263,260
-------- --------
-------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . . . . 230,618 263,930
-------- --------
-------- --------
</TABLE>
+ EFFECTIVE DECEMBER 31, 1995, THIS RATIO REFLECTS TOTAL EXPENSES BEFORE
REDUCTION FOR FEES PAID INDIRECTLY; SUCH REDUCTIONS ARE INCLUDED IN THE
RATIO OF NET EXPENSES.
12 - CALVERT FIRST GOVERNMENT MONEY MARKET FUND ANNUAL REPORT
<PAGE>
CALVERT FIRST GOVERNMENT MONEY MARKET FUND
[LOGO] CALVERT GROUP-Registered Trademark-
A MEMBER OF THE ACACIA GROUP-Registered Trademark-
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
CALVERT GROUP
INFORMATION
TO OPEN AN ACCOUNT
800-368-2748
YIELDS AND PRICES
Calvert Information Network
(24 HOURS, 7 DAYS A WEEK)
800-368-2745
SERVICE FOR EXISTING ACCOUNT
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDD FOR HEARING IMPAIRED
800-541-1524
BRANCH OFFICE
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
REGISTERED, CERTIFIED
OR OVERNIGHT MAIL
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
WEB SITE
http://www.calvertgroup.com
Please check the inside back cover for
Calvert Group's Family of Funds.
THIS REPORT IS INTENDED TO PROVIDE FUND
INFORMATION TO SHAREHOLDERS. IT IS NOT AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS
PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
<PAGE>
CALVERT GROUP'S
FAMILY OF FUNDS
TAX-EXEMPT
MONEY MARKET FUNDS
CTFR Money Market Portfolio
CTFR California Money Market Portfolio
TAXABLE
MONEY MARKET FUNDS
First Government Money Market Fund
CSIF Money Market Portfolio
BALANCED FUND
CSIF Managed Growth Portfolio
MUNICIPAL FUNDS
CTFR Limited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
Arizona Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Florida Muni. Intermediate Portfolio
Maryland Muni. Intermediate Portfolio
Michigan Muni. Intermediate Portfolio
New York Muni. Intermediate Portfolio
Pennsylvania Muni. Intermediate Portfolio
Virginia Muni. Intermediate Portfolio
TAXABLE BOND FUNDS
CSIF Bond Portfolio
Income Fund
EQUITY FUNDS
CSIF Equity Portfolio
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
New Africa Fund
[LOGO] printed on recycled paper
using soy-based inks
<PAGE>
[LOGO] CALVERT GROUP-Registered Trademark-
A MEMBER OF THE ACACIA GROUP-Registered Trademark-
4550 MONTGOMERY AVENUE
SUITE 1000 NORTH
BETHESDA, MARYLAND 20814
BULK RATE
U.S. POSTAGE
PAID
Permit No.
7470
<PAGE>
CALVERT FIRST GOVERNMENT MONEY MARKET FUND
DECEMBER 31, 1997
ANNUAL REPORT
CALVERT FIRST GOVERNMENT MONEY MARKET FUND
[LOGO] CALVERT GROUP-Registered Trademark-
A MEMBER OF THE ACACIA GROUP-Registered Trademark-
<PAGE>
TABLE OF
CONTENTS
President's Letter 1
Portfolio Manager Remarks 2
Report of Independent Accountants 7
Statement of Net Assets 9
Statements of Operations 27
Statements of Changes in Net Assets 30
Notes to Financial Statements 39
Financial Highlights 42
Dear Investor:
[PHOTO]
Financial professionals continue to be amazed by the almost paradoxical US
economy. We've enjoyed years of consistent expansion and a declining level of
unemployment without definitive signs of higher inflation. In fact, by most
measures, price inflation has been steadily declining. Business productivity has
been increasing, boosting profit margins and earnings. These remarkable
conditions have helped fuel another leg in the long bull market. Stock price
gains have been supported all along by a long-term rally in the bond market.
It's easy to drift away from your long-term investment goals during roaring
markets. For that reason, we've been encouraging investors thrilled with the
market's recent returns to submit to an occasional reality check and make sure
their performance expectations are inline with historical norms. While that's
always sound advice, it should not cause you to believe that our long-term
forecast is anything less than optimistic.
Our positive outlook is based on two fundamental waves of change that will
continue to reshape the investment landscape. First, we believe the 20th century
inflation wave has crested and is now receding, a development that is leading to
greater price equilibrium on a global scale. This allows investors, businesses
and consumers to make more certain plans for the future, reducing uncertainty
and boosting confidence. Second, baby boomers' demand for investment products
will continue to grow as this generation approaches retirement, leading to
continued strong flows of money into the stock market and increased investment
in our bond markets. Strong demand from investors during this time of shrinking
supply of available stocks and bonds fundamentally supports securities prices
and helps cushion downturns when they occur.
Looking to the shorter-term outlook, it is likely that we will continue to
experience a high degree of volatility in the US and global stock and bond
markets. Continued uncertainty over the impact of the Asian economic crisis
means that investors may tend to be more skittish than usual. But, for informed
and patient investors, today's stock and bond markets still offer tremendous
long term potential. We appreciate your investment in Calvert Group.
Sincerely,
/s/ Barbara J. Krumsiek
Barbara J. Krumsiek
President and CEO
February 5, 1998
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 1
<PAGE>
PORTFOLIO
STATISTICS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
INVESTMENT PERFORMANCE
6 MONTHS 12 MONTHS
- --------------------------------------------------------------------------------
<S> <C> <C>
NATIONAL 4.69% 7.11%
LIPPER INTERMEDIATE
MUNI. FUNDS AVERAGE 4.56% 7.16%
CALIFORNIA 4.45% 6.61%
LIPPER CA INTERMEDIATE
MUNI. FUNDS AVERAGE 4.45% 7.12%
MARYLAND 5.07% 7.68%
LIPPER OTHER STATES INT.
MUNI. FUNDS AVERAGE 4.35% 6.85%
VIRGINIA 4.59% 6.71%
LIPPER VA INTERMEDIATE
MUNI. FUNDS AVERAGE 4.55% 6.98%
ARIZONA 3.70% 6.04%
LIPPER OTHER STATES INT.
MUNI. FUNDS AVERAGE 4.35% 6.85%
FLORIDA 4.58% 7.06%
LIPPER FL INTERMEDIATE
MUNI. FUNDS AVERAGE 4.44% 6.82%
MICHIGAN 4.64% 7.41%
LIPPER OTHER STATES INT.
MUNI. FUNDS AVERAGE 4.35% 6.85%
NEW YORK 4.95% 7.31%
LIPPER NY INTERMEDIATE
MUNI. FUNDS AVERAGE 4.62% 7.42%
PENNSYLVANIA 4.73% 7.24%
LIPPER PA INTERMEDIATE
MUNI. FUNDS AVERAGE 4.62% 7.30%
</TABLE>
INVESTMENT PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ANY FRONT-END SALES
CHARGE.
SOURCE: LIPPER ANALYTICAL SERVICES, INC.
[PHOTO]
A DISCUSSION WITH CHIEF INVESTMENT OFFICER, RENO MARTINI
DESCRIBE MARKET CONDITIONS DURING THE PAST YEAR.
The economy continued to expand and inflation remained tame, despite rising
wages and low unemployment. While this can be favorable, it caused confusion
because historically inflation accompanies a rapidly expanding economy and/or
rising wages. In general, both short- and long-term interest rates rose until
March when the Federal Reserve raised the fed funds rate. Mixed economic
indicators combined with the market's slow acceptance of no visible inflationary
pressures caused rate volatility until mid-year. Rates trended lower throughout
the rest of the year, especially long-term rates which closed near the lows
of November of 1993. By year end the yield curve was relatively flat.
The yield curve is a graph showing the relationship between bond yields and
maturities. It's usually positively sloped, indicating that higher yields are
paid on longer-term securities. A flat yield curve can suggest that investors
are not overly concerned about rising inflation.
WHAT IS YOUR MANAGEMENT APPROACH?
Going into 1997, our forecast called for additional Fed tightening and a
corresponding rise in interest rates. Accordingly, we took steps to keep
duration which, like maturity, is a measure of interest rate sensitivity, near
the short end of our target range, approximately five and a half years. After
the first Fed adjustment in March, we shortened duration again by approximately
half a year.
We had reason to adopt a more bullish outlook and a less cautious stance in the
second half of the year, as we saw no buildup
2 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
PORTFOLIO
STATISTICS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
WEIGHTED AVERAGE MATURITY
6/30/97 12/31/97
- --------------------------------------------------------------------------------
<S> <C> <C>
National 8 years 10 years
California 8 years 9 years
Maryland 7 years 9 years
Virginia 7 years 8 years
Arizona 8 years 7 years
Florida 7 years 8 years
Michigan 8 years 8 years
New York 8 years 8 years
Pennsylvania 7 years 9 years
</TABLE>
<TABLE>
<CAPTION>
SEC YIELDS
30 DAYS ENDED
6/30/97 12/31/97
- --------------------------------------------------------------------------------
<S> <C> <C>
National 4.34% 4.00%
California 4.25% 3.87%
Maryland 4.17% 3.76%
Virginia 3.78% 3.70%
Arizona 3.73% 3.46%
Florida 4.79% 4.24%
Michigan 4.01% 3.74%
New York 4.13% 3.71%
Pennsylvania 4.26% 4.05%
</TABLE>
YIELDS ASSUME REINVESTMENT OF DIVIDENDS.
in pricing pressures making it less likely the Fed would tighten monetary
policy. Beginning in August, we took steps to lengthen the duration from roughly
five years to about five and three-quarters years.
HOW DID THE FUNDS' ONE-YEAR RETURNS COMPARE TO THOSE OF THEIR PEER GROUP?
In general, the Municipal Intermediate Funds performed in line with their peer
averages considering our conservative approach in the first half of the year.
WHICH FUNDS OUTPERFORMED THEIR LIPPER AVERAGES?
Maryland, Michigan and Florida posted above-average returns for this one-year
period. This was due, in part, to greater sector diversity and slightly longer
durations. In these cases, favorable supply/demand conditions allowed us to
quickly re-deploy assets into longer-maturity issues. For the Maryland and
Michigan Funds, another positive development was an increase in demand for
securities issued by these and other so-called "specialty states." This provided
a price support mechanism for issues from these states.
WHY WERE OTHER FUNDS SLOWER TO RESPOND TO DECLINING INTEREST RATES?
California, Virginia and Arizona trailed their Lipper averages for the one-year
period. Some underperformance in the California Fund can be attributed to higher
yielding securities that were less price sensitive. Thus, the Fund was slow to
reflect the price appreciation that resulted from a declining interest rate
environment. In the second half of the year, we made adjustments by investing in
options and longer-term securities to lengthen duration.
In the Virginia Fund, we tended to be more defensive by holding a higher
concentration in housing bonds relative to our peers. Housing bonds are
securities issued to provide funding for mortgage loans to low and moderate
income individuals. These securities perform
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 3
<PAGE>
PORTFOLIO
STATISTICS
DECEMBER 31, 1997
CREDIT QUALITY DISTRIBUTION
NATIONAL
[PIE CHART]
AAA 47%
AA 27%
A 4%
BBB 9%
BB 5%
Cash Equivalents 8%
CALIFORNIA
[PIE CHART]
AAA 68%
AA 6%
A 15%
BBB 11%
MARYLAND
[PIE CHART]
AAA 41%
AA 41%
A 5%
BBB 8%
Cash Equivalents 5%
VIRGINIA
[PIE CHART]
AAA 40%
AA 46%
A 6%
BB 5%
Cash Equivalents 3%
ARIZONA
[PIE CHART]
AAA 66%
AA 24%
Cash Equivalents 10%
TOTAL RETURNS ASSUME REINVESTMENT OF DIVIDENDS AND REFLECT THE DEDUCTION OF
FUND'S MAXIMUM FRONT-END SALES CHARGE OF 2.75%. NO SALES CHARGE HAS BEEN APPLIED
TO THE INDICES USED FOR COMPARISON.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS.
well in a rising rate environment and new issue housing bonds provide a higher
than average current income. However, they will underperform in a strong bull
market, as we experienced in the second half of the year. Just after the close
of this reporting period, we began to reduce the Fund's exposure to these
securities.
In the Arizona Fund, we continued to be handicapped by our small size. First,
the smaller stream of cash flowing into the Fund meant we were not able to take
advantage of buying opportunities. Second, our trades tend to be smaller in
size, which negatively affects yield spreads. This Fund has assets of
approximately $2.7 million, compared to the average of more than $100 million in
other Arizona funds tracked by Lipper Analytical Services, Inc.
WHAT'S YOUR OUTLOOK FOR THE BOND MARKET?
We remain bullish on the bond market. We expect economic activity to be moderate
and inflation to remain in check. Without the threat of inflation, interest
rates should remain low. And, because most measures of inflation remain low, any
action by the Fed is likely to be modest. However, the Fed will likely delay any
action until the consequences of the Asian financial crisis become clear.
January 22, 1998
PERFORMANCE COMPARISON
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT.
NATIONAL
[GRAPH]
Line graph here showing comparison from 10/1/92 to 12/31/97.
Calvert Nat'l Municipal Intermediate Fund $13,496
Lehman 7-year Municipal Bond Index TR $13,997
4 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
PORTFOLIO
STATISTICS
DECEMBER 31, 1997
CREDIT QUALITY DISTRIBUTION
FLORIDA
AAA 67%
AA 13%
A 4%
BBB 3%
Cash Equivalents 13%
MICHIGAN
[PIE CHART]
AAA 45%
AA 27%
A 16%
BBB 11%
Cash Equivalents 1%
NEW YORK
[PIE CHART]
AAA 36%
AA 9%
A 14%
BBB 25%
Cash Equivalents 16%
PENNSYLVANIA
[PIE CHART]
AAA 62%
AA 8%
A 15%
BBB 7%
Cash Equivalents 8%
TOTAL RETURNS ASSUME REINVESTMENT OF DIVIDENDS AND REFLECT THE DEDUCTION OF
FUND'S MAXIMUM FRONT-END SALES CHARGE OF 2.75%. NO SALES CHARGE HAS BEEN APPLIED
TO THE INDICES USED FOR COMPARISON.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS.
PERFORMANCE COMPARISON
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT.
CALIFORNIA
[GRAPH]
Line graph here showing comparison from 6/1/92 to 12/31/97.
Calvert CA Municipal Intermediate Fund $13,451
Lehman 7-year Municipal Bond Index TR $14,611
MARYLAND
[GRAPH]
Line graph here showing comparison from 10/1/93 to 12/31/97.
Calvert MD Municipal Intermediate Fund $12,192
Lehman 7-year Municipal Bond Index TR $12,621
VIRGINIA
[GRAPH]
Line graph here showing comparison from 10/1/93 to 12/31/97.
Calvert VA Municipal Intermediate Fund $12,223
Lehman 7-year Municipal Bond Index TR $12,621
ARIZONA
[GRAPH]
Line graph here showing comparison from 1/1/94 to 12/31/97.
Calvert AZ Municipal Intermediate Fund $11,655
Lehman 7-year Municipal Bond Index TR $12,471
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 5
<PAGE>
PORTFOLIO
STATISTICS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
AS OF 12/31/97
- --------------------------------------------------------------------------------
<S> <C>
NATIONAL
One year 4.15%
Five year 5.89%
Since inception (9/30/92) 5.87%
CALIFORNIA
One year 3.63%
Five year 5.00%
Since inception (5/29/92) 5.44%
MARYLAND
One year 4.77%
Since inception (10/1/93) 4.76%
VIRGINIA
One year 3.86%
Since inception (10/1/93) 4.83%
ARIZONA
One year 3.17%
Since inception (1/1/94) 3.90%
FLORIDA
One year 4.16%
Since inception (1/1/94) 4.43%
MICHIGAN
One year 4.54%
Since inception (10/1/93) 4.93%
NEW YORK
One year 4.44%
Since inception (10/1/93) 4.81%
PENNSYLVANIA
One year 4.36%
Since inception (1/1/94) 4.86%
</TABLE>
TOTAL RETURNS ASSUME REINVESTMENT OF DIVIDENDS AND REFLECT THE DEDUCTION OF
FUND'S MAXIMUM FRONT-END SALES CHARGE OF 2.75%. NO SALES CHARGE HAS BEEN APPLIED
TO THE INDICES USED FOR COMPARISON.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS.
PERFORMANCE COMPARISON
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT.
FLORIDA
[GRAPH]
Line graph here showing comparison from 1/1/94 to 12/31/97.
Calvert FL Municipal Intermediate Fund $11,896
Lehman 7-year Municipal Bond Index TR $12,471
MICHIGAN
[GRAPH]
Line graph here showing comparison from 10/1/93 to 12/31/97.
Calvert MI Municipal Intermediate Fund $12,273
Lehman 7-year Municipal Bond Index TR $12,621
NEW YORK
[GRAPH]
Line graph here showing comparison from 10/1/93 to 12/31/97.
Calvert NY Municipal Intermediate Fund $12,213
Lehman 7-year Municipal Bond Index TR $12,621
PENNSYLVANIA
[GRAPH]
Line graph here showing comparison from 1/1/94 to 12/31/97.
Calvert PA Municipal Intermediate Fund $12,095
Lehman 7-year Municipal Bond Index TR $12,471
6 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Calvert Municipal Fund, Inc:
We have audited the accompanying statements of net assets of Calvert National,
Arizona, California, Maryland, Michigan, New York, Pennsylvania, and Virginia
Municipal Intermediate Funds (eight portfolios comprising Calvert Municipal
Fund, Inc.) as of December 31, 1997, and the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
December 31, 1997, by correspondence with the custodian and brokers. 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the funds stated in the first paragraph as of December 31, 1997, the results
of their operations, changes in their net assets and financial highlights for
the respective periods referred to above, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
February 6, 1998
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of First Variable Rate Fund for Government Income and
Shareholders of Calvert Florida Municipal Intermediate Fund:
We have audited the accompanying statement of net assets of Calvert Florida
Municipal Intermediate Fund (one of the portfolios comprising First Variable
Rate Fund for Government Income) as of December 31, 1997, and the related
statements of operations for the year then ended, statements of changes in
net assets for each of the two years in the period then ended and the
financial highlights for each of the four years in the period 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 and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of investments owned as of December 31, 1997,
by correspondence with the custodian and brokers. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Calvert Florida Municipal Intermediate Fund as of December 31, 1997, the results
of its operations, the changes in its net assets and financial highlights for
the respective periods stated in the first paragraph, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
February 6, 1998
8 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
NATIONAL PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS - 98.7% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
ARIZONA - 2.5%
Maricopa County School District GO Bonds, 7.50%,
7/1/07, AMBAC Insured . . . . . . . . . . . . . . . .$1,000,000 $1,239,470
CALIFORNIA - 17.8%
Los Angeles MFH Revenue Bonds, 5.85%, 12/1/27. . . . . . 1,625,000 1,739,757
Orange County Local Transportation Authority Sales Tax
Revenue Bonds, 6.00%, 2/15/09 . . . . . . . . . . . . 2,000,000 2,256,400
Regents of the University of California, Los Angeles
Lease Revenue Bonds, 6.00%, 5/15/02 . . . . . . . . . 633,066 666,176
San Francisco International Airport Series-2 #5
Municipal Transportation Revenue Bonds:
5.90%, 5/1/05, FGIC Insured. . . . . . . . . . . . 500,000 546,870
6.00%, 5/1/06, FGIC Insured. . . . . . . . . . . . 750,000 825,285
Santa Clara Financing Authority Lease Revenue Bonds,
6.00%, 11/15/12, AMBAC Insured. . . . . . . . . . . . 2,000,000 2,248,360
Tahoe City Public Utility District COPs, Series B,
6.30%, 6/1/04 . . . . . . . . . . . . . . . . . . . . 400,000 438,092
COLORADO - 2.5%
Denver City and County Airport Revenue Bonds,
Series A, 7.10%, 11/15/01 . . . . . . . . . . . . . . 1,100,000 1,204,445
CONNECTICUT - 2.3%
Connecticut Special Tax Obligation Revenue Bonds,
Transportation Infrastructure
Project, 6.00%, 9/1/06. . . . . . . . . . . . . . . . 1,000,000 1,118,550
FLORIDA - 4.5%
Dade County Education Facilities Authority Revenue
Bonds, University of Miami, 6.00%, 4/1/08,
MBIA Insured. . . . . . . . . . . . . . . . . . . . . 1,000,000 1,126,830
Dade County MFH Revenue Bonds, 5.90%, 6/1/26 . . . . . . 1,000,000 1,061,510
GEORGIA - 3.5%
Atlanta Airport Authority Facility Revenue Bonds,
6.50%, 1/1/07, AMBAC Insured. . . . . . . . . . . . . 1,500,000 1,732,020
ILLINOIS - 2.4%
Chicago Water Revenue Bonds, 6.50%, 11/1/10,
FGIC Insured. . . . . . . . . . . . . . . . . . . . . 1,000,000 1,177,210
INDIANA - 4.9%
Indianapolis Local Public Improvement Bond Bank
Revenue Bonds, 6.75%, 2/1/14. . . . . . . . . . . . . 2,000,000 2,398,400
KENTUCKY - 3.9%
Glasgow Industrial Building Revenue VRDN, 5.95%,
6/1/20, LOC: Bank Tokyo Mitsubishi. . . . . . . . . . 1,900,000 1,900,000
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 9
<PAGE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
LOUISIANA - 0.7%
Louisiana Public Facility Authority Student Loan
Revenue Bonds, 6.50%, 3/1/02. . . . . . . . . . . . . $330,000 $349,272
MARYLAND - 9.9%
Cambridge Economic Development Authority Revenue
Bonds, Dorchester Hospital, 7.25%, 4/1/04 . . . . . . 930,000 1,022,562
Cecil County Health Department COPs, 7.875%, 7/1/14. . . 1,200,000 1,300,428
Maryland State Economic Development Authority Revenue
Bonds, Series A, 6.375%, 11/1/09, LOC: First
National Bank of Maryland, (Optional
Tender 10/31/99 @100) . . . . . . . . . . . . . . . . 650,000 655,304
Prince Georges County Economic Development Authority
Revenue Bonds, 5.68%, 8/1/11, LOC: First National
Bank of Maryland, (Tender 1/1/01 @100). . . . . . . . 1,797,800 1,851,123
MASSACHUSETTS - 2.2%
Massachusetts Special Obligation Revenue Bonds,
5.50%, 6/1/13 . . . . . . . . . . . . . . . . . . . . 1,000,000 1,072,210
MICHIGAN - 4.6%
Detroit Water Supply Revenue Bonds, 6.00%, 7/1/14. . . . 1,000,000 1,121,070
Michigan Higher Education Facilities Authority
Revenue Bonds, 6.00%, 11/1/03 . . . . . . . . . . . . 1,045,000 1,116,279
NEW MEXICO - 0.1%
New Mexico Educational Assistance Foundation Student
Loan Revenue Bonds, 6.30%, 12/1/02. . . . . . . . . . 40,000 42,062
NEW JERSEY - 4.8%
New Jersey Transportation Authority Revenue Bonds,
6.50%, 6/15/11, MBIA Insured. . . . . . . . . . . . . 2,000,000 2,358,140
NEW YORK - 4.4%
New York City GO Bonds, Series E, 5.75%, 2/15/09 . . . . 800,000 841,160
New York State COPs, 5.45%, 2/1/00 . . . . . . . . . . . 200,000 205,210
New York State Local Government Assistance Corp.
Revenue Bonds, 6.00%, 4/1/14. . . . . . . . . . . . . 1,000,000 1,124,580
PENNSYLVANIA - 2.1%
Philadelphia Hospitals & Higher Education
Facilities Authority Revenue Bonds, 5.85%, 7/1/02 . . 1,000,000 1,052,780
SOUTH DAKOTA - 4.9%
Heartland Consumers Power District Revenue Bonds,
FSA Insured:
6.00%, 1/1/09 . . . . . . . . . . . . . . . . . . . . 1,125,000 1,265,985
6.00%, 1/1/12 . . . . . . . . . . . . . . . . . . . . 1,000,000 1,122,400
TEXAS - 7.7%
Harris County GO Bonds, 5.75%, 10/1/14 . . . . . . . . . 2,000,000 2,197,380
North Texas Higher Education Student Loan Revenue
Bonds, Series B, 5.55%, 4/1/03. . . . . . . . . . . . 1,500,000 1,562,835
10 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
VIRGINIA - 10.6%
Arlington County Community Housing Finance Revenue
Bonds, 6.00%, 6/1/09. . . . . . . . . . . . . . . . . $300,000 $312,828
Chesapeake IDA Revenue Bonds, 6.00%, 6/1/07,
MBIA Insured. . . . . . . . . . . . . . . . . . . . . 1,000,000 1,121,410
Virginia State Housing Development Authority Revenue
Bonds:
Series A, 6.90%, 7/1/07 . . . . . . . . . . . . . . . 300,000 328,200
Series I, 6.00%, 7/1/03 . . . . . . . . . . . . . . . 1,120,000 1,179,875
Virginia College Building Authority Revenue Bonds,
Twenty First Century College Project, 5.00%, 8/1/09 . 1,000,000 1,033,520
West Point IDA Pollution Control Revenue Bonds,
Chesapeake Corp. Project, 6.375%, 5/1/03. . . . . . . 1,200,000 1,206,877
OTHER - 2.4%
Fort Mojave Indian Tribe of Arizona, California and
Nevada Public Facilities Combined Limited Obligation
and Revenue Bonds Adjustable Rate and Tender
Series of 1993, 11.50%, 12/1/18 . . . . . . . . . . . 455,020 455,020
Pitney Bowes Corp. LeaseTOPS VRDN, 4.10%, 4/1/98 . . . . 700,000 700,000
-----------
Total Municipal Obligations (Cost $45,124,669). . . . 48,277,885
-----------
-----------
<CAPTION>
OPTIONS PURCHASED - 0.0% CONTRACTS
- --------------------------------------------------------------------------------
<S> <C> <C>
Put Options on June U.S. Treasury Bond Futures,
Expiration 5/15/98, Strike Price 112. . . . . . . . . 50 19,531
-----------
Total Options (Premium $40,340). . . . . . . . . . . . . 19,531
-----------
TOTAL INVESTMENTS (Cost $45,165,009) - 98.7%. . 48,297,416
Other assets and liabilities, net - 1.3%. . . . 635,948
-----------
NET ASSETS - 100% . . . . . . . . . . . . . . . $48,933,364
-----------
-----------
<CAPTION>
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
<S> <C>
Paid-in capital applicable to 4,535,479 outstanding
Class A shares of common stock, $0.01 par value
with 250,000,000 Class A shares authorized. . . . . . $46,654,767
Undistributed net investment income. . . . . . . . . . . 69,302
Accumulated net realized gain (losses) on investments. . (923,112)
Net unrealized appreciation (depreciation) on
investments . . . . . . . . . . . . . . . . . . . . . 3,132,407
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $48,933,364
-----------
-----------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $10.79
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 11
<PAGE>
ARIZONA PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
ARIZONA MUNICIPAL OBLIGATIONS - 96.0% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Apache County IDA VRDN, 3.80%, 12/15/18,
LOC: Bank of New York . . . . . . . . . . . . . . . . $80,000 $80,000
Arizona State Transportation Board Highway Revenue
Bonds:
6.00%, 7/1/08 . . . . . . . . . . . . . . . . . . . . 200,000 226,318
5.00%, 7/1/09 . . . . . . . . . . . . . . . . . . . . 150,000 156,676
7.00%, 7/1/09, (Prerefunded 7/1/00 @ 101) . . . . . . 75,000 80,982
Casa Grande Excise Tax Revenue Bonds, 5.70%, 4/1/06,
FGIC Insured. . . . . . . . . . . . . . . . . . . . . 100,000 107,623
Cochise County School District GO Bonds, 7.50%, 7/1/09,
FGIC Insured. . . . . . . . . . . . . . . . . . . . . 100,000 126,601
Glendale GO Bonds, 5.15%, 7/1/03, FGIC Insured . . . . . 100,000 104,823
Glendale IDA Revenue VRDN, 4.20%, 1/1/20,
LOC: Sumitomo Bank. . . . . . . . . . . . . . . . . . 100,000 100,000
Maricopa County Creighton School District #14 GO Bonds,
6.90%, 7/1/03, FGIC Insured . . . . . . . . . . . . . 50,000 54,020
Maricopa County School District #6 GO Bonds, 6.75%,
7/1/02, AMBAC Insured . . . . . . . . . . . . . . . . 200,000 221,752
Maricopa County GO Bonds, Series A, 5.80%, 7/1/04. . . . 150,000 162,793
Maricopa County Glendale School District #40 GO Bonds,
6.30%, 7/1/03, FGIC Insured,
(Prerefunded 7/1/01@101). . . . . . . . . . . . . . . 50,000 56,673
Maricopa County Peoria School District #11 GO Bonds,
7.50%, 7/1/07, AMBAC Insured. . . . . . . . . . . . . 100,000 123,947
Maricopa County Tempe Elementary School District #3
GO Capital Appreciation Bonds, Zero Coupon, 7/1/04,
AMBAC Insured . . . . . . . . . . . . . . . . . . . . 105,000 78,976
Maricopa County Tolleson School District #214 GO Bonds,
5.35%, 7/1/03, FGIC Insured . . . . . . . . . . . . . 70,000 72,590
Mesa GO Bonds, 5.70%, 7/1/03, FGIC Insured . . . . . . . 25,000 26,875
Peoria Municipal Development Authority Revenue Bonds,
7.00%, 7/1/00, AMBAC Insured. . . . . . . . . . . . . 95,000 101,857
Phoenix Street and Highway User Revenue Bonds,
6.10%, 7/1/00, MBIA Insured . . . . . . . . . . . . . 50,000 52,547
Pima County GO Bonds, 6.00%, 7/1/06, MBIA Insured. . . . 245,000 274,392
Prescott Valley Property Corp. Municipal Facilities
Revenue Bonds, 5.55%, 1/1/06, FGIC Insured. . . . . . 125,000 134,580
Scottsdale GO Bonds, Series D, 6.50%, 7/1/01 . . . . . . 120,000 129,789
Tucson Street and Highway Revenue Bonds, Series A,
7.00%, 7/1/11, MBIA Insured . . . . . . . . . . . . . 100,000 123,144
----------
TOTAL INVESTMENTS (Cost $2,469,050) - 96.0% . . 2,596,958
Other assets and liabilities, net - 4.0%. . . . 107,507
----------
NET ASSETS - 100% . . . . . . . . . . . . . . . $2,704,465
----------
----------
</TABLE>
12 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
NET ASSETS CONSIST OF: VALUE
- --------------------------------------------------------------------------------
<S> <C>
Paid-in capital applicable to 527,700 outstanding
Class A shares of common stock, $0.01 par value
with 250,000,000 Class A shares authorized. . . . . . $2,595,260
Undistributed net investment income. . . . . . . . . . . 8,853
Accumulated net realized gain (losses) on investments. . (27,556)
Net unrealized appreciation (depreciation) on investments 127,908
----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $2,704,465
----------
----------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $5.13
----------
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 13
<PAGE>
CALIFORNIA PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS - 104.7% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA - 99.3%
Anaheim Public Financing Authority Lease Revenue Bonds,
6.00%, 9/1/14, FSA Insured. . . . . . . . . . . . . .$1,000,000 $1,132,810
Buena Park VRDN, 5.355%, 12/28/99, INSUR: Mass Mutual
Life Insurance. . . . . . . . . . . . . . . . . . . . 900,000 900,000
California Educational Facilities Revenue Bonds,
University of San Francisco, 5.90%, 10/1/02 . . . . . 595,000 640,892
California GO Bonds, 6.40%, 9/1/07 . . . . . . . . . . . 1,000,000 1,156,880
California State Department of Water Resources
Revenue Bonds, 6.00%, 12/1/10 . . . . . . . . . . . . 1,000,000 1,140,410
California State Public Works Department of
Corrections Lease Revenue Bonds, 5.25%, 12/1/07,
AMBAC Insured . . . . . . . . . . . . . . . . . . . . 1,750,000 1,872,797
California State Public Works Lease Revenue Bonds,
5.625%, 3/1/16, AMBAC Insured . . . . . . . . . . . . 1,000,000 1,055,550
California Statewide Development Authority MFH Revenue
Bonds, 8.50%, 11/1/00 . . . . . . . . . . . . . . . . 1,130,000 1,141,367
Los Angeles GO Bonds, Series A, 7.50%, 9/1/01,
MBIA Insured. . . . . . . . . . . . . . . . . . . . . 1,000,000 1,120,000
Los Angeles MFH Revenue Bonds, 5.85%, 12/1/27. . . . . . 3,000,000 3,211,860
Los Angeles School District GO Bonds, 6.00%, 7/1/11,
FGIC Insured. . . . . . . . . . . . . . . . . . . . . 2,360,000 2,674,258
Los Angeles Wastewater System Revenue Bonds, Series A,
8.50%, 6/1/02, MBIA Insured . . . . . . . . . . . . . 1,000,000 1,177,730
Oceanside Unified School District COPs, 7.25%, 8/1/02. . 592,000 611,198
Orange County Local Transportation Authority Sales Tax
Revenue Bonds, 6.00%, 2/15/09 . . . . . . . . . . . . 1,000,000 1,128,200
Port of Oakland Revenue Bonds, Series D, 7.00%,
11/1/02, MBIA Insured . . . . . . . . . . . . . . . . 1,000,000 1,128,710
Regents of University of California, Los Angeles,
COPs, 6.32%, 3/15/99. . . . . . . . . . . . . . . . . 229,896 232,446
Sacramento COPs:
6.75%, 3/1/02 . . . . . . . . . . . . . . . . . . . . 585,542 596,304
6.50%, 1/1/04 . . . . . . . . . . . . . . . . . . . . 1,223,833 1,272,677
Sacramento City Financing Authority Revenue Bonds,
Series B, 5.00%, 11/1/14. . . . . . . . . . . . . . . 1,000,000 1,004,460
San Diego County Water Authority COPs, 5.75%, 5/1/11 . . 1,000,000 1,112,220
San Jose Redevelopment Agency Allocation Bonds,
6.00%, 8/1/09, MBIA Insured . . . . . . . . . . . . . 1,000,000 1,137,120
Santa Clara Financing Authority Lease Revenue Bonds,
6.00%, 11/15/12, AMBAC Insured. . . . . . . . . . . . 2,000,000 2,248,360
Southern California Public Power Authority Revenue
Bonds, 6.75%, 7/1/13, FSA Insured . . . . . . . . . . 1,800,000 2,185,128
Southern California Rapid Transit District Special
Assessment Bonds, 5.90%, 9/1/07, AMBAC Insured. . . . 1,000,000 1,122,530
14 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Tahoe City Public Utility District COPs, Series B:
5.75%, 6/1/99 . . . . . . . . . . . . . . . . . . . . $505,000 $516,918
5.90%, 6/1/00 . . . . . . . . . . . . . . . . . . . . 745,000 774,137
6.25%, 6/1/03 . . . . . . . . . . . . . . . . . . . . 885,000 960,004
Valley Health System COPs, 6.25%, 5/15/99. . . . . . . . 425,000 431,923
Walnut Valley Unified School District GO Bonds,
6.10%, 8/1/08, AMBAC Insured. . . . . . . . . . . . . 1,000,000 1,141,650
OTHER - 5.4%
Guam Government Limited Obligation Revenue Bonds,
5.50%, 11/1/08, AMBAC Insured . . . . . . . . . . . . 1,000,000 1,088,703
Pitney Bowes Corp. LeaseTOPS VRDN:
4.10%, 4/1/98 . . . . . . . . . . . . . . . . . . . . 500,000 500,000
4.10%, 2/11/11. . . . . . . . . . . . . . . . . . . . 300,000 300,000
-----------
Total Municipal Obligations (Cost $35,064,879) . . . . . 36,717,242
-----------
<CAPTION>
OPTIONS PURCHASED - 0.0% CONTRACTS
- --------------------------------------------------------------------------------
<S> <C> <C>
Put Options on June U.S. Treasury Bond Futures,
Expiration 5/15/98, Strike Price 112. . . . . . . . . 25 9,766
-----------
Total Options (Premium $20,170). . . . . . . . . . . . . 9,766
-----------
TOTAL INVESTMENTS (Cost $35,085,049) - 104.7% . 36,727,008
Other assets and liabilities, net - (4.7%). . . (1,642,032)
-----------
NET ASSETS - 100% . . . . . . . . . . . . . . . $35,084,976
-----------
-----------
<CAPTION>
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
<S> <C>
Paid-in capital applicable to 3,299,751 outstanding
Class A shares of common stock, $0.01 par value
with 250,000,000 Class A shares authorized. . . . . . $34,236,188
Undistributed net investment income. . . . . . . . . . . 54,963
Accumulated net realized gain (losses) on investments. . (848,134)
Net unrealized appreciation (depreciation) on
investments . . . . . . . . . . . . . . . . . . . . . 1,641,959
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $35,084,976
-----------
-----------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $10.63
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 15
<PAGE>
FLORIDA PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
FLORIDA MUNICIPAL OBLIGATIONS - 99.8% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Boca Raton Beach Acquisition Revenue Bonds,
4.60%, 1/1/05, MBIA Insured . . . . . . . . . . . . . $150,000 $153,150
Brevard County Sales Tax Revenue Bonds,
5.40%, 12/1/06, MBIA Insured. . . . . . . . . . . . . 195,000 208,944
Brevard County School Board COPs, 5.40%, 7/1/10,
AMBAC Insured . . . . . . . . . . . . . . . . . . . . 410,000 442,541
Broward County School District GO Bonds,
7.20%, 2/15/00. . . . . . . . . . . . . . . . . . . . 100,000 102,401
Broward County Solid Waste System Revenue Bonds,
5.80%, 7/1/07, MBIA Insured . . . . . . . . . . . . . 150,000 162,460
City of Miami GO Bonds, 5.90%, 12/1/06, FGIC Insured . . 260,000 289,471
Dade County Aviation Revenue Bonds, 5.60%, 10/1/05,
AMBAC Insured . . . . . . . . . . . . . . . . . . . . 150,000 163,086
Dade County Educational Facilities Authority Revenue
Bonds, 6.00%, 4/1/08, MBIA Insured. . . . . . . . . . 300,000 338,049
Dade County MFH Revenue Bonds, 5.90%, 6/1/26 . . . . . . 500,000 530,755
Duval County MFH Revenue VRDN, 4.75%, 7/1/25,
LOC: Household Financial Corp.. . . . . . . . . . . . 550,000 550,000
East County Water Control District Water Revenue
Bonds, Series 1994, 5.45%, 11/1/02, Asset
Guaranty Insured. . . . . . . . . . . . . . . . . . . 150,000 157,914
Florida Board of Education GO Bonds, 5.00%, 6/10/10. . . 350,000 358,729
Florida Board of Regents Parking System Revenue Bonds,
5.00%, 7/1/08, FSA Insured. . . . . . . . . . . . . . 175,000 181,249
Florida Department of Transportation Alligator Alley
Revenue Bonds, 6.25%, 7/1/07, FGIC Insured. . . . . . 300,000 343,218
Florida Department of Transportation GO Bonds,
5.00%, 7/1/07 . . . . . . . . . . . . . . . . . . . . 250,000 261,545
Florida State MFH Revenue Bonds, Cypress Lake,
5.75%, 12/1/07, LOC: Heller Financial . . . . . . . . 300,000 307,584
Hillsborough County Port District Special Refunding
Revenue Bonds, 5.75%, 6/1/13, FSA Insured . . . . . . 500,000 533,285
Hillsborough County Solid Waste Revenue Bonds,
5.40%, 10/1/05, MBIA Insured. . . . . . . . . . . . . 150,000 160,647
Hollywood Water and Sewer Revenue Bonds, 6.75%,
10/1/11, FGIC Insured (Prerefunded 10/1/01 @ 102) . . 125,000 138,727
Jacksonville Electric Authority Revenue Bonds,
5.00%, 10/1/10, FGIC Insured. . . . . . . . . . . . . 300,000 307,260
Jacksonville Excise Tax Revenue Bonds,
6.25%, 10/1/05, AMBAC Insured . . . . . . . . . . . . 100,000 109,606
Jacksonville Water and Sewer Revenue Bonds,
5.20%, 10/1/02, MBIA Insured. . . . . . . . . . . . . 100,000 104,693
Lee County Transportation Facilities Revenue Bonds,
5.625%, 10/1/08, MBIA Insured . . . . . . . . . . . . 150,000 163,464
Palm Beach County GO Bonds, 6.75%, 7/1/11. . . . . . . . 135,000 163,340
Palm Beach Housing Finance Revenue VRDN,
5.525%, 3/1/22, INSUR: Firemans Insurance Co. . . . . 420,000 420,000
16 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
PRINCIPAL
FLORIDA MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Pinellas County Resource Recovery Revenue Bonds,
5.125%, 10/1/04 . . . . . . . . . . . . . . . . . . . $350,000 $364,654
St. Petersburg Professional Sports Facility Revenue
Bonds, 5.10%, 10/1/04, MBIA Insured . . . . . . . . . 150,000 157,719
Tallahassee Consolidated Utility System Revenue Bonds,
4.60%, 10/1/02. . . . . . . . . . . . . . . . . . . . 200,000 204,264
Tampa Capital Improvement Revenue Bonds,
8.375%, 10/1/18, IA: Multi-Bank . . . . . . . . . . . 200,000 204,988
University South Florida Revenue Bonds, 6.25%, 7/1/05. . 180,000 202,795
-----------
TOTAL INVESTMENTS (Cost $7,447,025) - 99.8% . . 7,786,538
Other assets and liabilities, net - 0.2%. . . . 12,539
-----------
NET ASSETS - 100% . . . . . . . . . . . . . . . $7,799,077
-----------
-----------
<CAPTION>
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
<S> <C>
Paid-in capital applicable to 1,513,922 Class A
shares of beneficial interest, unlimited number
of no par shares authorized:. . . . . . . . . . . . . $7,620,285
Undistributed net investment income. . . . . . . . . . . 5,491
Accumulated net realized gain (losses) on investments. . (166,212)
Net unrealized appreciation (depreciation) on
investments . . . . . . . . . . . . . . . . . . . . . 339,513
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $7,799,077
-----------
-----------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $5.15
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 17
<PAGE>
MARYLAND PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS - 100.6% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
MARYLAND - 96.0%
Anne Arundel County GO Bonds, 5.125%, 4/15/09. . . . . . $500,000 $516,630
Baltimore City GO Bonds:
8.90%, 10/15/99, MBIA Insured . . . . . . . . . . . . 385,000 417,810
6.00%, 10/15/04, AMBAC Insured. . . . . . . . . . . . 500,000 551,840
Cambridge Economic Development Revenue Bonds,
7.25%, 4/1/04 . . . . . . . . . . . . . . . . . . . . 845,000 929,103
Carroll County GO Bonds, 6.25%, 11/1/08
(Prerefunded 11/1/01 @ 102) . . . . . . . . . . . . . 400,000 437,340
Cecil County GO Bonds, 5.10%, 12/1/07, FGIC Insured. . . 500,000 522,825
Cecil County Health Department COPs, 7.875%, 7/1/14. . . 439,000 475,740
Charles County GO Bonds, 5.00%, 3/1/09 . . . . . . . . . 615,000 635,670
Frederick County GO Bonds, 5.00%, 8/1/09 . . . . . . . . 400,000 410,748
Harford County GO Bonds, 5.50%, 1/1/07 . . . . . . . . . 500,000 545,055
Howard County GO Bonds, 5.25%, 8/15/05 . . . . . . . . . 400,000 425,632
Maryland Economic Development Corp. Revenue VRDN,
4.20%, 6/1/20, LOC: Nationsbank . . . . . . . . . . . 120,000 120,000
Maryland GO Bonds, 5.00%, 8/1/11 . . . . . . . . . . . . 500,000 511,705
Maryland Health & Higher Education Facilities
Authority Revenue Bonds, 6.00%, 7/1/10. . . . . . . . 300,000 334,938
Maryland Housing & Community Development
Revenue Bonds, 5.05%, 4/1/08. . . . . . . . . . . . . 500,000 511,780
Maryland IDA Revenue Bonds, 5.20%, 12/1/05 . . . . . . . 250,000 261,707
Maryland IDA Revenue Bonds, 6.375%, 11/1/09,
LOC: First National Bank of Maryland
(Optional tender 10/31/99 @ 100). . . . . . . . . . . 170,000 171,387
Maryland Stadium Authority Revenue Bonds,
5.375%, 12/15/03, AMBAC Insured . . . . . . . . . . . 370,000 392,488
Maryland State COPs for St. Mary's County:
5.20%, 6/1/04 . . . . . . . . . . . . . . . . . . . . 155,000 163,420
5.20%, 12/1/04. . . . . . . . . . . . . . . . . . . . 180,000 190,381
Maryland State Economic Development Authority Revenue
Bonds, Series A:
6.10%, 1/1/00. . . . . . . . . . . . . . . . . . . 165,000 171,725
8.625%, 10/1/19. . . . . . . . . . . . . . . . . . 500,000 588,285
Montgomery County GO Bonds:
9.75%, 6/1/01 . . . . . . . . . . . . . . . . . . . . 250,000 295,397
7.00%, 5/1/03 . . . . . . . . . . . . . . . . . . . . 230,000 261,208
Montgomery County Opportunity MFH Revenue VRDN,
3.95%, 6/1/29, LOC: Key Bank. . . . . . . . . . . . . 100,000 100,000
Northeast Maryland Waste Disposal Authority Revenue
Bonds, 5.80%, 7/1/04. . . . . . . . . . . . . . . . . 250,000 268,140
Prince Georges County COPs, 5.90%, 9/15/08,
MBIA Insured. . . . . . . . . . . . . . . . . . . . . 300,000 329,277
University of Maryland Auxiliary System Revenue Bonds,
5.20%, 4/1/06 . . . . . . . . . . . . . . . . . . . . 400,000 421,124
18 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Washington D.C. Metropolitan Area Transit Authority
Revenue Bonds, 6.00%, 7/1/07, FGIC Insured. . . . . . $400,000 $448,268
Washington Suburban Sanitary District Revenue Bonds,
5.00%, 6/1/09 . . . . . . . . . . . . . . . . . . . . 500,000 521,655
OTHER - 4.6%
Puerto Rico Aqueduct & Sewer Authority Revenue Bonds,
6.00%, 7/1/09, AMBAC Insured. . . . . . . . . . . . . 500,000 566,761
-----------
Total Municipal Obligations (Cost $11,792,970) . . . . . 12,498,039
-----------
<CAPTION>
OPTIONS PURCHASED - 0.0% CONTRACTS
- --------------------------------------------------------------------------------
<S> <C> <C>
Put Options on June U.S. Treasury Bond Futures,
Expiration 5/15/98, Strike Price 112. . . . . . . . . 25 9,766
-----------
Total Options (Premium $20,170). . . . . . . . . . . . . 9,766
-----------
TOTAL INVESTMENTS (Cost $11,813,140) - 100.6% . 12,507,805
Other assets and liabilities, net - (0.6%). . . (70,745)
-----------
NET ASSETS - 100% . . . . . . . . . . . . . . . $12,437,060
-----------
-----------
<CAPTION>
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
<S> <C>
Paid-in capital applicable to 2,400,418 outstanding
Class A shares of common stock, $0.01 par value
with 250,000,000 Class A shares authorized. . . . . . $12,010,654
Undistributed net investment income. . . . . . . . . . . 26,285
Accumulated net realized gain (losses) on investments. . (294,544)
Net unrealized appreciation (depreciation) on
investments . . . . . . . . . . . . . . . . . . . . . 694,665
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $12,437,060
-----------
-----------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $5.18
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 19
<PAGE>
MICHIGAN PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MICHIGAN MUNICIPAL OBLIGATIONS - 98.8% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Cedar Springs Public School District GO Bonds,
7.65%, 5/1/03 . . . . . . . . . . . . . . . . . . . . $150,000 $ 174,174
Clarkston Community School GO Bonds,
5.25%, 5/1/07, FGIC Insured . . . . . . . . . . . . . 250,000 263,605
Detroit Water Supply System Revenue Bonds,
5.30%, 7/1/09, MBIA Insured . . . . . . . . . . . . . 175,000 186,006
Greenville Public School District GO Bonds,
5.75%, 5/1/06, MBIA Insured . . . . . . . . . . . . . 250,000 270,835
Jenison Public School GO Bonds, 5.40%, 5/1/08,
FGIC Insured. . . . . . . . . . . . . . . . . . . . . 250,000 266,427
Michigan Higher Education Facility Authority Revenue
Bonds:
6.00%, 11/1/03. . . . . . . . . . . . . . . . . . . . 500,000 534,105
7.00%, 11/1/05. . . . . . . . . . . . . . . . . . . . 610,000 712,132
Michigan State Housing Development Authority Revenue
VRDN, River Place Plaza Apts., 5.00%, 10/1/11 . . . . 455,000 455,946
Michigan State Building Authority Facilities Revenue
Bonds, Series II, 6.25%, 10/1/01, AMBAC Insured . . . 250,000 268,937
Milan Area Schools GO Bonds, 5.00%, 5/1/13 . . . . . . . 300,000 300,528
Morely Stanwood Community School GO Bonds,
5.15%, 5/1/07, FGIC Insured . . . . . . . . . . . . . 100,000 104,823
Mount Pleasant School District GO Bonds, 5.65%, 5/1/05 . 250,000 271,978
Oakland County Economic Development Corp. Limited
Obligation Revenue Bonds, 5.00%, 6/1/07, LOC:
First America Bank. . . . . . . . . . . . . . . . . . 250,000 255,070
Oakland County Economic Development Corp.
Limited Obligation Revenue Bonds, Cranbrook
Educational Community, 6.375%, 11/1/14. . . . . . . . 500,000 553,350
Southfield Economic Development Authority Corp. VRDN,
5.95%, 5/15/11, INSUR: Fireman's Insurance Co.. . . . 50,000 50,000
University of Michigan Revenue Bonds, 5.60%, 11/15/11. . 235,000 251,548
Zeeland Public Schools GO Bonds,
5.70%, 5/1/07, MBIA Insured . . . . . . . . . . . . . 205,000 224,015
-----------
TOTAL INVESTMENTS (Cost $4,778,737) - 98.8% . . 5,143,479
Other assets and liabilities, net - 1.2%. . . . 63,994
-----------
NET ASSETS - 100% . . . . . . . . . . . . . . . $5,207,473
-----------
-----------
<CAPTION>
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
<S> <C>
Paid-in capital applicable to 994,135 outstanding
Class A shares of common stock, $0.01 par value
with 250,000,000 Class A shares authorized. . . . . . $5,087,601
Undistributed net investment income. . . . . . . . . . . 3,526
Accumulated net realized gain (losses) on investments. . (248,396)
Net unrealized appreciation (depreciation) on
investments . . . . . . . . . . . . . . . . . . . . . 364,742
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $5,207,473
-----------
-----------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $ 5.24
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
NEW YORK PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS - 96.6% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Buffalo GO Bonds, Series B, 5.20%, 2/1/10,
AMBAC Insured . . . . . . . . . . . . . . . . . . . . $300,000 $312,594
Dundee Central School District GO Bonds,
5.70%, 6/15/07, AMBAC Insured . . . . . . . . . . . . 150,000 163,206
Glen Cove GO Bonds:
5.50%, 1/15/03. . . . . . . . . . . . . . . . . . . . 225,000 237,424
5.60%, 1/15/04. . . . . . . . . . . . . . . . . . . . 215,000 229,015
5.70%, 1/15/05. . . . . . . . . . . . . . . . . . . . 215,000 231,084
Lancaster School District GO Bonds, 5.125%, 6/1/14,
FGIC Insured. . . . . . . . . . . . . . . . . . . . . 300,000 303,216
Metropolitan Transit Authority Commuter Facility
Revenue Bonds, Series A, 5.70%, 7/1/02,
MBIA Insured. . . . . . . . . . . . . . . . . . . . . 180,000 191,345
New York City GO Bonds:
Series D, 5.70%, 8/15/06. . . . . . . . . . . . . . . 200,000 211,064
Series E, 5.75%, 2/15/09. . . . . . . . . . . . . . . 200,000 210,290
New York City Industrial Development Agency Civil
Facility Revenue Bonds, USTA National Tennis Center,
7.75%, 11/15/02, FSA Insured. . . . . . . . . . . . . 100,000 115,607
New York State Environmental Pollution Control
Revenue Bonds, 5.70%, 1/15/12 . . . . . . . . . . . . 500,000 540,305
New York State Dormitory Authority Revenue Bonds,
5.50%, 5/15/07. . . . . . . . . . . . . . . . . . . . 200,000 214,354
New York State Dormitory Authority Revenue Bonds
for City University, 5.625%, 7/1/16 . . . . . . . . . 200,000 211,984
New York State GO Bonds, 5.75%, 9/15/01. . . . . . . . . 75,000 79,314
New York State GO Bonds, Series B, 6.25%, 8/15/05. . . . 210,000 235,464
New York State Local Assistance Corp. Revenue Bonds,
Series E, 6.00%, 4/1/14 . . . . . . . . . . . . . . . 100,000 112,458
New York State Power Authority Revenue Bonds,
6.50%, 1/1/08 . . . . . . . . . . . . . . . . . . . . 100,000 116,226
New York State Thruway Authority Highway Revenue
Bonds, Series B, 5.375%, 4/1/02, FGIC Insured . . . . 240,000 251,426
New York State Urban Development Corp. Revenue Bonds,
5.60%, 1/1/07 . . . . . . . . . . . . . . . . . . . . 110,000 116,452
Oneida County GO Bonds, 5.70%, 3/15/01 . . . . . . . . . 150,000 156,790
Orange County IDA VRDN, 4.45%, 6/1/98,
LOC: Sakura Bank. . . . . . . . . . . . . . . . . . . 200,000 200,000
Orange County IDA VRDN, 5.61%, 12/1/05,
LOC: Summit Bank. . . . . . . . . . . . . . . . . . . 725,000 725,000
Oyster Bay GO Bonds, 5.00%, 2/15/10. . . . . . . . . . . 500,000 519,345
Suffolk County Industrial Development Agency Bonds,
6.00%, 2/1/08, FGIC Insured . . . . . . . . . . . . . 150,000 168,445
Triborough Building and Tunnel Revenue Bonds,
Series A, 5.00%, 1/1/07 . . . . . . . . . . . . . . . 275,000 286,531
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 21
<PAGE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Westchester County GO Bonds, 6.70%, 2/1/01 . . . . . . . $140,000 $151,236
Westchester County Industrial Development Agency
Civic Facility Revenue Bonds, 6.25%, 4/1/05 . . . . . 500,000 529,690
-----------
TOTAL INVESTMENTS (Cost $6,457,905) - 96.6% . . 6,819,865
Other assets and liabilities, net - 3.4%. . . . 238,758
-----------
NET ASSETS - 100% . . . . . . . . . . . . . . . $7,058,623
-----------
-----------
<CAPTION>
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
<S> <C>
Paid-in capital applicable to 1,348,661 outstanding
Class A shares of common stock, $0.01 par value
with 250,000,000 Class A shares authorized. . . . . . $6,727,798
Undistributed net investment income. . . . . . . . . . . 6,993
Accumulated net realized gain (losses) on investments. . (38,128)
Net unrealized appreciation (depreciation) on
investments . . . . . . . . . . . . . . . . . . . . . 361,960
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $7,058,623
-----------
-----------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $5.23
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
PENNSYLVANIA PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS - 98.9% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
PENNSYLVANIA - 96.8%
Allegheny County Airport Revenue Bonds,
5.75%, 1/1/13, MBIA Insured . . . . . . . . . . . . . $300,000 $324,207
Allegheny County GO Bonds, Series C-42, 5.00%, 10/1/07 . 170,000 176,173
Allegheny County Higher Education Building Authority
Revenue Bonds, Duquesne University Project,
6.50%, 3/1/10, AMBAC Insured. . . . . . . . . . . . . 100,000 117,442
Allegheny County Higher Education Building Authority
Revenue Bonds, Series A, 6.00%, 2/15/08 . . . . . . . 230,000 250,037
Allegheny County Hospital Development Authority
Revenue Bonds, 5.35%, 12/1/15, MBIA Insured . . . . . 200,000 203,518
Bucks County GO Bonds, Series A, 6.00%, 3/1/01 . . . . . 165,000 174,713
Cambria Township Water Authority Industrial User
Revenue Bonds, 6.00%, 12/1/12, LOC: Banque Paribas. . 250,000 259,565
Central Bucks County School District GO Bonds,
6.40%, 2/1/01 . . . . . . . . . . . . . . . . . . . . 130,000 139,000
Chester County GO Bonds, 5.50%,12/15/07. . . . . . . . . 175,000 185,080
Delaware County Memorial Hospital Revenue Bonds,
5.25%, 8/15/07, MBIA Insured. . . . . . . . . . . . . 180,000 190,584
Erie County GO Bonds, Series B, 6.75%, 9/1/16,
(Prerefunded 9/1/01 @100) . . . . . . . . . . . . . . 90,000 98,036
Jim Thorpe Area School District GO Bonds,
5.05%, 3/15/09, MBIA Insured. . . . . . . . . . . . . 210,000 216,785
Latrobe IDA Revenue Bonds, St. Vincent College,
6.40%, 5/1/06 . . . . . . . . . . . . . . . . . . . . 100,000 110,353
Montgomery County Higher Education & Health Authority
Revenue Bonds, 5.50%, 10/1/08, MBIA Insured . . . . . 220,000 237,054
Montgomery County Industrial Development Revenue VRDN,
4.10%, 12/1/13, LOC: PNC Bank . . . . . . . . . . . . 150,000 150,000
Pennsylvania Infrastructure Investment Authority
Revenue Bonds, 5.75%, 9/1/99. . . . . . . . . . . . . 75,000 77,135
Pennsylvania Intergovernmental Co-op Revenue Bonds,
5.25%, 6/15/06, FGIC Insured. . . . . . . . . . . . . 120,000 124,962
Pennsylvania State GO Bonds, Series I, 5.30%, 5/1/06 . . 100,000 106,249
Pennsylvania State IDA Revenue Bonds,
6.00%, 1/1/05, AMBAC Insured. . . . . . . . . . . . . 75,000 82,637
Peters Township School District GO Bonds,
6.00%, 5/15/04, FGIC Insured. . . . . . . . . . . . . 65,000 69,160
Philadelphia Airport Revenue Bonds:
5.25%, 6/15/98, FGIC Insured. . . . . . . . . . . . . 100,000 100,335
5.75%, 6/15/08, AMBAC Insured . . . . . . . . . . . . 300,000 325,536
Philadelphia Hospital and Higher Education Revenue Bonds,
Belmont Center, 5.75%, 10/1/07. . . . . . . . . . . . 195,000 208,092
Philadelphia MFH Revenue VRDN, 4.05%, 12/1/09,
LOC: Marine Midland Bank. . . . . . . . . . . . . . . 175,000 175,000
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 23
<PAGE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Philadelphia Water and Wastewater Revenue Bonds,
5.50%, 6/15/15, FSA Insured . . . . . . . . . . . . . $150,000 $153,819
Pittsburgh GO Bonds, Series A, 5.70%, 9/1/08,
MBIA Insured. . . . . . . . . . . . . . . . . . . . . 100,000 106,519
Pittsburgh Urban Redevelopment Authority Revenue Bonds,
6.00%, 8/1/08 . . . . . . . . . . . . . . . . . . . . 175,000 180,519
Ridley Park Hospital Authority Revenue Bonds,
Tayler Hospital, 5.125%, 12/1/98 . . . . . . . . . . 20,000 20,176
Seneca Valley School District GO Bonds,
5.80%, 2/15/11, FGIC Insured. . . . . . . . . . . . . 110,000 118,289
State Public School Building Authority Revenue Bonds,
Harrisburg Area Community College,
6.70%, 10/01/00, MBIA Insured . . . . . . . . . . . . 75,000 79,175
Wilkes Barre Area School District GO Bonds,
5.75%, 4/1/06, FGIC Insured . . . . . . . . . . . . . 125,000 135,398
OTHER - 2.1%
Puerto Rico Commonwealth Highway and Transportation
Revenue Bonds, 5.00%, 7/1/02. . . . . . . . . . . . . 105,000 108,546
-----------
TOTAL INVESTMENTS (Cost $4,725,852) - 98.9% . . 5,004,094
Other assets and liabilities, net - 1.1%. . . . 55,702
-----------
NET ASSETS - 100% . . . . . . . . . . . . . . . $5,059,796
-----------
-----------
<CAPTION>
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
<S> <C>
Paid-in capital applicable to 969,755 outstanding
Class A shares of common stock, $0.01 par value
with 250,000,000 Class A shares authorized. . . . . . $4,825,292
Undistributed net investment income. . . . . . . . . . . 34,972
Accumulated net realized gain (losses) on investments. . (78,710)
Net unrealized appreciation (depreciation) on
investments . . . . . . . . . . . . . . . . . . . . . 278,242
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $5,059,796
-----------
-----------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $5.22
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
VIRGINIA PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS - 98.2% AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
VIRGINIA - 94.0%
Arlington County Community Housing Finance
Revenue Bonds, 6.00%, 6/1/09. . . . . . . . . . . . . $535,000 $557,876
Arlington County GO Bonds, 5.50%, 8/1/06 . . . . . . . . 300,000 319,938
Blue Ridge Regional Jail Facility Revenue Bonds,
5.25%, 12/1/08. . . . . . . . . . . . . . . . . . . . 500,000 529,390
Chesapeake Bay Bridge and Tunnel Revenue Bonds,
5.50%, 7/1/06, FGIC Insured . . . . . . . . . . . . . 450,000 486,112
Chesapeake County GO Bonds, 5.60%, 5/1/00. . . . . . . . 300,000 311,001
Chesapeake County IDA Revenue Bonds, MBIA Insured:
6.00%, 6/1/07 . . . . . . . . . . . . . . . . . . . . 110,000 123,355
6.00%, 6/1/08 . . . . . . . . . . . . . . . . . . . . 175,000 197,097
Fairfax County IDA Revenue Bonds, Inova Health
Systems Project, 5.50%, 8/15/08 . . . . . . . . . . . 500,000 538,760
Hampton City GO Bonds, 5.90%, 1/15/07. . . . . . . . . . 400,000 441,092
Hanover County IDA Revenue Bonds,
5.30%, 8/15/07, MBIA Insured. . . . . . . . . . . . . 500,000 533,755
Henrico County IDA Revenue VRDN,
4.50%, 10/1/00, LOC: Tokai Bank . . . . . . . . . . . 100,000 100,000
Loudon County GO Bonds, Series A, 5.40%, 10/1/06 . . . . 200,000 213,744
Loudon County COPs, FSA Insured:
6.10%, 3/1/02 . . . . . . . . . . . . . . . . . . . . 200,000 215,006
6.30%, 3/1/04 . . . . . . . . . . . . . . . . . . . . 190,000 210,107
Metropolitan Washington Airport Authority Revenue
Bonds, Series A, MBIA Insured, 5.60%, 10/1/06 . . . . 300,000 323,538
Norfolk GO Bonds, Series A, 5.40%, 2/1/02. . . . . . . . 300,000 314,517
Northern Virginia Transportation District Revenue
Bonds, Series A, 5.125%, 5/15/10. . . . . . . . . . . 500,000 516,720
Peninsula Ports Health System Health Revenue Bonds,
6.00%, 7/1/01 . . . . . . . . . . . . . . . . . . . . 300,000 318,411
Riverside Regulatory Jail Authority Revenue Bonds,
5.70%, 7/1/08, MBIA Insured . . . . . . . . . . . . . 450,000 490,981
Russell County IDA Revenue Bonds, 5.45%, 4/1/98,
IA: Escrowed Treasury . . . . . . . . . . . . . . . . 500,000 500,000
Virginia College Building Authority Revenue Bonds,
Hampton University Project, 5.20%, 4/1/02 . . . . . . 435,000 451,056
Virginia College Building Authority Revenue Bonds,
Twenty First Century College Project, 5.00%, 8/1/09 . 500,000 516,760
Virginia Beach GO Bonds, 5.40%, 7/15/08. . . . . . . . . 340,000 367,200
Virginia State Housing Authority Revenue Bonds:
Series A, 6.50%, 7/1/03 . . . . . . . . . . . . . . . 200,000 216,166
Series A, 6.90%, 7/1/07 . . . . . . . . . . . . . . . 270,000 295,380
Series C, 6.00%, 1/1/03 . . . . . . . . . . . . . . . 400,000 421,840
Series C, 6.75%, 7/1/11 . . . . . . . . . . . . . . . 120,000 127,877
Virginia State Housing Authority Revenue VRDN,
6.875%, 1/1/17. . . . . . . . . . . . . . . . . . . . 110,000 110,000
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 25
<PAGE>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Virginia State MFH Revenue Bonds, 5.85%, 5/1/08. . . . . $500,000 $525,970
Virginia State Public Building Authority Revenue Bonds:
Series A, 5.80%, 8/1/02 . . . . . . . . . . . . . . . 100,000 106,301
Series A, 6.00%, 8/1/03 . . . . . . . . . . . . . . . 400,000 427,152
Series B, 5.625%, 8/1/02. . . . . . . . . . . . . . . 230,000 244,018
Virginia State Public School Authority Revenue Bonds,
Series A:
6.00%, 8/1/01 . . . . . . . . . . . . . . . . . . . . 200,000 213,086
6.00%, 8/1/03 . . . . . . . . . . . . . . . . . . . . 200,000 217,640
Virginia State Transportation Board Revenue Bonds,
Route 28 Project, 5.75%, 4/1/00 . . . . . . . . . . . 265,000 275,038
Washington County IDA Revenue Bonds, 5.625%, 7/1/02. . . 320,000 336,112
West Point IDA Revenue Bonds, Chesapeake Corporation,
6.375%, 5/1/03. . . . . . . . . . . . . . . . . . . . 300,000 301,719
Winchester IDA Revenue Bonds, Shenandoah University,
6.05%, 10/1/05, Asset Guaranty Insured. . . . . . . . 300,000 329,706
OTHER - 4.2%
Puerto Rico Aqueduct & Sewer Authority Revenue Bonds,
6.00%, 7/1/09, AMBAC Insured. . . . . . . . . . . . . 500,000 566,762
-----------
Total Municipal Obligations (Cost $12,580,275) . . . . . 13,291,183
-----------
<CAPTION>
OPTIONS PURCHASED - 0.0% CONTRACTS
- --------------------------------------------------------------------------------
<S> <C> <C>
Put Options on June U.S. Treasury Bond Futures,
Expiration 5/15/98, Strike Price 112. . . . . . . . . 25 9,766
-----------
Total Options (Premium $20,170). . . . . . . . . . . . . 9,766
-----------
TOTAL INVESTMENTS (Cost $12,600,445) - 98.2%. . 13,300,949
Other assets and liabilities, net - 1.8%. . . . 240,662
-----------
NET ASSETS - 100% . . . . . . . . . . . . . . . $13,541,611
-----------
-----------
<CAPTION>
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
<S> <C>
Paid-in capital applicable to 2,601,610 outstanding
Class A shares of common stock, $0.01 par value
with 250,000,000 Class A shares authorized. . . . . . $13,042,643
Undistributed net investment income. . . . . . . . . . . 19,814
Accumulated net realized gain (losses) on investments. . (221,350)
Net unrealized appreciation (depreciation) on
investments . . . . . . . . . . . . . . . . . . . . . 700,504
-----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $13,541,611
-----------
-----------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $5.21
-----------
-----------
</TABLE>
ABBREVIATIONS:
AMBAC - AMERICAN MUNICIPAL BOND IDA- INDUSTRIAL DEVELOPMENT AUTHORITY
ASSURANCE CORP.
COPS - CERTIFICATES OF PARTICIPATION MBIA - MUNICIPAL BOND INSURANCE
ASSOCIATION
FGIC - FINANCIAL GUARANTY INSURANCE MFH - MULTI-FAMILY HOUSING
COMPANY
FSA - FINANCIAL SECURITY ADVISOR VRDN - VARIABLE RATE DEMAND NOTES
GO - GENERAL OBLIGATION
EXPLANATION OF GUARANTEES:
GA - GUARANTY AGREEMENT INSUR - INSURANCE
IA - INVESTMENT AGREEMENT LOC - LETTER OF CREDIT
SEE NOTES TO FINANCIAL STATEMENTS.
26 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NATIONAL ARIZONA CALIFORNIA
NET INVESTMENT INCOME PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
Interest income . . . . . . . . . . . . . . . . . . $2,680,450 $126,495 $1,878,381
---------- -------- ----------
Expenses
Investment advisory fee . . . . . . . . . . . . . . 285,023 15,607 204,019
Transfer agency fees and expenses . . . . . . . . . 24,357 1,650 18,913
Directors' fees and expenses. . . . . . . . . . . . 6,389 360 4,654
Administrative fees . . . . . . . . . . . . . . . . 47,504 2,601 34,003
Custodian fees. . . . . . . . . . . . . . . . . . . 14,527 5,865 11,519
Registration fees . . . . . . . . . . . . . . . . . 31,941 1,782 1,560
Reports to shareholders . . . . . . . . . . . . . . 17,086 1,951 12,779
Professional fees . . . . . . . . . . . . . . . . . 26,790 1,462 19,130
Miscellaneous . . . . . . . . . . . . . . . . . . . 5,724 736 4,050
---------- -------- ----------
Total expenses . . . . . . . . . . . . . . . . . 459,341 32,014 310,627
Fees paid indirectly . . . . . . . . . . . . . . (14,527) (5,865) (11,519)
---------- -------- ----------
Net expenses. . . . . . . . . . . . . . . . . 444,814 26,149 299,108
---------- -------- ----------
NET INVESTMENT INCOME. . . . . . . . . . . . . . 2,235,636 100,346 1,579,273
---------- -------- ----------
<CAPTION>
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net realized gain (loss) on securities . . . . . . . . 69,155 (593) 297,945
Net realized gain (loss) on futures. . . . . . . . . . (82,775) (2,075) (84,875)
---------- -------- ----------
(13,620) (2,668) 213,070
Change in unrealized appreciation or depreciation. . . 1,075,751 51,083 389,342
---------- -------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . 1,062,131 48,415 602,412
---------- -------- ----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . . . $3,297,767 $148,761 $2,181,685
---------- -------- ----------
---------- -------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 27
<PAGE>
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
FLORIDA MARYLAND MICHIGAN
NET INVESTMENT INCOME PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
Interest income . . . . . . . . . . . . . . . . . . $343,569 $638,762 $288,081
---------- -------- ----------
Expenses
Investment advisory fee . . . . . . . . . . . . . . 40,391 70,899 32,281
Transfer agency fees and expenses . . . . . . . . . 1,498 7,661 2,571
Directors'/Trustees' fees and expenses. . . . . . . 896 1,603 734
Administrative fees . . . . . . . . . . . . . . . . 6,732 11,816 5,380
Custodian fees. . . . . . . . . . . . . . . . . . . 6,992 7,870 4,963
Registration fees . . . . . . . . . . . . . . . . . 179 2,845 1,356
Reports to shareholders . . . . . . . . . . . . . . 1,876 5,274 2,748
Professional fees . . . . . . . . . . . . . . . . . 761 6,643 3,028
Miscellaneous . . . . . . . . . . . . . . . . . . . 966 2,330 930
---------- -------- ----------
Total expenses . . . . . . . . . . . . . . . . . 60,291 116,941 53,991
Fees paid indirectly . . . . . . . . . . . . . . (6,992) (7,870) (4,963)
---------- -------- ----------
Net expenses. . . . . . . . . . . . . . . . . 53,299 109,071 49,028
---------- -------- ----------
NET INVESTMENT INCOME. . . . . . . . . . . . . . 290,270 529,691 239,053
---------- -------- ----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net realized gain (loss) on securities . . . . . . . . (12,361) 86,918 7,876
Net realized gain (loss) on futures. . . . . . . . . . -- -- (3,112)
---------- -------- ----------
(12,361) 86,918 4,764
Change in unrealized appreciation or depreciation. . . 188,130 262,099 127,486
---------- -------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . 175,769 349,017 132,250
---------- -------- ----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . . . $466,039 $878,708 $371,303
---------- -------- ----------
---------- -------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NEW YORK PENNSYLVANIA VIRGINIA
NET INVESTMENT INCOME PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
Interest income . . . . . . . . . . . . . . . . . . $346,331 $248,644 $699,329
---------- -------- ----------
Expenses
Investment advisory fee . . . . . . . . . . . . . . 39,300 27,612 79,695
Transfer agency fees and expenses . . . . . . . . . 4,636 2,483 6,899
Directors' fees and expenses. . . . . . . . . . . . 890 582 1,800
Administrative fees . . . . . . . . . . . . . . . . 6,550 4,602 13,283
Custodian fees. . . . . . . . . . . . . . . . . . . 7,297 8,153 10,325
Registration fees . . . . . . . . . . . . . . . . . 1,817 399 448
Reports to shareholders . . . . . . . . . . . . . . 3,308 2,491 5,344
Professional fees . . . . . . . . . . . . . . . . . 3,683 2,590 7,466
Miscellaneous . . . . . . . . . . . . . . . . . . . 1,105 774 2,605
---------- -------- ----------
Total expenses . . . . . . . . . . . . . . . . . 68,586 49,686 127,865
Fees paid indirectly . . . . . . . . . . . . . . (7,297) (8,153) (10,325)
---------- -------- ----------
Net expenses. . . . . . . . . . . . . . . . . 61,289 41,533 117,540
---------- -------- ----------
NET INVESTMENT INCOME. . . . . . . . . . . . . . 285,042 207,111 581,789
---------- -------- ----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net realized gain (loss) on securities . . . . . . . . (15,654) 10,066 (7,480)
Net realized gain (loss) on futures. . . . . . . . . . (2,075) -- --
---------- -------- ----------
(17,729) 10,066 (7,480)
Change in unrealized appreciation or depreciation. . . 213,929 108,804 291,183
---------- -------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . 196,200 118,870 283,703
---------- -------- ----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . . . $481,242 $325,981 $865,492
---------- -------- ----------
---------- -------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 29
<PAGE>
NATIONAL PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . $2,235,636 $2,162,414
Net realized gain (loss). . . . . . . . . . . . . . (13,620) 154,953
Change in unrealized appreciation or depreciation . 1,075,751 (492,296)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . 3,297,767 1,825,071
----------- ----------
Distributions to shareholders from
Net investment income:
Class A shares . . . . . . . . . . . . . . . . .(2,245,285) (1,940,913)
Class C shares . . . . . . . . . . . . . . . . . -- (203,415)
----------- ----------
Total distributions . . . . . . . . . . . . . . . .(2,245,285) (2,144,328)
----------- ----------
Capital share transactions
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . 13,264,382 13,543,646
Class C shares . . . . . . . . . . . . . . . . . -- 3,114,924
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . 1,846,162 1,548,570
Class C shares . . . . . . . . . . . . . . . . . -- 199,801
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . .(12,841,599) (9,392,644)
Class C shares . . . . . . . . . . . . . . . . . -- (9,607,268)
----------- ----------
Total capital share transactions. . . . . . . . . . 2,268,945 (592,971)
----------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . 3,321,427 (912,228)
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . 45,611,937 46,524,165
----------- -----------
End of year (including undistributed net investment
income of $69,302 and $81,236, respectively). . . .$48,933,364 $45,611,937
----------- -----------
----------- -----------
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . 1,251,649 1,286,733
Class C shares. . . . . . . . . . . . . . . . . . . -- 299,658
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . 174,583 147,867
Class C shares. . . . . . . . . . . . . . . . . . . -- 19,197
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . (1,209,723) (895,904)
Class C shares. . . . . . . . . . . . . . . . . . . -- (921,429)
----------- ---------
Total capital share activity . . . . . . . . . . . . . 216,509 (63,878)
----------- ---------
----------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
ARIZONA PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . $100,346 $104,228
Net realized gain (loss) . . . . . . . . . . . . . (2,668) 1,822
Change in unrealized appreciation or depreciation . 51,083 (24,832)
----------- ---------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . 148,761 81,218
----------- ---------
Distributions to shareholders from
Net investment income:
Class A shares . . . . . . . . . . . . . . . . . (101,945) (85,015)
Class C shares . . . . . . . . . . . . . . . . . -- (17,574)
----------- ---------
Total distributions . . . . . . . . . . . . . . . . (101,945) (102,589)
----------- ---------
Capital share transactions
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . 532,968 919,546
Class C shares . . . . . . . . . . . . . . . . . -- 64,050
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . 95,345 72,460
Class C shares . . . . . . . . . . . . . . . . . -- 17,573
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . (605,466) (390,378)
Class C shares . . . . . . . . . . . . . . . . . -- (816,670)
----------- ---------
Total capital share transactions. . . . . . . . . . 22,847 (133,419)
----------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . 69,663 (154,790)
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . 2,634,802 2,789,592
----------- ----------
End of year (including undistributed net investment
income of $8,853 and $10,452, respectively) . . . . $2,704,465 $2,634,802
----------- ----------
----------- ----------
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . 107,485 183,666
Class C shares. . . . . . . . . . . . . . . . . . . -- 12,912
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . 18,931 14,476
Class C shares. . . . . . . . . . . . . . . . . . . -- 3,518
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . (122,337) (77,803)
Class C shares. . . . . . . . . . . . . . . . . . . -- (163,192)
----------- ---------
Total capital share activity . . . . . . . . . . . . . 4,079 (26,423)
----------- ---------
----------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 31
<PAGE>
CALIFORNIA PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . $1,579,273 $1,627,836
Net realized gain (loss). . . . . . . . . . . . . . 213,070 99,571
Change in unrealized appreciation or depreciation . 389,342 (367,520)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . 2,181,685 1,359,887
----------- ----------
Distributions to shareholders from
Net investment income:
Class A shares . . . . . . . . . . . . . . . . .(1,559,789) (1,517,194)
Class C shares . . . . . . . . . . . . . . . . . -- (117,484)
----------- ----------
Total distributions . . . . . . . . . . . . . . . .(1,559,789) (1,634,678)
----------- ----------
Capital share transactions
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . 6,263,284 9,255,621
Class C shares . . . . . . . . . . . . . . . . . -- 1,279,993
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . 1,120,614 1,074,634
Class C shares . . . . . . . . . . . . . . . . . -- 114,171
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . (8,614,248) (8,831,034)
Class C shares . . . . . . . . . . . . . . . . . -- (5,441,016)
----------- ----------
Total capital share transactions. . . . . . . . . .(1,230,350) (2,547,631)
----------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . (608,454) (2,822,422)
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . 35,693,430 38,515,852
----------- -----------
End of year (including undistributed net investment
income of $54,963 and $46,997, respectively). . . .$35,084,976 $35,693,430
----------- -----------
----------- -----------
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . 598,006 889,558
Class C shares. . . . . . . . . . . . . . . . . . . -- 124,022
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . 107,426 103,600
Class C shares. . . . . . . . . . . . . . . . . . . -- 11,072
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . (824,559) (850,135)
Class C shares. . . . . . . . . . . . . . . . . . . -- (526,009)
----------- -----------
Total capital share activity . . . . . . . . . . . . . (119,127) (247,892)
----------- -----------
----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
32 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
FLORIDA PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . $290,270 $215,654
Net realized gain (loss). . . . . . . . . . . . . . (12,361) 592
Change in unrealized appreciation or depreciation . 188,130 (12,347)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . 466,039 203,899
----------- -----------
Distributions to shareholders from
Net investment income:
Class A shares . . . . . . . . . . . . . . . . . (290,832) (205,633)
Class C shares . . . . . . . . . . . . . . . . . -- (10,301)
----------- -----------
Total distributions . . . . . . . . . . . . . . . . (290,832) (215,934)
----------- -----------
Capital share transactions
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . 2,738,820 1,924,160
Class C shares . . . . . . . . . . . . . . . . . -- 53,368
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . 212,226 146,384
Class C shares . . . . . . . . . . . . . . . . . -- 9,206
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . (843,564) (440,515)
Class C shares . . . . . . . . . . . . . . . . . -- (457,422)
----------- -----------
Total capital share transactions. . . . . . . . . . 2,107,482 1,235,181
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . 2,282,689 1,223,146
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . 5,516,388 4,293,242
----------- -----------
End of year (including undistributed net investment
income of $5,491 and $6,053, respectively). . . . . $7,799,077 $5,516,388
----------- -----------
----------- -----------
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . 540,337 387,621
Class C shares. . . . . . . . . . . . . . . . . . . -- 10,776
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . 42,116 29,358
Class C share . . . . . . . . . . . . . . . . . . . -- 1,853
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . (166,864) (87,903)
Class C shares. . . . . . . . . . . . . . . . . . . -- (92,042)
----------- -----------
Total capital share activity . . . . . . . . . . . . . 415,589 249,663
----------- -----------
----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 33
<PAGE>
MARYLAND PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- ---------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . $529,691 $533,141
Net realized gain (loss). . . . . . . . . . . . . . 86,918 2,279
Change in unrealized appreciation or depreciation . 262,099 (106,935)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . 878,708 428,485
----------- -----------
Distributions to shareholders from
Net investment income:
Class A shares . . . . . . . . . . . . . . . . . (528,089) (427,812)
Class C shares . . . . . . . . . . . . . . . . . -- (91,849)
----------- -----------
Total distributions . . . . . . . . . . . . . . . . (528,089) (519,661)
----------- -----------
Capital share transactions
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . 2,004,752 4,655,361
Class C shares . . . . . . . . . . . . . . . . . -- 1,091,676
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . 443,291 361,985
Class C shares . . . . . . . . . . . . . . . . . -- 79,464
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . (2,384,609) (2,357,802)
Class C shares . . . . . . . . . . . . . . . . . -- (3,636,207)
----------- -----------
Total capital share transactions. . . . . . . . . . 63,434 194,477
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . 414,053 103,301
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . 12,023,007 11,919,706
----------- -----------
End of year (including undistributed net investment
income of $26,285 and $26,265, respectively). . . . $12,437,060 $12,023,007
----------- -----------
----------- -----------
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . 397,036 929,544
Class C shares. . . . . . . . . . . . . . . . . . . -- 217,973
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . 87,700 72,459
Class C shares. . . . . . . . . . . . . . . . . . . -- 16,019
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . (472,699) (473,179)
Class C shares. . . . . . . . . . . . . . . . . . . -- (731,705)
----------- -----------
Total capital share activity . . . . . . . . . . . . . 12,037 31,111
----------- -----------
----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
34 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
MICHIGAN PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- ---------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . $239,053 $249,943
Net realized gain (loss). . . . . . . . . . . . . . 4,764 (526)
Change in unrealized appreciation or depreciation . 127,486 (14,620)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . 371,303 234,797
----------- -----------
Distributions to shareholders from
Net investment income:
Class A shares . . . . . . . . . . . . . . . . . (238,876) (214,870)
Class C shares . . . . . . . . . . . . . . . . . -- (42,186)
----------- -----------
Total distributions . . . . . . . . . . . . . . . . (238,876) (257,056)
----------- -----------
Capital share transactions
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . 269,294 1,768,456
Class C shares . . . . . . . . . . . . . . . . . -- 413,783
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . 200,022 184,760
Class C shares . . . . . . . . . . . . . . . . . -- 38,664
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . (1,198,069) (703,139)
Class C shares . . . . . . . . . . . . . . . . . -- (1,928,904)
----------- -----------
Total capital share transactions. . . . . . . . . . (728,753) (226,380)
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . (596,326) (248,639)
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . 5,803,799 6,052,438
----------- -----------
End of year (including undistributed net investment
income of $3,526 and $3,383, respectively). . . . . $5,207,473 $5,803,799
----------- -----------
----------- -----------
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . 52,486 350,281
Class C shares. . . . . . . . . . . . . . . . . . . -- 82,385
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . 38,965 36,549
Class C shares. . . . . . . . . . . . . . . . . . . -- 7,685
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . (234,594) (139,386)
Class C shares. . . . . . . . . . . . . . . . . . . -- (382,779)
----------- -----------
Total capital share activity . . . . . . . . . . . . . (143,143) (45,265)
----------- -----------
----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 35
<PAGE>
NEW YORK PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . $285,042 $252,546
Net realized gain (loss). . . . . . . . . . . . . . (17,729) (22,548)
Change in unrealized appreciation or depreciation . 213,929 1,084
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . 481,242 231,082
----------- -----------
Distributions to shareholders from
Net investment income:
Class A shares . . . . . . . . . . . . . . . . . (283,097) (180,596)
Class C shares . . . . . . . . . . . . . . . . . -- (69,116)
Net realized gain on investments:
Class A shares . . . . . . . . . . . . . . . . . -- (4,252)
Class C shares . . . . . . . . . . . . . . . . . -- --
----------- -----------
Total distributions . . . . . . . . . . . . . . . . (283,097) (253,964)
----------- -----------
Capital share transactions
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . 1,818,232 3,815,003
Class C shares . . . . . . . . . . . . . . . . . -- 1,146,085
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . 263,936 163,741
Class C shares . . . . . . . . . . . . . . . . . -- 67,745
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . (1,439,645) (1,337,801)
Class C shares . . . . . . . . . . . . . . . . . -- (3,578,862)
----------- -----------
Total capital share transactions. . . . . . . . . . 642,523 275,911
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . 840,668 253,029
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . 6,217,955 5,964,926
----------- -----------
End of year (including undistributed net investment
income of $6,993 and $6,583, respectively). . . . . $7,058,623 $6,217,955
----------- -----------
----------- -----------
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . 357,668 755,503
Class C shares. . . . . . . . . . . . . . . . . . . -- 228,187
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . 51,640 32,402
Class C shares. . . . . . . . . . . . . . . . . . . -- 13,474
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . (282,335) (264,199)
Class C shares. . . . . . . . . . . . . . . . . . . -- (709,949)
----------- -----------
Total capital share activity . . . . . . . . . . . . . 126,973 55,418
----------- -----------
----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
PENNSYLVANIA PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . $207,111 $190,360
Net realized gain (loss). . . . . . . . . . . . . . 10,066 (12,540)
Change in unrealized appreciation or depreciation . 108,804 (22,000)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . 325,981 155,820
----------- -----------
Distributions to shareholders from
Net investment income:
Class A shares . . . . . . . . . . . . . . . . . (196,901) (138,021)
Class C shares . . . . . . . . . . . . . . . . . -- (42,430)
----------- -----------
Total distributions . . . . . . . . . . . . . . . . (196,901) (180,451)
----------- -----------
Capital share transactions
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . 813,057 2,352,099
Class C shares . . . . . . . . . . . . . . . . . -- 259,159
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . 151,476 97,735
Class C shares . . . . . . . . . . . . . . . . . -- 40,440
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . (519,933) (480,482)
Class C shares . . . . . . . . . . . . . . . . . -- (2,028,428)
----------- -----------
Total capital share transactions. . . . . . . . . . 444,600 240,523
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . 573,680 215,892
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . 4,486,116 4,270,224
----------- -----------
End of year (including undistributed net investment
income of $34,972 and $24,762, respectively). . . . $5,059,796 $4,486,116
----------- -----------
----------- -----------
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . 159,024 464,737
Class C shares. . . . . . . . . . . . . . . . . . . -- 51,179
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . 29,650 19,408
Class C shares. . . . . . . . . . . . . . . . . . . -- 8,037
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . (102,065) (95,924)
Class C shares. . . . . . . . . . . . . . . . . . . -- (401,715)
----------- -----------
Total capital share activity . . . . . . . . . . . . . 86,609 45,722
----------- -----------
----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 37
<PAGE>
VIRGINIA PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . $581,789 $501,050
Net realized gain (loss). . . . . . . . . . . . . . (7,480) 68,788
Change in unrealized appreciation or depreciation . 291,183 (123,053)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . 865,492 446,785
----------- -----------
Distributions to shareholders from
Net investment income:
Class A shares . . . . . . . . . . . . . . . . . (578,854) (397,746)
Class C shares . . . . . . . . . . . . . . . . . -- (100,982)
----------- -----------
Total distributions . . . . . . . . . . . . . . . . (578,854) (498,728)
----------- -----------
Capital share transactions
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . 2,455,336 5,790,886
Class C shares . . . . . . . . . . . . . . . . . -- 817,861
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . 533,068 348,686
Class C shares . . . . . . . . . . . . . . . . . -- 100,737
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . (2,351,006) (805,200)
Class C share. . . . . . . . . . . . . . . . . . -- (4,085,103)
----------- -----------
Total capital share transactions. . . . . . . . . . 637,398 2,167,867
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . 924,036 2,115,924
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . 12,617,575 10,501,651
----------- -----------
End of year (including undistributed net investment
income of $19,814 and $16,879, respectively). . . . $13,541,611 $12,617,575
----------- -----------
----------- -----------
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . 480,867 1,142,057
Class C shares. . . . . . . . . . . . . . . . . . . -- 161,108
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . 104,273 68,920
Class C shares. . . . . . . . . . . . . . . . . . . -- 19,934
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . (458,545) (158,926)
Class C shares. . . . . . . . . . . . . . . . . . . -- (806,106)
----------- -----------
Total capital share activity . . . . . . . . . . . . . 126,595 426,987
----------- -----------
----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
38 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
GENERAL: The Calvert Municipal Fund is comprised of eight Municipal
Intermediate Portfolios: National, Arizona, California, Maryland, Michigan, New
York, Pennsylvania, and Virginia. The First Variable Rate Fund for Government
Income has one Municipal Intermediate Portfolio, Florida. Each of the
Portfolios, collectively the "Fund," are registered under the Investment Company
Act of 1940 as open-end management investment companies. The operations of each
Portfolio are accounted for separately. Shares of each Portfolio are sold with a
maximum front-end sales charge of 2.75%. On October 29, 1996, all outstanding
Class C shares in the Fund were converted into an equivalent value of Class A
shares. This transaction was a non-taxable exchange and no sales charge was
applied to the Class A shares issued.
SECURITY VALUATION: Municipal securities are valued utilizing the average of
bid prices or at bid prices based on a matrix system (which considers such
factors as security prices, yields, maturities and ratings) furnished by dealers
through an independent pricing service. Securities (including options) listed or
traded on a national securities exchange are valued at the last reported sale
price. Other securities and assets for which market quotations are not available
or deemed inappropriate are valued in good faith under the direction of the
Board of Directors/Trustees.
OPTIONS: The Fund may write or purchase options. The option premium is the
basis for recognition of unrealized or realized gain or loss on the option. The
cost of securities acquired or the proceeds from securities sold through the
exercise of the option is adjusted by the amount of the premium. Risks from
writing or purchasing option securities arise from possible illiquidity of the
options market and the movement in the value of the investment or in interest
rates. The risk associated with purchasing options is limited to the premium
originally paid.
FUTURES CONTRACTS: The Fund may enter into futures contracts agreeing to buy or
sell a financial instrument for a set price at a future date. The Fund maintains
securities with a value equal to its obligation under each contract. Initial
margin deposits of either cash or securities are made upon entering into futures
contracts; thereafter, variation margin payments are made or received daily
reflecting the change in market value. Unrealized or realized gains and losses
are recognized based on the change in market value. Risks of futures contracts
arise from the possible illiquidity of the futures markets and the movement in
the value of the investment or in interest rates.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Interest income, accretion of discount and amortization
of premium are recorded on an accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded by
the Fund on ex-dividend date. Dividends from net investment income are paid
monthly. Distributions from net realized capital gains, if any, are paid at
least annually. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles;
accordingly, periodic reclassifications are made within the Fund's capital
accounts to reflect income and gains available for distribution under income tax
regulations.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 39
<PAGE>
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
EXPENSE OFFSET ARRANGEMENTS: The Fund has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Fund's cash on deposit with the bank. Such a deposit arrangement is an
alternative to overnight investments.
FEDERAL INCOME TAXES: No provision for federal income or excise tax is required
since the Fund intends to continue to qualify as a regulated investment company
under the Internal Revenue Code and to distribute substantially all of its
earnings.
NOTE B -- RELATED PARTY TRANSACTIONS
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Directors/Trustees of
the Fund. For its services, the Advisor receives a monthly fee based on the
following annual rates of average daily net assets of each Portfolio: .60% on
the first $500 million, .50% on the next $500 million and .40% on the excess of
$1 billion.
Calvert Administrative Services Company, an affiliate of the Advisor, provides
administrative services to the Fund for an annual fee, payable monthly, of .10%
of the average daily net assets of each Portfolio.
Calvert Distributors, Inc. (CDI), an affiliate of the Advisor, is the
distributor and principal underwriter for the Fund. Distribution Plans, adopted
by the Fund, allow the Fund to pay the distributor for expenses and services
associated with distribution of shares. The expenses paid may not exceed .15%
annually of average daily net assets, except for the California and National
Portfolios. Effective May 29, 1997 for California, and October 1, 1997 for
National, the expenses paid may not exceed .25%. The Distributor currently does
not charge any Distribution Plan expenses. For the year ended December 31, 1997,
CDI received sales charges in excess of the dealer reallowance of $11,597,
$1,130, $15,411, $130, $7,100, $1,312, $1,876 $1,825, and $7,697 for the
National, Arizona, California, Florida, Maryland, Michigan, New York,
Pennsylvania, and Virginia Portfolios, respectively.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Fund.
Each Director/Trustee who is not affiliated with the Advisor received an annual
fee of $20,500 plus up to $1,500 for each Board and Committee meeting attended.
Director's/Trustee's fees are allocated to each of the funds served.
40 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
NOTE C -- INVESTMENT ACTIVITY
During the period, purchases and sales of investments, other than short-term
securities, were:
<TABLE>
<CAPTION>
NATIONAL ARIZONA CALIFORNIA FLORIDA MARYLAND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Purchases: . . . $11,982,050 $417,988 $15,224,862 $1,699,564 $2,930,362
Sales: . . . . . 12,268,999 612,201 15,426,014 219,524 1,393,594
</TABLE>
<TABLE>
<CAPTION>
MICHIGAN NEW YORK PENNSYLVANIA VIRGINIA
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases: . . . $764,474 $594,699 $1,052,674 $1,071,935
Sales: . . . . . 1,505,435 654,066 655,055 1,027,860
</TABLE>
The cost of investments owned at December 31, 1997 was substantially the same
for federal income tax and financial reporting purposes for each Portfolio.
The table below presents the components of net unrealized appreciation
(depreciation) as of December 31, 1997, and the net capital loss
carryforwards as of December 31, 1997 with expiration dates.
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED CAPITAL LOSS EXPIRATION
APPRECIATION DEPRECIATION CARRYFORWARDS DATES
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
National . . . . . . $3,153,216 $20,809 $923,112 2002
Arizona. . . . . . . 127,908 -- 27,555 2005
California . . . . . 1,652,363 10,404 858,538 2003
Florida. . . . . . . 339,513 -- 166,213 2005
Maryland . . . . . . 705,069 10,404 267,013 2002
Michigan . . . . . . 364,742 -- 248,396 2003
New York . . . . . . 361,960 -- 38,128 2005
Pennsylvania . . . . 278,242 -- 72,750 2004
Virginia . . . . . . 710,908 10,404 205,386 2003
</TABLE>
Capital loss carryfowards may be utilized to offset current and future capital
gains until expiration.
As a cash management practice, Portfolios may sell or purchase short-term
variable rate demand notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
NOTE D -- LINE OF CREDIT
Effective July 1, 1997, a financing agreement is in place with all Calvert Group
Funds and State Street Bank and Trust Company ("the Bank"). Under the agreement,
the Bank is providing an unsecured line of credit facility, in the aggregate
amount of $50 million ($25 million committed and $25 million uncommitted), to be
accessed by the Funds for temporary or emergency purposes only. Borrowings under
this facility bear interest at the overnight Federal Funds Rate plus .50% per
annum. A commitment fee of .10% per annum will be incurred on the unused portion
of the committed facility which will be allocated to all participating funds.
This fee is paid quarterly in arrears. The Fund had no loans outstanding
pursuant to this line of credit at December 31, 1997.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 41
<PAGE>
NATIONAL PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES -- YEARS ENDED
---------------------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $10.56 $10.62 $9.81 $10.42
------- ------- ------- -------
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .50 .50 .51 .50
Net realized and unrealized gain (loss) . . . . 23 (.06) .80 (.62)
------- ------- ------- -------
Total from investment operations . . . . . . .73 .44 1.31 (.12)
------- ------- ------- -------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.50) (.50) (.50) (.49)
------- ------- ------- -------
Total increase (decrease) in net asset value . . . .23 (.06) .81 (.61)
------- ------- ------- -------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $10.79 $10.56 $10.62 $9.81
------- ------- ------- -------
------- ------- ------- -------
Total return * . . . . . . . . . . . . . . . . . . 7.11% 4.32% 13.64% (1.18%)
------- ------- ------- -------
------- ------- ------- -------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.71% 4.83% 4.97% 4.88%
------- ------- ------- -------
------- ------- ------- -------
Total expenses +. . . . . . . . . . . . . . . . .97% 1.04% .96% --
------- ------- ------- -------
------- ------- ------- -------
Net expenses. . . . . . . . . . . . . . . . . . .94% 1.01% .94% .69%
------- ------- ------- -------
------- ------- ------- -------
Expenses reimbursed . . . . . . . . . . . . . . -- -- -- .32%
------- ------- ------- -------
------- ------- ------- -------
Portfolio turnover . . . . . . . . . . . . . . . . 29% 23% 57% 122%
------- ------- ------- -------
------- ------- ------- -------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $48,933 $45,612 $40,146 $36,159
------- ------- ------- -------
------- ------- ------- -------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 4,535 4,319 3,780 3,686
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES -- PERIODS ENDED
CLASS A SHARES -------------------------------------------
DECEMBER 31, OCTOBER 29, DECEMBER 31, DECEMBER 31,
1993 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $10.01 $10.58 $9.79 $10.28
-------- -------- -------- --------
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .48 .33 .41 .34
Net realized and unrealized gain (loss) . . . . .45 (.13) .79 (.48)
-------- -------- -------- --------
Total from investment operations . . . . . . .93 .20 1.20 (.14)
-------- -------- -------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.48) (.33) (.41) (.35)
Net realized gains. . . . . . . . . . . . . . . (.04) -- -- --
-------- -------- -------- --------
Total distributions. . . . . . . . . . . . . (.52) (.33) (.41) (.35)
-------- -------- -------- --------
Total increase (decrease) in net asset value . . . .41 (.13) .79 (.49)
-------- -------- -------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $10.42 $10.45 $10.58 $9.79
-------- -------- -------- --------
-------- -------- -------- --------
Total return * . . . . . . . . . . . . . . . . . . 9.47% 1.90% 12.50% (1.12%)
-------- -------- -------- --------
-------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 5.01% 3.77%(a) 4.00% 4.01%(a)
-------- -------- -------- --------
-------- -------- -------- --------
Total expenses +. . . . . . . . . . . . . . . . -- 2.10%(a) 1.94% --
-------- -------- -------- --------
-------- -------- -------- --------
Net expenses. . . . . . . . . . . . . . . . . . .10% 2.07%(a) 1.92% 1.71%(a)
-------- -------- -------- --------
-------- -------- -------- --------
Expenses reimbursed . . . . . . . . . . . . . . .45% -- -- .58%(a)
-------- -------- -------- --------
-------- -------- -------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 162% 17% 57% 122%
-------- -------- -------- --------
-------- -------- -------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $37,467 $5,810 $6,378 $6,067
-------- -------- -------- --------
-------- -------- -------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 3,596 556 603 620
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
42 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
ARIZONA PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES -- YEARS ENDED
---------------------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.03 $5.07 $4.71 $5.00
-------- -------- -------- --------
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .19 .19 .22 .19
Net realized and unrealized gain (loss) . . . . .11 (.03) .36 (.29)
-------- -------- -------- --------
Total from investment operations . . . . . . .30 .16 .58 (.10)
-------- -------- -------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.20) (.20) (.22) (.19)
-------- -------- -------- --------
Total increase (decrease) in net asset value . . . .10 (.04) .36 (.29)
-------- -------- -------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.13 $5.03 $5.07 $4.71
-------- -------- -------- --------
-------- -------- -------- --------
Total return * . . . . . . . . . . . . . . . . . . 6.04% 3.17% 12.44% (1.84%)
-------- -------- -------- --------
-------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 3.86% 3.96% 4.43% 4.13%
-------- -------- -------- --------
-------- -------- -------- --------
Total expenses +. . . . . . . . . . . . . . . . 1.23% 1.31% .53% --
-------- -------- -------- --------
-------- -------- -------- --------
Net expenses. . . . . . . . . . . . . . . . . . 1.01% 1.00% .41% .38%
-------- -------- -------- --------
-------- -------- -------- --------
Expenses reimbursed . . . . . . . . . . . . . . -- .06% .54% .97%
-------- -------- -------- --------
-------- -------- -------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 18% 18% 10% 22%
-------- -------- -------- --------
-------- -------- -------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $2,704 $2,635 $2,045 $2,004
-------- -------- -------- --------
-------- -------- -------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 528 524 403 426
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES -- PERIODS ENDED
------------------------------------------
OCTOBER 29, DECEMBER 31, DECEMBER 31,
1996 1995 1994(1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.07 $4.70 $4.96
-------- ------- --------
-------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .13 .17 .13
Net realized and unrealized gain (loss) . . . . (.07) .38 (.25)
-------- ------- --------
Total from investment operations . . . . . . .06 .55 (.12)
-------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.13) (.18) (.14)
-------- ------- --------
Total increase (decrease) in net asset value . . . (.07) .37 (.26)
-------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.00 $5.07 $4.70
-------- ------- --------
-------- ------- --------
Total return * . . . . . . . . . . . . . . . . . . 1.17% 11.77% (2.07%)
-------- ------- --------
-------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 3.09%(a) 3.57% 3.26%(a)
-------- ------- --------
-------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . 2.16%(a) 1.38% --
-------- ------- --------
-------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . 1.84%(a) 1.25% 1.43%(a)
-------- ------- --------
-------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . .08%(a) .73% 1.24%(a)
-------- ------- --------
-------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 18% 10% 22%
-------- ------- --------
-------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $707 $744 $454
-------- ------- --------
-------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 142 147 97
-------- ------- --------
-------- ------- --------
</TABLE>
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 43
<PAGE>
CALIFORNIA PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES -- YEARS ENDED
---------------------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $10.44 $10.51 $9.81 $10.56
------- ------- ------- -------
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .49 .48 .47 .48
Net realized and unrealized gain (loss) . . . . .18 (.07) .69 (.76)
------- ------- ------- -------
Total from investment operations . . . . . . .67 .41 1.16 (.28)
------- ------- ------- -------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.48) (.48) (.46) (.47)
------- ------- ------- -------
Total increase (decrease) in net asset value . . . .19 (.07) .70 (.75)
------- ------- ------- -------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $10.63 $10.44 $10.51 $9.81
------- ------- ------- -------
------- ------- ------- -------
Total return * . . . . . . . . . . . . . . . . . . 6.61% 4.04% 12.07% (2.57%)
------- ------- ------- -------
------- ------- ------- -------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.64% 4.59% 4.59% 4.67%
------- ------- ------- -------
------- ------- ------- -------
Total expenses +. . . . . . . . . . . . . . . . .91% .97% .91% --
------- ------- ------- -------
------- ------- ------- -------
Net expenses. . . . . . . . . . . . . . . . . . .88% .94% .89% .76%
------- ------- ------- -------
------- ------- ------- -------
Expenses reimbursed . . . . . . . . . . . . . . -- -- -- .13%
------- ------- ------- -------
------- ------- ------- -------
Portfolio turnover . . . . . . . . . . . . . . . . 48% 25% 47% 68%
------- ------- ------- -------
------- ------- ------- -------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $35,085 $35,693 $34,424 $34,111
------- ------- ------- -------
------- ------- ------- -------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 3,300 3,419 3,276 3,476
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES -- PERIODS ENDED
CLASS A SHARES -------------------------------------------
DECEMBER 31, OCTOBER 29, DECEMBER 31, DECEMBER 31,
1993 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $10.24 $10.47 $9.79 $10.40
------- -------- ------- ---------
------- -------- ------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .53 .31 .38 .31
Net realized and unrealized gain (loss) . . . . .36 (.10) .68 (.59)
------- -------- ------- ---------
Total from investment operations . . . . . . .89 .21 1.06 (.28)
------- -------- ------- ---------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.53) (.32) (.38) (.33)
Net realized gains. . . . . . . . . . . . . . . (.04) -- -- --
------- -------- ------- --------
Total distributions . . . . . . . . . . . . . . (.57) (.32) (.38) (.33)
------- -------- ------- --------
Total increase (decrease) in net asset value . . . .32 (.11) .68 (.61)
------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $10.56 $10.36 $10.47 $9.79
------- -------- ------- --------
------- -------- ------- --------
Total return * . . . . . . . . . . . . . . . . . . 8.88% 2.02% 10.99% (2.42%)
------- -------- ------- --------
------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 5.12% 3.60%(a) 3.67% 3.60%(a)
------- -------- ------- --------
------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . -- 1.92%(a) 1.82% --
------- -------- ------- --------
------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . .21% 1.89%(a) 1.80% 1.86%(a)
------- -------- ------- --------
------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . .12% -- -- .38%(a)
------- -------- ------- --------
------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 21% 20% 47% 68%
------- -------- ------- --------
------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $35,726 $3,415 $4,092 $3,000
------- -------- ------- --------
------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 3,383 330 391 307
------- -------- ------- --------
------- -------- ------- --------
</TABLE>
44 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
FLORIDA PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES -- YEARS ENDED
---------------------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.02 $5.06 $4.67 $5.00
------- -------- ------- --------
------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .22 .21 .24 .21
Net realized and unrealized gain (loss) . . . . .13 (.04) .38 (.33)
------- -------- ------- --------
Total from investment operations . . . . . . .35 .17 .62 (.12)
------- -------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.22) (.21) (.23) (.21)
------- -------- ------- --------
Total increase (decrease) in net asset value . . . .13 (.04) .39 (.33)
------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.15 $5.02 $5.06 $4.67
------- -------- ------- --------
------- -------- ------- --------
Total return * . . . . . . . . . . . . . . . . . . 7.06% 3.53% 13.48% (2.44%)
------- -------- ------- --------
------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.31% 4.28% 4.73% 4.64%
------- -------- ------- --------
------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . .90% .94% .43% --
------- -------- ------- --------
------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . .79% .81% .35% .21%
------- -------- ------- --------
------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . -- .01% .43% .80%
------- -------- ------- --------
------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 4% 19% 44% 93%
------- -------- ------- --------
------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $7,799 $5,516 $3,892 $3,387
------- -------- ------- --------
------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 1,514 1,098 769 725
------- -------- ------- --------
------- -------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES -- PERIODS ENDED
------------------------------------------
OCTOBER 29, DECEMBER 31, DECEMBER 31,
1996 1995 1994(1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.05 $4.67 $4.93
-------- -------- --------
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .13 .19 .15
Net realized and unrealized gain (loss) . . . . (.08) .37 (.26)
-------- -------- --------
Total from investment operations . . . . . . .05 .56 (.11)
-------- -------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.13) (.18) (.15)
-------- -------- --------
Total increase (decrease) in net asset value . . . (.08) .38 (.26)
-------- -------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $4.97 $5.05 $4.67
-------- -------- --------
-------- -------- --------
Total return * . . . . . . . . . . . . . . . . . . 1.10% 12.28% (1.84%)
-------- -------- --------
-------- -------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 3.12%(a) 3.82% 3.58%(a)
-------- -------- --------
-------- -------- --------
Total expenses +. . . . . . . . . . . . . . . . 2.07%(a) 1.33% --
-------- -------- --------
-------- -------- --------
Net expenses. . . . . . . . . . . . . . . . . . 1.93%(a) 1.25% 1.32%(a)
-------- -------- --------
-------- -------- --------
Expenses reimbursed . . . . . . . . . . . . . . .06%(a) .65% 1.02%(a)
-------- -------- --------
-------- -------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 17% 44% 93%
-------- -------- --------
-------- -------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $353 $401 $919
-------- -------- --------
-------- -------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 71 79 197
-------- -------- --------
-------- -------- --------
</TABLE>
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 45
<PAGE>
MARYLAND PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES -- YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.03 $5.06 $4.67 $5.05
------- -------- ------- --------
------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .23 .23 .24 .24
Net realized and unrealized gain (loss) . . . . .15 (.04) .39 (.39)
------- -------- ------- --------
Total from investment operations . . . . . . .38 .19 .63 (.15)
------- -------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.23) (.22) (.24) (.23)
------- -------- ------- --------
Total increase (decrease) in net asset value . . . .15 (.03) .39 (.38)
------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.18 $5.03 $5.06 $4.67
------- -------- ------- --------
------- -------- ------- --------
Total return * . . . . . . . . . . . . . . . . . . 7.68% 3.96% 13.66% (2.94%)
------- -------- ------- --------
------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.48% 4.59% 4.87% 5.01%
------- -------- ------- --------
------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . .99% 1.00% .51% --
------- -------- ------- --------
------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . .92% .94% .48% .17%
------- -------- ------- --------
------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . -- .04% .43% .86%
------- -------- ------- --------
------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 13% 8% 11% 77%
------- -------- ------- --------
------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $12,437 $12,023 $9,411 $7,429
------- -------- ------- --------
------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 2,400 2,338 1,860 1,589
------- -------- ------- --------
------- -------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES -- PERIODS ENDED
CLASS A SHARES -------------------------------------------
DECEMBER 31, OCTOBER 29, DECEMBER 31, DECEMBER 31,
1993# 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.00 $5.04 $4.66 $4.97
-------- -------- ------- --------
-------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .04 .16 .20 .16
Net realized and unrealized gain (loss) . . . . .05 (.08) .38 (.30)
-------- -------- ------- --------
Total from investment operations . . . . . . .09 .08 .58 (.14)
-------- -------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.04) (.15) (.20) (.17)
-------- -------- ------- --------
Total increase (decrease) in net asset value . . . .05 (.07) .38 (.31)
-------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.05 $4.97 $5.04 $4.66
-------- -------- ------- --------
-------- -------- ------- --------
Total return * . . . . . . . . . . . . . . . . . . 7.46% 1.67% 12.55% (2.60%)
-------- -------- ------- --------
-------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.42%(a) 3.77%(a) 4.01% 4.29%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . -- 1.80%(a) 1.36% --
-------- -------- ------- --------
-------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . -- 1.73%(a) 1.33% 1.17%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . .80%(a) .05%(a) .53% .93%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 14% 7% 11% 77%
-------- -------- ------- --------
-------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $5,401 $3,291 $2,509 $1,806
-------- -------- ------- --------
-------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 1,070 662 498 388
-------- -------- ------- --------
-------- -------- ------- --------
</TABLE>
46 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
MICHIGAN PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES -- YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.10 $5.12 $4.74 $5.09
-------- -------- ------- --------
-------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .23 .22 .24 .23
Net realized and unrealized gain (loss) . . . . .14 (.01) .37 (.35)
-------- -------- ------- --------
Total from investment operations . . . . . . .37 .21 .61 (.12)
-------- -------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.23) (.23) (.23) (.23)
-------- -------- ------- --------
Total increase (decrease) in net asset value . . . .14 (.02) .38 (.35)
-------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.24 $5.10 $5.12 $4.74
-------- -------- ------- --------
-------- -------- ------- --------
Total return*. . . . . . . . . . . . . . . . . . . 7.41% 4.19% 13.08% (2.42%)
-------- -------- ------- --------
-------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.44% 4.37% 4.76% 4.76%
-------- -------- ------- --------
-------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . 1.00% 1.02% .52% --
-------- -------- ------- --------
-------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . .91% .93% .48% .18%
-------- -------- ------- --------
-------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . -- .02% .39% .84%
-------- -------- ------- --------
-------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 16% 18% 22% 65%
-------- -------- ------- --------
-------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $5,207 $5,804 $4,556 $5,255
-------- -------- ------- --------
-------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 994 1,137 890 1,109
-------- -------- ------- --------
-------- -------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES -- PERIODS ENDED
CLASS A SHARES -------------------------------------------
DECEMBER 31, OCTOBER 29, DECEMBER 31, DECEMBER 31,
1993# 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.00 $5.11 $4.74 $5.02
-------- -------- ------- --------
-------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .04 .14 .20 .16
Net realized and unrealized gain (loss) . . . . .09 (.06) .36 (.28)
-------- -------- ------- --------
Total from investment operations . . . . . . .13 .08 .56 (.12)
-------- -------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.04) (.15) (.19) (.16)
-------- -------- ------- --------
Total increase (decrease) in net asset value . . . .09 (.07) .37 (.28)
-------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.09 $5.04 $5.11 $4.74
-------- -------- ------- --------
-------- -------- ------- --------
Total return*. . . . . . . . . . . . . . . . . . . 10.28% 1.52% 11.96% (2.12%)
-------- -------- ------- --------
-------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.27%(a) 3.34%(a) 3.91% 3.95%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . -- 2.00%(a) 1.37% --
-------- -------- ------- --------
-------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . -- 1.91%(a) 1.33% 1.15%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . .89%(a) .08%(a) .52% .87%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . -- 18% 22% 65%
-------- -------- ------- --------
-------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $4,287 $1,189 $1,497 $1,219
-------- -------- ------- --------
-------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 842 236 293 257
-------- -------- ------- --------
-------- -------- ------- --------
</TABLE>
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 47
<PAGE>
NEW YORK PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES -- YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.09 $5.12 $4.71 $5.05
-------- -------- ------- --------
-------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .22 .21 .22 .23
Net realized and unrealized gain (loss) . . . . .14 (.02) .41 (.34)
-------- -------- ------- --------
Total from investment operations . . . . . . .36 .19 .63 (.11)
-------- -------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.22) (.22) (.22) (.23)
-------- -------- ------- --------
Total increase (decrease) in net asset value . .14 (.03) .41 (.34)
-------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.23 $5.09 $5.12 $4.71
-------- -------- ------- --------
-------- -------- ------- --------
Total return*. . . . . . . . . . . . . . . . . . . 7.31% 3.79% 13.72% (2.26%)
-------- -------- ------- --------
-------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.35% 4.20% 4.47% 4.77%
-------- -------- ------- --------
-------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . 1.05% 1.13% .58% --
-------- -------- ------- --------
-------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . .94% .98% .50% .18%
-------- -------- ------- --------
-------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . -- .03% .49% 1.13%
-------- -------- ------- --------
-------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 10% 19% 13% 56%
-------- -------- ------- --------
-------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $7,059 $6,218 $3,573 $2,648
-------- -------- ------- --------
-------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 1,349 1,222 698 562
-------- -------- ------- --------
-------- -------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES -- PERIODS ENDED
CLASS A SHARES -------------------------------------------
DECEMBER 31, OCTOBER 29, DECEMBER 31, DECEMBER 31,
1993# 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.00 $5.11 $4.71 $4.98
-------- -------- ------- --------
-------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .04 .14 .19 .16
Net realized and unrealized gain (loss) . . . . .05 (.06) .40 (.27)
-------- -------- ------- --------
Total from investment operations . . . . . . .09 .08 .59 (.11)
-------- -------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.04) (.14) (.19) (.16)
-------- -------- ------- --------
Total increase (decrease) in net asset value . . . .05 (.06) .40 (.27)
-------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.05 $5.05 $5.11 $4.71
-------- -------- ------- --------
-------- -------- ------- --------
Total return*. . . . . . . . . . . . . . . . . . . 7.22% 1.64% 12.63% (1.97%)
-------- -------- ------- --------
-------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 3.81%(a) 3.41%(a) 3.65% 3.93%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . -- 1.98%(a) 1.40% --
-------- -------- ------- --------
-------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . -- 1.83%(a) 1.33% 1.22%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . 2.00%(a) .06%(a) .59% .92%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . -- 10% 13% 56%
-------- -------- ------- --------
-------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $2,236 $2,365 $2,392 $1,119
-------- -------- ------- --------
-------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 433 468 468 237
-------- -------- ------- --------
-------- -------- ------- --------
</TABLE>
48 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
PENNSYLVANIA PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES -- YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.08 $5.10 $4.71 $5.00
-------- -------- ------- --------
-------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .23 .21 .25 .22
Net realized and unrealized gain (loss) . . . . .13 (.02) .37 (.29)
-------- -------- ------- --------
Total from investment operations . . . . . . .36 .19 .62 (.07)
-------- -------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.22) (.21) (.23) (.22)
-------- -------- ------- --------
Total increase (decrease) in net asset value . . . .14 (.02) .39 (.29)
-------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.22 $5.08 $5.10 $4.71
-------- -------- ------- --------
-------- -------- ------- --------
Total return*. . . . . . . . . . . . . . . . . . . 7.24% 3.92% 13.51% (1.29%)
-------- -------- ------- --------
-------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.50% 4.45% 5.10% 4.94%
-------- -------- ------- --------
-------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . 1.08% 1.11% .49% --
-------- -------- ------- --------
-------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . .90% .93% .41% .26%
-------- -------- ------- --------
-------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . -- .05% .54% .94%
-------- -------- ------- --------
-------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 15% 9% 17% 96%
-------- -------- ------- --------
-------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $5,060 $4,486 $2,522 $1,872
-------- -------- ------- --------
-------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 970 883 495 398
-------- -------- ------- --------
-------- -------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES -- PERIODS ENDED
------------------------------------------
OCTOBER 29, DECEMBER 31, DECEMBER 31,
1996 1995 1994(1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.11 $4.72 $4.91
-------- -------- -------
-------- -------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .15 .21 .16
Net realized and unrealized gain (loss) . . . . (.07) .37 (.19)
-------- -------- -------
Total from investment operations . . . . . . .08 .58 (.03)
-------- -------- -------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.14) (.19) (.16)
-------- -------- -------
Total increase (decrease) in net asset value . . . (.06) .39 (.19)
-------- -------- -------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.05 $5.11 $4.72
-------- -------- -------
-------- -------- -------
Total return*. . . . . . . . . . . . . . . . . . . 1.63% 12.55% (.30%)
-------- -------- -------
-------- -------- -------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 3.58%(a) 4.29% 4.20%(a)
-------- -------- -------
-------- -------- -------
Total expenses +. . . . . . . . . . . . . . . . 1.92%(a) 1.32% --
-------- -------- -------
-------- -------- -------
Net expenses. . . . . . . . . . . . . . . . . . 1.74%(a) 1.24% 1.22%(a)
-------- -------- -------
-------- -------- -------
Expenses reimbursed . . . . . . . . . . . . . . .08%(a) .62% 1.15%(a)
-------- -------- -------
-------- -------- -------
Portfolio turnover . . . . . . . . . . . . . . . . 9% 17% 96%
-------- -------- -------
-------- -------- -------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $1,555 $1,748 $1,168
-------- -------- -------
-------- -------- -------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 308 342 248
-------- -------- -------
-------- -------- -------
</TABLE>
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 49
<PAGE>
VIRGINIA PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES -- YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.10 $5.13 $4.74 $5.06
-------- -------- ------- --------
-------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .22 .22 .24 .23
Net realized and unrealized gain (loss) . . . . .11 (.03) .39 (.32)
-------- -------- ------- --------
Total from investment operations . . . . . . .33 .19 .63 (.09)
-------- -------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.22) (.22) (.24) (.23)
-------- -------- ------- --------
Total increase (decrease) in net asset value . . . .11 (.03) .39 (.32)
-------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.21 $5.10 $5.13 $4.74
-------- -------- ------- --------
-------- -------- ------- --------
Total return*. . . . . . . . . . . . . . . . . . . 6.71% 3.82% 13.54% (2.04%)
-------- -------- ------- --------
-------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.38% 4.35% 4.86% 4.87%
-------- -------- ------- --------
-------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . .96% 1.00% .54% --
-------- -------- ------- --------
-------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . .88% .92% .51% .19%
-------- -------- ------- --------
-------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . -- .03% .38% .86%
-------- -------- ------- --------
-------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 8% 4% 11% 65%
-------- -------- ------- --------
-------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $13,542 $12,618 $7,295 $5,866
-------- -------- ------- --------
-------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 2,602 2,475 1,423 1,239
-------- -------- ------- --------
-------- -------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
CLASS C SHARES -- PERIODS ENDED
CLASS A SHARES -------------------------------------------
DECEMBER 31, OCTOBER 29, DECEMBER 31, DECEMBER 31,
1993# 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $5.00 $5.13 $4.74 $4.99
-------- -------- ------- --------
-------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . .05 .15 .20 .16
Net realized and unrealized gain (loss) . . . . .06 (.06) .39 (.25)
-------- -------- ------- --------
Total from investment operations . . . . . . .11 .09 .59 (.09)
-------- -------- ------- --------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . (.05) (.15) (.20) (.16)
-------- -------- ------- --------
Total increase (decrease) in net asset value . . . .06 (.06) .39 (.25)
-------- -------- ------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $5.06 $5.07 $5.13 $4.74
-------- -------- ------- --------
-------- -------- ------- --------
Total return*. . . . . . . . . . . . . . . . . . . 8.65% 1.75% 12.62% (1.54%)
-------- -------- ------- --------
-------- -------- ------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . 4.81%(a) 3.54%(a) 4.07% 4.19%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Total expenses +. . . . . . . . . . . . . . . . -- 1.79%(a) 1.35% --
-------- -------- ------- --------
-------- -------- ------- --------
Net expenses. . . . . . . . . . . . . . . . . . -- 1.71%(a) 1.31% .94%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Expenses reimbursed . . . . . . . . . . . . . . 1.54%(a) .04%(a) .43% .99%(a)
-------- -------- ------- --------
-------- -------- ------- --------
Portfolio turnover . . . . . . . . . . . . . . . . 28% 4% 11% 65%
-------- -------- ------- --------
-------- -------- ------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $2,720 $3,505 $3,207 $2,766
-------- -------- ------- --------
-------- -------- ------- --------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . 537 692 625 583
-------- -------- ------- --------
-------- -------- ------- --------
</TABLE>
(a) ANNUALIZED
* TOTAL RETURN DOES NOT REFLECT DEDUCTION OF CLASS A FRONT-END SALES CHARGE.
+ EFFECTIVE DECEMBER 31, 1995, THIS RATIO REFLECTS TOTAL EXPENSES BEFORE
REDUCTION FOR FEES PAID INDIRECTLY; SUCH REDUCTIONS ARE INCLUDED IN THE
RATIO OF NET EXPENSES.
# FROM OCTOBER 1, 1993 INCEPTION.
(1) FROM MARCH 1, 1994 INCEPTION.
50 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
THIS PAGE IS RESERVED FOR ANY COMMENTS AND QUESTIONS.
ANNUAL REPORT CALVERT MUNICIPAL FUND, INC. - 51
<PAGE>
THIS PAGE IS RESERVED FOR ANY COMMENTS AND QUESTIONS.
52 - CALVERT MUNICIPAL FUND, INC. ANNUAL REPORT
<PAGE>
CALVERT
MUNICIPAL
INTERMEDIATE
FUNDS
[LOGO]
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
CALVERT GROUP
INFORMATION
TO OPEN AN ACCOUNT
800-368-2748
YIELDS AND PRICES
Calvert Information Network
(24 HOURS, 7 DAYS A WEEK)
800-368-2745
SERVICE FOR EXISTING ACCOUNT
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDD FOR HEARING IMPAIRED
800-541-1524
BRANCH OFFICE
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
REGISTERED, CERTIFIED
OR OVERNIGHT MAIL
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
WEB SITE
http://www.calvertgroup.com
Please check the inside back cover for
Calvert Group's Family of Funds.
THIS REPORT IS INTENDED TO PROVIDE FUND
INFORMATION TO SHAREHOLDERS. IT IS NOT AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS
PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
<PAGE>
printed on recycled paper
using soy-based inks
CALVERT GROUP'S
FAMILY OF FUNDS
TAX-EXEMPT
MONEY MARKET FUNDS
CTFR Money Market Portfolio
CTFR California Money Market Portfolio
TAXABLE
MONEY MARKET FUNDS
First Government Money Market Fund
CSIF Money Market Portfolio
BALANCED FUND
CSIF Managed Growth Portfolio
MUNICIPAL FUNDS
CTFRLimited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
Arizona Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Florida Muni. Intermediate Portfolio
Maryland Muni. Intermediate Portfolio
Michigan Muni. Intermediate Portfolio
New York Muni. Intermediate Portfolio
Pennsylvania Muni. Intermediate Portfolio
Virginia Muni. Intermediate Portfolio
TAXABLE BOND FUNDS
CSIF Bond Portfolio
Income Fund
EQUITY FUNDS
CSIFEquity Portfolio
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
New Africa Fund
<PAGE>
[LOGO] BULK RATE
4550 MONTGOMERY AVENUE U.S. POSTAGE
SUITE 1000 NORTH PAID
BETHESDA, MARYLAND 20814 Permit No. 7470
Baltimore, MD
<PAGE>
DECEMBER 31, 1997
ANNUAL
REPORT
CALVERT MUNICIPAL
FUND, INC.
[LOGO]
