SELIGMAN
---------------------
MUNICIPAL FUND [GRAPHIC OMITTED]
SERIES. INC.
ANNUAL REPORT
SEPTEMBER 30, 1998
---------
PROVIDING
INCOME EXEMPT
FROM REGULAR
INCOME
TAX
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
SELIGMAN--TIMES CHANGE...VALUES ENDURE
J. & W. SELIGMAN & CO. INCORPORATED IS A FIRM WITH A LONG TRADITION OF
INVESTMENT EXPERTISE, OFFERING A BROAD ARRAY OF INVESTMENT CHOICES TO HELP
TODAY'S INVESTORS SEEK THEIR LONG-TERM FINANCIAL GOALS.
TIMES CHANGE...
Established in 1864, Seligman's history of providing financial services has been
marked not by fanfare, but rather by a quiet and firm adherence to financial
prudence. While the world has changed dramatically in the 134 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions through changing times.
In the late 19th century, as the country grew, Seligman helped finance the
westward expansion of the railroads, the construction of the Panama Canal, and
the launching of urban transit systems. In the first part of the 20th century,
as America became an industrial power, the firm helped fund the growing capital
needs of the nascent automobile and steel industries.
With the formation of Tri-Continental Corporation in 1929 -- today, the nation's
largest diversified publicly-traded closed-end investment company -- Seligman
began shifting its emphasis from investment banking to investment management.
Despite the stock market crash and ensuing depression, Seligman was convinced of
the importance that investment companies could have in building wealth for
individual investors and launched its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including funds that focus on technology stocks, municipal
bonds, and international securities.
...VALUES ENDURE
Seligman is proud of its distinctive past and of the traditional values that
continue to shape the firm's business decisions and investment judgment. While
much has changed over the years, the firm's commitment to providing prudent
investment management that seeks to build wealth for clients over time is an
enduring value that will guide Seligman into the new millennium.
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 ......................... 64
Board of Directors ..................................... 65
Executive Officers AND For More Information ............ 66
Glossary of Financial Terms ............................ 67
<PAGE>
TO THE SHAREHOLDERS
Seligman Municipal Fund Series posted strong results for its fiscal year ended
September 30, 1998. Although the growth of the US economy slowed from its record
pace, the expansion continued. Inflation and interest rates reached their lowest
levels in a quarter century, and unemployment was at its lowest level since
1970.
Despite ongoing strength in the US, economic turmoil spread throughout the rest
of the world. The Asian financial crisis worsened, Japan failed to resolve its
banking problems, Russia's economy became chaotic, and economic crises loomed
throughout much of Latin America, particularly in Brazil. Fears of risk in
nearly all types of financial assets drove investors out of the equity markets
and into the relative safety and quality of investments such as US Treasury
bonds, often a haven from a turbulent stock market. This "flight to quality"
helped create a more attractive environment for municipal bonds.
Major factors influencing the market for municipal bonds over the year were the
prolonged Treasury bond rally and heavy issuance of municipal securities.
Municipal bond holders fared well as interest rates generally declined over this
time period. Nonetheless, the performance of the municipal market lagged that of
the Treasury bond market, as investors focused on quality because of concerns
about financial instability. Treasury bond prices rose sharply over the 12-month
period, sending yields significantly lower. At one point in the period, selected
municipal obligations traded at the same yield as Treasuries, even though
municipals offered more favorable tax treatment. Currently, long-term municipal
bonds have not been this attractive, relative to long-term Treasuries, since
1986, when proposed legislation threatened the tax-exempt status of municipal
securities.
Looking ahead, we see the favorable climate for municipal bonds continuing. Low
inflation and a growing economy should serve to protect the value of municipal
investments. Fewer new issues may be entering the market, which could tighten
the supply/demand balance. This could improve overall total rate-of-return
prospects. Also, although the US economy continues to grow, this growth is
slowing, and the global situation is forcing the Federal Reserve into a more
benign strategy on interest rates. The Fed has already cut short-term rates
twice, and we expect more cuts until a semblance of international stability
emerges. Finally, the municipal market's record of safety and stability offers
further appeal to investors in these more troubled times, especially as equity
market volatility continues.
All in all, we feel the investment attractiveness of municipals remains
compelling. In this period of global economic uncertainty and low interest
rates, municipals are an appropriate alternative for those investors with
suitable investment requirements.
As you may know, companies are modifying their computer systems to recognize
dates of January 1, 2000, and beyond. This is often referred to as the "Y2K"
problem. Unless systems are updated, many applications may interpret the last
two digits of the year to mean 1900 instead of 2000. J. & W. Seligman & Co.
Incorporated, the Seligman Investment Companies, and Seligman Data Corp., your
shareholder service agent, have jointly established a team to ensure that your
investment and shareholder services are not disrupted. This team is supported by
consulting firms specializing in Y2K solutions. Substantial work has been
performed to date, and we are confident that when our plans are finalized and
all systems are tested, there will be no disruption in the services provided by
your Fund.
Thank you for your continued support of Seligman Municipal Fund Series. We 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
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
-----------------------
Brian T. Zino
President
October 30, 1998
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER
Q. WHAT ECONOMIC FACTORS INFLUENCED SELIGMAN MUNICIPAL FUND SERIES IN THE LAST
12 MONTHS?
A. The continuing combination of low inflation, low unemployment, and steady
economic growth throughout the past 12 months sustained what became one of
the nation's longest peacetime economic expansions. This contributed to the
overall improvement of the financial condition of America's states, cities,
and municipalities. Over the past year, credit rating upgrades significantly
outnumbered rating downgrades. These upgrades enhanced the overall
creditworthiness of the municipal marketplace.
But, by the end of the fiscal year, there was widespread expectation that
the US may be unable to avoid the economic slowdown that has already gripped
much of the world. While many economists were calling a recession unlikely,
the fact that they were including its potential in their forecasts implied
that the ongoing domestic economic expansion would not continue. In the
final months of the fiscal year, turmoil in world markets began to
contribute to a modest slowdown in the pace of US economic growth, and
prevented an acceleration in the rate of inflation. In September, the
Federal Reserve Board lowered the federal funds rate by one-quarter of one
percent. With a warning that growing fear among investors and lenders was
threatening the nation's economic expansion, the Fed unexpectedly cut
interest rates again in October, the first time in four and a half years
that the central bank had changed interest-rate policy outside one of its
normally scheduled meetings. This unusual timing suggested that the Fed
believed that the domestic economy is beginning to deteriorate as the
worldwide financial crisis gains momentum, and that a credit shortage may be
developing that could further curb growth. Fed officials have hinted that
more interest-rate reductions will ensue if the global financial turmoil
escalates. Declining US equity markets reflected these fears, as investors
sold stocks in favor of the relative safety and quality of US Treasury
bonds, which are often considered a haven from a volatile stock market.
Q. WHAT MARKET FACTORS INFLUENCED SELIGMAN MUNICIPAL FUND SERIES IN THE LAST 12
MONTHS?
A. Overall, Seligman Municipal Fund Series ended its fiscal year on a positive
note. During the period, long-term municipal yields fluctuated within a
narrow range, decreasing by almost one-half of a point. The declining
interest-rate environment led to rising prices for the majority of holdings
and competitive performance results for each Series' net asset value.
[GRAPHIC OMITTED]
SELIGMAN MUNICIPAL TEAMS: (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 SERIES' INVESTMENT OBJECTIVE.
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER
THOMAS G. MOLES
However, the municipal market underperformed the US Treasury market during
the 12-month period. The ongoing strength in the economy over the year
caused the supply of Treasury bonds to shrink, as the federal government
needed to borrow less after running its first budget surplus in 29 years.
But, the solid economy and low interest rates caused the supply of municipal
bonds to grow. The net reduction in Treasury financing and the increasing
municipal bond issuance was compounded by the increased investor demand for
Treasuries. These factors caused the decline in Treasury yields to
significantly outpace the drop in municipal yields. Because of these
factors, long-term municipal bonds have not been as attractive, relative to
long-term Treasuries, since 1986, when proposed tax legislation threatened
the tax-exempt status of municipal securities.
Q. WHAT WAS YOUR INVESTMENT STRATEGY?
A. Throughout the 12-month period, the long-term interest rate outlook was
positive, and Seligman Municipal Fund Series was positioned to benefit from
the declining interest-rate environment. The Seligman Municipals Team
engaged in duration-extension trades, selling shorter-term holdings and
replacing them with long-term, current-coupon bonds. Current-coupon bonds
have coupon rates that are at or near current market rates. Generally, when
long-term bond yields decline, the prices appreciate more than those of
shorter-term bonds.
During the past 12 months, we also improved the call protection of the
portfolios. As the bonds within the portfolio mature, older holdings
approach their optional call dates (a callable bond can be redeemed by the
issuer, prior to maturity, on specified dates and at predetermined prices).
Declining interest rates increase the risk that these bonds will be called
by the issuer. The lower interest-rate environment over the 12-month period
prompted many municipal issuers to retire outstanding, higher-coupon debt.
Additionally, as a direct result of the significant increase in refunding
volume, many of the portfolio's holdings were advance-refunded, which had a
positive impact on performance. In general, when a municipal bond is
refunded, total return performance is improved, and the bond's rating is
often upgraded.
Q. WHAT IS YOUR OUTLOOK?
A. Long-term municipal yields have fallen to levels not seen in many years.
Municipal securities continue to offer a significant yield advantage
compared to the after-tax returns of other fixed-income investments.
Further, as the yield spread between municipal and Treasury bonds
normalizes, municipal market performance should improve, relative to the
Treasury market. Finally, the municipal market's record of safety and
stability may become more appealing as volatility persists in the US equity
markets. Consequently, we remain optimistic about the long-term prospects
for the municipal bond market, and for Seligman Municipal Fund Series.
3
<PAGE>
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,
1998, 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 Fund 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
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9526 10000 10000
9794 10281 10185
9885 10377 10252
10476 10998 10859
9/30/89 10347 10862 10867
10756 11291 11284
10684 11216 11335
10964 11510 11600
9/30/90 10771 11307 11607
11382 11948 12107
11578 12154 12381
11824 12412 12645
9/30/91 12305 12917 13136
12688 13319 13578
12657 13286 13619
13162 13816 14136
9/30/92 13393 14059 14511
13688 14369 14775
14381 15096 15323
14944 15688 15824
9/30/93 15536 16309 16359
15617 16394 16588
14336 15049 15677
14423 15141 15851
9/30/94 14320 15033 15959
14064 14763 15729
15224 15981 16841
15613 16390 17247
9/30/95 15964 16758 17744
16891 17731 18475
16524 17346 18251
16636 17464 18392
9/30/96 17077 17926 18815
17453 18322 19295
17355 18218 19250
18016 18912 19914
9/30/97 18682 19611 20516
19264 20223 21072
19493 20463 21314
19781 20765 21638
9/30/98 20363 21376 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 (0.54)% 3.81% 4.55% 7.37% n/a
Without Sales Charge 4.46 9.00 5.56 7.89 n/a
CLASS D**
With 1% CDSC 2.87 6.76 n/a n/a n/a
Without CDSC 3.87 7.76 n/a n/a 4.57%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A $8.32 $8.16 $8.01 Class A $0.394 -- 3.86%
Class D 8.31 8.16 8.02 Class D 0.319 -- 3.16
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
Revenue Bonds 81% Aaa/AAA 38% A/A 21%
General Obligation Bonds 19 Aa/AA 29 Baa/BBB 12
</TABLE>
WEIGHTED AVERAGE MATURITY 24.7 years
- ----------
See footnotes on page 16.
4
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN COLORADO MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9528 10000 10000
9813.95 10299.64 10185
9917.61 10408.43 10252
10474.22 10992.58 10859
9/30/89 10452.21 10969.48 10867
10799.09 11333.52 11284
10734.07 11265.29 11335
10984.95 11528.58 11600
9/30/90 10909.81 11449.72 11607
11344.18 11905.6 12107
11533.33 12104.1 12381
11743.36 12324.51 12645
9/30/91 12126.35 12726.46 13136
12410.18 13024.34 13578
12382.81 12995.61 13619
12793.04 13426.14 14136
9/30/92 13065.18 13711.74 14511
13361.95 14023.2 14775
13805.63 14488.84 15323
14248.54 14953.67 15824
9/30/93 14703.19 15430.82 16359
14846.95 15581.7 16588
14123.24 14822.16 15677
14249.19 14954.35 15851
9/30/94 14273.9 14980.28 15959
14085.74 14782.8 15729
14979.21 15720.49 16841
15236.82 15990.85 17247
9/30/95 15495.22 16262.03 17744
16052.56 16846.95 18475
15862.52 16647.51 18251
16025.26 16818.31 18392
9/30/96 16232.1 17035.38 18815
16596.37 17417.68 19295
16574.53 17394.77 19250
17015.93 17858.01 19914
9/30/97 17416.77 18278.7 20516
17844.68 18727.78 21072
18034.86 18927.37 21314
18300.18 19205.82 21638
9/30/98 18814 19745 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 (0.58)% 2.89% 4.03% 6.52% n/a
Without Sales Charge 4.32 8.03 5.05 7.04 n/a
CLASS D**
With 1% CDSC 2.70 5.90 n/a n/a n/a
Without CDSC 3.70 6.90 n/a n/a 3.89%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.64 $7.50 $7.42 CLASS A $0.360 -- 3.80%
CLASS D 7.63 7.50 7.42 CLASS D 0.291 -- 3.09
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
REVENUE BONDS 81% AAA/AAA 49%
GENERAL OBLIGATION BONDS 19 AA/AA 25
A/A 12
WEIGHTED AVERAGE MATURITY 21.3 years Baa/BBB 14
</TABLE>
- ------------
See footnotes on page 16.
5
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN GEORGIA MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9530 10000 10000
9858.8 10345.47 10185
9951 10442.11 10252
10539.97 11060.27 10859
9/30/89 10496.44 11014.6 10867
10832.01 11366.73 11284
10832.01 11366.73 11335
11072.38 11618.96 11600
9/30/90 11040.95 11585.98 11607
11591.31 12163.51 12107
11803.42 12386.08 12381
12040.7 12635.07 12645
9/30/91 12509.22 13126.72 13136
12863.3 13498.27 13578
12854.83 13489.38 13619
13378.28 14039 14136
9/30/92 13716 14392.82 14511
14021.03 14713.13 14775
14427.52 15139.68 15323
14915.7 15651.95 15824
9/30/93 15630.27 16401.79 16359
15732.53 16509.1 16588
14658.86 15382.44 15677
14748.93 15476.96 15851
9/30/94 14768 15496.62 15959
14530.75 15248 15729
15650.32 16422.82 16841
16120.93 16916.67 17247
9/30/95 16489.52 17303.45 17744
17314.63 18169.3 18475
16958.21 17795.28 18251
17109.44 17953.99 18392
9/30/96 17571.95 18439.32 18815
17983.71 18871.42 19295
17833.25 18713.54 19250
18519.79 19433.96 19914
9/30/97 19091.39 20033.77 20516
19605.21 20572.95 21072
19826.96 20805.64 21314
20153.91 21148.73 21638
9/30/98 20702 21724 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 (0.55)% 3.35% 4.76% 7.55% n/a
Without Sales Charge 4.41 8.44 5.78 8.07 n/a
CLASS D**
With 1% CDSC 2.94 6.59 n/a n/a n/a
Without CDSC 3.94 7.59 n/a n/a 4.90%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.38 $8.21 $8.12 CLASS A $0.375 $0.032 3.69%
CLASS D 8.40 8.23 8.13 CLASS D 0.301 0.032 2.99
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
Revenue Bonds 66% Aaa/AAA 43%
General Obligation Bonds 34 Aa/AA 36
A/A 18
WEIGHTED AVERAGE MATURITY 18.6 years Baa/BBB 3
</TABLE>
- --------
See footnotes on page 16.
6
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN LOUISIANA MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9523 10000 10000
9732.81 10220.08 10185
9848.63 10341.7 10252
10380.93 10900.65 10859
9/30/89 10383.79 10903.65 10867
10719.31 11255.97 11284
10721.19 11257.94 11335
10984.21 11534.15 11600
9/30/90 10923.82 11470.73 11607
11455.08 12028.59 12107
11695.72 12281.27 12381
11939.1 12536.84 12645
9/30/91 12397.93 13018.63 13136
12758.92 13397.71 13578
12744.2 13382.26 13619
13268.39 13932.7 14136
9/30/92 13529.88 14207.28 14511
13758.47 14447.31 14775
14282.07 14997.13 15323
14713.74 15450.41 15824
9/30/93 15166.51 15925.85 16359
15333.5 16101.2 16588
14507.95 15234.31 15677
14569.92 15299.39 15851
9/30/94 14585.03 15315.25 15959
14431.18 15153.69 15729
15379.62 16149.62 16841
15681.87 16467.01 17247
9/30/95 16086.5 16891.9 17744
16898.5 17744.61 18475
16624.27 17456.58 18251
16677.94 17512.94 18392
9/30/96 17103.45 17959.75 18815
17488 18363.56 19295
17469.59 18344.23 19250
18049.78 18953.45 19914
9/30/97 18500.82 19427.08 20516
18966.3 19915.86 21072
19171.91 20131.77 21314
19408.04 20379.72 21638
9/30/98 19996 20997 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 (0.69)% 2.98% 4.66% 7.17% n/a
Without Sales Charge 4.30 8.08 5.68 7.70 n/a
Class D**
With 1% CDSC 2.82 6.11 n/a n/a n/a
Without CDSC 3.82 7.11 n/a n/a 4.61%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.51 $8.36 $8.28 CLASS A $0.407 $0.014 3.82%
CLASS D 8.50 8.35 8.27 CLASS D 0.331 0.014 3.11
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
Revenue Bonds 85% Aaa/AAA 78%
General Obligation Bonds 15 Aa/AA 14
Baa/BBB 8
WEIGHTED AVERAGE MATURITY 20.0 years
</TABLE>
- ----------
See footnotes on page 16.
7
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MARYLAND MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9523 10000 10000
9755 10243 10185
9871 10365 10252
10448 10971 10859
9/30/89 10421 10943 10867
10779 11318 11284
10752 11290 11335
10977 11527 11600
9/30/90 10887 11432 11607
11442 12015 12107
11630 12212 12381
11841 12434 12645
9/30/91 12331 12948 13136
12640 13272 13578
12681 13316 13619
13140 13798 14136
9/30/92 13459 14133 14511
13681 14366 14775
14188 14898 15323
14677 15412 15824
9/30/93 15239 16002 16359
15313 16080 16588
14503 15229 15677
14593 15323 15851
9/30/94 14617 15349 15959
14475 15200 15729
15482 16257 16841
15825 16617 17247
9/30/95 16210 17022 17744
16912 17759 18475
16620 17453 18251
16815 17657 18392
9/30/96 17183 18043 18815
17532 18410 19295
17417 18289 19250
17976 18876 19914
9/30/97 18495 19421 20516
18949 19898 21072
19179 20139 21314
19438 20411 21638
9/30/98 19954 20954 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 (0.92)% 2.72% 4.52% 7.15% n/a
Without Sales Charge 4.04 7.89 5.54 7.68 n/a
Class D**
With 1% CDSC 2.69 5.91 n/a n/a n/a
Without CDSC 3.69 6.91 n/a n/a 4.59%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.32 $8.19 $8.14 CLASS A $0.395 $0.048 3.86%
CLASS D 8.33 8.19 8.15 CLASS D 0.321 0.048 3.15
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
Revenue Bonds 77% Aaa/AAA 43%
General Obligation Bonds 23 Aa/AA 38
A/A 17
WEIGHTED AVERAGE MATURITY 21.8 years Baa/BBB 2
</TABLE>
- ---------
See footnotes on page 16.
8
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MASSACHUSETTS MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9525 10000 10000
9716.55 10201 10185
9765.6 10252.61 10252
10343.83 10859.68 10859
9/30/89 10304.4 10818.29 10867
10558.88 11085.44 11284
10556 11082.46 11335
10775 11312.65 11600
9/30/90 10560 11086.62 11607
11130.86 11685.94 12107
11463.16 12034.83 12381
11730.29 12315.27 12645
9/30/91 12232.45 12842.47 13136
12574.71 13201.8 13578
12645.32 13275.93 13619
13123.25 13777.69 14136
9/30/92 13425.45 14094.96 14511
13716.21 14400 14775
14210 14918.62 15323
14723.31 15457.53 15824
9/30/93 15194.58 15952.32 16359
15296.89 16059.74 16588
14579.3 15306.38 15677
14698.91 15431.93 15851
9/30/94 14747.79 15483.25 15959
14618.99 15348.02 15729
15520 16294.06 16841
15810.25 16598.68 17247
9/30/95 16160.94 16966.86 17744
16840.83 17680.65 18475
16549.23 17374.51 18251
16726.63 17560.75 18392
9/30/96 17125.04 17979.03 18815
17537.45 18412 19295
17399.28 18266.93 19250
17989.8 18886.9 19914
9/30/97 18514.12 19437.36 20516
19059.03 20009.44 21072
19313.65 20276.76 21314
19612.26 20590.27 21638
9/30/98 20328 21342 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 0.26% 4.56% 4.96% 7.35% n/a
Without Sales Charge 5.25 9.80 5.99 7.88 n/a
CLASS D**
With 1% CDSC 3.78 7.68 n/a n/a n/a
Without CDSC 4.78 8.68 n/a n/a 5.00%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.27 $8.04 $7.99 CLASS A $0.380 $0.094 3.72%
CLASS D 8.26 8.03 7.99 CLASS D 0.307 0.094 3.02
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C> <C> <C>
Revenue Bonds 88% Aaa/AAA 60% Baa/BBB 5%
General Obligation Bonds 12 Aa/AA 28 Non-Rated 2
A/A 5
WEIGHTED AVERAGE MATURITY 22.5 years
</TABLE>
- ---------
See footnotes on page 16.
9
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MICHIGAN MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9520 10000 10000
9762 10253 10185
9862 10359 10252
10483 11011 10859
9/30/89 10463 10991 10867
10807 11351 11284
10799 11343 11335
11055 11612 11600
9/30/90 10941 11492 11607
11439 12015 12107
11676 12265 12381
11933 12534 12645
9/30/91 12400 13025 13136
12813 13458 13578
12837 13484 13619
13356 14029 14136
9/30/92 13709 14399 14511
14006 14712 14775
14481 15210 15323
15012 15769 15824
9/30/93 15487 16267 16359
15614 16401 16588
14892 15642 15677
14977 15731 15851
9/30/94 15038 15795 15959
14859 15607 15729
15836 16634 16841
16109 16920 17247
9/30/95 16475 17304 17744
17204 18071 18475
16925 17778 18251
17053 17912 18392
9/30/96 17490 18371 18815
17846 18745 19295
17777 18673 19250
18399 19326 19914
9/30/97 18916 19869 20516
19404 20382 21072
19634 20623 21314
19940 20944 21638
9/30/98 20548 21583 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 (0.31)% 3.45% 4.80% 7.47% n/a
Without Sales Charge 4.66 8.63 5.82 8.00 n/a
Class D**
With 1% CDSC 3.19 6.66 n/a n/a n/a
Without CDSC 4.19 7.66 n/a n/a 4.76%
Lehman Index*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ capital gain+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.83 $8.64 $8.60 CLASS A $0.413 $0.074 3.76%
CLASS D 8.82 8.63 8.59 CLASS D 0.334 0.074 3.06
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
Revenue Bonds 78% Aaa/AAA 56%
General Obligation Bonds 22 Aa/AA 34
A/A 10
WEIGHTED AVERAGE MATURITY 21.7 years
</TABLE>
- ---------
See footnotes on page 16.
10
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MINNESOTA MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9519 10000 10000
9753.87 10246.75 10185
9797.9 10293.04 10252
10387.15 10912.03 10859
9/30/89 10312.42 10833.52 10867
10718.59 11260.21 11284
10722 11263.82 11335
10965.59 11519.69 11600
9/30/90 10909.45 11460.73 11607
11417.72 11994.69 12107
11565.86 12150.3 12381
11779.82 12375.06 12645
9/30/91 12120 12732.44 13136
12277.28 12897.67 13578
12407.49 13034.46 13619
12785.26 13431.33 14136
9/30/92 13054.27 13713.92 14511
13219.38 13887.39 14775
13762.71 14458.16 15323
14282.38 15004.09 15824
9/30/93 14759.49 15505.32 16359
15002.26 15760.36 16588
14517.49 15251.1 15677
14620.72 15359.54 15851
9/30/94 14776.66 15523.36 15959
14621.5 15360.38 15729
15352.49 16128.29 16841
15637.43 16427.63 17247
9/30/95 15900.95 16704.47 17744
16289.3 17112.44 18475
16095.31 16908.65 18251
16228.13 17048.18 18392
9/30/96 16535.26 17370.82 18815
16841.41 17692.45 19295
16836.9 17687.71 19250
17239.31 18110.45 19914
9/30/97 17667 18559.75 20516
18023.44 18934.2 21072
18194.93 19114.35 21314
18445.64 19377.72 21638
9/30/98 19023 19984 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 (0.41)% 2.54% 4.19% 6.64% n/a
Without Sales Charge 4.55 7.68 5.21 7.17 n/a
CLASS D**
With 1% CDSC 3.07 5.71 n/a n/a n/a
Without CDSC 4.07 6.71 n/a n/a 4.01%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $7.98 $7.82 $7.79 CLASS A $0.381 $0.009 4.01%
CLASS D 7.98 7.82 7.79 CLASS D 0.310 0.009 3.33
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
Revenue Bonds 49% Aaa/AAA 36%
General Obligation Bonds 51 Aa/AA 44
A/A 20
WEIGHTED AVERAGE MATURITY 19.1 years Caa/CCC --
</TABLE>
- -----------
See footnotes on page 16.
11
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN MISSOURI MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9530 10000 10000
9840 10325 10185
9888 10376 10252
10457 10973 10859
9/30/89 10420 10933 10867
10769 11300 11284
10763 11293 11335
11047 11592 11600
9/30/90 10989 11531 11607
11515 12083 12107
11738 12317 12381
12012 12605 12645
9/30/91 12485 13100 13136
12824 13456 13578
12827 13459 13619
13304 13960 14136
9/30/92 13468 14131 14511
13754 14432 14775
14222 14923 15323
14717 15442 15824
9/30/93 15242 15993 16359
15322 16077 16588
14386 15096 15677
14468 15182 15851
9/30/94 14503 15218 15959
14354 15062 15729
15403 16162 16841
15684 16458 17247
9/30/95 16051 16842 17744
16787 17615 18475
16457 17269 18251
16648 17468 18392
9/30/96 17056 17897 18815
17410 18269 19295
17279 18131 19250
17844 18724 19914
9/30/97 18370 19275 20516
18817 19745 21072
18983 19918 21314
19326 20279 21638
9/30/98 19915 20897 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 (0.06)% 3.26% 4.48% 7.13% n/a
Without Sales Charge 4.91 8.41 5.49 7.65 n/a
CLASS D**
With 1% CDSC 3.44 6.45 n/a n/a n/a
Without CDSC 4.44 7.45 n/a n/a 4.50%
Lehman Index*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.03 $7.83 $7.82 CLASS A $0.361 $0.065 3.74%
CLASS D 8.03 7.83 7.82 CLASS D 0.290 0.065 3.04
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
Revenue Bonds 83% Aaa/AAA 37%
General Obligation Bonds 17 Aa/AA 42
A/A 19
WEIGHTED AVERAGE MATURITY 20.7 years Baa/BBB 2
</TABLE>
- ----------
See footnotes on page 16.
12
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN NEW YORK MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9522 10000 10000
9795.85 10287.58 10185
9831.7 10325.23 10252
10464.69 10990 10859
9/30/89 10412.17 10934.85 10867
10715.78 11253.7 11284
10601.73 11133.91 11335
10907.95 11455.51 11600
9/30/90 10744.36 11283.71 11607
11163 11723.47 12107
11422.33 11995.71 12381
11717.99 12306.3 12645
9/30/91 12308.64 12926.51 13136
12673.09 13309.25 13578
12691.1 13328.17 13619
13278.24 13944.8 14136
9/30/92 13514.89 14193.3 14511
13852.61 14547.99 14775
14494.16 15221.74 15323
15040.21 15795.1 15824
9/30/93 15576.56 16358.47 16359
15689.78 16477.38 16588
14652.19 15387.71 15677
14751.42 15491.92 15851
9/30/94 14740.09 15480 15959
14445.54 15170.66 15729
15619.57 16403.62 16841
15953.87 16754.7 17247
9/30/95 16351.81 17172.61 17744
17234.58 18099.7 18475
16900.48 17748.83 18251
17042.67 17898.17 18392
9/30/96 17491.31 18369.32 18815
17895.13 18793.4 19295
17759.91 18651.42 19250
18404.4 19328.24 19914
9/30/97 19144.53 20105.53 20516
19692.39 20680.88 21072
19950.06 20951.49 21314
20287.34 21305.71 21638
9/30/98 21061 22119 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 0.51% 4.83% 5.18% 7.73% n/a
Without Sales Charge 5.57 10.02 6.22 8.26 n/a
CLASS D**
With 1% CDSC 4.09 7.88 n/a n/a n/a
Without CDSC 5.09 8.88 n/a n/a 5.24%
Lehman Index*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.60 $8.34 $8.28 CLASS A $0.396 $0.083 3.91%
CLASS D 8.60 8.34 8.29 CLASS D 0.320 0.083 3.23
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
Revenue Bonds 82% Aaa/AAA 63%
General Obligation Bonds 18 Aa/AA 7
A/A 22
WEIGHTED AVERAGE MATURITY 23.4 YEARS BAA/BBB 8
</TABLE>
- -----------
See footnotes on page 16.
13
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN OHIO MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9530 10000 10000
9754.2 10234.95 10185
9872.56 10359.14 10252
10383.6 10895 10859
9/30/89 10349.39 10859 10867
10723.38 11251.89 11284
10752.44 11282.38 11335
10973.43 11514.26 11600
9/30/90 10939.46 11478.62 11607
11429.34 11992.63 12107
11642.71 12216.52 12381
11891.53 12477.62 12645
9/30/91 12356.91 12965.93 13136
12722.51 13349.54 13578
12758.09 13386.87 13619
13258.92 13912 14136
9/30/92 13552.56 14220.49 14511
13795 14475 14775
14288.48 14992.66 15323
14794 15523.5 15824
9/30/93 15289 16042.54 16359
15400.9 16159.93 16588
14647.76 15369.67 15677
14800.84 15530.2 15851
9/30/94 14817.82 15548 15959
14645.21 15366.99 15729
15592.5 16360.98 16841
15903.56 16687.38 17247
9/30/95 16238.7 17039.04 17744
16875.69 17707.43 18475
16603.51 17420.83 18251
16787 17614 18392
9/30/96 17160.31 18006 18815
17512.51 18375.63 19295
17432.84 18292 19250
17952.56 18837 19914
9/30/97 18454.49 19364 20516
18981.86 19917 21072
19142.67 20086 21314
19428.69 20386 21638
9/30/98 20074 21063 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 (0.14)% 3.59% 4.57% 7.22% n/a
Without Sales Charge 4.86 8.77 5.60 7.73 n/a
CLASS D**
With 1% CDSC 3.38 6.78 n/a n/a n/a
Without CDSC 4.38 7.78 n/a n/a 4.67%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.37 $8.18 $8.19 CLASS A $0.403 $0.108 3.83%
CLASS D 8.41 8.22 8.23 CLASS D 0.331 0.108 3.14
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C> <C> <C>
Revenue Bonds 70% Aaa/AAA 77% Baa/BBB 3%
General Obligation Bonds 30 Aa/AA 14 Non-Rated 3
A/A 3
</TABLE>
WEIGHTED AVERAGE MATURITY 19.8 YEARS
- -----------
See footnotes on page 16.
14
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN OREGON MUNICIPAL SERIES
[GRAPHIC OMITTED]
[Table below reflect plotting points for line chart]
DATE With Load Without Load Lehman**
9/30/88 9526 10000 10000
9808.05 10296 10185
9877.56 10369 10252
10518.28 11042 10859
9/30/89 10473.59 10995 10867
10832.08 11371 11284
10789.62 11326.7 11335
11079.6 11631 11600
9/30/90 10996.06 11543 11607
11535.49 12109.7 12107
11774.38 12360.5 12381
12021.8 12620 12645
9/30/91 12453.6 13073.5 13136
12783.8 13420 13578
12824.3 13462.7 13619
13218.59 13876.6 14136
9/30/92 13493.56 14165 14511
13777.93 14463.79 14775
14199 14905.8 15323
14666.42 15396.5 15824
9/30/93 15141.12 15894.8 16359
15280 16040.6 16588
14595.89 15322 15677
14722.65 15455.5 15851
9/30/94 14781.1 15516.9 15959
14582.5 15309 15729
15478.6 16249 16841
15786.8 16573 17247
9/30/95 16118.9 16921 17744
16703.7 17535 18475
16444.8 17263 18251
16619 17446.7 18392
9/30/96 16968.8 17813.5 18815
17339.6 18202.8 19295
17298.4 18159.6 19250
17837.7 18725.7 19914
9/30/97 18427.3 19344.7 20516
18908 19849.7 21072
19126 20078 21314
19424.5 20391 21638
9/30/98 19990 20986 22302
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<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 (0.41)% 3.36% 4.70% 7.17% n/a
Without Sales Charge 4.52 8.48 5.71 7.69 n/a
CLASS D**
With 1% CDSC 3.04 6.37 n/a n/a n/a
Without CDSC 4.04 7.37 n/a n/a 4.72%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29++
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.05 $7.88 $7.87 CLASS A $0.363 $0.100 3.73%
CLASS D 8.04 7.87 7.87 CLASS D 0.291 0.100 3.02
</TABLE>
<TABLE>
<CAPTION>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
<S> <C> <C> <C>
Revenue Bonds 61% Aaa/AAA 44%
General Obligation Bonds 39 Aa/AA 29
A/A 22
WEIGHTED AVERAGE MATURITY 18.0 years Baa/BBB 5
</TABLE>
- --------
See footnotes on page 16.
15
<PAGE>
PERFORMANCE OVERVIEW AND PORTFOLIO SUMMARY
SELIGMAN SOUTH CAROLINA MUNICIPAL SERIES
DATE With Load Without Load Lehman**
9/30/88 9524 10000 10000
9805.9 10295.5 10185
9858 10350 10252
10492 11016 10859
9/30/89 10420.6 10940.9 10867
10845.8 11387 11284
10804 11343.77 11335
11066 11619 11600
9/30/90 10887 11430.78 11607
11498 12071.9 12107
11722 12306.9 12381
11968 12565.5 12645
9/30/91 12406 13025 13136
12822 13462 13578
12880 13523 13619
13369 14036.7 14136
9/30/92 13655.9 14337.8 14511
13898 14592 14775
14361.8 15078.9 15323
14851.7 15593 15824
9/30/93 15366 16133 16359
15525 16300 16588
14566 15293 15677
14653 15384.7 15851
9/30/94 14656 15388 15959
14484.7 15207.97 15729
15531.8 16307 16841
15854.8 16646.5 17247
9/30/95 16223 17033 17744
17041.7 17892.6 18475
16714.8 17549 18251
16894 17738 18392
9/30/96 17329.8 18195 18815
17711.5 18595.86 19295
17577.66 18455 19250
18189 19097 19914
9/30/97 18714 19648 20516
19255 20216.8 21072
19455.8 20427 21314
19738 20723.8 21638
9/30/98 20334 21349 22302
[GRAPHIC OMITTED]
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.
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------------
CLASS D
SIX ONE FIVE 10 SINCE INCEPTION
MONTHS* YEAR YEARS YEARS 2/1/94
--------- ------ ------- ------- -------------------
CLASS A**
<S> <C> <C> <C> <C>
With Sales Charge (0.46)% 3.46% 4.75% 7.36% n/a
Without Sales Charge 4.51 8.66 5.76 7.88 n/a
CLASS D**
With 1% CDSC 3.04 6.68 n/a n/a n/a
Without CDSC 4.04 7.68 n/a n/a 4.76%
LEHMAN INDEX*** 4.64 8.71 6.40 8.35 6.29++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE DIVIDEND, CAPITAL GAIN, AND YIELD INFORMATION
FOR PERIODS ENDED SEPTEMBER 30, 1998
9/30/98 3/31/98 9/30/97 DIVIDENDS+ CAPITAL GAIN+ SEC YIELD++
------- ------- ------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $8.38 $8.21 $8.16 CLASS A $0.390 $0.074 3.82%
CLASS D 8.38 8.21 8.16 CLASS D 0.315 0.074 3.12
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
HOLDINGS BY MARKET SECTOR0 MOODY'S/S&P RATINGS0
Revenue Bonds 94% Aaa/AAA 65%
General Obligation Bonds 6 Aa/AA 12
A/A 19
WEIGHTED AVERAGE MATURITY 20.7 YEARS BAA/BBB 4
</TABLE>
- --------------------
* Returns for periods of less than one year are not annualized.
** 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 charge ("CDSC"),
charged 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 each Series' 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.
+ Represents per share amount paid or declared for the year ended September
30, 1998.
++ Current yield, representing the annualized yield for the 30-day period
ended September 30, 1998, has been computed in accordance with SEC
regulations and will vary.
0 Percentages based on current market values of long-term holdings at
September 30, 1998.
16
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
17
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
NATIONAL SERIES
FACE RATINGS+ MARKET
STATE AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ----------- ---------------------- --------------- -------------
<S> <C> <C> <C>
ALASKA-- 1.4% $1,500,000 Alaska Housing Finance Corporation Mortgage Rev.,
5 3/4% due 6/1/2024* ................................ Aaa/AAA $ 1,570,410
CALIFORNIA -- 2.6% 2,500,000 San Joaquin Hills Transportation Corridor Agency Rev.
(Orange County Senior Lien Toll Road),
6 3/4% due 1/1/2032 ................................. Aaa/AAA 2,852,875
FLORIDA-- 4.6% 5,000,000 Jacksonville Electric Authority (Electric System Rev.),
5.10% due 10/1/2032 ................................. Aa2/AA 5,042,900
ILLINOIS-- 6.6% 3,000,000 Chicago Water Rev., 5 1/2% due 11/1/2022 ............... Aaa/AAA 3,194,730
1,250,000 Illinois Health Facilities Authority Rev.
(Edward Hospital Project), 6% due 2/15/2019 ......... A2/A+ 1,325,438
2,500,000 Illinois Health Facilities Authority Rev. (Northwestern
Memorial Hospital), 6% due 8/15/2024 ................ Aa2/AA 2,720,575
KENTUCKY-- 1.9% 1,880,000 Trimble County Pollution Control Rev. (Louisville
Gas & Electric Co. Project), 7 5/8% due 11/1/2020* .. Aa2/A+ 2,043,992
MICHIGAN-- 2.2% 2,250,000 Michigan State Strategic Fund Pollution Control Rev.
(General Motors Corp.), 6.20% due 9/1/2020 .......... A2/A 2,454,075
MISSOURI-- 4.7% 4,750,000 St. Louis Industrial Development Authority
Pollution Control Rev. (Anheuser-Busch Companies,
Inc. Project), 5 7/8% due 11/1/2026* ................ A1/A+ 5,086,110
NEVADA-- 4.7% 5,000,000 Clark County Industrial Development Rev. (Nevada
Power Company Project), 5.90% due 11/1/2032* ........ NR/BBB- 5,120,150
NEW YORK-- 6.9% 2,500,000 Long Island Power Authority Electric System General Rev.,
5 1/2% due 12/1/2029 ................................ Baa1/A- 2,590,150
3,495,000 New York City GOs, 7 1/4% due 8/15/2024 ................ Aaa/A- 3,836,741
5,000 New York City GOs, 7 1/4% due 8/15/2024 ................ A3/A- 5,425
1,000,000 Trust for Cultural Resources of the City of
New York Rev. (American Museum of Natural History),
5.65% due 4/1/2027 .................................. Aaa/AAA 1,077,800
SOUTH 2,000,000 Oconee County Pollution Control Rev. (Duke Power Company
CAROLINA-- 1.9% Project), 7 1/2% due 2/1/2017 ....................... Aa2/AA- 2,082,840
SOUTH 6,000,000 South Dakota Housing Development Authority Rev.
DAKOTA-- 5.8% (Homeownership Mortgage), 6.15% due 5/1/2026* ....... Aa1/AAA 6,286,860
TEXAS-- 18.7% 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 4,013,094
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 2,213,880
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 2,168,480
4,750,000 Potter County Industrial Development Corp. Pollution
Control Rev. (Southwestern Public Service Company
Project), 5 3/4% due 9/1/2016 ....................... Aaa/AAA 5,215,168
2,500,000 San Antonio Electric &Gas Rev., 5 1/2% due 2/1/2020 .... Aa1/AA 2,623,425
- --------------------
+ 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 Statement.
</TABLE>
18
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
NATIONAL SERIES (CONTINUED)
FACE RATINGS+ MARKET
STATE AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ----------- ---------------------- --------------- -------------
<S> <C> <C> <C>
TEXAS (CONTINUED) $2,495,000 Texas Veterans' Housing Assistance GOs,
6.80% due 12/1/2023* ................................ Aa2/AA $ 2,700,139
1,340,000 Travis County Housing Finance Corporation
(Single Family Mortgage Rev.),
6.95% due 10/1/2027 ................................. NR/AAA 1,455,655
UTAH-- 3.7% 4,000,000 Intermountain Power AgencyPower Supply Rev.,
5% due 7/1/2020 ..................................... Aaa/AAA 3,999,680
Virginia-- 9.6% 5,000,000 Fairfax County Industrial Development Authority
Health Care Rev. (Inova Health System Project),
6% due 8/15/2026 .................................... Aa2/AA 5,524,150
5,000,000 Pocahontas Parkway Association TollRoad Bonds
(Route 895 Connector), 5 1/2% due 8/15/2028 ......... Baa3/BBB- 5,025,650
Washington-- 12.8% 4,325,000 King County Sewer GOs, 6 1/8% due 1/1/2033 ............. Aaa/AAA 4,798,544
3,000,000 Port Seattle Rev., 5 1/2% due 9/1/2021 ................. Aaa/AAA 3,173,100
5,520,000 Seattle Water System Rev., 5 5/8% due 8/1/2026 ......... Aaa/AAA 5,983,459
WISCONSIN -- 6.2% 6,000,000 LaCrosse Resource Recovery Rev. (Northern States Power
Company Project), 6% due 11/1/2021* ................. A1/AA- 6,798,120
WYOMING-- 3.9% 4,000,000 Sweetwater County Pollution Control Rev. (Idaho Power
Company Project), 6.05% due 7/15/2026 ............... A3/A 4,315,280
------------
TOTAL MUNICIPAL BONDS (Cost $99,547,792)-- 98.2% ............................................................. 107,298,895
VARIABLE RATE DEMAND NOTES (Cost $700,000)-- 0.6% ............................................................ 700,000
OTHER ASSETS LESS LIABILITIES-- 1.2% ......................................................................... 1,302,468
------------
NET ASSETS-- 100.0% .......................................................................................... $109,301,363
============
</TABLE>
<TABLE>
<CAPTION>
COLORADO SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <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 $ 3,247,050
1,000,000 Boulder, Larimer and Weld Counties,CO(Vrain Valley School District),
5% due 12/15/2022 ........................................................... Aaa/AAA 1,003,890
3,000,000 Colorado Health Facilities Authority Rev. (North Colorado Medical Center),
6% due 5/15/2020 ............................................................ Aaa/AAA 3,275,520
2,250,000 Colorado Health Facilities Authority Rev. (Sisters of Charity of
Leavenworth Health Services Corporation), 5% due 12/1/2025 .................. Aaa/AAA 2,243,205
2,000,000 Colorado Health Facilities Authority Rev. (Catholic Health
Initiatives), 5% due 12/1/2028 .............................................. Aa2/AA 1,978,340
2,350,000 Colorado Springs, CO Utilities Rev., 53/8% due 11/15/2026 ...................... Aa2/AA 2,450,533
105,000 Colorado Water Resources & Power Development Authority (Clean Water
Bonds Rev.), 6 7/8% due 9/1/2011 ............................................ Aa1/AAA 114,520
2,000,000 Colorado Water Resources & Power Development Authority (Clean Water
Bonds Rev.), 6% due 9/1/2014 ................................................ Aa1/AAA 2,160,820
- --------------------
+ 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 Statement.
</TABLE>
19
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
COLORADO SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$1,000,000 Colorado Water Resources & Power Development Authority (Clean Water
Bonds Rev.), 6.30% due 9/1/2014 ............................................ Aa1/AAA $ 1,099,760
2,000,000 Denver, CO City & County (St. Anthony Hospital Systems Rev.), 7 3/4%
due 5/1/2014 ................................................................ Aaa/AAA 2,070,860
2,000,000 Denver, CO City &County Department of Aviation Airport System Rev.,
5 1/2% due 11/15/2025 ....................................................... Aaa/AAA 2,127,520
2,000,000 Denver, CO Health and Hospital Authority Healthcare Rev.,
5 3/8% due 12/1/2028 ........................................................ Baa2/BBB 2,008,180
1,985,000 Fort Collins, CO GOs Water Bonds, 6 3/8% due 12/1/2012 ......................... Aa1/AA 2,185,922
2,500,000 Fort Collins Pollution Control Rev. (Anheuser-Busch Project),
6% due 9/1/2031 ............................................................. A1/A+ 2,745,700
1,000,000 Fountain Valley Authority, CO Water Treatment Rev., 6.80% due 12/1/2019 ........ Aa/AA 1,079,580
1,895,000 Northglenn, CO Joint Water & Wastewater Utility, 6.80% due 12/1/2008 ........... Aaa/NR 2,150,086
2,500,000 Platte River Power Authority, CO Power Rev., 6 1/8% due 6/1/2014 ............... Aa3/A+ 2,695,075
1,655,000 Pueblo County, CO Single Family Mortgage Rev., 7.05% due 11/1/2027 ............. NR/AAA 1,795,510
2,000,000 Puerto Rico Highway &Transportation Authority Rev., 5 1/2% due 7/1/2036 ........ Baa1/A 2,180,920
2,000,000 University of Colorado Hospital Authority Rev., 5 1/4% due 11/15/2022 .......... Aaa/NR 2,043,860
2,000,000 Virgin Islands Public Finance Authority Rev., 5 1/2% due 10/1/2022 ............. NR/BBB- 2,065,900
2,000,000 Westminster, CO (Adams & Jefferson Counties) Sales & Use Tax Rev.,
7% due 12/1/2008 ........................................................... Aaa/AAA 2,151,320
-----------
TOTAL MUNICIPAL BONDS (Cost $41,613,242)-- 97.7% ................................................................. 44,874,071
VARIABLE RATE DEMAND NOTES (Cost $300,000)-- 0.7% ................................................................ 300,000
OTHER ASSETS LESS LIABILITIES-- 1.6% ............................................................................. 753,088
-----------
NET ASSETS-- 100.0% .............................................................................................. $45,927,159
===========
- --------------------
+ 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 Statement.
</TABLE>
GEORGIA SERIES
<TABLE>
<CAPTION>
GEORGIA SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$2,500,000 Atlanta, GA Water & Sewer Rev., 5 1/4% due 1/1/2027 ............................ Aaa/AAA $ 2,573,725
1,000,000 Cartersville, GA Development Authority Rev. Water & Wastewater Facilities
(Anheuser-Busch), 7.40% due 11/1/2010* ...................................... A1/A+ 1,265,020
2,000,000 Cartersville, GA Development Authority Rev. Water & Wastewater Facilities
(Anheuser-Busch), 6 3/4% Due 2/1/2012* ...................................... A1/A+ 2,196,880
3,000,000 Chatham County, GA School District GOs, 5 1/2% due 8/1/2020 .................... Aaa/AAA 3,140,520
2,000,000 Columbia County, GA School District GOs, 6 1/4% due 4/1/2013 ................... Aaa/AAA 2,240,860
1,000,000 DeKalb County, GA GOs, 5 1/4% due 1/1/2020 ..................................... Aa1/AA+ 1,025,980
1,000,000 DeKalb County, GA Water & Sewerage Rev., 7% due 10/1/2014 ...................... Aaa/AA 1,083,650
2,000,000 DeKalb County, GA Water & Sewerage Rev., 5 1/4% due 10/1/2023 .................. Aa/AA 2,045,820
700,000 DeKalb Private Hospital Authority, GA Rev. (Emory University Project),
6 3/4% due 4/1/2017 ......................................................... Aa1/AA 764,246
300,000 DeKalb Private Hospital Authority, GA Rev. (Emory University Project),
7% due 4/1/2021 ............................................................. Aa1/AA 329,235
1,000,000 Fayette County, GA School District GOs, 6 1/8% due 3/1/2015 .................... Aa/A+ 1,107,340
1,000,000 Fulco Hospital Authority HealthSystem Rev. (Catholic Health East),
5% due 11/15/2028 ........................................................... Aaa/AAA 996,850
- --------------------
+ 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 Statement.
</TABLE>
20
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
GEORGIA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$3,000,000 Fulton County, GA School District GOs, 5 5/8% due 1/1/2021 ..................... Aa2/AA $ 3,293,940
2,250,000 Georgia Housing & Finance Authority Rev. (Single Family Mortgage),
5 1/4% due 12/1/2020 ........................................................ Aa2/AAA 2,287,440
2,500,000 Georgia Municipal Gas Authority Rev. (Southern Storage Gas Project),
6.40% due 7/1/2014 .......................................................... NR/A- 2,732,200
1,000,000 Georgia State GOs, 5 3/4% due 2/1/2011 ......................................... Aaa/AAA 1,062,310
1,750,000 Glynn-Brunswick Memorial Hospital Authority Rev. (Southeast Georgia Health
Systems Project), 6% due 8/1/2016 ........................................... Aaa/AAA 1,927,958
1,000,000 Gwinnett County, GA School District GOs, 6.40% due 2/1/2012 .................... Aa1/AA+ 1,201,200
1,500,000 Henry County School District, GA GOs, 6.45% due 8/1/2011 ....................... A1/A+ 1,789,710
500,000 Metropolitan Atlanta Rapid Transit Authority, GA Sales Tax Rev.,
6 1/4% due 7/1/2018 ......................................................... A1/A+ 586,585
2,000,000 Monroe County, GA Development Authority Pollution Control Rev. (Georgia Power
Company Plant-- Scherer Project), 6% due 7/1/2025 ........................... Aaa/AAA 2,110,880
2,500,000 Peachtree City, GA Water &Sewerage Authority Sewer System Rev.,
5.60% due 3/1/2027 .......................................................... Aa3/AA 2,707,150
2,000,000 Private Colleges & Universities Authority, GA (Spelman College Project),
6.20% due 6/1/2014 .......................................................... Aaa/AAA 2,241,120
1,500,000 Private Colleges & Universities Authority, GA (Mercer University Project),
6 1/2% due 11/1/2015 ........................................................ Aaa/AAA 1,832,625
3,000,000 Private Colleges & Universities Authority, GA (Agnes Scott College Project),
5 5/8% due 6/1/2023 ......................................................... Aa3/AA- 3,184,020
1,500,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2026 ....... Baa1/A 1,580,895
2,000,000 Savannah, GA Airport Rev., 6 1/4% due 1/1/2015* ................................ Aaa/AAA 2,167,800
-----------
TOTAL MUNICIPAL BONDS (Cost $44,875,862)-- 96.6% .............................................................. 49,475,959
VARIABLE RATE DEMAND NOTES (Cost $1,000,000)-- 1.9% ........................................................... 1,000,000
OTHER ASSETS LESS LIABILITIES-- 1.5% .......................................................................... 757,327
-----------
NET ASSETS-- 100.0% ........................................................................................... $51,233,286
===========
- --------------------
+ 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 Statement.
</TABLE>
21
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
LOUISIANA SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$3,000,000 Bastrop, LA Industrial Development Board Pollution Control Rev.
(International Paper Company Project), 6.90% due 3/1/2007 ................... A3/BBB+ $ 3,299,850
2,500,000 Calcasieu Parish, LA Industrial Development Board (Conoco Inc. Project),
5 3/4% due 12/1/2026* ....................................................... Aa3/AA- 2,679,225
2,120,000 East Baton Rouge Parish, LA Mortgage Finance Authority (Single
Family Mortgage Rev.), 5.40% due 10/1/2025 .................................. Aaa/NR 2,154,556
3,000,000 East Baton Rouge Parish, LA Public Improvement Sales & Use Tax Rev.,
5.90% due 2/1/2018 .......................................................... Aaa/AAA 3,245,070
2,000,000 Houma, LA Utilities Rev., 6 1/4% due 1/1/2012 .................................. Aaa/AAA 2,170,360
2,000,000 Jefferson Parish, LA Home Mortgage Authority (Single Family Mortgage Rev.),
6% due 12/1/2024* ........................................................... Aa/NR 2,078,800
2,500,000 Lafayette, LA Public Improvement Sales Tax, 5% due 5/1/2021 .................... Aaa/AAA 2,507,700
2,495,000 Louisiana Housing Finance Agency Mortgage Rev. (Single Family),
6.45% due 6/1/2027* ......................................................... Aaa/AAA 2,663,612
2,500,000 Louisiana Public Facilities Authority Hospital Rev. (Franciscan
Missionaries of Our Lady HealthSystem Project), 5% due 7/1/2025 ............. Aaa/AAA 2,488,850
2,500,000 Louisiana Public Facilities Authority Rev. (Loyola University Project),
5 5/8% due 10/1/2016 ........................................................ Aaa/AAA 2,723,825
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+ 2,615,450
3,000,000 Louisiana Public Facilities Authority Rev. (Tulane University),
5 3/4% due 2/15/2021 ........................................................ Aaa/AAA 3,204,300
1,500,000 Louisiana State GOs, 5% due 4/15/2018 .......................................... Aaa/AAA 1,514,385
2,000,000 Louisiana State University & Agricultural & Mechanical College
Auxiliary Rev., 5 3/4% Due 7/1/2014 ......................................... AAA/AAA 2,164,780
2,500,000 Ouachita Parish, LA Hospital Service District Rev. (Glenwood
Regional Medical Center), 5 3/4% due 5/15/2021 .............................. Aaa/AAA 2,718,875
190,000 Ouachita Parish, LA Industrial Development Rev. (International
Paper Company), 6 1/2% due 4/1/2006 ......................................... NR/NR 190,215
2,500,000 Saint Bernard Parish, LA Exempt Facility Rev. (Mobil Oil
Corporation Project), 5.90% due 11/1/2026* .................................. Aa2/AA 2,742,975
1,250,000 Saint Charles Parish, LA Environmental Improvement Rev. (Louisiana
Power and Light Company Project), 6.20% due 5/1/2023* ....................... Baa2/BBB 1,316,563
2,960,000 Saint Charles Parish, LA Waterworks & Wastewater District Utility Rev.,
7.15% due 7/1/2016 .......................................................... Aaa/AAA 3,257,687
2,500,000 Shreveport, LA Airport System Rev., 5 3/8% due 1/1/2024* ....................... Aaa/AAA 2,562,425
1,555,000 Shreveport, LA GOs, 7 1/2% due 4/1/2006 ........................................ Aaa/AAA 1,704,949
- --------------------
+ 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 Statement.
</TABLE>
22
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
LOUISIANA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$2,050,000 Sulphur, LA Housing & Mortgage Finance Trust (Residential Mortgage Rev.),
7 1/4% due 12/1/2010 ........................................................ Aaa/AAA $ 2,454,034
2,500,000 Tangipahoa Parish, LA Hospital Service District No. 1 Rev.
(Northoaks Medical Center), 6 1/4% due 2/1/2024 ............................. Aaa/AAA 2,774,975
-----------
TOTAL MUNICIPAL BONDS (Cost $50,964,493)-- 96.7% ............................................................. 55,233,461
VARIABLE RATE DEMAND NOTES (Cost $800,000)-- 1.4% ............................................................ 800,000
OTHER ASSETS LESS LIABILITIES-- 1.9% ......................................................................... 1,111,191
-----------
NET ASSETS-- 100.0% .......................................................................................... $57,144,652
===========
</TABLE>
<TABLE>
<CAPTION>
MARYLAND SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$1,340,000 Anne Arundel County, MD GOs, 5 1/8% due 2/1/2026 ............................... Aa2/AA+ $ 1,369,641
1,340,000 Anne Arundel County, MDGOs, 5 1/8% due 2/1/2027 ................................ Aa2/AA+ 1,369,641
3,000,000 Anne Arundel County, MD Pollution Control Rev. (Baltimore Gas and Electric
Company Project), 6% due 4/1/2024 ........................................... A2/A 3,245,820
2,000,000 Baltimore, MD Consolidated Public Improvement GOs, 6 3/8% due 10/15/2006 ....... Aaa/AAA 2,326,840
2,500,000 Baltimore, MD Port Facilities Rev. (Consolidated Coal Sales Co. Project),
6 1/2% due 10/1/2011 ........................................................ Aa3/AA- 2,753,775
2,000,000 Baltimore, MD Project and Refunding Rev. (Water Projects), 5 1/2% due 7/1/2026 . Aaa/AAA 2,123,440
2,000,000 Howard County, MD Metropolitan District Project GOs, 5 1/2% due 8/15/2022 ...... Aaa/AAA 2,083,420
2,000,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Multi-Family Housing), 7.70% due 5/15/2020* .................... Aa/NR 2,132,080
2,465,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Single Family Program), 6.80% due 4/1/2024* .................... Aa2/NR 2,649,333
2,500,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Residential Rev.), 5 7/8% due 9/1/2025* ........................ Aa2/NR 2,628,150
2,500,000 Maryland Community Development Administration Dept. of Housing & Community
Development (Multi-Family Housing), 6.70% due 5/15/2027 ..................... Aa/NR 2,683,525
2,710,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Good Samaritan Hospital), 5 3/4% due 7/1/2019 .............................. A1/A 2,881,543
2,000,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Suburban Hospital), 5 1/8% due 7/1/2021 .................................... A1/A+ 2,007,200
2,750,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Ann Arundel Medical Center), 5% due 7/1/2023 ............................... Aaa/AAA 2,751,347
2,500,000 Maryland Health & Higher Educational Facilities Authority Rev.
(Francis Scott Key Medical Center), 5% due 7/1/2023 ......................... Aaa/AAA 2,501,225
2,000,000 Maryland Health &Higher Educational Facilities Authority Rev.
(Mercy Medical Center), 5 3/4% due 7/1/2026 ................................. Aaa/AAA 2,164,220
- --------------------
+ 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 Statement.
</TABLE>
23
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
MARYLAND SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$1,500,000 Maryland Health &Higher Education Facilities Authority Rev.
(Anne Arundel Medical Center), 5 1/8% due 7/1/2028 .......................... Aaa/AAA $ 1,516,395
1,000,000 Maryland National Capital Park & Planning Commission GOs (Prince
George's County), 6.90% due 7/1/2010 ........................................ Aa2/AA 1,074,350
2,000,000 Maryland Transportation Authority Rev. (Baltimore/Washington International
Airport Project), 6 1/4% due 7/1/2014* ...................................... Aaa/AAA 2,212,920
2,000,000 Maryland Transportation Authority Rev. Transportation Facilities Projects,
5 3/4% due 7/1/2015 ......................................................... A1/A+ 2,093,720
1,000,000 Maryland Water Quality Financing Administration Revolving Loan Fund Rev.,
6.70% due 9/1/2013 .......................................................... Aaa/AAA 1,102,080
1,000,000 Maryland Water Quality Financing Administration Revolving Loan Fund Rev.,
7.10% due 9/1/2013 .......................................................... Aaa/AAA 1,112,650
440,000 Montgomery County, MD Housing Opportunities Commission (Single Family
Mortgage Rev.), 7 3/8% due 7/1/2017 ......................................... Aa2/NR 455,140
1,500,000 Montgomery County, MD Housing Opportunities Commission Rev.,
6.20% due 7/1/2026* ......................................................... Aa2/NR 1,605,180
2,000,000 Northeast Maryland Waste Disposal Authority Solid Waste Rev.
(Montgomery County Resource Recovery Project),
6.30% due 7/1/2016* ......................................................... A2/NR 2,162,320
1,000,000 Puerto Rico Highway &Transportation Authority Rev., 5 1/2% due 7/1/2036 ........ Baa1/A 1,090,460
35,000 Puerto Rico Housing Finance Corporation (Single Family Mortgage Rev.
Portfolio 1), 7.80% due 10/15/2021 .......................................... Aaa/AAA 35,724
630,000 Puerto RicoHousing Finance Corporation (Single Family Mortgage Rev.
Portfolio 1-C), 6.85% due 10/15/2023 ........................................ Aaa/AAA 674,900
2,000,000 Washington Suburban Sanitary District, MD, 6 1/2% due 1/1/2016 ................. Aa1/AA 2,185,460
-----------
TOTAL MUNICIPAL BONDS (Cost $50,569,450)-- 94.8% .............................................................. 54,992,499
VARIABLE RATE DEMAND NOTES (Cost $2,200,000)-- 3.8% ........................................................... 2,200,000
OTHER ASSETS LESS LIABILITIES-- 1.4% .......................................................................... 826,114
-----------
NET ASSETS-- 100.0% ........................................................................................... $58,018,613
===========
</TABLE>
<TABLE>
<CAPTION>
MASSACHUSETTS SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$5,000,000 Boston, MA Water & Sewer Commission General Rev., 5 1/4% due 11/1/2019 ......... A1/A+ $ 5,300,250
3,000,000 Boston, MA Water & Sewer Commission General Rev., 7.10% due 11/1/2019 .......... Aaa/AAA 3,175,950
5,000,000 Massachusetts Bay Transportation Authority General Transportation System Rev.,
5 5/8% due 3/1/2026 ......................................................... Aa3/AA- 5,557,650
1,155,000 Massachusetts Education Loan Authority Education Loan Rev., 8% due 6/1/2002 .... NR/AAA 1,168,848
3,000,000 Massachusetts Health & Educational Facilities Authority Rev. (Daughters of Charity
National Health Systems-- Carney Hospital), 6% due 7/1/2009 ................. Aa2/AA+ 3,320,460
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+ 2,741,925
- --------------------
+ 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 Statement.
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
MASSACHUSETTS SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$5,000,000 Massachusetts Health & Educational Facilities Authority Rev.
(Newton-Wellesley Hospital), 6% due 7/1/2018 ................................ Aaa/AAA $ 5,509,300
3,500,000 Massachusetts Health & Educational Facilities Authority Rev.
(Williams College), 5 3/4% due 7/1/2019 ..................................... Aa1/AA+ 3,798,620
2,500,000 Massachusetts Health & Educational Facilities Authority Rev.
(Suffolk University), 8 1/8% due 7/1/2020 ................................... NR/NR 2,721,025
5,100,000 Massachusetts Health & Educational Facilities Authority Rev.
(SmithCollege), 5 3/4% due 7/1/2024 ......................................... Aa2/AA- 5,455,521
5,000,000 Massachusetts Health & Educational Facilities Authority Rev.
(Partners Healthcare System), 5 3/8% due 7/1/2024 ........................... Aaa/AAA 5,187,800
7,500,000 Massachusetts Health & Educational Facilities Authority Rev.
(Harvard University), 5 5/8% Due 11/1/2028 ............................... AAA/AAA 8,135,250
5,000,000 Massachusetts Health & Educational Facilities Authority Rev.
(Catholic Health East Health System), 5% due 11/15/2028 ..................... Aaa/AAA 4,984,250
5,250,000 Massachusetts Housing Finance Agency Rev. (Single Family Housing),
5 1/2% due 12/1/2030* ....................................................... Aaa/AAA 5,459,790
2,000,000 Massachusetts Industrial Finance Agency Electric Utility Rev.
(Nantucket Electric Company Project), 5 7/8% due 7/1/2017* .................. Aaa/AAA 2,187,160
3,500,000 Massachusetts Industrial Finance Agency Rev. (Phillips Academy),
5 3/8% due 9/1/2023 ......................................................... Aa1/AA+ 3,687,425
3,000,000 Massachusetts Industrial Finance Agency Rev. (College of the Holy Cross),
5 5/8% due 3/1/2026 ......................................................... Aaa/AAA 3,225,660
3,000,000 Massachusetts Industrial Finance Agency Rev. (Suffolk University),
5 1/4% due 7/1/2027 ......................................................... Aaa/AAA 3,091,770
3,000,000 Massachusetts Port Authority Special Facilities Rev. (BOSFUELProject),
5 3/4% due 7/1/2039* ........................................................ Aaa/AAA 3,205,740
1,500,000 Massachusetts Special Obligation Rev. (Highway Improvement Loan),
5.80% due 6/1/2014 .......................................................... Aa3/AA 1,656,480
5,000,000 Massachusetts State Consolidated Loan GOs, 5 1/8% due 11/1/2013 ................ Aaa/AAA 5,221,600
2,400,000 Massachusetts State Port Authority Rev., 5% due 7/1/2023 ....................... Aa3/AA- 2,405,760
2,000,000 Massachusetts State Port Authority Rev., 5% due 7/1/2028* ...................... Aa3/AA- 1,978,460
5,000,000 Massachusetts Water Pollution Abatement Trust Pool Loan Program,
5 5/8% due 2/1/2016 ......................................................... Aaa/AAA 5,414,300
5,500,000 Massachusetts Water Resources Authority General Rev.,
5.60% due 11/1/2026 ......................................................... Aaa/AAA 5,894,185
730,000 Puerto Rico Electric Power Authority Power Rev.,
7 1/8% due 7/1/2014 ......................................................... Baa1/BBB+ 760,441
4,000,000 Puerto Rico Highway & Transportation Authority Rev.,
5 1/2% due 7/1/2036 ......................................................... Baa1/A 4,361,840
2,750,000 Puerto Rico Port Authority Rev., 6% due 7/1/2021* .............................. Aaa/AAA 2,886,703
------------
TOTAL MUNICIPAL BONDS (Cost $99,244,542)-- 97.9% ............................................................... 108,494,163
VARIABLE RATE DEMAND NOTES (Cost $900,000)-- 0.8% .............................................................. 900,000
OTHER ASSETS LESS LIABILITIES-- 1.3% ........................................................................... 1,401,953
------------
NET ASSETS-- 100.0% ............................................................................................ $110,796,116
============
- --------------------
+ 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 Statement.
</TABLE>
25
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
MICHIGAN SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$5,000,000 Capital Region Airport Authority, MI Airport Rev., 6.70% due 7/1/2021* ......... Aaa/AAA $ 5,503,950
5,000,000 Detroit, MI GOs, 5 1/2% due 4/1/2016 ........................................... Aaa/AAA 5,315,550
6,000,000 Detroit, MI Water Supply System Rev., 6 1/4% due 7/1/2012 ...................... Aaa/AAA 6,602,280
3,000,000 Grand Haven, MI Electric System Rev., 5 1/4% due 7/1/2013 ...................... Aaa/AAA 3,122,460
5,000,000 Grand Rapids, MI Water Supply System Rev., 5 3/4% due 1/1/2018 ................. Aaa/AAA 5,120,250
1,000,000 Grand Traverse County, MI Hospital Finance Authority (Munson Healthcare
Obligated Group), 6 1/4% due 7/1/2012 ....................................... Aaa/AAA 1,090,080
1,500,000 Grand Traverse County, MI Hospital Finance Authority (Munson Healthcare
Obligated Group), 6 1/4% due 7/1/2022 ....................................... Aaa/AAA 1,636,215
2,000,000 Grand Traverse County, MI Hospital Finance Authority (Munson Healthcare
Obligated Group), 5% due 7/1/2028 ........................................... Aaa/NR 1,984,540
2,500,000 Kalamazoo, MI Hospital Finance Authority Rev. (Bronson Methodist
Hospital), 5 1/2% due 5/15/2028 ............................................. Aaa/NR 2,635,450
5,000,000 Kent County, MI Airport Rev., 6.10% due 1/1/2025* .............................. Aa/AAA 5,521,550
1,850,000 Kent County, MI Airport Rev., 5% due 1/1/2028* ................................. Aaa/AAA 1,830,224
2,775,000 Kentwood, MI Public Schools Building & Site GOs, 6.40% due 5/1/2015 ............ Aa2/A+ 3,068,068
3,000,000 Lansing, MI Building Authority Rev., 5.60% due 6/1/2019 ........................ Aa3/AA+ 3,187,230
3,250,000 Marquette, MI Hospital Finance Authority Rev. (Marquette General Hospital),
6.10% due 4/1/2019 .......................................................... Aaa/AAA 3,628,982
3,000,000 Michigan Public Power Agency Rev. (Belle River Project), 5 1/4% due 1/1/2018 ... A1/AA- 3,054,120
3,000,000 Michigan State Building Authority Rev., 6 1/4% due 10/1/2020 ................... Aa2/AA 3,229,170
6,000,000 Michigan State GOs (Environmental Protection Program), 5.40% due 11/1/2019 ..... Aa1/AA+ 6,304,260
5,000,000 Michigan State Hospital Finance Authority Rev. (Henry Ford Health System),
5 1/4% due 11/15/2020 ....................................................... Aa3/AA 5,086,650
5,000,000 Michigan State Hospital Finance Authority Rev. (Oakwood Obligated Group),
5 1/8% due 8/15/2025 ........................................................ Aaa/AAA 5,015,150
4,500,000 Michigan State Hospital Finance Authority Rev. (St. John Hospital),
5 1/4% due 5/15/2026 ........................................................ Aaa/AAA 4,584,870
5,000,000 Michigan State Hospital Finance Authority Rev. (Mercy Health Services
Obligated Group), 5 3/4% due 8/15/2026 ..................................... Aa3/AA- 5,410,200
5,000,000 Michigan State Hospital Finance Authority Rev. (Sparrow Obligated Group),
6% due 11/15/2036 ........................................................... Aaa/AAA 5,524,500
2,500,000 Michigan State Housing Development Authority Rev. (Single Family Mortgage),
6.80% due 12/1/2016 ......................................................... NR/AA+ 2,706,675
4,055,000 Michigan State Housing Development Authority Rev. (Rental Housing),
6.65% due 4/1/2023 .......................................................... NR/AA- 4,369,222
4,000,000 Michigan State Housing Development Authority Rev. (Single Family Mortgage),
6.05% due 12/1/2027 ......................................................... NR/AA+ 4,246,120
- --------------------
+ 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 Statement.
</TABLE>
26
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
MICHIGAN SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$3,000,000 Michigan State Strategic Fund Pollution Control Rev.
(Detroit Edison Company), 6 1/2% due 2/15/2016 .............................. Aaa/AAA $ 3,265,980
6,000,000 Michigan State Strategic Fund Pollution Control Rev.
(General Motors Corp.), 6.20% due 9/1/2020 .................................. A2/A 6,544,200
2,500,000 Michigan State Trunk Line Rev., 5.80% due 11/15/2024 ........................... Aaa/AAA 2,800,300
5,000,000 Michigan State Trunk Line Rev., 5% due 11/1/2026 ............................... Aaa/AAA 5,004,300
2,000,000 Midland, MI Water Supply System Rev., 7.20% due 4/1/2010 ....................... A/A 2,129,840
6,300,000 Oxford, MI Area Community Schools GOs, 5 1/2% due 5/1/2021 ..................... Aaa/AAA 6,666,660
5,000,000 Royal Oak, MI Hospital Finance Authority Rev. (William
Beaumont Hospital), 5 1/4% due 1/1/2020 ..................................... Aa3/AA 5,087,600
4,000,000 University of Michigan Hospital Rev., 6 3/8% due 12/1/2024 ..................... Aa2/AA 4,226,160
5,000,000 Western Michigan State University Rev., 5 1/8% due 11/15/2022 .................. Aaa/AAA 5,045,050
3,000,000 Wyandotte, MI Electric Rev., 6 1/4% due 10/1/2017 .............................. Aaa/AAA 3,297,420
------------
TOTAL MUNICIPAL BONDS (COST $132,968,484)-- 98.5% ............................................................ 143,845,276
VARIABLE RATE DEMAND NOTES (COST $100,000)-- 0.1% ............................................................ 100,000
OTHER ASSETS LESS LIABILITIES-- 1.4% ......................................................................... 2,057,041
------------
NET ASSETS-- 100.0% .......................................................................................... $146,002,317
============
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$6,250,000 Becker, MN Pollution Control Rev. (Northern States Power Company),
6.80% due 4/1/2007 ......................................................... A1/A+ $ 6,465,250
1,500,000 Buffalo, MN Independent School District GOs, 6.15% due 2/1/2022................. Aaa/AAA 1,612,605
2,250,000 Burnsville - Eagan - Savage, MN Independent School
District GOs, 5 1/8% due 2/1/2016 .......................................... Aa1/NR 2,320,245
2,350,000 Burnsville - Eagan - Savage, MN Independent School District GOs,
5 1/8% due 2/1/2017 ........................................................ Aa1/NR 2,418,009
1,500,000 Cloquet, MN Pollution Control Rev. (Potlatch Corporation
Projects), 5.90% due 10/1/2026 ............................................. NR/A- 1,600,380
5,000,000 Edina, MN Housing Development Rev. (Edina Park Plaza Project),
7.70% due 12/1/2028 ........................................................ Aa/NR 5,193,150
3,545,000 Fridley, MN Independent School District GOs, 5.35% due 2/1/2021 ................ Aaa/AAA 3,644,331
1,500,000 Minneapolis, MN GOs, 6% due 3/1/2016 ........................................... Aaa/AAA 1,608,900
4,725,000 Minneapolis, MN Rev. (University Gateway Project),
5 1/4% due 12/1/2024 ....................................................... Aa2/AA 4,856,166
4,300,000 Minneapolis, MN Special School District GOs, 5% due 2/1/2014 ................... Aa1/AA+ 4,400,448
1,400,000 Minneapolis - St. Paul Metropolitan Area (Metropolitan Council of
the Twin Cities), MN, 5 1/2% due 12/1/2012 ................................. Aaa/AAA 1,496,432
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 5,246,550
- --------------------
+ 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 Statement.
</TABLE>
27
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
MINNESOTA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$4,000,000 Minneapolis - St. Paul, MN Metropolitan Airport Commission Rev.,
5% due 1/1/2030 ............................................................. Aaa/AAA $ 4,009,960
2,250,000 Minnesota Agricultural & Economic Development Board Rev.
(Evangelical Lutheran Good Samaritan Society Project),
5.15% due 12/1/2022 ......................................................... Aaa/AAA 2,274,615
2,775,000 Minnesota Higher Education Facilities Authority Rev.
(University of St. Thomas), 5.40% due 4/1/2022 .............................. A2/NR 2,882,282
1,000,000 Minnesota Higher Education Facilities Authority Rev. (St. John's
University), 5.40% due 10/1/2022 ............................................ A3/NR 1,040,480
1,775,000 Minnesota Higher Education Facilities Authority Rev. (University
of St. Thomas), 5.40% due 4/1/2023 .......................................... A2/NR 1,837,356
2,500,000 Minnesota Higher Education Facilities Authority Rev. (St. Olaf College),
5 1/4% due 4/1/2029 ......................................................... A3/NR 2,535,800
810,000 Minnesota Housing Finance Agency (Housing Development),
6 1/4% due 2/1/2020 ......................................................... Aa2/AA 822,409
800,000 Minnesota Housing Finance Agency (Single Family Mortgage),
5.65% due 7/1/2022* ......................................................... Aa2/AA+ 815,640
5,000,000 Minnesota Housing Finance Agency (Single Family Mortgage),
6.85% due 1/1/2024* ......................................................... Aa2/AA+ 5,322,900
1,500,000 Minnesota Public Facilities Authority Water Pollution Control Rev.,
7.10% due 3/1/2012 .......................................................... Aaa/AAA 1,600,845
4,000,000 Minnesota Public Facilities Authority Water Pollution Control Rev.,
6 1/4% due 3/1/2015 ......................................................... Aaa/AAA 4,524,280
5,000,000 Minnesota State GOs, 5.70% due 5/1/2016 ........................................ Aaa/AAA 5,421,900
5,000,000 North Saint Paul - Maplewood, MNIndependent School District GOs,
5 1/8% due 2/1/2025 ......................................................... Aa1/AA+ 5,062,250
2,500,000 Northfield, MN Independent School District GOs, 5 1/4% due 2/1/2017 ............ Aa1/NR 2,560,675
2,000,000 Ramsey & Washington Counties, MN Resource Recovery Rev. (Northern
States Power Company Project), 6 3/4% due 12/1/2006 ......................... A1/AA 2,058,660
4,000,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo
Medical Center), 7.45% due 11/15/2006 ....................................... NR/AA+ 4,306,560
4,500,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo
Medical Center), 6 1/4% due 11/15/2014 ...................................... NR/AA+ 4,946,850
1,000,000 Rochester, MN Health Care Facilities Rev. (Mayo Foundation/Mayo
Medical Center), 6 1/4% due 11/15/2021 ...................................... NR/AA+ 1,091,300
2,575,000 Rochester, MN Independent School District GOs, 5 5/8% due 2/1/2016 ............. Aaa/AA+ 2,752,469
2,715,000 Rochester, MN Independent School District GOs, 5 5/8% due 2/1/2017 ............. Aaa/AA+ 2,903,855
45,000 Saint Paul Port Authority, MN Industrial Development Rev. Series E,
9 1/8% due 10/1/2000 ....................................................... NR/CCC 45,775
5,000 Saint Paul Port Authority, MN Industrial Development Rev. Series H,
9 1/8% due 12/1/2000 ....................................................... NR/CCC 5,092
55,000 Saint Paul Port Authority, MN Industrial Development Rev. Series I,
9 1/8% due 12/1/2000 ....................................................... NR/CCC 56,009
50,000 Saint Paul Port Authority, MN Industrial Development Rev. Series E,
9 1/8% due 10/1/2001 ....................................................... NR/CCC 51,176
10,000 Saint Paul Port Authority, MN Industrial Development Rev. Series H,
9 1/8% due 12/1/2001 ....................................................... NR/CCC 10,208
55,000 Saint Paul Port Authority, MN Industrial Development Rev. Series I,
9 1/8% due 12/1/2001 ....................................................... NR/CCC 56,145
5,000 Saint Paul Port Authority, MN Industrial Development Rev. Series L,
9 3/4% due 12/1/2001 ....................................................... NR/CCC 5,109
- --------------------
+ 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 Statement.
</TABLE>
28
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
MINNESOTA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$ 50,000 Saint Paul Port Authority, MN Industrial Development Rev. Series E,
9 1/8% due 10/1/2002 ....................................................... NR/CCC $ 51,165
10,000 Saint Paul Port Authority, MN Industrial Development Rev. Series H,
9 1/8% due 12/1/2002 ....................................................... NR/CCC 10,207
60,000 Saint Paul Port Authority, MN Industrial Development Rev. Series I,
9 1/8% due 12/1/2002 ....................................................... NR/CCC 61,244
10,000 Saint Paul Port Authority, MNIndustrial Development Rev. Series L,
9 3/4% due 12/1/2002 ....................................................... NR/CCC 10,217
1,500,000 Southern Minnesota Municipal Power Agency -- Power Supply System Rev.,
5 3/4% due 1/1/2018 ........................................................ A2/A+ 1,577,715
750,000 Southern Minnesota Municipal Power Agency-- Power Supply System Rev.,
5 3/4% due 1/1/2018 ........................................................ Aaa/AAA 815,947
1,500,000 Southern Minnesota Municipal Power Agency-- Power Supply System Rev.,
4 3/4% due 1/1/2016 ........................................................ A2/A+ 1,465,350
3,500,000 Washington County, MN GOs, 5.90% due 2/1/2010 .................................. Aa2/AA- 3,705,555
3,090,000 Western Minnesota Municipal Power Agency-- Power Supply Rev.,
5 1/2% due 1/1/2015 ........................................................ A1/A 3,092,039
9,305,000 Western Minnesota Municipal Power Agency-- Power Supply Rev.,
6 3/8% due 1/1/2016 ........................................................ Aaa/AAA 10,680,372
------------
TOTAL MUNICIPAL BONDS (Cost $113,546,777)-- 98.3% ............................................................. 121,332,877
VARIABLE RATE DEMAND NOTES (Cost $400,000)-- 0.3% ............................................................. 400,000
OTHER ASSETS LESS LIABILITIES-- 1.4% .......................................................................... 1,743,633
------------
NET ASSETS-- 100.0% ........................................................................................... $123,476,510
============
</TABLE>
<TABLE>
<CAPTION>
MISSOURI SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$2,000,000 Columbia, MO Water and Electric System Improvement Rev., 6 1/8% due 10/1/2012 .. A1/AA $ 2,209,900
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 2,660,375
1,500,000 Hannibal, MO Industrial Development Authority Health Facilities Rev.
(Hannibal Regional Hospital), 5 3/4% due 3/1/2022 ........................... Aaa/AAA 1,619,865
1,000,000 Joplin, MO Industrial Development Authority Rev. (Catholic Health
Initiatives), 5 1/8% due 12/1/2015 .......................................... Aa2/AA 1,015,670
1,500,000 Joplin, MO Industrial Development Authority Rev. (Catholic Health
Initiatives), 5% due 12/1/2028 .............................................. Aa2/AA 1,490,640
565,000 Missouri School Boards Pooled Financing Program Certificates of
Participation, 7 3/8% due 3/1/2006 .......................................... Aaa/AAA 579,594
740,000 Missouri School Boards Pooled Financing Program Certificates of
Participation, 7% due 3/1/2006 .............................................. Aaa/AAA 757,967
1,000,000 Missouri State Environmental Improvement & Energy Resources Authority Rev.
(State Revolving Fund Program), 6.55% due 7/1/2014 .......................... Aa1/NR 1,098,200
2,500,000 Missouri State Environmental Improvement & Energy Resources Authority Rev.
(Union Electric Company Project), 5.45% due 10/1/2028* ...................... A1/AA- 2,619,725
29
- --------------------
+ 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 Statement.
</TABLE>
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
MISSOURI SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$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 $ 2,616,250
2,000,000 Missouri State GOs, 5 5/8% due 4/1/2017 ........................................ Aaa/AAA 2,159,120
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 2,663,500
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+ 1,628,145
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+ 1,045,330
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+ 1,000,490
2,500,000 Missouri State Health & Educational Facilities Authority Rev. (Barnes-Jewish,
Inc./Christian Health Services), 5 1/4% due 5/15/2021 ....................... Aa2/AA 2,538,950
2,500,000 Missouri State Health & Educational Facilities Authority Rev.
(SSM Health Care), 5% due 6/1/2022 .......................................... Aaa/AAA 2,489,525
2,500,000 Missouri State Health & Educational Facilities Authority Rev. (The
Washington University), 5% due 11/15/2037 ................................... Aa1/AA+ 2,502,100
860,000 Missouri State Housing Development Commission Housing Development Bonds
(Federally Insured Mortgage Loans), 6% due 10/15/2019 ....................... Aa2/AA+ 873,674
2,415,000 Missouri State Housing Development Commission Single Family Mortgage Rev.
(Homeownership Loan Program), 5.90% due 9/1/2028* ........................... NR/AAA 2,535,847
1,000,000 Puerto Rico Highway &Transportation Authority Rev., 5 1/2% due 7/1/2026 ........ Baa1/A 1,053,930
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+ 1,835,100
1,500,000 St. Louis, MO Municipal Finance Corporation City Justice Center
Leasehold Improvement Rev., 5.95% due 2/15/2016 ............................. Aaa/AAA 1,659,735
2,400,000 Southeast Missouri Correctional Facility Lease Rev. (Missouri State
Project), 5 3/4% due 10/15/2016 ............................................. Aa/AA 2,536,008
2,500,000 Springfield, MO Waterworks Rev., 5.60% due 5/1/2023 ............................ Aa/A+ 2,738,600
2,750,000 University of Missouri Systems Facilities Rev., 5 1/2% due 11/1/2023 ........... Aa2/AA+ 2,863,767
-----------
TOTAL MUNICIPAL BONDS (Cost $45,286,528)-- 96.9% .............................................................. 48,792,007
VARIABLE RATE DEMAND NOTES (Cost $800,000)-- 1.6% ............................................................. 800,000
OTHER ASSETS LESS LIABILITIES-- 1.5% .......................................................................... 775,406
-----------
NET ASSETS-- 100.0% ........................................................................................... $50,367,413
===========
- --------------------
+ 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 Statement.
</TABLE>
30
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
NEW YORK SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$2,490,000 Buffalo Municipal Water Finance Authority, NY Water System Rev.,
5% due 7/1/2026 ............................................................ Aaa/AAA $ 2,496,399
2,500,000 Long Island Power Authority, NY Electric Systems General Rev.,
5 1/2% due 12/1/2029 ....................................................... Baa1/A- 2,590,150
4,000,000 Metropolitan Transportation Authority, NY (Dedicated Tax Fund),
5% due 4/1/2023 ............................................................ Aaa/AAA 4,010,400
4,000,000 Metropolitan Transportation Authority, NY (Transit Facilities Rev.),
4 3/4% due 7/1/2026 ........................................................ Aaa/AAA 3,921,120
4,000,000 New York City Municipal Water Finance Authority Water & Sewer System Rev.,
6 1/4% due 6/15/2020 ........................................................ Aaa/AAA 4,644,240
1,340,000 New York City, NY GOs, 7 1/4% due 8/15/2024 .................................... Aaa/A- 1,471,025
5,000 New York City, NY GOs, 7 1/4% due 8/15/2024 .................................... A3/A- 5,425
1,380,000 New York City, NY GOs, 6% due 8/1/2026 ......................................... A3/A- 1,511,707
2,450,000 New York City, NY Industrial Development Agency Civic Facility Rev.
(The Nightingale - Bamford School Project), 5.85% due 1/15/2020 ............. A3/A 2,591,414
2,500,000 New York City, NY Transitional Finance Authority (Future Tax
Secured Bonds), 5% due 5/1/2026 ............................................. Aa3/AA 2,506,425
4,000,000 New York City, NY Trust for Cultural Resources Rev. (American Museum of
Natural History), 5.65% due 4/1/2027 ........................................ Aaa/AAA 4,311,200
4,000,000 New York State Dormitory Authority Rev. (Fordham University),
5 3/4% due 7/1/2015 ......................................................... Aaa/AAA 4,316,800
4,000,000 New York State Dormitory Authority Rev. (Rochester Institute of Technology),
5 1/2% due 7/1/2018 ......................................................... Aaa/AAA 4,280,561
3,500,000 New York State Dormitory Authority Rev. (Mental Health Services Facilities
Improvement), 5 3/4% due 8/15/2022 .......................................... A3/A- 3,754,205
3,000,000 New York State Dormitory Authority Rev. (Skidmore College),
5 3/8% due 7/1/2023 ......................................................... Aaa/AAA 3,096,510
1,500,000 New York State Dormitory Authority Rev. (Vassar Brothers Hospital),
5 3/8% due 7/1/2025 ......................................................... Aaa/AAA 1,562,265
2,000,000 New YorkState Dormitory Authority Rev. (Hospital for Special Surgery),
5% due 2/1/2028 ............................................................. Aaa/AAA 1,993,760
2,000,000 New YorkState Dormitory Authority Rev. (Rockefeller University),
5% due 7/1/2028 ............................................................. Aaa/AAA 2,010,460
4,000,000 New York State Energy Research &Development Authority Gas Facilities Rev.
(Brooklyn Union Gas), 5 1/2% due 1/1/2021 ................................... Aaa/AAA 4,243,720
3,000,000 New York State Environmental Facilities Corporation Pollution Control Rev.
(State Water-- Revolving Fund), 6.90% due 11/15/2015 ........................ Aaa/AAA 3,495,750
3,000,000 New York State Housing Finance Agency Rev. (Phillips Village Project),
7 3/4% due 8/15/2017* ....................................................... A2/NR 3,359,670
3,000,000 New York State Local Government Assistance Corp., 6% due 4/1/2024 .............. A3/A+ 3,267,750
2,000,000 New York State Mortgage Agency Rev. (Homeowner Mortgage),
7 1/2% due 4/1/2016 ......................................................... Aa2/NR 2,080,160
1,000,000 New York State Mortgage Agency Rev. (Homeowner Mortgage),
5 1/2% due 10/1/2028* ....................................................... Aa2/NR 1,025,540
- -----------------------
+ 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 Statement.
</TABLE>
31
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
NEW YORK SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$3,000,000 New York State Thruway Authority General Rev., 6% due 1/1/2025 ................. Aaa/AAA $ 3,400,680
2,000,000 New York State Thruway Authority (Highway and Bridge Trust Fund),
5% due 4/1/2018 ............................................................. A3/A- 2,001,740
4,000,000 New York State Thruway Authority Service Contract Rev.,
6 1/4% due 4/1/2014 ......................................................... Baa1/BBB+ 4,582,640
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 4,516,200
2,250,000 Port Authority of New York and New Jersey Consolidated Rev.,
6 1/8% due 6/1/2094 ......................................................... A1/AA- 2,698,380
-----------
TOTAL MUNICIPAL BONDS (Cost $78,726,229)-- 98.6% ............................................................. 85,746,296
OTHER ASSETS LESS LIABILITIES-- 1.4% ......................................................................... 1,257,287
-----------
NET ASSETS-- 100.0% .......................................................................................... $87,003,583
===========
</TABLE>
<TABLE>
<CAPTION>
OHIO SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$2,250,000 Beavercreek Local School District, OH GOs (School Improvement Bonds),
5.70% due 12/1/2020 ......................................................... Aaa/AAA $ 2,443,860
3,450,000 Big Walnut Local School District, OH School Building Construction
& Improvement GOs, 7.20% due 6/1/2007 ....................................... Aaa/AAA 3,821,427
4,000,000 Butler County, OH Transportation Improvement District Highway Improvement
Rev., 5 1/8% due 4/1/2017 ................................................... Aaa/AAA 4,140,000
4,000,000 Cleveland, OH Airport System Rev., 5 1/8% due 1/1/2027* ........................ Aaa/AAA 4,004,760
2,395,000 Cleveland, OH Airport System Rev., 5 1/8% due 1/1/2027 ......................... Aaa/AAA 2,426,518
5,000,000 Cleveland, OH Public Power System Rev., 5% due 11/15/2024 ...................... Aaa/AAA 5,011,550
4,915,000 Cleveland, OH Waterworks Improvement First Mortgage Rev.,
5 3/4% due 1/1/2021 ......................................................... Aaa/AAA 5,538,566
85,000 Cleveland, OH Waterworks Improvement First Mortgage Rev.,
5 3/4% due 1/1/2021 ......................................................... Aaa/AAA 93,026
4,500,000 Columbus, OH Municipal Airport Authority Rev. (Port Columbus
International Airport Project), 6% due 1/1/2020* ............................ Aaa/AAA 4,874,715
1,000,000 Columbus, OH Municipal Airport Authority Rev. (Port Columbus
International Airport Project), 5% due 1/1/2028 ............................. Aaa/AAA 1,000,780
3,000,000 Dayton, OH Water System Mortgage Rev., 6 3/4% due 12/1/2010 .................... Aaa/AAA 3,067,530
7,000,000 Franklin County, OH GOs, 5 3/8% due 12/1/2020 .................................. Aaa/AAA 7,440,300
7,500,000 Franklin County, OH Hospital Rev. (Riverside United Methodist
Hospital), 5 3/4% due 5/15/2020 ............................................. Aa3/NR 7,882,425
2,500,000 Hamilton County, OH Sewer System Rev., 5 1/2% due 12/1/2017 .................... Aaa/AAA 2,643,750
5,000,000 Hamilton, OH Electric System Mortgage Rev., 6% due 10/15/2023 .................. Aaa/AAA 5,452,900
4,000,000 Hudson Local School District, OH GOs, 7.10% due 12/15/2013 ..................... A1/NR 4,367,480
1,095,000 Lake County, OH Hospital Improvement Rev. (Lake Hospital
System Inc.), 8% due 1/1/2013 ............................................... Aaa/AAA 1,115,279
+ 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 Statement.
</TABLE>
32
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
OHIO SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$6,425,000 Mahoning County, OHHospital Rev. (Forum Health Obligated Group),
5% due 11/15/2025 ........................................................... Aaa/AAA $ 6,430,076
2,000,000 Montgomery County, OHCatholic Health Initiatives Rev.,
5 1/8% due 12/1/2017 ........................................................ Aa2/AA 2,029,620
4,650,000 Mount Vernon, OH Hospital Rev. (Knox Community Hospital),
7 7/8% due 6/1/2012 ......................................................... NR/NR 4,755,276
2,000,000 Ohio Air Quality Development Authority Rev. (Cincinnati Gas & Electric
Company Project), 5.45% due 1/1/2024 ........................................ Aaa/AAA 2,082,400
6,500,000 Ohio Air Quality Development Authority Rev. (JMG Project),
6 3/8% due 1/1/2029* ........................................................ Aaa/AAA 7,270,900
4,415,000 Ohio Housing Finance Agency Residential Mortgage Rev. (Mortgage-Backed
Securities Program), 6.10% due 9/1/2028* .................................... NR/AAA 4,720,342
3,000,000 Ohio State Higher Educational Facilities Commission Rev.
(Oberlin College Project), 5 3/8% due 10/1/2015 ............................. NR/AA 3,137,850
4,000,000 Ohio State Higher Educational Facilities Commission Rev.
(University of Dayton Project), 5.40% due 12/1/2022 ......................... Aaa/AAA 4,194,320
2,000,000 Ohio State Liquor Profits Rev., 6.85% due 3/1/2000 ............................. Aaa/AAA 2,089,420
4,000,000 Ohio State Public Facilities Commission Rev. (Higher Education
Capital Facilities), 6.30% due 5/1/2006 .................................... Aaa/AAA 4,334,120
2,330,000 Ohio State Water Development Authority Rev. (Safe Water),
9 3/8% due 12/1/2010 ........................................................ Aaa/AAA 2,968,047
7,500,000 Ohio State Water Development Authority Rev. (Fresh Water),
5 1/8% due 12/1/2023 ........................................................ Aaa/AAA 7,601,475
5,000,000 Ohio State Water Development Authority Rev. (Community Assistance),
5 3/8% due 12/1/2024 ........................................................ Aaa/AAA 5,259,250
5,000,000 Ohio State Water Development Authority Rev. (Dayton Power &
Light Co. Project), 6.40% due 8/15/2027 ..................................... Aa3/AA- 5,418,200
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- 2,768,525
3,000,000 Ohio Turnpike Commission, OH Turnpike Rev., 5.70% due 2/15/2017 ................ Aaa/AAA 3,375,810
2,955,000 Pickerington Local School District, OH School Building Construction
GOs, 8% due 12/1/2005 ....................................................... Aaa/AAA 3,499,843
4,000,000 Puerto Rico Highway &Transportation Authority Rev., 5 1/2% due 7/1/2036 ........ Baa1/A 4,361,840
775,000 Toledo, OH Sewer System Rev., 7 3/4% due 11/15/2017 ............................ Aaa/AAA 794,445
560,000 Toledo, OH Waterworks Rev., 7 3/4% due 11/15/2017 .............................. Aaa/AAA 574,050
2,500,000 Twinsburg City School District, OH School Improvement GOs,
5.90% due 12/1/2021 ......................................................... Aaa/AAA 2,770,175
3,000,000 University of Toledo, OH General Receipts Bonds, 7.10% due 6/1/2010 ............ Aaa/AAA 3,225,840
2,000,000 Worthington City School District, OH School Building Construction
& Improvement GOs, 8 3/4% due 12/1/2002 ..................................... Aaa/AAA 2,156,100
------------
TOTAL MUNICIPAL BONDS (Cost $139,947,906)-- 98.0% ............................................................ 151,142,790
VARIABLE RATE DEMAND NOTES (Cost $800,000)-- 0.5% ............................................................ 800,000
OTHER ASSETS LESS LIABILITIES-- 1.5% ......................................................................... 2,286,703
------------
NET ASSETS-- 100.0% .......................................................................................... $154,229,493
+ 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 Statement.
</TABLE>
33
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
OREGON SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$2,000,000 Benton County, OR Hospital Facilities Authority Rev. (Samaritan Health
Services Project), 5 1/8% due 10/1/2028 ..................................... NR/A $ 1,998,480
2,000,000 Chemeketa, OR Community College District GOs, 5.95% due 6/1/2016 ............... Aaa/AAA 2,263,740
1,000,000 Clackamas & Washington Counties, OR GOs (West Linn-Wilsonville School
District), 5% due 6/1/2017 .................................................. Aaa/AAA 1,021,100
2,000,000 Eugene, OR Electric Utility Rev., 5.80% due 8/1/2022 ........................... Aaa/AAA 2,219,120
1,500,000 Eugene, OR Trojan Nuclear Project Rev., 5.90% due 9/1/2009 ..................... Aa1/AA- 1,502,445
1,250,000 Multnomah County, OR Education Facility Rev. (University of Portland),
5% due 4/1/2018 ............................................................. Aaa/AAA 1,273,538
1,250,000 Multnomah County School District, OR GOs, 6.80% due 12/15/2004 ................. Aa/A+ 1,258,438
1,750,000 Multnomah County School District, OR GOs, 5 1/2% due 6/1/2015 .................. A1/A+ 1,867,005
2,000,000 North Clackamas Parks & Recreation District -- Clackamas County, OR Rev.
(Recreational Facilities), 5.70% due 4/1/2013 ............................... NR/A- 2,113,240
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- 2,026,120
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 ............ Aa2/AA 808,927
2,500,000 Oregon Department of Administrative Services Certificates of
Participation, 5.80% due 5/1/2024 ............................................ Aaa/AAA 2,722,250
1,000,000 Oregon Department of Transportation Regional Light Rail Extension Rev.,
6.20% due 6/1/2008 ........................................................... Aaa/AAA 1,123,260
2,500,000 Oregon Health, Housing, Educational & Cultural Facilities Authority Rev.
(Reed College Project), 5 3/8% due 7/1/2025 .................................. NR/A+ 2,606,750
1,250,000 Oregon Health Sciences University Rev., 5 1/4% due 7/1/2028 ..................... Aaa/AAA 1,274,750
2,000,000 Oregon Housing & Community Services Department Housing & Finance Rev.
(Assisted or Insured Multi-Unit Program), 5 3/4% due 7/1/2012 ................ Aa2/A+ 2,079,080
900,000 Oregon Housing & Community Services Department Mortgage Rev. (Single Family
Mortgage Program), 5.65% due 7/1/2019* ....................................... Aa2/NR 923,643
310,000 Oregon Housing & Community Services Department Mortgage Rev. (Single Family
Mortgage Program), 7% due 7/1/2022* .......................................... Aa2/NR 314,101
500,000 Oregon Housing & Community Services Department Mortgage Rev. (Single Family
Mortgage Program), 5.30% due 7/1/2024* ....................................... Aa2/NR 506,510
1,000,000 Oregon Housing & Community Services Department Mortgage Rev. (Single Family
Mortgage Program), 6% due 7/1/2027* .......................................... Aa2/NR 1,058,150
- ----------------
+ 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 Statement.
</TABLE>
34
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
OREGON SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$ 500,000 Oregon State GOs (Veterans' Welfare), 9% due 10/1/2006 ......................... Aa2/AA $ 671,400
1,375,000 Oregon State GOs (Veterans' Welfare), 5 7/8% due 10/1/2018 ..................... Aa2/AA 1,450,144
500,000 Oregon State GOs (Alternate Energy Project), 8.40% due 1/1/2008 ................. Aa2/AA 518,545
250,000 Oregon State GOs (Elderly & Disabled Housing), 7.20% due 8/1/2021 ............... Aa2/AA 270,192
1,000,000 Oregon State GOs (Elderly & Disabled Housing), 6.60% due 8/1/2022* .............. Aa2/AA 1,109,860
950,000 Port of Portland, OR International Airport Rev., 7.10% due 7/1/2021* ............ Aaa/AAA 1,190,331
50,000 Port of Portland, OR International Airport Rev., 7.10% due 7/1/2021* ............ Aaa/AAA 54,133
500,000 Port of Portland, OR International Airport Rev., 5 3/4% due 7/1/2025* ........... Aaa/AAA 530,710
1,500,000 Port of Portland, OR International Airport Rev., 5 5/8% due 7/1/2026* ........... Aaa/AAA 1,590,555
2,000,000 Portland, OR GOs, 5.60% due 6/1/2014 ............................................ Aa2/NR 2,156,820
1,250,000 Portland, OR Hospital Facilities Authority Rev. (Legacy Health System),
6 5/8% due 5/1/2011 .......................................................... Aaa/AAA 1,352,050
2,500,000 Portland, OR Sewer System Rev., 5% due 6/1/2015 ................................. Aaa/AAA 2,568,875
1,000,000 Puerto Rico Highway & Transportation Authority Rev., 5 1/2% due 7/1/2026 ........ Baa1/A 1,053,930
630,000 Puerto Rico Housing Finance Corp. (Single Family Mortgage Rev.),
6.85% due 10/15/2023 ......................................................... Aaa/AAA 674,900
1,000,000 Puerto Rico Ports Authority Rev., 7% due 7/1/2014* .............................. Aaa/AAA 1,089,000
1,000,000 Puerto Rico Telephone Authority Rev., 5 1/2% due 1/1/2013 ....................... A/A+ 1,052,240
2,600,000 Salem, OR Pedestrian Safety Improvements GOs, 5 3/4% due 5/1/2011 .............. Aaa/AAA 2,861,170
1,000,000 Tri-County Metropolitan Transportation District of Oregon GOs
(Light Rail Extension), 6% due 7/1/2012 ...................................... Aa/AA+ 1,077,960
1,110,000 Tualatin Development Commission, OR (Urban Renewal & Redevelopment),
7 3/8% due 1/1/2007 .......................................................... Baa1/NR 1,119,424
500,000 Virgin Islands Public Finance Authority Rev., 5 1/2% due 10/1/2022 .............. NR/BBB- 516,475
2,500,000 Washington and Multnomah Counties, OR (Beaverton School District),
5% due 8/1/2017 ............................................................. Aa2/AA- 2,554,425
1,500,000 Washington County, OR Unified Sewerage Agency Rev.,
5 3/4% due 10/1/2011 ........................................................ Aaa/AAA 1,708,485
-----------
TOTAL MUNICIPAL BONDS (COST $53,777,463)-- 96.5% .............................................. 58,132,271
-----------
VARIABLE RATE DEMAND NOTES
-------------------------------
300,000 Floyd County, GA Development Authority Environmental Improvement
Rev. (Georgia Kraft Co. Project) due 12/1/2015 .............................. P-1/NR 300,000
200,000 New York City Municipal Water Finance Authority, NY Water & Sewer System Rev.
due 6/15/2022 ............................................................... VMIG-1/A-1+ 200,000
900,000 New York State Energy Research & Development Authority Pollution Control Rev.
(Niagara Mohawk) due 12/1/2023 .............................................. NR/A-1+ 900,000
+ 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 Statement.
</TABLE>
35
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
OREGON SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$1,100,000 New York State Energy Research & Development Authority Pollution Control Rev.
(Niagara Mohawk) due 7/1/2027* .............................................. NR/A-1+ $ 1,100,000
600,000 Sweetwater County, WY Pollution Control Rev. (Pacificorp) due 12/1/2014 ........ P-1/A-1+ 600,000
-----------
TOTAL VARIABLE RATE DEMAND NOTES (Cost $3,100,000)-- 5.1% .................................................... 3,100,000
-----------
other assets less liabilities-- (1.6)% ....................................................................... (980,745)
-----------
NET ASSETS-- 100.0% .......................................................................................... $60,251,526
===========
</TABLE>
<TABLE>
<CAPTION>
SOUTH CAROLINA SERIES
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$2,500,000 Anderson County, SC Hospital Rev. (Anderson Memorial Hospital),
5 1/4% due 2/1/2012 ......................................................... Aaa/AAA $ 2,589,675
3,800,000 Berkeley County, SC Water & Sewer Rev., 5.55% due 6/1/2016 ..................... Aaa/AAA 4,011,318
745,000 Charleston County, SC Public Facilities Corp. Certificates of
Participation, 7.15% due 2/1/2004 ........................................... A1/A 789,991
770,000 Charleston County, SC Public Facilities Corp. Certificates of
Participation, 7.15% due 8/1/2004 ........................................... A1/A 816,500
800,000 Charleston County, SC Public Facilities Corp. Certificates of
Participation, 7.20% due 2/1/2005 ........................................... A1/A 848,280
2,500,000 Charleston, SC Waterworks & Sewer System Rev., 6% due 1/1/2012 ................. A1/AA- 2,684,525
6,000,000 Darlington County, SC Industrial Development Rev. (Nucor Corporation
Project), 5 3/4% due 8/1/2023* .............................................. A1/AA- 6,310,560
2,000,000 Darlington County, SC Industrial Development Rev. (Sonoco Products
Company Project), 6% Due 4/1/2026* .......................................... A2/A 2,169,820
2,500,000 Fairfield County, SC Pollution Control Rev. (South Carolina Electric &
Gas Company), 6 1/2% due 9/1/2014 ........................................... A1/A+ 2,758,850
1,000,000 Georgetown County, SC Pollution Control Facilities Rev.
(International Paper Company), 7 3/8% due 6/15/2005 ......................... A3/BBB+ 1,030,410
3,000,000 Greenville Hospital System, SC Hospital Facilities Rev.,
5 1/2% due 5/1/2016 ......................................................... NR/AA 3,113,820
2,000,000 Greenville Hospital System, SC Hospital Facilities Rev.,
5 1/4% due 5/1/2023 ......................................................... Aa3/AA 2,039,140
3,000,000 Greenwood County, SC Hospital Facilities Rev. (Self Memorial Hospital),
5 7/8% due 10/1/2017 ........................................................ Aaa/AAA 3,208,650
2,600,000 Lancaster County, SC School District GOs, 6.60% due 7/1/2012 ................... Aaa/AAA 2,906,098
2,000,000 Lancaster County, SC Waterworks & Sewer System Rev., 5 1/4% due 5/1/2021 ....... Aaa/AAA 2,046,360
2,720,000 Laurens County, SC Combined Utility System Rev., 5% due 1/1/2018 ............... Aaa/AAA 2,736,021
5,000,000 Lexington County,SC Hospital Rev. (Health Services District, Inc.),
5 1/8% due 11/1/2026 ........................................................ Aaa/AAA 5,019,900
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 1,100,640
1,000,000 Medical University South Carolina Hospital Facilities Rev.,
5.60% due 7/1/2011 .......................................................... Aaa/AAA 1,121,290
3,000,000 Mount Pleasant, SC Water & Sewer Rev., 6% due 12/1/2020 ........................ Aaa/AAA 3,277,770
+ 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 Statement.
</TABLE>
36
<PAGE>
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
SOUTH CAROLINA SERIES (CONTINUED)
FACE RATINGS+ MARKET
AMOUNT MUNICIPAL BONDS MOODY'S/S&P VALUE
-------- ------------------- -------------- -------------
<S> <C> <C> <C>
$2,000,000 Myrtle Beach, SC Waterworks & Sewer System Rev., 5 1/4% due 3/1/2020 ........... Aaa/AAA $ 2,040,280
1,500,000 North Charleston Sewer District, SC Rev., 6 3/8% due 7/1/2012 .................. Aaa/AAA 1,801,395
5,000,000 Oconee County, SC Pollution Control Rev. (Duke Power Co. Project),
5.80% due 4/1/2014 .......................................................... Aa2/AA- 5,326,800
1,250,000 Piedmont Municipal Power Agency, SC Electric Rev., 6 1/4% due 1/1/2021 ......... Aaa/AAA 1,499,937
3,000,000 Piedmont Municipal Power Agency, SC Electric Rev., 6.30% due 1/1/2022 .......... Aaa/AAA 3,344,130
1,000,000 Puerto Rico Highway &Transportation Authority Rev., 5 1/2% due 7/1/2036 ........ Baa1/A 1,090,460
2,000,000 Puerto Rico Highway &Transportation Authority Rev., 5% due 7/1/2038 ............ Baa1/A 1,982,760
2,500,000 Puerto Rico Industrial, Tourist, Educational, Medical & Environmental
Control Facilities Financing Authority Higher Education Rev.
(Inter-American University of Puerto Rico Project), 5% due 10/1/2022 ........ Aaa/AAA 2,517,975
1,000,000 Puerto Rico Telephone Authority Rev., 5 1/2% due 1/1/2022 ...................... A/A+ 1,038,440
2,000,000 Richland County, SC Solid Waste Disposal Facilities Rev. (Union
Camp Corp. Project), 7.45% due 4/1/2021* .................................... A1/A- 2,185,440
1,000,000 Richland County, SC Solid Waste Disposal Facilities Rev. (Union Camp
Corp. Project), 7 1/8% due 9/1/2021* ........................................ A2/A- 1,088,950
5,000,000 Rock Hill, SC Combined Utilities System Rev., 5% due 1/1/2020 .................. Aaa/AAA 5,003,400
2,000,000 South Carolina Jobs--Economic Development Authority Hospital Rev.
(Georgetown Memorial Hospital), 5% due 11/1/2029 ............................ Aaa/NR 1,978,120
6,000,000 South Carolina Public Service Authority Rev., 5 7/8% due 1/1/2023 .............. Aaa/AAA 6,592,920
1,740,000 South Carolina State Housing Authority (Single Family Mortgage Purchase),
6.70% due 7/1/2010 .......................................................... Aaa/AAA 1,760,062
500,000 South Carolina State Housing Finance & Development Authority
(Homeownership Mortgage), 7.55% due 7/1/2011 ................................ Aa2/AA 522,015
2,140,000 South Carolina State Housing Finance & Development Authority
Rental Housing Rev. (North Bluff Project), 5.60% due 7/1/2016 ............... NR/AA 2,186,802
1,000,000 South Carolina State Housing Finance & Development Authority
(Multi-Family Development Rev.), 6 7/8% due 11/15/2023 ...................... Aaa/NR 1,065,060
5,000,000 South Carolina State Ports Authority Rev., 5.30% due 7/1/2026* ................. Aaa/AAA 5,100,500
5,000,000 Spartanburg, SC Water System Rev., 5% due 6/1/2027 ............................. Aaa/AAA 5,003,750
3,000,000 University of South Carolina Rev., 5 3/4% due 6/1/2026 ......................... Aaa/AAA 3,266,550
2,000,000 Western Carolina Regional Sewer Authority, SC Sewer System Rev.,
5 1/2% due 3/1/2010 ........................................................ Aaa/AAA 2,135,420
------------
TOTAL MUNICIPAL BONDS (Cost $100,589,439)-- 97.5% ........................................................... 109,110,784
VARIABLE RATE DEMAND NOTES (Cost $800,000)-- 0.7% ........................................................... 800,000
OTHER ASSETS LESS LIABILITIES-- 1.8% ........................................................................ 2,011,237
------------
NET ASSETS-- 100.0% ......................................................................................... $111,922,021
============
+ 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 Statement.
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITES
SEPTEMBER 30, 1998
NATIONAL COLORADO GEORGIA LOUISIANA MARYLAND
SERIES SERIES SERIES SERIES SERIES
--------------- -------------- -------------- -------------- --------------
ASSETS:
Investments, at value (see Portfolios of Investments):
<S> <C> <C> <C> <C> <C>
Long-term holdings ............................ $107,298,895 $44,874,071 $49,475,959 $55,233,461 $54,992,499
Short-term holdings ........................... 700,000 300,000 1,000,000 800,000 2,200,000
------------ ----------- ----------- ----------- -----------
107,998,895 45,174,071 50,475,959 56,033,461 57,192,499
Cash ............................................ 123,926 77,738 122,737 105,448 93,416
Interest receivable ............................. 1,562,261 835,793 785,873 943,112 912,213
Receivable for Capital Stock sold ............... 116,365 -- 783 6,718 26,190
Expenses prepaid to shareholder
service agent ................................. 13,754 6,287 6,680 6,680 7,466
Receivable for securities sold .................. -- -- -- 265,000 --
Other ........................................... 1,449 630 682 767 750
------------ ----------- ----------- ----------- -----------
TOTAL ASSETS .................................... 109,816,650 46,094,519 51,392,714 57,361,186 58,232,534
------------ ----------- ----------- ----------- -----------
Liabilities:
Payable for Capital Stock repurchased ........... 202,840 17,872 170 31,977 34,989
Dividends payable ............................... 181,880 75,001 80,571 96,299 94,112
Payable for securities purchased ................ -- -- -- -- --
Accrued expenses, taxes, and other .............. 130,567 74,487 78,687 88,258 84,820
------------ ----------- ----------- ----------- -----------
TOTAL LIABILITIES ............................... 515,287 167,360 159,428 216,534 213,921
------------ ----------- ----------- ----------- -----------
NET ASSETS ...................................... $109,301,363 $45,927,159 $51,233,286 $57,144,652 $58,018,613
============ =========== =========== =========== ===========
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ....................................... $ 12,255 $ 5,968 $ 5,777 $ 6,619 $ 6,598
Class D ....................................... 889 45 334 99 375
Additional paid-in capital ...................... 103,096,331 42,776,160 46,360,182 52,120,753 53,403,553
Undistributed/accumulated net realized
gain (loss) ................................... (1,559,215) (115,843) 266,896 748,213 185,038
Net unrealized appreciation of investments ...... 7,751,103 3,260,829 4,600,097 4,268,968 4,423,049
------------ ----------- ----------- ----------- -----------
NET ASSETS ...................................... $109,301,363 $45,927,159 $51,233,286 $57,144,652 $58,018,613
============ =========== =========== =========== ===========
NET ASSETS:
Class A ....................................... $101,908,896 $45,583,092 $48,423,993 $56,307,378 $54,891,172
Class D ....................................... $ 7,392,467 $ 344,067 $ 2,809,293 $ 837,274 $ 3,127,441
SHARES OF CAPITAL STOCK OUTSTANDING
($.001 PAR VALUE):
Class A ....................................... 12,255,165 5,968,019 5,776,921 6,619,224 6,597,655
Class D ....................................... 889,145 45,080 334,454 98,467 375,599
NET ASSET VALUE PER SHARE:
CLASS A ....................................... $8.32 $7.64 $8.38 $8.51 $8.32
CLASS D ....................................... $8.31 $7.63 $8.40 $8.50 $8.33
- ----------------------
See Notes to Financial Statements.
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
MASSACHUSETTS MICHIGAN MINNESOTA MISSOURI
SERIES SERIES SERIES SERIES
---------------- --------------- ---------------- -------------
ASSETS:
Investments, at value (see Portfolios of Investments):
<S> <C> <C> <C> <C>
Long-term holdings ........................................... $108,494,163 $143,845,276 $121,332,877 $48,792,007
Short-term holdings .......................................... 900,000 100,000 400,000 800,000
------------ ------------ ------------ -----------
............................................................... 109,394,163 143,945,276 121,732,877 49,592,007
Cash ........................................................... 69,480 72,871 129,277 10,05
Interest receivable ............................................ 1,627,916 2,500,978 1,981,575 935,202
Receivable for Capital Stock sold .............................. 14,168 30,957 14,281 27,504
Expenses prepaid to shareholder
service agent ................................................ 14,147 18,470 16,898 6,680
Receivable for securities sold ................................. -- -- -- --
Other .......................................................... 1,480 1,970 1,659 689
------------ ------------ ------------ -----------
TOTAL ASSETS ................................................... 111,121,354 146,570,522 123,876,567 50,572,133
------------ ------------ ------------ -----------
Liabilities:
Payable for Capital Stock repurchased .......................... 20,610 177,957 53,965 46,024
Dividends payable .............................................. 174,746 236,774 203,842 77,772
Payable for securities purchased -- -- -- --
Accrued expenses, taxes, and other ............................. 129,882 153,474 142,250 80,924
------------ ------------ ------------ -----------
TOTAL LIABILITIES .............................................. 325,238 568,205 400,057 204,720
------------ ------------ ------------ -----------
NET ASSETS ..................................................... $110,796,116 $146,002,317 $123,476,510 $50,367,413
============ ============ ============ ===========
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ...................................................... $ 13,227 $ 16,333 $ 15,217 $ 6,223
Class D 178 209 263 52
Additional paid-in capital ..................................... 101,176,263 132,640,548 114,171,159 46,119,176
Undistributed/accumulated net realized
gain (loss) .................................................. 356,827 2,468,435 1,503,771 736,483
Net unrealized appreciation of investments ..................... 9,249,621 10,876,792 7,786,100 3,505,479
------------ ------------ ------------ -----------
NET ASSETS ..................................................... $110,796,116 $146,002,317 $123,476,510 $50,367,413
============ ============ ============ ===========
NET ASSETS:
Class A ...................................................... $109,327,849 $144,160,667 $121,373,756 $49,949,695
Class D ...................................................... 1,468,267 1,841,650 2,102,754 417,718
SHARES OF CAPITAL STOCK OUTSTANDING
($.001 PAR VALUE):
Class A ...................................................... 13,227,527 16,332,742 15,216,589 6,222,997
Class D ...................................................... 177,650 208,879 263,568 52,037
NET ASSET VALUE PER SHARE:
CLASS A ...................................................... $8.27 $8.83 $7.98 $8.03
CLASS D ...................................................... $8.26 $8.82 $7.98 $8.03
- ----------------------
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
NEW YORK OHIO OREGON SOUTH CAROLINA
SERIES SERIES SERIES SERIES
-------------- --------------- -------------- ----------------
ASSETS:
Investments, at value (see Portfolios of Investments):
<S> <C> <C> <C> <C>
Long-term holdings ...................................... $85,746,296 $151,142,790 $58,132,271 $109,110,784
Short-term holdings ..................................... -- 800,000 3,100,000 800,000
----------- ------------ ----------- ------------
.......................................................... 85,746,296 151,942,790 61,232,271 109,910,784
Cash ...................................................... 113,225 160,645 110,843 97,468
Interest receivable ....................................... 1,406,077 2,653,997 1,032,032 1,785,326
Receivable for Capital Stock sold ......................... 51,273 19,510 37,382 424,137
Expenses prepaid to shareholder
service agent ........................................... 11,003 20,041 7,859 14,147
Receivable for securities sold ............................ -- -- 171,403 --
Other ..................................................... 1,155 2,067 786 1,498
----------- ------------ ----------- ------------
TOTAL ASSETS .............................................. 87,329,029 154,799,050 62,592,576 112,233,360
----------- ------------ ----------- ------------
Liabilities:
Payable for Capital Stock repurchased ..................... 82,754 144,002 192,678 4,023
Dividends payable ......................................... 137,336 259,015 92,028 177,701
Payable for securities purchased .......................... -- -- 1,967,373 --
Accrued expenses, taxes, and other ........................ 105,356 166,540 88,971 129,615
----------- ------------ ----------- ------------
TOTAL LIABILITIES ......................................... 325,446 569,557 2,341,050 311,339
----------- ------------ ----------- ------------
NET ASSETS ................................................ $87,003,583 $154,229,493 $60,251,526 $111,922,021
=========== ============ =========== ============
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ................................................. $ 9,867 $ 18,304 $ 7,159 $ 12,682
Class D 253 131 329 668
Additional paid-in capital ................................ 77,894,645 140,608,940 55,517,834 102,662,939
Undistributed/accumulated net realized
gain (loss) ............................................. 2,078,751 2,407,234 371,396 724,387
Net unrealized appreciation of investments ................ 7,020,067 11,194,884 4,354,808 8,521,345
----------- ------------ ----------- ------------
NET ASSETS ................................................ $87,003,583 $154,229,493 $60,251,526 $111,922,021
=========== ============ =========== ============
NET ASSETS:
Class A ................................................. $84,821,960 $153,126,162 $57,601,297 $106,328,118
Class D ................................................. 2,181,623 1,103,331 2,650,229 5,593,903
SHARES OF CAPITAL STOCK OUTSTANDING
($.001 PAR VALUE):
Class A ................................................. 9,866,681 18,303,910 7,158,690 12,681,944
Class D ................................................. 253,558 131,260 329,620 667,830
NET ASSET VALUE PER SHARE:
CLASS A ................................................. $8.60 $8.37 $8.05 $8.38
CLASS D ................................................. $8.60 $8.41 $8.04 $8.38
- ----------------------
See Notes to Financial Statements.
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1998
NATIONAL COLORADO GEORGIA LOUISIANA MARYLAND
SERIES SERIES SERIES SERIES SERIES
------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest .......................................... $5,890,123 $2,702,213 $2,764,172 $3,256,299 $3,151,030
---------- ---------- ---------- ---------- ----------
EXPENSES:
Management fees ................................... 522,358 236,819 253,187 283,699 276,179
Distribution and service fees ..................... 144,067 48,288 72,377 60,185 73,397
Shareholder account services ...................... 128,464 63,960 70,106 68,976 76,286
Auditing and legal fees ........................... 35,088 38,029 36,590 38,371 37,938
Registration ...................................... 28,590 11,929 14,206 15,673 16,143
Shareholder reports and communications ............ 14,047 10,951 13,278 13,652 15,704
Custody and related services ...................... 10,266 9,828 8,947 11,739 7,135
Directors' fees and expenses ...................... 5,244 4,873 4,957 4,928 4,884
Miscellaneous ..................................... 5,414 3,353 3,354 3,477 3,524
---------- ---------- ---------- ---------- ----------
TOTAL EXPENSES .................................... 893,538 428,030 477,002 500,700 511,190
---------- ---------- ---------- ---------- ----------
NET INVESTMENT INCOME ............................. 4,996,585 2,274,183 2,287,170 2,755,599 2,639,840
---------- ---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments .................. 1,375,240 1,217,468 355,347 750,930 183,975
Net change in unrealized appreciation
of investments .................................. 2,557,155 133,704 1,483,755 904,770 1,341,557
---------- ---------- ---------- ---------- ----------
NET GAIN ON INVESTMENTS ........................... 3,932,395 1,351,172 1,839,102 1,655,700 1,525,532
---------- ---------- ---------- ---------- ----------
INCREASE IN NET ASSETS FROM OPERATIONS ............ $8,928,980 $3,625,355 $4,126,272 $4,411,299 $4,165,372
========== ========== ========== ========== ==========
</TABLE>
- -----------------------------
See Notes to Financial Statements.
40
<PAGE>
<TABLE>
<CAPTION>
MASSACHUSETTS MICHIGAN MINNESOTA MISSOURI NEW YORK OHIO OREGON SOUTH CAROLINA
SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES
- ----------------------------- ------------ ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 6,041,059 $ 8,081,223 $6,978,847 $2,860,843 $4,741,309 $ 8,760,743 $3,153,675 $5,980,487
- ----------- ----------- ---------- ---------- ---------- ----------- ---------- ----------
545,891 726,553 614,405 260,574 426,872 768,368 287,757 539,515
116,077 153,231 134,829 56,182 92,196 152,714 71,660 142,882
133,887 183,757 170,425 71,916 98,764 192,969 76,751 137,733
39,566 35,761 38,824 35,841 35,086 36,526 40,474 36,487
15,581 17,776 11,713 12,948 14,886 15,797 12,974 14,238
16,168 19,074 16,241 13,147 14,985 18,565 13,780 9,381
11,006 11,378 13,669 10,240 11,193 10,040 12,912 14,206
5,578 6,214 5,808 4,942 5,157 6,336 5,021 5,863
5,755 7,210 6,539 3,406 4,640 7,653 3,617 5,584
- ----------- ----------- ---------- ---------- ---------- ----------- ---------- ----------
889,509 1,160,954 1,012,453 469,196 703,779 1,208,968 524,946 905,889
- ----------- ----------- ---------- ---------- ---------- ----------- ---------- ----------
5,151,550 6,920,269 5,966,394 2,391,647 4,037,530 7,551,775 2,628,729 5,074,598
- ----------- ----------- ---------- ---------- ---------- ----------- ---------- ----------
360,413 2,466,720 2,326,890 792,748 2,733,067 3,398,423 375,535 1,214,196
4,686,395 2,641,464 714,989 984,919 1,350,015 1,953,712 1,637,046 2,638,545
- ----------- ----------- ---------- ---------- ---------- ----------- ---------- ----------
5,046,808 5,108,184 3,041,879 1,777,667 4,083,082 5,352,135 2,012,581 3,852,741
- ----------- ----------- ---------- ---------- ---------- ----------- ---------- ----------
$10,198,358 $12,028,453 $9,008,273 $4,169,314 $8,120,612 $12,903,910 $4,641,310 $8,927,339
=========== =========== ========== ========== ========== =========== ========== ==========
</TABLE>
41
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NATIONAL SERIES COLORADO SERIES GEORGIA SERIES
----------------------------- ------------------------------- -------------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
----------------------------- ------------------------------- -------------------------------
1998 1997 1998 1997 1998 1997
-------------- ------------- -------------- ------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income ........ $ 4,996,585 $ 5,074,538 $ 2,274,183 $ 2,552,660 $ 2,287,170 $ 2,496,948
Net realized gain (loss)
on investments ............. 1,375,240 278,366 1,217,468 (1,295,378) 355,347 117,571
Net change in unrealized
appreciation of
investments ................ 2,557,155 3,753,003 133,704 2,352,484 1,483,755 1,648,469
------------- ------------- ------------- ------------- ------------- -------------
INCREASE IN NET ASSETS
FROM OPERATIONS............. 8,928,980 9,105,907 3,625,355 3,609,766 4,126,272 4,262,988
------------- ------------- ------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ................... (4,774,389) (4,906,738) (2,263,810) (2,542,330) (2,185,497) (2,406,265)
Class D ................... (222,196) (167,800) (10,373) (10,330) (101,673) (90,683)
Net realized gain on
investments:
Class A ................... -- -- -- -- (187,062) (180,236)
Class D ................... -- -- -- -- (10,787) (6,873)
------------- ------------- ------------- ------------- ------------- -------------
Decrease in Net Assets from
Distributions ............. (4,996,585) (5,074,538) (2,274,183) (2,552,660) (2,485,019) (2,684,057)
------------- ------------- ------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale
of shares:
Class A ................... 7,098,841 3,114,125 1,287,016 1,076,262 2,038,654 4,134,682
Class D ................... 929,650 475,323 143,429 32,754 918,990 1,056,744
Net asset value of shares
issued in payment
of dividends:
Class A ................... 2,620,048 2,676,250 1,265,360 1,383,913 1,422,482 1,593,994
Class D ................... 171,356 108,599 7,311 6,306 87,282 74,720
Exchanged from
associated Funds:
Class A ................... 7,059,979 5,221,126 2,208,315 2,519,749 260,904 220,471
Class D ................... 16,952,120 35,760,206 40,000 13,676 53,323 46,374
Net asset value of shares
issued in payment of
gain distributions:
Class A ................... -- -- -- -- 145,261 140,329
Class D ................... -- -- -- -- 9,588 6,295
------------- ------------- ------------- ------------- ------------- -------------
Total ........................ 34,831,994 47,355,629 4,951,431 5,032,660 4,936,484 7,273,609
------------- ------------- ------------- ------------- ------------- -------------
Cost of shares repurchased:
Class A ................... (9,998,684) (10,801,204) (7,569,275) (6,020,226) (6,905,867) (6,985,116)
Class D ................... (631,664) (585,245) (78,801) (45,914) (608,241) (749,883)
Exchanged into
associated Funds:
Class A ................... (6,101,457) (5,287,181) (2,730,725) (2,526,522) (703,073) (984,750)
Class D ................... (12,491,491) (38,546,451) (14,735) (29,141) (381,284) (201,142)
------------- ------------- ------------- ------------- ------------- -------------
Total ........................ (29,223,296) (55,220,081) (10,393,536) (8,621,803) (8,598,465) (8,920,891)
------------- ------------- ------------- ------------- ------------- -------------
INCREASE (DECREASE)
IN NET ASSETS
FROM CAPITAL SHARE
TRANSACTIONS ............... 5,608,698 (7,864,452) (5,442,105) (3,589,143) (3,661,981) (1,647,282)
------------- ------------- ------------- ------------- ------------- -------------
INCREASE (DECREASE)
IN NET ASSETS .............. 9,541,093 (3,833,083) (4,090,933) (2,532,037) (2,020,728) (68,351)
NET ASSETS:
Beginning of year ............ 99,760,270 103,593,353 50,018,092 52,550,129 53,254,014 53,322,365
------------- ------------- ------------- ------------- ------------- -------------
END OF YEAR .................. $ 109,301,363 $ 99,760,270 $ 45,927,159 $ 50,018,092 $ 51,233,286 $ 53,254,014
============= ============= ============= ============= ============= =============
</TABLE>
- -------------
See Notes to Financial Statements.
42
<PAGE>
<TABLE>
<CAPTION>
LOUISIANA SERIES MARYLAND SERIES MASSACHUSETTS SERIES
------------------------------ -------------------------------- -------------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------------ -------------------------------- -------------------------------
1998 1997 1998 1997 1998 1997
------------- ------------- ------------- ------------- ------------- -------------
<S> <S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income ........ $ 2,755,599 $ 2,882,172 $ 2,639,840 $ 2,728,689 $ 5,151,550 $ 5,574,868
Net realized gain (loss)
on investments ............. 750,930 96,176 183,975 383,873 360,413 1,304,763
Net change in unrealized
appreciation of
investments ................ 904,770 1,423,177 1,341,557 952,592 4,686,395 1,867,804
------------- ------------- ------------- ------------- ------------- -------------
INCREASE IN NET ASSETS
FROM OPERATIONS............. 4,411,299 4,401,525 4,165,372 4,065,154 10,198,358 8,747,435
------------- ------------- ------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ................... (2,732,585) (2,865,407) (2,539,788) (2,647,830) (5,099,272) (5,516,992)
Class D ................... (23,014) (16,765) (100,052) (80,859) (52,278) (57,876)
Net realized gain on
investments:
Class A ................... (95,055) (753,044) (307,098) (281,130) (1,288,484) (1,068,791)
Class D ................... (862) (5,217) (11,949) (11,087) (14,760) (14,031)
------------- ------------- ------------- ------------- ------------- -------------
Decrease in Net Assets from
Distributions ............. (2,851,516) (3,640,433) (2,958,887) (3,020,906) (6,454,794) (6,657,690)
------------- ------------- ------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale
of shares:
Class A ................... 1,593,079 1,489,134 3,716,423 1,434,072 2,426,260 2,431,716
Class D ................... 275,183 135,107 1,423,657 510,347 392,038 288,117
Net asset value of shares
issued in payment
of dividends:
Class A ................... 1,366,881 1,461,539 1,496,930 1,543,240 3,066,637 3,307,753
Class D ................... 16,878 9,122 78,222 69,209 22,770 31,220
Exchanged from
associated Funds:
Class A ................... 29,131 21,008 294,333 613,677 10,859,223 11,842,999
Class D ................... 45,621 -- 16,794 -- 116,384 8,924
Net asset value of shares
issued in payment of
gain distributions:
Class A ................... 64,975 518,498 225,691 205,081 951,011 774,630
Class D ................... 692 3,466 10,991 10,110 7,293 9,688
------------- ------------- ------------- ------------- ------------- -------------
Total ........................ 7,273,609 3,392,440 3,637,874 7,263,041 4,385,736 17,841,616
------------- ------------- ------------- ------------- ------------- -------------
Cost of shares repurchased:
Class A ................... (4,220,025) (5,240,608) (4,254,611) (5,400,781) (9,987,117) (11,114,300)
Class D ................... (28,622) (34,626) (521,910) (509,633) (361,116) (510,040)
Exchanged into
associated Funds:
Class A ................... (266,535) (69,802) (282,486) (896,334) (11,696,486) (9,172,465)
Class D ................... -- -- (3,461) (99,960) -- (8,905)
------------- ------------- ------------- ------------- ------------- -------------
Total ........................ (4,515,182) (5,345,036) (5,062,468) (6,906,708) (22,044,719) (20,805,710)
------------- ------------- ------------- ------------- ------------- -------------
INCREASE (DECREASE)
IN NET ASSETS
FROM CAPITAL SHARE
TRANSACTIONS ............... (1,122,742) (1,707,162) 2,200,573 (2,520,972) (4,203,103) (2,110,663)
------------- ------------- ------------- ------------- ------------- -------------
INCREASE (DECREASE)
IN NET ASSETS .............. 437,041 (946,070) 3,407,058 (1,476,724) (459,539) (20,918)
NET ASSETS:
Beginning of year ............ 56,707,611 57,653,681 54,611,555 56,088,279 111,255,655 111,276,573
------------- ------------- ------------- ------------- ------------- -------------
END OF YEAR .................. $ 57,144,652 $ 56,707,611 $ 58,018,613 $ 54,611,555 $ 110,796,116 $ 111,255,655
============= ============= ============= ============= ============= =============
</TABLE>
- -------------
See Notes to Financial Statements.
<PAGE>
MICHIGAN SERIES
------------------------------
YEAR ENDED SEPTEMBER 30,
-----------------------------
1998 1997
------------- -------------
OPERATIONS:
Net investment income ........ $ 6,920,269 $ 7,494,605
Net realized gain (loss)
on investments ............. 2,466,720 1,259,022
Net change in unrealized
appreciation of
investments ................ 2,641,464 2,653,074
------------- -------------
INCREASE IN NET ASSETS
FROM OPERATIONS............. 12,028,453 11,406,701
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ................... (6,853,272) (7,427,374)
Class D ................... (66,997) (67,231)
Net realized gain on
investments:
Class A ................... (1,235,329) (1,581,301)
Class D ................... (15,651) (17,780)
------------- -------------
Decrease in Net Assets from
Distributions ............. (8,171,249) (9,093,686)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale
of shares:
Class A ................... 4,780,685 5,064,050
Class D ................... 325,385 706,948
Net asset value of shares
issued in payment
of dividends:
Class A ................... 4,190,240 4,475,470
Class D ................... 50,303 47,279
Exchanged from
associated Funds:
Class A ................... 2,928,969 9,115,725
Class D ................... 106,164 258,662
Net asset value of shares
issued in payment of
gain distributions:
Class A ................... 911,174 1,180,119
Class D ................... 14,084 13,960
------------- -------------
Total ........................ 13,307,004 13,307,004
------------- -------------
Cost of shares repurchased:
Class A ................... (12,531,450) (15,967,293)
Class D ................... (479,641) (552,079)
Exchanged into
associated Funds:
Class A ................... (3,299,610) (10,959,291)
Class D ................... (66,539) (145,528)
------------- -------------
Total ........................ (16,377,240) (27,624,191)
------------- -------------
INCREASE (DECREASE)
IN NET ASSETS
FROM CAPITAL SHARE
TRANSACTIONS ............... (3,070,236) (6,761,978)
------------- -------------
INCREASE (DECREASE)
IN NET ASSETS .............. 786,968 (4,448,963)
NET ASSETS:
Beginning of year ............ 145,215,349 149,664,312
------------- -------------
END OF YEAR .................. $146,002,317 $ 145,215,349
============= =============
- -------------
See Notes to Financial Statements.
43
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MINNESOTA SERIES MISSOURI SERIES NEW YORK SERIES
----------------------------- ---------------------------- -----------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
----------------------------- ---------------------------- -----------------------------
1998 1997 1998 1997 1998 1997
--------------- ------------- -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income ................. $ 5,966,394 $ 6,538,641 $ 2,391,647 $ 2,583,310 $ 4,037,530 $ 4,228,630
Net realized gain on investments ...... 2,326,890 757,947 792,748 389,565 2,733,067 200,181
Net change in unrealized
appreciation of investments ......... 714,989 978,768 984,919 900,350 1,350,015 3,171,620
------------ ------------ ----------- ----------- ----------- -----------
INCREASE IN NET ASSETS
FROM OPERATIONS ..................... 9,008,273 8,275,356 4,169,314 3,873,225 8,120,612 7,600,431
------------ ------------ ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ............................ (5,891,605) (6,456,679) (2,377,089) (2,563,601) (3,969,021) (4,176,066)
Class D ............................ (74,789) (81,962) (14,558) (19,709) (68,509) (52,564)
Net realized gain on investments:
Class A ............................ (139,563) -- (437,159) (542,355) (837,486) (213,515)
Class D ............................ (2,075) -- (3,680) (5,999) (15,723) (3,062)
------------ ------------ ----------- ----------- ----------- -----------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS ...................... (6,108,032) (6,538,641) (2,832,486) (3,131,664) (4,890,739) (4,445,207)
------------ ------------ ----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ............................ 3,759,777 5,444,733 1,518,510 5,524,679 3,404,935 3,917,958
Class D ............................ 583,305 135,740 79,605 39,028 541,566 431,628
Net asset value of shares issued in
payment of dividends:
Class A ............................ 3,934,003 4,394,871 1,135,261 1,240,533 2,342,732 2,427,328
Class D ............................ 42,082 55,878 12,480 15,171 49,242 36,517
Exchanged from associated Funds:
Class A ............................ 373,852 356,606 223,404 243,591 3,247,626 4,314,919
Class D ............................ 132,637 90,000 -- 100 109,289 12,295
Net asset value of shares issued in
payment of gain distributions:
Class A ............................ 112,803 -- 281,752 354,701 666,270 166,872
Class D ............................ 1,581 -- 2,904 5,296 12,694 2,545
------------ ------------ ----------- ----------- ----------- -----------
Total ................................. 8,940,040 10,477,828 3,253,916 7,423,099 10,374,354 11,310,062
------------ ------------ ----------- ----------- ----------- -----------
Cost of shares repurchased:
Class A ............................ (10,246,157) (14,412,829) (6,778,544) (4,255,392) (8,149,245) (9,574,807)
Class D ............................ (199,128) (503,408) (162,241) (114,612) (152,914) (68,104)
Exchanged into associated Funds:
Class A ............................ (1,084,969) (1,994,727) (522,272) (1,021,172) (3,375,173) (3,551,797)
Class D ............................ (306,816) (39,298) -- (40,189) (22,942) (42,506)
------------ ------------ ----------- ----------- ----------- -----------
Total ................................. (11,837,070) (16,950,262) (7,463,057) (5,431,365) (11,700,274) (13,237,214)
------------ ------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ..... (2,897,030) (6,472,434) (4,209,141) 1,991,734 (1,325,920) (1,927,152)
------------ ------------ ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS 3,211 (4,735,719) (2,872,313) 2,733,295 1,903,953 1,228,072
NET ASSETS:
Beginning of year ..................... 123,473,299 128,209,018 53,239,726 50,506,431 85,099,630 83,871,558
------------ ------------ ----------- ----------- ----------- -----------
END OF YEAR ........................... $123,476,510 $123,473,299 $50,367,413 $53,239,726 $87,003,583 $85,099,630
============= ============ =========== =========== =========== ===========
- ------------------
See Notes to Financial Statements.
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
OHIO SERIES OREGON SERIES SOUTH CAROLINA SERIES
----------------------------- ---------------------------- ------------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
----------------------------- ---------------------------- ------------------------------
1998 1997 1998 1997 1998 1997
---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income ................. $ 7,551,775 $ 8,161,050 $ 2,628,729 $ 2,771,624 $ 5,074,598 $ 5,370,795
Net realized gain on investments ...... 3,398,423 1,052,154 375,535 747,838 1,214,196 452,558
Net change in unrealized
appreciation of investments ......... 1,953,712 2,121,935 1,637,046 1,208,172 2,638,545 2,381,666
------------ ------------ ----------- ----------- ------------ ------------
INCREASE IN NET ASSETS
FROM OPERATIONS ..................... 12,903,910 11,335,139 4,641,310 4,727,634 8,927,339 8,205,019
------------ ------------ ----------- ----------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ............................ (7,504,421) (8,118,451) (2,555,801) (2,712,769) (4,905,709) (5,239,991)
Class D ............................ (47,354) (42,599) (72,928) (58,855) (168,889) (130,804)
Net realized gain on investments:
Class A ............................ (2,017,799) (1,382,343) (700,268) (304,704) (905,320) (1,667,625)
Class D ............................ (15,589) (8,277) (21,792) (8,165) (34,538) (42,381)
------------ ------------ ----------- ----------- ------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS ...................... (9,585,163) (9,551,670) (3,350,789) (3,084,493) (6,014,456) (7,080,801)
------------ ------------ ----------- ----------- ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ............................ 3,716,543 3,568,969 4,579,085 2,019,494 10,736,862 4,596,375
Class D ............................ 208,265 352,330 912,518 513,511 2,250,161 1,258,114
Net asset value of shares issued in
payment of dividends:
Class A ............................ 4,618,664 5,063,815 1,588,261 1,713,320 2,804,800 3,057,472
Class D ............................ 40,700 38,045 56,847 43,464 133,057 111,193
Exchanged from associated Funds:
Class A ............................ 404,291 858,387 120,904 59,994 452,032 385,497
Class D ............................ 70,396 15,368 47,138 105,958 52,119 29,567
Net asset value of shares issued in
payment of gain distributions:
Class A ............................ 1,532,501 1,060,708 536,993 232,602 698,627 1,298,064
Class D ............................ 13,962 7,582 18,047 6,239 31,538 40,550
------------ ------------ ----------- ----------- ------------ ------------
Total ................................. 10,605,322 10,965,204 7,859,793 4,694,582 17,159,196 10,776,832
------------ ------------ ----------- ----------- ------------ ------------
Cost of shares repurchased:
Class A ............................ (13,102,427) (18,663,417) (5,263,365) (6,926,397) (10,837,647) (16,191,089)
Class D ............................ (395,804) (216,985) (103,120) (525,899) (605,605) (432,224)
Exchanged into associated Funds:
Class A ............................ (1,758,230) (1,482,349) (437,002) (801,759) (1,330,837) (1,366,846)
Class D ............................ (17,309) (60,245) (12,598) (51,638) (57,130) (106,657)
------------ ------------ ----------- ----------- ------------ ------------
Total ................................. (15,273,770) (20,422,996) (5,816,085) (8,305,693) (12,831,219) (18,096,816)
------------ ------------ ----------- ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ..... (4,668,448) (9,457,792) 2,043,708 (3,611,111) 4,327,977 (7,319,984)
------------ ------------ ----------- ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS (1,349,701) (7,674,323) 3,334,229 (1,967,970) 7,240,860 (6,195,766)
NET ASSETS:
Beginning of year ..................... 155,579,194 163,253,517 56,917,297 58,885,267 104,681,161 110,876,927
------------ ------------ ----------- ----------- ------------ ------------
END OF YEAR ........................... $154,229,493 $155,579,194 $60,251,526 $56,917,297 $111,922,021 $104,681,161
============ ============ =========== =========== ============ ============
- ------------------
See Notes to Financial Statements.
</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. 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 charge ("CDSC") 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 CDSC 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, 1998,
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,
1998, were as follows:
SERIES PURCHASES SALES
- -------------- ------------- --------------
National $23,762,460 $18,323,615
Colorado 13,277,678 18,619,022
Georgia 1,442,325 5,205,437
Louisiana 8,789,265 10,259,954
Maryland 4,075,165 4,145,015
Massachusetts 14,246,324 18,932,828
Michigan 33,205,383 36,554,371
Minnesota 25,897,686 27,603,543
Missouri 10,775,390 14,822,167
New York 33,532,285 34,942,327
Ohio 37,247,043 44,155,347
Oregon 7,559,695 7,064,965
South Carolina 20,757,120 17,566,580
46
<PAGE>
NOTES TO FINANCIAL STATEMENTS
At September 30, 1998, 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 of portfolio
securities was as follows:
TOTAL
UNREALIZED
SERIES APPRECIATION
- ------------- ---------------
National $ 7,751,103
Colorado 3,260,829
Georgia 4,600,097
Louisiana 4,268,968
Maryland 4,423,049
Massachusetts 9,249,621
Michigan 10,876,792
Minnesota 7,786,100
Missouri 3,505,479
New York 7,020,067
Ohio 11,194,884
Oregon 4,354,808
South Carolina 8,521,345
4. MANAGEMENT FEE, DISTRIBUTION 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 Advisors, Inc. (the "Distributor") (formerly Seligman Financial
Services, Inc.), 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 sales of Class A shares:
DISTRIBUTOR DEALER
SERIES CONCESSIONS COMMISSIONS
- -------------- -------------- --------------
National $10,617 $ 75,401
Colorado 5,093 38,359
Georgia 6,978 52,316
Louisiana 6,743 50,723
Maryland 10,969 80,864
Massachusetts 9,068 65,913
Michigan 21,176 155,700
Minnesota 16,223 116,958
Missouri 7,654 52,971
New York 7,561 58,094
Ohio 17,244 124,965
Oregon 15,346 121,619
South Carolina 23,670 171,364
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, 1998, the Distributor charged such fees to the Fund pursuant to
the Plan as follows:
TOTAL FEES % OF AVERAGE
SERIES PAID NET ASSETS
- -------------- ------------- ---------------
National $ 87,412 .09%
Colorado 45,621 .10
Georgia 44,562 .09
Louisiana 54,359 .10
Maryland 47,718 .09
Massachusetts 102,371 .09
Michigan 135,906 .09
Minnesota 115,933 .09
Missouri 52,242 .10
New York 74,294 .09
Ohio 140,954 .09
Oregon 51,836 .09
South Carolina 98,768 .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, 1998, fees incurred under the Plan
equivalent to 1% per annum of the average daily net assets of Class D shares
were as follows:
SERIES SERIES
- -------------- -------------
National $56,655 Minnesota $18,896
Colorado 2,667 Missouri 3,940
Georgia 27,815 New York 17,902
Louisiana 5,826 Ohio 11,760
Maryland 25,679 Oregon 19,824
Massachusetts 13,706 South Carolina 44,114
Michigan 17,325
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The Distributor is entitled to retain any CDSC 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, 1998, such charges were as follows:
SERIES SERIES
- ------------- -------------
National $ 3,560 Minnesota $ 47
Colorado 219 Missouri 35
Georgia 26,175 New York 1,310
Maryland 445 Ohio 1,259
Massachusetts 267 Oregon 40
Michigan 397 South Carolina 2,648
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of shares of the Fund, as well as distribution
and service fees pursuant to the Plan. For the year ended September 30, 1998,
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 $ 192 $7,528
Colorado 2,216 2,599
Georgia 1,654 918
Louisiana 117 1,112
Maryland 366 1,572
Massachusetts 718 2,105
Michigan 219 2,822
Minnesota 1,344 2,335
Missouri 405 3,410
New York 3,453 13,359
Ohio 4,159 3,900
Oregon 45 1,682
South Carolina 19,615 4,498
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost for shareholder account services the following
amounts:
SERIES SERIES
- ------------- ------------
National $128,464 Minnesota $170,425
Colorado 63,960 Missouri 71,916
Georgia 70,106 New York 98,764
Louisiana 68,976 Ohio 192,969
Maryland 76,286 Oregon 76,751
Massachusetts 133,887 South Carolina 137,733
Michigan 183,757
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. Directors may elect to have their
deferred fees accrue interest or earn a return based on the performance of the
Fund or other funds in the Seligman Group of Investment Companies. Deferred fees
and related accrued earnings are not deductible for federal income tax purposes
until such amounts are paid. The cost of such fees and earnings accrued thereon
is included in directors' fees and expenses, and the accumulated balances
thereof at September 30, 1998, are included in other liabilities as follows:
SERIES SERIES
- ------------ -------------
National $16,068 Minnesota $13,782
Colorado 10,193 Missouri 10,201
Georgia 9,587 New York 13,693
Louisiana 11,049 Ohio 13,851
Maryland 11,045 Oregon 10,045
Massachusetts 13,748 South Carolina 9,707
Michigan 13,378
5. COMMITTED LINE OF CREDIT -- Effective July 1, 1998, the Fund entered into a
joint $800 million committed line of credit that is shared by substantially all
funds in the Seligman Group of Investment Companies. Each Series' borrowings are
limited to 10% of its net assets. Borrowings pursuant to the credit facility are
subject to interest at a rate equal to the overnight federal funds rate plus
0.50% on an overnight basis. Each Series incurs a commitment fee of 0.08% per
annum on its share of the unused portion of the credit facility. The credit
facility may be drawn upon only for temporary purposes and is subject to certain
other customary restrictions. The credit facility commitment expires one year
from the date of the agreement but is renewable with the consent of the
participating banks. To date, the Fund has not borrowed from the credit
facility.
6. 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 on an annual basis. At
September 30, 1998, the net loss carryforwards for the National and Colorado
Series amounted to $1,559,215 and $115,843, 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 and Colorado Series until net capital gains have
been realized in excess of the available capital loss carryforwards.
48
<PAGE>
NOTES TO FINANCIAL STATEMENTS
7. CAPITAL STOCK TRANSACTIONS -- The Fund has 1,300,000,000 shares of Capital
Stock authorized. At September 30, 1998, 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,
------------------------ ------------------------ ------------------------ -------------------------
1998 1997 1998 1997 1998 1997 1998 1997
------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of shares:
Class A ..................... 873,287 401,292 171,756 146,785 248,416 513,632 191,119 181,700
Class D ..................... 114,176 61,208 19,107 4,493 111,889 133,099 32,909 16,439
Shares issued in payment
of dividends:
Class A ..................... 321,523 343,369 168,624 188,633 173,232 200,681 163,549 179,244
Class D ..................... 21,003 13,912 974 860 10,608 9,380 2,019 1,120
Exchanged from associated Funds:
Class A ..................... 865,763 672,956 294,638 345,869 31,751 28,040 3,509 2,599
Class D ..................... 2,093,008 4,606,174 5,319 1,897 6,394 5,782 5,444 --
Shares issued in payment of
gain distributions:
Class A ..................... -- -- -- -- 17,956 17,674 7,857 63,776
Class D ..................... -- -- -- -- 1,182 792 84 426
--------- --------- --------- -------- --------- --------- -------- ---------
Total ......................... 4,288,760 6,098,911 660,418 688,537 601,428 909,080 406,490 445,304
--------- --------- --------- -------- --------- --------- -------- ---------
Shares repurchased:
Class A ..................... (1,226,722) (1,389,619) (1,009,933) (821,576) (844,100) (881,743) (505,091) (642,677)
Class D ..................... (77,574) (75,516) (10,459) (6,235) (73,925) (94,407) (3,426) (4,237)
Exchanged into associated Funds:
Class A ..................... (747,805) (679,856) (363,810) (345,924) (86,018) (123,961) (31,881) (8,595)
Class D ..................... (1,545,820) (4,948,529) (1,959) (4,012) (46,291) (25,271) -- --
--------- --------- --------- -------- --------- --------- -------- ---------
Total ......................... (3,597,921) (7,093,520) (1,386,161) (1,177,747) (1,050,334) (1,125,382) (540,398) (655,509)
--------- --------- --------- -------- --------- --------- -------- ---------
Increase (decrease) in shares . 690,839 (994,609) (725,743) (489,210) (448,906) (216,302) (133,908) (210,205)
========= ========= ========= ======== ========= ========= ======== =========
MARYLAND SERIES MASSACHUSETTS SERIES MICHIGAN SERIES MINNESOTA SERIES
------------------------ ------------------------ ------------------------ -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------ ------------------------ -------------------------
1998 1997 1998 1997 1998 1997 1998 1997
------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
Sales of shares:
Class A ..................... 452,967 178,081 301,803 308,839 552,545 596,810 480,210 706,910
Class D ..................... 173,585 63,517 48,564 36,578 37,739 83,579 74,514 17,609
Shares issued in payment
of dividends:
Class A ..................... 182,716 192,610 381,287 420,799 484,322 529,332 502,233 569,754
Class D ..................... 9,536 8,633 2,830 3,981 5,822 5,592 5,371 7,244
Exchanged from associated Funds:
Class A ..................... 35,858 77,084 1,354,117 1,523,024 339,541 1,080,365 47,797 46,568
Class D ..................... 2,043 -- 14,321 1,134 12,157 30,637 16,965 11,509
Shares issued in payment of
gain distributions:
Class A ..................... 27,829 25,571 120,229 98,428 106,820 139,825 14,480 --
Class D ..................... 1,354 1,259 923 1,232 1,653 1,654 203 --
--------- --------- --------- -------- --------- --------- -------- ---------
Total ......................... 885,888 546,755 2,224,074 2,394,015 1,540,599 2,467,794 1,141,773 1,359,594
--------- --------- --------- -------- --------- --------- -------- ---------
Shares repurchased:
Class A ..................... (519,240) (674,114) (1,241,182) (1,413,634) (1,447,886) (1,886,059) (1,308,615)(1,868,498)
Class D ..................... (63,527) (63,960) (44,816) (65,121) (55,636) (65,355) (25,476) (65,288)
Exchanged into associated Funds:
Class A ..................... (34,518) (112,466) (1,454,254) (1,175,580) (382,652) (1,297,651) (138,742) (258,689)
Class D ..................... (423) (12,507) -- (1,133) (7,657) (17,125) (38,924) (5,099)
--------- --------- --------- -------- --------- --------- -------- ---------
Total ......................... (617,708) (863,047) (2,740,252) (2,655,468) (1,893,831) (3,266,190) (1,511,757)(2,197,574)
--------- --------- --------- -------- --------- --------- -------- ---------
Increase (decrease) in shares . 268,180 (316,292) (516,178) (261,453) (353,232) (798,396) (369,984) (837,980)
========= ========= ========= ======== ========= ========= ======== =========
</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,
----------------------- ------------------------- ------------------------ -------------------------
1998 1997 1998 1997 1998 1997 1998 1997
------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of shares:
Class A ...................... 192,882 722,053 409,090 486,564 453,643 441,039 578,820 262,547
Class D ...................... 10,178 5,024 64,754 52,683 25,288 43,216 115,620 66,778
Shares issued in payment
of dividends:
Class A ...................... 144,574 161,292 280,689 300,867 563,375 626,911 201,391 222,418
Class D ...................... 1,589 1,973 5,891 4,524 4,941 4,687 7,211 5,646
Exchanged from associated Funds:
Class A ...................... 28,380 31,545 389,085 540,465 49,472 106,616 15,314 7,803
Class D ...................... -- 13 12,843 1,501 8,543 1,906 5,944 13,881
Shares issued in payment of
gain distributions:
Class A ...................... 36,308 46,125 81,252 20,729 189,198 131,276 69,111 30,287
Class D ...................... 374 688 1,546 316 1,715 934 2,326 813
--------- --------- --------- -------- --------- --------- -------- ---------
Total .......................... 414,285 968,713 1,245,150 1,407,649 1,296,175 1,356,585 995,737 610,173
--------- --------- --------- -------- --------- --------- -------- ---------
Shares repurchased:
Class A ...................... (861,837) (553,544) (974,859) (1,191,908) (1,599,143) (2,310,439) (666,927) (900,692)
Class D ...................... (20,769) (15,067) (18,301) (8,476) (48,136) (26,589) (13,128) (68,686)
Exchanged into associated Funds:
Class A ...................... (66,519) (131,979) (404,227) (442,854) (214,380) (184,026) (55,368) (104,744)
Class D ...................... -- (5,250) (2,738) (5,338) (2,092) (7,441) (1,600) (6,685)
--------- --------- --------- -------- --------- --------- -------- ---------
Total .......................... (949,125) (705,840) (1,400,125) (1,648,576) (1,863,751) (2,528,495) (737,023)(1,080,807)
--------- --------- --------- -------- --------- --------- -------- ---------
Increase (decrease) in shares .. (534,840) 262,873 (154,975) (240,927) (567,576) (1,171,910) 258,714 (470,634)
========= ========= ========= ========= ========= ========= ======== =========
</TABLE>
SOUTH CAROLINA
-------------------------
YEAR ENDED
SEPTEMBER 30,
-------------------------
1998 1997
------------ -----------
Sales of shares:
Class A ...................... 1,307,029 572,615
Class D ...................... 273,163 156,977
Shares issued in payment
of dividends:
Class A ...................... 341,280 380,701
Class D ...................... 16,202 13,850
Exchanged from associated Funds:
Class A ...................... 54,738 47,863
Class D ...................... 6,370 3,643
Shares issued in payment of
gain distributions:
Class A ...................... 86,250 161,652
Class D ...................... 3,898 5,056
--------- ---------
Total .......................... 2,088,930 1,342,357
--------- ---------
Shares repurchased:
Class A ...................... (1,319,559) (2,018,325)
Class D ...................... (73,888) (53,697)
Exchanged into associated Funds:
Class A ...................... (162,725) (170,000)
Class D ...................... (6,993) (13,276)
--------- ---------
Total .......................... (1,563,165) (2,255,298)
--------- ---------
Increase (decrease) in shares .. 525,765 (912,941)
========= =========
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.
NATIONAL SERIES
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................... $8.01 $7.70 $7.58 $7.18 $8.72
----- ----- ----- ----- -----
Net investment income ............................................ 0.39 0.39 0.40 0.40 0.41
Net realized and unrealized
investment gain (loss) ......................................... 0.31 0.31 0.12 0.40 (1.04)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM
INVESTMENT OPERATIONS .......................................... 0.70 0.70 0.52 0.80 (0.63)
Dividends paid or declared ....................................... (0.39) (0.39) (0.40) (0.40) (0.41)
Distributions from net gain realized ............................. -- -- -- -- (0.50)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.31 0.31 0.12 0.40 (1.54)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ..................................... $8.32 $8.01 $7.70 $7.58 $7.18
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 9.00% 9.40% 6.97% 11.48% (7.83)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 0.80% 0.84% 0.80% 0.86% 0.85%
Net investment income to average net assets ...................... 4.82% 5.05% 5.19% 5.46% 5.30%
Portfolio turnover ............................................... 18.00% 20.63% 33.99% 24.91% 24.86%
NET ASSETS, END OF YEAR
(000s omitted) ................................................... $101,909 $97,481 $98,767 $104,184 $111,374
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- ------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................. $8.02 $7.70 $7.57 $7.18 $8.20
----- ----- ----- ----- -----
Net investment income ............................................ 0.32 0.32 0.33 0.32 0.22
Net realized and unrealized
investment gain (loss) ......................................... 0.29 0.32 0.13 0.39 (1.02)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM
INVESTMENT OPERATIONS .......................................... 0.61 0.64 0.46 0.71 (0.80)
Dividends paid or declared ....................................... (0.32) (0.32) (0.33) (0.32) (0.22)
Distributions from net gain realized ............................. -- -- -- -- --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.29 0.32 0.13 0.39 (1.02)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................... $8.31 $8.02 $7.70 $7.57 $7.18
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 7.76% 8.56% 6.13% 10.17% (9.96)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 1.71% 1.75% 1.67% 1.95% 1.76%+
Net investment income to average net assets ...................... 3.91% 4.15% 4.27% 4.40% 4.37%+
Portfolio turnover ............................................... 18.00% 20.63% 33.99% 24.91% 24.86%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................... $7,392 $2,279 $4,826 $1,215 $446
</TABLE>
- ---------------------
See footnotes on page 63.
51
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
COLORADO SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................... $7.42 $7.27 $7.30 $7.09 $7.76
----- ----- ----- ----- -----
Net investment income ............................................ 0.36 0.37 0.37 0.38 0.37
Net realized and unrealized
investment gain (loss) ......................................... 0.22 0.15 (0.03) 0.21 (0.59)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.58 0.52 0.34 0.59 (0.22)
Dividends paid or declared ....................................... (0.36) (0.37) (0.37) (0.38) (0.37)
Distributions from net gain realized ............................. -- -- -- -- (0.08)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.22 0.15 (0.03) 0.21 (0.67)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ..................................... $7.64 $7.42 $7.27 $7.30 $7.09
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 8.03% 7.30% 4.76% 8.56% (2.92)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 0.90% 0.90% 0.85% 0.93% 0.86%
Net investment income to average net assets ...................... 4.80% 5.01% 5.07% 5.31% 5.06%
Portfolio turnover ............................................... 28.66% 3.99% 12.39% 14.70% 10.07%
NET ASSETS, END OF YEAR
(000s omitted) ................................................... $45,583 $49,780 $52,295 $54,858 $58,197
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................. $7.42 $7.27 $7.29 $7.09 $7.72
----- ----- ----- ----- -----
Net investment income ............................................ 0.29 0.30 0.31 0.30 0.20
Net realized and unrealized
investment gain (loss) ......................................... 0.21 0.15 (0.02) 0.20 (0.63)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.50 0.45 0.29 0.50 (0.43)
Dividends paid or declared ....................................... (0.29) (0.30) (0.31) (0.30) (0.20)
Distributions from net gain realized ............................. -- -- -- -- --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.21 0.15 (0.02) 0.20 (0.63)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................... $7.63 $7.42 $7.27 $7.29 $7.09
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 6.90% 6.34% 3.95% 7.26% (5.73)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 1.80% 1.81% 1.75% 2.02% 1.78%+
Net investment income to average net assets ...................... 3.90% 4.10% 4.17% 4.23% 4.05%+
Portfolio turnover ............................................... 28.66% 3.99% 12.39% 14.70% 10.07%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................... $344 $238 $255 $193 $96
- ------------
See footnotes on page 63.
</TABLE>
52
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GEORGIA SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................... $8.12 $7.87 $7.81 $7.48 $8.43
----- ----- ----- ----- -----
Net investment income ............................................ 0.38 0.38 0.39 0.39 0.41
Net realized and unrealized investment
gain (loss) .................................................... 0.29 0.28 0.11 0.43 (0.86)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.67 0.66 0.50 0.82 (0.45)
Dividends paid or declared ....................................... (0.38) (0.38) (0.39) (0.39) (0.41)
Distributions from net gain realized ............................. (0.03) (0.03) (0.05) (0.10) (0.09)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.26 0.25 0.06 0.33 (0.95)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ..................................... $8.38 $8.12 $7.87 $7.81 $7.48
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 8.44% 8.65% 6.56% 11.66% (5.52)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 0.89% 0.89% 0.83% 0.91% 0.73%
Net investment income to average net assets ...................... 4.57% 4.82% 4.94% 5.26% 5.21%
Portfolio turnover ............................................... 2.92% 12.28% 16.24% 3.36% 19.34%
NET ASSETS, END OF YEAR
(000s omitted) ................................................... $48,424 $50,614 $50,995 $57,678 $61,466
Without management fee waiver:*
Net investment income per share ................................ $0.39 $0.40
Ratios:
Expenses to average net assets ................................. 0.96% 0.93%
Net investment income to average net assets .................... 5.21% 5.01%
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................. $8.13 $7.88 $7.82 $7.49 $8.33
----- ----- ----- ----- -----
Net investment income ............................................ 0.30 0.31 0.32 0.32 0.22
Net realized and unrealized
investment gain (loss) ......................................... 0.30 0.28 0.11 0.43 (0.84)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.60 0.59 0.43 0.75 (0.62)
Dividends paid or declared ....................................... (0.30) (0.31) (0.32) (0.32) (0.22)
Distributions from net gain realized ............................. (0.03) (0.03) (0.05) (0.10) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.27 0.25 0.06 0.33 (0.84)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................... $8.40 $8.13 $7.88 $7.82 $7.49
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 7.59% 7.67% 5.60% 10.58% (7.57)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 1.80% 1.79% 1.73% 1.90% 1.76%+
Net investment income to average net assets ...................... 3.66% 3.92% 4.03% 4.28% 4.28%+
Portfolio turnover ............................................... 2.92% 12.28% 16.24% 3.36% 19.34%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................... $2,809 $2,640 $2,327 $2,079 $849
Without management fee waiver:*
Net investment income per share ................................ $0.31 $0.21
Ratios:
Expenses to average net assets ................................. 1.95% 1.90%+
Net investment income to average net assets .................... 4.23% 4.15%+
</TABLE>
- ----------
See footnotes on page 63.
53
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................... $8.28 $8.16 $8.14 $7.94 $8.79
----- ----- ----- ----- -----
Net investment income ............................................ 0.41 0.41 0.42 0.43 0.44
Net realized and unrealized
investment gain (loss) ......................................... 0.24 0.23 0.08 0.34 (0.77)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.65 0.64 0.50 0.77 (0.33)
Dividends paid or declared ....................................... (0.41) (0.41) (0.42) (0.43) (0.44)
Distributions from net gain realized ............................. (0.01) (0.11) (0.06) (0.14) (0.08)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.23 0.12 0.02 0.20 (0.85)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ..................................... $8.51 $8.28 $8.16 $8.14 $7.94
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 8.08% 8.17% 6.32% 10.30% (3.83)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 0.88% 0.86% 0.82% 0.89% 0.87%
Net investment income to average net assets ...................... 4.86% 5.08% 5.15% 5.44% 5.31%
Portfolio turnover ............................................... 15.72% 16.08% 10.08% 4.82% 17.16%
NET ASSETS, END OF YEAR
(000s omitted) ................................................... $56,308 $56,199 $57,264 $61,988 $61,441
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................. $8.27 $8.16 $8.14 $7.94 $8.73
----- ----- ----- ----- -----
Net investment income ............................................ 0.33 0.34 0.35 0.35 0.24
Net realized and unrealized
investment gain (loss) ......................................... 0.24 0.22 0.08 0.34 (0.79)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.57 0.56 0.43 0.69 (0.55)
Dividends paid or declared ....................................... (0.33) (0.34) (0.35) (0.35) (0.24)
Distributions from net gain realized ............................. (0.01) (0.11) (0.06) (0.14) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.23 0.11 0.02 0.20 (0.79)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................... $8.50 $8.27 $8.16 $8.14 $7.94
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 7.11% 7.07% 5.37% 9.17% (6.45)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 1.78% 1.76% 1.72% 1.91% 1.78%+
Net investment income to average net assets ...................... 3.96% 4.18% 4.25% 4.41% 4.33%+
Portfolio turnover ............................................... 15.72% 16.08% 10.08% 4.82% 17.16%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................... $837 $509 $389 $465 $704
</TABLE>
- ----------
See footnotes on page 63.
54
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MARYLAND SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................... $8.14 $7.99 $7.96 $7.71 $8.64
----- ----- ----- ----- -----
Net investment income ............................................ 0.40 0.40 0.40 0.41 0.42
Net realized and unrealized
investment gain (loss) ......................................... 0.23 0.19 0.06 0.38 (0.76)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.63 0.59 0.46 0.79 (0.34)
Dividends paid or declared ....................................... (0.40) (0.40) (0.40) (0.41) (0.42)
Distributions from net gain realized ............................. (0.05) (0.04) (0.03) (0.13) (0.17)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.18 0.15 0.03 0.25 (0.93)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ..................................... $8.32 $8.14 $7.99 $7.96 $7.71
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 7.89% 7.64% 6.00% 10.90% (4.08)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 0.89% 0.90% 0.84% 0.96% 0.92%
Net investment income to average net assets ...................... 4.82% 4.99% 5.05% 5.31% 5.17%
Portfolio turnover ............................................... 7.59% 14.79% 5.56% 3.63% 17.68%
NET ASSETS, END OF YEAR
(000s omitted) ................................................... $54,891 $52,549 $54,041 $56,290 $57,263
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................. $8.15 $7.99 $7.97 $7.72 $8.46
----- ----- ----- ----- -----
Net investment income ............................................ 0.32 0.33 0.33 0.33 0.23
Net realized and unrealized
investment gain (loss) ......................................... 0.23 0.20 0.05 0.38 (0.74)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.55 0.53 0.38 0.71 (0.51)
Dividends paid or declared ....................................... (0.32) (0.33) (0.33) (0.33) (0.23)
Distributions from net gain realized ............................. (0.05) (0.04) (0.03) (0.13) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.18 0.16 0.02 0.25 (0.74)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................... $8.33 $8.15 $7.99 $7.97 $7.72
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 6.91% 6.80% 4.91% 9.75% (6.21)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 1.80% 1.81% 1.72% 2.02% 1.80%+
Net investment income to average net assets ...................... 3.91% 4.08% 4.14% 4.27% 4.26%+
Portfolio turnover ............................................... 7.59% 14.79% 5.56% 3.63% 17.68%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................... $3,128 $2,063 $2,047 $630 $424
</TABLE>
- ----------
See footnotes on page 63.
55
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MASSACHUSETTS SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................... $7.99 $7.85 $7.91 $7.66 $8.54
----- ----- ----- ----- -----
Net investment income ............................................ 0.38 0.40 0.41 0.42 0.44
Net realized and unrealized
investment gain (loss) ......................................... 0.37 0.22 0.05 0.28 (0.67)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.75 0.62 0.46 0.70 (0.23)
Dividends paid or declared ....................................... (0.38) (0.40) (0.41) (0.42) (0.44)
Distributions from net gain realized ............................. (0.09) (0.08) (0.11) (0.03) (0.21)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.28 0.14 (0.06) 0.25 (0.88)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ..................................... $8.27 $7.99 $7.85 $7.91 $7.66
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 9.80% 8.11% 5.97% 9.58% (2.94)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 0.80% 0.84% 0.80% 0.86% 0.85%
Net investment income to average net assets ...................... 4.72% 5.06% 5.24% 5.51% 5.46%
Portfolio turnover ............................................... 13.41% 29.26% 26.30% 16.68% 12.44%
NET ASSETS, END OF YEAR
(000s omitted) ................................................... $109,328 $110,011 $109,872 $115,711 $120,149
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................. $7.99 $7.84 $7.90 $7.66 $8.33
----- ----- ----- ----- -----
Net investment income ............................................ 0.31 0.33 0.34 0.34 0.24
Net realized and unrealized
investment gain (loss) ......................................... 0.36 0.23 0.05 0.27 (0.67)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.67 0.56 0.39 0.61 (0.43)
Dividends paid or declared ....................................... (0.31) (0.33) (0.34) (0.34) (0.24)
Distributions from net gain realized ............................. (0.09) (0.08) (0.11) (0.03) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.27 0.15 (0.06) 0.24 (0.67)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................... $8.26 $7.99 $7.84 $7.90 $7.66
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 8.68% 7.29% 5.01% 8.33% (5.34)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 1.71% 1.74% 1.70% 1.95% 1.78%+
Net investment income to average net assets ...................... 3.81% 4.16% 4.32% 4.47% 4.52%+
Portfolio turnover ............................................... 13.41% 29.26% 26.30% 16.68% 12.44%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................... $1,468 $1,245 $1,405 $809 $1,099
</TABLE>
- ----------
See footnotes on page 63.
56
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MICHIGAN SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................... $8.60 $8.46 $8.54 $8.28 $9.08
----- ----- ----- ----- -----
Net investment income ............................................ 0.41 0.43 0.45 0.46 0.46
Net realized and unrealized
investment gain (loss) ......................................... 0.30 0.23 0.06 0.30 (0.71)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.71 0.66 0.51 0.76 (0.25)
Dividends paid or declared ....................................... (0.41) (0.43) (0.45) (0.46) (0.46)
Distributions from net gain realized ............................. (0.07) (0.09) (0.14) (0.04) (0.09)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.23 0.14 (0.08) 0.26 (0.80)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ..................................... $8.83 $8.60 $8.46 $8.54 $8.28
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 8.63% 8.16% 6.16% 9.56% (2.90)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 0.79% 0.81% 0.78% 0.87% 0.84%
Net investment income to average net assets ...................... 4.78% 5.13% 5.29% 5.50% 5.32%
Portfolio turnover ............................................... 23.60% 10.98% 19.62% 20.48% 10.06%
NET ASSETS, END OF YEAR
(000s omitted) ................................................... $144,161 $143,370 $148,178 $151,589 $151,095
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................. $8.59 $8.45 $8.54 $8.28 $9.01
----- ----- ----- ----- -----
Net investment income ............................................ 0.33 0.36 0.37 0.37 0.25
Net realized and unrealized
investment gain (loss) ......................................... 0.30 0.23 0.05 0.30 (0.73)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.63 0.59 0.42 0.67 (0.48)
Dividends paid or declared ....................................... (0.33) (0.36) (0.37) (0.37) (0.25)
Distributions from net gain realized ............................. (0.07) (0.09) (0.14) (0.04) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.23 0.14 (0.09) 0.26 (0.73)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................... $8.82 $8.59 $8.45 $8.54 $8.28
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 7.66% 7.19% 5.09% 8.36% (5.47)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 1.70% 1.71% 1.68% 2.01% 1.75%+
Net investment income to average net assets ...................... 3.87% 4.23% 4.39% 4.40% 4.40%+
Portfolio turnover ............................................... 23.60% 10.98% 19.62% 20.48% 10.06%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................... $1,841 $1,845 $1,486 $1,172 $671
</TABLE>
- ----------
See footnotes on page 63.
57
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MINNESOTA SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................... $7.79 $7.68 $7.82 $7.72 $8.28
----- ----- ----- ----- -----
Net investment income ............................................ 0.38 0.40 0.42 0.45 0.45
Net realized and unrealized
investment gain (loss) ......................................... 0.20 0.11 (0.12) 0.11 (0.44)
----- ----- ----- ----- -----
INCREASE FROM INVESTMENT
OPERATIONS ..................................................... 0.58 0.51 0.30 0.56 0.01
Dividends paid or declared ....................................... (0.38) (0.40) (0.42) (0.45) (0.45)
Distributions from net gain realized ............................. (0.01) -- (0.02) (0.01) (0.12)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.19 0.11 (0.14) 0.10 (0.56)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ..................................... $7.98 $7.79 $7.68 $7.82 $7.72
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 7.68% 6.85% 3.99% 7.61% 0.12%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 0.81% 0.85% 0.81% 0.87% 0.85%
Net investment income to average net assets ...................... 4.87% 5.21% 5.47% 5.89% 5.70%
Portfolio turnover ............................................... 21.86% 6.88% 26.89% 5.57% 3.30%
NET ASSETS, END OF YEAR
(000s omitted) ................................................... $121,374 $121,674 $126,173 $132,716 $134,990
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............................. $7.79 $7.68 $7.82 $7.73 $8.22
----- ----- ----- ----- -----
Net investment income ............................................ 0.31 0.33 0.35 0.38 0.25
Net realized and unrealized
investment gain (loss) ......................................... 0.20 0.11 (0.12) 0.10 (0.49)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ..................................................... 0.51 0.44 0.23 0.48 (0.24)
Dividends paid or declared ....................................... (0.31) (0.33) (0.35) (0.38) (0.25)
Distributions from net gain realized ............................. (0.01) -- (0.02) (0.01) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ....................... 0.19 0.11 (0.14) 0.09 (0.49)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................... $7.98 $7.79 $7.68 $7.82 $7.73
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ........................... 6.71% 5.89% 3.06% 6.45% (3.08)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................... 1.72% 1.75% 1.71% 1.85% 1.74%+
Net investment income to average net assets ...................... 3.96% 4.31% 4.57% 4.92% 4.68%+
Portfolio turnover ............................................... 21.86% 6.88% 26.89% 5.57% 3.30%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................... $2,103 $1,799 $2,036 $2,237 $1,649
</TABLE>
- ----------
See footnotes on page 63.
58
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MISSOURI SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................. $7.82 $7.71 $7.70 $7.41 $8.31
----- ----- ----- ----- -----
Net investment income .......................................... 0.36 0.38 0.39 0.40 0.40
Net realized and unrealized
investment gain (loss) ....................................... 0.28 0.19 0.08 0.36 (0.79)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................................... 0.64 0.57 0.47 0.76 (0.39)
Dividends paid or declared ..................................... (0.36) (0.38) (0.39) (0.40) (0.40)
Distributions from net gain realized ........................... (0.07) (0.08) (0.07) (0.07) (0.11)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 0.21 0.11 0.01 0.29 (0.90)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ................................... $8.03 $7.82 $7.71 $7.70 $7.41
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ......................... 8.41% 7.70% 6.27% 10.67% (4.85)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 0.89% 0.89% 0.86% 0.88% 0.74%
Net investment income to average net assets .................... 4.59% 4.93% 5.03% 5.31% 5.18%
Portfolio turnover ............................................. 21.26% 6.47% 8.04% 3.88% 14.33%
NET ASSETS, END OF YEAR
(000s omitted) ................................................. $49,949 $52,766 $49,941 $51,169 $52,621
Without management fee waiver:*
Net investment income per share .............................. $0.39 $0.39
Ratios:
Expenses to average net assets ............................... 0.93% 0.88%
Net investment income to average net assets .................. 5.26% 5.04%
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ........................... $7.82 $7.72 $7.70 $7.41 $8.20
----- ----- ----- ----- -----
Net investment income .......................................... 0.29 0.31 0.32 0.32 0.22
Net realized and unrealized
investment gain (loss) ....................................... 0.28 0.18 0.09 0.36 (0.79)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................................... 0.57 0.49 0.41 0.68 (0.57)
Dividends paid or declared ..................................... (0.29) (0.31) (0.32) (0.32) (0.22)
Distributions from net gain realized ........................... (0.07) (0.08) (0.07) (0.07) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 0.21 0.10 0.02 0.29 (0.79)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................. $8.03 $7.82 $7.72 $7.70 $7.41
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ......................... 7.45% 6.60% 5.46% 9.49% (7.16)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 1.79% 1.80% 1.76% 1.98% 1.70%+
Net investment income to average net assets .................... 3.69% 4.02% 4.13% 4.23% 4.27%+
Portfolio turnover ............................................. 21.26% 6.47% 8.04% 3.88% 14.33%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................. $418 $474 $565 $515 $350
Without management fee waiver:*
Net investment income per share .............................. $0.32 $0.22
Ratios:
Expenses to average net assets ............................... 2.03% 1.80%+
Net investment income to average net assets .................. 4.18% 4.17%+
</TABLE>
- ----------
See footnotes on page 63.
59
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NEW YORK SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................. $8.28 $7.98 $7.86 $7.67 $8.75
----- ----- ----- ----- -----
Net investment income .......................................... 0.40 0.41 0.42 0.42 0.43
Net realized and unrealized
investment gain (loss) ....................................... 0.40 0.32 0.12 0.36 (0.88)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................................... 0.80 0.73 0.54 0.78 (0.45)
Dividends paid or declared ..................................... (0.40) (0.41) (0.42) (0.42) (0.43)
Distributions from net gain realized ........................... (0.08) (0.02) -- (0.17) (0.20)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 0.32 0.30 0.12 0.19 (1.08)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ................................... $8.60 $8.28 $7.98 $7.86 $7.67
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ......................... 10.02% 9.45% 6.97% 10.93% (5.37)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 0.81% 0.82% 0.77% 0.88% 0.87%
Net investment income to average net assets .................... 4.74% 5.09% 5.24% 5.52% 5.31%
Portfolio turnover ............................................. 39.85% 23.83% 25.88% 34.05% 28.19%
NET ASSETS, END OF YEAR
(000s omitted) ................................................. $84,822 $83,528 $82,719 $83,980 $90,914
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ........................... $8.29 $7.98 $7.87 $7.67 $8.55
----- ----- ----- ----- -----
Net investment income .......................................... 0.32 0.34 0.34 0.34 0.23
Net realized and unrealized
investment gain (loss) ....................................... 0.39 0.33 0.11 0.37 (0.88)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................................... 0.71 0.67 0.45 0.71 (0.65)
Dividends paid or declared ..................................... (0.32) (0.34) (0.34) (0.34) (0.23)
Distributions from net gain realized ........................... (0.08) (0.02) -- (0.17) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 0.31 0.31 0.11 0.20 (0.88)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................. $8.60 $8.29 $7.98 $7.87 $7.67
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ......................... 8.88% 8.60% 5.86% 9.87% (7.73)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 1.72% 1.73% 1.68% 1.96% 1.81%+
Net investment income to average net assets .................... 3.83% 4.18% 4.33% 4.42% 4.39%+
Portfolio turnover ............................................. 39.85% 23.83% 25.88% 34.05% 28.19%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................. $2,182 $1,572 $1,152 $885 $476
</TABLE>
60
- ----------
See footnotes on page 63.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................. $8.19 $8.09 $8.11 $7.90 $8.77
----- ----- ----- ----- -----
Net investment income .......................................... 0.40 0.42 0.43 0.44 0.44
Net realized and unrealized
investment gain (loss) ....................................... 0.29 0.17 0.02 0.28 (0.70)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................................... 0.69 0.59 0.45 0.72 (0.26)
Dividends paid or declared ..................................... (0.40) (0.42) (0.43) (0.44) (0.44)
Distributions from net gain realized ........................... (0.11) (0.07) (0.04) (0.07) (0.17)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 0.18 0.10 (0.02) 0.21 (0.87)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ................................... $8.37 $8.19 $8.09 $8.11 $7.90
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ......................... 8.77% 7.54% 5.68% 9.59% (3.08)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 0.78% 0.81% 0.77% 0.84% 0.84%
Net investment income to average net assets .................... 4.92% 5.19% 5.32% 5.56% 5.34%
Portfolio turnover ............................................. 24.74% 11.76% 12.90% 2.96% 9.37%
NET ASSETS, END OF YEAR
(000s omitted) ................................................. $153,126 $154,419 $162,243 $170,191 $171,469
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ........................... $8.23 $8.13 $8.15 $7.92 $8.61
----- ----- ----- ----- -----
Net investment income .......................................... 0.33 0.35 0.36 0.36 0.24
Net realized and unrealized
investment gain (loss) ....................................... 0.29 0.17 0.02 0.30 (0.69)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................................... 0.62 0.52 0.38 0.66 (0.45)
Dividends paid or declared ..................................... (0.33) (0.35) (0.36) (0.36) (0.24)
Distributions from net gain realized ........................... (0.11) (0.07) (0.04) (0.07) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 0.18 0.10 (0.02) 0.23 (0.69)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................. $8.41 $8.23 $8.13 $8.15 $7.92
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ......................... 7.78% 6.57% 4.74% 8.67% (5.36)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 1.69% 1.71% 1.67% 1.93% 1.78%+
Net investment income to average net assets .................... 4.01% 4.29% 4.42% 4.48% 4.41%+
Portfolio turnover ............................................. 24.74% 11.76% 12.90% 2.96% 9.37%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................. $1,103 $1,160 $1,011 $660 $324
</TABLE>
61
- ----------
See footnotes on page 63.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OREGON SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................. $7.87 $7.65 $7.66 $7.43 $8.08
----- ----- ----- ----- -----
Net investment income .......................................... 0.36 0.38 0.40 0.40 0.40
Net realized and unrealized
investment gain (loss) ....................................... 0.28 0.26 -- 0.25 (0.59)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................................... 0.64 0.64 0.40 0.65 (0.19)
Dividends paid or declared ..................................... (0.36) (0.38) (0.40) (0.40) (0.40)
Distributions from net gain realized ........................... (0.10) (0.04) (0.01) (0.02) (0.06)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 0.18 0.22 (0.01) 0.23 (0.65)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ................................... $8.05 $7.87 $7.65 $7.66 $7.43
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ......................... 8.48% 8.60% 5.27% 9.05% (2.38)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 0.88% 0.90% 0.86% 0.86% 0.78%
Net investment income to average net assets .................... 4.60% 4.88% 5.18% 5.40% 5.20%
Portfolio turnover ............................................. 12.62% 19.46% 28.65% 2.47% 9.43%
NET ASSETS, END OF YEAR
(000s omitted) ................................................. $57,601 $55,239 $57,345 $59,549 $59,884
Without management fee waiver:*
Net investment income per share $0.40 $0.39
Ratios:
Expenses to average net assets 0.91% 0.89%
Net investment income to average net assets 5.35% 5.09%
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ........................... $7.87 $7.64 $7.65 $7.43 $8.02
----- ----- ----- ----- -----
Net investment income .......................................... 0.29 0.31 0.33 0.33 0.22
Net realized and unrealized
investment gain (loss) ....................................... 0.27 0.27 -- 0.24 (0.59)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................................... 0.56 0.58 0.33 0.57 (0.37)
Dividends paid or declared ..................................... (0.29) (0.31) (0.33) (0.33) (0.22)
Distributions from net gain realized ........................... (0.10) (0.04) (0.01) (0.02) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 0.17 0.23 (0.01) 0.22 (0.59)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................. $8.04 $7.87 $7.64 $7.65 $7.43
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ......................... 7.37% 7.77% 4.33% 7.86% (4.76)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 1.79% 1.80% 1.76% 1.83% 1.72%+
Net investment income to average net assets .................... 3.69% 3.98% 4.28% 4.41% 4.32%+
Portfolio turnover ............................................. 12.62% 19.46% 28.65% 2.47% 9.43%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................. $2,650 $1,678 $1,540 $1,495 $843
Without management fee waiver:*
Net investment income per share $0.33 $0.22
Ratios:
Expenses to average net assets 1.88% 1.82%+
Net investment income to average net assets 4.36% 4.22%+
</TABLE>
62
- ----------
See footnotes on page 63.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SOUTH CAROLINA SERIES
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF YEAR ............................. $8.16 $8.07 $7.97 $7.61 $8.52
----- ----- ----- ----- -----
Net investment income .......................................... 0.39 0.40 0.41 0.41 0.41
Net realized and unrealized
investment gain (loss) ....................................... 0.29 0.22 0.12 0.37 (0.79)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................................... 0.68 0.62 0.53 0.78 (0.38)
Dividends paid or declared ..................................... (0.39) (0.40) (0.41) (0.41) (0.41)
Distributions from net gain realized ........................... (0.07) (0.13) (0.02) (0.01) (0.12)
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 0.22 0.09 0.10 0.36 (0.91)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF YEAR ................................... $8.38 $8.16 $8.07 $7.97 $7.61
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ......................... 8.66% 7.99% 6.82% 10.69% (4.61)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 0.80% 0.84% 0.80% 0.88% 0.83%
Net investment income to average net assets .................... 4.74% 5.04% 5.15% 5.38% 5.12%
Portfolio turnover ............................................. 16.63% -- 20.66% 4.13% 1.81%
NET ASSETS, END OF YEAR
(000s omitted) ................................................. $106,328 $101,018 $108,163 $112,421 $115,133
CLASS D
----------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2/1/94**
----------------------------------------- TO
1998 1997 1996 1995 9/30/94
----- ----- ----- ----- -------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ........................... $8.16 $8.06 $7.97 $7.61 $8.42
----- ----- ----- ----- -----
Net investment income .......................................... 0.31 0.33 0.34 0.34 0.22
Net realized and unrealized
investment gain (loss) ....................................... 0.29 0.23 0.11 0.37 (0.81)
----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................................... 0.60 0.56 0.45 0.71 (0.59)
Dividends paid or declared ..................................... (0.31) (0.33) (0.34) (0.34) (0.22)
Distributions from net gain realized ........................... (0.07) (0.13) (0.02) (0.01) --
----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 0.22 0.10 0.09 0.36 (0.81)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ................................. $8.38 $8.16 $8.06 $7.97 $7.61
===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ......................... 7.68% 7.15% 5.73% 9.63% (7.14)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 1.71% 1.75% 1.70% 1.85% 1.74%+
Net investment income to average net assets .................... 3.83% 4.13% 4.25% 4.40% 4.29%+
Portfolio turnover ............................................. 16.63% -- 20.66% 4.13% 1.81%++
NET ASSETS, END OF PERIOD
(000s omitted) ................................................. $5,594 $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.
63
<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, 1998, 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, 1998 by correspondence with the Fund's custodian and brokers;
where replies were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, 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, 1998, 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 30, 1998
64
<PAGE>
JOHN R. GALVIN 2, 4
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Corporation
ALICE S. ILCHMAN 3, 4
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW 2, 4
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Industries, Inc.
DIRECTOR, New York Presbyterian Hospital
BETSY S. MICHEL 2, 4
TRUSTEE, The 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, 4
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch,
Law Firm
JAMES Q. RIORDAN 3, 4
DIRECTOR, KeySpan Energy Corporation
TRUSTEE, Committee for Economic Development
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, DIRECTOR OF INVESTMENTS,
J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3, 4
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON 2, 4
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, CommScope, Inc.
DIRECTOR, C-SPAN
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR, ICIMutual Insurance Company
DIRECTOR EMERITUS
FRED E. BROWN
DIRECTOR AND CONSULTANT, J. & W. Seligman & Co. Incorporated
- ----------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
65
<PAGE>
EXECUTIVE OFFICERS
WILLIAM MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
THOMAS G. MOLES
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT
THOMAS G. ROSE
TREASURER
FRANK J. NASTA
SECRETARY
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 Advisors, 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
(212) 682-7600 Outside the
United States
(800) 622-4597 24-Hour Automated
Telephone Access
Service
66
<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 taxed at different rates, primarily depending upon the
length of time the securities were owned by the fund.
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 not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund (the
CDSC 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 -- A document that contains updated or more
detailed information about an investment company and that 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 1998 Mutual Fund Fact Book.
67
<PAGE>
THIS REPORT IS INTENDED ONLY FOR THE INFORMATION OF SHAREHOLDERS OR THOSE WHO
HAVE RECEIVED THE OFFERING PROSPECTUS COVERING SHARES OF CAPITAL 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.
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1865
100 PARK AVENUE, NEW YORK, NY 10017
TEA2 9/98 [LOGO] PRINTED ON RECYCLED PAPER
