SELIGMAN
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[PHOTO]
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MUNICIPAL FUND
SERIES, INC.
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PROVIDING INCOME FREE FROM REGULAR INCOME TAX
SEPTEMBER 30, 1997 -- ANNUAL REPORT
<PAGE>
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OVER THE LONG TERM -- J. & W. SELIGMAN & CO. INCORPORATED
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TIME IS THE TEST
In an industry that has changed dramatically in recent years, it's
comforting to know that stability, tradition, and consistent professional
service can still be found in an investment management firm.
J. & W. Seligman & Co. Incorporated has been providing financial services
for more than 130 years. From its beginning, Seligman has followed a long-term
approach to making money for its clients, by managing investment products and
providing services of the highest quality. Today, Seligman manages the Seligman
Group of Funds, which offers investors more than 50 investment options.
A PLACE IN HISTORY
Established in 1864, Seligman played a major role in the geographical
expansion and industrial development of the United States. The firm helped
finance the westward path of the railroads and the building of the Panama Canal.
In the late 1800s and early 1900s, the firm was instrumental in financing the
fledgling automobile and steel industries. Seligman also participated in the
original underwritings for some of the nation's most prominent companies,
including General Motors, Victor Talking Machine, United Artists Theater
Circuit, and Maytag. In 1929, Seligman introduced Tri-Continental Corporation --
which today is the nation's largest diversified closed-end investment company.
In 1930, Seligman began managing its first mutual fund, Broad Street Investing
Co., now known as Seligman Common Stock Fund.
[PHOTO]
James, Jesse and Joseph Seligman
SELIGMAN MUNICIPAL FUND SERIES
Seligman Municipal Fund Series, which commenced operations on December 30,
1983, is a series of a national and state-specific municipal bond funds that
seeks to maximize income exempt from regular federal income taxes and from
personal income taxes in the applicable state. This is done consistent with the
preservation of capital and with consideration given to opportunities for
capital gain by investing in investment grade municipal securities of the
designated state, its political subdivisions, municipalities, and public
authorities.
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TABLE OF CONTENTS
To the Shareholders ....................................................... 1
Interview With Your Portfolio Manager ..................................... 2
Performance Overview and Portfolio Summary ................................ 4
Portfolios of Investments ................................................. 18
Statements of Assets and Liabilities ...................................... 38
Statements of Operations .................................................. 40
Statements of Changes in Net Assets ....................................... 42
Notes to Financial Statements ............................................. 46
Financial Highlights ...................................................... 51
Report of Independent Auditors ............................................ 58
Board of Directors ........................................................ 59
Executive Officers and For More Information ............................... 60
Glossary of Financial Terms ............................................... 61
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TO THE SHAREHOLDERS
Seligman Municipal Fund Series posted strong results in its fiscal year
ended September 30, 1997. The steady growth of the economy, combined with benign
levels of inflation, reduced yields in the municipal bond market beginning in
May. Bond prices rose, improving the Series' total returns as they continued to
provide monthly income free from regular income tax. Additional information on
the Series' investment results begins on page 4.
Long-term municipal bond yields fluctuated within a narrow range during the
Series' first quarter and into the early part of 1997. By March, yields began to
rise in response to reports of strong economic growth and in anticipation of a
Federal Reserve Board interest rate increase. After raising the federal funds
rate to 5.50% from 5.25% on March 25, the Fed left rates unchanged. As economic
growth continued without prompting a noticeable increase in inflation, the
municipal bond market rallied from May to July, and then traded within a narrow
range from August to September.
The yield on the Bond Buyer 20-Bond General Obligation Index, a benchmark
for the municipal market, ended the Series' fiscal year at 5.36% on September
30, 1997, significantly lower than its 12-month high of 5.88% on April 10, and
only slightly higher than the July 31 low of 5.23%. The yield for the Bond Buyer
20-Bond General Obligation Index stood at 5.76% on September 30, 1996.
While economic indicators have been mixed recently, the overall tone of the
environment is good. Unemployment levels have remained historically low,
consumer and producer prices have been fairly stable, consumer spending has been
increasing at a reasonable rate, and orders for durable goods -- goods that have
a life span of three or more years -- have been rising. This economic expansion
has improved the financial well-being of municipalities and increased investor
confidence in the municipal bond market.
The next few months could be more challenging, given the recent volatility
in the global equity markets and the business slowdown in Southeast Asia.
Nevertheless, US economic reports remain positive overall. There are still a few
areas where potential inflationary problems persist, particularly in the labor
market. A significant increase in labor costs could prompt the Fed to become
more restrictive and move interest rates up another notch, though this is a
fading risk given recent international events. Nonetheless, the future prospects
of both the municipal bond market and your Series remain positive. Supply and
demand levels in the municipal market should remain favorable regardless of the
short-term impact of any Fed move.
We thank you for your continued interest in Seligman Municipal Fund Series,
and look forward to serving your investment needs in the many years to come.
A discussion with your Portfolio Manager, performance overviews, portfolio
holdings, and financial statements follow this letter.
By order of the Board of Directors,
/s/William C. Morris
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William C. Morris
Chairman
/s/Brian T. Zino
----------------
Brian T. Zino
President
October 31, 1997
1
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INTERVIEW WITH YOUR PORTFOLIO MANAGER, THOMAS G. MOLES
Q. WHAT ECONOMIC FACTORS AFFECTED SELIGMAN MUNICIPAL FUND SERIES IN THE LAST
12 MONTHS?
A. A healthy economy and a stable rate of inflation would seem the best of all
possible worlds. However, for much of the past year, the fixed-income
markets were most heavily influenced by economic growth and whether or not
inflation was an important risk factor. The longer the economic expansion
endured, the more anxious some market participants became that rising
inflation was just around the corner. The strong employment picture was of
particular concern. While low unemployment resulted in scattered labor
shortages, it did not translate into meaningfully higher wages. To date,
wage pressures continue to be restrained, mainly due to productivity
improvements and global competition. The market's reluctance to accept the
premise that economic vigor and low inflation are not mutually exclusive
has prevented long-term interest rates from falling to levels that would
better reflect this remarkable economic environment.
Q. WHAT MARKET FACTORS AFFECTED SELIGMAN MUNICIPAL FUND SERIES IN THE LAST
12 MONTHS?
A. Seligman Municipal Fund Series ended its fiscal year on a positive note.
During the past 12 months, long-term municipal yields, as measured by the
Bond Buyer 20-Bond General Obligation Index, fluctuated within a narrow
trading range. At September 30, 1997, yields were almost a half-point lower
than at the beginning of the Series' fiscal year. The declining interest
rate environment led to rising prices for the majority of the holdings and
favorable performance results for each Series.
Investor demand for municipal securities generally kept pace with supply,
contributing to the relative stability of the municipal bond market. While
new issue volume has increased modestly over the past several years, it has
had a negligible impact on the total outstanding supply of municipal bonds
due to a record number of bond calls and redemptions.
Additionally, the extraordinary economic expansion, now in its seventh
year, continued to improve credit trends for the nation's states, cities,
and municipalities. Year-to-date, credit rating upgrades significantly
outnumbered rating downgrades. Within the Seligman Municipal Fund Series,
the overall credit quality of the portfolios improved as several of our
holdings received upgraded ratings.
Q. WHAT WAS YOUR INVESTMENT STRATEGY?
A. Consistent with our positive long-term interest rate outlook, new purchases
were concentrated in longer maturity bonds. Generally, when there is a
decline in yields, long-term bonds appreciate more in price than
shorter-term bonds. Long-term bonds also offer significantly higher yields
than shorter-term bonds, allowing us to improve the Series' yields.
Further, given the market's short-term volatility, we sought to lessen the
impact of temporary interest rate increases on the Series' net asset values
without sacrificing future upside potential. To do this, we elected to
purchase mostly current coupon bonds
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[PHOTO]
SELIGMAN MUNICIPALS TEAM: (FROM LEFT) AUDREY KUCHTYAK, THERESA BARION, DEBRA
MCGUINNESS, (SEATED) EILEEN COMERFORD, THOMAS G. MOLES (PORTFOLIO MANAGER)
A TEAM APPROACH
Seligman Municipal Fund Series is managed by the Seligman Municipals Team,
headed by Thomas G. Moles. Mr. Moles is assisted in the management of the Fund
by a group of seasoned professionals who are responsible for research and
trading consistent with the Fund's investment objective.
YOUR PORTFOLIO MANAGER
Thomas G. Moles is a Managing Director of J. & W. Seligman & Co. Incorporated,
Vice President and Portfolio Manager of Seligman Municipal Fund Series and the
other Seligman municipal mutual funds that include 19 separate portfolios, and
President and Portfolio Manager of Seligman Select Municipal Fund and Seligman
Quality Municipal Fund. He is responsible for more than $1.8 billion in
municipal securities. Mr. Moles, with more than 25 years of experience, has
spearheaded Seligman's municipal investment efforts since joining the firm in
1983.
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2
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INTERVIEW WITH YOUR PORTFOLIO MANAGER, THOMAS G. MOLES
(bonds with coupon rates at or near current market rates). Current coupon
bonds are intrinsically less sensitive to changes in interest rates than
lower coupon bonds of the same maturity.
As each Series matures, older, callable portfolio holdings are
approaching their optional call dates, resulting in increased reinvestment
risk. (Callable bonds are bonds that are redeemable on specified dates and
at specified prices -- prior to maturity -- at the option of the issuer.)
In general, an open-end fund's income distributions will, over time, move
toward current market levels as a result of portfolio activity, shareholder
transactions, and bond calls and redemptions. In the past year, we focused
on improving the Series' call protection by selling shorter-call bonds and
replacing them with longer-call bonds, while attempting to minimize the
impact on income distributions.
Q. WHAT IS THE OUTLOOK?
A. While fixed-income market participants remain cautious, economic
fundamentals point to a continuation of steady, moderate growth with low
inflation. We, therefore, remain optimistic regarding the long-term
prospects of the Series. Stable long-term interest rates, improving credit
trends, and attractive real rates of return bode well for the performance
of the municipal bond market going forward. We believe municipal bond funds
will continue to play an important role in helping investors meet their
investment goals. At Seligman, we have a straightforward approach to
managing municipal bond funds. We invest for the long term, building
diversified portfolios of quality bonds, and always work to provide our
shareholders with competitive investment returns.
3
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PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
The following charts compare a $10,000 hypothetical investment made in each
Series of Seligman Municipal Fund Series Class A shares, with and without the
initial 4.75% maximum sales charge, for the 10-year period ended September 30,
1997, to a $10,000 hypothetical investment made in the Lehman Brothers Municipal
Bond Index (Lehman Index) for the same period. The performance of each Series of
Seligman Municipal Series Class D shares is not shown in the charts but is
included in the table below each chart. It is important to keep in mind that the
Lehman Index does not include any fees or sales charges, and does not reflect
state-specific bond market performance. The table below each chart also includes
relevant portfolio characteristics for each Series.
SELIGMAN NATIONAL MUNICIPAL SERIES
[The following table represents a chart in the printed report]
NATIONAL SERIES CLASS A
With Without
DATE Sales Charge Sales Charge Lehman Index
9/30/87 9,524.00 10,000.00 10,000.00
10,008.10 10,507.83 10,447.00
10,285.49 10,799.06 10,806.00
10,664.83 11,197.34 11,015.00
9/30/88 11,089.49 11,643.21 11,297.00
11,401.33 11,970.61 11,506.00
11,507.16 12,081.74 11,582.00
12,195.65 12,804.61 12,268.00
9/30/89 12,044.89 12,646.32 12,276.00
12,520.97 13,146.16 12,747.00
12,437.75 13,058.78 12,805.00
12,763.55 13,400.85 13,104.00
9/30/90 12,538.88 13,164.96 13,112.00
13,249.51 13,911.08 13,677.00
13,478.50 14,151.50 13,987.00
13,764.18 14,451.45 14,285.00
9/30/91 14,324.12 15,039.35 14,840.00
14,769.65 15,507.11 15,339.00
14,733.84 15,469.51 15,385.00
15,321.40 16,086.40 15,969.00
9/30/92 15,590.42 16,368.87 16,393.00
15,933.95 16,729.55 16,691.00
16,740.94 17,576.83 17,310.00
17,396.87 18,265.51 17,876.00
9/30/93 18,085.52 18,988.53 18,480.00
18,180.05 19,087.79 18,739.00
16,688.98 17,522.27 17,710.00
16,790.00 17,628.33 17,907.00
9/30/94 16,670.32 17,502.67 18,029.00
16,371.50 17,188.94 17,769.00
17,721.92 18,606.79 19,025.00
18,175.28 19,082.78 19,484.00
9/30/95 18,583.83 19,511.73 20,045.00
19,662.64 20,644.40 20,871.00
19,236.14 20,196.61 20,618.00
19,366.26 20,333.23 20,777.00
9/30/96 19,878.93 20,871.50 21,255.00
20,317.67 21,332.15 21,797.00
20,203.20 21,211.96 21,747.00
20,972.25 22,019.41 22,497.00
9/30/97 21,747.93 22,833.81 23,177.00
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 2.54% 4.26% 5.85% 8.08% n/a
Without Sales Charge 7.65 9.40 6.88 8.61 n/a
CLASS D*
With 1% CDSL 6.31 7.56 n/a n/a n/a
Without CDSL 7.31 8.56 n/a n/a 3.71%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.01 $7.63 $7.70 CLASS A $0.393 -- 4.31%
CLASS D 8.02 7.63 7.70 CLASS D 0.324 -- 3.63
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C> <C> <C>
Revenue Bonds 75% Aaa/AAA 35% Baa/BBB 3%
General Obligation Bonds 25 Aa/AA 39 Non-Rated 3
A/A 20
WEIGHTED AVERAGE MATURITY 24.2 years
</TABLE>
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See footnotes on page 16.
4
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PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN COLORADO MUNICIPAL SERIES
[The following table represents a chart in the printed report]
COLORADO SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,522 10,000 10,000
10,114 10,621 10,447
10,485 11,011 10,806
10,733 11,272 11,015
9/30/88 11,064 11,619 11,297
11,395 11,967 11,506
11,515 12,093 11,582
12,162 12,772 12,268
9/30/89 12,136 12,745 12,276
12,539 13,168 12,747
12,463 13,089 12,805
12,755 13,395 13,104
9/30/90 12,668 13,303 13,112
13,172 13,833 13,677
13,392 14,063 13,987
13,635 14,319 14,285
9/30/91 14,080 14,786 14,840
14,410 15,132 15,339
14,378 15,099 15,385
14,854 15,599 15,969
9/30/92 15,170 15,931 16,393
15,515 16,293 16,691
16,030 16,834 17,310
16,544 17,374 17,876
9/30/93 17,072 17,928 18,480
17,239 18,104 18,739
16,399 17,221 17,710
16,545 17,375 17,907
9/30/94 16,574 17,405 18,029
16,355 17,175 17,769
17,393 18,265 19,025
17,692 18,579 19,484
9/30/95 17,992 18,894 20,045
18,639 19,574 20,871
18,418 19,342 20,618
18,607 19,540 20,777
9/30/96 18,847 19,793 21,255
19,270 20,237 21,797
19,245 20,210 21,747
19,757 20,748 22,497
9/30/97 20,223 21,237 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 0.10% 2.24% 4.88% 7.30% n/a
Without Sales Charge 5.08 7.30 5.92 7.82 n/a
CLASS D*
With 1% CDSL 3.76 5.34 n/a n/a n/a
Without CDSL 4.76 6.34 n/a n/a 3.09%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.42 $7.24 $7.27 CLASS A $0.368 -- 3.90%
CLASS D 7.42 7.23 7.27 CLASS D 0.301 -- 3.20
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C>
Revenue Bonds 77% Aaa/AAA 53%
General Obligation Bonds 23 Aa/AA 32
A/A 11
WEIGHTED AVERAGE MATURITY 18.9 years Baa/BBB 4
</TABLE>
- ------------------
See footnotes on page 16.
5
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PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN GEORGIA MUNICIPAL SERIES
[The following table represents a chart in the printed report]
GEORGIA SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,530 10,000 10,000
10,195 10,698 10,447
10,561 11,082 10,806
10,846 11,381 11,015
9/30/88 11,198 11,751 11,297
11,585 12,156 11,506
11,693 12,270 11,582
12,386 12,996 12,268
9/30/89 12,335 12,943 12,276
12,729 13,356 12,747
12,729 13,356 12,805
13,011 13,653 13,104
9/30/90 12,974 13,614 13,112
13,621 14,293 13,677
13,870 14,554 13,987
14,149 14,847 14,285
9/30/91 14,700 15,425 14,840
15,116 15,861 15,339
15,106 15,851 15,385
15,721 16,496 15,969
9/30/92 16,118 16,912 16,393
16,476 17,289 16,691
16,954 17,790 17,310
17,528 18,392 17,876
9/30/93 18,367 19,273 18,480
18,487 19,399 18,739
17,226 18,075 17,710
17,332 18,186 17,907
9/30/94 17,354 18,209 18,029
17,075 17,917 17,769
18,391 19,298 19,025
18,944 19,878 19,484
9/30/95 19,377 20,332 20,045
20,347 21,350 20,871
19,928 20,910 20,618
20,105 21,097 20,777
9/30/96 20,649 21,667 21,255
21,133 22,175 21,797
20,956 21,989 21,747
21,763 22,836 22,497
9/30/97 22,434 23,541 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
WITH SALES CHARGE 1.94% 3.52% 5.81% 8.42% n/a
Without Sales Charge 7.06 8.65 6.84 8.94 n/a
CLASS D*
With 1% CDSL 5.43 6.67 n/a n/a n/a
Without CDSL 6.43 7.67 n/a n/a 4.19%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.12 $7.77 $7.87 CLASS A $0.383 $0.028 4.13%
CLASS D 8.13 7.79 7.88 CLASS D 0.312 0.028 3.44
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C>
Revenue Bonds 66% Aaa/AAA 42%
General Obligation Bonds 34 Aa/AA 35
A/A 18
WEIGHTED AVERAGE MATURITY 20.2 years Baa/BBB 5
</TABLE>
- ------------------
See footnotes on page 16.
6
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PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN LOUISIANA MUNICIPAL SERIES
[The following table represents a chart in the printed report]
LOUISIANA SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,521 10,000 10,000
10,033 10,537 10,447
10,355 10,876 10,806
10,573 11,104 11,015
9/30/88 10,920 11,469 11,297
11,160 11,721 11,506
11,293 11,861 11,582
11,903 12,502 12,268
9/30/89 11,907 12,505 12,276
12,291 12,909 12,747
12,293 12,911 12,805
12,595 13,228 13,104
9/30/90 12,526 13,156 13,112
13,135 13,795 13,677
13,411 14,085 13,987
13,690 14,378 14,285
9/30/91 14,216 14,931 14,840
14,630 15,366 15,339
14,613 15,348 15,385
15,214 15,979 15,969
9/30/92 15,514 16,294 16,393
15,776 16,569 16,691
16,377 17,200 17,310
16,872 17,720 17,876
9/30/93 17,391 18,265 18,480
17,582 18,466 18,739
16,636 17,472 17,710
16,707 17,547 17,907
9/30/94 16,724 17,565 18,029
16,548 17,379 17,769
17,635 18,522 19,025
17,982 18,886 19,484
9/30/95 18,446 19,373 20,045
19,377 20,351 20,871
19,062 20,021 20,618
19,124 20,085 20,777
9/30/96 19,612 20,598 21,255
20,053 21,061 21,797
20,031 21,039 21,747
20,697 21,737 22,497
9/30/97 21,214 22,280 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 0.87% 3.00% 5.42% 7.81% n/a
Without Sales Charge 5.90 8.17 6.46 8.34 n/a
CLASS D*
With 1% CDSL 4.30 6.07 n/a n/a n/a
Without CDSL 5.30 7.07 n/a n/a 3.94%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.28 $8.02 $8.16 CLASS A $0.414 $0.108 4.28%
CLASS D 8.27 8.02 8.16 CLASS D 0.341 0.108 3.60
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C>
Revenue Bonds 77% Aaa/AAA 79%
General Obligation Bonds 23 Aa/AA 13
A/A 6
WEIGHTED AVERAGE MATURITY 18.9 years Baa/BBB 2
</TABLE>
- ------------------
See footnotes on page 16.
7
<PAGE>
================================================================================
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MARYLAND MUNICIPAL SERIES
[The following table represents a chart in the printed report]
MARYLAND SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,528 10,000 10,000
10,157 10,659 10,447
10,448 10,965 10,806
10,684 11,213 11,015
9/30/88 11,027 11,573 11,297
11,296 11,855 11,506
11,430 11,995 11,582
12,098 12,697 12,268
9/30/89 12,067 12,665 12,276
12,481 13,099 12,747
12,450 13,066 12,805
12,711 13,340 13,104
9/30/90 12,607 13,231 13,112
13,249 13,905 13,677
13,467 14,134 13,987
13,712 14,390 14,285
9/30/91 14,278 14,985 14,840
14,636 15,360 15,339
14,684 15,411 15,385
15,215 15,968 15,969
9/30/92 15,585 16,356 16,393
15,842 16,626 16,691
16,429 17,242 17,310
16,995 17,836 17,876
9/30/93 17,646 18,520 18,480
17,732 18,610 18,739
16,794 17,625 17,710
16,897 17,734 17,907
9/30/94 16,926 17,764 18,029
16,761 17,591 17,769
17,927 18,814 19,025
18,325 19,232 19,484
9/30/95 18,771 19,700 20,045
19,584 20,553 20,871
19,246 20,198 20,618
19,471 20,435 20,777
9/30/96 19,897 20,881 21,255
20,301 21,306 21,797
20,168 21,166 21,747
20,816 21,846 22,497
9/30/97 21,416 22,476 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 1.17% 2.51% 5.52% 7.91% n/a
Without Sales Charge 6.19 7.64 6.56 8.44 n/a
CLASS D*
With 1% CDSL 4.71 5.80 n/a n/a n/a
Without CDSL 5.71 6.80 n/a n/a 3.97%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.14 $7.86 $7.99 CLASS A $0.399 $0.042 4.23%
CLASS D 8.15 7.87 7.99 CLASS D 0.327 0.042 3.55
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C>
Revenue Bonds 81% Aaa/AAA 31%
General Obligation Bonds 19 Aa/AA 44
A/A 23
WEIGHTED AVERAGE MATURITY 22.1 years Baa/BBB 2
</TABLE>
- ------------------
See footnotes on page 16.
8
<PAGE>
================================================================================
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MASSACHUSETTS MUNICIPAL SERIES
[The following table represents a chart in the printed report]
MASSACHUSETTS SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,524 10,000 10,000
10,069 10,573 10,447
10,464 10,987 10,806
10,707 11,243 11,015
9/30/88 10,967 11,515 11,297
11,187 11,747 11,506
11,244 11,806 11,582
11,909 12,505 12,268
9/30/89 11,864 12,457 12,276
12,157 12,765 12,747
12,154 12,761 12,805
12,406 13,027 13,104
9/30/90 12,158 12,766 13,112
12,816 13,456 13,677
13,198 13,858 13,987
13,506 14,181 14,285
9/30/91 14,084 14,788 14,840
14,478 15,202 15,339
14,559 15,287 15,385
15,110 15,865 15,969
9/30/92 15,458 16,230 16,393
15,792 16,582 16,691
16,361 17,179 17,310
16,952 17,799 17,876
9/30/93 17,494 18,369 18,480
17,612 18,493 18,739
16,786 17,625 17,710
16,924 17,770 17,907
9/30/94 16,980 17,829 18,029
16,832 17,673 17,769
17,869 18,763 19,025
18,203 19,113 19,484
9/30/95 18,607 19,537 20,045
19,390 20,359 20,871
19,054 20,007 20,618
19,258 20,221 20,777
9/30/96 19,717 20,703 21,255
20,192 21,202 21,797
20,033 21,034 21,747
20,713 21,748 22,497
9/30/97 21,316 22,382 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 1.40% 2.99% 5.61% 7.86% n/a
Without Sales Charge 6.41 8.11 6.64 8.39 n/a
CLASS D*
With 1% CDSL 4.94 6.29 n/a n/a n/a
Without CDSL 5.94 7.29 n/a n/a 4.02%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.99 $7.70 $7.85 CLASS A $0.398 $0.077 4.33%
CLASS D 7.99 7.70 7.84 CLASS D 0.327 0.077 3.65
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C> <C> <C>
Revenue Bonds 84% Aaa/AAA 52% Baa/BBB 4%
General Obligation Bonds 16 Aa/AA 27 Non-Rated 3
A/A 14
WEIGHTED AVERAGE MATURITY 21.4 years
</TABLE>
- ------------------
See footnotes on page 16.
9
<PAGE>
================================================================================
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MICHIGAN MUNICIPAL SERIES
[The following table represents a chart in the printed report]
MICHIGAN SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,529 10,000 10,000
10,078 10,577 10,447
10,440 10,957 10,806
10,725 11,255 11,015
9/30/88 11,051 11,598 11,297
11,331 11,892 11,506
11,448 12,015 11,582
12,168 12,770 12,268
9/30/89 12,146 12,747 12,276
12,545 13,165 12,747
12,536 13,156 12,805
12,833 13,468 13,104
9/30/90 12,701 13,329 13,112
13,279 13,935 13,677
13,554 14,224 13,987
13,852 14,537 14,285
9/30/91 14,395 15,107 14,840
14,873 15,609 15,339
14,901 15,638 15,385
15,504 16,271 15,969
9/30/92 15,913 16,700 16,393
16,258 17,062 16,691
16,810 17,641 17,310
17,426 18,288 17,876
9/30/93 17,977 18,867 18,480
18,125 19,021 18,739
17,286 18,141 17,710
17,385 18,245 17,907
9/30/94 17,456 18,320 18,029
17,248 18,101 17,769
18,382 19,292 19,025
18,699 19,624 19,484
9/30/95 19,124 20,070 20,045
19,970 20,958 20,871
19,647 20,619 20,618
19,795 20,774 20,777
9/30/96 20,302 21,307 21,255
20,716 21,741 21,797
20,636 21,657 21,747
21,358 22,415 22,497
9/30/97 21,958 23,044 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 1.39% 3.04% 5.62% 8.18% n/a
Without Sales Charge 6.41 8.16 6.65 8.71 n/a
CLASS D*
With 1% CDSL 4.81 6.19 n/a n/a n/a
Without CDSL 5.81 7.19 n/a n/a 3.98%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.60 $8.29 $8.46 CLASS A $0.434 $0.091 4.34%
CLASS D 8.59 8.29 8.45 CLASS D 0.358 0.091 3.67
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C> <C> <C>
Revenue Bonds 80% Aaa/AAA 52% Baa/BBB --
General Obligation Bonds 20 Aa/AA 24 Non-Rated 2%
A/A 22
WEIGHTED AVERAGE MATURITY 21.2 years
</TABLE>
- ------------------
See footnotes on page 16.
10
<PAGE>
================================================================================
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MINNESOTA MUNICIPAL SERIES
[The following table represents a chart in the printed report]
MINNESOTA SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,519 10,000 10,000
9,973 10,478 10,447
10,352 10,875 10,806
10,593 11,129 11,015
9/30/88 10,924 11,476 11,297
11,193 11,759 11,506
11,244 11,812 11,582
11,920 12,523 12,268
9/30/89 11,834 12,433 12,276
12,300 12,922 12,747
12,304 12,926 12,805
12,584 13,220 13,104
9/30/90 12,519 13,152 13,112
13,103 13,765 13,677
13,273 13,944 13,987
13,518 14,202 14,285
9/30/91 13,908 14,612 14,840
14,089 14,801 15,339
14,238 14,958 15,385
14,672 15,414 15,969
9/30/92 14,981 15,738 16,393
15,170 15,937 16,691
15,794 16,592 17,310
16,390 17,219 17,876
9/30/93 16,937 17,794 18,480
17,216 18,087 18,739
16,660 17,502 17,710
16,778 17,627 17,907
9/30/94 16,957 17,815 18,029
16,779 17,628 17,769
17,618 18,509 19,025
17,945 18,852 19,484
9/30/95 18,247 19,170 20,045
18,693 19,638 20,871
18,470 19,404 20,618
18,623 19,564 20,777
9/30/96 18,975 19,935 21,255
19,327 20,304 21,797
19,321 20,298 21,747
19,783 20,784 22,497
9/30/97 20,274 21,299 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 0.05% 1.81% 5.22% 7.32% n/a
Without Sales Charge 4.93 6.85 6.24 7.85 n/a
CLASS D*
With 1% CDSL 3.46 4.89 n/a n/a n/a
Without CDSL 4.46 5.89 n/a n/a 3.29%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.79 $7.62 $7.68 CLASS A $0.401 -- 4.11%
CLASS D 7.79 7.62 7.68 CLASS D 0.332 -- 3.42
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C>
Revenue Bonds 46% Aaa/AAA 42%
General Obligation Bonds 54 Aa/AA 38
A/A 20
WEIGHTED AVERAGE MATURITY 16.5 years
</TABLE>
- ------------------
See footnotes on page 16.
11
<PAGE>
================================================================================
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MISSOURI MUNICIPAL SERIES
[The following table represents a chart in the printed report]
MISSOURI SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,522 10,000 10,000
10,205 10,718 10,447
10,576 11,107 10,806
10,853 11,398 11,015
9/30/88 11,115 11,674 11,297
11,476 12,053 11,506
11,533 12,112 11,582
12,197 12,809 12,268
9/30/89 12,153 12,763 12,276
12,560 13,191 12,747
12,553 13,183 12,805
12,884 13,532 13,104
9/30/90 12,817 13,461 13,112
13,430 14,105 13,677
13,691 14,378 13,987
14,011 14,714 14,285
9/30/91 14,562 15,293 14,840
14,957 15,708 15,339
14,960 15,712 15,385
15,517 16,297 15,969
9/30/92 15,708 16,497 16,393
16,041 16,847 16,691
16,587 17,421 17,310
17,165 18,027 17,876
9/30/93 17,777 18,670 18,480
17,871 18,768 18,739
16,779 17,622 17,710
16,875 17,723 17,907
9/30/94 16,915 17,765 18,029
16,742 17,583 17,769
17,965 18,867 19,025
18,293 19,212 19,484
9/30/95 18,720 19,661 20,045
19,579 20,563 20,871
19,195 20,159 20,618
19,417 20,392 20,777
9/30/96 19,893 20,893 21,255
20,306 21,326 21,797
20,153 21,165 21,747
20,813 21,858 22,497
9/30/97 21,425 22,501 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 1.21% 2.64% 5.37% 7.92% n/a
Without Sales Charge 6.31 7.70 6.40 8.45 n/a
CLASS D*
With 1% CDSL 4.83 5.60 n/a n/a n/a
Without CDSL 5.83 6.60 n/a n/a 3.71%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.82 $7.54 $7.71 CLASS A $0.379 $0.084 4.03%
CLASS D 7.82 7.54 7.72 CLASS D 0.309 0.084 3.31
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C>
Revenue Bonds 83% Aaa/AAA 46%
General Obligation Bonds 17 Aa/AA 36
A/A 18
WEIGHTED AVERAGE MATURITY 18.2 years
</TABLE>
- ------------------
See footnotes on page 16.
12
<PAGE>
================================================================================
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN NEW YORK MUNICIPAL SERIES
[The following table represents a chart in the printed report]
NEW YORK SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,529 10,000 10,000
10,095 10,594 10,447
10,374 10,887 10,806
10,588 11,112 11,015
9/30/88 10,933 11,474 11,297
11,247 11,804 11,506
11,288 11,847 11,582
12,015 12,609 12,268
9/30/89 11,955 12,546 12,276
12,304 12,912 12,747
12,173 12,775 12,805
12,524 13,144 13,104
9/30/90 12,336 12,946 13,112
12,817 13,451 13,677
13,115 13,763 13,987
13,454 14,120 14,285
9/30/91 14,132 14,831 14,840
14,551 15,270 15,339
14,572 15,292 15,385
15,246 16,000 15,969
9/30/92 15,517 16,285 16,393
15,905 16,692 16,691
16,642 17,465 17,310
17,269 18,123 17,876
9/30/93 17,885 18,769 18,480
18,015 18,905 18,739
16,823 17,655 17,710
16,937 17,775 17,907
9/30/94 16,924 17,761 18,029
16,586 17,406 17,769
17,934 18,821 19,025
18,318 19,224 19,484
9/30/95 18,775 19,703 20,045
19,788 20,767 20,871
19,405 20,364 20,618
19,568 20,536 20,777
9/30/96 20,083 21,076 21,255
20,547 21,563 21,797
20,391 21,400 21,747
21,131 22,176 22,497
9/30/97 21,981 23,068 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 2.71% 4.23% 6.16% 8.19% n/a
Without Sales Charge 7.80 9.45 7.21 8.72 n/a
CLASS D*
With 1% CDSL 6.31 7.60 n/a n/a n/a
Without CDSL 7.31 8.60 n/a n/a 4.27%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.28 $7.88 $7.98 CLASS A $0.410 $0.021 4.23%
CLASS D 8.29 7.89 7.98 CLASS D 0.337 0.021 3.54
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C>
Revenue Bonds 83% Aaa/AAA 49%
General Obligation Bonds 17 Aa/AA 5
A/A 26
WEIGHTED AVERAGE MATURITY 23.2 years Baa/BBB 20
</TABLE>
- ------------------
See footnotes on page 16.
13
<PAGE>
================================================================================
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN OHIO MUNICIPAL SERIES
[The following table represents a chart in the printed report]
OHIO SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,523 10,000 10,000
10,042 10,545 10,447
10,426 10,949 10,806
10,758 11,298 11,015
9/30/88 11,024 11,576 11,297
11,283 11,848 11,506
11,420 11,992 11,582
12,011 12,613 12,268
9/30/89 11,971 12,571 12,276
12,404 13,026 12,747
12,437 13,061 12,805
12,693 13,329 13,104
9/30/90 12,654 13,288 13,112
13,220 13,883 13,677
13,467 14,142 13,987
13,755 14,445 14,285
9/30/91 14,293 15,010 14,840
14,716 15,454 15,339
14,757 15,497 15,385
15,337 16,106 15,969
9/30/92 15,676 16,462 16,393
15,957 16,757 16,691
16,528 17,356 17,310
17,113 17,971 17,876
9/30/93 17,685 18,572 18,480
17,814 18,707 18,739
16,943 17,793 17,710
17,120 17,979 17,907
9/30/94 17,140 17,999 18,029
16,940 17,790 17,769
18,036 18,940 19,025
18,396 19,318 19,484
9/30/95 18,783 19,725 20,045
19,520 20,499 20,871
19,205 20,168 20,618
19,418 20,391 20,777
9/30/96 19,849 20,845 21,255
20,257 21,273 21,797
20,165 21,176 21,747
20,766 21,807 22,497
9/30/97 21,346 22,417 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 0.78% 2.48% 5.35% 7.88% n/a
Without Sales Charge 5.86 7.54 6.37 8.41 n/a
CLASS D*
With 1% CDSL 4.37 5.57 n/a n/a n/a
Without CDSL 5.37 6.57 n/a n/a 3.84%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.19 $7.94 $8.09 CLASS A $0.419 $0.070 4.24%
CLASS D 8.23 7.98 8.13 CLASS D 0.348 0.070 3.56
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C> <C> <C>
Revenue Bonds 75% Aaa/AAA 67% Baa/BBB 3%
General Obligation Bonds 25 Aa/AA 19 Non-Rated 3
A/A 8
WEIGHTED AVERAGE MATURITY 19.1 years
</TABLE>
- ------------------
See footnotes on page 16.
14
<PAGE>
================================================================================
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN OREGON MUNICIPAL SERIES
[The following table represents a chart in the printed report]
OREGON SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,525 10,000 10,000
10,126 10,631 10,447
10,486 11,009 10,806
10,865 11,408 11,015
9/30/88 11,229 11,789 11,297
11,561 12,139 11,506
11,643 12,225 11,582
12,399 13,018 12,268
9/30/89 12,346 12,962 12,276
12,769 13,406 12,747
12,719 13,353 12,805
13,060 13,712 13,104
9/30/90 12,962 13,609 13,112
13,598 14,276 13,677
13,879 14,572 13,987
14,171 14,878 14,285
9/30/91 14,680 15,413 14,840
15,069 15,821 15,339
15,117 15,872 15,385
15,582 16,360 15,969
9/30/92 15,906 16,700 16,393
16,241 17,052 16,691
16,737 17,573 17,310
17,288 18,151 17,876
9/30/93 17,848 18,739 18,480
18,012 18,911 18,739
17,205 18,064 17,710
17,355 18,221 17,907
9/30/94 17,424 18,293 18,029
17,189 18,048 17,769
18,246 19,157 19,025
18,609 19,538 19,484
9/30/95 19,000 19,949 20,045
19,690 20,673 20,871
19,385 20,352 20,618
19,591 20,568 20,777
9/30/96 20,002 21,001 21,255
20,439 21,460 21,797
20,391 21,409 21,747
21,027 22,076 22,497
9/30/97 21,722 22,806 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 1.43% 3.46% 5.40% 8.07% n/a
Without Sales Charge 6.53 8.60 6.43 8.59 n/a
CLASS D*
With 1% CDSL 5.19 6.77 n/a n/a n/a
Without CDSL 6.19 7.77 n/a n/a 4.01%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.87 $7.57 $7.65 CLASS A $0.376 $0.041 4.27%
CLASS D 7.87 7.56 7.64 CLASS D 0.306 0.041 3.58
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C>
Revenue Bonds 71% Aaa/AAA 42%
General Obligation Bonds 29 Aa/AA 26
A/A 22
WEIGHTED AVERAGE MATURITY 19.2 years Baa/BBB 10
</TABLE>
- ------------------
See footnotes on page 16.
15
<PAGE>
================================================================================
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN SOUTH CAROLINA MUNICIPAL SERIES
[The following table represents a chart in the printed report]
SOUTH CAROLINA SERIES CLASS A
With Without
Sales Charge Sales Charge Lehman Index
9/30/87 9,529 10,000 10,000
10,135 10,637 10,447
10,478 10,996 10,806
10,727 11,257 11,015
9/30/88 11,070 11,618 11,297
11,398 11,961 11,506
11,458 12,025 11,582
12,195 12,799 12,268
9/30/89 12,112 12,711 12,276
12,606 13,230 12,747
12,558 13,179 12,805
12,863 13,499 13,104
9/30/90 12,654 13,280 13,112
13,364 14,025 13,677
13,624 14,298 13,987
13,910 14,599 14,285
9/30/91 14,419 15,133 14,840
14,903 15,641 15,339
14,970 15,711 15,385
15,539 16,308 15,969
9/30/92 15,872 16,658 16,393
16,154 16,953 16,691
16,693 17,519 17,310
17,262 18,116 17,876
9/30/93 17,860 18,744 18,480
18,045 18,938 18,739
16,930 17,768 17,710
17,031 17,874 17,907
9/30/94 17,035 17,878 18,029
16,836 17,669 17,769
18,053 18,946 19,025
18,428 19,340 19,484
9/30/95 18,856 19,789 20,045
19,808 20,788 20,871
19,428 20,389 20,618
19,637 20,608 20,777
9/30/96 20,143 21,139 21,255
20,586 21,605 21,797
20,431 21,441 21,747
21,142 22,188 22,497
9/30/97 21,752 22,828 23,177
The performance of Class D shares will be greater than or less than the
performance shown for Class A shares, based on the differences in sales charges
and fees paid by shareholders.
<PAGE>
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS YEAR YEARS YEARS 2/1/94
---------- ------ ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
CLASS A*
With Sales Charge 1.43% 2.89% 5.47% 8.08% n/a
Without Sales Charge 6.47 7.99 6.51 8.60 n/a
CLASS D*
With 1% CDSL 4.98 6.15 n/a n/a n/a
Without CDSL 5.98 7.15 n/a n/a 3.97%
LEHMAN INDEX** 6.57 9.03 7.17 8.77 5.64#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1997
9/30/97 3/31/97 9/30/96 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.16 $7.86 $8.07 CLASS A $0.404 $0.125 4.18%
CLASS D 8.16 7.86 8.06 CLASS D 0.332 0.125 3.49
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR(O) MOODY'S/S&P RATINGS(O)
<S> <C> <C> <C>
Revenue Bonds 82% Aaa/AAA 64%
General Obligation Bonds 18 Aa/AA 8
A/A 26
WEIGHTED AVERAGE MATURITY 18.3 years Baa/BBB 2
</TABLE>
- ---------------
* Return figures reflect any change in price and assume all distributions
within the period are invested in additional shares. Returns for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Returns for Class D shares are calculated with and
without the effect of the 1% contingent deferred sales load ("CDSL"), charged
only on redemptions made within one year of the date after purchase. No
adjustment was made to the performance of Class A shares for periods prior to
January 1, 1993, the commencement date for the annual Administration,
Shareholder Services and Distribution Plan fee of up to 0.25% of average
daily net assets. The rates of return will vary and the principal value of an
investment will fluctuate. Shares, if redeemed, may be worth more or less
than their original cost. A portion of eachSeries' income may be subject to
applicable state and local taxes, and any amount may be subject to the
federal alternative minimum tax. Past performance is not indicative of future
investment results.
** The Lehman Index is an unmanaged index that does not include any fees or
sales charges, and does not reflect state-specific bond market performance.
Investors cannot invest directly in an index.
# From 1/31/94.
+ Repesents per share amount paid or declared for the year ended September 30,
1997.
++ Current yield, representing the annualized yield for the 30-day period ended
September 30, 1997, has been computed in accordance with SEC regulations and
will vary.
(O)Percentages based on current market values of long-term holdings.
16
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
17
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
NATIONAL SERIES
FACE RATINGS+ MARKET
STATE AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- -------- ----------- --------------- ----------- -------
<S> <C> <C> <C>
ALASKA-- 4.9% $5,000,000 Valdez Marine Terminal Rev.
(BP Pipeline Inc. Project),
5 1/2% due 10/1/2028 ............................. Aa2/AA $ 4,912,400
CALIFORNIA-- 2.8% 2,500,000 San Joaquin Hills Transportation
Corridor Agency Rev.(Orange County
Senior Lien Toll Road),
6 3/4% due 1/1/2032 .............................. NR/NR 2,833,875
FLORIDA-- 2.7% 2,750,000 Jacksonville Electric Authority
(Electric System Rev.),
5 1/4% due 10/1/2028 ............................. Aa1/AA 2,676,162
ILLINOIS-- 12.3% 3,000,000 Chicago Water Rev., 5 1/2% due 11/1/2022 ............ Aaa/AAA 2,991,750
1,000,000 Illinois Health Facilities Authority Rev.
(Northwestern MemorialHospital),
6.10% due 8/15/2014 .............................. Aa2/AA 1,058,160
1,250,000 Illinois Health Facilities Authority Rev.
(Edward Hospital Project), 6% due 2/15/2019 ..... A2/A+ 1,271,275
2,500,000 Illinois Health Facilities Authority Rev.
(Northwestern Memorial
Hospital), 6% due 8/15/2024 ...................... Aa2/AA 2,586,675
4,000,000 Regional Transportation Authority GOs
(Cook, DuPage, Kane, Lake, McHenry,
and Will Counties), 5.85% due 6/1/2023 ........... Aaa/AAA 4,365,240
KENTUCKY-- 2.1% 1,880,000 Trimble County Pollution Control Rev.
(Louisville Gas & Electric Co. Project),
7 5/8% due 11/1/2020* ............................ Aa2/AA- 2,066,628
MASSA- 2,000,000 Massachusetts Health &Education Facilities
CHUSETTS-- 2.2% Authority Rev. (Amherst College),
6.80% due 11/1/2021 ............................... Aa1/AA+ 2,178,100
MICHIGAN-- 2.4% 2,250,000 Michigan State Strategic Fund Pollution
Control Rev. (General Motors Corp.),
6.20% due 9/1/2020 ............................... A3/A- 2,366,415
MISSOURI-- 5.2% 5,000,000 St. Louis Industrial Development Authority
Pollution Control Rev. (Anheuser-Busch
Companies, Inc. Project),
5 7/8% due 11/1/2026* ............................ A1/A+ 5,141,450
NEW YORK-- 3.8% 2,485,000 New York City GOs, 7 1/4% due 8/15/2024 ............. Baa1/BBB+ 2,703,258
1,015,000 New York City GOs, 7 1/4% due 8/15/2024 ............. Aaa/BBB+ 1,126,498
SOUTH 2,000,000 Oconee County Pollution Control Rev.
CAROLINA-- 2.1% (Duke Power Company Project),
7 1/2% due 2/1/2017 .............................. Aa2/AA- 2,131,960
SOUTH 6,000,000 South Dakota Housing Development Authority Rev.
DAKOTA-- 6.2% (Homeownership Mortgage), 6.15% due 5/1/2026* .... Aa1/AAA 6,130,740
TEXAS-- 22.6% 3,700,000 Harris County Health Facilities Development
Corp. Hospital Rev. (St. Luke's
Episcopal Hospital Project),
6 3/4% due 2/15/2021 ............................. Aa3/AAA 4,073,774
2,000,000 Harris County Health Facilities Development
Corp. SCH Health Care System Rev.
(Sisters of Charity of the Incarnate Word),
7.10% due 7/1/2021 ............................... Aa3/AA 2,232,000
2,000,000 Harris County Health Facilities Development
Corp. SCH Health Care System Rev.
(Sisters of Charity of the Incarnate Word),
5 3/4% due 7/1/2027 .............................. Aa3/AA 2,049,640
5,000,000 Potter County Industrial Development Corp.
Pollution Control Rev. (Southwestern
Public Service Company Project),
5 3/4% due 9/1/2016 .............................. Aaa/AAA 5,230,950
2,500,000 San Antonio Electric & Gas Rev.,
5 1/2% due 2/1/2020 .............................. Aa1/AA 2,522,900
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
18
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
NATIONAL SERIES (CONTINUED)
FACE RATINGS+ MARKET
STATE AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- -------- ----------- --------------- ----------- -------
<S> <C> <C> <C>
TEXAS (CONTINUED) $2,000,000 Texas State Turnpike Authority Rev.
(Dallas North Thruway--Addison Airport
Toll Tunnel Project), 6 3/4% due 1/1/2015 ........ Aaa/AAA $ 2,263,340
2,605,000 Texas Veterans' Housing Assistance GOs,
6.80% due 12/1/2023* ............................. Aa2/AA 2,760,154
1,340,000 Travis County Housing Finance Corporation
(Single Family Mortgage Rev.),
6.95% due 10/1/2027 ............................. NR/AAA 1,437,203
VIRGINIA-- 5.2% 5,000,000 Fairfax County Industrial Development
Authority Health Care Rev. (Inova
Health System Project), 6% due 8/15/2026 ......... Aa2/AA 5,202,200
WASHINGTON-- 13.1% 4,325,000 King County GOs, 6 1/8% due 1/1/2033 ................ Aaa/AAA 4,550,289
3,000,000 Port Seattle Rev., 5 1/2% due 9/1/2021 .............. Aaa/AAA 2,991,930
5,520,000 Seattle Water System Rev., 5 5/8% due 8/1/2026 ...... Aaa/AAA 5,569,404
WISCONSIN-- 6.4% 6,000,000 LaCrosse Resource Recovery Rev.
(Northern States Power Company
Project), 6% due 11/1/2021* ...................... A2/AA- 6,376,680
WYOMING-- 4.2% 4,000,000 Sweetwater County Pollution Control Rev.
(Idaho Power Company Project),
6.05% due 7/15/2026 ............................. A3/A 4,140,640
-----------
TOTAL MUNICIPAL BONDS (Cost $92,747,742)-- 98.2% .................................................... 97,941,690
OTHER ASSETS LESS LIABILITIES-- 1.8% ................................................................ 1,818,580
-----------
NET ASSETS-- 100.0% ................................................................................. $99,760,270
===========
COLORADO SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 3,000,000 Adams County, CO Pollution Control Rev. (Public Service Co.
of Colorado Project), 5 7/8% due 4/1/2014 .................................. Aaa/AAA $ 3,143,340
1,500,000 Colorado Association of School Boards Lease Purchase
Finance Program Certificates of Participation (Pueblo School
District No. 60), 7 1/4% due 12/1/2009 ..................................... Aaa/AAA 1,614,840
2,000,000 Colorado Health Facilities Authority Rev. (Sisters of Charity
Health Care Systems, Inc.),
6% due 5/15/2013 ........................................................... Aaa/AAA 2,066,760
3,000,000 Colorado Health Facilities Authority Rev.
(North Colorado Medical Center), 6% due 5/15/2020 .......................... Aaa/AAA 3,126,300
2,085,000 Colorado Housing Finance Authority (Single Family Housing Rev.),
5.85% due 11/1/2015 ........................................................ Aa1/AA+ 2,142,421
195,000 Colorado Housing Finance Authority (Single Family Residential Housing Rev.),
8% due 3/1/2017 ............................................................ Aa1/NR 198,249
2,250,000 Colorado Springs, CO Utilities Rev., 6 1/8% due 11/15/2020 ..................... Aa2/AA 2,364,075
105,000 Colorado Water Resources & Power Development Authority (Clean Water Bonds Rev.),
6 7/8% due 9/1/2011 ........................................................ Aa2/AA+ 115,103
2,000,000 Colorado Water Resources & Power Development Authority (Clean Water Bonds Rev.),
6% due 9/1/2014 ............................................................ Aa2/AA 2,122,500
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
19
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
COLORADO SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$1,000,000 Colorado Water Resources & Power Development Authority
(Clean Water Bonds Rev.), 6.30% due 9/1/2014 ............................... Aa2/AA $ 1,083,580
2,000,000 Denver, CO City & County (St. Anthony Hospital Systems Rev.),
7 3/4% due 5/1/2014 ........................................................ Aaa/AAA 2,135,060
2,500,000 Denver, CO City & County (Sisters of Charity of Leavenworth Health
Services Corporation), 5% due 12/1/2023 .................................... Aa3/AA 2,350,550
2,000,000 Denver, CO City &County Department of Aviation Airport System Rev.,
5 1/2% due 11/15/2025 ...................................................... Aaa/AAA 1,994,180
2,250,000 Denver, CO City & County Excise Tax Rev., 6 1/2% due 9/1/2014 .................. Aaa/AAA 2,346,502
1,985,000 Fort Collins, CO GOs Water Bonds, 6 3/8% due 12/1/2012 ......................... Aa2/AA 2,159,084
2,500,000 Fort Collins Pollution Control Rev. (Anheuser-Busch Project),
6% due 9/1/2031 ............................................................ A1/A+ 2,591,550
3,000,000 Fountain Valley Authority, Co Water Treatment Rev.,
6.80% due 12/1/2019 ........................................................ AA/AA 3,262,470
1,895,000 Northglenn, CO Joint Water & Wastewater Utility,
6.80% due 12/1/2008 ........................................................ Aaa/NR 2,100,380
2,500,000 Platte River Power Authority, CO Power Rev.,
6 1/8% due 6/1/2014 ........................................................ Aa3/A+ 2,638,800
1,750,000 Pueblo County, CO Single Family Mortgage Rev.,
7.05% due 11/1/2027 ........................................................ NR/AAA 1,863,278
2,000,000 Puerto Rico Highway & Transportation Authority Highway Rev.,
5 1/2% due 7/1/2036 ........................................................ Baa1/A 2,006,800
3,000,000 University of Colorado Hospital Authority Hospital Rev.,
6.40% due 11/15/2022 ....................................................... Aaa/AAA 3,272,670
2,000,000 Westminster, CO (Adams & Jefferson Counties) Sales & Use Tax Rev.,
7% due 12/1/2008 ........................................................... Aaa/AAA 2,178,200
-----------
TOTAL MUNICIPAL BONDS (Cost $45,749,567)-- 97.7% .................................................... 48,876,692
VARIABLE RATE DEMAND NOTES (Cost $300,000)-- 0.6% ................................................... 300,000
OTHER ASSETS LESS LIABILITIES-- 1.7% ................................................................ 841,400
-----------
NET ASSETS-- 100.0% ................................................................................. $50,018,092
===========
GEORGIA SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 2,000,000 Atlanta, GA Water & Sewer Rev., 5 1/4% due 1/1/2027 ............................ Aaa/AAA $ 1,953,080
1,000,000 Cartersville, GA Development Authority Rev. Water & Wastewater Facilities
(Anheuser-Busch), 7.40% due 11/1/2010* ..................................... A1/A+ 1,217,380
2,000,000 Cartersville, GA Development Authority Rev. Water & Wastewater Facilities
(Anheuser-Busch), 6 3/4% due 2/1/2012* ..................................... A1/A+ 2,185,720
3,000,000 Chatham County, GA School District GOs, 5 1/2% due 8/1/2020 .................... Aaa/AAA 3,007,320
750,000 Chatham County Hospital Authority, GA Rev. (Memorial Medical Center, Inc.),
7% due 1/1/2021 ............................................................ Aaa/AAA 826,507
2,000,000 Columbia County, GA School District GOs,
6 1/4% due 4/1/2013 ........................................................ Aaa/AAA 2,189,740
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
20
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
GEORGIA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 1,000,000 Columbia County, GA Water & Sewerage Rev., 6 1/4% due 6/1/2012 ................. Aaa/AAA $ 1,082,390
1,000,000 DeKalb County, GA GOs, 5 1/4% due 1/1/2020 ..................................... Aa1/AA+ 985,720
1,000,000 DeKalb County, GA Water & Sewerage Rev., 7% due 10/1/2014 ...................... Aaa/AA 1,098,560
2,000,000 DeKalb County, GA Water & Sewerage Rev., 5 1/4% due 10/1/2023 .................. Aa/AA 1,969,320
700,000 DeKalb Private Hospital Authority, GA Rev.
(Emory University Project), 6 3/4% due 4/1/2017 ............................ Aa1/AA 769,321
300,000 DeKalb Private Hospital Authority, GA Rev. (Emory University
Project), 7% due 4/1/2021 .................................................. Aa1/AA 332,130
1,000,000 Fayette County, GA School District GOs,
6 1/8% due 3/1/2015 ........................................................ Aa/A+ 1,067,990
3,000,000 Fulton County, GA School District GOS,
5 5/8% DUE 1/1/2021 ........................................................ AA3/AA 3,046,200
2,975,000 Georgia Housing & Finance Authority Rev. (Single Family Mortgage),
5 1/4% due 12/1/2020 ....................................................... Aa2/AA+ 2,874,237
2,500,000 Georgia Municipal Gas Authority Rev. (Southern Storage Gas Project),
6.40% due 7/1/2014 ......................................................... NR/A- 2,686,025
1,000,000 Georgia State GOs, 5 3/4% due 2/1/2011 ......................................... Aaa/AAA 1,046,280
1,750,000 Glynn-Brunswick Memorial Hospital Authority Rev. (Southeast Georgia Health
Systems Project), 6% due 8/1/2016 .......................................... Aaa/AAA 1,857,275
1,000,000 Gwinnett County, GA School District GOs, 6.40% due 2/1/2012 .................... Aa1/AA+ 1,150,870
1,500,000 Henry County School District, GA GOs, 6.45% due 8/1/2011 ....................... A1/A+ 1,711,980
1,000,000 Metropolitan Atlanta Rapid Transit Authority,
GA Sales Tax Rev., 7 1/4% due 7/1/2010 ..................................... A1/AA- 1,042,730
500,000 Metropolitan Atlanta Rapid Transit Authority,
GA Sales Tax Rev., 6 1/4% due 7/1/2018 ..................................... A1/AA- 559,980
2,000,000 Monroe County, GA Development Authority Pollution Control Rev.
(Georgia Power Company Plant-- Scherer Project), 6% due 7/1/2025 ........... Aaa/AAA 2,084,360
2,500,000 Peachtree City, GAWater &Sewerage Authority Sewer System Rev.,
5.60% due 3/1/2027 ......................................................... Aa3/AA 2,554,925
2,500,000 Private Colleges & Universities Authority, GA (Spelman College Project),
6.20% due 6/1/2014 ......................................................... Aaa/AAA 2,722,000
1,500,000 Private Colleges & Universities Authority, GA (Mercer University Project),
6 1/2% due 11/1/2015 ....................................................... Aaa/AAA 1,746,075
3,000,000 Private Colleges & Universities Authority, GA (Agnes Scott College Project),
5 5/8% due 6/1/2023 ........................................................ Aa3/AA- 3,039,810
1,500,000 Puerto Rico Highway & Transportation Authority Highway Rev.,
5 1/2% due 7/1/2026 ........................................................ Baa1/A 1,495,560
1,000,000 Puerto Rico Highway & Transportation Authority Highway Rev.,
5 1/2% due 7/1/2036 ........................................................ Baa1/A 1,003,400
2,000,000 Savannah, GA Airport Rev., 6 1/4% due 1/1/2015* ................................ Aaa/AAA 2,110,680
-----------
TOTAL MUNICIPAL BONDS (Cost $48,301,223)-- 96.5% ..................................................... 51,417,565
VARIABLE RATE DEMAND NOTES (Cost $1,000,000)-- 1.9% .................................................. 1,000,000
OTHER ASSETS LESS LIABILITIES-- 1.6% ................................................................. 836,449
-----------
NET ASSETS-- 100.0% .................................................................................. $53,254,014
===========
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
21
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
LOUISIANA SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 1,055,000 Alexandria, LA Utilities Rev., 5.30% due 5/1/2013 .............................. Aaa/AAA $ 1,058,576
3,000,000 Bastrop, LA Industrial Development Board Pollution Control Rev.
(International Paper Company Project), 6.90% due 3/1/2007 .................. A3/A- 3,296,700
2,500,000 Calcasieu Parish, LA Industrial Development Board (Conoco Inc. Project),
5 3/4% due 12/1/2026* ...................................................... Aa3/AA- 2,524,400
2,420,000 East Baton Rouge Parish, LA Mortgage Finance Authority
(Single Family Mortgage Rev.), 5.40% due 10/1/2025 ......................... Aaa/NR 2,365,356
1,000,000 East Baton Rouge Parish, LA Public Improvement Sales & Use Tax Rev.,
7 1/4% due 2/1/2009 ........................................................ Aaa/AAA 1,057,140
3,000,000 East Baton Rouge Parish, LA Public Improvement Sales & Use Tax Rev.,
5.90% due 2/1/2018 ......................................................... Aaa/AAA 3,148,740
2,000,000 Houma, LA Utilities Rev., 6 1/4% due 1/1/2012 .................................. Aaa/AAA 2,149,280
2,000,000 Jefferson Parish, LA Home Mortgage Authority
(Single Family Mortgage Rev.), 6% due 12/1/2024* ........................... Aa/NR 2,026,840
2,495,000 Louisiana Housing Finance Agency Mortgage Rev. (Single Family),
6.45% due 6/1/2027* ........................................................ Aaa/AAA 2,593,727
2,500,000 Louisiana Public Facilities Authority Hospital Rev.
(Our Lady of Lourdes Regional Medical Center
Project), 6.45% due 2/1/2022 ............................................... Aaa/AAA 2,706,150
2,500,000 Louisiana Public Facilities Authority Rev. (Loyola University Project),
5 5/8% due 10/1/2016 ....................................................... Aaa/AAA 2,571,475
2,500,000 Louisiana Public Facilities Authority Rev. (Sisters of Mercy
Health System, St. Louis, Inc.), 7 3/8% due 6/1/2019 ....................... Aaa/AA+ 2,683,675
3,000,000 Louisiana Public Facilities Authority Rev. (Tulane University),
5 3/4% due 2/15/2021 ....................................................... Aaa/AAA 3,077,640
3,000,000 Louisiana State GOs, 6 1/2% due 5/1/2011 ....................................... Aaa/AAA 3,293,610
2,000,000 Louisiana State University & Agricultural & Mechanical College
Auxiliary Rev., 5 3/4% due 7/1/2014 ........................................ Aaa/AAA 2,074,960
2,500,000 Ouachita Parish, LAHospital Service District Rev.
(Glenwood Regional Medical Center), 5 3/4% due 5/15/2021 ................... Aaa/AAA 2,579,175
190,000 Ouachita Parish, LA Industrial Development Rev. (International Paper Company),
6 1/2% due 4/1/2006 ........................................................ NR/NR 190,137
2,500,000 Saint Bernard Parish, LA Exempt Facility Rev. (Mobil Oil
Corporation Project), 5.90% due 11/1/2026* ................................. Aa2/AA 2,576,400
1,250,000 Saint Charles Parish, LA Environmental Improvement Rev.
(Louisiana Power and Light Company Project), 6.20% due 5/1/2023* ........... Baa2/BBB 1,282,063
2,960,000 Saint Charles Parish, LA Waterworks & Wastewater District Utility Rev.,
7.15% due 7/1/2016 ......................................................... Aaa/AAA 3,287,672
1,555,000 Shreveport, LA GOs, 7 1/2% due 4/1/2006 ........................................ Aaa/AAA 1,696,474
1,750,000 Shreveport, LA Water & Sewer Rev., 7 1/8% due 12/1/2014 ........................ Aaa/AAA 1,794,643
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
22
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
LOUISIANA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 2,050,000 Sulphur, LA Housing & Mortgage Finance Trust (Residential Mortgage Rev.),
7 1/4% due 12/1/2010 ....................................................... Aaa/AAA $ 2,354,486
2,500,000 Tangipahoa Parish, LA Hospital Service District No. 1 Rev.
(Northoaks Medical Center), 6 1/4% due 2/1/2024 ............................ Aaa/AAA 2,672,050
-----------
TOTAL MUNICIPAL BONDS (Cost $51,697,171)-- 97.1% .................................................... 55,061,369
VARIABLE RATE DEMAND NOTES (COST $500,000)-- 0.9% ................................................... 500,000
OTHER ASSETS LESS LIABILITIES-- 2.0% ................................................................ 1,146,242
-----------
NET ASSETS-- 100.0% ................................................................................. $56,707,611
===========
MARYLAND SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 3,000,000 Anne Arundel County, MD Pollution Control Rev. (Baltimore Gas and Electric
Company Project), 6% due 4/1/2024 .......................................... A2/A $ 3,097,710
2,000,000 Baltimore, MD Consolidated Public Improvement GOs,
6 3/8% due 10/15/2006 ...................................................... Aaa/AAA 2,268,060
2,500,000 Baltimore, MD Port Facilities Rev. (Consolidated Coal Sales Co. Project),
6 1/2% due 10/1/2011 ....................................................... Aa3/AA- 2,724,975
2,000,000 Baltimore, MD Project and Refunding Rev. (Water Projects),
5 1/2% due 7/1/2026 ........................................................ Aaa/AAA 2,014,340
2,000,000 Howard County, MD Metropolitan District Project GOs,
5 1/2% due 8/15/2022 ....................................................... Aaa/AA+ 2,016,380
2,000,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Multi-Family Housing), 7.70% due 5/15/2020* ................... Aa/NR 2,122,560
2,465,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Single Family Program), 6.80% due 4/1/2024* ................... Aa/NR 2,616,326
2,500,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Residential Rev.), 5 7/8% due 9/1/2025* ....................... AA2/NR 2,527,850
2,500,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Multi-Family Housing), 6.70% due 5/15/2027 .................... Aa/NR 2,619,300
2,710,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Good Samaritan Hospital), 5 3/4% due 7/1/2019 ............................. A1/A 2,786,449
3,000,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Johns Hopkins University), 7 1/2% due 7/1/2020 ............................ Aa2/AA- 3,135,540
2,000,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Suburban Hospital), 5 1/8% due 7/1/2021 ................................... A1/A+ 1,952,860
2,750,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Ann Arundel Medical Center), 5% due 7/1/2023 .............................. Aaa/AAA 2,619,760
2,500,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Francis Scott Key Medical Center), 5% due 7/1/2023 ........................ Aaa/AAA 2,381,600
2,000,000 Maryland Health &Higher Educational Facilities Authority Rev.
(Mercy Medical Center), 5 3/4% due 7/1/2026 ................................ Aaa/AAA 2,056,340
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
23
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MARYLAND SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 1,000,000 Maryland National Capital Park & Planning Commission GOs
(Prince George's County), 6.90% due 7/1/2010 ............................... Aa2/AA $ 1,089,440
2,000,000 Maryland Transportation Authority Rev. (Baltimore/Washington International
Airport Project), 6 1/4% due 7/1/2014* ..................................... Aaa/AAA 2,143,060
2,500,000 Maryland Transportation Authority Rev. Transportation Facilities Projects,
5 3/4% due 7/1/2015 ........................................................ A1/A+ 2,563,350
1,000,000 Maryland Water Quality Financing Administration Revolving Loan Fund Rev.,
6.70% due 9/1/2013 ......................................................... Aaa/AAA 1,106,810
1,000,000 Maryland Water Quality Financing Administration Revolving Loan Fund Rev.,
7.10% due 9/1/2013 ......................................................... Aaa/AAA 1,121,130
450,000 Montgomery County, MD Housing Opportunities Commission (Single Family
Mortgage Rev.), 7 3/8% due 7/1/2017 ........................................ Aa2/NR 470,966
1,500,000 Montgomery County, MD Housing Opportunities Commission Rev.,
6.20% due 7/1/2026* ........................................................ Aa2/NR 1,547,340
2,000,000 Northeast Maryland Waste Disposal Authority Solid Waste Rev.
(Montgomery County Resource Recovery Project),
6.30% due 7/1/2016* ........................................................ A/NR 2,113,880
1,000,000 Puerto Rico Highway & Transportation Authority Highway Rev.,
5 1/2% due 7/1/2036 ........................................................ BAA1/A 1,003,400
35,000 Puerto Rico Housing Finance Corporation (Single Family
Mortgage Rev. Portfolio 1), 7.80% due 10/15/2021 ........................... Aaa/AAA 35,871
630,000 Puerto Rico Housing Finance Corporation (Single Family Mortgage
Rev. Portfolio 1-C), 6.85% due 10/15/2023 .................................. Aaa/AAA 665,545
2,500,000 Washington Suburban Sanitary District, MD, 6 1/2% due 1/1/2016 ................. Aa1/AA 2,732,725
-----------
TOTAL MUNICIPAL BONDS (Cost $50,452,075)-- 98.0% .................................................... 53,533,567
OTHER ASSETS LESS LIABILITIES-- 2.0% ................................................................ 1,077,988
-----------
NET ASSETS-- 100.0% ................................................................................. $54,611,555
===========
MASSACHUSETTS SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 5,000,000 Boston, MA Water & Sewer Commission General Rev., 5 1/4% due 11/1/2019 ......... A2/A $ 5,025,800
3,000,000 Boston, MA Water & Sewer Commission General Rev., 7.10% due 11/1/2019 .......... Aaa/AAA 3,240,270
5,000,000 Massachusetts Bay Transportation Authority General Transportation System,
5 5/8% due 3/1/2026 ........................................................ A1/A+ 5,033,050
1,505,000 Massachusetts Education Loan Authority Education Loan Rev., 8% due 6/1/2002 .... NR/AAA 1,533,384
3,000,000 Massachusetts Health & Educational Facilities Authority Rev.
(Daughters of Charity National Health Systems--Carney
Hospital), 6% due 7/1/2009 ................................................. Aa2/AA+ 3,151,680
2,500,000 Massachusetts Health & Educational Facilities Authority Rev.
(Daughters of Charity National Health Systems--Carney Hospital),
6.10% due 7/1/2014 ......................................................... Aa2/AA+ 2,645,550
5,000,000 Massachusetts Health & Educational Facilities Authority Rev. (Newton-Wellesley
Hospital), 6% due 7/1/2018 ................................................. Aaa/AAA 5,251,750
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
24
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MASSACHUSETTS SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 3,295,000 Massachusetts Health & Educational Facilities Authority Rev. (Tufts University),
7.40% due 8/1/2018 ......................................................... Aaa/A+ $ 3,456,422
705,000 Massachusetts Health & Educational Facilities Authority Rev. (Tufts University),
7.40% due 8/1/2018 ......................................................... A1/A+ 737,684
3,500,000 Massachusetts Health &Educational Facilities Authority Rev. (Williams College),
5 3/4% due 7/1/2019 ........................................................ Aa1/AA 3,598,595
2,500,000 Massachusetts Health & Educational Facilities Authority Rev. (Suffolk University),
8 1/8% due 7/1/2020 ........................................................ NR/NR 2,784,800
5,100,000 Massachusetts Health & Educational Facilities Authority Rev. (SmithCollege),
5 3/4% due 7/1/2024 ........................................................ Aa2/AA- 5,190,678
5,000,000 Massachusetts Health &Educational Facilities Authority Rev. (Partners Healthcare
System), 5 3/8% due 7/1/2024 ............................................... Aaa/AAA 4,912,500
7,500,000 Massachusetts Health & Educational Facilities Authority Rev.
(Harvard University), 5 5/8% due 11/1/2028 ................................. Aaa/AAA 7,635,375
4,705,000 Massachusetts Housing Finance Agency Rev. (Single Family Housing),
7.30% due 6/1/2014 ......................................................... Aa/A+ 4,806,110
3,500,000 Massachusetts Industrial Finance Agency Rev. (Phillips Academy),
5 3/8% due 9/1/2023 ........................................................ Aa1/AA+ 3,463,600
3,000,000 Massachusetts Industrial Finance Agency Rev. (College of The Holy Cross),
5 5/8% due 3/1/2026 ........................................................ Aaa/AAA 3,045,930
3,000,000 Massachusetts Industrial Finance Agency Rev. (Suffolk University),
5 1/4% due 7/1/2027 ........................................................ Aaa/AAA 2,924,820
2,000,000 Massachusetts Industrial Finance Agency Electric Utility Rev.
(Nantucket Electric Company Project), 5 7/8% due 7/1/2017* ................. Aaa/AAA 2,082,340
3,000,000 Massachusetts Port Authority Special Facilities Rev. (BOSFUEL Project),
5 3/4% due 7/1/2039* ....................................................... Aaa/AAA 3,022,650
2,500,000 Massachusetts Special Obligation Rev. (Highway Improvement Loan),
5.80% due 6/1/2014 ......................................................... Aa3/AA 2,713,200
5,000,000 Massachusetts State Consolidated Loan GOs, 5 1/8% due 11/1/2013 ................ Aaa/AAA 4,980,250
8,475,000 Massachusetts State Port Authority Rev., 7 1/8% due 7/1/2012 ................... Aa3/AA 8,538,817
5,000,000 Massachusetts Water Pollution Abatement Trust Pool Loan Program,
5 5/8% due 2/1/2016 ........................................................ Aaa/AAA 5,197,300
5,500,000 Massachusetts Water Resources Authority General Rev.,
5.60% due 11/1/2026 ........................................................ Aaa/AAA 5,576,835
730,000 Puerto Rico Electric Power Authority Power Rev.,
7 1/8% due 7/1/2014 ........................................................ Baa1/BBB+ 779,297
4,000,000 Puerto Rico Highway & Transportation Authority Highway Rev.,
5 1/2% due 7/1/2036 ........................................................ Baa1/A 4,013,600
2,750,000 Puerto Rico Port Authority Rev., 6% due 7/1/2021* .............................. Aaa/AAA 2,806,045
------------
TOTAL MUNICIPAL BONDS (Cost $103,585,106)-- 97.2% ................................................... 108,148,332
VARIABLE RATE DEMAND NOTES (Cost $1,800,000)-- 1.6% ................................................. 1,800,000
OTHER ASSETS LESS LIABILITIES-- 1.2% ................................................................ 1,307,323
------------
NET ASSETS-- 100.0% ................................................................................. $111,255,655
============
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
25
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MICHIGAN SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 5,000,000 Capital Region Airport Authority, MI Airport Rev.,
6.70% due 7/1/2021* ........................................................ Aaa/AAA $ 5,445,300
5,000,000 Detroit, MI GOs, 5 1/2% due 4/1/2016 ........................................... Aaa/AAA 5,027,750
6,000,000 Detroit, MI Water Supply System Rev.,
6 1/4% due 7/1/2012 ........................................................ Aaa/AAA 6,479,700
3,000,000 Grand Haven, MI Electric System Rev.,
5 1/4% due 7/1/2013 ........................................................ Aaa/AAA 2,993,370
5,000,000 Grand Rapids, MI Water Supply System Rev., 5 3/4% due 1/1/2018 ................. Aaa/AAA 5,063,000
1,000,000 Grand Traverse County, MI Hospital Finance Authority (Munson Healthcare
Obligated Group), 6 1/4% due 7/1/2012 ...................................... Aaa/AAA 1,065,830
1,500,000 Grand Traverse County, MI Hospital Finance Authority (Munson Healthcare
Obligated Group), 6 1/4% due 7/1/2022 ...................................... Aaa/AAA 1,590,885
3,000,000 Holland School District, MI GOs (School Building and Site Bonds),
7 3/8% due 5/1/2019 ........................................................ NR/NR 3,090,750
5,000,000 Kent County, MI Airport Rev., 6.10% due 1/1/2025* .............................. Aa/AAA 5,304,100
5,000,000 Kent County, MI Refuse Disposal System GOs, 8.40% due 11/1/2010 ................ Aa2/AAA 5,144,100
2,775,000 Kentwood, MI Public Schools Building & Site GOs, 6.40% due 5/1/2015 ............ Aa2/A+ 3,060,742
3,000,000 Lansing, MIBuilding Authority Rev., 5.60% due 6/1/2019 ......................... A1/AA+ 3,060,330
3,250,000 Marquette, MIHospital Finance Authority Hospital Rev.
(Marquette General Hospital), 6.10% due 4/1/2019 ........................... Aaa/AAA 3,441,230
3,000,000 Michigan Public Power Agency Rev. (Belle River Project),
5 1/4% due 1/1/2018 ........................................................ A1/AA- 2,912,370
3,000,000 Michigan State Building Authority Rev., 6 1/4% due 10/1/2020 ................... A1/AA- 3,186,000
6,000,000 Michigan State GOs (Environmental Protection Program), 5.40% due 11/1/2019 ..... Aa2/AA 6,033,900
5,000,000 Michigan State Hospital Finance Authority Hospital Rev.
(St. John Hospital), 5 3/4% due 5/15/2016 .................................. Aaa/AAA 5,117,250
5,000,000 Michigan State Hospital Finance Authority Hospital Rev.
(Henry Ford Health System), 5 3/4% due 9/1/2017 ............................ Aaa/AAA 5,102,550
5,000,000 Michigan State Hospital Finance Authority Hospital Rev.
(Detroit Medical Center), 6 1/2% DUE 8/15/2018 ............................. A2/A 5,373,200
2,000,000 Michigan State Hospital Finance Authority Hospital Rev. (St. John Hospital),
5 1/4% due 5/15/2026 ....................................................... Aaa/AAA 1,925,400
5,000,000 Michigan State Hospital Finance Authority Hospital Rev. (Mercy Health Services
Obligated Group), 5 3/4% due 8/15/2026 ..................................... Aa3/AA- 5,081,400
5,000,000 Michigan State Hospital Finance Authority Hospital Rev.
(Sparrow Obligated Group), 6% due 11/15/2036 ............................... Aaa/AAA 5,265,200
2,500,000 Michigan State Housing Development Authority Rev. (Single Family Mortgage),
6.80% due 12/1/2016 ........................................................ NR/AA+ 2,658,050
5,000,000 Michigan State Housing Development Authority Rev. (Rental Housing),
6.65% due 4/1/2023 ......................................................... NR/A+ 5,215,500
4,000,000 Michigan State Housing Development Authority Rev. (Single Family Mortgage),
6.05% due 12/1/2027 ........................................................ NR/AA+ 4,123,280
3,000,000 Michigan State Strategic Fund Pollution Control Rev.
(Detroit Edison Company), 6 1/2% due 2/15/2016 ............................. Aaa/AAA 3,277,530
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
26
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MICHIGAN SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 6,000,000 Michigan State Strategic Fund Pollution Control Rev. (General Motors Corp.),
6.20% due 9/1/2020 ......................................................... A3/A- $ 6,310,440
7,500,000 Michigan State Trunk Line Rev., 5.80% due 11/15/2024 ........................... Aaa/AAA 7,718,850
2,000,000 Midland, MI Water Supply System Rev., 7.20% due 4/1/2010 ....................... A/A 2,164,240
6,300,000 Oxford, MI Area Community Schools GOs, 5 1/2% due 5/1/2021 ..................... Aaa/AAA 6,319,719
5,000,000 University of Michigan Hospital Rev., 6 3/8% due 12/1/2024 ..................... Aa2/AA 5,178,050
5,000,000 Wayne, MI State University Rev., 5.65% due 11/15/2015 .......................... Aaa/AAA 5,113,100
3,000,000 Wyandotte, MI Electric Rev., 6 1/4% due 10/1/2017 .............................. Aaa/AAA 3,222,090
------------
TOTAL MUNICIPAL BONDS (Cost $133,829,878)-- 97.8% .................................................. 142,065,206
VARIABLE RATE DEMAND NOTES (Cost $800,000)-- 0.6% .................................................. 800,000
OTHER ASSETS LESS LIABILITIES-- 1.6% ............................................................... 2,350,143
------------
NET ASSETS-- 100.0% ................................................................................ $145,215,349
============
MINNESOTA SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 6,250,000 Becker, MN Pollution Control Rev. (Northern States Power Company),
6.80% due 4/1/2007 ......................................................... A2/A+ $ 6,587,437
1,500,000 Buffalo, MN Independent School District GOs, 6.15% due 2/1/2022 ................ Aaa/AAA 1,578,360
1,500,000 Cloquet, MN Pollution Control Rev. (Potlatch Corporation Projects),
5.90% due 10/1/2026 ........................................................ NR/A- 1,547,040
3,000,000 Dakota County, MN GOs Capital Improvement, 7.30% due 2/1/2008 .................. Aa3/NR 3,032,970
5,000,000 Edina, MN Housing Development Rev. (Edina Park Plaza Project),
7.70% due 12/1/2028 ........................................................ Aa/NR 5,230,800
3,545,000 Fridley, MN Independent School District Gos, 5.35% Due 2/1/2021 ................ Aaa/AAA 3,493,633
1,200,000 Lakeville, MN Independent School District GOs, 6.70% due 2/1/2015 .............. Aaa/AAA 1,240,236
7,500,000 Minneapolis, MN Community Development Agency Tax Increment Rev.,
Zero Coupon Bond due 9/1/2003 .............................................. Aaa/AAA 5,769,825
1,400,000 Minneapolis-St. Paul Metropolitan Area (Metropolitan Council of
the Twin Cities), MN, 5 1/2% due 12/1/2012 ................................. Aaa/AAA 1,444,940
5,000,000 Minneapolis-St. Paul, MN Housing & Redevelopment Authority Health Care Rev.
(Children's Health Care), 5 1/2% due 8/15/2025 ............................. Aaa/AAA 4,957,400
1,500,000 Minneapolis, MN GOs, 6% due 3/1/2016 ........................................... Aaa/AAA 1,574,625
2,000,000 Minneapolis, MN Hospital Facilities Rev. (Lifespan, Inc. --
Abbott-Northwestern Hospital, Inc.), 7 7/8% due 12/1/2014 .................. Aaa/AAA 2,053,460
4,300,000 Minneapolis, MN Special School District GOs, 5% due 2/1/2014 ................... Aa1/AA+ 4,261,816
1,500,000 Minneapolis, MN Tax Increment Rev., 7% due 3/1/2003 ............................ Aaa/AAA 1,519,020
2,775,000 Minnesota Higher Education Facilities Authority Rev. (University
of St. Thomas), 5.40% due 4/1/2022 ......................................... A2/NR 2,767,508
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
27
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MINNESOTA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 830,000 Minnesota Housing Finance Agency (Housing Development),
6 1/4% due 2/1/2020 ........................................................ Aa2/AA $ 840,973
5,000,000 Minnesota Housing Finance Agency (Single Family Mortgage),
6.85% due 1/1/2024* ........................................................ Aa2/AA+ 5,277,900
5,500,000 Minnesota Public Facilities Authority Water Pollution Control Rev.,
7.10% due 3/1/2012 ......................................................... Aaa/AAA 5,982,515
5,000,000 Minnesota State GOs, 5.70% due 5/1/2016 ........................................ Aaa/AAA 5,181,600
5,000,000 North Saint Paul/Maplewood, MN Independent School District GOs,
5 1/8% due 2/1/2025 ........................................................ Aa1/AA+ 4,839,000
5,000,000 Northern Municipal Power Agency, MN Electric System Rev.,
7 1/4% due 1/1/2016 ........................................................ A2/A 5,285,650
2,500,000 Northern Municipal Power Agency, MN Electric System Rev.,
7.40% due 1/1/2018 ......................................................... AAA/AAA 2,653,075
2,500,000 Northfield, MNIndependent School District GOs, 5 1/4% due 2/1/2017 ............. Aa1/NR 2,490,800
2,000,000 Ramsey & Washington Counties, MN Resource Recovery Rev.
(Northern States Power Company Project), 6 3/4% due 12/1/2006 .............. A1/AA- 2,066,480
4,000,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo Medical Center),
7.45% due 11/15/2006 ....................................................... NR/AA+ 4,384,120
4,500,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo Medical Center),
6 1/4% due 11/15/2014 ...................................................... NR/AA+ 4,825,350
1,000,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo Medical Center),
6 1/4% due 11/15/2021 ...................................................... NR/AA+ 1,068,540
2,575,000 Rochester, MN Independent School District GOs, 5 5/8% due 2/1/2016 ............. Aaa/AA+ 2,658,610
2,715,000 Rochester, MN Independent School District GOs, 5 5/8% due 2/1/2017 ............. Aaa/AA+ 2,795,744
1,000,000 Saint Cloud, MNHospital Facilities Rev. (Saint Cloud Hospital),
5% due 7/1/2020 ............................................................ Aaa/AAA 946,630
223,857 Saint Paul, MN Science Museum Facilities Rev. (Science Museum of
Minnesota Project), 7 1/2% due 12/15/2001 .................................. NR/AAA 239,660
45,000 Saint Paul Port Authority, MN Industrial Development Rev.
Series E, 9 1/8% due 10/1/2000 ............................................. NR/CCC 44,826
5,000 Saint Paul Port Authority, MN Industrial Development
Rev. Series H, 9 1/8% due 12/1/2000 ........................................ NR/CCC 4,979
55,000 Saint Paul Port Authority, MN Industrial Development
Rev. Series I, 9 1/8% due 12/1/2000 ........................................ NR/CCC 54,765
50,000 Saint Paul Port Authority, MN Industrial Development
Rev. Series E, 9 1/8% due 10/1/2001 ........................................ NR/CCC 49,672
10,000 Saint Paul Port Authority, MN Industrial Development
Rev. Series H, 9 1/8% due 12/1/2001 ........................................ NR/CCC 9,930
55,000 Saint Paul Port Authority, MN Industrial Development
Rev. Series I, 9 1/8% due 12/1/2001 ........................................ NR/CCC 54,614
5,000 Saint Paul Port Authority, MN Industrial Development
Rev. Series L, 9 3/4% due 12/1/2001 ........................................ NR/CCC 5,071
50,000 Saint Paul Port Authority, MN Industrial Development
Rev. Series E, 9 1/8% due 10/1/2002 ........................................ NR/CCC 49,510
10,000 Saint Paul Port Authority, MN Industrial Development
Rev. Series H, 9 1/8% due 12/1/2002 ........................................ NR/CCC 9,897
60,000 Saint Paul Port Authority, MN Industrial Development
Rev. Series I, 9 1/8% due 12/1/2002 ........................................ NR/CCC 59,383
10,000 Saint Paul Port Authority, MN Industrial Development
Rev. Series L, 9 3/4% due 12/1/2002 ........................................ NR/CCC 10,148
1,500,000 Southern Minnesota Municipal Power Agency -- Power Supply System Rev.,
5 3/4% due 1/1/2018 ........................................................ A2/A+ 1,513,110
750,000 Southern Minnesota Municipal Power Agency -- Power Supply System Rev.,
5 3/4% due 1/1/2018 ........................................................ AAA/AAA 773,212
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
28
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MINNESOTA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 1,500,000 Southern Minnesota Municipal Power Agency -- Power Supply System Rev.,
4 3/4% due 1/1/2016 ........................................................ A2/A+ $ 1,382,685
3,500,000 Washington County, MN GOs, 5.90% due 2/1/2010 .................................. Aa2/AA- 3,641,330
3,090,000 Western Minnesota Municipal Power Agency-- Power Supply
Rev., 5 1/2% due 1/1/2015 .................................................. A1/A 3,089,938
9,580,000 Western Minnesota Municipal Power Agency-- Power Supply
Rev., 6 3/8% due 1/1/2016 .................................................. Aaa/AAA 10,701,052
------------
TOTAL MUNICIPAL BONDS (Cost $112,978,728)-- 97.2% ................................................... 120,049,839
VARIABLE RATE DEMAND NOTES (Cost $1,900,000)-- 1.6% ................................................. 1,900,000
OTHER ASSETS LESS LIABILITIES-- 1.2% ................................................................ 1,523,460
------------
NET ASSETS-- 100.0% ................................................................................. $123,473,299
============
MISSOURI SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 2,000,000 Columbia, MO Water and Electric System Improvement
Rev., 6 1/8% due 10/1/2012 ................................................. A1/AA $ 2,127,000
2,500,000 Curators of the University of Missouri Health Facilities Rev.
(University of Missouri Health System), 5.60% due 11/1/2026 ................ Aaa/AAA 2,530,775
1,500,000 Hannibal, MO Industrial Development Authority Health Facilities Rev.
(Hannibal Regional Hospital), 5 3/4% due 3/1/2022 .......................... Aaa/AAA 1,541,340
3,775,000 Kansas City, MO Water Rev., 6 1/4% due 12/1/2009 ............................... Aa/NR 3,828,190
1,500,000 Kansas City School District Building Corporation, MO Leasehold Rev.,
7.90% due 2/1/2008 ......................................................... Aaa/AAA 1,550,355
1,000,000 Liberty, MO Waterworks Improvement Rev., 6.30% due 10/1/2012 ................... Aaa/AAA 1,074,740
2,000,000 Little Blue Valley, MO Sewer District Rev., 7 1/4% due 10/1/2007 ............... Aaa/AAA 2,063,460
565,000 Missouri School Boards Pooled Financing Program Certificates of Participation,
7 3/8% due 3/1/2006 ........................................................ Aaa/AAA 584,029
1,270,000 Missouri School Boards Pooled Financing Program Certificates of Participation,
7% due 3/1/2006 ............................................................ Aaa/AAA 1,310,818
1,000,000 Missouri State Environmental Improvement & Energy Resources Authority Rev.
(State Revolving Fund Program), 6.55% due 7/1/2014 ......................... Aa1/NR 1,087,670
2,500,000 Missouri State Environmental Improvement & Energy Resources Authority Rev.
(Union Electric Company Project), 5.45% due 10/1/2028* ..................... A1/AA- 2,495,525
2,500,000 Missouri State Environmental Improvement & Energy Resources
Authority-- Water Pollution Control Rev. (State Revolving
Fund Program), 5.40% due 7/1/2015 .......................................... Aa1/NR 2,515,500
2,000,000 Missouri State GOs, 5 5/8% due 4/1/2017 ........................................ Aaa/AAA 2,076,780
2,500,000 Missouri State Health & Educational Facilities Authority Rev.
(Lester E. Cox Medical Centers Project), 5 1/4% due 6/1/2015 ............... Aaa/AAA 2,534,400
1,500,000 Missouri State Health & Educational Facilities Authority Rev.
(Sisters of Mercy Health System, St. Louis, Inc.),
6 1/4% due 6/1/2015 ........................................................ Aa1/AA+ 1,589,310
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
29
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MISSOURI SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 3,500,000 Missouri State Health & Educational Facilities Authority Rev.
(SSM Health Care), 6 1/4% due 6/1/2016 ..................................... Aaa/AAA $ 3,715,880
1,000,000 Missouri State Health & Educational Facilities Authority Rev.
(Sisters of Mercy Health System, St. Louis, Inc.), 7 1/4% due 6/1/2019 ..... Aaa/AA 1,070,960
1,000,000 Missouri State Health & Educational Facilities Authority Rev.
(Sisters of Mercy Health System, St. Louis, Inc.), 5% due 6/1/2019 ......... Aa1/AA+ 955,340
2,500,000 Missouri State Health Facilities Rev. (Barnes-Jewish, Inc./
Christian Health Services), 5 1/4% due 5/15/2021 ........................... Aa2/AA 2,459,950
860,000 Missouri State Housing Development Commission Housing Development Bonds
(Federally Insured Mortgage Loans), 6% due 10/15/2019 ...................... Aa2/AA+ 873,889
1,935,000 Missouri State Housing Development Commission Single Family Mortgage Rev.
(Homeownership Loan Program), 6 1/8% due 3/1/2028* ......................... NR/AAA 1,992,682
1,500,000 St. Louis, MO Industrial Development Authority Pollution Control Rev.
(Anheuser-Busch Companies, Inc. Project), 6.65% due 5/1/2016 ............... A1/A+ 1,768,995
1,500,000 St. Louis, MO Municipal Finance Corporation City Justice Center Leasehold
Improvement Rev., 5.95% due 2/15/2016 ...................................... Aaa/AAA 1,589,970
2,400,000 Southeast Missouri Correctional Facility Lease Rev. (Missouri State Project),
5 3/4% due 10/15/2016 ...................................................... Aa/AA 2,461,032
2,500,000 Springfield, MO Waterworks Rev., 5.60% due 5/1/2023 ............................ Aa/A+ 2,513,650
2,750,000 University of Missouri Systems Facilities Rev., 5 1/2% due 11/1/2023 ........... Aa2/AA+ 2,756,958
-----------
TOTAL MUNICIPAL BONDS (Cost $48,548,638)-- 95.9% ..................................................... 51,069,198
VARIABLE RATE DEMAND NOTES (Cost $1,000,000)-- 1.9% .................................................. 1,000,000
OTHER ASSETS LESS LIABILITIES-- 2.2% ................................................................. 1,170,528
-----------
NET ASSETS-- 100.0% .................................................................................. $53,239,726
===========
NEW YORK SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 4,000,000 Metropolitan Transportation Authority, NY
(Commuter Facilities Rev.), 6 1/2% due 7/1/2024 ............................ Baa1/BBB+ $ 4,538,040
3,900,000 Metropolitan Transportation Authority, NY (Transit Facilities Rev.),
6.10% due 7/1/2026 ......................................................... Aaa/AAA 4,156,152
4,000,000 New York City Municipal Water Finance Authority, NY Water & Sewer System Rev.,
6 1/4% due 6/15/2020 ....................................................... A2/A- 4,322,200
1,775,000 New York City, NY GOs, 7 1/4% due 8/15/2024 .................................... Baa1/BBB+ 1,930,898
660,000 New York City, NY GOs, 7 1/4% due 8/15/2024 .................................... Aaa/BBB+ 732,501
1,500,000 New York City, NY GOs, 6% due 8/1/2026 ......................................... Baa1/BBB+ 1,544,430
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
30
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
NEW YORK SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 2,500,000 New York City, NY Industrial Development Agency Civic Facility Rev.
(The Nightingale-Bamford School Project), 5.85% due 1/15/2020 .............. A3/A $ 2,560,775
2,000,000 New York City, NY Trust for Cultural Resources Rev. (American Museum of
Natural History), 5.65% due 4/1/2027 ....................................... Aaa/AAA 2,045,860
3,500,000 New York State Dormitory Authority Rev. (Rockefeller University),
7 3/8% due 7/1/2014 ........................................................ Aaa/AAA 3,662,960
4,000,000 New York State Dormitory Authority Rev. (Fordham University),
5 3/4% due 7/1/2015 ........................................................ Aaa/AAA 4,158,480
4,000,000 New York State Dormitory Authority Rev. (Rochester Institute of Technology),
5 1/2% due 7/1/2018 ........................................................ Aaa/AAA 4,041,040
3,500,000 New York State Dormitory Authority Rev. (Mental Health Services Facilities
Improvement), 5 3/4% due 8/15/2022 ......................................... Baa1/A- 3,522,960
4,000,000 New York State Dormitory Authority Rev. (Skidmore College),
5 3/8% due 7/1/2023 ........................................................ Aaa/AAA 3,904,320
2,500,000 New York State Energy Research &Development Authority Gas Facilities Rev.
(Brooklyn Union Gas), 6 3/4% due 2/1/2024* ................................. Aaa/AAA 2,734,025
3,000,000 New York State Environmental Facilities Corporation Pollution Control Rev.
(State Water-- Revolving Fund), 6.90% due 11/15/2015 ....................... Aaa/AAA 3,446,460
3,000,000 New York State Housing Finance Agency Rev. (Phillips Village Project),
7 3/4% due 8/15/2017* ...................................................... A2/NR 3,328,680
3,000,000 New York State Local Government Assistance Corp., 6% due 4/1/2024 .............. A3/A+ 3,168,960
2,000,000 New York State Medical Care Facilities Finance Agency Rev.
(The Hospital for Special Surgery), 6 3/8% due 8/15/2024 ................... Aa2/AA 2,163,560
2,000,000 New York State Mortgage Agency (Homeownership Mortgage),
7 1/2% due 4/1/2016 ........................................................ Aa2/NR 2,100,340
3,000,000 New York State Power Authority General Purpose Rev.,
6 1/2% due 1/1/2019 ........................................................ Aaa/AAA 3,278,070
4,000,000 New York State Thruway Authority Service Contract Rev.,
6 1/4% due 4/1/2014 ........................................................ Baa1/BBB+ 4,283,920
4,000,000 New York State Thruway Authority General Rev., 6% due 1/1/2025 ................. Aaa/AAA 4,205,320
4,000,000 Onondaga County, NY Industrial Development Agency Sewer Facilities Rev.
(Bristol Myers-Squibb Co. Project), 5 3/4% due 3/1/2024* ................... Aaa/AAA 4,254,160
2,250,000 Port Authority of New York and New Jersey Consolidated Rev., 6 1/8% due 6/1/2094 A1/AA- 2,492,573
1,000,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2026 ....... Baa1/A 997,040
5,000,000 United Nations Development Corporation, NY (A Public Benefit Corporation
of the State of New York Senior Lien), 6% due 7/1/2026 ..................... A2/NR 5,512,450
-----------
TOTAL MUNICIPAL BONDS (COST $77,416,122)-- 97.6% .................................................... 83,086,174
VARIABLE RATE DEMAND NOTES (Cost $900,000)-- 1.1% ................................................... 900,000
-----------
OTHER ASSETS LESS LIABILITIES-- 1.3% ................................................................ 1,113,456
-----------
NET ASSETS-- 100.0% ................................................................................. $85,099,630
===========
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
31
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
OHIO SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 2,000,000 Barberton, OH Sewer System Mortgage Rev., 6 5/8% due 12/1/2006 ................. Aaa/AAA $ 2,048,840
2,250,000 Beavercreek Local School District, OH GOs (School Improvement Bonds),
5.70% due 12/1/2020 ........................................................ Aaa/AAA 2,321,662
3,450,000 Big Walnut Local School District, OH School Building Construction & Improvement
GOs, 7.20% due 6/1/2007 .................................................... Aaa/AAA 3,857,549
5,000,000 Cleveland, OH Waterworks Improvement Rev., 5 3/4% due 1/1/2021 ................. Aaa/AAA 5,183,750
4,000,000 Columbus, OH GOs, 6 1/2% due 1/1/2010 .......................................... Aaa/AAA 4,356,120
4,500,000 Columbus, OH Municipal Airport Authority Rev. (Port Columbus International
Airport Project), 6% due 1/1/2020* ......................................... Aaa/AAA 4,644,180
3,000,000 DAYTON, OH WATER SYSTEM MORTGAGE REV., 6 3/4% DUE 12/1/2010 .................... AAA/AAA 3,073,890
7,000,000 Erie County, OH Franciscan Services Corp. Rev. (Providence Hospital Inc.),
6% due 1/1/2013 ............................................................ NR/A- 7,168,350
7,000,000 Franklin County, OH GOs, 5 3/8% due 12/1/2020 .................................. Aaa/AAA 7,068,600
7,500,000 Franklin County, OH Hospital Rev. (Riverside United Methodist Hospital),
5 3/4% due 5/15/2020 ....................................................... Aa3/NR 7,610,325
4,000,000 Franklin County, OH Hospital Rev. (Holy Cross Health System Corporation),
5 7/8% due 6/1/2021 ........................................................ Aa3/AA 4,145,640
5,000,000 Hamilton County, OH Health Care System Rev. (Sisters of Charity Health Care),
6 1/4% due 5/15/2014 ....................................................... Aaa/AAA 5,310,400
2,500,000 Hamilton County, OH Sewer System Rev., 5 1/2% due 12/1/2017 .................... Aaa/AAA 2,524,350
7,000,000 Hamilton, OH Electric System Mortgage Rev., 6% due 10/15/2023 .................. Aaa/AAA 7,364,350
4,000,000 Hudson Local School District, OH GOs, 7.10% due 12/15/2013 ..................... A1/NR 4,423,400
1,095,000 Lake County, OH Hospital Improvement Rev. (Lake Hospital System Inc.),
8% due 1/1/2013 ............................................................ Aaa/AAA 1,120,349
4,830,000 Mount Vernon, OH Hospital Rev. (Knox Community Hospital),
7 7/8% due 6/1/2012 ........................................................ NR/NR 4,961,424
2,500,000 Northeast, OH Regional Sewer District Wastewater Rev.,
5.60% due 11/15/2013 ....................................................... Aaa/AAA 2,605,175
5,000,000 Ohio Air Quality Development Authority Pollution Control Rev.
(Ohio Edison Company Project), 7.45% due 3/1/2016 .......................... Aaa/AAA 5,440,600
2,000,000 Ohio Air Quality Development Authority Rev. (Cincinnati Gas & Electric
Company Project), 5.45% due 1/1/2024 ....................................... Aaa/AAA 1,986,000
6,500,000 Ohio Air Quality Development Authority Rev. (JMG Project),
6 3/8% due 1/1/2029* ....................................................... Aaa/AAA 6,980,740
4,430,000 Ohio Housing Finance Agency Residential Mortgage Rev. (Mortgage-Backed
Securities Program), 6.10% due 9/1/2028* ................................... NR/AAA 4,641,444
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
32
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
OHIO SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 3,000,000 Ohio State GOs Infrastructure Improvement, 6 1/2% due 8/1/2011 ................. Aa1/AA+ $ 3,227,700
1,205,000 Ohio State Higher Educational Facilities Commission Rev.
(University of Dayton Project), 7 1/4% due 12/1/2000 ....................... Aaa/AAA 1,337,454
295,000 Ohio State Higher Educational Facilities Commission Rev.
(University of Dayton Project), 7 1/4% due 12/1/2012 ....................... Aaa/AAA 326,031
3,000,000 Ohio State Higher Educational Facilities Commission Rev.
(University of Dayton Project), 5.40% due 12/1/2022 ........................ Aaa/AAA 2,995,650
3,000,000 Ohio State Higher Educational Facilities Commission Rev.
(Oberlin College Project), 5 3/8% due 10/1/2015 ............................ NR/AA 3,010,620
2,000,000 Ohio State Liquor Profits Rev., 6.85% due 3/1/2000 ............................. Aaa/AAA 2,126,800
6,000,000 Ohio State Public Facilities Commission Rev. (Higher Education
Capital Facilities), 6.30% due 5/1/2006 .................................... Aaa/AAA 6,449,820
2,455,000 Ohio State Water Development Authority Rev. (Safe Water),
9 3/8% due 12/1/2010 ....................................................... Aaa/AAA 3,099,757
2,500,000 Ohio State Water Development Authority Solid Waste Disposal Rev.
(North Star BHP Steel, L.L.C. Project-- Cargill, Incorporated, Guarantor),
6.30% due 9/1/2020* ........................................................ Aa3/AA- 2,669,925
8,000,000 Ohio State Water Development Authority Water Development Rev.
(Dayton Power & Light Co. Project), 6.40% due 8/15/2027 .................... Aa3/AA- 8,599,040
3,000,000 Ohio Turnpike Commission, OH Turnpike Rev., 5.70% due 2/15/2017 ................ Aaa/AAA 3,103,830
2,955,000 Pickerington Local School District, OH School Building Construction GOs,
8% due 12/1/2005 ........................................................... Aaa/AAA 3,422,717
4,000,000 Puerto Rico Highway & Transportation Authority Highway Rev.,
5 1/2% due 7/1/2036 ........................................................ Baa1/A 4,013,600
775,000 Toledo, OH Sewer System Rev., 7 3/4% due 11/15/2017 ............................ Aaa/AAA 821,965
560,000 Toledo, OH Waterworks Rev., 7 3/4% due 11/15/2017 .............................. Aaa/AAA 593,936
2,500,000 Twinsburg City School District, OH School Improvement GOs,
5.90% due 12/1/2021 ........................................................ Aaa/AAA 2,627,175
3,000,000 University of Toledo, OH General Receipts Bonds,
7.10% due 6/1/2010 ......................................................... Aaa/AAA 3,278,190
2,000,000 Worthington City School District, OH School Building Construction
& Improvement GOs, 8 3/4% due 12/1/2002 .................................... Aaa/AAA 2,225,380
------------
TOTAL MUNICIPAL BONDS (Cost $143,525,556)-- 98.2% .................................................. 152,766,728
VARIABLE RATE DEMAND NOTES (Cost $700,000)-- 0.4% .................................................. 700,000
OTHER ASSETS LESS LIABILITIES-- 1.4% ............................................................... 2,112,466
------------
NET ASSETS-- 100.0% ................................................................................ $155,579,194
============
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
33
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
OREGON SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 1,000,000 Albany, OR GOs Water Bonds, 6 5/8% due 11/1/2009 ............................... Aaa/AAA $ 1,002,260
2,000,000 Chemeketa, OR Community College District GOs,
5.95% due 6/1/2016 ......................................................... Aaa/AAA 2,131,900
2,000,000 Eugene, OR Electric Utility Rev., 5.80% due 8/1/2022 ........................... Aaa/AAA 2,072,520
1,500,000 Eugene, OR Trojan Nuclear Project Rev., 5.90% due 9/1/2009 ..................... Aa1/AA- 1,501,680
730,000 Eugene, OR Water Utility System Rev., 6.55% due 8/1/2003 ....................... A1/AA- 742,454
2,500,000 Hillsboro, OR Hospital Facilities Authority Rev. (Tuality Healthcare),
5 3/4% due 10/1/2012 ....................................................... NR/BBB+ 2,512,200
1,000,000 Metropolitan Service District, OR GOs (Oregon Convention Center),
6 1/4% due 1/1/2013 ........................................................ Aa/AA+ 1,056,430
1,250,000 Multnomah County School District, OR GOs, 6.80% due 12/15/2004 ................. Aa/A+ 1,257,712
1,750,000 Multnomah County School District, OR GOs, 5 1/2% due 6/1/2015 .................. A1/A+ 1,754,637
2,000,000 North Clackamas Parks & Recreation District -- Clackamas County, OR Rev.
(Recreational Facilities), 5.70% due 4/1/2013 .............................. NR/A- 2,041,560
2,000,000 North Wasco County People's Utility District-- Wasco County, OR Rev.
(Bonneville Power Administration), 5.20% due 12/1/2024 ..................... Aa1/AA- 1,957,140
750,000 Ontario, Or Hospital Facility Authority Health Facilities Rev.
Catholic Health Corporation (Dominican Sisters of Ontario Inc.,
D.B.A. Holy Rosary Medical Center Project), 6.10% DUE 11/15/2017 ........... A1/AA- 782,453
2,500,000 Oregon Department of Administrative Services Certificates of Participation,
5.80% due 5/1/2024 ......................................................... Aaa/AAA 2,596,050
1,000,000 Oregon Department of Transportation Regional Light Rail Extension Rev.,
6.20% due 6/1/2008 ......................................................... Aaa/AAA 1,104,480
2,500,000 Oregon Health, Housing, Educational &Cultural Facilities Authority Rev.
(Reed College Project), 5 3/8% due 7/1/2025 ................................ NR/A+ 2,487,275
1,250,000 Oregon Health Sciences University Rev., 5 1/4% due 7/1/2028 .................... Aaa/AAA 1,223,750
10,000 Oregon Housing Agency Mortgage Rev. (Single Family Mortgage Program),
7 3/8% due 7/1/2020* ....................................................... Aa2/NR 10,418
2,000,000 Oregon Housing & Community Services Department Housing & Finance Rev.
(Assisted or Insured Multi-Unit Program), 5 3/4% due 7/1/2012 .............. A1/A+ 2,028,500
925,000 Oregon Housing & Community Services Department Mortgage Rev. (Single Family
Mortgage Program), 5.65% due 7/1/2019* ..................................... Aa2/NR 925,546
855,000 Oregon Housing & Community Services Department Mortgage Rev. (Single Family
Mortgage Program), 7% due 7/1/2022* ........................................ Aa2/NR 896,391
1,000,000 Oregon Housing & Community Services Department Mortgage Rev. (Single Family
Mortgage Program), 6% due 7/1/2027* ........................................ Aa2/NR 1,024,570
500,000 Oregon State GOs (Veterans' Welfare), 9% due 10/1/2006 ......................... Aa2/AA 662,425
1,460,000 Oregon State GOs (Veterans' Welfare), 5 7/8% due 10/1/2018 ..................... Aa2/AA 1,521,072
500,000 Oregon State GOs (Alternate Energy Project), 8.40% due 1/1/2008 ................ Aa2/AA 536,155
250,000 Oregon State GOs (Elderly & Disabled Housing), 7.20% due 8/1/2021 .............. Aa2/AA 271,333
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
34
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
OREGON SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 1,000,000 Oregon State GOs (Elderly & Disabled Housing), 6.60% due 8/1/2022* ............. Aa2/AA $ 1,088,610
950,000 Port of Portland, OR International Airport Rev., 7.10% due 7/1/2021* ........... Aaa/AAA 1,141,776
50,000 Port of Portland, OR International Airport Rev., 7.10% due 7/1/2021* ........... Aaa/AAA 54,347
500,000 Port of Portland, OR International Airport Rev., 5 3/4% due 7/1/2025* .......... Aaa/AAA 509,670
1,500,000 Port of Portland, OR International Airport Rev., 5 5/8% due 7/1/2026* .......... Aaa/AAA 1,510,080
2,000,000 Portland, OR GOs, 5.60% due 6/1/2014 ........................................... Aa/NR 2,077,440
1,250,000 Portland, OR Hospital Facilities Authority Rev. (Legacy Health System),
6 5/8% due 5/1/2011 ........................................................ Aaa/AAA 1,358,187
2,500,000 Portland, OR Sewer System Rev., 5% due 6/1/2015 ................................ Aaa/AAA 2,465,200
1,000,000 Puerto Rico Highway & Transportation Authority Highway Rev.,
5 1/2% due 7/1/2026 ........................................................ Baa1/A 997,040
1,000,000 Puerto Rico Highway &Transportation Authority Highway Rev.,
5 1/2% due 7/1/2036 ........................................................ Baa1/A 1,003,400
630,000 Puerto Rico Housing Finance Corp. (Single Family Mortgage Rev.),
6.85% due 10/15/2023 ....................................................... Aaa/AAA 665,545
1,000,000 Puerto Rico Ports Authority Rev., 7% due 7/1/2014* ............................. Aaa/AAA 1,091,910
1,000,000 Puerto Rico Telephone Authority Rev., 5 1/2% due 1/1/2013 ...................... A/A+ 1,020,870
2,600,000 Salem, OR Pedestrian Safety Improvements GOs, 5 3/4% due 5/1/2011 .............. Aaa/AAA 2,758,860
1,000,000 Tri-County Metropolitan Transportation District of Oregon GOs
(Light Rail Extension), 6% due 7/1/2012 .................................... Aa/AA+ 1,051,820
1,110,000 Tualatin Development Commission, OR (Urban Renewal & Redevelopment),
7 3/8% due 1/1/2007 ........................................................ Baa1/NR 1,118,491
1,500,000 Washington County, OR Unified Sewerage Agency Rev.,
5 3/4% due 10/1/2011 ....................................................... Aaa/AAA 1,629,690
-----------
TOTAL MUNICIPAL BONDS (Cost $52,926,085)-- 97.8% .................................................... 55,643,847
VARIABLE RATE DEMAND NOTES (Cost $100,000)-- 0.1% ................................................... 100,000
OTHER ASSETS LESS LIABILITIES-- 2.1% ................................................................ 1,173,450
-----------
NET ASSETS-- 100.0% ................................................................................. $56,917,297
===========
SOUTH CAROLINA SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 2,500,000 Anderson County, SC Hospital Rev. (Anderson Memorial Hospital),
5 1/4% due 2/1/2012 ........................................................ Aaa/AAA $ 2,504,325
3,800,000 Berkeley County, SC Water & Sewer Rev., 5.55% due 6/1/2016 ..................... Aaa/AAA 3,845,068
745,000 Charleston County, SC Public Facilities Corp. Certificates of Participation,
7.15% due 2/1/2004 ......................................................... A1/A 790,609
770,000 Charleston County, SC Public Facilities Corp. Certificates of Participation,
7.15% due 8/1/2004 ......................................................... A1/A 817,139
800,000 Charleston County, SC Public Facilities Corp. Certificates of Participation,
7.20% due 2/1/2005 ......................................................... A1/A 856,384
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
35
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
SOUTH CAROLINA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 750,000 Charleston, SC Waterworks & Sewer System Rev., 7 3/4% due 1/1/2011 ............. Aaa/AAA $ 772,358
2,500,000 Charleston, SC Waterworks & Sewer System Rev., 6% due 1/1/2012 ................. A1/AA- 2,612,150
1,500,000 Clemson University, SC Student & Faculty Housing Rev.,
6.65% due 6/1/2011 ......................................................... Aaa/AAA 1,609,950
1,000,000 Clinton, SC Utility System Rev., 7.20% due 6/1/2011 ............................ Baa1/NR 1,095,770
6,000,000 Darlington County, SC Industrial Development Rev. (Nucor
Corporation Project), 5 3/4% due 8/1/2023* ................................. A1/AA- 6,050,280
2,000,000 Darlington County, SC Industrial Development Rev.
(Sonoco Products Company Project), 6% due 4/1/2026 ......................... A2/A 2,068,500
2,500,000 Fairfield County, SC Pollution Control Rev. (South Carolina
Electric & Gas Company), 6 1/2% due 9/1/2014 ............................... A1/A 2,711,275
1,000,000 Georgetown County, SC Pollution Control Facilities Rev.
(International Paper Company), 7 3/8% due 6/15/2005 ........................ A3/A- 1,049,440
3,000,000 Greenville Hospital System, SC Hospital Facilities Rev., 5 1/2% due 5/1/2016 ... NR/AA- 3,025,740
2,000,000 Greenville Hospital System, SC Hospital Facilities Rev., 5 1/4% due 5/1/2023 ... Aa3/AA- 1,961,280
3,000,000 Greenwood County, SC Hospital Facilities Rev. (Self Memorial Hospital),
5 7/8% due 10/1/2017 ....................................................... Aaa/AAA 3,102,420
2,425,000 Lancaster County, SC School District GOs, 6.60% due 7/1/2011 ................... Aaa/AAA 2,673,175
2,600,000 Lancaster County, SC School District GOs, 6.60% due 7/1/2012 ................... Aaa/AAA 2,866,084
2,000,000 Lancaster County, SC Waterworks & Sewer System Rev., 5 1/4% due 5/1/2021 ....... Aaa/AAA 1,939,400
2,720,000 Laurens County, SC Combined Utility System Rev., 5% due 1/1/2018 ............... Aaa/AAA 2,593,221
1,650,000 Laurens County, SC Combined Utility System Rev., 7 5/8% due 1/1/2018 ........... Aaa/AAA 1,715,010
500,000 Laurens County, SC Health Care System, 7.80% due 1/1/2008 ...................... Aaa/AAA 514,940
1,000,000 Lexington County School District, SC Certificates of Participation
(Red Bank/White Knoll Elementary Project), 7.10% due 9/1/2011 .............. Aaa/AAA 1,105,910
1,000,000 Medical University South Carolina Hospital Facilities Rev., 5.60% due 7/1/2011 . Aaa/AAA 1,066,260
3,000,000 Mount Pleasant, SC Water & Sewer Rev., 6% due 12/1/2020 ........................ Aaa/AAA 3,141,870
2,000,000 Myrtle Beach, SC Waterworks & Sewer System Rev., 5 1/4% due 3/1/2020 ........... Aaa/AAA 1,938,440
1,500,000 North Charleston Sewer District, SC Rev., 6 3/8% due 7/1/2012 .................. Aaa/AAA 1,721,775
1,500,000 North Charleston Sewer District, SC Rev., 7 3/4% due 8/1/2018 .................. Aaa/AAA 1,577,760
5,000,000 Oconee County, SC Pollution Control Rev. (Duke Power Co. Project),
5.80% due 4/1/2014 ......................................................... Aa2/A+ 5,151,550
1,250,000 Piedmont Municipal Power Agency, SC Electric Rev., 6 1/4% due 1/1/2021 ......... Aaa/AAA 1,407,537
4,000,000 Piedmont Municipal Power Agency, SC Electric Rev., 6.30% due 1/1/2022 .......... Aaa/AAA 4,314,400
1,000,000 Puerto Rico Highway &Transportation Authority Highway Rev.,
5 1/2%, due 7/1/2036 ....................................................... Baa1/A 1,003,400
1,000,000 Puerto Rico Telephone Authority Rev., 5 1/2% due 1/1/2022 ...................... A/A+ 1,005,250
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
36
<PAGE>
================================================================================
PORTFOLIOS OF INVESTMENTS
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
SOUTH CAROLINA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
- ----------- --------------- ----------- -----------
<C> <C> <C> <C>
$ 2,000,000 Richland County, SC Solid Waste Disposal Facilities Rev.
(Union Camp Corp. Project), 7.45% due 4/1/2021* ............................ A1/A- $ 2,203,440
1,000,000 Richland County, SC Solid Waste Disposal Facilities Rev.
(Union Camp Corp. Project), 7 1/8% due 9/1/2021* ........................... A1/A- 1,089,640
1,000,000 Rock Hill, SC Combined Utilities System Rev., 8% due 1/1/2018 .................. Aaa/AAA 1,030,430
5,000,000 Rock Hill, SC Combined Utilities System Rev., 5% due 1/1/2020 .................. Aaa/AAA 4,723,800
1,000,000 St. Andrews, SC Public Service District Sewer Systems Rev., 7 3/4% due 1/1/2018 Aaa/AAA 1,029,810
6,000,000 SouthCarolina Public Service Authority Rev., 5 7/8% due 1/1/2023 ............... Aaa/AAA 6,226,320
1,740,000 South Carolina State Housing Authority (Single Family Mortgage Purchase),
6.70% due 7/1/2010 ............................................................. Aaa/AAA 1,761,924
500,000 South Carolina State Housing Finance & Development Authority (Homeownership
Mortgage), 7.55% due 7/1/2011 .............................................. Aa/AA 528,845
2,225,000 South Carolina State Housing Finance & Development Authority Rental Housing Rev.
(North Bluff Project), 5.60% due 7/1/2016 .................................. NR/AA 2,219,660
1,000,000 South Carolina State Housing Finance & Development Authority (Multi-Family
Development Rev.), 6 7/8% due 11/15/2023 ................................... Aaa/NR 1,054,420
4,000,000 Spartanburg,SC Water System Rev., 6.10% due 6/1/2021 ........................... Aaa/AAA 4,439,800
3,000,000 University of South Carolina Rev., 5 3/4% due 6/1/2026 ......................... Aaa/AAA 3,080,310
2,000,000 Western Carolina Regional Sewer Authority, SC Sewer System Rev.,
5 1/2% due 3/1/2010 ........................................................ Aaa/AAA 2,065,020
------------
TOTAL MUNICIPAL BONDS (Cost $96,179,289)-- 97.5% .................................................... 102,062,089
VARIABLE RATE DEMAND NOTES (Cost $1,200,000)-- 1.1% ................................................. 1,200,000
OTHER ASSETS LESS LIABILITIES-- 1.4% ................................................................ 1,419,072
------------
NET ASSETS-- 100.0% ................................................................................. $104,681,161
============
</TABLE>
- -----------------
# Ratings have not been audited by Deloitte & Touche LLP.
* Interest income earned from this security is subject
to the federal alternative minimum tax.
See Notes to Financial Statements.
37
<PAGE>
================================================================================
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 1997
<TABLE>
<CAPTION>
NATIONAL COLORADO GEORGIA LOUISIANA MARYLAND
SERIES SERIES SERIES SERIES SERIES
------------- ------------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see portfolios of investments):
Long-term holdings ................................... $ 97,941,690 $ 48,876,692 $51,417,565 $55,061,369 $53,533,567
Short-term holdings .................................. -- 300,000 1,000,000 500,000 --
------------ ------------ ----------- ----------- -----------
97,941,690 49,176,692 52,417,565 55,561,369 53,533,567
Cash .................................................... 645,185 129,761 105,262 124,734 345,555
Interest receivable ..................................... 1,494,792 905,327 903,896 1,029,218 951,320
Receivable for Capital Stock sold ....................... 29,531 4,800 247 209,208 4,760
Expenses prepaid to shareholder service agent ........... 14,122 7,225 7,225 6,897 8,211
Receivable for securities sold .......................... -- 5,033 -- -- --
Other ................................................... 6,183 1,318 1,064 1,118 2,513
------------ ------------ ----------- ----------- -----------
TOTAL ASSETS ............................................ 100,131,503 50,230,156 53,435,259 56,932,544 54,845,926
------------ ------------ ----------- ----------- -----------
LIABILITIES:
Dividends payable ....................................... 171,093 85,964 86,025 100,655 93,261
Payable for Capital Stock repurchased ................... 72,503 50,495 21,722 45,454 62,541
Accrued expenses, taxes, and other ...................... 127,637 75,605 73,498 78,824 78,569
------------ ------------ ----------- ----------- -----------
TOTAL LIABILITIES ....................................... 371,233 212,064 181,245 224,933 234,371
------------ ------------ ----------- ----------- -----------
NET ASSETS .............................................. $ 99,760,270 $ 50,018,092 $53,254,014 $56,707,611 $54,611,555
============ ============ =========== =========== ===========
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A .............................................. $12,169 $6,707 $6,236 $6,790 $6,452
Class D .............................................. 284 32 324 62 253
Additional paid-in capital .............................. 97,488,324 48,217,539 50,021,714 53,243,361 51,203,248
Undistributed/accumulated net realized gain (loss) ...... (2,934,455) (1,333,311) 109,398 93,200 320,110
Net unrealized appreciation of investments .............. 5,193,948 3,127,125 3,116,342 3,364,198 3,081,492
------------ ------------ ----------- ----------- -----------
NET ASSETS .............................................. $ 99,760,270 $ 50,018,092 $53,254,014 $56,707,611 $54,611,555
============ ============ =========== =========== ===========
NET ASSETS:
Class A ................................................. $97,481,082 $49,779,996 $50,613,828 $56,199,301 $52,549,159
Class D ................................................. $ 2,279,188 $ 238,096 $ 2,640,186 $ 508,310 $ 2,062,396
SHARES OF CAPITAL STOCK
OUTSTANDING ($.001 par value):
Class A ................................................. 12,169,119 6,706,744 6,235,684 6,790,162 6,452,043
Class D ................................................. 284,352 32,098 324,597 61,437 253,031
NET ASSET VALUE PER SHARE:
CLASS A ................................................. $8.01 $7.42 $8.12 $8.28 $8.14
CLASS D ................................................. $8.02 $7.42 $8.13 $8.27 $8.15
- ----------
See Notes to Financial Statements.
</TABLE>
38
<PAGE>
================================================================================
<TABLE>
<CAPTION>
MASSACHUSETTS MICHIGAN MINNESOTA MISSOURI
SERIES SERIES SERIES SERIES
-------------- ------------ --------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (see portfolios of investments):
Long-term holdings ................................ $108,148,332 $142,065,206 $120,049,839 $51,069,198
Short-term holdings ............................... 1,800,000 800,000 1,900,000 1,000,000
------------ ------------ ------------- -----------
109,948,332 142,865,206 121,949,839 52,069,198
Cash ................................................. 95,557 82,201 150,293 77,691
Interest receivable .................................. 1,690,365 2,717,447 1,779,670 1,025,583
Receivable for Capital Stock sold .................... 3,872 41,065 10,055 250,101
Expenses prepaid to shareholder service agent ........ 15,436 19,706 19,927 7,225
Receivable for securities sold ....................... -- -- -- --
Other ................................................ 3,091 4,490 3,086 1,754
------------ ------------ ------------- -----------
TOTAL ASSETS ......................................... 111,756,653 145,730,115 123,912,870 53,431,552
------------ ------------ ------------- -----------
LIABILITIES:
Dividends payable .................................... 191,584 257,834 222,691 88,334
Payable for Capital Stock repurchased ................ 184,396 107,074 71,522 27,320
Accrued expenses, taxes, and other ................... 125,018 149,858 145,358 76,172
------------ ------------ ------------- -----------
TOTAL LIABILITIES .................................... 500,998 514,766 439,571 191,826
------------ ------------ ------------- -----------
NET ASSETS ........................................... $111,255,655 $145,215,349 $123,473,299 $53,239,726
============ ============ ============= ===========
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ........................................... $ 13,765 $ 16,680 $ 15,619 $ 6,749
Class D ........................................... 156 215 231 61
Additional paid-in capital ........................... 105,378,850 135,710,431 117,067,819 50,327,782
Undistributed/accumulated net realized gain (loss) ... 1,299,658 1,252,695 (681,481) 384,574
Net unrealized appreciation of investments ........... 4,563,226 8,235,328 7,071,111 2,520,560
------------ ------------ ------------- -----------
NET ASSETS ........................................... $111,255,655 $145,215,349 $123,473,299 $53,239,726
============ ============ ============= ===========
NET ASSETS:
Class A .............................................. $110,010,869 $143,370,409 $121,674,045 $52,765,370
Class D .............................................. $ 1,244,786 $ 1,844,940 $ 1,799,254 $ 474,356
SHARES OF CAPITAL STOCK
OUTSTANDING ($.001 par value):
Class A .............................................. 13,765,527 16,680,052 15,619,226 6,749,209
Class D .............................................. 155,828 214,801 230,915 60,665
NET ASSET VALUE PER SHARE:
CLASS A .............................................. $7.99 $8.60 $7.79 $7.82
CLASS D .............................................. $7.99 $8.59 $7.79 $7.82
</TABLE>
<TABLE>
<CAPTION>
NEW YORK OHIO OREGON SOUTH CAROLINA
SERIES SERIES SERIES SERIES
------------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (see portfolios of investments):
Long-term holdings ................................ $ 83,086,174 $152,766,728 $55,643,847 $102,062,089
Short-term holdings ............................... 900,000 700,000 100,000 1,200,000
------------ ------------ ------------ ------------
83,986,174 153,466,728 55,743,847 103,262,089
Cash ................................................. 131,788 80,946 285,152 102,317
Interest receivable .................................. 1,273,400 2,636,343 973,262 1,686,312
Receivable for Capital Stock sold .................... 3,000 40,483 6,476 8,737
Expenses prepaid to shareholder service agent ........ 11,167 21,406 8,211 14,933
Receivable for securities sold ....................... -- -- 80,637 --
Other ................................................ 4,138 3,900 1,614 2,961
------------ ------------ ------------ ------------
TOTAL ASSETS ......................................... 85,409,667 156,249,806 57,099,199 105,077,349
------------ ------------ ------------ ------------
LIABILITIES:
Dividends payable .................................... 145,872 279,276 94,252 176,994
Payable for Capital Stock repurchased ................ 58,837 223,472 5,478 95,360
Accrued expenses, taxes, and other ................... 105,328 167,864 82,172 123,834
------------ ------------ ------------ ------------
TOTAL LIABILITIES .................................... 310,037 670,612 181,902 396,188
------------ ------------ ------------ ------------
NET ASSETS ........................................... $ 85,099,630 $155,579,194 $ 56,917,297 $104,681,161
============ ============ ============ ============
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ........................................... $ 10,086 $ 18,862 $ 7,017 $ 12,375
Class D ........................................... 189 141 213 449
Additional paid-in capital ........................... 79,220,410 145,276,820 53,474,384 98,335,488
Undistributed/accumulated net realized gain (loss) ... 198,893 1,042,199 717,921 450,049
Net unrealized appreciation of investments ........... 5,670,052 9,241,172 2,717,762 5,882,800
------------ ------------ ------------ ------------
NET ASSETS ........................................... $ 85,099,630 $155,579,194 $ 56,917,297 $104,681,161
============ ============ ============ ============
NET ASSETS:
Class A .............................................. $ 83,528,254 $154,419,269 $55,239,617 $101,018,411
Class D .............................................. $ 1,571,376 $ 1,159,925 $ 1,677,680 $ 3,662,750
SHARES OF CAPITAL STOCK
OUTSTANDING ($.001 par value):
Class A .............................................. 10,085,651 18,861,745 7,016,349 12,374,931
Class D .............................................. 189,563 141,001 213,247 449,078
NET ASSET VALUE PER SHARE:
CLASS A .............................................. $8.28 $8.19 $7.87 $8.16
CLASS D .............................................. $8.29 $8.23 $7.87 $8.16
</TABLE>
39
<PAGE>
================================================================================
STATEMENTS OF OPERATIONS
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
NATIONAL COLORADO GEORGIA LOUISIANA MARYLAND
SERIES SERIES SERIES SERIES SERIES
------------- ----------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
INTEREST .............................. $ 5,959,439 $ 3,016,836 $ 2,983,023 $ 3,372,621 $ 3,244,604
----------- ----------- ----------- ----------- -----------
EXPENSES:
Management fees ....................... 506,520 254,781 261,126 283,702 275,393
Distribution and service fees ......... 132,329 49,865 71,599 59,425 70,856
Shareholder account services .......... 129,467 71,239 70,925 63,874 82,968
Auditing and legal fees ............... 32,344 38,605 33,850 40,598 35,192
Registration .......................... 21,797 5,123 5,786 6,553 7,790
Custody and related services .......... 21,782 12,854 15,392 11,599 13,446
Shareholder reports and communications 18,512 15,848 11,923 13,290 13,799
Shareholders' meeting ................. 8,605 5,428 4,988 3,969 5,776
Directors' fees and expenses .......... 6,550 5,866 5,845 5,956 5,947
Miscellaneous ......................... 6,995 4,567 4,641 1,483 4,748
----------- ----------- ----------- ----------- -----------
TOTAL EXPENSES ........................ 884,901 464,176 486,075 490,449 515,915
----------- ----------- ----------- ----------- -----------
NET INVESTMENT INCOME ................. 5,074,538 2,552,660 2,496,948 2,882,172 2,728,689
----------- ----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments 278,366 (1,295,378) 117,571 96,176 383,873
Net change in unrealized appreciation
of investments ........................ 3,753,003 2,352,484 1,648,469 1,423,177 952,592
----------- ----------- ----------- ----------- -----------
NET GAIN ON INVESTMENTS ............... 4,031,369 1,057,106 1,766,040 1,519,353 1,336,465
----------- ----------- ----------- ----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS $ 9,105,907 $ 3,609,766 $ 4,262,988 $ 4,401,525 $ 4,065,154
=========== =========== =========== =========== ===========
- ----------
See Notes to Financial Statements.
</TABLE>
40
<PAGE>
================================================================================
<TABLE>
<CAPTION>
MASSACHUSETTS MICHIGAN MINNESOTA MISSOURI
SERIES SERIES ERIES SERIES
-------------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ..................................................... $ 6,511,148 $ 8,694,361 $ 7,625,950 $ 3,056,891
----------- ----------- ----------- -----------
EXPENSES:
Management fees .............................................. 551,726 731,198 629,693 262,926
Distribution and service fees ................................ 120,698 160,396 141,728 53,256
Shareholder account services ................................. 142,926 184,992 187,336 69,822
Auditing and legal fees ...................................... 34,887 33,118 36,765 36,394
Registration ................................................. 12,577 9,169 9,372 7,783
Custody and related services ................................. 34,575 36,288 32,699 12,338
Shareholder reports and communications ....................... 15,673 15,435 20,186 15,324
Shareholders' meeting ........................................ 9,307 13,289 14,465 5,354
Directors' fees and expenses ................................. 6,452 6,699 6,589 5,889
Miscellaneous ................................................ 7,459 9,172 8,476 4,495
----------- ----------- ----------- -----------
Total Expenses ............................................... 936,280 1,199,756 1,087,309 473,581
----------- ----------- ----------- -----------
Net Investment Income ........................................ 5,574,868 7,494,605 6,538,641 2,583,310
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments ...................... 1,304,763 1,259,022 757,947 389,565
Net change in unrealized appreciation
of investments ............................................... 1,867,804 2,653,074 978,768 900,350
----------- ----------- ----------- -----------
Net Gain on Investments ...................................... 3,172,567 3,912,096 1,736,715 1,289,915
----------- ----------- ----------- -----------
Increase in Net Assets from Operations ....................... $ 8,747,435 $11,406,701 $ 8,275,356 $ 3,873,225
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
NEW YORK OHIO OREGON SOUTH CAROLINA
SERIES SERIES SERIES SERIES
-------- ------- -------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
INTEREST .......................................$ 4,925,293 $ 9,445,041 $ 3,296,520 $ 6,297,775
----------- ----------- ----------- -----------
EXPENSES:
Management fees ................................ 416,749 787,121 285,086 535,390
Distribution and service fees .................. 90,632 165,154 69,239 133,944
Shareholder account services ................... 99,177 196,399 77,799 137,996
Auditing and legal fees ........................ 32,344 33,557 37,306 33,544
Registration ................................... 7,682 11,930 6,560 7,620
Custody and related services ................... 20,082 36,596 18,178 37,139
Shareholder reports and communications ......... 11,861 22,340 14,064 18,666
Shareholders' meeting .......................... 5,911 14,176 5,874 9,110
Directors' fees and expenses ................... 6,282 6,805 5,902 6,232
Miscellaneous .................................. 5,943 9,913 4,888 7,339
----------- ----------- ----------- -----------
TOTAL EXPENSES ................................. 696,663 1,283,991 524,896 926,980
----------- ----------- ----------- -----------
NET INVESTMENT INCOME .......................... 4,228,630 8,161,050 2,771,624 5,370,795
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments ........ 200,181 1,052,154 747,838 452,558
Net change in unrealized appreciation
of investments ................................. 3,171,620 2,121,935 1,208,172 2,381,666
----------- ----------- ----------- -----------
NET GAIN ON INVESTMENTS ........................ 3,371,801 3,174,089 1,956,010 2,834,224
----------- ----------- ----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS .........$ 7,600,431 $11,335,139 $ 4,727,634 $ 8,205,019
=========== =========== =========== ===========
</TABLE>
41
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NATIONAL SERIES COLORADO SERIES
------------------------------ ------------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------------ ------------------------------
1997 1996 1997 1996
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .......................... $ 5,074,538 $ 5,411,626 $ 2,552,660 $ 2,708,720
Net realized gain (loss) on investments ........ 278,366 1,270,012 (1,295,378) 230,074
Net change in unrealized appreciation
of investments ................................. 3,753,003 477,663 2,352,484 (404,283)
------------- ------------- ------------- -------------
INCREASE IN NET ASSETS FROM
OPERATIONS ..................................... 9,105,907 7,159,301 3,609,766 2,534,511
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ..................................... (4,906,738) (5,337,292) (2,542,330) (2,698,764)
Class D ..................................... (167,800) (74,334) (10,330) (9,956)
Net realized gain on investments:
Class A ..................................... -- -- -- --
Class D ..................................... -- -- -- --
-------------
DECREASE IN NET ASSETS FROM ------------- ------------- -------------
DISTRIBUTIONS .................................. (5,074,538) (5,411,626) (2,552,660) (2,708,720)
------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ..................................... 3,114,125 6,105,129 1,076,262 1,368,525
Class D ..................................... 475,323 940,723 32,754 56,953
Net asset value of shares issued in
payment of dividends:
Class A ..................................... 2,676,250 2,793,160 1,383,913 1,465,852
Class D ..................................... 108,599 56,590 6,306 5,835
Exchanged from associated Funds:
Class A ..................................... 5,221,126 30,244,931 2,519,749 1,429,514
Class D ..................................... 35,760,206 8,276,409 13,676 1,923
Net asset value of shares issued in
payment of gain distribution:
Class A ..................................... -- -- -- --
Class D ..................................... -- -- -- --
------------- ------------- ------------- -------------
Total .......................................... 47,355,629 48,416,942 5,032,660 4,328,602
------------- ------------- ------------- -------------
Cost of shares repurchased:
Class A ..................................... (10,801,204) (13,127,822) (6,020,226) (5,606,419)
Class D ..................................... (585,245) (326,631) (45,914) (1,000)
Exchanged into associated Funds:
Class A ..................................... (5,287,181) (33,145,022) (2,526,522) (1,047,428)
Class D ..................................... (38,546,451) (5,370,882) (29,141) --
------------- ------------- ------------- -------------
Total .......................................... (55,220,081) (51,970,357) (8,621,803) (6,654,847)
------------- ------------- ------------- -------------
DECREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS ............................. (7,864,452) (3,553,415) (3,589,143) (2,326,245)
------------- ------------- ------------- -------------
DECREASE IN NET ASSETS ......................... (3,833,083) (1,805,740) (2,532,037) (2,500,454)
NET ASSETS:
Beginning of year .............................. 103,593,353 105,399,093 52,550,129 55,050,583
------------- ------------- ------------- -------------
END OF YEAR .................................... $ 99,760,270 $ 103,593,353 $ 50,018,092 $ 52,550,129
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
GEORGIA SERIES LOUISIANA SERIES
------------------------------ ------------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------------ ------------------------------
1997 1996 1997 1996
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .............................. $ 2,496,948 $ 2,794,673 $ 2,882,172 $ 3,108,490
Net realized gain (loss) on investments ............ 117,571 234,736 96,176 764,403
Net change in unrealized appreciation
of investments ..................................... 1,648,469 574,897 1,423,177 (27,213)
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS FROM
OPERATIONS ......................................... 4,262,988 3,604,306 4,401,525 3,845,680
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ......................................... (2,406,265) (2,697,792) (2,865,407) (3,091,821)
Class D ......................................... (90,683) (96,881) (16,765) (16,669)
Net realized gain on investments:
Class A ......................................... (180,236) (395,597) (753,044) (467,263)
Class D ......................................... (6,873) (14,504) (5,217) (3,540)
------------ ------------ ------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS ...................................... (2,684,057) (3,204,774) (3,640,433) (3,579,293)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ......................................... 4,134,682 2,193,735 1,489,134 2,360,417
Class D ......................................... 1,056,744 1,001,710 135,107 95,464
Net asset value of shares issued in
payment of dividends:
Class A ......................................... 1,593,994 1,741,886 1,461,539 1,645,661
Class D ......................................... 74,720 77,107 9,122 10,639
Exchanged from associated Funds:
Class A ......................................... 220,471 290,528 21,008 4,573
Class D ......................................... 46,374 7,853 -- --
Net asset value of shares issued in
payment of gain distribution:
Class A ......................................... 140,329 304,162 518,498 317,865
Class D ......................................... 6,295 13,827 3,466 3,070
------------ ------------ ------------ ------------
Total .............................................. 7,273,609 5,630,808 3,637,874 4,437,689
------------ ------------ ------------ ------------
Cost of shares repurchased:
Class A ......................................... (6,985,116) (10,153,419) (5,240,608) (8,844,981)
Class D ......................................... (749,883) (419,468) (34,626) (185,368)
Exchanged into associated Funds:
Class A ......................................... (984,750) (1,457,061) (69,802) (467,638)
Class D ......................................... (201,142) (435,462) -- (5,400)
------------ ------------ ------------ -------------
Total .............................................. (8,920,891) (12,465,410) (5,345,036) (9,503,387)
------------ ------------ ------------ ------------
DECREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS ................................. (1,647,282) (6,834,602) (1,707,162) (5,065,698)
------------ ------------ ------------ ------------
DECREASE IN NET ASSETS ............................. (68,351) (6,435,070) (946,070) (4,799,311)
NET ASSETS:
Beginning of year .................................. 53,322,365 59,757,435 57,653,681 62,452,992
------------ ------------ ------------ ------------
END OF YEAR ........................................ $ 53,254,014 $ 53,322,365 $ 56,707,611 $ 57,653,681
============ ============ ============ ============
- ----------
See Notes to Financial Statements.
</TABLE>
42
<PAGE>
================================================================================
<TABLE>
<CAPTION>
MARYLAND SERIES MASSACHUSETTS SERIES
------------------------------ ------------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .......................... $ 2,728,689 $ 2,850,710 $ 5,574,868 $ 5,969,270
Net realized gain (loss) on investments ........ 383,873 237,843 1,304,763 1,211,500
Net change in unrealized appreciation
of investments ................................. 952,592 207,699 1,867,804 (502,191)
------------- ------------- ------------- -------------
INCREASE IN NET ASSETS FROM
OPERATIONS ..................................... 4,065,154 3,296,252 8,747,435 6,678,579
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income:
Class A ..................................... (2,647,830) (2,793,641) (5,516,992) (5,917,218)
Class D ..................................... (80,859) (57,069) (57,876) (52,052)
Net realized gain on investments:
Class A ..................................... (281,130) (237,764) (1,068,791) (1,556,813)
Class D ..................................... (11,087) (3,924) (14,031) (12,717)
------------- ------------- ------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS .................................. (3,020,906) (3,092,398) (6,657,690) (7,538,800)
------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ..................................... 1,434,072 2,002,265 2,431,716 3,289,916
Class D ..................................... 510,347 1,482,760 288,117 664,274
Net asset value of shares issued in
payment of dividends:
Class A ..................................... 1,543,240 1,630,540 3,307,753 3,456,082
Class D ..................................... 69,209 47,295 31,220 33,741
Exchanged from associated Funds:
Class A ..................................... 613,677 1,117,092 11,842,999 4,648,026
Class D ..................................... -- -- 8,924 180,514
Net asset value of shares issued in
payment of gain distribution:
Class A ..................................... 205,081 175,287 774,630 1,131,226
Class D ..................................... 10,110 3,460 9,688 9,793
------------- ------------- ------------- -------------
Total .......................................... 4,385,736 6,458,699 18,695,047 13,413,572
------------- ------------- ------------- -------------
Cost of shares repurchased:
Class A ..................................... (5,400,781) (6,209,930) (11,114,300) (12,032,238)
Class D ..................................... (509,633) (122,344) (510,040) (239,034)
Exchanged into associated Funds:
Class A ..................................... (896,334) (1,151,307) (9,172,465) (5,473,480)
Class D ..................................... (99,960) (10,726) (8,905) (133,437)
------------- ------------- ------------- -------------
Total .......................................... (6,906,708) (7,494,307) (20,805,710) (17,878,189)
------------- ------------- ------------- -------------
DECREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS ............................. (2,520,972) (1,035,608) (2,110,663) (4,464,617)
------------- ------------- ------------- -------------
DECREASE IN NET ASSETS ......................... (1,476,724) (831,754) (20,918) (5,324,838)
NET ASSETS:
Beginning of year .............................. 56,088,279 56,920,033 111,276,573 116,601,411
------------- ------------- ------------- -------------
END OF YEAR .................................... $ 54,611,555 $ 56,088,279 $ 111,255,655 $ 111,276,573
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
MICHIGAN SERIES
------------------------------
YEAR ENDED SEPTEMBER 30,
------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income .................................... $ 7,494,605 $ 8,012,309
Net realized gain (loss) on investments .................. 1,259,022 1,595,202
Net change in unrealized appreciation
of investments ........................................... 2,653,074 (620,275)
------------- -------------
INCREASE IN NET ASSETS FROM
OPERATIONS ............................................... 11,406,701 8,987,236
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income:
Class A ............................................... (7,427,374) (7,945,727)
Class D ............................................... (67,231) (66,582)
Net realized gain on investments:
Class A ............................................... (1,581,301) (2,526,473)
Class D ............................................... (17,780) (24,970)
------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS ............................................ (9,093,686) (10,563,752)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ............................................... 5,064,050 5,017,723
Class D ............................................... 706,948 643,962
Net asset value of shares issued in
payment of dividends:
Class A ............................................... 4,475,470 4,892,727
Class D ............................................... 47,279 43,735
Exchanged from associated Funds:
Class A ............................................... 9,115,725 2,197,763
Class D ............................................... 258,662 210,059
Net asset value of shares issued in
payment of gain distribution:
Class A ............................................... 1,180,119 1,901,806
Class D ............................................... 13,960 21,146
------------- -------------
Total .................................................... 20,862,213 14,928,921
------------- -------------
Cost of shares repurchased:
Class A ............................................... (15,967,293) (13,211,454)
Class D ............................................... (552,079) (368,116)
Exchanged into associated Funds:
Class A ............................................... (10,959,291) (2,652,409)
Class D ............................................... (145,528) (217,280)
------------- -------------
Total .................................................... (27,624,191) (16,449,259)
------------- -------------
DECREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS ....................................... (6,761,978) (1,520,338)
------------- -------------
DECREASE IN NET ASSETS ................................... (4,448,963) (3,096,854)
NET ASSETS:
Beginning of year ........................................ 149,664,312 152,761,166
------------- -------------
END OF YEAR .............................................. $ 145,215,349 $ 149,664,312
============= =============
</TABLE>
43
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
MINNESOTA SERIES MISSOURI SERIES
------------------------------ -----------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------------ -----------------------------
1997 1996 1997 1996
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .......................... $ 6,538,641 $ 7,189,682 $ 2,583,310 $ 2,553,696
Net realized gain (loss) on investments ........ 757,947 (1,345,678) 389,565 702,168
Net change in unrealized appreciation
of investments ................................. 978,768 (718,882) 900,350 (147,019)
------------- ------------- ------------- -------------
INCREASE IN NET ASSETS FROM
OPERATIONS ..................................... 8,275,356 5,125,122 3,873,225 3,108,845
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ..................................... (6,456,679) (7,091,290) (2,563,601) (2,529,631)
Class D ..................................... (81,962) (98,392) (19,709) (24,065)
Net realized gain on investments:
Class A ..................................... -- (339,461) (542,355) (477,820)
Class D ..................................... -- (5,862) (5,999) (5,541)
------------- ------------- ------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS .................................. (6,538,641) (7,535,005) (3,131,664) (3,037,057)
------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ..................................... 5,444,733 5,136,193 5,524,679 2,604,871
Class D ..................................... 135,740 355,058 39,028 354,207
Net asset value of shares issued in
payment of dividends:
Class A ..................................... 4,394,871 4,809,942 1,240,533 1,314,503
Class D ..................................... 55,878 74,558 15,171 15,852
Exchanged from associated Funds:
Class A ..................................... 356,606 496,211 243,591 90,007
Class D ..................................... 90,000 48,646 100 44,301
Net asset value of shares issued in
payment of gain distribution:
Class A ..................................... -- 270,799 354,701 311,188
Class D ..................................... -- 4,666 5,296 2,649
------------- ------------- ------------- -------------
Total .......................................... 10,477,828 11,196,073 7,423,099 4,737,578
------------- ------------- ------------- -------------
Cost of shares repurchased:
Class A ..................................... (14,412,829) (13,463,390) (4,255,392) (4,836,102)
Class D ..................................... (503,408) (507,655) (114,612) (304,921)
Exchanged into associated Funds:
Class A ..................................... (1,994,727) (1,423,552) (1,021,172) (788,552)
Class D ..................................... (39,298) (135,371) (40,189) (57,294)
------------- ------------- ------------- -------------
Total .......................................... (16,950,262) (15,529,968) (5,431,365) (5,986,869)
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS ..................... (6,472,434) (4,333,895) 1,991,734 (1,249,291)
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS .............. (4,735,719) (6,743,778) 2,733,295 (1,177,503)
NET ASSETS:
Beginning of year .............................. 128,209,018 134,952,796 50,506,431 51,683,934
------------- ------------- ------------- -------------
END OF YEAR .................................... $ 123,473,299 $ 128,209,018 $ 53,239,726 $ 50,506,431
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
NEW YORK SERIES OHIO SERIES
------------------------------ ------------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- ----------- -------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .......................... $ 4,228,630 $ 4,425,553 $ 8,161,050 $ 8,922,203
Net realized gain (loss) on investments ........ 200,181 1,161,126 1,052,154 1,396,965
Net change in unrealized appreciation
of investments ................................. 3,171,620 36,180 2,121,935 (1,059,760)
------------- ------------- ------------- -------------
INCREASE IN NET ASSETS FROM
OPERATIONS ..................................... 7,600,431 5,622,859 11,335,139 9,259,408
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ..................................... (4,176,066) (4,381,889) (8,118,451) (8,882,222)
Class D ..................................... (52,564) (43,664) (42,599) (39,981)
Net realized gain on investments:
Class A ..................................... (213,515) -- (1,382,343) (794,088)
Class D ..................................... (3,062) -- (8,277) (3,482)
------------- ------------- ------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS .................................. (4,445,207) (4,425,553) (9,551,670) (9,719,773)
------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ..................................... 3,917,958 3,350,809 3,568,969 4,520,137
Class D ..................................... 431,628 411,499 352,330 348,741
Net asset value of shares issued in
payment of dividends:
Class A ..................................... 2,427,328 2,485,560 5,063,815 5,490,252
Class D ..................................... 36,517 31,604 38,045 34,422
Exchanged from associated Funds:
Class A ..................................... 4,314,919 3,161,968 858,387 939,551
Class D ..................................... 12,295 184,854 15,368 4,272
Net asset value of shares issued in
payment of gain distribution:
Class A ..................................... 166,872 -- 1,060,708 599,050
Class D ..................................... 2,545 -- 7,582 3,281
------------- ------------- ------------- -------------
Total .......................................... 11,310,062 9,626,294 10,965,204 11,939,706
------------- ------------- ------------- -------------
Cost of shares repurchased:
Class A ..................................... (9,574,807) (9,268,664) (18,663,417) (16,177,726)
Class D ..................................... (68,104) (258,544) (216,985) (24,324)
Exchanged into associated Funds:
Class A ..................................... (3,551,797) (2,173,151) (1,482,349) (2,863,802)
Class D ..................................... (42,506) (116,722) (60,245) (10,486)
------------- ------------- ------------- -------------
Total .......................................... (13,237,214) (11,817,081) (20,422,996) (19,076,338)
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS ..................... (1,927,152) (2,190,787) (9,457,792) (7,136,632)
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS .............. 1,228,072 (993,481) (7,674,323) (7,596,997)
NET ASSETS:
Beginning of year .............................. 83,871,558 84,865,039 163,253,517 170,850,514
------------- ------------- ------------- -------------
End of Year .................................... $ 85,099,630 $ 83,871,558 $ 155,579,194 $ 163,253,517
============= ============= ============= =============
- ----------
See Notes to Financial Statements.
</TABLE>
44
<PAGE>
================================================================================
<TABLE>
<CAPTION>
OREGON SERIES SOUTH CAROLINA SERIES
------------------------------ ------------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------------ ------------------------------
1997 1996 1997 1996
------------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .............................. $ 2,771,624 $ 3,107,679 $ 5,370,795 $ 5,818,944
Net realized gain (loss) on investments ............ 747,838 286,078 452,558 1,720,268
Net change in unrealized appreciation
of investments ..................................... 1,208,172 (342,324) 2,381,666 (81,642)
------------- ------------- ------------- -------------
INCREASE IN NET ASSETS FROM
OPERATIONS ......................................... 4,727,634 3,051,433 8,205,019 7,457,570
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income:
Class A ......................................... (2,712,769) (3,041,984) (5,239,991) (5,721,911)
Class D ......................................... (58,855) (65,695) (130,804) (97,033)
Net realized gain on investments:
Class A ......................................... (304,704) (61,975) (1,667,625) (253,251)
Class D ......................................... (8,165) (1,566) (42,381) (5,029)
------------- ------------- ------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS ...................................... (3,084,493) (3,171,220) (7,080,801) (6,077,224)
------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ......................................... 2,019,494 3,453,799 4,596,375 7,339,428
Class D ......................................... 513,511 410,708 1,258,114 1,431,442
Net asset value of shares issued in
payment of dividends:
Class A ......................................... 1,713,320 1,922,589 3,057,472 3,322,251
Class D ......................................... 43,464 51,715 111,193 85,491
Exchanged from associated Funds:
Class A ......................................... 59,994 554,373 385,497 844,016
Class D ......................................... 105,958 21,324 29,567 --
Net asset value of shares issued in
payment of gain distribution:
Class A ......................................... 232,602 46,901 1,298,064 195,931
Class D ......................................... 6,239 1,353 40,550 4,927
------------- ------------- ------------- -------------
Total .............................................. 4,694,582 6,462,762 10,776,832 13,223,486
------------- ------------- ------------- -------------
Cost of shares repurchased:
Class A ......................................... (6,926,397) (7,135,242) (16,191,089) (14,837,001)
Class D ......................................... (525,899) (304,546) (432,224) (519,148)
Exchanged into associated Funds:
Class A ......................................... (801,759) (932,697) (1,366,846) (2,478,917)
Class D ......................................... (51,638) (129,221) (106,657) (16,928)
------------- ------------- ------------- -------------
Total .............................................. (8,305,693) (8,501,706) (18,096,816) (17,851,994)
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET A
CAPITAL SHARE TRANSACTIONS ......................... (3,611,111) (2,038,944) (7,319,984) (4,628,508)
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS .................. (1,967,970) (2,158,731) (6,195,766) (3,248,162)
NET ASSETS:
Beginning of year .................................. 58,885,267 61,043,998 110,876,927 114,125,089
------------- ------------- ------------- -------------
END OF YEAR ........................................ $ 56,917,297 $ 58,885,267 $ 104,681,161 $ 110,876,927
============= ============= ============= =============
</TABLE>
45
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Municipal Fund Series, Inc. (the
"Fund") consists of 13 separate series: the "National Series," the "Colorado
Series," the "Georgia Series," the "Louisiana Series," the "Maryland Series,"
the "Massachusetts Series," the "Michigan Series," the "Minnesota Series," the
"Missouri Series," the "New York Series," the "Ohio Series," the "Oregon
Series," and the "South Carolina Series." Each Series of the Fund offers two
classes of shares. All shares existing prior to February 1, 1994, the
commencement date of Class D shares, were classified as Class A shares. Class A
shares are sold with an initial sales charge of up to 4.75% and a continuing
service fee of up to 0.25% on an annual basis. Class A shares purchased in an
amount of $1,000,000 or more are sold without an initial sales charge but are
subject to a contingent deferred sales load ("CDSL") of 1% on redemptions within
18 months of purchase. Class D shares are sold without an initial sales charge
but are subject to a distribution fee of up to 0.75% and a service fee of up to
0.25% on an annual basis, and a CDSL of 1% imposed on redemptions made within
one year of purchase. The two classes of shares for each Series represent
interests in the same portfolio of investments, have the same rights and are
generally identical in all respects except that each class bears its separate
distribution and certain other class expenses, and has exclusive voting rights
with respect to any matter on which a separate vote of any class is required.
2. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
a. SECURITY VALUATION -- All municipal securities and other short-term holdings
maturing in more than 60 days are valued based upon quotations provided by
an independent pricing service or, in their absence, at fair value
determined in accordance with procedures approved by the Board of Directors.
Short-term holdings maturing in 60 days or less are generally valued at
amortized cost.
b. FEDERAL TAXES -- There is no provision for federal income tax. Each Series
has elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
c. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Investment
transactions are recorded on trade dates. Identified cost of investments
sold is used for both financial statement and federal income tax purposes.
Interest income is recorded on the accrual basis. The Fund amortizes
original issue discounts and premiums paid on purchases of portfolio
securities. Discounts other than original issue discounts are not amortized.
d. MULTIPLE CLASS ALLOCATIONS -- All income, expenses (other than
class-specific expenses), and realized and unrealized gains or losses are
allocated daily to each class of shares based upon the relative value of the
shares of each class. Class-specific expenses, which include distribution
and service fees and any other items that are specifically attributable to a
particular class, are charged directly to such class. For the year ended
September 30, 1997, distribution and service fees were the only
class-specific expenses.
e. DISTRIBUTIONS TO SHAREHOLDERS -- Dividends are declared daily and paid
monthly. Other distributions paid by the Fund are recorded on the
ex-dividend date. The treatment for financial statement purposes of
distributions made to shareholders during the year from net investment
income or net realized gains may differ from their ultimate treatment for
federal income tax purposes. These differences are caused primarily by
differences in the timing of the recognition of certain components of
income, expense, or realized capital gain for federal income tax purposes.
Where such differences are permanent in nature, they are reclassified in the
components of net assets based on their ultimate characterization for
federal income tax purposes. Any such reclassification will have no effect
on net assets, results of operations, or net asset value per share of the
Fund.
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding short-term investments, for the year ended September 30,
1997, were as follows:
SERIES PURCHASES SALES
- ------- -------------- -----------
National .................................. $20,257,068 $31,445,100
Colorado .................................. 1,971,600 4,980,241
Georgia ................................... 6,297,365 7,704,168
Louisiana ................................. 8,894,825 11,777,281
Maryland .................................. 7,962,960 10,182,170
Massachusetts ............................. 31,357,187 34,857,833
Michigan .................................. 15,757,416 23,896,463
Minnesota ................................. 8,380,328 17,177,125
Missouri .................................. 4,457,100 3,283,300
New York .................................. 19,425,215 21,547,816
Ohio ...................................... 18,308,120 28,742,312
Oregon .................................... 10,855,065 15,713,300
South Carolina ............................ -- 9,536,925
46
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
At September 30, 1997, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation of
portfolio securities were as follows:
TOTAL TOTAL
UNREALIZED UNREALIZED
SERIES APPRECIATION DEPRECIATION
------------- ---------------- ----------------
National ................... $5,332,596 $ 138,648
Colorado ................... 3,127,125 --
Georgia .................... 3,223,885 107,543
Louisiana .................. 3,418,841 54,643
Maryland ................... 3,108,634 27,142
Massachusetts .............. 4,564,252 1,026
Michigan ................... 8,235,328 --
Minnesota .................. 7,114,327 43,216
Missouri ................... 2,520,560 --
New York ................... 5,692,572 22,520
Ohio ....................... 9,279,502 38,330
Oregon ..................... 2,717,762 --
South Carolina ............. 5,900,680 17,880
4. MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides the necessary personnel and facilities. Compensation of all officers of
the Fund, all directors of the Fund who are employees or consultants of the
Manager, and all personnel of the Fund and the Manager is paid by the Manager.
The Manager's fee, calculated daily and payable monthly, is equal to 0.50% per
annum of each Series' average daily net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of each Series' shares, and an affiliate of the Manager, received
the following concessions after commissions were paid to dealers for the sale of
Class A shares:
DISTRIBUTOR DEALER
SERIES CONCESSIONS COMMISSIONS
------ ----------- -----------
National ............... $ 8,749 $ 60,789
Colorado ............... 4,828 36,405
Georgia ................ 7,820 56,992
Louisiana .............. 6,792 49,286
Maryland ............... 7,366 52,904
Massachusetts .......... 10,093 74,691
Michigan ............... 18,739 141,150
Minnesota .............. 9,979 75,908
Missouri ............... 4,557 36,025
New York ............... 11,532 84,357
Ohio ................... 16,992 124,695
Oregon ................. 9,740 74,960
South Carolina ......... 17,715 133,456
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, service organizations can enter into agreements with
the Distributor and receive continuing fees of up to 0.25% on an annual basis,
payable quarterly, of the average daily net assets of the Class A shares
attributable to the particular service organizations for providing personal
services and/or the maintenance of shareholder accounts. For the year ended
September 30, 1997, the Distributor charged such fees to the Fund pursuant to
the Plan as follows:
ANNUALIZED
TOTAL FEES % OF AVERAGE
SERIES PAID NET ASSETS
------------- ------------- ---------------
National .................... $ 91,999 .09%
Colorado .................... 47,350 .09
Georgia ..................... 48,452 .10
Louisiana ................... 55,423 .10
Maryland .................... 51,056 .09
Massachusetts ............... 106,820 .10
Michigan .................... 144,511 .10
Minnesota ................... 122,699 .10
Missouri .................... 48,358 .09
New York .................... 78,075 .09
Ohio ........................ 155,221 .10
Oregon ...................... 54,461 .10
South Carolina .............. 102,127 .09
Under the Plan, with respect to Class D shares, service organizations can
enter into agreements with the Distributor and receive continuing fees for
providing personal services and/or the maintenance of shareholder accounts of up
to 0.25% on an annual basis of the average daily net assets of the Class D
shares for which the organizations are responsible, and fees for providing other
distribution assistance of up to 0.75% on an annual basis of such average daily
net assets. Such fees are paid monthly by the Fund to the Distributor pursuant
to the Plan. For the year ended September 30, 1997, fees paid equivalent to 1%
per annum of the average daily net assets of Class D shares were as follows:
SERIES SERIES
- ----------- -----------
National ............. $40,330 Minnesota .... $19,029
Colorado ............. 2,515 Missouri ..... 4,898
Georgia .............. 23,147 New York ..... 12,557
Louisiana ............ 4,002 Ohio ......... 9,933
Maryland ............. 19,800 Oregon ....... 14,778
Massachusetts ........ 13,878 South Carolina 31,817
Michigan ............. 15,885
The Distributor is entitled to retain any CDSL imposed on redemptions of
Class D shares occurring within one year after purchase and on certain
redemptions of Class A shares occurring within 18 months of purchase. For the
year ended September 30, 1997, such charges were as follows:
47
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
SERIES SERIES
- ------------- -------------
National ............... $1,711 Minnesota ............. $372
Colorado ............... 19 Missouri .............. 64
Georgia ................ 6,039 New York .............. 5
Louisiana .............. 26 Ohio .................. 668
Maryland ............... 2,223 Oregon ................ 105
Massachusetts .......... 260 South Carolina ........ 724
Michigan ............... 398
Seligman Services, Inc., an affiliate of the Manager, is eligible to
receive commissions from certain sales of Fund shares, as well as distribution
and service fees pursuant to the Plan. For the year ended September 30, 1997,
Seligman Services, Inc. received commissions from the sale of shares of each
Series and distribution and service fees pursuant to the Plan, as follows:
DISTRIBUTION AND
SERIES COMMISSIONS SERVICE FEES
------------- ---------------- ---------------------
National .................... $ 456 $ 6,388
Colorado .................... 4,678 2,918
Georgia ..................... 283 988
Louisiana ................... 21 685
Maryland .................... 523 1,425
Massachusetts ............... 1,865 2,080
Michigan .................... 515 2,537
Minnesota ................... 594 2,087
Missouri .................... 1,220 3,261
New York .................... 2,889 12,398
Ohio ........................ 1,485 3,132
Oregon ...................... 24 1,417
South Carolina .............. 2,582 1,576
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost for shareholder account services the following
amounts:
SERIES SERIES
------------- ------------
National .............. $128,809 Minnesota ......... $186,678
Colorado .............. 70,580 Missouri .......... 69,163
Georgia ............... 70,267 New York .......... 98,518
Louisiana ............. 63,215 Ohio .............. 195,740
Maryland .............. 82,309 Oregon ............ 77,140
Massachusetts ......... 142,267 South Carolina .... 137,337
Michigan .............. 184,333
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Fund has a compensation agreement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. Deferred fees and the related accrued interest are not deductible for
federal income tax purposes until such amounts are paid. The cost of such fees
and interest is included in directors' fees and expenses, and the accumulated
balances thereof at September 30, 1997, are as follows:
SERIES SERIES
---------- -------------
National .............. $18,086 Minnesota ......... $15,369
Colorado .............. 11,295 Missouri .......... 11,298
Georgia ............... 10,582 New York .......... 15,334
Louisiana ............. 12,285 Ohio .............. 15,393
Maryland .............. 12,284 Oregon ............ 11,108
Massachusetts ......... 15,354 South Carolina .... 10,626
Michigan .............. 14,857
5. LOSS CARRYFORWARD -- In accordance with current federal income tax law, each
of the Series' net realized capital gains and losses are considered separately
for purposes of determining taxable capital gains. At September 30, 1997, the
net loss carryforwards for the National, Colorado, and Minnesota Series amounted
to $2,934,455, $38,129, and $681,481, respectively, which are available for
offset against future taxable net gains, expiring in various amounts through
2005. Accordingly, no capital gain distributions are expected to be paid to
shareholders of the National, Colorado, and Minnesota Series until net capital
gains have been realized in excess of the available capital loss carryforwards.
48
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
6. CAPITAL STOCK TRANSACTIONS -- The Fund has 1,300,000,000 shares of Capital
Stock authorized. At September 30, 1997, 100,000,000 shares were authorized for
each Series of the Fund. Transactions in shares of Capital Stock were as
follows:
<TABLE>
<CAPTION>
NATIONAL SERIES COLORADO SERIES GEORGIA SERIES LOUISIANA SERIES
--------------------------- ------------------------- ------------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ------------------------- ------------------------- ------------------------
1997 1996 1997 1996 1997 1996 1997 1996
----------- ----------- ---------- -------- ----------- --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sale of shares:
Class A .......... 401,292 787,838 146,785 186,485 513,632 278,594 181,700 289,128
Class D .......... 61,208 122,738 4,493 7,709 133,099 125,912 16,439 11,771
Shares issued
in payment
of dividends:
Class A .......... 343,369 362,598 188,633 200,194 200,681 221,658 179,244 201,153
Class D .......... 13,912 7,360 860 799 9,380 9,793 1,120 1,298
Exchanged from
associated Funds:
Class A .......... 672,956 3,977,611 345,869 197,002 28,040 36,617 2,599 559
Class D .......... 4,606,174 1,084,989 1,897 258 5,782 1,004 -- --
Shares issued
in payment of
gain distributions:
Class A .......... -- -- -- -- 17,674 38,308 63,776 38,670
Class D .......... -- -- -- -- 792 1,739 426 374
---------- ---------- ---------- -------- ---------- ---------- -------- ----------
Total .............. 6,098,911 6,343,134 688,537 592,447 909,080 713,625 445,304 542,953
---------- ---------- ---------- -------- ---------- ---------- -------- ----------
Shares repurchased:
Class A .......... (1,389,619) (1,709,147) (821,576) (766,043) (881,743) (1,294,735) (642,677) (1,076,395)
Class D .......... (75,516) (42,115) (6,235) (139) (94,407) (53,212) (4,237) (22,258)
Exchanged into
associated Funds:
Class A .......... (679,856) (4,341,083) (345,924) (142,468) (123,961) (185,879) (8,595) (56,582)
Class D .......... (4,948,529) (706,332) (4,012) -- (25,271) (55,816) -- (657)
---------- ---------- ---------- -------- ---------- ---------- -------- ----------
Total .............. (7,093,520) (6,798,677) (1,177,747) (908,650) (1,125,382) (1,589,642) (655,509) (1,155,892)
---------- ---------- ---------- -------- ---------- ---------- -------- ----------
Decrease in shares . (994,609) (455,543) (489,210) (316,203) (216,302) (876,017) (210,205) (612,939)
========== ========== ========== ======== ========== ========== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
MARYLAND SERIES MASSACHUSETTS SERIES MICHIGAN SERIES MINNESOTA SERIES
------------------------ --------------------------- ------------------------- ----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------- ------------------------- ----------------------
1997 1996 1997 1996 1997 1996 1997 1996
--------- --------- --------- ----------- --------- --------- --------- --------
Sale of shares:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A .............. 178,081 251,027 308,839 420,626 596,810 590,794 706,910 662,567
Class D .............. 63,517 187,262 36,578 84,893 83,579 75,571 17,609 45,645
Shares issued
in payment
of dividends:
Class A .............. 192,610 203,932 420,799 439,779 529,332 577,449 569,754 622,155
Class D .............. 8,633 5,928 3,981 4,303 5,592 5,165 7,244 9,641
Exchanged from
associated Funds:
Class A .............. 77,084 138,972 1,523,024 598,715 1,080,365 261,523 46,568 63,682
Class D .............. -- -- 1,134 23,224 30,637 24,587 11,509 6,252
Shares issued in
payment of gain
distributions:
Class A .............. 25,571 21,748 98,428 142,832 139,825 222,433 -- 34,629
Class D .............. 1,259 429 1,232 1,238 1,654 2,476 -- 597
-------- -------- ---------- ---------- ---------- ---------- ---------- ----------
Total .................. 546,755 809,298 2,394,015 1,715,610 2,467,794 1,759,998 1,359,594 1,445,168
-------- -------- ---------- ---------- ---------- ---------- ---------- ----------
Shares repurchased:
Class A .............. (674,114) (777,341) (1,413,634) (1,532,595) (1,886,059) (1,562,041) (1,868,498) (1,744,913)
Class D .............. (63,960) (15,227) (65,121) (29,941) (65,355) (43,655) (65,288) (65,660)
Exchanged into
associated Funds:
Class A .............. (112,466) (144,008) (1,175,580) (700,147) (1,297,651) (314,340) (258,689) (183,451)
Class D .............. (12,507) (1,335) (1,133) (17,262) (17,125) (25,575) (5,099) (17,466)
-------- -------- ---------- ---------- ---------- ---------- ---------- ----------
Total .................. (863,047) (937,911) (2,655,468) (2,279,945) (3,266,190) (1,945,611) (2,197,574) (2,011,490)
-------- -------- ---------- ---------- ---------- ---------- ---------- ----------
Decrease in shares ..... (316,292) (128,613) (261,453) (564,335) (798,396) (185,613) (837,980) (566,322)
======== ======== ========== ========== ========== ========== ========== ==========
</TABLE>
49
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
MISSOURI SERIES NEW YORK SERIES OHIO SERIES OREGON SERIES
-------------------------- -------------------------- ------------------------ ----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
-------------------------- -------------------------- ------------------------ ----------------------
1997 1996 1997 1996 1997 1996 1997 1996
---------- ----------- ----------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sale of shares:
Class A .............. 722,053 336,439 486,564 420,183 441,039 556,577 262,547 449,036
Class D .............. 5,024 45,866 52,683 51,905 43,216 42,516 66,778 53,330
Shares issued in
payment of
dividends:
Class A .............. 161,292 170,657 300,867 311,826 626,911 676,616 222,418 250,740
Class D .............. 1,973 2,059 4,524 3,961 4,687 4,228 5,646 6,750
Exchanged from
associated Funds:
Class A .............. 31,545 11,737 540,465 396,166 106,616 115,979 7,803 72,458
Class D .............. 13 5,683 1,501 22,805 1,906 522 13,881 2,730
Shares issued in
payment of gain
distributions:
Class A .............. 46,125 40,153 20,729 -- 131,276 73,144 30,287 6,052
Class D .............. 688 342 316 -- 934 399 813 175
-------- -------- ---------- ---------- ---------- ---------- ---------- ----------
Total .................. 968,713 612,936 1,407,649 1,206,846 1,356,585 1,469,981 610,173 841,271
-------- -------- ---------- ---------- ---------- ---------- ---------- ----------
Shares repurchased:
Class A .............. (553,544) (626,785) (1,191,908) (1,161,173) (2,310,439) (1,993,888) (900,692) (932,734)
Class D .............. (15,067) (40,183) (8,476) (31,991) (26,589) (2,985) (68,686) (39,953)
Exchanged into
associated Funds:
Class A .............. (131,979) (102,871) (442,854) (273,410) (184,026) (354,919) (104,744) (122,134)
Class D .............. (5,250) (7,345) (5,338) (14,800) (7,441) (1,268) (6,685) (16,869)
-------- -------- ---------- ---------- ---------- ---------- ---------- ----------
Total .................. (705,840) (777,184) (1,648,576) (1,481,374) (2,528,495) (2,353,060) (1,080,807) (1,111,690)
-------- -------- ---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease)
in shares ............ 262,873 (164,248) (240,927) (274,528) (1,171,910) (883,079) (470,634) (270,419)
======== ======== ========== ========== ========== ========== ========== ==========
</TABLE>
SOUTH CAROLINA SERIES
-----------------------------
YEAR ENDED
SEPTEMBER 30,
-----------------------------
1997 1996
----------- -----------
SALE OF SHARES:
Class A ..................................... 572,615 909,638
Class D ..................................... 156,977 179,334
Shares issued in payment of dividends:
Class A ..................................... 380,701 412,361
Class D ..................................... 13,850 10,618
Exchanged from associated Funds:
Class A ..................................... 47,863 104,833
Class D ..................................... 3,643 --
Shares issued in payment of gain
distributions:
Class A ..................................... 161,652 24,100
Class D ..................................... 5,056 607
---------- ----------
Total ......................................... 1,342,357 1,641,491
---------- ----------
Shares repurchased:
Class A ..................................... (2,018,325) (1,840,951)
Class D ..................................... (53,697) (65,796)
Exchanged into associated Funds:
Class A ..................................... (170,000) (308,319)
Class D ..................................... (13,276) (2,110)
---------- ----------
Total ......................................... (2,255,298) (2,217,176)
---------- ----------
Decrease in shares ............................ (912,941) (575,685)
========== ==========
50
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance of each Class, on a per share basis, from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, per share amounts are derived by converting
the actual dollar amounts incurred for each item, as disclosed in the financial
statements, to their equivalent per share amounts, based on average shares
outstanding.
"Total return based on net asset value" measures each Class's performance
assuming that investors purchased shares at net asset value as of the beginning
of the period, invested dividends and capital gains paid at net asset value, and
then sold their shares at the net asset value on the last day of the period. The
total return computations do not reflect any sales charges investors may incur
in purchasing or selling shares of each Series. Total returns for periods of
less than one year are not annualized.
<TABLE>
<CAPTION>
NATIONAL SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- ------
PER SHARE OPERATING
PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning Of Period $7.70 $7.58 $7.18 $8.72 $8.07 $7.70 $7.57 $7.18 $8.20
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.39 0.40 0.40 0.41 0.45 0.32 0.33 0.32 0.22
Net realized and unrealized
investment gain (loss) 0.31 0.12 0.40 (1.04) 0.78 0.32 0.13 0.39 (1.02)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) From
Investment Operations 0.70 0.52 0.80 (0.63) 1.23 0.64 0.46 0.71 (0.80)
Dividends paid or declared (0.39) (0.40) (0.40) (0.41) (0.45) (0.32) (0.33) (0.32) (0.22)
Distributions
from net gain realized -- -- -- (0.50) (0.13) -- -- -- --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease)
In Net Asset Value 0.31 0.12 0.40 (1.54) 0.65 0.32 0.13 0.39 (1.02)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value,
End of Period $8.01 $7.70 $7.58 $7.18 $8.72 $8.02 $7.70 $7.57 $7.18
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 9.40% 6.97% 11.48% (7.83)% 16.00% 8.56% 6.13% 10.17% (9.96)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average
net assets 0.84% 0.80% 0.86% 0.85% 0.86% 1.75% 1.67% 1.95% 1.76%+
Net investment income to
average net assets 5.05% 5.19% 5.46% 5.30% 5.49% 4.15% 4.27% 4.40% 4.37%+
Portfolio turnover 20.63% 33.99% 24.91% 24.86% 72.68% 20.63% 33.99% 24.91% 24.86%++
Net Assets, End of Period
(000s omitted) $97,481 $98,767 $104,184 $111,374 $136,394 $2,279 $4,826 $1,215 $446
- ------------
See footnotes on page 57.
</TABLE>
51
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
COLORADO SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net Asset Value,
Beginning of Period $7.27 $7.30 $7.09 $7.76 $7.34 $7.27 $7.29 $7.09 $7.72
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.37 0.37 0.38 0.37 0.39 0.30 0.31 0.30 0.20
Net realized and unrealized
investment gain (loss) 0.15 (0.03) 0.21 (0.59) 0.49 0.15 (0.02) 0.20 (0.63)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease)
from Investment
Operations 0.52 0.34 0.59 (0.22) 0.88 0.45 0.29 0.50 (0.43)
Dividends paid or declared (0.37) (0.37) (0.38) (0.37) (0.39) (0.30) (0.31) (0.30) (0.20)
Distributions from
net gain realized -- -- -- (0.08) (0.07) -- -- -- --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease)
in Net Asset Value 0.15 (0.03) 0.21 (0.67) 0.42 0.15 (0.02) 0.20 (0.63)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $7.42 $7.27 $7.30 $7.09 $7.76 $7.42 $7.27 $7.29 $7.09
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 7.30% 4.76% 8.56% (2.92)% 12.54% 6.34% 3.95% 7.26% (5.73)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.90% 0.85% 0.93% 0.86% 0.90% 1.81% 1.75% 2.02% 1.78%+
Net investment income
to average net assets 5.01% 5.07% 5.31% 5.06% 5.21% 4.10% 4.17% 4.23% 4.05%+
Portfolio turnover 3.99% 12.39% 14.70% 10.07% 14.09% 3.99% 12.39% 14.70% 10.07%++
Net Assets, End of Period
(000s omitted) $49,780 $52,295 $54,858 $58,197 $67,912 $238 $255 $193 $96
</TABLE>
<TABLE>
<CAPTION>
GEORGIA SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning
of Period $7.87 $7.81 $7.48 $8.43 $7.85 $7.88 $7.82 $7.49 $8.33
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.38 0.39 0.39 0.41 0.43 0.31 0.32 0.32 0.22
Net realized and unrealized
investment gain (loss) 0.28 0.11 0.43 (0.86) 0.62 0.28 0.11 0.43 (0.84)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.66 0.50 0.82 (0.45) 1.05 0.59 0.43 0.75 (0.62)
Dividends paid or declared (0.38) (0.39) (0.39) (0.41) (0.43) (0.31) (0.32) (0.32) (0.22)
Distributions from net gain
realized (0.03) (0.05) (0.10) (0.09) (0.04) (0.03) (0.05) (0.10) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.25 0.06 0.33 (0.95) 0.58 0.25 0.06 0.33 (0.84)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $8.12 $7.87 $7.81 $7.48 $8.43 $8.13 $7.88 $7.82 $7.49
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 8.65% 6.56% 11.66% (5.52)% 13.96% 7.67% 5.60% 10.58% (7.57)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.89% 0.83% 0.91% 0.73% 0.63% 1.79% 1.73% 1.90% 1.76%+
Net investment income to average
net assets 4.82% 4.94% 5.26% 5.21% 5.34% 3.92% 4.03% 4.28% 4.28%+
Portfolio turnover 12.28% 16.24% 3.36% 19.34% 12.45% 12.28% 16.24% 3.36% 19.34%++
Net Assets, End of Period
(000s omitted) $50,614 $50,995 $57,678 $61,466 $64,650 $2,640 $2,327 $2,079 $849
Without management fee waiver:*
Net investment income per
share $0.39 $0.40 $0.40 $0.31 $0.21
Ratios:
Expenses to average net assets 0.96% 0.93% 0.93% 1.95% 1.90%+
Net investment income to
average net assets 5.21% 5.01% 5.04% 4.23% 4.15%+
- ------------
See footnotes on page 57.
</TABLE>
52
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of
Period $8.16 $8.14 $7.94 $8.79 $8.38 $8.16 $8.14 $7.94 $8.73
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.41 0.42 0.43 0.44 0.46 0.34 0.35 0.35 0.24
Net realized and unrealized
investment gain (loss) 0.23 0.08 0.34 (0.77) 0.51 0.22 0.08 0.34 (0.79)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.64 0.50 0.77 (0.33) 0.97 0.56 0.43 0.69 (0.55)
Dividends paid or declared (0.41) (0.42) (0.43) (0.44) (0.46) (0.34) (0.35) (0.35) (0.24)
Distributions from net gain
realized (0.11) (0.06) (0.14) (0.08) (0.10) (0.11) (0.06) (0.14) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.12 0.02 0.20 (0.85) 0.41 0.11 0.02 0.20 (0.79)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $8.28 $8.16 $8.14 $7.94 $8.79 $8.27 $8.16 $8.14 $7.94
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 8.17% 6.32% 10.30% (3.83)% 12.10% 7.07% 5.37% 9.17% (6.45)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.86% 0.82% 0.89% 0.87% 0.87% 1.76% 1.72% 1.91% 1.78%+
Net investment income to
average net assets 5.08% 5.15% 5.44% 5.31% 5.40% 4.18% 4.25% 4.41% 4.33%+
Portfolio turnover 16.08% 10.08% 4.82% 17.16% 9.21% 16.08% 10.08% 4.82% 17.16%++
Net Assets, End of Period
(000s omitted) $56,199 $57,264 $61,988 $61,441 $67,529 $509 $389 $465 $704
</TABLE>
<TABLE>
<CAPTION>
MARYLAND SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of
Period $7.99 $7.96 $7.71 $8.64 $8.15 $7.99 $7.97 $7.72 $8.46
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.40 0.40 0.41 0.42 0.44 0.33 0.33 0.33 0.23
Net realized and unrealized
investment gain (loss) 0.19 0.06 0.38 (0.76) 0.59 0.20 0.05 0.38 (0.74)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.59 0.46 0.79 (0.34) 1.03 0.53 0.38 0.71 (0.51)
Dividends paid or declared (0.40) (0.40) (0.41) (0.42) (0.44) (0.33) (0.33) (0.33) (0.23)
Distributions from net gain
realized (0.04) (0.03) (0.13) (0.17) (0.10) (0.04) (0.03) (0.13) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.15 0.03 0.25 (0.93) 0.49 0.16 0.02 0.25 (0.74)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of
Period $8.14 $7.99 $7.96 $7.71 $8.64 $8.15 $7.99 $7.97 $7.72
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 7.64% 6.00% 10.90% (4.08)% 13.23% 6.80% 4.91% 9.75% (6.21)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.90% 0.84% 0.96% 0.92% 0.97% 1.81% 1.72% 2.02% 1.80%+
Net investment income to
average net assets 4.99% 5.05% 5.31% 5.17% 5.28% 4.08% 4.14% 4.27% 4.26%+
Portfolio turnover 14.79% 5.56% 3.63% 17.68% 14.10% 14.79% 5.56% 3.63% 17.68%++
Net Assets, End of Period
(000s omitted) $52,549 $54,041 $56,290 $57,263 $64,472 $2,063 $2,047 $630 $424
</TABLE>
- ------------
See footnotes on page 57.
53
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MASSACHUSETTS SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of
Period $7.85 $7.91 $7.66 $8.54 $8.06 $7.84 $7.90 $7.66 $8.33
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.40 0.41 0.42 0.44 0.47 0.33 0.34 0.34 0.24
Net realized and unrealized
investment gain (loss) 0.22 0.05 0.28 (0.67) 0.55 0.23 0.05 0.27 (0.67)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.62 0.46 0.70 (0.23) 1.02 0.56 0.39 0.61 (0.43)
Dividends paid or declared (0.40) (0.41) (0.42) (0.44) (0.47) (0.33) (0.34) (0.34) (0.24)
Distributions from net gain
realized (0.08) (0.11) (0.03) (0.21) (0.07) (0.08) (0.11) (0.03) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.14 (0.06) 0.25 (0.88) 0.48 0.15 (0.06) 0.24 (0.67)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $7.99 $7.85 $7.91 $7.66 $8.54 $7.99 $7.84 $7.90 $7.66
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 8.11% 5.97% 9.58% (2.94)% 13.18% 7.29% 5.01% 8.33% (5.34)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.84% 0.80% 0.86% 0.85% 0.88% 1.74% 1.70% 1.95% 1.78%+
Net investment income to
average net assets 5.06% 5.24% 5.51% 5.46% 5.65% 4.16% 4.32% 4.47% 4.52%+
Portfolio turnover 29.26% 26.30% 16.68% 12.44% 20.66% 29.26% 26.30% 16.68% 12.44%++
Net Assets, End of Period
(000s omitted) $110,011 $109,872 $115,711 $120,149 $139,504 $1,245 $1,405 $809 $1,099
</TABLE>
<TABLE>
<CAPTION>
MICHIGAN SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of
Period $8.46 $8.54 $8.28 $9.08 $8.68 $8.45 $8.54 $8.28 $9.01
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.43 0.45 0.46 0.46 0.47 0.36 0.37 0.37 0.25
Net realized and unrealized
investment gain (loss) 0.23 0.06 0.30 (0.71) 0.59 0.23 0.05 0.30 (0.73)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.66 0.51 0.76 (0.25) 1.06 0.59 0.42 0.67 (0.48)
Dividends paid or declared (0.43) (0.45) (0.46) (0.46) (0.47) (0.36) (0.37) (0.37) (0.25)
Distributions from net gain
realized (0.09) (0.14) (0.04) (0.09) (0.19) (0.09) (0.14) (0.04) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.14 (0.08) 0.26 (0.80) 0.40 0.14 (0.09) 0.26 (0.73)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $8.60 $8.46 $8.54 $8.28 $9.08 $8.59 $8.45 $8.54 $8.28
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 8.16% 6.16% 9.56% (2.90)% 12.97% 7.19% 5.09% 8.36% (5.47)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.81% 0.78% 0.87% 0.84% 0.83% 1.71% 1.68% 2.01% 1.75%+
Net investment income to
average net assets 5.13% 5.29% 5.50% 5.32% 5.41% 4.23% 4.39% 4.40% 4.40%+
Portfolio turnover 10.98% 19.62% 20.48% 10.06% 6.33% 10.98% 19.62% 20.48% 10.06%++
Net Assets, End of Period
(000s omitted) $143,370 $148,178 $151,589 $151,095 $164,638 $1,845 $1,486 $1,172 $671
</TABLE>
- ------------
See footnotes on page 57.
54
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MINNESOTA SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of
Period $7.68 $7.82 $7.72 $8.28 $7.89 $7.68 $7.82 $7.73 $8.22
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.40 0.42 0.45 0.45 0.47 0.33 0.35 0.38 0.25
Net realized and unrealized
investment gain (loss) 0.11 (0.12) 0.11 (0.44) 0.51 0.11 (0.12) 0.10 (0.49)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.51 0.30 0.56 0.01 0.98 0.44 0.23 0.48 (0.24)
Dividends paid or declared (0.40) (0.42) (0.45) (0.45) (0.47) (0.33) (0.35) (0.38) (0.25)
Distributions from net gain
realized -- (0.02) (0.01) (0.12) (0.12) -- (0.02) (0.01) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.11 (0.14) 0.10 (0.56) 0.39 0.11 (0.14) 0.09 (0.49)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $7.79 $7.68 $7.82 $7.72 $8.28 $7.79 $7.68 $7.82 $7.73
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 6.85% 3.99% 7.61% 0.12% 13.06% 5.89% 3.06% 6.45% (3.08)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.85% 0.81% 0.87% 0.85% 0.90% 1.75% 1.71% 1.85% 1.74%+
Net investment income to
average net assets 5.21% 5.47% 5.89% 5.70% 5.89% 4.31% 4.57% 4.92% 4.68%+
Portfolio turnover 6.88% 26.89% 5.57% 3.30% 5.73% 6.88% 26.89% 5.57% 3.30%++
Net Assets, End of Period
(000s omitted) $121,674 $126,173 $132,716 $134,990 $144,600 $1,799 $2,036 $2,237 $1,649
</TABLE>
<TABLE>
<CAPTION>
MISSOURI SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of
Period $7.71 $7.70 $7.41 $8.31 $7.80 $7.72 $7.70 $7.41 $8.20
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.38 0.39 0.40 0.40 0.42 0.31 0.32 0.32 0.22
Net realized and unrealized
investment gain (loss) 0.19 0.08 0.36 (0.79) 0.57 0.18 0.09 0.36 (0.79)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.57 0.47 0.76 (0.39) 0.99 0.49 0.41 0.68 (0.57)
Dividends paid or declared (0.38) (0.39) (0.40) (0.40) (0.42) (0.31) (0.32) (0.32) (0.22)
Distributions from net gain
realized (0.08) (0.07) (0.07) (0.11) (0.06) (0.08) (0.07) (0.07) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.11 0.01 0.29 (0.90) 0.51 0.10 0.02 0.29 (0.79)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $7.82 $7.71 $7.70 $7.41 $8.31 $7.82 $7.72 $7.70 $7.41
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 7.70% 6.27% 10.67% (4.85)% 13.17% 6.60% 5.46% 9.49% (7.16)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.89% 0.86% 0.88% 0.74% 0.71% 1.80% 1.76% 1.98% 1.70%+
Net investment income to
average net assets 4.93% 5.03% 5.31% 5.18% 5.29% 4.02% 4.13% 4.23% 4.27%+
Portfolio turnover 6.47% 8.04% 3.88% 14.33% 17.03% 6.47% 8.04% 3.88% 14.33%++
Net Assets, End of Period
(000s omitted) $52,766 $49,941 $51,169 $52,621 $56,861 $474 $565 $515 $350
Without management fee waiver:*
Net investment income per share $0.39 $0.39 $0.41 $0.32 $0.22
Ratios:
Expenses to average net assets 0.93% 0.88% 0.91% 2.03% 1.80%+
Net investment income to
average net assets 5.26% 5.04% 5.09% 4.18% 4.17%+
</TABLE>
- ------------
See footnotes on page 57.
55
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NEWYORK SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of
Period $7.98 $7.86 $7.67 $8.75 $8.13 $7.98 $7.87 $7.67 $8.55
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.41 0.42 0.42 0.43 0.45 0.34 0.34 0.34 0.23
Net realized and unrealized
investment gain (loss) 0.32 0.12 0.36 (0.88) 0.74 0.33 0.11 0.37 (0.88)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.73 0.54 0.78 (0.45) 1.19 0.67 0.45 0.71 (0.65)
Dividends paid or declared (0.41) (0.42) (0.42) (0.43) (0.45) (0.34) (0.34) (0.34) (0.23)
Distributions from net gain
realized (0.02) -- (0.17) (0.20) (0.12) (0.02) -- (0.17) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.30 0.12 0.19 (1.08) 0.62 0.31 0.11 0.20 (0.88)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of
Period $8.28 $7.98 $7.86 $7.67 $8.75 $8.29 $7.98 $7.87 $7.67
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 9.45% 6.97% 10.93% (5.37)% 15.26% 8.60% 5.86% 9.87% (7.73)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.82% 0.77% 0.88% 0.87% 0.94% 1.73% 1.68% 1.96% 1.81%+
Net investment income to
average net assets 5.09% 5.24% 5.52% 5.31% 5.37% 4.18% 4.33% 4.42% 4.39%+
Portfolio turnover 23.83% 25.88% 34.05% 28.19% 27.90% 23.83% 25.88% 34.05% 28.19%++
Net Assets, End of Period
(000s omitted) $83,528 $82,719 $83,980 $90,914 $104,685 $1,572 $1,152 $885 $476
</TABLE>
<TABLE>
<CAPTION>
OHIO SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of
Period $8.09 $8.11 $7.90 $8.77 $8.28 $8.13 $8.15 $7.92 $8.61
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.42 0.43 0.44 0.44 0.46 0.35 0.36 0.36 0.24
Net realized and unrealized
investment gain (loss) 0.17 0.02 0.28 (0.70) 0.56 0.17 0.02 0.30 (0.69)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.59 0.45 0.72 (0.26) 1.02 0.52 0.38 0.66 (0.45)
Dividends paid or declared (0.42) (0.43) (0.44) (0.44) (0.46) (0.35) (0.36) (0.36) (0.24)
Distributions from net gain
realized (0.07) (0.04) (0.07) (0.17) (0.07) (0.07) (0.04) (0.07) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.10 (0.02) 0.21 (0.87) 0.49 0.10 (0.02) 0.23 (0.69)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of
Period $8.19 $8.09 $8.11 $7.90 $8.77 $8.23 $8.13 $8.15 $7.92
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 7.54% 5.68% 9.59% (3.08)% 12.81% 6.57% 4.74% 8.67% (5.36)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.81% 0.77% 0.84% 0.84% 0.85% 1.71% 1.67% 1.93% 1.78%+
Net investment income to
average net assets 5.19% 5.32% 5.56% 5.34% 5.44% 4.29% 4.42% 4.48% 4.41%+
Portfolio turnover 11.76% 12.90% 2.96% 9.37% 30.68% 11.76% 12.90% 2.96% 9.37%++
Net Assets, End of Period
(000s omitted) $154,419 $162,243 $170,191 $171,469 $190,083 $1,160 $1,011 $660 $324
</TABLE>
- ------------
See footnotes on page 57.
56
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OREGON SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of
Period $7.65 $7.66 $7.43 $8.08 $7.60 $7.64 $7.65 $7.43 $8.02
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.38 0.40 0.40 0.40 0.42 0.31 0.33 0.33 0.22
Net realized and unrealized
investment gain (loss) 0.26 -- 0.25 (0.59) 0.48 0.27 -- 0.24 (0.59)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.64 0.40 0.65 (0.19) 0.90 0.58 0.33 0.57 (0.37)
Dividends paid or declared (0.38) (0.40) (0.40) (0.40) (0.42) (0.31) (0.33) (0.33) (0.22)
Distributions from net gain
realized (0.04) (0.01) (0.02) (0.06) -- (0.04) (0.01) (0.02) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.22 (0.01) 0.23 (0.65) 0.48 0.23 (0.01) 0.22 (0.59)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of Period $7.87 $7.65 $7.66 $7.43 $8.08 $7.87 $7.64 $7.65 $7.43
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 8.60% 5.27% 9.05% (2.38)% 12.21% 7.77% 4.33% 7.86% (4.76)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.90% 0.86% 0.86% 0.78% 0.78% 1.80% 1.76% 1.83% 1.72%+
Net investment income to
average net assets 4.88% 5.18% 5.40% 5.20% 5.35% 3.98% 4.28% 4.41% 4.32%+
Portfolio turnover 19.46% 28.65% 2.47% 9.43% 8.08% 19.46% 28.65% 2.47% 9.43%++
Net Assets, End of Period
(000s omitted) $55,239 $57,345 $59,549 $59,884 $62,095 $1,678 $1,540 $1,495 $843
Without management fee waiver:*
Net investment income per share $0.40 $0.39 $0.41 $0.33 $0.22
Ratios:
Expenses to average net assets 0.91% 0.89% 0.93% 1.88% 1.82%+
Net investment income to aver
net assets 5.35% 5.09% 5.20% 4.36% 4.22%+
</TABLE>
<TABLE>
<CAPTION>
SOUTH CAROLINA SERIES CLASS A CLASS D
--------------------------------------------------- -----------------------------------
YEAR ENDED 2/1/94**
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, TO
--------------------------------------------------- -------------------------
1997 1996 1995 1994 1993 1997 1996 1995 9/30/94
----- ----- ----- ----- ----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of
Period $8.07 $7.97 $7.61 $8.52 $8.00 $8.06 $7.97 $7.61 $8.42
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income 0.40 0.41 0.41 0.41 0.43 0.33 0.34 0.34 0.22
Net realized and unrealized
investment gain (loss) 0.22 0.12 0.37 (0.79) 0.54 0.23 0.11 0.37 (0.81)
----- ----- ----- ----- ----- ----- ----- ----- -----
Increase (Decrease) from
Investment Operations 0.62 0.53 0.78 (0.38) 0.97 0.56 0.45 0.71 (0.59)
Dividends paid or declared (0.40) (0.41) (0.41) (0.41) (0.43) (0.33) (0.34) (0.34) (0.22)
Distributions from net gain
realized (0.13) (0.02) (0.01) (0.12) (0.02) (0.13) (0.02) (0.01) --
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Increase (Decrease) in
Net Asset Value 0.09 0.10 0.36 (0.91) 0.52 0.10 0.09 0.36 (0.81)
----- ----- ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of
Period $8.16 $8.07 $7.97 $7.61 $8.52 $8.16 $8.06 $7.97 $7.61
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED
ON NET ASSET VALUE: 7.99% 6.82% 10.69% (4.61)% 12.52% 7.15% 5.73% 9.63% (7.14)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 0.84% 0.80% 0.88% 0.83% 0.85% 1.75% 1.70% 1.85% 1.74%+
Net investment income to
average net assets 5.04% 5.15% 5.38% 5.12% 5.19% 4.13% 4.25% 4.40% 4.29%+
Portfolio turnover -- 20.66% 4.13% 1.81% 17.69% -- 20.66% 4.13% 1.81%++
Net Assets, End of Period
(000s omitted) $101,018 $108,163 $112,421 115,133 $120,589 $3,663 $2,714 $1,704 $1,478
</TABLE>
- -------------------
* During the periods stated, the Manager, at its discretion, waived portions
of its fees for the Georgia, Missouri, and
Oregon Series.
** Commencement of offering of Class D shares.
+ Annualized.
++ For the year ended September 30, 1994.
See Notes to Financial Statements.
57
<PAGE>
================================================================================
Report of Independent Auditors
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN MUNICIPAL FUND SERIES, INC.:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of the National, Colorado, Georgia, Louisiana,
Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York, Ohio, Oregon,
and South Carolina Series of Seligman Municipal Fund Series, Inc. as of
September 30, 1997, the related statements of operations for the year then ended
and of changes in net assets for each of the years in the two-year period then
ended, and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1997 by correspondence with the Fund's custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of each Series of
Seligman Municipal Fund Series, Inc. as of September 30, 1997, the results of
their operations, the changes in their net assets, and the financial highlights
for the respective stated periods, in conformity with generally accepted
accounting principles.
/s/DELOITTE & TOUCHE LLP
New York, New York
October 31, 1997
- --------------------------------------------------------------------------------
58
<PAGE>
================================================================================
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
FRED E. BROWN
DIRECTOR EMERITUS
DIRECTOR AND CONSULTANT, J. & W. Seligman & Co. Incorporated
JOHN R. GALVIN 2
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Corporation
DIRECTOR, USLIFE Corporation
ALICE S. ILCHMAN 3
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
BETSY S. MICHEL 2
TRUSTEE, Geraldine R. Dodge Foundation
CHAIRMAN OF THE BOARD OF TRUSTEES, St. George's School
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3
RETIRED VICE PRESIDENT, Pfizer Inc.
DIRECTOR, USLIFE Corporation
JAMES N. WHITSON 2
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. SELIGMAN & CO. INCORPORATED
CHAIRMAN, Seligman Data Corp.
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
- --------------------------------------------------------------------------------
59
<PAGE>
================================================================================
Executive Officers
- --------------------------------------------------------------------------------
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
THOMAS G. MOLES
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT
THOMAS G. ROSE
TREASURER
FRANK J. NASTA
SECRETARY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
GENERAL COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Deloitte & Touche LLP
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 Shareholder Services
(800) 622-4597 24-Hour Automated
Telephone Access
Service
- --------------------------------------------------------------------------------
60
<PAGE>
================================================================================
Glossary of Financial Terms
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio. For tax purposes,
these profits may be considered short-, mid-, or long-term capital gains and may
be taxed at different rates.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will be based not on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES LOAD (CDSL) -- Depending on the class of shares owned,
a fee charged by a mutual fund when shares are sold back to the fund (the CDSL
expires after a fixed time period).
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE (OP) -- The price at which a mutual fund's share can be
purchased. The offering price per share is the current net asset value plus any
sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, officers and directors, how shares are bought and
redeemed, fund fees and other charges, and the fund's financial statements.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- Document that contains updated or more
detailed information about a mutual fund and supplements the prospectus. It is
available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The AVERAGE ANNUAL TOTAL
RETURN represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
- ----------------
Adapted from the Investment Company Institute's 1997 MUTUAL FUND
FACT BOOK.
61
<PAGE>
Seligman Financial Services, Inc.
an affiliate of
[LOGO]
J. & W. Seligman & Co.
Incorporated
Established 1864
100 Park Avenue, New York, NY 10017
This material is intended only for the information of shareholders or those
who have received the offering prospectus covering shares of Captial Stock of
Seligman Municipal Fund Series, Inc., which contains information about the
sales charges, management fee, and other costs. Please read the prospectus
carefully before investing or sending money.
[LOGO]
TEA2 9/97 Printed on Recycled Paper
