<PAGE>
[LOGO] M F S ANNUAL REPORT FOR
THE FIRST NAME IN MUTUAL FUNDS YEAR ENDED
MARCH 31, 1995
MFS(R) MUNICIPAL SERIES TRUST
FOR THE STATES OF: FLORIDA, GEORGIA, MARYLAND, MASSACHUSETTS, NEW YORK,
NORTH CAROLINA, PENNSYLVANIA, SOUTH CAROLINA, VIRGINIA AND WEST VIRGINIA.
[GRAPHIC OMITTED: An 8 1/2" x 11" photo of a highway.]
<PAGE>
MFS(R) MUNICIPAL SERIES TRUST
TRUSTEES
A. Keith Brodkin*
Chairman and President
Richard B. Bailey*
Private Investor;
Former Chairman and Director (until 1991),
Massachusetts Financial Services Company
Marshall N. Cohan
Private Investor
Lawrence H. Cohn, M.D.
Chief of Cardiac Surgery, Brigham and
Women's Hospital; Professor of Surgery,
Harvard Medical School
The Hon. Sir J. David Gibbons, KBE
Chief Executive Officer, Edmund Gibbons Ltd.;
Chairman, Bank of N.T. Butterfield & Son Ltd.
Abby M. O'Neill
Private Investor;
Director, Rockefeller Financial Services, Inc.
(Investment Advisers)
Walter E. Robb, III
President and Treasurer,
Benchmark Advisors, Inc.
(Corporate Financial Consultants)
Arnold D. Scott*
Senior Executive Vice President
and Secretary, Massachusetts Financial Services Company
Jeffrey L. Shames*
President and Chief Equity Officer,
Massachusetts Financial Services Company
J. Dale Sherratt
President, Insight Resources, Inc.
(Acquisition Planning Specialists)
Ward Smith
Former Chairman (until 1994),
NACCO Industries;
Director, Sundstrand Corporation
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116-3741
PORTFOLIO MANAGERS
David R. King*
Geoffrey L. Schechter*
David B. Smith*
TREASURER
W. Thomas London*
ASSISTANT TREASURER
James O. Yost*
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
CUSTODIAN
State Street Bank and Trust Company
AUDITORS
Deloitte & Touche LLP
INVESTOR INFORMATION
For MFS stock and bond market outlooks,
call toll free: 1-800-637-4458 anytime from
a touch-tone telephone.
For information on MFS mutual funds,
call your financial adviser or, for an information
kit, call toll free: 1-800-637-2929 any business
day from 9 a.m. to 5 p.m. Eastern time
(or leave a message anytime).
INVESTOR SERVICE
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
For general information, call toll free:
1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
For service to speech- or hearing-impaired,
call toll free: 1-800-637-6576 any business
day from 9 a.m. to 5 p.m. Eastern time.
(To use this service, your phone must be
equipped with a Telecommunications Device
for the Deaf.)
For share prices, account balances and
exchanges, call toll free: 1-800-MFS-TALK
(1-800-637-8255) anytime from a touch-tone
telephone.
-------------------------------------------
TOP-RATED SERVICE
[SEAL] MFS was rated first when securities
firms evaluated the quality of
service they receive from 40
mutual fund companies. MFS got
high marks for answering calls
quickly, processing transactions
accurately and sending statements
out on time.
(Source: 1994 DALBAR Survey)
-------------------------------------------
Cover photo: Through their wide range of
investments, MFS mutual funds help you
share in America's growth.
*Affiliated with the Investment Adviser
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
During the fiscal year ended March 31, 1995, all classes of shares of the
individual state Funds available within the Trust enjoyed positive total
returns. For the most part, these returns underperformed the +7.43% return of
the Lehman Brothers Municipal Bond Index (the Lehman Index), an unmanaged index
of national municipal bond investments rated Baa or higher. However, although
this index is considered the benchmark for performance of municipal bonds, it is
comprised of municipal bonds issued nationwide, while each of the Funds in the
Trust is limited to investing in the bonds of a particular state. Because
individual indices for municipal bonds do not exist for all states, we have
provided on the following pages a discussion of each Fund's performance relative
to the Lehman Index.
Economic Environment
The economic expansion, entering its fifth year, gained firmer underpinnings
in 1994 as employers significantly stepped up hiring levels. Increased
employment, stronger capital spending by businesses, and strengthening overseas
economies resulted in 4.1% real (adjusted for inflation) gross domestic product
growth last year. Interest rates rose substantially over the past year, which
should help restrain, but not curtail, the economic expansion. Based on sound
economic fundamentals both here and abroad, we expect the business expansion to
continue well into 1995. However, recent data, including a March rise in the
unemployment rate and the first decline in industrial production in six months,
indicate the increased likelihood of a deceleration in the economy.
Despite a stronger economy, inflation at the consumer level has remained
relatively benign at 2.7% in 1994, the fourth straight year of 3.0% or less. Due
to a prolonged period of below-trend-line growth and continued pressure on
corporations to emphasize effective cost controls, wage growth and unit labor
costs have remained subdued. However, as the economy has exhibited continuing
strength, various industrial commodity prices have been rising substantially
faster than consumer prices. Nevertheless, businesses have had difficulty
passing these price increases on to the consumer. With the economy continuing to
expand, we expect some upward movement in inflation from below 3% to the 3 1/2%
range.
Municipal Bond Market
Municipal bond investors experienced unusual volatility during the fiscal
year ended March 31, 1995, with long-term yields rising 100 basis points through
mid-November, then retracing to finish the fiscal year unchanged. The municipal
market was battered during the first half of the fiscal year by rising
inflationary fears spurred by strong economic growth, and by heavy selling by
tax-exempt mutual funds. However, the market began to improve in December, when
inflation fears subsided and market participants focused on the reduction in
municipal supply. During 1994, new-issue supply declined 44% from 1993's record
level and was down an additional 46% during the first three months of this year.
This reduction in supply, combined with historically heavy bond calls and
redemptions, should result in an unprecedented two consecutive years of fewer
bonds outstanding.
We believe municipals continue to represent good value based on our forecast
of stable to lower long-term interest rates, and that they should provide
attractive after-tax returns relative to alternative fixed-income investments.
Portfolio Strategy
While the portfolio structure of each individual Fund of the Trust will vary
according to both the supply of bonds within each state as well as to the
political and economic environment, each Fund is managed in a similar style.
From a near-term perspective, we have increased the duration (a measure of
interest rate sensitivity) of each Fund in order to benefit more fully from the
recent trend of declining interest rates. Additionally, each portfolio remains
fully invested in an effort to maintain dividends at as high a rate as is
consistent with our prospectus guidelines.
Longer term, we continue to emphasize call protection in order to enhance
shareholder value by enabling the portfolios to sustain their tax-exempt
distribution rates, and to provide opportunities for price appreciation during
periods when rates decline. Additionally, the downgrading of Washington, D.C. to
below investment grade, and the bankruptcy filing by Orange County, California
have demonstrated clearly the importance of fundamental credit analysis. We
continue to monitor closely the changing environment for electric utilities and
hospitals. Another sector which bears watching is multi-family housing due to
recent changes in HUD policies regarding housing assistance programs. As always,
we will look for opportunities to reduce our exposure to declining credits where
appropriate.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
A. Keith Brodkin David R. King, Geoffrey L. Schechter and David B. Smith
Chairman and President Portfolio Managers
April 17, 1995
<PAGE>
The performance of shares of the individual state Funds listed below includes
the reinvestment of distributions but excludes the effects of any sales charges.
Each Fund's results have been compared to the Lehman Index.
The portfolio of each Fund will tend to be structured in similar fashion with
respect to maturity and coupon and sector distribution, reflecting our views on
interest rates, credit quality and financing trends. However, each Fund's
performance will differ because of supply/demand and credit quality conditions,
which vary from state to state.
FLORIDA
The Fund's total returns during the fiscal year ended March 31, 1995 of +6.07%
on Class A shares and +5.06% on Class B shares underperformed the +7.43% return
of the Lehman Index. The primary reason for the underperformance was the
defensive posture adopted by the Fund during the bond market sell-off in 1994,
as we reduced duration (interest rate sensitivity) and increased the coupon
structure. While this strategy proved beneficial during the first half of the
fiscal year, it caused the Fund to lag the market during the rally experienced
in the first quarter of 1995.
GEORGIA
The Fund's total returns during the fiscal year ended March 31, 1995 of +5.65%
on Class A shares and +4.88% on Class B shares underperformed the +7.43% return
of the Lehman Index. The primary reason for the underperformance was the
defensive posture adopted by the Fund during the bond market sell-off in 1994,
as we reduced duration (interest rate sensitivity) and increased the coupon
structure. While this strategy proved beneficial during the first half of the
fiscal year, it caused the Fund to lag the market during the rally experienced
in the first quarter of 1995.
MARYLAND
During the past 12 months, the +6.51% total return on Class A shares of the Fund
was slightly below the +7.43% return of the Lehman Index. Class B shares had a
total return of +5.75% over the same period. The Fund's underperformance
relative to the Lehman Index was attributable to a duration that was shorter
than that of the index for the first quarter of 1995, when the market rallied
sharply. We believe the Fund presently is well-balanced, and we will continue to
adjust duration for 1995 based on our interest rate outlook.
MASSACHUSETTS
During the fiscal year ended March 31, 1995, Class A shares of the Fund, which
provided a total return of +5.89%, and Class B shares, which returned +5.13%,
underperformed the +7.43% return of the Lehman Index. The Fund's structure,
weighted toward higher-coupon bonds, reduced its interest rate volatility during
the period. This strategy worked in its favor during the first eight months of
the fiscal year when general market interest rates were rising. However, it
caused the Fund to underperform in the rally which has occurred during the past
four months.
As the Massachusetts economy continues to improve, the Fund has benefited from
its exposure to the commonwealth's general obligation debt, to the debt of its
agencies, and to the Massachusetts Water Resources Authority. The Fund also
increased its health care exposure by adding to holdings of pre-eminent
institutions such as Brigham & Women's Hospital and New England Deaconess
Hospital, both of which have remained strong regional providers in spite of the
uncertainty and market discount assigned to providers during the health care
reform debate. The Fund did have a few high-coupon bonds called away during the
period, which cannot be replaced in the current interest rate environment.
NEW YORK
The Fund's total returns during the fiscal year ended March 31, 1995 of +6.03%
on Class A shares and +5.17% on Class B shares underperformed the +7.43% return
of the Lehman Index. The primary reason for the underperformance was the
defensive posture adopted by the Fund during the bond market sell-off in 1994,
as we reduced duration (interest rate sensitivity) and increased the coupon
structure. While this strategy proved beneficial for the Fund during the first
half of the fiscal year, it caused the Fund to lag the market during the rally
experienced in the first quarter of 1995.
<PAGE>
NORTH CAROLINA
During the fiscal year ended March 31, 1995, the Fund's total returns of +5.86%
on Class A shares, +5.20% on Class B shares and +5.18% on Class C shares
underperformed the +7.43% return of the Lehman Index. The primary reason for the
underperformance was the defensive posture adopted by the Fund during the bond
market sell-off in 1994, as we reduced duration (interest rate sensitivity) and
increased the coupon structure. While this strategy proved beneficial for the
Fund during the first half of the fiscal year, it caused the Fund to lag the
market during the rally experienced in the first quarter of 1995.
PENNSYLVANIA
During the 12 months ended March 31, 1995, the Fund's Class A share total return
of +8.14% outperformed the +7.43% return of the Lehman Index, while Class B
shares, which returned +7.07%, slightly underperformed the Lehman Index. The
Fund's results were caused by good coupon structure, which enabled it to perform
reasonably well during last year's sell-off and allowed good appreciation during
this year's rally.
VIRGINIA
The Fund's total returns for the 12 months ended March 31, 1995 of +5.67% for
Class A shares, +4.91% for Class B shares and +4.85% for Class C shares,
underperformed the +7.43% return of the Lehman Index. During this period of
interest rate volatility, the Fund took a defensive posture by emphasizing bonds
with higher coupons and distributable income, and by de- emphasizing
market-discount bonds. This strategy worked to the Fund's advantage during the
first eight months of the fiscal year, but to its disadvantage over the last
four months when market-discount bonds substantially outperformed
income-oriented issues.
WEST VIRGINIA
During the fiscal year ended March 31, 1995, the Fund underperformed the Lehman
Index, with Class A shares providing a total return of +6.07% and Class B shares
+5.30%. The lack of new issuance in the state (-56% year-over-year), and the
scarce amount of block-sized secondary-market activity, caused the structure of
the portfolio to remain largely the same during the reporting period. Value was
added as we purchased relatively cheap secondary-market insurance for exisiting
positions, resulting in a net increase in the value of those holdings. In
addition, because interest rates rose over much of the period, we hedged the
portfolio with Treasury bond futures to preserve principal. While the Fund did
participate in the recent rally in the market, it underperformed the Lehman
Index due to its relatively more defensive posture.
PORTFOLIO MANAGER PROFILES
A graduate of the University of New Hampshire and the Babson College Graduate
School of Business Administration, David King began his career at MFS in 1985 as
a member of the Fixed Income Department and was named Assistant Vice President -
Investments in 1987. In 1988 he was named Vice President - Investments. Mr. King
is a Chartered Financial Analyst and currently has portfolio management
responsibility for the Maryland, Pennsylvania and South Carolina Funds.
Geoff Schechter joined MFS in 1993 as an Investment Officer in the Fixed Income
Department. A graduate of the University of Texas and the Boston University
Graduate School of Business Administration, he was named Assistant Vice
President - Investments in 1994, Vice President - Investments in 1995 and
currently has portfolio management responsibilities for the Florida, Georgia,
New York and North Carolina Funds. Mr. Schechter is a Certified Public
Accountant and a Chartered Financial Analyst.
A graduate of Union College and the Babson College Graduate School of Business
Administration, David Smith began his career at MFS in 1988 as a Senior Treasury
Analyst in the Corporate Treasury Department. He was named Research Analyst in
the Fixed Income Department in 1989, Investment Officer in 1990, Assistant Vice
President - Investments in 1991 and Vice President - Investments in 1993. Mr.
Smith is a Chartered Financial Analyst and currently has portfolio management
responsibilities for the Massachusetts, Virginia and West Virginia Funds.
<PAGE>
OBJECTIVE AND POLICIES
The investment objective of each state Fund is to provide current income exempt
from federal income taxes and from the personal income taxes, if any, of the
state to which the Fund's name relates.
Each state Fund seeks to achieve its investment objective by investing its
assets primarily in municipal debt instruments, the interest on which is exempt
from federal income taxes and from the personal income taxes, if any, of the
state to which the Fund's name relates. Generally, each state Fund will invest
at least two-thirds of its assets in tax-exempt securities in the three highest
grades (A or above) of recognized rating agencies or comparable unrated
securities. Each state Fund may also enter into options and futures transactions
and purchase securities on a "when-issued" basis.
PERFORMANCE
The following information illustrates the growth of a hypothetical $10,000
investment for each Fund's Class A shares during the periods indicated in
comparison to various market indicators. Fund results reflect the deduction of
the 4.75% maximum sales charge; benchmark comparisons are unmanaged and do not
reflect any fees or expenses. You cannot invest in an index.
All results reflect the reinvestment of all dividends and capital gains. Please
note that effective September 7, 1993, Class B shares were offered and on
January 3, 1994, Class C shares were offered for certain Funds. Information on
the performance of these classes of shares appears on the following pages.
<PAGE>
MFS FLORIDA MUNICIPAL BOND FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the period from February 3,
1992 to March 31, 1995)
Line graph representing the growth of a $10,000 investment for the
period from February 3, 1992 to March 31, 1995. The graph is scaled
from $9,000 to $14,000 in $1,000 segments. The years are marked from
1992 to 1995. There are three lines drawn to scale. One is a solid
line representing MFS Florida Fund (Class A), a second line of short
dashes represents the Lehman Brothers Municipal Bond Index, and a third
line of long dashes represents the Consumer Price Index.
MFS Florida Fund (Class A) $11,701
Lehman Brothers Municipal Bond Index $12,377
Consumer Price Index $10,963
<TABLE>
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS 2/03/92* -
1 Year 3 Years 5 Years 3/31/95
-----------------------------------------------------------------------------------------------------------------------------
MFS Florida Municipal Bond Fund (Class A) including 4.75% sales charge +1.05% +5.51% -- +5.10%
-----------------------------------------------------------------------------------------------------------------------------
MFS Florida Municipal Bond Fund (Class A) at net asset value +6.07% +7.24% -- +6.74%
-----------------------------------------------------------------------------------------------------------------------------
MFS Florida Municipal Bond Fund (Class B) with CDSC+ +1.07% -- -- -3.64%**
-----------------------------------------------------------------------------------------------------------------------------
MFS Florida Municipal Bond Fund (Class B) without CDSC +5.06% -- -- -1.31%**
-----------------------------------------------------------------------------------------------------------------------------
Average Florida tax-exempt municipal bond fund +6.67%(58) +7.37%(21) -- +6.97%(19)
-----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% +7.34% -- +6.97%
-----------------------------------------------------------------------------------------------------------------------------
Consumer Price Index +2.85% +2.82% -- +2.95%
-----------------------------------------------------------------------------------------------------------------------------
*Commencement of offering of Class A shares. Benchmark comparisons are from February 1, 1992.
+These returns reflect the current maximum Class B contingent deferred sales charge (CDSC) of 4%.
**For the period from the commencement of offering of Class B shares, September 7, 1993 to March 31, 1995.
</TABLE>
<PAGE>
MFS GEORGIA MUNICIPAL BOND FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the period from July 1, 1988 to
March 31, 1995)
Line graph representing the growth of a $10,000 investment for the
period from July 1, 1988 to March 31, 1995. The graph is scaled from
$8,000 to $18,000 in $2,000 segments. The years are marked from 1989
to 1995. There are three lines drawn to scale. One is a solid line
representing MFS Georgia Fund (Class A), a second line of short dashes
represents the Lehman Brothers Municipal Bond Index, and a third line of
long dashes represents the Consumer Price Index.
MFS Georgia Fund (Class A) $15,595
Lehman Brothers Municipal Bond Index $17,276
Consumer Price Index $12,831
<TABLE>
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS 6/06/88* -
1 Year 3 Years 5 Years 3/31/95
-----------------------------------------------------------------------------------------------------------------------------
MFS Georgia Municipal Bond Fund (Class A) including 4.75% sales charge +0.61% +4.81% +6.49% +6.72%
-----------------------------------------------------------------------------------------------------------------------------
MFS Georgia Municipal Bond Fund (Class A) at net asset value +5.65% +6.53% +7.53% +7.48%
-----------------------------------------------------------------------------------------------------------------------------
MFS Georgia Municipal Bond Fund (Class B) with CDSC+ +0.89% -- -- -2.94%**
-----------------------------------------------------------------------------------------------------------------------------
MFS Georgia Municipal Bond Fund (Class B) without CDSC +4.88% -- -- -0.56%**
-----------------------------------------------------------------------------------------------------------------------------
Average Georgia tax-exempt municipal bond fund +6.33%(22) +6.68%(7) +7.47%(6) +7.91%(5)
-----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% +7.34% +8.24% +8.56%
-----------------------------------------------------------------------------------------------------------------------------
Consumer Price Index +2.85% +2.82% +3.30% +3.78%
-----------------------------------------------------------------------------------------------------------------------------
*Commencement of offering of Class A shares. Benchmark comparisons are from June 1, 1988.
+These returns reflect the current maximum Class B CDSC of 4%.
**For the period from the commencement of offering of Class B shares, September 7, 1993 to March 31, 1995.
</TABLE>
<PAGE>
MFS MARYLAND MUNICIPAL BOND FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-Year Period Ended March
31, 1995)
Line graph representing the growth of a $10,000 investment for the
10-year period ended March 31, 1995. The graph is scaled from $5,000
to $30,000 in $5,000 segments. The years are marked from 1985 to 1995.
There are three lines drawn to scale. One is a solid line representing
MFS Maryland Fund (Class A), a second line of short dashes represents
the Lehman Brothers Municipal Bond Index, and a third line of long dashes
represents the Consumer Price Index.
MFS Maryland Fund (Class A) $20,829
Lehman Brothers Municipal Bond Index $25,456
Consumer Price Index $14,227
<TABLE>
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------------------------------------------------------------
MFS Maryland Municipal Bond Fund (Class A) including 4.75% sales charge +1.48% +4.04% +5.83% +7.61%
-----------------------------------------------------------------------------------------------------------------------------
MFS Maryland Municipal Bond Fund (Class A) at net asset value +6.51% +5.74% +6.86% +8.14%
-----------------------------------------------------------------------------------------------------------------------------
MFS Maryland Municipal Bond Fund (Class B) with CDSC+ +1.75% -- -- -2.37%**
-----------------------------------------------------------------------------------------------------------------------------
MFS Maryland Municipal Bond Fund (Class B) without CDSC +5.75% -- -- 0.00%**
-----------------------------------------------------------------------------------------------------------------------------
Average Maryland tax-exempt municipal bond fund +6.17%(23) +6.69%(13) +7.34%(8) +7.76%(2)
-----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% +7.34% +8.24% +9.79%
-----------------------------------------------------------------------------------------------------------------------------
Consumer Price Index +2.85% +2.82% +3.30% +3.59%
-----------------------------------------------------------------------------------------------------------------------------
+These returns reflect the current maximum Class B CDSC of 4%.
**For the period from the commencement of offering of Class B shares, September 7, 1993 to March 31, 1995.
</TABLE>
<PAGE>
MFS MASSACHUSETTS MUNICIPAL BOND FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the period from May 1, 1985 to
March 31, 1995)
Line graph representing the growth of a $10,000 investment for the
period from May 1, 1985 to March 31, 1995. The graph is scaled from
$5,000 to $30,000 in $5,000 segments. The years are marked from 1986
to 1995. There are three lines drawn to scale. One is a solid line
representing MFS Massachusetts Fund (Class A), a second line of short
dashes represents the Lehman Brothers Municipal Bond Index, and a third
line of long dashes represents the Consumer Price Index.
MFS Massachusetts Fund (Class A) $21,266
Lehman Brothers Municipal Bond Index $24,557
Consumer Price Index $14,169
<TABLE>
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS 4/09/85* -
1 Year 3 Years 5 Years 3/31/95
-----------------------------------------------------------------------------------------------------------------------------
MFS Massachusetts Municipal Bond Fund (Class A) including 4.75% sales charge +0.89% +4.82% +6.59% +7.87%
-----------------------------------------------------------------------------------------------------------------------------
MFS Massachusetts Municipal Bond Fund (Class A) at net asset value +5.89% +6.54% +7.63% +8.40%
-----------------------------------------------------------------------------------------------------------------------------
MFS Massachusetts Municipal Bond Fund (Class B) with CDSC+ +1.15% -- -- -1.92%**
-----------------------------------------------------------------------------------------------------------------------------
MFS Massachusetts Municipal Bond Fund (Class B) without CDSC +5.13% -- -- +0.42%**
-----------------------------------------------------------------------------------------------------------------------------
Average Massachusetts tax-exempt municipal bond fund +6.36%(39) +7.14%(22) +7.97%(18) +8.55%(5)
-----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% +7.34% +8.24% +9.79%
-----------------------------------------------------------------------------------------------------------------------------
Consumer Price Index +2.85% +2.82% +3.30% +3.59%
-----------------------------------------------------------------------------------------------------------------------------
*Commencement of offering of Class A shares. Benchmark comparisons are from April 1, 1985.
+These returns reflect the current maximum Class B CDSC of 4%.
**For the period from the commencement of offering of Class B shares, September 7, 1993 to March 31, 1995.
</TABLE>
<PAGE>
MFS NEW YORK MUNICIPAL BOND FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the period from July 1, 1988 to
March 31, 1995)
Line graph representing the growth of a $10,000 investment for the
period from July 1, 1988 to March 31, 1995. The graph is scaled from
$8,000 to $18,000 in $2,000 segments. The years are marked from 1989
to 1995. There are three lines drawn to scale. One is a solid line
representing MFS New York Fund (Class A), a second line of short
dashes represents the Lehman Brothers Municipal Bond Index, and a third
line of long dashes represents the Consumer Price Index.
MFS New York Fund (Class A) $16,362
Lehman Brothers Municipal Bond Index $17,276
Consumer Price Index $12,831
<TABLE>
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS 6/06/88* -
1 Year 3 Years 5 Years 3/31/95
-----------------------------------------------------------------------------------------------------------------------------
MFS New York Municipal Bond Fund (Class A) including 4.75% sales charge +1.03% +5.83% +7.54% +7.47%
-----------------------------------------------------------------------------------------------------------------------------
MFS New York Municipal Bond Fund (Class A) at net asset value +6.03% +7.56% +8.59% +8.24%
-----------------------------------------------------------------------------------------------------------------------------
MFS New York Municipal Bond Fund (Class B) with CDSC+ +1.17% -- -- -2.26%**
-----------------------------------------------------------------------------------------------------------------------------
MFS New York Municipal Bond Fund (Class B) without CDSC +5.17% -- -- +0.10%**
-----------------------------------------------------------------------------------------------------------------------------
Average New York tax-exempt municipal bond fund +5.20%(70) +6.98%(47) +7.93%(37) +8.14%(31)
-----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% +7.34% +8.24% +8.56%
-----------------------------------------------------------------------------------------------------------------------------
Consumer Price Index +2.85% +2.82% +3.30% +3.78%
-----------------------------------------------------------------------------------------------------------------------------
*Commencement of offering of Class A shares. Benchmark comparisons are from June 1, 1988.
+These returns reflect the current maximum Class B CDSC of 4%.
**For the period from the commencement of offering of Class B shares, September 7, 1993 to March 31, 1995.
</TABLE>
<PAGE>
MFS NORTH CAROLINA MUNICIPAL BOND FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-Year Period Ended March
31, 1995)
Line graph representing the growth of a $10,000 investment for the
10-year period ended March 31, 1995. The graph is scaled from $5,000
to $30,000 in $5,000 segments. The years are marked from 1985 to 1995.
There are three lines drawn to scale. One is a solid line representing
MFS North Carolina Fund (Class A), a second line of short dashes
represents the Lehman Brothers Municipal Bond Index, and a third line of
long dashes represents the Consumer Price Index.
MFS North Carolina Fund (Class A) $21,750
Lehman Brothers Municipal Bond Index $25,456
Consumer Price Index $14,227
<TABLE>
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------------------------------------------------------------
MFS North Carolina Municipal Bond Fund (Class A) including 4.75% sales charge +0.86% +4.42% +5.88% +8.08%
-----------------------------------------------------------------------------------------------------------------------------
MFS North Carolina Municipal Bond Fund (Class A) at net asset value +5.86% +6.13% +6.91% +8.61%
-----------------------------------------------------------------------------------------------------------------------------
MFS North Carolina Municipal Bond Fund (Class B) with CDSC+ +1.21% -- -- -2.28%**
-----------------------------------------------------------------------------------------------------------------------------
MFS North Carolina Municipal Bond Fund (Class B) without CDSC +5.20% -- -- +0.10%**
-----------------------------------------------------------------------------------------------------------------------------
MFS North Carolina Municipal Bond Fund (Class C) +5.18% -- -- -0.40%***
-----------------------------------------------------------------------------------------------------------------------------
Average North Carolina tax-exempt municipal bond fund +6.35%(26) +6.60%(8) +7.27%(5) +8.28%(2)
-----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% +7.34% +8.24% +9.79%
-----------------------------------------------------------------------------------------------------------------------------
Consumer Price Index +2.85% +2.82% +3.30% +3.59%
-----------------------------------------------------------------------------------------------------------------------------
+These returns reflect the current maximum Class B CDSC of 4%.
**For the period from the commencement of offering of Class B shares, September 7, 1993 to March 31, 1995.
***For the period from the commencement of offering of Class C shares, January 3, 1994 to March 31, 1995.
</TABLE>
<PAGE>
MFS PENNSYLVANIA MUNICIPAL BOND FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the period from February 1,
1993 to March 31, 1995)
Line graph representing the growth of a $10,000 investment for the
period from February 1, 1993 to March 31, 1995. The graph is scaled
from $9,500 to $12,000 in $500 segments. The years are marked from
1993 to 1995. There are three lines drawn to scale. One is a solid
line representing MFS Pennsylvania Fund (Class A), a second line of
short dashes represents the Lehman Brothers Municipal Bond Index, and a
third line of long dashes represents the Consumer Price Index.
MFS Pennsylvania Fund (Class A) $10,519
Lehman Brothers Municipal Bond Index $11,269
Consumer Price Index $10,617
<TABLE>
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS 2/01/93* -
1 Year 3 Years 5 Years 3/31/95
-----------------------------------------------------------------------------------------------------------------------------
MFS Pennsylvania Municipal Bond Fund (Class A) including 4.75% sales charge +2.97% -- -- +2.37%
-----------------------------------------------------------------------------------------------------------------------------
MFS Pennsylvania Municipal Bond Fund (Class A) at net asset value +8.14% -- -- +4.71%
-----------------------------------------------------------------------------------------------------------------------------
MFS Pennsylvania Municipal Bond Fund (Class B) with CDSC+ +3.07% -- -- -2.45%**
-----------------------------------------------------------------------------------------------------------------------------
MFS Pennsylvania Municipal Bond Fund (Class B) without CDSC +7.07% -- -- -0.07%**
-----------------------------------------------------------------------------------------------------------------------------
Average Pennsylvania tax-exempt municipal bond fund +6.39%(47) -- -- +5.33%(29)
-----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% -- -- +5.67%
-----------------------------------------------------------------------------------------------------------------------------
Consumer Price Index +2.85% -- -- +2.80%
-----------------------------------------------------------------------------------------------------------------------------
*Commencement of offering of Class A shares.
+These returns reflect the current maximum Class B CDSC of 4%.
**For the period from the commencement of offering of Class B shares, September 7, 1993 to March 31, 1995.
</TABLE>
<PAGE>
MFS SOUTH CAROLINA MUNICIPAL BOND FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-Year Period Ended March
31, 1995)
Line graph representing the growth of a $10,000 investment for the
10-year period ended March 31, 1995. The graph is scaled from $5,000
to $30,000 in $5,000 segments. The years are marked from 1985 to 1995.
There are three lines drawn to scale. One is a solid line representing
MFS South Carolina Fund (Class A), a second line of short dashes
represents the Lehman Brothers Municipal Bond Index, and a third line of
long dashes represents the Consumer Price Index.
MFS South Carolina Fund (Class A) $22,630
Lehman Brothers Municipal Bond Index $25,456
Consumer Price Index $14,227
<TABLE>
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------------------------------------------------------------
MFS South Carolina Municipal Bond Fund (Class A) including 4.75% sales charge +1.84% +4.94% +6.38% +8.51%
-----------------------------------------------------------------------------------------------------------------------------
MFS South Carolina Municipal Bond Fund (Class A) at net asset value +6.93% +6.66% +7.42% +9.04%
-----------------------------------------------------------------------------------------------------------------------------
MFS South Carolina Municipal Bond Fund (Class B) with CDSC+ +2.26% -- -- -1.62%**
-----------------------------------------------------------------------------------------------------------------------------
MFS South Carolina Municipal Bond Fund (Class B) without CDSC +6.26% -- -- +0.78%**
-----------------------------------------------------------------------------------------------------------------------------
Average South Carolina tax-exempt municipal bond fund +6.64%(13) +6.82%(3) +7.46%(2) +9.04%(1)
-----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% +7.34% +8.24% +9.79%
-----------------------------------------------------------------------------------------------------------------------------
Consumer Price Index +2.85% +2.82% +3.30% +3.59%
-----------------------------------------------------------------------------------------------------------------------------
+These returns reflect the current maximum Class B CDSC of 4%.
**For the period from the commencement of offering of Class B shares, September 7, 1993 to March 31, 1995.
</TABLE>
<PAGE>
MFS VIRGINIA MUNICIPAL BOND FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-Year Period Ended March
31, 1995)
Line graph representing the growth of a $10,000 investment for the
10-year period ended March 31, 1995. The graph is scaled from $5,000
to $30,000 in $5,000 segments. The years are marked from 1985 to 1995.
There are three lines drawn to scale. One is a solid line representing
MFS Virginia Fund (Class A), a second line of short dashes represents
the Lehman Brothers Municipal Bond Index, and a third line of long dashes
represents the Consumer Price Index.
MFS Virginia Fund (Class A) $21,339
Lehman Brothers Municipal Bond Index $25,456
Consumer Price Index $14,227
<TABLE>
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------------------------------------------------------------
MFS Virginia Municipal Bond Fund (Class A) including 4.75% sales charge +0.61% +4.21% +5.96% +7.88%
-----------------------------------------------------------------------------------------------------------------------------
MFS Virginia Municipal Bond Fund (Class A) at net asset value +5.67% +5.91% +6.99% +8.40%
-----------------------------------------------------------------------------------------------------------------------------
MFS Virginia Municipal Bond Fund (Class B) with CDSC+ +0.93% -- -- -2.63%**
-----------------------------------------------------------------------------------------------------------------------------
MFS Virginia Municipal Bond Fund (Class B) without CDSC +4.91% -- -- -0.27%**
-----------------------------------------------------------------------------------------------------------------------------
MFS Virginia Municipal Bond Fund (Class C) +4.85% -- -- -0.98%***
-----------------------------------------------------------------------------------------------------------------------------
Average Virginia tax-exempt municipal bond fund +6.28%(24) +6.93%(12) +7.39%(5) +8.40%(1)
-----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% +7.34% +8.24% +9.79%
-----------------------------------------------------------------------------------------------------------------------------
Consumer Price Index +2.85% +2.82% +3.30% +3.59%
-----------------------------------------------------------------------------------------------------------------------------
+These returns reflect the current maximum Class B CDSC of 4%.
**For the period from the commencement of offering of Class B shares, September 7, 1993 to March 31, 1995.
***For the period from the commencement of offering of Class C shares, January 3, 1994 to March 31, 1995.
</TABLE>
<PAGE>
MFS WEST VIRGINIA MUNICIPAL BOND FUND
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (For the 10-Year Period Ended March
31, 1995)
Line graph representing the growth of a $10,000 investment for the
10-year period ended March 31, 1995. The graph is scaled from $5,000
to $30,000 in $5,000 segments. The years are marked from 1985 to 1995.
There are three lines drawn to scale. One is a solid line representing
MFS West Virginai Fund (Class A), a second line of short dashes
represents the Lehman Brothers Municipal Bond Index, and a third line of
long dashes represents the Consumer Price Index.
MFS west Virginai Fund (Class A) $22,131
Lehman Brothers Municipal Bond Index $25,456
Consumer Price Index $14,227
<TABLE>
<S> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------------------------------------------------------------
MFS West Virginia Municipal Bond Fund (Class A) including 4.75% sales charge +1.01% +4.81% +6.45% +8.27%
-----------------------------------------------------------------------------------------------------------------------------
MFS West Virginia Municipal Bond Fund (Class A) at net asset value +6.07% +6.53% +7.49% +8.79%
-----------------------------------------------------------------------------------------------------------------------------
MFS West Virginia Municipal Bond Fund (Class B) with CDSC+ +1.30% -- -- -1.95%**
-----------------------------------------------------------------------------------------------------------------------------
MFS West Virginia Municipal Bond Fund (Class B) without CDSC +5.30% -- -- +0.43%**
-----------------------------------------------------------------------------------------------------------------------------
Average other state tax-exempt municipal bond fund +5.79%(39) +6.56%(11) +7.10%(6) +8.79%(1)
-----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% +7.34% +8.24% +9.79%
-----------------------------------------------------------------------------------------------------------------------------
Consumer Price Index +2.85% +2.82% +3.30% +3.59%
-----------------------------------------------------------------------------------------------------------------------------
+These returns reflect the current maximum Class B CDSC of 4%.
**For the period from the commencement of offering of Class B shares, September 7, 1993 to March 31, 1995.
</TABLE>
<PAGE>
In the tables on the previous pages, we have included the average annual total
returns of state tax-exempt funds (including the Funds) tracked by Lipper
Analytical Services, Inc. (an independent firm which reports mutual fund
performance) for the applicable time periods ended March 31, 1995. The number of
funds in each state tax-exempt category is noted parenthetically next to each
respective return. Because these returns do not reflect any applicable sales
charge, we have also included the Funds' results at net asset value (no sales
charge) for comparison. The Consumer Price Index is a popular measure of change
in prices. All results are historical and, therefore, are not an indication of
future results. The principal value and income return of an investment in a
mutual fund will vary with changes in market conditions, and shares, when
redeemed, may be worth more or less than their original cost. All Fund results
reflect the applicable expense subsidy which is explained in the Notes to
Financial Statements. Had the subsidy not been in effect, the results would have
been less favorable. The subsidy may be rescinded by MFS at any time.
<TABLE>
<CAPTION>
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS (For the year ended March 31, 1995)
Sources of Distributions Paid++ New North South West
Florida Georgia Maryland Massachusetts York Carolina Pennsylvania Carolina Virginia Virginia
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
(Class A) $0.53950 $0.55850 $0.59000 $0.64200 $0.56671 $0.60350 $0.53950 $0.62450 $0.61200 $0.61850
(Class B) $0.43832 $0.47325 $0.51171 $0.56419 $0.48112 $0.52151 $0.44763 $0.53976 $0.53212 $0.53780
(Class C) -- -- -- -- -- $0.52955 -- -- $0.54043 --
Short-term capital gains:
(Class A) $0.02286 $0.00583 $0.00151 $0.00218 $0.01698 $0.01768 $0.02106 $0.01806 $0.02036 $0.00240
(Class B) $0.02286 $0.00583 $0.00151 $0.00218 $0.01698 $0.01768 $0.02106 $0.01806 $0.02036 $0.00240
(Class C) -- -- -- -- -- $0.01768 -- -- $0.02036 --
Long-term capital gains
(Class A, Class B
and Class C) $0.04616 $0.02789 $0.00846 $0.02836 $0.03429 $0.08238 $0.01498 $0.06043 $0.03093 $0.12230
Record date: 6/02/94
Payable date: 6/10/94
Long-term capital gains
(Class A, Class B
and Class C) -- -- $0.02947 -- -- -- -- $0.01032 -- --
Record date: 12/02/94
Payable date: 12/12/94
++Estimated at time of report.
</TABLE>
TAX FORM SUMMARY
In January 1995, shareholders were mailed a Tax Form Summary reporting the
federal tax status of all distributions paid during the calendar year 1994.
EXEMPT-INTEREST DIVIDENDS
For federal income tax purposes, 99% of the total dividends paid by each Fund
from net investment income during the year ended March 31, 1995 is designated as
an exempt-interest dividend.
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
MFS FLORIDA MUNICIPAL BOND FUND
Municipal Bonds - 97.0%
----------------------------------------------------------------------------
S&P Bond
Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
----------------------------------------------------------------------------
General Obligation - 5.6%
AA Florida Board of Education, Capital Outlay,
9.125s, 2014 $2,600 $ 3,569,462
AA Palm Beach County, FL, 6.5s, 2010 2,000 2,139,700
------------
$ 5,709,162
----------------------------------------------------------------------------
State and Local Appropriation - 3.0%
AAA Bay County, FL, School Board, Certificates
of Participation, AMBAC, 6.75s, 2012 $1,000 $ 1,081,400
AAA Palm Beach County, FL, School Board,
Certificates of Participation, AMBAC,
6.375s, 2015 2,000 2,045,080
------------
$ 3,126,480
----------------------------------------------------------------------------
Refunded and Special Obligation - 5.8%
AAA Broward County, FL, School District,
7.125s, 2008 $ 250 $ 273,918
AAA Dade County, FL, School District, 7.375s,
2008 1,000 1,109,770
AAA Florida Board of Education, Capital Outlay,
9.125s, 2014 400 537,816
AAA Florida Board of Education, Capital Outlay,
7.25s, 2023 510 569,394
AAA Florida Turnpike Authority Rev., AMBAC,
7.125s, 2018 1,250 1,405,412
AAA Gainesville, FL, Utility Systems Rev.,
AMBAC, 7.25s, 2013 500 547,335
AAA Orange County, FL, Tourist Development Tax
Rev., AMBAC, 7.25s, 2010 500 560,995
AAA Puerto Rico Highway & Transportation
Authority, Highway Rev., 6.625s, 2018 100 111,123
A Puerto Rico Public Buildings Authority,
6.875s, 2021 740 833,440
------------
$ 5,949,203
----------------------------------------------------------------------------
Federally Guaranteed Housing Revenue - 0.1%
NR Dade County, FL, Housing Finance Authority,
7s, 2024 $ 75 $ 77,281
----------------------------------------------------------------------------
Single Family Housing Revenue - 1.0%
AAA Dade County, FL, Housing Finance Authority,
6.95s, 2012 $1,000 $ 1,041,030
----------------------------------------------------------------------------
Multi-Family Housing Revenue - 1.5%
NR Florida Housing Finance Agency (Southlake
Apartments), 8.7s, 2021 $1,500 $ 1,509,360
----------------------------------------------------------------------------
Insured Health Care Revenue - 13.9%
AAA Brevard County, FL, Health Facilities
Authority Rev. (Holmes Regional Medical),
MBIA-IBC, 5.75s, 2013 $2,000 $ 1,948,600
AAA Brevard County, FL, Health Facilities
Authority Rev. (Wuesthoff Memorial),
MBIA, 6.5s, 2007 1,000 1,057,250
AAA Brevard County, FL, Health Facilities
Authority Rev. (Wuesthoff Memorial), MBIA-
IBC, 7.2s, 2013 1,000 1,073,670
AAA Charlotte County, FL, Public Facilities
Authority Rev. (Bon Secours), FSA,
7.538s, 2027++ 2,500 2,468,325
AAA Hillsborough County, FL, Industrial
Development Authority (University
Community Hospital), MBIA, 5.75s, 2014 2,000 1,938,300
AAA Hillsborough County, FL, Industrial
Development Authority (University
Community Hospital), MBIA, 6.5s, 2019 1,000 1,058,250
AAA Jacksonville, FL, Hospital Rev. (Baptist
Medical), MBIA, 7.3s, 2019 1,900 2,031,898
AAA Jacksonville, FL, Hospital Rev. (University
Medical Center, Inc.), Connie Lee, 6.6s, 2013 500 518,935
AAA Tallahassee, FL, Health Facilities Rev.
(Tallahassee Memorial Regional Medical),
MBIA, 6.625s, 2013 1,000 1,068,690
AAA Tampa, FL, Allegany Health System (St.
Joseph Hospital), MBIA, 6.5s, 2023 1,000 1,044,390
------------
$ 14,208,308
----------------------------------------------------------------------------
Health Care Revenue - 9.9%
NR Brevard County, FL, Health Facilities
Authority Rev. (Friendly Village),
9.25s, 2012 $ 375 $ 384,019
BBB+ Escambia County, FL, Health Facilities
Authority (Baptist Hospital), 6s, 2014 2,500 2,287,075
BBB+ Escambia County, FL, Health Facilities
Authority (Baptist Hospital & Baptist
Manor), 6.75s, 2014 1,000 997,480
NR Jacksonville, FL, Health Facilities
Authority, Industrial Development Rev.
(Cypress Village), 7s, 2014 1,250 1,248,450
NR Jacksonville, FL, Health Facilities
Authority, Industrial Development Rev.
(National Benevolent Assn./Cypress),
6.4s, 2016 1,475 1,716,467
NR Orange County, FL, Industrial Development
Authority Rev. (Friendly Village),
9.25s, 2012 335 347,318
A- Palm Beach County, FL, Health Facilities
Authority Rev. (Good Samaritan Health
System), 6.3s, 2022 2,750 2,704,213
NR St. Petersburg, FL, Health Facilities Rev.
(Swanholm Nursing), 10s, 2022 490 522,418
------------
$ 10,207,440
----------------------------------------------------------------------------
Electric and Gas Utility Revenue - 29.2%
AAA Charlotte County, FL, Utility Systems Rev.,
FGIC, 5.25s, 2021 $2,000 $ 1,780,320
AAA Charlotte County, FL, Utility Systems Rev.,
FGIC, 6.875s, 2021 500 538,700
AAA Escambia County, FL, Utilities District,
Utility Systems Rev., FGIC, 6.25s, 2015 1,500 1,539,225
AA Gainesville, FL, Utility Systems Rev.,
5.5s, 2013 5,000 4,738,100
AA- Hillsborough County, FL, Industrial
Development Authority, Pollution Control
Rev. (Tampa Electric Co.), 8s, 2022 3,000 3,480,210
AA Jacksonville, FL, Electric Authority Rev.
(St. Johns River Power), 5.5s, 2013 1,000 951,920
AA Jacksonville, FL, Electric Authority Rev.
(St. Johns River Power), 5.5s, 2014 1,000 951,660
AAA Kissimmee, FL, Utilities Authority,
Electric Systems Rev., FGIC, 5.25s, 2018 1,500 1,352,145
AA- Lakeland, FL, Electric & Water Rev.,
0s, 2011 5,000 1,892,850
AA- Lakeland, FL, Electric & Water Rev.,
0s, 2012 3,000 1,056,210
BBB- Martin County, FL, Industrial Development
Authority (Indiantown Cogeneration
Project), 7.875s, 2025 3,625 3,868,708
AA- Orlando, FL, Utilities Commission, Water &
Electric Rev., 6.75s, 2017 250 278,295
NR Palm Beach County, FL, Industrial
Development Rev. (Osceola Power Project),
6.85s, 2014 3,000 2,890,920
A- Puerto Rico Electric Power Authority Rev.,
6.125s, 2008 2,400 2,428,224
A- Puerto Rico Electric Power Authority Rev.,
7s, 2011 240 256,354
AAA Puerto Rico Electric Power Authority Rev.,
FSA, 6s, 2016 2,000 1,997,260
------------
$ 30,001,101
----------------------------------------------------------------------------
Water and Sewer Utility Revenue - 6.3%
AAA Bradenton, FL, Utility System Rev., FGIC,
0s, 2007 $ 600 $ 297,810
AAA Bradenton, FL, Utility System Rev., FGIC,
0s, 2008 1,000 461,340
AAA Miramar, FL, Wastewater Improvement, FGIC,
6.75s, 2016 1,500 1,606,425
A Puerto Rico Aqueduct & Sewer Authority,
7.875s, 2017 1,000 1,086,750
AAA Seminole, FL, Water & Sewer Improvement
Rev., MBIA, 6s, 2019 3,000 2,988,570
------------
$ 6,440,895
----------------------------------------------------------------------------
Turnpike Revenue - 5.0%
AAA Florida Turnpike Authority Rev., FGIC, 5s,
2013 $2,000 $ 1,783,520
A- Orlando & Orange County, FL, Expressway
Rev., 5.95s, 2023 3,500 3,370,220
------------
$ 5,153,740
----------------------------------------------------------------------------
Airport and Port Revenue - 1.9%
AAA Dade County, FL, Aviation Rev., MBIA,
5.75s, 2015 $2,000 $ 1,911,720
----------------------------------------------------------------------------
Sales and Excise Tax Revenue - 6.6%
AAA Broward County, FL, Tourist Development
Rev. (Convention Center), AMBAC,
5.625s, 2013 $1,805 $ 1,735,525
AAA Jacksonville, FL, Capital Improvement
(Gator Bowl), AMBAC, 5.5s, 2014 2,000 1,898,880
AAA Jacksonville, FL, Excise Tax Rev., FGIC,
0s, 2010 1,000 391,970
AAA Jacksonville, FL, Excise Tax Rev., FGIC,
0s, 2011 1,000 366,020
AAA Lee County, FL, Capital Improvement Rev.,
MBIA, 0s, 2012 2,000 696,980
A Puerto Rico Highway & Transportation
Authority Rev., 6.625s, 2018 1,000 1,027,450
AAA Sunrise, FL, Public Facilities Rev., MBIA,
0s, 2020 3,100 656,673
------------
$ 6,773,498
----------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 4.5%
BBB Escambia County, FL, Pollution Control Rev.
(Champion International Corp.), 6.95s,
2007 $2,500 $ 2,590,825
BBB Escambia County, FL, Pollution Control Rev.
(Champion International Corp.), 6.8s,
2012 1,000 1,026,910
BBB Escambia County, FL, Pollution Control Rev.
(Champion International Corp.), 6.9s,
2022 1,000 1,017,030
------------
$ 4,634,765
----------------------------------------------------------------------------
Other - 2.7%
AAA Gainesville, FL, Entitlement Rev., AMBAC,
5.5s, 2017 $1,250 $ 1,176,389
A Hillsborough County, FL, Capital
Improvement Rev., 6.75s, 2022 1,500 1,564,920
------------
$ 2,741,309
------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $95,734,249) $ 99,485,292
------------------------------------------------------------------------------
Floating Rate Demand Note - 0.1%
------------------------------------------------------------------------------
Hillsborough County, FL, Pollution Control
Rev. (Tampa Electric Co.), due 5/15/18,
at Identified Cost $ 100 $ 100,000
----------------------------------------------------------------------------
Total Investments (Identified Cost, $95,834,249) $ 99,585,292
Other Assets, Less Liabilities - 2.9% 2,975,619
----------------------------------------------------------------------------
Net Assets - 100.0% $102,560,911
----------------------------------------------------------------------------
++Inverse floating rate security.
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
MFS GEORGIA MUNICIPAL BOND FUND
Municipal Bonds - 96.9%
----------------------------------------------------------------------------
S&P Bond
Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
----------------------------------------------------------------------------
General Obligation - 13.9%
AA Atlanta, GA, 5.6s, 2018 $2,800 $ 2,638,832
AA+ DeKalb County, GA, Health Facilities,
5.5s, 2020 1,500 1,416,690
AA Fulton County, GA, School District,
6.375s, 2010 2,000 2,134,760
AA Fulton County, GA, School District,
6.375s, 2012 1,000 1,067,210
AA+ State of Georgia, 5.25s, 2009 1,500 1,449,630
AA+ State of Georgia, 5s, 2010 1,000 934,560
AA+ State of Georgia, 5.25s, 2011 1,500 1,446,195
NR Territory of Virgin Islands, 7.75s, 2006 440 483,305
-----------
$11,571,182
----------------------------------------------------------------------------
State and Local Appropriation - 4.0%
AA Fulton County, GA, Building Authority Rev.
(Judicial Center Project), 0s, 2011 $3,000 $ 1,165,380
AA Fulton County, GA, Building Authority Rev.
(Judicial Center Project), 0s, 2012 6,015 2,182,483
-----------
$ 3,347,863
----------------------------------------------------------------------------
Refunded and Special Obligation - 4.9%
AA+ DeKalb County, GA, 7.5s, 2020 $ 780 $ 873,545
AAA Fulton County, GA, School District,
7.625s, 2017 500 543,125
NR Hogansville, GA, Combined Public Utility
Systems Rev., 9s, 2015 2,200 2,635,754
-----------
$ 4,052,424
----------------------------------------------------------------------------
Single Family Housing Revenue - 3.1%
AAA DeKalb County, GA, Housing Authority,
Single Family Rev., GNMA, 7.75s, 2022 $ 495 $ 513,454
AA+ Georgia Housing & Finance Authority Rev.,
6.5s, 2011 465 473,802
AA+ Georgia Residential Finance Authority, Home
Ownership Mortgage, 8s, 2020 420 446,510
AA+ Georgia Residential Finance Authority,
Single Family Insured Mortgage,
8.25s, 2019 290 306,449
AA+ Georgia Residential Finance Authority,
Single Family Insured Mortgage,
8.375s, 2019 400 422,684
AA+ Georgia Residential Finance Authority,
Single Family Insured Mortgage,
7.25s, 2021 365 383,440
AAA Puerto Rico Housing Finance Corp., Single
Family Mortgage, GNMA, 7.8s, 2021 40 41,946
-----------
$ 2,588,285
----------------------------------------------------------------------------
Multi-Family Housing Revenue - 6.6%
A Cobb County, GA, Housing Authority Rev.
(Signature Place Project), 6.875s, 2017 $3,000 $ 3,043,560
NR Hinesville, GA, Leased Housing Corp. Rev.
(Baytree Apartments), 6.7s, 2017 900 921,816
AAA St. Mary's, GA, Housing Authority
(Cumberland Oaks Apartments), FHA,
7.375s, 2022 1,470 1,548,454
-----------
$ 5,513,830
----------------------------------------------------------------------------
Insured Health Care Revenue - 7.7%
AAA Albany-Dougherty County, GA, Hospital
Authority Rev. (Phoebe Putney Memorial
Hospital, Inc.), AMBAC, 5s, 2020 $1,000 $ 848,440
AAA Macon-Bibb County, GA, Hospital Authority
Rev. (Memorial Medical Center), FGIC,
5.25s, 2011 1,000 928,180
AAA Marietta, GA, Development Authority Rev.
(Life College, Inc.), CGIC, 7.2s, 2009 1,250 1,342,138
AAA Marietta, GA, Development Authority Rev.
(Life College, Inc.), CGIC, 7.25s, 2019 1,000 1,063,060
AAA Medical Center Hospital Authority, GA
(Columbus Regional Healthcare System),
MBIA, 5s, 2013 1,500 1,335,705
AAA Medical Center Hospital Authority, GA
(Columbus Regional Healthcare System),
MBIA, 5s, 2018 1,000 864,980
-----------
$ 6,382,503
----------------------------------------------------------------------------
Health Care Revenue - 6.1%
NR Fulton County, GA, Residential Care
Facilities, Elderly Authority Rev.
(Lenbrook Square Foundation), 9.75s, 2017 $1,065 $ 1,102,818
NR Richmond County, GA, Development Authority,
Nursing Home Rev. (Beverly Enterprises),
8.75s, 2011 1,190 1,280,678
NR Royston, GA, Hospital Authority Rev. (Cobb
Health), 7.375s, 2014 1,565 1,561,291
BBB+ Savannah, GA, Hospital Authority Rev.
(Candler Hospital), 7s, 2011 1,100 1,097,085
-----------
$ 5,041,872
----------------------------------------------------------------------------
Electric and Gas Utility Revenue - 9.7%
AAA Appling County, GA, Development Authority
(Oglethorpe Power Corp.), MBIA,
7.15s, 2021 $1,400 $ 1,501,584
AAA Georgia Municipal Electric Authority, Power
Rev., BIG, 0s, 2008 2,500 1,180,350
AAA Georgia Municipal Electric Authority, Power
Rev., BIG, 0s, 2009 1,500 664,155
AAA Georgia Municipal Electric Authority, Power
Rev., AMBAC, 0s, 2013 1,675 565,145
A+ Georgia Municipal Electric Authority, Power
Rev., 5.68s, 2023##++ 3,450 2,845,111
AAA Georgia Municipal Electric Authority,
Special Obligation, MBIA, 6.5s, 2020 1,250 1,311,700
-----------
$ 8,068,045
----------------------------------------------------------------------------
Water and Sewer Utility Revenue - 17.5%
AA- Atlanta, GA, Water & Sewer Rev., 5s, 2015 $2,200 $ 1,937,606
NR Barnesville, GA, Water & Sewer Rev.,
6.9s, 2022 1,715 1,750,723
AAA Brunswick, GA, Water & Sewer Rev., MBIA,
6.1s, 2014 1,000 1,024,050
AAA Cartersville, GA, Water & Sewer Rev.,
AMBAC, 7.2s, 2012 2,225 2,390,540
AAA Columbia County, GA, Water & Sewer Rev.,
AMBAC, 6.9s, 2011 1,000 1,070,550
A+ Columbus, GA, Water & Sewer Rev.,
5.7s, 2020 1,250 1,172,400
AAA Douglasville-Douglas Counties, GA, Water &
Sewer Authority, AMBAC, 5.625s, 2015 1,800 1,733,526
AAA Fulton County, GA, Water & Sewer Rev.,
FGIC, 6.375s, 2014 3,250 3,442,010
-----------
$14,521,405
----------------------------------------------------------------------------
Airport and Port Revenue - 5.9%
AAA Atlanta, GA, Airport Facilities Rev., MBIA,
0s, 2010 $3,500 $ 1,431,430
AAA Atlanta, GA, Airport Facilities Rev., MBIA,
0s, 2010 6,000 2,453,880
A Atlanta, GA, Airport Facilities Rev.,
6.25s, 2021 500 493,640
BB Clayton County, GA, Development Authority,
Special Facilities Rev. (Delta Airlines
Project), 7.625s, 2020 500 508,780
-----------
$ 4,887,730
----------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 15.6%
NR Adel County, GA, Industrial Development
Authority, Pollution Control Rev.
(Weyerhaeuser Co.), 9s, 2006 $1,000 $ 1,000,000
BB Atlanta, GA, Special Purpose Facilities
Rev. (Delta Airlines Project), 7.9s, 2018 1,000 1,030,640
AAA Bibb County, GA, Pollution Control Rev.,
AMBAC, 6.25s, 2019 2,280 2,283,124
A Burke County, GA, Development Authority,
Pollution Control Rev. (Georgia Power Co./
Vogtle Project), 8.375s, 2017 1,000 1,080,520
AA- Cartersville, GA, Development Authority
Rev., Water & Wastewater Facilities
(Anheuser-Busch Cos., Inc.), 7.4s, 2010 500 567,260
B+ Effingham County, GA, Development
Authority, Pollution Control Rev. (Fort
Howard Corp.), 7.9s, 2005 1,750 1,832,565
NR Emanuel County, GA, Development Authority
(Figgie Properties Project), 7.95s, 2004 475 478,382
A+ Monroe County, GA, Development Authority,
Pollution Control Rev. (Oglethorpe Power
Corp.), 6.8s, 2012 1,000 1,051,810
AA- Savannah, GA, Economic Development
Authority, Industrial Development Rev.
(Hershey Foods Corp.), 6.6s, 2012 1,450 1,505,767
BBB Savannah, GA, Port Authority, Pollution
Control Rev. (Union Carbide Corp.),
7.55s, 2004 1,000 1,021,390
BBB Wayne County, GA, Solid Waste Rev.
(ITT-Rayonier, Inc.), 8s, 2015 1,000 1,094,580
-----------
$12,946,038
----------------------------------------------------------------------------
Other - 1.9%
AA- George L. Smith II/Georgia World Congress
Center Authority (Domed Stadium Project),
7.875s, 2020 $1,475 $ 1,579,592
------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $76,676,741) $80,500,769
------------------------------------------------------------------------------
Floating Rate Demand Note - 1.3%
------------------------------------------------------------------------------
Hospital Equipment Financing Authority, GA,
due 12/01/95, at Identified Cost $1,100 $ 1,100,000
------------------------------------------------------------------------------
Total Investments (Identified Cost, $77,776,741) $81,600,769
Other Assets, Less Liabilities - 1.8% 1,526,464
------------------------------------------------------------------------------
Net Assets - 100.0% $83,127,233
------------------------------------------------------------------------------
## SEC Rule 144A restriction.
++ Inverse floating rate security.
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
MFS MARYLAND MUNICIPAL BOND FUND
Municipal Bonds - 98.0%
----------------------------------------------------------------------------
S&P Bond
Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
----------------------------------------------------------------------------
General Obligation - 13.5%
AA+ Anne Arundel County, MD, 4.9s, 2011 $1,005 $ 903,133
AA+ Baltimore County, MD, Metropolitan
District, 4.3s, 2004 1,000 917,590
AAA Baltimore, MD, Consolidated Public
Improvement, FGIC, 5.3s, 2009 700 658,518
AAA Baltimore, MD, Consolidated Public
Improvement, MBIA, 7s, 2009 1,000 1,131,280
A Baltimore, MD, Consolidated Public
Improvement, 7.15s, 2009 2,000 2,264,260
AAA Balitmore, MD, Consolidated Public
Improvement, FGIC, 5.3s, 2010 815 760,762
AAA Baltimore, MD, Consolidated Public
Improvement, FGIC, 5.375s, 2011 900 844,893
AAA Baltimore, MD, Consolidated Public
Improvement, FGIC, 5.375s, 2013 770 723,838
AA- Carroll County, MD, 5.2s, 2011 2,000 1,844,700
AA+ Howard County, MD, Metropolitan District,
0s, 2008 1,975 931,074
AAA Montgomery County, MD, Public Improvement,
0s, 2009 4,000 1,724,120
AA- Prince George's County, MD, 0s, 2007 5,110 2,484,738
AAA Prince George's County, MD, Public
Improvement, AMBAC, 5.5s, 2013 2,000 1,909,580
AAA State of Maryland, 9s, 1999 350 408,425
AA Washington Suburban Sanitation District,
MD, 5s, 2010 1,000 917,800
AA Washington Suburban Sanitation District,
MD, 5s, 2011 1,815 1,651,015
AA Washington Suburban Sanitation District,
MD, 6.1s, 2015 1,070 1,083,910
------------
$ 21,159,636
----------------------------------------------------------------------------
State and Local Appropriation - 15.2%
AAA Baltimore, MD, Certificates of
Participation, 5.25s, 2016 $2,000 $ 1,804,320
NR Calvert County, MD, Community Lease Rev.,
7.2s, 2010 750 812,565
AA+ Howard County, MD, Certificates of
Participation, 8.15s, 2021 450 574,245
AA+ Howard County, MD, Certificates of
Participation, "A", 8s, 2019 805 996,598
AA+ Howard County, MD, Certificates of
Participation, "B", 8s, 2019 385 476,634
AA+ Howard County, MD, Certificates of
Participation, "C", 8s, 2019 680 841,847
AAA Maryland Stadium Authority, Convention
Center Expansion, AMBAC, 5.875s, 2012 2,000 1,974,560
AA- Maryland Stadium Authority, Sports
Facilities Leasing Rev., 7.6s, 2019 2,580 2,815,322
AAA Prince George's County, MD, Certificates of
Participation, MBIA, 0s, 2005 2,495 1,426,217
AAA Prince George's County, MD, Certificates of
Participation, MBIA, 0s, 2006 2,490 1,333,071
AAA Prince George's County, MD, Certificates of
Participation, MBIA, 0s, 2011 3,675 1,407,635
AAA Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2004 980 596,967
AAA Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2006 1,800 963,666
AAA Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2009 1,500 655,665
AAA Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2010 2,730 1,117,608
AAA Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2011 2,810 1,076,314
AAA Prince George's County, MD, Industrial
Development Authority, MBIA, 0s, 2012 2,480 895,379
AAA Prince George's County, MD, Industrial
Development Authority, MBIA, 5.25s, 2019 1,500 1,348,170
A Puerto Rico Public Buildings Authority,
5.385s, 2016 (Municipal Swap)(S) 3,000 2,614,650
------------
$ 23,731,433
----------------------------------------------------------------------------
Refunded and Special Obligation - 16.2%
AAA Baltimore, MD, Water Utility Rev., MBIA,
6.5s, 2020 $ 540 $ 576,839
AAA Cecil County, MD, 9.25s, 2003 230 240,026
AAA Commonwealth of Puerto Rico, Public
Improvement, 6.8s, 2021 1,500 1,682,640
AAA Government of Guam, Limited Obligation
Highway Rev., CGIC, 9.25s, 2005 550 563,403
AAA Howard County, MD, Metropolitan District,
7.15s, 2020 500 551,760
AAA Maryland Board of Trustees, College &
University Rev., 7.625s, 2012 1,730 1,801,708
AAA Maryland Health & Higher Education
Facilities Authority Rev. (Sinai Hospital/
Baltimore), AMBAC, 7s, 2019 2,000 2,212,860
AAA Maryland Health & Higher Education
Facilities Authority Rev. (University of
Maryland Medical System), FGIC, 7s, 2017 1,840 2,056,605
AAA Maryland Health & Higher Education
Facilities Authority Rev. (University of
Maryland Medical System), FGIC, 6.5s, 2021 1,000 1,076,610
AAA Maryland Transportation Authority,
Transportation Facilities Project Co.,
9s, 2015 4,800 4,950,720
AAA Montgomery County, MD, Rev. Authority,
Lease Rev. (Regional Indoor Swim Center
Project), 7.6s, 2008 750 819,840
AAA Morgan State University, MD, Academic &
Auxiliary Facilities & Fees Rev., MBIA,
0s, 2006 1,135 602,254
AAA Morgan State University, MD, Academic &
Auxiliary Facilities & Fees Rev., MBIA,
0s, 2008 1,400 659,428
NR Prince George's County, MD, Hospital Rev.
(Dimensions Health Corp.), 7.25s, 2017 2,000 2,284,960
AAA Puerto Rico Aqueduct & Sewer Authority,
10.25s, 2009 500 686,590
AAA Puerto Rico Electric Power Authority Rev.,
8s, 2008 500 558,630
AAA Puerto Rico Electric Power Authority Rev.,
9.125s, 2015 250 260,432
AAA Puerto Rico Industrial, Medical &
Environmental Pollution Control
Facilities, Finance Authority, FHA,
9.75s, 2025 450 466,830
AAA St. Mary's County, MD, 7.75s, 2016 2,050 2,193,357
AA Washington Suburban Sanitation District,
MD, 6.9s, 2013 1,045 1,161,403
------------
$ 25,406,895
----------------------------------------------------------------------------
Federally Guaranteed Housing Revenue - 1.5%
BBB Baltimore, MD, City Housing Corp. Rev.,
7.75s, 2009 $1,065 $ 1,104,713
AAA Baltimore, MD, City Housing Corp. Rev.,
FNMA, 7.25s, 2023 1,245 1,291,227
------------
$ 2,395,940
----------------------------------------------------------------------------
Single Family Housing Revenue - 7.2%
NR Maryland Community Development
Administration, 7.75s, 2009 $1,500 $ 1,561,410
NR Maryland Community Development
Administration, 7.7s, 2015 685 725,641
NR Maryland Community Development
Administration, 8.25s, 2017 1,300 1,372,475
NR Maryland Community Development
Administration, 7.625s, 2020 2,500 2,616,175
NR Maryland Community Development
Administration, 8.25s, 2020 500 530,520
NR Maryland Community Development
Administration, 6.75s, 2026 2,250 2,279,182
NR Maryland Community Development
Administration, 7.625s, 2029 985 1,028,301
NR Maryland Community Development
Administration, 7.85s, 2029 750 795,930
NR Montgomery County, MD, Housing
Opportunities Commission, 7.5s, 2017 370 391,852
------------
$ 11,301,486
----------------------------------------------------------------------------
Multi-Family Housing Revenue - 3.1%
NR Maryland Community Development
Administration, 7.375s, 2021 $ 425 $ 442,421
NR Maryland Community Development
Administration, 8.4s, 2029 1,320 1,383,294
NR Maryland Community Development
Administration, 7.5s, 2031 65 67,831
NR Maryland Community Development
Administration, 0s, 2032 11,605 649,184
NR Maryland Community Development
Administration, 7.8s, 2032 1,200 1,269,144
NR Montgomery County, MD, Housing
Opportunities Commission, 7.375s, 2032 1,045 1,084,303
------------
$ 4,896,177
----------------------------------------------------------------------------
Insured Health Care Revenue - 5.0%
AAA Maryland Health & Higher Education
Facilities Authority Rev. (Francis Scott
Key Medical Center), FGIC, 5s, 2013 $1,000 $ 893,810
AAA Maryland Health & Higher Education
Facilities Authority Rev. (Frederick
Memorial Hospital), FGIC, 5s, 2018 1,000 868,550
AAA Maryland Health & Higher Education
Facilities Authority Rev. (Mercy Medical
Center), AMBAC, 5.5s, 2022 1,000 925,670
AAA Maryland Health & Higher Education
Facilities Authority Rev. (Suburban
Hospital), FGIC, 5.125s, 2021 2,200 1,918,092
AAA Maryland Health & Higher Education
Facilities Authority Rev. (University of
Maryland), FGIC, 5s, 2020 2,000 1,715,820
AAA Maryland Industrial Development Finance
Authority, Economic Development Rev. (Bon
Secours), FSA, 7.338s, 2022++ 1,500 1,434,285
------------
$ 7,756,227
----------------------------------------------------------------------------
Health Care Revenue - 12.1%
NR Berlin, MD, Hospital Rev. (Atlantic General
Hospital), 8.375s, 2022 $1,385 $ 1,446,522
BBB- Maryland Health & Higher Education
Facilities Authority Rev. (Doctors
Community Hospital), 5.5s, 2024 2,000 1,548,460
NR Maryland Health & Higher Education
Facilities Authority Rev. (Francis Scott
Key), 5.625s, 2025 1,500 1,347,000
AA- Maryland Health & Higher Education
Facilities Authority Rev. (Johns Hopkins
Hospital), 0s, 2010 2,000 801,800
AA- Maryland Health & Higher Education
Facilities Authority Rev. (Johns Hopkins
Hospital), 5s, 2023 2,500 2,149,300
AA Maryland Health & Higher Education
Facilities Authority Rev. (Kaiser
Permanente Hospital), 9.125s, 2015 500 514,900
NR Maryland Health & Higher Education
Facilities Authority Rev. (Medlantic
Hospital Care Corp.), 8.375s, 2014 3,720 3,921,401
A Maryland Health & Higher Education
Facilities Authority Rev. (Peninsula
Regional Medical), 5s, 2023 1,000 808,930
AA- Maryland Industrial Development Financing
Authority (Holy Cross Health System
Corp.), 5.5s, 2015 1,000 914,330
NR Prince George's County, MD, Hospital Rev.
(Dimensions Health Corp.), 5.3s, 2024 3,500 2,916,550
NR Prince George's County, MD, Hospital Rev.
(Southeast Healthcare System),
6.375s, 2023 2,900 2,547,244
------------
$ 18,916,437
----------------------------------------------------------------------------
Electric and Gas Utility Revenue - 1.6%
A Calvert County, MD, Pollution Control Rev.
(Baltimore Gas & Electric Co.),
5.55s, 2014 $1,500 $ 1,409,805
A- Puerto Rico Electric Power Authority Rev.,
7s, 2011 1,000 1,068,140
------------
$ 2,477,945
----------------------------------------------------------------------------
Water and Sewer Utility Revenue - 1.7%
AAA Baltimore, MD, Wastewater Rev., MBIA,
6.92s, 2020++ $3,000 $ 2,733,270
----------------------------------------------------------------------------
Turnpike Revenue - 1.8%
A Commonwealth of Puerto Rico, Highway Rev.,
5.5s, 2019 $1,000 $ 904,490
AA Maryland Department of Transportation,
County Transit Rev., 4.8s, 2004 2,000 1,871,820
------------
$ 2,776,310
----------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 5.0%
NR Baltimore, MD, Industrial Rev. Board
(Weyerhaeuser Co.), 9s, 2006 $3,150 $ 3,274,866
AA Baltimore, MD, Port Facilities Rev. (E.I.
du Pont de Nemours & Co.), 6.5s, 2011 1,500 1,562,250
NR Maryland Industrial Development Finance
Authority, Economic Development Rev.,
9.875s, 2005 185 192,250
AAA Northeast Maryland, Waste Disposal
Authority (Harford County Resource
Recovery), MBIA, 7.2s, 2005 1,000 1,127,050
NR Northeast Maryland, Waste Disposal
Authority (Montgomery County Resource
Recovery), 6s, 2006 1,000 995,410
A Upper Potomac River Commission, MD,
Pollution Control Rev. (Westvaco Corp.),
10.5s, 2004 150 157,317
A Upper Potomac River Commission, MD,
Pollution Control Rev. (Westvaco Corp.),
9.125s, 2015 500 521,560
------------
$ 7,830,703
----------------------------------------------------------------------------
Universities - 0.8%
NR Maryland Health & Higher Education
Facilities Authority Rev. (Mt. St. Mary's
College), 6.5s, 2009 $ 794 $ 690,288
AA+ University of Maryland, Auxiliary
Facilities & Tuition Rev., 0s, 2004 1,000 599,290
------------
$ 1,289,578
----------------------------------------------------------------------------
Special Assessment District - 3.4%
NR Northeast Maryland, Waste Disposal
Authority (Montgomery County Resource
Recovery), 6.3s, 2016 $5,400 $ 5,244,912
----------------------------------------------------------------------------
Other - 9.9%
NR Maryland Energy Financing Administration,
Solid Waste Disposal Rev. (Hagerstown),
9s, 2016 $1,000 $ 998,870
BBB Maryland Health & Higher Education
Facilities Authority Rev. (Kennedy
Institute), 6.75s, 2022 500 491,330
BBB Maryland Industrial Development Finance
Authority (America Center for Physics),
6.625s, 2017 1,500 1,486,650
NR Maryland Industrial Development Finance
Authority (YMCA/Baltimore), 8s, 2012 2,825 2,873,082
NR Maryland Industrial Development Finance
Authority (YMCA/Baltimore), 8.25s, 2012 945 966,971
A Prince George's County, MD, 5.25s, 2013 4,500 3,964,455
AAA Washington, D.C., Metropolitan Area Transit
Authority, Gross Rev., FGIC, 5.125s, 2009 1,100 1,026,905
AAA Washington, D.C., Metropolitan Area Transit
Authority, Gross Rev., FGIC, 5.25s, 2014 4,000 3,654,960
------------
$ 15,463,223
------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $148,674,736) $153,380,172
------------------------------------------------------------------------------
Floating Rate Demand Note - 0.6%
------------------------------------------------------------------------------
Uinta County, WY, Pollution Control Rev.
(Chevron Corp.), due 8/15/20,
at Identified Cost $ 900 $ 900,000
----------------------------------------------------------------------------
Total Investments (Identified Cost, $149,574,736) $154,280,172
Other Assets, Less Liabilities - 1.4% 2,248,655
------------------------------------------------------------------------------
Net Assets - 100.0% $156,528,827
------------------------------------------------------------------------------
(S)Indexed security.
++ Inverse floating rate security.
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
MFS MASSACHUSETTS MUNICIPAL BOND FUND
Municipal Bonds - 97.3%
----------------------------------------------------------------------------
S&P Bond
Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
----------------------------------------------------------------------------
Student Loan Revenue
NR Massachusetts Education Loan Authority,
9s, 2001 $ 140 $ 143,109
----------------------------------------------------------------------------
General Obligation - 10.3%
AAA Boston, MA, AMBAC, 6.5s, 2012 $ 2,000 $ 2,103,560
A+ Commonwealth of Massachusetts, 0s, 2004 10,000 5,956,100
AAA Commonwealth of Massachusetts, MBIA,
7.5s, 2004 2,850 3,305,088
A+ Commonwealth of Massachusetts, 0s, 2005 2,000 1,120,880
AAA Commonwealth of Massachusetts, FGIC,
0s, 2006 4,000 2,172,240
AAA Commonwealth of Massachusetts, AMBAC,
6.75s, 2009 2,500 2,681,675
AAA Commonwealth of Massachusetts, FGIC,
7s, 2009 1,250 1,410,500
A+ Commonwealth of Massachusetts, "A",
0s, 2005 2,000 1,141,340
AAA Gloucester, MA, AMBAC, 7s, 2009 225 240,286
AAA Gloucester, MA, AMBAC, 7s, 2010 215 229,607
AAA Haverhill, MA, FGIC, 7s, 2012 1,250 1,336,750
AAA Holyoke, MA, MBIA, 8s, 2001 1,700 1,957,499
AAA Holyoke, MA, MBIA, 8.1s, 2005 500 592,735
NR Holyoke, MA, Electric Rev., 8s, 2001 775 818,043
AAA Lawrence, MA, AMBAC, 9.75s, 2002 600 750,966
NR Lowell, MA, 8.4s, 2009 1,000 1,155,540
NR Northbridge, MA, 7.6s, 2001 325 357,468
AAA Princeton, MA, AMBAC, 7.25s, 2009 490 530,156
------------
$ 27,860,433
----------------------------------------------------------------------------
State and Local Appropriation - 8.6%
A+ Mass. Bay Transportation Authority,
5.5s, 2012 $ 5,000 $ 4,760,750
A+ Mass. Bay Transportation Authority,
6.2s, 2016 15,725 16,000,502
A+ Mass. Bay Transportation Authority,
5.875s, 2019 2,600 2,495,064
------------
$ 23,256,316
----------------------------------------------------------------------------
Refunded and Special Obligation - 20.8%
AAA Boston, MA, MBIA, 7.75s, 2008 $ 500 $ 553,005
A+ Commonwealth of Massachusetts, 6.875s, 2010 11,000 12,222,100
AAA Government of Guam, Limited Obligation
Highway Rev., CGIC, 9.25s, 2005 650 665,841
NR Holyoke, MA, 9.85s, 2008 400 456,548
NR Lowell, MA, 7.625s, 2010 4,875 5,613,270
AAA Mass. Bay Transportation Authority,
8.5s, 2014 3,000 3,430,920
AAA Mass. Bay Transportation Authority,
7.875s, 2021 1,500 1,736,130
AAA Mass. Federally Assisted Housing, HUD,
0s, 2023 4,285 802,281
NR Mass. Health & Education Facilities
Authority (Addison Gilbert Hospital),
9.25s, 2014 1,500 1,548,225
AA Mass. Health & Education Facilities
Authority (Children's Hospital),
7.75s, 2018 2,425 2,669,610
AAA Mass. Health & Education Facilities
Authority (Harvard Community Health),
AMBAC, 9.125s, 2017 4,250 4,385,320
AAA Mass. Health & Education Facilities
Authority (Harvard University),
8.5s, 2015 9,520 9,901,181
AAA Mass. Health & Education Facilities
Authority (Harvard University),
8.5s, 2016 2,500 2,600,100
NR Mass. Health & Education Facilities
Authority (Saint Elizabeth's Hospital),
7.75s, 2027 1,250 1,355,075
AAA Mass. Health & Education Facilities
Authority (South Shore Hospital), MBIA,
8.125s, 2017 1,070 1,167,680
NR Mass. Health & Education Facilities
Authority (Suffolk University), 8s, 2010 1,750 1,997,887
NR Mass. Health & Education Facilities
Authority (Youville Hospital), 9s, 2007 540 570,164
NR Mass. Health & Education Facilities
Authority (Youville Hospital), 9.1s, 2015 455 480,776
NR Mass. Industrial Finance Agency (Cape Cod
Health System), 8.5s, 2020 500 591,360
NR Mass. Industrial Finance Agency (Evanswood
Bethzatha Corp.), 9s, 2020 1,000 1,018,810
AAA Mass. Port Authority Rev., 12.75s, 2002 485 667,554
AAA Mass. Port Authority Rev., 13s, 2013 780 1,379,157
AAA Palmer, MA, AMBAC, 7.7s, 2010 500 571,670
------------
$ 56,384,664
----------------------------------------------------------------------------
Single Family Housing Revenue - 3.1%
A+ Mass. Housing Finance Agency, 9.5s, 2016 $ 1,590 $ 1,640,308
A+ Mass. Housing Finance Agency, 8.1s, 2020 2,420 2,538,991
A+ Mass. Housing Finance Agency, 8.1s, 2021 2,000 2,106,560
A+ Mass. Housing Finance Agency, 7.95s, 2023 1,000 1,054,680
A Mass. Housing Finance Agency, 7.5s, 2029 930 941,030
------------
$ 8,281,569
----------------------------------------------------------------------------
Multi-Family Housing Revenue - 4.2%
AAA Mass. Housing Finance Agency, AMBAC,
6.65s, 2019 $ 1,500 $ 1,511,400
AAA Mass. Housing Finance Agency, GNMA,
9.125s, 2020 490 511,555
BBB+ Mass. Housing Finance Agency, 8.4s, 2021 2,190 2,259,576
A+ Mass. Housing Finance Agency, 8.8s, 2021 1,995 2,078,311
AAA Mass. Housing Finance Agency, FNMA,
6.9s, 2025 1,700 1,764,294
AAA Mass. Housing Finance Agency, FNMA,
7.65s, 2028 1,430 1,493,006
BBB+ Mass. Housing Finance Agency, 8.2s, 2027 720 760,774
AAA Somerville, MA, Housing Authority Rev.
(Clarendon Hill), GNMA, 7.85s, 2010 1,000 1,080,710
------------
$ 11,459,626
----------------------------------------------------------------------------
Insured Health Care Revenue - 4.8%
AAA Mass. Health & Education Facilities
Authority (Beth Israel Hospital), AMBAC,
7.965s, 2025++ $ 4,000 $ 3,874,641
AAA Mass. Health & Education Facilities
Authority (Brigham & Women's Hospital),
MBIA, 6.75s, 2024 2,000 2,081,720
AAA Mass. Health & Education Facilities
Authority (Newton-Wellesley Hospital),
BIG, 8s, 2018 3,290 3,597,680
NR Mass. Health & Education Facilities
Authority (Youville Hospital), FHA,
6s, 2034 2,000 1,942,020
NR Mass. Industrial Finance Agency (Meadow
Green Nursing Home), FHA, 9.6s, 2027 1,475 1,564,916
------------
$ 13,060,977
----------------------------------------------------------------------------
Health Care Revenue - 16.3%
NR Boston, MA, Industrial Development Finance
Authority (Stonehedge Convalescent
Center), 10.75s, 2011 $ 805 $ 873,441
A Mass. Health & Education Facilities
Authority (Beth Israel Hospital), 7s, 2014 3,000 3,131,940
NR Mass. Health & Education Facilities
Authority (Central New England Health),
6.125s, 2013 2,200 1,897,544
A- Mass. Health & Education Facilities
Authority (Charlton Memorial Hospital),
7.25s, 2013 1,700 1,783,538
AA Mass. Health & Education Facilities
Authority (Children's Hospital),
6.125s, 2012 2,285 2,293,112
A Mass. Health & Education Facilities
Authority (Dana Farber Cancer), 5.5s, 2027 2,500 2,150,550
BBB Mass. Health & Education Facilities
Authority (Emerson Hospital), 8s, 2018 1,800 1,879,398
NR Mass. Health & Education Facilities
Authority (Fairview Extended Care
Facility), 10.25s, 2021 2,000 2,185,100
A- Mass. Health & Education Facilities
Authority (Jordan Hospital), 6.875s, 2022 2,150 2,152,731
BB Mass. Health & Education Facilities
Authority (Mass. Eye & Ear Infirmary),
7.375s, 2011 3,000 2,875,710
A Mass. Health & Education Facilities
Authority (New England Deaconess
Hospital), 6.875s, 2022 3,500 3,529,680
BBB Mass. Health & Education Facilities
Authority (Sisters of Providence Health
System), 6.5s, 2008 1,900 1,868,137
NR Mass. Industrial Finance Agency (Beverly
Enterprises), 8.375s, 2009 2,000 2,101,060
NR Mass. Industrial Finance Agency
(Continental Healthcare), 11.875s, 2015 5,525 5,747,602
NR Mass. Industrial Finance Agency (Evanswood
Bethzatha Corp.), 7.625s, 2014 1,200 1,201,584
NR Mass. Industrial Finance Agency (Martha's
Vineyard Long-Term Care), 9.25s, 2022 3,000 2,986,110
NR Mass. Industrial Finance Agency (Mass.
Biomedical Research), 0s, 2004 5,000 2,834,850
NR Mass. Industrial Finance Agency (Mass.
Biomedical Research), 0s, 2010 5,300 1,947,909
NR Mass. Industrial Finance Agency (Needham/
Hamilton House), 11s, 2010 800 817,232
------------
$ 44,257,228
----------------------------------------------------------------------------
Water and Sewer Utility Revenue - 7.2%
A Mass. Water Resources Authority, 5.5s, 2015 $ 7,000 $ 6,456,240
A Mass. Water Resources Authority, 6.5s, 2019 8,000 8,412,480
A Mass. Water Resources Authority, 5.5s, 2022 5,150 4,684,079
------------
$ 19,552,799
----------------------------------------------------------------------------
Turnpike Revenue - 3.3%
NR Mass. Industrial Finance Agency, Tunnel
Rev. (Mass. Turnpike), 9s, 2020 $ 8,310 $ 8,944,219
----------------------------------------------------------------------------
Airport and Port Revenue - 4.2%
AA- Mass. Port Authority Rev., 5s, 2015 $ 5,600 $ 4,923,408
AA- Mass. Port Authority Rev., 9.375s, 2015 1,520 1,567,576
AAA Mass. Port Authority Rev., FGIC, 7.5s, 2020 4,500 4,850,730
------------
$ 11,341,714
----------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 0.8%
NR Clinton, MA, Industrial Rev. Board (Zayre
Corp.), 8.5s, 2009 $ 793 $ 822,264
NR Mass. Industrial Finance Agency (Automatic
Data Processing, Inc.), 8.25s, 2019 900 927,594
NR Springfield, MA, Industrial Development
Finance Agency (Terminal Building),
10s, 2001 399 399,415
------------
$ 2,149,273
----------------------------------------------------------------------------
Universities - 8.6%
AAA Mass. Health & Education Facilities
Authority (Boston University), MBIA,
8.828s, 2031++ $ 5,000 $ 5,394,700
AA+ Mass. Health & Education Facilities
Authority (Wellesley College),
5.375s, 2019 3,440 3,146,155
A Mass. Health & Education Facilities
Authority (Wheaton College), 5.25s, 2019 2,335 2,044,946
AAA Mass. Industrial Finance Agency (Babson
College), MBIA, 5.75s, 2015 2,630 2,546,708
AAA Mass. Industrial Finance Agency (Brandeis
University), MBIA, 0s, 2004 1,000 600,400
AAA Mass. Industrial Finance Agency (Brandeis
University), MBIA, 0s, 2005 1,000 563,220
AAA Mass. Industrial Finance Agency (Brandeis
University), MBIA, 0s, 2009 1,000 425,310
AAA Mass. Industrial Finance Agency (Brandeis
University), MBIA, 0s, 2010 1,000 397,920
AAA Mass. Industrial Finance Agency (Brandeis
University), MBIA, 0s, 2011 500 185,970
NR Mass. Industrial Finance Agency (Curry
College), 8s, 2014 2,000 1,983,260
NR Mass. Industrial Finance Agency (Emerson
College), 8.9s, 2018 1,000 1,107,770
A+ Mass. Industrial Finance Agency (Holy
Cross), 6.45s, 2012 3,000 3,078,420
AA Mass. Industrial Finance Agency (Phillips
Academy), 5.375s, 2023 2,000 1,807,780
------------
$ 23,282,559
----------------------------------------------------------------------------
Other - 5.1%
NR Martha's Vineyard, MA, Land Bank,
8.125s, 2011 $ 4,200 $ 4,265,646
NR Mass. Health & Education Facilities
Authority (Learning Center for Deaf
Children), 9.25s, 2014 2,250 2,405,903
BBB Mass. Industrial Finance Agency (Dexter
School), 7.5s, 2011 1,720 1,812,261
BBB Mass. Industrial Finance Agency (Dexter
School), 7.5s, 2021 2,900 3,055,556
AAA Mass. Industrial Finance Agency (Jewish
Philanthropies), AMBAC, 6.375s, 2015 1,000 1,023,360
NR Nantucket Island, MA, Land Bank,
7.75s, 2020 1,200 1,336,092
------------
$ 13,898,818
----------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $249,937,712) $263,873,304
----------------------------------------------------------------------------
Floating Rate Demand Notes - 0.8%
----------------------------------------------------------------------------
Uinta County, WY, Pollution Control Rev.
(Chevron Corp.), due 8/15/20 $ 2,200 $ 2,200,000
Uinta County, WY, Pollution Control Rev.
(Chevron Corp.), due 12/01/22 100 100,000
----------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 2,300,000
----------------------------------------------------------------------------
Call Option Purchased - 0.1%
----------------------------------------------------------------------------
Principal Amount
of Contracts
Issuer/Expiration Date/Strike Price (000 Omitted)
----------------------------------------------------------------------------
Total Investments (Identified Cost, $252,369,112) $266,424,604
Other Assets, Less Liabilities - 1.8% 4,802,003
----------------------------------------------------------------------------
Net Assets - 100.0% $271,226,607
----------------------------------------------------------------------------
+ Restricted security.
++ Inverse floating rate security.
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
MFS NEW YORK MUNICIPAL BOND FUND
Municipal Bonds - 97.6%
----------------------------------------------------------------------------
S&P Bond
Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
----------------------------------------------------------------------------
General Obligation - 9.7%
A- New York, NY, 7.2s, 2008 $1,000 $ 1,042,620
A- New York, NY, 7.3s, 2010 880 920,427
A- New York, NY, 7.3s, 2011 5,000 5,229,700
A- New York , NY, 5.6s, 2012 1,000 962,730
A- New York, NY, 7.375s, 2013 1,600 1,676,064
A- New York, NY, 8s, 2015 10 10,778
A- New York, NY, 8.25s, 2016 160 174,936
A- New York, NY, 8s, 2018 60 64,686
NR Oswego County, NY, 6.7s, 2009 1,000 1,081,830
AAA Port Byron, NY, Central School District,
AMBAC, 7.4s, 2012 500 590,460
AAA Port Byron, NY, Central School District,
AMBAC, 7.4s, 2013 500 593,515
AAA Port Byron, NY, Central School District,
AMBAC, 7.4s, 2014 500 596,405
AAA Port Byron, NY, Central School District,
AMBAC, 7.4s, 2015 500 595,765
NR Territory of Virgin Islands, 7.75s, 2006 440 483,305
AAA Washingtonville, NY, Central School
District, FGIC, 7.35s, 2008 550 639,843
AAA Washingtonville, NY, Central School
District, FGIC, 7.35s, 2009 550 638,489
------------
$ 15,301,553
----------------------------------------------------------------------------
State and Local Appropriation - 24.2%
BBB Metropolitan Transportation Authority, NY,
Services Contract, 7.375s, 2008 $2,000 $ 2,199,660
BBB Metropolitan Transportation Authority, NY,
Services Contract, 0s, 2009 7,500 3,003,975
BBB New York Dormitory Authority (City
University), 8.125s, 2008 1,500 1,671,855
BBB New York Dormitory Authority (City
University), 5.75s, 2012 3,000 2,811,930
BBB New York Dormitory Authority (City
University), 5.75s, 2013 1,250 1,169,238
BBB+ New York Dormitory Authority (State
University), 5.25s, 2013 2,495 2,201,314
BBB+ New York Dormitory Authority (State
University), 5.25s, 2015 4,000 3,503,080
BBB New York Housing Finance Agency,
5.875s, 2014 1,070 1,007,758
A New York Local Government Assistance Corp.,
5.375s, 2016 2,000 1,813,960
A New York Local Government Assistance Corp.,
5.5s, 2021 2,000 1,815,480
A New York Local Government Assistance Corp.,
5.5s, 2022 1,000 906,350
BBB New York Medical Care Facilities Finance
Agency (Huntington Hospital), 6.5s, 2014 1,250 1,222,425
BBB+ New York Medical Care Facilities Finance
Agency, Mental Health Services Facilities
Rev., 7.875s, 2008 245 267,831
AAA New York Medical Care Facilities Finance
Agency, Mental Health Services Facilities
Rev., FSA, 5.375s, 2014 1,000 910,780
BBB+ New York Medical Care Facilities Finance
Agency, Mental Health Services Facilities
Rev., 6.375s, 2014 2,340 2,330,383
BBB+ New York Medical Care Facilities Finance
Agency, Mental Health Services Facilities
Rev., 7.3s, 2021 250 264,542
AAA New York Medical Care Facilities Finance
Agency, Mental Health Services Facilities
Rev., FGIC, 5.25s, 2023 1,500 1,314,255
BBB New York Urban Development Capital Corp.
(Correctional Facilities), 5.75s, 2013 4,500 4,181,850
AAA New York Urban Development Capital Corp.,
Higher Education Technology Grants, MBIA,
5.75s, 2015 1,000 954,180
BBB New York Urban Development Capital Corp.,
State Facilities Rev., 5.5s, 2014 1,100 990,231
BBB New York Urban Development Capital Corp.,
State Facilities Rev., 7.5s, 2020 1,000 1,072,620
A Puerto Rico Public Buildings Authority,
5.385s, 2016 (Municipal Swap)(S) 2,000 1,743,100
NR Troy, NY, Certificates of Participation,
Recreational Facilities Rev., 9.75s, 2010 930 1,001,777
------------
$ 38,358,574
----------------------------------------------------------------------------
Refunded and Special Obligation - 11.6%
A- New York City Municipal Water & Sewer
Finance Authority, 7.375s, 2013 $2,000 $ 2,272,060
A- New York City Municipal Water & Sewer
Finance Authority, 7s, 2015 530 586,699
A- New York City Municipal Water & Sewer
Finance Authority, 7s, 2015 225 249,071
AAA New York Local Government Assistance Corp.,
7.25s, 2018 2,500 2,824,975
AA New York Medical Care Facilities Finance
Agency, 8.3s, 2022 515 571,804
AAA New York Medical Care Facilities Finance
Agency (Buffalo General Hospital), FHA,
7.7s, 2022 500 554,575
AAA New York Medical Care Facilities Finance
Agency (Long Island Hospital), 8.1s, 2022 1,500 1,661,775
AA New York Medical Care Facilities Finance
Agency (Presbyterian Hospital), 7.7s, 2009 750 857,467
AAA New York Medical Care Facilities Finance
Agency (St. Luke's Hospital), FHA,
7.45s, 2029 2,600 2,918,266
AAA New York Medical Care Facilities Finance
Agency, Mental Health Services Rev.,
7.875s, 2008 225 259,072
AAA New York Medical Care Facilities Finance
Agency, Mental Health Services Rev.,
7.875s, 2020 560 644,801
AAA New York Medical Care Facilities Finance
Agency, Mental Health Services Rev.,
7.3s, 2021 750 853,823
A- New York, NY, 8s, 2015 490 570,340
A- New York, NY, 8.25s, 2016 1,840 2,189,214
AAA Puerto Rico Aqueduct & Sewer Authority,
9s, 2009 250 321,992
AAA Triborough Bridge & Tunnel Authority, NY,
7.375s, 2016 1,000 1,113,000
------------
$ 18,448,934
----------------------------------------------------------------------------
Single Family Housing Revenue - 4.6%
AA New York City Housing Development Corp.
(South Bronx Cooperatives), 8.1s, 2023 $ 580 $ 609,725
NR New York Mortgage Agency Rev., 7.375s, 2011 1,295 1,369,929
NR New York Mortgage Agency Rev., 8s, 2011 820 887,240
NR New York Mortgage Agency Rev., 6.45s, 2017 2,355 2,371,626
NR New York Mortgage Agency Rev., 8s, 2021 330 355,667
NR New York Mortgage Agency Rev., 8s, 2022 555 596,836
NR New York Mortgage Agency Rev., 7.75s, 2023 1,000 1,066,620
------------
$ 7,257,643
----------------------------------------------------------------------------
Insured Health Care Revenue - 18.1%
AAA New York Dormitory Authority (St. Vincent's
Hospital), FHA, 7.375s, 2011 $2,500 $ 2,710,500
AAA New York Medical Care Facilities Finance
Agency (Hospital & Nursing Home), FHA,
5.75s, 2019 6,000 5,640,180
AA New York Medical Care Facilities Finance
Agency (Hospital & Nursing Home),
5.7s, 2033 1,225 1,111,063
AA New York Medical Care Facilities Finance
Agency (Montefiore Medical), 7.25s, 2009 3,195 3,397,084
AA New York Medical Care Facilities Finance
Agency (Montefiore Medical), 7.25s, 2024 1,750 1,854,458
AAA New York Medical Care Facilities Finance
Agency (New York Hospital), AMBAC,
6.5s, 2029 2,550 2,623,057
AAA New York Medical Care Facilities Finance
Agency (Presbyterian Hospital), FHA,
5.375s, 2025 3,945 3,480,082
AAA New York, NY, Health & Hospital Corp. Rev.,
AMBAC, 5.75s, 2022 8,325 7,910,248
------------
$ 28,726,672
----------------------------------------------------------------------------
Health Care Revenue - 1.5%
NR Albany, NY, Industrial Development
Authority, Civic Facilities Rev. (Albany
Medical Center), 8.25s, 2004 $2,250 $ 2,371,320
----------------------------------------------------------------------------
Electric and Gas Utility Revenue - 3.8%
A+ New York Energy Research & Development,
6.75s, 2027 $3,000 $ 3,030,000
AA New York Power Authority, 8s, 2017 380 413,649
NR Virgin Islands Water & Power Authority,
Electric Systems Rev., 7.4s, 2011 2,450 2,577,008
------------
$ 6,020,657
----------------------------------------------------------------------------
Water and Sewer Utility Revenue - 8.8%
A- New York City Municipal Water & Sewer
Finance Authority, 6s, 2010 $ 620 $ 620,998
A- New York City Municipal Water & Sewer
Finance Authority, 7.1s, 2012 2,000 2,130,940
A- New York City Municipal Water & Sewer
Finance Authority, 7s, 2015 745 785,632
A- New York City Municipal Water & Sewer
Finance Authority, 5.5s, 2020 750 679,845
A- New York City Municipal Water & Sewer
Finance Authority, 7.6s, 2020 470 505,057
A- New York Environmental Facilities Corp.,
Pollution Control Rev., 5.75s, 2010 4,235 4,233,518
A New York Environmental Facilities Corp.,
Pollution Control Rev., 6.875s, 2010 2,000 2,134,500
NR New York Environmental Facilities Corp.,
Water Facilities Rev. (American Water
Co.), 8.85s, 2015 2,500 2,766,900
------------
$ 13,857,390
----------------------------------------------------------------------------
Turnpike Revenue - 3.8%
AAA New York Turnpike Authority, FGIC, 6s, 2025 $3,250 $ 3,205,605
A+ Triborough Bridge & Tunnel Authority, NY,
5.5s, 2017 3,000 2,835,990
------------
$ 6,041,595
----------------------------------------------------------------------------
Airport and Port Revenue - 3.3%
A New York, NY, Industrial Development Agency
(Terminal One Group), 6s, 2019 $2,000 $ 1,893,280
AA- Port Authority, NY & NJ, 5.25s, 2014 3,705 3,389,038
------------
$ 5,282,318
----------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 2.7%
A+ Allegany County, NY, Industrial Development
Authority, Solid Waste Rev. (Atlantic
Richfield Co.), 6.625s, 2016 $1,000 $ 1,011,710
NR Fulton County, NY, Industrial Development
Agency (Crossroads Incubator), 8.75s, 2009 1,195 1,276,463
NR Monroe County, NY, Industrial Development
Agency (Weyerhaeuser Co.), 9s, 2006 1,000 1,034,740
BB+ New York City Industrial Development
Agency, Special Facilities Rev. (American
Airlines), 6.9s, 2024 1,000 1,005,950
------------
$ 4,328,863
----------------------------------------------------------------------------
Universities - 1.8%
AA New York Dormitory Authority (Cornell
University), 7.375s, 2020 $1,500 $ 1,628,340
AA New York Dormitory Authority (Menorah
Campus), 7.4s, 2031 1,100 1,191,190
------------
$ 2,819,530
----------------------------------------------------------------------------
Other - 3.7%
AA Battery Park City Authority, NY, Rev.,
5.7s, 2020 $4,000 $ 3,691,840
NR Dutchess, NY, Industrial Development
Agency, Civic Facilities Rev. (New York
Assn. for Retarded Children), 8.625s, 2016 1,145 1,209,418
BBB Virgin Islands Public Finance Authority,
Highway Rev., 7.7s, 2004 800 875,608
------------
$ 5,776,866
----------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $145,769,990) $154,591,915
----------------------------------------------------------------------------
Call Options Purchased - 0.2%
----------------------------------------------------------------------------
Principal Amount
of Contracts
Issuer/Expiration Date/Strike Price (000 Omitted)
----------------------------------------------------------------------------
Georgia Municipal Electric Authority/2003/102 $ 5 $ 125,650
North Carolina Eastern Municipal Power Agency/
2003/102 5 82,200
State of New Jersey, "D"/2003/102 2 152,300
----------------------------------------------------------------------------
Total Call Options Purchased (Premiums Paid, $555,000) $ 360,150
----------------------------------------------------------------------------
Total Investments (Identified Cost, $146,324,990) $154,952,065
Other Assets, Less Liabilities - 2.2% 3,529,393
----------------------------------------------------------------------------
Net Assets - 100.0% $158,481,458
----------------------------------------------------------------------------
(S) Indexed security.
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
MFS NORTH CAROLINA MUNICIPAL BOND FUND
Municipal Bonds - 98.0%
----------------------------------------------------------------------------
S&P Bond
Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
----------------------------------------------------------------------------
General Obligation - 7.1%
AAA Charlotte, NC, Water & Sewer, 5.8s, 2013 $1,780 $ 1,791,392
AAA Charlotte, NC, Water & Sewer, 5.8s, 2014 5,050 5,054,696
AAA Charlotte, NC, Water & Sewer, 5.9s, 2019 2,000 2,015,200
A Commonwealth of Puerto Rico, 6.45s, 2017 2,300 2,348,461
AAA Commonwealth of Puerto Rico, FSA,
5.25s, 2018 1,815 1,641,014
AAA Durham, NC, 5.9s, 2013 2,400 2,458,152
AAA Durham, NC, 5.9s, 2014 2,400 2,446,152
AAA Greensboro, NC, 6.3s, 2011 4,165 4,356,923
BBB+ Hertford County, NC, 9.5s, 2000 100 105,415
BBB+ Hertford County, NC, 9.5s, 2001 100 105,366
BBB+ Hertford County, NC, 9.5s, 2002 100 105,316
AAA Lincoln County, NC, FGIC, 5.1s, 2009 1,170 1,110,693
AAA Mecklenburg County, NC, 5.5s, 2011 1,630 1,621,084
AAA Mecklenburg County, NC, 5.5s, 2012 1,750 1,730,645
AAA Mecklenburg County, NC, 5.5s, 2013 2,715 2,668,954
AA+ Orange County, NC, 5.5s, 2012 1,625 1,565,817
AA+ Orange County, NC, 5.5s, 2013 2,000 1,914,080
------------
$ 33,039,360
----------------------------------------------------------------------------
State and Local Appropriation - 14.3%
AA Charlotte, NC, Certificates of
Participation (Cityfair Parking
Facilities), 6.125s, 2010 $1,000 $ 1,007,090
AAA Charlotte, NC, Certificates of
Participation (Convention Facilities
Project), AMBAC, 0s, 2004 3,435 2,000,235
AAA Charlotte, NC, Certificates of
Participation (Convention Facilities
Project), AMBAC, 0s, 2005 4,810 2,645,789
AAA Charlotte, NC, Certificates of
Participation (Convention Facilities
Project), AMBAC, 0s, 2006 1,075 553,399
AAA Charlotte, NC, Certificates of
Participation (Convention Facilities
Project), AMBAC, 0s, 2008 3,000 1,341,990
AAA Charlotte, NC, Certificates of
Participation (Convention Facilities
Project), AMBAC, 5.25s, 2013 3,750 3,471,525
AAA Charlotte, NC, Certificates of
Participation (Convention Facilities
Project), AMBAC, 5.25s, 2020 7,450 6,713,195
AAA Charlotte, NC, Certificates of
Participation (Convention Facilities
Project), AMBAC, 5s, 2021 4,350 3,769,231
AA Charlotte, NC, Certificates of
Participation (Stadium Parking
Facilities), 6s, 2014 1,475 1,477,891
AAA Cumberland County, NC, Certificates of
Participation (Civic Center), AMBAC,
6.375s, 2010 1,100 1,149,643
AAA Cumberland County, NC, Certificates of
Participation (Civic Center), AMBAC,
0s, 2011 425 157,518
AAA Cumberland County, NC, Certificates of
Participation (Civic Center), AMBAC,
0s, 2013 1,000 323,050
AAA Dare County, NC, MBIA, 6.6s, 2006 2,100 2,245,278
AA Durham, NC, Certificates of Participation,
6.375s, 2012 3,970 4,097,754
AA Durham County, NC, Certificates of
Participation (Hospital & Office
Facilities), 5.875s, 2009 1,460 1,488,470
AA Durham County, NC, Certificates of
Participation (Hospital & Office
Facilities), 6s, 2014 1,000 1,008,360
AA Durham County, NC, Certificates of
Participation (Hospital & Office
Facilities), 6s, 2017 500 502,160
AA Durham, NC, Certificates of Participation
(New Durham Corp.), 6.875s, 2009 1,750 1,882,265
AAA Franklin County, NC, Certificates of
Participation (Jail & School Projects),
FGIC, 6.625s, 2014 2,000 2,092,880
AA Greensboro, NC, Certificates of
Participation (Coliseum Arena Project),
6.25s, 2011 2,180 2,209,016
AAA Harnett County, NC, Certificates of
Participation, AMBAC, 6.2s, 2006 1,000 1,054,760
AAA Harnett County, NC, Certificates of
Participation, AMBAC, 6.2s, 2009 2,500 2,576,200
BBB Puerto Rico Housing, Bank & Finance Agency,
7.5s, 2006 7,000 7,636,720
A Puerto Rico Public Buildings Authority,
5.5s, 2007 2,550 2,452,743
A Puerto Rico Public Buildings Authority,
5.385s, 2016 (Municipal Swap)(S) 6,500 5,665,075
AAA Scotland County, NC, Certificates of
Participation (Jail/Courthouse Project),
CGIC, 6.75s, 2011 1,000 1,057,260
AAA Thomasville, NC, Certificates of
Participation (City Hall), FSA, 6s, 2017 2,750 2,754,592
AAA Union County, NC, Certificates of
Participation, FSA, 6.375s, 2012 1,000 1,033,421
AA+ Winston-Salem, NC, Certificates of
Participation, 5s, 2011 2,000 1,817,360
------------
$ 66,184,870
----------------------------------------------------------------------------
Refunded and Special Obligation - 12.1%
NR Chapel Hill, NC, Parking Facilities Rev.
(Rosemary Street Project), 8.125s, 2013 $1,710 $ 1,983,959
NR Chapel Hill, NC, Parking Facilities Rev.
(Rosemary Street Project), 8.25s, 2023 3,305 3,854,522
AAA Charlotte, NC, Certificates of
Participation, AMBAC, 6.75s, 2021 4,250 4,714,440
AAA Charlotte-Mecklenberg, NC, Hospital
Authority, Health Care Systems Rev.,
8.25s, 2013 2,995 3,211,329
AAA Charlotte-Mecklenberg, NC, Hospital
Authority, Health Care Systems Rev.,
7.8s, 2018 1,280 1,423,514
AAA Charlotte-Mecklenberg, NC, Hospital
Authority, Health Care Systems Rev.,
8s, 2018 500 558,720
AAA Craven, NC, Regional Medical Authority,
MBIA, 7.2s, 2019 1,500 1,679,430
AAA Dare County, NC, School Bonds, MBIA,
6.9s, 2008 800 877,840
AAA Dare County, NC, School Bonds, MBIA,
6.9s, 2009 800 877,840
AAA Dare County, NC, School Bonds, MBIA,
6.9s, 2010 500 548,650
AAA North Carolina Eastern Municipal Power
Agency, 13s, 1998 3,000 3,623,460
A- North Carolina Eastern Municipal Power
Agency, 7.5s, 2010 2,595 3,047,127
AAA North Carolina Eastern Municipal Power
Agency, 7.75s, 2012 2,900 3,232,195
A- North Carolina Eastern Municipal Power
Agency, 5s, 2017 8,165 7,352,909
AAA North Carolina Medical Care Commission,
Hospital Rev. (Presbyterian Health
Services), 7.3s, 2015 1,000 1,124,360
AAA North Carolina Medical Care Commission,
Hospital Rev. (Presbyterian Health
Services), 7.375s, 2020 12,315 13,890,335
AAA North Carolina Municipal Power Agency, No.
1 Catawba Electric Rev., AMBAC,
7.625s, 2014 820 895,202
NR Pender County, NC, Certificates of
Participation (Pender County Prison),
7.6s, 2004 1,900 2,170,332
NR Pender County, NC, Certificates of
Participation (Pender County Prison),
7.7s, 2011 1,000 1,147,490
------------
$ 56,213,654
----------------------------------------------------------------------------
Single Family Housing Revenue - 4.6%
A+ North Carolina Housing Finance Agency,
10.375s, 2007 $ 75 $ 76,387
A+ North Carolina Housing Finance Agency,
6.7s, 2018 1,800 1,847,124
A+ North Carolina Housing Finance Agency,
8.125s, 2019 2,390 2,487,058
A+ North Carolina Housing Finance Agency,
7.7s, 2021 2,785 2,884,230
A+ North Carolina Housing Finance Agency,
7.8s, 2021 2,955 3,072,048
A+ North Carolina Housing Finance Agency,
7.85s, 2028 6,900 7,229,406
A+ North Carolina Housing Finance Agency,
7.6s, 2032 3,410 3,560,824
------------
$ 21,157,077
----------------------------------------------------------------------------
Multi-Family Housing Revenue - 4.1%
A Asheville, NC, Housing Authority (Asheville
Terrace Apartments), 7.1s, 2011 $5,000 $ 5,171,500
NR Charlotte, NC, Housing Authority (Merrywood
Senior Adult Project), 9.75s, 2019 6,710 6,441,600
AA North Carolina Housing Finance Agency,
6.9s, 2024 4,890 5,062,813
NR Salisbury, NC, Housing Corp., Inc. (Yadkin
Senior Citizens), 6.75s, 2022 2,180 2,194,235
------------
$ 18,870,148
----------------------------------------------------------------------------
Insured Health Care Revenue - 6.7%
AAA Craven, NC, Regional Medical Authority,
MBIA, 5.5s, 2023 $1,150 $ 1,067,545
AAA Cumberland County, NC, Hospital Facilities
Rev., MBIA, 0s, 2009 1,800 772,056
AAA Cumberland County, NC, Hospital Facilities
Rev. (Cumberland County Hospital), MBIA,
6s, 2017 4,000 4,014,080
AAA North Carolina Medical Care Commission,
Hospital Rev. (Alamance Health Services,
Inc.), FSA, 5.5s, 2024 3,000 2,740,050
AAA North Carolina Medical Care Commission,
Hospital Rev. (Moore Regional Hospital),
FGIC, 5.2s, 2013 6,750 6,087,420
AAA North Carolina Medical Care Commission,
Hospital Rev. (Moore Regional Hospital),
MBIA, 5s, 2018 3,800 3,239,196
AAA North Carolina Medical Care Commission,
Hospital Rev. (St. Joseph's Hospital),
AMBAC, 5.1s, 2014 1,550 1,384,103
AAA North Carolina Medical Care Commission,
Hospital Rev. (Wesley Long Community
Hospital), AMBAC, 5.25s, 2013 5,000 4,562,600
AAA Pitt County, NC, Hospital Rev. (Pitt
Memorial Hospital), MBIA, 6.75s, 2014 2,800 2,982,980
AAA Wake County, NC, Hospital Rev., MBIA,
5.125s, 2013 5,000 4,442,450
------------
$ 31,292,480
----------------------------------------------------------------------------
Health Care Revenue - 12.8%
AA Charlotte-Mecklenberg, NC, Hospital
Authority, Health Care Systems Rev.,
6.25s, 2020 $1,000 $ 1,012,150
AA- North Carolina Medical Care Commission,
Hospital Rev. (Baptist Hospital), 6s, 2022 2,725 2,703,445
AA North Carolina Medical Care Commission,
Hospital Rev. (Carolina Medical Project),
6s, 2021 19,000 18,729,440
AA North Carolina Medical Care Commission,
Hospital Rev. (Carolina Medicorp),
5.5s, 2015 2,185 2,021,715
A North Carolina Medical Care Commission,
Hospital Rev. (Gaston Health Care),
0s, 2007 500 229,710
A North Carolina Medical Care Commission,
Hospital Rev. (Gaston Health Care),
7.25s, 2019 1,400 1,463,420
NR North Carolina Medical Care Commission,
Hospital Rev. (Halifax Memorial Hospital),
6.75s, 2024 4,500 4,426,020
NR North Carolina Medical Care Commission,
Hospital Rev. (Memorial Mission Hospital),
9.1s, 2008 1,750 1,820,368
A- North Carolina Medical Care Commission,
Hospital Rev. (Mercy Hospital), 6.5s, 2015 1,650 1,609,311
A North Carolina Medical Care Commission,
Hospital Rev. (Moore Memorial Hospital),
9.1s, 1999 800 831,384
AA North Carolina Medical Care Commission,
Hospital Rev. (Presbyterian Health
Services), 5.5s, 2020 3,500 3,171,105
AA North Carolina Medical Care Commission,
Hospital Rev. (Presbyterian Hospital),
5.5s, 2014 8,850 8,208,198
A+ North Carolina Medical Care Commission,
Hospital Rev. (Rex Hospital), 6.25s, 2017 2,500 2,512,150
NR North Carolina Medical Care Commission,
Hospital Rev. (Valdese General Hospital),
8.75s, 2016 5,665 5,898,115
BBB Northern Hospital District, Surry County,
NC, Health Care Facilities Rev.,
7.875s, 2021 4,530 4,640,894
------------
$ 59,277,425
----------------------------------------------------------------------------
Electric and Gas Utility Revenue - 15.4%
A New Hanover County, NC, Industrial
Facilities Rev. (Carolina Power & Light
Co.), 6.9s, 2009 $1,000 $ 1,051,090
A- North Carolina Eastern Municipal Power
Agency, 6s, 2006 4,000 3,960,280
AAA North Carolina Eastern Municipal Power
Agency, AMBAC, 5.5s, 2007 2,040 2,006,095
A- North Carolina Eastern Municipal Power
Agency, 7s, 2007 5,000 5,297,350
A- North Carolina Eastern Municipal Power
Agency, 7.25s, 2007 5,000 5,421,800
A- North Carolina Eastern Municipal Power
Agency, 7s, 2008 1,815 1,920,960
A- North Carolina Eastern Municipal Power
Agency, 7.5s, 2010 3,005 3,319,203
AAA North Carolina Eastern Municipal Power
Agency, AMBAC, 6s, 2018 5,000 4,987,000
AAA North Carolina Eastern Municipal Power
Agency, FSA, 5.75s, 2019 2,500 2,384,600
AAA North Carolina Municipal Power Agency,
MBIA, 0s, 2009 10,000 4,463,300
AAA North Carolina Municipal Power Agency,
MBIA, 5s, 2018 2,500 2,141,650
AAA North Carolina Municipal Power Agency, No.
1 Catawba Electric Rev., MBIA, 0s, 2008 10,150 4,733,249
AAA North Carolina Municipal Power Agency, No.
1 Catawba Electric Rev., MBIA, 6s, 2011 5,000 5,074,800
AAA North Carolina Municipal Power Agency, No.
1 Catawba Electric Rev., MBIA, 5.47s, 2012++ 3,000 2,684,760
AAA North Carolina Municipal Power Agency, No.
1 Catawba Electric Rev., AMBAC,
7.625s, 2014 180 191,108
A North Carolina Municipal Power Agency, No.
1 Catawba Electric Rev., 5.75s, 2015 12,750 11,704,245
AAA North Carolina Municipal Power Agency, No.
1 Catawba Electric Rev., FSA, 6.2s, 2018 2,500 2,509,250
AAA Puerto Rico Electric Power Authority, FSA,
6s, 2016 5,500 5,492,465
A Wake County, NC, Industrial Facilities &
Pollution Control Financing Authority
Rev. (Carolina Power & Light Co.),
6.9s, 2009 2,000 2,102,180
------------
$ 71,445,385
----------------------------------------------------------------------------
Water and Sewer Utility Revenue - 3.0%
AAA Fayetteville, NC, Public Works Rev., FGIC,
7s, 2011 $ 2,000 $ 2,203,200
AAA Kanapolis, NC, Certificates of
Participation, MBIA, 7.375s, 2010 5,000 5,411,250
A Puerto Rico Aqueduct & Sewer Authority,
7.875s, 2017 2,000 2,173,500
AA+ Winston-Salem, NC, Water & Sewer Systems
Rev., 6.25s, 2012 4,000 4,123,040
------------
$ 13,910,990
----------------------------------------------------------------------------
Turnpike Revenue - 0.6%
A Puerto Rico Highway & Transportation
Authority, Highway Rev., 5.5s, 2015 $ 3,000 $ 2,768,670
----------------------------------------------------------------------------
Airport and Port Revenue - 1.4%
AAA Piedmont Triad Airport Authority, NC,
Airport Authority Rev., MBIA, 5s, 2016 $ 3,645 $ 3,193,822
BB+ Raleigh-Durham, NC, Airport Authority
(American Airlines), 9.625s, 2015 3,000 3,117,480
------------
$ 6,311,302
----------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 9.6%
NR Alamance County, NC, Industrial Facilities
& Pollution Control Finance Authority
(A.O. Smith Corp.), 7.375s, 2009 $ 1,000 $ 999,880
NR Chatham County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Weyerhaeuser Co.), 9s, 2006 1,260 1,309,946
A Craven County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Weyerhaeuser Co.), 6.35s, 2010 5,000 5,088,650
NR Gaston County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Combustion Engineering, Inc.), 8.85s, 2015 1,000 1,130,740
BBB Halifax County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Champion International Corp.), 8.15s, 2019 1,500 1,614,990
BBB Haywood County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Champion International Corp.), 8.1s, 2009 2,500 2,683,700
BBB Haywood County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Champion International Corp.), 5.5s, 2018 3,000 2,607,690
NR Henderson County, NC, Industrial Facilities
& Pollution Control Finance Authority
(Figgie International Real Estate), 8s, 2009 1,500 1,529,280
A Martin County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Weyerhaeuser Co.), 6.375s, 2010 5,500 5,607,525
A Martin County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Weyerhaeuser Co.), 7.25s, 2014 7,000 7,596,820
A Martin County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Weyerhaeuser Co.), 6.8s, 2024 7,500 7,686,150
AAA Mecklenburg County, NC, Industrial
Facilities & Pollution Control Finance
Authority (Precision Steel), 7.75s, 2014 2,600 2,817,152
NR Surry County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Weyerhaeuser Co.), 9.25s, 2002 1,500 1,830,855
NR Vance County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Keunemetal Co.), 8.05s, 1995 833 835,010
NR Wake County, NC, Industrial Facilities &
Pollution Control Finance Authority
(Mallinckrodt), 6.75s, 2012 1,100 1,131,944
------------
$ 44,470,332
----------------------------------------------------------------------------
Universities - 5.4%
AAA Appalachian State University, NC, MBIA,
6.1s, 2014 $ 1,140 $ 1,154,090
AAA Appalachian State University, NC, MBIA,
6.125s, 2019 6,370 6,435,675
AA North Carolina Education Facilities Finance
Agency (Duke University), 6.75s, 2021 12,500 13,142,750
AA University of North Carolina (Chapel Hill),
0s, 2012 9,105 3,031,692
AA University of North Carolina (Chapel Hill),
0s, 2013 4,285 1,334,049
------------
$ 25,098,256
----------------------------------------------------------------------------
Other - 0.9%
NR Iredell, NC, Solid Waste Systems Rev.,
6.25s, 2012 $ 1,250 $ 1,266,550
A Puerto Rico Highway & Transportation
Authority Rev., 6.625s, 2018 2,715 2,789,528
------------
$ 4,056,078
----------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $434,699,614) $454,096,027
------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.4%
------------------------------------------------------------------------------
Uinta County, WY, Pollution Control Rev.
(Chevron USA, Inc.), due 8/15/20 $ 1,500 $ 1,500,000
Wake County, NC, Industrial Facilities &
Pollution Control Rev. (Carolina Power &
Light Co.), due 3/01/17 600 600,000
----------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 2,100,000
----------------------------------------------------------------------------
Total Investments (Identified Cost, $436,799,614) $456,196,027
-----------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.6% 7,344,735
Net Assets - 100.0% $463,540,762
------------------------------------------------------------------------------
(S) Indexed security.
++ Inverse floating rate security.
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
MFS PENNSYLVANIA MUNICIPAL BOND FUND
Municipal Bonds - 96.9%
----------------------------------------------------------------------------
S&P Bond
Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
----------------------------------------------------------------------------
General Obligation - 17.9%
AAA Central Bucks, PA, School District, MBIA,
5.4s, 2014 $ 250 $ 234,100
AAA Erie County, PA, FGIC, 5.5s, 2016 250 232,158
AAA Lehigh County, PA, FGIC, 5.125s, 2011 500 461,160
AAA Northeastern York County, PA, School
District, FGIC, 0s, 2012 415 151,786
AAA Oley Valley, PA, School District, 0s, 2011 810 315,519
AAA Penn-Trafford, PA, School District, MBIA,
5.85s, 2014 275 273,081
AAA Philadelphia, PA, School District, MBIA,
5.45s, 2004 500 498,970
A Southeastern Area, PA, Special Schools
Authority Rev., 0s, 2007 360 161,352
AAA Spring-Ford, PA, School District, AMBAC,
5.8s, 2012 250 248,335
AA- State of Pennsylvania, 5s, 2010 250 228,635
AA- State of Pennsylvania, 6.25s, 2010 300 314,679
AA- State of Pennsylvania, 5.375s, 2012 500 468,795
NR Upper Merion, PA, Area School District,
5.5s, 2016 250 235,865
AAA Warrington Township, PA, FGIC, 5.75s, 2020 500 479,910
------------
$ 4,304,345
----------------------------------------------------------------------------
State and Local Appropriation - 6.0%
AAA Philadelphia, PA, Municipal Authority Rev.,
FGIC, 5.625s, 2014 $ 600 $ 568,182
NR Philadelphia, PA, Municipal Authority Rev.,
8.625s, 2016 400 433,792
AAA State of Pennsylvania, Certificates of
Participation, AMBAC, 5.25s, 2010 250 230,405
AAA State of Pennsylvania, Certificates of
Participation, AMBAC, 5s, 2015 250 217,160
------------
$ 1,449,539
----------------------------------------------------------------------------
Refunded and Special Obligation - 9.4%
AA Allegheny County, PA, Sanitation Authority,
7.45s, 2009 $ 200 $ 218,924
AAA Bethlehem, PA, Water Authority, MBIA,
6.1s, 2018 500 529,545
AAA Philadelphia, PA, Gas Works Rev., 6s, 2013 645 633,732
AAA Puerto Rico Highway & Transportation
Authority, Highway Rev., 6.5s, 2022 250 275,928
AAA Puerto Rico Public Buildings Authority,
6.875s, 2021 250 281,567
AAA Schuylkill, PA, Redevelopment Authority
Rev., FGIC, 7s, 2007 300 325,791
------------
$ 2,265,487
----------------------------------------------------------------------------
Single Family Housing Revenue - 5.2%
AA Pennsylvania Housing Finance Authority,
6.75s, 2014 $ 500 $ 507,530
AA Pennsylvania Housing Finance Authority,
6.4s, 2016 500 497,005
AA Pennsylvania Housing Finance Authority,
6.65s, 2021 250 251,630
------------
$ 1,256,165
----------------------------------------------------------------------------
Multi-Family Housing Revenue - 0.9%
NR Montgomery, PA, Redevelopment Authority
(KBF Associates), 6.5s, 2025 $ 250 $ 223,135
----------------------------------------------------------------------------
Insured Health Care Revenue - 8.2%
AAA Butler County, PA, Hospital Authority,
Hospital Rev. (Butler Memorial Hospital),
FSA, 5.25s, 2016 $ 400 $ 365,052
AAA Dauphin County, PA, General Authority
Hospital Rev., MBIA, 5.8s, 2002 355 368,962
AAA Delaware County, PA, Authority Hospital
Rev. (Chester Medical Center), MBIA,
5.3s, 2020 500 445,980
AAA Lehigh County, PA, Hospital Rev. (Lehigh
Valley Hospital), MBIA, 7s, 2016 250 276,878
NR Philadelphia, PA, Hospitals & Higher
Education Facilities Authority, Hospital
Rev. (Agnes Medical Center), 7.25s, 2031 500 522,900
------------
$ 1,979,772
----------------------------------------------------------------------------
Health Care Revenue - 6.0%
AA- Chester County, PA, Health & Education
Facilities Authority (Main Line Health
System), 5.5s, 2015 $ 335 $ 305,600
AA Philadelphia, PA, Hospitals & Higher
Education Facilities Authority, Hospital
Rev. (Children's Hospital), 5.375s, 2014 500 451,155
A- Philadelphia, PA, Hospitals & Higher
Education Facilities Authority, Hospital
Rev. (Temple University Hospital),
6.625s, 2023 250 245,103
A Sewickley Valley, PA, Hospital Authority
Rev. (Sewickley Valley Hospital),
5.75s, 2016 500 451,855
------------
$ 1,453,713
----------------------------------------------------------------------------
Electric and Gas Utility Revenue - 4.9%
NR Pennsylvania Economic Development Financing
Authority (Northampton Generating),
6.5s, 2013 $ 250 $ 231,495
BBB Philadelphia, PA, Gas Works Rev.,
6.375s, 2014 500 496,300
BBB Philadelphia, PA, Gas Works Rev.,
5.25s, 2015 250 215,197
NR Schuylkill County, PA, Industrial
Development Authority, Resource Recovery
Rev., 6.5s, 2010 240 225,089
------------
$ 1,168,081
----------------------------------------------------------------------------
Water and Sewer Utility Revenue - 7.9%
AAA Bethlehem, PA, Authority, Water Rev., MBIA,
5.2s, 2021 $ 250 $ 220,540
AAA Highland, PA, Sewer & Water Rev., FSA,
5.35s, 2013 500 461,855
AAA Lancaster, PA, Sewer Authority, FGIC,
6.85s, 2011 250 260,862
AAA Meadville, PA, Area Water Authority, FSA,
5.125s, 2014 250 224,900
AAA Philadelphia, PA, Water & Wastewater Rev.,
FSA, 5.75s, 2013 300 287,196
AAA Philadelphia, PA, Water & Wastewater Rev.,
MBIA, 5.25s, 2023 500 437,615
------------
$ 1,892,968
----------------------------------------------------------------------------
Turnpike Revenue - 1.9%
A Commonwealth of Puerto Rico, Highway &
Transportation Authority, 5.5s, 2013 $ 500 $ 463,470
----------------------------------------------------------------------------
Airport and Port Revenue - 3.3%
AAA Allegheny County, PA, Airport Rev. (Greater
Pittsburgh International Airport), FGIC,
7.75s, 2019 $ 750 $ 791,212
----------------------------------------------------------------------------
Sales and Excise Tax Revenue - 2.0%
AAA Pennsylvania Intergovernmental Coop
Authority (City of Philadelphia Funding
Project), MBIA, 5.6s, 2015 $ 500 $ 476,095
----------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 5.2%
A- Erie County, PA, Industrial Development
Authority (International Paper Co.),
7.625s, 2018 $ 250 $ 269,777
NR Hampden, PA, Industrial Development
Authority, 5.75s, 2008 250 233,233
A New Morgan, PA, Industrial Development Rev.
(Morgan Landfill Co.), 6.5s, 2019 500 495,140
BBB- Pennsylvania Economic Development Rev.,
7.6s, 2020 250 263,472
------------
$ 1,261,622
----------------------------------------------------------------------------
Universities - 11.0%
AAA Allegheny County, PA, Higher Education
Building Authority Rev. (Community
College), CGIC, 5s, 2010 $ 500 $ 453,035
AAA Northampton County, PA, Higher Education
Authority Rev. (LaFayette College), FGIC,
5s, 2015 690 602,984
AAA Northampton County, PA, Higher Education
Authority Rev. (Lehigh University), MBIA,
5.75s, 2018 250 239,098
AA- Pennsylvania State University, 5.5s, 2016 500 467,175
AA- Pennsylvania State University, 5.1s, 2018 250 220,160
AAA State of Pennsylvania, Higher Education
Facilities Authority, 5.5s, 2020 250 231,030
AA- State of Pennsylvania, Higher Education
Facilities Authority (University of
Pennsylvania), 7s, 2008 400 447,976
------------
$ 2,661,458
----------------------------------------------------------------------------
Other - 7.1%
BBB- Pennsylvania Convention Center Authority,
6.75s, 2019 $ 250 $ 250,535
A State of Pennsylvania Finance Authority
Rev. (Municipal Capital Improvement
Program), 6.6s, 2009 500 518,215
AAA State of Pennsylvania, Industrial
Development Authority Rev., 7s, 2007 300 336,459
AAA State of Pennsylvania, Industrial
Development Authority Rev., AMBAC,
5.8s, 2009 400 402,096
AAA State of Pennsylvania, Industrial
Development Authority Rev., 6s, 2012 200 201,142
------------
$ 1,708,447
------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $23,188,488) $ 23,355,509
------------------------------------------------------------------------------
Floating Rate Demand Notes - 3.3%
------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development
Authority Rev. (Presbyterian University
Hospital), due 3/01/20 $ 700 $ 700,000
Delaware County, PA, Industrial Development
Authority, Airport Facilities Rev.
(Parcel Service), due 12/01/15 100 100,000
----------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 800,000
----------------------------------------------------------------------------
Total Investments (Identified Cost, $23,988,488) $ 24,155,509
Other Assets, Less Liabilities - (0.2)% (46,451)
------------------------------------------------------------------------------
Net Assets - 100.0% $ 24,109,058
------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
MFS SOUTH CAROLINA MUNICIPAL BOND FUND
Municipal Bonds - 96.7%
----------------------------------------------------------------------------
S&P Bond
Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
----------------------------------------------------------------------------
General Obligation - 5.5%
AA Charleston County, SC, 5.5s, 2014 $2,250 $ 2,112,615
A Commonwealth of Puerto Rico, 5.25s, 2018 500 437,365
AAA Horry County, SC, School District, FSA,
4.8s, 2004 2,215 2,127,729
AA- North Charleston, SC, 5.875s, 2010 780 781,638
A Williamsburg County, SC, School District,
7.8s, 2003 200 208,706
A Williamsburg County, SC, School District,
7.9s, 2005 250 261,122
A Williamsburg County, SC, School District,
7.9s, 2006 275 287,111
A Williamsburg County, SC, School District,
7.9s, 2007 300 313,158
AAA York County, SC, AMBAC, 5s, 2011 3,940 3,549,704
------------
$ 10,079,148
----------------------------------------------------------------------------
State and Local Appropriation - 4.7%
AAA Berkeley County, SC, School District,
AMBAC, 6.3s, 2016 $1,800 $ 1,842,948
AAA Lexington County, SC, School District No.
1, Certificates of Participation (Gilbert
Middle School), MBIA, 6.65s, 2012 1,000 1,045,290
BBB+ Myrtle Beach, SC, Public Finance Corp.,
Certificates of Participation (Convention
Center), 6.875s, 2017 2,500 2,541,750
AAA North Charleston, SC, Certificates of
Participation (Coliseum), FGIC, 6s, 2016 1,355 1,354,133
NR Williamsburg County, SC, School District
Public Facilities Corp., Certificates of
Participation, 7.5s, 2006 175 169,696
NR Williamsburg County, SC, School District
Public Facilities Corp., Certificates of
Participation, 7.5s, 2007 190 183,950
NR Williamsburg County, SC, School District
Public Facilities Corp., Certificates of
Participation, 7.5s, 2008 205 198,184
NR Williamsburg County, SC, School District
Public Facilities Corp., Certificates of
Participation, 7.5s, 2009 220 212,399
NR Williamsburg County, SC, School District
Public Facilities Corp., Certificates of
Participation, 7.5s, 2012 270 251,397
NR Williamsburg County, SC, School District
Public Facilities Corp., Certificates of
Participation, 7.5s, 2014 315 292,247
NR Williamsburg County, SC, School District
Public Facilities Corp., Certificates of
Participation, 7.5s, 2018 635 585,794
------------
$ 8,677,788
----------------------------------------------------------------------------
Refunded and Special Obligation - 22.1%
NR Anderson County, SC, 7.75s, 2008 $ 500 $ 542,230
AA Charleston County, SC, 6.5s, 2011 1,315 1,426,683
AAA Charleston County, SC, Certificates of
Participation (Charleston Public
Facilities Corp.), MBIA, 7.1s, 2011 2,000 2,243,700
AA Columbia, SC, Waterworks & Sewer Rev.,
0s, 2004 1,500 936,000
AA Columbia, SC, Waterworks & Sewer Rev.,
0s, 2006 2,045 1,110,292
AA Commonwealth of Puerto Rico, Public
Improvement, 6.8s, 2021 425 476,748
AAA Greenville Hospital System, SC, Hospital
Facilities Rev., "A", FGIC, 7.8s, 2015 1,950 2,151,532
AAA Greenville Hospital System, SC, Hospital
Facilities Rev., "B", FGIC, 7.8s, 2015 1,500 1,655,025
AAA Greenwood County, SC, Hospital Rev. (Self
Memorial Hospital), BIG, 8.25s, 2007 500 550,300
AAA Greenwood County, SC, Hospital Rev. (Self
Memorial Hospital), BIG, 8.375s, 2017 1,000 1,103,490
AAA Laurens, SC, Utility Systems Rev., FGIC,
7.625s, 2018 1,100 1,210,572
AAA Lexington County, SC, School District No.
1, Certificates of Participation (White
Knoll Middle School), CGIC, 7.65s, 2009 1,400 1,560,902
AAA Myrtle Beach, SC, Water & Sewer Rev., MBIA,
6s, 2015 1,780 1,852,482
AAA Myrtle Beach, SC, Water & Sewer Rev., MBIA,
6s, 2020 1,750 1,821,260
AAA North Charleston, SC, Sewer Rev., MBIA,
7.75s, 2018 1,250 1,385,087
AAA Puerto Rico Aqueduct & Sewer Authority,
9s, 2009 750 965,977
AA Puerto Rico Highway & Transportation
Authority Rev., 6.625s, 2018 300 333,369
AA Richland County, SC, 6.25s, 2010 1,260 1,341,736
AAA Richland County, SC, Certificates of
Participation, FGIC, 0s, 2005 1,160 673,067
AAA Richland County, SC, Certificates of
Participation, FGIC, 0s, 2006 1,160 630,135
AAA Richland County, SC, Certificates of
Participation, FGIC, 0s, 2007 1,160 592,203
NR South Carolina Jobs, Economic Development
Authority (Carolina Hospital System
Project), 7.55s, 2022 2,000 2,312,860
AAA South Carolina Public Service Authority,
"B", 7.1s, 2021 2,000 2,246,020
AAA South Carolina Public Service Authority,
"C", 7.1s, 2021 1,220 1,370,072
AAA South Carolina Public Service Authority
(Santee Cooper), 6.625s, 2031 4,000 4,420,320
AAA South Carolina Public Service Authority,
Electric Rev., MBIA, 7.75s, 2015 3,155 3,294,767
AA- South Carolina Public Service Authority,
Electric Rev., 7.875s, 2021 650 678,886
A- Spartanburg County, SC, Hospital Facilities
Rev. (Mary Black Hospital), 8.25s, 2008 500 560,970
AAA York County, SC, School District No. 3,
MBIA, 7.5s, 2007 575 630,626
AAA York, SC, Water & Sewer Rev., AMBAC,
7.875s, 2013 620 660,567
------------
$ 40,737,878
----------------------------------------------------------------------------
Single Family Housing Revenue - 6.3%
AA South Carolina Housing Authority,
8.6s, 2019 $1,000 $ 1,050,160
AA South Carolina Housing Finance &
Development Authority, 7.55s, 2011 1,750 1,849,645
AA South Carolina Housing Finance &
Development Authority, 7.75s, 2022 2,650 2,791,086
AA South Carolina Housing Finance &
Development Authority, 7.8s, 2022 1,000 1,058,540
AA South Carolina Housing Finance &
Development Authority, 7.9s, 2032 4,610 4,901,767
------------
$ 11,651,198
----------------------------------------------------------------------------
Multi-Family Housing Revenue - 1.1%
AA South Carolina Housing Finance &
Development Authority (Fairway
Apartments), 7.625s, 2033 $1,985 $ 2,100,904
----------------------------------------------------------------------------
Insured Health Care Revenue - 8.1%
AAA Anderson County, SC, Hospital Facilities
Rev. (Anderson Area Medical Center, Inc.),
MBIA, 5.1s, 2006 $2,745 $ 2,613,953
AAA Anderson County, SC, Hospital Facilities
Rev. (Anderson Area Medical Center, Inc.),
MBIA, 5.25s, 2012 1,000 914,960
AAA Charleston County, SC, Hospital Rev.
(Bon Secours Health System Project), FSA,
5.625s, 2025 1,500 1,400,040
AAA Charleston County, SC, Hospital Rev.
(Medical Society Health Project), MBIA,
5.5s, 2019 2,550 2,338,426
AAA Charleston County, SC, Hospital Rev.
(Medical Society Health Project), MBIA,
5s, 2022 2,450 2,066,918
AAA Greenwood County, SC, Hospital Rev. (Self
Memorial Hospital), MBIA, 5.875s, 2017 1,000 970,210
AAA Pickens & Richland Counties, SC, Hospital
Rev. (Baptist Hospital), AMBAC,
5.75s, 2021 3,635 3,423,625
AAA Richland County, SC, Hospital Facilities
Rev. (Providence Hospital), CGIC,
5.25s, 2010 1,200 1,108,536
------------
$ 14,836,668
----------------------------------------------------------------------------
Health Care Revenue - 7.5%
NR Charleston County, SC, First Mortgage Rev.
(Driftwood Health Care), 12.5s, 2014 $2,115 $ 2,185,810
NR Greenville County, SC, First Mortgage Rev.
(Chestnut Hill), 10.125s, 2016 1,950 2,035,586
AA- Greenville Hospital System, SC, Hospital
Facilities Rev., 6s, 2020 5,400 5,111,802
NR Horry County, SC, Hospital Facilities Rev.
(Conway Hospital), 6.75s, 2012 4,500 4,483,575
------------
$ 13,816,773
----------------------------------------------------------------------------
Electric and Gas Utility Revenue - 10.8%
A Colleton & Dorchester Counties, SC,
Pollution Control Rev., 6.6s, 2014 $3,000 $ 3,056,520
A Fairfield County, SC, Pollution Control
Rev. (South Carolina Electric Co.),
6.5s, 2014 1,250 1,290,938
AAA Piedmont Municipal Power Agency, SC,
Electric Rev., FGIC, 6.25s, 2021 4,600 4,780,550
AAA Piedmont Municipal Power Agency, SC,
Electric Rev., FGIC, 5s, 2022 2,300 1,951,987
A- Puerto Rico Electric Power Authority,
5.5s, 2020 1,000 901,690
AAA South Carolina Public Service Authority,
6.64s, 2013++ 3,000 2,656,620
AAA South Carolina Public Service Authority,
MBIA, 5.5s, 2021 1,430 1,318,231
AAA South Carolina Public Service Authority,
FGIC, 5.875s, 2023 4,000 3,885,280
------------
$ 19,841,816
----------------------------------------------------------------------------
Water and Sewer Utility Revenue - 14.8%
AAA Cayce, SC, Waterworks & Sewer Rev., AMBAC,
5.25s, 2015 $1,500 $ 1,354,155
AA- Charleston County, SC, Waterworks & Sewer
Rev., 6s, 2012 2,500 2,516,850
AAA Charleston County, SC, Waterworks & Sewer
Rev., MBIA, 5s, 2022 3,150 2,699,046
AA Columbia, SC, Waterworks & Sewer Rev.,
0s, 2005 2,245 1,298,867
AA Columbia, SC, Waterworks & Sewer Rev.,
0s, 2006 9,330 5,052,289
AA Columbia, SC, Waterworks & Sewer Rev.,
5.375s, 2012 3,500 3,286,780
NR Laurens County, SC, Water & Sewer
Commission, Sewer System Rev., 5.5s, 2014 1,080 985,003
AAA Myrtle Beach, SC, Water & Sewer Rev., MBIA,
5.5s, 2013 1,000 941,130
AAA Rock Hill, SC, Utility Systems Rev., AMBAC,
5s, 2020 1,285 1,106,899
A+ South Carolina Resources Authority (Local
Government Program), 7.25s, 2020 3,000 3,197,310
AAA St. Andrews, SC, Public Services District,
Sewer System Rev., FGIC, 7.75s, 2018 1,000 1,071,650
AAA Union, SC, Combined Public Utility System
Rev., FGIC, 5s, 2021 1,650 1,431,408
AAA Western Carolina Regional Sewer Authority,
AMBAC, 0s, 2007 4,400 2,230,492
------------
$ 27,171,879
----------------------------------------------------------------------------
Turnpike Revenue - 1.3%
A Commonwealth of Puerto Rico, Highway &
Tranportation Authority, 5.5s, 2013 $1,500 $ 1,390,410
A Commonwealth of Puerto Rico, Highway &
Transportation Authority, 5.5s, 2015 1,000 922,890
------------
$ 2,313,300
----------------------------------------------------------------------------
Airport and Port Revenue - 1.0%
AAA Charleston County, SC, Airport District,
MBIA, 5s, 2013 $2,000 $ 1,771,320
----------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 12.5%
NR Aiken County, SC, Industrial Rev.
(Kimberly-Clark Project), 8.92s, 2005 $ 300 $ 311,700
A+ Calhoun, SC, Solid Waste Disposal Rev.
(Eastman Kodak), 6.75s, 2017 1,000 1,049,460
A Charleston County, SC, Resource Recovery
Rev. (Foster Wheeler), 9.25s, 2010 1,750 1,927,100
BBB+ Chester County, SC, Industrial Rev.
(Springs Industries, Inc.), 7.35s, 2014 1,000 1,048,930
BBB+ Chester County, SC, Industrial Rev.
(Springs Industries, Inc.), 7.8s, 2014 1,025 1,097,529
AA- Darlington County, SC, Industrial
Development Rev. (Nucor Corp.),
5.75s, 2023 1,000 904,440
NR Fairfield County, SC, Industrial Rev. (Rite
Aid, Inc.), 7.9s, 2016 2,950 3,080,006
AA Florence County, SC, Pollution Control
Facility Rev. (E.I. du Pont de Nemours),
6.35s, 2022 1,000 1,019,980
NR Greenville County, SC, Industrial Rev.
(Kroger Co.), 7.85s, 2015 500 540,075
NR Lexington County, SC, Industrial Rev. (J.B.
White & Co.), 8s, 2005 700 740,978
A- Oconee County, SC, Pollution Control Rev.
(Duke Power Co.), 5.8s, 2014 2,975 2,971,966
A- Oconee County, SC, Pollution Control Rev.
(Duke Power Co.), 7.5s, 2017 1,000 1,096,650
A- Richland County, SC, Pollution Control Rev.
(Union Camp Corp.), 6.55s, 2020 1,800 1,844,262
A- Richland County, SC, Solid Waste Facilities
Rev. (Union Camp Corp.), 6.75s, 2022 2,000 2,046,600
AA- York County, SC, Industrial Rev. (Hoechst
Celanese), 5.7s, 2024 3,725 3,347,546
------------
$ 23,027,222
----------------------------------------------------------------------------
Universities - 0.6%
AAA Coastal Carolina University, 6.875s, 2026 $1,000 $ 1,062,340
----------------------------------------------------------------------------
Other - 0.4%
AAA Puerto Rico Telephone Authority Rev.,
AMBAC, 4.47s, 2004 (Interest Rate Swap)(S) $1,000 $ 823,820
------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $170,924,735) $177,912,054
------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.7%
------------------------------------------------------------------------------
Uinta County, WY, Pollution Control Rev.
(Chevron Corp.), due 8/15/20 $2,400 $ 2,400,000
Uinta County, WY, Pollution Control Rev.
(Chevron Corp.), due 12/01/22 800 800,000
------------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 3,200,000
------------------------------------------------------------------------------
Total Investments (Identified Cost, $174,124,735) $181,112,054
Other Assets, Less Liabilities - 1.6% 2,896,587
------------------------------------------------------------------------------
Net Assets - 100.0% $184,008,641
------------------------------------------------------------------------------
(S) Indexed security.
++ Inverse floating rate security.
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
MFS VIRGINIA MUNICIPAL BOND FUND
Municipal Bonds - 96.4%
----------------------------------------------------------------------------
S&P Bond Principal
Rating Amount
(Unaudited) Issuer (000 Omitted) Value
----------------------------------------------------------------------------
General Obligation - 8.7%
AA Chesapeake, VA, Public Improvement,
5.25s, 2008 $ 3,300 $ 3,161,268
AAA Fairfax County, VA, 5.375s, 2009 3,000 2,922,060
AAA Fairfax County, VA, 5.2s, 2012 3,150 2,948,684
NR Lebanon, VA, 7.6s, 2005 375 384,915
NR Lebanon, VA, 7.75s, 2010 310 318,993
AA- Newport News, VA, 4.95s, 2007 2,670 2,485,957
AA Norfolk, VA, 5.5s, 2011 3,140 3,029,660
AA- Portsmouth, VA, 6.375s, 2012 1,555 1,603,298
AA Richmond, VA, 0s, 2006 1,000 538,330
AA Richmond, VA, 0s, 2006 2,500 1,345,825
AA Richmond, VA, 0s, 2007 5,280 2,653,200
AA Richmond, VA, 0s, 2008 2,000 942,120
AA Richmond, VA, 0s, 2008 5,270 2,470,207
AA Richmond, VA, 0s, 2009 5,175 2,219,609
AA Richmond, VA, 5.7s, 2016 2,000 1,898,100
AA Richmond, VA, 5.5s, 2022 2,000 1,822,780
AAA State of Virginia (Higher Educational
Institute), 0s, 1995 725 719,512
AAA State of Virginia (Higher Educational
Institute), 0s, 1996 1,000 947,490
AAA State of Virginia (Higher Educational
Institute), 0s, 1998 1,295 1,115,435
AAA State of Virginia (Higher Educational
Institute), 0s, 1999 1,300 1,063,049
AA State of Virginia, Public School Authority,
6.5s, 2013 1,875 1,962,788
A Suffolk, VA, 6.5s, 2006 1,250 1,309,000
AA Virginia Beach, VA, 5.45s, 2011 1,755 1,686,713
------------
$ 39,548,993
----------------------------------------------------------------------------
State and Local Appropriation - 5.5%
NR Chesterfield County, VA, Industrial
Development Authority, Public Facilities
Lease Rev. (Correctional Enterprises),
7.5s, 2008 $ 1,720 $ 1,726,777
AA Henrico County, VA, Industrial Development
Authority Rev., 6.5s, 2010 5,000 5,257,700
NR New Kent County, VA, Industrial Development
Authority, Public Facilities Lease Rev.
(New Kent County Courthouse), 7.5s, 2011 700 742,714
A Puerto Rico Public Buildings Authority,
5.385s, 2016 (Municipal Swap)(S) 6,500 5,665,075
AAA Virginia Public Building Authority, MBIA,
0s, 2007 13,305 6,626,023
AAA Virginia Public Building Authority, MBIA,
0s, 2008 10,650 4,947,564
------------
$ 24,965,853
----------------------------------------------------------------------------
Refunded and Special Obligation - 20.7%
NR Arlington County, VA, Industrial
Development Authority (Arlington
Hospital), 7.125s, 2021 $ 4,450 $ 5,013,993
AAA Bedford, VA, Electric Systems Rev., AMBAC,
8.875s, 2015 2,000 2,054,820
AAA Bedford, VA, Electric Systems Rev., AMBAC,
9s, 2025 1,000 1,027,700
NR Carroll County, VA, Solid Waste Authority
Rev., 7.5s, 2006 2,265 2,584,637
NR Chesapeake, VA, Certificates of
Participation, 7.75s, 2006 1,250 1,322,512
NR Chesapeake, VA, Industrial Development
Authority Rev. (Sentara Life Care Corp.),
10s, 2012 1,130 1,279,013
AA Chesapeake, VA, Public Improvement,
6.75s, 2008 2,500 2,715,375
AAA Chesterfield County, VA, Water & Sewer
Rev., FGIC, 9.125s, 2010 3,250 3,402,392
AAA Commonwealth of Puerto Rico, 7.9s, 2004 1,660 1,780,217
AAA Fairfax County, VA, Water Authority Rev.,
7.25s, 2027 3,090 3,428,417
AAA Frederick-Winchester, VA, Sewer System
Rev., AMBAC, 9.375s, 2015 1,500 1,580,970
AA- Hampton, VA, Public Improvement,
6.625s, 2010 1,500 1,618,605
AAA Henrico County, VA, Water & Sewer Rev.,
MBIA, 7.875s, 2013 3,500 3,693,900
AAA Nelson County, VA, Service Authority, Water
& Sewer Rev., FGIC, 7.875s, 2018 1,000 1,051,260
NR Newport News, VA, 6.5s, 2008 875 951,344
NR Newport News, VA, 6.5s, 2010 2,205 2,397,386
NR Newport News, VA, 6.5s, 2011 2,325 2,527,856
AA Norfolk, VA, Industrial Development
Authority (Sentara Hospital), 7.875s, 2008 1,000 1,113,050
AA Norfolk, VA, Industrial Development
Authority (Sentara Hospital), 7.9s, 2018 2,000 2,227,720
NR Norfolk, VA, Industrial Development
Authority (Sentara Life Care Corp.),
10s, 2012 4,320 4,889,678
AA- Portsmouth, VA, 6.9s, 2019 1,500 1,647,150
AAA Puerto Rico Aqueduct & Sewer Authority,
9s, 2009 4,150 5,345,075
AAA Puerto Rico Aqueduct & Sewer Authority,
10.25s, 2009 400 549,272
AAA Puerto Rico Electric Power Authority Rev.,
9.125s, 2015 1,500 1,562,595
AAA Puerto Rico Highway & Transportation
Authority, Highway Rev., 6.5s, 2022 1,750 1,931,493
AAA Puerto Rico Industrial, Medical &
Environmental Pollution Control Facilities
Finance Authority Rev., 9.75s, 2025 1,345 1,395,303
AAA Puerto Rico Public Buildings Authority,
8.875s, 2012 3,500 3,610,670
AAA Roanoke, VA, Industrial Development
Authority, Hospital Rev. (Memorial
Hospital), MBIA, 7.25s, 2010 1,750 1,956,185
A+ Roanoke, VA, Industrial Development
Authority, Hospital Rev. (Memorial
Hospital), 7.5s, 2020 1,245 1,405,854
NR Salem, VA, 8.65s, 2003 525 541,097
AAA Southeastern Public Service Authority, VA,
Solid Waste System Rev., 9.25s, 2015 2,750 2,960,898
AAA Southeastern Public Service Authority, VA,
Solid Waste System Rev., 10.5s, 2015 5,600 5,792,248
AAA State of Virginia, Public School Authority,
8.5s, 2009 500 541,490
AAA University of Virginia, Hospital Rev.,
9s, 2013 4,165 4,280,745
AAA Virginia Beach, VA, Certificates of
Participation (Judicial Center Project),
FGIC, 7.25s, 2010 4,955 5,552,474
A+ Virginia Beach, VA, Water & Sewer Rev.,
6.625s, 2017 2,400 2,627,784
NR Virginia College Building Authority
(Hampton University), 7.75s, 2014 750 835,973
AA Virginia Resources Authority, Water & Sewer
System Rev., 8.75s, 2003 500 616,115
AA Virginia Resources Authority, Water & Sewer
System Rev., 7.875s, 2018 800 888,872
NR Virginia Resources Authority, Water & Sewer
System Rev., 7.5s, 2020 1,180 1,306,590
AAA Virginia Transportation Board, Contract
Rev. (Route 28), 7.7s, 2008 2,175 2,387,846
------------
$ 94,396,574
----------------------------------------------------------------------------
Single Family Housing Revenue - 3.0%
AAA Puerto Rico Housing Finance Corp., GNMA,
7.8s, 2021 $ 45 $ 47,189
AAA Virginia Housing Development Authority,
FHA, 0s, 2010 560 125,390
NR Virginia Housing Development Authority,
6.02s, 2019++ 7,500 6,604,050
A+ Virginia Housing Development Authority,
7.1s, 2022 2,000 2,085,920
AA+ Virginia Housing Development Authority,
7.8s, 2028 2,000 2,109,020
AA+ Virginia Housing Development Authority,
0s, 2029 3,615 225,937
AA+ Virginia Housing Development Authority,
7.8s, 2038 2,500 2,622,500
------------
$ 13,820,006
----------------------------------------------------------------------------
Multi-Family Housing Revenue - 5.4%
NR Alexandria, VA, Redevelopment & Housing
Authority (Jefferson Village Apartments),
9s, 2018 $ 4,000 $ 4,114,520
NR Fairfax County, VA, Redevelopment & Housing
Authority (Little River Glen),
8.95s, 2020 3,880 3,990,890
AAA Harrisonburg, VA, Redevelopment & Housing
Authority (Battery Heights), GNMA,
7.375s, 2028 3,540 3,732,187
NR Norfolk, VA, Redevelopment & Housing
Authority (Dockside Apartments),
7.375s, 2028 2,000 2,114,400
NR Virginia Beach, VA, Development Authority
(Lake Point Associates Project),
12.125s, 2015 6,300 6,425,559
AA Virginia Housing Development Authority,
6.5s, 2013 2,300 2,310,327
AA Virginia Housing Development Authority,
5.875s, 2017 2,000 1,914,980
------------
$ 24,602,863
----------------------------------------------------------------------------
Insured Health Care Revenue - 6.0%
NR Albemarle County, VA, Industrial
Development Authority, First Mortgage
Rev., FHA, 8.9s, 2026 $ 2,150 $ 2,454,118
AAA Augusta County, VA, Industrial Development
Authority (Augusta Hospital Corp.), AMBAC,
5.125s, 2021 3,000 2,621,790
AAA Chesapeake, VA, Hospital Authority, First
Mortgage Rev. (Chesapeake General
Hospital), MBIA, 5.3s, 2008 1,500 1,436,025
AAA Danville, VA, Industrial Development
Authority (Danville Regional Medical
Center), FGIC, 6.5s, 2024 3,000 3,096,750
NR Front Royal-Warren County, VA, Industrial
Development Authority, FHA, 9.45s, 2024 1,000 1,099,050
AAA Henrico County, VA, Industrial Development
Authority Rev. (Bon Secours), FSA,
7.366s, 2027++ 8,700 8,301,366
AAA Peninsula Ports Authority, VA, Hospital
Facilities Rev. (Wittaker Memorial
Hospital), FHA, 8.7s, 2023 2,100 2,239,461
AAA Roanoke, VA, Industrial Development
Authority, Hospital Rev. (Roanoke Memorial
Hospital), MBIA, 6.125s, 2017 6,000 6,061,080
------------
$ 27,309,640
----------------------------------------------------------------------------
Health Care Revenue - 8.3%
NR Albemarle County, VA, Industrial
Development Authority (Martha Jefferson
Hospital), 5.5s, 2015 $ 2,000 $ 1,795,300
NR Albemarle County, VA, Industrial
Development Authority (Martha Jefferson
Hospital), 5.5s, 2020 1,000 876,020
NR Arlington County, VA, Industrial
Development Authority, Hospital Facilities
Rev. (Arlington Hospital), 5.3s, 2015 8,500 7,438,860
AA- Chesapeake, VA, Industrial Development
Authority (Sentara Life Care Corp.),
7.875s, 2008 1,000 1,098,200
AA- Chesapeake, VA, Industrial Development
Authority (Sentara Life Care Corp.),
8s, 2018 4,000 4,396,480
NR Fairfax, Fauquier & Loudoun Counties,VA,
Health Center Commission, Nursing Home
Rev., 9s, 2020 1,930 1,988,035
A+ Henrico County, VA, Industrial Development
Authority (St. John's Hospital),
8.875s, 2015 975 1,029,200
NR Hopewell County, VA, Hospital Authority
(John Randolph Hospital), 8.85s, 2013 4,760 4,887,711
A+ Lynchburg, VA, Industrial Development
Authority (Central Health, Inc.),
8.125s, 2016 1,400 1,516,060
NR Martinsville, VA, Industrial Development
Authority (Beverly Enterprises),
6.75s, 2004 1,230 1,157,455
AA- Norfolk, VA, Industrial Development
Authority (Sentara Life Corp.), "A",
7.875s, 2008 1,000 1,091,710
AA- Norfolk, VA, Industrial Development
Authority (Sentara Life Corp.), "A",
7.9s, 2018 2,000 2,134,700
BBB+ Peninsula Ports Authority, VA, Hospital
Facilities Rev. (Mary Immaculate
Hospital), 7.375s, 2017 3,000 3,080,760
A Suffolk, VA, Industrial Development
Authority (Louise Obici Memorial
Hospital), 7.875s, 2005 2,060 2,184,692
A+ Virginia Beach, VA, Hospital Facilities
Rev. (Virginia Beach General Hospital),
8.75s, 2017 2,875 3,206,372
------------
$ 37,881,555
----------------------------------------------------------------------------
Electric and Gas Utility Revenue - 3.8%
A+ Halifax County, VA, Industrial Rev.
Authority (Old Dominion Electric
Cooperative Project), 6s, 2022 $ 8,500 $ 8,135,265
AAA Southeastern Public Service Authority, VA,
Solid Waste System Rev., MBIA, 5.15s, 2009 3,000 2,805,990
A- Southeastern Public Service Authority, VA,
Solid Waste System Rev., 6s, 2017 6,750 6,354,248
------------
$ 17,295,503
----------------------------------------------------------------------------
Water and Sewer Utility Revenue - 8.6%
A+ Chesapeake, VA, Water & Sewer, 5.125s, 2021 $ 1,200 $ 1,031,352
AA Chesterfield County, VA, Water & Sewer
Rev., 0s, 2004 5,025 2,963,695
AA Chesterfield County, VA, Water & Sewer
Rev., 0s, 2005 4,815 2,660,094
AA Chesterfield County, VA, Water & Sewer
Rev., 0s, 2006 4,000 2,065,920
AA Chesterfield County, VA, Water & Sewer
Rev., 0s, 2007 6,000 2,909,160
AA Chesterfield County, VA, Water & Sewer
Rev., 0s, 2008 6,135 2,790,137
AA Chesterfield County, VA, Water & Sewer
Rev., 0s, 2009 6,135 2,597,927
AA Chesterfield County, VA, Water & Sewer
Rev., 0s, 2010 9,005 3,567,781
AA- Fairfax County, VA, Water Authority Rev.,
6s, 2022 11,400 11,250,432
AA- Fairfax County, VA, Water Authority Rev.,
5.75s, 2029 7,100 6,765,732
AA Virginia Resources Authority, Sewer Systems
Rev., 9.3s, 2005 250 260,800
AA Virginia Resources Authority, Water & Sewer
System Rev. (Campell Utilities & Service
Co.), 5.125s, 2013 500 438,900
------------
$ 39,301,930
----------------------------------------------------------------------------
Turnpike Revenue - 2.6%
AAA Chesapeake Bay, VA, Bridge & Tunnel
Authority, FGIC, 0s, 2005 $ 4,535 $ 2,543,273
AAA Chesapeake Bay, VA, Bridge & Tunnel
Authority, MBIA, 5.75s, 2025 4,000 3,781,280
AAA Richmond, VA, Metropolitan Authority, FGIC,
5.75s, 2022 2,000 1,897,180
AA State of Virginia, Transportation Board,
6.5s, 2018 3,500 3,637,900
------------
$ 11,859,633
----------------------------------------------------------------------------
Airport and Port Revenue - 6.5%
AAA Metropolitan Washington, D.C., Airport
Rev., MBIA, 6.625s, 2012 $ 3,000 $ 3,101,790
AA- Metropolitan Washington, D.C., Airport
Rev., 7.6s, 2014 5,030 5,480,034
AAA Metropolitan Washington, D.C., Airport
Rev., BIG, 8.2s, 2018 3,500 3,896,200
AAA Metropolitan Washington, D.C., Airport
Rev., MBIA, 5.75s, 2020 10,000 9,378,200
AA- Peninsula Airport Commission, VA,
7.3s, 2021 2,400 2,630,568
A+ Virginia Port Authority, 8.2s, 2008 4,500 4,974,120
------------
$ 29,460,912
----------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 4.0%
A- Halifax, VA, Industrial Development
Authority (Tandy Corp.), 8.25s, 2008 $ 3,500 $ 3,803,065
A+ Henrico County, VA, Industrial Development
Authority (St. Mary's Hospital), 7.5s, 2007 870 942,810
A- Isle Wight County, VA, Industrial
Development Authority (Union Camp Corp.),
6.55s, 2024 8,000 8,104,960
NR Lynchburg, VA, Industrial Development
Authority (Kroger Co.), 7.9s, 2011 1,000 1,074,420
NR Virginia Beach, VA, Development Authority
(Beverly Enterprises), 10s, 2010 1,400 1,564,528
BBB West Point, VA, Industrial Development
Authority (Chesapeake Corp.), 6.375s, 2019 2,600 2,487,290
------------
$ 17,977,073
----------------------------------------------------------------------------
Universities - 6.5%
A+ Albemarle County, VA, Industrial
Development Authority, Health Services
Rev. (University of Virginia Health
Services Foundation), 6.5s, 2022 $ 1,000 $ 997,480
A- Hampton Roads, VA, Medical College,
6.875s, 2016 2,000 2,076,860
A- Hampton Roads, VA, Medical College,
6.875s, 2016 1,500 1,557,645
NR Loudoun County, VA, Industrial Development
Authority, University Facilities Rev.
(George Washington University),
6.25s, 2012 2,710 2,742,005
NR Rockingham County, VA, Industrial
Development Authority Rev. (Bridgewater
College), 6s, 2023 6,610 6,071,484
AA+ University of Virginia, University Rev.,
5.375s, 2014 5,690 5,373,522
AA+ University of Virginia, University Rev.,
5.2s, 2015 2,000 1,822,580
AA+ University of Virginia, University Rev.,
5.375s, 2020 1,520 1,404,693
AA Virginia College Building Authority
(Washington & Lee University), 5.75s, 2019 5,000 4,866,950
BBB- Virginia College Building Authority,
Educational Facilities Rev. (Marymount
University), 7s, 2022 2,500 2,571,800
------------
$ 29,485,019
----------------------------------------------------------------------------
Other - 6.8%
NR Danville, VA, Industrial Development
Authority, Industrial Development Rev.
(Piedmont Mall), 8s, 2013 $ 3,180 $ 3,067,396
AA Fairfax County, VA, Economic Development
Authority Rev., 5.5s, 2014 9,250 8,736,163
AA Fairfax County, VA, Economic Development
Authority Rev., 5.5s, 2018 9,240 8,621,475
NR Pittsylvania County, VA, Industrial
Development Authority Rev., 7.5s, 2014 8,000 8,097,040
AA Virginia Public Building Authority,
5.4s, 2008 2,340 2,278,364
------------
$ 30,800,438
----------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $420,686,856) $438,705,992
----------------------------------------------------------------------------
Floating Rate Demand Notes - 1.9%
----------------------------------------------------------------------------
Peninsula Ports Authority, VA (Shell Oil
Co.), due 12/01/05 $ 7,700 $ 7,700,000
Uinta County, WY, Pollution Control Rev.
(Chevron Corp.), due 8/15/20 700 700,000
----------------------------------------------------------------------------
Total Floating Rate Demand Notes, at Identified Cost $ 8,400,000
----------------------------------------------------------------------------
Call Options Purchased - 0.2%
----------------------------------------------------------------------------
Principal Amount
of Contracts
Issuer/Expiration Date/Strike Price (000 Omitted)
----------------------------------------------------------------------------
Georgia Municipal Electric Authority/2003/102 $ 20 $ 502,600
State of New Jersey, "D"/2003/102 5 380,750
----------------------------------------------------------------------------
Total Call Options Purchased (Premiums Paid, $576,800) $ 883,350
----------------------------------------------------------------------------
Total Investments (Identified Cost, $429,663,656) $447,989,342
Other Assets, Less Liabilities - 1.5% 7,005,023
----------------------------------------------------------------------------
Net Assets - 100.0% $454,994,365
----------------------------------------------------------------------------
(S) Indexed security.
++ Inverse floating rate security.
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
MFS WEST VIRGINIA MUNICIPAL BOND FUND
Municipal Bonds - 96.4%
----------------------------------------------------------------------------
S&P Bond
Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
----------------------------------------------------------------------------
General Obligation - 7.1%
AAA Cabell, WV, Board of Education, MBIA, 6s,
2006 $ 500 $ 518,190
NR Charleston, WV, Public Improvement, 7.2s,
2008 1,240 1,401,770
NR Charleston, WV, Public Improvement, 7.2s,
2009 1,140 1,283,914
AAA Jefferson County, WV, Board of Education,
FGIC, 6.85s, 2009 1,680 1,838,474
AAA Monongalia County, WV, Board of Education,
MBIA, 7s, 2005 500 558,845
AAA Ohio County, WV, Board of Education, MBIA,
5.25s, 2018 1,180 1,090,662
AAA State of West Virginia, Water Development
Authority Rev., FSA, 6.2s, 2024 3,000 3,015,750
------------
$ 9,707,605
----------------------------------------------------------------------------
State and Local Appropriation - 7.2%
A Puerto Rico Public Buildings Authority,
5.385s, 2016 (Municipal
Swap)(S) $2,000 $ 1,743,100
AAA West Virginia Building Commission, Lease
Rev. (West Virginia Regional Jail), MBIA,
0s, 2007 3,150 1,540,823
AAA West Virginia Building Commission, Lease
Rev. (West Virginia Regional Jail), MBIA,
0s, 2008 3,050 1,389,275
AAA West Virginia Building Commission, Lease
Rev. (West Virginia Regional Jail), MBIA,
0s, 2009 2,500 1,056,875
AAA West Virginia Building Commission, Lease
Rev. (West Virginia Regional Jail), MBIA,
7s, 2015 1,000 1,068,360
A- West Virginia School Building Authority,
6.75s, 2015 3,000 3,154,290
------------
$ 9,952,723
----------------------------------------------------------------------------
Refunded and Special Obligation - 14.5%
BBB+ Charleston, WV, Parking Rev., 8.5s, 2006 $1,000 $ 1,062,890
AAA Kanawha County, WV, Building Commission
(St. Francis Hospital), 7.5s, 2007 275 320,441
AAA Monongalia County, WV, Hospital Rev. (West
Virginia University Hospitals, Inc.),
MBIA, 9.375s, 2018 2,245 2,308,578
AAA Puerto Rico Aqueduct & Sewer Authority,
9s, 2009 1,500 1,931,955
AAA Puerto Rico Electric Power Authority Rev.,
8s, 2008 1,000 1,117,260
AAA Puerto Rico Highway & Transportation
Authority, Highway Rev., 6.625s, 2018 400 444,492
AAA Puerto Rico Industrial, Medical &
Environmental Pollution Control Facilities
Finance Authority Rev., FHA, 9.75s, 2025 350 363,090
AAA South Charleston, WV, Hospital Rev.
(Herbert J. Thomas Memorial Hospital),
BIG, 8s, 2010 500 557,865
AAA West Virginia Hospital Finance Authority
(Monongalia General Hospital), BIG,
8.6s, 2017 1,000 1,082,090
AAA West Virginia Parkways, Economic
Development & Tourism Authority, FGIC,
0s, 2005 2,250 1,269,405
AAA West Virginia Parkways, Economic
Development & Tourism Authority, FGIC,
0s, 2006 2,500 1,319,300
AAA West Virginia Parkways, Economic
Development & Tourism Authority, FGIC,
0s, 2007 2,000 985,320
AAA West Virginia Parkways, Economic
Development & Tourism Authority, FGIC,
0s, 2008 610 285,480
AAA West Virginia Resources Recovery Authority,
Solid Waste Disposal Rev., BIG,
8.25s, 2009 700 742,903
AAA West Virginia Water Development Authority,
7.1s, 2009 250 284,530
BBB+ West Virginia Water Development Authority,
7.4s, 2019 750 851,468
BBB+ West Virginia Water Development Authority,
8.625s, 2028 750 850,868
BBB+ West Virginia Water Development Authority,
8.125s, 2029 1,750 1,957,095
AAA West Virginia Water Development Authority,
CGIC, 8.125s, 2029 2,015 2,260,507
------------
$ 19,995,537
----------------------------------------------------------------------------
Federally Guaranteed Housing Revenue - 0.6%
AAA Huntington, WV, Housing Corp., Multi-Family
Rev., FNMA, 7.5s, 2024 $ 800 $ 845,640
----------------------------------------------------------------------------
Single Family Housing Revenue - 10.0%
AAA Berkeley, Brookes & Fayette Counties, WV,
FGIC, 9.1s, 2011 $ 90 $ 92,488
NR Berkeley County, WV, Residential Mortgage
Rev., 7.875s, 2012 350 359,842
NR Charles Town, WV, Residential Mortgage
Rev., 6.2s, 2011 1,000 991,430
NR Mason County, WV, Rev., 0s, 2014 1,700 400,452
A+ West Virginia Housing Development Fund,
7.85s, 2014 890 932,916
A+ West Virginia Housing Development Fund,
0s, 2015 4,455 555,895
AA+ West Virginia Housing Development Fund,
7.95s, 2017 2,980 3,180,047
A+ West Virginia Housing Development Fund,
7.2s, 2018 5,000 5,158,400
A+ West Virginia Housing Development Fund,
7.2s, 2020 2,000 2,074,380
------------
$ 13,745,850
----------------------------------------------------------------------------
Multi-Family Housing Revenue - 0.4%
NR Webster County, WV, Housing Development
Rev. (Circlebrook), 6.35s, 2008 $ 555 $ 556,127
----------------------------------------------------------------------------
Insured Health Care Revenue - 7.7%
AAA Monongalia County, WV, Building Commission,
Hospital Rev. (Monongalia General
Hospital), MBIA, 6.625s, 2011 $1,000 $ 1,055,260
AAA West Virginia Hospital Finance Authority
(Cabell Huntington Hospital), AMBAC,
6.25s, 2019 4,000 4,035,000
AAA West Virginia Hospital Finance Authority
(West Virginia University Hospital,
Inc.), MBIA, 5s, 2016 3,250 2,866,240
AAA West Virginia Hospital Finance Authority
(West Virginia University Medical Corp.),
MBIA, 7.875s, 2007 1,500 1,620,105
AAA West Virginia Hospital Finance Authority
(West Virginia University Medical Corp.),
MBIA, 7.875s, 2018 1,000 1,083,260
------------
$ 10,659,865
----------------------------------------------------------------------------
Health Care Revenue - 8.5%
A- Berkeley County, WV, Building Commission,
Hospital Rev. (City Hospital Project),
6.5s, 2022 $2,500 $ 2,373,925
NR Hampshire County, WV, First Mortgage Rev.
(Romney Health Care), 9.5s, 2022 1,280 1,286,054
NR Monongalia County, WV, Health Facilities
Rev. (Beverly Enterprises, Inc.),
10s, 2007 910 1,009,272
NR Princeton, WV, Hospital Rev. (Princeton
Community Hospital), 6s, 2018 2,000 1,749,040
NR West Virginia Hospital Finance Authority
(Charleston Area Medical Center),
6.5s, 2023 2,000 2,007,620
NR West Virginia Hospital Finance Authority
(Teays Valley Haven Project), 10s, 2005 205 203,315
NR West Virginia Hospital Finance Authority
(Teays Valley Haven Project), 10s, 2015 3,025 3,081,265
------------
$ 11,710,491
----------------------------------------------------------------------------
Electric and Gas Utility Revenue - 5.2%
AAA Mason County, WV, Pollution Control Rev.
(Appalachian Power Co.), MBIA, 6.6s, 2022 $7,000 $ 7,189,630
----------------------------------------------------------------------------
Water and Sewer Utility Revenue - 5.9%
A Beckley, WV, Industrial Development Rev.
(Beckley Water Co.), 7s, 2017 $2,000 $ 2,073,520
AAA Charleston, WV, Sewer Rev., MBIA,
6.5s, 2017 2,260 2,349,428
AA Clarksburg, WV, Water Rev., 6.25s, 2019 1,000 988,790
AAA West Virginia Water Development Authority,
CGIC, 7.5s, 2009 1,100 1,188,198
BBB+ West Virginia Water Development Authority,
7.625s, 2009 500 533,960
AAA West Virginia Water Development Authority
(Loan Program No. 2), FSA, 5.75s, 2029 1,000 930,890
------------
$ 8,064,786
----------------------------------------------------------------------------
Turnpike Revenue - 1.9%
AAA West Virginia Parkways, Economic
Development & Tourism Authority, FGIC,
0s, 2006 $1,885 $ 995,525
AAA West Virginia Parkways, Economic
Development & Tourism Authority, FGIC,
7.068s, 2019++ 1,800 1,667,646
------------
$ 2,663,171
----------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 19.2%
B+ Harrison County, WV, Commercial Development
Rev. (K-Mart Corp.), 7.75s, 2009 $1,125 $ 1,194,953
NR Jackson County, WV, Pollution Control Rev.
(Kaiser Aluminum & Chemical Corp.),
6.5s, 2008 1,365 1,282,909
NR Kanawha County, WV, Commercial Development
Rev. (Kroger Co.), 8s, 2011 1,000 1,080,730
A Kanawha County, WV, Commercial Development
Rev. (May Department Stores Co.),
6.5s, 2003 3,000 3,162,930
BBB Kanawha County, WV, Pollution Control Rev.
(Union Carbide Corp.), 8s, 2020 2,000 2,159,980
BBB+ Marshall County, WV, Pollution Control Rev.
(Ohio Power Co.), 6.85s, 2022 3,150 3,314,021
AAA Marshall County, WV, Pollution Control Rev.
(Ohio Power Co.), MBIA, 6.85s, 2022 2,000 2,060,980
NR McDowell County, WV, Industrial Development
Rev. (War Telephone Co.), 13.5s, 2001 500 505,940
NR Monongalia County, WV, Commercial
Development Rev. (Kroger Co.), 7.7s, 2012 2,000 2,127,900
NR Ohio County, WV, Industrial Development
Rev. (Kroger Co.), 8.125s, 2011 2,000 2,169,100
NR Putnam County, WV, Industrial Development
Rev. (Rite Aid Corp.), 10.375s, 2002 590 609,818
AAA Putnam County, WV, Pollution Control Rev.
(Appalachian Power Co.), MBIA, 6.6s, 2019 3,200 3,309,568
A Raleigh County, WV, Commercial Development
Rev. (K-Mart Corp.), 6.05s, 2006 670 625,438
BBB South Charleston, WV, Pollution Control
Rev. (Union Carbide Corp.), 7.625s, 2005 2,500 2,759,925
------------
$ 26,364,192
----------------------------------------------------------------------------
Universities - 4.4%
AAA West Virginia University Rev. (West
Virginia University Dormitory Project),
AMBAC, 6s, 2012 $5,000 $ 5,001,100
AAA West Virginia University Rev. (West
Virginia University Dormitory Project),
MBIA, 6.75s, 2017 1,000 1,049,590
------------
$ 6,050,690
----------------------------------------------------------------------------
Other - 3.8%
BBB+ Charleston, WV, Parking Rev., 6s, 2013 $1,480 $ 1,410,395
A Puerto Rico Highway & Transportation
Authority Rev., 6.625s, 2018 1,600 1,643,920
NR West Virginia Hospital Finance Authority
(General Division Medical Building),
7.25s, 2014 2,000 2,104,600
------------
$ 5,158,915
------------------------------------------------------------------------------
Total Municipal Bonds (Identified Cost, $126,815,693) $132,665,222
----------------------------------------------------------------------------
Floating Rate Demand Note - 1.6%
----------------------------------------------------------------------------
Uinta County, WY, Pollution Control Rev.
(Chevron Corp.), due 8/15/20,
at Identified Cost $2,200 $ 2,200,000
----------------------------------------------------------------------------
Total Investments (Identified Cost, $129,015,693) $134,865,222
Other Assets, Less Liabilities - 2.0% 2,796,865
----------------------------------------------------------------------------
Net Assets - 100.0% $137,662,087
----------------------------------------------------------------------------
(S) Indexed security.
++ Inverse floating rate security.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
----------------------------------------------------------------------------------------------------------------------------------
Florida Georgia Maryland Massachusetts New York
March 31, 1995 Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments -
Identified cost $ 95,834,249 $ 77,776,741 $149,574,736 $252,369,112 $146,324,990
Unrealized appreciation 3,751,043 3,824,028 4,705,436 14,055,492 8,627,075
------------ ------------ ------------ ------------ ------------
Total, at value $ 99,585,292 $ 81,600,769 $154,280,172 $266,424,604 $154,952,065
Cash 27,207 78,045 75,821 63,289 --
Receivable for investments sold 998,917 1,717,625 248,825 3,166,164 9,458,964
Receivable for Fund shares sold 287,134 162,505 33,869 132,665 173,127
Interest receivable 2,110,580 1,389,013 2,634,956 4,820,314 2,701,264
Deferred organization expenses 3,996 -- -- -- --
Other assets 12,606 2,082 2,312 3,987 2,463
------------ ------------ ------------ ------------ ------------
Total assets $103,025,732 $ 84,950,039 $157,275,955 $274,611,023 $167,287,883
------------ ------------ ------------ ------------ ------------
Liabilities:
Cash overdraft $ -- $ -- $ -- $ -- $ 780,040
Distributions payable 293,346 167,946 306,024 728,203 271,687
Payable for investments purchased -- 1,434,644 -- 2,176,143 7,391,160
Payable for Fund shares reacquired 112,801 100,086 221,763 173,671 194,834
Payable to affiliates -
Management fee 1,127 1,257 2,367 4,096 2,394
Shareholder servicing agent fee 447 359 667 1,133 676
Distribution fee 344 45,745 91,020 162,651 92,667
Accrued expenses and other liabilities 56,756 72,769 125,287 138,519 72,967
------------ ------------ ------------ ------------ ------------
Total liabilities $ 464,821 $ 1,822,806 $ 747,128 $ 3,384,416 $ 8,806,425
------------ ------------ ------------ ------------ ------------
Net assets $102,560,911 $ 83,127,233 $156,528,827 $271,226,607 $158,481,458
------------ ------------ ------------ ------------ ------------
Net assets consist of:
Paid-in capital $106,806,530 $ 83,071,922 $155,033,431 $266,122,193 $156,925,818
Unrealized appreciation on investments 3,647,586 3,699,881 4,833,968 14,055,492 8,627,075
Accumulated net realized loss on investments (7,781,075) (3,447,226) (2,688,311) (7,916,486) (6,488,984)
Accumulated distributions in excess of net
investment income (112,130) (197,344) (650,261) (1,034,592) (582,451)
------------ ------------ ------------ ------------ ------------
Total $102,560,911 $ 83,127,233 $156,528,827 $271,226,607 $158,481,458
------------ ------------ ------------ ------------ ------------
Shares of beneficial interest outstanding:
Class A 9,360,814 7,188,288 13,290,287 24,222,800 13,971,589
Class B 1,319,480 839,376 1,021,654 800,021 1,132,905
------------ ------------ ------------ ------------ ------------
Total shares of beneficial interest
outstanding 10,680,294 8,027,664 14,311,941 25,022,821 15,104,494
------------ ------------ ------------ ------------ ------------
Net assets:
Class A $ 89,893,539 $ 74,432,319 $145,361,281 $262,551,080 $146,596,915
Class B 12,667,372 8,694,914 11,167,546 8,675,527 11,884,543
------------ ------------ ------------ ------------ ------------
Total net assets $102,560,911 $ 83,127,233 $156,528,827 $271,226,607 $158,481,458
------------ ------------ ------------ ------------ ------------
Class A shares:
Net asset value and redemption price per share
(net assets / shares of beneficial interest
outstanding) $ 9.60 $10.35 $10.94 $10.84 $10.49
------ ------ ------ ------ ------
Offering price per share (100/95.25 of net asset
value per share) $10.08 $10.87 $11.49 $11.38 $11.01
------ ------ ------ ------ ------
Class B shares:
Net asset value, offering price, and redemption
price per share
(net assets / shares of beneficial interest
outstanding) $ 9.60 $10.36 $10.93 $10.84 $10.49
------ ------ ------ ------ ------
On sales of $100,000 or more, the offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed
on redemptions of Class A and Class B shares.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
----------------------------------------------------------------------------------------------------------------------------------
North South
Carolina Pennsylvania Carolina Virginia West Virginia
March 31, 1995 Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments -
Identified cost $436,799,614 $ 23,988,488 $174,124,735 $429,663,656 $129,015,693
Unrealized appreciation 19,396,413 167,021 6,987,319 18,325,686 5,849,529
----------- ----------- ----------- ----------- -----------
Total, at value $456,196,027 $ 24,155,509 $181,112,054 $447,989,342 $134,865,222
Cash -- 64,836 19,594 25,492 10,305
Receivable for investments sold 10,985,765 296,041 4,096,147 1,000,938 --
Receivable for Fund shares sold 737,023 44,607 332,431 667,566 368,028
Interest receivable 8,986,412 407,243 2,968,034 8,396,768 2,921,438
Deferred organization expenses -- 5,000 -- -- --
Other assets 6,588 218 2,519 6,329 1,879
----------- ----------- ----------- ----------- -----------
Total assets $476,911,815 $ 24,973,454 $188,530,779 $458,086,435 $138,166,872
----------- ----------- ----------- ----------- -----------
Liabilities:
Cash overdraft $ 941 $ -- $ -- $ -- $ --
Distributions payable 815,494 41,126 350,876 1,020,990 274,880
Payable for investments purchased 11,089,266 816,173 3,871,581 1,018,043 --
Payable for Fund shares reacquired 1,057,820 2,072 101,615 631,198 81,218
Payable for daily variation margin on open
futures contracts -- -- -- 26,764 --
Payable to affiliates -
Management fee 7,001 66 2,777 6,877 2,077
Shareholder servicing agent fee 1,960 -- 782 1,918 586
Distribution fee 269,114 212 105,448 268,092 79,047
Accrued expenses and other liabilities 129,457 4,747 89,059 118,188 66,977
----------- ----------- ----------- ----------- -----------
Total liabilities $ 13,371,053 $ 864,396 $ 4,522,138 $ 3,092,070 $ 504,785
----------- ----------- ----------- ----------- -----------
Net assets $463,540,762 $ 24,109,058 $184,008,641 $454,994,365 $137,662,087
----------- ----------- ----------- ----------- -----------
Net assets consist of:
Paid-in capital $460,649,353 $ 24,901,298 $179,919,932 $452,234,555 $135,298,503
Unrealized appreciation on investments 18,982,589 186,956 7,060,768 18,325,686 5,849,529
Accumulated net realized loss on investments (14,829,367) (987,725) (2,534,470) (14,044,752) (3,064,548)
Accumulated undistributed (distributions in
excess of) net investment income (1,261,813) 8,529 (437,589) (1,521,124) (421,397)
----------- ----------- ----------- ----------- -----------
Total $463,540,762 $ 24,109,058 $184,008,641 $454,994,365 $137,662,087
----------- ----------- ----------- ----------- -----------
Shares of beneficial interest outstanding:
Class A 37,574,407 1,767,105 14,420,464 38,844,026 11,383,817
Class B 2,300,324 828,652 1,093,134 1,985,433 896,441
Class C 713,949 -- -- 207,665 --
----------- ----------- ----------- ----------- -----------
Total shares of beneficial interest
outstanding 40,588,680 2,595,757 15,513,598 41,037,124 12,280,258
----------- ----------- ----------- ----------- -----------
Net assets:
Class A $429,131,382 $ 16,410,526 $171,044,585 $430,688,007 $127,616,182
Class B 26,260,399 7,698,532 12,964,056 22,006,806 10,045,905
Class C 8,148,981 -- -- 2,299,552 --
----------- ----------- ----------- ----------- -----------
Total net assets $463,540,762 $ 24,109,058 $184,008,641 $454,994,365 $137,662,087
----------- ----------- ----------- ----------- -----------
Class A shares:
Net asset value and redemption price per share
(net assets / shares of beneficial interest
outstanding) $11.42 $ 9.29 $11.86 $11.09 $11.21
----- ----- ----- ----- -----
Offering price per share (100/95.25 of net asset
value per share) $11.99 $ 9.75 $12.45 $11.64 $11.77
----- ----- ----- ----- -----
Class B shares:
Net asset value, offering price, and redemption
price per share
(net assets / shares of beneficial interest
outstanding) $11.42 $ 9.29 $11.86 $11.08 $11.21
----- ----- ----- ----- -----
Class C shares:
Net asset value, offering price, and redemption
price per share
(net assets / shares of beneficial interest $11.41 $ -- $ -- $11.07 $ --
----- ----- ----- ----- -----
On sales of $100,000 or more, the offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed
on redemptions of Class A and Class B shares.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Operations
----------------------------------------------------------------------------------------------------------------------------------
Florida Georgia Maryland Massachusetts New York
Year Ended March 31, 1995 Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net investment income:
Interest $ 6,906,324 $ 5,786,024 $10,801,506 $19,544,403 $10,560,147
---------- ---------- ---------- ---------- ----------
Expenses -
Management fee $ 599,093 $ 477,819 $ 889,796 $ 1,495,879 $ 894,326
Trustees' compensation 13,435 15,279 16,078 16,249 14,973
Shareholder servicing agent fees (Class A) 148,187 119,220 228,793 398,269 229,430
Shareholder servicing agent fees (Class B) 22,010 16,855 20,355 14,225 21,084
Distribution and service fees (Class A) -- 279,473 533,850 929,292 536,111
Distribution and service fees (Class B) 100,045 76,623 92,525 64,659 95,837
Custodian fee 22,153 39,056 68,579 117,512 61,748
Printing 5,461 11,766 19,659 23,768 19,402
Postage 7,038 7,487 17,574 17,652 11,585
Auditing fees 29,794 31,741 28,068 29,468 41,793
Legal fees 4,074 3,033 4,547 3,036 1,459
Amortization of organization expenses 2,079 -- -- -- 1,080
Miscellaneous 60,596 61,727 109,638 122,119 65,269
---------- ---------- ---------- ---------- ----------
Total expenses $ 1,013,965 $ 1,140,079 $ 2,029,462 $ 3,232,128 $ 1,994,097
Reduction of expenses by investment adviser and
distributor (248,214) (79,714) -- -- (174,028)
---------- ---------- ---------- ---------- ----------
Net expenses $ 765,751 $ 1,060,365 $ 2,029,462 $ 3,232,128 $ 1,820,069
---------- ---------- ---------- ---------- ----------
Net investment income $ 6,140,573 $ 4,725,659 $ 8,772,044 $16,312,275 $ 8,740,078
---------- ---------- ---------- ---------- ----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $(7,494,601) $(2,896,869) $(1,887,336) $(8,247,504) $(5,784,110)
Futures contracts 78,647 (299,307) (36,095) 672,140 827,456
---------- ---------- ---------- ---------- ----------
Net realized loss on investments $(7,415,954) $(3,196,176) $(1,923,431) $(7,575,364) $(4,956,654)
---------- ---------- ---------- ---------- ----------
Change in unrealized appreciation (depreciation) -
Investments $ 7,938,620 $ 3,083,539 $ 2,836,791 $ 6,617,326 $ 6,122,638
Futures contracts (465,467) (374,434) (201,094) (332,948) (439,399)
---------- ---------- ---------- ---------- ----------
Net unrealized gain on investments $ 7,473,153 $ 2,709,105 $ 2,635,697 $ 6,284,378 $ 5,683,239
---------- ---------- ---------- ---------- ----------
Net realized and unrealized gain (loss) on
investments $ 57,199 $ (487,071) $ 712,266 $(1,290,986) $ 726,585
---------- ---------- ---------- ---------- ----------
Increase in net assets from operations $ 6,197,772 $ 4,238,588 $ 9,484,310 $15,021,289 $ 9,466,663
---------- ---------- ---------- ---------- ----------
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Operations
----------------------------------------------------------------------------------------------------------------------------------
North Carolina Pennsylvania South Carolina Virginia West Virginia
Year Ended March 31, 1995 Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net investment income:
Interest $ 30,821,338 $1,298,512 $11,928,530 $ 30,724,726 $ 9,180,565
---------- --------- ---------- ----------- ----------
Expenses -
Management fee $ 2,592,068 $ 119,253 $ 1,001,540 $ 2,504,233 $ 741,684
Trustees' compensation 16,451 13,470 16,088 16,088 16,114
Shareholder servicing agent fees (Class A) 663,157 23,196 255,051 646,763 190,539
Shareholder servicing agent fees (Class B) 46,263 13,755 25,458 39,786 16,359
Shareholder servicing agent fees (Class C) 12,228 -- -- 9,093 --
Distribution and service fees (Class A) 1,547,366 -- 596,846 1,509,114 446,892
Distribution and service fees (Class B) 210,286 62,617 115,719 180,844 74,360
Distribution and service fees (Class C) 81,518 -- -- 60,554 --
Custodian fee 186,294 1,842 72,952 181,233 50,134
Printing 59,703 4,569 22,668 53,155 19,090
Postage 31,912 5,339 12,651 39,500 10,529
Auditing fees 31,218 25,343 36,742 29,093 34,843
Legal fees 7,250 2,133 5,825 4,878 3,055
Amortization of organization expenses -- 1,756 -- -- --
Miscellaneous 193,280 49,675 82,340 182,450 60,246
---------- --------- ---------- ----------- ----------
Total expenses $ 5,678,994 $ 322,948 $ 2,243,880 $ 5,456,784 $ 1,663,845
Reduction of expenses by investment adviser and
distributor -- (258,379) -- -- --
---------- --------- ---------- ----------- ----------
Net expenses $ 5,678,994 $ 64,569 $ 2,243,880 $ 5,456,784 $ 1,663,845
---------- --------- ---------- ----------- ----------
Net investment income $ 25,142,344 $1,233,943 $ 9,684,650 $ 25,267,942 $ 7,516,720
---------- --------- ---------- ----------- ----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $(14,220,512) $ (820,943) $(2,090,704) $(13,509,607) $(3,225,777)
Futures contracts 997,319 (105,093) 16,788 (194,016) 365,224
---------- --------- ---------- ----------- ----------
Net realized loss on investments $(13,223,193) $ (926,036) $(2,073,916) $(13,703,623) $(2,860,553)
---------- --------- ---------- ----------- ----------
Change in unrealized appreciation (depreciation)
Investments $ 15,133,682 $1,354,564 $ 4,419,833 $ 12,894,739 $ 3,204,343
Futures contracts (1,360,167) (41,748) (115,480) (333,038) (199,823)
---------- --------- ---------- ----------- ----------
Net unrealized gain on investments $ 13,773,515 $1,312,816 $ 4,304,353 $ 12,561,701 $ 3,004,520
---------- --------- ---------- ----------- ----------
Net realized and unrealized gain (loss) on
investments $ 550,322 $ 386,780 $ 2,230,437 $ (1,141,922) $ 143,967
---------- --------- ---------- ----------- ----------
Increase in net assets from operations $ 25,692,666 $1,620,723 $11,915,087 $ 24,126,020 $ 7,660,687
---------- --------- ---------- ----------- ----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------------------------------------------------
Florida Georgia Maryland Massachusetts New York
Year Ended March 31, 1995 Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 6,140,573 $ 4,725,659 $ 8,772,044 $ 16,312,275 $ 8,740,078
Net realized loss on investments (7,415,954) (3,196,176) (1,923,431) (7,575,364) (4,956,654)
Net unrealized gain on investments 7,473,153 2,709,105 2,635,697 6,284,378 5,683,239
----------- ----------- ----------- ----------- -----------
Increase in net assets from operations $ 6,197,772 $ 4,238,588 $ 9,484,310 $ 15,021,289 $ 9,466,663
----------- ----------- ----------- ----------- -----------
Distributions declared to shareholders -
From net investment income (Class A) $ (5,649,584) $ (4,347,433) $ (8,333,922) $(15,941,100) $ (8,299,546)
From net investment income (Class B) (462,308) (355,084) (438,122) (341,011) (440,532)
From net realized gain on investments (Class A) (425,441) (44,822) -- (438,055) --
From net realized gain on investments (Class B) (36,769) (3,726) -- (8,649) --
In excess of net investment income (Class A) -- -- (34,518) -- (106,916)
In excess of net investment income (Class B) -- -- (1,815) -- (5,096)
In excess of net realized gain on investments
(Class A) (336,075) (231,782) (551,221) (334,517) (772,589)
In excess of net realized gain on investments
(Class B) (29,046) (19,268) (35,494) (6,605) (35,924)
----------- ----------- ----------- ----------- -----------
Total distributions declared to shareholders $ (6,939,223) $ (5,002,115) $ (9,395,092) $(17,069,937) $ (9,660,603)
----------- ----------- ----------- ----------- -----------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 67,775,415 $ 14,621,961 $ 14,962,711 $ 25,180,128 $ 78,439,130
Net asset value of shares issued to shareholders
in reinvestment of distributions 2,464,452 2,363,696 5,220,027 7,555,508 5,701,844
Cost of shares reacquired (83,511,284) (25,603,342) (31,511,548) (42,201,495) (94,352,331)
----------- ----------- ----------- ----------- -----------
Decrease in net assets from Fund share
transactions $(13,271,417) $ (8,617,685) $(11,328,810) $ (9,465,859) $(10,211,357)
----------- ----------- ----------- ----------- -----------
Total decrease in net assets $(14,012,868) $ (9,381,212) $(11,239,592) $(11,514,507) $(10,405,297)
Net assets:
At beginning of period 116,573,779 92,508,445 167,768,419 282,741,114 168,886,755
----------- ----------- ----------- ----------- -----------
At end of period $102,560,911 $ 83,127,233 $156,528,827 $271,226,607 $158,481,458
----------- ----------- ----------- ----------- -----------
Accumulated distributions in excess of net
investment income included in net assets at end
of period $ (112,130) $ (197,344) $ (650,261) $ (1,034,592) $ (582,451)
----------- ----------- ----------- ----------- -----------
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------------------------------------------------
North South
Carolina Pennsylvania Carolina Virginia West Virginia
Year Ended March 31, 1995 Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 25,142,344 $ 1,233,943 $ 9,684,650 $ 25,267,942 $ 7,516,720
Net realized loss on investments (13,223,193) (926,036) (2,073,916) (13,703,623) (2,860,553)
Net unrealized gain on investments 13,773,515 1,312,816 4,304,353 12,561,701 3,004,520
----------- ---------- ----------- ----------- -----------
Increase in net assets from operations $ 25,692,666 $ 1,620,723 $ 11,915,087 $ 24,126,020 $ 7,660,687
----------- ---------- ----------- ----------- -----------
Distributions declared to shareholders -
From net investment income (Class A) $(23,735,358) $ (918,914) $ (9,149,011) $(24,093,973) $ (7,131,736)
From net investment income (Class B) (973,317) (308,983) (535,639) (877,432) (360,160)
From net investment income (Class C) (383,161) -- -- (296,537) --
From net realized gain on investments (Class A) (2,495,977) (13,401) (887,817) (1,715,754) --
From net realized gain on investments (Class B) (103,677) (4,722) (54,897) (62,515) --
From net realized gain on investments (Class C) (43,596) -- -- (5,815) --
In excess of net investment income (Class A) -- -- (4,241) (70,576) --
In excess of net investment income (Class B) -- -- (248) (2,570) --
In excess of net investment income (Class C) -- -- -- (869) --
In excess of net realized gain on investments
(Class A) (1,516,684) (45,614) (433,734) (328,083) (170,490)
In excess of net realized gain on investments
(Class B) (62,999) (16,075) (26,820) (11,934) (8,251)
In excess of net realized gain on investments
(Class C) (26,491) -- -- (1,112) --
----------- ---------- ----------- ----------- -----------
Total distributions declared to shareholders $(29,341,260) $(1,307,709) $(11,092,407) $(27,467,170) $ (7,670,637)
----------- ---------- ----------- ----------- -----------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 54,114,282 $ 7,920,007 $ 21,068,556 $ 52,465,877 $ 14,859,231
Net asset value of shares issued to shareholders
in reinvestment of distributions 17,432,937 832,536 6,185,730 13,994,379 4,136,605
Cost of shares reacquired (87,206,798) (3,221,987) (27,469,733) (66,801,938) (17,506,211)
----------- ---------- ----------- ----------- -----------
Increase (decrease) in net assets from Fund
share transactions $(15,659,579) $ 5,530,556 $ (215,447) $ (341,682) $ 1,489,625
----------- ---------- ----------- ----------- -----------
Total increase (decrease) in net assets $(19,308,173) $ 5,843,570 $ 607,233 $ (3,682,832) $ 1,479,675
Net assets:
At beginning of period 482,848,935 18,265,488 183,401,408 458,677,197 136,182,412
----------- ---------- ----------- ----------- -----------
At end of period $463,540,762 $24,109,058 $184,008,641 $454,994,365 $137,662,087
----------- ---------- ----------- ----------- -----------
Accumulated undistributed (distributions in excess
of) net investment income included in net assets
at end of period $ (1,261,813) $ 8,529 $ (437,589) $ (1,521,124) $ (421,397)
----------- ---------- ----------- ----------- -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------------------------------------------------
Florida Georgia Maryland Massachusetts New York
Year Ended March 31, 1994<F1> Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 1,041,913 $ 796,058 $ 1,469,464 $ 2,760,761 $ 1,505,625
Net realized gain (loss) on investments (186,980) (31,030) 112,977 (311,972) (1,543,247)
Net unrealized loss on investments (11,690,275) (8,100,490) (14,276,091) (21,787,632) (12,294,941)
----------- ----------- ----------- ----------- -----------
Decrease in net assets from operations $(10,835,342) $ (7,335,462) $(12,693,650) $(19,338,843) $(12,332,563)
----------- ----------- ----------- ----------- -----------
Distributions declared to shareholders -
From net investment income (Class A) $ (900,283) $ (555,677) $ (866,989) $ (1,689,972) $ (1,055,956)
From net investment income (Class B) (48,741) (40,573) (40,833) (35,550) (34,946)
In excess of net investment income (Class A) (134,544) (217,092) (610,058) (1,062,519) (465,777)
In excess of net investment income (Class B) (6,267) (3,394) (3,870) (2,237) (4,662)
----------- ----------- ----------- ----------- -----------
Total distributions declared to shareholders $ (1,089,835) $ (816,736) $ (1,521,750) $ (2,790,278) $ (1,561,341)
----------- ----------- ----------- ----------- -----------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 7,972,609 $ 4,392,117 $ 6,146,983 $ 8,531,385 $ 7,401,369
Net asset value of shares issued to shareholders
in reinvestment of distributions 361,332 300,728 818,641 1,183,011 842,694
Cost of shares reacquired (11,209,415) (4,205,696) (3,746,022) (9,929,487) (14,814,451)
----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets from Fund
share transactions $ (2,875,474) $ 487,149 $ 3,219,602 $ (215,091) $ (6,570,388)
----------- ----------- ----------- ----------- -----------
Total decrease in net assets $(14,800,651) $ (7,665,049) $(10,995,798) $(22,344,212) $(20,464,292)
Net assets:
At beginning of period 131,374,430 100,173,494 178,764,217 305,085,326 189,351,047
----------- ----------- ----------- ----------- -----------
At end of period $116,573,779 $ 92,508,445 $167,768,419 $282,741,114 $168,886,755
----------- ----------- ----------- ----------- -----------
Accumulated distributions in excess of net
investment income included
in net assets at end of period $ (140,811) $ (220,486) $ (613,928) $ (1,064,756) $ (470,439)
----------- ----------- ----------- ----------- -----------
<FN>
<F1>For the two months ended March 31, 1994.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------------------------------------------------
North South
Carolina Pennsylvania Carolina Virginia West Virginia
Year Ended March 31, 1994<F1> Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 4,203,404 $ 151,666 $ 1,579,465 $ 4,177,932 $ 1,251,482
Net realized gain (loss) on investments 1,515,887 4,779 190,664 663,599 (97,707)
Net unrealized loss on investments (38,809,798) (1,837,746) (14,851,919) (38,366,885) (10,480,494)
------------- ------------- ------------- ------------- -------------
$ $ $ $ $
Decrease in net assets from operations (33,090,507) (1,681,301) (13,081,790) (33,525,354) (9,326,719)
------------- ------------- ------------- ------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (2,784,004) $ (126,697) $ (1,111,228) $ (2,609,189) $ (778,446)
From net investment income (Class B) (100,080) (27,938) (61,022) (89,058) (37,338)
From net investment income (Class C) (40,717) -- -- (10,232) --
In excess of net investment income (Class A) (1,306,778) -- (429,273) (1,444,664) (444,312)
In excess of net investment income (Class B) (4,647) (298) (3,827) (2,568) (1,909)
In excess of net investment income (Class C) (896) -- -- -- --
------------- ------------- ------------- ------------- -------------
Total distributions declared to shareholders $ (4,237,122) $ (154,933) $ (1,605,350) $ (4,155,711) $ (1,262,005)
------------- ------------- ------------- ------------- -------------
Fund share (principal) transactions -
Net asset value of shares issued to shareholders
in reinvestment of distributions 2,359,236 98,162 824,924 2,052,195 638,534
Cost of shares reacquired (10,590,746) (519,303) (4,612,283) (9,383,022) (3,760,396)
------------- ------------- ------------- ------------- -------------
Increase in net assets from Fund share
transactions $ 7,055,543 $ 2,713,821 $ 2,565,395 $ 5,315,060 $ 1,051,295
------------- ------------- ------------- ------------- -------------
Total increase (decrease) in net assets $(30,272,086) $ 877,587 $(12,121,745) $ 32,366,005) $ (9,537,429)
Net assets:
At beginning of period 513,121,021 17,387,901 195,523,153 491,043,202 145,719,841
------------- ------------- ------------- ------------- -------------
At end of period $482,848,935 $ 18,265,488 $183,401,408 $458,677,197 $136,182,412
------------- ------------- ------------- ------------- -------------
Accumulated undistributed (distributions in excess
of) net investment income included in net assets
at end of period $ (1,312,321) $ 2,483 $ (433,100) $ (1,447,109) $ (446,221)
------------- ------------- ------------- ------------- -------------
<FN>
<F1>For the two months ended March 31, 1994.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------------------------------------------------
Florida Georgia Maryland Massachusetts New York
Year Ended January 31, 1994 Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 5,427,790 $ 4,153,287 $ 8,893,750 $ 16,518,127 $ 8,668,205
Net realized gain on investments 1,736,260 209,313 752,402 5,970,582 3,282,230
Net unrealized gain on investments 6,043,652 5,116,021 6,260,864 7,585,271 7,577,071
----------- ----------- ----------- ----------- -----------
Increase in net assets from operations $ 13,207,702 $ 9,478,621 $ 15,907,016 $ 30,073,980 $ 19,527,506
----------- ----------- ----------- ----------- -----------
Distributions declared to shareholders -
From net investment income (Class A) $ (5,381,618) $ (3,996,380) $ (8,501,900) $(15,813,609) $ (8,469,259)
From net investment income (Class B) (57,121) (46,306) (47,693) (41,940) (39,087)
From net realized gain on investments (Class A) (1,086,402) (64,945) (893,666) (4,944,048) (2,679,907)
From net realized gain on investments (Class B) (44,845) (2,565) (13,619) (43,883) (39,115)
In excess of net investment income (Class A) (89,928) (197,747) (559,628) (1,033,469) (411,930)
In excess of net investment income (Class B) (2,961) (2,061) (2,014) (1,770) (2,793)
In excess of net realized gain on investments
(Class A) -- -- (285,695) -- --
In excess of net realized gain on investments
(Class B) -- -- (5,447) -- --
----------- ----------- ----------- ----------- -----------
Total distributions declared to shareholders $ (6,662,875) $ (4,310,004) $(10,309,662) $(21,878,719) $(11,642,091)
----------- ----------- ----------- ----------- -----------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 78,036,466 $ 38,887,258 $ 38,166,091 $ 43,485,858 $ 68,527,297
Net asset value of shares issued to shareholders
in reinvestment of distributions 2,061,463 1,520,053 5,497,645 9,895,798 6,121,743
Cost of shares reacquired (29,597,409) (10,051,163) (16,291,085) (27,269,464) (28,931,917)
----------- ----------- ----------- ----------- -----------
Increase in net assets from Fund share
transactions $ 50,500,520 $ 30,356,148 $ 27,372,651 $ 26,112,192 $ 45,717,123
----------- ----------- ----------- ----------- -----------
Total increase in net assets $ 57,045,347 $ 35,524,765 $ 32,970,005 $ 34,307,453 $ 53,602,538
Net assets:
At beginning of period 74,329,083 64,648,729 145,794,212 270,777,873 135,748,509
----------- ----------- ----------- ----------- -----------
At end of period $131,374,430 $100,173,494 $178,764,217 $305,085,326 $189,351,047
----------- ----------- ----------- ----------- -----------
Accumulated distributions in excess of net
investment income included in net assets at end
of period $ (92,889) $ (199,808) $ (561,642) $ (1,035,239) $ (414,723)
----------- ----------- ----------- ----------- -----------
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------------------------------------------------
North South
Carolina Pennsylvania Carolina Virginia West Virginia
Year Ended January 31, 1994 Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 23,639,673 $ 534,114 $ 8,700,854 $ 24,004,702 $ 7,020,710
Net realized gain on investments 1,621,795 22,452 762,732 4,746,234 1,599,326
Net unrealized gain on investments 19,979,696 711,886 9,029,209 16,123,082 6,029,100
------------- ------------- ------------- ------------- -------------
Increase in net assets from operations $ 45,241,164 $ 1,268,452 $ 18,492,795 $ 44,874,018 $ 14,649,136
------------- ------------- ------------- ------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $(22,593,670) $ (499,013) $ (8,351,192) $(23,000,542) $ (6,693,640)
From net investment income (Class B) (111,740) (29,351) (65,754) (107,077) (40,005)
From net investment income (Class C) (2,176) -- -- (291) --
From net realized gain on investments (Class A) (441,976) (7,638) (179,941) (7,602,939) (1,373,948)
From net realized gain on investments (Class B) (6,972) (1,470) -- (52,284) (26,180)
In excess of net investment income (Class A) (1,275,110) -- (404,781) (1,466,322) (434,275)
In excess of net investment income (Class B) (3,178) -- (2,434) (2,976) (1,423)
In excess of net investment income (Class C) (315) -- -- (32) --
------------- ------------- ------------- ------------- -------------
Total distributions declared to shareholders $(24,435,137) $ (537,472) $(9,004,102) $(32,232,463) $(8,569,471)
------------- ------------- ------------- ------------- -------------
Fund share (principal) transactions -
Net asset value of shares issued to shareholders
in reinvestment of distributions 13,376,861 350,218 4,481,087 16,799,726 4,199,846
Cost of shares reacquired (37,081,742) (1,130,853) (19,060,786) (31,116,518) (13,930,081)
------------- ------------- ------------- ------------- -------------
Increase in net assets from Fund share
transactions $ 93,963,476 $ 16,656,921 $ 41,495,427 $ 78,705,570 $ 24,351,112
------------- ------------- ------------- ------------- -------------
Total increase in net assets $114,769,503 $ 17,387,901 $ 50,984,120 $ 91,347,125 $ 30,430,777
Net assets:
At beginning of period 398,351,518 -- 144,539,033 399,696,077 115,289,064
------------- ------------- ------------- ------------- -------------
At end of period $513,121,021 $ 17,387,901 $195,523,153 $491,043,202 $145,719,841
------------- ------------- ------------- ------------- -------------
Accumulated undistributed (distributions in excess
of) net investment income included in net assets
at end of period $ (1,278,603) $ 5,750 $ (407,215) $ (1,469,330) $ (435,698)
------------- ------------- ------------- ------------- -------------
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
-----------------------------------------------------------------------------------------------------------------------------------
Florida Fund
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
March 31, January 31, March 31, January 31,
-----------------------------------------------------------------------------------------------------------------------------------
1995 1994<F5> 1994 1993<F1> 1995 1994<F5> 1994<F2>
-----------------------------------------------------------------------------------------------------------------------------------
Class A Class B
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.65 $10.63 $ 9.89 $ 9.53 $ 9.64 $10.62 $10.69
------ ------ ------ ------ ------ ------ ------
Income from investment operations<F4> -
Net investment income<F8> $ 0.54 $ 0.09 $ 0.57 $ 0.58 $ 0.43 $ 0.07 $ 0.18
Net realized and unrealized gain (loss)
on investments 0.02 (0.98) 0.86 0.36 0.04 (0.98) 0.03
------ ------ ------ ------ ------ ------ ------
Total from investment operations $ 0.56 $(0.89) $ 1.43 $ 0.94 $ 0.47 $(0.91) $ 0.21
------ ------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income (0.54) (0.08) (0.57) (0.58) (0.44) (0.06) (0.17)
From net realized gain on investments (0.04) -- (0.11) -- (0.04) -- (0.10)
In excess of net investment income -- (0.01) (0.01) -- -- (0.01) (0.01)
In excess of net realized gain on
investments (0.03) -- -- -- (0.03) -- --
------ ------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.61) $(0.09) $(0.69) $(0.58) $(0.51) $(0.07) $(0.28)
------ ------ ------ ------ ------ ------ ------
Net asset value - end of period $ 9.60 $ 9.65 $10.63 $ 9.89 $ 9.60 $ 9.64 $10.62
------ ------ ------ ------ ------ ------ ------
Total return<F6> 6.07% (8.39)%<F4> 14.71% 10.28%<F3> 5.06% (8.55)%<F4> 4.87%<F3>
Ratios (to average net assets)/Supplemental
data<F8>:
Expenses 0.60% 0.77%<F3> 0.49% 0.05%<F3> 1.68% 1.82%<F3> 1.64%<F3>
Net investment income 5.75% 5.15%<F3> 5.42% 6.27%<F3> 4.63% 4.08%<F3> 3.82%<F3>
Portfolio turnover 131% 19% 53% 54% 131% 19% 53%
Net assets at end of period (000 omitted) $89,894 $108,579 $124,131 $74,329 $12,667 $7,995 $7,244
<FN>
<F1>For the period from the commencement of investment operations, February 3, 1992 to January 31, 1993.
<F2>For the period from the commencement of offering of Class B shares, September 7, 1993 to January 31, 1994.
<F3>Annualized.
<F4>Unannualized.
<F5>For the two months ended March 31, 1994.
<F6>Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results would
have been lower.
<F7>Per share data for the periods beginning after January 31, 1994 are based on average shares outstanding.
<F8>The investment adviser did not impose all or a portion of its advisory, distribution or expense reimbursement fees for the
periods indicated. If these fees had been incurred by the Fund, the net investment income per share and the ratios would
have been:
Net investment income $ 0.52 $ 0.08 $ 0.52 $ 0.51 $ 0.41 $ 0.06 $ 0.16
Ratios (to average net assets):
Expenses 0.83% 1.12%<F3> 0.93% 0.81%<F3> 1.91% 2.17%<F3> 2.09%<F3>
Net investment income 5.52% 4.80%<F3> 4.97% 5.51%<F3> 4.40% 3.72%<F3> 3.38%<F3>
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
-----------------------------------------------------------------------------------------------------------------------------------
Georgia Fund
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
March 31, January 31, March 31, January 31,
-----------------------------------------------------------------------------------------------------------------------------------
1995 1994<F5> 1994 1993 1992 1991 1990 1989<F1> 1995 1994<F5> 1994<F2>
-----------------------------------------------------------------------------------------------------------------------------------
Class A Class B
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $10.38 $11.30 $10.57 $10.22 $ 9.83 $ 9.73 $ 9.73 $ 9.53 $10.38 $11.30 $11.26
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations<F7> -
Net investment
income<F8> $ 0.57 $ 0.09 $ 0.57 $ 0.58 $ 0.61 $ 0.63 $ 0.66 $ 0.32 $ 0.47 $ 0.07 $ 0.19
Net realized and
unrealized gain
(loss) on
investments -- (0.92) 0.75 0.38 0.46 0.12 0.02 0.14 0.02 (0.91) 0.05
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations $ 0.57 $(0.83) $ 1.32 $ 0.96 $ 1.07 $ 0.75 $ 0.68 $ 0.46 $ 0.49 $(0.84) $ 0.24
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions
declared to
shareholders -
From net investment
income $(0.56) $(0.06) $(0.55) $(0.60) $(0.66) $(0.63) $(0.66) $(0.26) $(0.47) $(0.07) $(0.18)
From net realized
gain on investments (0.01) -- (0.01) (0.01) (0.02) (0.02) (0.02) -- (0.01) -- (0.01)
In excess of net
investment income -- (0.03) (0.03) -- -- -- -- -- -- (0.01) (0.01)
In excess of net
realized gain on
investments (0.03 -- -- -- -- -- -- -- (0.03) -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions
declared to
shareholders $(0.60) $(0.09) $(0.59) $(0.61) $(0.68) $(0.65) $(0.68) $(0.26) $(0.51) $(0.08) $(0.20)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value -
end of period $10.35 $10.38 $11.30 $10.57 $10.22 $ 9.83 $ 9.73 $ 9.73 $10.36 $10.38 $11.30
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total return<F6> 5.65% (7.34)%<F4> 12.71% 9.56% 11.29% 8.06% 7.19% 7.57%<F3> 4.88% (7.47)%<F4> 5.34%<F3>
Ratios (to average
net assets)/
Supplemental data<F8>:
Expenses 1.14% 1.18%<F3> 1.21% 1.08% 0.99% 0.74% 0.42% 0.40%<F3> 1.96% 1.99%<F3> 1.97%<F3>
Net investment income 5.50% 5.05%<F3> 5.10% 5.75% 6.08% 6.46% 6.72% 6.18%<F3> 4.66% 4.17%<F3> 3.83%<F3>
Portfolio turnover 56% 5% 14% 27% 36% 71% 99% -- 56% 5% 14%
Net assets at end of
period (000 omitted) $74,432 $85,878 $94,407 $64,649 $47,869 $29,214 $12,628 $4,383 $8,695 $6,631 $5,766
<FN>
<F1>For the period from the commencement of investment operations, June 6, 1988
to January 31, 1989.
<F2>For the period from the commencement of offering of Class B shares,
September 7, 1993 to January 31, 1994.
<F3>Annualized.
<F4>Unannualized.
<F5>For the two months ended March 31, 1994.
<F6>Total returns for Class A shares do not include the applicable sales charge.
If the charge had been included, the results would have been lower.
<F7>Per share data for the periods beginning after January 31, 1994 are based on
average shares outstanding.
<F8>The investment adviser did not impose all or a portion of its advisory,
distribution or expense reimbursement fees for the periods indicated. If
these fees had been incurred by the Fund, the net investment income per
share and the ratios would have been:
Net investment
income $ 0.56 $ 0.09 $ 0.56 $ 0.57 $ 0.60 $ 0.59 $ 0.57 $ 0.29 -- -- $ 0.19
Ratios (to average
net assets):
Expenses 1.24% 1.28%<F3> 1.31% 1.18% 1.09% 1.11% 1.31% 1.07%<F3> -- -- 1.97%<F3>
Net investment
income 5.40% 4.95%<F3> 5.00% 5.65% 5.98% 6.09% 5.83% 5.51%<F3> -- -- 3.83%<F3>
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------------
Maryland Fund
----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended
March 31, January 31,
----------------------------------------------------------------------------------------------------------------------------------
1995 1994<F4> 1994 1993
----------------------------------------------------------------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.89 $11.81 $11.40 $11.20
------ ------ ------ ------
Income from investment operations<F6>-
Net investment income $ 0.59 $ 0.10 $ 0.62 $ 0.67
Net realized and unrealized gain (loss) on
investments 0.09 (0.92) 0.53 0.24
------ ------ ------ ------
Total from investment operations $ 0.68 $(0.82) $ 1.15 $ 0.91
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income<F8> $(0.59) $(0.06) $(0.61) $(0.69)
From net realized gain on investments -- -- (0.07) (0.02)
In excess of net investment income -- (0.04) (0.04) --
In excess of net realized gain on investments (0.04) -- (0.02) --
From paid-in capital -- -- -- --
------ ------ ------ ------
Total distributions declared to shareholders $(0.63) $(0.10) $(0.74) $(0.71)
------ ------ ------ ------
Net asset value - end of period $10.94 $10.89 $11.81 $11.40
------ ------ ------ ------
Total return<F5> 6.51% (6.96)%<F3> 10.27% 8.34%
Ratios (to average net assets)/Supplemental data:
Expenses 1.21% 1.23%<F2> 1.25% 1.14%
Net investment income 5.46% 4.97%<F2> 5.42% 6.13%
Portfolio turnover 31% 1% 25% 5%
Net assets at end of period (000 omitted) $145,361 $161,290 $173,419 $145,794
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------------
Maryland Fund
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
January 31, March 31, January 31,
-----------------------------------------------------------------------------------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986 1995 1994<F4> 1994<F1>
-----------------------------------------------------------------------------------------------------------------------------------
Class A Class B
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.97 $10.79 $10.76 $10.62 $11.20 $10.44 $ 9.89 $10.88 $11.80 $11.88
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment operations<F6> -
Net investment income $ 0.70 $ 0.70 $ 0.69 $ 0.69 $ 0.68 $ 0.71 $ 0.81 $ 0.51 $ 0.08 $ 0.22
Net realized and unrealized gain (loss) on
investments 0.31 0.19 0.04 0.14 (0.57) 0.78 0.62 0.09 (0.91) (0.01)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations $ 1.01 $ 0.89 $ 0.73 $ 0.83 $ 0.11 $ 1.49 $ 1.43 $ 0.60 $(0.83) $ 0.21
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income<F8> $(0.76) $(0.70) $(0.69) $(0.69) $(0.67) $(0.73) $(0.82) $(0.51) $(0.08) $(0.21)
From net realized gain on investments (0.02) (0.01) (0.01) -- (0.01) -- (0.06) -- -- (0.05)
In excess of net investment income -- -- -- -- -- -- -- -- (0.01) (0.01)
In excess of net realized gain on
investments -- -- -- -- -- -- -- (0.04) -- (0.02)
From paid-in capital<F7> -- -- -- -- (0.01) -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.78) $(0.71) $(0.70) $(0.69) $(0.69) $(0.73) $(0.88) $(0.55) $(0.09) $(0.29)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value - end of period $11.20 $10.97 $10.79 $10.76 $10.62 $11.20 $10.44 $10.93 $10.88 $11.80
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total return<F5> 9.55% 8.51% 6.90% 8.15% 1.25% 14.86% 15.47% 5.75% (7.08)%<F3> 4.45%<F2>
Ratios (to average net assets)/Supplemental data:
Expenses 1.16% 1.17% 1.18% 1.14% 1.10% 1.10% 0.98% 1.93% 1.95%<F2> 1.81%<F2>
Net investment income 6.32% 6.45% 6.33% 6.52% 6.47% 6.60% 8.22% 4.73% 4.19%<F2> 4.23%<F2>
Portfolio turnover 9% 41% 58% 34% 13% 11% 26% 31% 1% 25%
Net assets at end of period (000 omitted) $119,120 $101,742 $93,175 $84,380 $79,906 $81,712 $33.818 $11,168 $6,478 $5,345
<FN>
<F1>For the period from the commencement of offering of Class B shares,
September 7, 1993 to January 31, 1994.
<F2>Annualized.
<F3>Unannualized.
<F4>For the two months ended March 31, 1994.
<F5>Total returns for Class A shares do not include the applicable sales charge.
If the charge had been included, the results would have been lower.
<F6>Per share data for the periods beginning after January 31, 1994 are based on
average shares outstanding.
<F7>For the year ended January 31, 1986, the per share distribution from paid-in
capital was $0.0005.
<F8>For the year ended March 31, 1995, includes distributions in excess of net
investment income of $0.003 on Class A and Class B shares.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Fund
----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended
March 31, January 31,
----------------------------------------------------------------------------------------------------------------------------------
1995 1994<F5> 1994 1993
----------------------------------------------------------------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.90 $11.75 $11.41 $11.05
------ ------ ------ ------
Income from investment operations<F7>-
Net investment income $ 0.64 $ 0.11 $ 0.64 $ 0.68
Net realized and unrealized gain (loss) on
investments (0.03) (0.85) 0.58 0.39
------ ------ ------ ------
Total from investment operations $ 0.61 (0.74) $ 1.22 $ 1.07
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.64) $(0.07) $(0.64) $(0.71)
From net realized gain on investments (0.02) -- (0.20) --
In excess of net investment income -- (0.04) (0.04) --
In excess of net realized gain on investments (0.01) -- -- --
------ ------ ------ ------
Total distributions declared to shareholders $(0.67) $(0.11) $(0.88) $(0.71)
------ ------ ------ ------
Net asset value - end of period $10.84 $10.90 $11.75 $11.41
------ ------ ------ ------
Total return<F6> 5.89% (6.34)%<F4> 11.02% 10.03%
Ratios (to average net assets)/Supplemental data:
Expenses 1.17% 1.19%<F3> 1.19% 1.08%
Net investment income 6.01% 5.64%<F3> 5.71% 6.33%
Portfolio turnover 31% 4% 30% 32%
Net assets at end of period (000 omitted) $262,551 $277,748 $300,894 $270,778
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Fund
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
January 31, March 31, January 31,
-----------------------------------------------------------------------------------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986<F1> 1995 1994<F5> 1994<F2>
-----------------------------------------------------------------------------------------------------------------------------------
Class A Class B
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $10.68 $10.58 $10.65 $10.60 $11.25 $10.59 $ 9.52 $10.90 $11.75 $11.91
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations<F7> -
Net investment income $ 0.73 $ 0.71 $ 0.72 $ 0.72 $ 0.71 $ 0.74 $ 0.54 $ 0.55 $ 0.09 $ 0.23
Net realized and
unrealized gain (loss)
on investments 0.43 0.11 (0.07) 0.05 (0.65) 0.68 0.99 (0.02) (0.85) 0.04
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations $ 1.16 $ 0.82 $ 0.65 $ 0.77 $ 0.06 $ 1.42 $ 1.53 $ 0.53 $(0.76) $ 0.27
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions
declared to
shareholders -
From net investment
income $(0.78) $(0.72) $(0.72) $(0.72) $(0.71) $(0.75) $(0.46) $(0.56) $(0.09)<F8> $(0.22)
From net realized gain
on investments -- -- -- -- -- (0.01) -- (0.02) -- (0.20)
In excess of net
investment income<F8> -- -- -- -- -- -- -- -- -- (0.01)
In excess of net realized
gain on investments -- -- -- -- -- -- -- (0.01) -- --
From paid-in capital (0.01) -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions
declared to
shareholders $(0.79) $(0.72) $(0.72) $(0.72) $(0.71) $(0.76) $(0.46) $(0.59) $(0.09) $(0.43)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value -
end of period $11.05 $10.68 $10.58 $10.65 $10.60 $11.25 $10.59 $10.84 $10.90 $11.75
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total return<F6> 11.23% 8.12% 6.28% 7.65% 0.80% 14.10% 20.51%<F3> 5.13% (6.46)%<F4> 5.89%<F3>
Ratios (to average net
assets)/Supplemental data:
Expenses 1.06% 1.07% 1.10% 1.07% 1.04% 0.87% 0.86%<F3> 1.89% 1.91%<F3> 1.81%<F3>
Net investment income 6.65% 6.74% 6.75% 6.90% 6.79% 6.83% 7.82%<F3> 5.27% 4.89%<F3> 4.62%<F3>
Portfolio turnover 51% 43% 52% 26% 27% 7% 27% 31% 4% 30%
Net assets at end of
period (000 omitted) $239,311 $213,679 $215,381 $212,763 $224,219 $242,119 $94,575 $ 8,676 $4,993 $ 4,191
<FN>
<F1>For the period from the commencement of investment operations, April 9, 1985
to January 31, 1986.
<F2>For the period from the commencement of offering of Class B shares,
September 7, 1993 to January 31, 1994.
<F3>Annualized.
<F4>Unannualized.
<F5>For the two months ended March 31, 1994.
<F6>Total returns for Class A shares do not include the applicable sales charge.
If the charge had been included, the results would have been lower.
<F7>Per share data for the periods beginning after January 31, 1994 are based on
average shares outstanding.
<F8>For the year ended March 31, 1994, the per share distribution in excess of
net investment income was $0.0055.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
-----------------------------------------------------------------------------------------------------------------------------------
New York Fund
------------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
March 31, January 31, March 31, January 31,
-----------------------------------------------------------------------------------------------------------------------------------
1995 1994<F5> 1994 1993 1992 1991 1990 1989<F1> 1995 1994<F5> 1994<F2>
-----------------------------------------------------------------------------------------------------------------------------------
Class A Class B
-----------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -
beginning of period $ 10.50 $ 11.34 $ 10.78 $ 10.25 $ 9.90 $ 9.74 $ 9.79 $ 9.53 $ 10.50 $ 11.34 $ 11.46
------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Income from investment
operations<F4> -
Net investment income<F8> $ 0.56 $ 0.09 $ 0.59 $ 0.63 $ 0.65 $ 0.65 $ 0.68 $ 0.29 $ 0.47 $ 0.07 $ 0.18
Net realized and
unrealized gain
(loss) on investments 0.05 (0.84) 0.74 0.58 0.44 0.16 0.01 0.21 0.05 (0.83) 0.04
------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Total from investment
operations $ 0.61 $ (0.75) $ 1.33 $ 1.21 $ 1.09 $ 0.81 $ 0.69 $ 0.50 $ 0.52 $ (0.76) $ 0.22
------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Less distributions
declared to shareholders -
From net investment
income $(0.56) $(0.06) $ (0.57) $ (0.65) $ (0.69) $ (0.65) $ (0.67) $(0.24) $ (0.47) $ (0.07) $(0.18)
From net realized gain
on investment -- -- (0.17) (0.03) (0.05) -- (0.06) -- -- -- (0.15)
In excess of net
investment income (0.01) (0.03) (0.03) -- -- -- -- -- (0.01) (0.01) (0.01)
In excess of net realized
gain on investments (0.05) -- -- -- -- -- -- -- (0.05) -- --
From paid-in capital -- -- -- -- -- -- (0.01) -- -- -- --
------- ------ ------- ------- ------- ------- ------- ------ ------- ------- ------
Total distributions
declared to shareholders $ (0.62) $(0.09) $ (0.77) $ (0.68) $ (0.74) $ (0.65) $ (0.74) $(0.24) $ (0.53) $ (0.08) $(0.34)
------- ------ ------- ------- ------- ------- ------- ------ ------- ------- ------
Net asset value -
end of period $ 10.49 $10.50 $ 11.34 $ 10.78 $ 10.25 $ 9.90 $ 9.74 $ 9.79 $ 10.49 $ 10.50 $11.34
------- ------ ------- ------- ------- ------- ------- ------ ------- ------- ------
Total return<F6> 6.03% (6.58)%<F4> 12.69% 12.23% 11.42% 8.74% 7.33% 8.16%<F3> 5.17% (6.71)%<F4>5.20%<F3>
Ratios (to average
net assets)/
Supplemental data<F8>:
Expenses 1.07% 1.03%<F3> 0.93% 0.53% 0.65% 0.54% 0.40% 0.40%<F3> 1.89% 1.87%<F3>1.79%<F3>
Net investment income 5.43% 5.09%<F3> 5.21% 6.16% 6.44% 6.73% 6.88% 5.93%<F3> 4.58% 4.21%<F3>3.90%<F3>
Portfolio turnover 147% 15% 51% 61% 80% 188% 236% 32% 147% 15% 51%
Net assets at end
of period (000 omitted) $146,597 $162,621 $184,523 $135,749 $79,524 $37,385 $20,156 $6,412 $11,885 $6,265 $4,828
<PAGE>
<FN>
<F1>For the period from the commencement of investment operations, June 6, 1988 to January 31, 1989.
<F2>For the period from the commencement of offering of Class B shares, September 7, 1993 to January 31, 1994.
<F3>Annualized.
<F4>Unannualized.
<F5>For the two months ended March 31, 1994.
<F6>Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
<F7>Per share data for the periods beginning after January 31, 1994 are based on average shares outstanding.
<F8>The investment adviser did not impose all or a portion of its advisory, distribution or expense reimbursement fees for the
periods indicated. If these fees had been incurred by the Fund, the net investment income per share and the ratios would have
been:
Net investment income $ 0.55 $ 0.07 $ 0.56 $ 0.57 $ 0.60 $ 0.61 $ 0.59 $ 0.26 $ 0.47 $ 0.07 $ 0.17
Ratios (to average
net assets):
Expenses 1.18% 1.23%<F3> 1.23% 1.13% 1.16% 0.95% 1.32% 1.09%<F3> 1.91% 1.97%<F3>2.00%<F3>
Net investment
income 5.31% 4.88%<F3> 4.90% 5.56% 5.94% 6.33% 5.96% 5.24%<F3> 4.57% 4.11%<F3>3.69%<F3>
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
-----------------------------------------------------------------------------------------------------------------------------------
North Carolina Fund
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended
March 31, January 31,
-----------------------------------------------------------------------------------------------------------------------------------
1995 1994<F3> 1994 1993 1992 1991 1990 1989
-----------------------------------------------------------------------------------------------------------------------------------
Class A
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $ 11.48 $ 12.37 $ 11.80 $ 11.45 $ 11.30 $ 11.18 $ 11.15 $ 11.13
------- ------- ------- ------- ------- ------- ------- -------
Income from investment
operations<F3>-
Net investment income $ 0.61 $ 0.10 $ 0.64 $ 0.65 $ 0.70 $ 0.72 $ 0.73 $ 0.74
Net realized and
unrealized gain (loss)
on investments 0.03 (0.89) 0.58 0.37 0.26 0.17 0.03 0.02
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations $ 0.64 (0.79) $ 1.22 $ 1.02 $ 0.96 $ 0.89 $ 0.76 $ 0.76
------- ------- ------- ------- ------- ------- ------- -------
Less distributions
declared to
shareholders -
From net investment
income $ (0.60) $ (0.07) $ (0.61) $ (0.67) $ (0.76) $ (0.72) $ (0.73) $ (0.74)
From net realized
gain on investments (0.06) -- (0.01) -- (0.01) (0.05) -- --
In excess of net
investment income -- (0.03) (0.03) -- -- -- -- --
In excess of net
realized gain on
investments (0.04) -- -- -- -- -- -- --
From paid-in capital<F6> -- -- -- -- (0.04) -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total distributions
declared to
shareholders $ (0.70) $ (0.10) $ (0.65) $ (0.67) $ (0.81) $ (0.77) $ (0.73) $ (0.74)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value -
end of period $ 11.42 $ 11.48 $ 12.37 $ 11.80 $ 11.45 $ 11.30 $ 11.18 $ 11.15
======= ======= ======= ======= ======= ======= ======= =======
Total return<F4> 5.86% (6.39)%<F4> 10.59% 9.23% 8.82% 8.34% 6.97% 7.12%
Ratios (to average net
assets)/Supplemental data:
Expenses 1.16% 1.16%<F3> 1.19% 1.07% 1.09% 1.09% 1.12% 1.11%
Net investment income 5.38% 4.96%<F3> 5.21% 5.80% 6.17% 6.47% 6.48% 6.70%
Portfolio turnover 58% 2% 12% 2% 39% 44% 61% 25%
Net assets at end
of period (000 omitted) $429,131 $460,321 $495,158 $398,352 $312,466 $226,806 $175,101 $129,287
<PAGE>
<CAPTION>
Financial Highlights - continued
-----------------------------------------------------------------------------------------------------------------------------------
North Carolina Fund
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
January 31, March 31, January 31, March 31, January 31,
-----------------------------------------------------------------------------------------------------------------------------------
1988 1987 1998 1995 1994<F5> 1994<F1> 1995 1994<F5> 1994<F2>
-----------------------------------------------------------------------------------------------------------------------------------
Class A Class B Class C
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share
outstanding throughout
each period):
Net asset value -
beginning of period $11.82 $11.09 $10.01 $11.47 $12.36 $12.36 $11.47 $12.36 $12.24
------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations<F9> -
Net investment income $ 0.73 $ 0.75 $ 0.82 $ 0.52 $ 0.08 $ 0.22 $ 0.53 $ 0.10 $ 0.02
Net realized and
unrealized gain (loss)
on investments (0.69) 0.90 1.12 0.05 (0.89) 0.01 0.04 (0.90) 0.12
------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations $ 0.04 $ 1.65 $ 1.94 $ 0.57 $(0.81) $ 0.23 $ 0.57 $(0.80) $ 0.14
------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions declared
to shareholders -
From net investment
income<F7> $(0.73) $(0.76) $(0.82) $(0.52) $(0.08) $(0.21) $(0.53) $(0.09) $(0.02)
From net realized gain
on investments -- (0.16) (0.04) (0.06) -- (0.01) (0.06) -- --
In excess of net
investment income -- -- -- -- -- (0.01) -- -- --
In excess of net realized
gain on investments -- -- -- (0.04) -- -- (0.04) -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions
declared to
shareholders $(0.73) $(0.92) $(0.86) $(0.62) $(0.08) $(0.23) $(0.63) $(0.09) $(0.02)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value - end
of period $11.13 $11.82 $11.09 $11.42 $11.47 $12.36 $11.41 $11.47 $12.36
====== ====== ====== ====== ====== ====== ====== ====== ======
Total return<F8> 0.65% 15.76% 20.63% 5.20% (6.51)%<F4> 4.58%<F3> 5.18% (6.50)%<F4> 16.50%<F3>
Ratios (to average net
assets)/Supplemental data:
Expenses 1.08% 1.07% 0.90% 1.88% 1.88%<F3> 1.84%<F3> 1.81% 1.82%<F3> 1.44%<F3>
Net investment income 6.71% 6.63% 8.02% 4.64% 4.18%<F3> 4.03%<F3> 4.71% 4.25%<F3> 2.33%<F3>
Portfolio turnover 10% 10% 78% 58% 2% 12% 58% 2% 12%
Net assets at end of period
(000 omitted) $110,462 $105,668 $53,561 $26,260 $15,866 $13,379 $8,149 $6,661 $4,584
<FN>
<F1>For the period from the commencement of offering of Class B shares, September 7, 1993 to January 31, 1994.
<F2>For the period from the commencement of offering of Class C shares, January 3, 1994 to January 31, 1994.
<F3>Annualized.
<F4>Unannualized.
<F5>For the two months ended March 31, 1994.
<F6>For the year ended January 31, 1991, the per share distribution from paid-in capital wa $0.0005.
<F7>Includes distributions in excess of net investment income of $0.004 and $0.002, respectively, for Class B and Class C shares
for the two months ended March 31, 1994 and $0.003 per share for Class C shares for the year ended January 31, 1994.
<F8>Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
<F9>Per share data for the periods beginning after January 31, 1994 are based on average shares outstanding.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights -- continued
----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania Fund
----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
March 31, January 31, March 31, January 31,
----------------------------------------------------------------------------------------------------------------------------------
1995 1994<F5> 1994<F1> 1995 1994<F5> 1994<F2>
----------------------------------------------------------------------------------------------------------------------------------
Class A Class B
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout
each period):
Net asset value - beginning of period $ 9.15 $10.14 $ 9.53 $ 9.15 $10.15 $10.06
------ ------ ------ ------ ------ ------
Income from investment operations<F7> -
Net investment income<F9> $ 0.54 $ 0.09 $ 0.50 $ 0.45 $ 0.06 $ 0.17
Net realized and unrealized gain (loss) on
investments 0.18 (0.99) 0.62 0.18 (0.99) 0.10
------ ------ ------ ------ ------ ------
Total from investment operations $ 0.72 $(0.90) $ 1.12 $ 0.63 $(0.93) $ 0.27
Less distributions declared to shareholders -
From net investment income<F8> $(0.54) $(0.09) $(0.50) $(0.45) $(0.07) $(0.17)
From net realized gain on investments (0.01) -- (0.01) (0.01) -- (0.01)
In excess of net realized gain on investments (0.03) -- -- (0.03) -- --
------ ------ ------ ------ ------ ------
Total distributions declared to shareholders $(0.58) $(0.09) $(0.51) $(0.49) $(0.07) $(0.18)
------ ------ ------ ------ ------ ------
Net asset value - end of period $ 9.29 $ 9.15 $10.14 $ 9.29 $ 9.15 $10.15
------ ------ ------ ------ ------ ------
Total return<F6> 8.14% (8.91)%<F4> 12.12% 7.07% (9.16)%<F4> 6.76%<F3>
Ratios (to average net assets)/Supplemental data<F9>:
Expenses 0.01% 0.00%<F3> 0.00%<F3> 1.01% 1.00%<F3> 1.00%<F3>
Net investment income 5.97% 5.43%<F3> 5.30%<F3> 4.96% 4.37%<F3> 4.22%<F3>
Portfolio turnover 49% 1% 10% 49% 1% 10%
Net assets at end of period (000 omitted) $16,411 $13,961 $13,987 $7,699 $4,304 $3,401
<FN>
<F1>For the period from the commencement of investment operations, February 1,
1993 to January 31, 1994.
<F2>For the period from the commencement of offering of Class B shares,
September 7, 1993 to January 31, 1994.
<F3>Annualized.
<F4>Unannualized.
<F5>For the two months ended March 31, 1994.
<F6>Total returns for Class A shares do not include the applicable sales charge.
If the charge had been included, the results would have been lower.
<F7>Per share data for the periods beginning after January 31, 1994 are based on
average shares outstanding.
<F8>For the two months ended March 31, 1994, Class B net investment income
includes distributions in excess of net investment income of less than
$0.001 per share.
<F9>The investment adviser did not impose all or a portion of its advisory,
distribution or expense reimbursement fees for the periods indicated. If
these fees had been incurred by the Fund, the net investment income per
share and the ratios would have been:
Net investment income $ 0.43 $ 0.06 $ 0.32 $ 0.34 $ 0.04 $ 0.05
Ratios (to average net assets):
Expenses 1.18% 1.84%<F3> 1.94%<F3> 2.26% 2.91%<F3> 2.50%<F3>
Net investment income 4.80% 3.60%<F3> 3.36%<F3> 3.72% 2.47%<F3> 1.29%<F3>
</TABLE>
See notes to financial statements
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------------
South Carolina Fund
----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended
March 31, January 31,
----------------------------------------------------------------------------------------------------------------------------------
1995 1994<F4> 1994 1993 1992 1991 1990
---------------------------------------------------------------------------------------------------------------------------------
Class A
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $11.79 $12.74 $12.02 $11.74 $11.45 $11.30 $11.24
------ ------ ------ ------ ------ ------ ------
Income from investment operations<F8> -
Net investment income $ 0.63 $ 0.08 $ 0.63 $ 0.67 $ 0.70 $ 0.71 $ 0.72
Net realized and unrealized gain (loss) on
investments 0.15 (0.92) 0.74 0.34 0.40 0.21 0.06
------ ------ ------ ------ ------ ------ ------
Total from investment operations $ 0.78 $(0.84) $ 1.37 $ 1.01 $ 1.10 $ 0.92 $ 0.78
------ ------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.62) $(0.08) $(0.61) $(0.69) $(0.76) $(0.71) $(0.72)
From net realized gain on investments (0.06) -- (0.01) (0.04) (0.05) (0.06) --
In excess of net investment income -- (0.03) (0.03) -- -- -- --
In excess of net realized gain on investments (0.03) -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.71) $(0.11) $(0.65) $(0.73) $(0.81) $(0.77) $(0.72)
------ ------ ------ ------ ------ ------ ------
Net asset value - end of period $11.86 $11.79 $12.74 $12.02 $11.74 $11.45 $11.30
====== ====== ====== ====== ====== ====== ======
Total return<F7> 6.93% (6.65)%<F3> 11.69% 8.89% 9.95% 8.46% 7.13%
Ratios (to average net assets)/Supplemental data:
Expenses 1.19% 1.23%<F2> 1.22% 1.12% 1.15% 1.18% 1.21%
Net investment income 5.37% 5.09%<F2> 5.06% 5.74% 6.07% 6.30% 6.35%
Portfolio turnover 30% 4% 10% 11% 22% 47% 54%
Net assets at end of period (000 omitted) $171,045 $173,316 $187,307 $144,539 $101,434 $75,922 $57,675
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------------
South Carolina Fund
----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
January 31, March 31, January 31,
----------------------------------------------------------------------------------------------------------------------------------
1989 1988 1987 1986 1995 1994<F4> 1994<F1>
---------------------------------------------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $11.14 $11.54 $10.89 $ 9.95 $11.78 $12.73 $12.67
------ ------ ------ ------ ------ ------ ------
Income from investment operations<F8> -
Net investment income $ 0.76 $ 0.77 $ 0.77 $ 0.84 $ 0.54 $ 0.08 $ 0.21
Net realized and unrealized gain
(loss) on investments 0.11 (0.36) 0.69 0.95 0.17 (0.94) 0.06
------ ------ ------ ------ ------ ------ ------
Total from investment operations $ 0.87 $ 0.41 $ 1.46 $ 1.79 $ 0.71 $(0.86) $ 0.27
------ ------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.77) $(0.77) $(0.78) $(0.84) $(0.54) $(0.08) $(0.20)
From net realized gain on investments -- -- (0.03) (0.01) (0.06) -- --
In excess of net investment income<F5> -- -- -- -- -- (0.01) (0.01)
In excess of net realized gain on investments -- -- -- -- (0.03) -- --
From paid-in capital<F6> -- (0.04) -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total distributions declared to shareholders $(0.77) $(0.81) $(0.81) $(0.85) $(0.63) $(0.09) $(0.21)
------ ------ ------ ------ ------ ------ ------
Net asset value - end of period $11.24 $11.14 $11.54 $10.89 $11.86 $11.78 $12.73
------ ------ ------ ------ ------ ------ ------
Total return<F7> 8.18% 3.92% 14.05% 19.13% 6.26% (6.77)%<F3> 5.47%<F2>
Ratios (to average net assets)/Supplemental data:
Expenses 0.97% 0.81% 0.99% 1.01% 1.90% 1.96%<F2> 1.90%<F2>
Net investment income 6.90% 7.07% 7.00% 8.26% 4.63% 4.29%<F2> 3.86%<F2>
Portfolio turnover 27% 12% 13% 28% 30% 4% 10%
Net assets at end of period (000 omitted) $45,391 $34,025 $27,978 $10,936 $12,964 $10,085 $ 8,217
<FN>
<F1>For the period from the commencement of offering of Class B shares, September 7, 1993 to January 31, 1994.
<F2>Annualized.
<F3>Unannualized.
<F4>For the two months ended March 31, 1994.
<F5>For the year ended March 31, 1995, the Class B distribution in excess of net investment income was $.00436 per share.
<F6>For the year ended January 31, 1986, the per share distribution from paid-in capital was $0.00042.
<F7>Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results would
have been lower.
<F8>Per share data for the periods beginning after January 31, 1994 are based on average shares outstanding.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
Virginia Fund
---------------------------------------------------------------------------------------------------------------------------------
Year
Ended Year Ended
March 31, January 31,
---------------------------------------------------------------------------------------------------------------------------------
1995 1994<F3> 1994 1993 1992 1991 1990 1989
---------------------------------------------------------------------------------------------------------------------------------
Class A
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $11.15 $12.07 $11.72 $11.44 $11.16 $10.97 $10.91 $10.75
------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations<F5> -
Net investment income $ 0.56 $ 0.10 $ 0.65 $ 0.68 $ 0.71 $ 0.73 $ 0.73 $ 0.74
Net realized and unrealized gain (loss) on
investments 0.04 (0.92) 0.56 0.30 0.34 0.19 0.06 0.16
------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations $ 0.60 (0.82) $ 1.21 $ 0.98 $ 1.05 $ 0.92 $ 0.79 $ 0.90
------ ------ ------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income<F7> $(0.61) $(0.06) $(0.62) $(0.70) $(0.77) $(0.73) $(0.73) $(0.74)
From net realized gain on investments<F6> (0.04) -- (0.20) -- -- -- -- --
In excess of net investment income -- (0.04) (0.04) -- -- -- -- --
In excess of net realized gain on
investments (0.01) -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.66) $(0.10) $(0.86) $(0.70) $(0.77) $(0.73) $(0.73) $(0.74)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value - end of period $11.09 $11.15 $12.07 $11.72 $11.44 $11.16 $10.97 $10.91
====== ====== ====== ====== ====== ====== ====== ======
Total return<F4> 5.67% (6.80)%<F2> 10.67% 8.88% 9.76% 8.74% 7.46% 8.76%
Ratios (to average net assets)/Supplemental data:
Expenses 1.16% 1.17%<F1> 1.18% 1.08% 1.08% 1.11% 1.12% 1.09%
Net investment income 4.91% 5.33%<F1> 5.37% 6.02% 6.32% 6.64% 6.67% 6.91%
Portfolio turnover 27% 5% 22% 20% 13% 38% 41% 38%
Net assets at end of period (000 omitted) $430,688 $443,580 $479,333 $399,696 $328,664 $275,202 $240,553 $207,680
<FN>
<F1>Annualized.
<F2>Unannualized.
<F3>For the two months ended March 31, 1994.
<F4>Total returns for Class A shares do not include the applicable sales charge.
If the charge had been included, the results would have been lower.
<F5>Per share data for the periods beginning after January 31, 1994 are based on
average shares outstanding.
<F6>For the year ended January 31, 1993, the per share distribution from net
realized gain on investments was $0.00348.
<F7>For the year ended March 31, 1995, includes a distribution in excess of net
investment income of $0.002 on Class A shares.
</TABLE>
See notes to financial statements
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------------
Virginia Fund
----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
January 31, March 31, January 31, March 31, January 31,
----------------------------------------------------------------------------------------------------------------------------------
1988 1987 1986 1995 1994<F5> 1994<F1> 1995 1994<F5> 1994<F2>
----------------------------------------------------------------------------------------------------------------------------------
Class A Class B Class C
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $11.38 $10.78 $10.01 $11.14 $12.06 $12.14 $11.14 $12.06 $11.94
------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations<F9> -
Net investment income $ 0.72 $ 0.74 $ 0.81 $ 0.53 $ 0.09 $ 0.22 $ 0.56 $ 0.08 $ 0.02
Net realized and
unrealized gain
(loss) on investments (0.57) 0.61 0.77 (0.01) (0.92) 0.01 (0.04) (0.91) 0.12
------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations $ 0.15 $ 1.35 $ 1.58 $ 0.52 $(0.83) $ 0.23 $ 0.52 $(0.83) $ 0.14
------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions declared
to shareholders -
From net investment
income $(0.71) $(0.75) $(0.80) $(0.53)<F6>$(0.09)<F6> $(0.21) $(0.54)<F6> $(0.09) $(0.02)<F6>
From net realized gain
on investments (0.05) -- (0.01) (0.04) -- (0.09) (0.04) -- --
In excess of net
investment income -- -- -- -- -- (0.01) -- -- --
In excess of net realized
gain on investments -- -- -- (0.01) -- -- (0.01) -- --
From paid-in capital<F7> (0.02) -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions
declared to
shareholders $(0.78) $(0.75) $(0.81) $(0.58) $(0.09) $(0.31) $(0.59) $(0.09) $(0.02)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value -
end of period $10.75 $11.38 $10.78 $11.08 $11.14 $12.06 $11.07 $11.14 $12.06
------ ------ ------ ------ ------ ------ ------ ------ ------
Total return<F8> 1.61% 13.12% 16.82% 4.91% (6.92)%<F4> 4.93%<F3> 4.85% (6.91)%<F4> 17.05%<F3>
Ratios (to average net
assets)/Supplemental data:
Expenses 1.04% 1.02% 0.83% 1.88% 1.88%<F3> 1.82%<F3> 1.80% 1.82%<F3> 1.18%<F3>
Net investment income 6.75% 6.73% 8.89% 4.84% 4.52%<F3> 4.25%<F3> 4.90% 4.48%<F3> 1.79%<F3>
Portfolio turnover 11% 20% 23% 27% 5% 22% 27% 5% 22%
Net assets at end of period
(000 omitted) $192,104 $181,937 $85,706 $22,007 $13,337 $10,877 $ 2,300 $1,760 $ 833
<FN>
<F1>For the period from the commencement of offering of Class B shares, September 7, 1993 to January 31, 1994.
<F2>For the period from the commencement of offering of Class C shares, January 3, 1994 to January 31, 1994.
<F3>Annualized.
<F4>Unannualized.
<F5>For the two months ended March 31, 1994.
<F6>Includes a distribution in excess of net investment income of $0.002 on Class B and Class C shares for the periods indicated.
<F7>For the years ended January 31, 1987 and 1986, the per share distributions from paid-in capital were $0.0005 and $0.0015,
respectively.
<F8>Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
<F9>Per share data for the periods beginning after January 31, 1994 are based on average shares outstanding.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------------
West Virginia Fund
----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended
March 31, January 31,
----------------------------------------------------------------------------------------------------------------------------------
1995 1994<F4> 1994 1993 1992 1991 1990
----------------------------------------------------------------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $11.19 $12.06 $11.50 $11.20 $10.93 $10.72 $10.68
------ ------ ------ ------ ------ ------ ------
Income from investment operations<F8> -
Net investment income $ 0.62 $ 0.01 $ 0.64 $ 0.66 $ 0.70 $ 0.71 $ 0.71
Net realized and unrealized gain (loss) on
investments 0.03 (0.78) 0.69 0.34 0.34 0.21 0.04
------ ------ ------ ------ ------ ------ ------
Total from investment operations $ 0.65 $(0.77) $ 1.33 $ 1.00 $ 1.04 $ 0.92 $ 0.75
------ ------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.62) $(0.06) $(0.61) $(0.69) $(0.76) $(0.71) $(0.71)
From net realized gain on investments -- -- (0.12) (0.01) (0.01) -- --
In excess of net investment income -- (0.04) (0.04) -- -- -- --
In excess of net realized gain on investments (0.01) -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.63) $(0.10) $(0.77) $(0.70) $(0.77) $(0.71) $(0.71)
------ ------ ------ ------ ------ ------ ------
Net asset value - end of period $11.21 $11.19 $12.06 $11.50 $11.20 $10.93 $10.72
------ ------ ------ ------ ------ ------ ------
Total return<F3> 6.07% (6.37)%<F3> 11.80% 9.12% 9.84% 8.91% 7.26%
Ratios (to average net assets)/Supplemental data:
Expenses 1.19% 1.30%<F2> 1.24% 1.15% 1.17% 1.21% 1.22%
Net investment income 5.62% 5.36%<F2> 5.30% 5.97% 6.33% 6.59% 6.63%
Net assets at end of period (000 omitted) $127,616 $130,726 $141,190 $115,289 $80,440 $61,984 $52,398
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------------
West Virginia Fund
----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
January 31, March 31, January 31,
----------------------------------------------------------------------------------------------------------------------------------
1989 1988 1987 1986 1995 1994<F4> 1994<F1>
----------------------------------------------------------------------------------------------------------------------------------
Class A Class B
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.51 $11.30 $10.77 $ 9.83 $11.19 $12.06 $12.13
------ ------ ------ ------ ------ ------ ------
Income from investment operations<F8> -
Net investment income $ 0.77 $ 0.77 $ 0.81 $ 0.84 $ 0.53 $ 0.01 $ 0.22
Net realized and unrealized gain (loss
on investments 0.18 (0.72) 0.56 0.96 0.04 (0.87) 0.05
------ ------ ------ ------ ------ ------ ------
Total from investment operations $ 0.95 $ 0.05 $ 1.37 $ 1.80 $ 0.57 $(0.86) $ 0.27
------ ------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.78) $(0.76) $(0.81) $(0.85) $(0.54) $(0.01) $(0.21)
From net realized gain on investments -- (0.02) (0.03) (0.01) -- -- (0.12)
In excess of net investment income<F5> -- -- -- -- -- -- (0.01)
In excess of net realized gain on investments -- -- -- -- (0.01) -- --
From paid-in capital<F6> -- (0.06) -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.78) $(0.84) $(0.84) $(0.86) $(0.55) $(0.01) $(0.34)
------ ------ ------ ------ ------ ------ ------
Net asset value - end of period $10.68 $10.51 $11.30 $10.77 $11.21 $11.19 $12.06
------ ------ ------ ------ ------ ------ ------
Total return<F7> 9.43% 0.76% 13.42% 19.42% 5.30% (6.48)%<F3> 5.59%<F2>
Ratios (to average net assets)/Supplemental data:
Expenses 0.86% 0.79% 0.87% 1.00% 1.91% 2.02%<F2> 1.89%<F2>
Net investment income 7.01% 7.32% 7.42% 8.40% 4.87% 4.56%<F2> 4.14%<F2>
Portfolio turnover 9% 11% 9% 24% 23% 2% 26%
Net assets at end of period (000 omitted) $43,026 $36,276 $34,436 $17,733 $10,046 $5,456 $4,530
<FN>
<F1>For the period from the commencement of offering of Class B shares, September 7, 1993 to January 31, 1994.
<F2>Annualized.
<F3>Unannualized.
<F4>For the two months ended March 31, 1994.
<F5>For the year ended March 31, 1995, the Class B distribution in excess of net investment income was $0.00051 per share.
<F6>For the years ended January 31, 1987 and 1986, the per share distributions from paid-in capital were $0.0018 and $0.0005,
respectively.
<F7>Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results would
have been lower.
<F8>Per share data for the periods beginning after January 31, 1994 are based on average shares outstanding.
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS Municipal Series Trust (the Trust) is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended, as
an open-end management investment company. The Trust presently consists of
nineteen Funds, as follows: MFS Municipal Income Fund, MFS Alabama Municipal
Bond Fund, MFS Arkansas Municipal Bond Fund, MFS California Municipal Bond Fund,
MFS Florida Municipal Bond Fund* (Florida Fund), MFS Georgia Municipal Bond
Fund* (Georgia Fund), MFS Louisiana Municipal Bond Fund, MFS Maryland Municipal
Bond Fund* (Maryland Fund), MFS Massachusetts Municipal Bond Fund*
(Massachusetts Fund), MFS Mississippi Municipal Bond Fund, MFS New York
Municipal Bond Fund* (New York Fund), MFS North Carolina Municipal Bond Fund*
(North Carolina Fund), MFS Pennsylvania Municipal Bond Fund* (Pennsylvania
Fund), MFS South Carolina Municipal Bond Fund* (South Carolina Fund), MFS
Tennessee Municipal Bond Fund, MFS Texas Municipal Bond Fund, MFS Virginia
Municipal Bond Fund* (Virginia Fund), MFS Washington Municipal Bond Fund, and
MFS West Virginia Municipal Bond Fund* (West Virginia Fund). Each Fund, except
MFS Municipal Income Fund, is non-diversified.
The Funds denoted with an asterisk above are included within these financial
statements.
During 1994, the Trust changed its fiscal year end from January 31 to March 31.
(2) Significant Accounting Policies
Investment Valuations - Debt securities (other than short-term obligations which
mature in 60 days or less), including listed issues, are valued on the basis of
valuations furnished by dealers or by a pricing service with consideration to
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon exchange or
over-the-counter prices. Short-term obligations, which mature in 60 days or
less, are valued at amortized cost, which approximates value. Futures contracts,
options and options on futures contracts listed on commodities exchanges are
valued at closing settlement prices. Over-the- counter options are valued by
brokers through the use of a pricing model which takes into account closing bond
valuations, implied volatility and short-term repurchase rates. Securities for
which there are no such quotations or valuations are valued at fair value as
determined in good faith by or at the direction of the Trustees.
Repurchase Agreements - Each Fund may enter into repurchase agreements with
institutions that the Trust's investment adviser has determined are
creditworthy. Each repurchase agreement is recorded at cost. Each Fund requires
that the securities purchased in a repurchase transaction be transferred to the
custodian in a manner sufficient to enable the Fund to obtain those securities
in the event of a default under the repurchase agreement. Each Fund monitors, on
a daily basis, the value of the securities transferred to ensure that the value,
including accrued interest, of the securities under each repurchase agreement is
greater than amounts owed to the Fund under each such repurchase agreement.
Deferred Organization Expenses - Costs incurred by a Fund in connection with its
organization have been deferred and are being amortized on a straight-line basis
over a five-year period beginning on the date of commencement of operations of
the Fund.
Written Options - Each Fund may write covered call or put options for which
premiums are received and are recorded as liabilities, and are subsequently
adjusted to the current value of the options written. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised or are closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security purchased by the Fund. Each Fund, as writer of an option, may have no
control over whether the underlying securities may be sold (call) or purchased
(put) and, as a result, bears the market risk of an unfavorable change in the
price of the securities underlying the written option. In general, written call
options may serve as a partial hedge against decreases in value in the
underlying securities to the extent of the premium received. Written options may
also be used as a part of an income-producing strategy reflecting the view of
the Fund's management on the direction of interest rates.
Futures Contracts - Each Fund may enter into financial futures contracts for the
delayed delivery of securities or contracts based on financial indices at a
fixed price on a future date. In entering such contracts, each Fund is required
to deposit either in cash or securities an amount equal to a certain percentage
of the contract amount. Subsequent payments are made or received by the Fund
each day, depending on the daily fluctuations in the value of the underlying
security, and are recorded for financial statement purposes as unrealized gains
or losses by the Fund. Each Fund's investment in financial futures contracts is
designed to hedge against anticipated future changes in interest rates. Such
transactions may also be entered into for non-hedging purposes to the extent
permitted by applicable law. For example, interest rate futures may be used in
modifying the duration of the portfolio without incurring the additional
transaction costs involved in buying and selling the underlying securities.
Should interest rates move unexpectedly, each Fund may not achieve the
anticipated benefits of the financial futures contracts and may realize a loss.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premium and
original issue discount are amortized or accreted for both financial statement
and tax reporting purposes as required by federal income tax regulations.
Tax Matters and Distributions - The Trust's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net income,
including any net realized gain on investments. Accordingly, no provision for
federal income or excise tax is provided. Each Fund files a tax return annually
using tax accounting methods required under provisions of the Code which may
differ from generally accepted accounting principles, the basis on which these
financial statements are prepared. Accordingly, the amount of net investment
income and net realized gain reported on these financial statements may differ
from that reported on each Fund's tax return and, consequently, the character of
distributions to shareholders reported in the financial highlights may differ
from that reported to shareholders on Form 1099-DIV.
Distributions paid by each Fund from net interest received on tax-exempt
municipal bonds are not includable by shareholders as gross income for federal
income tax purposes because each Fund intends to meet certain requirements of
the Code applicable to regulated investment companies, which will enable each
Fund to pay exempt-interest dividends. That portion of such interest, if any,
earned on private activity bonds issued after August 7, 1986, may be considered
a tax preference item to shareholders. Distributions to shareholders are
recorded on the ex-dividend date.
Each Fund distinguishes between distributions on a tax basis and a financial
reporting basis and requires that only distributions in excess of tax basis
earnings and profits are reported in the financial statements as a return of
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains.
The temporary differences resulting in excess distributions from net investment
income or accumulated net realized gains, arose primarily from the differences
between book and tax accounting due to timing of distributions, losses deferred
for tax purposes and pension expense accruals. Net investment income, net
realized gains and net assets were not affected by this change.
Multiple Classes of Shares of Beneficial Interest - Each Fund offers both Class
A and Class B shares. Class B shares were first offered to the public on
September 7, 1993. Effective January 3, 1994, the North Carolina and Virginia
Funds began to offer Class C shares. The three classes of shares differ in their
respective shareholder servicing agent, distribution and service fees.
Shareholders of each class also bear certain expenses that pertain only to that
particular class. All shareholders bear the common expenses of the Fund pro rata
based on settled shares outstanding, without distinction between share classes.
Dividends are declared separately for each class. No class has preferential
dividend rights; differences in per share dividend rates are generally due to
differences in separate class expenses, including distribution and shareholder
service fees.
(3) Transactions with Affiliates
Investment Adviser - The Trust has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 0.55% of
each Fund's average daily net assets. The investment adviser voluntarily agreed
to reduce its fees with respect to the Florida Fund to 0.10% of average daily
net assets until October 1, 1993, to be increased by 0.05% each quarter
thereafter, not to exceed 0.55%; with respect to the New York Fund to 0.35% of
average daily net assets until October 1, 1993, to be increased by 0.05% each
quarter thereafter, not to exceed 0.55% of the Fund's average daily net assets;
and with respect to the Pennsylvania Fund to 0.10% of average daily net assets
effective as of March 1, 1995. For the year ended March 31, 1995, the investment
adviser did not impose $248,214, $21,059 and $117,301 of its fee in the case of
the Florida, New York and Pennsylvania Funds, respectively, which is reflected
as a reduction of expenses on the Statements of Operations.
Under an expense reimbursement agreement with MFS, MFS has agreed to pay all of
the operating expenses exclusive of management and distribution fees of the
Pennsylvania Fund until December 31, 2002 or the date upon which the expenses
attributable to the Fund are repaid. To accomplish the reimbursement, the Fund
will pay an expense reimbursement fee to MFS of 0.40% of average daily net
assets, with a limitation that immediately after any such payment that aggregate
expenses of the Fund, including the management fee but excluding any
distribution plan fees, will not exceed 0.95% of average daily net assets. MFS
voluntarily reduced, for an indefinite period, its expense reimbursement fee to
0% of average daily net assets, which amounted to $86,865 for the year ended
March 31, 1995.
To the extent that actual expenses are under the agreed-upon expense
limitations, the excess of the limitation over actual expenses will be applied
to amounts reimbursed by MFS in prior years. At March 31, 1995, unreimbursed
expenses owed to MFS were $182,357, of which $54,213 relates to the year ended
March 31, 1995.
The Trust pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the Trust, all of whom receive
remuneration for their services to the Trust from MFS. Certain of the officers
and Trustees of the Trust are officers or directors of MFS, MFS Fund
Distributors, Inc. (MFD) and MFS Service Center, Inc. (MFSC). The Trust has an
unfunded defined benefit plan for all its independent Trustees. Included in
Trustees' compensation for the year ended March 31, 1995 is a net periodic
pension expense for each Fund, as follows:
<TABLE>
<CAPTION>
New North South West
Florida Georgia Maryland Massachusetts York Carolina Pennsylvania Carolina Virginia Virginia
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$2,548 $4,347 $5,191 $5,308 $4,032 $5,510 $2,529 $5,146 $5,146 $5,174
</TABLE>
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$44,219, $39,551, $45,665, $53,182, $35,466, $137,516, $14,379, $61,952,
$128,244 and $57,411 as its portion of the sales charge on sales of Class A
shares of the Florida, Georgia, Maryland, Massachusetts, New York, North
Carolina, Pennsylvania, South Carolina, Virginia and West Virginia Funds,
respectively.
The Trustees have adopted separate distribution plans for Class A, Class B and
Class C shares pursuant to Rule 12b-1 of the Investment Company Act of 1940 as
follows:
The Class A Distribution Plan provides that each Fund will pay MFD up to 0.35%
of its average daily net assets attributable to Class A shares annually in order
that MFD may pay expenses on behalf of the Fund related to the distribution and
servicing of its shares. These expenses include a service fee to each securities
dealer that enters into a sales agreement with MFD of up to 0.25% of the Fund's
average daily net assets attributable to Class A shares which are attributable
to that securities dealer, a distribution fee to MFD of up to 0.10% of the
Fund's average daily net assets attributable to Class A shares, commissions to
dealers and payments to MFD wholesalers for sales at or above a certain dollar
level, and other such distribution-related expenses that are approved by the
Fund. MFD retains the service fee for accounts not attributable to a securities
dealer. The service fees retained amounted to $7,073, $20,684, $83,290, $19,831,
$28,742, $14,196, $30,661 and $10,812 for the Georgia, Maryland, Massachusetts,
New York, North Carolina, South Carolina, Virginia and West Virginia Funds,
respectively. MFD is currently waiving 0.10% of the distribution fee, which
amounted to $79,714 and $152,969, respectively, for the Georgia and New York
Funds for the year ended March 31, 1995. In the case of the Florida Fund,
payments under the distribution plan will commence on such a date to be
determined by the Trustees of the Trust. In the case of the Pennsylvania Fund,
payments under the distribution plan will commence when the net assets of the
Fund first equal or exceed $50,000,000.
Fees incurred under the distribution plan during the year ended March 31, 1995
attributable to Class A shares were:
<TABLE>
<CAPTION>
North South West
Georgia Maryland Massachusetts New York Carolina Carolina Virginia Virginia
Fund Fund Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total fees
incurred under
the distribution
plan $279,473 $533,850 $929,292 $536,111 $1,547,366 $596,846 $1,509,114 $446,892
-------- -------- -------- -------- ---------- -------- ---------- --------
</TABLE>
The Class B and Class C Distribution Plans provide that the Funds will pay MFD a
monthly distribution fee, equal to 0.75% per annum, and a quarterly service fee
of up to 0.25% per annum, of the Fund's average daily net assets attributable to
Class B and Class C shares. MFD retains the service fee for accounts not
attributable to a securities dealer. For Class B, the service fees retained
amounted to $362, $697, $416, $1,501, $736, $1,055, $914 and $211 for the
Georgia, Maryland, Massachusetts, New York, North Carolina, South Carolina,
Virginia and West Virginia Funds. For Class C, the service fees retained
amounted to $3,853 and $1,946 for the North Carolina and Virginia Funds,
respectively. MFD will pay to securities dealers that enter into a sales
agreement with MFD, all or a portion of the service fee attributable to Class B
and Class C shares, and will pay to such securities dealers all of the
distribution fee attributable to Class C shares. The service fee is intended to
be additional consideration for services rendered by the dealer with respect to
Class B and Class C shares.
Fees incurred under the distribution plan during the year ended March 31, 1995
were 1.00% of average daily net assets attributable to Class B shares on an
annualized basis and amounted to the following:
<TABLE>
<CAPTION>
North South West
Florida Georgia Maryland Massachusetts New York Carolina Pennsylvania Carolina Virginia Virginia
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total fees
incurred under
the distribution
plan $100,045 $76,623 $92,525 $64,659 $95,837 $210,286 $62,617 $115,719 $180,844 $74,360
-------- ------- ------- ------- ------- -------- ------- -------- -------- -------
</TABLE>
Fees incurred under the distribution plan during the year ended March 31, 1995
were 1.00% of average daily net assets attributable to Class C shares on an
annualized basis and amounted to the following:
North
Carolina Virginia
Fund Fund
-------------------------------------
Total fees
incurred under
the distribution
plan $81,518 $60,554
------- -------
A contingent deferred sales charge is imposed on shareholder redemptions of
Class A shares, on purchases of $1 million or more, in the event of a
shareholder redemption within 12 months following the share purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of Class
B shares in the event of a shareholder redemption within six years of purchase.
MFD receives all contingent deferred sales charges.
Contingent deferred sales charges imposed during the year ended March 31, 1995
on Class A and Class B shares were the following:
<TABLE>
<CAPTION>
North South West
Florida Georgia Maryland Massachusetts New York Carolina Pennsylvania Carolina Virginia Virginia
CDSC imposed Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $ 4,332 $ 2,683 $ -- $ -- $ 6,408 $ 70 $ -- $ 7,826 $ -- $ 4
Class B 26,736 22,152 28,095 31,362 37,704 61,014 10,091 32,652 56,011 24,295
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
$31,068 $24,835 $28,095 $31,362 $44,112 $61,084 $10,091 $40,478 $56,011 $24,299
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earned
fees for its services as shareholder servicing agent for the year ended March
31, 1995, as specified below. The fee is calculated as a percentage of average
daily net assets of each class of shares at an effective annual rate of up to
0.15%, up to 0.22% and up to 0.15% attributable to Class A, Class B and Class C
shares, respectively.
<TABLE>
<CAPTION>
North South West
Florida Georgia Maryland Massachusetts New York Carolina Pennsylvania Carolina Virginia Virginia
Fee paid by Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $148,187 $119,220 $228,793 $398,269 $229,430 $663,157 $23,196 $255,051 $646,763 $190,539
Class B 22,010 16,855 20,355 14,225 21,084 46,263 13,755 25,458 39,786 16,359
Class C -- -- -- -- -- 12,228 -- -- 9,093 --
</TABLE>
<PAGE>
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations, were as follows (000
omitted):
<TABLE>
<CAPTION>
North South West
Florida Georgia Maryland Massachusetts New York Carolina Pennsylvania Carolina Virginia Virginia
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases $136,602 $47,243 $38,388 $82,443 $225,075 $264,681 $15,889 $52,763 $132,961 $29,955
Sales 147,504 53,408 49,040 96,115 232,222 275,746 10,237 53,444 127,786 29,806
</TABLE>
The cost and unrealized appreciation or depreciation in value of the investments
owned by the Funds, as computed on a federal income tax basis, are as follows
(000 omitted):
<TABLE>
<CAPTION>
North South West
Florida Georgia Maryland Massachusetts New York Carolina Pennsylvania Carolina Virginia Virginia
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggregate cost $95,834 $77,777 $149,575 $252,369 $146,325 $437,829 $23,988 $174,172 $429,664 $129,016
------- ------- -------- -------- -------- -------- ------- -------- -------- --------
Gross unrealized
appreciation $ 4,015 $ 4,528 $ 7,386 $ 15,088 $ 9,200 $ 21,645 $ 573 $ 8,388 $ 21,799 $ 6,861
Gross unrealized
depreciation (264) (704) (2,681) (1,033) (573) (3,278) (406) (1,448) (3,473) (1,012)
------- ------- -------- -------- -------- -------- ------- -------- -------- --------
Net unrealized
appreciation $ 3,751 $ 3,824 $ 4,705 $ 14,055 $ 8,627 $ 18,367 $ 167 $ 6,940 $ 18,326 $ 5,849
------- ------- -------- -------- -------- -------- ------- -------- -------- --------
</TABLE>
At March 31, 1995, the following Funds, for federal income tax purposes, had
capital loss carryforwards which may be applied against any net taxable realized
gains of each succeeding year until the earlier of their utilization or
expiration.
<TABLE>
<CAPTION>
West
Florida Georgia Massachusetts New York Pennsylvania Virginia Virginia
Expiration Date Fund Fund Fund Fund Fund Fund Fund
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 2002 $ -- $ -- $ -- $1,065,323 $ -- $ -- $ --
March 31, 2003 6,439,058 2,399,843 3,052,342 5,172,474 111,447 6,639,082 295,369
---------- ---------- ---------- ---------- -------- ---------- --------
Total $6,439,058 $2,399,843 $3,052,342 $6,237,797 $111,447 $6,639,082 $295,369
---------- ---------- ---------- ---------- -------- ---------- --------
</TABLE>
(5) Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Class A Shares Florida Fund Georgia Fund Maryland Fund Massachusetts Fund New York Fund
------------------ ------------------ ------------------ ------------------ ------------------
Year Ended
March 31, 1995
(000 Omitted) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 6,609 $ 61,425 1,076 $ 10,979 793 $ 8,524 1,947 $ 20,608 6,955 $ 71,200
Shares issued to
shareholders in
reinvestment of
distributions 233 2,203 210 2,148 461 4,949 689 7,371 527 5,440
Shares reacquired (8,730) (81,517) (2,370) (23,804) (2,777) (29,402) (3,891) (41,117) (9,004) (92,427)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net decrease (1,888) $(17,889) (1,084) $(10,677) (1,523) $(15,929) (1,255) $(13,138) (1,522) $(15,787)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
</TABLE>
<TABLE>
<CAPTION>
Two Months Ended
March 31, 1994
(000 Omitted) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 631 $ 6,400 267 $ 2,924 373 $ 4,289 645 $ 7,388 508 $ 5,533
Shares issued to
shareholders in
reinvestment of
distributions 33 332 26 278 71 791 104 1,163 76 818
Shares reacquired (1,087) (11,122) (376) (4,116) (309) (3,496) (886) (9,925) (1,357) (14,790)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net increase
(decrease) (423) $ (4,390) (83) $ (914) 135 $ 1,584 (137) $ (1,374) (773) $ (8,439)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
</TABLE>
<TABLE>
<CAPTION>
Year Ended
January 31, 1994
(000 Omitted) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 6,785 $ 70,646 3,020 $ 33,191 2,812 $ 32,808 3,359 $ 39,196 5,703 $ 63,751
Shares issued to
shareholders in
reinvestment of
distributions 193 2,008 136 1,496 466 5,451 848 9,846 543 6,069
Shares reacquired (2,819) (29,380) (914) (10,041) (1,388) (16,230) (2,321) (27,134) (2,573) (28,924)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net increase 4,159 $ 43,274 2,242 $ 24,646 1,890 $ 22,029 1,886 $ 21,908 3,673 $ 40,896
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
</TABLE>
<TABLE>
<CAPTION>
North Carolina Fund Pennsylvania Fund South Carolina Fund Virginia Fund West Virginia Fund
------------------- ------------------ ------------------- ------------------ ------------------
Year Ended
March 31, 1995
(000 Omitted) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 3,008 $ 33,720 438 $ 3,991 1,422 $ 16,607 2,822 $ 30,863 908 $ 10,025
Shares issued to
shareholders in
reinvestment of
distributions 1,457 16,419 72 652 502 5,842 1,219 13,336 355 3,917
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Shares reacquired (7,002) (77,840) (269) (2,402) (2,209) (25,465) (4,988) (54,182) (1,557) (16,951)
Net increase
(decrease) (2,537) $(27,701) 241 $ 2,241 (285) $ (3,016) (947) $ (9,983) (294) $ (3,009)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Two Months Ended
March 31, 1994
(000 Omitted) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
Shares sold 714 $ 8,584 189 $ 1,823 307 $ 3,770 660 $ 7,747 226 $ 2,649
Shares issued to
shareholders in
reinvestment of
distributions 193 2,271 9 85 65 790 176 2,003 54 616
Shares reacquired (833) (9,920) (51) (503) (373) (4,586) (767) (8,945) (308) (3,531)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net increase
(decrease) 74 $ 935 147 $ 1,405 (1) $ (26) 69 $ 805 (28) $ (266)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
</TABLE>
<TABLE>
<CAPTION>
Year Ended
January 31, 1994
(000 Omitted) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 8,229 $ 99,737 1,457 $ 14,093 3,853 $ 47,933 6,766 $ 80,897 2,488 $ 29,466
Shares issued to
shareholders in
reinvestment of
distributions 1,092 13,288 34 336 356 4,450 1,400 16,705 350 4,157
Shares reacquired (3,035) (36,932) (112) (1,101) (1,524) (19,046) (2,559) (30,600) (1,160) (13,791)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net increase 6,286 $ 76,093 1,379* $ 13,328* 2,685 $ 33,337 5,607 $ 67,002 1,678 $ 19,832
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
</TABLE>
<TABLE>
<CAPTION>
Class B Shares Florida Fund Georgia Fund Maryland Fund Massachusetts Fund New York Fund
------------------ ------------------ ------------------ ------------------ ------------------
Year Ended
March 31, 1995
(000 Omitted) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 675 $ 6,350 358 $ 3,643 598 $ 6,438 428 $ 4,572 700 $ 7,239
Shares issued to
shareholders in
reinvestment of
distributions 28 262 21 216 25 271 17 184 25 262
Shares reacquired (213) (1,994) (178) (1,799) (197) (2,109) (103) (1,084) (190) (1,925)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net increase 490 $ 4,618 201 $ 2,060 426 $ 4,600 342 $ 3,672 535 $ 5,576
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
</TABLE>
<TABLE>
<CAPTION>
Two Months Ended
March 31, 1994
(000 Omitted) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 153 1,572 135 $ 1,468 162 $ 1,858 100 $ 1,143 171 $ 1,869
Shares issued to
shareholders in
reinvestment of
distributions 3 29 2 23 3 28 2 20 2 24
Shares reacquired (9) (87) (9) (90) (22) (250) (1) (4) (2) (24)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net increase 147 $ 1,514 128 $ 1,401 143 $ 1,636 101 $ 1,159 171 $ 1,869
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
</TABLE>
<TABLE>
Year Ended
January 31, 1994
(000 Omitted)** Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 698 $ 7,390 509 $ 5,696 454 $ 5,358 364 $ 4,290 422 $ 4,776
Shares issued to
shareholders in
reinvestment of
distributions 5 53 2 24 4 46 4 50 5 52
Shares reacquired (21) (217) (1) (10) (5) (61) (12) (135) (1) (8)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net increase 682 $ 7,226 510 $ 5,710 453 $ 5,343 356 $ 4,205 426 $ 4,820
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
</TABLE>
<TABLE>
<CAPTION>
North Carolina Fund Pennsylvania Fund South Carolina Fund Virginia Fund West Virginia Fund
------------------- ------------------ ------------------- ------------------ ------------------
Year Ended
March 31, 1995
(000 Omitted) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 1,174 $ 13,233 428 $ 3,928 383 $ 4,461 918 $ 10,079 440 $ 4,834
Shares issued to
shareholders in
reinvestment of
distributions 71 795 20 181 30 344 37 408 20 220
Shares reacquired (328) (3,609) (90) (820) (175) (2,005) (166) (1,815) (51) (555)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net increase 917 $ 10,419 358 $ 3,289 238 $ 2,800 789 $ 8,672 409 $ 4,499
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
</TABLE>
<TABLE>
<CAPTION>
Two Months Ended
March 31, 1994
(000 Omitted) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 297 $ 3,550 135 $ 1,312 210 $ 2,583 313 $ 3,668 130 $ 1,524
Shares issued to
shareholders in
reinvestment of
distributions 6 75 1 13 3 35 4 43 2 23
Shares reacquired (2) (28) (2) (16) (2) (27) (22) (249) (20) (229)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net increase 301 $ 3,597 134 $ 1,309 211 $ 2,591 295 $ 3,462 112 $ 1,318
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
</TABLE>
<TABLE>
<CAPTION>
Year Ended
January 31, 1994
(000 Omitted)** Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 1,087 $ 13,377 337 $ 3,345 644 $ 8,142 936 $ 11,282 384 $ 4,615
Shares issued to
shareholders in
reinvestment of
distributions 7 87 1 14 2 31 8 95 4 43
Shares reacquired (12) (150) (3) (29) (1) (15) (42) (500) (12) (139)
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Net increase 1,082 $ 13,314 335 $ 3,330 645 $ 8,158 902 $ 10,877 376 $ 4,519
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
*For the period from the commencement of investment operations, February 1,
1993 to January 31, 1994.
**For the period from the commencement of offering of Class B shares, September
7, 1993 to January 31, 1994.
</TABLE>
Class C Shares
Year Ended North Carolina Fund Virginia Fund
March 31, 1995 ------------------- ------------------
(000 Omitted) Shares Amount Shares Amount
----------------------------------------------------------------
Shares sold 637 $7,160 1,049 $11,525
Shares issued to
shareholders in
reinvestment of
distributions 19 219 23 250
Shares reacquired (523) (5,757) (1,022) (10,805)
---- ------ ------ -------
Net increase 133 $1,622 50 $ 970
---- ------ ------ -------
Two Months Ended
March 31, 1994
(000 Omitted) Shares Amount Shares Amount
----------------------------------------------------------------
Shares sold 262 $3,153 104 $ 1,231
Shares issued to
shareholders in
reinvestment of
distributions 1 13 1 6
Shares reacquired (53) (642) (16) (189)
---- ------ ------ -------
Net increase 210 $2,524 89 $1,048
---- ------ ------ -------
Year Ended
January 31, 1994
(000 Omitted)*** Shares Amount Shares Amount
----------------------------------------------------------------
Shares sold 371 $4,555 70 $ 843
Shares issued to
shareholders in
reinvestment of
distributions 1 2 -- --
Shares reacquired (1) (1) (1) (16)
---- ------ ------ -------
Net increase 371 $4,556 69 $ 827
---- ------ ------ -------
***For the period from the commencement of offering of Class C shares, January
3, 1994 to January 31, 1994.
(6) Line of Credit
The Trust entered into an agreement which enables each of the Funds to
participate with other funds managed by MFS, or an affiliate of MFS, in an
unsecured line of credit with a bank which permits borrowings up to $350
million, collectively. Borrowings may be made to temporarily finance the
repurchase of Fund shares. Interest is charged to each Fund, based on its
borrowings, at a rate equal to the bank's base rate. In addition, a commitment
fee, based on the average daily unused portion of the line of credit, is
allocated among the participating Funds at the end of each quarter. The
commitment fee allocated to each of the Funds for the year ended March 31, 1995
ranged from $330 to $7,411.
(7) Financial Instruments
The Funds may trade financial instruments with off-balance sheet risk in the
normal course of their investing activities in order to manage exposure to
market risks such as interest rates. These financial instruments include written
options and futures contracts. The notional or contractual amounts of these
instruments represent the investment the Fund has in particular classes of
financial instruments and does not necessarily represent the amounts potentially
subject to risk. The measurement of the risks associated with these instruments
is meaningful only when all related and offsetting transactions are considered.
A summary of open futures contracts under these financial instruments at March
31, 1995 is as follows:
<TABLE>
<CAPTION>
Unrealized
Appreciation
Fund Description Expiration Contracts Position (Depreciation)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Florida Fund U.S. Treasury Bonds June 1995 50 Short $(103,457)
Georgia Fund U.S. Treasury Bonds June 1995 60 Short $(124,147)
Maryland Fund U.S. Treasury Bonds June 1995 245 Short $ 128,532
North Carolina Fund U.S. Treasury Bonds June 1995 200 Short $(413,824)
Pennsylvania Fund U.S. Treasury Bonds June 1995 38 Short $ 19,935
South Carolina Fund U.S. Treasury Bonds June 1995 140 Short $ 73,449
At March 31, 1995, each Fund had sufficient cash and/or securities to cover margin requirements on open futures contracts.
</TABLE>
The Trust also invests in indexed securities whose value may be linked to
interest rates, commodities, indices or other financial indicators. Indexed
securities are fixed-income securities whose proceeds at maturity (principal-
indexed securities) or interest rates (coupon-indexed securities) rise and fall
according to the change in one or more specified underlying instruments. Indexed
securities may be more volatile than the underlying instrument itself. A summary
of indexed securities held at March 31, 1995 is as follows:
<TABLE>
<CAPTION>
Principal Unrealized
Fund Description Index (000 Omitted) Value Depreciation
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Maryland Fund Puerto Rico Public PSA Municipal Swap $3,000 $2,614,650 $(385,350)
Buildings Authority,
5.385s, 2016
New York Fund Puerto Rico Public PSA Municipal Swap $2,000 $1,743,100 $(256,900)
Buildings Authority,
5.385s, 2016
North Carolina Fund Puerto Rico Public PSA Municipal Swap $6,500 $5,655,075 $(834,925)
Buildings Authority,
5.385s, 2016
South Carolina Fund Puerto Rico Telephone Corp. Swap Rate Curve $1,000 $ 823,820 $(176,180)
Authority Rev.,
4.47s, 2004
Virginia Fund Puerto Rico Public PSA Municipal Swap $6,500 $5,655,075 $(834,925)
Buildings Authority,
5.385s, 2016
West Virginia Fund Puerto Rico Public PSA Municipal Swap $2,000 $1,743,100 $(256,900)
Buildings Authority,
5.385s, 2016
</TABLE>
(8) Restricted Securities
Each Fund may invest not more than 15% of its net assets in securities which are
subject to legal or contractual restrictions on resale. At March 31, 1995, the
Georgia Fund owned the following restricted security (constituting 3.42% of net
assets) which may not be publicly sold without registration under the Securities
Act of 1933. The Fund does not have the right to demand that such security be
registered. The value of this security is determined by valuations supplied by a
pricing service or broker. This security may be offered and sold to "qualified
institutional buyers" under Rule 144A of the 1933 Act.
<TABLE>
<CAPTION>
Date of Par Amount
Fund Description Acquisition (000 Omitted) Cost Value
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Georgia Fund Georgia Municipal Electric Authority, Power Rev., 5.68s, 2023 3/31/93 $3,450 $3,490,000 $2,845,111
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of MFS Municipal Series Trust:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of MFS Florida Municipal Bond Fund, MFS Georgia
Municipal Bond Fund, MFS Maryland Municipal Bond Fund, MFS Massachusetts
Municipal Bond Fund, MFS New York Municipal Bond Fund, MFS North Carolina
Municipal Bond Fund, MFS Pennsylvania Municipal Bond Fund, MFS South Carolina
Municipal Bond Fund, MFS Virginia Municipal Bond Fund and MFS West Virginia
Municipal Bond Fund (portfolios of MFS Municipal Series Trust) as of March 31,
1995, the related statements of operations for the year then ended, the
statements of changes in net assets for the year ended March 31, 1995, the two
months ended March 31, 1994 and the year ended January 31, 1994, and the
financial highlights for the year ended March 31, 1995, the two months ended
March 31, 1994 and each of the years in the nine-year period ended January 31,
1994. These financial statements and financial highlights are the responsibility
of the Trust'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 the securities owned at
March 31, 1995 by correspondence with the 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 of the
aforementioned Funds of MFS Municipal Series Trust at March 31, 1995, the
results of their operations, the changes in their net assets, and their
financial highlights for the respective stated periods in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 5, 1995
--------------------------------------
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
<PAGE>
MFS(R) MUNICIPAL -------------
SERIES TRUST [LOGO: NUMBER 1 VALUE BULK RATE
TOP RATED SERVICE] U.S. POSTAGE
PAID
500 Boylston Street PERMIT #55638
Boston, MA 02116 BOSTON, MA
-------------
MFS Florida Municipal Bond Fund
MFS Georgia Municipal Bond Fund
MFS Maryland Municipal Bond Fund
MFS Massachusetts Municipal Bond Fund
MFS New York Municipal Bond Fund
MFS North Carolina Municipal Bond Fund
MFS Pennsylvania Municipal Bond Fund
MFS South Carolina Municipal Bond Fund
MFS Virginia Municipal Bond Fund
MFS West Virginia Municipal Bond Fund
[LOGO: M F S
THE FIRST NAME IN MUTUAL FUNDS]
56/256
46/246
40/240
45/245
52/252
41/241/341
30/230
42/242
43/243/343
MST-2A 5/95 66M 44/244
