<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC. ANNUAL REPORT
CONTENTS
LETTER TO SHAREHOLDERS 1
SCHEDULE OF INVESTMENTS
NATIONAL PORTFOLIO 4
MINNESOTA PORTFOLIO 7
NEW YORK PORTFOLIO 10
STATEMENTS OF ASSETS AND LIABILITIES 12
STATEMENTS OF OPERATIONS 13
STATEMENTS OF CHANGES IN NET ASSETS 14
NOTES TO FINANCIAL STATEMENTS 17
INDEPENDENT AUDITORS' REPORT 22
FEDERAL INCOME TAX INFORMATION 23
BOARD OF DIRECTORS AND OFFICERS 24
- - TOLL-FREE PERSONAL ASSISTANCE
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- - TOLL-FREE INFORMATION LINE
- For daily account balances,
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FOR MORE INFORMATION ABOUT FORTIS FINANCIAL GROUP'S FAMILY OF PRODUCTS, CALL
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PROSPECTUSES OR SALES LITERATURE FOR ANY FORTIS PRODUCT, CALL (800) 800-2638,
EXT. 4579.
HIGHLIGHTS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
CLASS A* CLASS B* CLASS C* CLASS E CLASS H*
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
NATIONAL PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period.................... $ 9.79 $ 9.79 $ 9.79 $ 10.38 $ 9.79
End of period.......................... 10.71 10.70 10.70 10.72 10.71
DISTRIBUTIONS PER SHARE:
From net investment income............. $ 0.50 $ 0.43 $ 0.43 $ 0.59 $ 0.43
From net realized gains on
investments.......................... 0.01 0.01 0.01 0.01 0.01
MINNESOTA PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period.................... $ 9.55 $ 9.55 $ 9.55 $ 10.08 $ 9.55
End of period.......................... 10.30 10.27 10.30 10.32 10.30
DISTRIBUTIONS PER SHARE:
From net investment income............. $ 0.49 $ 0.42 $ 0.42 $ 0.57 $ 0.42
NEW YORK PORTFOLIO
NET ASSET VALUE PER SHARE:
Beginning of period.................... $ 10.35 $ 10.35 $ 10.79** $ 10.74 $10.89***
End of period.......................... 10.87 10.84 10.85 10.87 10.83
DISTRIBUTIONS PER SHARE:
From net investment income............. $ 0.52 $ 0.45 $ 0.21+ $ 0.61 $ 0.17++
From net realized gains on
investments.......................... 0.02 0.02 -- 0.02 --
* Period from November 14, 1994 (commencement of operations) to September 30, 1995.
** April 26, 1995.
*** May 31, 1995.
+ For the period from April 26, 1995 (date of first investment) to September 30, 1995.
++ For the period from May 31, 1995 (date of first investment) to September 30, 1995.
</TABLE>
HOW TO USE THIS REPORT
For a quick overview of the fund's performance during the past twelve months,
refer to the Highlights box below. The letter from the portfolio manager and
president provides a more detailed analysis of the fund and financial markets.
The charts alongside the letter are useful because they provide more information
about your investments. The top holdings chart shows the type of securities in
which the fund invests, and the pie chart shows a breakdown of the fund's assets
by industry.
The performance chart graphically compares the fund's total return performance
with a selected investment index. Remember, however, that an
index may reflect the performance of securities the fund may not hold. Also, the
index does not deduct sales charges, investment advisory fees and other fund
expenses, whereas your fund does. Individuals cannot buy an unmanaged index fund
without incurring some charges and expenses.
This report is just one of several tools you can use to learn more about your
investment in the Fortis Family of Mutual Funds. Your investment representative,
who understands your personal financial situation, can best explain the features
of your investment and how it's designed to help you meet your financial goals.
<PAGE>
FORTIS TAX-FREE PORTFOLIOS
[PHOTO]
"Not only does the Fortis Tax-Free National Portfolio help me reduce my
tax bill now, it lets me help revitalize our country by investing in
America."
DEAR SHAREHOLDER:
We're pleased to present the Fortis Tax-Free Portfolios annual report for the
year ended September 30, 1995.
ECONOMIC REVIEW AND
INVESTMENT STRATEGIES
Over the past year, fixed income markets performed well, even though short-term
rates rose in 1994. Longer-term rates have since declined about 1 1/2 percent.
This rally in bond prices was caused by signs of an economic slowdown, combined
with subdued inflation. In fact, the Federal Reserve confirmed the bond market's
recognition of a slowdown by lowering short-term rates in July.
Recent moderate growth may be the economic response to the doubling of
short-term interest rates, which the Federal Reserve engineered last year. With
the
NATIONAL PORTFOLIO COMPOSITION BY INDUSTRY AS OF 9/30/95
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
General Obligation 22.8%
Health Care/Services 14.5%
Utilities Electric 14.2%
Utilities Water and Sewer 12.2%
Refunded with U.S. Gov't 11.9%
Transportation 10.8%
Other 4.3%
Cash Equivalents/Receivables 2.9%
Housing 2.4%
Higher Education 2.2%
Miscellaneous 1.8%
100.0%
</TABLE>
TAX-FREE NATIONAL
TOP TEN HOLDINGS AS OF 09/30/95
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -----------------------------------------------------------------------------
<C> <S> <C>
1. Massachusetts Water Resources (6.25%) 2010 4.1%
2. Massachusetts General Obligation (5.875%) 2010 3.9%
3. Michigan State Trunk Line (5.50%) 2021 3.6%
4. Nebraska Public Power Dist (6.125%) 2015 3.4%
5. Boston (City of) MA General Obligation (6.00%) 2014 3.4%
6. New York Triborough Bridge & Tunnel Auth (5.50%) 2017 3.3%
7. New York State Dorm Auth (7.70%) 2012 3.2%
8. Metropolitan Transportation Auth, NY (5.75%) 2013 3.1%
9. Fairfax County Virginia Water Auth (6.00%) 2022 2.7%
10. Fulton County Georgia Water & Sewer (6.375%) 2014 2.6%
</TABLE>
NATIONAL PORTFOLIO
CLASS A, B, C AND H CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
Without With
Sales Sales
Charge Charge
- -------------------------------------------------------------
<S> <C> <C>
Class A shares+ +14.80% +9.63%
<CAPTION>
Without With
CDSC CDSC++
- -------------------------------------------------------------
<S> <C> <C>
Class B shares+ +13.96% +10.36%
Class C Shares+ +13.95% +12.95%
Class H shares+ +14.06% +10.46%
<FN>
Past performance is not indicative of future performance. Total returns include
investment of all dividend and capital gains distributions. The performance of
the separate classes (E, A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class E and A have a maximum sales charge of 4.50%, Class B
and H have a CDSC of 4.00% (with a waiver of 10% of the amount invested) if
redeemed within two years of purchase, and Class C has a CDSC of 1.00% if
redeemed within one year of purchase.
+ Since November 14, 1994 -- Date shares were first offered to the public
++ Assumes redemption on September 30, 1995.
</TABLE>
NATIONAL PORTFOLIO CLASS E SHARES
Value of $10,000 invested June 2, 1986
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROS. MUNICIPAL NATIONAL PORTFOLIO CLASS
BOND INDEX*** E
<S> <C> <C> <C>
06/02/86 10,000 9,525
09/30/86 10,638 9,868
09/30/87 10,694 9,810
09/30/88 12,082 11,024
09/30/89 13,131 11,940
09/30/90 14,023 12,460
09/30/91 15,872 14,205
09/30/92 17,531 15,619
09/30/93 19,765 17,749
09/30/94 19,290 17,193
09/30/95 21,448 18,792
National Portfolio Class E
Average Annual Total Return
1 Year 5 Year Since June 2, 1986 @
Class E* +4.38% +7.57% +6.99%
Class E** +9.30% +8.57% +7.52%
<FN>
Annual period ended September 30
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
@ Date shares were first offered to the public
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.50%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of municipal bonds with maturities greater than two
years.
</TABLE>
1
<PAGE>
[PHOTO]
"The Fortis Tax-Free Minnesota Portfolio provides tax-free income exempt
from both state and federal taxes. We feel good knowing our investments
ultimately support the schools, hospitals and roads in our state."
LETTER TO SHAREHOLDERS (Continued)
cost of money now lower, we feel economic expansion should continue through the
balance of this year and into 1996. As long as productivity continues to rise
and labor cost increases remain small, the expectation for inflation should
remain below 2 percent.
PORTFOLIO REVIEW
While interest rates for municipal bonds have also declined over the past 12
months, their decline has been significantly less than the decline in rates on
taxable fixed income securities. For example, a longer term U.S. Treasury
security has declined in yield nearly 1.5 percent over the
past year, resulting in substantial price appreciation. By contrast, municipal
securities have declined in yield by about one-half of 1 percent, resulting in
less price appreciation.
The primary reason for this relative underperformance is congressional
consideration for a simpler tax, such as the "flat tax."
MINNESOTA PORTFOLIO COMPOSITION BY INDUSTRY AS OF 9/30/95
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Health Care / Services 18.7%
Housing 19.7%
General Obligation 16.1%
Utilities Electric 12.8%
Public Facilities 7.0%
Higher Education 5.5%
Refunded with U.S. Gov't 7.9%
Miscellaneous 4.7%
Pollution Control 4.2%
Cash Equivalents/Receivables 2.4%
Utilities Water and Sewer 1.0%
100.0%
</TABLE>
TAX-FREE MINNESOTA
TOP TEN HOLDINGS AS OF 9/30/95
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -----------------------------------------------------------------------------
<C> <S> <C>
1. Robbinsdale, MN Hospital Revenue (5.45%) 2013 3.7%
2. Minneapolis, MN General Obligation (6.25%) 2012 3.7%
3. Minneapolis & St. Paul, MN HRA Healthcare System (5.70%)
2016 3.6%
4. Puerto Rico Public Building Authority (5.75%) 2016 3.5%
5. Southern MN Municipal Power Agency (5.75%) 2018 3.3%
6. Brainerd, MN Refunding Revenue (6.65%) 2017 3.0%
7. Stillwater Independent School District #834, MN (5.75%) 2015 2.9%
8. St. Paul, MN HRA Sales Tax (5.55%) 2023 2.8%
9. St. Louis Park, MN Hospital Facility (7.25%) 2015 2.7%
10. Rochester, MN Health Care Facility (6.25%) 2014 2.4%
</TABLE>
MINNESOTA PORTFOLIO
CLASS A, B, C AND H CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
Without With
Sales Sales
Charge Charge
- -------------------------------------------------------------
<S> <C> <C>
Class A shares+ +13.15% +8.06%
<CAPTION>
Without With
CDSC CDSC++
- -------------------------------------------------------------
<S> <C> <C>
Class B shares+ +12.10% +8.50%
Class C shares+ +12.31% +11.31%
Class H shares+ +12.42% +8.82%
<FN>
Past performance is not indicative of future performance. Total returns include
investment of all dividend and capital gains distributions. The performance of
the separate classes (E, A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class E and A have a maximum sales charge of 4.50%, Class B
and H have a CDSC of 4.00% (with a waiver of 10% of the amount invested) if
redeemed within two years of purchase, and Class C has a CDSC of 1.00% if
redeemed within one year of purchase.
+ Since November 14, 1994 -- Date shares were first offered to the public
++ Assumes redemption on September 30, 1995.
</TABLE>
MINNESOTA PORTFOLIO CLASS E SHARES
Value of $10,000 invested June 2, 1986
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROS. MUNICIPAL MINNESOTA PORTFOLIO CLASS
BOND INDEX*** E
<S> <C> <C> <C>
6/2/86 10,000 9,525
9/30/86 10,638 9,865
9/30/87 10,694 9,692
9/30/88 12,082 10,817
9/30/89 13,131 11,603
9/30/90 14,023 12,214
9/30/91 15,872 13,681
9/30/92 17,531 14,952
9/30/93 19,765 16,787
9/30/94 19,290 16,541
9/30/95 21,448 17,922
Minnesota Portfolio Class E
Average Annual Total Return
1 Year 5 Year Since June 2, 1986@
Class E* +3.47% +6.98% +6.45%
Class E** +8.35% +7.97% +6.98%
<FN>
Annual period ended September 30
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
@ Date shares were first offered to the public
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.50%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of municipal bonds with maturities greater than two
years.
</TABLE>
2
<PAGE>
[PHOTO]
"The recent increase in federal tax brackets concerned me. Because I
live in New York City, which has a very heavy tax burden, the Fortis
Tax-Free New York Portfolio offers the triple tax-free income I need."
LETTER TO SHAREHOLDERS (Continued)
A flat tax would presumably treat all income as taxable, and under such a
proposal, municipal securities would be repriced to compete with all other
taxable alternatives with similar credit characteristics. This concern has
reduced the demand from many traditional and nontraditional buyers of municipal
securities.
The goal of the funds during 1995 has been to improve performance in the current
NEW YORK PORTFOLIO COMPOSITION BY INDUSTRY AS OF 9/30/95
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Refunded with U.S. Gov't 37.2%
Housing 21.5%
Transportation 12.5%
Health Care / Services 6.8%
Miscellaneous 6.4%
Pollution Control 6.4%
General Obligation 3.8%
Cash Equivalents/ Receivables 3.1%
Utilities Electric 2.3%
100.0%
</TABLE>
falling rate environment by lengthening fund duration. We have swapped bonds
with lesser call protection for those with greater call protection. In the
National Portfolio, we continue to emphasize securities issued from states which
have high tax levels and double tax exemption.
IN CLOSING
We appreciate your investment in the Fortis Tax-Free Portfolios. If you have any
questions, please call us or talk with your investment professional.
Sincerely,
/s/ DEAN C. KOPPERUD
Dean C. Kopperud
President
/s/ HOWARD G. HUDSON
Howard G. Hudson
Vice President
October 26, 1995
TAX-FREE NEW YORK
TOP TEN HOLDINGS AS OF 9/30/95
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -----------------------------------------------------------------------------
<C> <S> <C>
1. New York State Dorm Auth (7.50%) 2011 7.2%
2. New York State Dorm Auth (7.80%) 2005 7.0%
3. New York City, NY General Obligation (8.25%) 2017 6.8%
4. New York State Urban Development Corp (7.375%) 2018 5.7%
5. New York Local Government Assistance Corp (7.50%) 2020 5.7%
6. New York State Med Care (7.45%) 2029 5.6%
7. New York Triborough Bridge & Tunnel Auth (8.125%) 2012 4.5%
8. New York State Med Care (6.375%) 2029 4.2%
9. New York State Thruway Auth (6.25%) 2014 4.1%
10. United Nations Development Corp, NY (6.00%) 2012 4.1%
</TABLE>
NEW YORK PORTFOLIO
CLASS A, B, C AND H CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
Without With
Sales Sales
Charge Charge
- --------------------------------------------------------------
<S> <C> <C>
Class A shares+ +10.51% +5.54%
<CAPTION>
Without With
CDSC CDSC++
- --------------------------------------------------------------
<S> <C> <C>
Class B shares+ +9.46% +5.86%
Class C shares* +2.54% +1.54%
Class H shares** +1.00% -2.60%
<FN>
Past performance is not indicative of future performance. Total returns include
investment of all dividend and capital gains distributions. The performance of
the separate classes (E, A, B, C, and H) will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes. Class E and A have a maximum sales charge of 4.50%, Class B
and H have a CDSC of 4.00% (with a waiver of 10% of the amount invested) if
redeemed within two years of purchase, and Class C has a CDSC of 1.00% if
redeemed within one year of purchase.
+ Since November 14, 1994 -- Date shares were first offered to the public
++ Assumes redemption on September 30, 1995.
* Since April 26, 1995 -- Date of first investment.
** Since May 31, 1995 -- Date of first investment.
</TABLE>
NEW YORK PORTFOLIO CLASS E SHARES
Value of $10,000 invested November 6, 1987
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROS. MUNICIPAL NEW YORK PORTFOLIO CLASS
BOND INDEX*** E
<S> <C> <C> <C>
11/6/87 10,000 9,550
9/30/88 11,258 10,413
9/30/89 12,235 11,371
9/30/90 13,067 11,877
9/30/91 14,790 13,385
9/30/92 16,336 14,893
9/30/93 18,418 16,662
9/30/94 17,974 16,458
9/30/95 19,986 17,662
New York Portfolio Class E
Average Annual Total Return
1 Year 5 Year Since November 6, 1987@
Class E* +2.48% +7.27% +7.46%
Class E** +7.31% +8.26% +8.09%
<FN>
Annual period ended September 30
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
@ Date shares were first offered to the public
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions and the reduction due to the maximum sales
charge of 4.50%.
** These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions without
adjustment for sales charge.
*** An unmanaged index of municipal bonds with maturities greater than two
years.
</TABLE>
3
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
National Portfolio
Schedule of Investments
September 30, 1995
MUNICIPAL BONDS-97.07%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
- ----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
CALIFORNIA-3.14%
$4,000,000 Southern California Public Power, 6.36% Zero Coupon Bond 7-1-2013
(d)................................................................. A+ $ 1,316,482 $ 1,352,760
2,750,000 Sulphur Springs (City of) CA, 7.00% Zero Coupon General Obligation Ser
A MBIA Insured 9-1-2012 (d)......................................... AAA 858,700 998,030
------------ ------------
2,175,182 2,350,790
------------ ------------
DISTRICT OF COLUMBIA-4.14%
1,250,000 District of Columbia, 7.50% General Obligation Ser 1990B FSA Insured
6-1-2010 (Refunded 6-1-2000 @ 102).................................. AAA 1,235,937 1,427,750
1,500,000 Georgetown University, 8.25% District of Columbia Bond 4-1-2018
(Crossover Refunded 10-1-2001 @ 103)................................ A+ 1,552,500 1,670,055
------------ ------------
2,788,437 3,097,805
------------ ------------
FLORIDA-2.40%
500,000 Florida (State of), 7.50% Mid-Bay Bridge Auth Ser 1991A 10-1-2017
(Crossover Refunded 10-1-2001 @ 103)................................ NR 472,956 551,070
500,000 Leesburg (City of) FL, 7.50% Capital Improvement Hosp Rev Bond
(Leesburg Regional Med Ctr) Ser 1991A 7-1-2021 (Refunded 7-1-2002 @
102)................................................................ A- 488,074 586,845
600,000 Tampa (City of) FL, 8.25% Cap Improvement Program Rev Bond Ser A
10-1-2018........................................................... AA 598,858 660,996
------------ ------------
1,559,888 1,798,911
------------ ------------
GEORGIA-4.00%
1,800,000 Fulton County Georgia Water & Sewer, 6.375% Ref Bond FGIC Insured
1-1-2014............................................................ AAA 1,784,800 1,951,542
1,000,000 Municipal Electric Auth of Georgia, 6.50% 5th Crossover Ser Proj 1
1-1-2017............................................................ A 992,427 1,053,300
------------ ------------
2,777,227 3,004,842
------------ ------------
ILLINOIS-5.76%
500,000 Channahon Park IL District, 7.50% General Obligation 1-1-2011......... NR 499,375 536,480
750,000 Chicago Gas Supply, 7.50% Rev for Peoples Gas Ser B 3-1-2015.......... AA- 759,976 827,700
1,000,000 Illinois Dev Fin Auth, 7.375% Power Co Proj Ser 1991-A 7-1-2021....... BBB 992,291 1,079,290
750,000 Illinois Health Fac Auth, 8.25% Rev Ref Bond (West Suburban Hospital
Med Ctr) 8-1-2013................................................... A* 765,293 806,610
1,000,000 Illinois Housing Dev Auth, 7.55% Multifamily Housing Ser 1990A
7-1-2014............................................................ A+ 987,575 1,065,000
------------ ------------
4,004,510 4,315,080
------------ ------------
INDIANA-3.69%
1,200,000 Indiana Bond Bank, 8.50% Special Loan Program Ser B 2-1-2018.......... A 1,213,251 1,334,028
1,250,000 Indianapolis (City of) IN Local Public Improvement Bond Bank, 7.40%
Ser 1990A 1-1-2020 (Refunded 7-1-2000 @ 102)........................ Aaa* 1,247,201 1,424,900
------------ ------------
2,460,452 2,758,928
------------ ------------
KENTUCKY-1.46%
1,000,000 Louisville & Jefferson County KY, 6.75% Metro Sewer Dist Rev Bond Ser
A AMBAC Insured 5-15-2019........................................... AAA 996,244 1,090,290
------------ ------------
MAINE-2.22%
1,500,000 Regional Waste Sys, Inc. of ME, 7.95% Ser A-C 7-1-2010................ AA 1,512,038 1,660,905
------------ ------------
MARYLAND-2.46%
1,940,000 Maryland Industrial Dev Fin Auth Rev Bonds, 5.50% Ser 1995 MBIA
Insured Bon Secours Health System Project 8-15-2020................. AAA 1,858,817 1,841,681
------------ ------------
MASSACHUSETTS-12.18%
2,500,000 Boston (City of) MA 6.00% General Obligation AMSAC Insured 8-1-2014... AAA 2,493,783 2,529,550
500,000 Boston City Hospital MA, 7.625% Rev Bond Ser A 2-15-2021 (Refunded
8-15-2000 @102)..................................................... Aaa* 496,262 571,025
2,850,000 Massachusetts, 5.875% General Obligation Ser B FGIC Insured
8-1-2010............................................................ AAA 2,824,750 2,910,448
3,000,000 Massachusetts Water Resources, 6.25% Gen Rev Ref Bond Ser 1992B
11-1-2010........................................................... A 2,995,744 3,104,820
------------ ------------
8,810,539 9,115,843
------------ ------------
MICHIGAN-6.80%
1,300,000 Lake Orion MI, 5.50% School District Ref Bonds UT100 AMBAC Insured
Q-SBLF 5-1-2020..................................................... AAA 1,250,795 1,244,230
2,850,000 Michigan State Trunk Line, 5.50% Ser A MBIA-IBC Insured 10-1-2021..... AAA 2,566,595 2,674,155
1,200,000 University of Michigan, 5.75% Hospital Revenue Bond Series A
12-1-2012........................................................... AA 1,174,255 1,171,764
------------ ------------
4,991,645 5,090,149
------------ ------------
</TABLE>
4
<PAGE>
MUNICIPAL BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
- ----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
MINNESOTA-4.35%
$1,140,000 Fergus Falls (City of) MN, 6.50% Health Care Facility (Lake Regional
Hospital) Ser A 9-1-2018............................................ BBB+ $ 1,133,579 $ 1,114,703
2,000,000 Minneapolis (City of) MN, 5.75% General Obligation Zero Coupon Bond
Ser 1993A 12-1-2013 (d)............................................. AAA 728,921 700,140
670,000 Minneapolis (City of) MN, 7.00% Health Care Fac Rev (St Olaf
Residence) Ser 1993 10-1-2012....................................... NR 670,000 693,859
690,000 St. Anthony (City of) MN, 6.75% Housing Dev Rev Ref Bond 7-1-2007..... AA 690,000 749,237
------------ ------------
3,222,500 3,257,939
------------ ------------
MISSOURI-1.75%
1,250,000 Missouri State Health & Educ, 7.70% Still Regional Med Ctr 2-1-2013... BBB 1,302,861 1,310,000
------------ ------------
NEBRASKA-3.39%
2,500,000 Nebraska Public Power District, 6.125% Power Supply Sys Rev
1-1-2015............................................................ A+ 2,459,190 2,535,800
------------ ------------
NEVADA-4.09%
1,500,000 Nevada School District #3 (Clark County), 7.65% General Obligation
5-1-2010 (Refunded 5-1-2000 @102)................................... A+ 1,490,865 1,719,645
1,200,000 Washoe County Nevada Hosp, 7.60% (Washoe Med Ctr) Rev Bond Ser 1989A
6-1-2019............................................................ A 1,171,449 1,341,840
------------ ------------
2,662,314 3,061,485
------------ ------------
NEW YORK-14.98%
2,465,000 Metropolitan Transportation Authority NY Commuter Facilities, 5.75%
Ser O 7-1-2013...................................................... BBB 2,387,428 2,353,976
750,000 New York City, 7.50% General Obligation Group A Ser B 2-1-2009........ BBB+ 733,539 810,053
1,000,000 New York City, 8.25% General Obligation Ser B 6-1-2005................ BBB+ 988,988 1,175,240
730,000 New York State Med Care, 7.50% Mental Health Ser A 2-15-2021 (Refunded
2-15-2001 @ 102).................................................... AAA 701,558 845,763
2,080,000 New York State, 7.70% Dorm Auth Ser 1990A 5-15-2012 (Refunded
5-15-2000 @ 102).................................................... BBB+ 2,090,007 2,398,427
1,000,000 New York State, 7.75% UDC Correctional Fac Ser 1 1-1-2014 (Refunded
1-1-2000 @ 102)..................................................... Aaa* 958,341 1,145,220
2,600,000 New York Triborough Bridge and Tunnel Auth, 5.50% General Purpose Ser
Y 1-1-2017.......................................................... A+ 2,490,444 2,486,770
------------ ------------
10,350,305 11,215,449
------------ ------------
NORTH DAKOTA-2.28%
500,000 Mercer County ND, 7.70% Basin City Elec Power Ser 1984C 1-1-2019...... A 500,961 520,080
1,100,000 Ward County ND, 7.50% Health Care Fac Ser 1991B 7-1-2011.............. A- 1,134,289 1,184,755
------------ ------------
1,635,250 1,704,835
------------ ------------
OHIO-1.07%
750,000 Cleveland (City of) OH Parking Fac, 8.10% Improvement Rev Bond
9-15-2022........................................................... NR 761,327 800,595
------------ ------------
PENNSYLVANIA-2.30%
750,000 Clarion County PA Hosp Auth, 8.50% Clarion Hosp Proj Rev Bond
7-1-2021............................................................ BBB- 733,008 792,900
890,000 Delaware County PA, 8.10% IDA Rev Res Recov Ser A LOC Security
Pacific: Proj Guar by Westinghouse 12-1-2013........................ A+ 933,920 931,839
------------ ------------
1,666,928 1,724,739
------------ ------------
PUERTO RICO-1.99%
1,555,000 Puerto Rico, 5.75% Public Building Auth Rev Ref Bond Ser L 7-1-2016... A 1,534,855 1,489,457
------------ ------------
SOUTH CAROLINA-1.34%
1,000,000 Charleston (City of) SC, 6.00% Water & Sewer Rev Bond 1-1-2018........ AA- 968,881 1,002,460
------------ ------------
UTAH-2.18%
1,500,000 Intermountain Power Agency, 7.75% Utah Power Supply Rev Ref Bond Ser B
7-1-2020............................................................ AA- 1,535,836 1,634,595
------------ ------------
VIRGINIA-4.75%
2,000,000 Fairfax County VA, 6.00% Authority Water Rev 4-1-2022................. AA- 1,974,030 2,001,820
1,500,000 Virginia State Public School Auth, 6.20% Ser A 8-1-2014............... AA 1,491,571 1,553,730
------------ ------------
3,465,601 3,555,550
------------ ------------
WASHINGTON-3.24%
1,200,000 Washington Public Power Supply Sys, 7.00% Nuclear Proj 2 Ref Rev Bond
Ser 1990B 7-1-2012.................................................. AA 1,157,141 1,275,168
1,000,000 Washington Public Power Supply Sys, 7.625% Proj 2 Rec Bond Ser 1990A
7-1-2008 (Refunded 7-1-2000 @ 102).................................. AAA 986,875 1,149,450
------------ ------------
2,144,016 2,424,618
------------ ------------
</TABLE>
5
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
National Portfolio (continued)
Schedule of Investments
September 30, 1995
MUNICIPAL BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
- ----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
WISCONSIN-1.11%
$ 750,000 Wisconsin Health & Educ Fac Auth, 8.50% Rev Bond Ser 1990 (Franciscan
Health Sys) 3-1-2020 (Refunded 3-1-2000 @ 102)...................... BBB+ $ 750,000 $ 833,685
------------ ------------
TOTAL MUNICIPAL BONDS................................................. $68,394,843 $72,676,431
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-1.46%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
- ----------- ------------
<C> <S> <C>
INVESTMENT COMPANY-1.46%
$1,090,543 Federated Tax-Free Obligation Fund, Current Rate -- 4.04%........................... $ 1,090,543
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $69,485,386) (A)............................. $73,766,974
------------
------------
</TABLE>
(a) At September 30, 1995, the cost of securities for federal income tax
purposes was $69,491,180 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation................. $ 4,442,638
Unrealized depreciation................. (166,844)
-----------------------------------------------------
Net unrealized appreciation............. $ 4,275,794
-----------------------------------------------------
</TABLE>
(b) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities
(c) Note:Percentage of investments as shown is the ratio of the total market
value to total net assets.
(d) The interest rate disclosed for zero coupon securities represents the
effective yields on the date of acquisition.
*Moody's Rating.
6
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Minnesota Portfolio
Schedule of Investments
September 30, 1995
MUNICIPAL BONDS-97.67%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
- ----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
GENERAL OBLIGATIONS-16.11%
$ 450,000 Eagan (City of) MN, 7.25% General Obligation Water Rev Sys Bond Ser
1990A 12-1-2008 (Crossover Refunded 12-1-1999 @ 100)................ A+ $ 445,500 $ 499,446
500,000 Edina (City of) MN,7.30% General Obligation 2-1-2008 (Crossover
Refunded 2-1-1998 @ 100)............................................ NR 503,456 535,175
1,900,000 Minneapolis (City of) MN, 6.25% General Obligation Sales Tax & Rev
Bond Ser 1992 4-1-2012.............................................. AAA 1,920,857 2,003,645
1,995,000 Puerto Rico, 5.75% Public Building Auth Ref Rev Bond Ser L 7-1-2016... A 1,978,500 1,910,911
1,200,000 St Paul (City of) MN, 5.80% Independent School District #625 Ser B
2-1-2012............................................................ AA 1,190,805 1,209,348
1,600,000 Stillwater (City of) MN, 5.75% Independent School District #834 MBIA
Ins. Sch Dist Enhancement Program 2-1-2015.......................... AAA 1,581,379 1,600,976
1,000,000 Wayzata (City of) MN, 5.95% Independent School District #284-GO Ser
1995B 2-1-2013...................................................... AAA 1,000,000 1,012,030
------------ ------------
8,620,497 8,771,531
------------ ------------
HEALTH CARE/SERVICES-18.72%
1,000,000 Duluth (City of) MN, 8.375% EDA Health Care Fac Rev (St. Mary's Med
Ctr) Ser 1990 2-15-2020 (Refunded 2-15-2000 @ 102).................. AAA 1,022,980 1,169,660
785,000 Duluth (City of) MN, 9.00% Hospital Fac Rev Bond for St. Luke's Ser
1988 5-1-2018 (Refunded 5-1-1998 @ 102)............................. AAA 802,172 890,151
500,000 Minneapolis & St Paul (Cities of) MN HRA, 6.75% Health Care Fac Rev
Bond Group Health Inc Ser 1992 12-1-2013............................ A- 485,875 523,945
1,100,000 Minneapolis & St. Paul MN, 6.75% HRA Health Care System HealthOne
Obligated Group MBIA Insured 8-15-2014.............................. AAA 1,098,784 1,177,836
2,000,000 Minneapolis & St. Paul MN, 5.70% HRA Health Care System Childrens
Health Care Ser A 8-15-2016......................................... AAA 1,975,800 1,968,680
2,100,000 Robbinsdale (City of) MN, 5.45% Hospital Rev North Memorial Medical
Ctr Ser B AMBAC Insured 5-15-2013................................... AAA 2,107,362 2,012,661
1,275,000 Rochester (City of) MN, 6.25% Health Care Fac Rev Bond Mayo
Foundation/Mayo Medical Ctr Ser 1992D 11-15-2014.................... AA+ 1,274,860 1,316,004
1,180,000 St. Paul (City of) MN, 5.50% HRA Hospital Revenue St. Paul Ramsey
Medical Ctr AMBAC Insured 5-15-2013................................. AAA 1,134,636 1,137,355
------------ ------------
9,902,469 10,196,292
------------ ------------
HIGHER EDUCATION-5.54%
1,275,000 Minnesota Higher Education, 6.40% Rev Ser 3J for Macalester College
3-1-2022............................................................ AA- 1,263,286 1,314,079
460,000 Minnesota Higher Education, 7.625% Mortgage Rev Ser 3F for St. Mary's
College 10-1-2016 (Refunded 10-1-2001 @ 100)........................ BBB- 457,700 531,245
500,000 Northfield (City of) MN, 8.00% College Fac Rev Bond for St Olaf
College 10-1-2018 (Refunded 10-1-1998 @ 100)........................ A 500,887 550,895
600,000 University of Minnesota, 7.75% Ref Bond Ser A 2-1-2010 (Refunded
2-1-1996 @ 102)..................................................... AAA 610,027 619,614
------------ ------------
2,831,900 3,015,833
------------ ------------
HOUSING-19.73%
1,500,000 Brainerd (City of) MN, 6.65% Ref Rev Bond Ser 1992B, Evangelical
Lutheran-Good Samaritan Project 3-1-2017............................ AAA 1,514,668 1,609,980
365,000 Dakota County MN,8.10% HRA Single Family Rev GNMA Backed 3-1-2016..... AAA 372,287 388,302
300,000 Eden Prairie (City of) MN, 7.40% Multifamily Housing Ser 1990 FHA
Insured 8-1-2025.................................................... AAA 299,956 317,988
880,000 Eden Prairie (City of) MN, 8.00% Multifamily Housing Ser A FHA Insured
7-1-2026............................................................ AAA 880,000 951,218
595,000 Edina (City of) MN, 7.50% Housing Dev Ref Rev Edina Park Plaza Ser
1989A 12-1-2009..................................................... Aa* 594,625 633,782
500,000 Edina (City of) MN, 7.70% Housing Dev Ref Rev Edina Park Plaza Ser A
FHA Insured 12-1-2028............................................... Aa* 500,000 529,765
525,000 Mankato (City of) MN, 8.25% Nursing Home Rev Bond Board of Soc
Ministry Mankato Lutheran Ser 1991A 10-1-2021....................... NR 520,000 561,540
600,000 Minneapolis (City of) MN CDA & HRA, 7.875% Rev Bond 7-1-2017.......... AA- 592,536 624,342
1,070,000 Minneapolis (City of) MN HRA, 7.10% Mortgage Rev Bond Riverplace Proj
Ser A LOC Bank of Tokyo 1-1-2020.................................... Aa3* 1,082,871 1,106,990
485,000 Minneapolis (City of) MN, 8.25% Health Care Fac Rev Bond
Jones-Harrison Residence Ser 1991 9-1-2011 NR 479,122 524,804
350,000 Minneapolis (City of) MN, 8.25% Rev Bond Trinity Housing Proj Ser 1991
2-1-2018............................................................ NR 350,000 358,806
500,000 Minnesota Housing Finance Agency, 6.95% Housing Dev Bond Ser 1992A
8-1-2017............................................................ A+ 500,000 524,735
220,000 Minnesota Housing Finance Agency, 7.70% Single Family Mtg Bond Ser C
7-1-2014............................................................ AA+ 221,286 234,139
440,000 Northfield (City of) MN, 7.00% Health Care Facility Northfield
Retirement Center 5-1-2015.......................................... NR 436,036 450,072
735,000 Red Wing (City of) MN, 6.50% Elderly Housing Fac Ref Rev River Region
Obligated Group Ser 1993C 9-1-2022.................................. BBB+ 730,648 729,399
500,000 Spring Park (City of) MN, 8.25% Health Care Fac Rev Bond Twin Birch
Health Care Ctr 8-1-2011............................................ NR 500,000 544,690
</TABLE>
7
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Minnesota Portfolio (continued)
Schedule of Investments
September 30, 1995
MUNICIPAL BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
- ----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
$ 660,000 Waconia (City of) MN HRA, 6.00% Ref Rev Bond Evangelical Lutheran Good
Samaritan Society Ser 1993A 6-1-2014................................ A- $ 660,000 $ 652,634
------------ ------------
10,234,035 10,743,186
------------ ------------
MISCELLANEOUS-4.67%
450,000 Dakota County MN HRA, 7.50% Limited Annual Appropriation Tax & Rev
Supported Bond Ser 1991 1-1-2006.................................... BBB+ 450,000 474,043
400,000 Dawson (City of) MN, 7.30% IDR Ref Bond Associated Milk Producers
9-1-2000............................................................ NR 396,426 419,940
1,000,000 Minneapolis (City of) MN CDA, 7.375% Limited Tax Supported Dev Rev
Common Bond Fund Ser 1992G-3 12-1-2012.............................. BBB+ 1,000,000 1,100,780
500,000 Minneapolis (City of) MN CDA, 8.375% Limited Tax Supported Dev Rev
Common Bond Fund Ser 1990-6A 6-1-2007............................... BBB+ 497,500 549,635
------------ ------------
2,343,926 2,544,398
------------ ------------
POLLUTION CONTROL-4.22%
650,000 East Grand Forks (City of) MN, 7.75% Pollution Control Rev (American
Crystal Sugar) Ser 1991A 4-1-2018................................... BBB+ 650,521 682,910
1,000,000 Minnesota Public Fac Auth, 6.65% Zero Coupon Water Pollution Rev Bond
Ser 1992A 3-1-2007 (d).............................................. AAA 473,932 520,670
1,000,000 Minnesota Public Fac Auth, 7.10% Water Pollution Rev Bond Ser 1990A
3-1-2012............................................................ AAA 978,768 1,093,200
------------ ------------
2,103,221 2,296,780
------------ ------------
PUBLIC FACILITES-6.96%
400,000 Duluth (City of) MN, 6.75% Gross Rev Recreation Fac Bond Spirit
Mountain Ser 1992 2-1-2007.......................................... NR 400,000 417,004
325,000 Moorhead (City of) MN, 7.75% Golf Course Rev Bond Ser 1992A
12-1-2015........................................................... NR 325,000 359,931
500,000 St. Paul (City of) MN HRA, 6.45% Parking Rev Bond Ser 1992A 8-1-2007
(Refunded 8-1-2000 @ 102)........................................... A- 500,000 548,615
1,000,000 St. Paul (City of) MN, 5.45% HRA Sales Tax Rev Bond Civic Ctr Proj Ser
1993 11-1-2013...................................................... A 983,751 958,880
1,600,000 St. Paul (City of) MN, 5.55% HRA Sales Tax Rev Civic Ctr Proj MBIA-IBC
11-1-2023........................................................... AAA 1,523,244 1,506,832
------------ ------------
3,731,995 3,791,262
------------ ------------
REFUNDED WITH U.S. GOVERNMENT SECURITIES-7.90%
400,000 Minneapolis (City of) MN, 8.00% HRA St. Paul HealthOne Ser 1990B
8-15-2014 (Prerefunded 8-15-2000) AAA 412,624 467,492
1,100,000 Minneapolis (City of) MN, 9.125% Hospital Fac Ref Rev Bond Ser B
12-1-2014 (Refunded 12-1-97 @102)................................... AAA 1,187,139 1,234,024
230,000 Minneapolis (City of) MN, 9.50% CDA For Mt Sinai Hospital Assoc Ser
1986 11-1-2006 (Refunded 11-1-96 @102).............................. AAA 243,271 248,060
1,275,000 St. Louis Park (City of) MN, 7.25% Hospital Fac Rev Methodist Ser
1990C AMBAC Insured 7-1-2015 (Prerefunded 7-1-2000 @ 102)........... AAA 1,261,527 1,445,289
765,000 St. Louis Park (City of) MN, 8.50% Health Care Fac (Park Nicollet Med
Ctr) Ser A 1-1-2011 (Refunded 1-1-2001 @ 100)....................... AAA 771,416 904,352
------------ ------------
3,875,977 4,299,217
------------ ------------
UTILITIES-ELECTRIC-12.79%
1,000,000 Northern MN Municipal Power Agency, 5.50% Elec Sys Rev Bond Ser B
AMBAC Insured 1-1-2018.............................................. AAA 947,300 966,300
1,295,000 Northern MN Municipal Power Agency, 7.102% Zero Coupon Elec Sys Rev
Ref Ser A Primary Insured AMBAC 1-1-2011 (d)........................ AAA 457,604 539,717
945,000 Northern MN Municipal Power Agency, 7.25% Elec Sys Rev Bond Ser A
1-1-2016............................................................ A 961,913 1,037,327
500,000 Northern MN Municipal Power Agency, 7.40% Elec Sys Rev Bond Ser A
AMBAC Insured 1-1-2018 (Refunded 1-1-1999 @ 102).................... AAA 508,075 554,465
1,870,000 Southern Minnesota Municipal Power Agency, 5.75% Ser A 01-01-2018..... A+ 1,811,833 1,806,083
1,000,000 Southern MN Municipal Power Agency, 5.00% Power Supply Sys Rev Bond
Ser 1993A 1-01-2012................................................. A+ 948,412 902,760
1,100,000 St. Cloud, (City of) MN Hydro Electric, 7.375% Gen Fac Rev Bond
12-16-2018.......................................................... A- 1,138,493 1,156,210
------------ ------------
6,773,630 6,962,862
------------ ------------
UTILITIES-WATER AND SEWER-1.03%
500,000 St. Paul (City of) MN, 8.00% Sewer Rev Bond Ser 1988A 12-1-2008
(Crossover Refunded 12-1-1998 @101)................................. BBB 500,000 558,785
------------ ------------
TOTAL MUNICIPAL BONDS................................................. $50,917,650 $53,180,146
------------ ------------
------------ ------------
</TABLE>
8
<PAGE>
SHORT-TERM INVESTMENTS-0.83%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
- --------- ------------
<C> <S> <C>
INVESTMENT COMPANY-0.83%
$453,221 Federated Minnesota Municipal Cash Trust, Current rate -- 4.07%..................... $ 453,221
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $51,370,871) (A)............................. $53,633,367
------------
------------
</TABLE>
(a) At September 30, 1995, the cost of securities for federal income tax
purposes was $51,385,837 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation................. $ 2,546,495
Unrealized depreciation................. (298,965)
-----------------------------------------------------
Net unrealized appreciation............. $ 2,247,530
-----------------------------------------------------
</TABLE>
(b) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities
(c) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets.
(d) The interest rate disclosed for zero coupon securities represents the
effective yields on the date of acquisition.
*Moody's Rating.
9
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
New York Portfolio
Schedule of Investments
September 30, 1995
MUNICIPAL BONDS-96.80%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
- --------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
GENERAL OBLIGATIONS-3.84%
$250,000 North Hempstead (Town of) NY, 7.25% Public Improvement Bond FGIC
Insured Ser A Unlimited Tax 4-1-2012 (Refunded 4-1-1999 @ 102)...... AAA $ 249,375 $ 278,325
200,000 Puerto Rico, 5.75% Public Building Auth Rev Ref Bond Ser l 7-1-2016... A 194,101 191,570
------------ ------------
443,476 469,895
------------ ------------
HEALTH CARE/SERVICES-6.83%
305,000 New York State Med Care Fac Fin Agency, 7.70% Mental Health Rev Bond
2-15-2018........................................................... BBB+ 315,525 328,140
500,000 New York State Med Care Fac Fin Agency, 6.375% Mt.Sinai Hospital &
Nursing Home Rev Ref Mtg C FHA Insured 8-15-2029.................... AAA 497,107 508,925
------------ ------------
812,632 837,065
------------ ------------
HOUSING-21.49%
410,000 New York State Mtg Agency, 7.85% Rev Homeowner Mtg Ser BB-2
10-1-2008........................................................... Aa* 409,133 438,966
770,000 New York State, 7.50% Dorm Auth Rev Ref State Univ Educ Fac Ser B
5-15-2011........................................................... BBB+ 785,078 886,848
791,000 New York State, 7.80% Dorm Auth Rev Bond Insd-Pooled Cap Prog, FGIC
Insured 12-1-2005 (Partially Refunded 12-1-1998 @ 102).............. AAA 801,578 861,106
400,000 New York State, 8.125% Dorm Auth City Univ Ref Bond Ser A 7-1-2007.... BBB 401,701 444,768
------------ ------------
2,397,490 2,631,688
------------ ------------
MISCELLANEOUS-6.37%
250,000 New York (City of) Municipal Assistance Corp., 7.625% Ser 67 Bond (Pub
Benefit Corp. of the State of NY) 7-1-2008.......................... AA- 252,682 279,905
500,000 United Nations Development Corp. of NY, 6.00% Rev Ref Sr Lien Ser
1992A 7-1-2012...................................................... A* 483,883 500,305
------------ ------------
736,565 780,210
------------ ------------
POLLUTION CONTROL-6.35%
290,000 Babylon (Town of) NY, 8.10% Industrial Dev Agency Res Recov Rev Bond
Ser 1985C (Ogden Martin Systems,Inc.) 1-1-2000 (Refunded 7-1-1998 @
103)................................................................ Aaa* 289,825 320,270
405,000 Babylon (Town of) NY, 8.50% Industrial Dev Agency Res Recov Rev Bond
Ser 1985C (Ogden Martin Systems,Inc.) 1-1-2019 (Refunded 7-1-1998 @
103)................................................................ Aaa* 420,910 457,581
------------ ------------
710,735 777,851
------------ ------------
REFUNDED WITH U.S. GOVERNMENT SECURITIES-37.15%
395,000 Metropolitan Transportation Auth, NY, 8.375% Transit Fac Rev Bond Ser
F 7-1-2016 (Refunded 7-1-1996 @ 102)................................ AAA 397,494 416,030
350,000 New York (City of) Municipal Assistance Corp., 8.25% Ser 56 Bond
7-1-2008 (Refunded 7-1-1996 @ 102).................................. AA- 353,530 368,316
450,000 New York City Municipal Water Fin Auth, 7.875% Water & Sewer Sys Rev
Bond Ser B 6-15-2016 (Refunded 6-15-1996 @ 102)..................... A- 455,636 471,533
690,000 New York City, 8.25% General Obligation Ser 1991F 11-15-2017 (Refunded
11-15-2001 @ 101.5)................................................. BBB+ 672,629 835,873
600,000 New York Local Government Assistance Corp., 7.50% Ser 1991B Bond
4-1-2020 (Refunded 4-1-2001 @ 102).................................. AAA 599,375 696,948
345,000 New York Med Care Fac Fin Agency, 7.70% Mental Health 2-15-2018
(Refunded 2-15-1998 @ 102).......................................... AAA 354,724 378,772
600,000 New York State Med Care, 7.45% (St. Luke's Hosp) FHA and Secondary
MBIA Insured Ser B 2-15-2029 (Refunded 2-15-2000 @ 102)............. AAA 598,500 682,026
600,000 New York State Urban Development Corp., 7.375% Rev Correctional Cap
Fac FSA Insured Ser 3 1-1-2018 (Refunded 1-1-2002 @102)............. Aaa* 595,918 700,014
------------ ------------
4,027,806 4,549,512
------------ ------------
TRANSPORTATION-12.52%
500,000 Metropolitan Transportation Authority NY Commuter Facilities, 5.75%
Ser O 7-1-2013...................................................... BBB 483,732 477,480
500,000 New York State Thruway Auth, 6.25% Loc Hwy & Bridge Svc Contract Ser
1995 4-1-2014....................................................... BBB 490,000 502,440
500,000 New York Triborough Bridge and Tunnel Auth, 8.125% General Purpose Rev
Ref Bond Ser L 1-1-2012............................................. A+ 501,897 553,840
------------ ------------
1,475,629 1,533,760
------------ ------------
UTILITIES-ELECTRIC-2.25%
300,000 New York (State of), 5.25% Power Auth General Purpose Ser CC
1-1-2018............................................................ AA- 296,174 275,976
------------ ------------
TOTAL MUNICIPAL BONDS................................................. $10,900,507 $11,855,957
------------ ------------
------------ ------------
*Moody's Rating
</TABLE>
10
<PAGE>
SHORT-TERM INVESTMENTS-1.30%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
- --------- ------------
<C> <S> <C>
CLOSED END BOND FUNDS-1.30%
$159,088 Federated Tax-Free Obligation Fund, Current Rate -- 4.04%........................... $ 159,088
------------
TOTAL INVESTMENTS IN SECURITIES (COST: $11,059,595) (A)............................. $12,015,045
------------
------------
</TABLE>
(a) At September 30, 1995, the cost of securities for federal income tax
purposes was $11,059,595 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation................. $ 984,431
Unrealized depreciation................. (28,981)
---------------------------------------------------
Net unrealized appreciation............. $ 955,450
---------------------------------------------------
</TABLE>
(b) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities
(c) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets.
11
<PAGE>
Fortis Tax-Free Portfolios, Inc.
Statements of Assets and Liabilities
September 30, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NATIONAL MINNESOTA NEW YORK
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments in securities, as detailed in the accompanying
schedules, at market (cost $69,485,386; $51,370,871; and
$11,059,595; respectively) (Note A)............................... $73,766,974 $53,633,367 $12,015,045
Receivables:
Investment securities sold........................................ -- 1,929,395 --
Interest.......................................................... 1,245,659 939,794 226,234
Subscriptions of capital stock.................................... 2,955 5,148 --
Deferred registration costs (Note A)................................ 20,423 30,117 16,058
Prepaid expenses.................................................... 96 -- 13,442
------------ ------------ ------------
TOTAL ASSETS.......................................................... 75,036,107 56,537,821 12,270,779
------------ ------------ ------------
LIABILITIES:
Cash portion of dividends payable................................... 111,028 57,484 11,649
Payable for investment securities purchased......................... -- 1,975,801 --
Redemptions of capital stock........................................ 30 17,000 1,308
Payable for investment advisory and management fees (Note B)........ 46,948 32,612 8,091
Payable for distribution fees (Note B).............................. 243 96 27
Accounts payable and accrued expenses............................... 9,234 7,000 1,947
------------ ------------ ------------
TOTAL LIABILITIES..................................................... 167,483 2,089,993 23,022
------------ ------------ ------------
NET ASSETS:
Net proceeds of capital stock, par value $.01 per share-authorized;
100,000,000,000 shares............................................ 71,756,984 52,576,541 11,285,224
Unrealized appreciation of investments.............................. 4,281,588 2,262,496 955,450
Distributions in excess of net investment income.................... (38,630) (21,214) (1,619)
Accumulated net realized gain (loss) from sale of investments....... (1,131,318) (369,995) 8,702
------------ ------------ ------------
TOTAL NET ASSETS...................................................... $74,868,624 $54,447,828 $12,247,757
------------ ------------ ------------
------------ ------------ ------------
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE:
Class A shares (based on net assets of $1,807,181; $883,555; and
$48,802; respectively and 168,770; 85,773; and 4,490 shares
outstanding; respectively)........................................ $10.71 $10.30 $10.87
------------ ------------ ------------
Class B shares (based on net assets of $668,200; $179,976; and
$193,682; respectively and 62,463; 17,521; and 17,863 shares
outstanding; respectively)........................................ $10.70 $10.27 $10.84
------------ ------------ ------------
Class C shares (based on net assets of $105,922; $143,053; and
$50,901; respectively and 9,896; 13,895; and 4,691 shares
outstanding; respectively)........................................ $10.70 $10.30 $10.85
------------ ------------ ------------
Class E shares (based on net assets of $70,530,792; $52,603,103; and
$11,882,000; respectively and 6,581,433; 5,097,390; and 1,092,955
shares outstanding; respectively)................................. $10.72 $10.32 $10.87
------------ ------------ ------------
Class H shares (based on net assets of $1,756,529; $638,141; and
$72,372; respectively and 164,006; 61,971; and 6,684 shares
outstanding; respectively)........................................ $10.71 $10.30 $10.83
------------ ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Statements of Operations
For the Year Ended September 30, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NATIONAL MINNESOTA NEW YORK
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ---------
<S> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income................................................... $4,763,639 $3,539,411 $839,939
----------- ----------- ---------
Expenses:
Investment advisory and management fees (Note B).................. 557,889 387,530 99,309
Distribution fees (Class A) (Note B).............................. 1,880 833 75
Distribution fees (Class B) (Note B).............................. 2,002 784 1,464
Distribution fees (Class C) (Note B).............................. 314 310 132
Distribution fees (Class H) (Note B).............................. 5,258 3,355 223
Registration fees (Note A)........................................ 69,049 48,000 57,069
Legal and auditing fees (Note B).................................. 45,501 35,791 21,302
Shareholders' notices and reports................................. 40,819 26,776 10,270
Custodian fees.................................................... 15,248 11,000 3,764
Directors' fees and expenses...................................... 9,292 7,397 1,897
Other............................................................. 12,023 9,900 2,996
----------- ----------- ---------
Total expenses...................................................... 759,275 531,676 198,501
Less reimbursable expenses.......................................... -- -- (63,096)
----------- ----------- ---------
Net Expenses........................................................ 759,275 531,676 135,405
----------- ----------- ---------
NET INVESTMENT INCOME................................................. 4,004,364 3,007,735 704,534
----------- ----------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE A):
Net realized gain (loss) from security transactions................. (592,450) (208,947) 18,022
Net change in unrealized appreciation of investments................ 2,893,045 1,525,922 158,431
----------- ----------- ---------
NET GAIN ON INVESTMENTS............................................... 2,300,595 1,316,975 176,453
----------- ----------- ---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. $6,304,959 $4,324,710 $880,987
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Statements of Changes in Net Assets
NATIONAL PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THREE-MONTH
FOR THE PERIOD ENDED
YEAR ENDED SEPTEMBER 30, 1994
SEPTEMBER 30, 1995 (NOTE C)
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 4,004,364 $ 1,096,634
Net realized loss from security transacations....................... (592,450) (480,946)
Net change in unrealized appreciation (depreciation) of investments
in securities..................................................... 2,893,045 (144,516)
------------------ ------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 6,304,959 471,172
------------------ ------------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A........................................................... (40,810) --
Class B........................................................... (8,802) --
Class C........................................................... (1,397) --
Class E........................................................... (4,004,117) (1,042,508)
Class H........................................................... (23,755) --
From net realized gains on investments
Class A........................................................... (158) --
Class B........................................................... (39) --
Class C........................................................... -- --
Class E........................................................... (35,901) --
Class H........................................................... (111) --
------------------ ------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS................................... (4,115,090) (1,042,508)
------------------ ------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (174,678 shares).......................................... 1,836,979 --
Class B (61,707 shares)........................................... 652,193 --
Class C (10,282 shares)........................................... 108,826 --
Class E (554,163 and 288,469 shares).............................. 5,801,785 3,032,231
Class H (162,867 shares).......................................... 1,720,757 --
Proceeds from shares issued as a result of reinvested dividends
Class A (2,193 shares)............................................ 23,365 --
Class B (756 shares).............................................. 8,023 --
Class C (104 shares).............................................. 1,105 --
Class E (255,916 and 66,477 shares)............................... 2,677,589 701,460
Class H (1,187 shares)............................................ 12,614 --
Less cost of repurchase of shares
Class A (8,101 shares)............................................ (86,435) --
Class B (0 shares)................................................ -- --
Class C (490 shares).............................................. (5,246) --
Class E (1,440,336 and 478,650 shares)............................ (14,948,936) (5,031,493)
Class H (48 shares)............................................... (514) --
------------------ ------------------
NET DECREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............ (2,197,895) (1,297,802)
------------------ ------------------
TOTAL DECREASE IN NET ASSETS.......................................... (8,026) (1,869,138)
NET ASSETS:
Beginning of period................................................. 74,876,650 76,745,788
------------------ ------------------
End of period [includes undistributed (excess of distributions over)
net investment income of ($38,630) and $35,887, respectively]..... $ 74,868,624 $74,876,650
------------------ ------------------
------------------ ------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Statements of Changes in Net Assets
MINNESOTA PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THREE-MONTH
FOR THE PERIOD ENDED
YEAR ENDED SEPTEMBER 30, 1994
SEPTEMBER 30, 1995 (NOTE C)
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 3,007,735 $ 783,827
Net realized loss from security transacations....................... (208,947) (86,449)
Net change in unrealized appreciation (depreciation) of investments
in securities..................................................... 1,525,922 (300,009)
------------------ ------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 4,324,710 397,369
------------------ ------------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A........................................................... (17,812) --
Class B........................................................... (3,618) --
Class C........................................................... (1,393) --
Class E........................................................... (3,012,388) (777,817)
Class H........................................................... (15,259) --
------------------ ------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS................................... (3,050,470) (777,817)
------------------ ------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (87,978 shares)........................................... 892,384 --
Class B (17,169 shares)........................................... 173,312 --
Class C (13,795 shares)........................................... 140,806 --
Class E (236,250 and 115,839 shares).............................. 2,367,394 1,180,013
Class H (60,955 shares)........................................... 614,862 --
Proceeds from shares issued as a result of reinvested dividends
Class A (665 shares).............................................. 6,825 --
Class B (355 shares).............................................. 3,618 --
Class C (103 shares).............................................. 1,058 --
Class E (228,148 and 59,511 shares)............................... 2,306,428 607,372
Class H (1,016 shares)............................................ 10,395 --
Less cost of repurchase of shares
Class A (2,870 shares)............................................ (28,715) --
Class B (3 shares)................................................ (25) --
Class C (3 shares)................................................ (25) --
Class E (781,394 and 166,694 shares).............................. (7,875,096) (1,700,863)
Class H (0 shares)................................................ -- --
------------------ ------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK
TRANSACTIONS........................................................ (1,386,779) 86,522
------------------ ------------------
TOTAL DECREASE IN NET ASSETS.......................................... (112,539) (293,926)
NET ASSETS:
Beginning of period................................................. 54,560,367 54,854,293
------------------ ------------------
End of period [includes undistributed (excess of distributions over)
net investment income of ($21,214) and $21,521, respectively]..... $54,447,828 $54,560,367
------------------ ------------------
------------------ ------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Statements of Changes in Net Assets
NEW YORK PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THREE-MONTH
FOR THE PERIOD ENDED
YEAR ENDED SEPTEMBER 30, 1994
SEPTEMBER 30, 1995 (NOTE C)
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 704,534 $ 183,772
Net realized gain from security transacations....................... 18,022 --
Net change in unrealized appreciation (depreciation) of investments
in securities..................................................... 158,431 (93,136)
------------------ ------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 880,987 90,636
------------------ ------------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A........................................................... (941) --
Class B........................................................... (7,056) --
Class C........................................................... (568) --
Class E........................................................... (694,432) (183,333)
Class H........................................................... (1,034) --
From realized gains on investments
Class A........................................................... (34) --
Class B........................................................... (287) --
Class E........................................................... (21,816) --
Excess distributions of net investment income
Class E........................................................... -- (2,122)
------------------ ------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS................................... (726,168) (185,455)
------------------ ------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from sale of shares
Class A (4,869 shares)............................................ 51,726 --
Class B (17,184 shares)........................................... 178,351 --
Class C (4,640 shares)............................................ 50,125 --
Class E (26,693 and 12,315 shares)................................ 287,441 133,289
Class H (6,604 shares)............................................ 72,245 --
Proceeds from shares issued as a result of reinvested dividends
Class A (86 shares)............................................... 929 --
Class B (679 shares).............................................. 7,285 --
Class C (53 shares)............................................... 571 --
Class E (52,417 and 13,268 shares)................................ 561,495 143,899
Class H (82 shares)............................................... 881 --
Less cost of repurchase of shares
Class A (465 shares).............................................. (5,003) --
Class B (0 shares)................................................ -- --
Class C (2 shares)................................................ (25) --
Class E (178,182 and 21,826 shares)............................... (1,909,876) (236,486)
Class H (2 shares)................................................ (25) --
------------------ ------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK
TRANSACTIONS........................................................ (703,880) 40,702
------------------ ------------------
TOTAL DECREASE IN NET ASSETS.......................................... (549,061) (54,117)
NET ASSETS:
Beginning of period................................................. 12,796,818 12,850,935
------------------ ------------------
End of period (includes excess of distributions over net investment
income of $1,619 and $2,122, respectively)........................ $12,247,757 $12,796,818
------------------ ------------------
------------------ ------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Notes to Financial Statements
- --------------------------------------------------------------------------------
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Fortis Tax-Free Portfolios, Inc. (the fund) is an open-end management
investment company which currently is comprised of three separate investment
portfolios and series of capital stock: the National and Minnesota
Portfolios, both of which are diversified portfolios, and the New York
Portfolio, which is a non-diversified portfolio, each of which has different
investment objectives and its own investment portfolio and net asset values.
The investment objective of National Portfolio is to seek as high a level of
current income exempt from federal income tax as is believed to be consistent
with preservation of capital. The investment objective of Minnesota Portfolio
is to seek as high a level of current income exempt from federal and
Minnesota income tax as is believed to be consistent with preservation of
capital. The investment objective of New York Portfolio is to seek as high a
level of current income exempt from federal, New York State, and New York
City income tax as is believed to be consistent with the preservation of
capital.
The Minnesota and New York Portfolios concentrate their investments in a
single state and, therefore, may have more credit risk related to the
economic conditions of the respective state than a portfolio with broader
geographical diversification.
The fund offers Class A, Class B, Class C, Class E and Class H shares. The
fund began to issue class shares effective November 14, 1994. Class E shares
were only available to existing shareholders on November 14, 1994. Class A
and E shares are sold with a front-end sales charge. Class B and H shares are
sold without a front-end sales charge and may be subject to a contingent
deferred sales charge for six years, and such shares automatically convert to
Class A after eight
years. Class C shares are sold without a front-end sales charge and may be
subject to a contingent deferred sales charge for one year. All classes of
shares have identical voting, dividend, liquidation and other rights and the
same terms and conditions, except that the level of distribution fees charged
differs between classes. Income, expenses (other than expenses incurred under
each class's distribution agreement) and realized and unrealized gains or
losses on investments are allocated to each class of shares based on its
relative net assets.
The significant accounting policies followed by the fund are summarized as
follows:
SECURITY VALUATION: Tax exempt bonds for which quotations are not readily
available are valued at fair value as determined by a pricing system approved
by the Board of Directors. The pricing service may employ electronic data
processing techniques and/or a matrix system to determine valuations using
methods which include consideration of yields or prices of municipal bonds of
comparable quality, type of issue, coupon, maturity and rating; indications as
to value from dealers; and general market conditions. Short-term investments,
with maturities of less than 60 days when acquired, or which subsequently are
within 60 days of maturity, are valued at amortized cost.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. Realized security gains and losses are determined using the identified
cost method. For financial reporting purposes, the portfolios amortize
long-term bond premium and original issue discount.
For the year ended September 30, 1995, the cost of purchases and proceeds
from sales of securities (other than short-term securities) aggregated
$24,873,211 and $27,429,219 for National Portfolio; $14,366,327 and
$15,620,781 for Minnesota Portfolio; and $1,162,950 and $1,870,361 for New
York Portfolio; respectively.
INCOME TAXES: The portfolios intend to qualify, under the Internal Revenue
Code, as regulated investment companies and if so qualified, will not have to
pay federal income taxes to the extent their taxable net income is
distributed. On a calendar year basis, the fund intends to distribute
substantially all of its taxable net investment income and realized gains, if
any, to avoid the payment of federal excise taxes.
Net realized gains may differ for financial statement and tax purposes
primarily because of wash sale transactions. The character of distributions
made during the year from net investment income or net realized gains may
also differ from their ultimate characterization for federal income tax
purposes. Also, due to the timing of dividend distributions, the fiscal year
in which amounts are distributed may differ from the year that the income or
realized gains (losses) were recorded by the fund. The effect on dividend
distributions of certain book-to-tax differences are reflected as excess
distributions of net investment income in the statements of changes in net
assets and the financial highlights.
For federal income tax purposes the National and Minnesota Portfolios had the
following capital loss carryovers at September 30, 1995, which, if not offset
by subsequent capital gains, will expire in 2002 and 2003 for the National
Portfolio, and in 1997, 2002 and 2003 for the Minnesota Portfolio. It is
unlikely the Board of Directors will authorize a distribution of any net
realized gains until the available capital loss carryovers have been offset
or expired.
<TABLE>
<S> <C>
National Portfolio................................. $1,125,524
Minnesota Portfolio................................ $ 355,029
</TABLE>
DEFERRED COSTS: Registration costs are deferred and charged to income over the
registration period.
INCOME AND CAPITAL GAINS DISTRIBUTION: The portfolios declare income
distributions daily to be paid on the last business day of each month. The
portfolios will make annual distributions of any realized capital gains as
required by law. These income and capital gains distributions may be
reinvested in additional shares of the portfolio at net asset value on the
payable date or paid in cash five business days after month end without any
charge to the shareholder.
B. PAYMENTS TO RELATED PARTIES: Fortis Advisers, Inc. (Advisers), is the
investment adviser for the fund. Investment advisory fees paid by the
Minnesota and New York Portfolios are computed at an annual rate of .8% of
the first $50 million in average daily net assets, .7% of the next $50
million in average daily net assets and .625% of average daily net assets in
excess of $100 million. The National Portfolio's investment advisory fees are
computed at an annual rate of .8% of the first $50 million in average daily
net assets, and .7% of average daily net assets in excess of $50 million. The
fee percentage for the Minnesota Portfolio is based upon the aggregate
average net assets of the National and Minnesota Portfolios combined. The fee
is then allocated to the Minnesota Portfolio based upon proportionate net
assets. The fee percentage for National and New York Portfolio is based upon
the average net assets of each portfolio alone.
In addition to the investment advisory and management fee, Classes A, B, C
and H pay Fortis Investors, Inc. (the fund's principal underwriter)
distribution fees equal to .25% (Class A) and 1.00% (Class B, C, and H) of
average daily net assets (of the respective
17
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
classes) on an annual basis, to be used to compensate those who sell shares
of the fund and to pay certain other expenses of selling fund shares. Fortis
Investors, Inc., also received sales charges (paid by purchasers of the
fund's shares) aggregating $47,430 for Class A and $103,765 for Class E for
National Portfolio; $25,681 for Class A and $69,612 for Class E for Minnesota
Portfolio; and $11,694 for Class E for New York Portfolio for the year ended
September 30, 1995.
Advisers has voluntarily undertaken to limit annual expenses for New York
Portfolio (exclusive of interest, taxes, brokerage commissions, 12b-1 fees
and non-recurring extraordinary charges and expenses) commencing November 1,
1994 to 1.09% of average daily net assets. During the year ended September
30, 1995, Advisers waived $63,096 of its advisory fee.
Legal fees and expenses aggregating $23,277, $17,105 and $3,479 for the
National, Minnesota, and New York Portfolios, respectively, were paid to a
law firm of which the secretary of the fund is a partner.
C. CHANGE IN ACCOUNTING PERIOD: Effective September 30, 1994, Fortis Tax-Free
Portfolios, Inc. changed its fiscal accounting year-end to September 30
(previously June 30).
18
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
D. FINANCIAL HIGHLIGHTS: Selected per share historical data for each of the
Portfolios were as follows:
<TABLE>
<CAPTION>
CLASS E
-------------------------------------------------------------------------
Three-Month Six-Month
YEAR ENDED Period Ended Year Ended June 30, Period Ended
SEPTEMBER 30, September 30, --------------------------- June 30,
NATIONAL PORTFOLIO 1995 1994 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.............. $ 10.38 $ 10.46 $ 11.13 $ 10.54 $ 9.99 $ 9.82
------------- ------------- ------- ------- ------- ------------
Operations:
Investment income - net......................... .58 .15 .60 .63 .66 .32
Net realized and unrealized gains (losses) on
investments................................... .36 (.09) (.64) .59 .55 .17
------------- ------------- ------- ------- ------- ------------
Total from operations............................. .94 .06 (.04) 1.22 1.21 .49
------------- ------------- ------- ------- ------- ------------
Distributions to shareholders:
From investment income - net.................... (.59) (.14) (.59) (.62) (.66) (.32)
Excess distribution of net investment income.... -- -- -- (.01) -- --
From realized gains............................. (.01) -- (.04) -- -- --
------------- ------------- ------- ------- ------- ------------
Total distributions to shareholders............... (.60) (.14) (.63) (.63) (.66) (.32)
------------- ------------- ------- ------- ------- ------------
Net asset value, end of period.................... $ 10.72 $ 10.38 $ 10.46 $ 11.13 $ 10.54 $ 9.99
------------- ------------- ------- ------- ------- ------------
Total Return @.................................... 9.30% .59% (0.49%) 11.99% 12.46% 5.09%
Net assets, end of period (000s omitted).......... $70,531 $74,877 $76,746 $70,754 $54,189 $43,707
Ratio of expenses to average daily net assets..... 1.03% .87%* .87% .94% .92% .95%*
Ratio of net investment income to average daily
net assets....................................... 5.54% 5.74%* 5.38% 5.80% 6.40% 6.58%*
Portfolio turnover rate........................... 35% 17% 25% 29% 38% 25%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS H
NATIONAL PORTFOLIO 1995+ 1995+ 1995+ 1995+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period........................ $ 9.79 $ 9.79 $ 9.79 $ 9.79
------- ------- ------- -------
Operations:
Investment income - net................................... .49 .42 .43 .43
Net realized and unrealized gains (losses) on
investments............................................. .94 .93 .92 .93
------- ------- ------- -------
Total from operations....................................... 1.43 1.35 1.35 1.36
------- ------- ------- -------
Distribution to shareholders:
From investment income - net.............................. (.50) (.43) (.43) (.43)
From net realized gains................................... (.01) (.01) (.01) (.01)
------- ------- ------- -------
Total distributions to shareholders......................... (.51) (.44) (.44) (.44)
------- ------- ------- -------
Net asset value, end of period.............................. $10.71 $10.70 $10.70 $10.71
------- ------- ------- -------
Total Return @.............................................. 14.80% 13.96% 13.95% 14.06%
Net assets end of period (000s omitted)..................... $1,807 $ 668 $ 106 $1,757
Ratio of expenses to average daily net assets............... 1.28%* 2.03%* 2.03%* 2.03%*
Ratio of net investment income to average daily net
assets..................................................... 5.03%* 4.04%* 4.14%* 4.24%*
Portfolio turnover rate..................................... 35%** 35%** 35%** 35%**
<FN>
*Annualized.
**For the period ended September 30, 1995. Portfolio turnover computed at the
fund level.
+For the period from November 14, 1994 (commencement of operations) to
September 30, 1995.
@These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions, without
adjustment for sales charge.
</TABLE>
19
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS E
---------------------------------------------------------
Three-Month
YEAR ENDED Period Ended Year Ended June 30,
SEPTEMBER 30, September 30, -------------------------
MINNESOTA PORTFOLIO 1995 1994 1994 1993 1992
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period........................ $ 10.08 $ 10.15 $ 10.65 $ 10.16 $ 9.78
Operations:
Investment income - net................................... .57 .15 .59 .61 .64
Net realized and unrealized gains (losses) on
investments............................................. .24 (.08) (.51) .49 .38
------------- ------------- ------- ------- -------
Total from operations....................................... .81 .07 (.08) 1.10 1.02
------------- ------------- ------- ------- -------
Distributions to shareholders:
From investment income - net.............................. (.57) (.14) (.58) (.61) (.64)
------------- ------------- ------- ------- -------
Net asset value, end of period.............................. $ 10.32 $ 10.08 $ 10.15 $ 10.65 $ 10.16
------------- ------------- ------- ------- -------
Total Return @.............................................. 8.35% .72% .64% 11.17% 10.71%
Net assets, end of period (000s omitted).................... $52,603 $54,560 $54,854 $52,271 $38,586
Ratio of expenses to average daily net assets............... .98% .85%* .85% .89% .90%
Ratio of net investment income to average daily net
assets..................................................... 5.60% 5.69%* 5.51% 5.82% 6.37%
Portfolio turnover rate..................................... 27% 8% 11% 17% 10%
<CAPTION>
Six-Month
Period Ended
June 30,
MINNESOTA PORTFOLIO 1991
<S> <C>
- ------------------------------------------------------------
Net asset value, beginning of period........................ $ 9.68
Operations:
Investment income - net................................... .31
Net realized and unrealized gains (losses) on
investments............................................. .11
------------
Total from operations....................................... .42
------------
Distributions to shareholders:
From investment income - net.............................. (.32)
------------
Net asset value, end of period.............................. $ 9.78
------------
Total Return @.............................................. 4.36%
Net assets, end of period (000s omitted).................... $29,449
Ratio of expenses to average daily net assets............... .97%*
Ratio of net investment income to average daily net
assets..................................................... 6.47%*
Portfolio turnover rate..................................... 8%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS H
MINNESOTA PORTFOLIO 1995+ 1995+ 1995+ 1995+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period........................ $ 9.55 $ 9.55 $ 9.55 $ 9.55
------- ------- ------- -------
Operations:
Investment income - net................................... .48 .41 .42 .41
Net realized and unrealized gains (losses) on
investments............................................. .76 .73 .75 .76
------- ------- ------- -------
Total from operations....................................... 1.24 1.14 1.17 1.17
------- ------- ------- -------
Distribution to shareholders:
From investment income - net.............................. (.49) (.42) (.42) (.42)
------- ------- ------- -------
Net asset value, end of period.............................. $10.30 $10.27 $10.30 $10.30
------- ------- ------- -------
Total Return @.............................................. 13.15% 12.10% 12.31% 12.42%
Net assets end of period (000s omitted)..................... $ 884 $ 180 $ 143 $ 638
Ratio of expenses to average daily net assets............... 1.23%* 1.98%* 1.98%* 1.98%*
Ratio of net investment income to average daily net
assets..................................................... 5.10%* 4.37%* 4.28%* 4.29%*
Portfolio turnover rate..................................... 27%** 27%** 27%** 27%**
</TABLE>
*Annualized.
**For the period ended September 30, 1995. Portfolio turnover computed at the
fund level.
+For the period from November 14, 1994 (commencement of operations) to
September 30, 1995.
@These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions, without
adjustment for sales charge.
20
<PAGE>
FORTIS TAX-FREE PORTFOLIOS, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS E
-----------------------------------------------------------------------
Three-Month Nine-Month
YEAR ENDED Period Ended Year Ended June 30, Period Ended
SEPTEMBER 30, September 30, ------------------------- June 30,
NEW YORK PORTFOLIO 1995 1994 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.............. $ 10.74 $ 10.81 $ 11.51 $ 11.03 $ 10.57 $ 10.27
------------- ------------- ------- ------- ------- ------------
Operations:
Investment income - net......................... .61 .15 .62 .65 .66 .48
Net realized and unrealized gains (losses) on
investments................................... .15 (.06) (.54) .65 .62 .30
------------- ------------- ------- ------- ------- ------------
Total from operations............................. .76 .09 .08 1.30 1.28 .78
------------- ------------- ------- ------- ------- ------------
Distributions to shareholders:
From investment income - net.................... (.61) (.16) (.62) (.65) (.66) (.48)
Excess distribution of net investment income.... -- -- -- (.01) -- --
From realized gains............................. (.02) -- (.16) (.16) (.16) --
------------- ------------- ------- ------- ------- ------------
Total distributions to shareholders............... (.63) (.16) (.78) (.82) (.82) (.48)
------------- ------------- ------- ------- ------- ------------
Net asset value, end of period.................... $ 10.87 $ 10.74 $ 10.81 $ 11.51 $ 11.03 $ 10.57
------------- ------------- ------- ------- ------- ------------
Total Return @.................................... 7.31% .79% .63% 12.19% 12.53% 8.23%
Net assets, end of period (000s omitted).......... $11,882 $12,797 $12,851 $13,915 $14,943 $15,952
Ratio of expenses to average daily net assets
(a).............................................. 1.09% 1.09%* .99% .99% 1.00% 1.23%*
Ratio of net investment income to average daily
net assets (a)................................... 5.69% 5.74%* 5.55% 5.74% 6.15% 6.08%*
Portfolio turnover rate........................... 10% 0% 4% 17% 19% 18%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS H
NEW YORK PORTFOLIO 1995+ 1995+ 1995++ 1995+++
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Net asset value, beginning of period.............. $10.34 $10.34 $10.79 $10.89
------- ------- ------- -------
Operations:
Investment income - net......................... .50 .43 .21 .16
Net realized and unrealized gains (losses) on
investments................................... .57 .54 .06 (.05)
------- ------- ------- -------
Total from operations............................. 1.07 .97 .27 .11
------- ------- ------- -------
Distribution to shareholders:
From investment income - net.................... (.52) (.45) (.21) (.17)
From net realized gains on investments.......... (.02) (.02) -- --
------- ------- ------- -------
Total distributions to shareholders............... (.54) (.47) (.21) (.17)
------- ------- ------- -------
Net asset value, end of period.................... $10.87 $10.84 $10.85 $10.83
------- ------- ------- -------
Total Return @.................................... 10.51% 9.46% 2.54% 1.00%
Net assets end of period (000s omitted)........... $ 49 $ 194 $ 51 $ 72
Ratio of expenses to average daily net assets
(a).............................................. 1.34%* 2.09%* 2.09%* 2.09%*
Ratio of net investment income to average daily
net assets (a)................................... 5.41%* 4.68%* 4.44%* 4.36%*
Portfolio turnover rate........................... 10%** 10%** 10%** 10%**
</TABLE>
(a)Advisers has voluntarily undertaken to limit annual expenses for New York
Portfolio (exclusive of interest, taxes, brokerage commissions, 12b-1 fees
and non-recurring extraordinary charges and expenses) to 1.09% of average
net assets. From June 1, 1993 to June 30, 1994, Advisers agreed to limit
expenses to .99% of average net assets. Prior to June 1, 1993, Advisers
agreed to limit expenses to 1.00% of average net assets. Prior to June 1,
1991 Empire of American Advisory Services, Inc., the previous advisor of the
Portfolio, and Empire National Securities, Incorporated, the previous
distributor of the Portfolio, each agreed to waive a portion of its fees or
reimburse the Fund for certain operating expenses. For each of the periods
presented, had the waivers and reimbursement of expenses not been in effect,
the ratios of expenses and net investment income to average daily net assets
would have been 1.60% and 5.18% for class E, 1.85% and 4.90% for class A,
2.60% and 4.17% for class B, 2.60% and 3.93% for class C, 2.60% and 3.85%
for class H, for the year ending September 30, 1995; 1.09% and 5.45% for the
year ended June 30, 1994; 1.05% and 5.68% for the year ended June 30, 1993;
1.26% and 5.89% for the year ended June 30, 1992; and 1.48% and 5.83% for
the nine-month period ended June 30, 1991.
*Annualized.
**For the period ended September 30, 1995. Portfolio turnover computed at the
fund level.
+For the period from November 14, 1994 (commencement of operations) to
September 30, 1995.
++For the period from April 26, 1995 (date of first investment) to September
30, 1995.
+++For the period from May 31, 1995 (date of first investment) to September 30,
1995.
@These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions, without
adjustment for sales charge.
21
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Fortis Tax-Free Portfolios, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments in securities, of National Portfolio, Minnesota
Portfolio and New York Portfolio (portfolios within Fortis Tax-Free Portfolios,
Inc.) as of September 30, 1995, and the related statements of operations for the
year then ended, the statements of changes in net assets for the year ended
September 30, 1995, and for the three-month period ended September 30, 1994, and
the financial highlights presented in footnote D to the financial statements.
These financial statements and the financial highlights are the responsibility
of fund management. Our responsibility is to express an opinion on these
financial statements and the 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 the 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. Investment securities held in custody are confirmed to us by the
custodian. As to securities purchased and sold but not received or delivered, we
request confirmations from brokers, and where replies are not received, we carry
out other appropriate auditing procedures. 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 the financial highlights referred
to above present fairly, in all material respects, the financial position of
National Portfolio, Minnesota Portfolio and New York Portfolio at September 30,
1995, and the results of their operations for the year then ended, the changes
in their net assets for the year ended September 30, 1995 and for the
three-month period ended September 30, 1994, and the financial highlights
presented in footnote D to the financial statements, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
November 10, 1995
22
<PAGE>
FEDERAL INCOME TAX INFORMATION
Exempt interest dividends are exempt from federal income taxes and should not be
included in shareholder's gross income, but need to be reported on the income
tax return for informational purposes. Each shareholder should consult a tax
adviser about reporting this income for state and local tax purposes. In
January, 1996, the fund will provide the shareholder with information regarding
the percentage of distributions exempt from federal income taxes and a breakdown
setting forth states from which income was earned.
During the year ended September 30, 1995, 100% of the National, Minnesota and
New York Portfolios' distributions were derived from interest on municipal
securities and qualify as exempt interest dividends for federal tax purposes.
Detailed below are the per share distributions made for the year ended September
30, 1995.
NATIONAL PORTFOLIO
Ordinary Income Per Share
<TABLE>
<CAPTION>
RECORD DATE Class E Class A* Class B* Class C* Class H*
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------
October 31, 1994.............. $ 0.048 $ N/A $ N/A $ N/A $N/A
November 30, 1994............. 0.048 0.029 0.025 0.025 0.025
December 30, 1994............. 0.050 0.048 0.042 0.042 0.042
January 31, 1995.............. 0.048 0.046 0.040 0.040 0.040
February 28, 1995............. 0.050 0.048 0.042 0.042 0.042
March 31, 1995................ 0.050 0.048 0.042 0.042 0.042
April 28, 1995................ 0.050 0.048 0.042 0.042 0.042
May 31, 1995.................. 0.050 0.048 0.041 0.041 0.041
June 30, 1995................. 0.050 0.048 0.041 0.041 0.041
July 31, 1995................. 0.050 0.048 0.041 0.041 0.041
August 31, 1995............... 0.048 0.046 0.039 0.039 0.039
September 29, 1995............ 0.048 0.046 0.039 0.039 0.039
------- -------- -------- --------- ----------
Total Distributions........... $ 0.590 $ 0.503 $ 0.434 $ 0.434 $ 0.434
------- -------- -------- --------- ----------
Short-Term Capital Gain Per
Share
DECEMBER 30, 1994............. $0.0052 $0.0052 $0.0052 $0.0052 $0.0052
------- -------- -------- --------- ----------
MINNESOTA PORTFOLIO
Ordinary Income Per Share
<CAPTION>
RECORD DATE Class E Class A* Class B* Class C* Class H*
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------
October 31, 1994.............. $ 0.048 $ N/A $ N/A $ N/A $N/A
November 30, 1994............. 0.048 0.029 0.025 0.025 0.025
December 30, 1994............. 0.048 0.046 0.040 0.040 0.040
January 31, 1995.............. 0.048 0.046 0.040 0.040 0.040
February 28, 1995............. 0.048 0.046 0.040 0.040 0.040
March 31, 1995................ 0.048 0.046 0.040 0.040 0.040
April 28, 1995................ 0.048 0.046 0.040 0.040 0.040
May 31, 1995.................. 0.048 0.046 0.040 0.040 0.040
June 30, 1995................. 0.048 0.046 0.040 0.040 0.040
July 31, 1995................. 0.048 0.046 0.040 0.040 0.040
August 31, 1995............... 0.047 0.045 0.038 0.038 0.038
September 29, 1995............ 0.047 0.045 0.038 0.038 0.038
------- -------- -------- --------- ----------
Total Distributions........... $ 0.574 $ 0.487 $ 0.421 $ 0.421 $ 0.421
------- -------- -------- --------- ----------
NEW YORK PORTFOLIO
Ordinary Income Per Share
<CAPTION>
RECORD DATE Class E Class A* Class B* Class C** Class H***
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------
October 31, 1994.............. $ 0.051 $ N/A $ N/A $ N/A $N/A
November 30, 1994............. 0.051 0.031 0.027 N/A N/A
December 30, 1994............. 0.051 0.049 0.042 N/A N/A
January 31, 1995.............. 0.051 0.049 0.042 N/A N/A
February 28, 1995............. 0.051 0.049 0.042 N/A N/A
March 31, 1995................ 0.051 0.049 0.042 N/A N/A
April 28, 1995................ 0.051 0.049 0.042 0.004 N/A
May 31, 1995.................. 0.051 0.049 0.042 0.042 0.001
June 30, 1995................. 0.051 0.049 0.042 0.042 0.042
July 31, 1995................. 0.051 0.049 0.042 0.042 0.042
August 31, 1995............... 0.050 0.048 0.041 0.041 0.041
September 29, 1995............ 0.050 0.048 0.041 0.041 0.041
------- -------- -------- --------- ----------
Total Distributions........... $ 0.610 $ 0.519 $ 0.445 $ 0.212 $ 0.167
------- -------- -------- --------- ----------
Long-Term Capital Gain Per
Share
DECEMBER 30, 1994............. $0.0188 $$0.0188 $0.0188 $ N/A $N/A
------- -------- -------- --------- ----------
<FN>
*Period from November 14, 1994 (initial offering shares) to September 30,
1995.
**Period from April 26, 1995 (date of first investment) to September 30, 1995.
***Period from May 31, 1995 (date of first investment) to September 30, 1995.
</TABLE>
23
<PAGE>
DIRECTORS
OFFICERS
RICHARD W. CUTTING
CPA and Financial
Consultant
ALLEN R. FREEDMAN
Chairman and Chief
Executive Officer
Fortis, Inc.;
Managing Director of
Fortis International, N.V.
DR. ROBERT M. GAVIN
President
Macalester College
BENJAMIN S. JAFFRAY
Chairman
Sheffield Group, Ltd.
JEAN L. KING
President
Communi-King
DEAN C. KOPPERUD
Chief Executive Officer
and Director
Fortis Advisers, Inc.
President and Director
Fortis Investors, Inc.
Senior Vice President
of Fortis Benefits
Insurance Company and
Time Insurance
Company
EDWARD M. MAHONEY
Prior to January, 1995, Chairman and Chief Executive Officer
Fortis Advisers, Inc.
Fortis Investors, Inc.
THOMAS R. PELLETT
Prior to January, 1991: Senior Vice
President-Administration
and Corporate Affairs
and Director
Pet, Inc.
ROBB L. PRINCE
Prior to July, 1995,
Vice President and
Treasurer
Jostens, Inc.
LEONARD J. SANTOW
Principal
Griggs & Santow, Inc.
JOSEPH M. WIKLER
Investment Consultant and Private Investor
Prior to January, 1994, Director of Research, Chief Investment Officer,
Principal, and Director
The Rothschild Co.
DEAN C. KOPPERUD
President and Director
ROBERT W. BELTZ, JR.
Vice President
JAMES S. BYRD
Vice President
CHARLES J. DUDLEY
Vice President
THOMAS D. GUALDONI
Vice President
MAROUN M. HAYEK
Vice President
HOWARD G. HUDSON
Vice President
ROBERT C. LINDBERG
Vice President
LARRY A. MEDIN
Vice President
KEVIN J. MICHELS
Vice President
JON H. NICHOLSON
Vice President
JOHN W. NORTON
Vice President
FRED OBSER
Vice President
DENNIS M. OTT
Vice President
DAVID A. PETERSON
Vice President
NICHOLAS L. M. DE PEYSTER
Vice President
STEPHEN M. POLING
Vice President
STEPHEN M. RICKET
Vice President
RICHARD P. ROCHE
Vice President
ANTHONY J. ROTONDI
Vice President
KEITH R. THOMSON
Vice President
CHRISTOPHER J. WOODS
Vice President
GARY N. YALEN
Vice President
MICHAEL J. RADMER
Secretary
TAMARA L. FAGELY
Treasurer
INVESTMENT MANAGER, REGISTRAR AND
TRANSFER AGENT
Fortis Advisers, Inc.
Box 64284
St. Paul, Minnesota 55164
PRINCIPAL UNDERWRITER
Fortis Investors, Inc.
Box 64284
St. Paul, Minnesota 55164
CUSTODIAN
First Bank
National Association
Minneapolis, Minnesota
GENERAL COUNSEL
Dorsey & Whitney P.L.L.P.
Minneapolis, Minnesota
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Minneapolis, Minnesota
THE USE OF THIS MATERIAL IS AUTHORIZED ONLY WHEN PRECEDED OR ACCOMPANIED BY A
PROSPECTUS.
24
<PAGE>
FORTIS FINANCIAL GROUP'S OTHER PRODUCTS AND SERVICES
MUTUAL FUNDS/PORTFOLIOS
Fortis Stock Funds
FORTIS ASSET ALLOCATION PORTFOLIO
FORTIS CAPITAL FUND
FORTIS FIDUCIARY FUND
FORTIS GROWTH FUND
FORTIS CAPITAL APPRECIATION PORTFOLIO
FORTIS GLOBAL GROWTH PORTFOLIO
Fortis Bond Funds
FORTIS MONEY FUND
FORTIS U.S. GOVERNMENT SECURITIES FUND
FORTIS GOVERNMENT TOTAL RETURN PORTFOLIO
FORTIS TAX-FREE MINNESOTA PORTFOLIO
FORTIS TAX-FREE NATIONAL PORTFOLIO
FORTIS TAX-FREE NEW YORK PORTFOLIO
FORTIS HIGH YIELD PORTFOLIO
FIXED AND VARIABLE ANNUITIES
Fortis Opportunity Fixed
& Variable Annuity
Masters Variable Annuity
FIXED ACCOUNT
MONEY MARKET
U.S. GOVERNMENT SECURITIES
DIVERSIFIED INCOME
GLOBAL BOND
HIGH YIELD
ASSET ALLOCATION
GLOBAL ASSET ALLOCATION
GROWTH & INCOME
GLOBAL GROWTH
GROWTH STOCK
INTERNATIONAL STOCK
AGGRESSIVE GROWTH
Fortune Fixed Annuities
SINGLE PREMIUM ANNUITY
FLEXIBLE PREMIUM ANNUITY
Income Annuities
GUARANTEED FOR LIFE
GUARANTEED FOR A SPECIFIED PERIOD
LIFE AND DISABILITY
WALL STREET SERIES VUL 100, 220 & 500
FIXED ACCOUNT
MONEY MARKET
U.S. GOVERNMENT SECURITIES
DIVERSIFIED INCOME
GLOBAL BOND
HIGH YIELD
ASSET ALLOCATION
GLOBAL ASSET ALLOCATION
GROWTH & INCOME
GROWTH STOCK
GLOBAL GROWTH
INTERNATIONAL STOCK
AGGRESSIVE GROWTH
Adaptable Life
Universal Life
Disability
[LOGO]
THE FORTIS FINANCIAL GROUP manages and distributes mutual funds, annuities and
life insurance products. The mutual funds, variable life and variable annuity
products are distributed through FORTIS INVESTORS, INC. and managed by FORTIS
ADVISERS, INC. The insurance products are issued by FORTIS BENEFITS INSURANCE
COMPANY and TIME INSURANCE COMPANY.
FOR MORE COMPLETE INFORMATION, INCLUDING CHARGES AND EXPENSES, SEND FOR A
PROSPECTUS. WRITE TO: FORTIS INVESTORS, INC., P.O. BOX 64284, ST. PAUL, MN
55164. READ IT CAREFULLY BEFORE INVESTING OR SENDING MONEY.
25
